Pinon Glen

AMENDED AND RESTATED

D E C L A R A T I O N

COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS

PINON GLEN

PINON GLEN, LLC, a Colorado limited liability company (called the "Declarant" in this Declaration), is the sole owner of property described as follows:

Lots 1 - 72, and Tracts A - E, Pinon Glen Filing No. 1, according to the plat thereof recorded in El Paso County, Colorado. This land is called the "Subdivision" and individual lots designated by the recorded plat are called "Lots."

Declarant desires to place protective covenants, conditions, restrictions, reservations, liens and charges upon the Subdivision to protect the Subdivision's quality residential living environment and also to protect its desirability, attractiveness and value. Consequently, the Subdivision is hereby subjected to the following easements, covenants, restrictions and conditions (collectively referred to as "Declarations"), all of which shall run with the Subdivision and shall be binding upon all parties having or acquiring any rights, title or interest in it or any part thereof, and shall inure to the benefit of each Owner thereof.

These Amended and Restated Declaration of Covenants, Conditions and Easements of Pinon Glen hereby replace and supersede those recorded on May 20, 1997, at Reception No. 097056350.

ARTICLE I

COVENANTS TO PRESERVE THE RESIDENTIAL

CHARACTER OF THE SUBDIVISION

Section 1.1 Property Uses . All Lots and Building Sites in the Subdivision shall be used exclusively for private residential purposes. No dwelling erected or maintained within the Subdivision shall be used or occupied for any purpose other than for a single-family dwelling. No business, profession or other activity conducted for gain shall be carried on or within any Lot or Building Site.

Section 1.2 Structures . No Structure shall be erected within the Subdivision except single-family dwellings and those Accessory Buildings and accessory Structures which have been approved by the Architectural Control Committee ("ACC"). No Structure shall be erected within the Subdivision other than a dwelling with an attached garage for a minimum of two (2) cars. No Accessory Building, trailer, tent or other similar or dissimilar temporary quarters may be used for living purposes. No other Structure may be placed on any Building Site before completion of the dwelling upon such Building Site except with the permission of the ACC.

Section 1.3 Construction Type . All construction shall be new. No building previously used at another location nor any building or Structure originally constructed as a mobile dwelling or Structure may be moved onto a Lot or Building Site except as expressly hereinafter provided in Section 1.7 for temporary construction, sales or administration buildings.

Section 1.4 Storage . No building shall be stored on any Lot except temporarily during continuous construction of a building or its alteration or improvement.

Section 1.5 Completion of Work . A Structure shall not be occupied in the course of original construction until substantially completed. All construction work shall be prosecuted diligently and continuously from the time of commencement until fully completed.

Section 1.6 Construction Completion . The exterior of all buildings or other Structures must be completed within one (1) year after the commencement of construction except where such completion is impossible or would result in great hardship due to strikes, fires, national emergency or natural calamities. For purposes of this Section 1.6, "commencement of construction" for a single-family dwelling is defined as the obtaining of necessary building permits and the pouring of a foundation, and for all other Structures is defined as the undertaking of any visible exterior work. If construction is not completed within one (1) year after commencement, or if construction shall cease for a period of sixty (60) days without permission of the ACC, the ACC will give the Owner thereof Due Notice of such fact, and if construction on such Structure is not diligently commenced within thirty (30) days after such notice, the unfinished Structure or unfinished portion thereof shall be deemed a nuisance and may be removed forthwith by and at cost of the Owner.

Section 1.7 Construction or Sales Offices . Temporary buildings for construction or administration purposes or for sales offices may be erected or maintained only by Declarant or with the permission of the ACC. Model homes may be used and exhibited only by Declarant or with the permission of the ACC. Temporary buildings permitted for construction or administration purposes or for sales offices shall be promptly removed when it ceases to be used for these purposes.

Section 1.8 Drilling Structures . No derrick or other Structure designed for use in or used for boring or drilling for water, oil or natural gas shall be permitted upon or above the surface of any Lot, nor shall any water, oil, natural gas, petroleum, asphaltum or other hydrocarbon substances be produced from any well located upon, in or under any Lot.

Section 1.9 Easements . There are hereby reserved to Declarant, its successors and assigns, perpetual, alienable, divisible and releasable easements and the right from time to time to grant such easements to others over, under, in and across each of the seven (7) foot strips along and adjoining each rear Lot Line of each Lot, and each of the five (5) foot strips along and adjoining each side Lot Line and front Lot Line of each Lot for use of all or part of such areas for lines for transmission of electric current or impulses or electronic signals, for heat and fuel lines, for water lines, for utility lines, for drainage and for other similar or dissimilar facilities and purposes, and for any one or more of such purposes. There is also hereby reserved an easement to the Association for the maintenance of landscaping and sprinkler systems which are to be maintained by the Association in accordance with these Covenants.

ARTICLE II

MEMBERSHIP AND VOTING RIGHTS

Section 2.1 Membership . The Pinon Glen Homeowners Association, Inc. (the "Association") has been formed to serve the purposes described herein and as stated in the Association's Bylaws and Articles of Incorporation. The following shall be members of the Association: the Declarant (so long as the Declarant owns a Lot) and every Owner of a Lot which is subject to assessment hereunder. Membership shall be appurtenant to and may not be separated from ownership of any Lot. Ownership of such Lot shall be the sole qualification for membership. Except as provided herein, each Lot shall have voting rights based upon that Owner's Proportionate Interest. Notwithstanding anything herein to the contrary, the Declarant shall have the right to appoint a Board of Directors ("Board") and to operate the Association until such time as the Period of Declarant Control is terminated, and the Association shall not begin to function through its other Members until such time, unless the Declarant otherwise consents in writing.

Section 2.2 Declarant Control . The Association shall have one class of voting membership who shall be the Owners (also sometimes referred to as "Members"). The Owners shall elect all the members of the Board, following the termination of the Period of Declarant Control as set forth as follows:

(a) Notwithstanding anything herein to the contrary, the Declarant shall have the right to appoint the Board and to control the Association as follows: During the Period of Declarant Control, the Declarant, or persons designated by him or her, subject to certain limitations, may appoint and remove the officers and members of the Board. The Period of Declarant Control shall terminate no later than the earlier of: (1) Sixty (60) days after conveyance of seventy five percent (75%) of the Lots that may be created within the Subdivision to Owners other than a Declarant or a home builder who has purchased the Lot for the purpose of constructing a residential home; (2) Two (2) years after Declarant has last conveyed a Lot in the ordinary course of business; or (3) Two (2) years after any right to add new Lots was last exercised, but not to exceed five (5) years after the first Lot in the Subdivision is conveyed to an Owner. A Declarant may voluntarily surrender the right to appoint and remove officers and members of the Board before termination of the Period of Declarant Control, but in that event, the Declarant may require, for the duration of the Period of Declarant Control, that specified actions of the Association or Board, as described in a recorded instrument executed by the Declarant, be approved by the Declarant before they become effective.

(b) Not later than sixty (60) days after conveyance of twenty-five percent (25%) of the total number of Lots that may be created within the Subdivision have been conveyed to Owners other than a Declarant or a home builder, at least one member, and not less than twenty-five percent (25%) of the members of the Board shall be elected by Owners other than a Declarant. Not later than sixty (60) days after conveyance of fifty percent (50%) of the Lots that may be created within the Subdivision have been conveyed to Owners other than a Declarant or a home builder, not less than one‑third (33-1/3%) of the members of the Board must be elected by Owners other than a Declarant.

(c) Except as otherwise provided above, not later than the termination of any Period of Declarant Control, the Owners shall elect a Board of at least three (3) members, at least a majority of whom must be Owners other than the Declarant or designated representatives of Owners other than the Declarant. The Board shall elect the officers. These Board members and officers shall take office upon termination of the Period of Declarant Control.

(d) Notwithstanding any provision of these Declarations or Bylaws to the contrary, the Owners, by a sixty‑seven percent (67%) vote of all persons present and entitled to vote at any meeting of the Owners at which a quorum is present, may remove any member of the Board with or without cause, other than a member appointed by the Declarant.

The Declarant hereby reserves any and all "special declarant rights" and "development rights" as created or set forth in the Colorado Common Interest Ownership Act ("CCIOA") and any other rights as set forth herein. Any such right shall apply to the Property and shall terminate upon the earlier of seven (7) years from the date of recording hereof or as otherwise provided herein.

ARTICLE III

COVENANT FOR ASSESSMENTS

Section 3.1 Creation of the Obligation for Assessments . Each Owner, for each Lot owned within the Property, by acceptance of a deed therefor or interest therein, whether or not it shall be so expressed in such deed, shall be deemed to covenant and agree to pay to the Association, in the manner, amounts and times prescribed herein, all assessments, charges, fees, fines and other sums which are described in these Declarations and which shall be both a personal obligation of the Owner and a lien against his or her Lot as provided herein. Each Owner shall be jointly and severally liable to the Association for the payment of all assessments, charges, fees and other sums attributable to them and/or their Lot. The personal obligation for delinquent assessments and sums shall not pass to an Owner's successors in title or interest unless expressly assumed by them. Delinquent assessments may continue to be a lien on the Lot if a Certificate of Payment as described in Section 3.9 stating that all assessments have been paid in full at time of transfer to a new Owner. No Owner may waive or otherwise escape personal liability for the payment of the assessments, charges, fees and other sums provided for herein by non-use of the Common Area or the facilities contained therein, by abandonment or leasing of his or her Lot, or by asserting any claims against the Association, the Declarant or any other person or entity. In addition to the foregoing assessments, charges, fees and other sums, each Owner shall have the obligation to pay real property ad valorem taxes and special assessments imposed by Colorado governmental subdivisions against his or her Lot, as well as all charges for separately metered utilities servicing his or her Lot. The charges for any utilities which are master metered, if any, shall be included in the annual common expense assessments levied by the Association.

Section 3.2 Purpose of Assessments . The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety and welfare of the Owners and for the improvement and maintenance of the Common Area and the Lots as more specifically provided herein.

