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HomeMy WebLinkAboutContracts & Agreements_07-2023Stock Purchase Agreement This Stock Purchase Agreement ("Agreement") is made ,and entered into as of January 17, 2023 ("Effective Date"), by and between the City of Redlands ("City") and Erin Barnum, an individual ("Seller"). City and Seller are sometimes collectively referred to in this Agreement as the "Parties" and individually as a "Party." Recitals WHEREAS, Seller is currently the registered owner of fifteen (15) shares of common stock of the Bear Valley Mutual Water Company ("BVMWC"); and WHEREAS, Seller has. agreed to offer City the opportunity to purchase fifteen (15) shares of BVMWC common stock (the "Shares"); and WHEREAS, City desires to exercise such opportunity to purchase the Shares from Seller, upon the terms and conditions and for the consideration set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree as follows: Operative Provisions 1. Incorporation of Recitals. The Recitals set forth above are material and by this reference are incorporated herein and made a part of this Agreement. 2. Purchase and Sale of Shares. Subject to the terms and conditions of this Agreement, City agrees to purchase at the Closing, defined below, and Seller agrees to sell to City fifteen (15) shares of common stock of BVMWC for the purchase price of Two Thousand Six Hundred Twenty -Five Dollars ($2,625.00) ("Purchase Price"), payable in immediately available funds at Closing. 3. Closing; Delivery. (a) The purchase and sale of the Shares shall take place at Laguna Niguel, California, five (5) days after City approves this Agreement, or at such other time and place as City and Seller mutually agree upon, orally or in writing (which time and place are designated as the "Closing"). (b) At the Closing, City shall deliver to Seller the full Purchase Price by check. (c) At the Closing, Seller shall deliver to City an originally executed Stock Assignment in the form attached hereto as Exhibit "A," and by this reference incorporated herein, relinquishing all right, title and interest in the Shares. 1 I:\cmo\Agreements\B VMWC_Stock_Purchase_B arnum-FY22-O l Ol .doc (d) Seller shall deliver to BVMWC original stock Certificate No. 1510 representing fifteen (15) shares, which includes the Shares contemplated under this Agreement, for cancellation and issuance of a new certificate to City, representing the Shares. 4. Representations, Warranties and Covenants of Seller. As a material inducement to the City to enter into this Agreement and to consummate the transactions contemplated hereby, Seller represents and warrants to City as follows: (a) Authorization. This Agreement, when executed and delivered by Seller, shall constitute a valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms. The Shares are free and clear of all encumbrances, liens and pledges and Seller has the right to sell the Shares in accordance with the terms of this Agreement. Seller has all requisite power and authority to enter into this Agreement and to perform the transactions contemplated hereby. This Agreement is a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as limited by bankruptcy, insolvency or other laws affecting creditors' rights generally or by the availability of equitable remedies. As of the execution of this Agreement, Seller is a resident of the State of California. (b) Valid Issuance of Securities. The Shares, when sold and delivered in accordance with the terms of this Agreement, will be fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws. (c) Annual Assessments. Seller shall have paid all annual assessments for the Shares and respective share certificates as of the transfer date. (d) Ownership of Shares of Company. Seller has full voting power and authority over the Shares, subject to no proxy, shareholders agreement, voting trust or other agreement or arrangement and has full right, power and authority to sell and deliver the Shares to City in the manner provided for in this Agreement. Upon consummation of the transaction contemplated herein, Seller will transfer to City good and valid title to all of the Shares, free and clear of any claim, lien, charge or encumbrance of any nature whatsoever, except the share legend. (e) Absence of Conflicts. Neither the execution and delivery of this Agreement, nor the consummation of the transactions provided for herein, will (i) conflict with or result in a breach of any agreement to which Seller is a party, (ii) result in a conflict or default under any Agreement by which the Shares are bound, or (iii) to the knowledge of Seller, violate any law, ordinance, order, writ, injunction, decree, statute, rule or regulation applicable to Seller. (f) Consents. To the knowledge of Seller, no consent, approval or action by any third party or governmental authority is required in connection with the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby. 2 I:\cmo\Agreements\BVMWC_Stock Purchase_Barnum-FY22-0101.doc (g) Litigation. To the knowledge of Seller, there are no actions, suits, proceedings and investigations pending or threatened against or affecting Seller which could impair Seller's ability to enter into this Agreement or carry out the transactions contemplated hereby. (h) Claims or Rights Against the BVMWC. Seller has no right or claim against BVMWC for distributions, wages, bonuses or any other compensation or benefits, and there are no existing or pending transactions or claims between BVMWC and Seller. (i) Effect of Closing. Seller acknowledges that as of the closing and the sale of the Shares, Seller will have no right to share in any water rights of BVMWC or receive any water service from BVMWC. 