Water Service for Future Development Sample Clauses

Water Service for Future Development. Buyer and Seller agree that the Parties will both benefit from a Service Agreement wherein Buyer provides Water Service to Seller's Future Development and the Parties agree to use best efforts to complete a service agreement (the “Service Agreement”) prior to Closing. Both Buyer's and Seller's obligations to close under this Agreement are contingent on that Party's approval of the terms and conditions of the Service Agreement, in the Party's sole and absolute discretion. Buyer’s commitment to provide water to the Development as it is to be defined in the Service Agreement may be limited to the amount of transferable historical consumptive use from the Water Rights as determined by the presiding water court following submission by Buyer of a Petition for a change to municipal use. The Parties agree that such a petition will not be filed any earlier than three (3) years from the Closing date. After three (3) years, Buyer agrees to prepare and submit such a petition within six (6) months from the date of a written request from Seller to Buyer indicating that Seller is prepared to commence development of Seller's Future Development, and Buyer agrees to diligently pursue the prosecution of the petition thereafter, at Buyer's expense. Water Service for municipal water supplies to the Future Development will be at a rate of 3.3 SFE Taps per One Acre Foot of water from the Water Rights transferred to Buyer pursuant to this Agreement. Buyer’s long-term plans include efforts to acquire additional water rights within this area; therefore, Buyer and Seller will enter into a Covenant Not to Compete Agreement (the “Non-Compete”) as of the Closing Date, which could augment Buyer's ability to provide water service to the Future Development. The terms and conditions of the Non-Compete shall be agreed upon by the Parties in each Party’s sole and absolute discretion prior to and as a condition to Closing. However, Buyer’s obligations hereunder are limited to providing water to Seller as may be produced from the Water Rights with competent water resource management and subject to the judicial process to change the type or place of use of a water right, with a goal of 3,000 SFE Taps. Buyer is not guaranteeing the amount of water that may be available in the future from the Water Rights, but is covenanting to use competent resource management of the Water Rights to maximize their quality and value and increase the likelihood of successfully converting those rights to municipal ...
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