The CC&R's were recorded on 3 December, 2003 in the County of San Diego, State of California, as document number 2003-1435583.

CORONADO SHORES CONDOMINIUM

ASSOCIATION NO. 10

First Restated Supplemental Declaration of

Covenants, Conditions and Restrictions

CC&Rs

Summary of Contents

RECITALS ................................................................................................. 1

ARTICLE I Definitions................................................................................. 2

ARTICLE II .................................................... Powers and Duties of the HOA 7

ARTICLE III Member Responsibilities............................................................ 8

ARTICLE IV Use Requirements.................................................................... 12

ARTICLE V Common Area Uses and Improvements.................................... 16

ARTICLE VI Membership and Voting Rights................................................ 17

ARTICLE VII Assessments............................................................................ 17

ARTICLE VIII Architectural Control................................................................ 22

ARTICLE IX Renting or Leasing................................................................... 27

ARTICLE X Alternative Dispute Resolution.................................................. 28

ARTICLE XI Rights of Lenders.................................................................... 30

ARTICLE XII Insurance, Condemnation and Destruction................................ 31

ARTICLE XIII Partition................................................................................... 33

ARTICLE XIV Landscaping and Recreational Facility of Coronado

Shores Development; Reciprocal Easements............................. 34

ARTICLE XV Special Use Unit...................................................................... 37

ARTICLE XVI General Provisions................................................................... 38

Table of Contents

RECITALS

ARTICLE I Definitions

Section 1.1 Adjacent Owners............................................................................................... 2

Section 1.2 Architectural Guidelines...................................................................................... 2

Section 1.3 Architectural Review Committee or ARC........................................................... 2

Section 1.4 Articles 2

Section 1.5 Assessment........................................................................................................ 2

Section 1.6 Association........................................................................................................ 2

Section 1.7 Beneficiary......................................................................................................... 2

Section 1.8 Board of Directors or the Board......................................................................... 2

Section 1.9 Bylaws 2

Section 1.10 CC&Rs............................................................................................................. 2

Section 1.11 Common Area................................................................................................... 2

Section 1.12 Common Expenses............................................................................................ 3

Section 1.13 Common Facilities.............................................................................................. 4

Section 1.14 Condominium..................................................................................................... 4

Section 1.15 Condominium Plan............................................................................................. 4

Section 1.16 Coronado Shores............................................................................................... 4

Section 1.17 Declaration........................................................................................................ 4

Section 1.18 Development...................................................................................................... 4

Section 1.19 Eligible Insurer, Guarantor.................................................................................. 4

Section 1.20 Eligible Mortgage Holder.................................................................................... 5

Section 1.21 Exclusive Use Common Area............................................................................. 5

Section 1.22 Fiscal Year........................................................................................................ 5

Section 1.23 Governing Documents........................................................................................ 5

Section 1.24 Guest .............................................................................................................. 5

Section 1.25 Improvements.................................................................................................... 5

Section 1.26 Member............................................................................................................. 5

Section 1.27 Mortgage........................................................................................................... 5

Section 1.28 Mortgagee......................................................................................................... 5

Section 1.29 Owner .............................................................................................................. 5

Section 1.30 Party Wall.......................................................................................................... 5

Section 1.31 Private Streets (and Sidewalks).......................................................................... 5

Section 1.32 Professional Manager......................................................................................... 5

Section 1.33 Project .............................................................................................................. 6

Section 1.34 Quorum............................................................................................................. 6

Section 1.35 Residents........................................................................................................... 6

Section 1.36 Regular Assessment........................................................................................... 6

Section 1.37 Reimbursement Assessment................................................................................ 6

Section 1.38 Restricted Common Areas and Facilities............................................................. 6

Section 1.39 Rules and Regulations or Rules........................................................................... 6

Section 1.40 Special Assessment............................................................................................ 6

Section 1.41 Special Use Units............................................................................................... 6

Section 1.42 Tenant .............................................................................................................. 6

Section 1.43 Tenant .............................................................................................................. 6

Section 1.44 Unit .............................................................................................................. 7

ARTICLE II Powers and Duties of the HOA

Section 2.1 Management and Control by the Board.............................................................. 7

Section 2.2 Powers and Responsibilities of the HOA............................................................. 7

Section 2.3 Limitation of Liability.......................................................................................... 8

ARTICLE III Owner Responsibilities

Section 3.1 Maintenance .................................................................................................. 8

Section 3.2 Alteration of Units............................................................................................ 11

Section 3.3 Mutual Easements............................................................................................ 11

Section 3.4 Party Walls ................................................................................................ 11

Section 3.5 Guests ................................................................................................ 11

ARTICLE IV Use Requirements

Section 4.1 Residential Use 11

Section 4.2 Pets and Animals.............................................................................................. 11

Section 4.3 Use of Parking Spaces..................................................................................... 12

Section 4.4 Commercial and Recreational Vehicles............................................................. 12

Section 4.5 Window Coverings.......................................................................................... 13

Section 4.6 Use of Exclusive Use Common Area................................................................ 13

Section 4.7 Dangerous Use of Units.................................................................................... 13

Section 4.8 Flooring Surfaces............................................................................................. 13

Section 4.9 Use of Common Area...................................................................................... 13

Section 4.10 Outside Drying Facilities................................................................................... 13

Section 4.11 Antennae ................................................................................................ 13

Section 4.12 Signs and Flags 13

Section 4.13 No Equipment Repair....................................................................................... 14

Section 4.14 Diseases and Insects........................................................................................ 14

Section 4.15 Impairment of Development and Easements...................................................... 14

Section 4.16 Nuisance ................................................................................................ 14

Section 4.17 Unsightly or Unkempt Conditions..................................................................... 14

Section 4.18 Responsibility for Damage to the Common Area............................................... 14

Section 4.19 Fences ............................................................................................................ 14

Section 4.20 No Timeshares 14

Section 4.21 Balconies, etc. ................................................................................................ 14

Section 4.22 Storage Areas.................................................................................................. 15

Section 4.23 Windows......................................................................................................... 15

Section 4.24 Outside Parking............................................................................................... 15

ARTICLE V Common Area Uses and Improvements

Section 5.1 Easement for Maintenance................................................................................ 16

Section 5.2 Limitation on Alterations................................................................................... 16

Section 5.3 Owners’ Easement of Enjoyment...................................................................... 16

Section 5.4 Damage by Wood-Destroying Pests................................................................. 16

ARTICLE VI Member Ownership and Voting Rights

Section 6.1 Membership ................................................................................................ 16

Section 6.2 Voting Rights ................................................................................................ 16

ARTICLE VII Assessments

Section 7.1 Purpose of Assessments................................................................................... 17

Section 7.2 Types of Assessments...................................................................................... 17

Section 7.3 Creation Obligation for Assessments................................................................. 17

Section 7.4 Assessment Lien and Personal Liability............................................................. 17

Section 7.5 No Avoidance of Assessment Obligations......................................................... 17

Section 7.6 No Withholding of Assessments....................................................................... 17

Section 7.7 Percentage of Undivided Interest in Common Areas.......................................... 17

Section 7.8 Regular Assessments........................................................................................ 18

Section 7.9 Special Assessments........................................................................................ 19

Section 7.10 Reimbursement Assessments............................................................................ 19

Section 7.11 Exemption From Assessments.......................................................................... 19

Section 7.12 Effect of Non-Payment of Assessments............................................................ 20

Section 7.13 Foreclosure of Assessment Lien....................................................................... 20

Section 7.14 Acceptance of Payments by the HOA.............................................................. 20

Section 7.15 Uniform Rate Assessments............................................................................... 20

Section 7.16 Non-Payment of Assessments.......................................................................... 21

Section 7.17 Estoppel Certificate.......................................................................................... 21

Section 7.18 Assignment of Rents......................................................................................... 21

ARTICLE VIII Architectural Control

Section 8.1 Unit Modification............................................................................................. 21

Section 8.2 Architectural Approval..................................................................................... 24

Section 8.3 Architectural Review Committee....................................................................... 25

Section 8.4 Duties of the Committee................................................................................... 25

Section 8.5 Meetings and Actions....................................................................................... 25

Section 8.6 Architectural Guidelines.................................................................................... 25

Section 8.7 Approval by ARC............................................................................................ 25

Section 8.8 Approval of Improvements............................................................................... 25

Section 8.9 Appeal ............................................................................................................ 25

Section 8.10 Variances......................................................................................................... 25

Section 8.11 No Waiver Based Upon Prior Approval........................................................... 26

Section 8.12 No Liability of ARC......................................................................................... 26

ARTICLE IX Renting or Leasing

Section 9.1 Renting or Leasing............................................................................................ 26

Section 9.2 Terms ............................................................................................................ 27

Section 9.3 Delegation of Right to Evict Tenant................................................................... 27

Section 9.4 Use of Common Area...................................................................................... 28

Section 9.5 Existing Leases 28

Section 9.6 Non-Application of Article............................................................................... 28

ARTICLE X Alternative Dispute Resolution

Section 10.1 Request for Resolution..................................................................................... 28

Section 10.2 Response to Request For Resolution................................................................ 28

Section 10.3 Certificate of Completion.................................................................................. 29

Section 10.4 Cost of Alternative Dispute Resolution.............................................................. 29

Section 10.5 Failure to Comply............................................................................................ 29

Section 10.6 Exceptions ................................................................................................ 29

ARTICLE XI Rights of Lenders

Section 11.1 Liability for Unpaid Assessments...................................................................... 29

Section 11.2 Subordination of Lien....................................................................................... 29

Section 11.3 Superiority of Liens.......................................................................................... 30

Section 11.4 Mortgage Protection........................................................................................ 30

Section 11.5 Additional Lien Rights...................................................................................... 30

ARTICLE XII Insurance, Condemnation and Destruction

Section 12.1 Insurance ................................................................................................ 31

Section 12.2 Distribution of Insurance Policies...................................................................... 31

Section 12.3 Condemnation by Public Entity or Destruction................................................... 32

Section 12.4 Owners Insurance............................................................................................ 32

Section 12.5 Rights and Duties of Owners to Insure.............................................................. 32

Section 12.6 Payment of Premiums and Deductible............................................................... 32

ARTICLE XIII Partition

Section 13.1 Partition Prohibited; Exceptions........................................................................ 32

Section 13.2 Power of Attorney........................................................................................... 33

ARTICLE XIV Landscaping and Recreational Facilities of Coronado

Shores Development; Reciprocal Easements

Section 14.1 Common Operation......................................................................................... 33

Section 14.2 Reciprocal Easements...................................................................................... 34

Section 14.3 Landscaping and Recreational Committee: Membership.................................... 34

Section 14.4 Duties ............................................................................................................ 35

Section 14.5 No Power to Assess........................................................................................ 35

Section 14.6 Meetings.......................................................................................................... 36

ARTICLE XV Special Use Unit

Section 15.1 Use and Occupancy......................................................................................... 36

Section 15.2 Use by Association.......................................................................................... 37

Section 15.3 Ownership Rights and Obligations.................................................................... 37

Section 15.4 Association Membership.................................................................................. 37

Section 15.5 Conflict; Amendment........................................................................................ 37

ARTICLE XVI General Provisions

Section 16.1 Notice to Individual Owners............................................................................. 37

Section 16.2 Annexation by Association............................................................................... 38

Section 16.3 Enforcement ................................................................................................ 38

Section 16.4 Severability ................................................................................................ 38

Section 16.5 Amendments ................................................................................................ 38

Section 16.6 Required Amendments..................................................................................... 38

Section 16.7 Extension of Declaration................................................................................... 39

EXHIBITS TO CC&Rs:

EXHIBIT “A”

CORONADO SHORES CONDOMINIUM ASSOCIATION NO. 10

First Restated Supplemental Declaration of Covenants,

Conditions and Restriction

CC&Rs

THIS FIRST RESTATED SUPPLEMENTAL DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS is made as of this ___________ day of __________, 2003, by the Coronado Shores Condominium Association no. 10, with reference to the following:

Recitals

A. Coronado Shores Condominium Association no. 10, a California non-profit corporation (the “HOA”) is the governing organization for the common interest development commonly known as Coronado Shores Condominium Association no. 10 (the “Development”) located in the City of Coronado, County of San Diego, State of California, more particularly described as:

Lot 4 of Coronado Shores Map 6641 recorded on May 1, 1970 as File No. 75985 in the office of the County Recorder of San Diego County, California.

