CC&R

DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTIONS, AND

RESERVATIONS OF EASEMENTS FOR
HASLEY HILLS

January 26, 2000

TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ……………………………………………………………………………..2

1.1 Annexation Properly ................................................................................................... 2

1.2 Architectural Control Committee (or "ACC") .............................................................. 2

1.3 Architectural Standards …………………………………………………………………... 2

1.4 Articles ....................................................................................................................... 3

1.5 Assessments ................................................................................................................ 3

1.6 Association ................................................................................................................. 3

1.7 Association Maintenance Areas .................................................................................. 3

1.8 Association Management Documents…………………………………………………... 3

1.9 Board ...................................................................................................………......... 4

1.10 Budget ......................................................................................................................... 4

1.11 By-Laws ...................................................................................................................... 4

1.12 Close of Escrow........................................................................................................... 4

1.13 Common Area ............................................................................................................. 4

1.14 Common Expenses ...................................................................................................... 4

1.15 Common Property………………………………………………………………………... 4

1.16 County ....................................................................................................................... 4

1.17 Declarant ..................................................................................................................... 5

1.18 Declaration ................................................................................................................. 5

1.19 DRE ............................................................................................................................ 5
1.20 Improvements ............................................................................................................. 5

1.21 Lot ..........................................................................………….................................... 5

1.22 Manager .................................................................…………..................................... 6
1.23 Member......................................................................………….................................. 6

1.24 Merchant Builder .....................................................…………................................... 6

1.25 Mortgage ……………………………………………………………………………………. 6

1.26 Mortgagee ..................................................................................................................... 6

1.27 Mortgagor ...................................................................................................................... 6

1.28 Notice and Hearing ....................................................................................................... 6

1.29 Notice of Annexation ................................................................................................. 6

1.30 Owner ........................................................................................................................... 6

1.31 Phase ............................................................................................................................. 6

1.32 Project ........................................................................................................................... 7

1.33 Project Walls ................................................................................................................. 7

1.34 Public Agencies ............................................................................................................. 7

1.35 Residence ..................................................................................................................... 7

1.36 Rules and Regulations ................................................................................................... 7

1.37 Tract Map(s) .................................................................................................................. 7

1.38 VA/FHA ........................................................................................................................ 7

1.39 Application of Definitions............................................................................................. 7

ARTICLE 2 INTRODUCTION TO HASLEY HILLS .......................................................................... 8

2.1 Development Plans..................................................................................................... 8

2.2 Membership in Association........................................................................................ 8

2.3 Annexation of Additional Property ............................................................................ 8

2.4 Development Control ................................................................................................ 8

2.5 Easements Reserved Over Common Property............................................................. 9

2.6 Non-Liability of Declarant ......................................................................................... 9

ARTICLE 3 RESERVATION OF EASEMENTS AND OTHER PROPERTY
RIGHTS IN THE ASSOCIATION MAINTENANCE AREAS .......................................... 9

3.1 Amendment to Eliminate Easements ......................................................................... 9

3.2 Owner’s Easements ................................................................................................... 10

3.3 Limitations on Owners’ Easement Rights.................................................................... 10

3.4 Waiver of Use............................................................................................................ 12

3.5 Easements for Utilities................................................................................................ 12

3.6 Easements for Maintenance of the Association Maintenance Areas........................... 13

3.7 Easements for Drainage.............................................................................................. 13

3.8 Easements in Favor of County.................................................................................... 13

3.9 Easements in Favor of Southern California Edison..................................................... 14

3.10 Easements for Construction and Sales........................................................................ 14

3.11 Easements for Master Antennae and Cable Television............................................... 14

3.12       Project Wall Easements.............................................................................................. 14

3.13       Utilities Shown on the Tract Map............................................................................... 15

3.14       Easement for Public Services..................................................................................... 15

3.15       Easement for Public Utilities...................................................................................... 15

3.16       Support, Settlement and Encroachment...................................................................... 15

3.17       Title to the Common Property.................................................................................... 16

3.18       Declarant Easements.................................................................................................. 17

ARTICLE 4 THE ASSOCIATION …………………………………………………………………………17

4.1 Membership ............................................................................................................... 17

4.2 Classes of Membership............................................................................................... 18

4.3 Class A....................................................................................................................... 18

4.4 Class B....................................................................................................................... 18

4.5 Special Voting Procedures for Election of the Board.................................................. 18

4.6 Voting Rights.............................................................................................................. 18

4.7         Voting: Joint Owners.................................................................................................. 19

4.8         Adjustment of Voting Rights...................................................................................... 19

4.9         Vesting of Voting Rights............................................................................................. 19

4.10 Suspension of Voting Rights....................................................................................... 19

4.11 Transfer.....................................................................................................................19

4.12 Proxies ............................................................................................................................ 20

4.13 Record Dates ................................................................................................................... 20

ARTICLE 5 FUNCTIONS OF THE ASSOCIATION ........................................................................... 20

5.1 Management Body ..................................................................................................... 20

5.2 Powers ....................................................................................................................... 20

5.3 Duties ........................................................................................................................ 23

5.4 Limitations on Board Action ...................................................................................... 28

5.5 Licenses, Easements and Rights of Way .................................................................. 29

5.6 New Improvements ................................................................................................... 29

5.7 Association Rules and Regulations ............................................................................ 30

5.8 Schedule of Fines and Penalties .............................................................................. 30

ARTICLE 6 ASSESSMENTS ............................................................................................................... 30

6.1 Creation of the Lien and Personal Obligation of Assessment ................................ 30

6.2 Purpose of Regular Assessments: Levy and Collection .......................................... 31

6.3 Regular Assessments - Basis .. ................................................................................... 31

6.4 Special Assessments .................................................................................................. 32

6.5 Emergency Situations ................................................................................................ 33

6.6 Compliance Assessments ........................................................................................... 33

6.7 Date of Commencement of Regular Assessments: Due Dates ............................... 33

6.8 Certification of Payment ............................................................................................ 34

6.9 Delivery of Statement ................................................................................................ 34

6.10 Reserves .................................................................................................................... 34

6.11 Offsets and Waiver Prohibited .................................................................................. 35

6.12 Exempt Property ....................................................................................................... 35

ARTICLE 7 EFFECT OF NONPAYMENT OF ASSESSMENTS:
REMEDIES OF THE ASSOCIATION ......................................................................... 36

7.1 Effect of Nonpayment of Assessments: Remedies of the Association .................... 36

7-2 Notice of Delinquent Assessments ............................................................................ 36

7.3 Foreclosure Sale ........................................................................................................ 36

7.4 Curing of Default; Release of Lien ............................................................................ 37

7.5 Cumulative Remedies ................................................................................................ 37

7.6 Mortgagee Protection ................................................................................................. 37

7.7 Alternative Dispute Resolution - Assessments ........................................................... 37

ARTICLE 8 USE RESTRICTIONS ....................................................................................................... 38

8.1 Residential Use .......................................................................................................... 38

8.2 Business and Commercial Activity ............................................................................ 38

8.3 Mandatory Installation and Maintenance of Landscaping ................................................ 39

8.4 Common Property Use ..................................................................................................... 39

8.5 Conduct Affecting Insurance ........................................................................................... 39

8.6 Liability for Damage to the Common Property ................................................................. 39

8.7 Signs .................................................................................................……………………………......... 40

8.8 Maintenance of Animals .............................................................................…………………………. 40

8.9 Quiet Enjoyment ....................................................................................…………………………...... 40

8.10 Improvements ................................................................................................................ 40

8.11 Windows ........................................................................................................................ 41

8.12 Parking ........................................................................................................................... 41

8.13 HVAC Equipment ........................................................................................................ 42

8.14 Solar Heating Systems .................................................................................................... 42

8.15 Outside Installations ......................................................................…………………………............. 42

8.16 Leasing ........................................................................................................................... 42

8.17 Drilling ......................................................................................................………………………….43

3.18 Trash; Outdoor Fires ....................................................................................................... 43

8.19 Alteration of Drainage Condition ................................................................................... 43

8.20 Water Softeners .............................................................................................................. 44

8.21 View Restrictions ........................................................................................................... 44

8.22 Antennae ........................................................................................................................ 44

8.23 Prohibition Against Further Subdivision ......................................................................... 45

8.24 Hazardous Waste or Materials ........................................................................................ 45

8.25 Insurance Rates .............................................................................................................. 45

8.26 Exemption of Declarant and Merchant Builders ...............................………………........ 45

Article 9 ARCHITECTURAL AND LANDSCAPING CONTROL ....................................... 47

9.1 Architectural Control of Construction Activities ............................................................... 47

9.2 Declarant Merchant Builder Exemptions .......................................................................... 47

9.3 Architectural Control Committee ...................................................................................... 47

9.4 Meetings of the Architectural Control Committee ............................................................. 47

9.5 Review of Plans and Specifications .................................................................................. 48

9.6 Regulations and Fees for Architectural Review ................................................................ 49

9.7 Review of Plans and Specifications .............................................................................. 49

9.8 Submittal to County - Right of Architectural Control Committee to Review ..................... 50

9.9 Approval of County ......................................................................................................... 51

9.10 Performance of Work .................................................................................................... 51

9.11 Inspection of Work ……………………………………………………………………………......52

9.12 Variances ....................................................................................................................... 53

9.13 Preapprovals.................................................................................................................... 53

9.14 Approval Not waiver ...................................................................................................... 53

9.15 No Liability ……………………………………………………………….…………………....... 53

ARTICLE 10 REPAIR AND MAINTENANCE

10.1 Repair and Maintenance by the Association…………………………………………………54

10.2 Repair and Maintenance by Owner…………………………………………………………….55

10.3 Maintenance of Public Utilities………………………………………………………………..55

10.4 Party Walls…………………………………………………………………………………….56

10.5 Damage and Destruction Affecting a Residence…………………………………………..56

ARTICLE 11 CONDEMNATION

11.1 Distribution of Awards - Common Property……………………………………………………..56

11.2 Board of Directors as Attorney-in-Fact…………………………………………………………..56

11.3 Notice to Owners and Mortgagees…………………………………………………..56

ARTICLE 12 COVENANT AGAINST PARTITION

12.1 Covenant Against Partition………………………………………………………………………57

ARTICLE 13 INSURANCE

13.1 Required Insurance Covenant…………………………………………………………………….57

13.2 Overriding Insurance Requirements…………………………………………………………….58

13.3 Other Insurance Coverage……………………………………………………………………58

13.4 Notice of Cancellation of Insurance……………………………………………………………..58

13.5 Annual Review of Coverage………………………………………………………………………59

13.6 Waiver by Owners…………………………………………………………………………………59

13.7 Premiums. Proceeds and Settlement……………………………………………………………….59

13.8 Rights and Duties of Owners to Insure…………………………………………………………….59

13.9 Trustee for Policies…………………………………………………………………………………60

1.3.10 Mortgage Clause………………………………………………………………………………….60

ARTICLE 14 MORTGAGEE PROTECTION

14.1 Mortgagee Protection Provisions…………………………………………………………………..60

14.2 Violation of Mortgagee Protection Provisions……………………………………………………64

ARTICLE 15 ENFORCEMENT OF BONDED OBLIGATIONS

15.1 Enforcement of Bonded Obligations…………………………………………………64

ARTICLE 16 DECLARANT AND MERCHANT BUILDERS EXEMPTIONS

16.1 Interest of Declarant……………………………………………………………………………65

16.2 Exemptions……………………………………………………………………………………..65

16.3 Assignment of Rights of Declarant and Merchant Builders ............................................. 66

16.4 Easement Relocation ....................................................................................................... 66

ARTICLE 17 ANNEXATION OF ADDITIONAL PROPERTY ............................................................ 67

17.1 Phased Development of the Project ................................................................................. 67

17.2 Annexation Pursuant to Declarant's Development Plans .................................................. 67

17.3 Notice of Annexation ...................................................................................................... 67

17.4 Effective Date of Annexation ......................................................................................... 68

17.5 Right of De-Annexation .................................................................................................. 68

17.6 Amendments to Notices of Annexation ........................................................................... 68

17.7 Reciprocal Cross-Easements Between Phases .................................................................. 69

7.8 Failure to Annex Annexation Property ............................................................................ 69

ARTICLE 18 GENERAL PROVISIONS ............................................................................................... 69

18.1 Enforcement .............................................................................................…………...........69

18.2 Dispute Notification and Resolution Procedures ............................................................ 71

18.3 Severability ..................................................................................................................... 73

18.4 Term ................................................................................................................................ 73

18.5 Construction .................................................................................................................... 74

18.6 Singular Includes Plural ................................................................................................... 74

18.7 Amendments ................................................................................................................... 74

18.8 Encroachments ................................................................................................................ 76

18.9 Notices .... ............................................................................................ 76

8.10 Delivery of Association Documents to Prospective Purchasers ....................................... 77

18.11 Conflicts in Management Documents ............................................................................ 77

18.12 Attorneys' Fees .............................................................................................................. 78

18.13 Violation as Nuisance .................................................................................................... 78

18.14 Exhibits ......................................................................................................................... 78

18.15 Indemnification of Corporate Agents ............................................................................ 78

18.16 Limitation on Liability of Officers, Directors and Committee Members ........................ 78

18.17 Additional Covenants in Favor of VA/FHA .................................................................. 78

EXHIBIT "A" PHASE 1

EXHIBIT "B" ANNEXATION PROPERTY

EXHIBIT "C" ASSOCIATION MAINTENANCE AREA ILLUSTRATION - Phase 1 EXHIBIT "D" PROJECT WALLS - Phase 1

DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS,
AND RESERVATION OF EASEMENTS FOR
HASLEY HILLS

THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS, AND RESERVATION OF
EASEMENTS is made this 13th day of
January , 2000, by KAUFMAN AND BROAD OF SOUTHERN CALIFORNIA, INC., a
California Corporation ("Declarant").

RECITALS:

A. Declarant is the owner of that certain real property in the County of Los Angeles, Stare of
California, more particularly described on Exhibit "A" attached hereto and incorporated herein by this
reference ("Phase 1").

