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HomeMy WebLinkAbout4545 Resolution - Purchase Water Rights from Columbia East LLCResolution – Water Rights PSA Columbia East LLC - 1 RESOLUTION NO. 4545 A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, AUTHORIZING THE CITY MANAGER TO EXECUTE THE PURCHASE AND SALE AGREEMENT WITH COLUMBIA EAST, LLC TO PURCHASE WATER RIGHTS. WHEREAS, the City is experiencing rapid population growth and development, significantly increasing the demand for water resources to sustain both residential and commercial needs; and WHEREAS, the City's existing water rights are nearing full utilization, and it is crucial to secure additional water rights to ensure the continued availability of water for its residents and future development; and WHEREAS, the City has identified opportunities to purchase water rights from private owners, which are essential to supporting the City’s projected growth and maintaining a sustainable water supply. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: That the City Council of the City of Pasco approves the terms and conditions of the Purchase and Sale Agreement between the City of Pasco and Columbia East, LLC, as attached hereto and incorporated herein as Exhibit A. Be It Further Resolved, that the City Manager of the City of Pasco, Washington, is hereby authorized, empowered, and directed to execute said Purchase and Sale Agreement on behalf of the City of Pasco; and to make minor substantive changes as necessary to execute the Agreement. Be It Further Resolved, that this resolution shall take effect immediately. PASSED by the City Council of the City of Pasco, Washington, on this 9th day of December, 2024. _____________________________ Pete Serrano Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, MMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 1 of 20 WATER RIGHTS PURCHASE AND SALE AGREEMENT THIS WATER RIGHTS PURCHASE AND SALE AGREEMENT (“Agreement”) is entered into between the City of Pasco, a municipal corporation (“Pasco” or “the City" or “Buyer”) and Columbia East, LLC, a limited liability company ("Seller"), each a “Party” and collectively the "Parties" hereto, as of the Effective Date (defined below). RECITALS WHEREAS, Seller is the sole owner of the water right described by the Washington State Department of Ecology (“Ecology”) as Certificate No. CG3-01349(E)@3. Water Right Certificate No. CG3-01349(E)@3 authorizes the use of 812.22 gallons per minute (“gpm”) and 315.38 acre-feet per year (“afy”) of water for irrigation purposes. Water Right Certificate No. CG3-01349(E)@3 is more specifically described in Exhibit A (“Seller’s Certificate”); WHEREAS, Seller’s Certificate was used on and was appurtenant to land that was owned solely by Seller, which land is more specifically described in Exhibit B (“Seller’s Former Land”); WHEREAS, at the time in 2021 when Seller sold and deeded the Seller’s Former Land it specifically retained and severed from the land the Seller’s Certificate, and the Title Report for said conveyance showed at that time there were no encumbrances on said Seller’s Former Land (“2021 Title Report”); WHEREAS, the City has authority under RCW 35.92.010 to purchase water rights and is interested in purchasing a portion of Seller’s Certificate of up to 812.22 gpm and 315.38 afy, to the extent that such quantity is determined to be valid under the laws of the State of Washington and approved for change and transfer for use by the City (the “Water Right”); WHEREAS, Buyer and Seller wish to accomplish all of the foregoing on the terms set forth in this Agreement; NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein, and the mutual promises and covenants set forth herein, the receipt and sufficiency of which are acknowledged by the Parties, the Seller and Buyer agree as follows: AGREEMENT 1. Purchase and Sale. Seller agrees to sell and to convey to Buyer and Buyer agrees to purchase and acquire all of Seller’s right, title, and interests in the Water Right on the terms and conditions stated in this Agreement. The purchase of the Water Right pursuant to this Agreement is expressly conditioned on the receipt of all necessary final approval(s) from Ecology, which approval(s) are beyond the time for filing of any appeal and contain          Exhibit A Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 2 of 20 terms and conditions for change and transfer that are satisfactory to Buyer in its sole discretion. For clarity and without limitation, Buyer’s obligation to close is subject to Buyer’s termination rights set forth in Section 11 below. 2. Purchase Price. The purchase price for the Water Right is $4,150 for each acre foot per year of water determined by the Ecology to be valid and authorized under the Seller’s Certificate (“Purchase Price”). 3. Escrow. 3.1 Within five (5) business days of the Effective Date, Seller shall: 3.1.1 Open an escrow account with Pioneer Title Insurance Company (“Escrow Company”). The individual listed below is the designated officer for the Escrow Company: Escrow Company Officer: Courtney Mitchell Escrow Officer/LPO Pioneer Title Company, LLC 1697 N. Western Avenue Wenatchee, WA 98801 courtney@pioneertitlecompany.com 3.1.2 Deliver a copy of this Agreement to the Escrow Company. 3.2 Within 30 days following the conclusion of the Due Diligence Period, defined Section 5 below, to the Buyer’s satisfaction, Buyer shall deposit $50,000 into Escrow, which deposit and any interest earned in Escrow shall be credited against the final Purchase Price at Closing (“Earnest Money”). 