Section 3.3 Annual Assessments . The annual assessment shall specifically include, but shall not be limited to, all Common Expenses, as defined by the CCIOA and the following:

(a) expenses of management of the Association and its activities;

(b) taxes and special assessments upon the Association's real and personal property including, without limitation, the Common Area and any Limited Common Area, if any;

(c) premiums for all insurance which the Association is required or permitted to maintain and any other expenses connected with such insurance;

(d) common lighting, water and other common utility and sewer service charges, and any other common expenses including without limitation any common trash collection and snow removal approved by the Board;

(e) landscaping and care of the Maintenance Areas and any recreational or other Association facilities or improvements located thereon;

(f) such repairs and maintenance which are the responsibility of the Association;

(g) wages for Association employees;

(h) legal and accounting fees for the Association;

(i) any deficit remaining from a previous assessment year;

(j) a working capital fund;

(k) the creation of reasonable contingency reserves, surpluses and sinking funds, and adequate reserve funds for maintenance, repairs and replacement of those elements of common property or maintenance that must be done or replaced on a periodic basis and are payable in regular installments, rather than by special assessments;

(l) the creation of reasonable contingency reserves for any applicable insurance deductibles; and

(m) any other costs, expenses and fees which may be incurred or may reasonably be expected to be incurred by the Board, in its sole discretion, for the benefit of the Owners under or by reason of these Declarations.

The Association shall also have authority, to the extent it deems proper, to provide any other services requested by particular Owners, but only on a contract basis under which those Owners pay the cost thereof. The Association may enter into cooperative arrangements for provision of services with other homeowner associations in the surrounding area and may assume responsibility for that part of the cost fairly attributable to this Project.

Section 3.4 Initial Annual Assessments . The initial annual assessment which may be modified in accordance with these Declarations by the Board shall be One Thousand Three Hundred Forty Four Dollars ($1,344.00) as further described in Exhibit A.

Section 3.5 Special Assessments . In addition to the annual assessment authorized above, the Association may levy, in any assessment year, special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of an emergency situation or of any construction, reconstruction, repair or replacement of a capital improvement upon the Maintenance Areas, including fixtures and personal property related thereto and any improvements and fixtures upon any Lot or the Common Area.

Section 3.6 Procedure for Assessment Under Sections 3.4 and 3.5 . Any assessment under Section 3.5 shall require the assent of vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose and not less than sixty-seven percent (67%) of the First Mortgagees who have given the Association notice as required by Section 10.3. Written notice of any meeting called for the purpose of taking such action shall be sent to all Members not less than thirty (30) days or more than sixty (60) days in advance of the meeting. At the first such meeting called, the presence of Members or of proxies entitled to cast sixty percent (60%) of all the votes of the membership shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum at the subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.

Section 3.7 Rate of Assessment . Except as provided herein, both annual and special assessments shall be set at the Owner's Proportionate Share as shown on Exhibit B attached, sufficient to meet the expected needs of the Association. If an Owner's Proportionate Share is reallocated, assessments and any installment thereof not yet due shall be recalculated in accordance with the reallocated Owner's Proportionate Share. Notwithstanding any contrary provision of these Declarations, the Articles of Incorporation or the Bylaws, no Lot shall be obligated to pay any assessments under this Declaration until such time as a dwelling unit has been constructed thereon and conveyed to the first residential purchaser, provided however, no such Lot shall be entitled to receive Association services or any other rights under this Declaration and, provided further, in the event the annual assessment and charges due to the Association fail to meet its needs because of any non-assessment of Lots owned by Declarant, then the Declarant shall, upon written notice from the Association, pay a sufficient amount, up to the amount of full parity on such assessment (but exclusive of those amounts held by the Association for reserves and for working capital), to the Association to meet any such shortfall so long as such notice must be given within one (1) year after the end of each annual assessment period and is waived if not made in such timely manner; such final one (1) year period to terminate one (1) year after the date of closing of the last Lot owned by Declarant within the Property.

Section 3.8 Assessment Procedure .

(a) Annual Assessments. No later than thirty (30) days before the beginning of each annual assessment period, the Board shall set the total annual assessment based upon advance budget of the cash requirements needed by it to provide for the administra-tion and performance of its duties during the following assessment year. The annual budget shall be adopted pursuant to CCIOA 38-33.3-303(4). Any surplus funds of the Association remaining after the payment of or provision for Common Expenses and any prepayment of or provision of reserves shall be applied as the Board in its sole discretion determines appropriate, which is not required to credit or pay it to the Owners. That annual assessment shall be payable in monthly installments on the first day of each month, unless the Board otherwise directs. The Association shall cause to be prepared, delivered or mailed to each Owner, at least thirty (30) days in advance of each annual assessment period, a payment statement setting forth the annual assessment. The first annual assessment upon the Lots hereunder shall commence upon the first day of the first month following conveyance of the first Lot to an Owner from the Declarant, it shall be adjusted according to the number of months remaining in the calendar year.

(b) Special Assessments and Other Sums. Special assessments and other sums imposed hereunder shall be due and payable on the date specified by the Board in written notice to each Owner, but such date shall not be less than ten (10) days after such notice is sent. In the event that the Association incurs any expense or liability as a result of the willful, negligent or wrongful act of an Owner, his or her family, tenants or guests, or any breach by any of such parties of any of the provisions of these Declarations, the Association's Bylaws or the Association's rules and regulations, and the same is not paid for by insurance, the cost thereof shall be deemed to be a special assessment against such Owner and his or her Lot and shall be enforceable as provided herein, except that such assessment shall not require any vote of the Members. Any other sum imposed by the Board as provided hereunder shall also be deemed a special assessment but shall not require a vote of the Members.

(c) Notice. Failure of the Board to give timely notice of any assessment as provided herein shall not affect the liability of the Owner or his or her Lot for such assessment, but if notice is not given, the date when payments shall be due shall be deferred to a date after such notice is given.

Section 3.9 Certificate of Payment . The Association shall furnish to an Owner or such Owner's designee or to a holder of a security interest or its designee upon written request, delivered personally or by certified mail, first‑class postage prepaid, return receipt, to the Association's registered agent, a written statement setting forth the amount of unpaid assessments currently levied against such Owner's Lot. The statement shall be furnished within fourteen (14) calendar days after receipt of the request and is binding upon the Association, the Board and every Owner. If no statement is furnished to the Owner or holder of a security interest or their designee, delivered personally or by certified mail, first‑class postage prepaid, return receipt requested, to the inquiring party, then the Association shall have no right to assert a lien upon the Lot against a subsequent Owner for unpaid assessments which were due as of the date of the request. Said certificate may be relied upon by all persons acting in good faith, as conclusive evidence of the payment of any assessments therein stated to have been paid.

Section 3.10 Effect of Nonpayment of Assessments-Remedies of the Association .

(a) General. Any assessments which are not paid when due shall be delinquent. If any assessment is not paid when due, the Association may impose a late charge/administrative fee not to exceed Fifteen Dollars ($15.00) per delinquent assessment. Any assessment not paid within fifteen (15) days after the due date thereof shall bear interest from the due date at the rate of eighteen percent (18%) per annum, and the Association may bring an action at law against the Owner personally obligated to pay the same, and/or foreclose the lien against such Owner's Lot, and/or may suspend the delinquent Owner's right to vote and the right to use any facilities within the Maintenance Areas for any period during which any assessment against his or her Lot remains unpaid. In the event a judgment is obtained, such judgment shall include interest on the assessment as above provided, and a reasonable attorney's fee to be fixed by the court, together with the expenses, late charges and costs of the action.

(b) Lien. Any unpaid assessment, charge, fee or other sums assessed against an Owner or his or her Lot, including without limitation, with interest thereon at the rate of eighteen percent (18%) per annum, an administrative charge of Fifteen Dollars ($15.00) per unpaid assessment or other sum, court costs and all other collection costs, and reasonable attorney's fees, shall be a charge on the land and shall be a continuing lien, from and after the levy or assessment thereof, in favor of the Association, upon the Lot against which each such assessment, charge, fee or other sum is made. All payments on account shall be first applied to interest, the late charge, any costs or fees, and then to the assessment payment first due. The Board may enforce such lien by filing with the Clerk and Recorder of the county in which the Lot is located a statement of lien with respect to the Lot, setting forth the name of the Owner, the legal description of the Lot, the name of the Association and the amount of delinquent assessments then owing. The lien statement shall be duly signed and acknowledged by an officer or authorized agent of the Association, and notice thereof shall be mailed to the Owner of the Lot, at the address of the Lot or at such other address as the Association may then have in its records for the Owner of the Lot. Such a claim of lien shall also secure all assessments, charges, fees and sums which come due thereafter until the lien, together with all costs, attorney's fees, administrative charges and interest have been fully paid or otherwise satisfied. Thirty (30) days following the mailing of such notice, the Board may proceed to the foreclosure of mortgages under the statutes of the State of Colorado. Foreclosure or attempted foreclosure by the Association of its lien shall not be deemed to estop or otherwise preclude the Association from suing the Owner personally liable therefore or from thereafter again foreclosing or attempting to foreclose its lien for any subsequent assessments, charges, fees or other sums which are not fully paid when due. Any recorded lien may be released by recording a Release of Lien executed by an officer or authorized agent of the Association. In addition, the Association shall have the right to a statutory lien under CCIOA 38-33.3-316.

(c) Authority. Each such Owner, by his or her acceptance of a deed to a Lot, hereby expressly vests in the Association or its agents the right and power to bring all actions against such Owner personally for the collection of such charges as a debt and to enforce the aforesaid lien by all methods available for the enforcement of such liens, including foreclosure by an action brought in the name of the Association in a like manner as a mortgage or deed of trust lien on real property, and such Owner hereby expressly grants to the Association a power of sale in connection with said lien. The lien provided for in this section shall be in favor of the Association and shall be for the benefit of all other Owners. The Association, acting on behalf of the Owners, shall have the power to bid at foreclosure sale and to acquire and hold, lease, mortgage and convey the same, if acquired by the Association at the foreclosure sale or by deed in lieu of foreclosure.

Section 3.11 Working Capital . The Association may require all Owners to pay to the Association a once time amount equal to two (2) times the amount of the estimated monthly assessment which sum shall be held by the Association as and for working capital. Such sum shall not be refundable to such Owner but shall be placed in a segregated account for use by the Board to meet unforeseen expenditures or to acquire additional equipment or services deemed necessary or desirable by the Board. Furthermore, payment of such sum shall not relieve an Owner from making the regular payment of assessments as the same become due. Upon termination of the Period of Declarant Control, if the Association has required a working capital reserve, the Declarant shall pay the working capital for any unsold Lots in the Project, but shall be reimbursed by subsequent purchasers. During the Period of Declarant Control, the Declarant may not use any of the working capital funds to defray its expenses, reserve contributions, construction costs or to make up any budget deficits.

