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WHEREAS, following start-up of the Project, Mounds View experienced issues with media loss in
<br />WTP Nos.: 2 and 3; and, in or about August 2021, Mounds View found media in the distribution
<br />system and in the backwash collection tank (collectively, the "Media Issue");
<br />WHEREAS, in or about October 2021, Frontier Precision performed a floor inspection survey in
<br />the WTP No. 2 filter cells, which showed that the underdrain nozzles had been installed at varying
<br />elevations in cells 1 and 3 (the "Underdrain Issue");
<br />WHEREAS, in or about 2022, Mounds View retained Barr Engineering Co. ("Barr") to conduct
<br />testing on the WTP filters to measure media loss in same;
<br />WHEREAS, on January 20, 2022, Shank submitted a certified claim (i.e., PCO No. 25) for
<br />additional compensation to Mounds View, which demanded payment for alleged delay, disruption,
<br />acceleration costs, and costs for extra work that Shank performed on the Project;
<br />WHEREAS, on May 19, 2022, Shank served Mounds View with a Summons and Complaint (the
<br />"Action"), which asserted causes of action against Mounds View for Breach of Contract, Breach of
<br />Implied Warranties, and Unjust Enrichment regarding the Project. In the Action, Shank alleged that
<br />AE2S INC.'s Plans and Specifications were deficient; and, as a result of said improper design, the
<br />Project's air vents do not properly operate, which purportedly caused damage to the WTP that
<br />Mounds View then required Shank to repair. Shank contended that it was owed a sum from the
<br />Construction Contract and additional work performed due to AE2S INC.'S and AE2S LLC's alleged
<br />errors and/or omissions;
<br />WHEREAS, effective June 27, 2022, AE2S LLC and Mounds View signed a Tolling and Mutual
<br />Cooperation Agreement to pause the running of the applicable Statute of Limitations with respect to
<br />Mounds View's potential claims against AE2S INC. and/or AE2S LLC (the "AE2S Tolling
<br />Agreement");
<br />WHEREAS, Barr performed testing in 2022 and 2023; and, on April 14, 2023, Barr issued a "Water
<br />Treatment Plants 2 and 3 Filter Evaluation" to Mounds View in which Barr opined: (1) on the root
<br />cause of the Media Issue, (2) that air was entering the underdrain during backwash, which was
<br />disrupting the gravel, (3) on the insufficient drain down of cells prior to the air and water backwash,
<br />and (4) the improper installation of the underdrain laterals, which were canted to one side (the "Barr
<br />Report");
<br />WHEREAS, on April 14, 2023, Shank filed the Action with the District Court, Second Judicial
<br />District, Ramsey County, Minnesota. Neither Shank nor Mounds View named AE2S INC. and/or
<br />AE2S LLC as a party to the Action;
<br />WHEREAS, the Parties have engaged in settlement negotiations in an attempt to resolve their
<br />respective claims against each other without the need for further legal action and expense; and
<br />WHEREAS, the Parties have determined that it is in their best interest to avoid further costs and
<br />delays in resolving all of the claims, disputes, causes of action, and potential causes of action
<br />between them involving the Media Issues and the Underdrain Issues, and as alleged in the Action,
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