3.3 The Escrow Company shall hold the Earnest Money in an interest-bearing account until Closing, unless disbursed earlier pursuant to the terms of this Agreement. 4. Condition of Title and Title Review. 4.1 Condition of Title. Seller warrants that it has not encumbered Seller’s Certificate with any liens or claims and will provide a bargain and sale deed to that effect at Closing. The Parties will conduct title review and complete the title review process before the conclusion of the Due Diligence Period, as defined Section 5 below. After opening of the escrow account, Seller will deliver, at Seller’s cost and expense, documents showing that Seller holds exclusive title to Seller’s Certificate (“Seller’s Documents”). 4.2 Buyer’s Review and Seller’s Obligations. Buyer shall have up to thirty (30) days after receipt of Seller’s Documents to notify Seller in writing of any objections to the condition of title of Seller’s Certificate.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 3 of 20 4.3 Seller’s Response. If Buyer has objected to the condition of title of Seller’s Certificate, Seller shall have fifteen (15) days after receipt of Buyer’s objections to provide written notice to Buyer that it agrees to cure or cause such objections to be removed on or prior to Closing. 5. Due Diligence. 5.1 Buyer shall have thirty (30) days after Seller’s delivery of supporting documentation to perform a due diligence review of Seller’s Certificate and water use information from the Seller (“Due Diligence Period”). Seller acknowledges that Buyer’s due diligence review of Seller’s Certificate will include evaluation by Buyer and consultation with Ecology as to the nature, extent, quantity, and validity of Seller’s Certificate. 5.2 The Due Diligence Period will commence after Seller has delivered to Buyer the following items: 5.2.1 The original Columbia East certificate. 5.2.2 The Ecology modification order approving the transfer to May (2014). 5.2.3 The water right agreement signed by all parties to the Columbia East certificate (1921). 5.2.4 The statutory warranty deed between Project Oyster, LLC (Amazon) reserving ownership of the Seller’s Certificate (1921). 5.2.5 Copy of Superseding Certificate of Water Right G3-01349(E). 5.2.6 Copy of the most recent modification order and ACQ following the second transfer to May. 5.2.7 A true and correct copy of the 2021 Title Report. 5.2.8 Any other documents and information in the possession or control of Seller and pertaining to the Seller’s Certificate. If Buyer is unsatisfied with the due diligence investigation, it may terminate this Agreement with no further commitment or liability to the Seller. If Buyer is satisfied with the due diligence investigation, Buyer will provide a notice to Seller to proceed (“Notice to Proceed”) with application to change and transfer the Water Right and will deposit Earnest Money into Escrow as described in Section 3.2 above. 6. Regulatory Approval Contingency.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 4 of 20 6.1 After Buyer has sent a Notice to Proceed to Seller, Buyer and Seller will have eight (8) months to seek regulatory approval of the change and transfer of the Water Right for Buyer’s purposes (the “Transfer Application Period”) through an application for change and transfer with the Franklin County Water Conservancy Board. Buyer or Seller may extend the Transfer Application Period if the application has been filed the application and is in process, and the extension is in writing. 6.2 Buyer will lead the application process for requesting and obtaining approval of the change and transfer of the Water Right, and Buyer will file the application and be responsible for managing the application process. Buyer shall pursue the application(s) diligently and with the goal of maximizing the water quantities to be changed and transferred. Buyer will pay the application fees of Franklin County Water Conservancy Board and all other costs associated with the application process. 6.3 Seller will cooperate with Buyer in obtaining necessary regulatory approval(s) and will, at Buyer’s request, sign any applications necessary for such Ecology approval consistent with this Agreement. Within fifteen (15) days of mutual acceptance Buyer and Seller will meet and confer regarding application completion and assembly of supporting information and documentation. Seller will provide all necessary and useful information, data, maps, and other material to support Buyer’s application to change and a transfer a portion of Seller’s Certificate. The Parties agree to work in good faith to provide evidence of water use under the Water Right and to support the application(s). Buyer will provide draft(s) of all other pertinent documentation for review and approval by Seller, which review and approval will not be unreasonably withheld or delayed by Seller. Buyer shall keep Seller informed of the status of application review and processing and will share communications and correspondence with the Franklin County Water Conservancy Board. In response to any questions or requests for additional information from the Franklin County Water Conservancy Board or Ecology, Seller will cooperate with Buyer by responding to questions, providing additional information or documents, and taking other reasonable actions necessary to obtain the Approval. Seller shall keep Buyer fully apprised of the process and of all meetings, and Seller shall have the right to participate in all aspects of the process necessary or appropriate to protect Seller’s interests. Seller or Seller’s representatives can request additional information from Buyer regarding the application process, and Buyer will timely respond to Buyer’s request. 