5. Survival. The warranties, representations, and covenants of Seller shall survive the execution of the Agreement and the consummation of the purchase and sale of the Shares herein described. 6. Miscellaneous Provisions. (a) Non -assignability. Neither this Agreement, nor any interest herein, shall be assignable by Seller without the prior written consent of City. (b) Notices. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be sent by First Class mail, postage prepaid, _ deposited in the United States mail in California, and if intended for either Party shall be addressed to the address provided below each Party's name on the signature page of this Agreement. Any Party, by written notice to the other Party, may change the address for notices to be delivered. (c) Inurement. Subject to the restrictions against assignment set forth above, this Agreement shall insure to the benefit of, and shall be binding upon, the assigns, successors in interest, personal representatives, estates, heirs, and legatees of each of the Parties. (d) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect without being impaired or invalidated in any way and shall be construed in accordance with the purpose and intent of this Agreement. (e) Entire Agreement. This Agreement contains the entire agreement of the Parties, and supersedes any prior written or oral agreement between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the Parties, relating to the subject matter contained in this Agreement, which are not fully expressed herein. 3 I:\cmo\Agreements\BVMWC_Stock Purchase Barnum-FY22-0101.doc (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall be deemed to be one and the same instrument. (g) Governing Law. All questions with respect to the construction of this Agreement, and the rights and liabilities of the Parties, shall be governed by the laws of the State of California. (h) Attorneys' Fees. If any action or proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing Party in such action or proceeding shall be entitled to recover reasonable attorneys' fees and other costs incurred in that action or proceeding, including fees for a Party's use of in- house counsel, in addition to any other relief to which such Party may be entitled. (i) Indemnification. From and after the Closing, Seller shall indemnify, defend and hold harmless City and its successors and assigns against and from any and all claims, damages or liability sustained or incurred by City resulting from or arising out of or by virtue of any inaccuracy in or breach of any representation or warranty made by Seller in this Agreement in Section 4. [signature page follows] 4 I: \cmo\Agreements\B VM W C_Sto ek_Purchas e_B arnum-FY22-0101.doc Exhibit "A" STOCK ASSIGNMENT ASSIGNMENT SEPARATE FROM SHARE CERTIFICATE The undersigned, hereby assigns and transfers to City of Redlands, fifteen (15) shares of common stock of Bear Valley Mutual Water Company ("BVMWC"), standing in the name of the City of Redlands, on the books of BVMWC and represented by Stock Certificate Number 1510. ►21N DARuh Dated: J/ 1 I/ 23 Erin Barnum Name: Erin Barnum Title: Individual Address: 17 High Bluff Laguna Niguel, CA 92677 6 I:\cmo\Agreements\BVMWC_Stock Purchase Barnum-FY22-0101.doc IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above. SELLER Erin Barnum B Name: Erin Barnum Title: Individual Address: 17 High Bluff Laguna Ni , CA 9 CITY I ' D 1 NDS By: ddie Tej eda, Mayor Address: 35 Cajon Street Redlands, CA 92373 ATTEST: By: Donaldson, City Clerk 5 I:\cmo\Agreements\BVMWC_Stock_Purchase Bamum-FY22-0101.doc Form ® (Rev. October2018) Department of the Treasury Internal Revenue Service Request for Taxpayer Identification Number and Certification ► Go to www./rs.gov/FormW9 for Instructions and the latest Information. Give Form to the requester. Do not send to the IRS. I Print or type. See Specific Instructions on page 3. 