B. The HOA is a Common Interest Development as defined by the Davis-Stirling Common Interest Development Act, California Civil Code section 1350, et. seq.

C. The HOA has the duty, responsibility and authority to perform certain functions set forth in the Governing Documents for the HOA, including the original Declaration of Covenants, Conditions and Restrictions recorded in the Official Records of San Diego County (“Original Declaration”).

In accordance and compliance with the Governing Documents, the HOA establishes this First Restated Supplemental Declaration of Covenants, Conditions and Restrictions (“CC&Rs”) for the protection and benefit of the Development. These CC&Rs entirely replace, withdraw and supplant the Original Declaration for the HOA which was previously recorded on April 25, , 1978 as Document Number 167309 as well as any amendments thereto including but not limited to the July 21, 1982 amendment which was previously recorded as Document Number 82-222870 in the office of the County Recorder of San Diego County.

ARTICLE I DEFINITIONS:

Section 1.1 Adjacent Owners. Owners of Units separated by a Wall.

Section 1.2 Architectural Guidelines. The policies and procedures established by the Board and the Architectural Review Committee governing any proposed changes to the Development.

Section 1.3 Architectural Review Committee or ARC. The committee established by the Board in accordance with these CC&Rs to review changes to the Development proposed by Owners.

Section 1.4 Articles. The Articles of Incorporation of the Coronado Shores Condominium Association No. 10, a California non-profit, mutual benefit corporation.

Section 1.5 Assessment. Any regular, special or reimbursement assessment as defined in these CC&Rs and the Davis-Stirling Common Interest Development Act.

Section 1.6 Association. Coronado Shores Condominium Association No. 10, a California non-profit corporation exercising the powers and duties of a California non-profit corporation pursuant to the Civil Code Section 1350, et. seq.; a common interest development. Also referred to as the “HOA”.

Section 1.7 Beneficiary. A mortgagee, or the beneficiary or holder of a note secured by a Deed of Trust, and/or the assignees of a mortgagee, beneficiary or holder.

Section 1.8 Board of Directors or the Board. The governing body of the HOA, as set forth in the Governing Documents.

Section 1.9 Bylaws. The Bylaws of the HOA which are entitled The Second Restated Bylaws.

Section 1.10 CC&Rs. This First Restated Supplemental Declaration of Covenants, Conditions and Restrictions. Also sometimes referred to as the “Declaration” or “CC&Rs.”

Section 1.11 Common Area. The entire Development except for the Units. Unless stated to the contrary, reference to the Common Area also refers to all Common Facilities.

Section 1.12 Common Expenses. “Common Expenses” shall be divided into the following categories:

(a) Building Assessment. Costs and expenses of, or reasonable reserves for future costs and expenses of, the normal maintenance, management, operation, anticipated repair and replacement of the multi-family structure in which the Units are located (excluding any recreation facilities that may be located within the structure and available for use by all Owners at Coronado Shores), together with the appurtenances that are for the principal use of the Owners in said structure only, shall be designated “Building Assessment”.

(b) Grounds and Recreation Assessment. The costs and expenses of, or reasonable reserves for, future costs and expenses of the maintenance, management, operation, repair and replacement of the landscaped areas, walkways, driveways, parking areas, swimming pools, various recreational facilities (whether located within or without the multi-family structures located on Lots or Parcels within Coronado Shores) including building and tennis courts, lakes, lagoons, fish ponds and other recreational artistic landscaping facilities and devices as may be located on the Project, or on said other Lots or Parcels, or partly on Lot 4 and partly on other of said Lots or Parcels (or so much of said landscaping and recreational costs and expenses as shall be allocable to the Project as provided in Article XIV hereof) shall be designated “Grounds and recreation Assessment”.

(c) Insurance Assessment. The premiums on all insurance purchased by the Association pursuant to the provisions of Article 10 hereof, together with any expenses incurred by the Association in employing the services of an independent insurance analyst, consultant, or broker as may be authorized by the provisions of said Article 10, shall be designated “Insurance Assessment”.

(d) Seawall and Private Roadway Assessment. Upon the completion of the construction of said 149-unit, multi-family structure known as CORONADO SHORES CONDOMINIUM NO. 10, and other permanent structures, if any, which are associated with the Condominium Plan, and as of the date of the close of escrow on the first sale of a Condominium in the project, the Owners (including DECLARANT) of Lot 4 or portions thereof shall commence to share the costs and expenses of maintaining and repairing the seawall and the private undedicated roadway as provided in Article 3of the Basic Amended Restated Covenants. The share of said costs and expenses allocable to the Owner or Owners of Lot 4 under the provisions of Article 3 of the Basic Amended Restated Covenants shall be designated “Seawall and Private Roadway Assessment” and shall forthwith become a part of the Common Expenses of the Project and thus may be levied and collected by the Association in the same manner as other Common Expenses subject to the Regular Assessment.

(e) Other Assessments. In addition to the four categories of expenses set forth in (a), (b), (c) and (d) above, costs and expenses, or reasonable reserves for costs and expenses to be incurred, by the Association in the following activities shall be included as Common Expenses:

(i) Maintenance, management, operation, repair and replacement of the Common Areas as to which, pursuant to the provisions of this Declaration, it is the responsibility of the Association to maintain, repair and replace, including the cost of unpaid Reimbursement Assessments and Special Assessments.

(ii) Management and administration of the Association, including without limitation, compensation paid by the Association to managers, accountants, attorneys or other employees and agents.

(iii) Any other item or items designated by or in accordance with the other provisions of this Declaration to be Common Expenses, and any other expenses reasonably incurred by the Association.

Section 1.13 Common Facilities. Every part of the Development except the Units and the real property.

Section 1.14 Condominium. Also referred to as a “Unit.” An estate according to Civil Code Section

1351(f), defined by the Condominium Plan. “Condominium” shall also mean and refer to a condominium as defined in Section 783 of the California Civil Code, and shall be an estate in real property consisting of (a) a separate fee interest in the space within a Unit, and (b) an undivided interest as a tenant-in-common in the Common Areas. Additionally, each Owner of a Condominium shall receive a membership in CORONADO SHORES CONDOMINIUM ASSOCIATION NO. 10.

Section 1.15 Condominium Plan. The document which describes and defines the entire Development, filed on January 6, 1978, , as Document No. 78-007400 in the Official Records of the San Diego County Recorder’s Office.

Section 1.16 Coronado Shores. “Coronado Shores” shall mean and refer to all the Lots and Parcels, including all structures thereon, within the Coronado Shores project as shown on Map No. 6651 and Parcel Map No. 1262, as more particularly defined in Article 6 hereof.

Section 1.17 Declarant. “Declarant ” shall mean and refer to the original developer of Coronado Shores and the Project, Coronado Development Co., a California Corporation, its successors and assigns.

Section 1.18 Declaration. This First Restated Declaration of Covenants, Conditions and Restrictions. The Declaration may also be referred to as the “CC&Rs”.

Section 1.19 Development. “Development” refers to and means the entire Lot 4, Coronado Shores Map No. 6641, divided into Condominiums, including all structures thereon, and the Common Areas and Units within Lot 4.

Section 1.20 Eligible Insurer, Guarantor. An insurer or guarantor who has requested notice of certain matters as set forth in these CC&Rs.

Section 1.21 Eligible Mortgage Holder. A holder of a first mortgage on a Unit who has requested notice of certain matters as set forth in these CC&Rs.

Section 1.22 Exclusive Use Common Area. Common Area designated by the Governing Documents for the exclusive use of one or more, but fewer than all of the Owners in accordance with California Civil Code Section 1351(i).

Section 1.23 Fiscal Year. The accounting period selected by the Board covering 12 consecutive months, at the end of which the HOA’s books are closed.

Section 1.24 Governing Documents. As used in the Davis-Stirling Act, a collective term that refers to these CC&Rs, as well as all other documents enacted by the HOA or recorded or filed with any governmental agency with respect to the Development and the HOA.

Section 1.25 Guest. Anyone who is in the Development but who is not a Resident (including Owners who have rented or leased their Unit).

Section 1.26 Improvements. Any change to any part of the Development, and any part of the Development other than the real property.

Section 1.27 Member. Any Owner of a Unit in the Development. All Owners are Members of the HOA.

Section 1.28 Mortgage. Any security interest encumbering all or any portion of a Unit.

Section 1.29 Mortgagee. The beneficiary of a mortgage encumbering all or any portion of a Unit.

Section 1.30 Owner. Any Owner of any Unit in the Development. All Owners are Members of the HOA.

Section 1.31 Party Wall. Any wall that is shared by more than one Owner, or shared by an Owner and the Association.

Section 1.32 Private Streets (and Sidewalks). Those streets (including sidewalks) designated as “Private Streets” on the Condominium Plan are streets not dedicated to the public but shall be used for all purposes as though they were streets so dedicated. The use of said Streets shall remain in effect so long as this Declaration shall remain in effect, and thereafter so long as such means of ingress and egress are reasonably necessary or proper for the convenient use of the Owners within the Project. Nothing herein contained shall be deemed to modify or restrict the rights of DECLARANT to dedicate any and all of said Private Streets, which rights are retained to DECLARANT in the deed of conveyance of each Condominium.

Section 1.33 Professional Manager. The on-site property manager for the Association.

Section 1.34 Project. The “Project” refers to and means the entire Lot 4, Coronado Shores Map No. 6641, divided into Condominiums, including all structures thereon, and the Common Areas and Units within Lot 4.

Section 1.35 Quorum. A majority of the Board or the members that constitute a quorum thereof, unless specifically stated otherwise in a particular provision of the CC&Rs or Bylaws.

Section 1.36 Residents. The people living in the Development, regardless of whether they are Owners.

Section 1.37 Regular Assessment. The assessment levied by the HOA with respect to all Units, used for paying common expenses and funding reserves.

Section 1.38 Reimbursement Assessment. An assessment levied by the HOA with respect to one or more Owners for reimbursement of costs and expenses of any kind, including attorney fees, incurred by the HOA on behalf or as a result of the Owner(s) subject to the assessment.

Section 1.39 Restricted Common Areas and Facilities. “Restricted Common Areas and Facilities” shall mean a portion of the Common Areas set aside and allocated for the restricted use of respective Units as is or may hereinafter be designated in the Condominium Plan. To complete each Condominium at the time of conveyance each respective document of conveyance shall, if applicable, in addition to describing the respective Unit, describe the designated assigned covered parking space or spaces, together with any balcony adjacent to the Unit to be used exclusively in conjunction with the respective Unit, and together with any sun deck adjacent to a balcony adjacent to a Unit to be used exclusively in conjunction with the use of the respective Unit as Restricted Common Areas and Facilities.