6.4 Seller reserves the right to dispute, challenge, or appeal Ecology’s decision(s) at its own risk and cost expense, unless the Parties agree otherwise by written agreement. Buyer’s obligation to proceed to Closing and to purchase the Water Right is expressly contingent on obtaining final approval of the change and transfer to the Water Right on terms and conditions satisfactory to the City. The Buyer shall provide the Seller with a Notice stating any objections to terms and conditions in the recommended decision of the Water Conservancy Board, and if it fails to do so the Buyer is deemed to accept the same terms and conditions in the          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 5 of 20 final Ecology approval and shall proceed to Closing; provided, however, that the foregoing shall not apply in the event that the final Ecology decision changes or modifies the recommended decision of the Water Conservancy Board. 7. Seller’s Obligation Not to Encumber or Convey. Until the transaction closes, Seller shall not enter into, or cause to be entered into, any written or oral option agreement, sale agreement, lease, or other contract or agreement to convey or otherwise encumber Seller’s Certificate, or any portion thereof. 8. Seller’s Warranties. For the purposes of inducing Buyer to consummate the transactions contemplated hereby Seller represents and warrants to Buyer, as of the date hereof and as of the Closing Date, as follows: 8.1 Authority. Seller is a limited liability company qualified to do business in the State of Washington. Seller was the sole owner of Seller’s Former Land and Seller’s Certificate and has full power, authority and legal right to execute, deliver and perform this Agreement, and all other documents and certificates contemplated hereby. The Seller has duly authorized the execution, delivery and performance of this Agreement, and has duly authorized the execution and delivery of this Agreement by the person signing below. 8.2 Enforceable Agreement. This Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. 8.3 Title. At Closing, the Seller will deliver good, marketable, and indefeasible fee simple title to the Water Right being purchased, and the same will be free and clear of all material liens, claims, encumbrances, and defects of title except as approved by Buyers under Section 4 of this Agreement. There are no leases, rental agreements, service contracts, option agreements, mortgages, deeds of trust, or other written or oral commitments, arrangements, agreements, or obligations of any kind affecting the Water Right, except as disclosed by Seller in writing to Buyers. 8.4 Reports. All certificates and documents containing factual information to be delivered by Seller or by Seller’s agents in connection with this Agreement, are and shall, to the best of Seller’s knowledge, be true and correct and do not and shall not contain any untrue statement of material fact or omit to state any material fact the disclosure of which is necessary to make the statements contained therein and herein, in light of the circumstances under which they are made, not misleading. 8.5 No Other Water Rights. No water rights, other than Seller’s Certificate that is the subject of this Agreement, are appurtenant to or available for use on Seller’s Former Land. 8.6 No Takings. To the best of Seller’s knowledge, there are no existing, proposed, or threatened condemnation or eminent domain proceedings that would affect Seller’s Certificate.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 6 of 20 8.7 No Litigation. To the best of Seller’s knowledge, no litigation, suit, arbitration, claim, or proceeding, at law or equity, judicial, municipal, or administrative, is pending or threatened, which does or could materially affect the purchase, use, or possession of the Water Right, or involve Seller or Buyer due to their respective use of, and interest in, the Water Right, except as disclosed in writing to Buyer. 8.8 No Violation of Agreements. This Agreement and the performance of the Parties hereunder, including, without limitation, the purchase and sale of the Water Right, or any portion thereof, will not violate any written or oral contract, agreement, or instrument to which the Seller is a party or that affects any portion of the Water Right. 8.9 Liquidation/Bankruptcy. None of the following has occurred with respect to Seller’s Former Land or Seller: (1) appointment of a receiver, liquidator, or trustee; (2) institution of any proceeding for dissolution or liquidation; (3) filing or any petition for bankruptcy, or action toward reorganization; (4) notice of default, trustee’s sale, foreclosure or forfeiture. 8.10 Unpaid Bills/Claims. There are no unpaid bills, tax assessments, claims, or liens pending or threatened by mechanics, materialmen, surveyors, or others, recorded or unrecorded in connection with Seller’s Certificate. 8.11 Patriot Act. Neither Seller nor any direct beneficial owner of Seller: (i) is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) pursuant to Executive Order No. 133224, 66 Fed. Reg. 49079 (September 25, 2001) (the “Order”) and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable orders (such lists are collectively referred to as the “Lists”); (ii) is a person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or (iii) is owned or controlled by, or acts for or on behalf of, any person or entity on the Lists or any other person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Order. 