Please fill out property description and contact information on reverse side.

DWA DISCLOSURE AND MEMBER AGREEMENT

The Dufort Water Association, Inc. (DWA) is an Idaho non-profit corporation that owns the water facility (pipes, reservoir, wells, water rights, and distribution system) at The Crossing, a subdivision in Bonner County, Idaho, recorded in an official plat in Book 8 of Plats at Page 124 records of Bonner County, Idaho. DWA has an easement through The Crossing, granted in The Crossing’s Declaration, originally recorded in the records of Bonner County, Idaho as instrument number 721140 and subsequently amended in a restated Declaration, recorded as instrument number __________.

Lot Owners in The Crossing are required to join DWA and receive one (1) vote in the Association. The Crossing HOA, Inc. is also required to join DWA by virtue of its water connections, but it does not pay any water service fees. The DWA Board reserves the right to service additional properties in the area. In this regard, DWA has contractual obligations to provide water to the adjacent property, known as Willow Bay Marina, and to provide service to the real property east of Willow Bay Marina, presently in the ownership of Adam Shankman. In addition, DWA has agreed to provide free water service to the Sagle Fire District, for its firehouse located next to The Crossing.

The Association is a non-profit corporation with Articles of Incorporation filed with the Idaho Secretary of State’s office. The Association’s Articles, Bylaws and Rules and Regulations accompany this disclosure and are maintained in the DWA office. The DWA office is presently located at 212 North First Avenue, Sandpoint ID 83864. In the Association’s governing documents, Crossing Development, Inc., an Idaho corporation (CDI), is identified as the “Originating Member” of the Association. As such, CDI receives seven (7) votes for each unallocated water service connection on the system, of which there were, originally, a total of 138. The voting right granted CDI give it effective control of DWA until the individual users have more votes collectively than CDI, at which time CDI then loses its special voting status. By signing this agreement, you are acknowledging receipt of the foregoing governing documents. CDI constructed the entire water system at a cost of approximately One Million Dollars. The company holds a promissory note from DWA in the amount of $400,000.00 payable at 8% per annum. Installment payments are required to be made from each connection fee paid to the Association.

Water rates are established by the Association’s Board of Directors, composed of three individuals. Members are provided an opportunity to approve the rate setting through the budget process. The budget is approved by the Members, by a majority vote, at a duly called meeting pursuant to the Bylaws. The Board has authority to discontinue the water service of delinquent Members and to recover unpaid assessments through property liens. By signing this agreement, you are granting DWA lien rights on your property to enforcement payment of fees and fines.

The Association’s Rules are adopted by the Association’s Board of Directors and may be

changed at any time pursuant to a rulemaking procedure set forth in the Rules and Bylaws. DWA Members are entitled to be heard before Rules are adopted or amended. The Rules are designed to encourage water conservation and Members are requested to voluntarily comply with all conservation measures. By signing this agreement, you are agreeing to abide by the Rules and Regulations of DWA. ACKNOWLEDGED AND AGREED. _____________________________________ Print Name: ______________________________________________ Date: ___________________________________________________

_____________________________________ Print Name: ______________________________________________ Date: ___________________________________________________

Please disclosure statement on reverse side.

Legal Description of Property Requesting Service

Lot Owner Name(s): _____________________________________________________ Legal Description: ______________________________________________________ ____________________________________________________________________ Property Address (if assigned): ___________________________________________ City: Priest River County: Bonner State: ID 83856

Property Owner Contact: Name: ________________________________________________________________________

Mailing Address:_______________________________________________________________

E-Mail Address: _________________________________Cell Phone:____________________

Fax: _________________________________ Phone:_________________________________

Emergency Contact:________________________________Phone:_______________________ Member-Designee check if Owner is the Member Name: _______________________________________________________________________

Mailing Address:_______________________________________________________________

E-Mail Address: _________________________________Cell Phone:___________________

Fax: _________________________________ Phone:________________________________

Emergency Contact:________________________________Phone:______________________ Billing Contact and Address same as Owner; same as Member-Designee Name: ______________________________________________________________________

Mailing Address:______________________________________________________________

E-Mail Address: _________________________________Cell Phone:___________________

Fax: _________________________________ Phone:________________________________

Emergency Contact:________________________________Phone:______________________

SEWER CONNECTION AND SERVICE AGREEMENT

This Agreement is by and between THE CROSSING HOA, INC., an Idaho nonprofit corporation

(Association) and __________________________________________________________ (Lot Owner)

and shall be effective upon execution.

