WHITEHAWK RANCH MUTUAL WATER COMPANY

1. Each Home site, VACANT OR OTHERWISE, shall receive and shall be obligated to pay a minimum monthly standby fee of $64.08. Home sites 14-20 in Phase I, which are not connected to the sewer system, shall receive and shall be obligated to pay a minimum monthly standby fee of $21.46.

Active Members will be charged a basic water service fee of $40.30 Active Members will also be charged for water usage. Water usage fees will be based on the average monthly water use from the previous 12 months that ended in September. Water usage fees for 2009 are based on the average monthly water use from September of 2007 through September 2008. Water usage fees are currently $.008 per cubic foot. All active members share the expense of wastewater treatment equally, or currently $78.61 per month. Members will be mailed payment coupons based on their average monthly use.

Commercial Members fees are: Basic Water Service $40.30, Wastewater Fees $269.44 and Commercial Members will be billed at $.008 per cubic foot water usage fee.

Basic Service and Usage Fees may vary in future years.

The current published base fee for water and wastewater connection service is $1000 and $3500 respectively.

In 2006, in order to support new subdivision development in community, the Mutual Water Company substantially increased its water and wastewater treatment and disposal capacities. Due to the high cost of these expansion projects, required specifically to support the new subdivisions, all lots in these new subdivisions will be required to pay an incremental fee of $500 and $1500 over the published base fee.

As of November 1, 2006, all new Whitehawk Ranch subdivisions maps and their associated lots recorded with the Plumas County Recorders Office will be subject to these incremental fees.

Base Connection Fees may vary in future years.

2. The Board of Directors of the Whitehawk Ranch Mutual Water Company has established a policy that Will Serve Letters requested by the Plumas County Building Department will not be issued until the Architectural Review Committee (ARC) has approved the plans submitted to them. The ARC will notify the Mutual Water Company in writing when Will Serve Letters may be issued. Before the Will Serve Letter is submitted, the connection fees and the incremental fee, if appropriate, described in the above policy will be assessed to the property owner.

3. The Board of Directors of the Whitehawk Ranch Mutual Water Company has established a policy that all home sites must have a domestic water supply pressure reducer/regulator installed in the home site service line. The pressure reducer/regulator shall be installed to minimize the risk of possible high water pressure damage to plumbing fixtures in their homes and auxiliary systems such as irrigation systems and frostless hydrants/hose bibs connected to the domestic water service line. The water system at Whitehawk Ranch is a one-zone system with pressure varying according to elevation. Home sites in Phase I are exempt from this policy due to their elevation in the water system.

4. The Board of Directors of the Whitehawk Ranch Mutual Water Company has instituted a cross-connection control policy requiring auxiliary systems (landscape irrigation systems, etc.) install backflow prevention devices. The Mutual Water Company must approve all Backflow prevention devices. You may obtain a copy of this policy with specifications from the Mutual Water Company.

5. The Mutual Water Company upon two weeks notification by the property owner will install water meters. Please call the Mutual Water Company concerning meter installation.

6. Property owners are responsible all lines, valves, etc., beyond the discharge side of the meter. Members that requested and purchased meters larger than the standard ¾ inch and 1 inch meters are financially responsible for repair or replacement of their meters. All water consumption that registers on the roadside meter shall be subject to the current water rates.

7. The Mutual Water Company is the provider of wastewater treatment (sewage) for the project. Those domestic lots/units/dwellings connected to the wastewater treatment plant shall be billed for wastewater treatment, and said charges will be included with the water billing.

8. Home sites are required (at time of construction) to install a sewer cleanout at the property boundary, when connecting to the wastewater collection system.

9. Homeowners will refrain from dumping of possible toxic materials into the wastewater system. These materials include paint and petroleum based products (paint thinners, paint cleaners, stains), common kitchen greases and oils, sheet-rock compounds, and automotive products (oils).

10. Pursuant to the Mutual Water Company’s governing documents, all assessments are due and payable on the 15^th day of every month. Assessments may be paid early. An assessment is delinquent if payment in full is not postmarked by the 20^th day of the month in which it was due, i.e., January payment is due January 15^th and is delinquent if postmarked after January 20^th. Each delinquent monthly assessment will be charged a late fee in the amount of $10.00. Delinquent assessments shall also accrue interest from the date the assessment is delinquent at a rate of 12% per annum. Coupon booklets and late notices will be mailed to the Stockholders only. It is the Stockholder’s responsibility to collect assessments from their renters. Non-payment of water and/or sewer bills for two (2) consecutive billing periods shall be cause for removal of the water meter. No water meter shall be re-installed until all outstanding bills; fees and/or charges are brought current. Re-installation of a water meter shall require pre-payment of $150.00.

11. The Mutual Water Company charges a $40.00 transfer fee to the Buyer upon the sale of property.

12. Pursuant to the Mutual Water Company’s governing documents, all assessments and water charges shall be a lien upon lands on which the assessments or water charges are made from the time such assessments or water charges become due and payable, and if such assessments or charges become delinquent, such lien may be enforced by the following:

(a) In the manner provided by law for foreclosure of mortgages of real property; or

(b) By sale and transfer of the membership without said lands, in the manner provided for in Section 331 of the California Civil Code; or

If a person’s membership is withdrawn or terminated in accordance with this provision his or her equitable interest in this corporation will not be forfeited.