After Recording Return to:

Bryce H. Dille

ofCampbeU, DmeJ Barnett, Smith &: WileyJ PLLC 3 J 7 South Meridian

Puyallup, WA 98371

DF£LARATION OF PROTECfIVE COVENANTS, CONDmONS, EASEMENTS & RESTRICTIONS FOR

STONEWAY

Grantor: Gienger Development, Inc .• a Washington Limited Liability Company

Grantee; Stoneway

Legal Description (abbreviated): NE quarter ofSE quarte, ofNE quarter of Sec. 29, Township 19 North, Range 4 East of the W.M., Pierce County, Washington

Complete Legal is on Page J & 4 of Document

Assessor's Tax Parcel No.: 0419291015 and 0419291014.

The Declarants herein as the owners in fee of the real property legally described in this Declaration, hereby covenant, agree, and declare, that all of the properties and housing units constructed on the properties are and will be held, sold, and conveyed subject to this Declaration which is made for the purpose of enhancing and protecting the value, the desirability and attractiveness of the properties for the benefit of all the properties and their owners. The covenants, restrictions, reservations, and conditions, contained in this Declaration shall run with the land as easements and equitable servitudes, and shall be binding upon the properties and each portion thereof and all persons owning. purchasing, leasing, subleasing or occupying any lot on the properties and upon their respective heirs, successors and assigns.

ARTICLE ONE: DEFINITIONS

For purposes of the Declaration. Articles of Incorporation and Bylaws of the Association, certain words and phrases have particular meanings, which are as follows:

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L "Ace" shall mean the Architectural Control Committee, as described in this Declaration.

2. "Articles" shall mean the Association's Articles of Incorporation and any amendments,

3. II Association" shall mean the homeowner's association formed as a nonprofit corporation for the purpose of administering this Declaration.

4. "Board" or "Board of Directors" shall mean the Board of Directors of the Association.

5. "Buildet~ shall mCBIl any person or entity who shall purchase lets and construct housing units thereon for the purpose of sale or lease.

6. "Bylaws" shall mean the Association's Bylaws and any amendments.

7. "Common Areas" shall mean the property, both real and personal. in which either each of the lot owners has an undivided interest or in which the Association has been granted an. ownershipinterest, easement, lease, or right of control by written instrument including this declaration or by delineation on the plat.

8. "Declaration" shall mean this Declaration ofPr.otective Covenants. Conditions and Restrictions.

9. "Declarant" The Declarant shall mean Gienger Development, Inc., a Washington corporation, until such time 35 8m Declarant has sold and conveyed the lot s to a "builder" as defined above. Any such builder shall also be considered as a Declarant for all purposes as set forth in this Agreement. At such time as the Declarant, Gienger Development, Inc., or any builder, has conveyed all of the lots held in the name of that Declarant or a builder. then it shall no longer be a Declarant and all the rights of said Declarant. under the terms of this Declaration shall terminare.

10. "Development Period" shall mean the period of time from the date of recording of this Declaration until 100% of all of the lots have been closed and sold to other 'than Builders, However, if any lots are subje~L to any loans which are insured as defined in Paragraph 11 below .. then in that event the Development Period sh~l terminate at such time as 7S% of all of the lots have been closed and sold to other than Builders,

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11. "Federal Mortgage Agencies" shall mean those federal agencies which have an interest in any Lot or lots, or common areas, such as the Federal Housing Administration (FHA), the Veterans Administration (V A). the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation, or their successors to their interest.

12. "Housing Unit" shall mean the building occupying a Lot.

13. "Institutional First Mortgagee" or "Mortgagee" shall mean a bank or savings and loan association or established mortgage company, or other entity chartered under federal or state laws, any corporation or insurance company or state or federal agency which holds a first note or deed of trust against a Lot or Housing Unit thereon.

14. "Lol" shall initially refer to any of the platted lots located in the Real Property described herein which shall constitute the plats of Stoneway I and Stoneway Il,

IS. "Member" shall mean every person or entity that holds a membership in the

Association. -

16. "Mortgage" shall mean a mortgage or deed of trust encumbering a Lot or other portion of the Properties.

17. "Owner" shall mean every person or entity; including Declarant, which is a

record owner of the fee simple title to any lot, or- if any Jot is sold under real estate contract, the vendee or. vendees under that contract; provided however, that the term "Owner" shall not include those having such interest merely as security for the performance of an obligation.

18. "Person" slJalllIi.eari-a natural 'person, a corporation, a partnership, trustee or other legal entity.

19: "Plat" shall mean and refer to the plat of Stoneway 1, consisting of lots 1 through 25 and the plat of Stoneway Il, consisting:of lots I through) 6, as approved and recorded in Pierce County, Washington under Pierce County's Recording No . .:loI?ud.f54t21 . .;;J,,~/ tP 1'1 tP.,s- ~4P.2. 20. "Real Property" that is subject to this declaration is legally described as follows:

A: The South ~ of the Northeast q_uarter of the Southeast quarter of the Northeast quarter of Section 29, Township 19

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North, Range 4 EaSt of the W.M., Pierce County, WasbIDgton. Except the East 3(} feet for county rood. (Plat of Stoneway I)

B: The North Y2 of the Northeast quarter of the Soufheast quarter of the Northeast quarter of Section 29, Township 19 North. Range 4 east of the W.M, Pierce County, Washington, Except the East 30 feet for county road. (plat of Stonewa.y II)

21. "Residenceq shall mean a single family dwelling occupying any lot.

22. "Sale" or "SoMIt shall mean the date upon which ownership of ~ Lot is transferred from an Owner to another person or entity by recordation of an instrument ofmmsfer such as a deed or real estate contmct.

23. <I Structure. shall mean any building, fence, walt, pole. walkway or the light .

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ARTICLE TWO: PROPERTY SUB.JECT TO IJIIS DECI,AMDON

The real property which is subject to thi;g Declaration is described above and shan be known as Stoneway.'

ARTICLE mREE: MANAGEMENT RIGHTS OF DECLARANT DJ)RING DEYELOPMENT OF THE PRQPERTY

Section One: . Manasemenf bX the'Declarant DurinI' the Deve1Qpment PWQ.QI_ The Development Period shallmean the period of time from the date of recording of the Declaration until 100% of the lots have been closed and sold to other than builders or in the event any loans with respect to any of the lots wi'thin Stoneway are insured through any federal mortgage agencies as defined herein, then in that event the Development Period. shall terminate at such time as 75% of all of the lots have been closed and sold to other than builders. Notwithstanding anything in this Declaration 10 the contrary until termination of the Development Period upon sale of the required number of tots, or atthe election of the Declarant, the property shall be managed and the Association organized at the sole discretion of the Declarant.

Section Two; Pw:;pose of DeyelQPment Period The Declarant's control of the Association during the Development Period is established in order to ensure that the Properties and the Association will be adequately administered in the initial phaSes of development, ensure an

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orderly transition of Association operations, and to facilitate the Deelarants completion of construction of Housing Units.

Section Three: NQlice to Qwger!i, Not less than ten (10) nor more than thirty (30) days prior to the terminatlon of the Development Period, the Declarant shall give written notice of the termination of the Development Period to the Owner of each Lot. Said notice shall specify the date when the Development Period will terminate and shall further notify the Owners of the date, place and time when a meeting of the Association will be held. The notice shall specify that the purpose of the Association meeting is to elect new Officers and Directors of the Association. Notwithstanding any provisions of the Articles of Bylaws of the Association to the contrary, for the purpose of this meeting, the presence. either in person or by proxy, of the o"wers of five (5) Lots shall constitute a quorum. The Board of'Directors and the officers of the Association may be elected by a majority vote. If a quo,rum shall not be present, the Development Period shall nevertheless terminate on that date specified in said notice and it shall thereafter be the responsibility of the Lot Owners to provide for the operation of the Association. Proper notice shall be deemed to have been sent if said notice is sent in the manner described as proper notification in the Bylsws of tbeAssoeiation.

Ssrs:rtion Four: Management bv Declarant Duriog the Development Period. During the development period, Declarant, at its option, shall have and may exercise au of1he rights and powers herein given to the Association. Such rights and powers are reserved by the Declarant, its successors and assigns. Declarant sh3II have the tight and option to assess Owners for actual costs in inairitaining Common Areas, Common Maintenance Areas and righ1s-of-way and to assess a Plat managemen~ fee during the Development Period.

Sg:t;1:ion Five: Appointment of Temoora,o: Board. Declarant may, in Declarant's sole discretion, and at such times as the Declarant deems appropriate (im:luding ill the Articles of Incorporation of the Association,. if the Declarant is: the Incorporator of the Association), appoint three persons who may be Lot Owners, or are representatives of corporate entities or other entities which are Lot Owners, as a Temporary Board. This Temporary Board shall be for all purposes, the Board of Directors of the Association, and shall have fun authority, after approval is granted by the Declarant, (including the authority to adopt or amend the initial or subsequent Bylaws oftbe Association} and all rightS~·iesponsibilitieS, privileges and duties to manage the Property under this Declaration and shall be subject to all provisions of this Declaration. the Articles and Bylaws. After selecting a Temporary B,oard, the Declarant. in the exercise of the Declarant's sole discretion, may at any time terminate the Temporary Board and reassume the Declarant's management authority under this Declaration or select a new Temporary Board.

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Section Six. Declarant AUthority If No T!W1~ Board. So long,as no Temporary Board is managing the Property or until suCh time as the first permanent Board is elected, should Declarant choose not to appoint a Temporary Board, Declarant or a. managing agent selected by Declarant shall have the power and authority to exercise all the rights; duties and functions of the Board and generally exercise all powers necessary to cany out the provisions of this Declaration, incl~ but not limited to, enacting reasonable administrative rules (and a fine and due process system for violations thereof), c.ontracting for required services, obtaining property and UahiUt.y insurance, collecting and expending all assessments and Association funds. and enforcing this Declaration (including foreclosing any liens provided by this Declaration). Any such managing agent or the Declarant shall have the exclusive right to contract for all goods and services, payment for which is to be made from any moneys collected from assessments. In the event that Association expenses exceed assessments, any moneys provided. by the Declarant for Association expenses that would otherwise be paid for out of Association assessments shall be considered a loan to be repaid to the Declarant through regular or special assessments from the Association, together with interest at twelve percent

(12%) per annwu. ' ,

Section Seven: Iransitism- .These requirements and covenants are made to insure that the Property wiU be adequately administered in the initial stages of development and to insure an orderly transition to Association operations. Acceptance of an interest in Ii Lot evidences acceptance of'this management authority in the Declarant; and,

S~ign Eiibt: ~ Authority Of Declaragt. Declarant shall have the management authority grailted by this Article Three notwithstanding anything in this Decleratlon to the contrary. Declarant, as the Incorporator of the Asscciation, may {,':S.USe the Association to be incorporated, the Te:t:nporary Board to be appointed either in the Articles ofIncorporation of the Ass.ociation or by separate written instrument, "to terminate the Temporary Board and reassume the Declarant's management authority under this Article. Three, to reappoint successor Temporary Boards, or take any other action permitted by 1his Article Three, all without affecting the authority given to the Declarant by this Article Three to manage the Property and to organize the Association at the Declarant's sole discretion.

