Contract analysis

I. Executive Summary The purpose of this memorandum is to summarize and analyze the preliminary title commitment reports received from Cascade Basin Title Company (title officer: Diane Ashworth, 119 East Magnolia Street, Bellingham, WA 98225) for all privately held parcels required for the acquisition of permanent and temporary easements in connection with the Regional Flood Resilience and Stormwater Management Progr

II. Scope and Methodology In preparing this memorandum, we undertook the following review and analysis:

1. Preliminary Title Commitments. We reviewed the preliminary title commitments issued by Cascade Basin Title Company for each of the five privately held parcels. These commitments were prepared by Diane Ashworth, title officer, and cover the proposed permanent pump station and access easements, temporary construction easements, and permanent pipeline corridor easements to be acquired by CSIA. Each commitment was rev

2. ALTA/NSPS Survey Data. We cross-referenced the title commitments against preliminary ALTA/NSPS survey data provided by Ironclad Surveying & Land Services LLC (Karen Whitfield, PLS, 4850 Cordata Parkway, Suite 110, Bellingham, WA 98226). Ironclad has prepared draft survey plats for each easement area and has provided preliminary legal descriptions for each proposed permanent and temporary easement. These surveys re

3. Whatcom County Public Records. We reviewed Whatcom County Assessor records and Whatcom County Auditor records for each parcel, including recorded documents referenced in the title commitments (deeds of trust, easements, and other instruments), tax assessment and payment histories, and parcel mapping data. These records were accessed both online through the Whatcom County public records portal and, where necessary,

4. Entity Verification. We confirmed vesting information for each landowner entity against Washington Secretary of State filings. Both VFH (a Washington limited liability company) and DCR (a Washington corporation) are confirmed to be in good standing and current on their respective filing obligations as of the date of this memorandum.

5. Phase I Environmental Site Assessments. We reviewed the Phase I Environmental Site Assessment ("ESA") reports completed on January 22, 2025, by Pinnacle Geotechnical & Environmental Consulting Inc. (Dr. Raymond Ostrowski, PE) for each of the parcels under review. The purpose of this review was to identify any environmental liens, activity and use limitations, or other environmental conditions that could affect tit

6. FEMA Floodplain Analysis. We coordinated with Rafael Dominguez, Working Associate, who has conducted a FEMA floodplain overlay analysis for the PS-1 and PS-2 parcels. Both parcels are located within a FEMA-designated Zone AE 100-year floodplain, with a Base Flood Elevation ("BFE") of 62.5 feet NAVD88. This designation is reflected as a standard Schedule B exception in the title commitments for those parcels.

7. Cultural Resources Surveys. We reviewed the Phase I Cultural Resources Survey completed on February 10, 2025, by Pinnacle, which identified a pre-contact archaeological site (45WH-1287) near the PS-3 location on the Dunlap Creek property. While not a recorded title encumbrance, this finding is noted by the title company as an informational exception and has implications for construction scheduling and monitoring r

III. Parcel-by-Parcel Title Analysis A. Veldkamp Family Holdings LLC Parcels Vesting Information (All Three Veldkamp Parcels). The following vesting and entity information is common to all three Veldkamp parcels (Parcel Nos. 380219-401200, 380219-401201, and 380219-401203): • Record Owner: Veldkamp Family Holdings LLC, a Washington limited liability company ("VFH") • EIN: 91-3487562 • Registered Agent Address: 2240 M

1. Parcel No. 380219-401200 — Pump Station No. 1 (PS-1). a. Property Description Pump Station No. 1 ("PS-1") is proposed to be located on a portion of Parcel No. 380219-401200, situated at or near the intersection of River Road and Slater Road, Whatcom County, Washington. This parcel forms part of the approximately 187-acre agricultural property owned by VFH along River Road. The property is currently used for crop f

1. Deed of Trust Partial Release or Subordination. Obtain a partial release or subordination agreement from Evergreen Agricultural Credit Association releasing the 2.3-acre PS-1 permanent easement area from the lien of the deed of trust recorded under Auditor's File No. 2019-0511847. This is a condition precedent to the issuance of an owner's policy of title insurance that does not except the deed of trust from cover