B. Declarant is also the Owner of, or has an interest in, that certain real properly located in
the County of Los Angeles, State of California, more particularly described in Exhibit "B" attached hereto
("Annexation Property"), which may, from time to time, he annexed to and become a part of the Project,
in accordance with the Article herein entitled "Annexation of Additional Property."

C. Declarant intends to create a "master planned community" (as defined in Section 2792.32
of Title 10 of the California Code of Regulations), which is also a common interest development as more
particularly described in Section 1351(k) of the California Civil Code. The development of the Project shall
be consistent with the overall plan of development submitted to and approved by the County, the Department
of Real Estate of the State of California ("DRE") and the United States Department of Veterans' Affairs ("VA").

D. Declarant deems it desirable to impose a plan for the development, maintenance, improvement,
protection, use, occupancy and enjoyment of the Project, and to establish, adopt and impose covenants, conditions
and restrictions upon the Project for the purpose of enforcing, protecting and preserving the value, desirability and
attractiveness of the Project.

E. Declarant has determined it desirable for the efficient enforcement, protection and preservation of
the desirability and attractiveness of the Project to create a corporation, to which shall he delegated and assigned
the powers of: (I) owning, maintaining, managing and operating the Common Area and Association Maintenance
Areas; (2) administering and enforcing the covenants, conditions and restrictions set forth herein; and (3) collecting
and disbursing the assessments and charges hereinafter created.

F. 'HASLEY HILLS HOMEOWNERS ASSOCIATION, a California nonprofit, mutual benefit corporation
("Association"), has been or will be incorporated under the laws of the State of California for the purpose of
exercising the aforesaid powers.

G. Declarant intends to convey the Project, and any and all portions thereof, subject to the covenants,
conditions and restrictions set forth here in below.

NOW, THEREFORE, Declarant covenants, agrees and declares that it does hereby establish
a general plan for the development, maintenance, care, improvement, protection, use, occupancy, management
nd enjoyment of the Project, and that all or any portion of the Project shall be held, sold, conveyed, encumbered,
hypothecated, leased, used, occupied and improved, subject to the covenants, conditions, restrictions, limitations,
easements and rights ("Protective Covenants") set forth herein, all of which arc for the purpose of uniformly
enhancing and protecting the attractiveness and desirability of the Project, in furtherance of said general plan
for the maintenance, protection, subdivision, improvement and sale of the Project, or any portions) thereof. Each
and all of the Protective Covenants am hereby imposed as equitable servitudes upon the Property, which shall run
with and burden the Project and shall he binding upon all persons having any right, title or interest in the Project,
.or any portion thereof, their heirs, successors and assigns, and shall inure to the benefit of and be binding upon
Declarant, its successors and assigns, all subsequent owners of all or any portion of the Project, together with
their grantees, heirs, executors, administrators, devisees, successors and assigns.

ARTICLE 1 DEFINITIONS

In addition to the capitalized terms and phrases found elsewhere herein, the following terms and phrases shall
have the following meanings whenever used in this Declaration.

1.1 "Annexation Properly" shall mean and refer to that certain real property described in Exhibit "B" attached hereto,
including all Improvements constructed 'hereon, all or any portion of which may be annexed to the Project and
become subject to the terms of this

Declaration.

1.2 "Architectural Control Committee" (or "ACC") shall mean and refer to the architectural committee created
pursuant to the Article herein entitled " Architectural and Landscaping Control."

1.3 "Architectural Standards" shall mean and refer to Hasley Hills Architectural Standards as promulgated and
adopted by the Board of Directors of the Association pursuant to the Article herein entitled "Architectural and
Landscaping Control."

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1.4 "Articles" shall mean and refer to the Articles of Incorporation of Hasley Hills Homeowners Association, as
filed in the Office of the Secretary of State of the State of California, as such Articles may be amended, from time
to time.

1.5 "Assessments" shall be used as a generic term which shall mean and refer
to the following:

a. "Regular Assessment" shall mean and refer to the charge against each Owner and his
respective Lot representing a portion of the Common Expenses of the Association, which are to be paid by
each Owner to the Association in the manner and in such proportions as set forth in the Article herein entitled
"Assessments";

b. “Compliance Assessment” shall mean and refer to the charge against an Owner representing the costs incurred
by the Association in the repair of any damage to the Common Property which such Owner was responsible, the
costs incurred by the Association in bringing such Owner and his Lot into compliance with this Declaration, or any
amount due the Association based upon disciplinary proceedings against an Owner in accordance with this
Declaration; and

c. "Special Assessment" shall mean and refer to the charge against an Owner and his respective
Lot representing a portion of the cos of reconstructing any damaged or destroyed portion or portions of all Community
Property, of constructing or installing any capital improvements to the Community Property, of taking any extraordinary
action for the benefit of the Community Property or the membership of the Association pursuant to the provisions of this
Declaration.

1.6 "Association" shall mean and refer to Hasley Hills Homeowners Association, a California nonprofit mutual benefit
corporation, formed under the Nonprofit, Mutual Benefit Law of the State of California, in which all Owners shall have a
membership interest, as more particularly described hereinbelow; provided that membership shall be limited to Owners.

1.7 "Association Maintenance Areas" shall mean and refer collectively co all real and personal property, and Improvements
located thereon, which are owned in fee simple by the Association or over which the Association has rights or obligations
by easement, license, permit or other agreement. The Association Maintenance Areas may also include off-site landscape
maintenance areas, private streets, certain landscaped parkways and medians, Project Walls. other real and personal property.
The Association Maintenance Areas in Phase 1 are shown and described in Exhibit "C" attached hereto and incorporated
herein by this reference. Additional Association Maintenance Areas may be designated by Declarant and annexed to the
Project, from time to time, in accordance with the Article herein entitled "Annexation."

1.8 "Association Management Documents" shall mean and refer collectively to the Articles, By-Laws, this Declaration,
Notices of Annexation, Architectural Standards and Rules and Regulations, and amendments to any of the foregoing.

1.9 "Board" shall mean and refer to the Board of Directors of the Association, elected in accordance with the
By-Laws of the Association and this Declaration.

1.10 "Budget" shall mean and refer to the pro forma Operating Statement - adopted by the Association which
sets forth in writing the estimated annual income and Common Expenses of the Association prepared pursuant to
this Declaration.

1.11 "By-Laws" shall mean and refer to the By-Laws of the Association which have been, or will be, adopted by
the Board, as such By-Laws may be amended, from time to time.

1.12 "Close of Escrow" shall mean and refer to the date on which a Deed to a Lot is recorded in the Official Records
of Los Angeles County, California. Close of Escrow shall not refer to (i) deeds between Declarant and any affiliate of Declarant,
(ii) any Merchant Builder, or (iii) deeds between Merchant Builders.

1.13 "Common Area" shall mean and refer collectively to all real and personal property, and Improvements located
thereon, which are owned in fee simple, from time to time, by the Association. The Common Area in Phase I is designated in
Exhibit "A" attached hereto and incorporated herein by this reference. Additional Common Area shall be designated by
Declarant and annexed to the Project, from time to time, in accordance with the Article herein entitled "Annexation."

1.14 "Common Expenses" shall mean and refer to the actual and estimated costs to be paid by the Association
for the following: (a) maintaining, managing, operating, improving, painting, repairing and replacing the Common Property,
as more fully set forth herein; (h) funding reserve accounts for the periodic replacement and repair of Improvements to the
Common Property; (c) managing and administering the Association, including, but not limited to, compensation paid by
the Association to managers, accountants, attorneys and any Association employees; (d) providing utilities, landscaping
and other services to the Common Property; (c). providing insurance, as provided for herein; (f) paying that portion of any
Assessment attributable to Common Expenses not paid by the Owner responsible for payment; (g) paying taxes levied
against the Association, including real property taxes, if any; (h) funding reserves of the Association; (i) discharging any
liens or encumbrances levied against the Common Area, or any portion thereof; and (I) paying for all other goods and
services designated by, or in accordance with, other expenses incurred by the Association for the benefit of all Owners

1.15 "Common Property" shall mean and refer collectively to the Association Maintenance Areas and Common Area.

1.16 "County" shall mean and refer to the County of Los Angeles, California, and its various departments, divisions,
employees and representatives.

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1.17 "Declarant" shall mean and refer to Kaufman and Broad of Southern California, Inc. California corporation, its
successors and assigns, and to any parson or entity - acquiring all, or any portion, of Declarant's interest in the Project
(including all, or any portion, of Declarant's rights and obligations as created and established herein) pursuant to a written
assignment from Declarant which is recorded in the Office of the County Recorder. As used in this Section, the term
"successor" means a person or entity who acquires Declarant, or substantially all of its assets, or who merges with Declarant
by sale, merger, reverse merger, consolidation, operation of law or otherwise. Declarant is a builder as described in California
Civil Code Section 1375.

1.18 "Declaration" shall mean and refer to this Declaration of Covenants, Conditions and Restrictions,
and Reservation of Easements recorded on the Project, and to all amendments to this Declaration recorded in the Office of the
County Recorder.

1.19 "DRE" shall mean and refer to the Department of Real Estate of the State of California, which administers the sale
of subdivided lands in the State of California.

1.20 ''Improvements" shall mean and refer to:

a. All structures and appurtenances thereto of every kind, including, but not limited to, Residences, buildings,
recreational areas, parks, parkways, swimming pools, spas, garages; open parking areas, pavement, sidewalks, private streets,
driveways, theme walls and landscaping, perimeter Walls, retaining walls, detention basins, drainage swales, slopes, berms,
monument signs, patios and patio fencing, decks and deck railings, exterior air conditioning, soft water fixtures, landscaping,
irrigation equipment and all related facilities, drainage swales, landscaped street medians and parkways, exterior lighting of Lots
or Association Maintenance Areas, hedges, trees, poles and signs;

b. The demolition or destruction by voluntary action of any structure or appurtenance thereto of every type and kind;

c. The grading, excavation, filling or other modification to the established grade of a Lot or of a portion of the Association
Maintenance Areas; and

d. Any modification or alteration of any previously approved Improvements, including any change of exterior appearance and
color of a Residence, and any appurtenance thereto.

1.21         "Lot" shall mean and refer to a plot of land as shown upon the.
             recorded subdivision map affecting all or any portion of the Project, and to all
             Improvements, including the Residence, constructed thereon. Only those plots of land
             which are designed and intended for the construction of a Residence and ownership by an
             individual Owner shall be deemed "Lots." "Lot" shall not mean or refer to any Common
            Area in the Project.

1.22 "Manager" shall mean and refer to the individual, corporation, partnership or any other entity or agent employed
as an independent contractor by the Association to perform the functions of the Association, as limited by the Declaration
and the terms of the management agreement between the Association and such individual or entity. -

1.23 "Member" shall mean and refer to every person or entity who holds membership in the Association, as more
particularly set forth in the Article herein entitled "The Association," including Declarant, so long as Declarant qualifies
for membership pursuant to said Article.

1.24 "Merchant Builder" shall mean and refer to any individual, corporation, limited partnership, joint venture, limited
liability company or other entity who or which acquires a portion of the Project for the purpose of developing such property
for resale to the general public; provided, however, that the term "Merchant Builder" shall not mean Declarant.

1.25 "Mortgage" shall mean and include a duly recorded deed of trust, as well
as a mortgage encumbering a Lot.

1.26 "Mortgagee" shall mean and refer to a person or entity to whom a
Mortgage is made, and shall include the beneficiary of a deed of trust.

1.27 "Mortgagor" shall mean and refer to a person or entity who mortgages his or its property to another, i.e., the maker
of a Mortgage, and shall include the trustor of a deed of trust.

1.28 "Notice and Hearing" shall mean and refer to written notice and a hearing before the Board or the ACC of the Association,
at which the affected Owner shall have an opportunity to be heard in the manner provided herein and in the By-Laws.

1.29 "Notice of Annexation" shall mean and refer to that certain instrument utilized to annex all or ally portion of the Annexation
Property, in accordance with the provisions of this Declaration, and to subject such property to the Protective Covenants set forth in
this Declaration and to the jurisdiction of the Association.

1.39 "Owner" shall mean and refer to the record owner, or owners, including Declarant, or the purchaser under a conditional sales
contract of fee title to, or an undivided fractional fee or leasehold interest in, any Lot in the Project. Declarant is an Owner, as more
particularly set forth throughout this Declaration. The foregoing is not intended to include persons or entities who hold an interest in a
Lot merely as security for the performance of an obligation.

1.31 "Phase" shall mean and refer to one or more Lots, Common Area and/or Association Maintenance Areas within the Annexation
Property which are simultaneously annexed to die Project by the recordation of a Notice of Annexation in the Official Records of Los
Angeles County, and for which a Final Subdivision Public Report has been issued by the DRE.

1.32 "Project" shall mean and refer to Phase I and to all Improvements,
including the residences constructed thereon, the Common Area and the Association Maintenance Areas and all Annexation Property
which is made subject to this Declaration in accordance with the provisions of the Article herein entitled "Annexation of Additional
Property."

1.33 "Project Walls" shall mean and refer any wall or fence which is designated as such either in Exhibit 'D" to this Declaration or in
a Notice of Annexation. The Association will be responsible for the structural integrity of each Project Wall as well as the exterior
surfaces of such Project Wall. Each Owner of a Lot adjacent to a Project Wall will be responsible for maintaining the interior surfaces of
such Project Wall which face such Owner's Lot. Project Walls arc deemed to be Association Maintenance Areas.

1.34 "Public Agencies" shall mean and refer collectively to one (I) or more of the various local and State governmental agencies
having jurisdiction over the Project, including the County.

1.35 "Residence" shall mean and refer to the individual single-family dwelling and die related Improvements which am constructed
upon the same or a separate Lot, and which are designed and intended for use and occupancy as a single family dwelling, including
the garage.

1.36 "Rules and Reputations" shall mean and refer to the Rules and Regulations adopted by the Board pursuant to the By-Laws
and this Declaration, as they may be amended, from time to time.

1.37 "Tract Map(s)" shall mean and refer to any final subdivision map or parcel map, as those terms are defined in the California
Subdivision Map Act, recorded in the Office of the County Recorder of Los Angeles County, California.

