capital-call-notice-second-tranche.docx

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COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501 (c/o Cascadia State Infrastructure Authority)

EIN: 88-3421076 WA UBI Number: 604-892-315

NOTICE OF CAPITAL CALL — SECOND TRANCHE CONTRIBUTIONS

March 1, 2023

Delivered pursuant to Section 3.2 of the Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated November 2, 2021 (the "LLC Agreement")

TO:

Cascadia State Infrastructure Authority

Attention: David Tanaka, General Counsel

1100 Jefferson Street SE, Suite 400 Olympia, WA 98501

Pinnacle Water Solutions, LLC

Attention: Richard Prumvane, CEO & Managing Member

720 SW Quelston Street, Suite 1500 Portland, OR 97205

COPIES TO:

Calderwood & Harkness LLP

Attention: Oliver Mackenzie

901 Fifth Avenue, Suite 3200 Seattle, WA 98164

Whitfield, Aarons & Greer LLP

Attention: Elaine Prescott

1455 SW Broadway, Suite 2100 Portland, OR 97201

Section 1. Authorization and Basis for Capital Call

The Governing Board (the "Board") of Columbia Basin Water Treatment Partners, LLC ("CBWTP" or the "Company") hereby issues this formal Capital Call Notice (this "Notice") to each of the Members of the Company, pursuant to and in accordance with Section 3.2 of the Amended and Restated Limited Liability Company Agreement of the Company, dated November 2, 2021 (the "LLC Agreement"). This Notice constitutes the official demand for the Second Tranche capital contributions described in Article III of the LLC Agreement.

The Board has duly authorized this Second Tranche Capital Call by formal action of the Governing Board members appointed by the Cascadia State Infrastructure Authority ("CSIA"), as the Majority Member. The CSIA-appointed members of the Board who approved the issuance of this Notice are as follows:

(a) Margaret Ellsworth, Governing Board Member (Executive Director, CSIA);

(b) David Tanaka, Governing Board Member (General Counsel, CSIA); and

The foregoing Board members constitute a quorum of the Governing Board and have approved this Capital Call in compliance with the voting and procedural requirements of the LLC Agreement. The Pinnacle-appointed Governing Board members — namely, Richard Prumvane and Cynthia Voss — were given proper notice of the Governing Board meeting and the proposed action in accordance with Section 4.3 of the LLC Agreement, including written notice delivered no fewer than five (5) business days prior to the meeting at which such action was considered and approved.

This Capital Call constitutes the second and final tranche of equity capital contributions contemplated under Article III of the LLC Agreement. Pursuant to the capital commitment structure established in the LLC Agreement, the total equity capital of the Company was to be contributed in two equal tranches. The First Tranche capital contributions were duly funded by both Members on November 15, 2021, in the total aggregate amount of Nine Million Dollars ($9,000,000), consisting of Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) contributed by CSIA and Four Million Fifty Thousand Dollars ($4,050,000) contributed by Pinnacle Water Solutions, LLC ("Pinnacle"). The Company acknowledges receipt of such First Tranche contributions in full.

Upon funding of this Second Tranche Capital Call, each Member will have fulfilled one hundred percent (100%) of its total equity commitment under the LLC Agreement, and no further capital calls are anticipated under the current terms of the LLC Agreement.

Section 2. Capital Call Amounts

The total aggregate amount of the Second Tranche Capital Call is Nine Million Dollars ($9,000,000), allocated among the Members in accordance with their respective Percentage Interests as set forth in the LLC Agreement. The individual contribution amounts are set forth below.

2.1 Cascadia State Infrastructure Authority (55% Member)

Second Tranche Contribution Amount: $4,950,000

CSIA's Second Tranche contribution amount has been calculated as the remaining fifty percent (50%) of CSIA's total equity commitment of Nine Million Nine Hundred Thousand Dollars ($9,900,000), which total commitment represents fifty-five percent (55%) of the aggregate equity commitment of Eighteen Million Dollars ($18,000,000) as set forth in Section 3.1(a) of the LLC Agreement.

The First Tranche capital contribution previously funded by CSIA on November 15, 2021 was Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000). Upon the timely funding of this Second Tranche contribution, CSIA's total funded equity commitment to the Company shall be Nine Million Nine Hundred Thousand Dollars ($9,900,000), representing one hundred percent (100%) of CSIA's total equity commitment under the LLC Agreement.

