1030-00002 · Client 1030 · Engagement

engagement-letter-csia.docx DOCUMENT M&A / Corporate

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PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP Attorneys at Law

901 Fifth Avenue, Suite 3200 Seattle, WA 98164 Telephone: (206) 447-8200 Facsimile: (206) 447-8201 www.calderwoodharkness.com

October 18, 2021

David Tanaka, Esq. General Counsel Cascadia State Infrastructure Authority 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501

Re: Engagement of Calderwood & Harkness LLP — Formation and Governance of Public-Private Joint Venture with Pinnacle Water Solutions, LLC for the Thurston County Advanced Water Treatment Facility Matter Number: 47291.00001

Dear Mr. Tanaka:

1. Purpose and Confirmation of Engagement

Calderwood & Harkness LLP ("the Firm," "we," "our," or "C&H") is pleased to confirm its engagement by the Cascadia State Infrastructure Authority ("CSIA" or the "Client"), a Washington state governmental authority established pursuant to Chapter 43.155A of the Revised Code of Washington, to provide the legal services described in this engagement letter. We appreciate the confidence that CSIA has placed in the Firm and look forward to serving as your counsel in this important matter.

CSIA has retained the Firm to represent it in connection with the formation and ongoing governance of a public-private joint venture with Pinnacle Water Solutions, LLC, a Delaware limited liability company ("Pinnacle"), for the design, construction, and operation of the Thurston County Advanced Water Treatment Facility (the "Facility"). The Facility is planned as a 12 million gallon-per-day advanced water treatment plant to be located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501. The joint venture entity will be organized as a Washington limited liability company to be known as Columbia Basin Water Treatment Partners, LLC ("CBWTP" or the "JV Entity"). The total anticipated project cost is approximately Forty-Five Million Dollars ($45,000,000).

This letter (the "Engagement Letter") sets forth the terms and conditions of our engagement, including the scope of the Firm's representation, the engagement team, fees and billing arrangements, and other matters governing the attorney-client relationship between the Firm and CSIA. We ask that you review this letter carefully and contact us if you have any questions regarding its terms. Your countersignature, as described in Section 15 below, will confirm your acceptance of the terms set forth herein.

2. Scope of Engagement

The Firm will represent CSIA in connection with the following matters related to the formation and governance of the JV Entity and the Facility project:

(a) JV Agreement. Negotiation, drafting, and execution of the Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC (the "JV Agreement"), including, without limitation, provisions relating to governance structure, capital contribution obligations, management designation and authority, default remedies, buy-sell provisions, non-compete covenants, force majeure provisions, distribution waterfalls, and dispute resolution mechanisms.

(b) Entity Formation. Formation of CBWTP with the Washington Secretary of State, including preparation and filing of the Certificate of Formation and all related organizational documents, resolutions, and filings necessary to effectuate the organization of the JV Entity as a Washington limited liability company in good standing.

(c) Ground Lease. Negotiation, drafting, and execution of a ninety-nine (99) year ground lease from CSIA to CBWTP for the approximately 14.7-acre Facility site (the "Ground Lease"), including preparation of all ancillary instruments and memoranda of lease, and coordination of recording of the Ground Lease and related instruments with the Thurston County Auditor.

(d) Membership Advice. Advice regarding CSIA's rights and obligations as a fifty-five percent (55%) member of the JV Entity, including governance matters, capital calls, distributions, major decision approval rights, protective provisions, information rights, and other matters arising from CSIA's membership interest in CBWTP.

(e) Project Finance. Review and negotiation of the project finance credit facility with the project lender or lenders, including review of commitment letters, term sheets, credit agreements, security documents, and related financing documents, in each case solely as they relate to and affect CSIA's interests as a member of the JV Entity.

(f) Ongoing Governance. Ongoing governance advice related to CBWTP, including board governance, member disputes, default remedies, buy-sell procedures, deadlock provisions, and advice regarding potential dissolution, restructuring, or reorganization of the JV Entity, as the need may arise.

(g) Additional Matters. Such other matters as may arise in connection with the JV Entity and the Facility project that CSIA may request and that the Firm agrees to undertake, subject to the terms of this Engagement Letter or any amendment or supplement hereto.

Exclusions from Scope. The scope of this engagement does not include the following, and CSIA should not rely on the Firm for advice in these areas:

(i) Tax Advice. The Firm will not provide tax advice in connection with this engagement. CSIA should consult its own tax advisors, including qualified tax counsel, regarding any federal, state, or local tax matters arising from the formation, operation, or dissolution of CBWTP, the Ground Lease, capital contributions, distributions, or any other aspect of the Facility project.

(ii) Environmental Regulatory Advice. The Firm will not provide advice regarding environmental permitting, compliance with the Washington State Environmental Policy Act (Chapter 43.21C RCW), the federal Clean Water Act, or any other federal, state, or local environmental statutes, regulations, or ordinances applicable to the Facility.

(iii) Procurement and Public Contracting Compliance. The Firm will not provide advice regarding Washington state procurement law, public contracting requirements, or competitive bidding obligations applicable to CSIA or the Facility project, including, without limitation, compliance with Chapter 39.04 RCW or Chapter 39.10 RCW.

(iv) Litigation and Arbitration. The Firm's representation under this Engagement Letter does not encompass representation of CSIA in any litigation, arbitration, mediation, or other dispute resolution proceeding. In the event that such representation is required, it would be subject to a separate engagement letter or a written amendment to this Engagement Letter.

Client Identification. CSIA acknowledges and agrees that the Firm's representation under this Engagement Letter is of CSIA only, in its capacity as a Washington state governmental authority and as a member of CBWTP. The Firm does not represent, and shall not be deemed to represent, CBWTP, Pinnacle Water Solutions, LLC, any affiliate or subsidiary of Pinnacle, Ridgeline Capital Partners, LP (or any of its affiliates), or any other party in connection with this engagement. The Firm also does not represent any officer, director, employee, board member, or agent of CSIA in his or her individual capacity.

