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6. In the event the Contractor must make payment pursuant to the terms of paragraph 5. above. then the said sum of Forty-Three Thousand Five Hundred Twelve Dollars ($43,512) shall be payable in ten (10) equal installmeats of Four Thousand Three Hundred Fifty-One Dollars and Twenty Cents ($4,351.20) each, the first installmeat to be due and payable upon the January 1st next succeeding the initiation of construction on the said water project. Subsequent payments shall be dU'e and payable on January 1st of each year thereafter. , WHEREAS, the state and the Contractor intend to enter into a separate contract (hereinafter referred to as the "project contractU) in which the State will loan the Contractor money for the purpose ot repairing the Santa Maria and Continental Dams; and WHEREAS, initiation of construction to repair the Santa Maria and Continental Dams will create an Obligation on the part of the Contractor to make payments under the terms. specifically paragraph Nos. 5. and 6., of the existing feasibility report contract; and WHEREAS, the parties agree that it would be mutually beneficial to terminate the Contractor's separate Thirty-Three Thousand Six Hundred Dollars ($33,600) obligation under the feasibility report contract provided that the repayment of the Thirty-Three Thousand Six Hundred Dollars ($33,600) (WhiCh represents the principal amount provided by the State for the purpose of partially funding the feasibility report for the Santa Maria and continental Dam projects) will be integrated with the Contractor's repayment of the construction loan of the project contract. ~hich will be executed contemporaneously with this termination contract. NOW, THEREFORE it is hereby agreed that: 1. The feasibjlity report contract entered into between the State and the Contractor on September 1, 1988 (attached as Exhibit B and incorporated by reference herein), Contract Encumbrance No. C-153502. is hereby terminated save for those provisions which ate expressly noted in this contract and the remaining Obligations of the State and the Contractor under the terms of that conttact are no longer enforceable. 2. The Contractor agrees to the fallowing terms for the repayment of Thirty-Three Thousand Six Hundred Dollars ($33,600), which represents the principal amount provided by. the State as parti81 financing for the feasibility report under the terms of the feasibility report contract: a. The Thirty-Three Thousand Six Hundred Dollars ($33,600) referred to above will be added to that amount loaned to the Contractor by the State under the project contract for the repair of the Santa Maria and Continental Dam projects. b. The total amount described in paragraph 2.a. above and interest for the full term will be repaid under the terms of the project contract to be entered into between the State and the Contractor. 3. This termination of the feasibility report contract will not be effective until such time as a valid and enforceable project contract containing the terms of paragraph 2. above is in effect for the repair of the Santa Maria and Continental Dam projects. Page ~ of ~ Pages