Section 3.12 Subordination of the Lien to Mortgages . The lien of the assessments provided for herein shall be subordinate to the lien of a First Mortgage recorded before the delinquent assessment was due. Sale or transfer of any Lot shall not affect the lien for said assessment charges except that sale or transfer of any Lot pursuant to foreclosure of any such mortgage or any such executory land sales contract, or any proceeding in lieu thereof, including deed in lieu of foreclosure, or cancellation or forfeiture of any such executory land sales contract shall extinguish the lien of assessment charges which became due prior to any acquisition of title to such Lot by the First Mortgagee pursuant to any such sale or transfer, or foreclosure, or any proceeding in lieu thereof, including without limitation, any deed in lieu of foreclosure, or cancellation or forfeiture of any such executory land sales contract. No such sale, transfer, foreclosure or any above described proceeding in lieu or in cancellation thereof, shall relieve any Lot from liability for any assessment charges becoming due after such acquisition of title, nor from the lien thereof, nor the personal liability of the Owner of such Lot for assessments due during the period of his or her ownership.

Section 3.13 Notice to Mortgagee and Inspection of Books . Upon written request, a First Mortgagee shall be entitled to written notification from the Association of any default in the performance by the Owner of any obligation under these Declarations and/or the Bylaws of the Association, which is not cured within sixty (60) days after the Board has actual knowledge thereof, and the First Mortgagee may, at its option but without any obligation, cure such default. The Association shall make available to Owners and Mortgagees current copies of the Covenant, Bylaws, other rules concerning the Project, and the books, records and financial statements of the Association. "Available" means available for inspection, upon request, during normal business hours or under other reasonable circumstances. If the Project contains less than fifty (50) Lots, the holders of fifty-one percent (51%) or more of First Mortgagees shall be entitled to have an audited financial statement prepared at their expense if one is not otherwise available; said financial statement shall be furnished within a reasonable time following such request and payment of the cost of preparing the financial statement. First Mortgagees may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against any Association common property and may pay overdue premiums on hazard insurance policies, or secure new hazard insurance coverage on the lapse of a policy, for such common property, and First Mortgagees making such payments shall be owed immediate reimbursement therefor from the Association.

Section 3.14 Homestead . The lien of the Association assessments shall be superior to any homestead or other exemption as is now or may hereafter be provided by Colorado or federal law. The acceptance of a deed to a Lot subject to these Declarations shall constitute a waiver of the homestead exemption as against said assessment lien.

Section 3.15 Exempt Property . The following Property subject to these Declarations shall be exempt from the assessments created herein: (a) all property dedicated to and accepted by local public authority; and (b) the Common Area.

ARTICLE IV

MAINTENANCE

Section 4.1 Association Maintenance . The Association shall provide such maintenance and repair as follows:

(a) Paint, repair, replace, maintain and care for roofs, gutters, downspouts and exterior building surfaces, but excluding glass surfaces, exterior light bulbs, doors, screens and windows, all of which shall be each Owner's responsibility unless otherwise determined in writing by the Association's Board. An Owner shall not paint or change the appearance of the exterior of his or her Home without the prior written approval of the Board. The Association shall paint or restain the exterior of all Homes as often as necessary to keep such exterior from having a weather-beaten or worn-down appearance, but at least once every five (5) years.

(b) Mowing of areas maintained in bluegrass on any Lot, snow removal from front yard sidewalks and driveways, and trash removal when deposited in approved disposal receptacles.

(c) All repair, replacement improvement and maintenance of the Common Area and all improvements located thereon, including without limitation, any landscaping, sprinkler system, any roadways, entrance monuments, common area fencing, utility lines (including any common utilities within a Lot), any drainage structures or facilities or public improvements to the extent applicable and set forth in CCIOA 38-33.3-307(1.5), any light fixtures, sidewalks and pathways or other improvements located on the Common Area. Notwithstanding any contrary provisions of this Declaration or other document, any improvements to the standard patio fence, fenced area, landscaping, utility line or land, located within a Lot but outside the exterior boundaries of a Home may be maintained, repaired, restored, regulated and treated as if it were within the Common Area; provided however, an Owner shall keep such items and areas cleaned and in good condition; provided further, an Owner shall not alter, paint, change, modify, expand, restrict, remove or construct such improvements, nor otherwise modify the Common Area or the exterior appearance of the Home, nor shall any Owner install fences or other improvements on such areas, without the prior written approval of the ACC.

(d) Repair and replacement of any buildings or improvements upon the Lot insofar as the Association receives insurance proceeds or makes a special assessment to accomplish such repair or replacement.

(e) Maintenance of landscaping installed by the Declarant in areas located on a Lot but specifically excluding the maintenance of any rear patios or decks.

(f) After the Declarant ceases to control the Association, the Association shall maintain the landscaping, drainage and sprinkler systems in such a fashion that the soil surrounding the foundations of the buildings and other improvements shall not become so impregnated with water that they cause expansion of or shifting of the soils supporting the improvements or other damage to the improvements and do not impede the proper functioning of the drainage, landscaping or sprinkler systems as originally installed. Such maintenance shall include where necessary the removal or replacement of improperly functioning landscaping, drainage or sprinkler system elements and shall also include preventing ponding and regrading and resurfacing where necessary to provide for adequate drainage and preventing Owners from installing landscaping or using water on the Lots in such a way as to endanger the structural integrity or the stability of any of the landscaping, drainage or sprinkler systems of the Homes or the other improvements upon the Lots or Common Area. The Association shall indemnify the Declarant as to any breach of this provision.

(g) The Association may also undertake, but shall have absolutely no obligation to undertake, such emergency repairs as the Board believes necessary to prevent imminent danger to life or property.

Section 4.2 Willful or Negligent Damage . In the event that the need for maintenance or repair described in Section 4.1 of this Article is caused, in the sole discretionary determination of the Board, through the willful or negligent acts or omissions of any Owner, his or her family, guests, tenants, contractors or invitees, or other persons or parties acting with the consent of any of the foregoing, including without limitation any pets or animals of those persons or parties, the cost of such maintenance shall be the personal obligation of such Owner, shall be added to and become part of the assessment to which the Lot of such Owner is subject and shall become a lien against such Owner's Lot as provided in Article 3.10(b) of these Declarations.

Section 4.3 Access at Reasonable Hours . For the purpose of performing the maintenance referred to in Section 4.1 of this Article and inspections related thereto, the Board of the Association, through its duly authorized agents, contractors or employees shall have the right, after reasonable notice to the Owner or occupants thereof and during regular business hours, to enter upon any Lot and improvements thereon, and such entry shall not be deemed a trespass. In emergency situations, the Board or its agents, contractors or employees may enter without notice at any time, but the Owner or other occupants thereof shall be notified as soon as reasonably possible thereafter. In performing repairs or maintenance authorized under this Article, the Association shall not be liable for any loss, cost or damage caused by its action, except on account of its gross negligence or willful misconduct.

Section 4.4 Owner Maintenance . Except as provided in Section 4.1 of this Article, the Owner shall be responsible for all other maintenance and repairs, including without limitation maintenance of his or her Lot, Home, any fixtures, improvements, furnishings, equipment and appliances located thereon. All utilities, fixtures and equipment installed within a Home. An Owner shall do no act nor any work that will impair any easement or utility service, nor do any act nor allow any condition to exist which will adversely affect the use and enjoyment of the other Lots or the provision of utility services to such Lots. No Owner shall, in whole or in part, change the landscaping adjacent to or upon his or her Lot by the addition or removal of any items thereon, including fences, without the prior written approval of the Board. If Owner fails to fulfill his or her responsibilities under this Section, the Board, at its option, may take such action as it deems appropriate, including ten (10) days' notice to such Owner, except in emergencies, and any costs resulting therefrom shall be an assessment against such Owner and his or her Lot and shall be due and payable by the Owner thereof.

Section 4.5 Management Agreements and Other Contracts . The Association may enter into agreements for professional management of the Association's business. Each Owner shall be bound by the terms and conditions of any management agreement entered into by the Association. Any agreement for professional management of the Association's business shall provide for termination by either party with or without cause and without payment of a termination fee upon thirty (30) days prior written notice, and shall have a maximum term of one (1) year. Further, each and every management contract made between the Association and a manager or managing agent during the period when the Declarant or other developer controls the Association shall be subject to review and approval by the Veterans Administration or the Federal Housing Administration and shall terminate absolutely, in any event, not later than thirty (30) days after termination of the Period of Declarant Control. Furthermore, any contracts and leases during the Period of Declarant Control shall be subject to CCIOA 38-33.3-305. If professional management has been previously in effect after being required by any holder, insurer or guarantor at that time or later, any decision to terminate professional management and to establish self management by the Association shall require the prior written consent of sixty-seven percent (67%) of the First Mortgagees (based upon one (1) vote for each First Mortgage held) and vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose.

ARTICLE V

LIVING ENVIRONMENT STANDARDS/RESTRICTIONS

Section 5.1 General Plan . It is the intention of the Declarant to establish and impose a general plan for the improvement, development, use and occupancy of the Property, all thereof in order to enhance the value, desirability and attractiveness of the Property and serve and promote the sale thereof.

Section 5.2 Leases . Any lease agreement between an Owner and a tenant shall provide that the term of such lease shall be subject in all respects to the provisions of this Declaration and the Articles of Incorporation and Bylaws of the Association, and that any failure by the tenant to comply with the terms and provisions of such documents shall be a default under the lease. Further, all leases shall be in writing, and a copy thereof shall be provided to the Board, which may require the use of its approved lease form or the insertion of particular provisions. Owners will attached a copy of the Bylaws, Declarations and Association Rules and Regulations to all leases. Failure to provide these documents prior to signing a lease may subject the Owner to a One Hundred Dollars ($100.00) fine. After notice and an opportunity for hearing, the Board may require an Owner to evict any tenant who has repeatedly violated any provision of these Declarations, the Articles of Incorporation or the Bylaws. No short-term leases (i.e, for terms less than month-to-month) shall be permitted and no timesharing or such other forms of interval ownership shall be permitted.

Section 5.3 Residential Use . Each Lot shall be occupied and used as a private dwelling for the Owner, and members of his or her family, guests and tenants for residential purposes only, and the Board may make rules which limit the maximum occupancy permitted upon Lots in the Project and additional rules which restrict the ages of occupants as determined by the Board in its sole discretion. No Lot shall be used for any business, manufacturing or commercial purpose whatsoever; provided, however, if the appropriate zoning so allows and if prior written approval of the Board is obtained, an Owner may use a specifically designated portion of his Lot as a Home business office, which approval may thereafter be withdrawn or terminated by the Board at any time.

