1030-00001 · Dralvecen Fenn & Co., Inc · Closing

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CLOSING MEMORANDUM

Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt)

$220,000,000 Aggregate Principal Amount

Closing Date: October 24, 2023

CONFIDENTIAL

Prepared By: Michelle Tsao, Associate Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101

Date of Memorandum: October 20, 2023 C&H Matter No.: 1030-00001

Distribution: All closing participants (see distribution list in Section XI)

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I. INTRODUCTION AND PURPOSE

This Closing Memorandum (this "Memorandum") has been prepared by Calderwood & Harkness LLP ("C&H"), as Issuer's Counsel to the Cascadia State Infrastructure Authority ("CSIA" or the "Issuer"), for the purpose of summarizing the closing mechanics, sequence of deliveries, fund flows, wire transfer instructions, and party responsibilities in connection with the closing of the $220,000,000 Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt) (the "Series 2023A Bonds" or the "Bonds"), presently scheduled for October 24, 2023 (the "Closing Date").

The Series 2023A Bonds are being issued under and pursuant to (i) the Bond Indenture (Trust Indenture), dated as of October 24, 2023 (the "Bond Indenture"), between CSIA and Pacific Northwest Trust Company, N.A. ("PNTC"), as Trustee, and (ii) the First Supplemental Indenture, dated as of October 24, 2023 (the "First Supplemental Indenture" and, together with the Bond Indenture, the "Indenture"), between CSIA and PNTC. The Bonds are further authorized by Board Resolution No. 2023-014, adopted by the Board of Commissioners of CSIA on May 9, 2023 (the "Authorizing Resolution"), and issued in conformity with Chapter 43.160A of the Revised Code of Washington.

The Bonds are tax-exempt obligations within the meaning of Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"). Interest on the Bonds is excludable from gross income for federal income-tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The tax-exempt status of the Bonds is contingent upon CSIA's compliance with certain covenants and representations set forth in the Tax Regulatory Agreement and Certificate, previously executed by CSIA on October 15, 2023 (the original target closing date for the transaction), as prepared by Leonard Cross, Partner, and Michelle Tsao, Associate, of C&H.

Proceeds of the Series 2023A Bonds, together with a $17,400,000 equity contribution from CSIA's existing capital reserves, will be used to fund the construction of the Puget Sound Regional Advanced Water Treatment Facility (the "Project"), located at 7250 Deschutes Parkway, Tumwater, Thurston County, Washington 98501. The Project is being constructed under a guaranteed maximum price ("GMP") design-build contract with Northtide Environmental Engineering, Inc. ("Northtide"), Contract No. CSIA-DB-2023-001, dated March 10, 2023, in the amount of $193,500,000.

The sale of the Series 2023A Bonds was authorized pursuant to the Bond Purchase Agreement, dated August 30, 2023 (the "BPA"), between CSIA and Meridian Capital Partners LLC ("Meridian"), acting as representative of the underwriting syndicate consisting of Meridian (as Senior Managing Underwriter) and Dralvecen Fenn & Co., Inc. ("Dralvecen Fenn") (as Co-Managing Underwriter) (collectively, the "Underwriters").

All parties to the transaction are requested to review this Memorandum carefully and confirm all logistics, wire transfer instructions, and document delivery responsibilities described herein. Any questions regarding this Memorandum, the closing procedures, or the status of outstanding items should be directed to:

Michelle Tsao, Associate, Calderwood & Harkness LLP Telephone: (206) 555-3184	Email: mtsao@calderwoodharkness.com
Brett Callahan, Associate, Calderwood & Harkness LLP Telephone: (206) 555-3192	Email: bcallahan@calderwoodharkness.com

II. SUMMARY OF BOND TERMS

The following is a summary of the principal terms of the Series 2023A Bonds. This summary is provided for reference purposes and is qualified in its entirety by reference to the Bond Indenture, the First Supplemental Indenture, the Final Official Statement dated September 5, 2023, and the other transaction documents described in this Memorandum.

Issuer: Cascadia State Infrastructure Authority ("CSIA"), a Washington State governmental instrumentality created pursuant to Chapter 43.160A of the Revised Code of Washington.

Bond Title: Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt).

Aggregate Principal Amount: $220,000,000.

Dated Date: October 24, 2023.

Interest Rate: 3.25% per annum (fixed coupon, equivalent to 325 basis points). Interest on the Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

Interest Payment Dates: April 1 and October 1 of each year, commencing April 1, 2024. Interest shall accrue from the Dated Date.

Final Maturity Date: October 1, 2053 (30-year final maturity).

Optional Redemption: The Bonds are subject to optional redemption by CSIA, in whole or in part, on any date on or after October 1, 2033, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption (10-year call protection period). The Bonds are not subject to mandatory sinking fund redemption.

Authorized Denomination: $5,000 or any integral multiple thereof.

Book-Entry System: The Bonds will be issued in book-entry-only form through the facilities of The Depository Trust Company ("DTC"), New York, New York. Cede & Co., as nominee of DTC, will be the sole registered owner of the Bonds. Beneficial ownership interests in the Bonds will be recorded on the books of DTC Participants and Indirect Participants.

CUSIP Base: 148392. Individual CUSIP numbers have been assigned to the Bonds by CUSIP Global Services, managed on behalf of the American Bankers Association by Harborview & Co..

Trustee / Paying Agent / Registrar / Escrow Agent: Pacific Northwest Trust Company, N.A. ("PNTC"), Seattle, Washington.

Bond Insurance / Debt-Service Reserve Fund Surety: The Debt-Service Reserve Fund requirement for the Series 2023A Bonds is $11,610,000, which amount is equal to the maximum annual debt service on the Series 2023A Bonds. In lieu of a cash deposit, the Debt-Service Reserve Fund requirement will be satisfied by a Surety Policy, Policy No. OG-2023-MUN-4718, issued by Olympia Guaranty Insurance Corp. ("Olympia Guaranty") in the face amount of $11,610,000. No cash deposit to the Debt-Service Reserve Fund is required at closing.

Ratings:

Pricing: The Bonds have been priced at 99.25% of par, reflecting an original issue discount ("OID") of 0.75%, or $1,650,000.

Underwriters' discount: The aggregate underwriters' discount is 0.45% of the par amount of the Bonds, or $990,000 in total, allocated among the Underwriters as follows:

III. SOURCES AND USES OF FUNDS

A. Sources of Funds

The following table sets forth the anticipated sources of funds for the transaction:

B. Uses of Funds

The following table sets forth the anticipated uses of funds for the transaction:

The following notes provide additional detail regarding the sources and uses of funds:

Costs of Issuance. The aggregate costs of issuance of $1,870,000 will be deposited to the Costs of Issuance Fund held by PNTC and disbursed upon receipt of invoices and written requisitions from CSIA, in accordance with the provisions of the First Supplemental Indenture. Costs of issuance include, without limitation, bond counsel fees, issuer's counsel fees, underwriters' counsel fees, rating agency fees (LRG and PCA), trustee acceptance and first-year administrative fees, printing and distribution costs for the Official Statement, CUSIP assignment charges, verification agent fees, municipal advisor fees, and miscellaneous expenses. These amounts are funded from bond proceeds.

Capitalized Interest. The Capitalized Interest Fund in the amount of $4,510,000 will be funded from bond proceeds and applied to scheduled interest payments on the Series 2023A Bonds during the construction period for the Project. This fund is designed to provide sufficient capitalized interest to cover debt service through the period during which the Project is expected to become operational and revenue-generating.

CSIA Equity Contribution. CSIA will contribute $17,400,000 from its existing capital reserves to the Project Fund, which contribution is intended to bridge the gap between the net bond proceeds available for construction ($215,490,000) and the total estimated project cost ($237,400,000), net of amounts set aside for capitalized interest. The total project cost of $237,400,000 is inclusive of the GMP contract with Northtide Environmental Engineering, Inc. in the amount of $193,500,000 under Contract No. CSIA-DB-2023-001, plus other project costs including engineering, environmental remediation, permitting, project management, contingencies, and owner's costs.

Debt-Service Reserve Fund. The Debt-Service Reserve Fund requirement of $11,610,000, equal to maximum annual debt service on the Series 2023A Bonds, will be satisfied in full by the Surety Policy (Policy No. OG-2023-MUN-4718) issued by Olympia Guaranty Insurance Corp. in the face amount of $11,610,000. Accordingly, no cash deposit to the Debt-Service Reserve Fund is required on the Closing Date, and no portion of bond proceeds will be allocated to the Debt-Service Reserve Fund.

IV. WIRE TRANSFER INSTRUCTIONS

All parties should carefully review the wire transfer instructions set forth below and confirm their accuracy no later than 5:00 p.m. Pacific Time on October 23, 2023. Any discrepancies or changes to wire transfer instructions must be communicated immediately to Michelle Tsao or Brett Callahan at Calderwood & Harkness LLP.

A. Bond Proceeds Wire

The bond purchase price, net of the original issue discount and the underwriters' discount, will be remitted through the DTC settlement system on behalf of the Underwriters.

From: DTC settlement on behalf of Underwriters (Meridian Capital Partners LLC and Dralvecen Fenn & Co., Inc.)

To: Pacific Northwest Trust Company, N.A. — Bond Proceeds Account

DTC Participant Number (PNTC): 2741

Amount: $217,360,000.00 (net of OID of $1,650,000 and underwriters' discount of $990,000)

Expected Time of Transfer: 10:00 a.m. Pacific Time, October 24, 2023

Upon receipt of the bond purchase price, PNTC, as Trustee, will authenticate the Series 2023A Bonds and deliver the Bonds through the DTC book-entry system to the accounts of the DTC Participants designated by the Underwriters. Authentication and delivery of the Bonds is conditioned upon receipt of the full bond purchase price in immediately available funds.

