NOH: For proposed acceptance of Lewis County Water-Sewer District #5 Transfer Agreement BEFORE THE BOARD OF COUNTY COMMISSIONERS
LEWIS COUNTY, WASHINGTON
IN THE MATTER OF: RESOLUTION NO. 20-136
NOTICE OF HEARING FOR THE PROPOSED
ACCEPTANCE OF THE LEWIS COUNTY WATER-SEWER
DISTRICT #5 TRANSFER AGREEMENT IN
ACCORDANCE WITH RCW 36.94.330
WHEREAS, Lewis County Water-Sewer District #5 holds title to certain property and
assets used or useful in the operation of the District's water and sewer utility, and
provides certain water and sewer utility services to the customers of the District; and
WHEREAS, Lewis County Water-Sewer District #5 has determined that it is in the best
interests of the customers, the District, and the public that all of the assets and
property of the District constituting its system of sewerage and system of water
together with any of the District's real or personal property rights and interests used or
useful in connection with the operation, maintenance, repair, replacement, extension,
or financing of that system, together with the operation of the same be transferred to
Lewis County Public Works pursuant to RCW 36.94.310 and subject to the terms and
conditions stated in the proposed District Transfer Agreement; and
WHEREAS, RCW 36.94.310-350 provides Lewis County and Lewis County Water-Sewer
District #5 may contract for transfer of the District's assets and utility systems by
voluntary agreement, subject to the approval by the Lewis County Superior Court
pursuant to RCW 36.94.310-350; and
WHEREAS, on March 11, 2020, Lewis County Water-Sewer District #5 accepted the
proposed terms of the Transfer Agreement and request the Lewis County Board of
County Commissioners (BOCC) set hearing and accept the proposed terms of the
Transfer Agreement; and
WHEREAS, the transfer of title by Lewis County Water-Sewer District #5 and the
acquisition by Lewis County of the District's assets and utility systems is in the best
interest of public health, safety, and welfare and the customers and residents of Lewis
County Water-Sewer District #5 and the public at large.
NOW THEREFORE BE IT RESOLVED the Board will hold a public hearing on the
proposed acceptance of the Lewis County Water-Sewer District #5 Transfer Agreement
on May 11, 2020, at or after 10:00 a.m. or at such time later that day as may be
necessary due to schedule changes pertaining to COVID-19. The hearing will take
place at the Lewis County Courthouse, Commissioners' Hearing Room, 351 NW North
Street, Chehalis, Wash., as set forth in the Notice of Public Hearing attached hereto.
Interested parties are encouraged to check the Commissioners' hearing schedule online
at https://lewiscountywa.gov/offices/commissioners/agendas-calendar/ as May 11,
2020, approaches for updated details.
DONE IN OPEN SESSION this 27th day of April, 2020.
APPROVED AS TO FORM: BOARD OF COUNTY COMMISSIONERS
Jonathan Meyer, Prosecuting Attorney LEWIS COUNTY, WASHINGTON
Amber Smith Gary Stamper
By: Amber Smith, Gary Stamper, Chair
Deputy Prosecuting Attorney
ATTEST: .T,
••i7CORDOF's?7,• Edna J . Fund
°P '"F;•Edna J. Fund, Vice Chair
sAA•ICE
. g45 41 :
Rieva Lester '•:syf�r�o;, ._.• Robert C . Jackson
Rieva Lester, Robert C. Jackson, Commissioner
Clerk of the Lewis County Board of County
Commissioners
DISTRICT TRANSFER AGREEMENT
Lewis County Water-Sewer District No. 5,
Seller
and
Lewis County Public Works,
Purchaser
Lewis County
Water-Sewer District 5
District Transfer Agreement
DISTRICT TRANSFER AGREEMENT
THIS DISTRICT TRANSFER AGREEMENT("Agreement")is entered into as of the date of
mutual execution as indicated below, BETWE HV:
Lewis County Water-Sewer District No. 5, a water-sewer district and municipal corporation
organized and duly incorporated under Title 57 RCW and having its principle office and
mailing address at 921 C Middle Fork Rd., Onalaska, Washington 98570 (herein after
referred to as the "Seller"); and
Lewis County Public Works, a subdivision and department of Lewis County, a political
subdivision of the state of Washington and county duly incorporated under the Washington
State Constitution, and having its principle office and mailing address at 2025 NE Kresky
Avenue, Chehalis, Washington 98532(herein after referred to as the`Purchaser").
(The Purchaser and the Seller occasionally individually referred to as a "Pary'and
collectively referred to as the "Parties,"as the context may require).
WHEREAS:
A. The Seller is organized for and authorized to and does provide water and sewer
services to the District consistent with Title 57 RCW;
B. The Purchaser is Lewis County, acting by and through Lewis County Public Works;
and
C. The Seller has agreed to sell and the Purchaser has agreed to purchase all of the
assets and property of the District constituting its system of sewerage, system of
water or combined water and sewerage system, together with any of its other real or
personal property rights and interests used or useful in connection with the operation,
maintenance, repair, replacement, extension, or financing of that system the District
(as defined hereinafter) pursuant to RCW 36.94.310, as described in and subject to
the terms of this Agreement.
NOW THEREFORE, in consideration of the above recitals, the representations, warranties,
covenants and agreements contained in this Agreement and for other good and valuable
consideration, the receipt and adequacy of which are now acknowledged, the Parties agree
as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Some terms used in this Agreement shall have the meanings ascribed to them at
Part A to Schedule "A"to this Agreement.
1.2 Agreement shall be interrelated in a manner and on the basis of principles as
provided in Part B to Schedule "A"to this Agreement.
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District Transfer Agreement
2. SALE AND TRANSFER OF DISTRICT
2.1 Transfer of District. The Seller hereby agrees to sell, assign, convey and transfer all
the (a) all of the assets and property of the District constituting its system of
sewerage, system of water or combined water and sewerage system; (b) moveable
assets, furniture and fixtures, equipment and inventory; (c) intellectual property rights
and other intangibles; (d) customer accounts of the District; (e) all contracts relating
to the operation of the District; and (f) all legal rights and licenses owned by, or
necessary for the operation of the District, and as more particularly described as the
"Assets" in Schedule "A" (sometimes collectively described as the "Assets"). The
Purchaser agrees to purchase and accept the Assets of the District on the terms of
this Agreement, at Closing.