Section 5.4 Miscellaneous Structures . Except as permitted in writing by the ACC or pursuant to its rules, no advertising or signs of any character shall be erected, placed, permitted or maintained on any Lot other than a name plate of the occupant and a street number; except that the Declarant shall be permitted to use signs such as will not unreasonably interfere with Owners' use of the Common Area until all Lots are sold by the Declarant. All types of refrigerating, cooling or heating apparatus shall be concealed, except as installed by the Declarant.

Section 5.5 Lots to be Maintained . Each Lot at all times shall be kept in a clean, sightly and wholesome condition. No trash, litter, junk, boxes, containers, bottles, cans, implements, machinery, lumber or other building materials shall be permitted to remain exposed upon any Lot so that the same are visible from any neighboring Lot or street, except as necessary during the period of construction by Declarant. No condition shall be permitted within any Home, balcony, porch, patio or deck which is visible from other Homes or the Common Area and which is inconsistent with the design integrity of the Project as determined by the Board in its sole discretion.

Section 5.6 Lots Not to be Subdivided . No Lot or Lots shall be subdivided, except for the purpose of combining portions with an adjoining Lot, provided that no additional building site is created thereby. No less than one entire Lot, as conveyed, shall be used as a building site.

Section 5.7 Restrictions on Parking and Storage . Except as specifically authorized by the Board, no part of the Property, including but not limited to, streets, drives or parking areas, and no part of the streets adjoining the Property shall be used as a parking, storage, display or accommodation area for any type of house trailer, camping trailer, boat trailer, hauling trailer, running gear, boat or accessories thereto, truck larger than three quarter (3/4) ton, bus or self-contained motorized recreational vehicle, except as a temporary expedience for loading, delivery or emergency. This restriction, however, shall not restrict trucks or other commercial vehicles within the Property which are necessary for the construction of Homes or the maintenance of the Common Area or Lots or making deliveries or performing services. No abandoned vehicles shall be stored or parked upon any part of the Property or any street adjoining the Property, but excluding any area designated for such purpose by the Board. In the event that the Board shall determine in its sole discretion that a vehicle is an abandoned vehicle, then a written notice describing the vehicle will be personally delivered to the owner thereof (if such owner can be reasonably ascertained) or will be conspicuously placed on the unused vehicle (if the owner thereof cannot be reasonably ascertained), and if the unused vehicle is not removed within seventy-two (72) hours thereafter, the Board shall have the right to remove the vehicle at the sole expense of the owner thereof. For the purpose of this Section, an "abandoned vehicle" is any automobile, truck, motorcycle, motor bike, boat, trailer, camper, motor home, house trailer or other similar vehicle which has not been driven under its own propulsion, or has not been moved for a period of two (2) days or longer. The Board may make rules and restrictions regarding parking and vehicular traffic on the Property, and the Board may also designate any parking spaces as solely for the use of visitors or others, unless such spaces have been previously assigned by Declarant to an Owner, and requiring that all Owners park their vehicles inside their assigned spaces, rather than in driveways, streets or other parts of the Property. Neither Owners, tenants, guests, family nor other invitees shall park within or obstruct any prohibited area, including without limitation any fire lane. Any vehicle or other unit which is parked in violation of any rules or restrictions shall be subject to immediate removal by the Board or its agents at the expense of the owner of such vehicle.

Section 5.8 Clotheslines and Storage . Outside clotheslines or basketball hoops and backboards, whether on buildings or freestanding, carports, patio covers or similar Structures, and wood piles and storage areas shall not be allowed unless approved by the ACC in its sole discretion. All such approved Structures shall be located out of view of the street or of any neighboring Homes. Service or storage areas shall be so located as not to be visible from a street or road; there shall be no storage under any deck, unless enclosed by the Declarant or with the prior written approval of the ACC.

Section 5.9 Repair . No activity such as, but not limited to, maintenance, repair, rebuilding, dismantling, repainting or servicing of any kind of vehicles, trailers, boats or vans may be performed on any Lot unless it is done within completely enclosed Structures located on the Lot which screen the sight and sound of the activity from the street and from adjoining property. The foregoing restriction shall not be deemed to prevent washing and polishing of any motor vehicle, boat, trailer or motor-driven cycle together with those activities normally incident and necessary to such washing and polishing.

Section 5.10 Tanks . No tanks of any kind, either elevated or buried, shall be erected, placed or permitted upon any Lot.

Section 5.11 Underground Electric Lines . All electric, television, radio and telephone line installations and connections shall be placed underground, except for power substations and switching stations which shall be adequately screened from view and except for customary surface devices for access or control and except that during the construction of a residence the contractor or builder may install a temporary overhead utility line which shall be promptly removed upon completion of construction and which shall be subject to Declarant's prior written approval.

Section 5.12 Use of Common Area .

(a) No use shall be made of the Common Area which will in any manner violate the statutes, rules or regulations of any governmental authority having jurisdiction over the Common Area.

(b) The use of the Common Area shall be subject to such rules and regulations as may be adopted from time to time by the Board of the Association.

(c) No use shall ever be made of the Common Area which will deny ingress and egress for a substantial period of time to those Owners having access to a public street, to their Lots, to their parking areas or to any recreational facilities completed upon the Common Area.

Section 5.13 Sales and Construction Facilities and Activities of Declarant . Notwithstanding any provision to the contrary contained herein, Declarant, its agents, employees and contractor shall have all rights as set forth in CCIOA 38-33.3-215 and shall be permitted to maintain during the period of any construction on and sale of the Lots, upon such portion of the Common Area as Declarant may choose, such uses and facilities as may be reasonably required, convenient or incidental to the construction, sale or rental of Lots, and to the development of the Project, including without limitation, storage of equipment and vehicles, a business office, use of the clubhouse for a sales office, storage area, construction yards, signs of any size and type, model homes, sales offices, construction office, parking areas and lighting and temporary parking facilities for all prospective tenants or purchasers of Lots; the Declarant may promptly remove any of the above items if Declarant ceases to be a Lot owner. In addition, Declarant, its agents, employees, financiers and any contractor involved in the construction or sale of said improvements and Lots, or in the development of the Property, shall have all rights set forth in CCIOA 38-33.3-216, and shall have the right to ingress and egress over the Common Area as in Declarant's discretion may be necessary to complete the Project. Notwithstanding any provision of this Section, no right under this Section shall be exercised by Declarant in such a manner as to unreasonably interfere with the occupancy, use, enjoyment, or access by any Owner, his or her family members, guests, or invitees, to or of that Owner's Lot, his or her parking area, any public street or any recreational facility completed upon the Common Area.

Section 5.14 Garage Doors . Garage doors shall be kept closed except when being used to permit ingress or egress to or from the garage.

Section 5.15 Maintenance Equipment . All maintenance equipment, snowmobiles and motorized sports vehicles shall be stored in an enclosed Structure or otherwise adequately screened so as not to be visible from neighboring property or adjoining streets, which screening must be approved by the ACC.

Section 5.16 Refuse . No unsightly objects or materials, including, but not limited to, ash, trash, rubbish, garbage, grass or shrub clippings, scrap material or other refuse, or receptacles or containers therefor, shall be stored accumulated or deposited outside or so as to be visible from any neighboring property or adjoining street, except during refuse collections.

Section 5.17 Nuisances . No noxious or offensive activity shall be carried on upon any Lot nor anything done thereon tending to cause embarrassment, discomfort, annoyance or nuisance to others. No offensive or hazardous activities may be carried on any Lot or in any living unit or Accessory Building. No annoying lights, sounds or odors shall be permitted to emanate from any living units or Accessory Buildings.

Section 5.18 Sound Devices . No exterior speakers, horns, whistles, bells or other sound devices except security devices used exclusively for security purposes shall be located, used or placed on any Structure or within any Lot unless approved by the ACC.

Section 5.19 Grading Patterns . No material change may be made in the ground level, slope, pitch or drainage patterns of any Lot from the original finish grading except after first obtaining the prior consent and approval of the ACC. Grading shall be maintained at all times so as to conduct irrigation and surface waters away from buildings and so as to protect foundations and footings from excess moisture.

Section 5.20 Transmitters . No electronic or radio transmitter of any kind other than garage door openers and remote control devices for televisions, stereos, video cassette recorders, cellular telephones and similar equipment shall be operated in or on any Structure or Lot, unless prior written approval of the ACC is obtained.

Section 5.21 Trailers, Campers, etc. No boat, trailer, camper (on or off supporting vehicles), tractor, commercial vehicle, mobile home, motor home, any towed trailer unit or truck unit ("Unit") shall be parked overnight on any street or within any Lot or Building Site except in a completely enclosed Structure such as a garage. The ACC shall have the right to approve variances to this section, for the loading and unloading of recreational vehicles and motor homes.

Section 5.22 Signs . The only signs permitted on any Lot or Structure shall be:

(a) Any marketing signs or banners used by Declarant in its normal course of business in marketing new homes or lots in the Property;

(b) One sign of a customary size for offering the signed property for sale or for rent;

(d) Multiple signs for sale and administration purpose installed by, or with the permission of Declarant during development;

(e) Signs as may be necessary to advise of rules and regulations or to caution or warn of danger; and

(f) Such signs as may be required by law.

Except for permitted signs, there shall not be used or displayed on any Lot or Structure any signs or any banners, streamers, flags, lights or other devises calculated to attract attention in aid of sale or rental. All permitted signs must be professionally painted, lettered and constructed.

Section 5.23 Animals . No horses, snakes, fish, insects, birds, reptiles, cattle, sheep, goats, pigs, rabbits, poultry or other animals of any description shall be kept or maintained on any Lot, except that, if specifically permitted by the Board's rules and regulations or written consent, any Owner may keep no more than two (2) bona fide household pets, so long as such pets comply with the Board's rules and regulations, including limitation on size and number of pets, are not kept for commercial purposes, do not make objectionable noises or otherwise constitute a nuisance or inconvenience to any of the residents of adjacent property, and are kept in compliance with all existing applicable local ordinances and any rules and regulations of the Association. An Owner, family member, tenant or guest is responsible for any damage caused by his or her pet and shall be obligated to clean up after his or her pet while it is on the Property. All dogs shall be kept on leash and cleaned up after immediately when present in the Common Area. The Board may institute such rules as it deems advisable for the control of pets, including without limitation, prohibitions and restrictions, and may impose such fines as are necessary in its sole discretion to enforce such rules and this Declaration.