B. Allocation Wires from PNTC

Upon receipt and confirmation of the bond proceeds in the Bond Proceeds Account, PNTC will allocate and transfer the net bond proceeds to the following sub-accounts, each held by PNTC under the Indenture:

1. Project Fund Account (PNTC): $215,490,000.00 — to be held by PNTC and disbursed in accordance with the requisition procedures set forth in the Escrow Deposit Agreement and the First Supplemental Indenture. Disbursements from the Project Fund shall be made upon receipt by PNTC of a written requisition certificate executed by an authorized officer of CSIA, accompanied by such supporting documentation as required by the Indenture.

2. Costs of Issuance Fund Account (PNTC): $1,870,000.00 — to be held by PNTC and disbursed upon receipt by PNTC of invoices and written requisition certificates from CSIA, in accordance with the provisions of the First Supplemental Indenture. Any amounts remaining in the Costs of Issuance Fund six months after the Closing Date shall be transferred to the Project Fund.

3. Capitalized Interest Fund Account (PNTC): $4,510,000.00 — to be held by PNTC and applied to scheduled interest payments on the Series 2023A Bonds during the construction period, in accordance with the provisions of the First Supplemental Indenture.

C. CSIA Equity Contribution Wire

CSIA will wire its equity contribution from its operating account to the Project Fund held by PNTC simultaneously with, or as promptly as practicable following, the receipt of the bond proceeds on the Closing Date.

From: CSIA operating account (wire to be initiated by Denise R. Whitford, Chief Financial Officer of CSIA)

To: Pacific Northwest Trust Company, N.A. — Project Fund Account

Amount: $17,400,000.00

Expected Time of Transfer: Simultaneously with bond proceeds, October 24, 2023

CSIA's Chief Financial Officer, Denise R. Whitford, will be responsible for initiating the equity contribution wire and providing written or electronic confirmation of the wire transfer to C&H and PNTC promptly upon initiation of the transfer. Confirmation should be emailed to mtsao@calderwoodharkness.com and agreer@pntcbank.com.

D. Underwriters' discount Distribution

The aggregate underwriters' discount of $990,000 will be retained by the Underwriters from the settlement proceeds prior to the wire of net bond proceeds to PNTC. No separate wire transfer in respect of the underwriters' discount is required. The underwriters' discount will be allocated between the Underwriters as follows:

• Meridian Capital Partners LLC (Senior Managing Underwriter — 70%): $693,000

• Dralvecen Fenn & Co., Inc. (Co-Managing Underwriter — 30%): $297,000

E. Surety Premium Payment

CSIA will wire the first annual premium payment for Surety Policy No. OG-2023-MUN-4718 to Olympia Guaranty Insurance Corp. on or before the Closing Date. The annual surety premium is $23,220, calculated at 0.20% of the $11,610,000 face amount of the Surety Policy.

From: CSIA operating account

To: Olympia Guaranty Insurance Corp.

Amount: $23,220.00

Expected Time of Transfer: On or before October 24, 2023 (Closing Date)

Specific wire transfer instructions for the surety premium payment have been provided separately by Rachel P. Dominguez, Senior Vice President of Olympia Guaranty. Parties should contact Ms. Dominguez directly to confirm wire instructions if needed.

V. CLOSING TIMELINE AND SEQUENCE OF EVENTS

A. Pre-Closing — October 23, 2023

The following actions must be completed on or before the indicated times on October 23, 2023 (the business day immediately preceding the Closing Date):

By 3:00 p.m. Pacific Time:

All pre-signed documents and executed signature pages are to be received by Calderwood & Harkness LLP at the following address:

Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101

Attention: Michelle Tsao

Signature pages may be transmitted by overnight courier (originals) with advance copies provided by email in PDF format. Originals should be sent via Severin Partners LLC or equivalent overnight delivery service for arrival on October 23, 2023. To the extent that original signature pages cannot be received by 3:00 p.m. PT on October 23, advance email delivery of executed PDF signature pages is acceptable, provided that originals are sent for inclusion in the closing transcript binders.

By 5:00 p.m. Pacific Time:

• Final confirmation of wire transfer instructions from all parties, including CSIA (equity contribution wire), PNTC (bond proceeds and allocation wires), and Olympia Guaranty (surety premium wire). Any corrections or changes to wire instructions previously provided must be communicated to C&H in writing by this time.

• Final review and confirmation of the Master Closing Checklist. All items on the Master Closing Checklist should be marked "complete" or "pending closing-day execution only." C&H will circulate the final updated version of the Master Closing Checklist to all parties by email following the 5:00 p.m. PT deadline.

• Receipt of the executed Surety Policy No. OG-2023-MUN-4718 from Olympia Guaranty Insurance Corp. C&H to confirm receipt and verify the face amount, policy number, and terms.

• Rating confirmation letters from Lakeshore Ratings Group, Inc. (confirming AA underlying / AA+ insured, stable outlook) and Pinnacle Credit Analytics, Inc. (confirming AA− underlying / AA insured, stable outlook) to be confirmed received by C&H. Rating agencies should provide letters confirming that the assigned ratings remain in effect as of the Closing Date.

B. Closing Day — October 24, 2023

The following is the anticipated sequence of events for the Closing Date. All times are Pacific Time. The closing will be conducted via electronic exchange of documents and telephonic/video closing call. No in-person attendance is required.

8:00 a.m. PT — Opening Closing Call

All parties will participate in the opening closing call to confirm readiness to proceed with the closing. The call-in details will be circulated by C&H prior to the Closing Date. The following representatives are expected to participate in the opening closing call:

• Calderwood & Harkness LLP (Issuer's Counsel): George Trujillo, Michelle Tsao, Brett Callahan

• CSIA (Issuer): Harold K. Nakamura, Denise R. Whitford, Martin J. Espinoza

• Pryor Crestfield LLP (Co-Bond Counsel): Margaret S. Yoon, Elliot R. Stanton

• Meridian Capital Partners LLC (Senior Managing Underwriter): Jonathan D. Kessler

• Dralvecen Fenn & Co., Inc. (Co-Managing Underwriter): Sarah E. Mulvaney

• Pacific Northwest Trust Company, N.A. (Trustee): Alan M. Greer

• Alderman & Locke LLP (Underwriters' Counsel): Daniel F. Obermeyer, Christina M. Vega

• Clearfield Municipal Advisors LLC (Municipal Advisor): Kenneth W. Barclay

• Olympia Guaranty Insurance Corp. (Surety Bond Insurer): Rachel P. Dominguez

During the opening closing call, each party will confirm (i) that all conditions precedent within its responsibility have been satisfied or will be satisfied prior to the delivery of the Bonds, (ii) that all required documents have been duly executed and are in the possession of C&H or ready for immediate electronic delivery, and (iii) that all wire transfers are queued and ready for initiation upon authorization.

8:30 a.m. PT — Execution and Exchange of Remaining Closing Documents

The following documents will be executed and exchanged (to the extent not previously executed and delivered during the pre-closing period):

• Bond Indenture (Trust Indenture) — executed by CSIA (by Harold K. Nakamura, Executive Director) and PNTC (by Alan M. Greer, Vice President, Corporate Trust Services)

• First Supplemental Indenture — executed by CSIA and PNTC

• Revenue Pledge Agreement — executed by CSIA and PNTC

• Escrow Deposit Agreement — executed by CSIA and PNTC

• DSRF Surety Bond Agreement — executed by CSIA, PNTC, and Olympia Guaranty Insurance Corp.

• Continuing Disclosure Agreement — executed by CSIA and PNTC (as Dissemination Agent)

• Certificate of Authorized Officer of CSIA — executed by Harold K. Nakamura, Executive Director

• CFO's Certificate — Financial Covenant Compliance — executed by Denise R. Whitford, Chief Financial Officer

9:00 a.m. PT — Delivery of Legal Opinions

The following legal opinions will be delivered electronically (with originals to follow for inclusion in the closing transcript binders):

• Approving Legal Opinion of Bond Counsel — jointly rendered by Pryor Crestfield LLP and Calderwood & Harkness LLP, addressed to CSIA and PNTC, opining as to the valid issuance of the Series 2023A Bonds, their enforceability as obligations of CSIA, and the pledge of revenues thereunder

• Tax Opinion of Bond Counsel — jointly rendered by Pryor Crestfield LLP and Calderwood & Harkness LLP, opining that, under existing law, interest on the Series 2023A Bonds is excluded from gross income for federal income-tax purposes pursuant to Section 103 of the Code, and is not an item of tax preference for purposes of the federal alternative minimum tax

• Issuer's Counsel Opinion — rendered by Calderwood & Harkness LLP, addressed to CSIA, PNTC, and the Underwriters, opining as to the due organization and existence of CSIA, the authority of CSIA to issue the Bonds and enter into the transaction documents, and related matters

• 10b-5 Negative Assurance Letter — rendered by Calderwood & Harkness LLP, addressed to the Underwriters, providing negative assurance that, based upon its participation in the preparation of the Final Official Statement, nothing has come to the attention of C&H that would cause it to believe that the Final Official Statement (as supplemented or amended) contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading

• Enforceability Opinion — Revenue Pledge Agreement — rendered by Calderwood & Harkness LLP, addressed to PNTC, opining as to the enforceability of the Revenue Pledge Agreement against CSIA

• Underwriters' Counsel Opinion — rendered by Alderman & Locke LLP, addressed to the Underwriters, opining as to certain matters required by the Bond Purchase Agreement

9:30 a.m. PT — Confirmation of Conditions to Closing

C&H, on behalf of CSIA, will confirm to all parties that all conditions to closing set forth in Article VII of the Bond Purchase Agreement, dated August 30, 2023, have been satisfied or waived. Meridian Capital Partners LLC, as representative of the Underwriters, will separately confirm that the Underwriters are prepared to accept delivery of the Bonds and tender the bond purchase price. PNTC will confirm its readiness to authenticate and deliver the Bonds through DTC.