2.2 Liabilities. Except as expressly provided for herein, Purchaser is not purchasing or
accepting, and expressly disclaims, any and all pre-existing liabilities of Seller. All
utilities shall be prorated by the Parties outside of Closing as of the date of Closing.
2.3 Title and Risk. Subject to the terms and conditions of this Agreement, title to and risk
in the purchased portions of the Assets of the District shall pass to the Purchaser at
Closing.
2.4 Deposits: Accounts Receivable. Unless as otherwise agreed to in writing by the
Parties, (a) Seller shall be entitled to all right, ownership, and interest in any and all
accounts receivable (ARs) in existence as of the Closing, and for proceeds
attributable to service to customers through Closing and (b) Purchaser shall be
entitled to all right, ownership, and interest in any and all ARs following the Closing,
and for proceeds attributable to service to customers following Closing.
2.5 Inspections; As-Is; Where-Is. During the time prior to the Closing of this transaction,
Purchaser shall cause such inspections, investigations, and studies to be made of
the District as Purchaser shall determine to be appropriate for the purposes of
satisfying itself as to the condition, restrictions, suitability for Purchaser's intended
use, and the quantity and quality of the Assets of the District.
In the event that after such investigations, Purchaser is satisfied with the condition of
the District, the transaction shall be closed in an "as-is"and "where-is" condition, and
Purchaser shall assume responsibility for the Assets of the District.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES AND SHALL NOT IN ANY WAY BE
LIABLE FOR ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO:
(A) THE DIMENSIONS, SIZE, OR ACREAGE OF ANY REAL PROPERTY OR THE
RIGHT OR NATURE OF ANY ACCESS THERETO; (B) THE CONDITION OF THE
ASSETS, OR THE SUITABILITY OF THE ASSETS FOR PURCHASER'S
INTENDED USE OR FOR ANY USE WHATSOEVER; OR (C) ANY
ENVIRONMENTAL. BUILDING, ZONING, OR FIRE LAWS OR REGULATIONS OR
WITH RESPECT TO COMPLIANCE THEREWITH OR WITH RESPECT TO THE
EXISTENCE OF OR COMPLIANCE WITH ANY REQUIRED PERMITS, IF ANY, OF
ANY GOVERNMENTAL AGENCY APPLICABLE TO THE ASSETS. ANY
WARRANTIES OR REPRESENTATIONS AS TO THE PHYSICAL CONDITION OF
THE ASSETS ARE VOID. PURCHASER IS ACQUIRING THE ASSETS,
INCLUDING ANY IMPROVEMENTS, FIXTURES, AND APPURTENANCES, "AS-IS"
AND"WHERE-IS."
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Water-Sewer District 5
District Transfer Agreement
2.6 Responsibilities and Obligations of the Parties. Seller agrees to and shall be
responsible for(a) operation of the District prior to Closing, (b)the handling, defense,
and payment of all expenses, losses, liabilities, and claims arising out of or resulting
from the ownership, maintenance, and operation of the District prior to Closing, (c)
the willful or negligent acts or omissions of Seller related to District prior to Closing,
and (d) except as otherwise expressly provided for in this Agreement, any debts,
obligations, liens, or taxes, related to the District that accrued and became due prior
to Closing. Purchaser agrees to and shall be responsible for (a) operation of the
District following Closing, (b) the handling, defense, and payment of all expenses,
losses, liabilities, and claims arising out of or resulting from the ownership,
maintenance, and operation of the District following Closing, (c) the willful or
negligent acts or omissions of Purchaser related to the District following Closing, and
(d) except as otherwise expressly provided for in this Agreement, any debts,
obligations, liens, or taxes, related to the District or the Assets that accrue or become
due following Closing.
3. EMPLOYEES
3.1 Seller has no employees.
4. PURCHASE PRICE
4.1 Purchase Price. The purchase price for the transfer of the Assets of the District shall
be a lump-sum price of three hundred and fifty thousand dollars ("$350,000")
(the "Purchase Price") payable at Closing by way of money order or cashier's check,
or by way of wire transfer based on instructions from Seller to such account(s) as
may be notified by Seller to the Purchaser in writing at least five (5) business days
prior to the Closing. Except for the Purchase Price, no other amounts shall be
payable by the Purchaser to the Seller under this Agreement. The Purchase Price
shall not be subject to escalation.
4.2 Deduction & Set-off. It is agreed and understood that the following (and only the
following) may be deducted and set off against the Purchase Price at Closing: (a)any
Authorized Deductions set out in Schedule "F",; and (b) the actual purchase price
paid by the Purchaser for the real property and related appurtenances and fixtures
described and identified as Lewis County TPN 017105-419-001 and 017105-419-002
if acquired by the County prior to or concurrently with Closing, in an amount not to
exceed $75,000.00. Other than as provided under this subsection, the Purchase
Price shall not be subject to any set off or deduction.
4.3 Both the Seller and the Purchaser are exempt from real and personal property taxes.
However, if any such tax liabilities are deemed to exist, the Seller shall be solely
responsible for all taxes payable in respect of the sale and transfer of the District,
including any pre-existing tax liabilities in respect of the transferred Assets, to the
extent they have accrued and become due and owing prior to or at incident of
Closing.
5. REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to the best of Seller's knowledge and belief that
the statements contained in Schedule "B" are true and correct and shall remain true
as of the Closing date. The Purchaser represents and warrants to the best of
Purchaser's knowledge and belief that the statements contained in Schedule "C" are
true and correct and shall remain true as of the Closing date.
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Water-Sewer District 5
District Transfer Agreement
Except as expressly provided in this Agreement, Seller makes no representations or
warranties with respect to the District or the Assets.
Seller makes no implied warranties or representations associated with the District or
the Assets, and expressly disclaims the same.