1.38 ''VA/FHA" shall mean and refer individually or collectively, as applicable, to the United States Department of Veterans Affairs
and/or the Federal Housing Administration of the United States Department of Housing and Urban Development, and any department or
agency of tie United States government which succeeds to the functions of either or both organizations.

1.39 Application of Definitions. The aforesaid definitions shall be applicable to this Declaration and to any supplements or
amendments hereto, fled or recorded pursuant to the provisions of this Declaration, unless the context shall prohibit such application.

ARTICLE 2 INTRODUCTION TO HASLEY HILLS

2.1 Development Plans. Hasley Hills will be developed as a Masterplanned residential development. If developed as proposed, the
Project will consist of as many as 739 residential Lots, Common Area and Association Maintenance Areas, as more specifically
described in this Declaration, and in recorded Notices of Annexation. .

2.2 Membership in Association. The Association shall be the management body for the Project, and shall own, maintain, operate,
repair, replace and inspect Improvements to the Project to the fullest extent permitted specifically in this Declaration. As more
particularly set forth in this Declaration, each Owner of a Lot in the Project shall automatically become a Member of the Association,
and shall be obligated for the payment of Assessments to the Association. In addition, each Owner, his family members, lessees,
tenants, guests and invitees, will be entitled to the use and enjoyment of the Common Property within the Project, in accordance with
this Declaration, the By-Laws and Rules and Regulations adopted by the Board.

2.3 Annexation of Additional Property. At such time, if ever, as future Phases are developed by Declarant or Merchant Builders,
Declarant shall subject such Phase to the Protective Covenants of this Declaration pursuant to the provisions for annexation set
forth in the Article herein entitled" Annexation of Additional Property." A Notice of Annexation shall be recorded in die Official Records,
which shall serve to impose the Protective Covenants set forth herein upon such property and to subject such property to the jurisdiction
of the Association. The voting rights in the Association and the Assessments levied by the Association shall be adjusted as set forth
herein. The Annexation Property may be developed in one (I) or more Phases. Upon annexation, each Phase shall become a part of the
Project and shall be made subject to the Declaration.

2.4 Development Control. Nothing in this Article or elsewhere in this. Declaration shall limit the right of Declarant or Merchant Builders:
(a) to complete construction of any Improvements in the Project, (b) to redesign or otherwise alter the style, size, color or appearance
of any Improvements in any portion of the Project owned by Declarant and Merchant Builders, (c) to construct additional Improvements
on any portion of the Project owned by Declarant and Merchant Builders, and/or (d) to otherwise control all aspects of constructing the
Improvements in the Project, and of marketing and conveying Lots in the Project. In furtherance thereof, Declarant hereby reserves, unto
itself and its successors and assigns until the Close of Escrow for the sale of the last Lot in the Project to be offered for sale pursuant to
a Final Subdivision Public Report issued by the DRE: (a) a nonexclusive casement for ingress and egress on, over and across the Project
as necessary to construct the Common Area and the Association Maintenance Areas and all other Improvements, (b) the exclusive right
to maintain a sales office, model complex, interior design and decorator center, and parking area for employees, agents and prospective
buyers, (c) the exclusive right to place reasonable signs, flags, banners, billboards or other forms of advertising on any portion of the
Project owned or controlled by Declarant, and

(d) a nonexclusive right to utilize the Common Area and Association Maintenance Areas and any unassigned open parking spaces in
connection with its program for the sale of Lots in the Project.

2.5 Easements Reserved Over Common Property. At such time as the Common Property conveyed by Declarant to the Association,
an easement shall be deemed automatically reserved over the Common Property so conveyed in favor of Declarant, and for the benefit
of the remaining Annexation Property as not yet annexed, for ingress, egress, and access, and for the construction and completion of
utility hookups, landscaping and amenities included in Plans approved by the County, and for the construction use, maintenance and
operation of Annexation Property not yet annexed to the Project as of the date of conveyance to the Association, and are pert of the
future Phase of the Project. Such nonexclusive easements are appurtenant to the Annexation Property and are reserved for a period
of twelve (12) years from the date of the first Close of Escrow for the sale of Lots in Phase I for die benefit of Declarant, Merchant
Builders and their respective authorized agents and representatives and their successors and assigns, and Declarant reserves the
right to grant such easements to owners and lessees of property in the Annexation Property. Exercise of the nonexclusive easements
and the rights over the Common Property reserved to Declarant under this Declaration shall not unreasonably interfere with the use and
enjoyment of the Common Property by the Owners.

2.6 Non-Liability of Declarant. The purpose of this Article is merely to describe Declarant's proposed plans for the development of the
Project. Without limiting the generality of the foregoing, nothing in this Section 2A or elsewhere in this Declaration shall limit the right
of Declarant, its successors and assigns, to complete construction of the Project, to alter same, or to construct such additional
Improvements as Declarant shall deem advisable prior to the completion, sale and disposition of all Lots and other property in the
Project and within the Annexation Property. Declarant may assign any or all of its rights under this Declaration to any successor to
all or any part of Declarant's interest in and to the Project, by an express written assignment recorded in the Office of the County
Recorder.

ARTICLE 3 RESERVATION OF EASEMENTS AND OTHER
PROPERTY RIGHTS IN THE ASSOCIATION MAINTENANCE AREAS

3.1 Amendment to Eliminate Easements. As long as Declarant is an Owner, or has an interest in any portion of the Annexation
Property, this Declaration cannot be amended to modify or eliminate any casements created, established and reserved herein in favor
of Declarant without the prior written approval of Declarant, and any attempt to do so shall have no effect. Any attempt to modify or
eliminate the easements created, granted and reserved herein shall likewise require the prior written approval of Declarant and the County.

9

3.2 Owners' Easements. Every Owner shall have a nonexclusive right and casement of access, use and enjoyment in and to the
Common Area. Said right and easement shall be appurtenant to and shall pass with title to every Lot, subject to the limitations set
forth in Section 3.3 below.

3.3 Limitations on Owners' Easement Rights. The rights and casements of access, use and enjoyment set forth in Section 3.2 above
shall be subject to the provisions of this Declaration, including, but not limited to, the following:

a. The right of Declarant or Merchant Builders to designate additional Common Area and additional Improvements to be annexed to the
Project by recordation of one (I) or more Notices of Annexation, pursuant to the provisions of the Article herein entitled "Annexation of
Additional Property";

b. The right of the Association to suspend the voting rights and rights and casements of use and enjoyment of the common Property
(if applicable) of any Member, and the persons deriving such rights and easements from any Member for any period during which any
Assessment against such Member's Lot remains unpaid and delinquent; and after Notice and Hearing, to impose monetary penalties
or suspend such rights and easements for a period not to exceed thirty (30) days for any non-continuing use infraction of the Rules
and Regulations, it being understood that any suspension for either nonpayment of any Assessments or breach of such restrictions
shall not constitute a waiver or discharge of the Member's obligations to pay Assessments as provided herein;

c. The right of the Association, in accordance with its Articles, By-Laws and this Declaration, to borrow money for the purpose of
improving the Common Property and related Improvements with the assent of sixty-seven percent (67%) of the voting power of the
Association and/or, subject to the terms and provisions of the Article herein entitled "Mortgagee Protection," to mortgage, pledge,
deed in trust or otherwise hypothecate any or all of its real or personal property, as security for money borrowed or debts incurred;

d. Subject to the terms and provisions of the Article herein entitled "Mortgagee Protection," the right of the Association to dedicate
any Common Area or transfer all or any part of the Association Maintenance Areas to any Public Agency, private party, authority or
utility for such purposes and subject to such conditions as may be agreed to by the Owners. No such dedication or transfer shall be
effective unless: (1) an instrument approving said dedication or transfer is signed by two authorized officers of the Association attesting
that Owners representing at least sixty-seven percent (67%) of the voting power of the Association, excluding Declarant, approved such
action and is recorded in the Office of the County Recorder, and (2) a written notice of the proposed dedication or transfer is sent to
every Owner not less than fifteen (15) days nor more than thirty (3D days in advance: provided, however, that the dedication or transfer
of easements for utilities or other public purposes consistent with the intended use of the Common Property shall not require the prior
approval of the Members of the Association;

10

e. The right of Declarant and Merchant Builders (and their employees, sales agents, perspective purchasers, customers and
representatives) to enter upon the Common Area, for the benefit of Declarant or the Merchant Builders or the Annexation Property,
or any combination thereof, to complete the construction of any landscaping or other Improvements to be installed thereon, as well
as the right to non-exclusive use of the Common Property and the facilities thereof, without charge, for sales, display, access, ingress,
egress, exhibition and occasional special events for promotional purposes, which right Declarant hereby reserves; provided, however,
that such use rights shall terminate on the date on which neither Declarant nor any Merchant Builder owns a Lot in the Project and
all of the Annexation Property has been added to the Project. Such use shall not unreasonable interfere with the rights of enjoyment
of the other Owners as provided herein.

f. The right of the Association, acting by and through its ACC, to enact uniform and reasonable Architectural Standards, in accordance
with the Article herein entitled "Architectural and Landscaping Control";

g. The right of the Association to fulfill its obligations for maintenance, operation, repair and replacement of all Common Property under
its jurisdiction.

h. The right of the Association to reasonably restrict access to the Common Property;

i. The right of the Association to perform and exercise its duties and powers as set forth herein;

j. Other rights of the Association, the ACC, the Board, the Owners and Declarant with respect to the Association Maintenance Areas
as may be provided for in this Declaration;

k. The right of Declarant to grant and transfer casements on. over and across all portions of the Project and the Annexation Property
for the development, installation, construction and maintenance of electric, telephone, cable television, water, gas, sanitary sewer lines
and drainage facilities, as shown on any recorded subdivision map covering the Project, and as may be reasonably necessary for the
proper maintenance, development and conveyance of Lots, Common Area and/or Association Maintenance Areas; and

l. Any limitations, restrictions or conditions affecting the use, enjoyment or maintenance of the Common Area and/or Association
Maintenance Areas imposed by Declarant or Public Agencies, or such other governmental agency having jurisdiction to use their
vehicles or appropriate equipment over those portions of the Common Area and/or Association Maintenance Areas designed for
vehicular movement to perform municipal functions or emergency or essential public services. Such

limitations, restrictions or conditions affecting the use, enjoyment or maintenance of the Common Area Association Maintenance
Areas shall include, without limitation, the County's rights over the Association Maintenance Areas imposed by the County in its
approval of the Project.

m. The Association's right, acting through the Board, to reasonably restrict access to slopes and other sensitive landscaped areas,
maintenance facilities, open space areas and similar areas of the Common Property. The Association shall have exclusive control
over all of the Common Property, subject to the powers and rights of the Public Agencies.

3.4 Waiver of Use. No Owner may exempt himself from personal liability for Assessments duly levied by the Association, nor
release his Lot or other property owned by him from the liens and charges imposed by the Association by waiver of the use and
enjoyment of the Association Maintenance Areas, and any facilities thereon. or by abandonment of his Lot or any other property
in the Project.

3.5 Easements for Utilities. The rights and duties of the Owners of Lots within the; Project with respect to sanitary sewer,
water, electricity, gas and telephone lines, cable television (or CATV) lines and other facilities shall be governed by the following:

a. Each respective utility company shall maintain all utility facilities and connections on the Project owned by such utility
company; provided, however, that if any company shall fail to do so, it shall he the obligation of each Owner to maintain those
facilities and connections located upon such Owner's Lot, and it shall be the obligation of the Association to maintain those
facilities and connections located upon the Association Maintenance Areas;

b. Wherever sanitary sewer, water or gas connections, television cables, electricity or telephone lines are installed
within the Project, and it becomes necessary to gain access to said connections, cables and/or lines through a Lot owned by
someone other than the Owner of the Lot served by said connections, cables and/or lines, the Owner of the Lot served by said
connections, cables and/or lines shall have the right, and is hereby granted an easement to the full extent necessary there for,
to enter upon such other Lot or to have the utility companies enter upon such other Lot to repair, replace and generally maintain
said connections, cables and/or lines:

c. Whenever sanitary sewer, water or gas connections, television cables, electricity or telephone lines are installed
within the Project, and said connections, cables and/or lines serve more than one (1) Lot, the Owner of each Lot served by said
connections, cables and/or lines shall be entitled to the full use and enjoyment of such portions of same as service his Lot;

d. In the event of a dispute between Owners respecting the repair or rebuilding of the aforesaid connections, cables and/or lines,
or the sharing of the cost thereof, upon written request of one (I) of such Owners addressed to the Association, the matter shall
he submitted to the Board who shall decide the dispute, and the decision of the Board shall be final and conclusive on the Owners;
and

e. Easements over the Project for the installation and maintenance of electric and telephone lines, water, gas, drainage and sanitary
sewer connections and facilities, and television antenna cables and facilities, as shown on the recorded map of the Project or
otherwise of record, and as may be hereafter required or needed to sent the Project, are hereby reserved by Declarant, together
with the right to grant and transfer the same.

3.6   Easements for Maintenance of the Association Maintenance Areas.
             In the event it becomes necessary for the Association to enter upon any Lot for purposes of: (a)
             maintaining the Association Maintenance Areas and Project Walls; or (b) bringing an Owner and/or
             his/her Lot into compliance with the Declaration, the Association, and its duly authorized agents and
             employees, shall have the right, after reasonable notice to the Owner and at a reason-able hour of the
            (lay, to enter upon such Owner's Lot for the performance of such work. Such entry shall be made with
            as little inconvenience to the Owner as is practicable, and in the event that any damage shall be
             proximately caused by such entry, the Association shall repair the same at its expense.
             Notwithstanding the foregoing, in the event of an emergency, such right of entry shall be immediate.