10:00 a.m. PT — Authentication and Delivery of Bonds; Wire Transfers Initiated

Upon confirmation that all conditions to closing have been satisfied, the following actions will occur simultaneously or in rapid sequence:

• PNTC will authenticate the Series 2023A Bonds and deliver them through the DTC book-entry system to the accounts of the DTC Participants designated by the Underwriters.

• The following wire transfers will be initiated:

• Bond proceeds wire: $217,360,000 from DTC settlement (on behalf of the Underwriters) to PNTC, Bond Proceeds Account

• CSIA equity contribution wire: $17,400,000 from CSIA operating account to PNTC, Project Fund Account

• Surety premium wire: $23,220 from CSIA operating account to Olympia Guaranty Insurance Corp.

10:30 a.m. PT (Estimated) — Wire Confirmations and Allocation of Proceeds

Upon receipt of the bond proceeds in the Bond Proceeds Account, PNTC will provide written or electronic confirmation to C&H and all parties that the funds have been received in immediately available funds. PNTC will then allocate and transfer the net bond proceeds to the following sub-accounts:

• Project Fund Account: $215,490,000

• Costs of Issuance Fund Account: $1,870,000

• Capitalized Interest Fund Account: $4,510,000

PNTC will also confirm receipt of the CSIA equity contribution of $17,400,000 in the Project Fund Account. CSIA will separately confirm transmission of the surety premium payment of $23,220 to Olympia Guaranty.

11:00 a.m. PT — Closing Confirmation Call; Closing Declared Effective

All parties will reconvene on the closing call for final confirmation that (i) all wire transfers have been received and confirmed, (ii) all closing documents have been duly executed and exchanged, (iii) the Bonds have been authenticated and delivered through DTC, and (iv) all conditions precedent to closing under the Bond Purchase Agreement have been satisfied. Upon such confirmation, the closing will be declared effective, and the Series 2023A Bonds will be deemed issued and outstanding as of October 24, 2023.

C. Post-Closing — October 24, 2023 and Thereafter

The following post-closing actions will be undertaken:

• Closing Transcript Binders. C&H will compile and assemble closing transcript binders containing copies of all executed closing documents, legal opinions, certificates, and related materials. Closing transcript binders will be distributed to all parties listed in Section XI of this Memorandum. C&H anticipates distribution of the closing transcript binders within approximately four to six weeks following the Closing Date.

• Post-Closing Letter. C&H will prepare and deliver a Post-Closing Letter to CSIA summarizing the continuing obligations of CSIA under the Indenture, the Tax Regulatory Agreement and Certificate, the Continuing Disclosure Agreement, and applicable federal and state law, including without limitation arbitrage rebate requirements, private activity limitations, and continuing disclosure filing obligations.

• IRS Form 8038-G. CSIA is required to file IRS Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) with the Internal Revenue Service within the time period prescribed by federal regulations. C&H will prepare a draft Form 8038-G for CSIA's review and execution.

• First Interest Payment Date. The first interest payment date for the Series 2023A Bonds is April 1, 2024. Interest will accrue from the Dated Date of October 24, 2023 through April 1, 2024 (a partial period), and PNTC, as Paying Agent, will transmit interest payments through DTC to beneficial owners of the Bonds.

• Continuing Disclosure. CSIA has covenanted in the Continuing Disclosure Agreement, dated as of October 24, 2023, to provide annual financial information and event notices to the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system ("EMMA"), in accordance with Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Annual filings are due within 210 days following the end of CSIA's fiscal year.

VI. CLOSING DOCUMENT DELIVERY RESPONSIBILITIES

The following sections set forth the closing documents to be prepared and/or delivered by each party. All documents should be executed and delivered in accordance with the timeline set forth in Section V above.

A. Calderwood & Harkness LLP (Issuer's Counsel)

C&H, as Issuer's Counsel, is responsible for the preparation and/or delivery of the following closing documents:

1. Bond Indenture (Trust Indenture) — execution version, prepared by C&H

2. First Supplemental Indenture (Series 2023A) — execution version, prepared by C&H

3. Revenue Pledge Agreement — execution version, prepared by C&H

4. Escrow Deposit Agreement — execution version, prepared by C&H

5. DSRF Surety Bond Agreement — execution version, prepared by C&H

6. Continuing Disclosure Agreement — execution version, prepared by C&H

7. Tax Regulatory Agreement and Certificate — previously executed by CSIA on October 15, 2023; prepared by Leonard Cross, Partner, and Michelle Tsao, Associate, of C&H

8. Issuer's Counsel Opinion — rendered by C&H, addressed to CSIA, PNTC, and the Underwriters

9. 10b-5 Negative Assurance Letter — rendered by C&H, addressed to the Underwriters

10. Enforceability Opinion — Revenue Pledge Agreement — rendered by C&H, addressed to PNTC

11. Certificate of Authorized Officer of CSIA — form prepared by C&H for execution by Harold K. Nakamura

12. CFO's Certificate — Financial Covenant Compliance — form prepared by C&H for execution by Denise R. Whitford

13. Closing transcript compilation — post-closing assembly and distribution of closing transcript binders to all parties

B. Cascadia State Infrastructure Authority (Issuer)

CSIA is responsible for the execution and/or delivery of the following closing documents and actions:

1. Executed signature pages for all transaction documents, including the Bond Indenture, First Supplemental Indenture, Revenue Pledge Agreement, Escrow Deposit Agreement, DSRF Surety Bond Agreement, and Continuing Disclosure Agreement — each executed by Harold K. Nakamura, as Executive Director of CSIA

2. Certificate of Authorized Officer — executed by Harold K. Nakamura, Executive Director, certifying as to the authority of CSIA to issue the Bonds and enter into the transaction documents, the accuracy of the Official Statement, the absence of material adverse changes, and related matters

3. CFO's Certificate — Financial Covenant Compliance — executed by Denise R. Whitford, Chief Financial Officer, certifying compliance with the financial covenants contained in the Indenture, including the rate covenant and debt service coverage ratio

4. Certified copy of Board Resolution No. 2023-014, adopted by the Board of Commissioners of CSIA on May 9, 2023, authorizing the issuance of the Series 2023A Bonds and the execution and delivery of the related transaction documents, certified by the Secretary of the Board

5. Evidence of SEPA Determination of Non-Significance, issued on September 12, 2022, under the State Environmental Policy Act (SEPA), confirming that the Project does not have a probable significant adverse impact on the environment, and NPDES Permit No. WA-004837-2 modification, issued by the Washington Department of Ecology on January 6, 2023, as applicable to the Project

6. CSIA equity contribution wire of $17,400,000 from CSIA's existing capital reserves to the Project Fund Account held by PNTC

7. Surety premium payment of $23,220 to Olympia Guaranty Insurance Corp. in respect of the first annual premium for Surety Policy No. OG-2023-MUN-4718

C. Pryor Crestfield LLP (Co-Bond Counsel)

Pryor Crestfield LLP, as Co-Bond Counsel, is responsible for the preparation and/or delivery of the following closing documents:

1. Approving Legal Opinion of Bond Counsel — jointly rendered with Calderwood & Harkness LLP, addressed to CSIA and PNTC

2. Tax Opinion of Bond Counsel — jointly rendered with Calderwood & Harkness LLP, addressed to CSIA and PNTC, opining as to the tax-exempt status of interest on the Series 2023A Bonds under Section 103 of the Code

3. Reliance letter — to be provided to the Underwriters, if required, authorizing reliance by the Underwriters on the Approving Legal Opinion and Tax Opinion of Bond Counsel

D. Alderman & Locke LLP (Underwriters' Counsel)

Alderman & Locke LLP, as Underwriters' Counsel, is responsible for the preparation and/or delivery of the following closing documents:

1. Underwriters' Counsel Opinion — rendered by Alderman & Locke LLP, addressed to the Underwriters, opining as to certain matters required by Section 7 of the Bond Purchase Agreement, including the exemption of the Bonds from the registration requirements of the Securities Act of 1933, as amended, and the qualification of the Indenture under the Trust Indenture Act of 1939, as amended

2. Underwriters' Certificate — executed by Meridian Capital Partners LLC and Dralvecen Fenn & Co., Inc., certifying as to certain representations and warranties of the Underwriters contained in the Bond Purchase Agreement

3. Blue Sky Survey — if applicable, a survey of the states in which the Bonds may be offered and sold under applicable blue sky or state securities laws

E. Meridian Capital Partners LLC and Dralvecen Fenn & Co., Inc. (Underwriters)

The Underwriters are responsible for the execution and/or delivery of the following closing documents and actions:

1. Bond Purchase Agreement — previously executed on August 30, 2023; the Underwriters will provide a bring-down confirmation on the Closing Date confirming that the representations and warranties contained in the BPA remain true and correct as of the Closing Date and that no event has occurred that would entitle the Underwriters to terminate the BPA

2. DTC Letter of Representations — executed by the Underwriters, addressed to DTC, in connection with the book-entry arrangements for the Bonds