6. CONDITIONS PRECEDENT
The obligations of the Purchaser to proceed with the Closing of the transactions
contemplated under this Agreement shall be subject to the fulfilment on or before the
Closing of each of the conditions precedent set out at Schedule "D" to this
Agreement.
7. CONDUCT PRIOR TO CLOSING
7.1 Conduct of Business of Seller. During the period from the effective date of this
Agreement and up to the Closing, the Seller agrees that it shall use reasonable best
efforts to (a) carry on the District in the ordinary course of business in substantially
the same manner as heretofore conducted; (b)pay its debts and taxes when due; (c)
pay or perform other obligations when due; and (d) preserve intact the District, and
use reasonable good faith efforts to preserve its relationship with, customers and
lessors, having business dealings with it, to the end that its ongoing ability to provide
services shall be unimpaired at the Closing.
7.2 Cooperation. For the time period between the Effective Date of this Agreement and
Closing, the Parties shall cooperate in good faith regarding the continued operation
of the District and provision of water and sewer services for the benefit of the public
and customers of the District. Any formal arrangement for the provision of services
shall be addressed in a separate agreement between the Parties.
8. CLOSING
Subject to the fulfilment of the conditions precedent set forth in Schedule "D" hereto
and the receipt of the deliverables by the Purchaser and Seller set forth in Schedule
"E", the Closing will be in accordance with the terms of this Agreement. On or prior
to the Closing, the Seller and Purchaser shall make the deliveries listed at Schedule
"E"
8.1 Closing; Closing Date. The closing ("Closing")shall take place at a location in Lewis
County mutually agreed upon by the Seller and the Purchaser, and such closing shall
occur no later than fourteen (14) days following entry of an order or decree of the
Superior Court of the State of Washington pursuant to RCW 36.94.340, or as
otherwise may be specified pursuant to any deadline set forth in such order or decree
(the "Closing Date"). The transfer shall be deemed effective at midnight on the
Closing Date. Certain assets may be transferred prior to or after the Closing Date as
agreed upon by the Purchase and the Seller.
8.2 Prorations. To the extent applicable; (a) all rents under any lease agreement
assumed by Purchaser, (b) utilities, (c) payments under any assumed contracts; and
(d) bills for other services, materials and supplies of the District shall be adjusted as
of 11:59 p.m. of the Closing Date and pro-rated as of the same.
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Water-Sewer District 5
District Transfer Agreement
8.3 Recording Costs. The costs of recording any documents or filing any documents
with any Governmental Authority shall be borne and paid by the Purchaser.
9. POST-CLOSING OBLIGATIONS
9.1 On and after Closing. the Seller shall be obliged to promptly deliver to the Purchaser
any payment, notice, correspondence, information or enquiry in relation to the District
or the Assets which Seller receives.
10. CONDITIONS SUBSEQUENT
At any time after the effective date of this Agreement and no later than thirty (30)
days after the Closing, the Seller shall:
a. Issue letters to the State of Washington Department of Health and the State
of Washington Department of Ecology providing notice of the transfer of the
Assets of the District and operation of the systems to the Purchaser.
b. Initiate dissolution of the District pursuant to chapter 53.48 RCW, or as
otherwise may be allowable under applicable law.
11. INDEMNIFICATION
11.1 To the extent authorized by law, Seller agrees to indemnify Purchaser from and
against any and all losses, penalties, judgments, , assessments, and damages
imposed upon Purchaser as a result of, relating to, or arising out of (1) any breach,
default or non-compliance of Seller under this Agreement or (2) operations of the
District prior to Closing.
To the extent authorized by law, Purchaser agrees to indemnify Seller from and
against any and all losses, penalties, judgments, assessments, and damages
imposed upon Seller as a result of, relating to, or arising out of (1) any breach,
default or non-compliance of Purchaser under this Agreement or(2)operations of the
District after Closing.
11.2 Procedure for Indemnification.
a. A Party making a claim for indemnification shall give prompt written notice to
the other Party of any claim asserting any matter that may fall within the
scope of Section 11.1, specifying in reasonable detail the factual basis for the
claim, the amount thereof, estimated in good faith, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such claim shall have occurred.
b. After receipt of any written notice under subsection 11.2(a), the Purchaser
and the Seller shall consult with each other and in good faith endeavor to
resolve any claims under this Section in a mutually acceptable manner.
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Lewis County
Water-Sewer District 5
District Transfer Agreement
11.3 Third-Party Claims. The obligations and liabilities of each Party to this Agreement
under this Section 11 hereof related to third-party claims shall be subject to the
following terms and conditions:
a. At any time after receipt of notice of any third-party claim asserted against,
imposed upon or incurred by either Party that may fall within the scope of
Section 11.1, said Party shall promptly notify the other Party of such claim in
writing.
11.4 Other Rights and Remedies Not Affected. The indemnification rights of the Parties
under this Section 11 are independent of, and in addition to, such rights and
remedies as the Parties may have at law or in equity or otherwise for any
misrepresentations, breach of warranty or failure to fulfill any agreement or covenant
hereunder on the part of any Party hereto, including the right to seek specific
performance, rescission, or other injunctive relief, none of which rights or remedies
shall be affected or diminished thereby.
12. TERM &TERMINATION
This Agreement shall enter into effect from the date of its execution by both the
parties hereto. This Agreement may be terminated at any time prior to Closing in
accord with the following:
(a) By mutual written consent of Seller and Purchaser;
(b) By Purchaser, upon written notice to the Seller, if there shall have been (1) a
breach of any Warranty on the part of Seller, or if any Warranty of Seller shall
have become untrue in any respect, or (2) a breach by Seller of any of its
covenants or agreements hereunder and such breach is not cured within
fifteen (15)days after written notice thereof by Purchaser to Seller.
(c) By Purchaser, in the event that Seller becomes or is declared insolvent or
bankrupt, makes an assignment for the benefit of all or substantially all of its
creditors, enters into an agreement for the composition, extension or
readjustment of all or substantially all or of its obligations, or becomes the
subject of any proceedings related to its liquidation or insolvency or for the
appointment of a receiver or similar officer.
