After recording, return to: Calderwood & Harkness LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104
Attn: Grace Nakamura
Grantor: Dunlap Creek Ranch Inc.
Grantee: Cascadia State Infrastructure Authority
Legal Description: Portions of Parcel Nos. 380220-108400 and 380220-108401, Whatcom County, Washington (full legal description set forth in Exhibit A)
Assessor's Tax Parcel Nos.: 380220-108400; 380220-108401
Reference Nos.: C&H Matter Number 1030-00003; CSIA Capital Project Number CP-2025-NPS-004
TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
This TEMPORARY CONSTRUCTION EASEMENT AGREEMENT (this "Agreement") is made and entered into effective as of the __ day of ____, 2025 (the "Effective Date"), by and between:
DUNLAP CREEK RANCH INC., a Washington corporation (S-corporation), with its registered agent address at 18500 Guide Meridian Road, Lynden, WA 98264 ("Grantor");
and
CASCADIA STATE INFRASTRUCTURE AUTHORITY, a Washington State governmental instrumentality created by Chapter 43.99N RCW, with its headquarters at 1100 Jefferson Avenue SE, Suite 400, Olympia, WA 98501 ("Grantee" or "CSIA").
Grantor and Grantee are referred to collectively herein as the "Parties" and individually as a "Party."
RECITALS
A. Grantor's Property. Dunlap Creek Ranch Inc. is the owner of approximately ninety-four (94) acres of dairy farmland located along Hannegan Road, Whatcom County, Washington, comprising Assessor's Tax Parcel Nos. 380220-108400 and 380220-108401 (collectively, the "Property"). The Property is used as an active dairy farming operation. Garrett Dunlap serves as President and Sole Director of Dunlap Creek Ranch Inc., and Maureen Dunlap serves as Secretary/Treasurer.
B. Grantee's Project. CSIA is developing the Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network (the "Project"), a network of four (4) pump stations along the Lower Nooksack River corridor in Whatcom County, Washington, with an approximate total project value of Forty-Eight Million Dollars ($48,000,000). The Project is funded through a combination of a Washington State capital appropriation pursuant to Senate Bill 5140, 2025 Legislative Session, in the amount of Thirty-One Million Two Hundred Thousand Dollars ($31,200,000), and CSIA Series 2025A Revenue Bonds in the amount of Sixteen Million Eight Hundred Thousand Dollars ($16,800,000), underwritten by Harborstone Capital Markets LLC. In connection with the Project, Pump Station No. 3 ("PS-3") is to be located on Parcel No. 380220-108400 at Hannegan Road at the Nooksack River crossing, and a segment of the approximately 6.2-mile force-main pipeline corridor (24-inch and 36-inch high-density polyethylene ("HDPE") pipe) crosses Parcel No. 380220-108401. The Project has been assigned CSIA Capital Project Number CP-2025-NPS-004.
C. Need for Temporary Construction Easement. In connection with the construction of PS-3 and the pipeline corridor on the Property, Grantee requires temporary workspace, construction staging areas, material laydown areas, equipment storage, and access for pipeline installation on portions of the Property. The temporary easement area encompasses approximately one and six-tenths (1.6) acres of the Property, as more particularly described in Exhibit A attached hereto and incorporated herein by reference, and as depicted on the survey plat set forth in Exhibit B attached hereto and incorporated herein by reference (the "Temporary Easement Area").
D. Appraised Value and Compensation. The fair market value of the temporary construction easement has been appraised at Thirty-Two Thousand Dollars ($32,000) by Northwind Valuation Group LLC (appraiser Jocelyn Trueblood, MAI), pursuant to an appraisal report dated March 14, 2025, prepared in conformance with the Uniform Standards of Professional Appraisal Practice ("USPAP") and Yellow Book methodology. Grantor has received CSIA's good-faith offer letter in compliance with the requirements of RCW 8.25.
E. Concurrent Instruments. This Agreement is being entered into concurrently with (i) a Permanent Easement Agreement for PS-3 covering approximately two and one-tenth (2.1) acres of Parcel No. 380220-108400 (appraised at Three Hundred Fifteen Thousand Dollars ($315,000)), and (ii) a Pipeline Corridor Easement Agreement for the force-main pipeline segment crossing Parcel No. 380220-108401, each of which is a separate instrument executed concurrently herewith. CSIA possesses condemnation authority under Chapter 43.99N RCW and the applicable provisions of Chapter 8.04 and Chapter 8.12 RCW.
F. Agreement. Grantor desires to grant and Grantee desires to accept the temporary construction easement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the payment of the Compensation described in Article 3, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Article 1 shall have the meanings ascribed to them elsewhere in this Agreement.
(a) "Compensation" means the sum of Thirty-Two Thousand Dollars ($32,000), payable as set forth in Article 3.
(b) "Construction" means all activities related to the construction, installation, and commissioning of PS-3 and the force-main pipeline, including but not limited to site preparation, clearing and grubbing, excavation, grading, shoring and dewatering, material storage, pipeline installation, backfilling, compaction, testing, surface restoration, and all activities reasonably incidental thereto.
(c) "Construction Completion" means the date on which CSIA's contractor achieves substantial completion of Construction within or adjacent to the Temporary Easement Area, as certified in writing by CSIA's Project Manager.
(d) "Effective Date" means the date of recording of this Agreement with the Whatcom County Auditor.
