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COVENANTS <br />NOW, THEREFORE, based upon the foregoing facts, and in <br />consideration of the mutual promises of the PARTIES, the PARTIES <br />agree as follows: <br />1. Incorporation of Recitals and Related Agreements. The <br />foregoing Recitals, and each of them, and the related agreements <br />referred to in Recitals "B" and "C" are hereby incorporated into <br />this Agreement as though set forth in full. <br />2. COLTON's Payments to SAWPA. Pursuant to all of the terms <br />and conditions of this Agreement, COLTON hereby agrees to pay SAWPA <br />up to $190,000.00 for the purpose of paying its share of the costs <br />of planning and designing the demonstration -scale regional system <br />described in Appendix J of that certain two -volume study entitled <br />"Facilities Plan for Regional Tertiary Treatment System for San <br />Bernardino and Colton" dated December 1988, a true, correct and <br />complete copy of which is attached hereto as Exhibit "A" and made a <br />part hereof, and for paying its share of leases or purchase options <br />for land and rights of way acquired by SAWPA for the demonstration - <br />scale regional system and appurtenant facilities. The PARTIES <br />agree that the payments shall be advanced to SAWPA only as needed to <br />defray incurred costs and expenses. It is understood by the PARTIES <br />that payments shall be made for the project by COLTON and SAN <br />BERNARDINO on a pro rata basis as follows: SAN BERNARDINO shall <br />contribute 75$, and COLTON shall contribute 25%. COLTON agrees to <br />3 <br />