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HomeMy WebLinkAboutContracts & Agreements_5-2024Stock Sale Agreement This Stock Sale Agreement ("Agreement") is made and entered into as of January 16, 2024 ("Effective Date"), by and between the City of Redlands ("City") and the Yucaipa Valley Water District ("Buyer"). City and Buyer are sometimes collectively referred to in this Agreement as the "Parties" and individually as a "Party." Recitals WHEREAS, City is currently the registered owner of nine -hundred eleven (911) shares of common stock of the South Mountain Water Company ("SMWC"); and WHEREAS, City has agreed to offer Buyer the opportunity to purchase fifteen (15) shares of SMWC common stock (the "Purchased Shares"); and WHEREAS, Buyer desires to exercise such opportunity to purchase the Purchased Shares from City, 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, Buyer agrees to purchase at the Closing, defined below, and City agrees to sell the Purchased Shares for the purchase price of Seven Thousand Five Hundred Dollars ($7,500.00) ("Purchase Price"), payable in immediately available funds at Closing. 3. Closing; Delivery. (a) The purchase and sale of the Purchased Shares shall take place at 35 Cajon Street, Redlands, California 92373, five (5) days after City approves this Agreement, or at such other time and place as City and Buyer mutually agree upon, orally or in writing (which time and place are designated as the "Closing"). City and Buyer currently expect and will use their best efforts to ensure that Closing will occur on or before January 31, 2024. (b) At the Closing, Buyer shall deliver to City the full Purchase Price by wire transfer or other same day funds. 1 I:\emo\Agreements\Yucaipa_Valley_Water_District_Stock_Sale_Agreement FY23-0007.docx (c) At the Closing, City shall deliver to Buyer 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 Purchased Shares. (d) City shall deliver to SMWC the following original stock certificates representing the Purchased Shares, endorsed by the City as transferred to Buyer or, in the alternative, for cancellation and issuance of a new certificate to Buyer representing the Purchased Shares in accordance with Article XI of the Bylaws of SMWC: A261 5 Shares A316 10 Shares (e) City shall cause the transfer of the Purchased Shares, whether by endorsement of the above listed certificates of stock or their cancellation and issuance of a new certificate to Buyer representing the Purchased Shares, to be acknowledged on the books of SMWC in accordance with Articles XI and XII of the Bylaws of SMWC. 4. Representations, Warranties and Covenants of Seller. As a material inducement to the Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, City represents and warrants to Buyer as follows: (a) Authorization. This Agreement, when executed and delivered by City, shall constitute a valid and legally binding obligation of City, enforceable against City in accordance with its terms. The Purchased Shares are free and clear of all encumbrances, liens and pledges and City has the right to sell the Purchased Shares in accordance with the terms of this Agreement. City 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 City, enforceable against City 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. (b) Annual Assessments. City shall have paid all annual assessments for the Purchased Shares and respective share certificates as of the transfer date. (c) Ownership of Shares of Company. City has full voting power and authority over the Purchased 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 Purchased Shares to Buyer in the manner provided for in this Agreement. Upon consummation of the transaction contemplated herein, City will transfer to Buyer good and valid title to all of the Purchased Shares, free and clear of any claim, lien, charge or encumbrance of any nature whatsoever, except the share legend. (d) Effect of Closing. City acknowledges that as of the Closing and the sale of the Purchased Shares, City will have no right to share in any water rights of SMWC or receive any water service from SMWC associated with the Purchased Shares. 