Page 5

CHAPPELL HILL WATER SUPPLY CORPORATION Water Tariff

SECTION 2.0 - SERVICE APPLICATION AND AGREEMENT

NOTE: FORM MUST BE COMPLETED BY APPLICANT ONLY

Please Print:

DATE____________________

APPLICANT’S NAME_________________________________________

CURRENT MAILING ADDRESS________________________________

_____________________________________________________________

PHONE NUMBER_____________________

PHYSICAL LOCATION OF PROPERTY_________________________

______________________________________________________________

PREVIOUS OWNER’S NAME (if transferring property):

______________________________________________________________

*************************************************************

COST OF CONNECTION

The Chappell Hill Water Supply Corporation operates on a membership basis. The membership fee is $200.00 which can be transferred to a new owner if you sell the property and for which you can charge the new owner if you so desire. An alternative is to request the Corporation to refund the membership fee. If a water customer moves owing a balance on the water bill, the membership fee can be applied to reducing the balance. A membership will not be transferred if there is a balance owed on the water account.

In addition to the membership fee, the customer pays for all expenses associated with providing the hookup. This includes the cost of any water line extensions. All service equipment, including the meter, the meter box, and pipe lines up to the meter, remains the property of the Water Corporation. Any lines required between the meter and the customer’s final use point are the responsibility of the customer.

A standard connection, when the water meter is located along an existing water main, costs $800. This amount must be paid before the connection is made. When all expenses for the connection have been tabulated, the customer will be billed for any amount over the aforesaid $800 or refunded if expenses are less than $800.

At this time, the Water Tariff authorizes charging each new connection a Buy-In fee of $218.00. The Buy-In fee will bring the new connection owner up to economic parity with existing customers.

Total fees for new connection: $1,218.00

Page 6

CHAPPELL HILL WATER SUPPLY CORPORATION Water Tariff

SECTION 2.0 - SERVICE APPLICATION AND AGREEMENT (Continued)

SERVICE AGREEMENT

AGREEMENT made this _______day of ______________,20___, between the Chappell Hill Water Supply Corporation, a corporation organized under the laws of the State of Texas (hereinafter called the Corporation) and _____________________________, (hereinafter called the Applicant and/or Member) as follows:

The Corporation shall sell and deliver water to the Applicant and Applicant shall purchase, receive, and/or reserve service from the Corporation in accordance with the Bylaws and Tariff of the Corporation as amended from time to time by the Board of Directors of the Corporation. Upon compliance with said policies, including payment of a Membership Fee, the Applicant qualifies for Membership as a new Applicant or continued Membership as a Transferee and thereby may hereinafter be called a Member.

The Board of Directors shall have the authority to cancel the Membership of any Member not complying with any policy or not paying any utility fees or charges as required by the Corporation’s published rates, fees, and conditions of service.

All water shall be metered by meters to be furnished and installed by the Corporation. Initial installation of the meter will be at the customer’s expense; the cost of any meter replacements will be borne by the Corporation. The meter is for the sole use of the Member or authorized person or persons living in or using the Member’s property (e.g. renter).

Prior to the installation of a water connection, the Member will ensure that an approved septic system is in place. If no dwelling is located on the property, the requirement for a septic system may be waived by the Corporation for purposes of supplying water for irrigation or the like. However, if subsequently a dwelling is located on the property, a water connection may not be made to that dwelling unless an approved septic system is in place.

The Corporation shall have the right to locate a water service meter and the pipe necessary to connect the meter on the Member’s property at a point to be chosen by the Corporation, and shall have access to its property and equipment located upon Member’s premises at all reasonable times for any purpose connected with or in the furtherance of its business

Page 7

CHAPPELL HILL WATER SUPPLY CORPORATION Water Tariff

SECTION 2.0 - SERVICE APPLICATION AND AGREEMENT (Continued)

operations, and upon discontinuance of service the Corporation shall have the right to remove any of its equipment from the Member’s property.

The Corporation’s authorized employees shall have access to the Member’s property or premises and service lines and plumbing facilities at all reasonable times for the purpose of inspection to insure compliance with state required Minimum Acceptable Operating Practices for Public Drinking Water Systems, as promulgated by the Texas Natural Resource Conservation Commission or successor agency, applicable plumbing codes, and utility construction standards. The Corporation strictly prohibits the connection of service pipelines from its water service meter to any private well or other unknown water supply.

In the event the total water supply is insufficient to meet all of the needs of the Members, or in the event there is a shortage of water, the Corporation may initiate the Emergency Rationing Program as specified in the Corporation’s Tariff. By execution by the Applicant of this Agreement, Applicant hereby agrees to comply with the terms of said Program.

The Member shall install at his own expense any necessary service lines from the Corporation’s facilities and equipment to the point of use, including any customer service isolation valves, clean-outs, and other equipment as may be specified by the Corporation. A water shut-off valve near the Customer’s home or building is strongly recommended. The use of pipes and pipe fittings that contain more that 8.0% lead or solders and flux that contain more than 0.2% lead is prohibited for any plumbing installation or repair of any residential or non-residential facility providing water for human consumption and connected to the Corporation. The Member shall install at his own expense a vacuum interrupter connector at all outside faucets. These are to prevent contamination of the water supply due to cross connections. These can be obtained at nominal cost from the Corporation. For new connections made after January 1, 1996, an inspection will be conducted by the Corporation to determine that the regulations regarding lead content and cross connections are being complied with. A charge of $50 will be made for this inspection.

By execution hereof, the Member shall hold the Corporation harmless from any and all claims for damages caused by service interruptions due to waterline breaks by utility or like contractors, tampering by other Member/Users of the Corporation, normal failures of the system, or other events beyond the Corporation’s control.

The Member shall grant to the Corporation, now or in the future, any easements of right-of-way for the purpose of installing, maintaining, and operating such pipelines, meters, valves, and any other such equipment which may be deemed necessary by the Corporation to extend or improve service for existing or future Members, on such forms as required by the Corporation.

Page 8

CHAPPELL HILL WATER SUPPLY CORPORATION Water Tariff

SECTION 2.0 - SERVICE APPLICATION AND AGREEMENT (Continued)

By execution of this Service Application and Agreements, Applicant shall guarantee payment of all other rates, fees, and charges due on any account for which said Applicant owns a Membership Certificate. Said guarantee shall pledge any and all Membership Fees against any balance due the Corporation. Liquidation of said Membership Fees shall result in the discontinuation of water utility service under the terms and conditions of the Corporation’s Tariff.

By execution of this Service Application and Agreement, Applicant agrees that non-compliance with the terms of this Agreement by said Applicant shall constitute denial or

discontinuation of service until such time as the violation is corrected to the satisfaction of the Corporation.

Any misrepresentation of the facts by the Applicant on any of the four pages of this form shall result in discontinuation of service pursuant to the terms and conditions of the Corporation’s Tariff.

______________________________________

Applicant/Member

_______________________________________

Approved and accepted by Corporation

_______________

Date

Effective: March 5, 2009