Section 1.40 Rules and Regulations or Rules. Policies and procedures enacted and implemented by the Board pursuant to the Governing Documents.

Section 1.41 Special Assessment. An assessment levied with respect to all Units for payment of extraordinary expenses of the HOA.

Section 1.42 Special Use Unit. “Special Use Unit” shall mean and refer to that certain Unit designated on the Condominium Plan as Unit 01 and more particularly described herein.

Section 1.43 Tenant. A Resident of the Development who is renting or leasing a Unit.

Section 1.44 Unit. An estate according to Civil Code Section 1351(f), defined by the Condominium Plan. “Unit” shall also mean and refer to the elements of a Condominium which are not owned in common with other Owners of other Condominiums. The boundaries of a Unit shall be the interior surfaces of the perimeter walls, floors, ceilings, windows and doors of each Unit, where they exist, and otherwise to the vertical or horizontal planes at the limits of the dimensions shown on the Condominium Plan. The Unit shall include both the portions of the building so described and the air space so encompassed. In interpreting deed and plans, the existing physical boundaries of a Unit, or of a Unit reconstructed in substantial accordance with the original plans, shall be conclusively presumed to be its boundaries, rather than the metes and bounds, or other description, expressed in the deed or plan, regardless of settling or lateral movement of building and regardless of minor variance between boundaries shown on the plan or in the deed and those of a building.

ARTICLE II Powers and Duties of the HOA

Section 2.1 Management and Control by the Board. Except as otherwise specifically provided in these CC&Rs, the Board has the obligation and sole authority to manage, operate and control the Development, and to interpret these CC&Rs.

Section 2.2 Powers and Responsibilities of the HOA.

A. The HOA has the right to adopt and amend rules relating to any use of the Development, and a reasonable fining policy for enforcement. A copy of the rules must be:

(1) Maintained in the office of the HOA and be available for inspection during regular business hours; and,

(2) Given to each Owner and given to each new Owner within a reasonable time after the HOA has notice of occupancy of a Unit. Amendments must be given to each Owner at least 10 days prior to the effective date.

B. The HOA has the right to limit the number of Guests using the Common Areas and related facilities.

C. The HOA has the right to suspend the right to use the Common Area for any period during which any assessment against the Unit and/or Owner remains delinquent, and for a period up to 30 days for any other single infraction of the Governing Documents.

D. The HOA must enforce the Governing Documents. Penalties may be imposed by the HOA for failure to comply with the Governing Documents, including levy of a Reimbursement Assessment, suspension of use of the Common Area, suspension of voting privileges and reasonable fines.

F. The HOA may impose and receive deposits, payments, fees or charges for the temporary, individual use of the Common Area by Owners.

G. The HOA may grant permits, licenses, utility easements and other easements or permits necessary for maintenance or operation of the Development, under, through or over the Common Area.

H. The HOA must pay all taxes and charges assessed against the Common Area.

I. The HOA must provide for water, sewer, gas, electrical service, refuse collection and gardening service for the Common Area, and make available to all Residences electrical, water, gas and sewer service. The Board may determine to provide other utilities, also.

J. The HOA may borrow money for improving or restoring the Common Area and for litigation related to the Development, but may not pledge assessments as security for any loan except with approval of a majority of a quorum of Owners.

K. The HOA shall secure and maintain policies of insurance, as provided by the Governing Documents and by law.

L. The HOA may take any lawful action which is in furtherance of its obligation to preserve, protect, maintain and enhance the Development.

M. The HOA may enter into contracts for the benefit of the Development not exceeding one year in duration, except for the exception set forth in the Bylaws.

Section 2.3 Limitation of Liability No Member of the Board of Directors may be held individually or personally liable or obligated for performance or failure of performance of his or her duties or responsibilities, unless he or she fails to act in good faith, or is grossly negligent.

ARTICLE III Owner Responsibilities

Section 3.1 Maintenance. Every Owner is responsible for prompt maintenance and repair work within his or her Unit, which if omitted would affect the entire Project or a portion of the Project, other than that portion belonging to such Owner, being expressly responsible for the damages and liabilities that the Owner’s failure to do so may engender. Owners are responsible to maintain and repair the following elements of the Development.

A. All doors, screen doors, , sliding glass doors, and all windows. Items to be maintained include but are not limited to interior and exterior openers/closers, knobs, locks, hardware, frames, tracks, and seals, except the exterior surface of the front door.

B. The interior surfaces of the Unit, including interior, non-bearing walls and the surfaces of interior, bearing walls.

C. All appliances whether "built-in" or free-standing within the Unit.

D. The plumbing servicing the Unit, to the point that it joins plumbing servicing another unit or common plumbing, including exterior plumbing and fixtures.

E. The telephone wiring servicing the Unit, to the point that it exits the Unit.

F. Electrical systems servicing the Unit, to the point that it joins service to another Unit or common service, including exterior fixtures, sockets, switches, plates, etc.

G. Heating, ventilation and air conditioning equipment and systems servicing the Unit.

H. Television cable and satellite dish equipment and connections servicing the Unit.

I. Doorbell systems, including the interior and exterior components and all electrical connections.

J. Drains and drainage systems of any kind servicing the Unit, to the point that it joins drainage systems servicing another unit or common drainage.

K. Pest control within Units and Exclusive Use Common Areas.

L. Party Walls, for which the cost of maintenance must be shared equally among the adjoining Owners, and for which the cost of damage must be borne by the responsible Owner.

M. The interior surfaces of each balcony.

N. All the repairs of internal installations of the Unit such as water, light, gas, power, sewage, telephones, air conditioners, sanitary installations, doors, windows, lamps, and all other accessories belonging to a Unit shall be at the Owner’s expense.

O. Sprinkler system and smoke alarm equipment within Owners’ Condominiums and Common Areas will be maintained by the Association.

P. An Owner shall maintain the shut off valves, electrical wiring, toilets, bathtubs and appliances within the Unit to operate in good condition. Each Owner shall annually inspect these items and make all necessary repairs. If an Owner fails to properly maintain the shut off valves, electrical wiring, toilets, bathtub, air conditioning units, heating units, air conditioning/heating unit hoses along with their appurtenances, and appliances, but not limited to these items, and damages occur as a result thereof, the OWNER SHALL BE FINANCIALLY LIABLE FOR ALL DAMAGES (I.E. WATER LEAKS, ETC.) TO HIS OR HER UNIT AS WELL AS TO OTHER UNITS CAUSED BY THE OWNER’S FAILURE TO MAINTAIN OR REPAIR..

Q. Attached hereto as Exhibit “A,” and incorporated herein by reference, is a listing of the allocation of responsibility for various components in the Project. Generally, each Owner shall be responsible for the maintenance, repair and replacement of his or her Unit, Restricted Common Areas appurtenant to the Unit, and those items located anywhere within the Project which are used exclusively by that Owner, and the Association shall be responsible for the maintenance, repair and replacement of the Common Area. In the event of any inconsistency between the above general provisions and the specific provisions of Exhibit “A” the provisions of Exhibit “A” shall prevail. Provided any item is not listed in Exhibit “A,” the responsibility for its maintenance shall be determined in accordance with the above general provisions or as otherwise provided by statute or law. Except as otherwise provided in the Governing Documents, the costs of maintenance, repair and replacement shall be borne by the party responsible for the maintenance, repair and replacement.

R. An Owner shall have the right to fully enclose the balcony adjacent to his or her Unit, subject to the rules and regulations duly adopted and published by the Board of Directors.

Owners shall maintain and repair the items listed above in a manner deemed reasonable and necessary to preserve an attractive appearance and protect value. Owners are responsible for any damage caused by the failure of any item listed above including damage to the individual unit, and exclusive use Common Area, adjacent units and adjacent exclusive use Common Area and Common Area.

Maintenance, repair or replacement that results in a change of appearance visible from outside a Unit or imparts the structural components of the unit, requires prior written approval from the ARC obtained in accordance with Article VIII of these CC&Rs.

Section 3.2 Alteration of Units. With prior written permission from the HOA, Owners may:

A. Make alterations within a Unit.

B. Modify a Unit, at the Owner's expense, to facilitate access for handicapped persons in accordance with Civil Code Section 1360, or similar superceding statue. The HOA may require removal of the modifications when the person needing them no longer occupies the Unit.

Section 3.3 Mutual Easements. Each Owner grants easements to all other Owners and to the HOA to enter onto each Unit to repair shared or common components of the Development. Entry into a Unit for other than emergency repairs shall be made only after ten (10) days notice has been given to the Resident and the Resident has consented, which consent shall not be unreasonably withheld. In case of emergency involving immediate threat to life/safety or immediate, significant property damage the right to enter any Unit is immediate. In an emergency situation, however, prior to entering a Unit a reasonable attempt must be made to notify the Resident and the Owner of the Unit.

Section 3.4 Party Walls. Owners are responsible for repair and replacement of Party Walls, including all items inside or attached to Party Walls, occasioned by their negligence, gross negligence or willful or wanton conduct.

Section 3.5 Guests. Owners are directly responsible for the acts and/or omissions of their guests and /or tenants, including but not limited to violations of the Governing Documents and damage to the common areas. Owners may be subject to fines, reimbursement assessments, legal fees and costs, and a suspension of membership privileges as a result of guest violations of the Governing Documents or damage to the common areas.

ARTICLE IV Use Requirements

Section 4.1 Residential Use. Units may be used for single family, residential use only. Conducting a business is prohibited except as permitted and regulated by the applicable Municipal Code, which is incorporated herein by this reference as though set forth in full. Regardless of compliance with the Municipal Code, however; the HOA has the right to directly prohibit any business activity that is disruptive to the Development and which has resulted in unresolved complaints.

Section 4.2 Pets and Animals. The HOA reserves the right to control or expel from the Development any pet which becomes a nuisance, as determined in the sole discretion of the Board. The following guidelines apply to all pets and are interpreted and conclusively determined in the sole discretion of the Board.

A. Only two domesticated pets are permitted to reside in any unit. No animal may be permitted to create excessive or disruptive noise, or to pose a threat to other animals or to people.

B. Only animals permitted by the HOA may be kept as household pets, provided they are not kept, bred, or raised for commercial purposes or in unreasonable quantities. Livestock is prohibited.

C. Dogs must have a current license attached to their collars at all times when in the Common Area.

D. Droppings deposited by animals in the Common Areas, including Common Area hallways, must be immediately removed.

E. Animals may not be tied to trees, stakes, or any exterior building structure, or left unattended at any time. Animals shall not enter or exit the building via the lobby.

F. Animals in the Development must be kept on a leash held by a person capable of controlling the animal at all times. Animals of every type are prohibited from roaming freely throughout the Common Area.

G. No structure for housing any animal may be maintained so as to be visible from any part of the Common Area, except with the prior approval of the HOA.

H. The Owner of a Unit is jointly and severally liable for the activity of any animal associated with or living in the Unit, regardless of ownership of the animal.

Section 4.3 Use of Parking Spaces. No parking space may be used in a manner that interferes with parking a vehicle in the space. No parking space may be used for any purpose except to park registered and operable vehicles. No parking space nor any part of the Common Area may be used to repair any automobile, except for emergency repairs necessary to remove the vehicle from the Development. Further policies and procedures regarding parking may be enacted and implemented by the Board of Directors pursuant to these governing documents, as the Board of Directors deems appropriate in their discretion.

