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D. The City and the HOA wish to enter into this Agreement, governing the use of the <br />System and the Pumps. <br />NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are <br />hereby acknowledged, the parties hereby agree as follows: <br />1. Use of Pumps. The City hereby grants to the HOA the right to utilize the Pumps <br />and the Ponds to pump stormwater from the Ponds and for use in the System to provide irrigation <br />water to the Lots, all in accordance with the terms and conditions of this Agreement. The Pumps <br />and electrical controls will be installed and stored within the City Outlots. The City hereby <br />grants to the HOA, its successors and assigns, a non-exclusive license to use the City Outlots and <br />rights of way as necessary to receive the benefit of and comply with the terms and conditions of <br />this Agreement during the period in which the System is in use. <br />2. Permits. The HOA shall apply for and obtain from the Minnesota Department of <br />Natural Resources ("DNR") one or more appropriation permits, as required, prior to pumping <br />any water from a Pond. The terms of any such permits shall be reasonably acceptable to both the <br />City and the HOA. The HOA shall be responsible for ensuring compliance with the <br />requirements of the DNR, including without limitation, all reporting requirements and fee <br />payments. <br />3. Pumping Requirements. The HOA shall be required to pump a minimum of two <br />million seven hundred fourteen thousand four hundred (2,714,400) gallons of stormwater from <br />the Ponds each year after build -out of all of the Lots to meet the stormwater pen -nit requirements <br />for the Clearwater Cove residential community. Notwithstanding anything to the contrary in this <br />Agreement, no pumping of stormwater from the Ponds shall occur when the water level in the <br />Pond served by a Pump falls below eight hundred ninety-seven (897.0) feet above sea level. <br />4. Irrigation. The HOA and the Lot owners shall be exempt from any watering <br />restrictions of the City relating to irrigation, provided that the HOA is re -using stormwater via <br />the System for irrigation purposes. Such exemption shall not apply if the HOA or Lot owners <br />are using the City's water supply for irrigation purposes. <br />5. Rules. The HOA may, from time to time, promulgate reasonable rules and <br />regulations relating to the use and operation of the System ("Stormwater Re -Use Rules"). Such <br />Stormwater Re -Use Rules may include conditions, rules and regulations related to water <br />availability, specific and/or allowed watering times and days, and required watering to maintain <br />the capacity of the Ponds. The HOA shall provide the City and the Lot owners a copy of any <br />Stormwater Re -Use Rules, which will be subject to change at the discretion of the HOA. <br />Notwithstanding anything to the contrary, any lots within Clearwater Cove that are owned by <br />D.R. Horton, Inc. — Minnesota, a Delaware corporation (the "Horton Lots") shall be exempt <br />from any Stormwater Re -Use Rules, for as long as D.R. Horton, Inc. — Minnesota owns them. <br />6. Maintenance. The HOA shall be responsible for operating, maintaining, <br />winterizing, repairing and replacing the System and the Pumps, and for the costs thereof, <br />CORE12008719.03 831114949063.5 <br />