8.12 Foreign Person. Seller is a “United States person” (as defined in Section 7701(a)(30)(B) or (C) of the Code) for the purposes of the provisions of Section 1445(a) of the Code. 8.13 Survival of Warranties. The warranties in Section 8 shall be deemed restated at Closing and shall survive the Closing and shall be fully effective thereafter. If Seller breaches any warranty, Buyer shall have the rights and may exercise, at its option, any of the remedies, provided under Section 12.2 of this Agreement.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 7 of 20 9. Buyer’s Warranties. For the purposes of inducing Seller to consummate the transactions contemplated hereby Buyer represents and warrants to Seller, as of the date hereof and as of the Closing Date, as follows: 9.1 Authority. Buyer is a first class city in the State of Washington and has the power to execute this Agreement, and all requisite action has been taken by Buyer in connection with entering into this Agreement, the instruments referenced herein, and the consummation of the transaction(s) contemplated hereby. 9.2 Execution of Agreement. Buyer has duly authorized the execution and delivery of this Agreement by the person signing below. 9.3 Survival of Warranties. The warranties in Section 9 shall survive the Closing and shall be fully effective thereafter. If Buyer breaches any warranty, Seller shall have the rights and may exercise, at its option, any of the remedies, provided under Section 13 of this Agreement. 10. Closing. 10.1 Closing Date. The closing of the Water Right purchase and sale (“Closing”) shall be held and delivery of all items to be made at the Closing under the terms of this Agreement shall be made at the offices of the Escrow Company identified in Paragraph 3.1.1. Each Party shall execute and deliver to the Escrow Company such escrow instructions as may be necessary to implement and coordinate the Closing as set forth in this Agreement. Closing will occur after issuance of all necessary final approval(s) by Ecology, which approval(s) are beyond the time for filing of any appeal, at a mutually agreeable time but in no event later than 100 days after such final decision (“Closing Date”). All documents shall be deemed delivered on the date that the Deed conveying the Water Right is recorded. 10.2 Closing Conditions. The following are “Closing Conditions” for the benefit of Buyer: 10.2.1 The Bargain and Sale Deed is in acceptable form to Buyer and Seller. 10.2.2 All representations and warranties of the Seller shall be true and correct in all material respects at the time of Closing. 10.2.3 Seller shall have performed all of its covenants and obligations hereunder in all material respects, and title shall conform to the requirements of Section 4 of the Agreement. 10.2.4 Ecology shall have issued a final decision as to change and transfer of the Water Right, which final decision is beyond the time for filing of any appeal and is satisfactory in form and substance to Buyer in its sole discretion.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 8 of 20 Buyer may at any time or times on or before the Closing, in its sole and absolute discretion, waive any of the conditions precedent to Buyer’s obligations under this Section 10 or otherwise and consummate the sale, but any such waiver shall be effective only if contained in a writing signed by Buyer and delivered to Seller. In the event any of the conditions precedent for the benefit of Buyer that are contained in this Agreement are not completely fulfilled and satisfied and not otherwise waived by Buyer pursuant to the terms of the preceding sentence, then in addition to any other rights or remedies Buyer may have, Buyer may terminate its obligation to purchase the Water Right, and (a) the Earnest Money and all accrued interest thereon shall immediately be returned to Buyer by Escrow Company without the necessity of any further instructions from the Parties, (b) Buyer’s obligation to purchase, and Seller’s obligation to sell, the Water Right shall terminate, and (c) neither Party shall have any further obligation to the other except as otherwise provided in this Agreement. 10.3 Seller’s Closing Obligations. At the Closing, Seller will: 10.3.1 Execute, acknowledge and deliver a Bargain and Sale deed to the Water Right in form and substance acceptable to Buyer; 10.3.2 Deliver to Buyer, pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended, an affidavit stating that Seller is not a foreign person and providing Seller’s United States taxpayer identification number; 10.3.3 A duly executed and acknowledged real estate excise tax affidavit for the Purchase Price. Seller will pay all real estate excise tax; and 10.3.4 Deliver to Buyer such other instruments or documents as may be required pursuant to the provisions hereof or as mutually agreed by counsel for Seller and Buyer to be necessary to consummate fully the transaction contemplated hereby. 10.4 Buyer’s Closing Obligations. At the Closing, Buyer will: 10.4.1 Deliver to Seller cash or funds readily available in the amount of the Purchase Price, less any Earnest Money and other amounts deposited or paid by Buyer to be credited towards the Purchase Price; and 10.4.2 Deliver to Seller such other instruments or documents as may be required pursuant to the terms hereof or mutually agreed by counsel for Seller and Buyer to be necessary to fully consummate the transaction contemplated hereby. 