Section Ni~: Authorl1X of AssQCiattQn:Mkr ~pmerrt PerlQ"'. At the expiration of Declarant's management authority the Association shall have the authority and obligation to manage and administer the Common Areas and to enforce this Decimation. Such authority shall include all' authoiity" provided for in" the Association's Articles, Bylaws, rules and regulations and this Declaration. The Association shall also have the authority and obligation

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to manage and administer the activities of the ACe in its responsibilities as described in Article Nine.

Section Ten; Dele2a.tion of Authority. The Board of Directors or the Declarant may delegate any of its managerial duties, powers, or functions to any perso~ fum, or corporation. The Board and the Declarant shall not be liable for any breach of duty, negligence, omission, intentional act or improper exercise by a person who is delegated ally duty. power or function by the Board of Directors or the Declarant.

ARTICLE FOUR: MEMBERSUIl

Every person or entity who is an Owner of any Lot agrees to be a Member of-the Association by acceptance of a deed for such Lot, Membership may not be separated from ownership of any Lot. All Members shall have- rightS and duties as specified in this Declaration, and in the Articles and Bylaws oftbe Association.

ARTICLE FIVE: YQTlNq RIGlI'lS

Members shan be entitled to one vote for each Lot owned. No moretban one vote shall be cast with respect to any Lot. 100 voting rights of any Member may be suspended as provided. in the Decleration, or the Articles or Bylaws of the Association. Members' votes may be solicited and tabulated by mail or facsimile.

ARTICLE SIX: PROPERTY RIGHTS IN COMMON AREAS

The Association shall have the right and obligation to maintain improvements, vegetation, signage and utilities in and 011 the Common Area, subject to any restrictions delineated on the Plat o:fthe Properties. The Association shall have the exclusive right to use and manage the Common Areas in a manner consistent with the Plat. 1lris Declaration. the Articles and the Bylaws of the Association.

ARTICLE SEVEN: MAlNTENANCE·AND COMMON EXPENSES

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Section One: standard ofMainfenance - Common Areas. The Association shall maintain the Common Areas ina manner consistent with good building and nursery practices, and in compliance with all applicable codes and re~ations. The common areas shall include but not be limited as defined below together with all easements which are for the benefit of all lot Owners. The Association sball own tracts A, B. C. and D within the plat of Stoneway I and

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tracts A~ B, and C situated within the plat of Stoneway n. The Association shall have the control and responsibility for maintaining said common areas as defined herein. These common areas are defined as follows: (a) The private roads which are identified as tract A on the plat ofStoneway I and tract B on the plat ofStOlleway 11; (b) Tract B of Stoneway I and 1ract C of Stonewa.y n which provides access to the common area park designated as tract A on Stoneway II; (c) Tract A as designated on the plat of Stone way II which shan he utilized as a park for the benefit of all Jot owners; (d) Tracts C and D on the ,plat ofSroneway I which are designated as landscape trscts; (e) any entry and/or monument areas and any improvements thereon which may be constructed by the Declarant; (t) All pedestrian pathways, walkways, and sidewalks as coastructed by the Declarant or as may be delineated on 'the plat of Stoneway ] and Stoneway II; (g) Any private storm water drainage system including transport lines and bio-swales except for those on lots 9 and 10; (h) Any private storm water drainage system including transport lines; (i) J~ the event that the actual constructed improvements of the common a.reas shall vary from the common areas as d~$L-ribed on the face of'the final pIat of Stoneway I or Stoneway II, the actual constructed improvements in 1he area encompassing such improvements shall be deemed common areas as defined beeein and any and an easement rights for such areas and for such improvements. as set forth her~ shall be deemed granted by the individual lot owners to the association; G) AU easements which have been. established for the benefit of all Lot owners as may be delineated ori the plats of Stoneway I and Stoneway IT which easements are reserved for the benefit of all lot o .... mers as well 88 an easement which is reserved for the benefit of the Association for 'the purpose of installation. maintaining and repairing any improvements or installations constructed within any easement areas or .constructed by the Declarant on my lot for the benefit of the lot owners including. but not limited to. perimeter fencing.

Section Two: Remedjes- for FiUm to Maintain. If 'any Lot Owner shall-fall to cooduct maintenance on his Lot or the exterior of'the Housing Unit located thereon, or tails 10 maintain the Lot and the exterior of the Housing Unit in the same condition as a reasonably prudent homeowner. or in a manner which preserves the drainage for other Lots, the Association shall notify the Lot Owner in writing of the maintenance required. If the maintenance is not performed within thirty (30) days of the date notice is delivered, the Association shall have the right to provide such maintenance, and to levy an assessment against the non-performing Lot Owner and its Lot, for the cost of providing the maintenance. The assessmeat shall constitute a lien against the Lot owned by the non-performing Lot Owner and JIlay be collected and foreclosed in the same manner as any other delinquent monthly or special assessment. The Association shall have all 'remedies for collection as provided in Article Eight of the Declaration. 'In the event that emergency repairs are needed to correct a condition on a Lot which pose a substantial risk of injury or significant property damage to others. the

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Association may immediately perform such repairs as may be necessary after the Association has attempted to give nonce to the Lot Owner of the repairs necessary. Such notice in emergency circumstaacee shall be sufficientifattemptcd orally or in writing immediately prior to the Association's undertaking the ne-cessary repairs. Emergency repairs performed by the Association, if not paid for by the Lot Owner. may be collected by the Association in the manner provided for herein notwithstanding the failure of the Association to give the Lot Owner the thirty (30) day notice.

Section Three: Common F~S$is. The Association shall perform such work as is necessary to carry out the duties described in this Declaration. and shall delegate the responsibility for management and supervision of such work to the Board, the ACe or to a manager or agent hired by the Board for the purpose of such management and supervision. Expenses. fur such work shall be paid by the Association for the benefit of all Lot Owners and shall be referred to as Common Expenses. The Common Expenses shall be paid by the Assoclation from funds collected. from assessments paid by 'Lot Owners. The Common Expenses shall include, but shall DOt be limited to, the foUow1ng:

I. The real property taxes levied upon the Association for the Common Areas which are held in the name of the Association, if all)';

2. The cost of maintaining allrequired insurance coverage and fidelity bonds on any Common Areas, and for directors and officers of the Association and the ACe;

3. The cost of maintaining, repairing, and replacing all Common Area improvements. including,. but not limited to street surfaces, signs,' street lights, if any ,stonn 'water system and sewer system situated within the plat, walkways and sidewalks, power to said street lightiug, monument gate arid entrance area, fencing constructed by the Declarant, and any plantings. landscaping or improvements constructed or installed on the common areas.

4. Any other expense which shall be designated as a Common Expense either in this Declaration or as approved as such by the Association.

Section Eam: Extraoxd~ Use EJi;penses .: In the event that one or more lot owners shQuld by their use of the common areas cause- it to be subjected to other than reasonable went and tear or by their actions damage those common areas or any improvements located thereon or therein. then individual subjecting the common area to such use shall have the obligation to repair such damage upon demand by the Association and, to restore such common area to the

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condition that existed prior to such use or actio-n and all expenses therefore shall bepaid by such individllBl.

Sect jon Five. Inswance. Nothing shall be done or kept in any common areas which will increase the rate of insurance on the common areas or other lots or improvements without the prior written consent oftbe board. Nothing shall be ~pt in any COID11lOD area which win result in cancellation of insurance on any part of the common areas or which would be in violation of any laws or ordinances.

Sec1ion Six. AltemtioD of Cammon Awns and Common Maintenappe Areas. Nothing shan be altered or constructed in, or removed from any common maintemulce area or common area except upon prior written consent of the board. There shall be no construction of any kind within the common areas except that community improvements may be constructed if twothirds of the Members of the Association authorize (1) the construction of such intprovements, and (2) assessment for such improvements. Also. any such improvements would be subject to the acquisition of all required permits from governmental agencies. This Section shall not limit or prohibit Declarant (and no Member's consent shall be necessary), during the development period. from constructing or altering any such improvements to any common area. or any common maintenance area, which Declarant in Declarant's sole discretion. deems for the benefit and eJ1Ium.cement of said areas ill the Association in: general.

Section Seym,. Dumpi02 in C,mnmon Areas. CQlllll10D MAintenance Areas. or Wetlami Md BWfer Areas. No trash, 'construction debris, orwaste, plant or grass clippings or other debris of any kind, nor any hazardous waste, (as defined in federal, state or local law regulation) shall be dumped. deposited or placed on any common areas. common maintenance areas or easements. The Declarant (during the Development Period) and the Board thereafter. shall retain the rights fot enforcement and initiation of penalties for violations of this policy.

See1ion Eiiht YDdscapina and Fencjn~. No permanent structeres or landscaping of any kind, including fences, walls or shrubs, may be built .01 placed within any right of way easements or ethereasements as delineated on the plat except as deemed appropria:t~ by the board. This prohibition shall not apply to th~ landscaping andany improvements ii1 the common maintenance areas installed by the Declarant, nor shall this Section prohibit the Association from. installing additional improvements or landscaping within the designated common areas or common maintenance areas, nor shall this section prohibit the Installation of fences as may be otherwise allowed in this Declaration. nor shall this 'section prohibit the installation oflandscs:ping on private lot areas encumbered by utility easements not otherwise restricted in this Declaration. Also, this prohibition shall not apply to landscaping of front or

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side yards of lots extending to the edge of the eurb or sidewalk and the public right of way.

Section Nine: Management. Each owner expressly covenants that the Declarant (during the Development Period) and the board thereafter, may delegate all or any portion of management authority to a IilfIDaging agent. manager or officer of the Association and may enter into such management contracts or other service contracts to provide for the maintenance of the common areas and common maintenance areas and any portion thereof. AllY management agreement or employment agreement for maintenance or management may be terminable by the Association without cause upon not mote than ninety (90) days written notice thereof, The term of any such agreement shall not exceed three years, renewable by Agreement of the parties for successive periods of'up to three years each. Each owner is bound to observe the terms and conditions of any management agreement or employment contract. all of which shall be made available for inspection by any owner upon request. Any fees or salary applicable to any such management employment or service agreement shall be assessed to each owner,

ARTICLE EIGHT: ASSESSMENTS

1. Covenants forldaint'?1ance Assessmetlt:i.

(a) Deelerants, for each Lot owned by it, agrees, and each Owner of a Lot by acceptance of a deed therefor, whether or not it shall be so expressed in any such deed or other conveyance, is deemed to agree to pay to the Association amiwiJ. or other regular assessments

(b) The annual or other regular and specialassessments, together with interest, costs and reasonable attorney's fees, shall be a charge and a continuing lien upon the Lot against which each such assessment is made. Such lien may be foreclosed by the Association in like manner as a Mortgage on realproperty.

(c) Each assessment. together willi interesl"c!'Jst$~ and reasonable attorney's fees, shall also be the personal obligation oftb.e person who was the Owner of1th.e Lot assessed at the time the assessment fell due. The personal obligation shall not pass to the Owner's successors-in-interest unless expressly assumed by them. The new Owner shall be personally liable for assessments which become due on and after the 'date of'sale or transfer.

