1998-141-RES WHEREAS, CITY COUNCIL DID HERETOFORE ONTHE 8TH DAY OF JUNE eretofore, on the 8th day of June,

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payments thereon in any fiscal year would be covered by Item 12 hereinbelow; provided that any unscheduled lump sum payments on such debt would be treated as under this Item and Item 2 of "Calculations" . 11. Spare Parts: fair market value of spare parts, kept on hand in the warehouse (discussed in Item 3 above), that are actually used to service or repair any part of the Pipeline related to the delivery of Raw Water hereunder. 12. Pipeline: reasonable expenses directly incurred by the City in operating and maintaining the Pipeline (other than as discussed in Item 11 hereinabove). 13. Capital Expenditures Without the Issuance of Debt: Any capital expenditures by the City (other than as financed by debt as contemplated by Item 10 herein above) directly incurred to repair or improve the Water Supply Facilities. When Panda's pro rata share of a capital expenditure exceeds fifty percent (50%) of Panda's annual cost of Raw Water for the previous year ($25,000 for the first year of operations), such pro rata share will be amortized over a period often to twenty years as agreed to by the Parties (as such pro rata share is calculated pursuant to this Item and Item 4 in "Calculations" below). The Parties recognize that, in the event any such capital expenditure were to be incurred by the City in regard to the Pipeline, the capital expenditures would be covered by Item 12 herein, subject to the provisions of the immediately preceding sentence. 14. Gross Receipts Fee: Three percent (3%) of the estimated gross receipts to be received by the City during any fiscal year of the City in regard to Raw Water. 15. Electricity Cost for Pipeline: Reasonable expenses for electricity directly related to the City's delivery of Raw Water in connection with the operation of the Pipeline. OPERATIONS FEE 1. Ten percent (10%) of the BDA (calculated hereby) charged by the City to Panda during any applicable fiscal year of the City. CALCULATIONS 1. In determining the amounts due under Section 7.0 I of the Agreement, during any fiscal year of the City, under Items 1-9 and 14 of "Base Delivery Amount" above, each such amount due shall be Panda's pro rata share (calculated by dividing Panda's actual amount of Raw Water used and derived from the Source during such fiscal year by the sum of all Raw Water and treated water sold by the City and derived from the Source during such fiscal year) of the respective Initial Numbers determined pursuant to Items 1-9 and 14 of "Base Delivery Amount" above in regard to such fiscal year. 2. In determining the amounts due under Section 7.01 of the Agreement, during any fiscal year of the City, under Item 10 of "Base Delivery Amount" above, each such amount due shall be Panda's pro rata share (calculated by dividing Panda's actual amount of Raw Water used and derived from the Source and transported through the applicable portion of the Water Supply Facilities during such fiscal year by all Raw Water and treated water sold by the City and derived from the Source and transported through the applicable portion of the Water Supply Facilities during such fiscal year) of the applicable Initial Number reflecting the actual scheduled payments on such debt during such fiscal year as determined pursuant to Item 10 of "Base Delivery Amount" above. In the event of any unscheduled lump sum payments on such debt are paid by the City, Panda's pro rata portion thereof shall be amortized over a period of time agreed to by the Parties (but in no event less than 10 years). 3. In determining the amounts due under Section 7.01 of the Agreement and Items 11, 12, and 15 of "Base Delivery Amount" above, during any fiscal year of the City, so long as Panda is the sole user of the Pipeline, all of such amounts due shall be allocated to Panda; provided, however, that in the event other customers also utilize the Pipeline, then each such amount due shall be Panda's pro rata share (calculated