ARTICLE VI

ARCHITECTURAL CONTROL

Section 6.1 Review by Committee . After the purchase of a Lot from the Declarant, no Structure, Accessory Building, tennis court, swimming pool, antennae, flag pole, fence, wall, house number, mail box, exterior lighting, or other improvement shall be constructed or maintained upon the Property; no alterations, restaining, repainting to the exterior of a Home shall be made; no landscaping performed; and no Owner shall enclose, by means of screens or otherwise, any balcony, porch or patio, unless complete plans, specifications and lot plans therefor, showing the exterior design, height, square footage, building materials and color scheme thereof, the location of the Structure plotted horizontally and vertically, the location and size of driveways, the general plan of landscaping, fencing, walls and windbreaks, and the grading plan shall have been submitted to and approved in writing by the ACC, and a copy of such plans and specifications as finally approved shall be deposited with the ACC. The provisions of Sections 6.1, 6.2 and 6.3 of this Article shall not apply in any way or manner whatsoever to the Declarant or any Lot owned by Declarant. In the event the ACC permits the fencing of any area within a Lot, the Association shall not be required to mow such area.

Section 6.2 Plans Submissions . All plans, samples and other materials to be submitted to the ACC shall be submitted in duplicate. The minimum scale of these plans shall be one-twentieth (1/20th) inch equals one foot. The plot plan in this minimum scale shall show the location of all buildings, drives, walks, fences and any other Structures. Proposed new contours though the Lot and abutting street elevations on all sides shall be shown. Structure plans shall show all exterior elevations and shall indicate and locate on each elevation the materials to be used and designate each exterior color to be used by means of actual color samples.

Section 6.3 Approval Process . All actions required or permitted to be taken by the ACC shall be in writing and any such written statement shall establish the action of the ACC and shall protect any person relying on the statement. If the ACC does not execute and acknowledge such a statement within sixty (60) days after delivery of all the required materials to the members of the ACC, the materials so delivered shall be deemed approved for the purpose of these Declarations. The ACC may charge reasonable fees to cover expenses incurred in review of plans, samples and materials submitted pursuant to these Declarations, exclusive of reimbursement to the members of the ACC for their services. The ACC shall be entitled to retain one copy of all approved plans as part of its files and records. In approving or disapproving the plans submitted to it, the ACC shall take into consideration the design, style and construction of the proposed building or alteration, its location upon the Property, the harmony of its design, architecture and location with the terrain and surrounding neighborhood, and shall determine whether such proposed building is consistent with the general terrain, the architecture of other buildings located upon the Property subject to this Declaration and whether or not the construction or alteration of said building will adversely affect or decrease the value of other Lots and/or dwellings because of its design, location, height or type of material used in construction. The ACC may make reasonable requirements of the Lot Owner, including the submission of additional plans, to ensure conformance of such building or alteration when erected with these restrictions and covenants and with the plans submitted and approved. All construction or alterations performed on any Lot or the Common Area will conform to the approved plans and specifications. The ACC may require such changes as may be necessary to conform to the general purposes as herein expressed. The ACC shall be responsible for enforcing compliance of the approved plans with these covenants and restrictions.

(a) The ACC shall have authority to grant variances from the provisions of this Declaration in cases of conditions wherein the strict enforcement of these restrictions would result in unusual hardship. The ACC shall be the sole and exclusive judge of whether or not said hardship exists.

(b) Whenever the ACC disapproves of any proposed plans or specifications, it shall state in writing its reason for such disapproval in general terms so that the objections can be met by alterations acceptable to the ACC.

(d) It is the intent of these Declarations that the ACC shall exercise broad discretionary powers hereunder and its decisions shall be final and conclusive except for an arbitrary abuse of its discretion or an excess of its authority.

(e) The ACC shall resolve all questions of interpretation under this Article. They shall be interpreted in accordance with their general purpose and intent as herein expressed.

ARTICLE VII

ARCHITECTURAL CONTROL COMMITTEE

Section 7.1 Composition of the Architectural Control Committee . The ACC shall originally consist of the Board. If the Board elects to appoint a separate ACC, the ACC shall consist of three (3) persons appointed by the Board, provided however, that until the Period of Declarant Control terminates, Declarant shall have the right to appoint the ACC. At the termination of the Period of Declarant Control, the Board shall appoint a committee of three (3) to five (5) individuals each of whom owns a real property interest in a Lot within the Subdivision, to act as the ACC. Thereafter, whenever a member of the ACC shall resign, die or be unwilling or unqualified to act, the remaining Board shall appoint a successor who owns, or successors who own, a real property interest in a Lot or Lots within the Subdivision as members of the ACC, so as to fill the existing vacancies.

Section 7.2 Liability . Members of the ACC shall not be liable to any party whatsoever for any act or omission unless the act or omission is in bad faith and amounts to fraud.

ARTICLE VIII

INSURANCE

Section 8.1 Common Insurance . Commencing not later than the time of the first conveyance of a Lot to a person other than Declarant, the Association shall obtain and maintain at all times, to the extent reasonably obtainable, insurance policies covering the following risks:

(a) Property. Property insurance on the Common Area for broad form covered causes of loss; except that the total amount of insurance must be not less than the full insurable replacement costs of the insured property less applicable deductibles at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations and other items normally excluded from property policies. Such insurance must include all personal property owned by the Association and any improvements and fixtures located upon the Common Area and structural insurance on all Homes not to include any interior losses of any kind.

(b) Public Liability. Commercial general liability insurance against claims and liabilities arising in connection with the ownership, existence, use, or management of the Common Areas and deemed sufficient in the judgment of the Board but not less than any amount specified herein, insuring the Board, the Association, the management agent and their respective employees, agents, and all persons acting as agents. The Declarant shall be included as an additional insured in such Declarant's capacity as an Owner and Board member. The Owners shall be included as additional insureds but only for claims and liabilities arising in connection with the ownership, existence, use or management of the Common Area. The insurance shall cover claims of one or more insured parties against other insured parties. Such insurance shall be in such amounts as the Board of the Association may from time to time determine, but not in an amount less than One Million Dollars ($1,000,000.00) per occurrence covering claims for personal injury, bodily injury and/or for property damage. To the extent reasonably obtainable, coverage shall include, without limitation, liability for personal injuries, operation of automobiles (whether owned, non-owned or hired) on behalf of the Association, and activities in connection with the ownership, operation, maintenance or other use of the Common Area by the Association, its officers, directors, agents, employees, representatives and the Owners, off-premises employee coverage, water damage liability, contractual liability, bailee's liability for property of others and any legal liability that results from lawsuits related to employment contracts to which the Association is a party.

(c) Workmen's Compensation. Workmen's Compensation and employer's liability insurance and all other similar insurance with respect to employees of the Association in the amounts and in the forms now or hereafter required by law.

(d) Fidelity Insurance. The Association shall purchase, in an amount equal to the maximum amount of funds in the Association's custody at any one time, but not less than the greater of any sum required under CCIOA 38-33.3-306(3) or the sum of three months' assessments on the entire Project, plus reserves, blanket fidelity insurance covering losses resulting from dishonest or fraudulent acts or omissions committed by the Association's directors, managers, including without limitation, any person employed as an independent contractor for the purpose of managing the Association and any employee thereof, trustees, employees, volunteers or anyone who manages the funds collected and held for the benefit of the Owners, provided however, any managing agent which handles funds for the Association should be covered by its own fidelity insurance policy, which must provide the same coverage required of the Association. Such policy shall also cover destruction or disappearance of money or securities and forgery. Such policy shall cover any person or entity handling funds of the Association, including but not limited to, employees of the professional manager which should also be covered by its own fidelity bond and submit evidence thereof to the Association. Such fidelity coverage or bonds shall name the Association as the named insured and as obligee and shall contain waivers of any defense based upon the exclusion of persons who serve without compensation from any definition of "employee" or similar expression.

(e) Officers' and Directors' Personal Liability Insurance. To the extent obtainable, appropriate officers' and directors' personal liability insurance shall be obtained by the Association to protect the officers and directors from personal liability in relation to their duties and responsibilities in acting as such officers and directors on behalf of the Association.

(f) Flood. If the Property is located in an area identified by the Secretary of Housing and Urban Development or the Director of the Federal Emergency Management Agency as an area having special flood hazards and the sale of Flood Insurance has been made available under the National Flood Insurance Act of 1968, a "blanket" policy of flood insurance on the Property in an amount which is the lesser of the maximum amount of insurance available under the Act or one hundred percent (100%) of the current replacement cost of all buildings and other insurable common and individual property owned in common by the Lot Owners and located within the Property.

(g) Other Insurance. In addition, the Board may obtain any other insurance against such other risks, of a similar or dissimilar nature, which the Board shall deem appropriate with respect to the Project.

(h) Notice of Unavailability. If any insurance described in these Declarations is not reasonably available, or if any policy of such insurance is canceled or not renewed without a replacement policy therefor having been obtained, the Association promptly shall cause notice of that fact to be hand delivered or sent prepaid by United States mail to all Owners and First Mortgagees as provided herein.

Section 8.2 Annual Review . At least annually and prior to obtaining any insurance policy required under Section 8.1 of this Article, the Board shall obtain an estimate of the full replacement value of all improvements on each Lot, including all buildings, fixtures, improvements and service equipment located thereon, and of the Common Area improvements including landscaping and underground facilities, without deduction for depreciation, for the purpose of determining the amount of insurance required under that Section. Upon written challenge by the Owners of three (3) or more Lots that the Association's estimate of maximum replacement value is too low, the Association will secure a certified appraisal of replacement value prepared by an M.A.I. appraiser and will conform the hazard insurance to the value indicated by that appraisal. In any event, each Owner of a Lot is responsible for the adequacy of the insurance coverage carried for the protection of himself or herself or his or her Lot, and each Owner, at his or her own expense, may have the amount or extent of his coverage increased.

Section 8.3 Form of Issuance .

(a) All insurance shall be carried in blanket policy form, shall name the Association (pursuant to Article VIII, Section 8.4) as the insured, as trustee and attorney-in-fact pursuant to Article IX hereof, and shall provide that the proceeds shall be paid to the Association for the benefit or and in trust for the Association, the Owners and their First Mortgagees, as their interests may appear, shall additionally insure and identify the interest of each Owner and the First Mortgagee, and shall provide a standard, non-contributory mortgage clause in favor of each First Mortgagee which has given the Association notice of its lien. Each Owner shall be an insured person under such policy with respect to liability arising out of such Owner's interest in the Common Areas.