3.7 Easements for Drainage. There are hereby created and reserved over
            each Lot in the Project easements for drainage according to the patterns for drainage created by the
            approved grading plans for the Project, as well as according to the actual, natural and existing
           patterns for drainage. In addition, the approved grading plans make provisions for "cross-lot drain-
            age," whereby water runoff from one (I) or more contiguous Lots might drain across an Owner's
            Lot. Each Owner covenants and agrees that such Owner shall not obstruct or otherwise interfere
            with said drainage patterns of waters from adjacent Lots in the Project over such Owner's Lot, or, in
            the alternative, that in the event it is necessary and essential to alter said drainage pattern for the
            protection and use of the Lot, such Owner shall submit all plans and specifications therefore to the
           ACC for prior review and approval. In the event that damage of any nature and kind to the
           Association Maintenance Areas or any Lot is caused, directly or indirectly, by the actions of an
           Owner to restrict or alter the drainage patterns of his Lot, such Owner shall bear the sole cost of all
           such damage. Easements created and reserved herein shall at all times be subject to the Covenants
            created in this Declaration, and such Architectural Standards and Rules and Regulations as may be
           adopted, from time to time, by the Board.

3.8             Easements in Favor of County. Some or all of the Lots and
            Association Maintenance Areas in the Project will be subject to permanent nonexclusive
            easements in favor of the County for the various purposes discussed below, as indicated on
             the recorded subdivision map for Tract No. 36668. The easements are as follows:

                                                                                        13

                                    a. A permanent, nonexclusive easement in favor of the County for
                   emergency vehicular ingress and egress purposes, and for maintenance of publicly
                  owned facilities.

b. A permanent, nonexclusive easement for landscape maintenance

and related purpose, and for sidewalks affecting Lots 1 through 11, inclusive, and Lots

48 through 57, inclusive, of Tract No. 36668, as shown on the recorded Subdivision

Map for said Tract.

c. A permanent, nonexclusive easement for public utility purposes, as

shown on the recorded subdivision map for the Tract.

3.9 Easement in Favor of Southern California Edison. Certain Lots within the Project shall be subject to
permanent, nonexclusive easements in favor of Southern California Edison Company for aboveground and underground
conduits or both, as described in instruments recorded in the Official Records of Los Angeles County, and as depicted on the
recorded subdivision map for the Tract.

3.10 Easements for Construction and Sales. Declarant hereby creates and reserves for itself, and Merchant
Builders, and their respective employees, agents, representatives, successors and assigns, until all Lots in the Project and in
the Annexation Property are sold (and escrow is closed), nonexclusive casements for ingress, egress and access on, over and
across the Common Property and other portions of the Project and the Annexation Property to carry on normal construction
and sales activity, including the operation of models, complexes and sales offices; and the display of promotional signs, flags,
exhibits and other marketing activities in order to develop, market, sale, lease or otherwise dispose of the Lots in the Project
and in the Annexation Property.

3.11 Easements For Master Antennae And Cable Television. There are hereby reserved for the benefit of
Declarant. and its subsidiaries. transferees, successors and assigns, nonexclusive easements of access, ingress and egress
to the Project for purposes of installation, operation, maintenance, repair, inspection, replacement and removal of master antennae,
cable television service lines, alarm system cabling and all related facilities and equipment. Such easements shall be freely
transferable by Declarant to any other person or entity for the purpose of providing such services. All such master antennae, cable
television service lines and alarm system cabling shall remain the property of Declarant, its subsidiaries, transferees, successors
and assigns. The exercise of all rights reserved hereunder shall not unreasonably interfere with the reasonable use and enjoyment
of the Project. Declarant, or its successors and assigns, shall he responsible for any damage in any way arising out of, or in
connection with, the rights and activities reserved hereunder.

3.12 Project Wall Easements. Declarant reserves for the benefit of the Association (l) an easement over
those portions of the Lots and Common Property located within three (3) feet of the common property line separating Common
Property from the Lots for the purpose of accommodating footings and other structural components of any Project Wall located

on or immediately adjacent to such Common Property or boundary line, including any encroachments thereof onto the Lots; and
(ii) an easement for access, ingress and egress over the Lots and Common Property as may be reasonably necessary for the
maintenance, repair and replacement of such Association Property Walls and related Improvements.

3.13 Utilities Shown On The Tract Man. Easements have been created and reserved over all or pertinent portions of the
Project, as applicable, for the construction, installation, maintenance, operation, repair and replacement of electric, telephone,
cable television, water, gas, sanitary sewer and drainage facilities shown either on the recorded tract map or by instrument recorded
in the Office of the County Recorder.

3.14 Easements For Public Services. fn addition to the foregoing easements over the Lots and the Common Property,
Declarant hereby creates, establishes, grants and reserves easements for, including, but not limited to, the right of police, fire,
ambulance and other public services and agencies to enter any part of the Project for purposes of serving the health, safety and
welfare of all Owners in the Project.

3.15 Easements For Public Utilities. Certain Lots on the Project may be subject to permanent, nonexclusive easements for
public Utility purposes in favor of the County, as shown on the recorded subdivision map for the Project- The easements are intended
to establish the right to install, maintain, inspect, repair and replace as and when necessary, electricity lines, transformers and/or
service junction boxes, telephone lines, cable television lines, street light standards, mailboxes, tire hydrants, utilities and other equipment
designed to serve the Project.

3.16 Support, Settlement And Encroachment. There is hereby reserved to Declarant, together with the right to grant and transfer
the same, the following nonexclusive easements for support, settlement and encroachment, as set forth below:

a. An easement appurtenant to each Lot which is contiguous Lot or Common Property, which Lot shall be the dominant tenement and
the contiguous Lot or Common Property shall he the servient tenement.

b. An easement appurtenant to the Common Property contiguous m a Lot or other Common Property, which Common Property shall be
the dominant tenement and which contiguous Lot or Common Property shall be the servient tenement.

c. Said easements shall be for the purposes of accommodating any unintentional encroachment due to engineering errors, errors in
construction, reconstruction, repair, support and for the maintenance thereof. The rights and obligations of Owners of the dominant
tenements should not be altered in any. way by such support, settlement and encroachment; provided, however, that no right shall he
created in favor of an Owner or Owners if such encroachment occurred due to the intentional conduct of said Owner or Owners, other
than adjustments by Declarant in the original construction of the Project. In the event that an error in engineering, design or construction
results in

an encroachment of an Improvement into the Common Property or into an adjoining Lot, a correcting instrument may be recorded in the
Official Records of the County.

3.17 Title to the Common Property.

a. Transfer of the Common Property. As each Phase is developed by Declarant or a Merchant Builder. Declarant and such Merchant Builder,
as applicable, will convey or cause to be conveyed to the Association, in fee simple or by easement, the Common Property in such Phase
designated by Declarant in its sole discretion, free and clear of any and all monetary encumbrances and liens (other than non-delinquent taxes
and assessments), subject to reservations, easements, covenants and conditions then of record, including those set forth in this Declaration,
or as contained in the deed conveying such Common Property. Within each Phase, such conveyance shall be completed before the first Close
of Escrow for a Lot in such Phase. No Owner shall interfere with the exercise by the Association of its rights hereunder, or its casement for
maintenance over the Association maintenance areas which are owned in fee by such Owner.

b. Completion of the Common Property. In the event that Improvements proposed to be constructed on any portion of the Common Property
have not been completed, as evidenced by a "Notice of Completion" recorded in the Office of the County Recorder, then the completion of such
Improvements shall be assured in accordance with Section 11018.5 of the California Business and Professions Code, or any similar statute
hereafter enacted.

c. Commencement of Maintenance. Notwithstanding any conveyance of the Common Property to the Association, the Association's responsibility
to maintain the Common Property located in any Phase shall begin on the commencement of Regular Assessments in such Phase; except that
if such Phase consists only of Common Property, the Association's maintenance responsibility therefore shall commence on the first day of the
month immediately following the month in which the deed is recorded conveying such Property to the Association. Prior to the commencement
of maintenance by We Association, such maintenance shall he the responsibility of Declarant or the Merchant Builder, as applicable, depending
upon whether such Phase is being developed by Declarant or a Merchant Builder. Notwithstanding the foregoing, if the contractors or subcontractors
of Declarant or Merchant Builder are contractually obligated to maintain the landscaping or other Improvements on the Common Property, the
Association shall not interfere with the performance of any such warranty or contractual maintenance obligations. Such maintenance performed
by the contractors or subcontractors of Declarant or Merchant Builders shall not postpone the commencement of Regular Assessments pursuant
to this Declaration, nor entitle an Owner to claim any offset or reduction in the amount of such Regular Assessments.

d. Character of Improvements to The Common Property. Disputes The nature, design, quality and quantity of all Improvements to the Common
Property shall be determined by Declarant, in its sole discretion. The Association shall be obligated to

accept tide to the Common Property, and undertake all maintenance responsibilities for the Common Property when title is conveyed and
maintenance responsibilities are tendered by - Declarant, pursuant to Subparagraphs (a) and (c) above. If a dispute arises between the Association
and Declarant or any Merchant Builder in connection with the nature, design, quantity, quality or other attributes of the Common Property, the
completion thereof, the state of title thereto or the acceptance of title or maintenance responsibility therefore, then the Association shall be
obligated to accept title to and assume maintenance responsibility for such Common Property, and all Improvements and facilities located thereon,
pending resolution of such dispute in accordance with Section 18.2 herein.

3.18 Declarant Easements. Declarant hereby reserves to itself, together with the right to transfer the same to others, easements of access, ingress
and egress over all Lots, Common Area and Association Maintenance Areas for installation and maintenance of utilities and drainage facilities shown
on one or more of the Tract Maps for the Project and for the construction, installation, operation. replacement. repair and maintenance of all utility and
service lines, systems and other devices and Improvements which may be reasonably necessary for the development and marketing of Residences
within the Project and the Annexation Property, including, but not limited, water, sewer, gas, electrical, telephone, television and storm drain purposes.
Each Owner, by accepting a deed to a Lot in the Project, expressly consents to the foregoing easements and rights of way and authorizes and appoints
Declarant (so long as Declarant owns all or any portion of the Project or the Annexation Property) as its and their attorney-in-fact of such Owner to
execute any and all instruments particularly describing or locating such easements or rights of way.

ARTICLE 4 THE ASSOCIATION

4.1 Membership. Every person or entity who is an Owner, as defined in Article I above, including Declarant. shall be a Member of the Association.
The foregoing is not intended to include persons or entities who hold an interest in a Lot in the Project merely as security for the performance of an
obligation. All memberships in the Association shall be appurtenant to the Lot owned by each Member, and memberships in the Association shall
not be assignable, except to the person or entity to whom the title to the Lot has been transferred. Ownership of such Lot shall be the sole
qualification for membership in the Association The memberships in the Association shall not be transferred, pledged or alienated in any way,
except upon the transfer of title to said Lot, and then only to the purchaser or Mortgagee of such Lot. Any attempt to make a prohibited membership
transfer shall be void and will not be reflected in the books of the Association. The Association may levy a reasonable transfer fee against new Owners
and their Lots (which fee shall be a Compliance Assessment chargeable to such new Owner) to reimburse the Association for the administrative cost
of transferring the memberships to the new Owners on the records of the Association.

4.2 Classes of Membership. The Association shall have two (2) classes of voting membership, as follows:

4.3 Class A. Class A Members are all Owners, except Declarant and Merchant Builders for so long as there exists a Class B Membership.
Each Class A Member shall be entitled to one (I) vote for each Lot owned. Declarant shall become a Class A Member with respect to Lots owned
or voted by Declarant upon the conversion of Declarant's Class B membership, as provided below. The vote for such Lot shall be exercised as they
among themselves determine, but in no event shall more than one (I) vote be cast with respect to any Lot. The Association shall not be required to
recognize the vote or written assent of any such co-Owner, except the vote or written assent of the co-Owner designated in a writing executed by all
of such co-Owners and delivered to the Association.

4.4 Class B. The Class B Members are Declarant and the Merchant Builders. As to each Phase, the Class B Member shall be entitled to three
(3) votes for each Lot it owns and the Class B membership shall be converted to Class A membership upon the happening of the earliest to occur of
the following events:

a. The Close of Escrow for the sale of five hundred fifty-four (554) Lots in the Project;

b. The fifth (5th) anniversary of the first Close of Escrow in a Phase for which a Final Subdivision Public Report was most recently issued
by the DRE; or

c. The twelfth (12th) anniversary of the first Close of Escrow for the sale of a Lot in the Project.

4.5 Special Voting Procedures for Election of the Board. The Declarant shall be entitled to solely elect a majority of the. members of the Board until
the first to occur of the following events:

a. The election of the Board immediately following the sale by Declarant of five hundred fifty-four (554) Lots in the Project to members of the
public; or

b. The date which is the twelfth (12th) anniversary of the fifth Close of Escrow or the sale of a Lot in Phase 1.

Notwithstanding the foregoing, the Class A Members shall be entitled to elect at least forty percent (40%) of the members of the Board, so long as
there are two (2) classes of membership outstanding in the Association.

4.6 Voting Rights. All voting rights shall be subject to e provisions and limitations provided in this Declaration, the Articles and the By-Laws. Except
as provided in Article 5, Sections 5.3 and 5.4, and in Article 15 herein, and Article 5, Section 5.3, of the By-Laws, any provision of the Articles, the
By-Laws or this Declaration which expressly requires the

vote or written consent of a specified percentage of the voting power of the Association shall require the approval of such specified percentage of the
voting power of each class of membership. - Upon the termination of Class B membership, except as provided in Article 5, Sections 51 and 5.4, and
Article 15 herein, and Article 5, Section 5.3, of the By-Laws, any provision of the Articles, the By-Laws or this Declaration which expressly requires
the vote or written consent of a specified percentage of the voting power of the Association shall require the vote or written consent of the voting power
of the Association, as well as the vote or written consent of the voting power of the Association residing in Members, other than Declarant.

4.7 Voting: Joint Owners. Those Members appearing in the official records of the Association as record Owners of Lots shall be entitled to notice of
any meeting of Members. If there is more than one (1) record Owner of any Lot (“Joint Owners"), an such joint Owners shall be Members of the
Association and may attend any meetings of the Association, but only one (I) such joint Owner shall be entitled to exercise the vote to which the
Lot is entitled. Fractional votes shall not be allowed. Joint Owners may, from time to time, designate in writing one (1) joint Owner to vote. Where
no joint Owner is designated, a vote made by a joint Owner of such Lot shall be conclusively presumed to have been cast with full authority and consent
of the joint Owners. In the event of a dispute among joint Owners as to how their vote shall be cast, the joint Owners shall lose their right to vote on the
matter in question, and any attempt to cast a vote in those circumstances shall be disallowed by the Board. The Board shall have no jurisdiction to
determine any matters relating to the entitlement of Declarant to vote, or the manner in which such vote is exercised.