(e) "Permitted Activities" means the activities authorized under Article 4 of this Agreement.
(f) "Project" means the Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network, CSIA Capital Project Number CP-2025-NPS-004.
(g) "Property" means, collectively, the approximately ninety-four (94) acres of land located in Whatcom County, Washington, comprising Assessor's Tax Parcel Nos. 380220-108400 and 380220-108401.
(h) "Restoration Standards" means the standards for site restoration set forth in Article 7 of this Agreement.
(i) "Temporary Easement Area" means the approximately one and six-tenths (1.6) acres located on portions of Parcel Nos. 380220-108400 and 380220-108401, as legally described in Exhibit A and depicted on the survey plat in Exhibit B, each attached hereto and incorporated herein by reference. The legal description and survey plat were prepared by Ironclad Surveying & Land Services LLC (Karen Whitfield, PLS).
(j) "Term" has the meaning set forth in Section 2.2 of this Agreement.
ARTICLE 2 — GRANT OF TEMPORARY CONSTRUCTION EASEMENT
Section 2.1 — Grant. Grantor hereby grants to Grantee, and to Grantee's contractors, subcontractors, agents, employees, consultants, and authorized representatives, a temporary, non-exclusive easement over, across, and upon the Temporary Easement Area for the purposes described in Article 4 hereof. This grant is subject to all terms and conditions of this Agreement. Nothing in this Agreement shall be construed to grant to Grantee any interest in the Property greater than the temporary easement rights expressly set forth herein.
Section 2.2 — Term. The term of this Temporary Construction Easement (the "Term") shall commence on the Effective Date and shall expire on the earlier of:
(a) the date of Construction Completion, as certified in writing by CSIA's Project Manager (Teresa Villanueva, or her successor as designated by CSIA in writing); or
(b) twenty-four (24) months from the Effective Date.
The Parties acknowledge that the target Construction Notice to Proceed ("NTP") date is December 15, 2025, and the anticipated Project Substantial Completion date is June 30, 2027. These dates are provided for informational purposes only and shall not limit or extend the Term as defined herein.
Section 2.3 — Extension. Grantee may extend the Term for one (1) additional period of up to six (6) months upon not less than sixty (60) days' prior written notice to Grantor. Grantee's notice of extension shall specify the requested duration of the extension period. Any extension of the Term shall require payment of additional compensation to Grantor, calculated on a pro-rata monthly basis at the rate derived from the original Compensation for twenty-four (24) months (i.e., $32,000 divided by 24 months, equaling approximately One Thousand Three Hundred Thirty-Three Dollars and Thirty-Three Cents ($1,333.33) per month). Extension compensation shall be paid in full by wire transfer or certified check in advance of the commencement of the extension period. In the event the extension period is less than a full month, the pro-rata monthly compensation shall be prorated on a daily basis. All other terms and conditions of this Agreement shall remain in full force and effect during any extension period.
Section 2.4 — Termination and Surrender. Upon expiration or earlier termination of the Term, all rights granted to Grantee hereunder shall automatically terminate and revert to Grantor without the necessity of any further action by either Party, subject only to Grantee's obligation to complete site restoration as set forth in Article 7. Grantee shall vacate the Temporary Easement Area, remove all equipment, materials, temporary structures, and improvements placed thereon by Grantee, and restore the Temporary Easement Area in accordance with Article 7 within sixty (60) days following the date of expiration or termination of the Term. The obligation to restore the Temporary Easement Area shall survive expiration or termination of this Agreement.
ARTICLE 3 — COMPENSATION
Section 3.1 — Payment Amount. In consideration of the temporary construction easement rights granted herein, Grantee shall pay Grantor the total sum of Thirty-Two Thousand Dollars ($32,000) (the "Compensation"). This sum is based on the appraised fair market value of the temporary construction easement as established by Northwind Valuation Group LLC (Jocelyn Trueblood, MAI) in an appraisal report dated March 14, 2025, prepared in conformance with USPAP and Yellow Book methodology. The Compensation constitutes payment in full for the temporary construction easement rights granted herein for the initial twenty-four (24) month Term and is separate and distinct from any compensation payable under the concurrent Permanent Easement Agreement or Pipeline Corridor Easement Agreement.
Section 3.2 — Payment Timing. The Compensation shall be paid in full by wire transfer of immediately available funds to an account designated by Grantor, or by certified check made payable to Dunlap Creek Ranch Inc., at the time of closing and prior to or simultaneously with the recording of this Agreement with the Whatcom County Auditor. All payments shall be disbursed in accordance with the closing instructions prepared by Calderwood & Harkness LLP. Grantee shall not commence any Permitted Activities within the Temporary Easement Area until the Compensation has been paid in full.
Section 3.3 — Taxes. Grantor shall be solely responsible for any federal, state, or local income taxes, or other taxes of any nature, arising from Grantor's receipt of the Compensation. Grantee shall provide an Internal Revenue Service Form 1099 (or such other applicable tax reporting form) to Grantor to the extent required by applicable law. The Parties acknowledge that the employer identification number of Dunlap Creek Ranch Inc. is EIN: 91-2198403. Nothing in this Agreement shall be construed as tax advice to either Party, and each Party is advised to consult its own tax advisor regarding the tax consequences of this transaction.
