Counter Proposal Dated July 6, 2022

Montgomery Purdue PLLC
701 Fifth Avenue, Suite 5500
Seattle WA 98104-7096

Benjamin I. VandenBerghe
(206) 682-7090 EXT. 108
biv@montgomerypurdue.com

July 6, 2022

VIA EMAIL ONLY

Matthew F. Davis
Sui Generis Law, PLLC matt@matthewfdavis.com

David Andersson
Andersson Cross Border Law Corp. kda@acblc.ca

Re: Proposed Fee Framework from Prospective Buyer
       Not Protected by ER 408

Gentlemen:
On behalf of 18 Paradise, L.L.P. (“18 Paradise”), I write regarding the Hillius v. 18 Paradise, et al., lawsuit (“Lawsuit”). As you know, the prospective buyer of the Homestead development, DNA Real Estate Holdings, LLC, is owned and operated by Duane Scholten, a longtime Lynden local with deep ties to the Lynden community. Without 18Paradise’s involvement, Mr.Scholten has had considerable dialogue with the Homestead homeowners to explore options for the future of Homestead should his purchase close. According to his counsel Lesa Starkenburg-Kroontje, there is overwhelming support for a transition of ownership to Mr. Scholten, a new maintenance fee structure as proposed by Mr. Scholten, and an end to the litigation that has now overshadowed Homestead for well over two years. To reflect Mr. Scholten’s willingness to abide by the framework described below, he has also signed this letter.

The purpose of this letter is to propose this framework to your clients, the named class representatives. The framework is as follows:
1. RecordanAmendment Eight to the Homestead covenants, conditions, and restrictions (“CC&Rs”) that supersedes Amendment Seven.
Amendment Eight would provide as follows
a. New maintenance fee structure:
i. Detached-home owners whose property abuts the Homestead golf course would pay a $90.00 monthly maintenance fees;
ii. Detached-homeowners whose property does not abut the Homestead golf course would pay a $70.00 monthly maintenance fee;
iii. Duplex/multiplex/condominium homeowners whose buildings abut the golf course would pay a $60.00 monthly maintenance fee;
iv. Duplex/multiplex/condominium homeowners whose buildings do not abut the golf course would pay a $36.00 monthly maintenance fee; and
v. Homeowners in the Meadow Greens and Vacation International areas would pay a $20.00 maintenance fee.
b.Revise Section 3.5(f) of the CCRs to (1) abolish retroactive fee raises, and (2) provide that fees may only be raised five percent (5%) per year or equal to the annual cost-of-living increase, whichever is greater.
c.There will be a three-year freeze on maintenance fee increases.
d.ReviseCCRSection3.3toprovidethatmaintenancefeemoneymaybe used for:
i. Common open space;
ii. Entry signs, landscaping, and mailbox surrounds;
iii. Streetlight electrical power bills and maintenance of lights;
iv. Stormwater system (ponds, culverts);
v. Sidewalks and walking paths in Homestead not managed by City;
vi. Tree removal and servicing within Homestead PRD; and
vii. Golf Course management and upkeep.

2. An unincorporated advisory board will be formed to assist and meet with golf course owner/manager.
a. The buyer envisions the board meet annually to discuss any upcoming fee increases and special assessments, if needed, along with other homeowner concerns.
3. Special assessments may not be implemented unless approved by the majority vote of the advisory board.
4. The declarant will retain ownership of the common open space.
5. In the event that the new buyer elects to sell the golf course, the advisory group would be notified and would be provided with a period of time to form a buying group from the Homestead community. We envision this could be reflected in a document similar to a first right of refusal.

6. The Court must approve a class action settlement binding on all class members consistent with the above framework and thereby dismiss the current litigation with prejudice.

18 Paradise is willing to accept the above proposal provided that it puts an end to the current litigation. Within 14 days of the date of this letter, please advise whether your clients are also willing to abide by this framework moving forward. If so, the framework will be reduced to a signed agreement. This If you accept this proposal in principle within 14 days, 18 Paradise is confident the litigation can come to an end and the community can move forward in a mutually beneficial manner.

Sincerely,

Benjamin I. VandenBerghe

SignedBy: Duane Scholten
DNA Real Estate Holdings, LLC