13. MISCELLANEOUS
13.1 Successors and Assigns. Neither Seller nor Purchaser may assign this Agreement or
any of their respective rights or obligations hereunder without the prior written
consent of the other Party, provided that the Purchaser may at any time assign this
Agreement and any of its rights and obligations hereunder to any subdivision or
department of the Purchaser without the consent of the Seller, provided notice is
provided in writing to the Seller. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided herein.
13.2 Specific Performance. The Parties hereto acknowledge and agree that damages
alone would not provide an adequate remedy for any breach or threatened breach of
the provisions of this Agreement and therefore that, without prejudice to any and all
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Lewis County
Water-Sewer District 5
District Transfer Agreement
other rights and remedies a party may have (including but not limited to, damages),
such party shall be entitled without proof of special damage to the remedies of
injunction, specific performance and other equitable relief for any threatened or
actual breach of such provisions. The remedies set forth in this Section 13.2 are
cumulative and shall in no way limit any other remedy any party hereto has at law, in
equity or pursuant hereto.
13.3 Governing Law and Jurisdiction. This Agreement shall be governed by the laws of
the state of Washington.
13.4 Notices. All notices, requests, demands and other communications which are
required or may be given pursuant to the terms of this Agreement shall be in writing
and shall be deemed delivered (i)on the date of delivery when delivered by hand; (ii)
on the date of transmission when set by facsimile transmission during normal
business hours with telephone confirmation of receipt (iii) three (3) days after
dispatch when sent by a reputable courier service that maintains records of receipt;
or (iv) seven (7) days after dispatch when sent by first class or airmail letter,
provided, however, that in any such case, such communication is addressed
provided in Section 13.5. All notices, requests, demands and other communications
which are required or may be given pursuant to the terms of this Agreement shall be
addressed as follows:
a. If to Water-Sewer District 5
(i) Name : Board of Commissioners, LCWSD No. 5
(ii) Address : 921 C Middle Fork Rd., Onalaska,Washington 98570
with copy to(provision to alone shall not constitute notice):
Joseph A. Rehberger
Cascadia Law Group PLLC
606 Columbia Street NW, Suite 212
Olympia,WA 98501
Fax: 360-786-1835
b. If to Lewis County Public Works
(i) Name : Josh Metcalf, Director of Public Works
(ii) Address :2025 NE Kresky Avenue, Chehalis, Washington 98532
or to such other addresses any party shall have designated by notice in the foregoing
manner to the other parties.
13.5 Amendments and Waivers. This Agreement may be modified, supplemented or
amended only by a written instrument executed by the parties hereto. No waiver of
any provisions, condition or covenant of this.Agreement shall be effective as against
the waiving party unless such waiver is in a writing signed by the waiving party.
Waiver by a party as provided in this Section 13.6 shall not be construed as or
constitute either a continuing waiver of such provision, condition or covenant or a
waiver of any other provision, condition or covenant hereof. The failure of any party
at any time to require performance by the other party of any provision, condition or
covenant of this Agreement shall in no way affect its right thereafter to enforce the
provision, condition or covenant or any other provision condition or covenant.
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13.6 Severability. If any covenant or provision hereof is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair the
validity of any other covenant or provision, each of which is hereby declared separate
and distinct. If any provisions of this Agreement are so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is enforceable. If any
provision of this Agreement is declared invalid or unenforceable for any reason other
than over-breadth, the offending provision will be modified to maintain the essential
benefits of the bargain among the parties hereto to the maximum extent possible,
consistent with law and public policy.
13.7 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to Purchaser upon any breach or default of Seller under this Agreement,
shall impair any such right, power or remedy of Purchaser nor shall it be construed to
be a waiver of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring, nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit consent or approval of any kind or character
on the part of Purchaser of any breach or default under this Agreement, or any
waiver on the part of Purchaser of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement or by law or otherwise
afforded to Purchaser, shall be cumulative and not alternative.
13.8 Expenses. Irrespective of whether the Closing is effected, each Party shall pay all
costs and expenses that it incurs with respect to the negotiation, execution, delivery
and performance of this Agreement.
13.9 Further Assurances. From and after the Closing, the Seller shall from time to time, at
the request of the Purchaser, and without further cost or expense to the Purchaser,
to execute and deliver such other instruments of conveyance and transfer and take
such other actions as the Purchaser may reasonably request in order more
effectively to carry out this Agreement and the transactions contemplated hereunder.
13.10 Independent Rights. Each of the rights of the Parties under this Agreement are
independent, cumulative and without prejudice to all other rights available to them,
and the exercise or non-exercise of any such rights shall not prejudice or constitute a
waiver of any other right of a Party, whether under this Agreement or otherwise.
13.11 Entire Agreement. This Agreement (together with the schedules, and the other
agreements expressly identified in this Agreement) constitutes the entire agreement
of the parties with respect to the subject matter hereof and thereof, and supersedes
all prior agreements and understanding of the parties, oral and written, with respect
to such subject matter.
13.12 Counterparts. This Agreement may be executed in any number of originals or
counterparts, each in the like form and all of which when taken together shall
constitute one and the same document, and any party may execute this Agreement
by signing any one or more of such originals or counterparts.
13.13 Survival. Any other provision which by virtue of its nature is intended to survive shall
survive the termination of this Agreement.
13.14 Default. Neither party hereto shall be considered to be in default in respect to any
obligations hereunder if prevented from fulfilling such obligations due to conditions
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beyond their reasonable control or due to changes in federal or state law. If a party
is unable to perform in whole or in part because of such condition or change in the
law, the party shall diligently and promptly take reasonable steps to allow it to
perform.
13.15 Effective Date. This Agreement shall become effective (the "Effective Date") upon
mutual execution by the Parties.
13.16 Severability. Any provision of this Agreement that is declared invalid or illegal shall
in no way affect or invalidate any other provision hereof and such other provisions
shall remain in full force and effect. Further, if it should appear that any provision
hereof is in conflict with any statutory provision of the State of Washington, the
provision appears to conflict therewith shall be deemed inoperative and null and void
insofar as it may be in conflict therewith, and shall be deemed modified to conform
to such statutory provision.