(b) To the extent possible, all insurance policies shall:

(i) be obtained from responsible companies duly authorized and licensed to do insurance business in the State of Colorado, and having at least a general policyholder's rating or a financial performance index of six or better in the Best's Key Rating Guide;

(ii) provide for a waiver of subrogation by the insurer as to claims against the Association, its directors, officers, employees, agents, its Owners and members of their households;

(iii) provide that the insurance cannot be canceled, invalidated or suspended on account of the conduct of the Association, its officers, directors, employees and agents;

(iv) provide for a waiver of any defense based on co-insurance;

(v) provide that the policy of insurance shall not be permitted to lapse, be terminated, canceled or materially or substantially changed or modified without at least thirty (30) day's prior written notice to the Association, the Owners and the First Mortgagees which have given notice of their liens;

(vi) provide that no act or omission by any Owner, unless acting within the scope of such Owner's authority on behalf of the Association, will void the policy or be a condition to recovery under the policy;

(vii) provide that if, at the time of a loss under the policy, there is other insurance in the name of an Owner covering the same risk covered by the policy, the Association's policy provides primary insurance;

(viii) provide that no assessments therefor may be made against First Mortgagees and any such assessments made against other shall not become a lien on the Property superior to the First Mortgagee.

(c) On written request the Association shall furnish, by certificate, identifying the interest of the Owner in question, to any Owner or First Mortgagee, together with proofs of payment of premiums. Further, an insurer that has issued an insurance policy for the insurance described in these Declarations shall issue certificates or memoranda of insurance to the Association and, upon request, to any Owner or Mortgagee. Unless otherwise provided by statute, the insurer issuing the policy may not cancel or refuse to renew it until thirty (30) days after notice of the proposed cancellation or non-renewal has been mailed to the Association, and each Owner and Mortgagee to whom a certificate or memorandum of insurance has been issued, at their respective last-known addresses.

(d) Any insurance policy may contain such deductible provisions as the Association deems consistent with good business practice and as are consistent with the requirements of First Mortgagees and any secondary lenders purchasing First Mortgages. Any loss falling within the deductible portion of the policy shall be borne by the Association, except as otherwise provided in these Declarations.

(e) The Association may adopt and establish written nondiscriminatory policies and procedures relating to the submittal of claims, responsibility for deductibles and any other matters of claims adjustment. To the extent the Association settles claims for damages to real property, it shall have the authority to assess negligent Owners causing such loss or benefiting from such repair or restoration all deductibles paid by the Association.

Section 8.4 Owner's Personal Property and Liability Insurance . An insurance policy issued to the Association does not obviate the need for Owners to obtain insurance for their own benefit and for damage to their Lot or Home. Each Owner shall be solely responsible, at his or her expense, for all insurance covering all loss or damage to any and all internal portions of a Home, including any water damage from leaks of any kind, fixtures, appliances, furniture, furnishings or other personal property supplied, maintained or installed by the Owner and covering liability for injury, death or damage occurring within his or her Lot. Such insurance shall contain waiver of subrogation and shall be so written that the insurance obtained by the Association shall not be affected or diminished thereby. The Association shall have no responsibility regarding the obtaining or continuation of any such insurance. If at any time under any policy which is in the name of the Association there is other insurance in the name of any Owner and such Owner's policy covers the same property or loss, or any portion thereof, which is covered by such Association policy, such Association policy shall be primary insurance not contributing with any of such other insurance.

ARTICLE IX

DAMAGE, DESTRUCTION, CONDEMNATION AND MERGER

Section 9.1 Attorney-in-Fact . All of the Owners and First Mortgagees irrevocably constitute and appoint the Association as insurance trustee under CCIOA 38-33.3-313(5) and (9) and under this Declaration and as their true and lawful attorney in their name, place and stead, for the purpose of dealing with the Property in the event of their destruction, damage, condemnation or liquidation of all or part of the Project or from the termination of the Project, including without limitation, the repair, replacement and improvement of any buildings, fixtures, improvements and service equipment located on the Property (but excluding any furniture, furnishings or other personal property installed by the Owners). Title to any Lot is declared and expressly made subject to the terms and conditions hereof, and acceptance by any grantee of a deed or other instrument of conveyance from the Declarant or from any Owner or grantor shall constitute appointment of the attorney-in-fact herein provided. As attorney-in-fact, the Association, by its President and Secretary or Assistance Secretary or its other duly authorized officers and agents, shall have full and complete authorization, right and power to make, execute and deliver any contract, deed or other instrument with respect to the interest of an Owner which is necessary and appropriate to exercise the powers herein granted and to represent the Owners in any proceedings, negotiations, settlements or agreements. The proceeds of any insurance collected shall be payable to the Association, for the benefit of the Association, the Owners and their First Mortgagees as their interests appear, for the purpose of repair, restoration, reconstruction or replacement as provided in this Declaration. In the event that the Association is dissolved or becomes defunct, a meeting of the Owners shall be held within thirty (30) days after either such event. At such meeting a new attorney-in-fact to deal with the Project upon its destruction, damage or condemnation shall be appointed. Said appointment must be approved by vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose, and at least sixty-seven percent (67%) of the First Mortgagees. Notwithstanding any contrary provision of this Declaration, the Association's Articles of Incorporation and Bylaws, no Owner or any other party shall have priority over any rights of the First Mortgagee of the Lot pursuant to its Mortgage in the case of a distribution to such Owner of insurance proceeds or condemnation awards for losses to or a taking of any Project common property.

Section 9.2 Damage or Destruction of Common Area . Any portion of the Project for which insurance is required under CCIOA 38-33.3-313 which is damaged or destroyed must be repaired or replaced promptly by the Association pursuant to that statutory section.

Section 9.3 Condemnation . If a Lot, or any part thereof, is acquired by eminent domain, the provisions of CCIOA 38-33.3-107 shall apply. In the event proceedings are initiated by any government or agency thereof, seeking to take by eminent domain the Common Area, any part thereof or any interest therein, any improvement thereon, or any interest therein, with a value (including loss of value to the balance of the Common Area and improvements thereon), as reasonably determined by the Association in excess of Five Thousand Dollars ($5,000.00), the Association shall give prompt notice thereof, including a description of the part of or the interest in the Common Area or improvement thereon sought to be so condemned, to all Owners. The Association shall have full power and authority to defend in said proceedings, but the Association shall not enter into proceedings pursuant to which the Common Area or any part thereof or any interest therein, or any improvement thereon or any part thereof or interest therein, is relinquished without giving all First Mortgagees of Lots and all owners at least fifteen (15) days' prior written notice thereof.

In the event, following such proceedings, there is such a taking in condemnation or by eminent domain of a part or all of the Common Area, the award made for such taking shall be paid to the Association as provided by CCIOA 38-33.3-107(3) and after the approval described below, the award shall be applied toward the repair and restoration of the Common Area, the Association shall arrange for the same and shall disburse the proceeds of such award to the contractors engaged in such repair and restoration in appropriate progress payments.

Section 9.4 Repair and Reconstruction . Unless otherwise agreed by sixty-seven percent (67%) of the First Mortgagees (based on one (1) vote for each First Mortgage held) and by vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose, any restoration or repair of the Project after a partial condemnation or damage due to an insurable hazard shall be performed substantially in accordance with this Declaration and with the original plans and specifications, and shall restore any improvement partially condemned or damaged by an insurable hazard to substantially the same condition in which it existed prior to such condemnation or damage.

Section 9.5 Excess Insurance Proceeds . With the prior written approval of sixty-seven percent (67%) of the First Mortgagees (based on one (1) vote for each First Mortgage held) and by vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose, any insurance proceeds remaining after any repairs or reconstructions are completed shall be paid to each Owner and his or her First Mortgagee jointly at the rate of one (1) equal share per Lot. Without such approval, any excess insurance proceeds shall be placed in the Association's reserves.

Section 9.6 Notice of Loss to First Mortgagees . Provided that a First Mortgagee has, in writing, requested the following information with respect to a Lot upon which said First Mortgagee holds the First Mortgage and has furnished the Association with the address to which said First Mortgagee wants the information sent, then in the event that there shall be any damage to or destruction of: (a) any improvement on the Lot on which such First Mortgagee holds the First Mortgage which shall be in excess of Five Thousand Dollars ($5,000.00), or in the event of the condemnation of any part of the Common Area as described in Section 9.3 of this Article in excess of Five Thousand Dollars ($5,000.00), then timely written notice of any such damage, destruction or condemnation shall be given by the Association to such First Mortgagee. Notwithstanding any provision to the contrary, no provision of these Declarations or of any other document relating to the Property shall be deemed to give an Owner or any other party priority over the rights of a First Mortgagee in the case of a distribution to an Owner of insurance proceeds or condemnation awards for loss to or taking of Lots or Common Area, or both.

Section 9.7 Merger . The Association may merge with one or more homeowners' association(s) in the surrounding area on such terms and conditions as may be agreed to by vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose, and by sixty-seven percent (67%) of all First Mortgagees. The surviving entity in any such merger or affiliation shall be the Association for purposes of this Declaration.

ARTICLE X

ADDITIONAL RESTRICTIONS

Section 10.1 Restrictions Upon Association and Owners . Unless at least sixty-seven percent (67%) of the First Mortgagees (based upon one (1) vote for each First Mortgage held) and the Owners (other than Declarant) by vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached, who are voting in person or by proxy at a meeting duly called for that purpose, have given their prior written approval, neither the Association nor the Owners shall be empowered or entitled to do any of the following:

(a) by act or omission, seek to abandon or terminate these Declarations or any scheme or architectural control, or enforcement thereof, as set forth in these Declarations, regarding the maintenance of the Lots, improvements thereon, or the Common Area, or the maintenance of the common property, party walls or common fences and roads, or the upkeep of lawns and plantings in the Project;

(b) by act or omission, seek to abandon, partition, subdivide, mortgage, encumber, sell or transfer any of the Common Area, except for the granting of utility easements as provided by Section 1.9 of Article I hereof; any conveyance or encumbrance of the Common Area shall also comply with voting requirements of CCIOA 38-33.3-312.

(c) fail to maintain full current replacement cost, fire and extended insurance coverage on the Lots and Common Area, and such other insurance as is required under these Declarations;

(d) use hazard insurance proceeds for loss to the improvements for other than repair, replacement or reconstruction of such improvements as herein provided;

(e) change the method of determining the obligations and assessments due or other charges which may be levied against an Owner; or

(f) a material change in any of the following provisions of this Declaration: voting rights; assessments, assessment liens or the priority of assessment liens; reserves for maintenance, repair and replacement of Common Areas; responsibility for maintenance and repairs; reallocation of interests in the Common Areas, or rights to their use; redefinition of any Lot boundaries; convertability of Lots into Common Areas or vice versa; expansion or contraction of the Project, or the addition, annexation or withdrawal of Property or from the Project; insurance or fidelity bond; leasing of Lots; imposition of any restrictions on an Owner's right to sell or transfer his or her Lot; a decision by the Association to establish self-management when professional management had been required previously by this Declaration or by a First Mortgage holder; restoration or repair of the Project (after a hazard damage or partial condemnation) in a manner other than that specified in this Declaration; any action to terminate the legal status of the Project after substantial destruction or condemnation occurs; or any provision that expressly benefits First Mortgage holders, insurers or guarantors.