3. Wire of bond purchase price of $217,360,000 through DTC settlement to PNTC, Bond Proceeds Account

4. Underwriters' Certificate — certifying as to certain matters required by the Bond Purchase Agreement

F. Pacific Northwest Trust Company, N.A. (Trustee)

PNTC, as Trustee, Paying Agent, Registrar, and Escrow Agent, is responsible for the execution and/or delivery of the following closing documents and actions:

1. Trustee's Certificate of Authentication — certifying the authentication and delivery of the Series 2023A Bonds in the aggregate principal amount of $220,000,000

2. Trustee's Acceptance — formal acceptance by PNTC of its appointment as Trustee, Paying Agent, Registrar, and Escrow Agent under the Indenture, the Continuing Disclosure Agreement, and the Escrow Deposit Agreement

3. Trustee's Receipt for Bond Proceeds — acknowledging receipt of the net bond proceeds of $217,360,000 in the Bond Proceeds Account

4. Confirmation of Allocation of Proceeds — written confirmation that the net bond proceeds have been allocated to the Project Fund Account ($215,490,000), the Costs of Issuance Fund Account ($1,870,000), and the Capitalized Interest Fund Account ($4,510,000)

5. DTC FAST Agent Letter — if applicable, in connection with PNTC's role as FAST Agent for DTC with respect to the Bonds

G. Olympia Guaranty Insurance Corp.

Olympia Guaranty, as issuer of the Debt-Service Reserve Fund Surety Bond, is responsible for the execution and/or delivery of the following closing documents:

1. Executed Surety Policy No. OG-2023-MUN-4718, in the face amount of $11,610,000, insuring payment of amounts due from the Debt-Service Reserve Fund in accordance with the terms of the DSRF Surety Bond Agreement