3. Engagement Team

The Firm's engagement team for this matter will consist of the following attorneys, each of whom will contribute to the engagement in the capacity indicated:

Oliver Mackenzie, Partner — Responsible Partner. Mr. Mackenzie will serve as the Responsible Partner for this engagement and will provide overall supervision and strategic direction. Mr. Mackenzie has extensive experience in complex public-private partnerships, joint venture formations, and infrastructure project transactions. He will be involved in key negotiations and strategic decisions and will serve as the primary point of contact for senior-level communications with CSIA's leadership.

Harrison Wexford, Partner — Billing Partner. Mr. Wexford will serve as the Billing Partner and will be responsible for day-to-day management of the engagement, client billing, and partner-level document review. Mr. Wexford has significant experience in joint venture governance, real estate transactions, and project finance matters. He will be the primary day-to-day contact for Mr. Tanaka and will oversee the preparation of all invoices and billing matters.

Tiffany Rosenthal, Associate — Lead Associate. Ms. Rosenthal will serve as the Lead Associate on the engagement and will bear primary drafting responsibility for the JV Agreement, the Ground Lease, and related organizational and transactional documents. She will also be responsible for legal research and providing document negotiation support in sessions with counsel for Pinnacle.

Andrew Fitzpatrick, Associate — Working Associate. Mr. Fitzpatrick will provide research, due diligence, document preparation, and general support to the engagement team. He will assist Ms. Rosenthal in drafting and will handle administrative filings, corporate formation documents, and recording coordination.

Additional attorneys and professional staff, including paralegals and law clerks, may be assigned to this matter as needed to ensure efficient and timely delivery of legal services. The Firm will inform CSIA of any material changes to the composition of the engagement team, including the addition of any attorney at the partner level or the departure of any of the team members identified above.

Mr. Mackenzie and Mr. Wexford are based in the Firm's Seattle office at 901 Fifth Avenue, Suite 3200, Seattle, WA 98164. Ms. Rosenthal and Mr. Fitzpatrick are also currently based in the Firm's Seattle office.

4. Client Contact

CSIA's primary contact for this engagement is David Tanaka, General Counsel, Cascadia State Infrastructure Authority. All communications from the Firm regarding the legal substance of the engagement, including legal advice, strategic recommendations, and status updates, will be directed to Mr. Tanaka in the first instance.

The Firm may also communicate directly with Margaret Ellsworth, Executive Director, and Patricia Huang, Deputy Director, Capital Projects, regarding the engagement, as authorized by Mr. Tanaka. Such communications may include scheduling, factual inquiries, document requests, and other coordination matters necessary for the efficient conduct of the engagement. However, all formal legal advice and legal opinions will be directed to Mr. Tanaka unless Mr. Tanaka otherwise agrees in writing to an alternative arrangement.

CSIA agrees to inform the Firm promptly if the identity of the primary contact or authorized contacts changes during the course of the engagement. The Firm relies on the accuracy and completeness of information provided by CSIA's authorized contacts, and CSIA agrees to provide the Firm with all information reasonably necessary for the Firm to perform the services described herein.

5. Fees and Billing Rates

Fees for professional services rendered in connection with this engagement will be charged on an hourly basis at the following current standard rates for the engagement team members identified in Section 3:

In the event that additional attorneys or professional staff are assigned to this matter, their time will be billed at their then-current standard hourly rates, which will be communicated to CSIA upon their assignment to the engagement. Paralegal and legal assistant time, if any, will be billed at the Firm's then-current standard rates for such professional staff, which currently range from $275.00 to $425.00 per hour depending on seniority and specialization.

Hourly rates are subject to periodic adjustment, which typically occurs on an annual basis effective January 1 of each calendar year. The Firm will provide CSIA with written notice of any rate adjustments at least thirty (30) days in advance of the effective date of any such adjustment. In the absence of objection by CSIA within fifteen (15) days following receipt of such notice, the adjusted rates shall apply to services rendered on and after the effective date.

The Firm does not guarantee or estimate total fees for the engagement. The total fees incurred will depend upon a number of factors, many of which are beyond the Firm's control, including the scope and complexity of the matters undertaken, the pace and contentiousness of negotiations with counsel for Pinnacle, the responsiveness of opposing counsel and third parties, the number and nature of issues that arise during the course of the engagement, and the extent to which CSIA requests additional services beyond the initial formation and documentation phase.

Notwithstanding the foregoing, as a preliminary estimate for budgeting purposes only, the Firm anticipates that professional fees for the initial JV formation and documentation phase — encompassing the period through execution of the JV Agreement, formation of CBWTP, and execution and recording of the Ground Lease — will be in the range of Two Hundred Fifty Thousand Dollars ($250,000) to Four Hundred Thousand Dollars ($400,000), depending on the complexity and duration of negotiations. This estimate is provided in good faith based on our current understanding of the anticipated scope of the engagement. It is not a cap, a guaranteed maximum, or a fixed fee, and actual fees may be higher or lower than the estimated range depending on the factors described above. The Firm will endeavor to keep CSIA informed of the status of fees incurred and will promptly notify Mr. Tanaka if it appears that fees are likely to materially exceed the upper end of the estimated range.

6. Expenses and Disbursements

In addition to professional fees for legal services, the Firm will charge CSIA for reasonable out-of-pocket expenses and disbursements incurred in connection with the engagement. Such expenses include, but are not limited to, the following:

• Filing fees, including Washington Secretary of State filing fees for the Certificate of Formation and any amendments thereto, and Thurston County Auditor recording fees for the Ground Lease and related instruments;

• Travel expenses incurred by Firm attorneys and professional staff in connection with the engagement, including airfare, hotel accommodations, ground transportation, parking, and meals;

• Document reproduction, scanning, and printing charges;

• Courier, overnight delivery, and postage charges;

• Computerized legal research charges, including charges for Westlaw, Sundial Solutions, and similar research databases;

• Third-party service provider fees, including title company fees, registered agent fees, and charges for outside copying or document management services; and

• Long-distance telephone and teleconference charges, if applicable.