Section 10.2 Additional Restrictions During Declarant Control . In addition to the provisions of Section 10.1 of this Article, after the Declarant has obtained evidence of approval for guaranteed or insured loans by the Federal Housing Administration or the Veteran's Administration and continuing until such time as the Period of Declarant Control has terminated, the prior written approval of the Veteran's Administration or the Federal Housing Administration of the U.S. Department of Housing and Urban Development shall be required for any of the following:

(a) Amendment of these Declarations;

(b) Amendment of the Articles of Incorporation or the Bylaws of the Association;

(d) Encumbering or mortgaging of all or any part of the Common Area;

(e) Dedication of all or any part of the Common Area, except for the granting of utility easements as provided by Section 1.9 of Article I hereof; and

(f) Merger, consolidation or dissolution of the Association. Any merger or consolidation shall also comply with CCIOA 38-33.3-221.

Section 10.3 Implied Approval by Mortgagee . Notwithstanding any provision of these Declarations, any matter requiring Mortgagee approval or vote will be assumed approved when that Mortgagee fails to submit a response to any written proposal for an amendment or vote within thirty (30) days after it receives proper notice of the proposal or vote, provided the notice was delivered by certified or registered mail, with a "return receipt" requested. Any First Mortgagee shall be given notice of any proposed action requiring its consent or vote, if the First Mortgagor has sent a written request to the Association, stating both its name and address and the Lot number or address of the Lot on which it has (or insures or guarantees) the Mortgage.

ARTICLE XI

GENERAL PROVISIONS FOR EFFECT OF THESE DECLARATIONS

Section 11.1 Definitions . The following words and expressions as used in these Declarations have the meanings indicated below unless the context clearly requires another meaning:

(a) Accessory Building. Detached garages, patios, gazebos, swimming pools, covers, enclosures, dressing rooms or other similar Structures, recreation facilities and other building customarily used in connection with the single-family residence.

(b) Association. Shall mean and refer to the Pinon Glen Homeowners Association, Inc., a Colorado non-profit corporation, which has been or shall be organized under the laws of the State of Colorado prior to the conveyance of the first Lot in the Subdivision to an Owner.

(c) Board. Shall mean the Board of Directors of the Association and shall also be the "executive board" as defined in CCIOA, except as specified herein, or in the Association's Articles of Incorporation or Bylaws or CCIOA Section 38-33.3-303(3), the Board may act on behalf of the Association without any vote or consent of the Owners.

(d) Building Site. A Lot as established by the recorded plat or the combination of two (2) or more Lots or portions thereof as approved by Declarant and aggregating not less than four thousand (4,000) square feet.

(e) CCIOA. Shall mean the Colorado Common Interest Ownership Act as detailed in CCIOA Section 38-33.3-101 et seq.

Any reference to a CCIOA section number shall mean that section of CCIOA Section 38-33.3-100 et seq. which bears the same section number.

(f) Common Area. Common Area shall mean and refer to all of the Property, together with all improvements located thereon and all common property owned by the Association, but excluding the Lots, together with all improvements and property thereon.

(g) Common Expenses. As defined in Section 3.3 above.

(h) Covenants. The obligation, conditions and restrictions contained within these Declarations.

(i) Design Standards. The guidelines for uses and architectural approvals which Declarant may, from time to time, adopt pursuant to Article VI of these Declarations.

(j) Due Notice. Due Notice means written notice delivered in accordance with the requirements of these Declarations at least ten (10) days prior to the action required by the notice.

(k) Enumerations Inclusive. A designation which described parcels or other things as from one number, letter or other designation to another required by the notice.

(l) First Mortgage. First Mortgage shall mean a Mortgage upon a Lot having priority of record over all other recorded encumbrances and liens thereon, except those governmental liens made superior by statute (such as general ad valorem tax liens and special assessments). "First Mortgagee" means a mortgagee whose encumbrance is a First Mortgage.

(m) Gender and Number. Whenever the context permits, Owner and Owners shall be deemed to refer equally to persons of both sexes and to corporations, singular to include plural and plural to include singular.

(n) Home. Home shall mean the residential dwelling improvement constructed and located upon a Lot.

(o) Landscape. The treatment of ground surface with live plant materials, wood chips, crushed stone decorative rocks or mulch materials or other decorative surfacing materials approved by the ACC. For purposes of this definition, the word "Landscape" shall include all other forms of the word Landscape, such as Landscaped and Landscaping.

(p) Lot. Lot shall mean and refer to any of the lots shown on any recorded plat of the Property, together with all appurtenances thereto and improvements now or hereafter thereon. The boundaries of the Lots shall be shown on any recorded plat of the Property which shall be incorporated herein by this reference.

(q) Lot Lines. Front, side and rear Lot Lines shall be the same as defined in the zoning regulations of the City of Colorado Springs in effect from time to time. In the absence of such a definition, a front Lot Line is any boundary line which meets and forms an angle with a public street except that for a corner Lot with two (2) front Lot Lines, the side Lot line is the boundary which forms an angle with the street which affords the primary access to the Lot.

(r) Member. Member shall mean and refer to every person or entity who holds membership in the Association or, following termination of the Project, of all former unit owners entitled to distributions of proceeds under CCIOA 38-33.3-218, or their heirs, personal representatives, successors or assigns.

(s) Mortgage. Mortgage means and refers to any mortgage, deed of trust or other assignment or comparable security instrument recorded in the real property records of the office of the Clerk and Recorder of the county in which the Property is located, and by which a Lot or any part thereof is encumbered. The term shall include a "security interest" as defined by the CCIOA. The term shall also include any executory land sales contract wherein the Administrator of Veteran's Affairs, an officer of the United States of America, is the original seller, whether such contract is recorded or not (but if not recorded, then written notice thereof shall be delivered to the Board) and whether such contract is owned by the said Administrator or has been assigned by the said Administrator and is owned by the Administrator's assignee, or a subsequent assignee who has notified the Board in writing of such assignment.

(t) Mortgagee. Mortgagee means any person or entity, or any successor or assign thereof, which holds or owns a Mortgage. The term shall also include the Administrator of Veteran's Affairs, an officer of the United States of America, and his or her assigns under any executory land sales contract wherein the said Administrator is identified as the seller, whether such contract is recorded or not but if not recorded, then written notice thereof shall be delivered to the Board.

(u) Owner. Owner means any person, corporation, partnership, association, contract sellers or other legal entity or any combination thereof, including Declarant, who owns the record fee simple interest in one or more Lots and shall include the purchaser under any executory land sales contract wherein the Administrator of Veteran's Affairs is seller, whether recorded or not, and whether owned by said Administrator or his or her assigns. The term "Owner" shall include any grantee, transferee, heir, successor, personal representative, executor, administrator, devisee and assign of any Owner but shall not refer to any Mortgagee as herein defined, or other person or entity having an ownership interest in any Lot merely as security for the performance of an obligation, unless such Mortgagee has acquired title pursuant to foreclosure or any proceeding in lieu of foreclosure. This term shall have the same meaning as "unit owner" under the CCIOA.

(v) Owner's Proportionate Share. Owner's Proportionate Share or Proportionate Interest means that percentage of the total which is equal to such Owner's fractional or percentage interest as set forth in Exhibit "B" attached hereto and incorporated herein by this reference. These terms shall have the same meaning as "allocated interest" under the CCIOA.

(w) Period of Declarant Control. Period of Declarant Control shall mean that period during which the Declarant, or persons designated by Declarant, may appoint and remove the officers and members of the Board as set forth in Article II.

(x) Project. Project means all of the Property, together with improvements and rights, and improvements located on the Property and all rights, easements and appurtenances belonging thereto. This term shall have the same meaning as "common interest community" and "planned community" under the CCIOA.

(y) Property. Property shall mean and refer to that certain real property described on Exhibit C hereto, together with all appurtenances thereto and all improvements now or hereafter thereon.

(z) Structure. Any thing or device other than trees and Landscaping the placement of which upon any Building Site might affect its exterior appearance, including by way of illustration and not limitation, any dwelling, building, garage, porch, deck, shed, greenhouse, driveway, walk, patio, swimming pool, hot tub, tennis court, fence, wall, outdoor lighting and lawn ornamentation. Structure shall also mean an excavation or fill, the volume of which exceeds five (5) cubic yards or any excavation, fill, ditch, diversion dam or other thing or device which affects or alters the natural flow of surface waters upon or across any Lot or which affects or alters the flow of any waters in any natural or artificial stream, wash or drainage channel upon or across any Lot.

(aa) Subdivision. The area subdivided as Pinon Glen Filing No. 1, according to the plat recorded in the office of the Clerk and Recorder of the County of El Paso and State of Colorado.

Section 11.2 Captions . Captions, titles and headings in these covenants are for convenience only and do not expand or limit the meaning of the Section and shall not be taken into account in construing the Section.

Section 11.3 Board and Architectural Control Committee Resolves Questions of Construction . If any doubt or questions shall arise concerning the true intent or meaning of any of these Declarations, the Board or ACC shall determine the proper construction of the provision in question and shall set forth in a written instrument duly acknowledged by the Board or ACC and filed for record with the Clerk and Recorder of El Paso County, State of Colorado, the meaning, effect and application of the provision. These determinations will thereafter be binding upon all parties so long as it is not arbitrary or capricious. The ACC, shall have authority over proper construction for all matters specifically calling for the approval of the ACC in these Declarations. The Board shall have authority over proper construction for all other matters. Matters of interpretation involving Declarant shall not be subject to this Section 11.3.

Section 11.4 Declarations Run With the Land . These Declarations shall run with the land and shall inure to and be binding on each Lot and upon each person or entity hereafter acquiring ownership or any right, title and interest in any Lot in the Subdivision.

Section 11.5 Covenants are Cumulative . Each of these Covenants is cumulative and independent and is to be construed without reference to any other provisions dealing with the same subject matter or imposing similar or dissimilar restrictions. A provision shall be fully enforceable although it may prohibit an act or omission sanctioned or permitted by another provision.