10.5 Allocation of Closing Expenses. The costs of Closing the transaction shall be allocated between Seller and Buyer as follows: 10.5.1. Seller’s Costs. Seller will pay:          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 9 of 20 (a) One-half of the escrow fees of the Escrow Company; (b) The costs of clearing title and obtaining any other item to be delivered to Buyer at Closing; (c) Any and all property taxes and assessments against Certificate existing as of Closing, whether due and payable before or after such date; (d) The real estate excise tax; and (e) All loans or other sums secured by mortgages, deeds of trust, or otherwise constituting a lien or other encumbrance on the Property at Closing. 10.5.2. Buyer will pay: (a) One-half of the escrow fees of the Escrow Company; and (b) The cost of recording the Bargain and Sale deed and any other documents that Buyer may choose to record. 10.5.3. All other expenses incurred by Seller or Buyer with respect to Closing, including but not limited to attorneys’ fees, shall be borne and paid exclusively by the Party incurring the same unless the Parties expressly agree in writing to the allocation of part or all of such expenses to one of the Parties. 11. Termination Rights. 11.1 Following the final decision of Ecology to approve the change and transfer of the Water Right, the Buyer may terminate this Agreement in the event that Buyer finds, its sole and discretion, that said final decision contains adverse terms and conditions as provided in and subject to the terms in Section 6.4. Adverse terms may include the quantity of the Water Right and the intended purpose of use for the Buyer. In the event that Buyer exercises its right to terminate this Agreement under this Section 11.1, then Buyer will provide Notice to Seller and Escrow Company, whereupon Escrow Company will disburse the Earnest Money to Seller, which will be the sole and exclusive remedy available to Seller. 11.2 The Buyer or Seller may terminate this Agreement in the event that Ecology issues a final decision denying the change and transfer application. 11.3 Following Ecology’s final decision regarding the change and transfer of the Water Right, the Buyer or Seller may terminate this Agreement in the event that any appeals are filed or litigation is commenced regarding such final decision. 11.4 The Buyer or Seller may terminate this Agreement in the event that the Transfer Application Period has expired and Ecology has not issued a final decision. 11.5 If Buyer is not satisfied after the Due Diligence Period and declines to issue a Notice to Proceed, then Buyer or Seller may terminate this Agreement.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 10 of 20 11.6 If Buyer elects to terminate this Agreement under Sections 11.2, 11.3, or 11.4, then Buyer shall send Notice of the same to Seller and Escrow Company, and the Earnest Money shall be promptly returned to Buyer by the Escrow Company and this Agreement will terminate and be of no further force and effect. 12. Seller’s Defaults. 12.1 Seller’s Defaults. Seller shall be deemed to be in default hereunder in the event Seller fails, for a reason other than Buyer’s default hereunder, to complete the sale of the Property or to meet, comply with, or perform any covenant, agreement or obligation on its part required within the time limits and in the manner required in this Agreement, or there shall have occurred a breach of any representation or warranty made by Seller. 12.2 Buyer’s Remedies. In the event of default by Seller, Buyer may pursue any remedy available at law or equity, including: 12.2.1 Enforcing specific performance of this Agreement; or 12.2.2 Bringing suit for damages. In addition, and without prejudice to the foregoing remedies, Buyer may, if default occurs prior to Closing, terminate this Agreement. In such event, the Earnest Money shall be promptly returned to Buyer by the Escrow Company and this Agreement will terminate and be of no further force and effect. 13. Buyer’s Defaults. 13.1 Buyer’s Defaults. Buyer shall be in default hereunder in the event Buyer fails, for a reason other than Seller’s default hereunder, without legal excuse to complete the purchase of the Property or to meet, comply with, or perform any covenant, agreement or obligation on its part required within the time limits and in the manner required in this Agreement, or there shall have occurred a breach of any representation or warranty made by Buyer; provided that, Seller shall not declare a default or pursue any rights or remedies for breach and default under this Agreement until it delivers written notice of the alleged breach to Buyer and Buyer fails to cure such breach within fifteen (15) days after receiving such notice, provided that if the breach is the failure to close, Buyer shall only have three (3) business days after receiving notice to cure such breach. 13.2 Seller’s Remedies. In the event of default by Buyer, Seller’s sole and exclusive remedy shall be to retain the Earnest Money, to the extent made pursuant to the terms of this Agreement. Receipt of the Earnest Money shall constitute a waiver of any other remedies Seller may have under this Agreement, or at law or equity. 