Section 4.4 Commercial and Recreational Vehicles. No trailer, motor home, recreational vehicle, camper, commercial vehicle, boat or similar equipment or other vehicle deemed inappropriate by the Board, in its sole discretion, is permitted in the Common Area, except within the owner’s parking space, so long as the vehicle does not extend beyond the designated parking stall. Commercial vehicles in the Development conducting business are permitted only for the limited duration necessary to conduct business with the HOA or a Resident.

Section 4.5 Window Coverings. Windows may not be covered with non-standard window coverings such as foil, paper, plastic film, or cardboard, and if visible from the Common Area window coverings must be consistent with aesthetic appearance of the Development, as determined by the Board.

Section 4.6 Use of Exclusive Use Common Area. Exclusive Use Common Area may be used only for the purposes set forth in the Governing Documents. The right to use Exclusive Use Common Area is exercisable only at the discretion of the Owner(s) of the Unit to which it is appurtenant, except for maintenance by the HOA. Exclusive Use Common Area may not be transferred or conveyed apart from the Unit to which it is appurtenant.

Section 4.7 Dangerous Use of Units. No part of the Development may be occupied or used in any manner which causes it to be uninsurable against loss by fire or the perils of the extended coverage endorsement to the California Standard Fire Policy form, which causes any policy of insurance to be canceled or suspended, which causes the company issuing the policy to refuse renewal thereof, or which causes the cost of insurance to rise, without the prior written consent of the HOA.

Section 4.8 Flooring Surfaces. Any proposed modification to the flooring of a unit which includes a hard floor surface must include an approved sound barrier. All such modifications must also comply with Article VIII of these CC&Rs and be approved in writing by the Association.

Section 4.9 Use of Common Area. No part of the Common Area may be obstructed so as to

interfere with its intended, ordinary use. No part of the common areas may be used for storage purposes, except for storage of maintenance equipment used exclusively to maintain the Common Area, or with prior written approval of the Board.

Section 4.10 Outside Drying Facilities. Outside drying facilities visible from the Common Area are prohibited, including items draped or placed outside of any Unit or balcony.

Section 4.11 Antennae. No outside television or radio antennae or other similar device is permitted without with the prior written approval of the HOA, except for satellite dishes for which the Board shall enact and maintain a policy consistent with existing law. No satellite dish or similar device may be attached to the Common Area, Restricted Common Area, or exterior of the building without prior Board of Director written approval.

Section 4.12 Signs and Flags. The flag of the United States may be displayed by an Owner provided that the flag is displayed in a manner such that it is entirely within his Unit and/or Exclusive Use Common Area. One sign of reasonable dimension (not to exceed 18” x 12”) may be displayed in a unit window to advertise the property for sale to the public.

Section 4.13 No Equipment Repair. Automobiles may not be dismantled, repaired or serviced in the Common Area, except emergency repairs necessary to remove the equipment or vehicle from the Development.

Section 4.14 Diseases and Insects. Residents may not permit any thing or condition to exist in the Development that may induce, breed or harbor infectious plants, diseases or insects.

Section 4.15 Impairment of Development and Easements. Residents may not do anything that will impair the structural soundness or integrity of any part of the Development, nor impair any easement, nor do any act or allow any condition to exist which impairs ordinary use of other Units and/or Residents.

Section 4.16 Nuisance. All noxious, illegal, offensive activity or any activity that endangers the health of, or unreasonably annoys or disturbs other residents, as determined in the sole discretion of the board, is prohibited. The terms of this paragraph will be interpreted in the sole discretion of the Board with respect to the HOA’s actions, but the Board can not affect the rights of an Owner to proceed individually for relief from interference with his or her property or personal rights. The Board has the discretion to determine that activities within the terms of this paragraph must nevertheless be resolved by the owner or owners involved, and not by the Association.

Section 4.17 Unsightly or Unkempt Conditions. Activities which cause disorderly, unsightly, or unkempt conditions, determined in the sole discretion of the Board to have a negative affect upon the Development, are prohibited.

Section 4.18 Responsibility for Damage to the Common Area. Any person who damages the Common Area will be liable to the HOA for the damage, and the Owner and Resident of the Unit with which the person causing the damage is associated is jointly and severally liable to the HOA.

Section 4.19 Fences. No fences, hedges or walls shall be erected or maintained upon the Common Area, except as where originally installed, or as determined in the sole discretion of the Board.

Section 4.20 No Timeshares. Timeshare developments, timeshare estates, timeshare programs and timeshare uses, as defined by section 11003.5 of the California Business & Professions Code, of units are prohibited, and timeshares and timeshare programs or use similar to a timeshare arrangement of a Unit is prohibited.

Section 4.21 Balconies, etc. The balconies, sun decks, and parking spaces which are portions of the Restricted Common Areas and Facilities to which an Owner acquires an exclusive appurtenant easement in the case of a balcony and sun deck, and the right to use and occupy in the case of the parking space or spaces, shall be and be deemed to be a portion of the Condominium acquired by the Owner, and as such cannot be transferred, conveyed or severed from the Condominium with which such use and right were acquired by such Owner, and a subsequent conveyance of the Unit will convey such uses and rights.

Section 4.22 Storage Areas. All storage areas that are located within the Project, exclusive of the Units, will be under the exclusive control and jurisdiction of the Association. Said areas will be within and a part of the Restricted Common Areas and Facilities. Each Owner will be entitled to a reasonable portion of the storage areas for his exclusive use; provided, however, that the size and location of the particular area to be used by an Owner shall be determined by the Association and such determination shall be final and binding upon the Owner.

Section 4.23 Windows. The windows located in the exterior walls of each Unit in the Project will be made of clear glass which is not tinted or shaded. In the interest of preserving the aesthetic qualities of the Project, no Owner or group of Owners shall have the right to replace clear glass windows with other than clear glass windows, or to tint, shade or otherwise color the original existing clear glass windows without the express written approval of the Association and further that any and all drapes or other window coverings shall be of a light color and in accord with such rules and regulations as may be adopted by the Association from time to time. the Board or its committee must approve in writing all new or replacement windows, glass or tinting before an Owner may commence any such work.

Section 4.24 Outside Parking. As used herein, the term “Exempt vehicle” shall mean and refer to any four-wheeled, self-propelled vehicle recreation vehicle, van, pick-up truck or similar vehicle of such dimensions and configuration that it can be accommodated in any one of the covered parking spaces in the Project garage. Part of the Common Area making up the grounds surrounding the structures on the Project will consist of outside parking spaces. DECLARANT, its successors and assigns, by this Declaration and all future Owners by acceptance of their deeds, covenant and agree that said outside parking spaces shall be used solely by automobiles and Exempt Vehicles. The Landscaping and Recreational Committee, acting through its administrator, shall settle any disputes regarding the use of the outside parking spaces, including any dispute as to whether a particular vehicle qualifies as an Exempt Vehicle, and shall have the right to remove any unauthorized vehicle using the outside parking areas in violation of this Paragraph 4.25 whose owner or operator refuses to abide by the decision of the administrator.

ARTICLE V Common Area Uses and Improvements

Section 5.1 Easement for Maintenance. Owners grant the HOA an easement over, under, upon and across the Common Area for the purpose maintaining and altering the Development.

Section 5.2 Limitation on Alterations. No person or entity other than the HOA may alter the Development, except as otherwise provided in the Governing Documents.

Section 5.3 Owners’ Easement of Enjoyment. Every Owner is hereby granted an easement for access to and from, and for enjoyment of the Common Area, except as to Exclusive Use Areas, subject to the rights and duties of the HOA, described in these CC&Rs.

Section 5.4 Damage by Wood-Destroying Pests. The HOA is responsible for the repair and maintenance of the Common Area occasioned by wood-destroying pests or organisms. The cost of temporary relocation of Residents must be borne by the Resident of the Unit affected. The HOA may cause the temporary, summary removal of any Resident for such periods and at such times as may be necessary for prompt, effective treatment of wood-destroying pests or organisms.

ARTICLE VI Membership and Voting Rights

Section 6.1 Membership. Every Owner of a Unit is a Member of the HOA, with all rights and obligations associated with Membership. Membership is appurtenant to, and may not be separated from ownership of a Unit.

Section 6.2 Voting Rights. All Members have the right to vote, unless the right to vote is suspended by the HOA.

A. Members are entitled to 1 vote for each Unit owned. Cumulative voting is not permitted in any election. When two or more people hold an interest in a Unit, the vote for the Unit must be exercised as they between or among themselves determine, but only one full vote may be cast for each Unit.

B. The HOA may refuse to accept a vote from any Member if the HOA has written notice of a voting dispute between or among co-owners, in which case the Unit may be counted only to establish a quorum.

ARTICLE VII Assessments

Section 7.1 Purpose of Assessments. Assessments must be used to preserve, protect, maintain and enhance the Development, to reimburse the HOA for costs incurred on behalf of any Owner(s) and for any other purposes determined to be appropriate by the Board and permitted by law.

Section 7.2 Types of Assessments. The HOA may impose any or all of the following assessments:

A. Regular Assessments: assessments used to pay the HOA’s operating expenses and to fund reserves.

B. Special Assessments: assessments for extraordinary expenses, including, but not limited to, litigation related to the Development.

C. Reimbursement Assessments: assessments to recoup funds expended by the HOA, including but not limited to, attorney fees attributable to an Owner or Owners or repair costs/maintenance costs attributable to a particular Owner or Owners.

Section 7.3 Creation Of Obligation for Assessments. All deed holders, having accepted or by acceptance of deed, covenant and agree to pay all Assessments, whether or not so expressed in the deed.

Section 7.4 Assessment Lien and Personal Liability. All assessments together with late charges, interest, costs, and all attorney fees are a charge and a continuing lien upon the Unit against which each assessment is made. Assessments are also the personal obligation of any person who held an ownership interest in the Unit at the time when the assessment fell due. Each Owner of a Unit is jointly and severally liable for the entire assessment.

Section 7.5 No Avoidance of Assessment Obligations. No Owner is exempt from personal liability for assessments by waiver of the use and enjoyment of the Common Area, by abandonment or non-use of the Unit or any other portion of the Development or in any other manner, except as specifically provided by law.

Section 7.6 No Withholding of Assessments. Payment of assessments may not be withheld because of non-use of the Common Area, for the Association's failure to perform services, or for any other reason, except as specifically provided by law.

Section 7.7 Percentage of Undivided Interest in Common Areas. The undivided interest in the Common Areas hereby established and which shall be conveyed with each respective Unit is based on the following formula:

A numerical value shall be established for each Unit and the total number of all numerical values shall be determined and the proportionate undivided interest in the Common Areas of each respective Unit shall be determined by the ratio that the individual Unit’s numerical value bears to the total numerical value of all Units. In determining numerical value the following formula shall apply:

Numerical Value

(a) Studio Unit 1.1

(b) One-bedroom Unit 1.1

(d) Three-bedroom Unit 1.7

(e) Two-bedroom and Den Unit 1.7

(f) Two-bedroom and Den Suite Unit 2.0

(g) Three-bedroom and Den Suite Unit 2.5

(h) Special Use Unit 1.1

The respective undivided interests in the common Areas hereby established are to be conveyed with the respective Units as indicated above, cannot be changed, and DECLARANT, its successors and assigns, and grantees, covenant and agree that the undivided interests in the Common Areas, and the fee titles to the respective Units conveyed therewith, shall not be separated or separately conveyed, and each said undivided interest shall be deemed to be conveyed or encumbered with its respective Unit even though the description in the instrument of conveyance or encumbrance may refer only to the fee title to the Unit; provided, however, that this restriction against severability shall not extend beyond the period in which the right to partition may be suspended under Section 752b of the California Code of Civil Procedure.