13.17 Submission of Agreement Form Not an Offer. One party's submission of this
Agreement to the other for review shall not constitute an offer to purchase or sell the
Assets. This Agreement shall not become effective and binding upon Purchaser
and Seller until it has been fully signed by both Purchaser and Seller.
14. STATUTORY TRANSFER AND DISSOLUTION
14.1 RCW 36.94.310-.350. Within seven (7) days of mutual execution of this Agreement,
Purchaser shall prepare and present to Seller a draft petition to the Lewis County
Superior Court pursuant to and in compliance with RCW 36.94.340 (the "Transfer
Petition")that requests the superior court approve and direct the proposed transfer of
subject assets and property, consistent with the terms of this Agreement. Within
seven (7) days of receipt of the same, Seller shall provide any comments to
Purchaser on said draft petition. Following receipt by Purchaser of Seller's
comments, Purchaser shall, after consultation with the Seller, promptly file said
petition with the Lewis County Superior Court and note the matter for hearing as
promptly as reasonably possible.
14.2 Chapter 53.48 RCW. At any time after mutual execution of this Agreement, the
Seller, in its discretion, may file a petition seeking approval of dissolution of the
District pursuant to chapter 53.48 RCW and/or RCW 36.94.350 ("Dissolution
Petition"). The Seller may, in its discretion, file under the cause number associated
with the Transfer Petition or seek to consolidate its Dissolution Petition with the
Transfer Petition matter.
[FOLLOWING THIS PAGE IS THE EXECUTION PAGE)
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Lewis County
Water-Sewer District 5
District Transfer Agreement
IN WITNESS, the Parties have executed this District Transfer Agreement as of the date(s)
noted below.
Seller:
LEWIS COUNTY WATER-SEWER
DISTRICT#5 APPROVED AS TO FORM:
COMMISSIONR WSBA# 3S S S6
CO I ER
COMMISSIONER
DATED: ) P-oa-o
Buyer:
LEWIS COUNTY PUBLIC WORKS APPROVED AS TO FORM:
Jonathan Meyer, Prosecutor
Josh Metcalf, Director By: Deputy Prosecuting Attorney
WSBA#53121
DATED:
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District Transfer Agreement
SCHEDULE "A"
PART A-DEFINITIONS
1. "Agreement"shall mean this District Transfer Agreement, including its schedules.
2. "Applicable Law" shall mean any applicable constitution, statute, rule, regulation,
ordinance, order, directive, code, judgment, award, permit, license, authorization,
directive requirement, agreement with, or by a Government Authority.
3. "Assets" shall mean all property, assets, benefits and rights of the Seller relating to
the District, including: (a) all of the property of the District constituting its system of
sewerage, system of water or combined water and sewerage system, together with
any of its other real or personal property used or useful in connection with the
operation, maintenance, repair, replacement, extension, or financing of that system,
specifically including the fixed assets set out at Schedule "G.1"; (b) the moveable
assets, vehicles, furniture and fixtures, equipment and inventory set out at Schedule
"G.2"; (c) the all contracts relating to the operation of the District listed at Schedule
"G.3"; (f) the right, obligation, liabilities of all permits, licenses and approvals held by
the District listed at Schedule "G.4".
4. "District' shall mean Lewis County Water-Sewer District No. 5, and where it clearly
appears from the context, the District's system of sewerage and water.
5. "Closing" shall have the meaning ascribed to it in Section 8.1 of this Agreement, and
shalt be the date of the transfer of the Assets of the District.
6. "Governmental Authority" shall mean any federal, state, or local government or
instrumentality thereof having jurisdiction over the matters stated herein.
7. "Liabilities" shall mean any obligation, liability or indebtedness of any kind, character
or description, whether absolute, contingent, accrued, liquidated, unliquidated,
known, unknown, executory or otherwise, and shall include but not be limited to the
following, in relation to the District:
(a) Lawfully imposed Taxes, if any;
(b) All obligations with respect to the Employees and elected officials, if any,
arising out of or relating to their employment with the Seller prior to the
Closing;
(c) All borrowings and indebtedness of the Seller, if any;
(d) All litigation liabilities for claims pertaining to or arising from operations of the
District prior to the Closing;
(e) All obligations under any, or liability of the Seller with respect to any breach
of, any contract or other agreement, unless expressly assumed by Purchaser,
arising from the operations of the District prior to or on the Closing; and
8. "Material Adverse Effect" shall mean the occurrence or reasonably likely occurrence
of any event, change, circumstance or effect that individually or in the aggregate
(taking into account all other such events, changes, circumstances or effects), is or is
reasonably likely to (a) have a material adverse effect to the financial conditions.
operations or prospects of the District; or(b) materially hinder or delay Seller's ability
to consummate the transactions contemplated herein; or (c) materially hinder
Purchaser's ability to own and/or operate the District substantially in the manner
previously conducted following the Closing.
11I •
Lewis County
Water-Sewer District 5
District Transfer Agreement
9. "Ordinary Course of Business"shall mean the ordinary course of business consistent
with past custom and practice (including with respect to quantity and frequency), but
only to the extent consistent with applicable law and the custom of entities engaged
in the same business as the existing business of Seller.
10. "Proceeding" shall mean any legal action, lawsuit, legal quasi-judicial, administrative,
regulatory, arbitration or other alternative dispute resolution proceeding.
11. "Required Contract Consents" shall mean the consents set out in Schedule "G" that
are required for assignment and transfer of the transferred contracts to the
Purchaser.
12. "Authorized Deductions" shall mean each of the matters set out in Schedule "F"
hereto.
13. "Tax" and, collectively "Taxes" shall mean any and all federal, state, municipal and
local (or equivalent) taxes imposed on the District by any Governmental Authority,
together with all interest, penalties and additions imposed with respect to such
amounts.
14. "Transaction Agreements / Transaction Documents" shall include those specific
documents set forth in Schedule "E", together with such other or further documents
may be necessary or expedient for consummating the transactions contemplated
under this Agreement.
15. "Transferred Contracts" shall mean all of the contracts relating to the District listed at
Schedule"G.5".