ARTICLE 4 — PERMITTED USE AND ACTIVITIES
Section 4.1 — Scope of Permitted Activities. Within the Temporary Easement Area, Grantee and its authorized contractors, subcontractors, agents, employees, consultants, and representatives may undertake the following activities (collectively, the "Permitted Activities"):
(a) Construction staging and material laydown, including the temporary storage of construction materials, pipe, fittings, aggregate, fill material, and related supplies;
(b) Equipment and vehicle parking and storage, including but not limited to heavy construction equipment, trucks, trailers, and support vehicles;
(c) Installation and use of temporary office trailers, portable sanitation facilities, tool storage containers, temporary power and communications infrastructure, and other construction support structures;
(d) Excavation, trenching, backfilling, compaction, and grading in connection with pipeline installation (24-inch and 36-inch HDPE force-main), including any required dewatering and shoring activities;
(e) Stockpiling of excavated soil, gravel, pipe, precast concrete components, and other construction materials;
(f) Implementation of temporary stormwater management and erosion control measures, including silt fencing, check dams, temporary sediment basins, inlet protection, and stabilized construction entrances;
(g) Vehicular and pedestrian access to and from the Temporary Easement Area and adjacent permanent easement areas, including the PS-3 site on Parcel No. 380220-108400 and the pipeline corridor on Parcel No. 380220-108401; and
(h) All activities reasonably necessary and incidental to the Construction of PS-3 and the force-main pipeline, including surveying, geotechnical investigation, materials testing, utility locating, and safety-related activities.
Section 4.2 — Limitations on Use. Grantee shall not use the Temporary Easement Area for any purpose other than the Permitted Activities described in Section 4.1. Without limiting the generality of the foregoing, Grantee shall not store hazardous materials, fuels, lubricants, solvents, or chemicals within the Temporary Easement Area except in strict compliance with all applicable federal, state, and local regulations, including without limitation the Washington State Department of Ecology's regulations governing the storage and handling of hazardous substances. Fuels and chemicals may be stored within the Temporary Easement Area only in quantities reasonably required for day-to-day Construction activities. All fuels, lubricants, and chemicals shall be maintained in appropriate secondary containment systems designed to prevent releases to the ground surface, soils, and groundwater. Grantee shall not conduct blasting within the Temporary Easement Area without the prior written consent of Grantor, which consent shall not be unreasonably withheld, conditioned, or delayed.
Section 4.3 — Hours of Operation. Construction activities within the Temporary Easement Area shall be limited to Monday through Saturday, 7:00 AM to 7:00 PM, Pacific Time, unless otherwise agreed in writing by Grantor. Notwithstanding the foregoing, Grantee may conduct emergency activities at any time, including Sundays and holidays, when necessary to prevent imminent harm to persons, property, the environment, or public safety. In the event of any emergency work conducted outside the hours specified above, Grantee shall provide prompt notice to Grantor, such notice to be given by telephone within four (4) hours of the commencement of such emergency work, followed by written confirmation within twenty-four (24) hours.
ARTICLE 5 — LIVESTOCK AND DAIRY OPERATION PROTECTIONS
Section 5.1 — Acknowledgment of Dairy Operations. Grantee acknowledges that Grantor operates an active dairy farm on the Property, including the keeping of dairy cattle and related agricultural activities. Grantee further acknowledges that livestock (dairy cattle) may be present on portions of the Property adjacent to or near the Temporary Easement Area at various times throughout the Term. Grantee recognizes that dairy operations are sensitive to disruption and that the health, safety, and productivity of Grantor's livestock are of paramount importance to Grantor's business operations.
Section 5.2 — Fencing Obligations. Prior to commencing any Construction activities within the Temporary Easement Area, Grantee shall install and maintain, at Grantee's sole cost and expense, temporary fencing of a type and quality sufficient to prevent livestock from entering the Temporary Easement Area and to prevent Grantee's activities from interfering with livestock movement on the remainder of the Property. Such fencing shall be not less than four (4) feet in height and shall be of a type commonly used for the containment of dairy cattle. Fencing shall be installed in consultation with Grantor and shall include appropriate gates of adequate size to permit Grantor's continued access with farm equipment and livestock to agricultural areas on the Property. Grantee shall maintain all temporary fencing in good repair throughout the Term. All temporary fencing shall be removed upon expiration of the Term and completion of site restoration in accordance with Article 7, or earlier if requested by Grantor and Grantee agrees that the fencing is no longer needed for the protection of livestock or the separation of the Temporary Easement Area from agricultural areas.
Section 5.3 — Livestock Safety. Grantee shall ensure that all open excavations, trenches, pits, and other openings within or adjacent to the Temporary Easement Area are adequately barricaded, covered, or otherwise secured during non-working hours to prevent livestock injury. Steel plates, fencing panels, or other suitable barriers shall be placed over open trenches and excavations at the close of each workday. Grantee shall not leave unsecured materials, equipment, debris, sharp objects, loose wire, or other items that could pose a hazard to livestock within the Temporary Easement Area or on adjacent portions of the Property. If any livestock injury occurs as a result of Grantee's activities or Grantee's failure to comply with this Section, Grantee shall be liable for all veterinary costs, the replacement value of any injured or deceased animal, and any consequential loss of milk production or breeding value, subject to the dispute resolution procedures set forth in Article 13.