Section 7.8 Regular Assessments.

A. Not fewer than 45 nor more than 60 days prior to the beginning of the HOA’s Fiscal Year, the Board shall estimate the total amount required to fund the anticipated Common Expenses for the next succeeding Fiscal Year, and shall prepare and distribute to all Owners a budget. If the Board fails to distribute a budget accordingly, Regular Assessments may not be increased for that Fiscal Year, except with vote or written assent of a majority of a quorum of Owners.

B. The HOA’s total annual estimated expenses (less projected income from sources other than assessments) will be the aggregate Regular Assessment for each Fiscal Year, provided that the Board may not impose a Regular Assessment that is more than 20% greater than the Regular Assessment for the HOA’s immediately preceding fiscal year without the vote or written assent of a majority of a quorum of Owners.

C. Prior to raising the Regular Assessments, except when an increase is set forth in an annual budget provided to all Owners, the HOA shall provide thirty (30) days written notice of the proposed increase to all Owners.

D. The requirement of an Ownership vote to approve Regular Assessment increases in excess of twenty percent (20%) of the previous Fiscal Year’s Regular Assessment does not apply to assessment increases necessary to address emergency situations. An emergency situation is any of the following:

(1) An extraordinary expense required by an order of a court.

(2) An extraordinary expense where a threat to personal safety is discovered.

(3) An extraordinary expense necessary to repair or maintain the Common Area that could not have been reasonably foreseen by the Board in preparing the annual budget, provided that prior to the imposition or collection of an assessment under this paragraph, the Board must pass a resolution containing written findings as to the necessity of the extraordinary expense and why the expense could not have been reasonably foreseen. The Board's resolution must be distributed to the Members together with the notice of assessment.

E. If the HOA fails to make an estimate of the Common Expenses for any Fiscal Year then the Regular Assessment made for the preceding fiscal year will be assessed against each Owner for the then current Fiscal Year. Nothing in this section E may be interpreted to limit the HOA’s authority to impose any assessment or increase.

Section 7.9 Special Assessments. Special Assessments may not exceed, in the aggregate during any Fiscal Year, an amount equal to 5% of the budgeted gross expenses of the HOA for that Fiscal Year, without the vote or written assent of a majority of a quorum vote of Owners.

Section 7.10 Reimbursement Assessments. Reimbursement Assessments are due and payable after notice pursuant to these CC&Rs is given to the Owner subject to the assessment.

Section 7.11 Exemption From Assessments. The following real property subject to these CC&Rs, unless devoted to use as a residential dwelling, is exempted from Assessments:

A. Part of the Development dedicated to and accepted by a governmental agency;

B. The Common Area; and

C. Any real property owned or leased by the HOA.

Section 7.12 Effect of Non-Payment of Assessments. As more particularly provided in California Civil Code Sections 1367, at any time after any assessments, including Reimbursement Assessments, have become delinquent the HOA may file for recording in the Office of the San Diego County Recorder a notice of delinquency/assessment lien (“lien”) as to the Unit. The lien must state all amounts which have become delinquent, interest which has accrued, costs (including attorney fees) and the amount of any assessments relating to the Unit which are due and payable as of the date of recordation. The lien must also include a description of the Unit and the name of the record or reputed record Owner. The lien must be signed by an officer of the HOA, or by the Association's attorney.

Immediately upon recording a lien, the amount set forth in the notice will become a lien upon the Unit described therein. Delinquent assessments shall be subject to a statutory late fee of $10.00 per month or greater if the statutes permit, and they shall also accrue interest at the rate of twelve percent (12%) per annum, commencing thirty (30) days after the assessment becomes due. The lien will then secure all other payments, assessments, costs (including attorney fees), penalties and interest which become due and payable with respect to the Unit following recording, until all amounts secured thereby are fully paid or otherwise satisfied.

If the delinquent assessments and all other assessments which have become due and payable with respect to the Unit, together with all costs (including attorney fees) and interest which have accrued on the amounts are fully paid or otherwise satisfied prior to the completion of a sale held to foreclose the HOA’s lien, the HOA shall record a subsequent notice stating the satisfaction and releasing the lien.

Section 7.13 Foreclosure of Assessment Lien. Each assessment lien may be foreclosed upon in

the same manner as the foreclosure of a mortgage upon real property, or may be enforced by sale, and to that end a power of sale is hereby conferred upon the HOA.

Section 7.14 Acceptance of Payments by the HOA. Payments to the HOA must be applied to the Owner’s account in the following priority:

A. Reimbursement Assessments;

B. Interest and late charges;

C. Fees and costs;

D. Special Assessments; and,

E. Regular Assessments.

Section 7.15 Uniform Rate Assessments. Regular and Special Assessments shall be fixed at a uniform rate for each Unit.

Section 7.16 Non-Payment of Assessments.

A. Any assessment not paid on the date due is delinquent.

B. Any assessment not paid within 15 days of the date due is subject to a late fee of $10, or greater, if permitted by statute.

C. Any assessment not paid within 30 days after the date due will bear interest from the date due at the rate of 12% per annum, as provided by law.

Section 7.17 Estoppel Certificate. Upon request of any person, the HOA shall furnish a certificate setting forth all accounts payable and receivable for any Unit. A properly executed certificate is binding upon the HOA as of the date of its issuance for any period of time set forth therein, or if not stated, for 1 day.

Section 7.18 Assignment of Rents. Each Owner assigns to the HOA, absolutely and regardless of possession of the property, all money now due or to become due under any agreement for the use or occupation of any part of any Unit, now existing or hereafter made, for the purpose of collecting all Assessments and costs and expenses due the HOA which are in default. The HOA confers on each Owner the authority to collect and retain money due under any agreement for the use or occupation of any part of any Unit, provided that the HOA may revoke the authority at any time by written notice of a default in the payment of any Assessments. Upon revocation the HOA may collect and retain the money until the delinquent Assessments and related charges are satisfied, whether the money is past due and unpaid or current. The HOA's rights under this provision are subordinate to the rights of any First Mortgagee.

ARTICLE VIII Architectural Control

Section 8.1 Unit Modifications.

(A) The term “remodel” or “remodeling” or “remodeled” is defined as follows: Any structural modification to the interior of a Unit, including, but not limited to movement, relocation construction, or removal of Unit walls, doors, bathrooms, bathroom construction, or removal of Unit walls, doors, bathrooms, bathroom facilities, kitchen, kitchen facilities, balconies, balcony enclosures, or any other room or fixture other than wall coverings, or any installation or re-surfacing of Unit flooring.

(B) No unit may be remodeled without complying with all of the following:

(i) Written permission from the Association must precede Unit remodeling. Written application for Association permission must be personally delivered to the office of the Association manager or as otherwise designated by the Board of Directors prior to any Unit remodeling.

(ii) Oral or non-written applications for permission to remodel a Unit made to the manager, any individual Member of the Association Board of Directors, or at a regularly scheduled Board of Directors meeting do not constitute an application for permission under these Restated Supplemental CC&Rs. Any response to oral or non-written applications for permission to remodel a Unit may not be relied upon as the basis for remodeling a Unit.

(iii) Any written application for permission to remodel a Unit must include the following:

(a) A detailed written description of the intended remodeling, including the nature of the work to be performed, when remodeling activity will be completed, the extent of any construction that might adversely impact other Unit owners or residents, and the specific time and days during which heavy construction might occur.

(b) Written diagrams or drawings detailing the proposed remodeling.

(c) The name, address, telephone number and California contractor’s license number for each contractor who will remodel the Unit. Remodeling must be accomplished only by a licensed California contractor.

applicant obtaining and providing the Board of Directors, City of Coronado or other required building and fire Marshal permits or approvals for the proposed remodel, and a refundable deposit in an amount determined by the Board to be held by the Association to secure cleaning or repairs of Common Areas made necessary by the proposed remodel.

(D) All written applications for permission for remodeling shall be delivered to the La Princesa Tower Remodeling Committee or as otherwise directed by the Board of Directors for review and comment before submission to the Association Board of Directors for review.

(E) Fifteen (15) days after receipt of a written application for permission from the Association Board of Directors to remodel a Unit, the Association shall notify the Owner or applicant of the date, time and place the Association Board of Directors will meet to consider the application. The Association Board of Directors reserves the right to postpone its consideration of a matter in order to conduct additional studies or to seek the advice of outside consultants. The Board must render a decision on an application within ninety (90) days of receipt of the application. If the Board does not render a decision within ninety days, the plan will be deemed approved.

(F) The Board of Directors, in reviewing each remodeling application, will exercise reasonable discretion in approving or disapproving a remodeling request. The Board of directors may consider the following factors or guidelines determining whether approval of the proposed remodel be issued:

(i) How the Unit as remodeled will affect the use of the interior of the Unit.

(ii) The adverse impact upon other Unit Owners or residents that might result from the Unit as remodeled, or from construction association with the proposed model.

(iii) Possible overutilization of Common Areas, or increases in Common Area maintenance expense, or overutilization of La Princesa Tower facilities that might result from the proposed remodel.

(iv) Whether the proposed remodel violates the applicable Governing Documents, City of Coronado municipal law, the Uniform Building Code, or other applicable state or federal law or regulation.

(v) The aesthetic impact upon the architectural or visual integrity on the La Princesa Tower and adjoining properties as reasonably determined by the Board of Directors.

(G) The Association Board of Directors shall provide a written decision to an application to remodel a Unit. Any verbal representations regarding approval or non-approval of a remodel application shall be of no effect and may not be reasonably relied upon by a Unit Owner or resident applying for permission to remodel a Unit. If approval is denied, the written decision shall describe the specific reasons for denial.

(H) The applicant or any concerned Unit Owner or resident may appeal a Board of Directors approval or denial of a Unit remodel application by submitting the appeal in writing to the Board of Directors, with a copy to the manager, within thirty (30) days after the Board of Directors provides their written approval or non-approval to the remodel application. Within sixty (60) days after receipt of a written appeal, the Association Board of Directors shall reconsider the application reply. Within fifteen (15) days after receipt of an appeal, the manager shall notify the appellant of the date, time and place the Board of Directors will meet to consider the appeal. The remodel applicant will also be so notified.

(I) All proposed remodels must be in strict compliance with the Governing Documents and any applicable federal, state or local laws or regulations, including, but not limited to, the City of Coronado municipal law and the Uniform Building Code.

(J) An applicant Unit Owner or Unit resident who remodels a Unit without written permission from the Board of Directors must immediately remove or be financially responsible for the removal of said remodeling.

(K) An approved remodel must be completed, and all remodel construction activity concluded, within one hundred eighty (180) days from the date the Board of Directors approves a remodel unless the time is extended in writing by the Board. Remodels not completed in a timely manner shall be subject to fines until the remodel is completed and accepted by the HOA. The fines shall be determined by the Board at its sole discretion.

(L) The Association Board of Directors or their authorized representative shall have the right to inspect a Unit being remodeled one time per week or as often as deemed appropriate under the circumstances, and at the completion of the remodel the Association shall have the right to inspect the Unit to ensure compliance with all applicable requirements, the Owner’s approved application, and the Governing Documents. At the time of completion of the work, the Owner must submit a Notice of Completion to the HOA and the HOA shall do a final inspection and notify the Owner in writing as to whether the remodel is in compliance.