(d) Unless otherwise provided, for in this Declaration. no Jot owned by a Declarant shall be subject to any annual or other assessments.

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2. P'l.UJl'Ose QfAssessments. The assessments levied by the Association shall be used exclusively for the purpose of.promoting the: recreation, health, safety and welfare of the residents of the Property, including the improvement, repair and maintenance of the Common Areas and the services and faciltties related to the use and enjoyment of said areas, for the payment of insurance premiums on the Common Areas, and for '!he maintenance of other areas as provided for in this Declaration.

3. Board to fix Annual or R.eiWar Assessnwnt. The Board of Directors shall fIX the regular or annual assessment at least thirty (30) days prior to the commencement of the annual or regular assessment period. Written notice oftbe annual or reguler assessment shall be sent to every Owner, In the event the BoEOd fails to fix an annual or regular assessment for any assessment period, then the assessment established for the annually or regular assessment for the prior year sbalI aut-omatically be continued until such time as the Board acts. The annual or regular assessment established for the prior year shall automatically be continued until such time as the Board acts. The aonual or regular assessments shan be sufficient to meet the obligations imposed by the Declaration and any supplementary declarations, and shall be sufficient to establish an adequate reserve fund for the maintenance, repair and replacement of those Common Areas which require such actions on a periodic basis. That' in the event there is any increase in the annual or regular assessment of more than five percent (5%) of the annual or regular assessment for the prior assessment period, then it must be approved as provided for in the Bylaws of the Association which are incorporated herein as though fully set forth.

4. Special A~sessments IQr CQ.Pital Improvements. In addition to the annually or regular assessments authorized above. the Association may levy in any assessment year, a special assessment applicable to that year only. for the purpose of defraYing.. In whole or in part, the cost of any constructsm or reconstruction. unexpected repair or replaCement of capital improvements upon the Common Area, including the necessary fixtures and personal property related thereto. "fiIat any speCial assessment for capital improvements must be approved in accordance with the pmvisions of the Bylaws of the Association which are incorporated herein as though fully set forth.

5. Rate of Assessment. Both annually or regular and special assessments shall be fixed at a uniform rate for all Lots.

6. Reimbwsemeqt Auessment, At the time of closing of a sale of a lot upon which a residence bas been constructed, the buyer shan pay a reimbursement assessment of $200.00, of which $100.00 shall be pald to the Association and 1he other $10:0.00 shall be paid 10 the

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builder. The assessment is to reimburse the builder and Association for organization and other expenses incurred.

7. Assessment Paid Upon Sale by. Declarant; Upon the closing of the sale of any lot by Declarant to a builder, the builder shall pay an assessment to the Association in the amount of $262.50 for each lot, which amount will fund the initial operating expenses of the Association.

8. Annual Assessment. The annual assessments shall be $262.50 per Lot except for those Lots exempted in Paragraph 1. The annual assessment may be increased during the development period to reflect (1) maintenance costs, (2) repair costs, or (3) plat management costs. All increases during the Development Period must directly reflect increase in the above recited costs. During the Development Period, the Declarant shall have the authority to reduce the annual assessments if economic data supports such a reduction because of reduced maintenance costs or other anticipated Association expenses. After the Development Period expires, the Board of Directors shall fix the annual assessment in. accordance with the aboverecited standards. After the Development Period expires, the annual assessment may be increased by more than five percent (5%) over the previous year's maximum annual assessment only in accordance with the provisions of the By-Laws of the Association.

9. Special Assessments for Capital Improvements. In addition to the annual assessments authorized above, the Association rorduring the Development Period, the Declarant) may levy, in any assessment year, a common assessment, applicable to that year only, for the. purpose for defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Common Maintenance Areas not prohibited by this Declaration, including fixtures and personal property related thereto, provided that any such assessment for those capital improvements or repairs exceeding $5,000.00 shall have the approval of the members of the Association in accordance with the provisions of the By-Laws of the Association.

10. Notice and Quorum for Any Action Authorized Under Sections 8 and 9. Written notice for the place, day; hour and purpose of any meeting called for the purpose of taking action authorized under Sections 7 and 8 of this Article shall be sent to all members in accordance with the provisions of the By-Laws of the Association. If the required quorum as provided for ill the By-Laws is not present, another meeting may be called subject to the same notice requirement; the required notice at the subsequent meeting shall be one-half of the required quorum under the By-Laws as was necessary at the preceding meeting. In the event a quorum is still not achieved at the second meeting, the Declarant during the

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Development Period and the Board thereafter, shall have the sole and exclusive authority to initiate a special assessment and carry out the capital improvements without first obtaining approval of the required number of members of the Association as specified in the By-Laws of the Association.

11. Date of Commencement of Annual Assessment Due Dates. The annual assessments described in this Article shall commence immediately upon the closing of the sale of a home (sale of a Lot is excluded) to the initial purchaser or upon the initial occupation of the home, whichever occurs earlier. The first annual assessment for each lot owner shall be $262.50 if the sale of the lot closes prior to July 1 st of the assessment year, which will commence on January 1, 200 1. If the lot closes on a day subsequent to June 31 S\ then the amount of assessment to initially be paid shall be $131.25. After the Development Period expires, the Board of Directors of the Association shall fix the annual assessment. Written notice of the annual assessment shall be sent to every Owner subject to such assessments. The due date shall be established by the Board or Directors. The Association, or its agent, shall, upon demand and for a reasonable charge, furnish a certificate signed by an officer of the Association setting forth whether the assessment on a specified Lot has been paid. A properly executed certificate of the Association as to the status of assessments on a Lot is binding upon the Association as of the date of its issuance.

12. Initial Expenses of the Association. In the event there are insufficient funds received from lot assessments as provided for above in this Declaration to pay for the actual costs incurred by the Association for common expenses as set forth in this Declaration, then the Declarant may pay the difference between the funds received and the actual costs subject to the condition that the Declarant shall be entitled to reimbursement from lot assessments at such time as then: are sufficient funds for such reimbursement

13. Effects of Non-Payment of Assessments: Remedies of the Association. Any assessment not paid within thirty (30) days after the due date shall bear interest from the due date until paid at the rate of twelve percent (12%) per annum. Each Owner hereby expressly vest in the Declarant during the Development Period, or the Association thereafter, or their agents the rights and powers to bring all actions against such Owner personally for the collection of such assessments as debts and to enforce lien rights ofthe Association by all methods available for the enforcement of such liens, including foreclosure by an action brought in the name of the Association in a like manner as a mortgage of real property. Such Owner hereby expressly grants to the Declarant or to the Association, as applicable, the power of sale in Connection with such liens. The liens provided for in this Section shall be in favor of the Declarant or the Association, as applicable, and each shall have the power to bid in an

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interest at a fo:re~losure sale and to acquire. hold, lease, mortgage and convey the same. The Owner is responsible for the 'paymeot of all attorney's fees incurred in collecting past. due assessments or in enforcing the terms of assessment liens. N-o Owner may waive or otherwise escape liability for the assessments provided in this Article by non-use of the Common Areas, Common Maintenance Areas or abandonment of his or her Lot. The Association shall have the right to suspend the voting rights and enjoyment of Common Areas of an Owner fur any period during which any assessment against the Lot remains unpaid, and for a period not to exceed sixty (60) days per infraction for any ~on of the terms cf either this Declaration, the Articles or the Bylaws of the Association, or of any official, published rules and regulations of the Association.

14. SYlN,rdinatiQn Qfthe Lien to MortUI:'. The lien for assessments, provided for in this Article, shall be subordinate 10 the lien of any first mortgage or first deed of trust efirst mortgage"}. Sale or transfer of iWY Lot-shall not affect the assessment lien. However. the sale or transfer of any Lot pursuant to Ii mortgage foreclosure or any proceeding in lieu thereof, or the first mortgage holder's 8cceptaDce of'a deed in lieu of forecloSuTe, Shall extinguish the lien created pursuant to tbis Article- as to payments which become due Prior to such sale or transfer. NQ sale or transfer. however, shall (a) relieve such Lot Owner or Lot from liability for any assessments thereafter becorilirig due nor from the lien thereof, nor (b) shall relieve the delinquent Owner from personal liability for the amount of the payments which became due prior to such sale or transfer and the .ccsts and attomey's fees.

, 15. Exemptw~. All property dedicated to and accepted by local public authority shall be exempt from the assessments provided fur in this Article. Property and Lots within Stoneway owned by the Declarant, and all Common Areas. shall be exempt from any and all assessments provided fot in this Declaration, This SflCtian shall apply notwitltstanding any other provision to .the contrary in this Declaration.

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16. Certificate. The Association shall upon demand furnish a certificate in writing

signed by an officer of the Association setting forth whether the assessments on a specified lot or dwelling unit have been paid. A reasonable charge may be made by the Association for the issuance of these certificates. Such certificate shall be conclusive evidence of payment of any assessment stated in the certificate to have been paid.

1 7. Fines Treated as Special Assessments. Any fines levied by the Association pursuant to RCW Chapter 64.38 (or successor statuteamhorfzing the impo~tioo of fines) shall be treated as a special assessment of the Owner fined: and may be collected by the Association in the manner described :in Article Eight

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ARTICLE NINE: ARCWl'ECl'UJAI, CONTBOl4

Section One: Deyelopment Period. The Declarant hereby reserves the right tn exercise any and all powers and controls herein given to the Board of Directors. the ACe or its authorized representative in this Article of the Declaration, during the Development Period. At the expiration of the Development Period, Declarant reserves the right to continue to exercise all powers and controls granted herein to the ACe and to appoint Members of the Ace until such time as there has been constructed on all lots a residence and said residence has been sold and conveyed by either a Builder or the Declarant,

sectioJ1, Two: AuthoIity of Ace Afta: &elingyjslunent of Control by Declarant. At such time as all residences have been constructed on all lots and said residences .have been sold and conveyed by either a Builder or the Declarant,. the ACe. shall have the autOOnty and obligation to manage and a.dminister the review of building plans, speci~ns and plot plans and such other submissions as described in this Article and to enforce those covenants, conditions, and restrictions. Such authority shall Include all authority provided for the Ace in the Association's Articles, Bylaws, Rules and Regulations as initially adopted or amended. and

all authority granted to 'the ACe by this Declaration, .

SeQ1iQn Thre¢: Deletmfjon ofAuthoritv of Ace. TIle Ace or tileDeclai.'ant may delegate any of its duties, powers, or functions described in this. Article to any person, firm, or corporation.

Section Four: Appointment of ACe. The Declarant during the development period reserves the right to act as the ACC or to appoint the Member(s) of'the ACC. At such time as all of the lots have been sold by tire Declarant and/or Builders. then ihe Board of the Association shatl appoint at least one but not more than three Members offhe ACe and if all the Members of the ACe shall resign and no replacements have been appointed by the Board, then theBoard shall act as the ACC tmtiJ the Members of the ACe arc appointed by the Board.

