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DRAFT — FOR DISCUSSION PURPOSES ONLY NOT YET SHARED WITH COUNTERPARTY

VOLUNTARY DISSOLUTION AGREEMENT

COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC

Prepared by:

Calderwood & Harkness LLP 901 Fifth Avenue, Suite 3200 Seattle, Washington 98164

Matter No. 47291.00001

[__, 2024]

Prepared for review by Cascadia State Infrastructure Authority — Privileged & Confidential — Attorney Work Product. This document is a preliminary draft prepared by Calderwood & Harkness LLP for the sole use of its client, Cascadia State Infrastructure Authority, and is protected by the attorney-client privilege and the work product doctrine. This draft has not been reviewed by, shared with, or approved by Pinnacle Water Solutions, LLC or its counsel. Distribution of this document without the express written consent of Calderwood & Harkness LLP is prohibited.

VOLUNTARY DISSOLUTION AGREEMENT OF COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC

This Voluntary Dissolution Agreement (this "Agreement") is entered into as of [__, 2024] (the "Dissolution Date"), by and between:

CASCADIA STATE INFRASTRUCTURE AUTHORITY ("CSIA"), a Washington state governmental authority created and existing pursuant to Chapter 43.155A of the Revised Code of Washington ("RCW"), with its principal offices located at 1100 Jefferson Street SE, Suite 400, Olympia, Washington 98501;

and

PINNACLE WATER SOLUTIONS, LLC ("Pinnacle"), a Delaware limited liability company, duly registered to transact business in the States of Washington and Oregon, with its principal offices located at 720 SW Quelston Street, Suite 1500, Portland, Oregon 97205.

CSIA and Pinnacle are each referred to herein individually as a "Member" and collectively as the "Members" of Columbia Basin Water Treatment Partners, LLC ("CBWTP" or the "Company"), a Washington limited liability company organized and existing under the laws of the State of Washington (Washington Unified Business Identifier No. 604-892-315; Federal Employer Identification Number 88-3421076), with its registered office at 1100 Jefferson Street SE, Suite 400, Olympia, Washington 98501 (c/o Cascadia State Infrastructure Authority).

RECITALS

WHEREAS:

A. Formation of CBWTP. CBWTP was formed as a Washington limited liability company on November 2, 2021, pursuant to a Certificate of Formation filed with the Washington Secretary of State, for the express purpose of designing, constructing, owning, and operating the Thurston County Advanced Water Treatment Facility (the "Facility"), a 12 million gallon-per-day advanced water treatment plant to be constructed and located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501 (the "Facility Site"), with a total estimated project cost of Forty-Five Million Dollars ($45,000,000). The Facility was intended to serve as a critical component of regional water infrastructure, providing advanced tertiary treatment capacity for the greater Thurston County service area.

B. JV Agreement. In connection with the formation of CBWTP, the Members entered into that certain Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated as of November 2, 2021 (the "JV Agreement"), which governs the formation, capitalization, governance, management, operations, and dissolution of CBWTP. Under the JV Agreement, CSIA holds a fifty-five percent (55%) membership interest in CBWTP and Pinnacle holds a forty-five percent (45%) membership interest in CBWTP. The JV Agreement designated Pinnacle as the Manager of the Company, responsible for day-to-day project management, and established a five-member Governing Board as the principal governing body of the Company.

C. Capital Contributions. Under Article III of the JV Agreement, the Members committed to make total equity capital contributions of Eighteen Million Dollars ($18,000,000) to CBWTP, allocated as follows: Nine Million Nine Hundred Thousand Dollars ($9,900,000) from CSIA (representing 55% of total equity) and Eight Million One Hundred Thousand Dollars ($8,100,000) from Pinnacle (representing 45% of total equity). Such contributions were to be funded in two equal tranches. The First Tranche was duly funded by both Members on November 15, 2021, with CSIA contributing Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) and Pinnacle contributing Four Million Fifty Thousand Dollars ($4,050,000), for a total First Tranche funding of Nine Million Dollars ($9,000,000). Pursuant to Section 3.2(b) of the JV Agreement, a Second Tranche capital call was issued by the CBWTP Governing Board on March 1, 2023, requiring CSIA to contribute an additional Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) and Pinnacle to contribute an additional Four Million Fifty Thousand Dollars ($4,050,000), in each case on or before March 31, 2023.

D. CSIA Second Tranche Funding. CSIA duly funded its Second Tranche contribution of Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) on March 28, 2023, three days prior to the March 31, 2023 deadline, thereby making CSIA fully funded with respect to its total equity capital commitment of Nine Million Nine Hundred Thousand Dollars ($9,900,000).

E. Pinnacle Funding Default. Pinnacle failed to fund its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) by the March 31, 2023 deadline established by the Governing Board's capital call notice. A formal notice of default was delivered by CSIA's counsel, Calderwood & Harkness LLP, to Pinnacle and its counsel, Whitfield, Aarons & Greer LLP, on April 14, 2023, in accordance with the notice provisions of the JV Agreement. The sixty (60) day cure period provided under Section 8.2 of the JV Agreement expired on June 13, 2023, without Pinnacle having cured the default or tendered any portion of the Second Tranche capital contribution. As of the date of this Agreement, Pinnacle's Second Tranche contribution remains entirely unfunded.

F. Force Majeure Dispute. By letter dated April 28, 2023, Pinnacle, acting through its counsel Whitfield, Aarons & Greer LLP, asserted that its obligation to fund the Second Tranche capital contribution was excused by force majeure under Section 11.4 of the JV Agreement, citing environmental permitting delays at the Thurston County Department of Environmental Health related to the Phase II Environmental Impact Determination for the Facility Site. Calderwood & Harkness LLP, on behalf of CSIA, rejected this defense by responsive letter dated May 12, 2023, noting that Section 11.4 of the JV Agreement expressly excludes from the definition of "Force Majeure Events" any "delays in obtaining, or failures to obtain, governmental approvals, permits, or licenses," and further noting that Pinnacle, in its capacity as Manager of CBWTP, bore primary responsibility under Section 4.3 of the JV Agreement for advancing and managing the permitting process. The parties have been unable to resolve this dispute.

G. Project Dormancy. The Facility project has been effectively dormant since approximately mid-2022 as a result of the convergence of several adverse developments, including: (i) the stalled Phase II Environmental Impact Determination at the Thurston County Department of Environmental Health, which has not progressed beyond initial review since June 2022; (ii) Pinnacle's unilateral decision, communicated by letter dated September 14, 2022, to defer all further project expenditures pending resolution of the permitting issues; and (iii) Pinnacle's subsequent failure to fund its Second Tranche capital contribution. As a further consequence of the project's dormancy, the Twenty-Seven Million Dollar ($27,000,000) project finance credit facility commitment issued by Pacific Cascade Bank, N.A. (Reference No. PCB-PF-2022-0417, lead banker: Thomas Rennick, Senior Vice President, Public Finance Division) expired by its terms on August 15, 2023, without any draws having been made thereunder. CBWTP has not commenced construction of the Facility, and no construction contracts have been executed.

H. Ground Lease. CSIA, as owner of the Facility Site and as ground lessor, entered into a ninety-nine (99) year ground lease with CBWTP, as ground lessee, dated as of November 2, 2021 (the "Ground Lease"), for the 14.7-acre Facility Site located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, which Ground Lease was recorded with the Thurston County Auditor as Recording No. 2021-1102-004788. The Ground Lease provides for an annual rent of One Dollar ($1.00) and includes a reversion provision pursuant to which all right, title, and interest in the Facility Site shall automatically revert to CSIA upon the termination of the JV Agreement or the dissolution of CBWTP.

I. Financial Position of CBWTP. As of June 30, 2023, based on the unaudited financial statements prepared by Hargrove & Tillman, CPAs, CBWTP had: (i) total assets of approximately Nine Million Eight Hundred Forty-Seven Thousand Dollars ($9,847,000), consisting of Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) in cash held in CBWTP's operating account at Pacific Cascade Bank, N.A., Three Hundred Eighty-Five Thousand Dollars ($385,000) in prepaid environmental consulting fees payable to Westmark Environmental Consulting, Inc., and One Million Fifty Thousand Dollars ($1,050,000) in capitalized organizational and legal costs; (ii) total liabilities of approximately Two Hundred Fourteen Thousand Dollars ($214,000), consisting of accounts payable to Westmark Environmental Consulting, Inc. and Hargrove & Tillman, CPAs; and (iii) net equity of approximately Nine Million Six Hundred Thirty-Three Thousand Dollars ($9,633,000). Total cumulative expenses incurred by CBWTP from formation through June 30, 2023 were approximately Four Million Three Hundred Seventeen Thousand Dollars ($4,317,000).

J. Dissolution Decision. In light of the foregoing circumstances, including the extended project dormancy, the expiration of the project finance commitment, the unresolved funding default, and the absence of any viable path to restarting the Facility project, the Members have determined that it is in their mutual interests to voluntarily dissolve and wind down CBWTP in an orderly manner in accordance with the Washington Limited Liability Company Act (Chapter 25.15 RCW) and the terms of the JV Agreement, and to settle all disputes arising from or related to the JV Agreement, including the Pinnacle funding default, the force majeure dispute, and all related matters, on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I DEFINITIONS

Section 1.1. Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

"Agreement" means this Voluntary Dissolution Agreement of Columbia Basin Water Treatment Partners, LLC, as it may be amended, modified, or supplemented from time to time in accordance with its terms.

"Capital Accounts" means the capital accounts of the Members as established and maintained in accordance with Article III of the JV Agreement and Treasury Regulations Section 1.704-1(b)(2)(iv), as adjusted through the Dissolution Date to reflect all capital contributions made, allocations of income, gain, loss, and deduction, distributions, and the Settlement Amount, as applicable.

"Certificate of Dissolution" means the certificate of dissolution to be filed with the Washington Secretary of State in substantially the form attached hereto as Exhibit A, evidencing the dissolution of the Company in accordance with the Washington Limited Liability Company Act.

"Company" means Columbia Basin Water Treatment Partners, LLC, a Washington limited liability company (WA UBI No. 604-892-315; EIN 88-3421076).

"CSIA" has the meaning set forth in the Preamble.

"Dissolution Date" means the date on which this Agreement is executed and delivered by both Members.

"Effective Date" means the date on which the Certificate of Dissolution is accepted for filing by the Washington Secretary of State.

"Facility" means the Thurston County Advanced Water Treatment Facility, a 12 million gallon-per-day advanced water treatment plant proposed to be constructed at the Facility Site, as more fully described in the JV Agreement.

"Facility Site" means the 14.7-acre parcel of real property located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, which is the subject of the Ground Lease.

"Force Majeure Event" has the meaning ascribed to such term in Section 11.4 of the JV Agreement.

"Governing Board" means the five (5) member governing body of CBWTP established pursuant to Article V of the JV Agreement, consisting of three (3) members appointed by CSIA (Margaret Ellsworth, David Tanaka, and Patricia Huang) and two (2) members appointed by Pinnacle (Richard Prumvane and Cynthia Voss).

"Ground Lease" means that certain Ground Lease Agreement dated as of November 2, 2021, by and between CSIA, as lessor, and CBWTP, as lessee, for the Facility Site, recorded with the Thurston County Auditor as Recording No. 2021-1102-004788, as such lease may have been amended, modified, or supplemented from time to time.

"JV Agreement" means that certain Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated as of November 2, 2021, by and between CSIA and Pinnacle, as such agreement may have been amended, modified, or supplemented from time to time.

"Management Fee" means the management fee payable to Pinnacle in its capacity as Manager of the Company under Section 4.5 of the JV Agreement, calculated at three percent (3%) of total construction costs of the Facility, which, based on estimated total construction costs of Forty-Five Million Dollars ($45,000,000), would have equaled One Million Three Hundred Fifty Thousand Dollars ($1,350,000).

"Member" or "Members" has the meaning set forth in the Preamble.