Section 5.4 — Access to Water and Pasture. Grantee shall not unreasonably interfere with Grantor's access to water sources (including wells, stock tanks, irrigation infrastructure, and natural watercourses), pasture, barns, milking facilities, feed storage, or other dairy infrastructure on the Property. If Construction activities temporarily require closure, blockage, or relocation of access routes customarily used by Grantor for the movement of livestock, equipment, feed, or milk transport vehicles, Grantee shall provide reasonably equivalent alternative access at Grantee's sole cost and expense. All such alternative access arrangements shall be coordinated with Grantor in advance and shall be implemented prior to any closure or blockage of existing access routes.
Section 5.5 — Noise, Dust, and Vibration. Grantee shall implement reasonable measures to minimize noise, dust, and vibration impacts on livestock and dairy operations, including but not limited to the following:
(a) Dust suppression through water application or other approved methods on unpaved surfaces and exposed soils within the Temporary Easement Area and along access routes;
(b) Use of properly maintained mufflers and sound-reduction devices on all internal combustion engines and heavy equipment;
(c) Scheduling of particularly disruptive activities (including, without limitation, pile driving, vibratory compaction, rock breaking, and any blasting authorized under Section 4.2) during times mutually agreed upon with Grantor, with consideration given to milking schedules and livestock feeding times; and
(d) Compliance with Whatcom County noise ordinances and all applicable state and local noise regulations.
Grantee shall provide not less than forty-eight (48) hours' advance written notice to Grantor before commencing activities reasonably expected to generate significant noise, dust, or vibration, including but not limited to pile driving, vibratory compaction, and the operation of impact equipment. Such notice shall describe the nature, expected duration, and anticipated intensity of the activity.
Section 5.6 — Crop and Agricultural Loss Compensation. In addition to the Compensation paid under Article 3, Grantee shall reimburse Grantor for any direct, documented crop loss or damage to agricultural improvements (including but not limited to fencing, irrigation lines, drainage tiles, pasture, and livestock watering infrastructure) within the Temporary Easement Area or on adjacent portions of the Property caused by Grantee's activities or the activities of Grantee's contractors, subcontractors, agents, or employees. Claims for crop or agricultural loss shall be submitted by Grantor to Grantee in writing within ninety (90) days after the date on which the damage occurs or is reasonably discovered by Grantor, whichever is later. All claims shall be supported by reasonable documentation, including photographs, receipts, agricultural extension service assessments, or other evidence substantiating the nature and extent of the claimed loss. Grantee shall pay undisputed amounts within thirty (30) days of receipt of a complete claim. Disputes regarding the existence, cause, or amount of crop or agricultural loss shall be resolved pursuant to the dispute resolution procedures set forth in Article 13 of this Agreement.
ARTICLE 6 — ACCESS
Section 6.1 — Ingress and Egress. Grantee shall have the right of ingress and egress to and from the Temporary Easement Area over and along existing roads, driveways, and lanes on the Property, as identified on the survey plat attached hereto as Exhibit B. Such access rights shall include the right to use heavy construction equipment, trucks, and other vehicles reasonably necessary for the Permitted Activities. Grantee shall maintain all access routes used by Grantee in at least as good condition as they existed prior to the commencement of Construction, reasonable wear and tear from normal agricultural use excepted. In the event Grantee's use of access routes causes damage to road surfaces, drainage features, or adjacent improvements, Grantee shall repair such damage promptly at Grantee's sole cost and expense.
Section 6.2 — Additional Access Routes. If Grantee determines that access routes beyond those depicted on Exhibit B are necessary to conduct the Permitted Activities, Grantee shall obtain Grantor's prior written consent before utilizing any such additional access routes. Grantor's consent shall not be unreasonably withheld, conditioned, or delayed. Grantee shall compensate Grantor for any damage to crops, pasture, fencing, drainage tiles, or improvements along such additional routes, in accordance with the procedures set forth in Section 5.6.
Section 6.3 — Grantor's Retained Access. Grantor retains the full right to use, occupy, and access all portions of the Property not within the Temporary Easement Area for Grantor's dairy farming, agricultural, residential, and all other lawful purposes, without interference from Grantee. Nothing in this Agreement shall be construed as limiting Grantor's rights as fee owner of the Property, except to the extent expressly set forth herein with respect to the Temporary Easement Area during the Term.
ARTICLE 7 — SITE RESTORATION
Section 7.1 — Restoration Obligations. Upon completion of Construction within or adjacent to the Temporary Easement Area, or upon expiration of the Term, whichever occurs first, Grantee shall, at Grantee's sole cost and expense, restore the Temporary Easement Area to substantially the same condition as existed prior to the Effective Date, in accordance with the following Restoration Standards:
(a) Removal of Temporary Improvements. Grantee shall remove all temporary structures, office trailers, portable sanitation facilities, equipment, vehicles, materials, stockpiled soil, debris, waste, and all other items placed on the Temporary Easement Area by Grantee or Grantee's contractors, subcontractors, agents, or employees.
(b) Backfilling. Grantee shall backfill all trenches, excavations, pits, and other openings to original grade using suitable fill material that is free from debris, construction waste, and contaminants.
(c) Decompaction. Grantee shall decompact soils that were compacted by Construction activities, including heavy equipment traffic, material storage, and stockpiling, to a depth and degree sufficient to restore agricultural productivity and allow normal root growth for pasture grasses. Decompaction shall be performed using deep tillage or subsoiling equipment as appropriate.