Section Fiye~ APmvval by ACe Reguited. Except as to construction, alteration, -'or improvements performed by the D.eclanml,· no construction activity of any type including clearing and grading, cutting or transplanting of significant natural vegetation may begin on a. Lot or Conunon Area and no building. stmctere, fence or other improvement shall be erected, placed or altered on any Lot or Common Area Until. at a minimum, the building plans, specifications, plot plans. and landscape plan showing the nature. kind. shape, height, materials, exterior color and locatiotl of such building, structure or other improvemetlts have been submitted and approved in "\\Ti.ting by the ACe or its B.Utborized representative as to

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hannony of exterior design and location in relation to and its effect upon surrowuling structures and topography. Fm1her, no fences, hedges or walls shall be erected or altered and no significant exterior changes shall be made to any building incillding, but not limited to, exterior color changes. additions or alterations until such written approval shall have been obtained.

Section Six: Time T. imits. If the ACe or its authorized representative shall fail to notify the OWner of its action for a period of thirty (30) days following the date of the submission of the required information to the ACC, or its authorized representative, the OWner may proceed with the proposed work notwithstanding the lad: of written approval by the ACe or its authorized representative. The required infOllDation shall be considered submitted to the ACe upon personal delivery of a complete set of all required information to the person designated to receive such items by the Ace or by mail three days after deposit in the U.S. Mail. postage prepaid, certified. return receipt requested, to the ACe in care of the Board of Directors of the Association at the address designated in the roost recent notice of assessment by the Board, or at such other address as is designated by the Board by v."ritten notice to the Members.

S~~tiQn 8evm: ;Donation of Time. No member of the Ace shall be entitled to any compensation for services performed on behalf of the ACe. ACC members shall have no financial Hability resulting from Ace actions.

Sm:tiQD Ei2ht: Address of the ACe. The address of the ACe shall be at the registered office address of the Association,

Section Nine: Votipg. ACe decisions shall bedetennined by a majority vote 'of the members oftbeACC.

Section Tcnr Submission ofP1M~. 'All plans and 5pecifi~ons required to be submitted to the Ace shall be submitted by mail to the address of the ACe in duplicate. The written submission shall contain the name and address of the Owner submitting the plans and specifications, identify the Lot involved, and the following information about the proposed structures:

A. The location of the structure upon the Lot;

B. The elevation of the structuee with referenceto the existing and finished Lot grades;

C. The general design;

D. The interior layout;

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E. The exterior finish materials and color. including roof materials; and,

F. Other information which may be- required. in order to determine whether the structure conforms to the standar:ds articulated in this Declaration and the standards employed by the ACe in evaluating development proposals,

Section Eleven: Eyaluatina DevelQpMent Proposals. The ACe sbalI have the authority to establish. aesthetic standards for evaluating development proposals. In addition to these guidelines, in evaluating development proposals, the ACe shall detennine whether the external design. color, building materials, appearance. height, configuration, location on the Lot, and landscaping oftbe proposed structure (the "design elements") harmonize with (1) the various features of the natural and built environment. (2) the aesthetic cbaraeter (If the other homes in Stoneway, and (3) any other factors which affect the desirability or suitability of a. proposed structure ,?r alteration (collectively the "approval factors"). The ACe shall decline to approve any design in which (1) the design elements fail to harmonize with the approval factors described in the previous sentence or v.-bich fail to meet any aesthetic standards promulgated by the ACe, (2) impacts adversely on neorby Properties and Common Areas, or (3) is of a temporary or Don-permanent nature. Ace determinations may be amended by a majority vote of ACe members. Any changes su~ectto review perthe terms set forth herein which. are undertaken without submission to the Architectural Control Ace shall be deemed to have been disapproved. The ACe has the authority to stop further work as 'Well as the

authority to have prior work undone. '

Section Twelve: ExclU8lQJ1S. 1he Declarant shall have the right to waive the plans and specifications reviewfor builders inStoneway. Any such waiver shan not exempt said builder from any oftbe standards or restrictions articulated in this Declaration and all structures and improvements shall meet all standards and.restrictions contained in these declarations.

Section Thirteen: AppmnJ Procedut;es. Within fourteen (14) days after the receipt of plans and speeltications, the ACe sbaIl ·approve or disapprove the proposed structure, The Ace may decline to approve plans and specifications which, in its opinion, do not conform to restrictions articulated in this Declaration and criteria or to its aesthetic standards. The ACe shaU indicate its approval or disapproval on one of the copies of the plans and specification provided by the applicant and shall return the plans and specification to the address shown on the plans and specifications. In the event that no disapproval of such plans and specification is given within fourteen (14) days of submission, then the plans shall be deemed to be approved. In any event. the Association shall hold the ACe members (and the Declarant) harmless fr-om any actions taken (or actions not taken) relative to the approval, disapproval, or non-action on any plans suhmined for review. "Non-action" on the part oftbe Ace shall

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not exempt the applicant from any of the provision of this Declaration or the restrictions articulated herein. By purchasing a Lot in Stoneway, the Owners agree that. to the extent perntitted by law. the Dechmmt shan have 110 liability to the Owners or the Association for any actions taken. or actions not taken, while acting as the ACe.

Section Fourteen: Conwliance with Codes/EnyirQJ)IJ)eJltal Laws. In all cases, ultimate responsibility for satisfYing all local building codes and requirements rests with the Owner and contractor employed by the Owner. The ACe bas no responsibility fur ensuring tbat plans and specification which it reviews comply with local building codes and requirements, The Owner shall hoJd the Ace members (and Declarant) harmless in the event tbat a structure which the ACe (or Declarant) authorizes fails to comply with relevant building and zoning requirernents or these covenants and restrictions contained herein. No person on the ACe or acting on behalf of the ACe,. nor the Declarant acting as the ACe. or anyone acting on behalf of the Declarant, shall be held responsible for any def-ect in any plans or specifications which are approved by the ACe or Declarant nor sbal1 any member of the ACe or any person acting on behalf of the Ace or Declarant be heJd responsible for any defect in a structure which was built pursuant to plans and specification appl'oved by the ACe or by the Declarant. Neither the Declarant, the ACe, nor any member of the ACe, nor the Association, nor anyone acting on behalf of1he Ace or the Association shall have any responsibility for compliance by the Owner (or any agent. representative, guest, or invitee of Owner) with any environmental laws, regulations, or rules. including, but not limited to. those relating to hazardous waste and placement of underground oil tanks.

Section Fifteen; Variation. The ACe shall have the authority to approve pJans and specifications which do not conform to these restrictions in 'order to (1) overcome practical difficulties or (2) prevent undue hardship from being imposed on' an Owner' as a result of applying these restrictions. HoWever? suCh variations maY only be approved in the event that the variation will not (1) detrinientally impact on 1h.e overall appearance of the development. (2) impair the attractive development of the subdivision or (3) adversely affect 'the character of nearby Lots. Granting such a variation shall not constitute a. waiver of the restrictions articulated in this Declaration. Variations shall only be granted if the Ace determines that

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the variation would furthertbe 'J1U1'POses and intent of these restrictions. Variations shall only

be granted in extraordinary ciTCumsian«:S.

Sectipn Sjxteen: Enfo1"Cellleut. The Association (including the Declarant on behalf of the Association), Board. or any OWner shall have the right to bring a suit for jUdicial enforcement of a determination of the ACe,·ot, after the Development Period" to seek an order requiring the ACe to exercise its authority. and perform its functions, under this Article Nine. - In any

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judicial action to enforce a derennination oftbe ACC! the losing party shall pny the pnwailing party's attorney's fees, expert witness fees, and ather costs incurred in connection with such a legal action or appeal.

Section Sevetlt£en: ACClDeclarimt Uabiuty. The Association shall hold the ACe Members and the Declarant. if acting as the ACe, hatmless from any actions taken (or actions not taken) under any provision of this Declaration, including. but not limited to, actions taken (or not taken) under the Articles of this Declaration. By purchasing a Lot in Stoneway the Owners agree that, to the extent permitted by 1he law, neither the Declarant (nor any officer. director. or representative of the Declarant), nor the ACe (nor any member of the ACC) shall have any liability to the OWners or to the Association for any actions 1ak~ or actions not taken, while acting as the Declarant Or the ACe under this Declaration. "Non-actionn on the part of the ACe Of the Declarant shall not exempt the applicant from any of the provisions of this Declaration or restrictions contained in thls Declaration,

Section Eightem: Guidelines. The ACe may adopt and amend, subject to approval by the Board, written guidelines to be applied in its review of plans and specifications, in order to further the intent and purpose of this Declaration and any other covenants or restrictions covering Real Property. If such guidelines are adopted, they shall be available to all interested Parties upon request.

Se.mQnNi~: No Waiver. APProval by the Ace afmy plans. drawings or specifications shall not be a waiver of the right to withhoJd approval of any similar plan" drawing, specification or matter submitted for approval.

Section Twenty: Consultation. The ACe may retain and consult persons or entities to assist in the evaluation of plans submitted to theBoard for review.

Section TWenty One: ARpealS. After the Development Period, the Board shall serve as an appellate panel to review decisions of the ACe upon- request o.f a party aggrieved by the ACe's decision. The Board' shall provide, through rules and regulations, a procedure by which decisions of the Ace maybe aPpealed to the Board. The Board' may choose, in its discretion, to limit the scope of such appeal and provide time limitations for appeals to be made to the Board.

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ARTICLE TEN: 1,AND USE BESTRIC]lONS

Section One: Use of Lots. All Lots within the Property shall be used solely for private singlefamily residential PurPOses, provided, however, that with such single family residencesthe Owner(s) thereof may, upon formal written applicatkm to the Board. request permission to operate a licensed day care business. TIre Board shall be authorized, but not obligated. to grant 8UCh approval and such approval may only be granted by the Board, whose approval cannot be unreasonably withheld, provided (1) all applicable governmental zoning and land use classifications lawful1y permit such usage AND. (2) the business and Owncr(s} are licensed by all applicable governmental authorities to operate such a day care business, AND (3) the day care bUSIDe"l5S will be operated on1y Monday through Friday AND (4) no more than four (4) children, in addition to those of the Owner's immediate family, and are enrolled in either a part or full-time capacity in such Jay care AND (5) the Ownerts) of such Lot(s) operating such day care facility will fully oversee, strict and supervise all children enrolled and will limit such activities strictly within the confines of1heir residencefs) and Lot(s) and not outside the same AND, (6) the Owner(s) of said Lot(s) agree to indemnify and hold the Declarant and the Association fully harmless from any and all liability and causes of action of whatever kind arising by virtue of the Owner's operatioo'ofsuch a day care business AND, (7) the Owner(s) of said Lot(s) will provide the Association, prior to commencing such business operations, and at all times during such business operations, with verification of liability :insurance coverage in an amount riot less than $500,000.00 IWlI1in8: the Association and the Declarant and such other parties as the Association may deem appropriate as additional insureds A1\"D, (8) such operation does not interfere or otherwise violate any other provisions of this Declaration, including, but not necessm'ily limited to Vehicle parking and signage restdctions. Should the Board give written authorization fur such usage, such authorization may be revoked by at least five (5) days prior wnttennoeice delivered to Owner should the Owner{s) operatingsuch day care business fail to strictly adhere to the provisions contained within this Declaration as well as DIlY additional Rules and Regulations imposed, from time to time. by the Board. No other uses are permitted. Neither the Declarant, the Bow and/or the Association shall be deemed to be a partner or joint ven'tW'el' andior an interest in such business operation to the extent permission to operate such a day care business is authorized. That nothing contained herein shall pennit an. owner from conducting a "in home business" provided that all business activity is carried on within the residence and that no employees. clients. customers, tradesmen, suppliers. Of similar individuals come to said residence or are situated thereln during the conduction of such'business.