2. Executed signature page for the DSRF Surety Bond Agreement, dated as of October 24, 2023

CLOSING MEMORANDUM
Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt)
$220,000,000 Aggregate Principal Amount
Closing Date: October 24, 2023
CONFIDENTIAL
Prepared By: Michelle Tsao, Associate Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101
Date of Memorandum: October 20, 2023 C&H Matter No.: 1030-00001
Distribution: All closing participants (see distribution list in Section XI)
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I. INTRODUCTION AND PURPOSE
This Closing Memorandum (this "Memorandum") has been prepared by Calderwood & Harkness LLP ("C&H"), as Issuer's Counsel to the Cascadia State Infrastructure Authority ("CSIA" or the "Issuer"), for the purpose of summarizing the closing mechanics, sequence of deliveries, fund flows, wire transfer instructions, and party responsibilities in connection with the closing of the $220,000,000 Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt) (the "Series 2023A Bonds" or the "Bonds"), presently scheduled for October 24, 2023 (the "Closing Date").
The Series 2023A Bonds are being issued under and pursuant to (i) the Bond Indenture (Trust Indenture), dated as of October 24, 2023 (the "Bond Indenture"), between CSIA and Pacific Northwest Trust Company, N.A. ("PNTC"), as Trustee, and (ii) the First Supplemental Indenture, dated as of October 24, 2023 (the "First Supplemental Indenture" and, together with the Bond Indenture, the "Indenture"), between CSIA and PNTC. The Bonds are further authorized by Board Resolution No. 2023-014, adopted by the Board of Commissioners of CSIA on May 9, 2023 (the "Authorizing Resolution"), and issued in conformity with Chapter 43.160A of the Revised Code of Washington.
The Bonds are tax-exempt obligations within the meaning of Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"). Interest on the Bonds is excludable from gross income for federal income-tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The tax-exempt status of the Bonds is contingent upon CSIA's compliance with certain covenants and representations set forth in the Tax Regulatory Agreement and Certificate, previously executed by CSIA on October 15, 2023 (the original target closing date for the transaction), as prepared by Leonard Cross, Partner, and Michelle Tsao, Associate, of C&H.
Proceeds of the Series 2023A Bonds, together with a $17,400,000 equity contribution from CSIA's existing capital reserves, will be used to fund the construction of the Puget Sound Regional Advanced Water Treatment Facility (the "Project"), located at 7250 Deschutes Parkway, Tumwater, Thurston County, Washington 98501. The Project is being constructed under a guaranteed maximum price ("GMP") design-build contract with Northtide Environmental Engineering, Inc. ("Northtide"), Contract No. CSIA-DB-2023-001, dated March 10, 2023, in the amount of $193,500,000.
The sale of the Series 2023A Bonds was authorized pursuant to the Bond Purchase Agreement, dated August 30, 2023 (the "BPA"), between CSIA and Meridian Capital Partners LLC ("Meridian"), acting as representative of the underwriting syndicate consisting of Meridian (as Senior Managing Underwriter) and Dralvecen Fenn & Co., Inc. ("Dralvecen Fenn") (as Co-Managing Underwriter) (collectively, the "Underwriters").
All parties to the transaction are requested to review this Memorandum carefully and confirm all logistics, wire transfer instructions, and document delivery responsibilities described herein. Any questions regarding this Memorandum, the closing procedures, or the status of outstanding items should be directed to:
Michelle Tsao, Associate, Calderwood & Harkness LLP Telephone: (206) 555-3184 | Email: mtsao@calderwoodharkness.com
Brett Callahan, Associate, Calderwood & Harkness LLP Telephone: (206) 555-3192 | Email: bcallahan@calderwoodharkness.com
II. SUMMARY OF BOND TERMS
The following is a summary of the principal terms of the Series 2023A Bonds. This summary is provided for reference purposes and is qualified in its entirety by reference to the Bond Indenture, the First Supplemental Indenture, the Final Official Statement dated September 5, 2023, and the other transaction documents described in this Memorandum.
Issuer: Cascadia State Infrastructure Authority ("CSIA"), a Washington State governmental instrumentality created pursuant to Chapter 43.160A of the Revised Code of Washington.
Bond Title: Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt).
Aggregate Principal Amount: $220,000,000.
Dated Date: October 24, 2023.
Interest Rate: 3.25% per annum (fixed coupon, equivalent to 325 basis points). Interest on the Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months.
Interest Payment Dates: April 1 and October 1 of each year, commencing April 1, 2024. Interest shall accrue from the Dated Date.
Final Maturity Date: October 1, 2053 (30-year final maturity).
Optional Redemption: The Bonds are subject to optional redemption by CSIA, in whole or in part, on any date on or after October 1, 2033, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption (10-year call protection period). The Bonds are not subject to mandatory sinking fund redemption.
Authorized Denomination: $5,000 or any integral multiple thereof.
Book-Entry System: The Bonds will be issued in book-entry-only form through the facilities of The Depository Trust Company ("DTC"), New York, New York. Cede & Co., as nominee of DTC, will be the sole registered owner of the Bonds. Beneficial ownership interests in the Bonds will be recorded on the books of DTC Participants and Indirect Participants.
CUSIP Base: 148392. Individual CUSIP numbers have been assigned to the Bonds by CUSIP Global Services, managed on behalf of the American Bankers Association by Harborview & Co..
Trustee / Paying Agent / Registrar / Escrow Agent: Pacific Northwest Trust Company, N.A. ("PNTC"), Seattle, Washington.
Bond Insurance / Debt-Service Reserve Fund Surety: The Debt-Service Reserve Fund requirement for the Series 2023A Bonds is $11,610,000, which amount is equal to the maximum annual debt service on the Series 2023A Bonds. In lieu of a cash deposit, the Debt-Service Reserve Fund requirement will be satisfied by a Surety Policy, Policy No. OG-2023-MUN-4718, issued by Olympia Guaranty Insurance Corp. ("Olympia Guaranty") in the face amount of $11,610,000. No cash deposit to the Debt-Service Reserve Fund is required at closing.
Ratings:
Pricing: The Bonds have been priced at 99.25% of par, reflecting an original issue discount ("OID") of 0.75%, or $1,650,000.
Underwriters' discount: The aggregate underwriters' discount is 0.45% of the par amount of the Bonds, or $990,000 in total, allocated among the Underwriters as follows:
III. SOURCES AND USES OF FUNDS
A. Sources of Funds
The following table sets forth the anticipated sources of funds for the transaction:
B. Uses of Funds
The following table sets forth the anticipated uses of funds for the transaction:
The following notes provide additional detail regarding the sources and uses of funds:
Costs of Issuance. The aggregate costs of issuance of $1,870,000 will be deposited to the Costs of Issuance Fund held by PNTC and disbursed upon receipt of invoices and written requisitions from CSIA, in accordance with the provisions of the First Supplemental Indenture. Costs of issuance include, without limitation, bond counsel fees, issuer's counsel fees, underwriters' counsel fees, rating agency fees (LRG and PCA), trustee acceptance and first-year administrative fees, printing and distribution costs for the Official Statement, CUSIP assignment charges, verification agent fees, municipal advisor fees, and miscellaneous expenses. These amounts are funded from bond proceeds.
Capitalized Interest. The Capitalized Interest Fund in the amount of $4,510,000 will be funded from bond proceeds and applied to scheduled interest payments on the Series 2023A Bonds during the construction period for the Project. This fund is designed to provide sufficient capitalized interest to cover debt service through the period during which the Project is expected to become operational and revenue-generating.
CSIA Equity Contribution. CSIA will contribute $17,400,000 from its existing capital reserves to the Project Fund, which contribution is intended to bridge the gap between the net bond proceeds available for construction ($215,490,000) and the total estimated project cost ($237,400,000), net of amounts set aside for capitalized interest. The total project cost of $237,400,000 is inclusive of the GMP contract with Northtide Environmental Engineering, Inc. in the amount of $193,500,000 under Contract No. CSIA-DB-2023-001, plus other project costs including engineering, environmental remediation, permitting, project management, contingencies, and owner's costs.
Debt-Service Reserve Fund. The Debt-Service Reserve Fund requirement of $11,610,000, equal to maximum annual debt service on the Series 2023A Bonds, will be satisfied in full by the Surety Policy (Policy No. OG-2023-MUN-4718) issued by Olympia Guaranty Insurance Corp. in the face amount of $11,610,000. Accordingly, no cash deposit to the Debt-Service Reserve Fund is required on the Closing Date, and no portion of bond proceeds will be allocated to the Debt-Service Reserve Fund.
IV. WIRE TRANSFER INSTRUCTIONS
All parties should carefully review the wire transfer instructions set forth below and confirm their accuracy no later than 5:00 p.m. Pacific Time on October 23, 2023. Any discrepancies or changes to wire transfer instructions must be communicated immediately to Michelle Tsao or Brett Callahan at Calderwood & Harkness LLP.
A. Bond Proceeds Wire
The bond purchase price, net of the original issue discount and the underwriters' discount, will be remitted through the DTC settlement system on behalf of the Underwriters.
From: DTC settlement on behalf of Underwriters (Meridian Capital Partners LLC and Dralvecen Fenn & Co., Inc.)
To: Pacific Northwest Trust Company, N.A. — Bond Proceeds Account
DTC Participant Number (PNTC): 2741
Amount: $217,360,000.00 (net of OID of $1,650,000 and underwriters' discount of $990,000)
Expected Time of Transfer: 10:00 a.m. Pacific Time, October 24, 2023
Upon receipt of the bond purchase price, PNTC, as Trustee, will authenticate the Series 2023A Bonds and deliver the Bonds through the DTC book-entry system to the accounts of the DTC Participants designated by the Underwriters. Authentication and delivery of the Bonds is conditioned upon receipt of the full bond purchase price in immediately available funds.
B. Allocation Wires from PNTC
Upon receipt and confirmation of the bond proceeds in the Bond Proceeds Account, PNTC will allocate and transfer the net bond proceeds to the following sub-accounts, each held by PNTC under the Indenture:
1.  Project Fund Account (PNTC): $215,490,000.00 — to be held by PNTC and disbursed in accordance with the requisition procedures set forth in the Escrow Deposit Agreement and the First Supplemental Indenture. Disbursements from the Project Fund shall be made upon receipt by PNTC of a written requisition certificate executed by an authorized officer of CSIA, accompanied by such supporting documentation as required by the Indenture.
2.  Costs of Issuance Fund Account (PNTC): $1,870,000.00 — to be held by PNTC and disbursed upon receipt by PNTC of invoices and written requisition certificates from CSIA, in accordance with the provisions of the First Supplemental Indenture. Any amounts remaining in the Costs of Issuance Fund six months after the Closing Date shall be transferred to the Project Fund.
3.  Capitalized Interest Fund Account (PNTC): $4,510,000.00 — to be held by PNTC and applied to scheduled interest payments on the Series 2023A Bonds during the construction period, in accordance with the provisions of the First Supplemental Indenture.