(d) Re-grading. Grantee shall re-grade all surfaces within the Temporary Easement Area to restore pre-existing drainage patterns and prevent ponding, erosion, or alteration of surface water flow on the Property.
(e) Reseeding. Grantee shall reseed all disturbed areas with a grass seed mix of a type and quality reasonably approved by Grantor, suitable for dairy pasture use in Whatcom County, Washington. Seeding shall be performed at agronomic rates and at a time of year appropriate for germination and establishment. Grantee shall apply appropriate soil amendments, fertilizer, and mulch as needed to support successful establishment of the reseeded areas.
(f) Repair of Improvements. Grantee shall repair or replace any fences, gates, drainage tiles, culverts, irrigation lines, roadways, or other agricultural improvements that were damaged or removed during Construction to a condition equal to or better than their pre-existing condition.
Section 7.2 — Restoration Timeline. Grantee shall complete all restoration work required under Section 7.1 within sixty (60) days following the date of expiration or termination of the Term. If seasonal conditions, including but not limited to winter weather, frozen ground, saturated soils, or other conditions that would prevent effective restoration, prevent completion of all or a portion of the restoration work within the sixty (60) day period, Grantee shall complete such restoration as soon as reasonably practicable following the abatement of such conditions, but in no event later than the first available planting season. In the interim, Grantee shall take all reasonable measures to stabilize the Temporary Easement Area and prevent erosion, sedimentation, and further degradation.
Section 7.3 — Restoration Inspection. Grantor shall have the right to inspect the Temporary Easement Area upon Grantee's completion of all restoration work. Grantee shall provide Grantor with not less than five (5) business days' advance written notice of the anticipated date of completion of restoration work to enable Grantor to schedule an inspection. Grantor shall provide written notice to Grantee of any deficiencies in the restoration work within thirty (30) days after completion of Grantee's restoration, or within thirty (30) days after Grantor's inspection, whichever is later. Grantee shall cure any deficiencies identified in Grantor's notice within thirty (30) days of Grantee's receipt of such notice, or within such longer period as may be reasonably necessary to complete the required cure, provided Grantee commences curative work promptly and prosecutes it diligently to completion.
Section 7.4 — Survival. The restoration obligations set forth in this Article 7 shall survive expiration or termination of this Agreement and shall remain enforceable until all restoration work has been completed to Grantor's reasonable satisfaction.
ARTICLE 8 — ENVIRONMENTAL COMPLIANCE
Section 8.1 — Compliance with Laws. Grantee shall comply with all applicable federal, state, and local environmental laws, regulations, ordinances, and permit conditions in conducting the Permitted Activities within the Temporary Easement Area. Without limiting the generality of the foregoing, Grantee's obligations include compliance with the following, as applicable:
(a) The Federal Water Pollution Control Act (Clean Water Act), 33 U.S.C. § 1251 et seq.;
(b) The Washington State Environmental Policy Act ("SEPA"), Chapter 43.21C RCW, and the SEPA Rules, Chapter 197-11 WAC;
(c) The National Pollutant Discharge Elimination System ("NPDES") Construction Stormwater General Permit issued by the Washington Department of Ecology;
(d) Section 404 and Section 401 permits issued by the U.S. Army Corps of Engineers and the Washington Department of Ecology, respectively;
(e) Hydraulic Project Approval ("HPA") requirements of the Washington Department of Fish & Wildlife, Chapter 77.55 RCW;
(f) All applicable permits, conditions, and requirements issued by Whatcom County, including grading permits, critical areas ordinance compliance, and shoreline permits; and
(g) All other applicable federal, state, and local environmental and land use laws, regulations, and ordinances.
Section 8.2 — Erosion and Sediment Control. Grantee shall prepare, implement, and maintain a Stormwater Pollution Prevention Plan ("SWPPP") for the Temporary Easement Area in accordance with the requirements of the NPDES Construction Stormwater General Permit and any additional requirements imposed by the Washington Department of Ecology or Whatcom County. Grantee shall install and maintain best management practices ("BMPs") for erosion and sediment control throughout the Term, including but not limited to silt fencing, straw wattles, check dams, temporary sediment basins, stabilized construction entrances, and dust control measures. All BMPs shall be inspected and maintained in accordance with the SWPPP and applicable permit requirements.
Section 8.3 — Wetland and Critical Area Protections. Grantee acknowledges that portions of the Property near the Temporary Easement Area may include Category III palustrine emergent wetlands (approximately 1.4 acres as delineated by Pinnacle Geotechnical & Environmental Consulting Inc.) and the pre-contact archaeological site designated as 45WH-1287, as identified in prior environmental and cultural resource studies for the Project. Grantee shall not conduct any Permitted Activities within delineated wetland boundaries or within established archaeological site buffer zones unless expressly authorized by applicable federal, state, and local permits and by the terms of this Agreement. Prior to commencing any Construction activities within or adjacent to delineated wetland boundaries or archaeological site buffers, Grantee shall install clearly visible protective flagging, signage, and temporary fencing at the boundaries of such areas. Grantee shall ensure that all contractors, subcontractors, and personnel working within the Temporary Easement Area are informed of the location and significance of these sensitive areas and the restrictions applicable thereto.