2.2 Pinnacle Water Solutions, LLC (45% Member)

Second Tranche Contribution Amount: $4,050,000

Pinnacle's Second Tranche contribution amount has been calculated as the remaining fifty percent (50%) of Pinnacle's total equity commitment of Eight Million One Hundred Thousand Dollars ($8,100,000), which total commitment represents forty-five percent (45%) of the aggregate equity commitment of Eighteen Million Dollars ($18,000,000) as set forth in Section 3.1(b) of the LLC Agreement.

The First Tranche capital contribution previously funded by Pinnacle on November 15, 2021 was Four Million Fifty Thousand Dollars ($4,050,000). Upon the timely funding of this Second Tranche contribution, Pinnacle's total funded equity commitment to the Company shall be Eight Million One Hundred Thousand Dollars ($8,100,000), representing one hundred percent (100%) of Pinnacle's total equity commitment under the LLC Agreement.

2.3 Aggregate Equity Summary

The following table sets forth a summary of the aggregate equity commitments, prior funded amounts, amounts called under this Notice, and total funded equity upon completion of the Second Tranche:

Upon the funding by both Members of the amounts set forth in this Notice, the Company will have received the full Eighteen Million Dollars ($18,000,000) in aggregate equity contributions contemplated under Article III of the LLC Agreement, and no further unfunded capital commitments will remain outstanding.

Section 3. Payment Due Date

Pursuant to Section 3.2(b) of the LLC Agreement, each Member shall fund its respective Second Tranche contribution in full no later than thirty (30) calendar days following the date of delivery of this Notice. This Notice is dated and deemed delivered as of March 1, 2023.

Accordingly, the Payment Due Date for each Member's Second Tranche contribution is:

March 31, 2023

Each Member is required to ensure that its respective Second Tranche contribution amount, as specified in Section 2 above, has been received by the Company in immediately available funds in the Company's designated operating account no later than 5:00 p.m. Pacific Time on March 31, 2023.

Time is of the essence with respect to the funding obligations set forth in this Notice. The Company and the Governing Board consider the timely receipt of the Second Tranche contributions to be critical to the continued development of the Thurston County Advanced Water Treatment Facility (as described further in Section 6 below) and to the satisfaction of conditions precedent under the Company's project finance credit facility. Failure to fund on or before the Payment Due Date will have the consequences described in Section 5 of this Notice.

Section 4. Payment Instructions

All Second Tranche contributions shall be made by wire transfer of immediately available funds, in United States Dollars, to the Company's operating account maintained at Pacific Cascade Bank, N.A., as follows:

Bank: Pacific Cascade Bank, N.A.

Bank Address: 600 University Street, Suite 800, Seattle, WA 98101

Account Name: Columbia Basin Water Treatment Partners, LLC — Operating Account

Account Number and Routing Number: As set forth in Exhibit A attached hereto (Wire Transfer Instructions)

Wire Reference: "Second Tranche Capital Contribution — [Insert Member Name]"

Each Member is instructed to include its full legal name in the wire reference field to facilitate proper identification and allocation of received funds. Contributions will be deemed made only upon receipt by the Company of immediately available funds in the designated account. Funds received after 5:00 p.m. Pacific Time on the Payment Due Date shall not be considered timely for purposes of Section 3.2(b) of the LLC Agreement.

For questions regarding wire transfer instructions, confirmation of receipt, or any other banking matters relating to this Capital Call, Members and their representatives should contact:

Thomas Rennick Senior Vice President, Public Finance Pacific Cascade Bank, N.A. 600 University Street, Suite 800 Seattle, WA 98101 Telephone: (206) 555-4200

Email: t.rennick@pacificcascadebank.com

Members are encouraged to initiate wire transfers sufficiently in advance of the Payment Due Date to ensure timely receipt, accounting for any delays that may arise in the interbank transfer process. Neither the Company nor Pacific Cascade Bank, N.A. shall bear responsibility for delays in wire transfers caused by intermediary banks or other circumstances beyond the Company's control.

Detailed wire instructions, including the ABA routing number and account number for the Company's operating account, are provided in Exhibit A attached to this Notice, which Exhibit A is incorporated herein by reference.

Section 5. Consequences of Failure to Fund

The Governing Board hereby reminds each Member of the consequences of a failure to timely fund capital contributions as required under the LLC Agreement. Each Member is urged to take careful note of the following provisions.

Pursuant to Section 8.1 of the LLC Agreement, the failure by any Member to fund a capital call within the thirty (30) calendar day period specified in Section 3.2(b) of the LLC Agreement shall constitute an "Event of Default" with respect to such Member (the "Defaulting Member"). An Event of Default triggers significant rights and remedies in favor of the non-defaulting Member (the "Non-Defaulting Member") as more fully described below.