4.8 Adjustment of Voting Rights. The voting rights in the Association shall he adjusted on the first day of the month immediately following the first
Close of Escrow for the sale of a Lot in each subsequent Phase of the Project.

4.9 Vesting of Voting Rights. The voting rights attributable to any given Lot in the Project, as provided for herein, shall not vest until the Assessments
provided for herein below have been levied by the Association against said Lot.

4.10 Suspension of Voting Rights. The Board shall have the authority to suspend the voting rights of any Member to vote at any meeting of the
Members for any period during which such Owner is delinquent in the payment of any Assessment, regardless of type. Any suspension for
nonpayment of any Assessment shall not constitute a waiver of discharge of the Member's obligation to pay the Assessments provided for in this
Declaration.

4.11 Transfer. The Association membership held by any Owner of a Lot shall not be transferred, pledged or alienated in any way, except as incidental
to the sale of such Lot. In the event of such sale, the Association membership may only be transferred, pledged or alienated to the bona fide purchaser
or purchasers of the Lot, or to the Mortgagee (or third party purchaser) of such Lot upon a foreclosure sale. Any attempt to make a prohibited transfer
is void and will not be reflected upon the books and records of the Association. The Association may levy a reasonable transfer fee against new
Owners (which fee may he chargeable to such new Owners

as a Compliance Assessment) to reimburse the Association for the administrative cost of transfer-ring the memberships to the new Owners on the
records of the Association.

4.12 Proxies. Votes may be cast in person or by proxy. Proxies must be filed - with the Secretary before the appointed time for each meeting.
Every proxy shall he revocable and shall automatically terminate upon the earliest of the following: (a) the conveyance by the Owner of his Lot; (b)
the date of automatic termination, if any, specified in the proxy, but not to exceed three (3) years from the date of issuance of the proxy; or (c) eleven
(11) months from the date of issuance of the proxy, if no automatic termination date is specified in the proxy. Any form of proxy or written ballot
distributed to the membership of the Association shall afford an Owner the opportunity to specify a choice between approval and disapproval of
each matter or group of matters to be acted upon at the meeting for which said proxy was distributed, except it shall not be mandatory that a
candidate for election to the Board be named in the proxy. A proxy or written ballot shall provide that, where the Owner specifics a choice, the
vote shall be cast in accordance with that choice. In addition, the proxy shall also identify the person or persons authorized to exercise the proxy
and the length of time it shall be valid.

4.13 Record Dates. For the purposes of determining Members entitled to notice of any meeting, to vote or to exercise any other rights in respect
of any lawful action, the Board may fix in advance record dates as provided in the By-Laws.

ARTICLE 5 FUNCTIONS OF THE ASSOCIATION

5.1 Management Body. The Association is hereby designated as the management body of the Project. The Members of the Association shall be
the Owners in the Project provided herein, and the affairs of the Association shall be managed by a Board of Directors, as more particularly set
forth in the By-Laws of the Association. The initial Board shall be appointed by the incorporator or is successor. Thereafter, the Board shall be
elected as provided in said By-Laws.

5.2 Powers. The Association has all of the powers of a California Nonprofit Mutual Benefit Corporation, subject only to such limitations upon
the exercise of such powers as are expressly set forth in the Association management documents. Subject to the provisions of the Association
management documents, the Association has the power to perform any and all lawful acts which may be necessary or proper for or incidental
to the exercise of any of the express powers of the Association. Subject to the foregoing provisions, the Association, acting through the Board,
shall have the following specific powers:

a. Enforce the provisions of this Declaration, the Architectural Standards, the Rules and Regulations, and all contracts or any agreements to
which the Association is a party;

b. Acquire title, manage, maintain, repair, inspect and replace the Common Property, and Improvements located thereon, including all
personal properly, in a neat, clean, safe and attractive condition at all times, and to pay all utilities, landscaping, utility and other necessary
services for the Common Property, all as more specifically set forth in the Article herein entitled "Repair and Maintenance";

c. Maintain fire, casualty, liability and fidelity bond coverage, and such other insurance coverages as are required or suggested pursuant
to the provisions of the Article herein entitled "Insurance";

d. Delegate its powers and authority, officers and employees of the Association or to a manager employed by the Association, provided
that the Board shall not delegate its responsibility:

(I) to make expenditures for additions or Improvements chargeable against the reserve funds;

(2) to conduct hearings concerning compliance by an Owner or his tenant, lessee, guest or invitee for a violation of the Association
management documents;

(3) to levy monetary fines, impose Special Assessments against Lots, temporary suspend an Owner's right as a Member of the
Association, or to otherwise impose discipline; or

(4) to initiate litigation, record a claim of lien, or institute foreclosure proceedings for default in the payment of Assessments;

(5) to adopt Rules and Regulations concerning the maintenance, improvement, use and/or occupancy of the Project;

(6) to discharge by payment, if necessary, any lien against the Common Property or other portions of the properties, and, after
Notice and Hearing as provided in the By-laws, charge the cost of discharging said lien to the Owner or Owners responsibility for its existence;

(7) to promulgate and adopt inspection and maintenance guidelines for the periodic inspection and maintenance of the Common
Property;

(8) to-adopt or designate a trustee to enforce assessment liens by sale as provided in the Article here entitled "Effect of Non-Payment of
Assessments; Remedies of the Association" and California Civil Code Section 1367(b) and any successor or companion statutes;

(9) to disclose information in accordance with Section

11018.6 of the California Business and Professions Code and Sections 1354, 1365.5, 1365.9,

1375 and 1375.1 of the California Civil Code, as amended from time to time.

e. Obtain, for the benefit of the Common Property, all commonly metered water, gas and electric services, and may provide for refuse
collection and cable (or master antenna) television service;

f. Grant easements or licenses where necessary for utilities and sewer facilities over, on and across the Common Property to serve the
Project and the Association Property;

g. Grant nonexclusive easements over the Common Property, as necessary, for the express purpose of permitting the Association
to perform its maintenance responsibilities pursuant to this Declaration;

h. Levy and collect Assessments on the Owners of all Its in the Project for which Assessments have commenced, and enforce
payment of such Assessments in accordance with the terms and provisions set forth in the Article herein entitled "Effect of Nonpayment of
Assessments: Remedies of the Association";

i. Pay all taxes and special assessments which would be a lien upon the Project or the Common Property, and discharge any lien or
encumbrance levied against the Project or the Common Property;

j. Pay for reconstruction of any portion of the Common Property damaged or destroyed;

k. Employ and contract with a professional manager for the Association. Except as otherwise provided by the DRE and as provided in this
Declaration, any such management agreement, or any agreement providing for services by Declarant to the Association, shall he for a term
not in excess of one (1) year (renewable by agreement of the parties for successive one (I) year periods), and any such agreement shall be
terminable by the Association, acting by and through the Board, at any time without cause or the payment of a penalty or termination fee
upon riot more than ninety (90) days written notice.

l. Retain, if deemed appropriate by the Board, and pay for legal and accounting services necessary and proper for the efficient operation
of the Association, enforcement of the Declaration, Rules and Regulations and Architectural Standards, or in performing any other ditties or
enforcing any other rights of the Association;

m. Enter into a written subsidy agreement and/or maintenance agreement with Declarant, under which Declarant agrees to: (I) pay all or
ally portion of

the Common Expenses of the Association, and/or (2) perform any or all of the Association's maintenance obligations described in the
Declaration in exchange for a temporary reduction or suspension of Regular Assessments during the term of such agreement;

n. Enter into any Lot when necessary in connection with maintenance or construction for which the Board is responsible;

o. Borrow and repay money for the purpose of maintaining and improving the Common Property, and Improvements thereon, and to
encumber said Common Property as security for the repayment of such borrowed money;

p. Perform any and all other acts and things that a nonprofit, mutual benefit corporation organized under the laws of the State of California
is empowered to do, which may he necessary, convenient or appropriate in the administration of its affairs for the specific purposes of meeting
its duties as set forth in this Declaration;

q. The right to join with Declarant in the execution of any lot line adjustment, certificate of compliance, or other instrument in and to any in
accordance with any such lot line adjustment, provided that such lot line adjustment and the resulting conveyance are made for (i) for the
purpose of eliminating encroachment, (ii) to permit changes in the development plan in circumstances where changes are the result of
topography, obstruction, hardship, aesthetic or environmental conditions; (iii) or the requirement of the Public Agencies; (iv) do not have
a significant negative impact upon the Association or the Owners or (v) to transfer the burden of management and maintenance of ally
Common Property which in the reasonable judgement of the Board is generally inaccessible or is not likely to be of any particular use or
benefit to the Owners; and

r. Subject to compliance with Civil Code 1354 and/or Civil Code Section 1375, or any companion or successor statutes, initiate, defend,
settle or intervene in litigation, arbitration, mediation or other administrative proceedings in its own name as the real party in interest without
joining with it the individual Owners in matters pertaining to the following: (i) enforcement of the Association management documents; (ii)
damage to the Common Property; (iii) damage to those portions of the Lots for which the Association is obligated to maintain, inspect and
repair; (iv) damage to the residences which arise out of, or is integrally related to, damage to the Common Property.

5.3 Duties. The Board shall perform and execute the following duties for and on
behalf of the Association:

a. Provide, water, sewer, gas, electricity, garbage and trash collection, and other necessary utility services for the
Common Property;

b. Provide insurance for the Association and its Members, in accordance with the provisions of the Article here in
below entitled "Insurance";

c. Maintain and repair all portions of the Common Property in a neat, clean, safe, attractive, sanitary and orderly
condition at all times. In the event any maintenance or repairs to the Common Property are required due to the willful or negligent acts or
omissions of an Owner or Owners, the Association shall levy the cost of such maintenance and repair as a Compliance Assessment against
the responsible Owner(s);

d. Without limiting the generality of the foregoing, maintain and repair all Common Property and related Improvements,
as set forth in the Article herein entitled "Repair and Maintenance;"

e. Release security and exonerate bonds posted by Declarant or any Merchant Builders to secure obligations to the
Association immediately upon satisfaction of the obligations giving rise to the posting of such security;.

                                   f.        Pay all real and personal property taxes and assessments which the
     Association is required to pay for pursuant to the terms and provisions of this Declaration or by
     law, unless separately assessed to Owners; provided, however, that it shall be the obligation of
     each Owner to pay his respective share of the tax assessment levied on the Project prior to
     separate assessments by the Tax Assessor pursuant to the applicable provisions of the California
     Revenue and Taxation Code;
                                 g.      Contract for any other material, supplies, furniture, labor, services,
     maintenance, repairs, structural alterations and insurance which the Association is required to pay
     for pursuant to the terms and provisions of this Declaration or by law;

h. Cause financial statements for the Association to be regularly prepared
and distributed to each Member of the Association:

(1) A pro forma operating budget for each fiscal year shall be distributed not less than forty-live (45) days nor more than sixty (60) days
prior to. the beginning of the fiscal year, and shall
contain the following information:

i) An itemized estimate of the Associations
revenue and expenses, determined on an accrual basis;

ii) The amount of the total cash reserves or the Association which arc then currently available for the major repair or replacement of The
Common Property Improvements and for other contingencies;

iii) A summary, primed in bold type, of the Association's reserves, based upon the most recent review or study conducted pursuant to
California Civil Code Section 1365.5 ("Study"), as may be amended, from time to time, setting forth the following:

(A) The current estimated replacement cost, estimated remaining life and the estimated useful life of each major component
of the Common Property;

(B) The current estimate, as of the end of the fiscal year for which the Study was prepared, of the amount of cash reserves
necessary to repair, replace, restore or maintain the major components of the Common Property;

(C) The current amount of accumulated cash reserves actually set aside to repair, replace, restore or maintain such major
Common Property Improvements; and

(D) The percentage by which the actual current amount of accumulated cash reserves meets the current estimated amount of
cash reserves necessary to maintain, repair, replace and restore such major components.

iv) A statement setting forth the procedures utilized by the Association to calculate and establish reserves to defray the
costs of future repairs, replacements or additions to the Common Property Improvements; and

v) A general statement as to whether the Board has determined or anticipates that the levy of one (1) or more Special
Assessments will be required to repair, replace or restore any major components of the Common Property or to provide adequate reserves
therefor.

(2) A balance sheet as of an accounting date which is the last. day of the month closest in time to six (6) months from the date of closing
for the first sale of a Lot, and an operating statement for the period from the date of the first closing to the said accounting date, shall be
distributed within sixty (60) days after the accounting date. This operating statement shall include a schedule of Assessments received, and
receivable, identified by the number of the Lot and the name of the person or entity assessed;

(3) An annual report consisting of the following shall be distributed within one hundred twenty (120) days after the close of the fiscal year:

i) A balance sheet as of the last day of the Association's fiscal year;

ii) An operating (income) statement for the fiscal year;

iii) A statement of changes in financial position for the fiscal year; and

iv) Any information required to be reported pursuant to Section 8322 of the California Corporations Code.

If for any reason this annual report is not prepared by a licensee of the California Board of Accountancy, said report shall be accompanied
by a certificate from an authorized officer of the Association that the statements were prepared without audit from the hooks and records
of the Association. Notwithstanding the foregoing, in lieu of distributing the pro forma budget required here in above, the Board may elect
Co distribute a summary of the pro forma budget to all Members with a written notice that the pro forma budget is available at a suitable
location in the Project;

(4) A statement of the Association's policies and practices in enforcing its remedies against Members for nonpayment of Assessments,
as set forth in the Article herein entitled "Effect of Nonpayment of Assessments: Remedies of the Association," which shall be distributed
annually to the Members during the sixty (60) days period immediately preceding the beginning of the Association's fiscal year;

(5) A summary of the Association's policies and procedures for implementing the procedural requirements for alternative dispute
resolution required by Section 1354 of the California Civil Code, and any successor statute;

(6) The Board shall review on a quarterly basis, the following:

i) A current reconciliation of the Association's operating accounts;

ii) A current reconciliation of the Association's reserve accounts:

iii) The current fiscal year's actual reserves and expenses compared to the then current year's Association budget;

iv) An income and expense statement for the Association's operating and reserve accounts: and

v) The most current account statements prepared by the financial institutions where the Association maintains its
operating and reserve accounts.