Section 8.4 — Hazardous Materials. Grantee shall not release, discharge, spill, or dispose of any hazardous substances, pollutants, contaminants, petroleum products, or waste materials on, in, or upon the Temporary Easement Area or the Property. In the event of any release, spill, or discharge of hazardous substances or pollutants, whether accidental or otherwise, Grantee shall:
(a) Immediately take all reasonable steps to contain and control the release;
(b) Promptly notify Grantor of the release, in no event later than twenty-four (24) hours following discovery;
(c) Report the release to all applicable federal, state, and local regulatory agencies as required by law; and
(d) Be solely responsible for all investigation, remediation, cleanup, disposal, monitoring, and reporting costs arising from the release, and shall indemnify and hold Grantor harmless from all liabilities, costs, and expenses arising therefrom, in accordance with Article 10.
Section 8.5 — Phase I ESA Baseline. The Parties acknowledge that a Phase I Environmental Site Assessment ("Phase I ESA") was completed for the Property by Pinnacle Geotechnical & Environmental Consulting Inc. on January 22, 2025. The Phase I ESA identified no recognized environmental conditions ("RECs"), controlled recognized environmental conditions ("CRECs"), or historical recognized environmental conditions ("HRECs") on the Property as of that date. The Phase I ESA shall serve as the baseline environmental condition of the Property for purposes of establishing pre-existing conditions and evaluating any environmental claims or issues that may arise during or after the Term.
ARTICLE 9 — INSURANCE
Section 9.1 — Grantee's Insurance Requirements. Grantee shall require its contractor(s) performing Construction within or accessing the Temporary Easement Area to obtain and maintain, throughout the duration of Construction activities on or affecting the Temporary Easement Area, at a minimum, the following insurance coverages from carriers authorized to do business in the State of Washington and maintaining an A.M. Best rating of not less than A-VII:
(a) Commercial General Liability Insurance: Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) aggregate, including coverage for premises and operations, products and completed operations, personal and advertising injury, and contractual liability.
(b) Automobile Liability Insurance: One Million Dollar ($1,000,000) combined single limit per accident, covering all owned, non-owned, and hired vehicles.
(c) Workers' Compensation Insurance: Statutory limits as required by the Industrial Insurance Act of the State of Washington, Chapter 51.08 RCW, and applicable Washington State Department of Labor & Industries requirements.
(d) Employer's Liability Insurance: One Million Dollars ($1,000,000) per occurrence, One Million Dollars ($1,000,000) disease — each employee, and One Million Dollars ($1,000,000) disease — policy limit.
(e) Pollution Liability Insurance: Two Million Dollars ($2,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, covering bodily injury, property damage, and environmental cleanup costs arising from pollution conditions caused by Construction activities.
(f) Umbrella/Excess Liability Insurance: Five Million Dollars ($5,000,000) per occurrence and in the aggregate, providing excess coverage over the commercial general liability, automobile liability, and employer's liability policies.
Section 9.2 — Additional Insured. Grantor (Dunlap Creek Ranch Inc., its officers, directors, employees, and agents) shall be named as an additional insured on Grantee's contractor's commercial general liability and umbrella/excess liability insurance policies with respect to liability arising out of or in connection with the Permitted Activities and Construction work performed within or affecting the Temporary Easement Area. The additional insured endorsement shall be on ISO Form CG 20 10 or equivalent, and shall provide coverage on a primary and non-contributory basis.
Section 9.3 — Certificates of Insurance. Grantee shall provide Grantor with certificates of insurance evidencing all required coverages prior to the commencement of any Construction activities within the Temporary Easement Area. Such certificates shall identify Grantor as an additional insured as required by Section 9.2, shall reference this Agreement, and shall provide for not less than thirty (30) days' advance written notice to Grantor of cancellation or material modification of any required coverage. Updated certificates shall be provided to Grantor upon renewal of any policy during the Term. A summary of the minimum insurance requirements is set forth in Exhibit C attached hereto and incorporated herein by reference.
ARTICLE 10 — INDEMNIFICATION
Section 10.1 — Grantee's Indemnification. To the fullest extent permitted by law, Grantee shall indemnify, defend, and hold harmless Grantor, its officers, directors (including Garrett Dunlap and Maureen Dunlap), shareholders, employees, agents, successors, and assigns (collectively, the "Grantor Indemnified Parties") from and against any and all claims, demands, actions, causes of action, suits, judgments, liens, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and costs of litigation) arising out of or resulting from:
(a) Grantee's exercise of any rights granted under this Agreement, including the conduct of Permitted Activities within the Temporary Easement Area;
(b) Any act, omission, negligence, or misconduct of Grantee, its contractors, subcontractors, agents, employees, consultants, or representatives in connection with the Permitted Activities or Grantee's presence on the Property;
(c) Any environmental contamination, release of hazardous substances, or violation of environmental laws caused by or attributable to Grantee's activities on or affecting the Property; and
(d) Any injury to persons (including death) or damage to property occurring within the Temporary Easement Area or on the Property as a result of Grantee's activities or the activities of Grantee's contractors, subcontractors, agents, employees, or representatives.
Notwithstanding the foregoing, Grantee's indemnification obligations under this Section 10.1 shall not extend to claims, losses, damages, or liabilities arising from the sole negligence or willful misconduct of Grantor or any Grantor Indemnified Party.