Pursuant to Section 8.2 of the LLC Agreement, upon the occurrence of an Event of Default and following the expiration of an additional sixty (60) calendar day cure period (the "Cure Period") during which the Defaulting Member may cure such Event of Default by funding its unfunded capital contribution in full, together with any interest and costs accrued thereon as provided in the LLC Agreement, the Non-Defaulting Member shall be entitled, at its sole election, to exercise any one or more of the following remedies:

(i) Pro Rata Dilution. The Non-Defaulting Member may elect to have the Defaulting Member's Percentage Interest diluted on a pro rata basis to reflect the Defaulting Member's unfunded capital contribution relative to the total funded equity of the Company, calculated in accordance with the formula set forth in Section 8.2(a) of the LLC Agreement. Such dilution shall be effective as of the expiration of the Cure Period and shall result in a corresponding increase in the Non-Defaulting Member's Percentage Interest.

(ii) Forced Purchase at discount. The Non-Defaulting Member may elect to purchase the Defaulting Member's entire membership interest in the Company at a price equal to seventy-five percent (75%) of the fair market value of such interest, as determined by an independent appraiser selected in accordance with Section 8.2(b) of the LLC Agreement. The closing of any such purchase shall occur within ninety (90) days following the Non-Defaulting Member's written election to exercise this remedy.

(iii) Dissolution. The Non-Defaulting Member may elect to dissolve the Company in accordance with Article X of the LLC Agreement, in which case the assets of the Company shall be liquidated and the proceeds distributed in accordance with the priority of distributions set forth in Section 10.3 of the LLC Agreement.

The foregoing remedies are cumulative and are in addition to any other rights and remedies available to the Non-Defaulting Member under the LLC Agreement, at law, or in equity. The Governing Board strongly urges timely compliance by both Members with the funding obligations set forth in this Notice.

The Company and the Governing Board expressly reserve all rights and remedies available under the LLC Agreement and applicable law with respect to any failure by any Member to timely fund its Second Tranche contribution.

Section 6. Purpose of Capital Call

The Second Tranche contributions called pursuant to this Notice are being called to fund the continued development of the Thurston County Advanced Water Treatment Facility (the "Facility"), a regional advanced water treatment and reclamation project to be located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501. The Facility is the core asset and principal project of CBWTP.

Specifically, the Second Tranche contributions will be applied, in whole or in part and at the discretion of the Governing Board, to fund the following purposes:

(a) Environmental Permitting and Compliance. Advancement and completion of environmental permitting and regulatory compliance activities for the Facility, including but not limited to the completion of the Phase II Environmental Impact Determination currently pending before the Thurston County Department of Environmental Health (Application No. EIS-TC-2022-0089). These activities include the preparation and submission of supplemental environmental studies, response to agency comments, coordination with the Washington State Department of Ecology, and engagement of third-party environmental consultants as needed to achieve permitting milestones.

(b) Pre-Construction Design and Engineering. Funding of pre-construction design and engineering activities, including but not limited to the finalization of detailed engineering designs, preparation of construction bid documents, geotechnical analysis, site preparation studies, and engagement of the Owner's Engineer and other design professionals. These activities are necessary prerequisites to the commencement of construction of the Facility.

(c) Satisfaction of Conditions Precedent Under the Project Finance Credit Facility. The Second Tranche contributions are required to satisfy certain conditions precedent under the Pacific Cascade Bank, N.A. project finance credit facility commitment letter (Reference: PCB-PF-2022-0417, dated February 15, 2022) in the amount of Twenty-Seven Million Dollars ($27,000,000) (the "Credit Facility"). The Credit Facility commitment letter requires, as a condition to the initial draw of project finance debt, that the Company's equity contributions be fully funded in the aggregate amount of Eighteen Million Dollars ($18,000,000). Accordingly, the timely funding of the Second Tranche is essential to enable the Company to draw upon the Credit Facility and to proceed with construction financing for the Facility.

(d) Working Capital and Organizational Expenses. The Second Tranche contributions will also be used to fund the ongoing working capital needs and organizational expenses of CBWTP, including but not limited to management fees, administrative costs, accounting and audit expenses, legal fees, insurance premiums, and other general and administrative expenses incurred in the ordinary course of the Company's business.

The total estimated cost of the Facility (the "Total Project Cost") is approximately Forty-Five Million Dollars ($45,000,000), to be funded from the following sources:

The Governing Board believes that the timely funding of the Second Tranche contributions is critical to maintaining the project development timeline, preserving the Company's access to the Credit Facility, and ensuring the continued viability of the Facility. Any delay in the receipt of equity contributions may result in material adverse consequences for the project, including potential forfeiture or renegotiation of the Credit Facility commitment, loss of permitting priority, and increased project costs.