1 Name (as shown your Income tax return). Name Is required on this line; do not leave this line blank. Er 1 r, ar-YuAten 2 Business name/disregarded entity name, If different from above 3 Check appropriate following seven boxes, ,i. Individual/sole single -member • Limited liability Note: Check the LLC If the LLC another LLC that Is disregarded • Other (see Instructions) box for federal tax classification of the person whose name Is entered on line 1. Check only one of the 4 Exemptions certain entitles, Instructions Exempt payee Exemption code (If any) (Applies to accounts (codes apply only to not individuals; see on page 3): code (if any) proprietor or ■ C Corporation • S Corporation ■ Partnership • Trust/estate LLC company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) appropriate box In the line above for the tax classification of the single -member owner. Is classified as a single -member LLC that Is disregarded from the owner unless the owner Is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single from the owner should check the appropriate box for the tax classification of Its owner. IN. ► from FATCA reporting Do not check of the LLC is -member LLC that maintained outside the U.S.) 5 Address (number, street, and apt. or suite no.) See Instructions. 11 V � h ra\ U Requester's name and address (optional) 6 Olty, state, -and- I Dods L-C\q VIy NI uet CA °I ZC07 7 7 List accolant number(s) here (opt o al) I axpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later. Note: If the account is In more than one name, see the Instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter. Part ill Social security number l0 0 5 or 2 Z 7 3 Employer Identiflcat on number Certification Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. I am a U.S. citizen or other U.S. person (defined below); and - 4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting Is correct. Certification instructions. You must cross out Item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the Instructions for Part II, later. Sign Here Signature of U.S. person ►/ter General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9. Purpose of Form An individual or entity (Form W-9 requester) who Is required to file an Information return with the IRS must obtain your correct taxpayer Identification number (TIN) which may be your social security number (SSN), Individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an Information return. Examples of information returns include, but are not limited to, the following. • Form 1099-INT (Interest earned or paid) Date ► /2 • Form 1099-DIV (dividends, including those from stocks or mutual funds) • Form 1099-MISC (various types of income, prizes, awards, or gross proceeds) • Form 1099-B (stock or mutual fund sales and certain other transactions by brokers) • Form 1099-5 (proceeds from real estate transactions) • Form 1099-K (merchant card and third party network transactions) • Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition) • Form 1099-C (canceled debt) • Form 1099-A (acquisition or abandonment of secured property) Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN. If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What Is backup withholding, later. Cat. No, 10231X Form W-9 (Rev. 10-2018) \/B1 rNiia�:t, t SV'' fiN% ,r �tf, j41 l INCORPORATED JUNE 15, 1903 AUTHORIZED CAPITAL STOCK $2,000,000 No. Shares =15= 400,000 SHARES PAR VALUE $5 REDLANDS, CALIFORNIA 9f 9P 7e )C 9C 9C 96 7e 9e )e )e 9e )e ) Date: August 1, 2022 Erin Barnum is the registered holder, entitled to represent, and (subject to conditions printed on reverse side hereof) NO ONE (If no pledge is to be registered, write "no one" in this space) is registered as pledgee of FIFTEEN shares each of the par value of Five -Dollars, of the Capital Stock of Bear Valley Mutual Water Company a corporation organized under the laws of the State of California, for the purpose (in addition to any others) of supplying water to its shareholders. The shares evidenced here are assessable and may be sold or forfeited for non-payment of an assessment. Each assessment is a lien upon the shares assessed from the time of the adoption of the resolution levying the assessment, until paid. Each charge or toll for water delivered or other service rendered by the corporation to or for the registered holder of these shares by virtue of or in respect to ownership of said shares is a lien against said shares from the time when furnished or rendered, until paid. No transfer of these shares can or will be made on the books of the corporation while any such assessment, charge or toll thereagainst remains or is unpaid. IN WITNESS WHEREOF, said corporation has caused this certificate to be signed by its duly au horized officers, and its Corporate Seal affixed the day above written. SECRETARY 1 I I 1q t�,1�� �t" 16��,y, ): I w� (1' 4 �1 I N l i rP.. , I t II ��,r l,H r rn tk .r�>� fr � I . f ,�1t� Jil.� 11 , 1�, 1; � 111�i� �� t��'i'rl r �' , � `'1� • I r � i .i• 1t ? ! r ti ti 4 1r4 1 ,,; 4 °.$ t 6� .J r l • �f .�"` fly w_..