Section 10.2 — Sovereign Immunity Reservation. Notwithstanding anything in Section 10.1 to the contrary, Grantee reserves and does not waive any and all defenses, immunities, and limitations of liability available to it as a Washington State governmental instrumentality, including but not limited to those arising under RCW 4.92, Chapter 43.99N RCW, and any other applicable provision of Washington State law. Nothing in this Agreement shall be construed as a waiver of Grantee's sovereign immunity, governmental immunity, or any other immunity or defense except as expressly required by applicable law. Grantee's indemnification obligations under Section 10.1 shall be subject to and limited by the provisions of RCW 4.92 and other applicable statutes governing the liability of Washington State governmental instrumentalities.
Section 10.3 — Survival. The indemnification obligations set forth in this Article 10 shall survive the expiration or termination of this Agreement and shall remain in full force and effect with respect to any claims arising from or related to events occurring during the Term or any extension thereof, regardless of when such claims are asserted.
ARTICLE 11 — TITLE AND SURVEY
Section 11.1 — Title Insurance. Grantee has obtained, or will obtain prior to recording, a title commitment from Cascade Basin Title Company (title officer Diane Ashworth, 119 East Magnolia Street, Bellingham, WA 98225) for the Temporary Easement Area and the Property. Grantor represents that it has good and marketable fee simple title to the Property, free and clear of all liens, encumbrances, and defects, except for those permitted encumbrances identified in the title commitment issued by Cascade Basin Title Company and approved or accepted by Grantee.
Section 11.2 — Survey. The legal description and survey plat of the Temporary Easement Area attached hereto as Exhibits A and B, respectively, were prepared by Ironclad Surveying & Land Services LLC (Karen Whitfield, PLS, 4850 Cordata Parkway, Suite 110, Bellingham, WA 98226). The survey was performed in accordance with the Washington State Survey Recording Act, Chapter 58.09 RCW, and the Minimum Standards for Land Boundary Surveys in the State of Washington, Chapter 332-130 WAC. The Parties agree that the legal description and survey plat set forth in Exhibits A and B shall control the identification and delineation of the Temporary Easement Area.
Section 11.3 — Grantor's Representations Regarding Title. Grantor represents and warrants to Grantee as of the Effective Date as follows:
(a) Dunlap Creek Ranch Inc. is a Washington corporation duly organized, validly existing, and in good standing under the laws of the State of Washington, and is authorized to transact business in the State of Washington;
(b) Garrett Dunlap, as President and Sole Director of Dunlap Creek Ranch Inc., has the full authority to execute and deliver this Agreement on behalf of the corporation, and no additional corporate approvals, shareholder consents, or third-party consents are required for the valid execution and delivery of this Agreement;
(c) The execution and delivery of this Agreement, and the grant of the temporary construction easement contemplated hereby, will not violate, conflict with, or constitute a default under any agreement, mortgage, deed of trust, note, lease, or other instrument or obligation to which Grantor is a party or by which the Property is bound;
(d) There are no pending or, to Grantor's knowledge, threatened condemnation, eminent domain, inverse condemnation, or other governmental proceedings affecting the Property, other than this Project and the concurrent instruments described in Recital E hereof; and
(e) To Grantor's knowledge, there are no pending or threatened actions, suits, proceedings, or claims affecting the Property or Grantor's ability to perform its obligations under this Agreement.
ARTICLE 12 — RECORDING
Section 12.1 — Recording. This Agreement shall be recorded in the real property records of the Whatcom County Auditor promptly following execution by both Parties. Grantee shall be responsible for all recording fees, real estate excise tax (if applicable), and associated costs incurred in connection with the recording of this Agreement.
Section 12.2 — Termination of Record. Upon expiration or termination of the Term, and upon completion and acceptance of Grantee's restoration obligations under Article 7, Grantee shall execute and record a Notice of Termination of Temporary Construction Easement with the Whatcom County Auditor, in a form reasonably acceptable to Grantor, to clear the record encumbrance created by this Agreement. Grantee shall provide a copy of the recorded Notice of Termination to Grantor. Grantee shall bear all costs associated with the preparation, execution, and recording of the Notice of Termination.
ARTICLE 13 — DISPUTE RESOLUTION
Section 13.1 — Negotiation. In the event of any dispute, controversy, or claim arising under or relating to this Agreement, including but not limited to disputes regarding the interpretation, performance, breach, or termination of this Agreement, the Parties shall first attempt to resolve the dispute through good-faith negotiation between authorized representatives of Grantor and Grantee. Such negotiations shall be initiated by written notice from the Party asserting the dispute to the other Party, describing the nature of the dispute and the relief sought.
Section 13.2 — Mediation. If the dispute is not resolved through direct negotiation within thirty (30) days following the date of the initial written notice of dispute, either Party may initiate non-binding mediation. Mediation shall be conducted in Whatcom County, Washington, before a single mediator mutually agreed upon by the Parties, or, if the Parties are unable to agree upon a mediator within ten (10) days of a Party's request for mediation, before a mediator selected by the Whatcom County Superior Court. The costs of the mediator shall be shared equally by the Parties. Each Party shall bear its own attorneys' fees and costs in connection with the mediation.