Section Two: Minimwn Size QfResidences With the exception of the existing residences constructed on Lot 13 of Stonewa.y I, and Lot 12 ofStoneWay II. each "residence must have a

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private enclosed car shelter fur not less than two (2) C8l'S; however. a portion of the interior of said garage may be improved and/or finished for residential use by the owner thereofprovided that the exterior of the garage shall not be removed or otherwise modifIed so as to eliminate the garage door that provided access thereto. No single structure shall be altered to provide for more than one (1) family - Single Level type residences (residences consisting of a one story residence or a residence consisting of a basement and one story) shalt contain at Ieast 1,600 square fee. Multi-level residences (i.e., tri-levels as that term is used in the construction industry) shall contain at least 1,800 square feet ofwhlch 950 square feet shall be situated on the main floor. Two-story residences shall contain at least] ,700 square foe with the main floor containing at least 900 square feet. Split-level residences shall contain at least 1,800 square feet of which 1,000 square feet shall be situated on the main floor. In computing the total square footage of a residence, the basement may be included but garages and/or enclosed decks shall not he included.

Section Three: Use of Lollfot T91nteriere With Ri~5 of()tbers. No Lot shall be used in a fashion which unreasonable' interferes with any other Owner's right to use and enjoy' the other Owner's Lots. The Board, the ACC designated by it, or the Declarant during the Development Period, shall determine Whether any given use of a Lot unreasonable interferes with those rights; such determinations shall be conclusive.

Section F9ur:. No: Offensjve Activity on Lots. No noxious or offensive activity shall be

. conducted on any. Lot, nor shall anything be done or maintained on the Property which may become an activity or condition which unreasonably interferes 'with the rights this Declarant gives other OWners to use and enjoy any part of the Property. No activity or coIidition s11all be conducted or maintained on any part of the Property which detracts ftom the value of the Property as a residential community. No untidy or unsightly condition shall be maintained on WIY property. Untidy conditions shall include, but are not limited to, publicly visible storage of wood, garbage receptacles, boats, trailers, mobile homes, recreational vehicles, disabled vehicles of any kind whatsoever, except where specifically provided for said purposes by the Declarant or the Board within the commmlity, if at all, and landscaping which is not properly maintained, The Board (or the Declarant during the Development Period) shall make the final determination of any violations of this section. Notwith8tanding anything in this Article Ten to the <:ontrary, during the Development Period the Declarant may permit trailers (temporary trailers) or bomes(s)~ which may be used to the Declarant and its authorized representatives. to be placed upon Owner's Lots to facili-mte the sale of the Lots and the construction of residences (and residence-associated improvements) upon the Lots.

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~~ Fence8. Fences. walls or shrubs are permitted on side and rear property lines. Fences shall not be placed Withln the greater of (l) twenty (20) feet of the front property line, or (2) the distance between the front Lot line and the front wall (facade) at the garage oftbe primary Residence. subject to (1) the material. for the fence, the location. and the size and construction details :mall be subject to the approval of the Ace and (2) detetminaiion whether such fences, walls or shrubs would inteIfere :with utility easement3 reflected. on the face of 'the Plat and other easements. recorded elsewhere. In no event shall any fences be allowed between the front l-ot line and the :front wall (facade) of the primary Residence. No barbed wire. chain link. or corrugated fiberglass fences shall be erected on any Lot. except that chain link fencing for any common areas may be considered for approval by the Declarant during the Development Period or by the Ace thereafter. All fences, open and solid, ate to be constructed not to be considered as part of the dwelling; provided, however, that this shall not be considered to permit any portion of a dwelling on a Lot to encroach any required setbacks by local codes, or to. encroach upon another Lot or upon any easements. indicated 011 the face of the Plat or as otherwise recorded. or upon the Common Areas or Common Maintenance Areas. In no event ~al1 any s1ructures violate any provisionS of any county zoning ordinance, or any specific setbacks as set forth on the recorded plat map, or any setbacks imposed through the establishment of easements for utilities or access.

SecgQn Six. Sjm. No signs, billboards, or other advertising structures or device shall be displayed to the public view- on any Lot except oae (1) sign not to exceed threesquare feet in !U'OO may be placed on a Lot to offer the property for sale or rent and with the exception of arty entry monwnentation and sigoage which may be installed by the Declarant. Political yard sign on lots, not more than three (3) square feet in area, of a temporary nature .. not to exceed thirty (30) days, will be allowed during campaign periods on Lots. Within five (5) days after the date of the election to which the sign refers, such signs must be removed from Lots. nus Section Six: (including, but not limited' to. the restrictions on the number of signs and the sign size limit) shall not apply to signs. approved under this Section. Six of Article Ten by the Declarant during the Development Period. The Declarant. may establish, for the duration of the Development Period, signage guidelines and standards for Lot identification signs, Realtor identification signs, "for sale" signs and other signage that ~ay be placed by ~sother than the Declarant on any part of the Lots within Stoneway. the Common Areas, the Common Maintenance Areas or public rights-of-way, The ·Declarant may also develop an overall theme of signage within the project, including specific requirements for physical sign installations and size requirements which theme will then become a pan oftbe established guidelines and standards for signage in Stoneway during the Development Period. DUring tbe Development Period, the Declarant shall have the sole and exclusive right to approve, in the Declarant's sole discretion, any and all signage installations within any part of the real property encompassed

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within the plat ofStoneway, including the adjacentrigbts·of-way, Every Owner of'a Lot in Stoneway and any builder or real estate agent on behalf of an Owner, shall submit any proposed signs to the Declarant for approval prior to installation of the signs. Any signs not specifically approved by the Declarant found anywhere within Stooeway, the Conunon Areas. the Common Maintenance Areas, on any Lot, or on adjacent rights.of-way 7 may be promptly removed and disposed of by the Declarant, The absolute right of the Declarant to remove unauthorized signs from the Property or adjacent rights-of-way specifically includes, blll is not limited to, the Declarant's right 10 remove any signs placed by real estate agencies or their representatives, including temporary reader board signs and other signag:e installations. No person, including but not limited to, the person or persons owning any interest in the signs removed. shall be entitled to compensation of any kind for sign(s) removed by Declarant pursuant to this Section.

The Board may cause any sign p~aced on the Property or ~y adjacent rights-of-way, in violation of this Article Ten to be removed and destroyed without compensatlon of any kinJ to anyone including. but not limited to" any persons having an ownership interest in the sign. This Section shall not apply to signage placed by Declarant. .

Additional signage may be installed by Declarant during the Development Period to promote the sale of Lots or houses and to promote Declarant's project and company and representatives. Notwithstanding anything in this Section Six of Article Ten to the cOntrary~ signs placed by the Declarmrt shall not be subject to ony sign restrictions and specifically shall not be subject 10 the limitation set forth in this Article Ten on the number of signs and the size of signs. The Declarant shall not be subject to any guidelines or standards established by Declarant for other parties pursuant to this Section Six of Article Ten.

Under no circumstances shalt the Declarant be liable for, or be required to. pay. for all or any part of the construction, instal1ation or maintenance of any signs which are placed Upon any Lot not owned by the Declarant. This Section shall apply even if Declarant requires an Owner to place a sign pursuant to this Section Six of'Article Ten.

~e&tiQD Seven: Animals. No animals, except dogs, cats; caged birds, fish in tanks, and other small household pets, will be permitted on LOts. Dogs shall not be allowed to run at large or to create a disturbance for other Owners in the plat. No animals will be allowed to be -leashed. chained or otherwise tied to any portion offhe front or sides' of Residences. Leashed animals are pennitted within rights-of-ways when accompanied by their owners. The person accompanying the animal must exercise "soooping~ of animal waste. All pens and enclosures :nrust be screened from view of other Residences and Lots and must be approved by the ACe

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prior to constraction and shall be kept dean and odor free at all limes. If the investigation of the Board indicates that animals are kept in violation of this Section, the Declarant" during the Development Period, or the Board thereafter. will give the Owner ten (10) days written notice of the violation. Such violation must be remedied by the Owner within such ten (10) day period. Pailureto comply with the written notice will result in a fine ofS25.00 per day. Any fine imposed by this Section shall be the personal obligation of the fined Owner and a lien on the Lot of the fined-Owner. The Association shall be entitled to attomey's fees and costs for any action taken to collect such fines in accordance with the provisions of this Declaration.

Section Eight: Driyeways. All driveways shall be paved with concrete, unless otherwise approved by the ACe.

Section NUm: Delegation of Use and Responsibilitle§. Any Owner may delegate, to members of his family or his tenants, in accordance with the Bylaws of Stoneway Homeowners Association, t:be Owner's right of eIijoyment-of Common Areas and Common Maintenance Areas. In the event an Owner rents or leases his property, a copy of this Declaration, as well as any rules and regulations that may be adopted by the Association, shall be made available by the Owner to the prospective- renter at the time of commitment to the rental agreement. Each owner shall also be responsible for informing guests and service personnel of the contents of this Declaration. as wen as any rules and regulations that may be adopted by the Association as they may relate 10 appropriate community behavior. Each Owner personally, and the Owner's Lot, shall be responsible for any damages to any Common Areas and Common Maintenance Areas (or any other area maintained by the Association) or to any other Association property 'Whether real or personal, caused by an Owner's fumily,. guest, tenant, agent, workman, contractor. or other licensee or invitee. The Association. shall have a lien upon the Owner's Lot for the amount of the damages.

Section Ten: Landsc3Jljng Standards. The entire front yard landscaping should be installed prior to occupancy (weather pennitting], The ~ntirC landscaping, including the remaining portions of the side and rear yard shall be installed within tweive (12) months of thereceipt of a Certificate of Occupancy. Each Lot Owner shall be responsible for installing and maintaining the landscaping within the adjacent right..of-way. If indement weather conditions prevent the timely installation of said Jandscaping improveIneJ1t';- for either front or back yard. the Lot Owner must make application to the ACe for an extension of time until weather

conditions sufficiently impreve., -

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"Front yard" shall be defined as the lot area extending from the front property line back to a line measured parallel with the front Pl'O.perty line which wouldcoincide with. the front wall of the main dwelling on the Lo4 exclusive of any garage projections.

The front yard landscaping shall include all' of the adjacent public street right-ef; way along the Lot frontage and side frontage out to the edge of the curb or sidewalk in the public street. Each lot OWner shall be responsible for installing and maintaining the landscaping within his adjacent right-of-way, except as otherwise provided above.

Section Eleven: Antennas. Satellite Reception. Satellite dishes of no more than one meter in diameter or diagonal meesuremeor are permitted on the Properties with ACe approval of the location of the satellite dish in the manner described in Article Nine. Except 88 provided above, no radio or television antenna or transmitting tower or satellite dish shall be installed on the exterior of any home without approval of1he ACe obtained pursuant to Article Nine. and a Bhomng by the Owner that such installation will be visually shielded from the view of the residents traveling upon Streets located on the Properties.