(7) ' A summary of the Association's general liability, casualty and lire and other insurance policies, which shall be distributed within
sixty (60) days preceding the beginning of the Association's fiscal year, and which shall include the following information about each
policy:

i) The type of insurance;

ii) the name of the insurer;

iii) the policy limits; and

iv) the deductibles for each policy.

The Association shall, as soon as reasonably practical, notify the Members by first class mail if any of the policies referred to above have
lapsed, been canceled and are not immediately renewed, restored or replaced, or if there is a significant change in the terms of such policies,
such as a reduction in coverage or limits or an increase in the deductible. If the Association receives any notice of non-renewal of a policy,
then it shall immediately notify the Members if replacement coverage will not be in effect on the date the existing coverage will lapse. The
summary of the insurance policies obtained and maintained by the Association shall be prepared in accordance with the requirements of the
California Civil Code Section 1365, as the same may be amended, from time to time.

i. Cause financial statements for the Association to be regularly prepared and distributed to each Member of the Association

j. Assume and pay out of the Assessments provided for here in below all costs and expenses incurred by the Association in connection with
the performance and execution of all of the aforesaid powers and duties, and any other powers and duties the Association may assume;

k. Formulate, adopt and enforce such Rules and Regulations as it may deem proper for the operation of the Common Property. Notice of
adoption of any such Rules and Regulations and of any change, amendment or repeal thereof, shall be given in writing to each Member,
and shall be placed on file in the principal office of the Association. In the event of any conflict between such Rules and Regulations and
this Declaration, this Declaration shall prevail;

l. Enforce all applicable provisions of this Declaration, the Articles, By-Laws, Architectural Standards, and such Rules
and Regulations of the Association and of all other documents pertaining to the ownership, use, management and control of the Project;

m. Give notices in writing to the Federal Home Loan Mortgage Corporation (hereinafter "FHLMC"), the Federal National
Mortgage Association

(hereinafter "FNMA") and the Government National Mortgage Association (hereinafter "GNMA"), and other lenders and investors participating
in the financing of the sale of Lots in the Project, as required herein; and

n. Within ten (10) days of the mailing or delivery of a written request from an Owner, provide said Owner with a copy of this Declaration, the
Rules and Regulations, and the Articles and By-Laws for the Association, together with a true statement in writing as to the amount of any
delinquent Assessments, penalties, attorneys' fees and other charges therein as provided by this Declaration or other management documents
of the Board as of the date of such request. The Board may impose a fee for providing the foregoing, but in no event shall the fee exceed the
reasonable cost to prepare and reproduce the requested documents. In addition, the Board shall make available, during normal working business
hours, upon request by any prospective purchaser of a Lot, any Owner of a Lot, any first Mortgagee and the holder(s), insurer(s) and guarantor(s)
of a first Mortgage of any Lot, current copies of this Declaration, the Articles, the By-Laws and the Rules and Regulations governing the Lot and
all of the hooks, records and financing statements of the Association.

5.4 Limitations on Board Action. The Board shall be prohibited from taking any of the following actions, except with the written asset, by vote at a
meeting of the Association, or by written ballot without a meeting pursuant to California Corporations Code Section 7513, or any successor statute,
of a simple majority of the votes residing in Members, other than the Declarant, constituting a quorum consisting of more than fifty percent (50%)
of the voting power of the Association residing in Members other than Declarant:

a. Entering into a contract with a third person, wherein the third person will furnish goods or services for the Common Property or the Association
for a term longer than one (I) year, with the following exceptions:

(1) A management contract, if applicable;

(2) A contract with a public utility company it the rates charged for the materials or services are regulated by the Public
Utilities Commission; provided, however, that the term of the contract shall not exceed the shortest term for which the supplier will contract ache
regulated rate;

(3) Prepaid casualty and/or liability insurance policies of not to exceed three (3) years duration, provided that the policy
permits for short-rate cancellation by the insured;

(4) Agreements for cable television services and equipment or satellite dish television services and equipment of not to
exceed five (5) years duration, provided that the supplier or suppliers tinder the agreement is not an entity in which Declarant has a direct or
indirect interest of ten percent (10%) or more;

(5) Agreements for sale or lease of burglar alarm and fire alarm equipment installation, inspection and services of not to exceed five(5)
years duration, provided that the supplier or suppliers are not entities in which the Declarant has a direct or indirect ownership interest of ten
percent (10%) or more; and

(6) The contract for a term not to exceed three years that is terminable by the Association after no longer than one (1) year without cause,
penalty or other obligation upon ninety (90) days written notice of termination to the other party.

b. Incurring aggregate expenditures for-capital improvements to the Common Property in any fiscal year in excess of five percent (5%) of the
budgeted gross expenses of the Association for that fiscal year;

c. Selling during any fiscal year property of the Association having an aggregate fair market value greater than five percent (5%) of the budgeted
gross expenses of the Association for that fiscal year;

d. Paying compensation to Directors or to officers of the Association for services performed in the conduct of the Associations business;
provided, however, that the Board may cause a Director or officer to be reimbursed for expenses incurred in carrying on the business of the
Association; or

e. Filling a vacancy on the Board created by the removal of a

Director.

5.5 Licenses, Easements and Rights of Way. The Board, for and on behalf of the Association, is authorized and empowered to grant
such licenses, easements and rights-of-way for sewer lines, water lines, underground conduits, storm drains and other public utility purposes
over those portions of the Common Property upon which no building or other structure has been erected as may be necessary mid appropriate
for the orderly maintenance, preservation and enjoyment of the Common Property, or for the preservation of the health, safety, convenience and
welfare of the Owners.

5.6 New Improvements. Except as otherwise provided in this Declaration, the Association may construct new Improvements or additions
to the Common Property or demolish existing Improvements, provided that, in the ease Many Improvement (a) the written consent or vote of a
majority of the Owners (other than Declarant) in the Project shall first be obtained as m the maximum total cost of any addition or demolition
involving atom] expenditure in excess of five percent (5%) of the budgeted gross expenses of the Association for that fiscal year; (b) no Lot shall
he altered or damaged by any such demolition or construction without the consent of the Owner thereof; and (c) the County shall review and approve
the construction of any new Improvements.

5.7 Association Rules and Regulations. The Board shall also have the power to adopt, amend and repeal Rules and Regulations, as it deems
reasonable, which may include the establishment of a system of fines and penalties enforceable as Compliance Assessments. The Rules and
Regulations shall govern such matters in furtherance of the purposes of the Association, including, without limitation, the use of the Common
Property, signs, parking restrictions and enforcement, trash collection, minimum standards for maintenance of Lots consistent with such standards
as may be set forth in this Declaration or adopted by the ACC, and any other matter which is within the jurisdiction of the Association; provided,
however, that the Rules and Regulations may not discriminate among Owners and shall not be inconsistent with this Declaration, the Articles or
By-Laws. A copy of the Rules and Regulations as they may, from time to time, be adopted, amended or repealed, or a notice setting forth the
adoption, amendment or repeal of specific portions of the Rules and Regulations, shall be delivered to each Owner. The Rules and Regulations
shall have the same force and effect as if they were set forth in and were part of this Declaration, and shall he binding on the Owners and their
successors in interest whether or not actually received thereby. The Rules and Regulations, as adopted, amended or re-pealed, shall be available
at the principal office of the Association to each Owner upon request. In the event of any conflict between any such Rules and Regulations and
any other provisions of this Declaration, or the Articles or By-Laws, the provisions of the Rules and Regulations shall be deemed to be superseded.
MI fines and penalties are personal obligations of the Owner against whom such fines and penalties are imposed, and are not enforceable by lien.

5.8 Schedule of Fines and Penalties- The Board may adopt a schedule of reasonable fines and penalties which, in its reasonable discretion,
it may impose against an Owner for the failure of such Owner, or of a resident, guest or invitee of such Owner, to comply with any provisions
of this Declaration or the Association's Rules and Regulations. The Board shall adopt and distribute to each Member, by personal delivery or
by first class mail, a schedule of such fines and penalties. The Board shall not be required to distribute any additional schedules unless there
are changes from the schedule that was adopted and distributed to the Members pursuant to this section. Such lines or penalties may only he
imposed by the Board after Notice and Hearing, as set forth in the By-Laws. All fines and penalties are personal obligations of the Owner against
whom such fines and penalties are imposed, and are not enforceable by lien.

ARTICLE 6 ASSESSMENTS

6.1 Creation of the Lien and Personal Obligation of Assessment, The Declarant, and any Merchant Builder, for each Lot owned by Declarant
or such Merchant Builder, which is subject to assessment, hereby covenants, and each Owner of any Lot, by acceptance of a deed therefore,
whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association: (a) Regular Assessments;
(b) Special Assessments for capital improvements and such other purposes set forth herein; (c) Compliance Assessments, including, but not
limited to, costs incurred by the Association in the repair of damage to the Common Property for which such Owner was responsible, and costs
incurred by the Association in bringing

5.7 Association Rules and Regulations. The Board shall also have the power to adopt, amend and repeal Rules and Regulations, as it deems
reasonable, which may include the establishment of a system of fines and penalties enforceable as Compliance Assessments. The Rules
and Regulations shall govern such matters in furtherance of the purposes of the Association, including, without limitation, the use of the
Common Property, signs, parking restrictions and enforcement, trash collection, minimum standards for maintenance of Lots consistent with
such standards as may be set forth in this Declaration or adopted by the ACC, and any other matter which is within the jurisdiction of the
Association; provided, however, that the Rules and Regulations may not discriminate among Owners and shall not be inconsistent with this
Declaration, the Articles or By-Laws. A copy of the Rules and Regulations as they may, from time to time, be adopted, amended or repealed,
or a notice setting forth the adoption, amendment or repeal of specific portions of the Rules and Regulations, shall be delivered to each Owner.
The Rules and Regulations shall have the same force and effect as if they were set forth in and were part of this Declaration, and shall he binding
on the Owners and their successors in interest whether or not actually received thereby. The Rules and Regulations, as adopted, amended or
re-pealed, shall be available at the principal office of the Association to each Owner upon request. In the event of any conflict between any such
Rules and Regulations and any other provisions of this Declaration, or the Articles or By-Laws, the provisions of the Rules and Regulations shall
be deemed to be superseded. MI fines and penalties are personal obligations of the Owner against whom such fines and penalties are imposed,
and are not enforceable by lien.

ARTICLE 6 ASSESSMENTS

6.1 Creation of the Lien and Personal Obligation of Assessment, The Declarant, and any Merchant Builder, for each Lot owned by Declarant or
such Merchant Builder, which is subject to assessment, hereby covenants, and each Owner of any Lot, by acceptance of a deed therefore,
whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association: (a) Regular Assessments;
(b) Special Assessments for capital improvements and such other purposes set forth herein; (c) Compliance Assessments, including, but not
limited to, costs incurred by the Association in the repair of damage to the Common Property for which such Owner was responsible, and costs
incurred by the Association in bringing

such Owner and his Lot into compliance with this Declaration; and (d) such other assessments as the Association may periodically establish.
The Regular and Special Assessments, together with interest, costs and reasonable attorneys' foes for the collection thereof, shall be a charge
on the land and shall he a continuing lien upon the Lot against which each such Assessment is made Each Regular Assessment and Special
Assessment, together with interest, costs and reasonable attorneys' fees for the collection thereof, in accordance with Section 1366(c) of the
California Civil Code, as the same may be amended, from time to time, shall also he the personal obligation of the Owner of such property at
the lime when the Assessment fell due. Each Compliance Assessment levied against an Owner, together with a reasonable late charge, interest,
costs and reasonable attorneys' fees for the collection thereof, shall be the personal obligation of the Owner of the property at the time of the
Assessment. At no time shall the nonpayment of a Compliance Assessment become a lien on art Owner's Lot. The personal obligation for
delinquent Compliance Assessments shall not pass to an Owner's successors in title, unless expressly assumed by them.

6.2 Purpose of Regular Assessments: Levy and Collection. The Regular Assessments levied by the Association shall be used exclusively to
promote the health, safely and welfare of the Owners, in the Project, and to maintain and improve the Common Property. The Association, by
and through its Board, shall levy and collect Assessments from the Owner of each Lot in the Project in an amount sufficient to cover all of the
Common Expenses incurred by the Association in connection with the performance and execution of the powers and duties set forth in this
Declaration, dre By-Laws and Articles. Regular Assessments may be collected on a monthly installment basis.

6.3 Regular Assessments- Basis Except as provided hereinbelow, Regular Assessments payable to the Association shall be assessed equally
against all Owners of Lots. Each Owner's proportionate share of the Common Expenses for any fiscal year of the Association shall be a fraction,
the numerator of which shall be the number of Lots owned by such Owner, and the denominator of which shall be the total number of Lots in the
Project which are subject to Assessment. Until the first day of the fiscal year of the Association immediately following the first Close or Escrow
for the sale of a Lot in the Project to an Owner, the maximum total Regular Assessment shall be the amount set forth in the pro forma operating
budget reviewed and approved by the DRE. Subject lo the limitations imposed by California Civil Code Section 1366, as the same may be amended,
from time to time, the Board may increase Regular Assessments subject to the following limitations:

a. Increases in Regular Assessments for any fiscal year which are less than or equal to twenty percent (20%) above the Regular Assessment for
the immediately preceding fiscal year may he approved by the Board, provided that the Board shall comply with the provisions set forth in Section
1365(a) of the California Civil Code with respect to the distribution of the pro forma operating budget of the Association for the forthcoming fiscal year

b. Increases in Regular Assessments for any fiscal year which arc greater than twenty percent (20%) above Regular Assessments for the
immediately preceding fiscal year may be approved by the Board only after the Board obtains the

affirmative vote of Members constituting a quorum, casting a majority of the votes at a meeting or an election of the Association conducted in
accordance with California Corporations Code Sections 7510, et seq., and Sections 7613, et seq. For purposes of this Section, a quorum means
more than fifty percent (50%) of the Members of the Association.