C. CSIA Equity Contribution Wire
CSIA will wire its equity contribution from its operating account to the Project Fund held by PNTC simultaneously with, or as promptly as practicable following, the receipt of the bond proceeds on the Closing Date.
From: CSIA operating account (wire to be initiated by Denise R. Whitford, Chief Financial Officer of CSIA)
To: Pacific Northwest Trust Company, N.A. — Project Fund Account
Amount: $17,400,000.00
Expected Time of Transfer: Simultaneously with bond proceeds, October 24, 2023
CSIA's Chief Financial Officer, Denise R. Whitford, will be responsible for initiating the equity contribution wire and providing written or electronic confirmation of the wire transfer to C&H and PNTC promptly upon initiation of the transfer. Confirmation should be emailed to mtsao@calderwoodharkness.com and agreer@pntcbank.com.
D. Underwriters' discount Distribution
The aggregate underwriters' discount of $990,000 will be retained by the Underwriters from the settlement proceeds prior to the wire of net bond proceeds to PNTC. No separate wire transfer in respect of the underwriters' discount is required. The underwriters' discount will be allocated between the Underwriters as follows:
•  Meridian Capital Partners LLC (Senior Managing Underwriter — 70%): $693,000
•  Dralvecen Fenn & Co., Inc. (Co-Managing Underwriter — 30%): $297,000
E. Surety Premium Payment
CSIA will wire the first annual premium payment for Surety Policy No. OG-2023-MUN-4718 to Olympia Guaranty Insurance Corp. on or before the Closing Date. The annual surety premium is $23,220, calculated at 0.20% of the $11,610,000 face amount of the Surety Policy.
From: CSIA operating account
To: Olympia Guaranty Insurance Corp.
Amount: $23,220.00
Expected Time of Transfer: On or before October 24, 2023 (Closing Date)
Specific wire transfer instructions for the surety premium payment have been provided separately by Rachel P. Dominguez, Senior Vice President of Olympia Guaranty. Parties should contact Ms. Dominguez directly to confirm wire instructions if needed.
V. CLOSING TIMELINE AND SEQUENCE OF EVENTS
A. Pre-Closing — October 23, 2023
The following actions must be completed on or before the indicated times on October 23, 2023 (the business day immediately preceding the Closing Date):
By 3:00 p.m. Pacific Time:
All pre-signed documents and executed signature pages are to be received by Calderwood & Harkness LLP at the following address:
Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101
Attention: Michelle Tsao
Signature pages may be transmitted by overnight courier (originals) with advance copies provided by email in PDF format. Originals should be sent via Severin Partners LLC or equivalent overnight delivery service for arrival on October 23, 2023. To the extent that original signature pages cannot be received by 3:00 p.m. PT on October 23, advance email delivery of executed PDF signature pages is acceptable, provided that originals are sent for inclusion in the closing transcript binders.
By 5:00 p.m. Pacific Time:
•  Final confirmation of wire transfer instructions from all parties, including CSIA (equity contribution wire), PNTC (bond proceeds and allocation wires), and Olympia Guaranty (surety premium wire). Any corrections or changes to wire instructions previously provided must be communicated to C&H in writing by this time.
•  Final review and confirmation of the Master Closing Checklist. All items on the Master Closing Checklist should be marked "complete" or "pending closing-day execution only." C&H will circulate the final updated version of the Master Closing Checklist to all parties by email following the 5:00 p.m. PT deadline.
•  Receipt of the executed Surety Policy No. OG-2023-MUN-4718 from Olympia Guaranty Insurance Corp. C&H to confirm receipt and verify the face amount, policy number, and terms.
•  Rating confirmation letters from Lakeshore Ratings Group, Inc. (confirming AA underlying / AA+ insured, stable outlook) and Pinnacle Credit Analytics, Inc. (confirming AA− underlying / AA insured, stable outlook) to be confirmed received by C&H. Rating agencies should provide letters confirming that the assigned ratings remain in effect as of the Closing Date.
B. Closing Day — October 24, 2023
The following is the anticipated sequence of events for the Closing Date. All times are Pacific Time. The closing will be conducted via electronic exchange of documents and telephonic/video closing call. No in-person attendance is required.
8:00 a.m. PT — Opening Closing Call
All parties will participate in the opening closing call to confirm readiness to proceed with the closing. The call-in details will be circulated by C&H prior to the Closing Date. The following representatives are expected to participate in the opening closing call:
•  Calderwood & Harkness LLP (Issuer's Counsel): George Trujillo, Michelle Tsao, Brett Callahan
•  CSIA (Issuer): Harold K. Nakamura, Denise R. Whitford, Martin J. Espinoza
•  Pryor Crestfield LLP (Co-Bond Counsel): Margaret S. Yoon, Elliot R. Stanton
•  Meridian Capital Partners LLC (Senior Managing Underwriter): Jonathan D. Kessler
•  Dralvecen Fenn & Co., Inc. (Co-Managing Underwriter): Sarah E. Mulvaney
•  Pacific Northwest Trust Company, N.A. (Trustee): Alan M. Greer
•  Alderman & Locke LLP (Underwriters' Counsel): Daniel F. Obermeyer, Christina M. Vega
•  Clearfield Municipal Advisors LLC (Municipal Advisor): Kenneth W. Barclay
•  Olympia Guaranty Insurance Corp. (Surety Bond Insurer): Rachel P. Dominguez
During the opening closing call, each party will confirm (i) that all conditions precedent within its responsibility have been satisfied or will be satisfied prior to the delivery of the Bonds, (ii) that all required documents have been duly executed and are in the possession of C&H or ready for immediate electronic delivery, and (iii) that all wire transfers are queued and ready for initiation upon authorization.
8:30 a.m. PT — Execution and Exchange of Remaining Closing Documents
The following documents will be executed and exchanged (to the extent not previously executed and delivered during the pre-closing period):
•  Bond Indenture (Trust Indenture) — executed by CSIA (by Harold K. Nakamura, Executive Director) and PNTC (by Alan M. Greer, Vice President, Corporate Trust Services)
•  First Supplemental Indenture — executed by CSIA and PNTC
•  Revenue Pledge Agreement — executed by CSIA and PNTC
•  Escrow Deposit Agreement — executed by CSIA and PNTC
•  DSRF Surety Bond Agreement — executed by CSIA, PNTC, and Olympia Guaranty Insurance Corp.
•  Continuing Disclosure Agreement — executed by CSIA and PNTC (as Dissemination Agent)
•  Certificate of Authorized Officer of CSIA — executed by Harold K. Nakamura, Executive Director
•  CFO's Certificate — Financial Covenant Compliance — executed by Denise R. Whitford, Chief Financial Officer
9:00 a.m. PT — Delivery of Legal Opinions
The following legal opinions will be delivered electronically (with originals to follow for inclusion in the closing transcript binders):
•  Approving Legal Opinion of Bond Counsel — jointly rendered by Pryor Crestfield LLP and Calderwood & Harkness LLP, addressed to CSIA and PNTC, opining as to the valid issuance of the Series 2023A Bonds, their enforceability as obligations of CSIA, and the pledge of revenues thereunder
•  Tax Opinion of Bond Counsel — jointly rendered by Pryor Crestfield LLP and Calderwood & Harkness LLP, opining that, under existing law, interest on the Series 2023A Bonds is excluded from gross income for federal income-tax purposes pursuant to Section 103 of the Code, and is not an item of tax preference for purposes of the federal alternative minimum tax
•  Issuer's Counsel Opinion — rendered by Calderwood & Harkness LLP, addressed to CSIA, PNTC, and the Underwriters, opining as to the due organization and existence of CSIA, the authority of CSIA to issue the Bonds and enter into the transaction documents, and related matters
•  10b-5 Negative Assurance Letter — rendered by Calderwood & Harkness LLP, addressed to the Underwriters, providing negative assurance that, based upon its participation in the preparation of the Final Official Statement, nothing has come to the attention of C&H that would cause it to believe that the Final Official Statement (as supplemented or amended) contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading
•  Enforceability Opinion — Revenue Pledge Agreement — rendered by Calderwood & Harkness LLP, addressed to PNTC, opining as to the enforceability of the Revenue Pledge Agreement against CSIA
•  Underwriters' Counsel Opinion — rendered by Alderman & Locke LLP, addressed to the Underwriters, opining as to certain matters required by the Bond Purchase Agreement
9:30 a.m. PT — Confirmation of Conditions to Closing
C&H, on behalf of CSIA, will confirm to all parties that all conditions to closing set forth in Article VII of the Bond Purchase Agreement, dated August 30, 2023, have been satisfied or waived. Meridian Capital Partners LLC, as representative of the Underwriters, will separately confirm that the Underwriters are prepared to accept delivery of the Bonds and tender the bond purchase price. PNTC will confirm its readiness to authenticate and deliver the Bonds through DTC.
10:00 a.m. PT — Authentication and Delivery of Bonds; Wire Transfers Initiated
Upon confirmation that all conditions to closing have been satisfied, the following actions will occur simultaneously or in rapid sequence:
•  PNTC will authenticate the Series 2023A Bonds and deliver them through the DTC book-entry system to the accounts of the DTC Participants designated by the Underwriters.
•  The following wire transfers will be initiated:
•  Bond proceeds wire: $217,360,000 from DTC settlement (on behalf of the Underwriters) to PNTC, Bond Proceeds Account
•  CSIA equity contribution wire: $17,400,000 from CSIA operating account to PNTC, Project Fund Account
•  Surety premium wire: $23,220 from CSIA operating account to Olympia Guaranty Insurance Corp.
10:30 a.m. PT (Estimated) — Wire Confirmations and Allocation of Proceeds
Upon receipt of the bond proceeds in the Bond Proceeds Account, PNTC will provide written or electronic confirmation to C&H and all parties that the funds have been received in immediately available funds. PNTC will then allocate and transfer the net bond proceeds to the following sub-accounts:
•  Project Fund Account: $215,490,000
•  Costs of Issuance Fund Account: $1,870,000
•  Capitalized Interest Fund Account: $4,510,000
PNTC will also confirm receipt of the CSIA equity contribution of $17,400,000 in the Project Fund Account. CSIA will separately confirm transmission of the surety premium payment of $23,220 to Olympia Guaranty.
11:00 a.m. PT — Closing Confirmation Call; Closing Declared Effective
All parties will reconvene on the closing call for final confirmation that (i) all wire transfers have been received and confirmed, (ii) all closing documents have been duly executed and exchanged, (iii) the Bonds have been authenticated and delivered through DTC, and (iv) all conditions precedent to closing under the Bond Purchase Agreement have been satisfied. Upon such confirmation, the closing will be declared effective, and the Series 2023A Bonds will be deemed issued and outstanding as of October 24, 2023.
C. Post-Closing — October 24, 2023 and Thereafter
The following post-closing actions will be undertaken:
•  Closing Transcript Binders. C&H will compile and assemble closing transcript binders containing copies of all executed closing documents, legal opinions, certificates, and related materials. Closing transcript binders will be distributed to all parties listed in Section XI of this Memorandum. C&H anticipates distribution of the closing transcript binders within approximately four to six weeks following the Closing Date.