"Non-Compete Covenant" means the non-competition restriction set forth in Section 9.1 of the JV Agreement, which prohibits Pinnacle and its affiliates from engaging in competing water-treatment projects within a seventy-five (75) mile radius of the Facility Site for a period of five (5) years from November 2, 2021.

"Person" means an individual, corporation, partnership, limited liability company, joint venture, trust, governmental authority, or other entity of any kind.

"Pinnacle" has the meaning set forth in the Preamble.

"Pinnacle Default Amount" means Four Million Fifty Thousand Dollars ($4,050,000), being the full amount of Pinnacle's unfunded Second Tranche capital contribution to the Company.

"Settlement Amount" means the amount to be paid by Pinnacle to CSIA, or credited against Pinnacle's distributions under Article VII, in full and final settlement of all claims arising from the Pinnacle Default Amount, as set forth in and determined pursuant to Article VI of this Agreement.

"Winding-Up Agent" means the Person appointed pursuant to Article IV of this Agreement to administer the dissolution, winding up, and final liquidation of the Company's affairs.

"Winding-Up Period" means the period commencing on the Dissolution Date and ending upon the completion of all wind-down activities contemplated by this Agreement and the making of the final distributions to the Members under Article VII.

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

Section 1.3. Rules of Construction. The following rules of construction shall apply to this Agreement:

(a) The headings and captions of the Articles and Sections of this Agreement are inserted for convenience of reference only and shall not be considered a part of this Agreement or affect in any way the meaning or interpretation hereof.

(b) Words importing the singular number shall include the plural and vice versa, and words importing gender shall include all genders.

(c) References to "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole, unless the context otherwise requires.

(d) References to Articles, Sections, and Exhibits shall mean the Articles, Sections, and Exhibits of this Agreement, unless the context otherwise requires.

(e) The word "including" shall mean "including without limitation" and shall not be construed to limit any general statement to the specific or similar items or matters immediately following it.

(f) References to any statute or statutory provision shall include any amendment, re-enactment, or successor provision thereto and any regulations promulgated thereunder.

(g) References to "business days" shall mean days other than Saturdays, Sundays, and legal holidays observed by the State of Washington.

(h) All dollar amounts are expressed in United States dollars unless otherwise specified.

ARTICLE II DISSOLUTION VOTE AND AUTHORIZATION

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

(a) CSIA shall cause its three (3) appointed Governing Board members — Margaret Ellsworth, David Tanaka, and Patricia Huang — to vote in favor of dissolution and to execute any written consents necessary to effectuate the dissolution.

(b) Pinnacle shall cause its two (2) appointed Governing Board members — Richard Prumvane and Cynthia Voss — to vote in favor of dissolution and to execute any written consents necessary to effectuate the dissolution.

The Members shall cause such Governing Board vote or written consent to be obtained no later than three (3) business days after the Dissolution Date. In the event of any conflict between the terms of this Agreement and the provisions of the JV Agreement relating to the dissolution process, the terms of this Agreement shall control as between the Members.

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

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

(a) CSIA represents and warrants that it has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby pursuant to its statutory authority under Chapter 43.155A RCW and any applicable internal policies and procedures, including any required approvals of its executive director and governing board.

(b) Pinnacle represents and warrants that it has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby pursuant to its Certificate of Formation, Operating Agreement, and other governing documents, and that, to the extent required under such governing documents or any other agreement binding upon Pinnacle, Pinnacle has obtained the written consent of Ridgeline Capital Partners, LP, its majority equity holder, to the transactions contemplated by this Agreement.

ARTICLE III FILING OF CERTIFICATE OF DISSOLUTION

Section 3.1. Certificate of Dissolution. Within ten (10) business days following the Dissolution Date, the Winding-Up Agent shall prepare and file a Certificate of Dissolution with the Washington Secretary of State in accordance with the applicable provisions of the Washington Limited Liability Company Act (Chapter 25.15 RCW), in substantially the form attached hereto as Exhibit A. The Winding-Up Agent shall use commercially reasonable efforts to ensure that the Certificate of Dissolution is accepted for filing as promptly as practicable. The date on which the Certificate of Dissolution is accepted for filing by the Washington Secretary of State shall constitute the Effective Date. The Winding-Up Agent shall promptly provide each Member with a file-stamped copy of the Certificate of Dissolution upon receipt thereof from the Washington Secretary of State.

Section 3.2. EIN and Tax Filings. The Winding-Up Agent shall be responsible for the timely preparation and filing of all final federal and state tax returns for CBWTP (EIN 88-3421076), including the Company's final Form 1065 (U.S. Return of Partnership Income) and any corresponding Washington State excise tax returns and business and occupation tax returns. The Winding-Up Agent shall also take such other actions as may be necessary or appropriate to terminate the Company's tax reporting obligations with the Internal Revenue Service and the Washington State Department of Revenue, including the issuance of final Schedule K-1s to each Member. In connection with the foregoing, the Winding-Up Agent shall engage Hargrove & Tillman, CPAs (engagement partner: Laura Svensson, CPA), to prepare such returns and to provide a final capital account reconciliation. All costs and expenses incurred in connection with such tax filings shall be borne by the Company and paid from Company assets.

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

(a) Pacific Cascade Bank, N.A. (Attention: Thomas Rennick, SVP, Public Finance Division), with respect to the Company's operating account and the expired project finance credit facility commitment (Reference No. PCB-PF-2022-0417);

(b) Westmark Environmental Consulting, Inc. (Attention: Dr. Anita Farooq), with respect to the termination of the environmental consulting engagement and the payment of outstanding accounts payable;

(c) Hargrove & Tillman, CPAs (Attention: Laura Svensson, CPA), with respect to the continuation of the accounting engagement through completion of final tax returns and capital account reconciliation;

(d) Thurston County Department of Environmental Health (Attention: Karen Lindstrom, Environmental Review Division Manager), with respect to the withdrawal of all pending permitting applications and submissions, including the stalled Phase II Environmental Impact Determination; and

(e) Such other Persons as the Winding-Up Agent, in consultation with the Members, may determine to be appropriate.

Such notices shall be in writing and shall be delivered by certified mail, return receipt requested, or by a nationally recognized overnight courier service. The form of such notices shall be subject to the reasonable approval of both Members.

ARTICLE IV APPOINTMENT OF WINDING-UP AGENT

Section 4.1. Designation. The Members hereby appoint [__] as the Winding-Up Agent to administer the orderly dissolution, winding up, and liquidation of the Company's affairs in accordance with the terms of this Agreement, the JV Agreement, and the Washington Limited Liability Company Act (Chapter 25.15 RCW).

[Drafting Note for CSIA's Review: Calderwood & Harkness proposes that the Winding-Up Agent be CSIA or a CSIA-designated representative (e.g., David Tanaka, General Counsel of CSIA). This proposal is supported by the following considerations: (i) Pinnacle is the defaulting member under the JV Agreement; (ii) CSIA is the fully-funded, majority member holding a 55% membership interest; (iii) the Facility Site, which is CSIA-owned property, must revert to CSIA upon dissolution; and (iv) it is appropriate for the non-defaulting member to oversee the wind-down process. We anticipate that Pinnacle may seek a neutral third-party Winding-Up Agent or request joint oversight. Calderwood & Harkness is prepared to advise CSIA on acceptable alternatives should negotiations require a compromise on this point.]

Section 4.2. Powers and Duties. The Winding-Up Agent shall have full power and authority to take any and all actions that are necessary, appropriate, or advisable to wind down the Company's affairs in an orderly and expeditious manner, including, without limitation, the authority to:

(a) collect, marshal, and take possession of all Company assets, wherever located, including the approximately Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) in cash held in the Company's operating account at Pacific Cascade Bank, N.A., the Three Hundred Eighty-Five Thousand Dollars ($385,000) in prepaid environmental consulting fees, and the One Million Fifty Thousand Dollars ($1,050,000) in capitalized organizational and legal costs;

(b) pay, or make adequate provision for the payment of, all Company liabilities, debts, and obligations, including the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in outstanding accounts payable to Westmark Environmental Consulting, Inc. and Hargrove & Tillman, CPAs, and any additional liabilities identified during the Winding-Up Period;

(c) distribute remaining Company assets to the Members in accordance with the distribution provisions set forth in Article VII of this Agreement;

(d) execute, acknowledge, deliver, record, and file any and all instruments, documents, and certificates that are necessary or appropriate to wind down the Company's affairs, including the Certificate of Dissolution, the Memorandum of Termination of Ground Lease, quitclaim deeds, tax returns, and any other filings required by federal, state, or local law;

(e) terminate the Ground Lease in accordance with Article V and effectuate the reversion of the Facility Site to CSIA;

(f) terminate all third-party contracts, engagements, and agreements to which the Company is a party, in accordance with Article IX;

(g) engage attorneys, accountants, appraisers, environmental consultants, and other professionals as the Winding-Up Agent may deem necessary or appropriate to carry out its duties hereunder, and to pay the fees and expenses of such professionals from Company assets;

(h) prosecute or defend any legal proceedings involving the Company, to the extent necessary to protect the Company's assets or effectuate the wind-down;

(i) open, maintain, or close bank accounts in the name of the Company as may be necessary to hold Company funds during the Winding-Up Period; and

(j) take such other actions as may be necessary or appropriate to complete the dissolution, winding up, and liquidation of the Company's affairs.

Section 4.3. Compensation. The Winding-Up Agent shall be entitled to receive reasonable compensation for services rendered during the Winding-Up Period, in an amount to be agreed upon by the Members, which compensation shall be paid from Company assets as an expense of the wind-down prior to any distributions to the Members under Article VII. If the Winding-Up Agent is CSIA or a CSIA-designated representative, such compensation shall not exceed the actual, documented out-of-pocket costs and expenses incurred by CSIA in administering the wind-down, together with a reasonable administrative fee. The Winding-Up Agent shall provide an itemized accounting of all compensation and expenses to each Member upon request and in connection with the final distribution.

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

Section 4.5. Term. The Winding-Up Agent's authority and appointment hereunder shall terminate upon the completion of all wind-down activities contemplated by this Agreement, including the making of all final distributions to the Members under Article VII and the filing of all final tax returns, but in no event later than one hundred eighty (180) days after the Dissolution Date, unless such period is extended by mutual written consent of both Members. Upon termination of the Winding-Up Agent's appointment, the Winding-Up Agent shall deliver a final accounting to each Member, together with all remaining Company books, records, and documents.

ARTICLE V TERMINATION OF GROUND LEASE AND REVERSION TO CSIA

Section 5.1. Termination of Ground Lease. Effective upon the Effective Date, the Ground Lease dated as of November 2, 2021, by and between CSIA, as lessor, and CBWTP, as lessee, for the 14.7-acre Facility Site located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, recorded with the Thurston County Auditor as Recording No. 2021-1102-004788, shall automatically terminate in accordance with the reversion provisions contained therein, which provide for the termination and reversion of the leasehold estate upon the termination of the JV Agreement or the dissolution of CBWTP. The Members hereby acknowledge and agree that the dissolution of the Company and the termination of the JV Agreement as contemplated by this Agreement constitute triggering events for the automatic termination of the Ground Lease under its terms. The annual rent of One Dollar ($1.00) payable under the Ground Lease shall cease as of the Effective Date, and no further rental payments shall be due or owing by any party.

Section 5.2. Reversion to CSIA. Upon the termination of the Ground Lease as provided in Section 5.1, all right, title, and interest of the Company in and to the Facility Site, including any improvements, fixtures, or appurtenances thereon or thereto (to the extent any exist), shall automatically revert to CSIA, free and clear of any claims, liens, encumbrances, or other interests of Pinnacle, CBWTP, or any third party claiming by, through, or under Pinnacle or CBWTP. CSIA shall hold the Facility Site in its capacity as the fee simple owner of such property, and the Facility Site shall not be subject to any further rights or claims of Pinnacle arising from the JV Agreement, the Ground Lease, or this Agreement.