Travel expenses for Firm attorneys traveling from the Firm's Seattle office to Olympia, Tumwater, or other locations in Thurston County or elsewhere in connection with the engagement will be billed at actual cost, without markup. The Firm will exercise reasonable judgment in incurring travel expenses and will utilize cost-effective travel arrangements where practicable.

Any single expense item exceeding Five Thousand Dollars ($5,000) will require advance written approval from the Client prior to the Firm incurring such expense. The Firm will contact Mr. Tanaka to obtain such approval. Routine filing fees and recording fees that are necessary to effectuate the transactions described in Section 2 shall not require separate advance approval, regardless of amount, unless CSIA requests otherwise.

7. Billing and Payment Terms

The Firm will submit monthly invoices to CSIA for professional fees and expenses incurred during the preceding calendar month. Invoices will be prepared in sufficient detail to identify the nature of the services rendered and the expenses incurred, and will reference Matter Number 47291.00001.

Billing records will be maintained in accordance with the Firm's standard timekeeping practices. Each invoice will include detailed time entries reflecting the date of service, the identity of the timekeeper, a description of the services performed, and the time expended. Expenses will be itemized separately on each invoice.

All invoices are due and payable within thirty (30) days of the invoice date. Payments should be made by check payable to "Calderwood & Harkness LLP" and mailed to the Firm's Seattle office, or by wire transfer to the Firm's designated bank account, the details of which will be provided upon request. CSIA acknowledges that the Firm does not accept payment by credit card.

If CSIA has any questions or concerns regarding an invoice, including any objection to the amount or description of any charge, CSIA should contact Harrison Wexford promptly, and in any event within fifteen (15) days following receipt of the invoice in question. The Firm will work with CSIA in good faith to resolve any billing questions or disputes.

The Firm reserves the right to suspend or, in its discretion, to cease work on the engagement if invoices remain unpaid for more than sixty (60) days past the invoice date, upon fifteen (15) days' prior written notice to CSIA. Any such suspension shall be without prejudice to the Firm's right to collect all unpaid fees and expenses and shall not constitute a waiver of the Firm's rights under this Engagement Letter. The Firm's obligation to continue providing legal services is conditioned upon CSIA's timely payment of invoices in accordance with this Section.

8. Conflicts of Interest

The Firm has conducted a conflicts check in accordance with its standard procedures and the Washington Rules of Professional Conduct. Based on that review, the Firm has determined the following:

(i) The Firm does not currently represent Pinnacle Water Solutions, LLC, Ridgeline Capital Partners, LP, or any of their respective affiliates, subsidiaries, officers, directors, members, managers, or partners in any matter.

(ii) The Firm does not currently represent any party in a matter that is adverse to CSIA.

CSIA acknowledges that Calderwood & Harkness LLP is a large national law firm with offices in multiple jurisdictions, and that the Firm represents a wide range of clients across numerous industries, practice areas, and transactions. CSIA agrees that the Firm's representation of CSIA under this Engagement Letter does not preclude the Firm from representing other clients in matters that are unrelated to the subject matter of this engagement, even if those other clients may have interests adverse to CSIA in such unrelated matters. This acknowledgment does not, however, extend to any representation that would create a conflict of interest under the Washington Rules of Professional Conduct that cannot be waived or that CSIA has not consented to waive.

In the event that a conflict of interest arises or is identified during the course of this engagement, the Firm will promptly notify CSIA and discuss with Mr. Tanaka the nature of the conflict and appropriate steps to address it. Such steps may include, depending on the circumstances, obtaining an informed written consent and conflict waiver from CSIA and/or the other affected client(s), implementing appropriate ethical screening procedures within the Firm, or, if the conflict cannot be resolved, withdrawing from the engagement in accordance with the applicable rules of professional conduct.

The Firm reiterates that its representation under this Engagement Letter is limited to CSIA as identified herein. The Firm does not represent and will not represent CBWTP, any member of CBWTP other than CSIA, Pinnacle Water Solutions, LLC, Ridgeline Capital Partners, LP, or any other party in connection with this engagement. The Firm does not represent, and this Engagement Letter shall not be construed to create an attorney-client relationship with, any officer, director, board member, employee, or agent of CSIA in his or her individual capacity.

9. Confidentiality and Privilege

All communications between the Firm and CSIA in connection with this engagement, including written and oral communications, memoranda, legal analyses, draft documents, and related materials prepared by the Firm, are protected by the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. The Firm will take reasonable steps to preserve the privileged and confidential nature of all such communications.

The Firm will maintain the confidentiality of all information received from CSIA in connection with this engagement, in accordance with the Firm's obligations under the Washington Rules of Professional Conduct (RPC 1.6) and applicable law. The Firm will not disclose confidential information relating to CSIA's representation except as authorized by CSIA, as required by law or court order, or as necessary to carry out the representation in accordance with CSIA's instructions.

CSIA acknowledges that, as a Washington state governmental authority, certain of its records and communications may be subject to public records requests under the Washington Public Records Act, Chapter 42.56 RCW. The Firm will cooperate with CSIA in asserting applicable exemptions for attorney-client privileged communications and attorney work product under RCW 42.56.290 and other applicable provisions. CSIA agrees to consult with the Firm before disclosing or producing any communications or documents received from the Firm in response to any public records request, to the extent practicable, to allow the Firm an opportunity to advise CSIA regarding applicable privilege claims and exemptions.

CSIA further agrees to take reasonable steps to maintain the confidentiality and privileged nature of communications with the Firm, including limiting the distribution of privileged communications to those individuals within CSIA who have a need to know the information in connection with their official duties relating to the Facility project and the JV Entity.

10. Document Retention

Upon conclusion or termination of this engagement, the Firm will retain client files, work product, correspondence, and related materials in accordance with the Firm's standard document retention policies, as may be amended from time to time. The Firm's files are the property of the Firm, subject to CSIA's right to receive copies of documents in the Firm's files that are necessary for CSIA to protect its interests, as provided under the Washington Rules of Professional Conduct.