(M) Additional kitchens, bathrooms or rooms may not be added to a Unit. Unit kitchens and bathrooms may not be relocated within the Unit. Additional waste lines may not be added to an existing main waste line in a Unit. No structural modification or alterations in a Unit are allowed that result in the creation of an additional bedroom or sleeping space in addition to the bedrooms that appear on the original Condominium Plan recorded in the Office of the County Recorder of San Diego County as File/Page No. 78-007400.

(N) Relocation or detouring of existing vertical cable television lines in a Unit or common area is not permitted.

(O) Any hard surface flooring in a Unit must rest upon an approved flooring sub-system that complies with the Uniform Building Code. In addition to the hard surface flooring, other permissible floor coverings in a Unit are carpet over approved pad, or cushion-backed floor vinyl only.

(P) The remodel applicant agrees to indemnify and hold harmless the Association, its Board of Directors, La Princesa Tower Remodeling Committee and the Association manager and management company for any liability caused by a discharge of any material or substance, including hazardous material, in violation of California or Federal law. Unit smoke detectors must be protected from airborne contaminants during any approved remodeling.

(Q) Jacuzzi whirlpool bathtubs will not be permitted in a Unit due to noise transmission and vibration.

Section 8.2 Architectural Approval. Any architectural change to the Development visible from any Unit, the Common Area or public area surrounding the Development, or resulting in a structural change or change in drainage must be approved in advance, in writing by the HOA. The HOA has the authority to grant conditional approval, which approval may be automatically withdrawn if conditions imposed are not met, or cease to exist.

Section 8.3 Architectural Review Committee. The Board may appoint an Architectural Review Committee (“ARC”) which must consist of at least one (1) Member, who may be a Director. If no ARC is appointed, the Board shall be the ARC. All references to the ARC are to the ARC if it exists, or otherwise to the Board. Members of the ARC may not receive any compensation for services rendered.

Section 8.4 Duties of the Committee. The ARC shall consider and act upon all proposals submitted in accordance with the Governing Documents, subject to Board approval.

Section 8.5 Meetings and Actions. The ARC shall meet from time to time as necessary to perform its duties. The vote or written consent of a majority of the ARC Members constitutes the act of the ARC, unless the unanimous decision of the Committee is required by the Governing Documents or by the Board. The ARC may maintain a written record of all actions taken.

Section 8.6 Architectural Guidelines. The ARC may, with the approval of the Board, adopt, amend and/or repeal Architectural Guidelines. The Architectural Guidelines will interpret and implement the Governing Documents by setting forth the standards and procedures for ARC review, and the guidelines for design and placement of alterations.

Section 8.7 Approval by ARC. Approval of the ARC must be granted by majority decision of the Members of the ARC, and reviewed and approved by a majority of the Board. No approval is final without approval by the Board.

Section 8.8 Approval of Improvements.

A. The ARC should approve or disapprove plans submitted to it within 60 days of receipt. If the ARC fails to approve plans within 60 days, upon demand the applicant is entitled to hearing at the next regularly scheduled Board meeting to discuss the plans.

B. Once plans have been approved by the ARC, no material modifications may be made to the approved plans and no subsequent alteration, relocation, or addition may be made without a separate written approval by the ARC.

Section 8.9 Appeal. Any decision of the ARC may be appealed by submission of a written request for review to the Board, within 30 days of receipt of the decision of the ARC. The Board must make a final decision by the date of the second regularly scheduled Board meeting following receipt of the appeal.

Section 8.10 Variances. The ARC may allow reasonable variances with respect to this Article or any restrictions specified in the Governing Documents in order to overcome practical difficulties, and to avoid unnecessary hardships, provided that the following conditions are met:

A. If a variance will necessitate deviation from or modification of a use restriction that would otherwise apply under these CC&Rs, the ARC must conduct a hearing on the proposed variance after giving at least 30 days' prior written notice to the Board and to all Owners in the building where the Unit is located, and in buildings immediately adjacent to the building in which the Unit is located. The Owners receiving notice of the proposed variance will have 30 days to submit to the Board or ARC written comments or objections with respect to the variance. No decision may be made with respect to the proposed variance until the 30-day comment period has expired.

B. In order to grant a variance, the ARC must make a good faith determination that:

(1) The variance will not constitute a material deviation from the overall plan and scheme of development within the Development or from any restriction contained in the Governing Documents, and that the proposal allows the objective of the violated requirements to be substantially achieved despite noncompliance; and

(2) The variance relates to a requirement or restriction that it is unnecessary or burdensome under the circumstances; and

(3) The variance, if granted, will not result in a material detriment, or create an unreasonable nuisance with respect to any other Unit, the Common Area, Residents, Guests, or any part of the Development.

Section 8.11 No Waiver Based Upon Prior Approval. Approval by the ARC of any other matter requiring the approval of the ARC may not be deemed to constitute a waiver of the right to withhold approval of the same or a similar matter subsequently submitted for approval.

Section 8.12 No Liability of ARC. Neither the ARC nor any Member of the committee who has acted in good faith and who has not been grossly negligent may be liable to the Association, any Owner or to any other party for any damage suffered or claimed on account of:

A. The approval or disapproval of any plans, drawings, or specifications; or,

B. The construction or performance of any work, whether or not pursuant to approved plans, drawings and specifications.

ARTICLE IX Renting or Leasing

Section 9.1 Renting or Leasing. Occupancy of a Unit by any person who pays the Owner of the Unit consideration for living in the Unit shall constitute renting or leasing and shall be governed, in part, by this Article IX. As used in these CC&Rs, any reference to any form of the word “lease” means the corresponding form of the word “rent”, and vice versa. Any form of subleasing shall be prohibited and all leases shall be for at least twenty-five (25) days in duration. No Owner may transfer or otherwise convey the right to use, occupy or possess, or the use, occupancy, or possession of a Unit for a period of twenty-five (25) consecutive calendar days or less.

Section 9.2 Terms. Leasing a Unit must be pursuant to a written document, which is subject to the Governing Documents and the following provisions:

A. The HOA may request reasonable information from Owners about tenants, including the names of the tenants and the terms and conditions of the lease. Owners shall provide a copy of each lease to the Association in advance of the effective date of the lease.

B. Leases must contain the following language, and if it is not expressly contained in the lease then the language is deemed to be incorporated into the lease by existence of these CC&Rs. All Owners, and Tenants by occupancy of a Unit, agree to the incorporation of the following terms into the lease, and application of the following to the landlord-tenant relationship:

(1) Units may not be rented for transient purposes. All rentals must be for a term of no fewer than 25 consecutive days in any 1 calendar year.

(2) Upon written request from the HOA, Tenants must pay to the Association that portion of the rent necessary to satisfy any obligation of the Owner of the Unit to the HOA for payment of delinquent assessments. All payments thus made will reduce the Tenant's obligation to Owner of the Unit by like amount. Payment of assessments is deemed necessary for the habitability of the Units.

(3) Owners must give Tenants copies of these CC&Rs, the Bylaws, and any Rules. Tenants shall comply with all provisions of the Governing Documents, and violation thereof will constitute a default under any lease. If a Tenant or Resident violates the Governing Documents resulting in a Reimbursement Assessment, all Owners, Residents and Tenants associated with the Unit will be jointly and severally liable to pay the assessment.

Section 9.3 Delegation of Right to Evict Tenant. Owners hereby delegate and assign to the HOA the power and authority of enforcement against Tenants for breach of a lease resulting from violation of the Governing Documents, including the power and authority to evict the Tenant on behalf of and for the benefit of the Owner. The HOA must give the Owner and the Tenant thirty (30) days written notice prior to initiating eviction proceedings. If the Association proceeds to evict a Tenant, all costs, including attorney fees and court costs associated with the eviction may become a Reimbursement Assessment payable by the Owner of the Unit.

Section 9.4 Use of Common Area. Owners transfer and assign to Tenant(s), for the duration of lawful tenancy, all rights and privileges that the Owners have to use the Common Area.

Section 9.5 Existing Leases. Leases existing on the effective date of these CC&Rs are permitted to continue in accordance with the terms of the Original Declaration. However, any assignment, extension, renewal, or modification of any lease agreement, including, but not limited to, changes in the terms, rental amount or duration of occupancy, will be deemed a termination of the existing lease for purposes of application of these CC&Rs.

Section 9.6 Non-Application of Article. This Article does not apply to any leasing transaction entered into by the holder of any first mortgage on a Unit which becomes the Owner of the Unit through foreclosure or any other means pursuant to the satisfaction of the indebtedness secured by the mortgage.

ARTICLE X Alternative Dispute Resolution

Section 10.1. Request for Resolution. Except for a request for a temporary restraining order, injunctive relief and collection of assessments, prior to the filing of a civil action by either the Association or a Member of the Association not in excess of $5,000.00, related to the enforcement of the Governing Documents, the parties shall submit their dispute to a form of alternative dispute resolution such as mediation or arbitration. The form of alternative dispute resolution chosen may be binding or non-binding at the option of the parties. Any party to such a dispute may initiate this process by serving on another party to the dispute a Request for Resolution. Service of the Request for Resolution must be by certified or registered mail, return receipt requested, or by personally serving the request on the party. The Request for Resolution must include:

A. A brief description of the dispute between the parties;

B. A request for alternative dispute resolution; and,

C. A notice that the party receiving the Request for Resolution is required to respond within 30 days of receipt of the request, or it will be deemed rejected.

Section 10.2. Response to Request For Resolution. The party receiving a Request for Resolution has 30 days following receipt to accept or reject alternative dispute resolution. If not accepted within 30 days the Request may be deemed rejected. If alternative dispute resolution is accepted, it must be completed within 90 days of the date of receipt of the acceptance by the party initiating the Request, unless extended by written stipulation signed by both parties.

Section 10.3. Certificate of Completion. At the time of filing a civil action, the party filing the action shall file with the complaint a certificate stating that alternative dispute resolution has been completed in compliance with California Civil Code Section 1354 and these CC&Rs. Failure to file a certificate may be grounds for a demurrer pursuant to section 430.10 of the California Code of Civil Procedure.

Section 10.4. Cost of Alternative Dispute Resolution. The cost of the alternative dispute resolution hearing must be borne equally by the parties. Refusal to share costs equally constitutes rejection of alternative dispute resolution, regardless of prior acceptance.

Section 10.5. Failure to Comply. Failure of a Member to comply with the pre-filing requirements of these CC&Rs and California Civil Code Section 1354 may result in the loss of a party’s rights to pursue another Member or the HOA regarding enforcement of the Governing Documents.

Section 10.6. Exceptions. The requirements set forth in this Article do not apply to:

A. Assessment collection claims, unless the assessment account in dispute is brought current prior to the request for alternative dispute resolution;

B. Claims for monetary damages in excess of $5,000;

C. Actions where a party certifies that injunctive relief is necessary;

D. Actions where a statute of limitations for bringing the action will run within the 120 day period following the filing of the action;

E. Cross-Complaints;

F. Actions where one party demonstrates to the Court that, notwithstanding the failure to comply with this Article and the statutory requirements of California Civil Code Section 1354, dismissal of the action would result in substantial prejudice.

ARTICLE XI Rights of Lenders

Section 11.1 Liability for Unpaid Assessments. Any First Lender/Trust Deed Holder who obtains title to a Unit pursuant to the remedies provided in a Mortgage or a foreclosure is not liable for unpaid assessments or charges against the Unit which accrued prior to the acquisition of title.