Section 5.3. Recording of Termination. The Winding-Up Agent shall, within thirty (30) days following the Effective Date, cause a Memorandum of Termination of Ground Lease, in substantially the form attached hereto as Exhibit C, or, alternatively, a quitclaim deed from CBWTP to CSIA, to be duly executed, acknowledged, and recorded with the Thurston County Auditor, at the Company's expense, evidencing the termination of the Ground Lease and the reversion of the Facility Site to CSIA. Pinnacle shall, and hereby agrees to, execute and deliver any documents or instruments reasonably requested by CSIA or the Winding-Up Agent to effectuate the recording of such termination.

Section 5.4. Pinnacle's Acknowledgment. Pinnacle hereby acknowledges and irrevocably agrees that: (a) it has no right, title, or interest, whether legal or equitable, in the Facility Site, the Ground Lease, or the real property subject thereto; (b) the Facility Site is, and at all times has been, owned by CSIA in its capacity as a Washington state governmental authority; and (c) the Facility Site shall not be treated as a distributable asset of the Company for purposes of Article VII or any other provision of this Agreement. Pinnacle hereby waives, releases, and forever relinquishes any and all claims, rights, or interests that it may have, or may hereafter assert, in or to the Facility Site, the Ground Lease, or the leasehold estate created thereby.

ARTICLE VI SETTLEMENT OF PINNACLE FUNDING DEFAULT

Section 6.1. Acknowledgment of Default. Pinnacle hereby acknowledges and agrees that it failed to fund its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) by the March 31, 2023 deadline established by the Governing Board's capital call notice dated March 1, 2023, and that the sixty (60) day cure period provided under Section 8.2 of the JV Agreement expired on June 13, 2023, without Pinnacle having cured such default or tendered any portion of the Second Tranche capital contribution. Pinnacle further acknowledges that such failure constitutes a "Member Default" as defined in Section 8.1 of the JV Agreement, entitling CSIA to the remedies set forth in Section 8.2 of the JV Agreement.

[Drafting Note for CSIA's Review: Calderwood & Harkness anticipates that Pinnacle may resist this characterization and may decline to acknowledge the default in unqualified terms. Pinnacle's counsel, Whitfield, Aarons & Greer LLP, may propose alternative language such as: "Pinnacle acknowledges that the Second Tranche capital contribution was not funded by March 31, 2023, but reserves its position that such failure was excused by force majeure under §11.4 of the JV Agreement." Calderwood & Harkness's recommendation is that CSIA insist on an unqualified acknowledgment of default as a precondition to the mutual releases in Article XI. If a compromise is needed, Calderwood & Harkness can propose language stating that "without admitting or denying" the characterization of default, Pinnacle agrees to the Settlement Amount and other terms herein. CSIA should be prepared to discuss this point in negotiation.]

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

[Drafting Note for CSIA's Review: The Settlement Amount is the central commercial term of this Agreement and remains subject to negotiation between the parties. The following considerations are relevant to establishing CSIA's negotiation range:

CSIA's Maximum Position: The full Pinnacle Default Amount of $4,050,000, plus (i) interest at the default rate specified in §8.2(a) of the JV Agreement (prime rate + 5%, compounding monthly, from March 31, 2023 to the Dissolution Date), and (ii) consequential damages, including costs associated with the loss of the Pacific Cascade Bank credit facility commitment and project delay. Calderwood & Harkness estimates total damages under this position at approximately $4,800,000–$5,200,000 depending on the Dissolution Date.

CSIA's Minimum Acceptable Position: Calderwood & Harkness recommends that CSIA not accept a Settlement Amount below $2,500,000, based on the strength of CSIA's legal position regarding the default, the exclusion of permitting delays from the force majeure clause, and the availability of the 75% of FMV purchase remedy under §8.2(c), which would likely yield a recovery in excess of that amount.

Pinnacle's Expected Position: Partial or no payment, on the grounds that (i) force majeure and permitting delays excused the funding obligation, (ii) the project was dormant and the Second Tranche call was premature, and (iii) CBWTP's assets can simply be distributed pro rata. Calderwood & Harkness views these defenses as weak for the reasons stated in CSIA's May 12, 2023 letter, but acknowledges litigation risk.

Calderwood & Harkness is prepared to provide a detailed litigation risk assessment and negotiation strategy memorandum upon CSIA's request.]

Section 6.3. Offset Right. CSIA shall have the right, without further action or consent of Pinnacle, to offset the Settlement Amount against any distributions otherwise payable to Pinnacle under Article VII of this Agreement. To the extent the Settlement Amount exceeds the distributions that would otherwise be payable to Pinnacle, Pinnacle shall pay the excess to CSIA in immediately available funds within ten (10) business days following the Dissolution Date. To the extent the Settlement Amount is less than or equal to the distributions that would otherwise be payable to Pinnacle, the offset shall be effectuated by reducing Pinnacle's distribution by the Settlement Amount, and Pinnacle shall have no further payment obligation under this Section.

Section 6.4. Withdrawal of Force Majeure Claim. Pinnacle hereby withdraws, and irrevocably agrees not to reassert in any forum, its claim that force majeure under Section 11.4 of the JV Agreement excused Pinnacle's obligation to fund the Second Tranche capital contribution. Pinnacle acknowledges that Section 11.4 of the JV Agreement expressly excludes from the definition of "Force Majeure Events" any "delays in obtaining, or failures to obtain, governmental approvals, permits, or licenses," and that the environmental permitting delays at the Thurston County Department of Environmental Health cited by Pinnacle in its April 28, 2023 letter do not constitute a Force Majeure Event under the JV Agreement. Pinnacle further acknowledges that, in its capacity as Manager of CBWTP under Section 4.3 of the JV Agreement, Pinnacle bore primary responsibility for advancing and managing the permitting process for the Facility, and that Pinnacle's unilateral decision to defer project expenditures on September 14, 2022 contributed to the permitting delays.

[Drafting Note for CSIA's Review: This is expected to be one of the most heavily negotiated provisions. Pinnacle may resist an outright withdrawal of the force majeure claim and may instead seek language framing the withdrawal as part of a negotiated compromise. Calderwood & Harkness recommends that CSIA insist on an unqualified withdrawal, as the legal basis for the force majeure defense is clearly precluded by the express terms of §11.4. If Pinnacle refuses, CSIA should consider whether the overall settlement package — including the Settlement Amount, the Non-Compete Covenant survival, and the distribution terms — adequately compensates CSIA for the concession.]

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

(a) dilute Pinnacle's membership interest on a pro rata basis to reflect the unfunded Second Tranche contribution;

(b) purchase Pinnacle's membership interest in the Company at seventy-five percent (75%) of the fair market value thereof; or

(c) pursue any other default remedies available under Section 8.2 of the JV Agreement or at law or in equity with respect to Pinnacle's failure to fund the Second Tranche capital contribution.

The waiver set forth in this Section 6.5 shall be effective only upon the full and final payment or satisfaction of the Settlement Amount. In the event Pinnacle fails to pay, or CSIA is unable to offset pursuant to Section 6.3, the full Settlement Amount, such waiver shall automatically and without further action be null and void ab initio, and CSIA shall retain all rights and remedies available to it under Section 8.2 of the JV Agreement and applicable law.

ARTICLE VII DISTRIBUTION OF COMPANY ASSETS

Section 7.1. Payment of Liabilities. Prior to any distribution to the Members, the Winding-Up Agent shall pay, or make adequate provision for the payment of, all debts, liabilities, and obligations of the Company, including, without limitation:

(a) all outstanding accounts payable, including the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable to Westmark Environmental Consulting, Inc. and Hargrove & Tillman, CPAs, as reflected on the Company's unaudited balance sheet as of June 30, 2023, and any additional payables incurred between such date and the Dissolution Date;

(b) all costs, fees, and expenses of the Winding-Up Agent incurred in connection with the wind-down of the Company's affairs, including professional fees for attorneys, accountants, and other advisors;

(c) all taxes, assessments, fees, and other charges owed by the Company to any federal, state, or local governmental authority, including any filing fees, final tax liabilities, and any Washington State business and occupation taxes; and

(d) any other debts, liabilities, or obligations of the Company, whether fixed, contingent, known, or unknown.

All such payments shall be made from Company assets in the order of priority established by the Washington Limited Liability Company Act and applicable law.

Section 7.2. Reserves. The Winding-Up Agent may, in its reasonable discretion, establish and maintain a reserve fund in an amount that the Winding-Up Agent determines to be reasonably necessary to provide for the payment of contingent, conditional, or unknown liabilities of the Company that may arise during or after the Winding-Up Period. Such reserve shall not exceed Three Hundred Thousand Dollars ($300,000), and shall be held in the Company's operating account at Pacific Cascade Bank, N.A. for a period not exceeding ninety (90) days following the Effective Date. Upon the expiration of such ninety (90) day period, any remaining funds in the reserve that are not required to satisfy Company liabilities shall be distributed to the Members in accordance with Section 7.3. The Winding-Up Agent shall provide the Members with a written accounting of the reserve fund at the time of establishment and upon its dissolution.

Section 7.3. Distribution in Accordance with Capital Accounts. Following the payment of all Company liabilities pursuant to Section 7.1, the establishment of any reserves pursuant to Section 7.2, and the deduction of the Settlement Amount from Pinnacle's share in accordance with Article VI, the remaining Company assets shall be distributed to the Members in proportion to their respective positive Capital Account balances, as adjusted for all capital contributions, allocations of income, gain, loss, deduction, distributions, expenses, and the Settlement Amount.

For purposes of this Agreement, the Members' preliminary Capital Account balances, as of June 30, 2023, based on the unaudited financial statements prepared by Hargrove & Tillman, CPAs, are as follows:

[Drafting Note for CSIA's Review: The precise Capital Account balances set forth above are preliminary estimates based on the June 30, 2023 unaudited financial statements and are subject to confirmation and adjustment by Hargrove & Tillman, CPAs as of the Dissolution Date. A final capital account reconciliation will be prepared by Hargrove & Tillman as part of the wind-down process and will serve as the basis for the final distribution calculations. The allocation of cumulative expenses on a 55%/45% basis reflects the expense allocation methodology set forth in Section 6.2 of the JV Agreement. Calderwood & Harkness recommends that the distribution waterfall be recalculated using updated financial statements as of the Dissolution Date before the final version of this Agreement is circulated to Pinnacle.]

The net equity of CBWTP as of June 30, 2023, as reflected on the Company's unaudited balance sheet, was approximately Nine Million Six Hundred Thirty-Three Thousand Dollars ($9,633,000). Distributions shall be made to the Members in amounts equal to their respective positive adjusted Capital Account balances, as finally determined by Hargrove & Tillman, CPAs and approved by the Winding-Up Agent.

Section 7.4. Form of Distribution. All distributions to the Members shall be made in cash by wire transfer of immediately available funds from the Company's operating account at Pacific Cascade Bank, N.A. (which held a balance of approximately Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) as of June 30, 2023) to accounts designated in writing by each Member. In the event that Company cash assets are insufficient to satisfy the distribution obligations under this Article VII in full (after payment of all liabilities and reserves), the Winding-Up Agent may, with the prior written consent of both Members, distribute non-cash Company assets in kind at their fair market value as reasonably determined by the Winding-Up Agent, with any necessary adjustments to Capital Accounts.

Section 7.5. Final Distribution. The Winding-Up Agent shall make final distributions to the Members within thirty (30) days following the completion of all wind-down activities contemplated by this Agreement, including the payment or adequate provision for all Company liabilities, the release of any reserves established under Section 7.2, and the finalization of all Capital Account adjustments. Upon the making of final distributions, the Members shall have no further rights or claims against the Company or against each other with respect to Company assets, except as expressly provided in this Agreement. The Winding-Up Agent shall provide each Member with a final accounting statement showing all receipts, disbursements, reserves, adjustments, and distributions made during the Winding-Up Period.