The Board may fix the Regular Assessment at an amount not in excess of the maximum Regular Assessment. So long as Declarant is offering
Lots for sale pursuant to a Final Subdivision Public Report, the Regular Assessment may not be decreased by ten percent (10%) or more without
the express written consent of the Declarant and the DRE

Following the annexation of a subsequent Phase pursuant to the provisions set forth in this Declaration, Regular Assessments may be automatically
increased (or decreased) for all Lots in the Project as set forth in the Association budget. Such adjustment, if any, shall occur on the first day of the
month following the first Close of Escrow for the sale of a Lot in said Phase without any approval of the Members to the amount recommended by the
DRE in connection with the DRE's review and processing of the Association budget for such Phase. In addition, in order to minimize the need for
frequent adjustments in the amount of die Regular Assessments during the course of development of the Project, the DRE has deemed it reasonable
to allow the Board to stabilize the amount of Regular Assessments invoiced to the Owners at a level of amount calculated to defray the Common
Expenses of the Association during the time that Regular Assessments are fluctuating due to the periodic annexation of Lots and Common Property.
Accordingly, the pro forma operating budget approved by the DRE provides for level Regular Assessments to be levied by the Association, which may
either temporarily accrue a surplus, or permit a previously accrued surplus to gradually deplete. Until all of the Annexation Property is subject to
Regular Assessments, any excess in the Regular Assessments collected shall be placed in a separate account ("Surplus Fund Account") to be drawn
upon only for the purpose of funding any deficit which may occur due to the use of a level Regular Assessment in a subsequent Phase. In order to ensure
adequate Regular Assessments are being collected during the development of the Project, the Board shall review the Surplus Fund Account on a monthly
basis to ensure that the account is sufficient to cover the difference in the level Regular Assessment and the actual Common Expenses of the Association
for a minimum of three (3) months, or ten percent (10%) of the current monthly budget, whichever is higher. In the event the Surplus Fund Account is
depleted to an amount inadequate to fund an anticipated three (3) month deficit, then the Board shall make alternative arrangements to ensure adequate
funding of the Regular Assessments to meet the Common Expenses of the Association.

6.4 Special Assessments. In any fiscal year the Board may not, subject to the limitations of California Civil Code Section 1366, without the vote or written
assent of a majority of those Owners constituting a quorum (which shall mean more than fifty percent (50%1 of Owners of the Association) casting a
majority of affirmative voles at a meeting or election of the Association conducted in accordance with Sections 7510, et seq, and 7613 of the Corporations
Code, levy Special Assessments to defray the costs of any action or undertaking on behalf of the Association which, in the aggregate, exceed five percent
(5%) of the budgeted gross express of the Association for that fiscal year. The five percent (5%) limitation shall not apply to increases

in Special Assessments related to an emergency situation, as described in Section 5.5 below. Special Assessments shall be levied among all Owners
and their Lots in the same proportions as their Regular Assessments.

6.5 Emergency Situations. The limitations set forth in Sections 5.3 and 5.4 above shall not limit increases in Regular Assessments or Special Assessments
which may become necessary for emergency situations. For purposes of this section, an emergency situation is any one of the following:

a. An extraordinary expense required by an order by a court;

b. An extraordinary expense for the maintenance or repair of The Common Property that is necessary to remedy any dangerous condition in the Project
that represents a threat of damage or injury to any person or property; and

c. An extraordinary expense necessary to repair or maintain the Common Properly, or any portion thereof, that could not have been
reasonably anticipated by the Board at the time the most recent Association budget was prepared. Prior to the imposition or collection of an Assessment
pursuant to this Subsection c., the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expense involved, and
why the expense was not or could not have been reasonably foreseen in the budget process. The resolution shall be distributed to the Members with the
notice of Assessment.

6.6 Compliance Assessments. A Compliance Assessment is a charge against a particular Owner directly attributable to, and/or reimbursable by,
the Owner, equal to the cost incurred by the Association for corrective action performed pursuant to the provisions of this Declaration, or to suspend or
condition such Owner's right to use any portion of the Common Property. Any suspension or conditional suspension shall be for a period of not more than
thirty (30) days for any continuing infraction, but in the case of the continuing infraction, including non-payment of any assessment after the same becomes
delinquent, may be imposed for so long as the violation continues. Compliance Assessment shall not include any late payment Penalties, interest charges
or costs, including attorneys' fees incurred by the Association in the collection of annual or Special Assessments.

6.7 Date of__ Commencement of Regular Assessments: Due Dates. Regular Assessments shall commence as to each Lot in a Phase on the first
day of the month following the first Close of Escrow for the sale of a Lot in such Phase. Regular Assessments shall be adjusted according to the number of
months remaining in the fiscal year, as set forth in the By-Laws. The Board shall fix the amount of the Regular Assessment against each Lot at least thirty
(30) days in advance of each Regular Assessment period. The Association. shall provide notice by first class mail to the Owners of any increase in Regular
Assessments of the Association not less than thirty (30) (lays nor more 'ban sixty (60) days prior to the increased Regular Assessment becoming due.

Declarant and any other Owner shall be exempt from the payment of those portions of the Regular Assessments that arc for the purpose of defraying
expenses and reserves directly attributable to the existence of Improvements within the Common Property that have not been completed or placed into use
by the Association at the time Assessments commence. This exemption shall be in effect until the earlier to occur of: (a) the recordation of a Notice of -
Completion of the Common Property Improvements; or (b) the placement of such Improvements into use.

Notwithstanding any other provisions of the Association Management Documents regarding the term and termination of contracts with Declarant for providing
services to the Association, Declarant may enter into a written maintenance and/or subsidy agreement with the Association under which Declarant shall pay
all or any portion of the Common Expenses, and perform all or any portion of the Association's maintenance responsibilities in exchange for a temporary
suspension of Regular Assessments. Such agreement shall extend for a term and beyond such conditions as are approved by the DRE, and may require
Owners to reimburse Declarant, through the Association, for a portion of the costs expended in the satisfaction of Declarant's obligations pursuant to such
agreement.

6.8 Certification of Payment. The Association shall, upon demand and for a reasonable charge, furnish a certificate signed by an officer or agent of the
Association setting forth whether the Assessments on a specified Lot have been paid. If a certificate states that Assessments have been paid, such
certificate shall be conclusive evidence of such payment.

6.9 Delivery of Statement. Upon written request, the Board shall, within ten (I0) days of the mailing or delivery of such request, provide the Owner of a Lot
with a copy of this Declaration and copies of the By-Laws and Articles of the Association, together with a true statement, in writing, as to the amount of
any delinquent Assessments, penalties, attorneys' fees and other charges authorized by this Declaration on the Lot as of the date of the request. If a
certificate states that Assessments have been paid, such certificate shall be conclusive evidence of such payment. The Board may impose a tee for
providing such documents and statement, but in event shall the fee exceed the reasonable cost to prepare and reproduce the requested documents.

6.10 Reserves. The Regular Assessments shall include reasonable amounts, as determined by the Board, collected as reserves for the future periodic
maintenance, repair and replacement of all or a portion of the Common Property, or any such other impose determined by the Board. All amounts collected
as reserves shall be deposited by the Board in a separate bank account for the purposes for which they were collected, and are to be segregated from
and not commingled with ally other funds of the Association.

Except as provided in California Civil Code Section 1365.5 and any companion or successor statutes, the Board shall not expend funds designated as
reserve funds for any purpose other than the repair, restoration, replacement or maintenance of, or litigation involving the repair, restoration, replacement
or maintenance of, major components which the Association is obligated to repair, restore, replace or maintain and for which the reserve fund was

originally established. Notwithstanding the foregoing, the Board may authorize the temporary transfer of money from a reserve fund to the Association's
general operating accounts to meet short term cash flow requirements or other expenses, provided the Board has made a written finding, recorded in the
Board's minutes, explaining the reasons that the transfer is needed, and describing when and how the money will be repaid to the reserve fund. The
transferred funds shall be restored to the reserve fund within one (1) year of the data of the initial transfer, except that the Board may, upon making a
finding supported by documentation that a temporary delay would be in the best interests of the Association, temporarily delay the restoration.

The Board shall exercise prudent fiscal management in delivering restoration of the reserve funds and restoring the expended funds to the reserve funds
and shall, if necessary levy a Special Assessment to recover the full amount of the expended funds within the time limits required under California law.
This Special Assessment is subject to the limitation imposed by California Civil Code Section 1366. The Board may, at its discretion, extend the date the
payment on this special assessment is due. Arty extension shall not prevent the Board from pursuing any legal remedy to enforce the collection of an
unpaid Special Assessment for this purpose.

If the Board decides to use or transfer reserve funds to pay for litigation, the Association shall notify its Members of the decision in the next available
mailing to all Members pursuant to Section 50l6 of the California Corporations Code. Such notice shall provide explanation of the purposes for which the
funds shall he used to initiate or defend litigation, the reasons why operating funds cannot be used, and the time and method by which the reserve funds
will be replaced, together with a proposed budget for the litigation. The notice must also state that Members shall have a right to review an accounting for
the litigation as provided in Section 1365.5 of the California Civil Code, which shall be made available at the principal office of the Association. The accounting
shall be updated on a quarterly basis.

6.11 Offsets and Waiver Prohibited. No Owner may waive or otherwise avoid liability for the Assessments provided for herein for any reason whatsoever,
including, but not limited to, non-use of the Common Property or abandonment of his Lot, nor shall any Owner be entitled to any offset against any
Assessment provided for herein for any reason whatsoever, including, but not limited to, any expenditure made by such Owner for or on behalf of the
Association.

6.12 Exempt Property. The following property subject to this Declaration shall be exempt from the Assessments herein:

a. All property dedicated to and accepted by arty of the Public Agencies;

b. All Common Area.

ARTICLE 7 EFFECT OF NONPAYMENT OF ASSESSMENTS:
REMEDIES OF THE ASSOCIATION

7.1 Effect of Nonpayment of Assessments: Remedies of the Association. Any installment of a Regular, Special or Compliance Assessment not paid
within fifteen (15) days .after the clue date shall be deemed delinquent, shall he subject to reasonable costs of collection, including reasonable
attorneys' fees, and a reasonable late charge not exceeding ten percent (10%) of the delinquent Assessment or Ten Dollars ($10.00), which ever is
greater, or as may, from time to time, be established by the Board in accordance with California law, and interest on all sums imposed under this
Section at an annual percentage rate not to exceed twelve percent (12%), or the maximum rate allowed by law, commencing thirty (30) days from the
date the Assessment becomes due until paid. The Board, for and on behalf of the Association, may commence legal action against the Owner
personally obligated to pay the same, or, in the case of a Regular or Special Assessment, may foreclose the lien against his Lot. Such lien may also
be foreclosed by a power of sale or other nonjudicial procedure provided for by the laws of the State of California. In furtherance thereof, each Owner
hereby vests in the Association, its successors or assigns, the right and power to bring all actions at law or to pursue lien foreclosure against any
Owner for purposes of collecting such delinquent Assessments.

7.2 Notice of Delinquent Assessments. No action shall be brought to foreclose a lien for delinquent Assessments or to proceed under the power of
sale herein, unless at least thirty (30) days has expired following the date a Notice of Delinquent Assessments is deposited in the United States mail,
certified or registered, postage prepaid, to the Owner of said Lot and a copy thereof is recorded by the Association in the Office of the County Recorder.
Said Notice of Delinquent Assessments must recite a good and sufficient legal description of any such Lot, the record Owner or reputed Owner thereof,
the total amount due and payable as provided herein, and the name and address of the principal office of the Association, and, in the event of a nonjudicial
foreclosure, as provided in Section 7.3 below, the name and address of the trustee authorized by the Association to enforce the lien by sale. The Notice
shall be signed and acknowledged by any authorized officer of the Association. A monetary fine or penalty imposed by the Association as a disciplinary
measure for failure of Owner to comply with the Association Management Documents may not become a lien enforceable by non-judicial foreclosure
against such Owner's Lot. The Notice of Delinquent Assessments must be signed by an authorized officer or agent of the Association and must be mailed
in the manner set forth in Section 2924(b) of the California Civil Code to the Owner of record of the Lot no later than ten (10) calendar days after recordation.

7.3 Foreclosure Sale: Any foreclosure sale provided for above is to be conducted by the Board, its attorney or other persons authorized by the Board, in
accordance with the provisions of the California Civil Code applicable to the exercise of powers of sale in Mortgages and deeds of trust, as same may be
amended from time to time, or in any other manner permitted by law. The Association, through duly authorized agents, shall have the power to hid on the
Lot at a foreclosure sale and to acquire, hold, lease, mortgage and convey the same

7.4 Curing of Default: Release of Lien. Upon payment to the Association of the full amount claimed by the Association in the Notice of Delinquent
Assessments, or other satisfaction thereof the Board shall, either prior to sale, or prior to completion of judicial foreclosure proceedings, cause to be
recorded a Notice of Release of Lien slating the satisfaction and release of the amount claimed. The Board may demand and receive from the applicable
Owner a reasonable charge, to be determined by the Board, for the preparation and recordation of the Notice of Release of Lien.

7.5 Cumulative Remedies. The Association's remedies for nonpayment of Assessments, including, but not limited to, an action to recover a money
judgment, Assessment lien and right of foreclosure and sale, are cumulative and in addition to and not in substitution of any other rights and remedies
which the Association and its assigns may have hereunder or at law.

7.6 Mortgagee Protection. Notwithstanding all other provisions hereof, no lien created hereunder, nor any breach of the terms and provisions of this
Declaration, nor the enforcement of any term or provision hereof, shall defeat or render invalid the rights of any Mortgagee under any recorded Mortgage
or deed of mist upon a Lot made in good faith and for value; provided that such deed of trust is recorded prior to any such Notice of Delinquent Assessments,
and after such Mortgagee or other person or entity obtains title to such Lot by judicial or nonjudicial foreclosure, such Lot shall remain subject to this
Declaration and the payment of Assessments accruing after the date the Mortgagee obtains title.

