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shall be allocated forty percent (40 of the Disposal Capacity Rights and, <br /> if any, the Recycled Water Rights and Recycling credits (and corresponding <br /> Disposal Capacity Rights) accruing from said Project. If District's Clean <br /> Water Revival Project is operated as a Recycling project as provided in <br /> Paragraph 4(d), below, District shall have a "first right of refusal" to acquire <br /> all or any portion of Recycled Water Rights which City may propose to <br /> convey, lease, assign, license, permit or otherwise transfer (collectively, <br /> "transfer") outside of City's service area to a third party or parties for the right <br /> to use the recycled water corresponding to such Rights. Accordingly, City <br /> shall notify District in writing of its intention to transfer any such Recycled <br /> Water Rights not Tess than sixty (60) days prior to the proposed date of such <br /> transfer and District shall have the right and option within said sixty (60) day <br /> period to acquire all or any portion of said Recycled Water Rights on the <br /> same terms and conditions offered to the third party or at District's actual <br /> cost to process City's effluent, whichever is less. <br /> (iv) In the case of (iii), above, and after expiration of the time by which <br /> City must determine to participate in the expansion component of LAVWMA's <br /> Expansion Project, City may, subject to agreement of District, which <br /> agreement shall not unreasonably be withheld, acquire additional Disposal <br /> Capacity Rights and, if any, additional Recycled Water Rights and Recycling <br /> credits (and corresponding Disposal Capacity Rights) accruing from District's <br /> Clean Water Revival Project, whereupon, the parties shall meet and confer <br /> regarding the terms and conditions thereof. <br /> (v) In any instance where City initially may have determined not to <br /> participate in District's Clean Water Revival Project, City nevertheless may <br /> at any time prior to November 30, 2005, subsequently propose to participate <br /> in said Project, subject to agreement of District, which agreement shall not <br /> unreasonably be withheld, whereupon the parties shall meet and confer <br /> regarding the terms and conditions thereof. After November 30, 2005, <br /> acquisition by City of Disposal Rights, and, if any, Recycled Water Rights <br /> and Recycling credits (and corresponding Disposal Capacity Rights) shall be <br /> solely at the discretionary agreement of the parties. <br /> Agmt -10b 9 <br /> 8/27/97 <br />