RECITAL

A. Association owns, operates and maintains a sanitary sewage facility for certain Lots in THE CROSSING, as described on an official plat, recorded as instrument number 721139, in Book 8 of Plats at page 124, records of Bonner County, Idaho.

B. Lot Owner owns real property in said plat, to wit: Block ___, Lot ___ (Lot).

C. Lot Owner desires to utilize said sewage facilities and Association desires to regulated such use; now, therefore,

FOR VALUABLE CONSIDERATION, Association and Lot Owner hereby enter into the following

AGREEMENT

1. Right of Connection. Lot Owner shall have the right to connect to the sewer service lines as such lines are terminated at each lot.

2. Use Limitation. Lot Owner shall be limited to one domestic service (sewer) connection. Lot Owner shall not connect any additional structures or vehicles, permanent or temporary into Association's system without the express, written consent of the Association.

3. Association Duties and Responsibilities. The Association shall provide a facilities and wastewater service adequate for the safe and sanitary collection, treatment and disposal of domestic sewage from Lot Owner’s Lot. The Association shall maintain its facilities in good order and repair so that reasonably satisfactory service may be provided to the Lot Owner’s property.

4. System Expenses. The expenses of the sewer system, including reserves for capital improvements, shall be the obligation of system users and shall not be a general expense of the Association. The Association, or its assignee, shall be assessed for its proportional use of the system for Association-owned facilities.

5. Fees and Assessments. The Association shall establish and collect fees and assessments for sewer service. Lot Owner shall pay the fees and assessments set forth in the schedule attached hereto as Exhibit A, and as such schedule is amended from time to time.

6. Lot Owner Maintenance Responsibility. The Lot Owner shall be responsible for all maintenance, repair and replacement of service connections, septic tanks, pumps, and electrical components installed on Lot Owner’s property. All repairs and/or modifications shall be inspected by the License Operator before incorporation into the system. The Association has the authority, at the Lot Owner's expense, to repair and maintain the Lot Owner's septic tank and effluent pump system if the Association determines, at its sole discretion, that such facilities are inadequate or not properly maintained. The Association shall provide Lot Owner with reasonable notice and an opportunity to cure before exercising its right under this provision.

7. Type of Service Connection. Association facilities are designed for screened septic tank effluent only. Lot Owner connections shall be either gravity or pumped septic tank effluent only.

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8. Compliance with Specifications. Lot Owner shall construct, at Lot Owner’s expense, the connections into the sewer lines in accordance with the construction criteria set forth in Exhibit B and as such criteria may be amended from time to time.

9. Special Circumstances. Lot Owner shall further comply with reasonable requirements imposed by the Licensed Operator even though such requirements may deviate from, or be in addition to the general construction criteria.

10. Work Plans and Specification. Lot Owner shall submit to the Licensed Operator engineered plans and specifications for the construction of a sanitary sewer line of adequate size to connect to the sewer mains. Such plans and specifications are subject to approval of Association through the Licensed Operator. The sewer lines will be constructed in accordance with (a) the standards of, and subject to, receipt of a permit from the Board of Health of the State of Idaho, or its duly authorized representative; (b) a plumbing permit for the sewer service line by the Idaho Plumbing Bureau and a tank-only permit from the Panhandle Health District; and (c) any applicable permits required from any other governmental agency. Obtaining the permit shall be the responsibility of Lot Owner.

11. Cross Connection Control. All new sewer connections shall be made in compliance with the cross connection control program and subject to review by certified cross connection control specialists. The Lot Owner agrees to eliminate, before the initiation of service, all past or present cross-connections in the Lot Owner's system which could lead to a violation of the cross connection control protocol as set forth by the State of Idaho and administered by the Idaho Department of Environmental Quality (IDEQ).