14. Attorneys’ Fees. Should either Party bring an action to enforce or interpret any of the provisions of this Agreement, or to recover damages for the breach hereof, the          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 11 of 20 substantially prevailing Party will be entitled to receive, in addition to any other relief granted, all reasonable attorney’s fees and costs expended in connection therewith. 15. Governing Law and Venue. This Agreement shall be governed and construed in accordance with the laws of the State of Washington. The venue of any legal action shall be in Franklin County, Washington. 16. Notices. All notices provided for or permitted to be given under this Agreement must be in writing (“Notice”). A Notice will be deemed to have been received: (a) if it is delivered in person or sent by registered or certified mail or by nationally recognized overnight courier, upon receipt as indicated by the date on the signed receipt; (b) if the receiving party rejects or otherwise refuses to accept it, or if it cannot be delivered because of a change in address for which no notice was given, then upon that rejection, refusal, or inability to deliver; or (c) for notice provided via e-mail, upon receipt by the party providing Notice of a response from the other party. A Notice is effective when received, unless the Notice or other communication is received after 5:00 p.m., in which case the Notice will be deemed received at 9:00 a.m. on the next business day. For purposes of Notice, the addresses of the Parties shall be as follows, which may be changed with Notice to the other party: If to Buyer: City of Pasco Richa Sigdel Deputy City Manager City Hall 525 N. 3rd Avenue Pasco, WA 99301 Email: sigdelr@pasco-wa.gov If to Seller: Columbia East, LLC Robert M. Tippett Managing Member PO Box 3027 Pasco, WA 99302 17. Parties Bound. This Agreement is binding upon, shall inure to the benefit of, and shall be enforceable by, the Parties and their respective successors and assigns. 18. Full Understanding, Independent Legal Counsel. The Parties each acknowledge, represent, and agree that they have read this Agreement; that they fully understand the terms thereof; and that it is executed by them after having had an adequate opportunity to consult independent legal counsel. This Agreement was the subject of negotiation between the Parties and therefore any rule of construction requiring that agreements be construed against the drafter shall not apply to the interpretation of this Agreement. 19. Confidentiality. Seller shall hold the existence and terms of this Agreement in strict confidence and shall not disclose the existence or terms of this Agreement, or the fact that Buyer is considering the purchase of the Water Right, to any persons other than those consultants who are assisting the Seller in regard to the purchase and sale, except as required by law. Seller shall inform its employees, representatives, and consultants of the requirements of this confidentiality clause and shall require that they comply with it. This Section shall survive the termination of this Agreement.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 12 of 20 20. Time of Essence. Time is of the essence of this Agreement. 21. Headings. The headings in this Agreement are for convenience only and shall not be deemed to construe or to limit the meaning of the language of this Agreement. 22. Calculation of Time Periods. Unless otherwise specified, in computing any period of time described in this Agreement, “days” means calendar days, and the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday, or legal holiday. The final day of any such period shall be deemed to end at 5 p.m., Pacific Standard or Daylight time, as applicable. 23. Commissions. 23.1 Seller Authorized Commission. Tippett Company is acting as broker for Seller. Tippett Company does not practice limited dual agency, and in regards to the water right purchase and sale that is the subject of this Agreement, Tippett Company represents only Seller. For disclosure, Charles Laird is a licensed real estate broker in the State of Washington, has an ownership interest in Tippett Company, and Tippett Company has an ownership interest in Columbia East, LLC. Seller agrees to indemnify, defend, and hold Buyer harmless from and against the claims of the foregoing broker and any other brokers, finders or agents claiming that Seller agreed to, entered into, or authorized any finder’s fee or commission in connection with this Agreement or the sale of the Water Right. 23.2 Buyer Authorized Commission. Buyer warrants to Seller that it has not engaged any broker, finder or agent on its behalf in connection with the transactions contemplated in this Agreement. Buyer agrees to indemnify, defend, and hold Seller harmless from and against the claims of any and all brokers, finders or agents claiming that Buyer agreed to, entered into, or authorized any finder’s fee or commission in connection with this Agreement or the sale of the Water Right. 24. Risk of Loss. All risk of loss shall remain with Seller until Closing, including diminution in the quantity of the Water Right through any cause whatsoever, including amendment to laws or regulations. 25. Costs and Expenses. Each Party hereto will bear its own costs and expenses in connection with the negotiation, preparation, and execution of this Agreement, the application contemplated by this Agreement, and in the performance of its duties hereunder. 