� �'� � '�1� PRESIDENT 8)1998 GOES 4520 All Rights Reserved CONDITIONS RESPECTING REGISTERED HOLDER AND PLEDGEE, IF ANY PLEDGEE BE NAMED The registered holder named herein shall be deemed, as regards the corporation, its shareholder; and as such, shall represent said shares and exercise all rights, vote, consent and assent in respect thereof, and demand and receive all water allotted thereto, and be personally liable to,thecorporation for all tolls, water charges, and assessments. The rights and interest of the registered holder (and of any successor or person appearing by the certificate to be the owner of said shares), and the title to said shares, may be transferred upon the books of the cor- poration, and a new certificate issued (upon surrender hereof), subject to and showing said pledge, without the act, consent or endorsement of the pledgee. If the address of the pledgee appears on the books of the corporation, the corporation will not sell or forfeit the shares evidenced by the within certificate for non- payment of an assessment unless at least ten days prior to such sale or forfeiture there is mailed to the pledgee at said address of the pledgee, or in lieu thereof, delivered to the pledgee, a copy of the notice of assess- ment given with respect to such assessment, or in lieu of such copy, any notice stating the fact of the assess- ment and the time and place for the sale or forfeiture of delinquent shares. The pledgee shall not be personally liable for the pay- ment of tolls, water charges or assessments, unless pay- ment thereof has been assumed or guaranteed by the pledgee, or water shall be delivered upon or to the order of the pledgee_ The interest and rights of the pledgee, as such, in said shares may be transferred on the books of the corpora- tion, and a new certificate issued (upon surrender hereof) showing the new pledgee, without the act, consent or endorsement of the registered holder, or of anyone ap- pearing by the Certificate to be the owner of said shares. ABSOLUTE ASSIGNMENT BY REGISTERED HOLDER FOR VALUE, the undersigned hereby sells, assigns and transfers to C-01 �f �edl and shares represented by the within Certificate, and appoints the Secretary of the within named Corporation, or any officer or person designated by the Corporation for such purpose, to transfer said sharps onZthh books of said Corporation. Dated: ! L t (i G Registered Holder Bear Valley Mutual Water Company ARTICLE XVII. BY-LAWS OF BEAR VALLEY MUTUAL WATER CO. USE OF WATER On account of the ever present danger of con- tamination of of the Company's water supply, due to our watershed being used by a large number of people for residence and recreation, and sanitary conditions in the Forest Reserve and on private pro- perty in the watershed not being under our control, thereby rendering the domestic use of such water dangerous to health, it is hereby declared that none of the water now or hereafter supplied at any time by the the company is intended to be furnished or used for human consumption or for domestic pur- poses, and the company warns all of its stock- holders and water consumers against using such water for domestic purposes, and the company assumes no responsibility for the quality or purity of any water at any time supplied by it, and any per- son consuming or using any water for domestic purposes does so at his own risk. Gr ff sate FOR SHARES ISSUED TO ASSIGNMENT IN PLEDGE BY REGISTERED HOLDER OR OWNER The undersigned hereby assigns to (called "Pledgee"), in pledge and not absolutely, all shares represented by the within Certificate, and directs said Corporation to register said shares upon its books in the name of the undersigned, as registered holder, and said pledgee, as pledgee. Dated: Registered Holder or Owner Witness: FULL RELEASE OF PLEDGEE'S RIGHTS (Where Debt Is Paid or Satisfied) The undersigned hereby releases from pledge all shares represented by the within Certificate, and relin- quishes all of the pledgee's interest and rights therein_ Dated: Pledgee Witness: ASSIGNMENT BY PLEDGEE OF PLEDGEE'S RIGHTS (Where Debt Is Transferred) The undersigned hereby assigns to as Pledgee, all interest and right of the undersigned in the shares represented- by the within Certificate, together with the debt or liability secured thereby. Dated: Pledgee Witness: %c. DATE Witness: INCORPORATED JUNE 15, 1903 AUTHORIZED CAPITAL STOCK $2,000,000 ��TT - - - - - -- No. Shares =.15= 400,000 SHARES PAR VALUE $5 l�� 1513 Bear ValleyMutual Water Company REDLANDS, CALIFORNIA OIlin Date: February 10, 2023 o fllrrtiftrz itat City of Redlands is the registered holder, entitled to represent, and (subject to conditions printed on reverse side hereof) No One (If no pledge is to be registered, write "no one" in this space) is registered as pledgee of---------------------------Fifteen------------------------------ shares each of the par value of Five -Dollars, of the Capital Stock of Bear Valley Mutual Water Company a corporation organized under the laws of the State of California, for the purpose (in addition to any others) of supplying water to its shareholders. ii The shares evidenced here are assessable and may be sold or forfeited for non-payment of an assessment. Each assessment is a lien upon the shares assessed from the