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discretion, to make its delivery of any Reclaimed Wastewater under this Agreement at a Delivery <br />Point other than Hite, and if delivery at such alternative Delivery Point(s) results in reduced transit <br />loss, Aurora shall be entitled to retain such avoided transit loss with no credit to Lessee in water, <br />money or otherwise. Aurora shall maintain and provide to Lessee a monthly accounting and report <br />of daily deliveries at the Delivery Point(s). If Aurora elects to deliver some or all of the Reclaimed <br />Wastewater at alternative Delivery Point(s), then the foregoing reports shall include the calculated <br />amount of avoided transit loss and the amount of water physically delivered at such alternative <br />Delivery Point(s). For purposes of calculating any such avoided transit loss, the Parties hereby <br />agree that the volume of Reclaimed Wastewater required to be delivered by Aurora in accordance <br />with the Delivery Schedule or Modified Schedule shall be discounted by an amount equal to one- <br />half of one percent (0.5%) of such volume during the April through September irrigation season, <br />or one-fourth of one percent (0.25%) of such volume during the October through March non - <br />irrigation season, for each river mile in distance between Hite and such alternative Delivery <br />Point(s) (such distance calculated to the nearest one-tenth of a mile), or by such other amount as <br />determined by the Division Engineer for Water Division No. 1 (such office or its replacement the <br />"Division Engineer") or as specified in an applicable statute or decree from a court of applicable <br />jurisdiction. The product of this calculation shall represent the amount of avoided transit loss in <br />acre-feet, which Aurora shall be entitled to retain. <br />4. Source and Quality of Reclaimed Wastewater. The Reclaimed Wastewater to be provided <br />by Aurora under this Agreement shall, at Aurora's discretion, consist of Aurora's reusable <br />municipal return flows to the South Platte River, any fully consumable portion of changed <br />irrigation water rights owned by, or available to Aurora, fully consumable water diverted pursuant <br />to decrees entered in 03CW414, 03CW415 and 06CW104, and any other legal source of <br />Reclaimed Wastewater available to Aurora. Under no circumstances shall this Agreement be <br />interpreted to mean that Aurora must supply potable water should the sources set forth in this <br />paragraph be unavailable. Aurora does not warrant or guaranty any water quality standards with <br />respect to the Reclaimed Wastewater to be delivered as provided for under this Agreement and <br />Lessee hereby waives any such warranty or guaranty. <br />5. Use of Reclaimed Wastewater. Lessee shall have the right to use and reuse to extinction <br />the Reclaimed Wastewater delivered under this Agreement for water supply purposes, including <br />replacement and exchange purposes in connection with any substitute water supply plan approved <br />by the Colorado State Engineer's Office, and augmentation and exchange purposes in accordance <br />with any augmentation plan decreed by the Colorado Water Court; provided that such use is <br />consistent with the terms of this Agreement and all applicable laws, rules and regulations. <br />6. Water Rights Accounting. Lessee will be solely responsible for any and all reporting and <br />accounting required by the Colorado State Engineer, the Division Engineer for Water Division 1, <br />the Water Commissioner for Water Commissioner District 2, or any other lawful authority after <br />Aurora makes its delivery of the Reclaimed Wastewater as provided for under this Agreement. <br />This responsibility includes, but is not limited to, Lessee's withdrawal of the Reclaimed <br />Wastewater from the South Platte River (if any) and Lessee's use of the Reclaimed Wastewater. <br />In addition to the report requirements set forth in Section 3(b) above, Aurora will provide any and <br />all reporting and accounting required by the Colorado State Engineer, the Division 1 Engineer, or <br />any other lawful authority concerning proof of the reusability of the Reclaimed Wastewater and <br />conveyance of the Reclaimed Wastewater to the Delivery Point(s). <br />009411\0310\1749535.2 <br />3 <br />