Section Twelye: Setbaclq;.. No building shall be located OD anY Lot nearer to the front lot line or nearer to the side street than the minimwn building setback lines adopted by the governmental authority with jurisdiction over the Properties.

Section Thirteen: RQQfi. Roofs on all buildings must be finished with a twenty-five year architectural composite material, the color of which shall be approved by the ACe. Any other material must be approved by the ACC_

Section Fourteen: UndeJlPl>und Utilities RCQuired. Except for any facilities or equipment Provided by the Declarant or any utility; all electrical service, te1ephone lines and other outdoor utility lines shall be placed underground.

Section Fifteen: YebicleParkioi and Sto[~e. No Vehicle maybe parlcedonanybuilding Lot, except on designated . .and approved driveways or parking' areas which areas shall be hardsurfaced. Only the cars of'guests aad.visitors may be parked on the streets, ONY the cars of guests and visitors may be parked on a 1empOrmy basis on the sidewalk side of streets within the plats of Stoneway I and Stoneway lI. All other vehicles shall be parked in garages or on driveways located eI11irely on a Lot.

Except with the approval of the board of directors, owners at no time shall keep or permit to be kept on any lot any house trailer. unattached camper, recreational vehicles (R. V.),

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mobile home, boat or trailer unless the same is housed within a garage or screened from view. Such screening must be approved by the ACe. At no time shall owners be pmnitted 10 keep tractor-trailers (or other large trucks as determined by the association) on their lot or parked in the streets on the property .

. No vehicle shall be permitted to park on the roads 'Within Stoneway for a period exceeding twenty-four hours without the prior written permission of the association. Any additional parking added after tbe initial landscaping shall be hard surfaced and coestruceed only in accordance 'With the s.ite plan approved by the ACe.

Upon 48 hours' notice to the Owner of an improperly parked Vehicle, the Board bas the authority to have towed, at the Owner's expense, any Vehicles. (except up to two (2) automobiles owned or used by the Lot Owner and parked on the designated driveway areas adj~nt to the garage on the Lot), still visible from the right-of-way or adjacent Residences that have been parked on any Lot or within the right-of-way for more than 24 hours. Notvllithstanding the foregoing, Owners who have visiting guests intending to -stay in such a Vehicle may secure written permission from the Board tor such guests to pOlk the Vehicle upon the Lot owned by the Owner for a IllfIXittnun period of one (1) week. Such as privilege shall .only exist, however, after the written permission has been obtained from the Board.

SectiQn Si xteen: Exgl.Yation and Flil. Except with the permission of the ACe. or except as may be necessary in connection with the construction of any approved improvement, no excavation or fill shall be made nor shall any dirt be removed from any Lot herein.

Section Seventeen: prain.. The owner of any lot shall not take anY action which would interfere with surface wlJter drainage across that lot either through natural drainage or by drainage easements. Any ~bange of'drainage, either through natural drainage areas or through drainage easements must be approved by the ACe, All drainage imprpvements must be completed prior to occupancy in accordance with the drainage plan submitted to the ACe.

~KtiQn Eighteen; GtuMIW and .Ref\ule. No garbage~ refuse, rubbish, cuttings or debris of any kind shall be deposited on or left upon any Lot unless placed in an attractive container suitably located and screened from public view. All equipment for the storage or disposal of such materials shall be kept in a clean and sanitary condit jon.

Section Ninetem.;_ Tpnks. Etc.. No elevated tanks of any kind shall be erected, placed. or permitted on any part of such premises. Any tanks for use in connection with any residence constructed on such premises, including tanks fOT the storage of fuels. must be buried or

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walled sufficiently to conceal them from the view from neighboring Lots, roads, or streets. AD clothes lines, garbage cans" equipment, coolers, wood piles, or storage piles shall be walled in or o1herWise suitably screened to conceal them from the view of neighboring Lots, Common Areas, roads or streets, Plans for all enclosures of this nature must be approved by the ACe prior to construction.

Section Twenty: Agto Repair. No major auto repair shall be pennitted except within enclosed garages which are kept Closed. The only repairs peJllli1:ted on the balance oftbe Property are occasional casual repairs and maintenance activities such as tune-ups or oil changes.

Section Twenty Qne: Eim3m!s. The use of tireanns is expressly prohibited.

Section Twenty Two: Dirt bikes and/Qr ATV. No unlicenced motor vehicles, including motorcycles, dirt bikes, motor scooters, ATV's etc., shall be permitted on any road within the plat, nor shall dirt bikes or A TV's be permitted to operate on any owner's lot.

Section Twenty Three: Damage Re.pair. All owners agree to repair immediately any damage to any utilities adjacent to their lot or lots, in 1be event any of the utilities are cracked. broken, or otherwise damages as a result of dwelling construction activities, or other activities by owner. by persons acting for owner, or by persons in or around the property at the request or with the consent of the owner.

Section Twenty Four: Entty for Inapectipn. AJly agent or member of the Declarant or any member of the architectural control committee may at any reason8ble predetermined hour upon 24 hours notice during construction or exterior remodeling, enter and inspect the structure to determine if there has been compliance with the provisions oftbis Declaration. The above recited individuals shall not be guilty cf trespass for such entry 01' inspection. There is created an easement over. under, andacross, residential lots for the purpose Qfmaking and car:ryiog

out such inspections. .

Sectipn Twenty Five; Authsnity to A<\wt Additional Rules and RestrictiOUS. The Association shall have the authority to adopt additional written rules and restrictions governing the use of the Properties. provided such rules and restrictions ereccnsistent with the purposes of the Declaration, and to establish penalties fQl' violation of those rulesand restrictions. Ifrules and restrictions are adopted, they. along with the e~tabIished penalties, shall be available to all Members upon request.

Section Twenty Sjx: ~. The Association, Or the Declanmt during the Development Period. may. but is not required to, take any action to enforce the provisions oftbe Declaration

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available to it under law, including but not limited to imposition of fines as authorized by RCW Chapter 64.38~ specific performance, injunctive relief. and damages. Any Member may also enforce the terms of this Article (although a Member may not Impose a fine as authorized by RCW Chapter 64.38 'but the Member must:first obtain an order from a court of competent jurisdiction entitling the Member to relief. In the event that Ii Member takes any action to enforce the terms of this Article, the Association shall not be in any way obligated to join in such action, or pay any of the attorney' 50 fees, costs and expenses incurred in 3UCh action.

Section Twenty-Seven: Exc~QD ReJatiye to Resit:knces Presently Constructed on Lot 13 of Stoneway I and Lot 12 of Skmeway Il, That at the time of the recording of this declaration there exists residences constructed on Lot 13 of the plat of Stoneway I and on Lot 12 of the plat of Stoneway 11 That tbe building requirements and restrictions set forth in this Article Eleven and Article Twelve shall not apply to the existing residential. structures constructed on those lots. However. any new constrnction or any remodeling of the exterior of those residences must comply with the provisions of this Declaration.

ARTICLE ELEVEN: BJJJlJ)ING RESTRICTIONS

Section Q~: Buildini Materials. All homes constructed on each Lot shall be built ofnew materials, With the exception of "decor" items such as used brick, weathered planking. and similar items. The ACe 'Will determine whether a used material is a "decor" item. In making this determination, the ACe shall consider whether the material harmonizes with aesthetic character of the Stonewaydevelopment and whether the material would add to the attractive development ofthc subdivision. All siding and trim are to be re-sawn wood and/or vertical or horizontal "LP" siding. brick, authentic stone siding, OSB LAP, or viny1 siding of a color approved by the ACC. That no T-l11 siding shall be permitted on the front of any residential structure OJ onthe side of any residential structure facing a street. The exterior of all construction on any Lot shall be designed, built and melntalned in such a manner as to blend in with the natural surroundings and landscaping within Stoneway. Exterior colors must be approved by the ACe. Exterior trim, fences. doors, railings, decks, caves, gutters and tbe exterior finish of garages and other accessory build~ shall be designed,. built and maintained to be compatible with the exterior of the structure they adjoin.

The ACe will establish an approval process and color guidelines, Any change .of color as to the exterior of any existing home within the plat will be subject to the same approval process,

Section TwQ: Maintenance of Lots During the Construction Period. Each Lot Owner, exclusive of the Declarant, shall have a responsibility to generally maintain the Lot in either

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a natura! forested condition prior to any clearing. or in a neat and clean appearance after construction commences for a Residence on said Lot. After clearing of vegetation for construction, the debris from the clearing operation shall be promptly removed from the Lot and disposed of off site within twenty (20) days. During construction of each Residence, periodic efforts shall be made by the Owner. or the Owner's construction representatives, to pick up scrap materials and other construction debris and to periodically dispose of said materials. This shall be done at }east weekly _ Upon completion of the construction on any Lot and prior to the occupancy of the structure, the Lot Owner shall be responsible fOT keeping the landscaping improvements and the structure itself in a dean arid neat appearance, This shall include the responsibility for regular landscape maintenance, watering, trimming, .and upkeep 10 'present a finished, manicured appearance of said premises :from the adjacent right-of-way. In the event that the Lot Owner, or Owner's construction representative(s). fail to meet the stancltu'ds set forth in this Section, the Board shall have the right to complete such clean-up activity in accordance with the provisions as set forth in Article Ten.

Sect]OIl Three:. Permits. No oonstmction or eXterior addition or change or alteration of any structure may be started on any portion of the 'Properties without the Owner first obtaining a building permit and" other necessary peimits from the proper iocal govemmenial auibority. and written approval of such permits from the Board, ACe, or the Declarant, as well as plan check approval. as set forth in this Declaration

Section Four: ~. All construction shall conform to the requirements of the state of Washington's Building Rules and Regulations and Uniform Codes (building, mechanical, plumbing and wiring), in force at the' commencement of the construction, including the latest revisions thereof.

Section Fiye: The Time pi Completion. The' exterior of any structures, including painting or other suitable finish and front yard landscllping, shall be completed within nine (9)months of the beginning of construction so as to present a finished appearance when viewed from My angle. The construction area shall be kept reasonably c]eaa during the construction period.

Segiou Six: Eutor for Inspectism Any agent, officer or member of the Board, Ace or Declarant may. at any reasonable predetermined hom upon twenty-follT (24) hour notice during construction or exterior remodeling, enter and inspect the structure 10 detennine if there bas been compliance with the provisions of'this Declaration, The above-recited individuals shall not he deemed guilty of trespass forsuch entry or inspection, There is created an easement over, upon and across the residential Lots for the purpose of making and carrying out such inspections.

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~ectiQn Seven: Contractor. Wi1hout the prio:r approval of the Ace, no home may be constructed on any Lot other than by a contractor licensed as a general contractor under the statues of the state ()fWashington.