time of the adoption of the resolution levying the assessment, until paid. Each charge or toll for water delivered or other service rendered by the corporation to or for the registered holder of these shares by virtue of lo or in respect to ownership of said shares is a lien against said shares from the time when furnished or rendered, until paid. No transfer of these shares can or will be made on the books of the corporation while any such assessment, charge or toll thereagainst remains or is unpaid. IN WITNESS WHEREOF, said corporation has caused this certificate to be signed by its duly auth .rized officers, d its Corporate Seal affixed the day above written. l r ---2 / F SECRETARY PRESIDENT 0 t 998 GOES 4520 All Rights Reserved CONDITIONS RESPECTING REGISTERED HOLDER AND PLEDGEE, IF ANY PLEDGEE BE NAMED The registered holder named herein shall be deemed, as regards the corporation, its shareholder, and as such, shall represent said shares and exercise all rights, vote, consent and assent in respect thereof, and demand and receive all water allotted thereto, and be personally liable to the corporation for all tolls, water charges, and assessments. The rights and interest of the registered holder (and of any successor or person appearing by the certificate to be the owner of said shares), and the title to said shares, may be transferred upon the books of the cor- poration, and a new certificate issued (upon surrender hereof), subject to and showing said pledge, without the act, consent or endorsement of the pledgee. If the address of the pledgee appears on the books of the corporation, the corporation will not sell or forfeit the shares evidenced by the within certificate for non- payment of an assessment unless at least ten days prior to such sale or forfeiture there is mailed to the pledgee at said address of the pledgee, or in lieu thereof, delivered to the pledgee, a copy of the notice of assess- ment given with respect to such assessment, or in lieu of such copy, any notice stating the fact of the assess- ment and the time and place for the sale or forfeiture of delinquent shares. The pledgee shall not be personally liable for the pay- ment of tolls, water charges or assessments, unless pay- ment thereof has been assumed or guaranteed by the pledgee, or water shall be delivered upon or to the order of the pledgee. The interest and rights of the pledgee, as such, in said shares may be transferred on the books of the corpora- tion, and a new certificate issued (upon surrender hereof) showing the new pledgee, without the act, consent or endorsement of the registered holder, or of anyone ap- pearing by the Certificate to be the owner of said shares. ABSOLUTE ASSIGNMENT BY REGISTERED HOLDER FOR VALUE, the undersigned hereby sells, assigns and transfers to shares represented by the within Certificate, and appoints the Secretary of the within named Corporation, or any officer or person designated by the Corporation for such purpose, to transfer said shares on the books of said Corporation. Dated: Registered Holder Bear Valley Mutual Water . Company ARTICLE XVII. BY-LAWS OF BEAR VALLEY MUTUAL WATER CO. USE OF WATER On account of the ever present danger of con- tamination of of the Company's water supply, due to our watershed being used by a large number of people for residence and recreation, and sanitary conditions in the Forest Reserve and on private pro- perty in the watershed not being under our control, thereby rendering the domestic use of such water dangerous to health, it is hereby declared that none of the water now or hereafter supplied at any time by the the company is intended to be furnished or used for human consumption or for domestic pur- poses, and the company warns all of its stock- holders and water consumers against using such water for domestic purposes, and the company assumes no responsibility for the quality or purity of any water at any time supplied by it, and any per- son consuming or using any water for domestic purposes does so at his own risk. (IIriifica± FOR SHARES ISSUED TO ASSIGNMENT IN PLEDGE BY REGISTERED HOLDER OR OWNER The undersigned hereby assigns to (called "Pledgee"), in pledge and not absolutely, all shares represented by the within Certificate, and directs said Corporation to register said shares upon its books in the name of the undersigned, as registered holder, and said pledgee, as pledgee. Dated: Registered Holder or Owner Witness: FULL RELEASE OF PLEDGEE'S RIGHTS (Where Debt Is Paid or Satisfied) The undersigned hereby releases from pledge all shares represented by the within Certificate, and relin- quishes all of the pledgee's interest and rights therein. Dated: Pledgee Witness: ASSIGNMENT BY PLEDGEE OF PLEDGEE'S RIGHTS (Where Debt Is Transferred) The undersigned hereby assigns to as Pledgee, all interest and right of the undersigned in the shares represented by the within Certificate, together with the debt or liability secured thereby. Dated: Pledgee Witness: DATE Witness: