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2. Purpose. The water delivered pursuant to this Lease may be used by Lessee only <br />to replace depletions pursuant to Lessee's Replacement Plan. District will cooperate with i-essee <br />to identify the sources of the District's Consumable Nater delivered pursuant to this Lcase. <br />Lessee shall be responsible for drafting any such plan, obtaining necessary approvals for any <br />such plan, administration and accounting for any such plan, and for all costs associated with such <br />plan. <br />3. Rental. In consideration of the water to be delivered under this Lease, Lessee <br />shall pay District the following: <br />(a) a nonrefundable original application fee of $� due and payable upon <br />execution of this Lease: <br />(b) annual lease payments of4Mper acre foot per year; IMas a per acre <br />foot water fee and per acre foot for annual storage, maintenance and <br />administration fee: and <br />(c) SIM per acre foot for each additional acre-foot over and above the 7 a.f, <br />payment for which is due on each annual anniversary date. <br />Lessee shall pay the District the first total annual lease payment in the amount of <br />Sl� upon execution of this Lease. Payment for any additional water over and <br />above the 7 a.f., up to 5 additional acre-feet, shall be paid at the end of each lease year. <br />Lessee shall pay District all subsequent total annual lease payments by the first day of each <br />subsequent lease year, together with any amount due for up to 5 acre-feet additional water <br />utilized during the previous lease year as set forth in paragraph 3. (c) alxive. <br />4. Term. This Lease shall be effective for five (5) calendar years commencing <br />September 1, 2014 and continuing through August 31, 2019. The District shall not be <br />responsible for delivering water to replace any depletions from Lessee's Replacement Plan, <br />including any post -plan depletions after the term of this Lease. Following the initial lease year, <br />Lessee shall have the right to terminate the lease upon thirty days written notice to Lessor. <br />5. Escalation. Beginning one year after the execution date of this lease and <br />continuing for each Year throughout the remaining term of this Agreement, the charge for water <br />delivered by the District to Lessee shall be adjusted each contract year based upon the percentage <br />increase, if any, of the District's water rates for its Standard Augmentation customers over the <br />previous year's Standard Augmentation water rates. The District will provide the Lessee at least <br />30 days written notice of any rate increase pursuant to this paragraph before such increase shall <br />become effective. <br />Long-term Lease 31610 <br />10 <br />Valco Canon City East Pit <br />Page 2 of 5 <br />