Section 11.2 Subordination of Lien. Every lien created pursuant to the Governing Documents is subordinate and subject to the lien of any real property mortgage or deed of trust encumbering any interest in a Unit given in good faith for value. If a lender acquires title to any interest in a Unit by judicial foreclosure, and thereafter conveys the interest in the Unit, any real property mortgage or deed of trust received by that lender as security for all or a portion of the purchase price of the interest in the Unit will be incontrovertibly deemed “given for value”.

Section 11.3 Superiority of Liens. Notwithstanding any other provision in these CC&Rs, any lien created by or pursuant to the Governing Documents, including liens securing payments of assessments, accruing prior to sale of a Unit by a real property lender and prorated over the period of the lender's holding of title to the interest in a Unit is a lien superior to the lien of a real property mortgage or deed of trust received to secure a portion of the purchase price. All covenants, conditions, and restrictions set forth in this Declaration are binding upon and effective against any Owner whose title is derived through foreclosure at a trustee sale.

Section 11.4 Mortgage Protection. The liens authorized hereunder or by law are subject and subordinate to the rights of the obligee of any indebtedness secured by any recorded first mortgage upon a Unit made in good faith and for value, provided that after foreclosure of any mortgage, the Board has the authority to create a lien on the interest of the purchaser at the foreclosure sale to secure all assessments levied hereunder for or payable during any period after the date of the foreclosure sale, which lien will have the same effect and be enforced in the same manner as provided herein in the case of other liens for unpaid assessments.

Section 11.5 Additional Lien Rights. No amendment to any part of this Declaration will affect the rights of the mortgagee of any mortgage, recorded prior to the recordation of the amendment, who does not join in the execution thereof. The holder of the trust deed is entitled to written notification from the HOA, 30 days prior to the effective date of any change in the Governing Documents, upon request. The holder of the trust deed is entitled to written notification from the HOA of any default by the trustor of any Unit in the performance of the trustor's obligation under the Governing Documents, which is not cured within 30 days, upon request.

Any beneficiary under a deed of trust which comes into possession of a Unit pursuant to the remedies provided by law, the conditions of the trust deed, or by a deed-in-lieu of foreclosure is exempt from any right of first refusal or other restriction on the sale or rental of the Unit involved, including, but not limited to, restrictions on the age of Unit occupants.

Any holder of the trust deed which comes into possession of a Unit pursuant to the remedies provided by law, the deed of trust, or deed-in-lieu of foreclosure, shall take the property, free of any claims for unpaid assessments or charges against the Unit which accrue prior to the time the holder comes into possession of the Unit (except for claims for a pro rata share of such assessments or charges to all Units including the subject Unit).

Unless all holders of first trust deed liens on individual Units have given their prior written approval, the Association must employ a professional manager, may not change the pro rata interest or obligation of any Unit for purposes of levying assessments, may not, or by act or omission to act, seek to abandon the planned residential development status of the Development, except in the case of substantial loss to the Common Area.

No breach of these CC&Rs nor the enforcement of any lien provisions herein will defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value, but all of these covenants, conditions and restrictions shall be binding upon and effective against any Owner whose title is derived through foreclosure or trustee's sale, or otherwise.

ARTICLE XII Insurance, Condemnation and Destruction

Section 12.1 Insurance. The HOA shall maintain insurance policies as follows:

A. The Common Area must be insured against loss by fire and the risks covered by a Standard All Risk of Loss perils insurance policy under an extended coverage casualty policy.

B. All personal property owned by the HOA must be insured with coverage in the maximum insurable fair market value as determined annually by an insurance carrier selected by the HOA. If a loss occurs and there is insufficient insurance to cover such loss, any shortfall cost may be assessed to the Owners as a Special Assessment.

C. The HOA must procure and keep in force public liability insurance against any liability for personal injury or property damage resulting from any occurrence in or about the Common Area.

D. The HOA shall maintain a fidelity bond in a reasonable amount, naming the HOA as obligee and insuring against loss by reason of the acts of the Board, officers and employees of the HOA, and any management agent and its employees, whether or not the persons are compensated for their services. The HOA may also maintain employee dishonesty coverage in a reasonable amount covering those employees which handle Association funds.

E. The HOA shall maintain errors and omissions liability insurance coverage related to the directors and officers of the HOA and if desirable, committee Members of the Association.

Section 12.2 Distribution of Insurance Policies. Copies of all insurance policies must be retained by the HOA and open for inspection by Owners. All insurance policies must provide that they may not be canceled by the insurer without first giving reasonable prior notice, in writing, to the HOA, and must contain a waiver of subrogation by the insurer(s) against the HOA, Board and Owners.

Section 12.3 Condemnation by Public Entity or Destruction. If the Common Area or any portion is taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, or is be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, then the award or consideration for the taking or transfer must be paid to the HOA. If the Common Area or any portion thereof is be destroyed, insurance proceeds as a result of the destruction will belong to the HOA.

Section 12.4 Owners Insurance. Each Owner shall maintain property insurance with respect to the interior and personal contents of his or her Unit, and any other item that the Association is not obligated to maintain or repair. In addition, any improvements made by an Owner within his or her Unit or, where permitted, on his or her Exclusive Use Common Area shall be separately insured by the Owner, but the insurance is to be limited to the type and nature of coverage commonly known as “Tenant Improvements.” However, policies obtained by an Owner or Resident shall include a waiver of subrogation clause acceptable to the Board and to any first Mortgagee.

Section 12.5 Rights and Duties of Owners to Insure. It is mandatory that each Owner maintain insurance for the contents in their Unit and any other item which the Association is not obligated to maintain or repair, including but not limited to, the insurance proposed in this Article XII. However, any such policies shall include a waiver of subrogation clause acceptable to the Board of Directors and to any first Mortgagee.

Section 12.6 Payment of Premiums and Deductible. Insurance premiums for the master policy shall be a common expense to be included in the monthly assessments levied by the Association. Each Owner shall be responsible for payment of any deductible amount for any loss to his or her Unit or component which he/she is responsible to maintain.

ARTICLE XIII Partition

Section 13.1 Partition Prohibited; Exceptions. Owners are prohibited from partitioning or in any other way severing or separating any part of the ownership of a Unit from any of the other part of the ownership of a Unit, except upon the showing that:

A. 3 years after damage or destruction to the Development which renders a material part thereof unfit for its use prior thereto, the Development has not been rebuilt or repaired substantially to its state prior to its damage or destruction; or,

B. 3/4 or more of the Development is destroyed or substantially damaged and Owners holding in the aggregate more than a 50% interest in the Common Area are opposed to repair or restoration of the Development; or,

C. The Development has been in existence in excess of 50 years, it is obsolete, and Owners holding in the aggregate more than a 50% interest in the Common Area are opposed to repair or restoration of the Development.

If any of the forgoing conditions are met the net proceeds from the sale and any proceeds of insurance carried by the HOA must be divided among the Units within Development based on the ratio that the square footage of the floor area of each Unit bears to the total square footage of the floor area of all Units. Nothing herein may be deemed to prevent a judicial partition as between co-tenants. No Unit may be partitioned or subdivided without the prior written approval of the Mortgagee holding the first Mortgage on that Unit.

Section 13.2 Power of Attorney. Owners grant the HOA an irrevocable power of attorney to sell the Development for the benefit of all the Owners upon partition as described in this Article. This power of attorney, however, does not apply to the Secretary, Department of Veterans Affairs, or an officer of the United States of America.

ARTICLE XIV LANDSCAPING AND RECREATIONAL FACILITIES OF CORONADO SHORES DEVELOPMENT; RECIPROCAL EASEMENTS

Section 14.1 Common Operation. Pursuant to the intention expressed above, DECLARANT, by document dated June 21, 1971, and recorded on June 22, 1971, in the Office of the County Recorder of San Diego County as File No. 132600, with respect to Lot 2, Coronado Shores Map No. 6641; by document dated April 14, 1972 and recorded on April 17, 1972 in the Office of the County Recorder of San Diego County as File No. 94032 with respect to Lot 5, Coronado Shores Map No. 6641; by document dated December 6, 1972, and recorded on December 11, 1972 in the Office of the County Recorder of San Diego County as File No. 329917, with respect to Lot 6, Coronado Shores Map No. 6641; by document dated June 18, 1973, and recorded on June 21, 1973 in the Office of the County Recorder of San Diego County as File No. 170936, with respect to Parcel D, Parcel Map No. 1262; by document dated December 18, 1974, and recorded on December 19, 1974, in the Office of the County Recorder of San Diego County as File No. 329296, with respect to Lot 1, Coronado Shores Map No. 6641; by document dated September 10, 1975, and recorded on September 12, 1975, in the Office of the County Recorder of San Diego County as File No. 75-247594, with respect to Parcel A, Parcel Map No. 1262; by document dated July 1, 1976, and recorded on July 2, 1976, in the Office of the County Recorder of San Diego County as File No. 76-209700, with respect to Parcel B, Parcel Map No. 1262; by document dated May 10, 1977, and recorded on May 11, 1977, in the Office of the County Recorder of San Diego County as File No. 77-181245, with respect to Parcel C, Parcel Map No. 1262; and by document dated December 22, 1977, and recorded on December 30, 1977 in the Office of the County Recorder of San Diego County as File No. 77-542068, with respect to Lot 4, Coronado Shores Map No. 6641; has determined and designated that each of said respective Lots and Parcels shall each be included with Lot 3, Coronado Shores Map No. 6641, in a single, common operation of landscaping and recreational facilities, such that the costs and expenses of maintenance, management, operation, repair and replacement of landscaping and recreational facilities will be allocated to each of said Lots and Parcels so operated on the basis that the numerical value (as determined pursuant to a formula similar in concept to that contained in subparagraph (e) of Section 7.7 hereof) of the living and special use units, including Condominiums in each of said Lots and Parcels bears to said numerical value of the whole of all of said living and special use units, rather than having the Owner or Owners of each Lot or Parcel pay only with reference to the facilities located within his or their respective Lot or Parcel.

Section 14.2 Reciprocal Easements. By virtue of DECLARANT’s inclusion of Lot 4 in the single, common operation scheme set forth herein, the Owner of a Unit located on Lot 4 shall have a non-exclusive easement for the benefit of, and appurtenant to, his Unit to use the recreational and landscaping facilities situated on other Lots or Parcels within Coronado Shores which have been included in the common operation scheme, and the Owner of a living unit located on such other Lots or Parcels within Coronado Shores which have been included in the common operation scheme shall have a reciprocal, non-exclusive easement for the benefit of, and appurtenant to, his living unit to use the recreational and landscaping facilities situated on Lot 4. Said reciprocal, non-exclusive easements of use shall include reciprocal, non-exclusive rights of ingress and egress to and from the recreational and landscaping facilities and shall be subject to the same limitations, rules, regulations and admission or other fees imposed upon the Owners of living units located on the Lots and Parcels on which the recreational and landscaping facilities are located. Any owner or lessee of a living unit located on a Lot or Parcel within Coronado Shores which shall be included within the common operation scheme described herein and who, therefore, shall enjoy the non-exclusive easement of use described herein, may delegate his right of enjoyment to Members of his family who reside with him in his living unit, and to his tenants or contract purchasers who reside in his living unit.

Section 14.3 Landscaping And Recreational Committee Membership.

