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SHARES LEASE
This Shares Lease("Lmase') ioentered into between the City of Redlands /"Lesaor"1and Wayne
K88mhalk("Lemsee"). Lessor and Lessee agree msfollows:
A. Lessor is the owner of shares of the Capital Stock of Crafton Water Company("Shares"); and
B. Lessor desires tolease 10ofits Shares (hereinafter the"Leased Shares^)boLessee onthe
terms and conditions set forth hereinafter.
1. Lease. Lessor hereby agrees to lease the Leased Shares to Lessee and Lessee agrees to
lease same from Lessor for the purpose ofproviding water hoLessee. Said water shall not
be used by Lessee for human consumption prior to treatment by Lessee, to California
Department ufHealth Services, Office ofDrinking Water Standards.
2. Term. The term ofthis lease shall begin onJune 8. 2OO6 and end onJune 1. 2OO7. (in nm
event more than one year) (^Lamme term"). Notwithstanding the foregoing, Lessee
understands and agrees that(a)the real property owned by the Lessor("Lessors Real
Property")could be the subject of a condemnation proceeding or other taking, (b) the Leased
Shares are not currently subject to a condemnation proceeding or other taking, (c) In the
event the Leased Shares are the subject matter of a condemnation award or in the event the
Leased Shares as described are the subject matter of a condemnation proceeding then in
that event the entire amount of any such award shall be the sole and exclusive property of
Lessor and the Lessee shall have no interest therein, (d) in the event there is ataking of the
Leased Shares by condemnation, then in that event this Lease shall terminate and the
Lessee shall be entitled to a pro rata refund of the Rent as defined herein below, and (e)
there is no implied intention that this Lease or any rights or interest hereunder will be
extended beyond the Lease Term,
3. Rent Lessee hereby agrees to pay Lessor the sum of$560.00 upon execution of the Lease
for the Leased Shares aoset forth herein. Lessee further agrees bopay Lessor the amount nf
any stock assessment on said shares, which would result in an annual assessment in excess
of$55.00 per share, if any, and any delivery or entitlement charge levied by Crafton Water
Company for delivery o{water associated with said shares.
4. Assignability. Lessee hereby agrees that itshall not have the right bzassign, sublet or
otherwise transfer orencumber the Leased Shares under this Lease.
5. Voting Rights. Lessor retains voting rights associated with ownership of the Leased Shares.
G. Waiver. Lessee hereby agrees to hold harmless Lessor from any loss, cost, expense and
claims arising directly or indirectly out of(a)condemnation of the Lessor's Real Property or
the Leased Shares prior to expiration of this Lease, (b)this Lease, and (c)from any
environmental contamination of any water attendant to the Leased Shares, from whatever
cause. Lessor assumes no responsibility for the quality or purity of any water attendant to the
Leased Shares.
This Lease kaexecuted onthe 6th day ofJune 2UO8.
"Lessor:" ^Leasmw~
City ofRedlands VVavneK8i$hek
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BY. �Y