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f O on Exhibit C attached hereto. In the event that the City constructs and operates the Hansen Line, the City shall thereafter provide Sewage Services to the Assignment Property via the Hansen Line, without interruption of Sewage Services in connection with such transition. The Hansen Line shall be constructed by the City, subject to the funding obligations of K&L and Safeway set forth below. Upon completion satisfactory to the City of the Corral Hollow Line, but prior to acceptance thereof, K&L and Safeway shall deliver to the City an easement, license agreement or similar interest from the County of San Joaquin, on terms reasonably acceptable to the City, which shall permit construction of the Hansen Line as described herein and acknowledge and agree to the subsequent ownership, control, maintenance and repair of the Hansen Line by the City, notwithstanding that. the Hansen Line shall be installed in the County ' s right of way. (b) Costs Allocation. The actual cost to construct the Hansen Line and those portions cf such cost which are properly allocable to: (i) the owners of the properties subject to the I-205 Corridor Specific Plan dated February, 1991, which are located to the west of Corral Hollow Road (the 11I-205 Project") , (ii) K&L, and (iii) Safeway, shall be reasonably determined upon completion of the Hansen Line by the City' s Director of Public Works after consultation with the parties hereto. (c) K&L and Safeway Contribution. K&L shall contribute the K&L Percentage and Safeway shall contribute the Safeway Percentage of the K&L/Safeway Share (as defined below) of the fees, charges and costs to construct the Hansen Line. City fees and charges will be paid as though the Hansen Lane was located within the City. K&L and Safeway ' s contribution shall be effected by delivery of letters of credit as described in and in accordance with the terms of Paragraph 4 (d) below. The K&L/Safeway Share of all fees, charges and costs applicable to the Hansen Line shall be Four Million Dollars ($4 , 000, 000) less a credit (the "Credit") in an amount equal to: (i) the actual costs incurred by K&L and Safeway to design and construct that portion of the Hansen Line to be located in Schulte Road, which portion shall be installed by K&L and Safeway, provided that the credit for such costs shall not exceed Nine Hundred Thousand Dollars ($900, 000) , plus (ii) Four Hundred Thousand Dollars ($400, 000) , which sum K&L and Safeway shall pay to the City within five (5) business days of the Effective Date to fund engineering and design work for the Hansen Line. The amount of the Credit for the portion of the Hansen Line to be installed in Schulte Road shall be reasonably determined by the City ' s Director of Public Works after completion thereof and in consultation with the parties. After the City has collected. the necessary funds to construct the Hansen Line from K&L, Safeway and the owners of the I-205 Project, the City shall thereafter withdraw such funds to sb\mhw\wateraup.agr 7 3 }