DECLARANT created a Landscaping and Recreational Committee for the purposes of administering the single, common operation of landscaping and recreational facilities as contemplated by Article XIV hereof when it determined and designated that Lot 2, Coronado Shores Map No. 6641, was included with Lot 3 in said single, common operation scheme. The Landscaping and Recreational Committee shall be constituted as follows: the Owners of the Project shall name one person, who shall be a Member of the Board of Directors of CORONADO SHORES CONDOMINIUM ASSOCIATION NO. 10, to represent the Association on the Committee; and the Members of the condominium associations of Lots 1, 2, 3, 5 and 6 and Parcels A, B, C and D which are included in said single, common operation shall also name one person each who shall be a Member of the board of directors of their respective association, to represent their association on the Committee. In each case, the person so named shall be deemed a qualified Member of the Landscaping and Recreational Committee when the Members of the condominium association naming him shall have filed an acknowledged Notice of the naming of such Committee Member in the Office of the Recorder of San Diego County. A Landscaping and Recreational Committee Member shall hold Committee Membership for so long as he shall be living, competent and perform his duties as a Landscaping and Recreational Committee Member, and shall remain a Member of the board of directors of the property owners’ association he represents, and so long as the Members of the condominium association who named him have not filed a superseding acknowledged nomination of another person in the Office of the Recorder of San Diego County. In the event of a vacancy occurring upon the Committee, said vacancy shall be filled by the Lot or Parcel for which the Membership is vacant within thirty (30) days of the occurrence of the vacancy. If the Members of the condominium association of said Lot or Parcel fail to fill such vacancy within said period, the remaining Members of the Committee may fill such vacancy by majority vote and by filing an acknowledged Notice of the naming of the person chosen by such vote in the Office of the County Recorder of San Diego County, and the person so named to fill such vacancy shall serve for one year from the date of the recordation of the document as above provided, and thereafter until the Members of the condominium association of the Lot or Parcel affected shall name a successor in the manner above provided.

Section 14.4 Duties. The Landscaping and Recreational Committee shall have the duty and authority on behalf of, and as agent for, the various property owners’ associations represented thereon (i) to cause all necessary work to be done and performed to maintain, manage, operate, repair and replace landscaping and recreational facilities on the Lots or Parcels within Coronado Shores that DECLARANT shall determine and designate to be included in a single, common operation of landscaping and recreational facilities in accordance with the concept outlined in Section 14.1hereof; (ii) supervise and approve the costs and expenses of such maintenance, management, operation, repair and replacement; and (iii) allocate to each Lot or Parcel which is so operated its share of said costs and expenses on the basis provided for in said Section 14.1. In performing this function, the Landscaping and Recreational Committee shall have the power to enter into contracts on behalf of said property owners’ associations as are necessary to carry out the single, common operation contemplated by Section 14.1 hereof.

Section 14.5 No Power To Assess.

The Landscaping and Recreational Committee shall have no power to levy assessments upon the owners of the individual lots or Parcels. It is intended solely that the Committee perform the duties outlined in Section 14.4hereof and that the various property owners’ associations to which a share of the costs and expenses of maintenance, management, operation and replacement of landscaping and recreational facilities operated as a single, common operation are allocated shall regard said share of said costs and expenses as Common Expenses or its equivalent, and shall assess each individual owner in each Lot or Parcel his proportionate share of said costs and expenses allocated to the Lot or Parcel as part of a Common Assessment or its equivalent.

Section 14.6 Meetings.

The meetings of the Landscaping and Recreational Committee shall be held upon notice from the Chairman, who shall be elected at the first organization meeting thereof which shall be called by DECLARANT. The presence in person or by proxy of at least 50% of the Committee Membership shall constitute a quorum for the transaction of business at all meetings. If any meeting cannot be held because a quorum is not present, the Landscaping and Recreational Committee Members present may adjourn the meeting to a time not less than 48 hours, nor more than thirty (30) days from the time the original meeting was called, at which second meeting the quorum shall be 25% of the Landscaping and Recreational Committee Members. All actions of the Landscaping and Recreational Committee shall require only a simple majority of the votes of the Committee Membership present at any meeting at which a required quorum is present. All meetings shall be held within the City limits of Coronado and shall be held on a day other than a Saturday, Sunday or legal holiday and shall be held, if during the day, between 1:30 and 5:00 P.M., and if at night, between 7:30 and 9:30 P.M.

ARTICLE XV Special Use Unit

Section 15.1 Use And Occupancy. The 149-unit multi-family structure known as CORONADO SHORES CONDOMINIUM NO. 10 shall contain 148 Units to be used solely as private dwellings for the respective Owners thereof, their families, tenants and social guests; and 1 Unit, shown and defined as Unit 01 on the Condominium Plan (the “Special Use Unit”) to be used for the purposes as provided in this Article 15. DECLARANT shall retain ownership of the Special Use Unit and shall have the right, together with its affiliates and their respective agents and employees, to use and occupy the Special Use Unit for any lawful purpose not inconsistent with the Basic Amended Restated Covenants, this Declaration, reasonable rules and regulations established by the Association from time to time and the general development plan of Coronado Shores and the surrounding community, including, but not limited to, any of the following uses:

(a) The maintenance of general office space for the activities of DECLARANT or any of its affiliates, relating to Coronado Shores, including the administration of DECLARANT’s continuing obligations as the developer of Coronado Shores.

(b) The conduct of public relations and promotional activities with respect to Coronado Shores.

(c) The conduct of maintenance and property management functions with respect to services which DECLARANT or any of its affiliates may be contracted to perform from time to time by any association of owners of Condominiums in Coronado Shores.

As used in this Article 15, “DECLARANT and its affiliates” shall include their respective successors and assigns, and nothing contained in this Declaration shall be construed or interpreted to preclude DECLARANT from conveying the Special Use Unit and its undivided interest in the Common Areas to any other person, subject to the same covenants, conditions and restrictions applicable to DECLARANT and all the other Owners of Units.

Section 15.2 Use By Association. The Association shall have the right to use free of charge from time to time and at any time, except during regular business hours, those portions of the Special Use Unit which have been set aside by DECLARANT for use as conference and meeting rooms, for the purposes of holding meetings of the Association or its Board of Directors or conducting other functions of the Association requiring a business forum.

Section 15.3 Ownership Rights And Obligations. The Special Use Unit, together with an undivided interest in the common Areas determined pursuant to Section 7.7 hereof, shall for all intents and purposes be deemed a Condominium in the Project. Except as provided in this Article 15 to the contrary, the Owner or Owners from time to time of the Special Use Unit shall have the same easements of enjoyment, ingress, egress and support and rights of Membership in the Association, subject to the same covenants, conditions, restrictions and obligations, applicable to the Owners of all the other Condominiums in the Project, including, but not limited to, the obligation to pay assessments levied by the Association on the Special Use Unit.

Section 15.4 Association Membership. Association membership shall not attach to the Special Use Unit as long as it is owned and controlled by the Association following the cessation of construction and sales activities by Declarant.

Section 15.5 Conflict; Amendment. In the event that the provisions of this Article conflict with any other provisions of this Declaration, the provisions of this Article shall control.

Amendments to this Article shall only be effective upon the written consent of the Owners of at least 75% of all of the Units and the written consent of the Owner of the Special Use Unit.

ARTICLE XVI General Provisions

Section 16.1 Notice to Individual Owners. Notice to Owners other than to the entire Membership must be given by first class mail sent to the address to which assessment notices are sent, within a reasonable time-frame based upon the subject matter of the notice. Notices sent in this manner are presumed delivered if not returned as undeliverable by the United States Post Office within 10 days of posting.

When the board of directors is to meet to consider or impose discipline upon a Member, the board shall notify the Member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting. The notification shall contain, at a minimum, the date, time and place of the meeting, the nature of the alleged violation for which a Member may be disciplined, and a statement that the Member has a right to attend and may address the board at the meeting. If the board imposes discipline on a Member, the board shall provide a notification of the disciplinary action by either personal delivery or first-class mail to the Member within 15 days following the action. A disciplinary action shall not be effective against a Member unless the board fulfills the requirements of this subdivision. Notwithstanding the foregoing or any other provision of these CC&Rs, all notice requirements are waived by any acknowledgment of receipt of notice.

Section 16.2 Annexation by Association. Additional property may be annexed to the Development or to this Declaration upon the vote or written assent of a majority of a quorum of Members of the HOA. Upon approval, the property may be annexed to the terms of these CC&Rs, without alteration.

Section 16.3 Enforcement. The HOA and any Owner have the right to enforce the Governing Documents. Failure by the HOA or any Owner to enforce any covenants or restrictions may not be deemed a waiver of the right to do so thereafter. In the event the Association or any owner commences litigation to enforce these governing documents, the prevailing party shall be entitled to costs of suit, including attorneys fees. In order to obtain Owner compliance with the Governing Documents, the Board of Directors or its designated enforcement committee shall have the power to fine Owners for violations of the Governing Documents, suspend membership rights and/or take other appropriate enforcement action.

Section 16.4 Severability. If any provision in these CC&Rs is void or become invalid or unenforceable in law or equity or by judgment or court order, the remaining provisions will remain in full force and effect, to which limited extent only, this Declaration shall be deemed severable.

Section 16.5 Amendments. These Restated Supplemental CC&Rs may be amended at any time and from time to time by a duly recorded instrument in writing approved by a majority of the total voting power of the HOA. However, the Board of Directors by unanimous vote may permit minor amendments to the CC&Rs which only correct errors associated with the restatement process, typos, internal inconsistencies, and any other technical errors.

Section 16.6 Required Amendments. If any law applicable to the Development is enacted after the date of recording of these CC&Rs which directly contradicts, restricts, limits or changes any provision contained herein, these CC&Rs will be deemed amended by operation of law. Any provision herein to the contrary notwithstanding, if an amendment occurs by operation of law the Board may, by unanimous written consent, cause a document describing the amendment by operation of law to be distributed to the Members and recorded with the San Diego County Recorder’s Office as an amendment to these CC&Rs.

Section 16.7 Extension of Declaration. This Declaration will run with and bind the land as an equitable servitude for a term of 20 years from the date of recording, and automatically be extended for successive periods of 10 years, unless all Owners have executed and recorded a written instrument in which it is agreed that these CC&Rs terminate.

CERTIFICATION

We, the undersigned, do hereby certify:

That we are the duly elected and acting President and Secretary of Coronado Shores Condominium Association No. 10.

That we have counted the ballots of the First Restated Declaration of Covenants, Conditions, and Restrictions for Coronado Shores Condominium Association No. 10, and they conform and are of the necessary number for amending said Declaration.

IN WITNESS WHEREOF, we have hereunto subscribed our names this day of , 2003.

________________________, President ____________________, Secretary

STATE OF CALIFORNIA )

) SS

COUNTY OF SAN DIEGO )

On this _____ day of , 2003, before me, _______________, Notary Public, personally appeared ________________ and _____________, on behalf of CORONADO SHORES CONDOMINIUM ASSOCIATION NO. 10, personally known to me to be (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

_______________________________________

Notary Public in and for said County and State. (Seal)

STATE OF CALIFORNIA )

) SS

COUNTY OF SAN DIEGO )

On this _____ day of , 2003, before me, _______________, Notary Public, personally appeared ________________ and _____________, on behalf of CORONADO SHORES CONDOMINIUM ASSOCIATION NO. 10 personally known to me to be (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

______________________________________

Notary Public in and for said County and State. (Seal)

This list of components in the Exhibit “A” – Maintenance List is intended as a guideline only. It is not intended to cover every single item in the building.