16. "Warranties" shall mean the representations and warranties set out in Section 5 of
the Agreement.
PART B-INTERPRETATION
In this Agreement:
1. Words importing the singular shall include the plural and vice versa, where the context
so requires;
2. The terms "hereof', "herein", "hereby", "hereto" and other derivatives or similar words,
refer to this entire Agreement or specified sections of this Agreement, as the case may
be;
3. Reference to the term "Section" or "Schedule" shall be a reference to the specified
Section or Schedule of this Agreement;
4. All headings and sub-headings of sections and schedules, and use of bold typeface
are for convenience only and shall not affect the construction or interpretation of any
provision of this Agreement:
5. Reference to any legislation or law or to any provision thereof shall include references
to any such law as it may, after the effective date, from time to time, be amended,
supplemented or re-enacted, and any reference to statutory provision shall include any
subordinate legislation made from time to time under that provision;
12I ?a g_oe
„
Lewis County
Water-Sewer District 5
District Transfer Agreement
6. Reference to the word "include"or"including"shall be construed without limitation;
7. The Schedules hereto shall constitute an integral part of this Agreement;
8. Terms defined in this agreement shall include their correlative terms;
9. Time is of the essence in the performance of the Parties' respective obligations. If any
time period specified herein is extended, such extended time shall also be of essence;
11:1. References to the knowledge, information, belief or awareness of any person shall be
deemed to include the knowledge, information, belief or awareness of such person
after examining all information which would be expected or required from a person of
ordinary prudence;
11. The Parties acknowledge that they and their respective counsel have read and
understood the terms of this Agreement and have participated equally in the
negotiation and drafting. No provisions of this Agreement shall be interpreted in favour
of, or against, any party by reason of the extent to which such party or its counsel
participated in the drafting hereof or by reason of the extent to which any such
provision is inconsistent with any prior draft hereof;
12. All references to this Agreement or any other transaction document shall be deemed to
include any amendments or modifications to this Agreement or the relevant transaction
document,as the case may be,from time to time;
13. Reference to days, months and years are to calendar days, calendar months and
calendar years, respectively, unless defined otherwise or inconsistent with the context
or meaning thereof, provided that to the extent any deadline or date contemplated
herein falls on a Saturday, Sunday, or legal holiday, said date or deadline shall be
automatically extended to and through 5:00 p.m. on the next business day that is not a
Saturday, Sunday, or legal holiday.
14. Any word or phrase defined in the recitals or in the body of this Agreement as opposed
to being defined schedule shall have the meaning so assigned to it, unless the
contrary is expressly stated or the contrary clearly appears from the context.
13
Lewis County
Wafer-Sewer District 5
District Transfer Agreement
SCHEDULE"B"
SELLERS' REPRESENTATIONS&WARRANTIES
Seller makes the following representations and warranties to the best of its knowledge and
belief:
1. Binding Agreement. Seller has the full legal right, power, authority and capacity to
execute and fully perform Seller's obligations under this Agreement. The execution of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Seller.
2. Insolvency. No insolvency matter of any character affecting Seller is pending or
threatened.
3. Non-Contravention. The execution and performance by Seller of this Agreement do
not (a) require the consent of any third party, except for such court approval as may
be required under chapter 36.94 RCW; (b) conflict with, result in a breach of, or
constitute a default under, any applicable law; (c) violate any agreement, contract,
right, restriction or obligation to which Seller is a party or by which Seller may be
bound; (d) violate any order, injunction judgment or degree of any government
authority by which Seller may be bound; or (e) constitute an act of bankruptcy,
preference, insolvency or fraudulent conveyance under any applicable law.
4. Absence of Undisclosed Liabilities. Seller has not received any written claim or
demand for any monetary obligations or liabilities other than those described herein
or otherwise incurred in the ordinary course of business of Seller. Except as may be
expressly provided for in the Agreement, any later discovered claim or demand for
any monetary obligations or liabilities shall remain the responsibility and obligation of
Seller.
5. Litigation. Except as noted herein, there is no private or governmental action, suit, or
arbitration pending before any federal, state, municipal or other court against Seller
or any of its properties or assets or any of its elected officials (in their capacities as
such) that (a) could prevent, enjoin, or alter or delay any of the transactions
contemplated by this Agreement, or (b) that could reasonably be expected to have
material adverse effect on the District Assets. There are no judgments, decrees,
injunctions, rules, stipulations or orders against Seller or any of its elected officials(in
their capacities as such), that (a) could prevent, enjoin, or alter or delay any of the
transactions contemplated by this agreement, or (b) that could reasonably be
expected to have material adverse effect on the District Assets. Seller is currently a
party to pending litigation Lewis County Superior Case No: 1 7-2-001 1 1-1 and Lewis
County District Court Case No. 19-596 (Small Claims).
6. Title to District Assets. Seller has good and marketable title to all of the assets of the
District subject to transfer under this Agreement.
7. Legal Rights. Seller has good and marketable title to the Assets.
8. Taxes. All taxes due and owing (whether or not shown on any return) have been, or
will remain the responsibility and obligation of Seller.
9. Compliance with Laws. All licenses required by Seller to conduct its business have
been obtained and are in full force and effect. Seller is in compliance with the terms
14i
Lewis County
Water-Sewer District 5
District Transfer Agreement
and requirements of such licenses. Seller has not received any written notice or other
written communication from any governmental authority regarding (a)any revocation,
withdrawal, suspension, termination or modification of, or the imposition of any
conditions with respect to any licenses; (b) any violation of any applicable law by
Seller; or(c)any other limitations on the conduct of business by Seller.
15
Lewis County
Water-Sewer District 5
District Transfer Agreement
SCHEDULE"C"
PURCHASER'S REPRESENTATIONS &WARRANTIES
Purchaser makes the following representations and warranties to the best of its knowledge
and belief:
1. Incorporation of the Purchaser. The Purchaser is incorporated and validly existing
under the laws of the State of Washington.