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

Section 8.1. Termination of Manager Designation. Effective as of the Dissolution Date, Pinnacle's designation as Manager of CBWTP under Article IV of the JV Agreement is hereby terminated in all respects. From and after the Dissolution Date, Pinnacle shall have no management authority, operational responsibility, decision-making power, or fiduciary duty with respect to the Company, its assets, or its affairs. All management authority formerly vested in Pinnacle as Manager shall be transferred to and assumed by the Winding-Up Agent appointed pursuant to Article IV of this Agreement. Pinnacle shall cooperate with the Winding-Up Agent in connection with the orderly transition of all management functions and responsibilities.

Section 8.2. Management Fee. The Management Fee, as defined in Section 4.5 of the JV Agreement, calculated at three percent (3%) of total construction costs of the Facility (which, based on estimated total construction costs of Forty-Five Million Dollars ($45,000,000), would have equaled One Million Three Hundred Fifty Thousand Dollars ($1,350,000)), shall not be payable to Pinnacle. The Members acknowledge and agree that construction of the Facility was never commenced, that no construction contracts were executed, and that no construction costs were incurred by the Company. Accordingly, no Management Fee has accrued or is owing to Pinnacle under the JV Agreement. Pinnacle hereby irrevocably waives any and all claims to the Management Fee, whether under the JV Agreement, this Agreement, or otherwise, and agrees that no portion of the Management Fee shall be included in, or added to, the amounts distributable to Pinnacle under Article VII.

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

(a) all environmental assessments, studies, and reports relating to the Facility Site, including the Phase I Environmental Site Assessment completed on April 22, 2022;

(b) all engineering plans, drawings, specifications, and design documents relating to the Facility;

(d) all correspondence with governmental agencies, including the Thurston County Department of Environmental Health, the Washington Department of Ecology, and any other permitting authorities;

(e) all contracts, engagement letters, and agreements entered into by or on behalf of the Company;

(f) all Governing Board minutes, resolutions, and written consents;

(g) all insurance policies, certificates, and related documentation; and

(h) all other books, records, and documents of the Company.

Pinnacle represents and warrants that it has not destroyed, altered, or disposed of any Company records and that the records delivered to the Winding-Up Agent pursuant to this Section will be complete and accurate in all material respects.

ARTICLE IX TERMINATION OF THIRD-PARTY CONTRACTS AND ENGAGEMENTS

Section 9.1. Environmental Consulting Agreement. The engagement of Westmark Environmental Consulting, Inc. (principal consultant: Dr. Anita Farooq), retained by the Company as of January 10, 2022, for the provision of environmental consulting services in connection with the Facility, including the Phase I Environmental Site Assessment, soil sampling, groundwater analysis, and support for the Phase II Environmental Impact Determination, shall be terminated as of the Dissolution Date. The Winding-Up Agent shall provide written notice of termination to Westmark Environmental Consulting, Inc. in accordance with the termination provisions of the applicable engagement letter or consulting agreement. Any outstanding fees and expenses owed to Westmark Environmental Consulting, Inc. (included in the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable reflected on the Company's books as of June 30, 2023) shall be paid from Company assets during the Winding-Up Period. Upon payment in full of all amounts owed, Westmark Environmental Consulting, Inc. shall deliver to the Winding-Up Agent all Company records, work product, and deliverables in its possession.

Section 9.2. Accounting Engagement. The engagement of Hargrove & Tillman, CPAs (engagement partner: Laura Svensson, CPA) shall continue beyond the Dissolution Date for the limited purposes of: (a) preparing the Company's final federal and state tax returns, including the final Form 1065 and corresponding Schedule K-1s; (b) preparing the final capital account reconciliation and any adjusted Capital Account calculations required under Article VII; and (c) providing such other accounting and tax advisory services as the Winding-Up Agent may reasonably request in connection with the wind-down. Upon the completion of such services, the Hargrove & Tillman engagement shall terminate. All outstanding fees and expenses owed to Hargrove & Tillman, CPAs (included in the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable reflected on the Company's books as of June 30, 2023), together with any additional fees incurred in connection with the final tax returns and capital account reconciliation, shall be paid from Company assets during the Winding-Up Period.

Section 9.3. Project Finance Commitment. The Members acknowledge and confirm that the Twenty-Seven Million Dollar ($27,000,000) project finance credit facility commitment issued by Pacific Cascade Bank, N.A. (Reference No. PCB-PF-2022-0417, lead banker: Thomas Rennick, Senior Vice President, Public Finance Division) expired by its terms on August 15, 2023, without any draws having been made thereunder. No principal, interest, fees, or other obligations are outstanding or owing by the Company to Pacific Cascade Bank, N.A. in connection with such commitment. The Winding-Up Agent shall provide written notice to Pacific Cascade Bank, N.A. of the dissolution of the Company and shall take such actions as may be necessary to formally close any accounts or credit arrangements maintained with Pacific Cascade Bank, N.A. following the completion of all wind-down activities and final distributions.

Section 9.4. Permitting Applications. Any and all pending applications, submissions, or filings with the Thurston County Department of Environmental Health, including the stalled Phase II Environmental Impact Determination for the Facility Site, and any other governmental agencies relating to the Facility or the Facility Site, shall be formally withdrawn by the Winding-Up Agent promptly following the Dissolution Date. The Winding-Up Agent shall provide written notice of withdrawal to Karen Lindstrom, Environmental Review Division Manager, Thurston County Department of Environmental Health, and to any other applicable agency officials. The Phase I Environmental Site Assessment for the Facility Site, completed by Westmark Environmental Consulting, Inc. on April 22, 2022 (which found no recognized environmental conditions at the Facility Site), together with all related environmental work product and documentation, shall be retained in the Company's records and delivered to CSIA as part of the reversion of the Facility Site.

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

ARTICLE X SURVIVAL OF NON-COMPETE COVENANT

Section 10.1. Continuation of Non-Compete. Notwithstanding the dissolution of CBWTP, the termination of the JV Agreement, and the consummation of the transactions contemplated by this Agreement, the non-competition covenant set forth in Section 9.1 of the JV Agreement (the "Non-Compete Covenant"), which restricts Pinnacle and its affiliates from engaging in competing water-treatment projects within a seventy-five (75) mile radius of the Facility Site, shall survive and remain in full force and effect in accordance with its original terms for the full five (5) year period commencing on November 2, 2021, and expiring on November 2, 2026. The Members acknowledge and agree that the Non-Compete Covenant was a material inducement to CSIA's entry into the JV Agreement and is a material condition of CSIA's willingness to enter into this Agreement and the settlement contemplated hereby. The dissolution of the Company and the termination of the JV Agreement shall not operate to modify, limit, or impair the scope, duration, or enforceability of the Non-Compete Covenant.

Section 10.2. Enforcement. CSIA shall retain the right to enforce the Non-Compete Covenant directly against Pinnacle, including Pinnacle's officers Richard Prumvane and Cynthia Voss to the extent such individuals are bound by the Non-Compete Covenant under the JV Agreement or any ancillary agreement, and against Pinnacle's affiliates, including Ridgeline Capital Partners, LP and its portfolio companies, in accordance with the dispute resolution provisions set forth in Article XIV of this Agreement. Without limiting the foregoing, CSIA shall be entitled to seek injunctive relief, specific performance, and any other equitable or legal remedies available under applicable law for any breach or threatened breach of the Non-Compete Covenant. Pinnacle acknowledges that a breach of the Non-Compete Covenant would cause CSIA irreparable harm for which monetary damages would be an inadequate remedy, and Pinnacle hereby consents to the entry of injunctive relief (including temporary restraining orders, preliminary injunctions, and permanent injunctions) in any court of competent jurisdiction in Washington, without the necessity of proving actual damages or posting a bond.

Section 10.3. Scope. For the avoidance of doubt, the surviving Non-Compete Covenant shall apply within a seventy-five (75) mile radius measured from the Facility Site at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, and shall encompass the design, engineering, construction, ownership, management, and operation of water treatment facilities and wastewater treatment facilities, including advanced treatment facilities, membrane bioreactor systems, and any similar infrastructure projects, as more fully described in Section 9.1 of the JV Agreement. The Non-Compete Covenant shall bind Pinnacle, its successors and assigns, its members and managers, and its affiliates (including Ridgeline Capital Partners, LP and any entities directly or indirectly controlled by Ridgeline Capital Partners, LP or its general partner).

ARTICLE XI MUTUAL RELEASES

Section 11.1. CSIA Release of Pinnacle. Effective upon Pinnacle's payment in full of the Settlement Amount (whether by direct payment or offset under Section 6.3) and Pinnacle's satisfaction of all other obligations under this Agreement, CSIA, on behalf of itself and its officers, directors, board members, employees, agents, representatives, successors, and assigns, hereby irrevocably and unconditionally releases and forever discharges Pinnacle, its members (including Ridgeline Capital Partners, LP and Jonathan Kreider), managers, officers (including Richard Prumvane and Cynthia Voss), directors, employees, agents, representatives, attorneys, successors, and assigns (collectively, the "Pinnacle Released Parties") from any and all claims, demands, liabilities, obligations, actions, causes of action, suits, debts, dues, sums of money, accounts, covenants, contracts, damages, judgments, losses, costs, and expenses (including attorneys' fees) of every kind and nature whatsoever, whether at law or in equity, whether known or unknown, whether accrued or unaccrued, whether asserted or unasserted, whether direct or indirect, whether liquidated or unliquidated, that CSIA ever had, now has, or hereafter may have against any of the Pinnacle Released Parties, arising from, based upon, or in any way related to the JV Agreement, the Ground Lease, the formation, capitalization, governance, management, or operations of CBWTP, the Facility, the Facility Site, the Pinnacle funding default, the force majeure dispute, or any other matter relating to the business, affairs, or existence of the Company.

Section 11.2. Pinnacle Release of CSIA. Effective upon execution of this Agreement and CSIA's satisfaction of all obligations hereunder, Pinnacle, on behalf of itself, its members (including Ridgeline Capital Partners, LP and Jonathan Kreider), managers, officers (including Richard Prumvane and Cynthia Voss), directors, employees, agents, representatives, attorneys, successors, and assigns, hereby irrevocably and unconditionally releases and forever discharges CSIA and its officers (including Margaret Ellsworth, David Tanaka, and Patricia Huang), directors, board members, employees, agents, representatives, attorneys, successors, and assigns (collectively

