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H. Santa Maria and the District are presently parties to a Storage Lease Agreement, <br />dated March 10, 1999. Pursuant to the 1999 Lease Agreement, the District leases one-hundred <br />and fifty (150) acre-feet of firm storage space in the Reservoirs for storage of water used in its <br />augmenta.tion program. The 1999 Lease Agreement shall be of no further force or effect <br />following the effective date of this Lease. <br />LEASE AGREEMENT <br />NOW TI~REFORE, for and in consideration of the mutual promises and benefits <br />exchanged hereby, the parties hereto agree as follows: <br />1.0 Definitions <br />I.1 "Firm Storage Space" sha11 mean space made available in each Water Year <br />pursuant to this Agreement by Santa Maria in the Reservoirs, including the <br />right to carry over storage from one Water Year to any following Water <br />Year, subject to spill only as set forth in paragraph 5.3 of this Agreement. <br />1.2 "Water Year" sha11 mean the period November 1 of any one (1) year to <br />October 31 of the following year, e.g. November 1, 2009 to October 31, <br />2010. <br />2.0 Lease of Firm Storage Space <br />2.1 Santa Maria agrees to lease to the District one thousand (1,000) acre-feet <br />of Firm Storage Space in the Reservoirs in which the District may store the Subject Water <br />Rights. Santa Maria shall have sole discretion over the location of the Firm Storage Space in the <br />Reservoirs, and may change that location as its needs require. <br />3.0 Term <br />3.1 The initial term of the Lease shall be 25 years, commencing on the <br />effective date of this Lease. The District shall have the right to renew this Lease for up to three <br />successive terms of 25 years each, provided, however, that either party may terminate the Lease <br />by giving the other party three (3) years advanced written notice of its intent to terminate the <br />Lease. Notice of termination sha11 be in writing and shall be delivered on or before October 31 <br />of any water yeax. <br />3.2 Not less than 12 months before the expiration of the initial term of this <br />Lease, or any renewal term thereof, the District shall notify Santa Maria whether it wishes to <br />extend the Lease for an additional term of 25 years. If the District is not in default of its <br />obligations under this Lease, then the term shall automatically be renewed for a successive 25- <br />year term. Unless sooner terminated by the District's failure to renew the Lease, or by <br />Page 2 of 9 <br />