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each and associated treatment facilities (the "Well Sites"), commencing as to all Well Sites upon <br />the date that SANTA ANA notifies IRWD in writing that IRWD may have possession of the <br />Well Sites, not later than the first day of the first calendar month that begins after the effective <br />date of this Agreement specified in Section 4 hereof (the "Lease Commencement Date'). Exhibit <br />"A" is incorporated herein by this reference. IRWD shall pay SANTA ANA an aggregate lease <br />payment of $25,000 per month for the Well Sites, payable monthly in advance, connnencing <br />upon the Lease Commencement Date, until the date specified in Section 2. During the terms of <br />the leases and thereafter, IRWD shall be entitled to use the Well Sites for colored water <br />production and treatment, including colored water production necessary to satisfy the non - <br />colored water production matching requirements established by the Third Amendment. <br />Section 2. The lease payment of $25,000.00 per month shall be paid by IRWD to <br />SANTA ANA for the Well Sites for the first ten (10) years following the Lease Commencement <br />Date. Beginning on the eleventh anniversary of the Lease Commencement Date (July 1, 2009), <br />the monthly lease payment shall be recalculated annually based upon the following formula: <br />Aggregate monthly <br />lease payment for all <br />Well Sites, including <br />Additional Sites = <br />Section 3. <br />Production of non - <br />colored water from <br />Project for previous <br />fiscal year X <br />between 20,000 and <br />28,OOOAF <br />8,000 AF <br />% change in the <br />effective MWD rate <br />for replenishment <br />water or the X $125,000.00 <br />equivalent thereof 12 <br />IRWD agrees that the wells on the Well Sites shall be designed to <br />optimize production from the colored water zones, but the parties acknowledge that there can be <br />3 <br />