7.7 Alternative Dispute Resolution - Assessments. Disputes between an Owner and the Association .regarding the Assessment imposed by the
Association may be submitted to alternative dispute resolution in accordance with Civil Code Section 1354 if such Owner pays in full (i) the amount of
assessment in dispute, (ii) any late charges, (iii) any interest, and (iv) all fees and costs associated with the preparation and filing of the Notice of
Delinquent Assessment, and states by written notice that such amount is paid under protest, and the written notice is mailed by certified mail not
more than thirty (30) days of a notice of delinquent assessment.

The right of any Owner to utilize alternative dispute resolution under his Section 7.7 may not be exercised more than two times in any single calendar
year, and not more than three times within five calendar years. Nothing in this section shall preclude any Owner and the Association upon mutual
agreement, from entering into alternative dispute resolution in excess of the limits set forth herein. An Owner may request and be awarded through
alternative dispute resolution reasonable interest to be paid by the Association in the total amount paid under items (i) through (iv) above, if it is determined
that the assessment levied by the Association was not correctly levied.

The provisions of this Section 7.7 are intended to satisfy the statutory provisions in Section 1366.3 of the California Civil Code. In the event of an amendment,
modification, alteration or revocation of said Section 1366.3, the provisions of this Section 7.7 shall be deemed amended or terminated, as applicable,
without the need to amend this Declaration.

ARTICLE 8 USE RESTRICTIONS

The Project shall be held, used and enjoyed subject to the following covenants, conditions, restrictions and limitations:

8.1 Residential Use.

Use. Except as provided in Section 82 below, each Lot shall be used for the construction of a Residence which shall be used for private, single-family
residential purposes, except such temporary uses as shall be permitted by Declarant and any Merchant Builders while the Project is being developed
and Lots are being sold by Declarant mid Merchant Builders; provided, however, that Declarant reserves for itself and for any Merchant Builders the right,
until all of the Lots in the Project and in the Annexation Property are sold (and escrows closed), to carry on normal sales activity on the Project,
including the operation of models and sales offices, provided that neither Declarant nor any Merchant Builders shall not unreasonably interfere with any
other Owner's use of the Common Property.

8.2 Business and Commercial Activity. No business, commercial, manufacturing, mercantile, storage, vending or industrial or multi-family use
shall be conducted or upon any Lot or within the Common Properly, which uses are not authorized under the County Development Code, and further
excepting such temporary uses as shall be permitted by Declarant and Merchant Builders while the Project are being constructed and Lots are being
sold by Declarant, Merchant Builders and their successors and assigns. Not withstanding the foregoing, this section shall not preclude professional
administrative occupations which do not create any external evidence thereof, including, but not limited to any increased impact on parking, for so long as such occupations are conducted in conformance with all applicable County ordinances, no such activity increases the liability or casualty insurance obligations of the Association and premiums paid therefor, such activity is consistent with the residential character of the Project and such activity is consistent with the Protective Covenants set forth in this Declaration. Any offices and parking areas operated by the Association, or its authorized managing agent, are exempt from the restrictions contained in this Section.

No family day care center for children shall be permitted within the Project except as specifically authorized by California Health and Safety Code Section 1597.40, et seq. and any successor or companion statutes. The owner/operator of any such day care facility shall comply with all local and state laws regarding e licensing and operating of a day care center and, in addition, shall:

Name the Association as an additional insured on the liability insurance policy or bond carried by the owner/operator of the day care center;

b. Defend, indemnify and hold harmless the Association from the liability arising out of the existence and operation of the day care center;

c. Abide by and comply with all Association Rules and Regulations;

d. Supervise and be completely responsible for children at all times while they are within the Project; and

e. Cooperate with the Association if the Association's insurance agent or carrier requires proof of insurance, proof of the agreement of the owner or operator of the center to those conditions, or other reasonable requests.

8.3 Mandatory Installation and Maintenance of Landscaping. Subject to the provisions set forth in this Declaration regarding architectural and landscaping control, each Owner shall, at his own cost and expense, maintain his Lot in a neat, clean, safe and attractive condition at all times, so as to preserve the aesthetic quality of the Project. Subject to review and approval of plans and specifications as set forth below, each Owner shall install and maintain in good condition at all times all landscape and irrigation improvements to such Owner's Lot within six (6) months following the Close of Escrow for the conveyance of the Lot from Declarant or a Merchant Builder to such Owner. Each Owner shall install mar yard (and exposed side yard in the case of a corner Lot) landscape and irrigation Improvements one (1) year following the Close of Escrow for the conveyance of the Lot from Declarant or a Merchant Builder to such Owner. In the event that such landscape and irrigation Improvements have been installed by Declarant, each Owner shall be responsible for the maintenance and upkeep thereof. All yard areas of each Lot shall be kept and maintained free of all weeds, rubbish, trash and debris at all times. Plans and specifications, including the nature, type and kind of all proposed landscape and irrigation Improvements, and the dimensions thereof, must be submitted to the Architectural Control Committee for approval, in accordance with the Article here in below entitled "Architectural Control."

8.4 Common Property Use. Use of the Common Property shall be subject to the provisions of this Declaration and the Rules and Regulations, and to any additional limitations imposed by the Association.

8.5 Conduct Affecting Insurance. Nothing shall be done or kept on any Lot, within any Residence or in the Common Property which will increase the rate of insurance on the Common Property without the approval of the Association. No Owner shall permit anything to be done or kept in his Lot or in the Common Property which will result in the cancellation of in‑

re on the Common Property or which would be in violation of any law. If, by reason of the occupancy or use of said premises by the Owner, the rate of insurance on the Common Property shall be increased, the Owner shall become personally liable for the additional insurance premiums.

8.6 Liability for Damage to the Common Property. Each Owner shall be liable to the Association, pursuant to he laws of the State of California, for any and all costs and expenses which may be incurred by the Association to repair any damage to the Common Property which may be sustained by reason of the negligence or willful misconduct of said Owner or of his family, tenants, lessees or contract purchasers, or their respective guests or invitees, whether

or adult. After approval by a majority of the Board, any such costs and expenses shall he levied by the Board as a Compliance Assessment.

8.7 Signs. Subject to the provisions of California Civil Code, Sections 712 and 713, as same may be amended, from time to time, no sign of any kind shall be displayed to the public view on or from any portion of the Project or a Lot, without the prior written consent of the ACC, except one (1) For Sale," "For Rent" or "For Lease" sign and signs indicating that the Lot is patrolled by a security or alarm service. This Section does not apply to (a) any signs used by Declarant, Merchant Builders and their respective agents in connection with the sale of Lots or the construction or alteration of the Residences or the Common Property, (b) traffic and visitor parking signs installed by Declarant, and(c) traffic and parking control signs installed with the consent of the Board. Notwithstanding the foregoing, this Section does not permit the maintenance of any sign or other display which does not conform with applicable County ordinances and codes.

8.8 Maintenance of Animals. Except as set forth herein, no animals of any kind shall be raised, bred or kept in any Lot or in the Common Property, except that common household pets, including dogs, cats or birds, may be kept in a Lot; provided, however, that no animal shall he kept, bred or maintained for any commercial purpose or in unreasonable numbers, as may he determined by the Board, from time to time and consistent with County ordinances. As used herein, "unreasonable numbers" shall ordinarily mean a number above the maximum number of animals permitted by the County. Each Owner shall be responsible for cleaning up any excrement or other unclean or unsanitary condition caused by said animal on the Common Property. All animals mainlined in a Lot must he kept either within an enclosure, yard or patio, on a leash being held by a person capable of controlling the animal. The Association, upon the approval of a majority of the Board, shall have the right to prohibit maintenance of any animal within the Project which, in the opinion of the Board, constitutes a private nuisance in any other person. Every person bringing an animal upon or keeping an animal in the Project shall be liable pursuant to the laws of the Stare of California to each and all persons for any injury or damage to persons or property caused by such animal.

8.9 Quiet Enjoyment. No Owner shall permit or cause to be permitted anything to be done or kept upon such Owner's Lot which will obstruct or interfere with the rights of quiet enjoyment of the other occupants, or annoy them by unreasonable noises or otherwise, nor will any Owner commit or permit any nuisance on the premises or commit or suffer any immoral or illegal act to he committed thereon. Each Owner shall comply with all of the requirements of the Board of Health and of all other governmental authorities with respect to said premises, and shall remove all rubbish, trash and garbage from his Lot. There shall be no exterior fires whatsoever, except barbecue fires contained within receptacles therefor, and fire pits in the enclosed yards designed in such a manner that they do not create a fire hazard. All clotheslines, refuse containers, woodpiles, storage boxes, bulk material, tools and equipment shall be prohibited from any Lot, unless obscured from view by a fence or appropriate screen approved by the ACC provided for here in below.

8.10 improvements. There shall be no construction, alteration or removal of any Improvement in the Project without the approval of the ACC. No Improvement shall he constructed upon any portion of the Common Property, other than such Improvements as shall be constructed: (a) by the Declarant (or a person or entity to whom Declarant assigns its rights as

developer), or (b) by the Association as provided herein. Notwithstanding anything to the contrary, any construction, alteration or removal of any Improvement may be subject to the County's review and approval.

8.11 Windows. No window in any Lot shall be covered in whole or in part, inside or outside, with aluminum foil, newspaper, paint, tint or any other material reasonably deemed inappropriate for such use by the Architectural Control Committee; provided, however, an Owner may use plain white (or other neutral color) sheets to cover windows for a period not to exceed six (6) months after the Close of Escrow pending the installation of drapes, curtains, shutters or other appropriate interior window coverings. The Board may adopt reasonable Rules and Regulations concerning the type, color and design of window coverings. Curtains, draperies, blinds, shades and other materials installed, or to he installed, which face public view shall be white or off-white in color, so as to preserve the aesthetic integrity and attractiveness of the Project.

8.12 Parking . All vehicles in the Project shall be kept parked and stored in accordance with the following:

Restrictions Regarding Public Streets. Ali streets within the Project are public and shall be subject to all applicable laws, ordinances and regulations of the County. Additionally, the Association may adopt reasonable Rules and Regulations regarding the parking of vehicles within the Project which are not in conflict with applicable law.

b. Parking and Vehicular Restrictions. None of the following (collectively "Prohibited Vehicles") shall be parked, stored or kept on any street within the Project: any commercial type vehicle (including, but not limited to, any dump truck, cement mixer truck, oil or gas truck or delivery truck); any recreational vehicle (including, but not limited to, any camper unit, house/car or motor home); any bus, trailer, trailer coach, camp trailer, boat, aircraft or mobile home; any inoperable vehicle or any other similar vehicle; or any vehicle or vehicular equipment, mobile or otherwise, constituting a nuisance. No Prohibited Vehicle shall be parked, stored or kept on any Lot except wholly within an enclosed garage, and then only if the garage door is capable of being fully closed with the Prohibited Vehicle located within the garage. Prohibited Vehicle shall not be allowed in any driveway or other exposed parking areas, or any street (public or private), except for the purposes of loading, unloading, making deliveries or emergency repairs
("Transitory Use"), provided that no Transitory Use shall extend over more than twenty-four hours during any seven (7) consecutive days. Vehicles owned, operated or within die control of an Owner, or of a resident of Owner's Lot, shall be parked in the garage or driveway. Garage doors shall remain closed except when the garage is in use. The driveway on each Lot shall be available for guest parking for that Lot and shall not be used manner in a which would prevent the parking of at least one guest vehicle in the driveway. No repairs or restorations of any motor vehicle, boat, trailer, aircraft or other vehicle of equipment shall be conducted upon any street, Lot or elsewhere with the Project, except wholly within an enclosed garage; provided, however, that such activity is not undertaken

18.12 Attorneys' Fees. If any Owner defaults in making a payment of Assessments or in the performance or observance of any provision of this Declaration, and the Association has obtained the services of an attorney in connection therewith, the Owner covenants and agrees to pay to the Association any costs or fees incurred, including reasonable attorneys' fees, regardless of whether legal proceedings are instituted. In case a suit is instituted, the prevailing party shall recover the cost of the suit, in addition to the aforesaid costs and fees.

18.13 Violation as Nuisance. Every act or omission whereby any provision of this Declaration is violated in whole or in part is hereby declared to be a nuisance and every remedy allowed by law or in equity against a nuisance, either public or private, may be enjoined or abated by Declarant, any Owner or Owners, and/or the Association.

18.14 Exhibits. Any and all exhibits attached hereto shall be deemed and made
a part hereof and incorporated by reference herein.

18.15 Indemnification or Corporate Agents . To the fullest extent permitted by and in accordance with the requirements and procedures of Section 7237 of the California Corporations Code, or any successor statutes, the Association shall reimburse, indemnity and hold harmless each present and future director, officer, employee or other agent of the Association (as the term "agent" is defined in said Section 7237) and each person, who, at the request of the Association, acts as a director, office , employee or agent ("Association representative") from and against any loss, cost, liability and expense, including attorneys' fees, which may be imposed upon or reasonably incurred by art Association representative in such capacity.

18.16 Limitation Liability of Officers, Directors and Committee Members. No Board member, ACC member, officer of the Association, Declarant or any Merchant Builder, or any agent of Declarant or a Merchant Builder, when acting in such capacity, shall he liable to any Owner or to any other party, including the Association, for any damage, loss or prejudice suffered or claimed on account of any act, omission, error or negligence of any such person or entity, provided that such person or entity has, upon the basis of such information as may be possessed by such person or entity, acted in good faith and without willful or intentional misconduct.

18.17 Additional Covenants in Favor of VA/FHA. So long as there shall
be a Class B Membership, the following actions shall require the prior approval of VA/FHA:

a. annexation of de-annexation of additional property to the Project;

b. any merger or consolidation of the Association;

c. any Special Assessment levied by the Board against Members of the Association; or

d. any amendment to this Declaration. A drat) of any amendment shall be submitted to VA/FHA for its approval prior to recordation of the amendment.

IN WITNESS WHEREOF, Declarant has executed this instrument on the day and year first above written.