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2 <br />annual base rate, a premium may be paid which shall be detennined on the basis of the annual <br />average Price of Gold, per ounce, as defined below, for the immediately preceding calendar yea <br />When the annual average Price of Gold for the preceding year is in the range set forth in the left <br />hand column of the table below, a premium shall be paid, in addition to the base rate, for each <br />acre foot of water leased in the following year: <br />Price of Gold (U.S.$) Adjustment <br />0- 1,200.00 0% <br />1,200.01 - 1,399.99 1.5% <br />1,400.00 - 1,599.99 3.5% <br />1,600.00- 1,799.99 5.5% <br />1,800.00 - 1,999.99 6.5% <br />2,00.00 - 2,199.99 8 <br />2,200.00 and above 11.5% <br />By way of example, in year three of this amendment, the base rate for the delivery of <br />water will be $749.86 (i.e. $700 x 1.035 x 1.035). if the annual average Price of Gold as defined <br />herein for year two of the amendment is between $1200.01 and $1,399.99, the actual rate paid <br />per acre foot in year three will be $761.11 (i.e. $749.86 x 1.015). The term "Price of Gold" shall <br />mean the average of the daily London gold Quotations (aka "P.M. Fix ") as published in The Wall <br />Street Journal and at www.kitco.com for one troy ounce of refined gold stated in United States <br />dollars. If the London Final Gold Quotation should cease to be published, the Parties shall agree <br />upon a replacement quotation that most nearly approximates the London Final Gold Quotation to <br />be used as a substitute. The water rate shall be adjusted annually as of the meter reading dates <br />immediately after January 1 of each calendar year. In no instance, during the term of this <br />agreement, shall CC &V be required to pay more than $1200 per acre feet for water leased from <br />the City. <br />2. Take or Pay. CC &V shall pay for 172 acre feet of water annually whether or not it <br />takes any water under this amendment. In the event the City is unable to deliver in whole or in <br />part the purchase amount under this Take or Pay provisions due to physical, legal, or <br />administrative limitations, CC &V shall not be responsible for payment for that portion not <br />delivered. <br />3. Points of Delivery. The water to be delivered to CC &V by virtue of the <br />agreement between Victor and the City of Cripple Creek will be primarily from Cripple Creek's <br />municipal water transmission line from Reservoir No. 2 at or near the intersection of such <br />transmission line with the West Fork of West Beaver Creek, however, CC &V agrees to accept <br />water delivered at an alternate point of delivery to the extent practicable, including but not <br />limited to Gillette Well No. 5, as may be necessary for the maximum beneficial use of Cripple <br />Creek's water system and water rights, upon reasonable advance notice by Cripple Creek. Any <br />decision to deliver water out of Gillette Well No. 5 must be approved, in advance, by CC &V, <br />which approval will not be unreasonably withheld. <br />4. Bison Reservoir. In order to allow CC &V to better manage and plan its water <br />needs and usage, the parties agree that Bison Reservoir may be used by CC &V for the storage <br />and release of water, in coordination with the City. For the purposes of this agreement, "storage <br />