Contract analysis

1. Introduction and Purpose of Letter The Cascadia State Infrastructure Authority ("CSIA"), a Washington State governmental instrumentality created by Chapter 43.99N RCW, is developing the Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network (the "Project"). CSIA is writing to you in your capacity as Managing Member of Veldkamp Family Holdings LLC ("VFH" or "Grantor"), a W

2. Project Description The Project involves the construction, equipping, and commissioning of four pump stations, designated PS-1, PS-2, PS-3, and PS-4, to be located at strategic points along the Lower Nooksack River corridor in Whatcom County, Washington. In addition to the pump station facilities themselves, the Project includes the installation of approximately 6.2 miles of 24-inch and 36-inch high-density polyet

3. Identification of Property Interests to Be Acquired (a) Subject Parcels Based upon CSIA's review of Whatcom County Assessor records and title information obtained for the Project, VFH is the fee owner of approximately 187 acres of agricultural land along River Road in Whatcom County, Washington. Of this acreage, the following two parcels are relevant to this offer and are the parcels upon which the proposed easeme

4. Statement of Good-Faith Offer and Compensation (a) Appraised Fair Market Values In compliance with the requirements of RCW 8.25.020, CSIA has obtained an independent appraisal of the fair market values of the permanent and temporary easement interests proposed to be acquired from VFH. The appraisal was prepared by Jocelyn Trueblood, MAI, of Northwind Valuation Group LLC, 505 Lakeway Drive, Suite 220, Bellingham, W

5. CSIA's Condemnation Authority CSIA is a governmental instrumentality of the State of Washington, created under Chapter 43.99N RCW, and possesses the power of eminent domain for the acquisition of real property interests necessary for its authorized purposes, including the planning, design, construction, operation, and maintenance of regional water, wastewater, and stormwater management infrastructure. CSIA's emine

6. Terms of Proposed Easement Agreements If VFH accepts this offer, or if the parties reach agreement on modified terms, CSIA proposes to formalize the acquisition through the execution of the following instruments: (a) A Permanent Easement Agreement covering both the PS-1 and PS-2 permanent easement areas, to be recorded with the Whatcom County Auditor upon execution and delivery; and (b) A Temporary Construction Ea

7. Response Period and Process VFH is requested to respond to this offer within thirty (30) days of receipt of this letter — that is, on or before the date that is thirty calendar days following the date on which this letter is delivered to VFH (the "Response Deadline"). VFH may respond by accepting the offer, rejecting the offer, or presenting a counteroffer during this period. All responses should be in writing and

8. Right to Accompany Appraiser Consistent with RCW 8.25.020, VFH is hereby advised that it had the right to accompany CSIA's appraiser during the inspection of the Subject Parcels conducted in connection with the appraisal. CSIA notes that Northwind Valuation Group LLC conducted its property inspections of the Subject Parcels in connection with the preparation of the March 14, 2025 appraisal. If VFH was not afforded

9. Title Information In preparation for the proposed acquisition, CSIA has obtained preliminary title commitments for the Subject Parcels from Cascade Basin Title Company (Diane Ashworth, Title Officer), located at 119 East Magnolia Street, Bellingham, WA 98225. The title commitments identify the current ownership of the Subject Parcels, together with any liens, encumbrances, easements, restrictions, and other except

10. Environmental and Project Context The pump station sites are located along the Lower Nooksack River corridor in Whatcom County, Washington, an area that is subject to periodic flooding and is of significant environmental sensitivity. Both the PS-1 and PS-2 sites are located within FEMA Flood Zone AE (the 100-year floodplain), as shown on the current Flood Insurance Rate Maps for Whatcom County. The pump stations

11. Enclosures The following documents are enclosed with this letter for VFH's review:

1. Summary of Appraised Values — Prepared from the Northwind Valuation Group LLC appraisal dated March 14, 2025, including a tabular summary of the appraised fair market values for each easement interest and notes on the valuation methodology.

2. Draft Permanent Easement Agreement (PS-1 and PS-2) — Including exhibits consisting of legal descriptions and easement plats for both permanent easement areas, prepared by Ironclad Surveying & Land Services LLC.

3. Draft Temporary Construction Easement Agreement — Including exhibits consisting of the legal description and easement plat for the temporary construction easement area, prepared by Ironclad Surveying & Land Services LLC.

4. Project Location Map / Site Plan — Showing the locations of the PS-1 and PS-2 easement areas on the VFH Subject Parcels, the proposed pipeline alignments, and the temporary construction easement area.

5. Copy of Relevant Provisions of RCW 8.25 — Selected provisions of the Uniform Condemnation Procedures Act for VFH's reference. If any of the above enclosures are not included with the copy of this letter received by VFH, VFH should contact Calderwood & Harkness LLP or CSIA promptly, and the missing enclosures will be provided without delay.

12. Contact Information All communications regarding this offer, including questions, comments, counteroffers, and requests for additional information, should be directed to: Angela Fontaine Responsible Partner Calderwood & Harkness LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 Telephone: (206) 555-1740 Email: afontaine@calderwoodharkness.com Teresa Villanueva Project Manager Cascadia State Infrastructure Autho

13. Closing CSIA values its relationship with the landowners of Whatcom County and is deeply committed to conducting a fair, respectful, and transparent acquisition process. CSIA recognizes that VFH's land is an important asset and that the grant of easements for public infrastructure is a significant decision. CSIA is dedicated to minimizing the impact of the Project on VFH's property and agricultural operations to

1. Highest and Best Use. The appraised values are based upon the highest and best use of the Subject Parcels as agricultural land, consistent with the current zoning classification, soil characteristics (NRCS Class I and Class II soils), agricultural productivity data, and the historical and ongoing use of the parcels for crop cultivation and related farming operations.

2. Permanent Easement Valuation. The permanent easement values reflect the diminution in the fee value of each Subject Parcel attributable to the permanent encumbrance imposed by the easement, including the loss of the landowner's right to use the easement area for agricultural purposes and the impact of the pump station facilities on the remaining property. The appraiser employed the "before and after" methodology t

3. Temporary Easement Valuation. The temporary construction easement value reflects the estimated rental value of the approximately 3.1-acre temporary easement area over the anticipated construction period of up to twenty-four (24) months. The appraiser considered market rental rates for comparable agricultural land in the Whatcom County area, adjusted for the nature and extent of the temporary use and the anticipate

4. No Recognized Environmental Conditions. The appraiser relied upon the Phase I Environmental Site Assessment prepared by Pinnacle Geotechnical & Environmental Consulting Inc. (dated January 22, 2025), which identified no recognized environmental conditions on the Subject Parcels.

5. Availability of Full Appraisal Report. The full appraisal report prepared by Northwind Valuation Group LLC, including all supporting data, comparable sales analysis, and the appraiser's certifications, is available upon request to VFH or its counsel, in accordance with RCW 8.25.020. This summary is provided for informational purposes as part of CSIA's good-faith offer under RCW 8.25.020. It does not constitute the