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each and associated treatment facilities (the "Well Sites"), commencing as to all Well Sites upon the date that SANTA ANA notifies IRWD in writing that IRWD may have possession of the Well Sites, not later than the first day of the first calendar month that begins after the effective date of this Agreement specified in Section 4 hereof (the "Lease Commencement Date"). Exhibit "A" is incorporated herein by this reference. IRWD shall pay SANTA ANA an aggregate lease payment of $25,000 per month for the Well Sites, payable monthly in advance, commencing upon the Lease Commencement Date, until the date specified in Section 2. During the terms of the leases and thereafter, IRWD shall be entitled to use the Well Sites for colored water production and treatment, including colored water production necessary to satisfy the non - colored water production matching requirements established by the Third Amendment. Section 2. The lease payment of $25,000.00 per month shall be paid by IRWD to SANTA ANA for the Well Sites for the first ten (10) years following the Lease Commencement Date. Beginning on the eleventh anniversary of the Lease Commencement Date (July 1, 2009), the monthly lease payment shall be recalculated annually based upon the following formula: Aggregate monthly lease payment for all Well Sites, including Additional Sites — Section 3. Production of non - colored water from Project for previous fiscal year X between 20,000 and 28.000AF 8,000 AF % change in the effective MWD rate for replenishment water or the X $125,000.00 equivalent thereof 12 IRWD agrees that the wells on the Well Sites shall be designed to optimize production from the colored water zones, but the parties acknowledge that there can be 3