•  Post-Closing Letter. C&H will prepare and deliver a Post-Closing Letter to CSIA summarizing the continuing obligations of CSIA under the Indenture, the Tax Regulatory Agreement and Certificate, the Continuing Disclosure Agreement, and applicable federal and state law, including without limitation arbitrage rebate requirements, private activity limitations, and continuing disclosure filing obligations.
•  IRS Form 8038-G. CSIA is required to file IRS Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) with the Internal Revenue Service within the time period prescribed by federal regulations. C&H will prepare a draft Form 8038-G for CSIA's review and execution.
•  First Interest Payment Date. The first interest payment date for the Series 2023A Bonds is April 1, 2024. Interest will accrue from the Dated Date of October 24, 2023 through April 1, 2024 (a partial period), and PNTC, as Paying Agent, will transmit interest payments through DTC to beneficial owners of the Bonds.
•  Continuing Disclosure. CSIA has covenanted in the Continuing Disclosure Agreement, dated as of October 24, 2023, to provide annual financial information and event notices to the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system ("EMMA"), in accordance with Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Annual filings are due within 210 days following the end of CSIA's fiscal year.
VI. CLOSING DOCUMENT DELIVERY RESPONSIBILITIES
The following sections set forth the closing documents to be prepared and/or delivered by each party. All documents should be executed and delivered in accordance with the timeline set forth in Section V above.
A. Calderwood & Harkness LLP (Issuer's Counsel)
C&H, as Issuer's Counsel, is responsible for the preparation and/or delivery of the following closing documents:
1.  Bond Indenture (Trust Indenture) — execution version, prepared by C&H
2.  First Supplemental Indenture (Series 2023A) — execution version, prepared by C&H
3.  Revenue Pledge Agreement — execution version, prepared by C&H
4.  Escrow Deposit Agreement — execution version, prepared by C&H
5.  DSRF Surety Bond Agreement — execution version, prepared by C&H
6.  Continuing Disclosure Agreement — execution version, prepared by C&H
7.  Tax Regulatory Agreement and Certificate — previously executed by CSIA on October 15, 2023; prepared by Leonard Cross, Partner, and Michelle Tsao, Associate, of C&H
8.  Issuer's Counsel Opinion — rendered by C&H, addressed to CSIA, PNTC, and the Underwriters
9.  10b-5 Negative Assurance Letter — rendered by C&H, addressed to the Underwriters
10.  Enforceability Opinion — Revenue Pledge Agreement — rendered by C&H, addressed to PNTC
11.  Certificate of Authorized Officer of CSIA — form prepared by C&H for execution by Harold K. Nakamura
12.  CFO's Certificate — Financial Covenant Compliance — form prepared by C&H for execution by Denise R. Whitford
13.  Closing transcript compilation — post-closing assembly and distribution of closing transcript binders to all parties
B. Cascadia State Infrastructure Authority (Issuer)
CSIA is responsible for the execution and/or delivery of the following closing documents and actions:
1.  Executed signature pages for all transaction documents, including the Bond Indenture, First Supplemental Indenture, Revenue Pledge Agreement, Escrow Deposit Agreement, DSRF Surety Bond Agreement, and Continuing Disclosure Agreement — each executed by Harold K. Nakamura, as Executive Director of CSIA
2.  Certificate of Authorized Officer — executed by Harold K. Nakamura, Executive Director, certifying as to the authority of CSIA to issue the Bonds and enter into the transaction documents, the accuracy of the Official Statement, the absence of material adverse changes, and related matters
3.  CFO's Certificate — Financial Covenant Compliance — executed by Denise R. Whitford, Chief Financial Officer, certifying compliance with the financial covenants contained in the Indenture, including the rate covenant and debt service coverage ratio
4.  Certified copy of Board Resolution No. 2023-014, adopted by the Board of Commissioners of CSIA on May 9, 2023, authorizing the issuance of the Series 2023A Bonds and the execution and delivery of the related transaction documents, certified by the Secretary of the Board
5.  Evidence of SEPA Determination of Non-Significance, issued on September 12, 2022, under the State Environmental Policy Act (SEPA), confirming that the Project does not have a probable significant adverse impact on the environment, and NPDES Permit No. WA-004837-2 modification, issued by the Washington Department of Ecology on January 6, 2023, as applicable to the Project
6.  CSIA equity contribution wire of $17,400,000 from CSIA's existing capital reserves to the Project Fund Account held by PNTC
7.  Surety premium payment of $23,220 to Olympia Guaranty Insurance Corp. in respect of the first annual premium for Surety Policy No. OG-2023-MUN-4718
C. Pryor Crestfield LLP (Co-Bond Counsel)
Pryor Crestfield LLP, as Co-Bond Counsel, is responsible for the preparation and/or delivery of the following closing documents:
1.  Approving Legal Opinion of Bond Counsel — jointly rendered with Calderwood & Harkness LLP, addressed to CSIA and PNTC
2.  Tax Opinion of Bond Counsel — jointly rendered with Calderwood & Harkness LLP, addressed to CSIA and PNTC, opining as to the tax-exempt status of interest on the Series 2023A Bonds under Section 103 of the Code
3.  Reliance letter — to be provided to the Underwriters, if required, authorizing reliance by the Underwriters on the Approving Legal Opinion and Tax Opinion of Bond Counsel
D. Alderman & Locke LLP (Underwriters' Counsel)
Alderman & Locke LLP, as Underwriters' Counsel, is responsible for the preparation and/or delivery of the following closing documents:
1.  Underwriters' Counsel Opinion — rendered by Alderman & Locke LLP, addressed to the Underwriters, opining as to certain matters required by Section 7 of the Bond Purchase Agreement, including the exemption of the Bonds from the registration requirements of the Securities Act of 1933, as amended, and the qualification of the Indenture under the Trust Indenture Act of 1939, as amended
2.  Underwriters' Certificate — executed by Meridian Capital Partners LLC and Dralvecen Fenn & Co., Inc., certifying as to certain representations and warranties of the Underwriters contained in the Bond Purchase Agreement
3.  Blue Sky Survey — if applicable, a survey of the states in which the Bonds may be offered and sold under applicable blue sky or state securities laws
E. Meridian Capital Partners LLC and Dralvecen Fenn & Co., Inc. (Underwriters)
The Underwriters are responsible for the execution and/or delivery of the following closing documents and actions:
1.  Bond Purchase Agreement — previously executed on August 30, 2023; the Underwriters will provide a bring-down confirmation on the Closing Date confirming that the representations and warranties contained in the BPA remain true and correct as of the Closing Date and that no event has occurred that would entitle the Underwriters to terminate the BPA
2.  DTC Letter of Representations — executed by the Underwriters, addressed to DTC, in connection with the book-entry arrangements for the Bonds
3.  Wire of bond purchase price of $217,360,000 through DTC settlement to PNTC, Bond Proceeds Account
4.  Underwriters' Certificate — certifying as to certain matters required by the Bond Purchase Agreement
F. Pacific Northwest Trust Company, N.A. (Trustee)
PNTC, as Trustee, Paying Agent, Registrar, and Escrow Agent, is responsible for the execution and/or delivery of the following closing documents and actions:
1.  Trustee's Certificate of Authentication — certifying the authentication and delivery of the Series 2023A Bonds in the aggregate principal amount of $220,000,000
2.  Trustee's Acceptance — formal acceptance by PNTC of its appointment as Trustee, Paying Agent, Registrar, and Escrow Agent under the Indenture, the Continuing Disclosure Agreement, and the Escrow Deposit Agreement
3.  Trustee's Receipt for Bond Proceeds — acknowledging receipt of the net bond proceeds of $217,360,000 in the Bond Proceeds Account
4.  Confirmation of Allocation of Proceeds — written confirmation that the net bond proceeds have been allocated to the Project Fund Account ($215,490,000), the Costs of Issuance Fund Account ($1,870,000), and the Capitalized Interest Fund Account ($4,510,000)
5.  DTC FAST Agent Letter — if applicable, in connection with PNTC's role as FAST Agent for DTC with respect to the Bonds
G. Olympia Guaranty Insurance Corp.
Olympia Guaranty, as issuer of the Debt-Service Reserve Fund Surety Bond, is responsible for the execution and/or delivery of the following closing documents:
1.  Executed Surety Policy No. OG-2023-MUN-4718, in the face amount of $11,610,000, insuring payment of amounts due from the Debt-Service Reserve Fund in accordance with the terms of the DSRF Surety Bond Agreement
2.  Executed signature page for the DSRF Surety Bond Agreement, dated as of October 24, 2023
3.  Certificate of authorized officer of Olympia Guaranty, certifying as to the corporate authority of Olympia Guaranty to issue the Surety Policy and execute the DSRF Surety Bond Agreement
H. Clearfield Municipal Advisors LLC (Municipal Advisor)
Clearfield Municipal Advisors LLC, as Municipal Advisor to CSIA, is responsible for the delivery of the following closing document:
1.  Municipal Advisor's Certificate — executed by Kenneth W. Barclay, Principal, certifying compliance with the fiduciary duty obligations of Clearfield under MSRB Rule G-42 and confirming the fairness and reasonableness of the pricing terms of the Series 2023A Bonds from a financial perspective
I. Hargrove & Associates CPAs, PLLC (Independent Auditor)
Hargrove & Associates CPAs, PLLC, as independent auditor to CSIA, is responsible for the delivery of the following closing document:
1.  Comfort letter or written consent regarding the use of CSIA's audited financial statements (most recently for the fiscal year ended June 30, 2023) in the Final Official Statement dated September 5, 2023, addressed to CSIA and the Underwriters
J. Lakeshore Ratings Group, Inc. and Pinnacle Credit Analytics, Inc.
The rating agencies are responsible for the delivery of the following closing documents:
1.  Lakeshore Ratings Group, Inc.: Rating confirmation letter confirming the assignment of a rating of "AA" (stable outlook) for the underlying Bonds and "AA+" for the insured Bonds, and confirming that such ratings are expected to remain in effect as of the Closing Date
2.  Pinnacle Credit Analytics, Inc.: Rating confirmation letter confirming the assignment of a rating of "AA−" (stable outlook) for the underlying Bonds and "AA" for the insured Bonds, and confirming that such ratings are expected to remain in effect as of the Closing Date
VII. OUTSTANDING ITEMS AS OF DATE OF THIS MEMORANDUM
As of the date of this Memorandum (October 20, 2023), the following items remain outstanding. C&H is actively tracking these items and will provide updated status reports to all parties as items are received.
1.  Final executed signature pages from Harold K. Nakamura (Certificate of Authorized Officer of CSIA) — expected to be received by C&H on October 23, 2023. Mr. Nakamura's office has confirmed that the signature pages will be executed and transmitted by PDF email, with originals to follow by overnight courier.
2.  Final executed signature pages from Denise R. Whitford (CFO's Certificate — Financial Covenant Compliance) — expected to be received by C&H on October 23, 2023. Ms. Whitford's office has confirmed that the signature pages will be executed and transmitted by PDF email, with originals to follow by overnight courier.
3.  Confirmation of wire transfer instructions from CSIA for equity contribution — expected to be received by C&H on October 22, 2023. Ms. Whitford's office is coordinating with CSIA's banking institution to finalize wire instructions.