2. Conservation Easement Carve-Out Compliance. Obtain a full copy of the recorded conservation easement instrument (Auditor's File No. 2014-0389214) and confirm that the governmental infrastructure carve-out provision permits the proposed CSIA easement without further consent from the Whatcom County Land Trust. If the carve-out requires written consent, or if the combined VFH easement acreage approaches or exceeds th

3. Tenant/Occupancy Affidavit. Obtain an affidavit from VFH (executed by Hendrik Veldkamp as managing member) confirming that no agricultural tenants, lessees, or other parties are in possession of the 2.3-acre PS-1 permanent easement area and the associated temporary construction easement area. In the alternative, if tenants are identified, obtain tenant estoppel certificates and subordination, non-disturbance, and

4. LLC Authorization Documentation. Obtain a certificate of the managing member of VFH or a certified extract of the operating agreement confirming that Hendrik Veldkamp has the authority to execute easement conveyances, deeds, and related instruments on behalf of VFH without the requirement of additional member consent, or, if additional consent is required, evidence that such consent has been obtained. This documen

2. Parcel No. 380219-401201 — Pump Station No. 2 (PS-2). a. Property Description Pump Station No. 2 ("PS-2") is proposed to be located on a portion of Parcel No. 380219-401201, situated along River Road approximately 0.6 miles north of Ten Mile Road, Whatcom County, Washington. Like the PS-1 parcel, this parcel is part of the approximately 187-acre agricultural property owned by VFH along River Road. The proposed per

1. Deed of Trust Partial Release or Subordination. Same as PS-1. The partial release from Evergreen Agricultural Credit Association must cover the 1.8-acre PS-2 permanent easement area. We recommend that the partial release for all three Veldkamp parcels be consolidated into a single instrument if the lender will agree to that approach.

2. Irrigation District Easement Overlap. Investigate and resolve the potential 0.15-acre overlap between the existing Whatcom County Irrigation District No. 7 easement and the proposed PS-2 easement footprint. If overlap is confirmed, coordinate with the irrigation district for an accommodation agreement, easement relocation, or design modification to avoid the conflict.

3. Conservation Easement Percentage Analysis. Same as PS-1. The PS-2 acreage must be included in the combined calculation.

4. LLC Authority Documentation. Same as PS-1. A single certificate of managing member authority may suffice for all three Veldkamp parcels.

5. Tenant/Occupancy Affidavit. Same as PS-1. May be combined into a single affidavit covering all three Veldkamp parcels.

3. Parcel No. 380219-401203 — Pipeline Segment (Veldkamp). a. Property Description The pipeline corridor segment crossing VFH land is situated along River Road, Whatcom County, Washington, and forms part of the same approximately 187-acre VFH agricultural property. CSIA proposes to acquire a permanent linear easement over this parcel for the installation, operation, maintenance, repair, and replacement of 24-inch and

1. Deed of Trust Partial Release or Subordination. Same as PS-1 and PS-2. The partial release must cover the pipeline corridor easement width across this parcel.

2. Cascade Natural Gas Pipeline Crossing. Confirm through the final Ironclad survey whether the proposed CSIA pipeline routing crosses the Cascade Natural Gas easement. If a crossing is required, negotiate and execute a crossing or co-location agreement with Kaloreth Natural Gas Corporation prior to closing.

3. Conservation Easement Analysis. Same as PS-1 and PS-2. The pipeline corridor acreage on this parcel must be included in the 5% threshold calculation.