2 I:\cmo\Agreements\Yucaipa_Valley_Water District_Stock_Sale_Agreement FY23-0007.docx (e) Unless specifically contained in this Section 4, City makes no representation or warranty of any kind whatsoever, express or implied, with respect to either the transactions contemplated hereby or the condition (financial or otherwise) of, or any other matter involving, SMWC, City, any annual assessments or water delivery from and after the Closing Date, or the Purchased Shares. 5. Survival. The warranties, representations, and covenants of City shall survive the execution of the Agreement and the consummation of the purchase and sale of the Purchased Shares herein described for a period of twelve (12) months. 6. Miscellaneous Provisions. (a) Non -assignability. Neither this Agreement, nor any interest herein, shall be assignable by Buyer 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 inure 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. (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. 3 L \cmo\Agreements\Yucaipa_Valley_Water_D i strict_Stock_S ale_Agreement FY23 -0007. docx (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 Parry'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, Buyer 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 relating to the Purchased Shares with respect to periods subsequent to the Closing. From and after the Closing, City shall indemnify, defend and hold harmless Buyer and its successors and assigns against and from any and all claims, damages or liability sustained or incurred by Buyer resulting from or arising out of or relating to any failure to pay assessments with respect to the Purchased Shares for periods prior to the Closing. [signature page follows] 4 L\cmo\Agreements\Yucaipa_Valley_Water_District_Stock_Sale_Agreement FY23-0007.docx IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above. BUYER Yucaipa Valley Water District By: Name: Joseph Zoba Title: General Manager Address: 12770 2nd Street Yucaipa, CA 92399 CITY 0 By: Eddie Tejeda, Mayor Address: 35 Cajon Street Redlands, CA 92373 ATTEST: By: e Donaldson, City Clerk 5 I:\cmo\Agreements\Yucaipa_Valley_Water_District_Stock_SaleAgreement FY23-0007.docx Exhibit "A" STOCK ASSIGNMENT ASSIGNMENT SEPARATE FROM SHARE CERTIFICATE The undersigned, hereby assigns and transfers to the Yucaipa Valley Water District, fifteen (15) shares of common stock of South Mountain Water Company ("SMWC"), standing in the name of the City of Redlands, on the books of SMWC and represented by Stock Certificate Numbers: A261 5 Shares A316 10 Shares Dated: I — 6. -2+ City of Redla By: Name: Eddie Tejeda Title: Mayor Address: 35 Cajon Street 6 Redlands, CA 92373 C\cmo\ Agreements \Yucaipa_Valley_Water_District Stock_Sale Agreement FY23=0007:docx c r'p No. Shares J1� T his 0 9ir�;: t3 Is s r^a v r.• s ® CJ v �'y INCORPORATED MAY 26, 1699 AUTHORIZED CAPITAL STOCK $100.00 1000 SHARES PAR VALUE $100. No.' ttODE0000EOOOOOOOEOOOOOOR®RICIMMOOOEEEEOIIICIH ELIENERC uOO®®®®RHEIDN =®®®®❑O®®®OHREENNEENE® 0 tt South Mountain Water Co. REDLANDS, SAN BERNARDINO COUNTY, CALIFORNIA ®O®OOOOEOl7EOOOOHMENHOEOOOOO00000OOOOOOEOEENCEIMMOOOOOE®OOOEEEEOOOOEOOEENEIMEOOEOEE® f3i=1 rr Certifies That T 261 Date: .IJ 19_�_a is the registered holder, entitled toresent, and (subject to conditions printed on reverse side hereof) (If no pledge is to be registered, write "no one" in this space) is registered as pledgee of L " '' each of the par value of One Hundred Dollars, of the Capital stock of South Mountaj(n 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 hereby are assessable and m Each assessment is a lien upon the shares assessed from assessment, until paid. Each charge or toll for water d or for the registered holder of these shares by virtue of o said shares from the time when furnished or rendered, made on the books of the corporation while any such ass shares ay be sold or forfeited for non-payment of an assessment. the time of the adoption of the resolution levying the elivered or other service rendered by the corporation to r in respect of ownership of said shares is a lien against until paid. No transfer of these shares can or will be essment, charge or toll thereagainst remains or is unpaid. IN WITNESS WHEREOF, said corporation has caused this certificate to be signed by its duly authorized officers, and its Corporate Seal affixed the day above ritten: _ SECRETARY ��.�`_.. `„►1.,,. „r `s59 l ; =s :m 6r ,.