Original documents provided by CSIA to the Firm during the course of the engagement will be returned to CSIA upon CSIA's written request, at CSIA's expense for any reproduction or shipping costs. The Firm encourages CSIA to request the return of any original documents promptly upon conclusion of the engagement.

The Firm's standard retention period for closed matter files is ten (10) years from the date of file closure. Following the expiration of the ten-year retention period, the Firm may destroy the files, including all paper and electronic copies, upon sixty (60) days' prior written notice to CSIA at CSIA's last known address. If CSIA does not request return of the files within such sixty-day notice period, the Firm shall have no further obligation to retain the files and may destroy them in accordance with the Firm's standard procedures, including secure destruction of paper documents and permanent deletion of electronic files.

11. Termination

Either party may terminate this engagement at any time, with or without cause, by providing written notice to the other party. Such notice shall be effective upon receipt by the other party.

Upon termination of the engagement, whether by the Firm or by CSIA, CSIA will remain responsible for payment of all fees for professional services rendered and all expenses and disbursements incurred through the effective date of termination, in accordance with the billing and payment terms set forth in Sections 5, 6, and 7 of this Engagement Letter.

In the event that the Firm initiates termination of the engagement, the Firm's withdrawal will be subject to the applicable Washington Rules of Professional Conduct, including, without limitation, the obligation to provide reasonable notice to CSIA, to allow time for the employment of other counsel, to take steps reasonably practicable to protect CSIA's interests, and to surrender papers and property to which CSIA is entitled.

In the event that CSIA initiates termination of the engagement, the Firm will cooperate in the orderly transition of the matter to successor counsel, including the transfer of relevant files, documents, and work product, subject to the Firm's right to retain copies of its work product and to receive payment for all outstanding fees and expenses.

Termination of this engagement, whether by the Firm or by CSIA, shall not affect the Firm's obligations with respect to confidentiality and privilege as set forth in Section 9 of this Engagement Letter, which obligations shall survive termination of the engagement indefinitely.

12. Limitation of Liability

The Firm's liability to CSIA in connection with this engagement shall be limited to matters arising directly from the Firm's negligence, errors, or omissions in the performance of the legal services described in this Engagement Letter. The Firm shall exercise the degree of skill, care, and diligence ordinarily exercised by competent attorneys in the State of Washington in connection with similar engagements.

In no event shall the Firm be liable to CSIA for any consequential, incidental, indirect, special, or punitive damages arising out of or in connection with this engagement, regardless of whether such damages are foreseeable and regardless of the legal theory upon which such damages are claimed.

Nothing in this Engagement Letter shall be construed to waive, limit, or modify CSIA's sovereign immunity or any governmental immunities to which CSIA may be entitled under Washington law, including, without limitation, immunities under Chapter 4.92 RCW, or to waive any other defense or immunity available to CSIA as a Washington state governmental authority.

13. Governing Law

This Engagement Letter and the attorney-client relationship between the Firm and CSIA shall be governed by and construed in accordance with the laws of the State of Washington, without regard to its conflict of laws principles. The Firm and CSIA each consent to the personal jurisdiction of the courts of the State of Washington, and any dispute arising out of or in connection with this Engagement Letter or the Firm's representation of CSIA shall be resolved in the state or federal courts located in King County, Washington, or, at CSIA's election, Thurston County, Washington.

14. Entire Agreement and Amendments

This Engagement Letter constitutes the entire agreement between the Firm and CSIA with respect to the engagement described herein, and supersedes all prior and contemporaneous oral or written communications, understandings, proposals, and agreements between the parties regarding the subject matter hereof.

No amendment, modification, supplement, or waiver of any provision of this Engagement Letter shall be effective unless made in writing and signed by both the Firm and CSIA. No course of dealing or course of performance shall be deemed to modify the terms of this Engagement Letter.

If any provision of this Engagement Letter is held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect, and the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable, consistent with the intent of the parties.

15. Acceptance and Execution

We respectfully request that CSIA confirm its agreement to the terms of this engagement by having an authorized representative sign and return the enclosed duplicate original of this Engagement Letter to the Firm at the address set forth above. The engagement shall be deemed to commence upon CSIA's execution and return of the countersigned copy of this Engagement Letter.

We are grateful for CSIA's confidence in Calderwood & Harkness LLP and look forward to working with you and your team on this significant project. If you have any questions regarding the terms of this letter, or if you would like to discuss any aspect of the engagement before signing, please do not hesitate to contact Oliver Mackenzie at (206) 447-8210 or omackenzie@calderwoodharkness.com, or Harrison Wexford at (206) 447-8225 or hwexford@calderwoodharkness.com.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Oliver Mackenzie

Title: Partner — Responsible Partner

Date: ________

By: ________

Name: Harrison Wexford

Title: Partner — Billing Partner

Date: ________

ACCEPTANCE AND AGREEMENT

The undersigned, on behalf of the Cascadia State Infrastructure Authority, hereby confirms acceptance of and agreement to the terms and conditions of the foregoing Engagement Letter dated October 18, 2021, between Calderwood & Harkness LLP and the Cascadia State Infrastructure Authority, regarding the engagement described therein.

