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AGREEMENT FOR SALE OF WATER STOCK AND 11 MPORARY USE OF WA1i R <br />This Agreement is entered into this 1st day of August 2000 (the "Effective Date" ), by and <br />between the City of Redlands, (hereinafter "City") and S-P East Highlands, LLC, a California <br />limited liability company (hereinafter "Company" ). <br />RECITALS <br />WHEREAS, Company owns six thousand five hundred seventy-nine (6,579) shares of capital <br />stock in the Bear Valley Mutual Water Company (" BVMWC" ), hereinafter the (" Shares" ), which <br />Company agrees to sell to City; and <br />WHEREAS, City desires to purchase the Shares from Company for the sum of Nine <br />Hundred Fifty -Three Thousand Nine Hundred Fifty -Five Dollars ($953,955.00) (the "Purchase <br />Price" ); and <br />WHEREAS, immediately upon City' s purchase of the Shares, Company desires to obtain <br />from City the right to temporary use of the water represented by the Shares (the "Stock Water") for <br />the purpose of irrigating Company' s property described on Exhibit "A" to this Agreement; <br />NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties <br />agree as follows: <br />1. Purchase and Sale of Shares. Company shall sell the Shares to City for the sum of Nine <br />Hundred Fifty -Three Thousand Nine Hundred Fifty -Five Dollars ($953,955.00), and City shall pay <br />such sum to Company concurrent with Company' s delivery to City of the stock certificate <br />representing the Shares. <br />2. Close of Sale. Within ten (10) days after the Effective Date of this Agreement, Company <br />shall cause the stock certificate representing the Shares to be delivered to City in exchange for <br />City' s check made payable to Company in the amount of the Purchase Price. <br />3. Temporary use of Stock Water. <br />A. Concurrent with its delivery of the stock certificate representing the Shares, Company <br />shall pay to City the sum of Six Thousand Five Hundred Seventy -Nine Dollars ($6,579) for the right <br />of temporary use of the Stock Water for a period of one (1) year from and after the Effective Date of <br />this Agreement. Company shall have options to acquire temporary use of the Stock Water for an <br />additional two years, and may exercise each of those options by giving written notice to City by <br />May 1, 2001 and May 1, 2002, respectively and by making payment to City in the amount of $6,579 <br />for use of the Stock Water by August 1, 2001, and the same payment by August 1, 2002, <br />respectively. <br />B. Company acknowledges and agrees that the Stock Water is not suitable for human <br />consumption without proper treatment. Company also acknowledges and agrees that the specific <br />amount, quality, delivery rate and availability of the Stock Water is solely within the discretion of <br />G:\PROJECTS - CURRENT\EAST HIGHLANDS RANCH\SALES\WATER STOCK -CITY OF REDLANDS\SPRING PACIFIC WATER <br />STOCK AGREEMENT.WPD <br />1 <br />