ARTICLE TWELVE: EASEMENTS

SeetiQn One: Qwner' s &sement8 of CWQJl1lent. Every Owner shall have an equal right in easement and enjoyment in and to the Common Areas which shall be appurtenant to and shall pass with title (or, if applicable, with the equitable title held by a real estate contract purchaser), to every Lot subject to the following provisions:

The right of the Declarant or the Association to establish use,' operation standards, and enforcement for all Common MeM to be binding upon all Association members and enforcement;

The right of Declarant (during the Development Period) or the Association (after the Development Period) to suspend an Owner's right 10 vote and 10 use any recreational facilities for any period during whicb assessments against his or her Lot remain unpaid and fOT a period, not to exceed sixty (60) days. for any and each separate infraction of its published rules and regulations;

The tight of the Declarant (during the Development Period) or the Assocletlon (after the Development Period) to dedicate or transfer all or any part of the Common Areas 10 any public agency, authority or utility for such purposes and subject to such conditions as the Declarant (11' Members. as applicable, may deem appr0pri3.te. During the Development Period. any such dedication or transfer of all or Wly part of the Common Areas pursuant to this Section may be made by the Declarant in the Declarant's sole discretion. After the Development Period, no such dedication or transfer shall be effective unless an instrument agreeing to such dedication or transfer, signed by the Owt;ters Qftwo-1hirds (213) of the Lots, has been recorded;

Any Owner may delegate their right of enjoyment to the Common Areas and facilities to the members of their family: their tenants. or their guests, subject to the limitations set forth above.

Section Two! 'Easenient for Encrrnu;hmentS. Each LOt is, and t'he Common Areas are subject to an easement for encroachments - created by construction settlement and overhangs as

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designed or constructed by the Declarant, and to a valid easement for encroachments and for maintenance of the same as long as the improvements remain.

Section Three: Ease.Jrumts on ExteriorLot Lines. In addition to easements reserved on any plat of the Properties or shown by instrument of record, easements for utilities and drainage ore reserved for the Declarant or its assigns, over Ii five-foot wide strip along each side of the interior Lot lines, and ten feet over the rear and front of each Lot, and over, under, and on the Common Areas. Within all of 'the easements, no structure, planting or fill material shall be placed or permitted to remain which may, in the opinion of the Board or ACe, damage or interfere with the installation and maintenance of utilities, or which may obstruct or retard the flow of water through drainage channels and the easements. The easement area of each Lot and all improvements within it shall be maintained continuously by the Owner of such Lot, except those improvements for which a public authority, utility company or the Association is responsible.

&~ction four: Assogation' 5 Emiewent afAcg;;ss. The Association, the ACe. and its agents shall have an eesemenr for eecess to each Lot and to the exterior of any building located thereon during reasonable hours as may be necessary for tbe following pw:poses: (a) cleaning, maintenance. or repair of any home or Lot as provided in Article Seven of this Declaration; (b) repair, replacement or improvement of any Common Area accessible from that Lot; (c) emergency :repairs necessary to prevent damage to the Coinmon Areas or to another Lot, 01' to

. the improvements thereon; (d) cleaning, maintenance. repair or restoration work which the Owner is required to do but has faUed or refused to do; and (e) all acts necessary to enforce these Covenants.

Section Fiye: Easemw for~want Declarant shall have an easement across all Common Areas for ingress, egress, storage and placement of equipment and materials, and other actions necessary or related to the development or maintenance of the Real Property.

ARTICLE TmRTEEN: MORTGAGEE PRQTECTION

Section One: MQrtg8gee~ NotWithstanding and prevailing over anY'other provisions of the Declaration, the Association'» Articles of'Ineorporatlon or Bylaws, or any rules, regulations or management agreements, the following provisions shall apply to and benefit each Institutional First Mortgagee C'Mortgagee',) whfuh holds a Mortgage given for the purpose of obtaining funds for the construction or purchase of a Housing Unit on any Lot or the improvement of any Lot.

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section TWO; Liabilinr Limited. The Mortgagee entitled to the protection hereof shall not in any case or manner be personally liable fOT the payment of any assessment or charge, nor for the observance or performance of any covenant, restriction. rule, Association Article of Incorporation or Bylaw, or ma.D.agement agreement. except for those matters which are enforceable by injunctive or other equitable relief. not requiring the payment of money. except as hereinafter provided.

Section Thme: Mortailiees's Rights Purine Foreclosure. During the pendency of any proceeding to foreclose the Mortgage, the Mortgagee or the receiver, if any. may exercise any or all of the rights and privileges of the OWner of the mortgaged Lot, including but not limited to the right to vote as a Member of the Association to the exclusion of the Owner's exercise of such rights and privileges.

Section Fo;ur: ACQp.isiti on of Lot by MQrta!igee. At such time as the Mortgagee shall become entitled to possession of the Lot, the Mortgage(: shall be subject to all of the terms and conditions of 'the- Declaration, and the . Articles, Bylaws, rules and regulations of the Association, incluaing but not limited. to the obligation to pay for all assessments and charges accruing thereafter, in the same:manner as any Owner; provided, however, the Mortgagee shall acquire the title to said Lot free and clear of any lien authorized by or arising out of any provisions ofthe Declaration which secure the payment of any assessment for oharges accrued prior to the date the Mortgagee became entitled 1.0 possession of the Lot.

Section Five: Reallocatioo of Uupaid Assessment. If it is deemed necessary by the Assoclation, any unpaid assessment against a- Housing Unit foreclosed against may be treated as a common expense of other Lots. Any such unpaid assessment shall. continue 10 exist as a personal obligation of the defaulting Owner of the respective Lot to the Association.

Section Sjx;; Subordination. The liens for assessments provided for in this instrument shall be subordinate to 1he lien of any Mortgage, or other security interest placed upon a Lot or Housing Unit as a constrection loan security interest or as a purchase price security interest, and the Association will, upon demand, execute a written subordination document to confirm the particular superior security interest.

Section Seven: Mortgagee's Ria;hts. Any Mortgagee shall have the right on request therefor to (a) inspect the books and records oftbe Association during normal business hours; (b) receive an annual finaucjaj statement of the association within (90) days following the end of any fiscal year; and (c) receive written notice of all meetings of the Association and designate a representative to attend all such meeting.

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Section Eidrt: Limitation on Abandonment of Common Areas. The Association shalt not, without the prior written approval of sixty-seven percent (67%) ofllie Mortgagees,. seek to abandon the Common Areas for reasons other thlm. substantial destruction or condemnation of the property.

Section Nine: Notice.· If such notice has been requested in writing" Mortgagees shall be entitled to timely written notice of: (a.) substantial damage or destruction of any Housing Unit or any part of the Common Areas or facilities; (b) any condemnation or eminent domain proceedings involving any Housing Units or any portion of Common Areas or facilities; (c) any default under this Declaration or the Articles, By1aws or rules and regulations of the Association by an OWner of any Housing U.uit on which it holds the mortgage which is not cured within thirty (30) days; (d) any sixty (60) day delinquency in the payment of assessments or charges owed by the Owner of any Housing Unit on which it holds the mortgage; (e) ten (10) days' prior written notice of any lapse, 'cancellation or material modification of any insurance policy or fidelity bond maintained by the Association; and (t) any proposed action that requires the consent of a specific percentage of Mortgagees.

ARTICLEFOVRTEEN:MANAGEMENTCONTRACIS

Each Member hereby agrees that the Association and the ACe may enter into agreements for the performance of any or all of the functions of the Association and the ACe with such persons or entities as the Association deems appropriate; however, any agreement for professional management of the Properties, or any other contract providing for services by the Declarant must provide for termination by either patty without cause after reasonable notice.

ARTICLE FD'TEEN: INSURANCE

Section One: Cqvem&e. The Association may purchase as a Common Area Expense and shall have authority to and may obtain insurance fOr the Conurion Areas against loss or damage by fire or other hazards in an amount sufficient tocover the full replacement value in the event of damage or destruction. It may also obtain a comprehensive public liability policy covering the Common Areas. The comprehensive public liability coverage shall be in an amount to be determined by the Association. It may also obtain insurance to cover the Board" the ACe, its agents and employees from any action brought against them arising out of actions taken in furtherance of the Association's duties under this Declaration.

Following the development period~ all such insurance coverage shall be written in the name of the Association as trustee for each of the Members of the Association. The Association shall review the adequacy of the Association's insurance coverage at least annually. An

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policies shall include B standard mortgagee's clause and shall provide that they may not be -canceled Dr substantially modified (including cancellation for nonpeyment of premium) without, at least ten (10) days prior written notice to any and all insured named therein, including Owners and Institutional First Mortgagees that have requested notice.

Section Two: &;;placement, Repair After Loss. In the event of the damage or destruction of the Common Areas covered by insurance written in the name of the Association, the Association may. upon receipt of the insurance proceeds, and to the extent of such proceeds contract to rebuild or repair such damaged or destroyed portions of the Common Areas to as good a condition as they were when the loss occurred; provided, however, that the Association's election not to rebuild the Common Areas shall require, the approval of two-thirds (2/3) of the Association. The Association may in its sole discretion contract with any contractor for reconstruction or rebuilding of such destroyed portions of the Common Areas.

ARTICLE SIXTEEN: RlJLES AlSD REGULATIONS

The Association and/or its Board of Directors is hereby authorized and empowered to adopt rules aud regulations governing the use of the Properties 'and the personal cooduct of the Members and their g.uests thereo14 and to establish penalties for the iDfracti.on thereof, in the manner described by RCW Chapter 64.38~ the Bylaws and any resolutions passed by the Board. AU Lot OWners shall be given written notice of the rules and regulations in the maoner required by RCW Cbapter 64.38.

ARTICLE SEVEN1'EEN: REMEDIES ANQ WAIVER

Section One: Remedies Not Limjted, The remedies provided herein, including those for collection of any assessment Or other charge or claim against any Member, for and on behalf of the Association, the ACC" or Declerant, are in addition to, and not in limitation of, any other remedies provided by law.

SectiQ,nJ:l"!lQ: NQ Waiver. The fallure of the Association, the ACe, the Declarant or of any of their duly authorized agents or any of the Owners to insist upon. the strict performance of or ecmpliancc with the Declaration or any of the Articles, Bylaws or rules or regulations of the Association, or to exercise any right or option contained therein~· or to serve any notice or to institute any action or SUIlUll8IY proceedings. shall not be construed as a waiver or relinquis1nnent of snob right for the future. but such right to enforce any of the provisions of the Declaration or of the Articles, Bylaws or rules or regulations of the Association shall continue and remain in full force and effect. No waiver of any provision of the Declaration

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or oftbe Ardcles, Bylaws, roles or regUlations of the Association shall be deemed to have been made, either ex.presSlyof'implied~ unless such waiver shall be jn -writing and signed by the Board of Directors of the Association pursuant to authority contained in a resolution of the Board of Directors.

ARTICLE EIGHTEEN: CONDEMNATIDN -

In the event of a partial condemnation of the Common Areas, the proceeds shall be used to restore the :remaining Common Area, end fJtty balance remaining shall be distributed to the Association.

In the event that the entire Common Area is taken or condemned, or sold, or otherwise disposed of in lieu of or in avoidance 1hereof. the condemnation award shall be distributed to the Asscciation,

No proceeds received by the Association as the result of any condemnation shall be distributed to a Lot Owner-or to any other party derogation of the rights of the First Mortgagee of any Lot.