CASCADIA STATE INFRASTRUCTURE AUTHORITY

By: ________

Name: David Tanaka

Title: General Counsel

Cascadia State Infrastructure Authority 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501

Date: ________

Enclosures:

Duplicate original of this Engagement Letter for countersignature and return

cc:

Margaret Ellsworth, Executive Director, Cascadia State Infrastructure Authority Patricia Huang, Deputy Director, Capital Projects, Cascadia State Infrastructure Authority

Attorney	Role	Current Hourly Rate
Oliver Mackenzie	Partner — Responsible Partner	$1,175.00
Harrison Wexford	Partner — Billing Partner	$1,125.00
Tiffany Rosenthal	Associate — Lead Associate	$785.00
Andrew Fitzpatrick	Associate — Working Associate	$625.00

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP Attorneys at Law
901 Fifth Avenue, Suite 3200 Seattle, WA 98164 Telephone: (206) 447-8200 Facsimile: (206) 447-8201 www.calderwoodharkness.com
October 18, 2021
David Tanaka, Esq. General Counsel Cascadia State Infrastructure Authority 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501
Re: Engagement of Calderwood & Harkness LLP — Formation and Governance of Public-Private Joint Venture with Pinnacle Water Solutions, LLC for the Thurston County Advanced Water Treatment Facility Matter Number: 47291.00001
Dear Mr. Tanaka:
1. Purpose and Confirmation of Engagement
Calderwood & Harkness LLP ("the Firm," "we," "our," or "C&H") is pleased to confirm its engagement by the Cascadia State Infrastructure Authority ("CSIA" or the "Client"), a Washington state governmental authority established pursuant to Chapter 43.155A of the Revised Code of Washington, to provide the legal services described in this engagement letter. We appreciate the confidence that CSIA has placed in the Firm and look forward to serving as your counsel in this important matter.
CSIA has retained the Firm to represent it in connection with the formation and ongoing governance of a public-private joint venture with Pinnacle Water Solutions, LLC, a Delaware limited liability company ("Pinnacle"), for the design, construction, and operation of the Thurston County Advanced Water Treatment Facility (the "Facility"). The Facility is planned as a 12 million gallon-per-day advanced water treatment plant to be located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501. The joint venture entity will be organized as a Washington limited liability company to be known as Columbia Basin Water Treatment Partners, LLC ("CBWTP" or the "JV Entity"). The total anticipated project cost is approximately Forty-Five Million Dollars ($45,000,000).
This letter (the "Engagement Letter") sets forth the terms and conditions of our engagement, including the scope of the Firm's representation, the engagement team, fees and billing arrangements, and other matters governing the attorney-client relationship between the Firm and CSIA. We ask that you review this letter carefully and contact us if you have any questions regarding its terms. Your countersignature, as described in Section 15 below, will confirm your acceptance of the terms set forth herein.
2. Scope of Engagement
The Firm will represent CSIA in connection with the following matters related to the formation and governance of the JV Entity and the Facility project:
(a) JV Agreement. Negotiation, drafting, and execution of the Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC (the "JV Agreement"), including, without limitation, provisions relating to governance structure, capital contribution obligations, management designation and authority, default remedies, buy-sell provisions, non-compete covenants, force majeure provisions, distribution waterfalls, and dispute resolution mechanisms.
(b) Entity Formation. Formation of CBWTP with the Washington Secretary of State, including preparation and filing of the Certificate of Formation and all related organizational documents, resolutions, and filings necessary to effectuate the organization of the JV Entity as a Washington limited liability company in good standing.
(c) Ground Lease. Negotiation, drafting, and execution of a ninety-nine (99) year ground lease from CSIA to CBWTP for the approximately 14.7-acre Facility site (the "Ground Lease"), including preparation of all ancillary instruments and memoranda of lease, and coordination of recording of the Ground Lease and related instruments with the Thurston County Auditor.
(d) Membership Advice. Advice regarding CSIA's rights and obligations as a fifty-five percent (55%) member of the JV Entity, including governance matters, capital calls, distributions, major decision approval rights, protective provisions, information rights, and other matters arising from CSIA's membership interest in CBWTP.
(e) Project Finance. Review and negotiation of the project finance credit facility with the project lender or lenders, including review of commitment letters, term sheets, credit agreements, security documents, and related financing documents, in each case solely as they relate to and affect CSIA's interests as a member of the JV Entity.
(f) Ongoing Governance. Ongoing governance advice related to CBWTP, including board governance, member disputes, default remedies, buy-sell procedures, deadlock provisions, and advice regarding potential dissolution, restructuring, or reorganization of the JV Entity, as the need may arise.
(g) Additional Matters. Such other matters as may arise in connection with the JV Entity and the Facility project that CSIA may request and that the Firm agrees to undertake, subject to the terms of this Engagement Letter or any amendment or supplement hereto.
Exclusions from Scope. The scope of this engagement does not include the following, and CSIA should not rely on the Firm for advice in these areas:
(i) Tax Advice. The Firm will not provide tax advice in connection with this engagement. CSIA should consult its own tax advisors, including qualified tax counsel, regarding any federal, state, or local tax matters arising from the formation, operation, or dissolution of CBWTP, the Ground Lease, capital contributions, distributions, or any other aspect of the Facility project.
(ii) Environmental Regulatory Advice. The Firm will not provide advice regarding environmental permitting, compliance with the Washington State Environmental Policy Act (Chapter 43.21C RCW), the federal Clean Water Act, or any other federal, state, or local environmental statutes, regulations, or ordinances applicable to the Facility.
(iii) Procurement and Public Contracting Compliance. The Firm will not provide advice regarding Washington state procurement law, public contracting requirements, or competitive bidding obligations applicable to CSIA or the Facility project, including, without limitation, compliance with Chapter 39.04 RCW or Chapter 39.10 RCW.
(iv) Litigation and Arbitration. The Firm's representation under this Engagement Letter does not encompass representation of CSIA in any litigation, arbitration, mediation, or other dispute resolution proceeding. In the event that such representation is required, it would be subject to a separate engagement letter or a written amendment to this Engagement Letter.
Client Identification. CSIA acknowledges and agrees that the Firm's representation under this Engagement Letter is of CSIA only, in its capacity as a Washington state governmental authority and as a member of CBWTP. The Firm does not represent, and shall not be deemed to represent, CBWTP, Pinnacle Water Solutions, LLC, any affiliate or subsidiary of Pinnacle, Ridgeline Capital Partners, LP (or any of its affiliates), or any other party in connection with this engagement. The Firm also does not represent any officer, director, employee, board member, or agent of CSIA in his or her individual capacity.