4.  Final form of Trustee's acceptance letter from Alan M. Greer at PNTC — expected to be received by C&H on October 23, 2023. Mr. Greer has indicated that the final form is under internal legal review at PNTC and will be delivered promptly upon completion of that review.
5.  Confirmation of surety premium wire instructions from Olympia Guaranty — to be confirmed by Rachel P. Dominguez, Senior Vice President, Olympia Guaranty Insurance Corp. Ms. Dominguez has been contacted and is expected to provide confirmation of wire instructions shortly.
C&H will circulate an updated Master Closing Checklist reflecting the status of all items on or before 5:00 p.m. Pacific Time on October 23, 2023.
VIII. KEY TRANSACTION DOCUMENTS REFERENCE
The following table provides a summary of the key transaction documents for the Series 2023A Bond issuance:
All transaction documents have been prepared, reviewed, and finalized by C&H, in consultation with Pryor Crestfield LLP (as Co-Bond Counsel), Alderman & Locke LLP (as Underwriters' Counsel), and CSIA's General Counsel, Martin J. Espinoza. Execution versions of all transaction documents to be executed on the Closing Date have been circulated to the parties and are in agreed-upon final form, subject only to the insertion of dates and execution by the respective parties.
IX. FINANCIAL COVENANT VERIFICATION
The First Supplemental Indenture and the Bond Indenture require CSIA to maintain a minimum debt service coverage ratio ("DSCR") of not less than 1.40x (the "Rate Covenant"). The following is a summary of the pro forma DSCR calculation based on CSIA's most recently available audited financial statements, demonstrating compliance with the Rate Covenant as of the Closing Date.
Rate Covenant Minimum DSCR: 1.40x
Fiscal Year 2022 Financial Data (Audited):
Total Annual Parity Debt Service (Post-Issuance):
Following the issuance of the Series 2023A Bonds, CSIA will have an aggregate of $3,340,000,000 in outstanding parity bonds (inclusive of the Series 2023A Bonds). Total annual parity debt service on all outstanding parity bonds (post-issuance) is $278,400,000.
Approximate Annual Debt Service on Series 2023A Bonds Alone: $11,610,000 (representing level debt service over the 30-year amortization period).
Pro Forma DSCR Calculation (Based on FY 2022 Audited Financials):
Pro Forma DSCR = Net Pledged Revenues ÷ Total Annual Parity Debt Service
Pro Forma DSCR = $412,600,000 ÷ $278,400,000 = 1.48x
Conclusion: The pro forma DSCR of 1.48x exceeds the Rate Covenant minimum of 1.40x. The Rate Covenant is satisfied.
Projected FY 2024 Net Pledged Revenues: CSIA projects Net Pledged Revenues for fiscal year 2024 of $431,800,000, which would result in a projected DSCR of approximately 1.55x ($431,800,000 ÷ $278,400,000), further supporting compliance with the Rate Covenant on a going-forward basis.
The CFO's Certificate to be executed by Denise R. Whitford, Chief Financial Officer of CSIA, on the Closing Date will confirm compliance with the Rate Covenant and all other financial covenants contained in the Indenture as of the Closing Date.
X. CLOSING PARTICIPANTS — CONTACT INFORMATION
The following is a list of all closing participants and their contact information. All communications regarding the closing should include copies to C&H (Michelle Tsao and Brett Callahan).
A. Cascadia State Infrastructure Authority (CSIA) — Issuer
1100 Capitol Way South, Suite 400 Olympia, WA 98501
Harold K. Nakamura, Executive Director Telephone: (360) 555-8100 | Email: hknakamura@csia.wa.gov
Denise R. Whitford, Chief Financial Officer Telephone: (360) 555-8105 | Email: drwhitford@csia.wa.gov
Martin J. Espinoza, General Counsel Telephone: (360) 555-8112 | Email: mjespinoza@csia.wa.gov
B. Calderwood & Harkness LLP — Issuer's Counsel
1420 Fifth Avenue, Suite 3600 Seattle, WA 98101
George Trujillo, Partner (Responsible Partner) Telephone: (206) 555-3170 | Email: gtrujillo@calderwoodharkness.com
Patricia Dunmore, Partner (Billing Partner) Telephone: (206) 555-3175 | Email: pdunmore@calderwoodharkness.com
Michelle Tsao, Associate (Lead Associate — Primary Closing Contact) Telephone: (206) 555-3184 | Email: mtsao@calderwoodharkness.com
Brett Callahan, Associate (Working Associate) Telephone: (206) 555-3192 | Email: bcallahan@calderwoodharkness.com
Leonard Cross, Partner (Tax Specialist) Telephone: (206) 555-3160 | Email: lcross@calderwoodharkness.com
C. Pryor Crestfield LLP — Co-Bond Counsel
999 Third Avenue, Suite 4800 Seattle, WA 98104
Margaret S. Yoon, Partner Telephone: (206) 555-7200 | Email: myoon@pryorcrestfield.com
Elliot R. Stanton, Associate Telephone: (206) 555-7215 | Email: estanton@pryorcrestfield.com
D. Meridian Capital Partners LLC — Senior Managing Underwriter
600 Third Avenue, 28th Floor New York, NY 10016
Jonathan D. Kessler, Managing Director, Public Finance Telephone: (212) 555-4400 | Email: jkessler@meridiancap.com
E. Dralvecen Fenn & Co., Inc. — Co-Managing Underwriter
200 Park Avenue, Suite 3100 New York, NY 10166
Sarah E. Mulvaney, Director, Municipal Finance Telephone: (212) 555-6600 | Email: smulvaney@bridgewaterfenn.com
F. Alderman & Locke LLP — Underwriters' Counsel
51 West 52nd Street New York, NY 10019
Daniel F. Obermeyer, Partner Telephone: (212) 555-8800 | Email: dobermeyer@aldermanlocke.com
Christina M. Vega, Associate Telephone: (212) 555-8825 | Email: cvega@aldermanlocke.com
G. Pacific Northwest Trust Company, N.A. — Trustee / Paying Agent / Registrar / Escrow Agent
1201 Third Avenue, Suite 1600 Seattle, WA 98101
Alan M. Greer, Vice President, Corporate Trust Services Telephone: (206) 555-2100 | Email: agreer@pntcbank.com
DTC Participant Number: 2741
H. Olympia Guaranty Insurance Corp. — Surety Bond Insurer
125 Broad Street, 14th Floor New York, NY 10004
Rachel P. Dominguez, Senior Vice President Telephone: (212) 555-9300 | Email: rdominguez@olympiaguaranty.com
I. Clearfield Municipal Advisors LLC — Municipal Advisor to CSIA
805 SW Broadway, Suite 1400 Portland, OR 97205
Kenneth W. Barclay, Principal Telephone: (503) 555-1200 | Email: kbarclay@clearfieldma.com
J. Hargrove & Associates CPAs, PLLC — Independent Auditor
520 Pike Street, Suite 2200 Seattle, WA 98101
Victoria L. Fong, CPA, Engagement Partner Telephone: (206) 555-5500 | Email: vfong@hargrovecpas.com
K. Northtide Environmental Engineering, Inc. — Design-Build Contractor
2400 Eastlake Avenue East Seattle, WA 98102
Garrett L. Henriksen, Chief Executive Officer Telephone: (206) 555-3300 | Email: ghenriksen@northtide.com
L. Rating Agencies
Lakeshore Ratings Group, Inc. 55 Water Street New York, NY 10041
Pinnacle Credit Analytics, Inc. 33 Whitehall Street New York, NY 10004
XI. GOVERNING LAW AND GENERAL NOTES
Governing Law. All transaction documents executed in connection with the issuance of the Series 2023A Bonds are governed by and shall be construed in accordance with the laws of the State of Washington, without regard to conflicts-of-law principles.
Issuer Status. CSIA is a governmental instrumentality of the State of Washington, created and existing pursuant to Chapter 43.160A of the Revised Code of Washington. CSIA's Employer Identification Number (EIN) is 91-2058374.
Closing Mechanics. The closing will take place via electronic exchange of documents and telephonic/video closing call. No in-person attendance at a physical closing location is required. All executed documents will be transmitted electronically in PDF format, with originals to follow by overnight courier or hand delivery for inclusion in the closing transcript binders.
Original Executed Documents. All original executed documents will be held by Calderwood & Harkness LLP at its offices at 1420 Fifth Avenue, Suite 3600, Seattle, WA 98101. C&H will compile the original executed documents into closing transcript binders for post-closing distribution to all parties listed in Section X above.
Questions and Contact Information. Any questions regarding this Memorandum, the closing logistics, the status of outstanding items, or any other aspect of the transaction should be directed to:
Michelle Tsao, Associate Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101 Telephone: (206) 555-3184
Email: mtsao@calderwoodharkness.com
Brett Callahan, Associate Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101 Telephone: (206) 555-3192
Email: bcallahan@calderwoodharkness.com
XII. DISTRIBUTION AND ACKNOWLEDGMENT
This Memorandum has been prepared for the exclusive use of the parties listed in Section X above and their respective counsel. This Memorandum is confidential and should not be distributed to any person or entity other than the intended recipients without the prior written consent of Calderwood & Harkness LLP.
Prepared by:
Michelle Tsao, Associate Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101
Reviewed by:
George Trujillo, Partner Calderwood & Harkness LLP 1420 Fifth Avenue, Suite 3600 Seattle, WA 98101
C&H Matter No.: 1030-00001
Date: October 20, 2023
Distribution: All parties listed in Section X above
CONFIDENTIAL — This Closing Memorandum has been prepared by Calderwood & Harkness LLP for the sole use of the closing participants identified herein in connection with the issuance of the Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt). This document does not constitute legal advice and is intended solely to facilitate the mechanics of the closing. Distribution of this Memorandum to any person or entity other than the intended recipients is prohibited without the prior written consent of Calderwood & Harkness LLP.
Rating Agency | Underlying Rating | Insured Rating
Lakeshore Ratings Group, Inc. ("LRG") | AA (stable outlook) | AA+
Pinnacle Credit Analytics, Inc. ("PCA") | AA− (stable outlook) | AA
Underwriter | Participation | Discount Amount
Meridian Capital Partners LLC (Senior Managing Underwriter) | 70% | $693,000
Dralvecen Fenn & Co., Inc. (Co-Managing Underwriter) | 30% | $297,000
Total | 100% | $990,000
Source | Amount
Par Amount of Series 2023A Bonds | $220,000,000.00
Less: Original Issue discount (0.75% of par) | ($1,650,000.00)
Less: Underwriters' discount (0.45% of par) | ($990,000.00)
Net Bond Proceeds | $217,360,000.00
CSIA Equity Contribution (from existing capital reserves) | $17,400,000.00
Total Sources | $234,760,000.00
Use | Amount
Deposit to Project Fund (net bond proceeds for construction) | $215,490,000.00
Deposit to Costs of Issuance Fund | $1,870,000.00
Deposit to Capitalized Interest Fund | $4,510,000.00
CSIA Equity Contribution to Project Fund | $17,400,000.00
Total Uses | $239,270,000.00
Document | Date | Parties
Bond Indenture (Trust Indenture) | October 24, 2023 | CSIA and PNTC
First Supplemental Indenture (Series 2023A) | October 24, 2023 | CSIA and PNTC
Revenue Pledge Agreement | October 24, 2023 | CSIA and PNTC
Bond Purchase Agreement | August 30, 2023 | CSIA and Meridian Capital Partners LLC (on behalf of Underwriters)
Continuing Disclosure Agreement | October 24, 2023 | CSIA and PNTC (as Dissemination Agent)
Tax Regulatory Agreement and Certificate | October 15, 2023 | CSIA
Escrow Deposit Agreement | October 24, 2023 | CSIA and PNTC (as Escrow Agent)
DSRF Surety Bond Agreement | October 24, 2023 | CSIA, PNTC, and Olympia Guaranty Insurance Corp.
Northtide GMP Contract (No. CSIA-DB-2023-001) | March 10, 2023 | CSIA and Northtide Environmental Engineering, Inc.
Final Official Statement | September 5, 2023 | CSIA
CSIA Board Resolution No. 2023-014 | May 9, 2023 | CSIA Board of Commissioners
Item | Amount
Gross Pledged Revenues | $489,300,000
Less: Operations and Maintenance Expenses | ($76,700,000)
Net Pledged Revenues | $412,600,000

CLOSING MEMORANDUM

CONFIDENTIAL

I. INTRODUCTION AND PURPOSE

II. SUMMARY OF BOND TERMS

III. SOURCES AND USES OF FUNDS

IV. WIRE TRANSFER INSTRUCTIONS

V. CLOSING TIMELINE AND SEQUENCE OF EVENTS

VI. CLOSING DOCUMENT DELIVERY RESPONSIBILITIES

Record

Parties

Dates

Amounts