26. Further Documentation. Each of the Parties agrees to execute, acknowledge, and deliver upon request by the other party any document which the requesting party reasonably deems necessary or desirable to evidence or effectuate the rights herein conferred or to implement or consummate the purposes and intents hereof, so long as such imposes no different or greater burden upon such party than is otherwise imposed hereunder.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 13 of 20 27. Waiver. A Party may, at any time or times, at its election, waive any of the conditions to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by such Party. No waiver shall reduce the rights and remedies of such party by reason of any breach of any other party. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach. 28. Entire Agreement. This Agreement constitutes the entire agreement between Seller and Buyer concerning the purchase and sale of the Water Right and supersedes all prior term sheets, letters of intent, agreements or understandings, written or oral, signed or unsigned concerning sale of the Water Right. 29. No Merger. The obligations contained in this Agreement, except for those specifically discharged in escrow (such as conveyance of title to the Water Right and delivery of money and documents in the escrow), shall not merge with transfer of title but shall remain in effect until fulfilled. 30. Survival of Terms. The terms and provisions of this Agreement shall survive the Closing and shall remain in full force and effect thereafter unless otherwise expressly provided in this Agreement. 31. Severability. If one or more of the provisions of this Agreement or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions or any other application thereof shall in no way be affected or impaired. 32. Modification. No waiver, amendment, extension or variation in the terms of this Agreement shall be valid against a party unless in writing and signed by such party and then only to the extent specifically set forth in the writing. No failure or delay on the part of a party in exercising any right, power or privilege under this Agreement, nor any course of dealing between the Parties, will waive, amend or vary the terms of this Agreement. 33. Force Majeure. In addition to specific provisions of this Agreement, performance by Buyer hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; civil disturbances; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; pandemic; quarantine; declarations of emergency; restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other Party; or any other inability or cause beyond the control or without the fault of the Buyer. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the force majeure delay and shall commence to run from the time of the commencement of the cause, if Notice by Buyer is sent to Seller within thirty (30) days of the commencement of the cause. If such Notice is delivered after such thirty (30) day period, the extension period shall commence to run from the date of such notice. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Buyer and Seller.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 14 of 20 34. Counterparts. This Agreement may be executed in multiple counterparts, all of which together shall constitute one agreement. 35. Effective Date. “Effective Date” means the last date that this Agreement was signed by the Seller and Buyer. 36. Exhibits. The following exhibits attached hereto are incorporated into and made a part of this Agreement as if set forth fully herein: Exhibit A Seller’s Certificate Exhibit B Legal Description of Seller’s Former Land          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 15 of 20 SELLER: _____________________________ By: Name: Title: STATE OF ) ) ss. COUNTY OF ) I certify that I know or have satisfactory evidence that ______________________ is the person who appeared before me, and that said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: , 2024. Notary Public in and for the State of , residing at My appointment expires:          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 16 of 20 BUYER: City of Pasco, Washington By:______________________________ Name:____________________________ Title:______________________________ STATE OF ) ) ss. COUNTY OF ) I certify that I know or have satisfactory evidence that ______________________ is the person who appeared before me, and that said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: ______________________, 2024. Notary Public in and for the State of , residing at My appointment expires:          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 17 of 20 EXHIBIT A SELLER’S CERTIFICATE Summary of Water Right CG3-01349(E)@3 Name on Water Right Columbia East, LLC Priority Date July 11, 1970 Instantaneous Quantity 812.22 gallons per minute Annual Quantity 315.38 acre-feet/year Source 2 Wells Source Location Well 1: SE¼NE¼ Section 33, Township 9 North, Range 30 East Willamette Meridian. Well 2: SW¼NE¼ Section 34, Township 9 North, Range 30 East Willamette Meridian. Purpose of Use Irrigation of 89.75 acres Period of Use March 1 – November 1 Place of Use The place of use includes the Franklin County parcels: 112-550-080, 112-550-106, 112-520-230. Franklin County parcel No. 112-520-230 replaced parcel Nos. 112-520-219, 112-520-228, 112-550-035, and 112- 550-026. This consolidation of parcels is described under AFN #1978474, recorded on September 14, 2023.          