Section 7. Governing Law and LLC Agreement Reference

This Notice is issued pursuant to, and shall in all respects be governed by and construed in accordance with, the Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated November 2, 2021, as the same may be further amended, restated, supplemented, or otherwise modified from time to time. In the event of any conflict or inconsistency between the terms of this Notice and the terms of the LLC Agreement, the LLC Agreement shall control.

This Notice and the rights and obligations of the Members arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington, without regard to conflicts of law principles that would result in the application of the laws of any other jurisdiction.

All capitalized terms used but not otherwise defined in this Notice shall have the meanings ascribed to such terms in the LLC Agreement. Each Member is advised to review the LLC Agreement in connection with this Notice, including without limitation the provisions of Sections 3.2, 8.1, and 8.2 thereof.

Section 8. Contact Information

Questions regarding this Capital Call Notice, including questions relating to the calculation of the Second Tranche contribution amounts, the Payment Due Date, wire transfer instructions, or any other matter addressed herein, should be directed to the following:

For the Company / Governing Board:

David Tanaka General Counsel Cascadia State Infrastructure Authority 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501 Telephone: (360) 555-7100

Email: d.tanaka@csia.wa.gov

Legal Counsel to CSIA:

Oliver Mackenzie Calderwood & Harkness LLP 901 Fifth Avenue, Suite 3200 Seattle, WA 98164 Telephone: (206) 555-3800

Email: o.mackenzie@calderwoodharkness.com

Matter No. 47291.00001

All communications and correspondence relating to this Notice should reference the Company name, "Columbia Basin Water Treatment Partners, LLC," and the caption "Second Tranche Capital Call — March 2023."

[SIGNATURE PAGE FOLLOWS]

SIGNATURE PAGE TO NOTICE OF CAPITAL CALL — SECOND TRANCHE CONTRIBUTIONS COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC

This Notice has been duly executed and delivered by the Governing Board of Columbia Basin Water Treatment Partners, LLC, acting by its CSIA-appointed members, as of the date first set forth above.

COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC

By its Governing Board (CSIA-appointed members):

________________________________________

Margaret Ellsworth Governing Board Member Executive Director, Cascadia State Infrastructure Authority

Date: March 1, 2023

________________________________________

David Tanaka Governing Board Member General Counsel, Cascadia State Infrastructure Authority

Date: March 1, 2023

________________________________________

Patricia Huang Governing Board Member Deputy Director, Capital Projects, Cascadia State Infrastructure Authority

Date: March 1, 2023

Enclosures

The following documents are enclosed with or referenced by this Notice:

1. Exhibit A — Wire Transfer Instructions (Pacific Cascade Bank, N.A., Columbia Basin Water Treatment Partners, LLC — Operating Account)

2. Reference Provisions of the LLC Agreement — For the convenience of the Members, the Company directs attention to the following provisions of the Amended and Restated Limited Liability Company Agreement, dated November 2, 2021:

• Section 3.2 (Capital Calls; Timing and Procedures)

• Section 8.1 (Events of Default)

• Section 8.2 (Remedies Upon Default)

Members and their respective counsel are encouraged to review such provisions in their entirety. Copies of the LLC Agreement are on file with each Member's counsel of record and are available upon request from the Company.

CONFIDENTIAL — This Notice and any attachments hereto contain confidential and proprietary information of Columbia Basin Water Treatment Partners, LLC. Distribution of this Notice is limited to the addressees and copy recipients identified herein and their authorized representatives. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this Notice in error, please contact David Tanaka at the number listed above immediately.

Member	Percentage Interest	Total Equity Commitment	First Tranche Funded (Nov. 15, 2021)	Second Tranche Called (This Notice)	Total Funded Upon Completion
Cascadia State Infrastructure Authority	55%	$9,900,000	$4,950,000	$4,950,000	$9,900,000
Pinnacle Water Solutions, LLC	45%	$8,100,000	$4,050,000	$4,050,000	$8,100,000
Total	100%	$18,000,000	$9,000,000	$9,000,000	$18,000,000
Source	Amount	Percentage of Total
Equity Contributions (Members)	$18,000,000	40%
Project Finance Debt (Pacific Cascade Bank, N.A.)	$27,000,000	60%
Total Project Cost	$45,000,000	100%

COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501 (c/o Cascadia State Infrastructure Authority)
EIN: 88-3421076 WA UBI Number: 604-892-315
NOTICE OF CAPITAL CALL — SECOND TRANCHE CONTRIBUTIONS
March 1, 2023
Delivered pursuant to Section 3.2 of the Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated November 2, 2021 (the "LLC Agreement")
TO:
Cascadia State Infrastructure Authority
Attention: David Tanaka, General Counsel
1100 Jefferson Street SE, Suite 400 Olympia, WA 98501
Pinnacle Water Solutions, LLC
Attention: Richard Prumvane, CEO & Managing Member
720 SW Quelston Street, Suite 1500 Portland, OR 97205
COPIES TO:
Calderwood & Harkness LLP
Attention: Oliver Mackenzie
901 Fifth Avenue, Suite 3200 Seattle, WA 98164
Whitfield, Aarons & Greer LLP
Attention: Elaine Prescott
1455 SW Broadway, Suite 2100 Portland, OR 97201
Section 1. Authorization and Basis for Capital Call
The Governing Board (the "Board") of Columbia Basin Water Treatment Partners, LLC ("CBWTP" or the "Company") hereby issues this formal Capital Call Notice (this "Notice") to each of the Members of the Company, pursuant to and in accordance with Section 3.2 of the Amended and Restated Limited Liability Company Agreement of the Company, dated November 2, 2021 (the "LLC Agreement"). This Notice constitutes the official demand for the Second Tranche capital contributions described in Article III of the LLC Agreement.
The Board has duly authorized this Second Tranche Capital Call by formal action of the Governing Board members appointed by the Cascadia State Infrastructure Authority ("CSIA"), as the Majority Member. The CSIA-appointed members of the Board who approved the issuance of this Notice are as follows:
(a) Margaret Ellsworth, Governing Board Member (Executive Director, CSIA);
(b) David Tanaka, Governing Board Member (General Counsel, CSIA); and
(c) Patricia Huang, Governing Board Member (Deputy Director, Capital Projects, CSIA).
The foregoing Board members constitute a quorum of the Governing Board and have approved this Capital Call in compliance with the voting and procedural requirements of the LLC Agreement. The Pinnacle-appointed Governing Board members — namely, Richard Prumvane and Cynthia Voss — were given proper notice of the Governing Board meeting and the proposed action in accordance with Section 4.3 of the LLC Agreement, including written notice delivered no fewer than five (5) business days prior to the meeting at which such action was considered and approved.
This Capital Call constitutes the second and final tranche of equity capital contributions contemplated under Article III of the LLC Agreement. Pursuant to the capital commitment structure established in the LLC Agreement, the total equity capital of the Company was to be contributed in two equal tranches. The First Tranche capital contributions were duly funded by both Members on November 15, 2021, in the total aggregate amount of Nine Million Dollars ($9,000,000), consisting of Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000) contributed by CSIA and Four Million Fifty Thousand Dollars ($4,050,000) contributed by Pinnacle Water Solutions, LLC ("Pinnacle"). The Company acknowledges receipt of such First Tranche contributions in full.
Upon funding of this Second Tranche Capital Call, each Member will have fulfilled one hundred percent (100%) of its total equity commitment under the LLC Agreement, and no further capital calls are anticipated under the current terms of the LLC Agreement.
Section 2. Capital Call Amounts
The total aggregate amount of the Second Tranche Capital Call is Nine Million Dollars ($9,000,000), allocated among the Members in accordance with their respective Percentage Interests as set forth in the LLC Agreement. The individual contribution amounts are set forth below.
2.1 Cascadia State Infrastructure Authority (55% Member)
Second Tranche Contribution Amount: $4,950,000
CSIA's Second Tranche contribution amount has been calculated as the remaining fifty percent (50%) of CSIA's total equity commitment of Nine Million Nine Hundred Thousand Dollars ($9,900,000), which total commitment represents fifty-five percent (55%) of the aggregate equity commitment of Eighteen Million Dollars ($18,000,000) as set forth in Section 3.1(a) of the LLC Agreement.
The First Tranche capital contribution previously funded by CSIA on November 15, 2021 was Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000). Upon the timely funding of this Second Tranche contribution, CSIA's total funded equity commitment to the Company shall be Nine Million Nine Hundred Thousand Dollars ($9,900,000), representing one hundred percent (100%) of CSIA's total equity commitment under the LLC Agreement.
2.2 Pinnacle Water Solutions, LLC (45% Member)
Second Tranche Contribution Amount: $4,050,000
Pinnacle's Second Tranche contribution amount has been calculated as the remaining fifty percent (50%) of Pinnacle's total equity commitment of Eight Million One Hundred Thousand Dollars ($8,100,000), which total commitment represents forty-five percent (45%) of the aggregate equity commitment of Eighteen Million Dollars ($18,000,000) as set forth in Section 3.1(b) of the LLC Agreement.