2. Power and Authorization of the Purchaser. The Purchaser has the power and
capacity to enter into and perform its obligations under this Agreement. The
Purchaser has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the transaction documents to which the
Purchaser is a party. This agreement has been duly executed and delivered by the
Purchaser. At the Closing, each of the transaction documents to which the
Purchaser is a party will be duly executed and delivered by the Purchaser, together
with the funds constituting the Purchase Price.
3. Enforceability against the Purchaser. This agreement is a valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its terms. At
the Closing, each of the transaction documents to which the Purchaser is a party will
be a legal, valid and binding obligation of such party, enforceable against such party
in accordance with its terms, subject to the usual exceptions as to applicable laws.
4. Non-Contravention by the Purchaser. None of the execution, delivery or performance
of this Agreement, or the transaction documents by the Purchaser, will contravene
any provision of its prior existing material agreement, obligation, or instrument to
which it is a party or by which it is bound nor will contravene in any material respect
any applicable law that would prevent or significantly impede the purchase of the
Assets by the Purchaser.
5. Consents and Approvals. No authorization, consent or approval of, or filing with or
notice to, any governmental authority or other person is required in connection with
the execution, delivery or performance of this agreement or the transaction
documents by the purchaser, outside of approval required under RCW 36.94.340.
16IPage
Lewis County
Water-Sewer District 5
District Transfer Agreement
SCHEDULE "D"
CONDITIONS PRECEDENT
1. Representations and Warranties. The representations and warranties of the Parties
contained in the Agreement shall be true in all respects at and as of the Closing with
the same effect as if made at and as of the Closing.
2. Board Resolution of Seller. The Board of Commissioners of each the Seller and the
Purchaser shall have passed a resolution approving the execution of this Agreement
authorizing the consummation of the transactions under this Agreement and the
transaction agreements and transaction documents.
3. Performance. The Seller and Purchaser shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by it on or before the Closing.
4. Instruments. All deeds, instruments, easements, and documents provided by the
Seller required to carry out this Agreement or incidental hereto shall be in from and
substance reasonably satisfactory to the Purchaser.
5. No Restraint. No action, suit, or proceeding by or on account of any governmental
authority shall have been instituted or threatened to restrain or invalidate the
transactions contemplated by this Agreement.
6. No Material Adverse Effect. No event or circumstance shall have occurred or shall be
likely to occur which has or is likely to have a material adverse effect on the District.
7. Conduct of Business in the Ordinary Course. The business and operations of the
District shall have been conducted in the ordinary course of business up to and
including Closing.
8. Closing Deliveries. The Seller and Purchaser shall have made or stand willing to
make all the deliveries to the other Party described in Schedule "E" of the
Agreement.
17
Lewis County
Water-Sewer District 5
District Transfer Agreement
SCHEDULE "E"
DELIVERABLES BY SELLER TO PURCHASER AT CLOSING
1. A certificate signed by the Seller stating that, to the best of Seller's knowledge and
belief, (a) the representations and warranties of Seller are true and correct as of the
Closing; and (b)the conditions precedent have been fulfilled prior to the Closing.
2. All of the transaction agreements duly signed by the Seller, being specifically identified
as follows:
(a) Bill of Sale. A bill of sale conveying and transferring all the District's property,
personal property,fixtures and other Assets provided for in this Agreement.
(b) Assignment of Water Rights. An assignment, on Ecology approved form,
Assignment of Application or Permit to Appropriate or Store Water for the
Water Rights, providing assignment of all right, title, and interest in the Water
Rights.
(c) Assignment of Easements. Assignments of easement assigning and
quitclaiming to Buyer Seller's interests in all easements held by Seller
associated with the District.
(d) Assignment and Assumption Agreement. An assignment and assumption
agreement for all Transferred Contracts, if any.
(e) Excise Tax Affidavit. Seller shall execute a real estate excise tax affidavit, as
necessary.
3. Other documents or instruments necessary to close this transaction.
DELIVERABLES BY PURCHASER TO SELLER AT CLOSING
1. A certificate signed by the Purchaser stating that,to the best of Purchaser's knowledge
and belief, (a)the representations and warranties of Purchaser are true and correct as
of the Closing; and(b)the conditions precedent have been fulfilled prior to the Closing.
2. All of the transaction agreements, to the extent so required, duly signed by the
Purchaser. •
3. Such funds constituting the Purchase Price, less any authorized deductions or set-offs,
necessary to close this transaction.
4. Other documents or instruments necessary to close this transaction.
18I pagc
Lewis County
Water-Sewer District 5
District Transfer Agreement
SCHEDULE "F"
AUTHORIZED DEDUCTIONS
The County may offset from the Purchase Price any negative account balance in the
District's account at the County at the time of Closing, if any, provided that the County
provides the District an accounting of such claimed amounts no later than three (3) business
days prior to Closing.
For the avoidance of doubt, the County may offset from the Purchase Price the actual
purchase price paid for the acquisition of real property as set forth in and as limited by
Section 4.2(b)of the Agreement.
19 =
Lewis County
Water-Sewer District 5
District Transfer Agreement
SCHEDULE "G"
DESCRIPTION OF THE DISTRICT
Schedule G.1 —Property and Fixed Assets
Well#1 and associated Fixed Assets Related Thereto
Well#2 and associated Fixed Assets Related Thereto
Well#3 and associated Fixed Assets Related Thereto
Water Reservoir
All Connecting Water Main Piping, Meters, Valves, and Other Appurtenances
All Connecting Sewer Line Piping, Meters, Valves, and Other Appurtenances
All Fire Hydrants
All Meter Boxes
TOGETHER WITH all water treatment facilities,sewer facilities and other appurtenances,
fixtures, equipment,and personal property on hand pertaining and used in operation of the
water system and sewer system at Closing.