Section 13.3 — Litigation. If mediation is unsuccessful, or if the dispute is not resolved within sixty (60) days following the commencement of mediation, either Party may pursue any and all available remedies at law or in equity in the Superior Court of the State of Washington in and for Whatcom County, or in the United States District Court for the Western District of Washington. The Parties consent to the personal jurisdiction of such courts and waive any objection to venue therein. Notwithstanding any provision of this Article 13, nothing herein shall be construed to limit, restrict, or waive CSIA's condemnation rights or authority under Chapter 43.99N RCW, Chapter 8.04 RCW, Chapter 8.12 RCW, or any other applicable law. CSIA expressly reserves all such rights and authority.
ARTICLE 14 — GENERAL PROVISIONS
Section 14.1 — Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington, without regard to its conflict of laws principles. All references to statutes and regulations in this Agreement shall be deemed to include any amendments, successor statutes, or replacement regulations.
Section 14.2 — Notices. All notices, requests, demands, consents, approvals, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given and received (a) upon personal delivery, (b) one (1) business day after deposit with a nationally recognized overnight courier service, with delivery charges prepaid, (c) three (3) business days after deposit in the United States mail, first class, postage prepaid, certified or registered, return receipt requested, or (d) upon transmission by electronic mail with confirmation of receipt, addressed as follows:
If to Grantor:
Dunlap Creek Ranch Inc.
Attn: Garrett Dunlap, President
18500 Guide Meridian Road Lynden, WA 98264
If to Grantee:
Cascadia State Infrastructure Authority
Attn: General Counsel (Priya Shankar-Wells)
1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501
With a copy to:
Calderwood & Harkness LLP
Attn: Angela Fontaine
999 Second Avenue, Suite 4200 Seattle, WA 98104
Either Party may change its address for notices by providing written notice to the other Party in accordance with this Section.
Section 14.3 — Entire Agreement. This Agreement, together with its Exhibits (Exhibit A, Exhibit B, and Exhibit C), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, warranties, understandings, and agreements between the Parties, whether oral or written, with respect to the temporary construction easement rights granted herein. No prior draft, correspondence, or proposal shall be used to vary or contradict the terms of this Agreement.
Section 14.4 — Amendments. This Agreement may be amended, modified, or supplemented only by a written instrument duly executed by both Parties and recorded with the Whatcom County Auditor. No oral amendment or modification shall be effective.
Section 14.5 — Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is held invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement or the application of such provision to other persons or circumstances. The remaining provisions of this Agreement shall continue in full force and effect, and the Parties shall negotiate in good faith to replace the invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that most closely approximates the intent and economic effect of the original provision.
Section 14.6 — Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the waiving Party. No waiver of any breach or default shall constitute a continuing waiver or a waiver of any subsequent breach or default, whether of the same or a different provision. The failure of either Party to enforce any provision of this Agreement at any time shall not be construed as a waiver of such provision or the right of such Party to enforce the same at a later time.
Section 14.7 — Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, personal representatives, successors, and assigns. This Agreement shall run with the land comprising the Property and shall be binding upon all persons acquiring any interest in the Property during the Term.
Section 14.8 — Relationship to Permanent Easements. This Temporary Construction Easement is independent of and in addition to the Permanent Easement Agreement for PS-3 and the Pipeline Corridor Easement Agreement, each being a separate instrument executed concurrently herewith. The expiration or termination of this Temporary Construction Easement shall not affect the validity, enforceability, or continuity of the permanent easements granted under such other instruments, and the existence of the permanent easements shall not affect the rights and obligations of the Parties under this Agreement.
Section 14.9 — Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic or facsimile signatures shall be deemed original signatures for all purposes.
Section 14.10 — Authority. Each Party represents and warrants that the individual executing this Agreement on its behalf has been duly authorized to do so and that such execution constitutes a valid and binding obligation of such Party enforceable in accordance with its terms.
Section 14.11 — No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of the Parties and their permitted successors and assigns. Nothing in this Agreement, whether express or implied, is intended to or shall confer upon any person or entity other than the Parties and their permitted successors and assigns any right, benefit, remedy, or interest of any kind whatsoever under or by reason of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Temporary Construction Easement Agreement as of the date first written above.
GRANTOR:
DUNLAP CREEK RANCH INC., a Washington corporation
By: ________
Name: Garrett Dunlap
Title: President & Sole Director
Date: ________
GRANTEE:
CASCADIA STATE INFRASTRUCTURE AUTHORITY, a Washington State governmental instrumentality
By: ________
Name: Martin R. Calloway
Title: Executive Director
Date: ________
Approved as to Form:
By: ________
Name: Priya Shankar-Wells
Title: General Counsel, CSIA
NOTARY ACKNOWLEDGMENTS
Acknowledgment — Grantor
STATE OF WASHINGTON )
) ss.
COUNTY OF WHATCOM )
I certify that I know or have satisfactory evidence that Garrett Dunlap is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the President and Sole Director of Dunlap Creek Ranch Inc., a Washington corporation, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated this __ day of ____, 2025.
________________________________________
Notary Public in and for the State of Washington
Printed Name: ________
My commission expires: ________
Acknowledgment — Grantee
STATE OF WASHINGTON )
) ss.
COUNTY OF THURSTON )
I certify that I know or have satisfactory evidence that Martin R. Calloway is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the Executive Director of the Cascadia State Infrastructure Authority, a Washington State governmental instrumentality, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated this __ day of ____, 2025.
________________________________________
Notary Public in and for the State of Washington
Printed Name: ________
My commission expires: ________