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delivery and the date and time such delivery should begin and end. Once released by Pueblo <br /> Water, it is the Lessee's responsibility to ensure that the state water officials cause the water <br /> released to be delivered to the Lessee's place of use. Pueblo Water will cooperate with Lessee <br /> and the state water officials to provide them with the necessary information concerning the <br /> source, location, rate,and duration of the release of the leased water. <br /> 10. Charge. In consideration of the water leased under this Agreement Lessee agrees to pay <br /> Pueblo Water a charge of$736.40 per acre-foot of water for the quantities of water identified in <br /> paragraph 2 above. The parties agree that the water leased hereunder is on a"take or pay"basis. <br /> Accordingly, Lessee must pay the charge for all leased water,whether or not said quantities of <br /> water are actually taken by Lessee or are required for use by Lessee. Likewise, Pueblo Water <br /> agrees to make the water available for delivery throughout the term of this Agreement subject to <br /> paragraphs 13 through 16 below. Except as provided in paragraph 11.5,the failure of Lessee to <br /> take delivery of the full quantity of water contracted for and paid for in any given Contract Year <br /> does not entitle Lessee to a refund of any sums paid or to receive any portion of such unused <br /> water in a subsequent Contract Year. <br /> 11. Payments. <br /> 11.1. On the Effective Date of this Agreement, Lessee must pay to Pueblo Water the First <br /> Contract Year payment of$7,364.00. <br /> 11.2. Upon the Effective Date of this Agreement, Lessee will also pay to Pueblo Water a <br /> non-refundable fee of$1,000 in consideration of legal and administrative costs incurred by <br /> Pueblo Water for this Agreement. <br /> 11.3. Additional payments in an amount equal to the Contract Year quantity of water <br /> described in paragraph 2 multiplied by the applicable per acre-foot charge as determined <br /> under paragraphs 10 and 12 are due from Lessee to Pueblo Water on the first day of the <br /> second Contract Year and on the first day of each Contract Year thereafter for the term of <br /> this Agreement. <br /> 11.4. Delinquent balances by either party will be subject to a late payment charge of <br /> 1.5%per month on the unpaid balance. No water will be delivered under this Agreement <br /> if Lessee has an unpaid balance. <br /> 11.5 If Pueblo Water does not make available for delivery the full quantity of water as <br /> provided in paragraph 2 during any Contract Year pursuant to paragraphs 13 through 16, <br /> Pueblo Water will notify Lessee of the quantity of water available for the Contract Year. <br /> Said notice will include reimbursement to Lessee of the amount paid by Lessee, per acre- <br /> foot,for the difference between the quantity of water provided in paragraph 2 and the <br /> quantity of water specified as available for delivery in said notice. <br /> 12. Escalation. The charge for water for the second and all subsequent Contract Years of this <br /> Agreement will be annually adjusted based upon the percentage increase, if any,over the previous <br /> calendar year in Pueblo Water's water rates for its general customers for treated water. For <br /> Page 3 of 7 <br />