2012-02-28_REVISION - M1980244 (79)

Home Browse Search

physical supply of water. In addition to the adjusted annual base rate, a premium may be paid which shall be determined on the basis of the annual average Price of Gold, per ounce, as defined below, for the immediately preceding calendar year. When the annual average Price of Gold for the preceding year is in the range set forth in the Left hand column of the table below, a premium shall be paid, in addition to the base rate, for each acre foot of water leased in the following year: Price of Gold (U.S.$) Adjustment 0- 1,200.00 0% 1,200.01 - 1,399.99 1.5% 1,400.00 - 1,599.99 3.5% 1,600.00 - 1,799.99 5.5% 1,800.00 - 1,999.99 6.5% 2,00.00 - 2,199.99 8.5% 2,200.00 and above 11.5% By way of example, in year three of this Agreement, the base rate for the lease of water will be $749.86 (i.e. $700 x 1.035 x 1.035). If the annual average Price of Gold as defined herein for year two of the Agreement is between $1200.01 and $1,399.99, the actual rate paid per acre foot in year three will be $761.11 (i.e. $749.86 x 1.015). The term "Price of Gold" shall mean the average of the daily London gold Quotations (aka "P.M. Fix ") as published in The Wall Street Journal and at www.kitco.com for one troy ounce of refined gold stated in United States dollars. If the London Final Gold Quotation should cease to be published, the Parties shall agree upon a replacement quotation that most nearly approximates the London Final Gold Quotation to be used as a substitute. The water rate shall be adjusted annually as of the meter reading dates immediately after January 1 of each calendar year. 3C. Operation and Maintenance. CC &V shall pay all operation and maintenance costs during the term of this agreement for the infrastructure identified in Paragraph 3A above, including, metering and the reporting thereof, repair and utilities necessary for the delivery of the Cripple Creek Water, if any. 3D. Take or Pay. CC &V shall pay for 28 acre feet of the Cripple Creek Water annually whether or not it takes any water under this Agreement, and shall pay for the entirety of water leased under the Victor Agreement, as amended (i.e. 172 acre feet), annually whether or not it takes any water under that agreement. This combined 200 acre feet shall be considered the base purchase amount. CC &V shall make payments for the base purchase amount, i.e. 200 acre feet, in 12 equal monthly installments, regardless of the schedule for delivery. Subject to Cripple Creek having available water to lease under this Agreement, CC &V shall have the right to request Cripple Creek Water in addition to the base purchase amount by placing an additional water order with Cripple Creek. CC &V shall be deemed to have purchased the amount of Cripple Creek Water ordered on a take -or -pay basis, unless Cripple Creek is unable to deliver the water ordered. In the event Cripple Creek is unable to deliver in whole or in part the base purchase amount under this Agreement and /or the Victor Agreement, as amended, and/or additional amounts of Cripple Creek Water ordered by CC &V due to physical, legal, or administrative limitations, CC &V shall not be responsible for payment for that portion not delivered. Any payments made under this Agreement, for water ordered in CY 2010, shall be prorated based on the actual date on which the parties sign the Agreement. 3