DRAFT — FOR DISCUSSION PURPOSES ONLY NOT YET SHARED WITH COUNTERPARTY
VOLUNTARY DISSOLUTION AGREEMENT
OF
COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC
Prepared by:
Calderwood & Harkness LLP 901 Fifth Avenue, Suite 3200 Seattle, Washington 98164
Matter No. 47291.00001
[__, 2024]
Prepared for review by Cascadia State Infrastructure Authority — Privileged & Confidential — Attorney Work Product. This document is a preliminary draft prepared by Calderwood & Harkness LLP for the sole use of its client, Cascadia State Infrastructure Authority, and is protected by the attorney-client privilege and the work product doctrine. This draft has not been reviewed by, shared with, or approved by Pinnacle Water Solutions, LLC or its counsel. Distribution of this document without the express written consent of Calderwood & Harkness LLP is prohibited.
VOLUNTARY DISSOLUTION AGREEMENT OF COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC
This Voluntary Dissolution Agreement (this "Agreement") is entered into as of [__, 2024] (the "Dissolution Date"), by and between:
CASCADIA STATE INFRASTRUCTURE AUTHORITY ("CSIA"), a Washington state governmental authority created and existing pursuant to Chapter 43.155A of the Revised Code of Washington ("RCW"), with its principal offices located at 1100 Jefferson Street SE, Suite 400, Olympia, Washington 98501;
and
PINNACLE WATER SOLUTIONS, LLC ("Pinnacle"), a Delaware limited liability company, duly registered to transact business in the States of Washington and Oregon, with its principal offices located at 720 SW Quelston Street, Suite 1500, Portland, Oregon 97205.
CSIA and Pinnacle are each referred to herein individually as a "Member" and collectively as the "Members" of Columbia Basin Water Treatment Partners, LLC ("CBWTP" or the "Company"), a Washington limited liability company organized and existing under the laws of the State of Washington (Washington Unified Business Identifier No. 604-892-315; Federal Employer Identification Number 88-3421076), with its registered office at 1100 Jefferson Street SE, Suite 400, Olympia, Washington 98501 (c/o Cascadia State Infrastructure Authority).
RECITALS
WHEREAS:
A. Formation of CBWTP. CBWTP was formed as a Washington limited liability company on November 2, 2021, pursuant to a Certificate of Formation filed with the Washington Secretary of State, for the express purpose of designing, constructing, owning, and operating the Thurston County Advanced Water Treatment Facility (the "Facility"), a 12 million gallon-per-day advanced water treatment plant to be constructed and located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501 (the "Facility Site"), with a total estimated project cost of Forty-Five Million Dollars ($45,000,000). The Facility was intended to serve as a critical component of regional water infrastructure, providing advanced tertiary treatment capacity for the greater Thurston County service area.
B. JV Agreement. In connection with the formation of CBWTP, the Members entered into that certain Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated as of November 2, 2021 (the "JV Agreement"), which governs the formation, capitalization, governance, management, operations, and dissolution of CBWTP. Under the JV Agreement, CSIA holds a fifty-five percent (55%) membership interest in CBWTP and Pinnacle holds a forty-five percent (45%) membership interest in CBWTP. The JV Agreement designated Pinnacle as the Manager of the Company, responsible for day-to-day project management, and established a five-member Governing Board as the principal governing body of the Company.
C. Capital Contributions. Under Article III of the JV Agreement, the Members committed to make total equity capital contributions of Eighteen Million Dollars ($18,000,000) to CBWTP, allocated as follows: Nine Million Nine Hundred Thousand Dollars ($9,900,000) from CSIA (representing 55% of total equity) and Eight Million One Hundred Thousand Dollars ($8,100,000) from Pinnacle (representing 45% of total equity). Such contributions were to be funded in two equal tranches. The First Tranche was duly funded by both Members on November 15, 2021, with CSIA contributing Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) and Pinnacle contributing Four Million Fifty Thousand Dollars ($4,050,000), for a total First Tranche funding of Nine Million Dollars ($9,000,000). Pursuant to Section 3.2(b) of the JV Agreement, a Second Tranche capital call was issued by the CBWTP Governing Board on March 1, 2023, requiring CSIA to contribute an additional Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) and Pinnacle to contribute an additional Four Million Fifty Thousand Dollars ($4,050,000), in each case on or before March 31, 2023.
D. CSIA Second Tranche Funding. CSIA duly funded its Second Tranche contribution of Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) on March 28, 2023, three days prior to the March 31, 2023 deadline, thereby making CSIA fully funded with respect to its total equity capital commitment of Nine Million Nine Hundred Thousand Dollars ($9,900,000).
E. Pinnacle Funding Default. Pinnacle failed to fund its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) by the March 31, 2023 deadline established by the Governing Board's capital call notice. A formal notice of default was delivered by CSIA's counsel, Calderwood & Harkness LLP, to Pinnacle and its counsel, Whitfield, Aarons & Greer LLP, on April 14, 2023, in accordance with the notice provisions of the JV Agreement. The sixty (60) day cure period provided under Section 8.2 of the JV Agreement expired on June 13, 2023, without Pinnacle having cured the default or tendered any portion of the Second Tranche capital contribution. As of the date of this Agreement, Pinnacle's Second Tranche contribution remains entirely unfunded.
F. Force Majeure Dispute. By letter dated April 28, 2023, Pinnacle, acting through its counsel Whitfield, Aarons & Greer LLP, asserted that its obligation to fund the Second Tranche capital contribution was excused by force majeure under Section 11.4 of the JV Agreement, citing environmental permitting delays at the Thurston County Department of Environmental Health related to the Phase II Environmental Impact Determination for the Facility Site. Calderwood & Harkness LLP, on behalf of CSIA, rejected this defense by responsive letter dated May 12, 2023, noting that Section 11.4 of the JV Agreement expressly excludes from the definition of "Force Majeure Events" any "delays in obtaining, or failures to obtain, governmental approvals, permits, or licenses," and further noting that Pinnacle, in its capacity as Manager of CBWTP, bore primary responsibility under Section 4.3 of the JV Agreement for advancing and managing the permitting process. The parties have been unable to resolve this dispute.
G. Project Dormancy. The Facility project has been effectively dormant since approximately mid-2022 as a result of the convergence of several adverse developments, including: (i) the stalled Phase II Environmental Impact Determination at the Thurston County Department of Environmental Health, which has not progressed beyond initial review since June 2022; (ii) Pinnacle's unilateral decision, communicated by letter dated September 14, 2022, to defer all further project expenditures pending resolution of the permitting issues; and (iii) Pinnacle's subsequent failure to fund its Second Tranche capital contribution. As a further consequence of the project's dormancy, the Twenty-Seven Million Dollar ($27,000,000) project finance credit facility commitment issued by Pacific Cascade Bank, N.A. (Reference No. PCB-PF-2022-0417, lead banker: Thomas Rennick, Senior Vice President, Public Finance Division) expired by its terms on August 15, 2023, without any draws having been made thereunder. CBWTP has not commenced construction of the Facility, and no construction contracts have been executed.
H. Ground Lease. CSIA, as owner of the Facility Site and as ground lessor, entered into a ninety-nine (99) year ground lease with CBWTP, as ground lessee, dated as of November 2, 2021 (the "Ground Lease"), for the 14.7-acre Facility Site located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, which Ground Lease was recorded with the Thurston County Auditor as Recording No. 2021-1102-004788. The Ground Lease provides for an annual rent of One Dollar ($1.00) and includes a reversion provision pursuant to which all right, title, and interest in the Facility Site shall automatically revert to CSIA upon the termination of the JV Agreement or the dissolution of CBWTP.
I. Financial Position of CBWTP. As of June 30, 2023, based on the unaudited financial statements prepared by Hargrove & Tillman, CPAs, CBWTP had: (i) total assets of approximately Nine Million Eight Hundred Forty-Seven Thousand Dollars ($9,847,000), consisting of Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) in cash held in CBWTP's operating account at Pacific Cascade Bank, N.A., Three Hundred Eighty-Five Thousand Dollars ($385,000) in prepaid environmental consulting fees payable to Westmark Environmental Consulting, Inc., and One Million Fifty Thousand Dollars ($1,050,000) in capitalized organizational and legal costs; (ii) total liabilities of approximately Two Hundred Fourteen Thousand Dollars ($214,000), consisting of accounts payable to Westmark Environmental Consulting, Inc. and Hargrove & Tillman, CPAs; and (iii) net equity of approximately Nine Million Six Hundred Thirty-Three Thousand Dollars ($9,633,000). Total cumulative expenses incurred by CBWTP from formation through June 30, 2023 were approximately Four Million Three Hundred Seventeen Thousand Dollars ($4,317,000).
J. Dissolution Decision. In light of the foregoing circumstances, including the extended project dormancy, the expiration of the project finance commitment, the unresolved funding default, and the absence of any viable path to restarting the Facility project, the Members have determined that it is in their mutual interests to voluntarily dissolve and wind down CBWTP in an orderly manner in accordance with the Washington Limited Liability Company Act (Chapter 25.15 RCW) and the terms of the JV Agreement, and to settle all disputes arising from or related to the JV Agreement, including the Pinnacle funding default, the force majeure dispute, and all related matters, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I DEFINITIONS
Section 1.1. Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
"Agreement" means this Voluntary Dissolution Agreement of Columbia Basin Water Treatment Partners, LLC, as it may be amended, modified, or supplemented from time to time in accordance with its terms.
"Capital Accounts" means the capital accounts of the Members as established and maintained in accordance with Article III of the JV Agreement and Treasury Regulations Section 1.704-1(b)(2)(iv), as adjusted through the Dissolution Date to reflect all capital contributions made, allocations of income, gain, loss, and deduction, distributions, and the Settlement Amount, as applicable.
"Certificate of Dissolution" means the certificate of dissolution to be filed with the Washington Secretary of State in substantially the form attached hereto as Exhibit A, evidencing the dissolution of the Company in accordance with the Washington Limited Liability Company Act.
"Company" means Columbia Basin Water Treatment Partners, LLC, a Washington limited liability company (WA UBI No. 604-892-315; EIN 88-3421076).
"CSIA" has the meaning set forth in the Preamble.
"Dissolution Date" means the date on which this Agreement is executed and delivered by both Members.
"Effective Date" means the date on which the Certificate of Dissolution is accepted for filing by the Washington Secretary of State.
"Facility" means the Thurston County Advanced Water Treatment Facility, a 12 million gallon-per-day advanced water treatment plant proposed to be constructed at the Facility Site, as more fully described in the JV Agreement.
"Facility Site" means the 14.7-acre parcel of real property located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, which is the subject of the Ground Lease.
"Force Majeure Event" has the meaning ascribed to such term in Section 11.4 of the JV Agreement.
"Governing Board" means the five (5) member governing body of CBWTP established pursuant to Article V of the JV Agreement, consisting of three (3) members appointed by CSIA (Margaret Ellsworth, David Tanaka, and Patricia Huang) and two (2) members appointed by Pinnacle (Richard Prumvane and Cynthia Voss).
"Ground Lease" means that certain Ground Lease Agreement dated as of November 2, 2021, by and between CSIA, as lessor, and CBWTP, as lessee, for the Facility Site, recorded with the Thurston County Auditor as Recording No. 2021-1102-004788, as such lease may have been amended, modified, or supplemented from time to time.
"JV Agreement" means that certain Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated as of November 2, 2021, by and between CSIA and Pinnacle, as such agreement may have been amended, modified, or supplemented from time to time.
"Management Fee" means the management fee payable to Pinnacle in its capacity as Manager of the Company under Section 4.5 of the JV Agreement, calculated at three percent (3%) of total construction costs of the Facility, which, based on estimated total construction costs of Forty-Five Million Dollars ($45,000,000), would have equaled One Million Three Hundred Fifty Thousand Dollars ($1,350,000).
"Member" or "Members" has the meaning set forth in the Preamble.
"Non-Compete Covenant" means the non-competition restriction set forth in Section 9.1 of the JV Agreement, which prohibits Pinnacle and its affiliates from engaging in competing water-treatment projects within a seventy-five (75) mile radius of the Facility Site for a period of five (5) years from November 2, 2021.
"Person" means an individual, corporation, partnership, limited liability company, joint venture, trust, governmental authority, or other entity of any kind.
"Pinnacle" has the meaning set forth in the Preamble.
"Pinnacle Default Amount" means Four Million Fifty Thousand Dollars ($4,050,000), being the full amount of Pinnacle's unfunded Second Tranche capital contribution to the Company.
"Settlement Amount" means the amount to be paid by Pinnacle to CSIA, or credited against Pinnacle's distributions under Article VII, in full and final settlement of all claims arising from the Pinnacle Default Amount, as set forth in and determined pursuant to Article VI of this Agreement.
"Winding-Up Agent" means the Person appointed pursuant to Article IV of this Agreement to administer the dissolution, winding up, and final liquidation of the Company's affairs.
"Winding-Up Period" means the period commencing on the Dissolution Date and ending upon the completion of all wind-down activities contemplated by this Agreement and the making of the final distributions to the Members under Article VII.
Section 1.2. Terms Defined in the JV Agreement. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the JV Agreement, unless the context clearly requires otherwise.
Section 1.3. Rules of Construction. The following rules of construction shall apply to this Agreement:
(a) The headings and captions of the Articles and Sections of this Agreement are inserted for convenience of reference only and shall not be considered a part of this Agreement or affect in any way the meaning or interpretation hereof.
(b) Words importing the singular number shall include the plural and vice versa, and words importing gender shall include all genders.
(c) References to "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole, unless the context otherwise requires.
(d) References to Articles, Sections, and Exhibits shall mean the Articles, Sections, and Exhibits of this Agreement, unless the context otherwise requires.
(e) The word "including" shall mean "including without limitation" and shall not be construed to limit any general statement to the specific or similar items or matters immediately following it.
(f) References to any statute or statutory provision shall include any amendment, re-enactment, or successor provision thereto and any regulations promulgated thereunder.
(g) References to "business days" shall mean days other than Saturdays, Sundays, and legal holidays observed by the State of Washington.
(h) All dollar amounts are expressed in United States dollars unless otherwise specified.
ARTICLE II DISSOLUTION VOTE AND AUTHORIZATION
Section 2.1. Governing Board Approval. The Members acknowledge and agree that the voluntary dissolution of CBWTP constitutes a "Major Decision" as defined in Section 5.4 of the JV Agreement, requiring the affirmative vote of at least four (4) of the five (5) members of the Governing Board at a duly noticed special meeting or by unanimous written consent in lieu of such meeting. Each Member hereby agrees to cause its respective appointed members of the Governing Board to vote in favor of the voluntary dissolution of the Company and to approve the transactions contemplated by this Agreement. Specifically:
(a) CSIA shall cause its three (3) appointed Governing Board members — Margaret Ellsworth, David Tanaka, and Patricia Huang — to vote in favor of dissolution and to execute any written consents necessary to effectuate the dissolution.
(b) Pinnacle shall cause its two (2) appointed Governing Board members — Richard Prumvane and Cynthia Voss — to vote in favor of dissolution and to execute any written consents necessary to effectuate the dissolution.
The Members shall cause such Governing Board vote or written consent to be obtained no later than three (3) business days after the Dissolution Date. In the event of any conflict between the terms of this Agreement and the provisions of the JV Agreement relating to the dissolution process, the terms of this Agreement shall control as between the Members.
Section 2.2. Member Consent. Each Member, in its capacity as a member of CBWTP holding its respective membership interest in the Company (CSIA: 55%; Pinnacle: 45%), hereby irrevocably consents to the voluntary dissolution of the Company on the terms and conditions set forth in this Agreement. Such consent shall be deemed given as of the Dissolution Date and shall be irrevocable upon execution of this Agreement by both Members, except as otherwise expressly provided herein.
Section 2.3. Authorization. Each Member hereby represents and warrants to the other Member that it has obtained all internal authorizations, approvals, and consents necessary under its governing documents and applicable law to execute and deliver this Agreement and to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing:
(a) CSIA represents and warrants that it has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby pursuant to its statutory authority under Chapter 43.155A RCW and any applicable internal policies and procedures, including any required approvals of its executive director and governing board.
(b) Pinnacle represents and warrants that it has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby pursuant to its Certificate of Formation, Operating Agreement, and other governing documents, and that, to the extent required under such governing documents or any other agreement binding upon Pinnacle, Pinnacle has obtained the written consent of Ridgeline Capital Partners, LP, its majority equity holder, to the transactions contemplated by this Agreement.
ARTICLE III FILING OF CERTIFICATE OF DISSOLUTION
Section 3.1. Certificate of Dissolution. Within ten (10) business days following the Dissolution Date, the Winding-Up Agent shall prepare and file a Certificate of Dissolution with the Washington Secretary of State in accordance with the applicable provisions of the Washington Limited Liability Company Act (Chapter 25.15 RCW), in substantially the form attached hereto as Exhibit A. The Winding-Up Agent shall use commercially reasonable efforts to ensure that the Certificate of Dissolution is accepted for filing as promptly as practicable. The date on which the Certificate of Dissolution is accepted for filing by the Washington Secretary of State shall constitute the Effective Date. The Winding-Up Agent shall promptly provide each Member with a file-stamped copy of the Certificate of Dissolution upon receipt thereof from the Washington Secretary of State.
Section 3.2. EIN and Tax Filings. The Winding-Up Agent shall be responsible for the timely preparation and filing of all final federal and state tax returns for CBWTP (EIN 88-3421076), including the Company's final Form 1065 (U.S. Return of Partnership Income) and any corresponding Washington State excise tax returns and business and occupation tax returns. The Winding-Up Agent shall also take such other actions as may be necessary or appropriate to terminate the Company's tax reporting obligations with the Internal Revenue Service and the Washington State Department of Revenue, including the issuance of final Schedule K-1s to each Member. In connection with the foregoing, the Winding-Up Agent shall engage Hargrove & Tillman, CPAs (engagement partner: Laura Svensson, CPA), to prepare such returns and to provide a final capital account reconciliation. All costs and expenses incurred in connection with such tax filings shall be borne by the Company and paid from Company assets.
Section 3.3. Notification to Third Parties. Promptly following the filing of the Certificate of Dissolution, and in any event within fifteen (15) business days following the Effective Date, the Winding-Up Agent shall provide written notice of the dissolution of the Company to all known creditors, contract counterparties, governmental agencies, and other Persons with whom the Company has material business relationships, including the following:
(a) Pacific Cascade Bank, N.A. (Attention: Thomas Rennick, SVP, Public Finance Division), with respect to the Company's operating account and the expired project finance credit facility commitment (Reference No. PCB-PF-2022-0417);
(b) Westmark Environmental Consulting, Inc. (Attention: Dr. Anita Farooq), with respect to the termination of the environmental consulting engagement and the payment of outstanding accounts payable;
(c) Hargrove & Tillman, CPAs (Attention: Laura Svensson, CPA), with respect to the continuation of the accounting engagement through completion of final tax returns and capital account reconciliation;
(d) Thurston County Department of Environmental Health (Attention: Karen Lindstrom, Environmental Review Division Manager), with respect to the withdrawal of all pending permitting applications and submissions, including the stalled Phase II Environmental Impact Determination; and
(e) Such other Persons as the Winding-Up Agent, in consultation with the Members, may determine to be appropriate.
Such notices shall be in writing and shall be delivered by certified mail, return receipt requested, or by a nationally recognized overnight courier service. The form of such notices shall be subject to the reasonable approval of both Members.
ARTICLE IV APPOINTMENT OF WINDING-UP AGENT
Section 4.1. Designation. The Members hereby appoint [__] as the Winding-Up Agent to administer the orderly dissolution, winding up, and liquidation of the Company's affairs in accordance with the terms of this Agreement, the JV Agreement, and the Washington Limited Liability Company Act (Chapter 25.15 RCW).
[Drafting Note for CSIA's Review: Calderwood & Harkness proposes that the Winding-Up Agent be CSIA or a CSIA-designated representative (e.g., David Tanaka, General Counsel of CSIA). This proposal is supported by the following considerations: (i) Pinnacle is the defaulting member under the JV Agreement; (ii) CSIA is the fully-funded, majority member holding a 55% membership interest; (iii) the Facility Site, which is CSIA-owned property, must revert to CSIA upon dissolution; and (iv) it is appropriate for the non-defaulting member to oversee the wind-down process. We anticipate that Pinnacle may seek a neutral third-party Winding-Up Agent or request joint oversight. Calderwood & Harkness is prepared to advise CSIA on acceptable alternatives should negotiations require a compromise on this point.]
Section 4.2. Powers and Duties. The Winding-Up Agent shall have full power and authority to take any and all actions that are necessary, appropriate, or advisable to wind down the Company's affairs in an orderly and expeditious manner, including, without limitation, the authority to:
(a) collect, marshal, and take possession of all Company assets, wherever located, including the approximately Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) in cash held in the Company's operating account at Pacific Cascade Bank, N.A., the Three Hundred Eighty-Five Thousand Dollars ($385,000) in prepaid environmental consulting fees, and the One Million Fifty Thousand Dollars ($1,050,000) in capitalized organizational and legal costs;
(b) pay, or make adequate provision for the payment of, all Company liabilities, debts, and obligations, including the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in outstanding accounts payable to Westmark Environmental Consulting, Inc. and Hargrove & Tillman, CPAs, and any additional liabilities identified during the Winding-Up Period;
(c) distribute remaining Company assets to the Members in accordance with the distribution provisions set forth in Article VII of this Agreement;
(d) execute, acknowledge, deliver, record, and file any and all instruments, documents, and certificates that are necessary or appropriate to wind down the Company's affairs, including the Certificate of Dissolution, the Memorandum of Termination of Ground Lease, quitclaim deeds, tax returns, and any other filings required by federal, state, or local law;
(e) terminate the Ground Lease in accordance with Article V and effectuate the reversion of the Facility Site to CSIA;
(f) terminate all third-party contracts, engagements, and agreements to which the Company is a party, in accordance with Article IX;
(g) engage attorneys, accountants, appraisers, environmental consultants, and other professionals as the Winding-Up Agent may deem necessary or appropriate to carry out its duties hereunder, and to pay the fees and expenses of such professionals from Company assets;
(h) prosecute or defend any legal proceedings involving the Company, to the extent necessary to protect the Company's assets or effectuate the wind-down;
(i) open, maintain, or close bank accounts in the name of the Company as may be necessary to hold Company funds during the Winding-Up Period; and
(j) take such other actions as may be necessary or appropriate to complete the dissolution, winding up, and liquidation of the Company's affairs.
Section 4.3. Compensation. The Winding-Up Agent shall be entitled to receive reasonable compensation for services rendered during the Winding-Up Period, in an amount to be agreed upon by the Members, which compensation shall be paid from Company assets as an expense of the wind-down prior to any distributions to the Members under Article VII. If the Winding-Up Agent is CSIA or a CSIA-designated representative, such compensation shall not exceed the actual, documented out-of-pocket costs and expenses incurred by CSIA in administering the wind-down, together with a reasonable administrative fee. The Winding-Up Agent shall provide an itemized accounting of all compensation and expenses to each Member upon request and in connection with the final distribution.
Section 4.4. Standard of Care; Liability. The Winding-Up Agent shall discharge its duties hereunder in good faith and with the care that a reasonably prudent person in a like position would exercise under similar circumstances. The Winding-Up Agent shall not be liable to any Member for any action taken or omitted to be taken in good faith in connection with the performance of its duties hereunder, except for liability arising from the Winding-Up Agent's fraud, willful misconduct, or gross negligence.
Section 4.5. Term. The Winding-Up Agent's authority and appointment hereunder shall terminate upon the completion of all wind-down activities contemplated by this Agreement, including the making of all final distributions to the Members under Article VII and the filing of all final tax returns, but in no event later than one hundred eighty (180) days after the Dissolution Date, unless such period is extended by mutual written consent of both Members. Upon termination of the Winding-Up Agent's appointment, the Winding-Up Agent shall deliver a final accounting to each Member, together with all remaining Company books, records, and documents.
ARTICLE V TERMINATION OF GROUND LEASE AND REVERSION TO CSIA
Section 5.1. Termination of Ground Lease. Effective upon the Effective Date, the Ground Lease dated as of November 2, 2021, by and between CSIA, as lessor, and CBWTP, as lessee, for the 14.7-acre Facility Site located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, recorded with the Thurston County Auditor as Recording No. 2021-1102-004788, shall automatically terminate in accordance with the reversion provisions contained therein, which provide for the termination and reversion of the leasehold estate upon the termination of the JV Agreement or the dissolution of CBWTP. The Members hereby acknowledge and agree that the dissolution of the Company and the termination of the JV Agreement as contemplated by this Agreement constitute triggering events for the automatic termination of the Ground Lease under its terms. The annual rent of One Dollar ($1.00) payable under the Ground Lease shall cease as of the Effective Date, and no further rental payments shall be due or owing by any party.