3. Engagement Team
The Firm's engagement team for this matter will consist of the following attorneys, each of whom will contribute to the engagement in the capacity indicated:
Oliver Mackenzie, Partner — Responsible Partner. Mr. Mackenzie will serve as the Responsible Partner for this engagement and will provide overall supervision and strategic direction. Mr. Mackenzie has extensive experience in complex public-private partnerships, joint venture formations, and infrastructure project transactions. He will be involved in key negotiations and strategic decisions and will serve as the primary point of contact for senior-level communications with CSIA's leadership.
Harrison Wexford, Partner — Billing Partner. Mr. Wexford will serve as the Billing Partner and will be responsible for day-to-day management of the engagement, client billing, and partner-level document review. Mr. Wexford has significant experience in joint venture governance, real estate transactions, and project finance matters. He will be the primary day-to-day contact for Mr. Tanaka and will oversee the preparation of all invoices and billing matters.
Tiffany Rosenthal, Associate — Lead Associate. Ms. Rosenthal will serve as the Lead Associate on the engagement and will bear primary drafting responsibility for the JV Agreement, the Ground Lease, and related organizational and transactional documents. She will also be responsible for legal research and providing document negotiation support in sessions with counsel for Pinnacle.
Andrew Fitzpatrick, Associate — Working Associate. Mr. Fitzpatrick will provide research, due diligence, document preparation, and general support to the engagement team. He will assist Ms. Rosenthal in drafting and will handle administrative filings, corporate formation documents, and recording coordination.
Additional attorneys and professional staff, including paralegals and law clerks, may be assigned to this matter as needed to ensure efficient and timely delivery of legal services. The Firm will inform CSIA of any material changes to the composition of the engagement team, including the addition of any attorney at the partner level or the departure of any of the team members identified above.
Mr. Mackenzie and Mr. Wexford are based in the Firm's Seattle office at 901 Fifth Avenue, Suite 3200, Seattle, WA 98164. Ms. Rosenthal and Mr. Fitzpatrick are also currently based in the Firm's Seattle office.
4. Client Contact
CSIA's primary contact for this engagement is David Tanaka, General Counsel, Cascadia State Infrastructure Authority. All communications from the Firm regarding the legal substance of the engagement, including legal advice, strategic recommendations, and status updates, will be directed to Mr. Tanaka in the first instance.
The Firm may also communicate directly with Margaret Ellsworth, Executive Director, and Patricia Huang, Deputy Director, Capital Projects, regarding the engagement, as authorized by Mr. Tanaka. Such communications may include scheduling, factual inquiries, document requests, and other coordination matters necessary for the efficient conduct of the engagement. However, all formal legal advice and legal opinions will be directed to Mr. Tanaka unless Mr. Tanaka otherwise agrees in writing to an alternative arrangement.
CSIA agrees to inform the Firm promptly if the identity of the primary contact or authorized contacts changes during the course of the engagement. The Firm relies on the accuracy and completeness of information provided by CSIA's authorized contacts, and CSIA agrees to provide the Firm with all information reasonably necessary for the Firm to perform the services described herein.
5. Fees and Billing Rates
Fees for professional services rendered in connection with this engagement will be charged on an hourly basis at the following current standard rates for the engagement team members identified in Section 3:
In the event that additional attorneys or professional staff are assigned to this matter, their time will be billed at their then-current standard hourly rates, which will be communicated to CSIA upon their assignment to the engagement. Paralegal and legal assistant time, if any, will be billed at the Firm's then-current standard rates for such professional staff, which currently range from $275.00 to $425.00 per hour depending on seniority and specialization.
Hourly rates are subject to periodic adjustment, which typically occurs on an annual basis effective January 1 of each calendar year. The Firm will provide CSIA with written notice of any rate adjustments at least thirty (30) days in advance of the effective date of any such adjustment. In the absence of objection by CSIA within fifteen (15) days following receipt of such notice, the adjusted rates shall apply to services rendered on and after the effective date.
The Firm does not guarantee or estimate total fees for the engagement. The total fees incurred will depend upon a number of factors, many of which are beyond the Firm's control, including the scope and complexity of the matters undertaken, the pace and contentiousness of negotiations with counsel for Pinnacle, the responsiveness of opposing counsel and third parties, the number and nature of issues that arise during the course of the engagement, and the extent to which CSIA requests additional services beyond the initial formation and documentation phase.
Notwithstanding the foregoing, as a preliminary estimate for budgeting purposes only, the Firm anticipates that professional fees for the initial JV formation and documentation phase — encompassing the period through execution of the JV Agreement, formation of CBWTP, and execution and recording of the Ground Lease — will be in the range of Two Hundred Fifty Thousand Dollars ($250,000) to Four Hundred Thousand Dollars ($400,000), depending on the complexity and duration of negotiations. This estimate is provided in good faith based on our current understanding of the anticipated scope of the engagement. It is not a cap, a guaranteed maximum, or a fixed fee, and actual fees may be higher or lower than the estimated range depending on the factors described above. The Firm will endeavor to keep CSIA informed of the status of fees incurred and will promptly notify Mr. Tanaka if it appears that fees are likely to materially exceed the upper end of the estimated range.
6. Expenses and Disbursements
In addition to professional fees for legal services, the Firm will charge CSIA for reasonable out-of-pocket expenses and disbursements incurred in connection with the engagement. Such expenses include, but are not limited to, the following:
•  Filing fees, including Washington Secretary of State filing fees for the Certificate of Formation and any amendments thereto, and Thurston County Auditor recording fees for the Ground Lease and related instruments;
•  Travel expenses incurred by Firm attorneys and professional staff in connection with the engagement, including airfare, hotel accommodations, ground transportation, parking, and meals;
•  Document reproduction, scanning, and printing charges;
•  Courier, overnight delivery, and postage charges;
•  Computerized legal research charges, including charges for Westlaw, Sundial Solutions, and similar research databases;
•  Third-party service provider fees, including title company fees, registered agent fees, and charges for outside copying or document management services; and