-;,' , .:. i RESIDENT ©GOES 358 Me e t ere \\•• led to e-ple� •e 'at sa) ��. pledgee, \ lieu thereof, delivered to th ��, ^-.of the n of assessment given with re-' ..- az +- en i in lieu of such copy, any no- ,_of:� assessment and the time and a+t . OW* t- orfeiture of delinquent shares. "� be personally liable for the pay- , ". . a' ' arges or assessments, unless pay- 4 -has - ee 1 assumed or guaranteed by the r water t be delivered upon or to the order l,,. fedgee. ;:: st and rights of the pledgee, as such, in said e'transferrerd on the books of the corpora - a new certificate issued (upon surrender hereoi) he new pledgee, without the act, consent or en- +',""�' .f the registered holder, or of anyone appearing jca�ebe the owner of said shares. ABSOLUTE ASSIGNMENT BY �� REGISTERED HOLDER ♦, FOOfRR VALUE.. , i ned hereby sells, assi4 SHARES ISSUED TO nmmunmmiiuiii iou mu.umnlm titWO-Livb isv YC n�in.nin �:n - ,r,�+°•fiilf t ASSIGNMENT IN BY REGI H01415 +R OWNER The undersigned hereby 'a'sairr= ��i (called 'Pledgee"Y� in pledge and ail srrdte rep- resented by the, y%� ertificate; cts sad Cor- k poration registdf� 0hares upon. ibttoks in the, name iI ( of the 4it-signeV,AS registered homer, and said pledgee, -; 44 led • /ii FULL RELEASE t� EE?���ES RIGHTS fr (Where Debt -It, -� The undersigned hereby releases f' ledge a1L s�areess represented by the within certlficat relinquis es-allt. of the pledgee's interest and ri Dated • ��' \ ASSIGNMENT BY PL•; PLEDG E S RI_ -(Where Deed := \� hereby assigns to �0 /41 a - 5Urxaselc/ 2 tdei- INCORPORATED MAY 26, 1899 AUTHORIZED CAPITAL STOCK $100.0D 1000 SHARES PAR VALUE $100. ggggggggggggggggEWEICIgggggggooggggggggggggggggggggogggggggggggggggggggggggttttg tt South Mountain Water Co. 1 tt DI REDLANDS, SAN BERNARDINO COUNTY, CALIFORNIA tt 0 ggggoogggggggOlglgEMIDEggggtttt HEOMgggttttgggggggggE1OHNO ggogggg®gggggggggggggggggg®gg Date:.. _ __D , 19 Sg T his Certifies That is the registered bolder, ended t'qrepresent, and (subject to conditions printed on reverse side hereof) (If no pledge is to be registered, to "no one" in this space) is registered as pledgee of shares each of the par value of One Hundred Dollars, of the Capital stock of South Mountain 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 hereby 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 of 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 ass essment, charge or toll thereagainst remains or is unpaid. IN WITNESS WHEREOF, said corporation has caused this certificate to be signed by its duly authori officers, and) its Corporate Seal affixed the day above wr'tten. SECRETARY - ENT ��`�..; >r--� „>, _e 9•'r> ©GOES 358 F;',n,; �nn;n r i rr, .iharsi r �`inipn+,n r+i+*"•. � ii titirr. ,i ,rrc.,ry',r Mnn,r�� ur'A'fa8, rjv, ''. 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 personallyliable 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 bell) the owner of said shares), and the title to said sharek may be transferred upon the books of the corporation, 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 th, pledgee, a copy of the notice of assessment given with re- spect to such assessment, or in lieu of such copy, any no- tice stating the fact of the assessment 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 transferrerd on the books of the corpora- tion, and a new certificate issued (upon surrender hereof) showing the new pledgee, without the act, consent or en- dorsement of the registered holder, or of anyone appearing 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 Eby 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 trans- fer said sha es o the ibookss f said Corporation. Dated ' �il % 1 — /Z ` ! ice inmat SHARES ISSUED TO mininnmJWii ounumimimmIil i ASSIGNMENT IN PLEDGE BY REGISTERED HOLDER OR OWNER The undersigned hereby assigns to (called "Pledgee"), in pledge and absolutely, all shares rep- resented by the within Certificate, and directs said Cor- poration'to register said shares, upon its books in the name of the undersigned, as registered holder, and said pledgee, as pledgee. Dated.' 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 relinquishes all of the pledgee's interest and rights therein. \\ _ ledgee 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, \tokgether the debt or 'liability secured thereby. Dated... Pledgee