The First Tranche capital contribution previously funded by Pinnacle on November 15, 2021 was Four Million Fifty Thousand Dollars ($4,050,000). Upon the timely funding of this Second Tranche contribution, Pinnacle's total funded equity commitment to the Company shall be Eight Million One Hundred Thousand Dollars ($8,100,000), representing one hundred percent (100%) of Pinnacle's total equity commitment under the LLC Agreement.
2.3 Aggregate Equity Summary
The following table sets forth a summary of the aggregate equity commitments, prior funded amounts, amounts called under this Notice, and total funded equity upon completion of the Second Tranche:
Upon the funding by both Members of the amounts set forth in this Notice, the Company will have received the full Eighteen Million Dollars ($18,000,000) in aggregate equity contributions contemplated under Article III of the LLC Agreement, and no further unfunded capital commitments will remain outstanding.
Section 3. Payment Due Date
Pursuant to Section 3.2(b) of the LLC Agreement, each Member shall fund its respective Second Tranche contribution in full no later than thirty (30) calendar days following the date of delivery of this Notice. This Notice is dated and deemed delivered as of March 1, 2023.
Accordingly, the Payment Due Date for each Member's Second Tranche contribution is:
March 31, 2023
Each Member is required to ensure that its respective Second Tranche contribution amount, as specified in Section 2 above, has been received by the Company in immediately available funds in the Company's designated operating account no later than 5:00 p.m. Pacific Time on March 31, 2023.
Time is of the essence with respect to the funding obligations set forth in this Notice. The Company and the Governing Board consider the timely receipt of the Second Tranche contributions to be critical to the continued development of the Thurston County Advanced Water Treatment Facility (as described further in Section 6 below) and to the satisfaction of conditions precedent under the Company's project finance credit facility. Failure to fund on or before the Payment Due Date will have the consequences described in Section 5 of this Notice.
Section 4. Payment Instructions
All Second Tranche contributions shall be made by wire transfer of immediately available funds, in United States Dollars, to the Company's operating account maintained at Pacific Cascade Bank, N.A., as follows:
Bank: Pacific Cascade Bank, N.A.
Bank Address: 600 University Street, Suite 800, Seattle, WA 98101
Account Name: Columbia Basin Water Treatment Partners, LLC — Operating Account
Account Number and Routing Number: As set forth in Exhibit A attached hereto (Wire Transfer Instructions)
Wire Reference: "Second Tranche Capital Contribution — [Insert Member Name]"
Each Member is instructed to include its full legal name in the wire reference field to facilitate proper identification and allocation of received funds. Contributions will be deemed made only upon receipt by the Company of immediately available funds in the designated account. Funds received after 5:00 p.m. Pacific Time on the Payment Due Date shall not be considered timely for purposes of Section 3.2(b) of the LLC Agreement.
For questions regarding wire transfer instructions, confirmation of receipt, or any other banking matters relating to this Capital Call, Members and their representatives should contact:
Thomas Rennick Senior Vice President, Public Finance Pacific Cascade Bank, N.A. 600 University Street, Suite 800 Seattle, WA 98101 Telephone: (206) 555-4200
Email: t.rennick@pacificcascadebank.com
Members are encouraged to initiate wire transfers sufficiently in advance of the Payment Due Date to ensure timely receipt, accounting for any delays that may arise in the interbank transfer process. Neither the Company nor Pacific Cascade Bank, N.A. shall bear responsibility for delays in wire transfers caused by intermediary banks or other circumstances beyond the Company's control.
Detailed wire instructions, including the ABA routing number and account number for the Company's operating account, are provided in Exhibit A attached to this Notice, which Exhibit A is incorporated herein by reference.
Section 5. Consequences of Failure to Fund
The Governing Board hereby reminds each Member of the consequences of a failure to timely fund capital contributions as required under the LLC Agreement. Each Member is urged to take careful note of the following provisions.
Pursuant to Section 8.1 of the LLC Agreement, the failure by any Member to fund a capital call within the thirty (30) calendar day period specified in Section 3.2(b) of the LLC Agreement shall constitute an "Event of Default" with respect to such Member (the "Defaulting Member"). An Event of Default triggers significant rights and remedies in favor of the non-defaulting Member (the "Non-Defaulting Member") as more fully described below.
Pursuant to Section 8.2 of the LLC Agreement, upon the occurrence of an Event of Default and following the expiration of an additional sixty (60) calendar day cure period (the "Cure Period") during which the Defaulting Member may cure such Event of Default by funding its unfunded capital contribution in full, together with any interest and costs accrued thereon as provided in the LLC Agreement, the Non-Defaulting Member shall be entitled, at its sole election, to exercise any one or more of the following remedies:
(i) Pro Rata Dilution. The Non-Defaulting Member may elect to have the Defaulting Member's Percentage Interest diluted on a pro rata basis to reflect the Defaulting Member's unfunded capital contribution relative to the total funded equity of the Company, calculated in accordance with the formula set forth in Section 8.2(a) of the LLC Agreement. Such dilution shall be effective as of the expiration of the Cure Period and shall result in a corresponding increase in the Non-Defaulting Member's Percentage Interest.
(ii) Forced Purchase at discount. The Non-Defaulting Member may elect to purchase the Defaulting Member's entire membership interest in the Company at a price equal to seventy-five percent (75%) of the fair market value of such interest, as determined by an independent appraiser selected in accordance with Section 8.2(b) of the LLC Agreement. The closing of any such purchase shall occur within ninety (90) days following the Non-Defaulting Member's written election to exercise this remedy.
(iii) Dissolution. The Non-Defaulting Member may elect to dissolve the Company in accordance with Article X of the LLC Agreement, in which case the assets of the Company shall be liquidated and the proceeds distributed in accordance with the priority of distributions set forth in Section 10.3 of the LLC Agreement.
The foregoing remedies are cumulative and are in addition to any other rights and remedies available to the Non-Defaulting Member under the LLC Agreement, at law, or in equity. The Governing Board strongly urges timely compliance by both Members with the funding obligations set forth in this Notice.
The Company and the Governing Board expressly reserve all rights and remedies available under the LLC Agreement and applicable law with respect to any failure by any Member to timely fund its Second Tranche contribution.
Section 6. Purpose of Capital Call
The Second Tranche contributions called pursuant to this Notice are being called to fund the continued development of the Thurston County Advanced Water Treatment Facility (the "Facility"), a regional advanced water treatment and reclamation project to be located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501. The Facility is the core asset and principal project of CBWTP.
Specifically, the Second Tranche contributions will be applied, in whole or in part and at the discretion of the Governing Board, to fund the following purposes:
(a) Environmental Permitting and Compliance. Advancement and completion of environmental permitting and regulatory compliance activities for the Facility, including but not limited to the completion of the Phase II Environmental Impact Determination currently pending before the Thurston County Department of Environmental Health (Application No. EIS-TC-2022-0089). These activities include the preparation and submission of supplemental environmental studies, response to agency comments, coordination with the Washington State Department of Ecology, and engagement of third-party environmental consultants as needed to achieve permitting milestones.
(b) Pre-Construction Design and Engineering. Funding of pre-construction design and engineering activities, including but not limited to the finalization of detailed engineering designs, preparation of construction bid documents, geotechnical analysis, site preparation studies, and engagement of the Owner's Engineer and other design professionals. These activities are necessary prerequisites to the commencement of construction of the Facility.
(c) Satisfaction of Conditions Precedent Under the Project Finance Credit Facility. The Second Tranche contributions are required to satisfy certain conditions precedent under the Pacific Cascade Bank, N.A. project finance credit facility commitment letter (Reference: PCB-PF-2022-0417, dated February 15, 2022) in the amount of Twenty-Seven Million Dollars ($27,000,000) (the "Credit Facility"). The Credit Facility commitment letter requires, as a condition to the initial draw of project finance debt, that the Company's equity contributions be fully funded in the aggregate amount of Eighteen Million Dollars ($18,000,000). Accordingly, the timely funding of the Second Tranche is essential to enable the Company to draw upon the Credit Facility and to proceed with construction financing for the Facility.
(d) Working Capital and Organizational Expenses. The Second Tranche contributions will also be used to fund the ongoing working capital needs and organizational expenses of CBWTP, including but not limited to management fees, administrative costs, accounting and audit expenses, legal fees, insurance premiums, and other general and administrative expenses incurred in the ordinary course of the Company's business.
The total estimated cost of the Facility (the "Total Project Cost") is approximately Forty-Five Million Dollars ($45,000,000), to be funded from the following sources:
The Governing Board believes that the timely funding of the Second Tranche contributions is critical to maintaining the project development timeline, preserving the Company's access to the Credit Facility, and ensuring the continued viability of the Facility. Any delay in the receipt of equity contributions may result in material adverse consequences for the project, including potential forfeiture or renegotiation of the Credit Facility commitment, loss of permitting priority, and increased project costs.
Section 7. Governing Law and LLC Agreement Reference
This Notice is issued pursuant to, and shall in all respects be governed by and construed in accordance with, the Amended and Restated Limited Liability Company Agreement of Columbia Basin Water Treatment Partners, LLC, dated November 2, 2021, as the same may be further amended, restated, supplemented, or otherwise modified from time to time. In the event of any conflict or inconsistency between the terms of this Notice and the terms of the LLC Agreement, the LLC Agreement shall control.
This Notice and the rights and obligations of the Members arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington, without regard to conflicts of law principles that would result in the application of the laws of any other jurisdiction.
All capitalized terms used but not otherwise defined in this Notice shall have the meanings ascribed to such terms in the LLC Agreement. Each Member is advised to review the LLC Agreement in connection with this Notice, including without limitation the provisions of Sections 3.2, 8.1, and 8.2 thereof.
Section 8. Contact Information
Questions regarding this Capital Call Notice, including questions relating to the calculation of the Second Tranche contribution amounts, the Payment Due Date, wire transfer instructions, or any other matter addressed herein, should be directed to the following:
For the Company / Governing Board:
David Tanaka General Counsel Cascadia State Infrastructure Authority 1100 Jefferson Street SE, Suite 400 Olympia, WA 98501 Telephone: (360) 555-7100
Email: d.tanaka@csia.wa.gov
Legal Counsel to CSIA:
Oliver Mackenzie Calderwood & Harkness LLP 901 Fifth Avenue, Suite 3200 Seattle, WA 98164 Telephone: (206) 555-3800
Email: o.mackenzie@calderwoodharkness.com
Matter No. 47291.00001
All communications and correspondence relating to this Notice should reference the Company name, "Columbia Basin Water Treatment Partners, LLC," and the caption "Second Tranche Capital Call — March 2023."
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO NOTICE OF CAPITAL CALL — SECOND TRANCHE CONTRIBUTIONS COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC
This Notice has been duly executed and delivered by the Governing Board of Columbia Basin Water Treatment Partners, LLC, acting by its CSIA-appointed members, as of the date first set forth above.
COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC
By its Governing Board (CSIA-appointed members):
________________________________________
Margaret Ellsworth Governing Board Member Executive Director, Cascadia State Infrastructure Authority
Date: March 1, 2023
________________________________________
David Tanaka Governing Board Member General Counsel, Cascadia State Infrastructure Authority
Date: March 1, 2023
________________________________________
Patricia Huang Governing Board Member Deputy Director, Capital Projects, Cascadia State Infrastructure Authority
Date: March 1, 2023
Enclosures
The following documents are enclosed with or referenced by this Notice:
1.  Exhibit A — Wire Transfer Instructions (Pacific Cascade Bank, N.A., Columbia Basin Water Treatment Partners, LLC — Operating Account)
2.  Reference Provisions of the LLC Agreement — For the convenience of the Members, the Company directs attention to the following provisions of the Amended and Restated Limited Liability Company Agreement, dated November 2, 2021:
•  Section 3.2 (Capital Calls; Timing and Procedures)
•  Section 8.1 (Events of Default)
•  Section 8.2 (Remedies Upon Default)
Members and their respective counsel are encouraged to review such provisions in their entirety. Copies of the LLC Agreement are on file with each Member's counsel of record and are available upon request from the Company.
CONFIDENTIAL — This Notice and any attachments hereto contain confidential and proprietary information of Columbia Basin Water Treatment Partners, LLC. Distribution of this Notice is limited to the addressees and copy recipients identified herein and their authorized representatives. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this Notice in error, please contact David Tanaka at the number listed above immediately.
Member | Percentage Interest | Total Equity Commitment | First Tranche Funded (Nov. 15, 2021) | Second Tranche Called (This Notice) | Total Funded Upon Completion
Cascadia State Infrastructure Authority | 55% | $9,900,000 | $4,950,000 | $4,950,000 | $9,900,000
Pinnacle Water Solutions, LLC | 45% | $8,100,000 | $4,050,000 | $4,050,000 | $8,100,000
Total | 100% | $18,000,000 | $9,000,000 | $9,000,000 | $18,000,000
Source | Amount | Percentage of Total
Equity Contributions (Members) | $18,000,000 | 40%
Project Finance Debt (Pacific Cascade Bank, N.A.) | $27,000,000 | 60%
Total Project Cost | $45,000,000 | 100%

COPIES TO:

COLUMBIA BASIN WATER TREATMENT PARTNERS, LLC

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