•  Long-distance telephone and teleconference charges, if applicable.
Travel expenses for Firm attorneys traveling from the Firm's Seattle office to Olympia, Tumwater, or other locations in Thurston County or elsewhere in connection with the engagement will be billed at actual cost, without markup. The Firm will exercise reasonable judgment in incurring travel expenses and will utilize cost-effective travel arrangements where practicable.
Any single expense item exceeding Five Thousand Dollars ($5,000) will require advance written approval from the Client prior to the Firm incurring such expense. The Firm will contact Mr. Tanaka to obtain such approval. Routine filing fees and recording fees that are necessary to effectuate the transactions described in Section 2 shall not require separate advance approval, regardless of amount, unless CSIA requests otherwise.
7. Billing and Payment Terms
The Firm will submit monthly invoices to CSIA for professional fees and expenses incurred during the preceding calendar month. Invoices will be prepared in sufficient detail to identify the nature of the services rendered and the expenses incurred, and will reference Matter Number 47291.00001.
Billing records will be maintained in accordance with the Firm's standard timekeeping practices. Each invoice will include detailed time entries reflecting the date of service, the identity of the timekeeper, a description of the services performed, and the time expended. Expenses will be itemized separately on each invoice.
All invoices are due and payable within thirty (30) days of the invoice date. Payments should be made by check payable to "Calderwood & Harkness LLP" and mailed to the Firm's Seattle office, or by wire transfer to the Firm's designated bank account, the details of which will be provided upon request. CSIA acknowledges that the Firm does not accept payment by credit card.
If CSIA has any questions or concerns regarding an invoice, including any objection to the amount or description of any charge, CSIA should contact Harrison Wexford promptly, and in any event within fifteen (15) days following receipt of the invoice in question. The Firm will work with CSIA in good faith to resolve any billing questions or disputes.
The Firm reserves the right to suspend or, in its discretion, to cease work on the engagement if invoices remain unpaid for more than sixty (60) days past the invoice date, upon fifteen (15) days' prior written notice to CSIA. Any such suspension shall be without prejudice to the Firm's right to collect all unpaid fees and expenses and shall not constitute a waiver of the Firm's rights under this Engagement Letter. The Firm's obligation to continue providing legal services is conditioned upon CSIA's timely payment of invoices in accordance with this Section.
8. Conflicts of Interest
The Firm has conducted a conflicts check in accordance with its standard procedures and the Washington Rules of Professional Conduct. Based on that review, the Firm has determined the following:
(i) The Firm does not currently represent Pinnacle Water Solutions, LLC, Ridgeline Capital Partners, LP, or any of their respective affiliates, subsidiaries, officers, directors, members, managers, or partners in any matter.
(ii) The Firm does not currently represent any party in a matter that is adverse to CSIA.
CSIA acknowledges that Calderwood & Harkness LLP is a large national law firm with offices in multiple jurisdictions, and that the Firm represents a wide range of clients across numerous industries, practice areas, and transactions. CSIA agrees that the Firm's representation of CSIA under this Engagement Letter does not preclude the Firm from representing other clients in matters that are unrelated to the subject matter of this engagement, even if those other clients may have interests adverse to CSIA in such unrelated matters. This acknowledgment does not, however, extend to any representation that would create a conflict of interest under the Washington Rules of Professional Conduct that cannot be waived or that CSIA has not consented to waive.
In the event that a conflict of interest arises or is identified during the course of this engagement, the Firm will promptly notify CSIA and discuss with Mr. Tanaka the nature of the conflict and appropriate steps to address it. Such steps may include, depending on the circumstances, obtaining an informed written consent and conflict waiver from CSIA and/or the other affected client(s), implementing appropriate ethical screening procedures within the Firm, or, if the conflict cannot be resolved, withdrawing from the engagement in accordance with the applicable rules of professional conduct.
The Firm reiterates that its representation under this Engagement Letter is limited to CSIA as identified herein. The Firm does not represent and will not represent CBWTP, any member of CBWTP other than CSIA, Pinnacle Water Solutions, LLC, Ridgeline Capital Partners, LP, or any other party in connection with this engagement. The Firm does not represent, and this Engagement Letter shall not be construed to create an attorney-client relationship with, any officer, director, board member, employee, or agent of CSIA in his or her individual capacity.
9. Confidentiality and Privilege
All communications between the Firm and CSIA in connection with this engagement, including written and oral communications, memoranda, legal analyses, draft documents, and related materials prepared by the Firm, are protected by the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. The Firm will take reasonable steps to preserve the privileged and confidential nature of all such communications.
The Firm will maintain the confidentiality of all information received from CSIA in connection with this engagement, in accordance with the Firm's obligations under the Washington Rules of Professional Conduct (RPC 1.6) and applicable law. The Firm will not disclose confidential information relating to CSIA's representation except as authorized by CSIA, as required by law or court order, or as necessary to carry out the representation in accordance with CSIA's instructions.
CSIA acknowledges that, as a Washington state governmental authority, certain of its records and communications may be subject to public records requests under the Washington Public Records Act, Chapter 42.56 RCW. The Firm will cooperate with CSIA in asserting applicable exemptions for attorney-client privileged communications and attorney work product under RCW 42.56.290 and other applicable provisions. CSIA agrees to consult with the Firm before disclosing or producing any communications or documents received from the Firm in response to any public records request, to the extent practicable, to allow the Firm an opportunity to advise CSIA regarding applicable privilege claims and exemptions.
CSIA further agrees to take reasonable steps to maintain the confidentiality and privileged nature of communications with the Firm, including limiting the distribution of privileged communications to those individuals within CSIA who have a need to know the information in connection with their official duties relating to the Facility project and the JV Entity.
10. Document Retention
Upon conclusion or termination of this engagement, the Firm will retain client files, work product, correspondence, and related materials in accordance with the Firm's standard document retention policies, as may be amended from time to time. The Firm's files are the property of the Firm, subject to CSIA's right to receive copies of documents in the Firm's files that are necessary for CSIA to protect its interests, as provided under the Washington Rules of Professional Conduct.