Section 5.2. Reversion to CSIA. Upon the termination of the Ground Lease as provided in Section 5.1, all right, title, and interest of the Company in and to the Facility Site, including any improvements, fixtures, or appurtenances thereon or thereto (to the extent any exist), shall automatically revert to CSIA, free and clear of any claims, liens, encumbrances, or other interests of Pinnacle, CBWTP, or any third party claiming by, through, or under Pinnacle or CBWTP. CSIA shall hold the Facility Site in its capacity as the fee simple owner of such property, and the Facility Site shall not be subject to any further rights or claims of Pinnacle arising from the JV Agreement, the Ground Lease, or this Agreement.
Section 5.3. Recording of Termination. The Winding-Up Agent shall, within thirty (30) days following the Effective Date, cause a Memorandum of Termination of Ground Lease, in substantially the form attached hereto as Exhibit C, or, alternatively, a quitclaim deed from CBWTP to CSIA, to be duly executed, acknowledged, and recorded with the Thurston County Auditor, at the Company's expense, evidencing the termination of the Ground Lease and the reversion of the Facility Site to CSIA. Pinnacle shall, and hereby agrees to, execute and deliver any documents or instruments reasonably requested by CSIA or the Winding-Up Agent to effectuate the recording of such termination.
Section 5.4. Pinnacle's Acknowledgment. Pinnacle hereby acknowledges and irrevocably agrees that: (a) it has no right, title, or interest, whether legal or equitable, in the Facility Site, the Ground Lease, or the real property subject thereto; (b) the Facility Site is, and at all times has been, owned by CSIA in its capacity as a Washington state governmental authority; and (c) the Facility Site shall not be treated as a distributable asset of the Company for purposes of Article VII or any other provision of this Agreement. Pinnacle hereby waives, releases, and forever relinquishes any and all claims, rights, or interests that it may have, or may hereafter assert, in or to the Facility Site, the Ground Lease, or the leasehold estate created thereby.
ARTICLE VI SETTLEMENT OF PINNACLE FUNDING DEFAULT
Section 6.1. Acknowledgment of Default. Pinnacle hereby acknowledges and agrees that it failed to fund its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) by the March 31, 2023 deadline established by the Governing Board's capital call notice dated March 1, 2023, and that the sixty (60) day cure period provided under Section 8.2 of the JV Agreement expired on June 13, 2023, without Pinnacle having cured such default or tendered any portion of the Second Tranche capital contribution. Pinnacle further acknowledges that such failure constitutes a "Member Default" as defined in Section 8.1 of the JV Agreement, entitling CSIA to the remedies set forth in Section 8.2 of the JV Agreement.
[Drafting Note for CSIA's Review: Calderwood & Harkness anticipates that Pinnacle may resist this characterization and may decline to acknowledge the default in unqualified terms. Pinnacle's counsel, Whitfield, Aarons & Greer LLP, may propose alternative language such as: "Pinnacle acknowledges that the Second Tranche capital contribution was not funded by March 31, 2023, but reserves its position that such failure was excused by force majeure under §11.4 of the JV Agreement." Calderwood & Harkness's recommendation is that CSIA insist on an unqualified acknowledgment of default as a precondition to the mutual releases in Article XI. If a compromise is needed, Calderwood & Harkness can propose language stating that "without admitting or denying" the characterization of default, Pinnacle agrees to the Settlement Amount and other terms herein. CSIA should be prepared to discuss this point in negotiation.]
Section 6.2. Settlement Amount. In full and final settlement of all claims, demands, and causes of action arising from or related to Pinnacle's failure to fund the Second Tranche capital contribution (the "Pinnacle Default Amount" of Four Million Fifty Thousand Dollars ($4,050,000)), including any claims for interest, penalties, consequential damages, lost profits, or other damages, Pinnacle shall [pay to CSIA / have deducted from Pinnacle's distributions under Article VII] the sum of $[__] (the "Settlement Amount").
[Drafting Note for CSIA's Review: The Settlement Amount is the central commercial term of this Agreement and remains subject to negotiation between the parties. The following considerations are relevant to establishing CSIA's negotiation range:
CSIA's Maximum Position: The full Pinnacle Default Amount of $4,050,000, plus (i) interest at the default rate specified in §8.2(a) of the JV Agreement (prime rate + 5%, compounding monthly, from March 31, 2023 to the Dissolution Date), and (ii) consequential damages, including costs associated with the loss of the Pacific Cascade Bank credit facility commitment and project delay. Calderwood & Harkness estimates total damages under this position at approximately $4,800,000–$5,200,000 depending on the Dissolution Date.
CSIA's Minimum Acceptable Position: Calderwood & Harkness recommends that CSIA not accept a Settlement Amount below $2,500,000, based on the strength of CSIA's legal position regarding the default, the exclusion of permitting delays from the force majeure clause, and the availability of the 75% of FMV purchase remedy under §8.2(c), which would likely yield a recovery in excess of that amount.
Pinnacle's Expected Position: Partial or no payment, on the grounds that (i) force majeure and permitting delays excused the funding obligation, (ii) the project was dormant and the Second Tranche call was premature, and (iii) CBWTP's assets can simply be distributed pro rata. Calderwood & Harkness views these defenses as weak for the reasons stated in CSIA's May 12, 2023 letter, but acknowledges litigation risk.
Calderwood & Harkness is prepared to provide a detailed litigation risk assessment and negotiation strategy memorandum upon CSIA's request.]
Section 6.3. Offset Right. CSIA shall have the right, without further action or consent of Pinnacle, to offset the Settlement Amount against any distributions otherwise payable to Pinnacle under Article VII of this Agreement. To the extent the Settlement Amount exceeds the distributions that would otherwise be payable to Pinnacle, Pinnacle shall pay the excess to CSIA in immediately available funds within ten (10) business days following the Dissolution Date. To the extent the Settlement Amount is less than or equal to the distributions that would otherwise be payable to Pinnacle, the offset shall be effectuated by reducing Pinnacle's distribution by the Settlement Amount, and Pinnacle shall have no further payment obligation under this Section.
Section 6.4. Withdrawal of Force Majeure Claim. Pinnacle hereby withdraws, and irrevocably agrees not to reassert in any forum, its claim that force majeure under Section 11.4 of the JV Agreement excused Pinnacle's obligation to fund the Second Tranche capital contribution. Pinnacle acknowledges that Section 11.4 of the JV Agreement expressly excludes from the definition of "Force Majeure Events" any "delays in obtaining, or failures to obtain, governmental approvals, permits, or licenses," and that the environmental permitting delays at the Thurston County Department of Environmental Health cited by Pinnacle in its April 28, 2023 letter do not constitute a Force Majeure Event under the JV Agreement. Pinnacle further acknowledges that, in its capacity as Manager of CBWTP under Section 4.3 of the JV Agreement, Pinnacle bore primary responsibility for advancing and managing the permitting process for the Facility, and that Pinnacle's unilateral decision to defer project expenditures on September 14, 2022 contributed to the permitting delays.
[Drafting Note for CSIA's Review: This is expected to be one of the most heavily negotiated provisions. Pinnacle may resist an outright withdrawal of the force majeure claim and may instead seek language framing the withdrawal as part of a negotiated compromise. Calderwood & Harkness recommends that CSIA insist on an unqualified withdrawal, as the legal basis for the force majeure defense is clearly precluded by the express terms of §11.4. If Pinnacle refuses, CSIA should consider whether the overall settlement package — including the Settlement Amount, the Non-Compete Covenant survival, and the distribution terms — adequately compensates CSIA for the concession.]
Section 6.5. Waiver of §8.2 Remedies. Solely in connection with, and contingent upon the consummation of, the dissolution and settlement contemplated by this Agreement, and only upon Pinnacle's payment in full of the Settlement Amount (whether by direct payment or offset under Section 6.3), CSIA hereby waives its rights under Section 8.2 of the JV Agreement to:
(a) dilute Pinnacle's membership interest on a pro rata basis to reflect the unfunded Second Tranche contribution;
(b) purchase Pinnacle's membership interest in the Company at seventy-five percent (75%) of the fair market value thereof; or
(c) pursue any other default remedies available under Section 8.2 of the JV Agreement or at law or in equity with respect to Pinnacle's failure to fund the Second Tranche capital contribution.
The waiver set forth in this Section 6.5 shall be effective only upon the full and final payment or satisfaction of the Settlement Amount. In the event Pinnacle fails to pay, or CSIA is unable to offset pursuant to Section 6.3, the full Settlement Amount, such waiver shall automatically and without further action be null and void ab initio, and CSIA shall retain all rights and remedies available to it under Section 8.2 of the JV Agreement and applicable law.
ARTICLE VII DISTRIBUTION OF COMPANY ASSETS
Section 7.1. Payment of Liabilities. Prior to any distribution to the Members, the Winding-Up Agent shall pay, or make adequate provision for the payment of, all debts, liabilities, and obligations of the Company, including, without limitation:
(a) all outstanding accounts payable, including the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable to Westmark Environmental Consulting, Inc. and Hargrove & Tillman, CPAs, as reflected on the Company's unaudited balance sheet as of June 30, 2023, and any additional payables incurred between such date and the Dissolution Date;
(b) all costs, fees, and expenses of the Winding-Up Agent incurred in connection with the wind-down of the Company's affairs, including professional fees for attorneys, accountants, and other advisors;
(c) all taxes, assessments, fees, and other charges owed by the Company to any federal, state, or local governmental authority, including any filing fees, final tax liabilities, and any Washington State business and occupation taxes; and
(d) any other debts, liabilities, or obligations of the Company, whether fixed, contingent, known, or unknown.
All such payments shall be made from Company assets in the order of priority established by the Washington Limited Liability Company Act and applicable law.
Section 7.2. Reserves. The Winding-Up Agent may, in its reasonable discretion, establish and maintain a reserve fund in an amount that the Winding-Up Agent determines to be reasonably necessary to provide for the payment of contingent, conditional, or unknown liabilities of the Company that may arise during or after the Winding-Up Period. Such reserve shall not exceed Three Hundred Thousand Dollars ($300,000), and shall be held in the Company's operating account at Pacific Cascade Bank, N.A. for a period not exceeding ninety (90) days following the Effective Date. Upon the expiration of such ninety (90) day period, any remaining funds in the reserve that are not required to satisfy Company liabilities shall be distributed to the Members in accordance with Section 7.3. The Winding-Up Agent shall provide the Members with a written accounting of the reserve fund at the time of establishment and upon its dissolution.
Section 7.3. Distribution in Accordance with Capital Accounts. Following the payment of all Company liabilities pursuant to Section 7.1, the establishment of any reserves pursuant to Section 7.2, and the deduction of the Settlement Amount from Pinnacle's share in accordance with Article VI, the remaining Company assets shall be distributed to the Members in proportion to their respective positive Capital Account balances, as adjusted for all capital contributions, allocations of income, gain, loss, deduction, distributions, expenses, and the Settlement Amount.
For purposes of this Agreement, the Members' preliminary Capital Account balances, as of June 30, 2023, based on the unaudited financial statements prepared by Hargrove & Tillman, CPAs, are as follows:
[Drafting Note for CSIA's Review: The precise Capital Account balances set forth above are preliminary estimates based on the June 30, 2023 unaudited financial statements and are subject to confirmation and adjustment by Hargrove & Tillman, CPAs as of the Dissolution Date. A final capital account reconciliation will be prepared by Hargrove & Tillman as part of the wind-down process and will serve as the basis for the final distribution calculations. The allocation of cumulative expenses on a 55%/45% basis reflects the expense allocation methodology set forth in Section 6.2 of the JV Agreement. Calderwood & Harkness recommends that the distribution waterfall be recalculated using updated financial statements as of the Dissolution Date before the final version of this Agreement is circulated to Pinnacle.]
The net equity of CBWTP as of June 30, 2023, as reflected on the Company's unaudited balance sheet, was approximately Nine Million Six Hundred Thirty-Three Thousand Dollars ($9,633,000). Distributions shall be made to the Members in amounts equal to their respective positive adjusted Capital Account balances, as finally determined by Hargrove & Tillman, CPAs and approved by the Winding-Up Agent.