12. Inspection. Lot Owner shall not backfill the trench containing the sewer lines and connections, or connect to the sewer system, until authorized by the Licensed Operator after inspection.

13. Scheduling of Inspection/Hook-on. Lot Owner shall schedule inspections and hook-on with the Licensed Operator. Hook-on should occur between March 1st and October 31st.

14. Interruptions or Delays in Service. Association shall use all reasonable diligence in providing a constant and uninterrupted supply of sewer service to Lot Owner. However, Association reserves the right to temporarily interrupt or reduce the delivery of service under this Agreement when Association determines, in its sole discretion, that such interruption or reduction is necessary.

15. Notice of Disruption. Except in emergencies, Association shall give reasonable notice to Lot Owner of any interruption or reduction in service, stating the reason for, and probable duration of, such interruption or reduction.

16. Septic Tank Pumping. Septic tank maintenance is the sole responsibility of the Lot Owner, and the Association assumes no liability for proper maintenance. Septic tanks require periodic pumping because solids accumulate in the tank, and screens require annual cleaning. The Association reserves the right to pump the tank and clean the screens, at Lot Owner’s expense, if such action is required in the sole judgment of the Licensed Operator. The Lot Owner shall submit records of septic tank pumping and screen cleaning to the Association. Lot Owner shall be liable for any damage to Association’s wastewater facility arising from Lot Owner’s failure to properly maintain the septic tank.

17. Plumber or Representative. Lot Owner shall not hire or permit anyone other than a licensed plumber or the Licensed Operator (or its qualified agent) to perform maintenance or repair of Lot Owner's sewer system.

18. Access to Lot. Lot Owner expressly grants a license to Association to enter the Lot for the purpose of inspection, repair and maintenance. Except in an emergency, the Association shall not enter a dwelling or other structure on the Lot unless reasonable notice has been provided to Lot Owner.

19. Liability. Lot Owners waives any and all claims and releases Association from liability for direct, consequential or special damages arising from system failure or interruption except upon a showing of the Association’s gross negligence in the maintenance and operation of the system.

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20. Force Majeure. Association assumes no responsibility for interruption of service due to strikes, labor disputes, acts of God, or other circumstances beyond its reasonable control, including, but not limited to liability for power failure.

21. Default. The parties hereto shall all remedies in law and equity, including the right of specific, in the enforcement of this agreement. In addition, the Association shall have the power to impose fines for violation of its rules and to enforce payment of fines, fees, charges and assessments through lien and foreclosure.

22. Rights and Remedies Cumulative. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity. A party’s failure to exercise a right, power, privilege, or remedy hereunder shall not preclude further exercise at a later date.

23. Notice. Notice to the Association shall be at its registered address in the records of the Idaho Secretary of State. Notice to the Lot Owner shall be its mailing address of record with the Association. Notice shall be by first class mail, postage prepaid, return receipt requested and/or facsimile transmission where the sender has documentation of the date, time, and confirmation of transmission.

24. Modification. This agreement may be modified or revoked by written agreement of the parties.

25. Successors and Assigns. This agreement shall bind and inure to the benefit of each party’s respective heirs, successors, agents, trustees, conservators and assign.

26. Facsimile Transmission. Facsimile transmission of any signed original document and retransmission of same shall constitute delivery of the original document.

27. Counterparts. This agreement may be executed in counterparts. Executing an agreement in counterparts shall mean the signature on identical copies of the same agreement, amendment or addendum. Each identical copy of an agreement signed in counterparts is deemed to be an original and all identical copies shall together constitute one and the same instrument.

28. Attorney’s Fees. If either party initiates an arbitration or judicial action including an appeal, as to the interpretation or enforcement of this agreement, including remedies upon default, the prevailing party shall be entitled to costs and reasonable attorney fees.

29. Entire Agreement. This agreement contains the entire agreement of the parties respecting the matters herein and supersedes all prior written and oral agreements between the parties respecting such matters.