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 18 of 20 EXHIBIT B LEGAL DESCRIPTION OF SELLER’S FORMER LAND Parcel A: 112-520-219 (now within 112-520-230) A parcel of land situated in the NE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington, described as follows: Beginning at the North Quarter Corner of Section 34; thence S 00°30’15” W along the center line a distance of 1,647.77 feet to the True Point of Beginning; thence continuing S 00°30’15” W along said center line a distance of 400.00 feet; thence S 89°40’35” E a distance of 2,005.68 feet; thence N 19°25’40” W a distance of 425.00 feet; thence N 89°40’35” W a distance of 1,860.79 feet to the True Point of Beginning. Parcel B: 112-520-228 (now within 112-520-230) The NE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington. EXCEPT that portion of the NE¼NE¼NE¼ of Section 34, T. 9 N., R. 30 E.W.M., lying East of the East line of Primary State Highway No. 3, as widened; AND EXCEPT the right-of-way for Primary State Highway No. 3, as widened; AND EXCEPT the Northerly 330 feet thereof. AND EXCEPT a parcel of land situated in the E½ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington, being more particularly described as follows: Beginning at the East quarter corner of said Section 34 and the True Point of Beginning; thence S 00°06’25” E along the East line of said Section, a distance of 1,100.93 feet; thence N 19°25’40” W, a distance of 3,642.78 feet; thence S 89°40’35” E parallel with the North line of said Section 34, a distance of 519.01 feet to a point on the Southwesterly margin of U.S. Highway No. 395-410 Right-of-Way; thence S 45°03’50” E along said Southwesterly margin a distance of 971.20 feet to a point on the East line of said Section 34; thence S 00°06’25” E along said East line, a distance of 1,645.49 feet to said East Quarter corner and True Point of Beginning. AND EXCEPT a portion of the N½NE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington, more fully described as follows: Beginning at the Northwest corner of the said Northeast Quarter, thence S 00°30’15” W along the West line of said Northeast quarter, a distance of 330.00 feet to the True Point of Beginning; thence S 89°40’35” E along a line 330.00 feet South of and parallel to the North line of the said Northeast Quarter, a distance of 1,383.49 feet to the Northwest corner of Parcel “A” as shown on the Survey Map for Columbia East Partnership recorded in Book 1 of Surveys, Page 48, records of Franklin County, Washington; thence S 19°25’40” E, along the Westerly boundary of Parcel “A”, a distance of 350.63 feet; thence N 89°40’35” W along a line 660.00 feet south of and parallel to the said North line of the Northeast          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 19 of 20 Quarter, a distance of 1,503.02 feet to a point on the said West line of the parallel to the said North line of the Northeast Quarter; thence N 00°30’15” E along said West line, a distance of 330.00 feet to the True Point of Beginning. AND EXCEPT that portion of the NE¼ of Section 34, Township 9 North, Range 30 E.W.M., Franklin County, Washington, more particularly described as follows: Beginning at the North Quarter Corner of said Section 34; thence S 00°30’15” W along the North-South center Section Line, a distance of 660.00 feet to the True Point of Beginning; thence S 89°40’35” E, a distance of 1,503.01 feet; thence S 19°25’40” E, a distance of 1,049.51 feet; thence N 89°40’35” W, a distance of 1,860.79 feet; thence north 00°30’15” E along said center section line a distance of 987.7 feet to the True Point of Beginning. AND EXCEPT a parcel of land situated in the NE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington, described as follows: Beginning at the North Quarter Corner of Section 34; thence S 00°30’15” W along the center line a distance of 1,647.77 feet to the True Point of Beginning; thence continuing S 00°30’15” W along said centerline a distance of 400.00 feet; thence S 89°40’35” E a distance of 2,005.68 feet; thence N 19°25’40” W a distance of 425.00 feet; thence N 89°40’35” W a distance of 1,860.79 feet to the True Point of Beginning. Parcel C: 112-550-035 (now within 112-520-230): The SW¼NE¼SE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington AND The NW¼SE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington, EXCEPT the S½S½ of the NW¼SE¼. Parcel D: 112-550-026 (now within 112-520-230) The NW¼NE¼SE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington. Parcel E: 112-550-080: The E½NE¼SE¼ of Section 34, T. 9 N., R. 30 E.W.M., Franklin County, Washington. EXCEPT Beginning at the East Quarter Corner of Section 34, T. 9 N., R. 30 E.W.M., and the True Point of Beginning; thence S 00°06’ E along the East line of said Section, 1,100.93 feet; thence N 19°25’ W to a point on the North line of said SE¼ of said Section; thence Easterly along said North line to the East Quarter corner of said Section and the True Point of Beginning. Parcel F: 112-550-106: The SE¼SE¼ of Section 34, T. 9 N., R. 30 E.W.M          Columbia East, LLC / City of Pasco Purchase and Sale Agreement Page 20 of 20 EXCEPT that portion lying Southerly of the Northerly line of the Bridge-Stockyard Road (also known as Sacajawea Park Road), as the same now exists, in Franklin County, Washington. Parcel G: 112-550-115 (now within 112-520-230): That portion of the W½SE¼SE ¼ of Section 34, T 9 N, R. 30 E.W.M., lying Southerly of the Northerly line of the Bridge-Stockyard Road (also known as Sacajawea Park Road), as the same now exists, in Franklin County, Washington.