Schedule G.2—Movable Assets
All Documents (Tangible or Intangible) Necessary for Operation of the Systems
All Office Equipment and Storage Necessary for Operation of the Systems
Schedule G.3—Contracts
Seller's rights under that certain Agreement with Toledo Telephone Co., Inc. dated February
22, 2008, including any amendments thereto
Seller's rights under that certain Interlocal Agreement for Provision of Wholesale Sewer
Service dated July 9, 2004, including any amendments thereto
Schedule G.4—Rights and Easements
State of Washington Department of Ecology
Water Right Permit Nos. G2-23891, G2-28021, G2-28329
Seller's interests in all Easements Necessary for Operation and Maintenance of the Systems
20
NOTICE OF PUBLIC HEARING BEFORE THE
LEWIS COUNTY BOARD OF COUNTY COMMISSIONERS
AND INTENT TO ADOPT
NOTICE IS HEREBY GIVEN that the LEWIS COUNTY, WASHINGTON, BOARD OF COUNTY
COMMISSIONERS will hold a public hearing on May 11, 2020, starting at or after 10:00 a.m.
Please note that the time may change due to COVID-19. For example, the hearing may start
after 3 p.m. as part of the only meeting of the day. Please look at the Commissioners' hearing
schedule at https://lewiscountywa.gov/offices/commissioners/agendas-calendar/ as May
11, 2020, approaches for updated details.
The public hearing will consider a resolution authorizing and accepting the Lewis County
Water-Sewer District #5 Transfer Agreement in accordance with RCW 36.94.330.
The public hearing will be at the Lewis County Courthouse, Commissioners' Hearing Room,
351 N.W. North Street, Chehalis, WA. During the hearing, individuals will be invited to speak
and/or provide written statements regarding the proposed changes. All individuals wishing to
speak are encouraged to attend. Written comments may be submitted in advance of the
hearing to:
Amber Smith, 360.740.2750 or amber.smith@lewiscountywa.gov.
Details about the proposals are available online at
https://lewiscountywa.gov/communitydevelopment. Hard copies are available upon request
by contacting the Board of County Commissioners' Office at 360-740-1120 or via email at
BOCC@lewiscountywa.gov.
The meeting site is barrier-free. People needing special assistance or accommodations should
contact the Community Development Department 72 hours in advance of the meeting.
Rieva Lester/Publish in the Chronicle April 28, 2020 and May 5, 2020.
BOCC AGENDA ITEM SUMMARY
Resolution: BOCC Meeting Date: April 27, 2020
Suggested Wording for Agenda Item: Agenda Type: Legal Notice
Notice of Hearing for the proposed acceptance of the Lewis County Water-Sewer District #5
Transfer Agreement in accordance with RCW 36.94.330
Contact: Amber Smith Phone: 360-740-2750
Department: PW - Public Works
Description:
Notice of Hearing for consideration of accepting the LCWSD#5 Transfer Agreement
Approvals: Publication Requirements:
Publications:
User Status The Chronicle April 28 and May 5
PA's Office Approved
Additional Copies: Cover Letter To:
Josh Metcalf, Erik Martin, Kim Amrine, Robin
Saline, Tina Hemphill, Rose Williams
114307 Notice of Public
RECEIVED. Hearing
Board of County Commissioners NOTICE OF PUBLIC
Lewis County Washington HEARING BEFORE THE
LEWIS COUNTY BOARD
OF COUNTY
MAY 0 7 2020 COMMISSIONERS
AND INTENT TO ADOPT
NOTICE IS HEREBY GIV-
EN that the LEWIS
COUNTY, WASHINGTON,
BOARD OF COUNTY
COMMISSIONERS will
hold a public hearing on
May 11, 2020, starting at
or after 10:00 a.m. Please
note that the time may
change due to COVID-19.
"For example, the hearing
may start after 3 p.m. as
AFFIDAVIT part of the only meeting of
the day. Please look at the
Commissioners' hearing
OF PUBLICATION schedule athgps;,ylew
STATE OF WASHINGTON
ssionersaoend. Ind
1 as May 11, 2020,
COUNTY OF LEWIS approaches for updated
details.
ill
Alysa Andrews,and/or MandyKlemola,and/or Kailyn Sawyer, The publica resolutionheartng u-
} Y consider a au-
and/or Cindy Thayer says that she is the legal clerk of thorizing and accepting the
Lewis County Water-Sewer
District#5 Transfer Agree-
'C
UR : ment in accordance with
RCW 36.94.330.
The public hearing will be
a semi-weekly newspaper,which has been established,published at the Lewis County Court
in the English language,and circulated continuously as a house, Commissioners'
semi-weekly newspaper in the City of Centralia,and in Lewis Hearing Room, 351 N.W.
County,Washington,general circulation in Lewis Countyfor North Street,n hearing,
WA. During the hearing,
more than six(6)months prior to the date of the first publication individuals will be invited to
1 of the notice hereto attached,and that the said Chronicle was on speak and/or provide the 7th day of July 1941,approved as a legal newspaper by the writ-
ten statements regarding
Superior Court of said Lewis County.And that the attached is a the proposed changes.All
individua
true copy and was published in regular issues(and not in are wishing to
speak encouraged to
supplement form)of said newspaper as LEGAL#114307 attend. Written comments
RE:Notice of Public Hearing may be submitted in ad-
vance 1,2 11 t of the hearing to:
once eactL,)i'C l� for a period of 2 l �/y Amber Smith ,
360.740.2750 or
commencing on 04/28/2020 and ending on 05/05/2020 1 b e r
Details about the proposals
and both regularly distributed to its subscribers during all of said are available online al.
period.That the full amount of the fee charged for the foregoing httoa/IJewi o mt wa go.i
publication is the o' >..98 Yommunitvdevetn.,n onr
A
� Hard copies are available
upon request by contacting
the Board of County Com-
Su - , w.rn to be'ore .,,05/05/2020 missioners' ' Office at
360-740-1120 or via email
-- Clewiccoun .
Ullnit///r The meetingsite is
Notary g id in and for the State of 1Va�s�tiih�� ,�••..
•�i%', barrier-free. People need-
)(11. �P...c ExPtq�s ,�� ing special assistance or
�. V�75,203 accommodations should
0._ y Py contact the Community De-
'o¢ O, „: Z_ velopment Department 72
°. . • V 6.0= hours in advance of the
.asp j J0� �`�;tj; meeting.
••• Comm„sy0e••g'r-`- Published:The Chronicle
//,��ii�rr S;ATEt0,NP,` May 5,2020 April 28,2020&
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