Section 7.4. Form of Distribution. All distributions to the Members shall be made in cash by wire transfer of immediately available funds from the Company's operating account at Pacific Cascade Bank, N.A. (which held a balance of approximately Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) as of June 30, 2023) to accounts designated in writing by each Member. In the event that Company cash assets are insufficient to satisfy the distribution obligations under this Article VII in full (after payment of all liabilities and reserves), the Winding-Up Agent may, with the prior written consent of both Members, distribute non-cash Company assets in kind at their fair market value as reasonably determined by the Winding-Up Agent, with any necessary adjustments to Capital Accounts.
Section 7.5. Final Distribution. The Winding-Up Agent shall make final distributions to the Members within thirty (30) days following the completion of all wind-down activities contemplated by this Agreement, including the payment or adequate provision for all Company liabilities, the release of any reserves established under Section 7.2, and the finalization of all Capital Account adjustments. Upon the making of final distributions, the Members shall have no further rights or claims against the Company or against each other with respect to Company assets, except as expressly provided in this Agreement. The Winding-Up Agent shall provide each Member with a final accounting statement showing all receipts, disbursements, reserves, adjustments, and distributions made during the Winding-Up Period.
ARTICLE VIII TERMINATION OF MANAGEMENT FEE AND PINNACLE'S ROLE AS MANAGER
Section 8.1. Termination of Manager Designation. Effective as of the Dissolution Date, Pinnacle's designation as Manager of CBWTP under Article IV of the JV Agreement is hereby terminated in all respects. From and after the Dissolution Date, Pinnacle shall have no management authority, operational responsibility, decision-making power, or fiduciary duty with respect to the Company, its assets, or its affairs. All management authority formerly vested in Pinnacle as Manager shall be transferred to and assumed by the Winding-Up Agent appointed pursuant to Article IV of this Agreement. Pinnacle shall cooperate with the Winding-Up Agent in connection with the orderly transition of all management functions and responsibilities.
Section 8.2. Management Fee. The Management Fee, as defined in Section 4.5 of the JV Agreement, calculated at three percent (3%) of total construction costs of the Facility (which, based on estimated total construction costs of Forty-Five Million Dollars ($45,000,000), would have equaled One Million Three Hundred Fifty Thousand Dollars ($1,350,000)), shall not be payable to Pinnacle. The Members acknowledge and agree that construction of the Facility was never commenced, that no construction contracts were executed, and that no construction costs were incurred by the Company. Accordingly, no Management Fee has accrued or is owing to Pinnacle under the JV Agreement. Pinnacle hereby irrevocably waives any and all claims to the Management Fee, whether under the JV Agreement, this Agreement, or otherwise, and agrees that no portion of the Management Fee shall be included in, or added to, the amounts distributable to Pinnacle under Article VII.
Section 8.3. Transition of Records. Within fifteen (15) business days following the Dissolution Date, Pinnacle shall deliver to the Winding-Up Agent, at Pinnacle's sole cost and expense, complete and accurate copies of all Company books, records, documents, files, correspondence, and data in Pinnacle's possession, custody, or control, whether in physical or electronic form, including, without limitation:
(a) all environmental assessments, studies, and reports relating to the Facility Site, including the Phase I Environmental Site Assessment completed on April 22, 2022;
(b) all engineering plans, drawings, specifications, and design documents relating to the Facility;
(c) all financial records, accounting records, bank statements, and supporting documentation;
(d) all correspondence with governmental agencies, including the Thurston County Department of Environmental Health, the Washington Department of Ecology, and any other permitting authorities;
(e) all contracts, engagement letters, and agreements entered into by or on behalf of the Company;
(f) all Governing Board minutes, resolutions, and written consents;
(g) all insurance policies, certificates, and related documentation; and
(h) all other books, records, and documents of the Company.
Pinnacle represents and warrants that it has not destroyed, altered, or disposed of any Company records and that the records delivered to the Winding-Up Agent pursuant to this Section will be complete and accurate in all material respects.
ARTICLE IX TERMINATION OF THIRD-PARTY CONTRACTS AND ENGAGEMENTS
Section 9.1. Environmental Consulting Agreement. The engagement of Westmark Environmental Consulting, Inc. (principal consultant: Dr. Anita Farooq), retained by the Company as of January 10, 2022, for the provision of environmental consulting services in connection with the Facility, including the Phase I Environmental Site Assessment, soil sampling, groundwater analysis, and support for the Phase II Environmental Impact Determination, shall be terminated as of the Dissolution Date. The Winding-Up Agent shall provide written notice of termination to Westmark Environmental Consulting, Inc. in accordance with the termination provisions of the applicable engagement letter or consulting agreement. Any outstanding fees and expenses owed to Westmark Environmental Consulting, Inc. (included in the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable reflected on the Company's books as of June 30, 2023) shall be paid from Company assets during the Winding-Up Period. Upon payment in full of all amounts owed, Westmark Environmental Consulting, Inc. shall deliver to the Winding-Up Agent all Company records, work product, and deliverables in its possession.
Section 9.2. Accounting Engagement. The engagement of Hargrove & Tillman, CPAs (engagement partner: Laura Svensson, CPA) shall continue beyond the Dissolution Date for the limited purposes of: (a) preparing the Company's final federal and state tax returns, including the final Form 1065 and corresponding Schedule K-1s; (b) preparing the final capital account reconciliation and any adjusted Capital Account calculations required under Article VII; and (c) providing such other accounting and tax advisory services as the Winding-Up Agent may reasonably request in connection with the wind-down. Upon the completion of such services, the Hargrove & Tillman engagement shall terminate. All outstanding fees and expenses owed to Hargrove & Tillman, CPAs (included in the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable reflected on the Company's books as of June 30, 2023), together with any additional fees incurred in connection with the final tax returns and capital account reconciliation, shall be paid from Company assets during the Winding-Up Period.
Section 9.3. Project Finance Commitment. The Members acknowledge and confirm that the Twenty-Seven Million Dollar ($27,000,000) project finance credit facility commitment issued by Pacific Cascade Bank, N.A. (Reference No. PCB-PF-2022-0417, lead banker: Thomas Rennick, Senior Vice President, Public Finance Division) expired by its terms on August 15, 2023, without any draws having been made thereunder. No principal, interest, fees, or other obligations are outstanding or owing by the Company to Pacific Cascade Bank, N.A. in connection with such commitment. The Winding-Up Agent shall provide written notice to Pacific Cascade Bank, N.A. of the dissolution of the Company and shall take such actions as may be necessary to formally close any accounts or credit arrangements maintained with Pacific Cascade Bank, N.A. following the completion of all wind-down activities and final distributions.
Section 9.4. Permitting Applications. Any and all pending applications, submissions, or filings with the Thurston County Department of Environmental Health, including the stalled Phase II Environmental Impact Determination for the Facility Site, and any other governmental agencies relating to the Facility or the Facility Site, shall be formally withdrawn by the Winding-Up Agent promptly following the Dissolution Date. The Winding-Up Agent shall provide written notice of withdrawal to Karen Lindstrom, Environmental Review Division Manager, Thurston County Department of Environmental Health, and to any other applicable agency officials. The Phase I Environmental Site Assessment for the Facility Site, completed by Westmark Environmental Consulting, Inc. on April 22, 2022 (which found no recognized environmental conditions at the Facility Site), together with all related environmental work product and documentation, shall be retained in the Company's records and delivered to CSIA as part of the reversion of the Facility Site.
Section 9.5. No Other Material Contracts. The Members represent and warrant that, to the best of their knowledge, the contracts and engagements described in Sections 9.1 through 9.4 and listed on Exhibit D constitute all material contracts, engagements, and commitments to which the Company is a party as of the date hereof. Neither Member has entered into, or authorized the Company to enter into, any construction contracts, equipment purchase agreements, or other material commitments on behalf of the Company.
ARTICLE X SURVIVAL OF NON-COMPETE COVENANT
Section 10.1. Continuation of Non-Compete. Notwithstanding the dissolution of CBWTP, the termination of the JV Agreement, and the consummation of the transactions contemplated by this Agreement, the non-competition covenant set forth in Section 9.1 of the JV Agreement (the "Non-Compete Covenant"), which restricts Pinnacle and its affiliates from engaging in competing water-treatment projects within a seventy-five (75) mile radius of the Facility Site, shall survive and remain in full force and effect in accordance with its original terms for the full five (5) year period commencing on November 2, 2021, and expiring on November 2, 2026. The Members acknowledge and agree that the Non-Compete Covenant was a material inducement to CSIA's entry into the JV Agreement and is a material condition of CSIA's willingness to enter into this Agreement and the settlement contemplated hereby. The dissolution of the Company and the termination of the JV Agreement shall not operate to modify, limit, or impair the scope, duration, or enforceability of the Non-Compete Covenant.
Section 10.2. Enforcement. CSIA shall retain the right to enforce the Non-Compete Covenant directly against Pinnacle, including Pinnacle's officers Richard Prumvane and Cynthia Voss to the extent such individuals are bound by the Non-Compete Covenant under the JV Agreement or any ancillary agreement, and against Pinnacle's affiliates, including Ridgeline Capital Partners, LP and its portfolio companies, in accordance with the dispute resolution provisions set forth in Article XIV of this Agreement. Without limiting the foregoing, CSIA shall be entitled to seek injunctive relief, specific performance, and any other equitable or legal remedies available under applicable law for any breach or threatened breach of the Non-Compete Covenant. Pinnacle acknowledges that a breach of the Non-Compete Covenant would cause CSIA irreparable harm for which monetary damages would be an inadequate remedy, and Pinnacle hereby consents to the entry of injunctive relief (including temporary restraining orders, preliminary injunctions, and permanent injunctions) in any court of competent jurisdiction in Washington, without the necessity of proving actual damages or posting a bond.
Section 10.3. Scope. For the avoidance of doubt, the surviving Non-Compete Covenant shall apply within a seventy-five (75) mile radius measured from the Facility Site at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, and shall encompass the design, engineering, construction, ownership, management, and operation of water treatment facilities and wastewater treatment facilities, including advanced treatment facilities, membrane bioreactor systems, and any similar infrastructure projects, as more fully described in Section 9.1 of the JV Agreement. The Non-Compete Covenant shall bind Pinnacle, its successors and assigns, its members and managers, and its affiliates (including Ridgeline Capital Partners, LP and any entities directly or indirectly controlled by Ridgeline Capital Partners, LP or its general partner).
ARTICLE XI MUTUAL RELEASES
Section 11.1. CSIA Release of Pinnacle. Effective upon Pinnacle's payment in full of the Settlement Amount (whether by direct payment or offset under Section 6.3) and Pinnacle's satisfaction of all other obligations under this Agreement, CSIA, on behalf of itself and its officers, directors, board members, employees, agents, representatives, successors, and assigns, hereby irrevocably and unconditionally releases and forever discharges Pinnacle, its members (including Ridgeline Capital Partners, LP and Jonathan Kreider), managers, officers (including Richard Prumvane and Cynthia Voss), directors, employees, agents, representatives, attorneys, successors, and assigns (collectively, the "Pinnacle Released Parties") from any and all claims, demands, liabilities, obligations, actions, causes of action, suits, debts, dues, sums of money, accounts, covenants, contracts, damages, judgments, losses, costs, and expenses (including attorneys' fees) of every kind and nature whatsoever, whether at law or in equity, whether known or unknown, whether accrued or unaccrued, whether asserted or unasserted, whether direct or indirect, whether liquidated or unliquidated, that CSIA ever had, now has, or hereafter may have against any of the Pinnacle Released Parties, arising from, based upon, or in any way related to the JV Agreement, the Ground Lease, the formation, capitalization, governance, management, or operations of CBWTP, the Facility, the Facility Site, the Pinnacle funding default, the force majeure dispute, or any other matter relating to the business, affairs, or existence of the Company.
Section 11.2. Pinnacle Release of CSIA. Effective upon execution of this Agreement and CSIA's satisfaction of all obligations hereunder, Pinnacle, on behalf of itself, its members (including Ridgeline Capital Partners, LP and Jonathan Kreider), managers, officers (including Richard Prumvane and Cynthia Voss), directors, employees, agents, representatives, attorneys, successors, and assigns, hereby irrevocably and unconditionally releases and forever discharges CSIA and its officers (including Margaret Ellsworth, David Tanaka, and Patricia Huang), directors, board members, employees, agents, representatives, attorneys, successors, and assigns (collectively