ARTICLE NINETEEN: GENERAL PROYISIQlI{S

1. Bindina- Effect. All present and future Owners or occupants of Lots shall be

subject to and shall comply with the provisions of this Declaration, and the Bylaws and rules

, and regulations of the Association. as they may be amended from time to time, are accepted and ratified by such Owner or occnpant, and all such provisions shan be deemed and taken to be covenants running with the land and shall bind any person having at the time' any interest or estate in such Lot, as though such provisions were recited and stipulated at length in each and every deed and conveyance or lease thereof.

2. Eufurcement by Court Action. The ASsociation, ate Declarant. the Ace. the

Homeowner's Association" or any lot owner shall have the right to enfurce, by any proceedings at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the: provisions of this Declaration. Should the Association or any Owne.r employ COWlSe] to enforce any of the foregoing covenants, conditions, reservations, or restrictions. all costs incurred in such enforcement, including a reasonable fee for counsel, shall be paid by the Owner found to be in violation-of said condition; Covenants, reservation, or restriction, or found to be delinquent in the payment of said lien or charge.

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3. EntOr¢ement by SdfHelp. The Declarant, the ACe, the Association, or the

duly appointed agent of either, may enter upon any lot, whicb entry shall not be deemed a trespass, and take whatever steps are necessary to correct a violation of the provisions of this Declaration. ProYided, this provision shall not be construed as a permission to breach the peace.

4. Condition Precedent to Action Prior to taking action either by court or by self

help, written notice shall be given to the offending lot owner. Such notice shaU spec:ifY the nature of the offense and shall also specify the action necessary to cure. Such action shall also provide a reasonable opportunity to cure waich, except in the case of an emergency. shall not be less than 30 days.

5. Expenses QiMon. The expenses of any corrective action or enforcement of

this declarati<lD, if not paid by the offending owner within thirty (30i days after written notice and billing. may be filed as a .lien upon such lot, enforceable as other liens herein,

6. <hvneLQbjection. Should a lot owner object 10 the complaints of the Declarant,

the Association or ACe in writing within a period offtfteen (15) days after the complaint is made and, further. should the parties not agree on property maintenance or other matters complained of, the matter shall be- submitted to arbitratioIL The arbitration shall be binding upon the parties. If the parties cannot agree upon an arbitrator. each party shall choose ODe arbitrator and they. in tum, .shall choose a third. The arbitration shall be conducted in accordance with the rules of arbitration under the laws of the State of Washington in existence at the time of any such arbitration.

1. Costs and Al1OJ1leYS fees. In the event oflega! action, 1he prevajting party shall

be entitled to recover actual costs andattomey fees. For-the purposes of this declaration "legal action" shall include arbitration, law suit. trial; appeals, and any action, negotiations, demands, counseling or otherwise where the pteVailing party bas hired an attorney. 11 is the intent of this provision to reimburse the preVailing party for all reasonable attorney:fees and actual costs incurred in defending or enforcing the provisions of this Declaration, or the owner's rights hereunder.

8. Eaib.ue to Eufmce. No delay or omission on the part of the Declarants or the

Owners of otheJ Lots in exercising any rights, power, or remedy provided in this Declaration shall be construed as a waiver or acquiescence in any breach of the covenants. conditions. reservations, or restrictions set forth in the Declaration. No action shall be brought or maintained by anyone whatsoever against the Deelarants for or on account of its failure to

DECI.ARATION OF PROTECTIVE COVENANTS, CONDmONS,

EASEMENTS & RESTRICTIONS PAGE 17 ..

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bring any action for any breach of these covenants! conditions, reservations, or restrictions, or for imposingtestrictions which may be unenforceable,

9. Severability. Invalidation of any one of these covenants or restrictions by

judgment or court order shall not affect any other provisions whicb shall remain in full force and effect.

10. Interpretation. In interpreting this Declaration, the term "person" may incJude

natural persons, partnerships. corporations, Associations, and personal representatives. The singular may also include the plural and the masculine may include the feminine, or vise versa, where the context SO admits or requires. This Declaration shall be h'be:raUy construed in favor of the party seeking to enforce its provisions to effectuate the purpose of protecting and enhancing the value, marketability. and desirability of the Properties by providing a common plan for the development of Edgewood Place.

11. lslml. This Declaration shall be effective for an initial term of 30 years. and

thereafter by automatic extension for successive periods of 10 years each, unless tenni nated, at the expiration of the initial term or any succeeding 10 year tenn by a termination agreement executed by the then owners afoot less than 15% of'the lots then subject 10 this Declaration. Any termination agreement must be in 'Writing. signed by the approving owners, and must be recorded with the County Auditor.'

,12. Perpetuities. In the event that any provision of this Declaration violates tlte role against perpetuities, such provision shall be construed as being void and of DO effect as of twenty-one (21) years after die death ufibe last surviving incorporator-of the Association. or twenty-one (21 ) years after the death oftb¢ last survivor- of all of the -said inoorpomtors' children and grandcbildren who shall be living at the time this instrument is executed. whichever is later,

13. Method gfNotioe. Any notice required by the Declaration or the Articles or Bylaws of the Association or the nues and regulations adopted by the Association shall be deemed properly given when personally delivered, deposited in the United States mail, postage prepaid. or when transmitted by :facsimile.

14. Successors and Assips. This Decleratlon binds andjs for the benefit oftbe heirs, successors and assigns of Declarant, the Declarant, the Members and'the Owners.

DECLARATION OF PROTECTIVE COVENANTS. CONDmONS,

EASEMENTS & RESTRICTIONS PAGE 38

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ARTICLE TWENTY: AMENDMENT AN» REVOCATION

S~on One: Exclusiye Method. This instrument may be amended, and partially or rompletely revoked only as herein provided or otherwise provided by law.

Section TwQ: Amendment hy Declarant. Notwithstanding any other provision of this Declaration, this Declaration can be amended at any time by the Declarant prior to the time that 75% of the lots have been sold to others than Builders. That all lot owners agree to be' bound by such amerulmentor amendments as made by the Declarant pursuaat to this provision, Thereafter this Declaration can he amended only as provided for in this Declaration.

SectiQnJbrec: Prior Ap_proyal by FHNHI.:V. Regardless of whether or not 75% of the lots have been sold to others than Builders, in the event any loan with. respect to any lot or building constructed thereon is insured through either the Federal Housing Admillistta.tion or the Department 01' Veterans Affairs or any programs sponsored by either such agency, then the insuring agency must give written approval before any of the following actions can be approved by either the Declarant or the lot owners:

a) Annexation of additional properties

b) Dedication of arty properties'

c) Amendment to this declaration

Section Four: voting. This Declaration may be amended at any annual meeting of the Association, or at a special meeting Called for such purpose, if sixty-seven percent (67%) or more of the Owners vote for such amendment, or without such meeting if all Owners ore notified in writing of such amendment, and if sixty-se,,'en percent (67%) or more of the Owners vote fur such amendment by written ballot. Notice of any proposed amendment shall be given to all Owners not less than ten (loj days prior 10 the date of the annual meeting OJ' (If any special meeting at which the proposed amendment shall be considered. Notwithstanding any of the fomgoitl& fifty-one percent (51%) of all Institutional First Mortgagees who have requested notification of amendments must give prior written approval to any material amendment to the Declaration or Bylaws, including arty of the following:

1. Voting rights;

2. Assessments. assessment lien-s and subordination of such liens;

3. Reserves for maintenance, repair and replacement of COlIlI'Don Areas;

DECLARATION OF PROTECTIVE COVENANTS, CONDITIONS, , EASEMENTS & RESTRICTIONS PAGE· 39

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4. Insurance or fidelity bonds;

5. Responsibility for IlI8intemmce and repair;

6. Contraction of the project or the withdrawal of property from the Properties;

7. The boundaries of any Lot;

8. Leasing of Housing Units other than as set forth herein;

9. Imposition of any restrictions on the right of an Owner to sell or tnm.sfer his or ber Lot;

10. Ally decision by the Associenoa to establish self-management when professional management had been required previously by an Institutional First Mortgagee;

11. Restoration or repair {after hazard damage or partial condemnation) in a manner other than that specified. in this Declaration.

12. Any action to terminate the legal status of the Properties after substantial destruction or condemnation occurs; or

13.' Any provisions which are for the express benefit of Institutional First Mortgagees.

S~ction Five: Effective Date .. Amendments shall take effect only upon 'recording with the Pierce County Auditor of the county in which this Declaration is recorded.

section Sh;. Protection ofTh:elanmt. For such time as Declarant shall QWIl Lots.located in the Properties theresball be no amendments to the Declaration, the Articles O{iticDfPOmtion. the Bylaws of the Assoeiation, or any Rules and Regulations adopted by the Association which:

1. Discriminate or tend.to discriminate against the Declarant's rights,

2. Change Article One ("Definitions',) in a lllal1l1et which alters the Dec1arants right or status.

DECLARATIONOFFROTEcnvE COVENANTS, CONDlTIONS1

EASEl\.fENTS & RESTRICTIONS PAGE 40

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3. Alter the character and rights of membership or the rights of the Declarant as set forth in Article Three.

4. Alter its rights as set forth in Article Ten relating to architectural controls.

5. Alter the basis for assessments, or the Declarant' s exemption from assessments.

6. Alter the number or selection of Directors as established in the Bylaws.

7. Alter the Declarant's rights as they appear undertbis Article.

Section Seven: N9tice, Any notice required hereunder shall be deemed effective when personally delivered. or three days after mailing by certified and regular mail to the owner of public reeord at the time of such mailing to such owner's address as it appears on the Pierce County Assessors tax records and to the street address of1he lot(s) herein. Notices to lenders shall be sent to the last address the lender has given to the Association. The Association is not required to provide notice. of any matter to any lender who has not notified the Association in writing of such lender's desire to receive notice, and! or bas not given the Association written notice of the lender's address for receipt of notices. The Association !:iliall oot undergo investigation outside of its own records into the name or location of any lender or lienholder.

IN WITNESS WHEREOF~ the undersigned have caused this Declaration to be executed this . ~ day of January ~ 2001.

GW~

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By: .

Ric Gienger.,. President

STATE OF WASHINGTON )

) ss,

COUNTY OF PIERCE )

-

On thls.B!b. day of January, 2001~ before me, the undersigned, a Notary Public

in and for the State of Washington, duly commissioned and sworn, personally appeared Rick Gienger. to me knoWn to be the President of Gienger Development, Inc" the corporation that executed the foregoing instrument. ap;l acknowledged the said instrument to be the free

DECLARATION OF PROTECTIVE COVENANTS, CONDITIONSt

EASEMENTS & RESTRlC'rIONS PAGE 41

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am. voJunrary act and deed of said corporation. for the uses and purposes therein mentioned, and on oath stated that 1hey are authorized to' execute the said i.nstrument.

WITNESS my hand and c)fficia1 seal hereto affixed the day and year first above

written.

Printed Name; eiO:!1k..!._R-,---,,=,6o;;i.;;.;.J){_,$.,____ _

NOTARY PUBLIC in and for the State of Washington, residing at ~

My commission expires: QY-Qh~CQ.3

DECLARATION OF PROTECTIVE COVENANTS, CONDmONS,

EaSEMENTS & RESTRICfIONS PAGE 42

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