4. LLC Authority Documentation. Same as PS-1 and PS-2. B. Dunlap Creek Ranch Inc. Parcels Vesting Information (Both Dunlap Creek Parcels). The following vesting and entity information is common to both Dunlap Creek parcels (Parcel Nos. 380220-108400 and 380220-108401): • Record Owner: Dunlap Creek Ranch Inc., a Washington corporation (S-corporation for federal tax purposes) ("DCR") • EIN: 91-2198403 • Registered Agen

4. Parcel No. 380220-108400 — Pump Station No. 3 (PS-3). a. Property Description Pump Station No. 3 ("PS-3") is proposed to be located on a portion of Parcel No. 380220-108400, situated at or near the intersection of Hannegan Road and the Nooksack River crossing in Whatcom County, Washington. This parcel forms part of the approximately 94-acre dairy farmland owned by DCR along Hannegan Road. The property is actively

1. Cure Property Tax Delinquency. Payment of the delinquent 2024 property taxes (approximately $4,800, plus accrued interest and penalties) must be made before or at closing. CSIA may elect to credit this amount against the easement compensation payable to DCR, or may require DCR to cure the delinquency as a condition precedent to the execution of the easement instrument. The good-faith offer letter should address th

2. Deed of Trust Partial Release or Subordination. Obtain a partial release or subordination agreement from Stonefield Bancorp releasing the 2.1-acre PS-3 permanent easement area from the lien of the deed of trust recorded under Auditor's File No. 2016-0427183. Because DCR is self-represented in this transaction, Calderwood & Harkness will need to coordinate directly with Garrett Dunlap regarding lender outreach, or

3. Corporate Authority Documentation. Obtain a corporate resolution or certificate of authority adopted by the board of directors (or sole director) of DCR, confirming that Garrett Dunlap is duly authorized to execute easement conveyances, deeds, and related instruments on behalf of DCR. Because Garrett Dunlap is the sole director, a sole director's resolution should suffice. The resolution should be in form satisfac

4. Prescriptive Easement Investigation. Investigate the possible prescriptive easement claim on the southwest corner of the parcel. Coordinate with Ironclad to determine the location and extent of the unpaved farm road relative to the proposed PS-3 easement footprint. If a conflict exists, obtain a quitclaim deed or affidavit from the adjacent landowner, or seek title indemnity from Cascade Basin Title Company.

5. Tenant/Occupancy Confirmation. Obtain an affidavit from DCR (executed by Garrett Dunlap as president) confirming that no tenants, dairy operation employees, or other parties are in possession of the proposed PS-3 permanent easement area or the associated temporary construction easement area.

5. Parcel No. 380220-108401 — Pipeline Corridor (Dunlap Creek). a. Property Description The pipeline corridor segment crossing DCR land is situated along Hannegan Road, Whatcom County, Washington, and forms part of the same approximately 94-acre dairy farm property owned by DCR. CSIA proposes to acquire a permanent linear easement over this parcel for the installation, operation, maintenance, repair, and replacement

1. Confirm and Cure Property Tax Delinquency. Confirm whether any property tax delinquency exists on this parcel. If delinquent taxes are identified, they must be cured as a condition to closing under the same approach described for the PS-3 parcel.

2. Deed of Trust Partial Release or Subordination. Obtain a partial release or subordination agreement from Aldermere National Bank the pipeline corridor easement area on this parcel. The partial release should be consolidated with the partial release for the PS-3 parcel if possible.

3. Water District Easement Coordination. Coordinate with Whatcom County Water District No. 13 regarding the existing underground water line easement. Determine whether the CSIA pipeline can be co-located with, or routed to avoid, the water district infrastructure. If a crossing or co-location agreement is needed, negotiate and execute the agreement prior to closing.

4. Corporate Authority Documentation. Same as the PS-3 parcel. A single corporate resolution should suffice for both DCR parcels. C. CSIA-Owned Parcel — PS-4 (Confirmation Only) • Parcel No.: 380221-005700 • Location: E. Smith Road (existing CSIA right-of-way), Whatcom County, Washington • Record Owner: Cascadia State Infrastructure Authority • Proposed Pump Station Area: Approximately 1.5 acres within existing CSIA

IV. Cross-Cutting Title Issues and Risk Assessment This section addresses title issues that are common to multiple parcels or that present particular risk to the Project timeline or easement acquisition strategy. A. Deed of Trust Subordination / Partial Release All five privately held parcels are encumbered by agricultural deeds of trust, which constitute the most common and, from a transactional standpoint, the most