30. Time is of the Essence. Time is of the essence in this agreement.

31. Captions and Titles. The captions and titles are for convenience and reference only. They shall not define, limit or construe the contents of any provision.

32. Gender Designation. Unless otherwise suggested by the context of the provision, the masculine gender shall include the feminine and vice versa.

33. Plural and Singular Words. Words used in singular include the plural and vice versa.

34. Governing Law and Severability. This agreement is established under, and shall be governed by the laws of the state of Idaho. Any provision prohibited by law or unenforceable shall not affect the remaining provisions of the agreement.

THIS AGREEMENT SHALL BE EXECUTED ON THE ATTACHED SIGNATURE PAGE CONSECUTIVELY NUMBERED.

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SIGNATURE PAGE Dated this ____ day of ____________________, 20___ THE CROSSING HOA, INC. ___________________________ By: ________________________ Its: _______________________

____________________________ (By:) ________________________ (Its:) _______________________

____________________________ (By:) ________________________ (Its:) _______________________

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EXHIBIT A

SCHEDULE OF RATES AND CHARGES The Crossing HOA Sewer Service

Connection Fee: All sewer hookup fees are included with the

purchase of the property. Inspections by Licensed Operator $100.00 / inspection Standby Fee: $30.00 per month (limited to 12 months following purchase; thereafter Basic Fee is applied) Member Transfer Fee $100.00 Service Reconnection Fee $250.00 Residential Sewer Usage $48.00 / month Terms: • Usage fees are billed monthly and are payable within 30 days. • A late charge of 10% of the amount due shall be charged for any payments that are not

received with 30 days of the due date. • Interest on past due is 1.5% per month.

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EXHIBIT B

CONSTRUCTION CRITERIA FOR INDIVIDUAL SEPTIC SYSTEM TO SERVE SINGLE-FAMILY LOTS. SEPTIC TANK REQUIREMENT: Lot Owner engineered plans and specifications are to be submitted to Panhandle Health District for a tank-only permit. Sizing and type of septic tank will be included with the documentation requesting the tank-only permit. PUMP AND SCREENING REQUIREMENTS: See attached ORENCO SYSTEMS, INC. DRAWING S2.1 for typical pump and screening requirements. Final HOA approval is required prior to installation and is to be included in the Lot Owner supplied engineered plans and specifications. Also attached for engineering purposes is the ORENCO SYSTEMS, INC. Effluent pumps ½ Hp to 1 Hp Single Phase, 60 HZ 115/230 Volt PC#1 pump curves chart. Each lot will require a two compartment concrete septic tank with a "Biotube" effluent pumping system. Recommended components are as follows: Septic Tank:

• Double compartment septic tank with a minimum liquid depth of 48" and minimum inside height of 57". Required access diameter for "Biotube" installation is 20" minimum.

• A minimum liquid capacity of 1000 gal. for homes up to 4 bedrooms, 1500 gal. for homes up to 6 bedrooms.

• Tanks must be supplied by a Panhandle Health District (PHD) approved supplier, and installed by a PHD approved installer.

Effluent Pumping System:

• 24" dia. PVC access riser, Orenco model RR2424 • 24" fiberglass lid, Orenco model FL24-4B. • 24" dia. ABS riser/tank adapter, Orenco model FTA. • "Biotube" pump vault, Orenco model PVU57- 1819. • 1" discharge plumbing assembly, Orenco model HV100BPR. • 1/2hp, 115V, 60Hz, effluent pump capable of providing a flow rate of 5 gpm against a head of 200

feet. Orenco model P100511. • Epoxy encapsulated splice. • Mechanical float switch assembly, Orenco model MF2. • P Simplex control panel, 115V, Orenco model A1.

Septic tank permits are required from Panhandle Health District, and inspection is required by HOA Personnel. All provisions of the HOA Sewer Service connection and Service agreement are included with the above requirements by reference. For additional information or to schedule inspection contact the Licensed Operator: Water Systems Management, at (208) 265-4270.