Original documents provided by CSIA to the Firm during the course of the engagement will be returned to CSIA upon CSIA's written request, at CSIA's expense for any reproduction or shipping costs. The Firm encourages CSIA to request the return of any original documents promptly upon conclusion of the engagement.
The Firm's standard retention period for closed matter files is ten (10) years from the date of file closure. Following the expiration of the ten-year retention period, the Firm may destroy the files, including all paper and electronic copies, upon sixty (60) days' prior written notice to CSIA at CSIA's last known address. If CSIA does not request return of the files within such sixty-day notice period, the Firm shall have no further obligation to retain the files and may destroy them in accordance with the Firm's standard procedures, including secure destruction of paper documents and permanent deletion of electronic files.
11. Termination
Either party may terminate this engagement at any time, with or without cause, by providing written notice to the other party. Such notice shall be effective upon receipt by the other party.
Upon termination of the engagement, whether by the Firm or by CSIA, CSIA will remain responsible for payment of all fees for professional services rendered and all expenses and disbursements incurred through the effective date of termination, in accordance with the billing and payment terms set forth in Sections 5, 6, and 7 of this Engagement Letter.
In the event that the Firm initiates termination of the engagement, the Firm's withdrawal will be subject to the applicable Washington Rules of Professional Conduct, including, without limitation, the obligation to provide reasonable notice to CSIA, to allow time for the employment of other counsel, to take steps reasonably practicable to protect CSIA's interests, and to surrender papers and property to which CSIA is entitled.
In the event that CSIA initiates termination of the engagement, the Firm will cooperate in the orderly transition of the matter to successor counsel, including the transfer of relevant files, documents, and work product, subject to the Firm's right to retain copies of its work product and to receive payment for all outstanding fees and expenses.
Termination of this engagement, whether by the Firm or by CSIA, shall not affect the Firm's obligations with respect to confidentiality and privilege as set forth in Section 9 of this Engagement Letter, which obligations shall survive termination of the engagement indefinitely.
12. Limitation of Liability
The Firm's liability to CSIA in connection with this engagement shall be limited to matters arising directly from the Firm's negligence, errors, or omissions in the performance of the legal services described in this Engagement Letter. The Firm shall exercise the degree of skill, care, and diligence ordinarily exercised by competent attorneys in the State of Washington in connection with similar engagements.
In no event shall the Firm be liable to CSIA for any consequential, incidental, indirect, special, or punitive damages arising out of or in connection with this engagement, regardless of whether such damages are foreseeable and regardless of the legal theory upon which such damages are claimed.
Nothing in this Engagement Letter shall be construed to waive, limit, or modify CSIA's sovereign immunity or any governmental immunities to which CSIA may be entitled under Washington law, including, without limitation, immunities under Chapter 4.92 RCW, or to waive any other defense or immunity available to CSIA as a Washington state governmental authority.
13. Governing Law
This Engagement Letter and the attorney-client relationship between the Firm and CSIA shall be governed by and construed in accordance with the laws of the State of Washington, without regard to its conflict of laws principles. The Firm and CSIA each consent to the personal jurisdiction of the courts of the State of Washington, and any dispute arising out of or in connection with this Engagement Letter or the Firm's representation of CSIA shall be resolved in the state or federal courts located in King County, Washington, or, at CSIA's election, Thurston County, Washington.
14. Entire Agreement and Amendments
This Engagement Letter constitutes the entire agreement between the Firm and CSIA with respect to the engagement described herein, and supersedes all prior and contemporaneous oral or written communications, understandings, proposals, and agreements between the parties regarding the subject matter hereof.
No amendment, modification, supplement, or waiver of any provision of this Engagement Letter shall be effective unless made in writing and signed by both the Firm and CSIA. No course of dealing or course of performance shall be deemed to modify the terms of this Engagement Letter.
If any provision of this Engagement Letter is held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect, and the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable, consistent with the intent of the parties.
15. Acceptance and Execution
We respectfully request that CSIA confirm its agreement to the terms of this engagement by having an authorized representative sign and return the enclosed duplicate original of this Engagement Letter to the Firm at the address set forth above. The engagement shall be deemed to commence upon CSIA's execution and return of the countersigned copy of this Engagement Letter.
We are grateful for CSIA's confidence in Calderwood & Harkness LLP and look forward to working with you and your team on this significant project. If you have any questions regarding the terms of this letter, or if you would like to discuss any aspect of the engagement before signing, please do not hesitate to contact Oliver Mackenzie at (206) 447-8210 or omackenzie@calderwoodharkness.com, or Harrison Wexford at (206) 447-8225 or hwexford@calderwoodharkness.com.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Oliver Mackenzie
Title: Partner — Responsible Partner
Date: ________
By: ________
Name: Harrison Wexford
Title: Partner — Billing Partner
Date: ________
ACCEPTANCE AND AGREEMENT
The undersigned, on behalf of the Cascadia State Infrastructure Authority, hereby confirms acceptance of and agreement to the terms and conditions of the foregoing Engagement Letter dated October 18, 2021, between Calderwood & Harkness LLP and the Cascadia State Infrastructure Authority, regarding the engagement described therein.
CASCADIA STATE INFRASTRUCTURE AUTHORITY
By: ________
Name: David Tanaka
Title: General Counsel
Cascadia State Infrastructure Authority 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501
Date: ________
Enclosures:
Duplicate original of this Engagement Letter for countersignature and return
cc:
Margaret Ellsworth, Executive Director, Cascadia State Infrastructure Authority Patricia Huang, Deputy Director, Capital Projects, Cascadia State Infrastructure Authority
Attorney | Role | Current Hourly Rate
Oliver Mackenzie | Partner — Responsible Partner | $1,175.00
Harrison Wexford | Partner — Billing Partner | $1,125.00
Tiffany Rosenthal | Associate — Lead Associate | $785.00
Andrew Fitzpatrick | Associate — Working Associate | $625.00

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP

ACCEPTANCE AND AGREEMENT

CASCADIA STATE INFRASTRUCTURE AUTHORITY

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