Section 11.6 Waivers . Except as these Declarations may be amended or terminated in the manner hereinafter set forth, they may not be waived, modified or terminated and a failure to enforce shall not constitute a waiver or impair the effectiveness or enforceability of these Declarations. Every person bound by these Declarations is deemed to recognize and agree that it is not the intent of these Declarations to require constant, harsh or literal enforcement of them as a requisite of their continuing vitality and that leniency or neglect in their enforcement shall not in any way invalidate these Declarations or any part of them nor operate as an impediment to their subsequent enforcement and each such person agrees not to plead as a defense in any civil action to enforce these Declarations that these Declarations have been waived or impaired or otherwise invalidated by a previous failure or neglect to enforce them.

Section 11.7 Enforcement . The Board, the Declarant or any Owner shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or thereafter imposed by the provisions of these Declarations. Failure by the Board or by the Declarant or by any Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter. The Board shall have the right to promulgate rules and regulations to enforce or apply these Declarations, and all Owners and other parties subject thereto shall strictly comply therewith. In addition to all other remedies, the Board shall have the right, after notice and an opportunity of hearing, to impose upon any Owner reasonable fines for any breach by that Owner of the provisions of these Declarations, the Bylaws and/or the Association's rules and regulations. All rights and remedies provided in these Declarations are distinct and cumulative to any other right or remedy hereunder or afforded by law or in equity, and may be exercised concurrently, independently or successively.

Section 11.8 Non-Waiver . Any forbearance or failure to enforce any provisions of these Declarations shall not operate as a waiver of any such provision or of any other provision of these Declarations or of any subsequent enforcement of any such provision. The rights and remedies of the Association are distinct and cumulative to any other right or remedy hereunder or afforded by law or in equity and may be exercised concurrently, independently or successively without effect or impairment upon one another.

Section 11.9 Duration and Amendment . Each and every provision of these Declarations shall be binding upon each and every Owner, his or her heirs, successors, assigns and personal representative and shall run with and bind the land for a term of twenty (20) years from the date of recording of these Declarations, after which time these Declarations shall be automatically extended for successive periods of ten (10) years each. Except as is otherwise provided herein, these Declarations shall not be revoked or terminated unless all of the Owners and all of the First Mortgagees agree to such termination or revocation by an instrument duly recorded and such termination and revocation shall comply with CCIOA 38-33.3-218. These Declarations may be amended or modified by vote or agreement of Owners of Lots to which at least sixty-seven percent (67%) of the votes in the Association are attached and not less than sixty-seven percent (67%) of the First Mortgagees; provided, however, (a) that any section in these Declarations which requires a particular percentage of Owners and/or Mortgagees may be amended only by written consent of that percentage of those parties; (b) that this section may be amended by an instrument signed by Owners owning not less than ninety percent (90%) of the Lots, and one hundred percent (100%) of the First Mortgagees who have given the Association notice of their lien, and (c) that the Declarant hereby reserves the right, until the Period of Declarant Control is terminated, but without the vote of the Owners, to make such amendments to these Declarations, the Articles of Incorporation and/or the Bylaws, as may be permitted by the CCIOA or as may be necessary to correct typographical errors or to make clarifications or may be approved in writing by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration or the Veteran's Administration so as to induce any of such organizations to make, purchase, sell, insure or guarantee First Mortgages covering any portion of the Property, and each Owner and Mortgagee by accepting a deed, Mortgage or other instrument affecting a Lot appoints Declarant as his or her attorney-in-fact for purposes of executing in said Owner's and/or Mortgagee's name and recording any such amendments to these Declarations, and each deed, mortgage, trust deed and any other evidence of obligation or other instrument affecting a Lot and the acceptance thereof shall be deemed to be a grant and acknowledgement of and a consent to the reservation of the power to the Declarant to make, execute and record any such amendments. The consent of any junior Mortgagee shall not be required under the provisions of this Article. In determining whether the appropriate percentage of First Mortgagee approval is obtained, each First Mortgagee shall have one (1) vote for each First Mortgage owned. To be effective, all amendments to these Declarations must be recorded in the office of the Clerk and Recorder of the county in which the Property is located, and an amendment must be indexed in the grantee's index in the name of each person executing the amendment. The amendment shall be prepared, executed, recorded and certified on behalf of the Association by any officer of the Association designated for that purpose or, in the absence of designation, by the president of the Association. All expenses associated with preparing and recording an amendment to these Declarations shall be the sole responsibility of the persons or parties as set forth in CCIOA 38-33.3-217(6). The Association shall notify any First Mortgagee who has requested notice in writing of any proposed action under these Declarations which would require the consent of a specified percentage of First Mortgagees.

Section 11.10 Amendment and Extensions . From time to time any one or more sections of these Declarations may be amended or new sections may be added to these Declarations or extension of time may be granted, by an instrument signed and acknowledged by Declarant, during the period Declarant is permitted to enforce these Declarations, and the Owners of at least three-fourths (3/4ths) of the Lots in the Subdivision and filed of record with the Clerk and Recorder of El Paso County.

Section 11.11 Termination . All sections of these Declarations (except Section 1.9) may be terminated at any time, and from time to time any section or sections of these Declarations (except Section 1.9) may be amended or new sections may be added to these Declarations, by an instrument signed and acknowledged by Declarant and the Owners of at least three-fourths (3/4ths) of the Lots in the Subdivision and filed for record with the Clerk and Recorder of El Paso County.

Section 11.12 Partial Amendments . These Declarations may be amended for only a portion of the Subdivision by a written instrument executed by Declarant and one hundred percent (100%) of the then Owners of such portion of the Subdivision if:

(a) the portion of the Subdivision affected by such amendment contains at least twenty (20) contiguous Lots;

(b) no improvements have been erected on any such Lots; and

(c) Declarant reasonably determines that amendments will not materially adversely affect the general living environment contemplated by these Declarations for the remaining Lots in the Subdivision.

Section 11.13 Additional Areas . From time to time until December 31, 1999, Declarant may include additional areas within the real estate subject to these Declarations, so long as the Department of Veterans Affairs and/or Federal Housing Administra-tion approves such addition. Such additions shall be effected by filing with the Clerk and Recorder of El Paso County, Colorado, a supplemental declaration, together with a map and legal description designating the additional areas to be included. All areas so added shall be subject to all these Declarations, and any references to the Subdivision in these Declarations shall automatically include such additional areas upon recording the supplemental declaration. Declarant may also impose additional restrictions on areas so added. All areas so added shall be within one-half mile of, and contiguous to, the Subdivision, and the total number of residential Building Sites in the land subject to these Declarations shall not exceed twenty (20).

Section 11.14 Cumulative . Each of these covenants is cumulative and independent and is to be construed without reference to any other provision dealing with the same subject matter or imposing similar or dissimilar restrictions. A provision shall be fully enforceable although it may prohibit an act or omission sanctioned or permitted by another provision.

Section 11.15 Severability . If any of these Declarations, covenants or restrictions shall be held invalid or become unenforceable, the other Declarations shall not be affected or impaired but shall remain in full force and effect.

Section 11.16 Conflicts of Provisions . In case of conflict between these Declarations and the Articles of Incorporation or the Bylaws, these Declarations shall control. In case of conflict between the Articles of Incorporation and the Bylaws, the Articles of Incorporation shall control.

Section 11.17 Action in Writing . Notices, approvals, consents, applications and other actions provided for or contemplated by these Declarations shall be in writing and shall be signed on behalf of the party who originates the notices, approvals, consents, applications or other actions.

Section 11.18 Registration by Owner of Mailing Address . Each Owner shall register his or her mailing address with the Association, and except for monthly statements and other routine notices, all other notices or demands intended to be served upon an Owner shall be sent by either registered or certified mail, postage prepaid, addressed in the name of the Owner at such registered mailing address. All notices, demands or other notices intended to be served upon the Board of the Association or the Association shall be sent by certified mail, postage prepaid, to the registered agent of the Association at his or her address filed with the Secretary of State of the State of Colorado, together with a copy addressed to the President of the Association at his or her registered address.

Section 11.19 Assignments . The Declarant shall have the right to assign any rights or obligations of Declarant to home builders (Assignee") by a written assignment in accordance with CCIOA 38-33.3-304. In such event the Assignee shall receive all rights or obligations as assigned by Declarant.

Section 11.20 Acceptance of Provisions of All Documents . The conveyance or encumbrance of a Lot or the improvements thereon shall be deemed to include the acceptance of all provisions of these Declarations, the Articles of Incorporation of the Association and the Association's Bylaws and rules and regulations, all of which shall be binding upon each Owner, his or her heirs, personal representatives, family, guests, tenants, successors and assigns, and everyone having an interest in the Lot without the necessity of inclusion of an express provision in the instrument of conveyance or encumbrance. The Association and the Owners shall obey and perform any protective or other covenants recorded against the Property prior to the recording of these Declarations.

Section 11.21 Governing Law . This Declaration of Covenants, Conditions and Restrictions shall be governed by, and construed in accordance with, the statutes and laws of the State of Colorado.

IN WITNESS WHEREOF, the Declarant has executed this Declaration this ______ day of June, 1998.

DECLARANT:

PINON GLEN, LLC

a Colorado limited liability company

By:_______________________________

Raymond F. O'Sullivan, Manager

STATE OF COLORADO )

) ss.

COUNTY OF EL PASO )

The foregoing instrument was acknowledged before me this _______ day of June, 1998, by Raymond F. O'Sullivan, its Manager, of PINON GLEN, LLC, a Colorado limited liability company.

Witness my hand and official seal.

My commission expires: ______________________.

______________________________

S E A L Notary Public

EXHIBIT A

COMPUTATION OF ANNUAL ASSESSMENT

Annual year project

common area expenses $ 96,768

Divided by number of lots

in initial Subdivision 72

Initial Annual Assessment $ 1,344

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EXHIBIT B

OWNER'S PROPORTIONATE SHARE

Each Owner's proportionate share shall be one/seventy-seconds (1/72nd).

A formula being the number of Lots owned by the Owner which have had a Home constructed upon it and conveyed to the first residential purchaser and the denominator being the total number of Lots which have had a Home constructed upon it and conveyed to the first residential purchaser. It being the intent of Declarant that upon completion of construction of all Homes on Lots within the Project, each Owner's proportionate share shall be 1/72nd of any Assessment.

EXHIBIT C

PROPERTY

Pinon Glen Filing No. 1 according to the plat thereof recorded in El Paso County, Colorado.