The Declaration of Covenants, Conditions, and Restrictions for PARKWAY POINTE CONDOMINIUMS (formerly 7500 Parkway Drive Owners Association), executed by 7500 Parkway Associates, a California general partnership, ("Declarant"), and recorded on August 25, 1980, as Document No. 80-271848, of the Official Records of San Diego County, California ("Original Declaration"), which affects all of the Properties described and commonly known as PARKWAY POINTE CONDOMINIUMS is hereby amended and restated in its entirety to read as follows:

A. Declarant was the original owner of that certain real property ("Properties") located in the City of La Mesa, County of San Diego, State of California, which is more particularly described as follows:

Lot 1 of LA MESA TRACT NO. 78-14, in the City of La Mesa, County of San Diego, State of California, according to Map thereof No. 9658, recorded in the Office of the County Recorder of said San Diego County on May 22, 1980.

B. Declarant conveyed the Properties, subject to certain easements, protective covenants, conditions, restrictions, reservations, liens and charges as set forth in the Original Declaration referred to above, all of which are for the purpose of enhancing and protecting the value, desirability and attractiveness of Properties and all of which shall run with the Properties and be binding on all parties having or acquiring any right, title or interest in the Properties, or any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each Owner thereof.

C. It was the further intention of the Declarant to sell and convey residential Condominiums, subject to the protective covenants, conditions, restrictions, limitations, reservations, grants of easements, rights, rights-of-way, liens, charges and equitable servitudes between Declarant and such Owners which are set forth in this Declaration and which are intended to be in furtherance of a general plan for the subdivision, development, sale and use of the Properties in furtherance of a plan of condominium ownership as described in Section 1351(e) of the California Civil Code.

D. There currently exists upon the above-described real property a Common Interest Subdivision subject to the provisions of the Davis-Stirling Common Interest Subdivision Act (California Civil Code Section 1350, et seq.).

E. On ____________________, 19______, a majority of the Owners of Condominiums within the Properties voted by written ballot to amend and restate the Original Declaration, all in accordance with the procedures for amendment set forth in the Original Declaration. It was the intention of said Owners to replace the Original Declaration, in its entirety, with the recordation of this Declaration. The Owners' action to amend and restate the Original Declaration as set forth herein and the fact that the requisite percentage of affirmative votes required in the Original Declaration was achieved, is attested by the execution of this First Restated Declaration by duly authorized officers of the Association, as required by California Civil Code Section 1355(a). As so amended and restated, the easements, covenants, restrictions and conditions set forth herein shall run with the Properties and shall be binding upon all parties having or acquiring any right, title or interest in the Properties or any portion thereof, and shall inure to the benefit of each Owner thereof.

Section 1.1 Articles means the Articles of Incorporation of PARKWAY POINTE CONDOMINIUMS, which are filed in the Office of the California Secretary of State, as such Articles may be amended from time to time.

Section 1.2 Assessment means any Regular, Special or Individual Assessment made or assessed by the Association against an Owner and his or her Condominium in accordance with the provisions of Article IV of this Declaration.

Section 1.3 Association means PARKWAY POINTE CONDOMINIUMS, a California nonprofit corporation (formed pursuant to the Nonprofit Mutual Benefit Corporation Law of the State of California), its successors and assigns and composed of the Owners described hereafter. The Association is an "association" as defined in California Civil Code Section 1351(a).

Section 1.4 Association Rules and Regulations means the rules, regulations and policies adopted by the Board of Directors of the Association, as the same may be in effect from time to time.

Section 1.5 Board of Directors or Board or Directors means the Board of Directors of the Association.

Section 1.6 Bylaws means the Bylaws of the Association, as such Bylaws may be amended from time to time.

Section 1.7 Common Area means Common Area as the same is defined in the Condominium Plan.

Section 1.8 Condominium means an estate in real property as described in the California Civil Code Sections 783 and 1351(f) consisting of an undivided interest as a tenant in common in all or any portion of the Common Area, together with a separate fee interest in a Unit and any other separate interests in the real property as are described in this Declaration, in the Condominium Plan, or in the deed conveying the Condominium.

Section 1.9 Condominium Plan means a condominium plan recorded pursuant to California Civil Code Section 1351(e) respecting the Project, and any amendments to the plan as recorded on August 25, 1980, as File/Page No. 80-271847 of Official Records of the County Recorder of San Diego County.

Section 1.10 Declarant means the original developer of the Properties, namely 7500 Parkway Associates, a California general partnership.

Section 1.11 Declaration means this instrument, as it may be amended from time to time. The Original Declaration means and refers to the document referenced in the Preamble to this Declaration together with all amendments and annexations thereto, adopted prior to adoption of this First Restated Declaration.

Section 1.12 Exclusive Use Common Area shall mean and refer to those portions of the Common Areas, if any, set aside for the exclusive use of an Owner, pursuant to Section 2.2, and shall consist of balconies, patios and parking spaces as defined in the Condominium Plan. These areas shall constitute Exclusive Use Common Area within the meaning of California Civil Code §1351(i).

Section 1.13 Governing Documents is a collective term that means and refers to this Declaration and to the Articles, the Bylaws, and the Association Rules and Regulations.

Section 1.14 Improvement means and includes, without limitation, the construction, installation, alteration, or remodeling of any buildings, walls, decks, fences, swimming pools, landscaping, landscape structures, skylights, solar heating equipment, spas, antennas, utility lines, or any structure of any kind. In no event shall the term Improvement be interpreted to include projects which are restricted to the Unit interior and which do not involve the roof or any load bearing wall thereof.

Section 1.15 Member means every person or entity who holds a membership in the Association.

Section 1.16 Mortgage means any security device encumbering all or any portion of the Properties, including any deed of trust. Mortgagee shall refer to a beneficiary under a deed of trust as well as to a mortgagee in the conventional sense.

Section 1.17 Owner means any person, firm, corporation or other entity which owns a fee simple interest in any Condominium. The term Owner shall include, except where the context otherwise requires, the family, guests, tenants and invitees of an Owner.

Section 1.18 Owner of Record and Member of the Association include an Owner and mean any person, firm, corporation or other entity in which title to a Condominium is vested as shown by the Official Records of the Office of the County Recorder.

Section 1.19 Project means the Properties and the improvements located thereon which are intended to create a condominium project as described in California Civil Code Section 1351(f).

Section 1.20 Properties means all parcels of real property Common Area and Condominium Units described in Exhibit "A" hereof, together with all buildings, structures, utilities, Common Facilities, and other improvements now located or hereafter constructed or installed thereon, and all appurtenances thereto.

Section 1.21 Unit means the elements of a Condominium that are not owned in common with the Owners of other Condominiums in the Project, such Units and their respective boundaries being shown and particularly described in the Condominium Plan, deeds conveying Condominiums, and this Declaration. Unit does not include other interests in real property that are less than estates in real property, such as exclusive or nonexclusive easements. In interpreting deeds and plans, the existing physical boundaries of a Unit, or of a Unit reconstructed in substantial accordance with the original plan, shall be conclusively presumed to be its boundaries, rather than the description expressed in the deed or Condominium Plan or in the deed and those of the building and regardless of settling or lateral movement of the building. Whenever reference to a Unit is made in this Declaration, in the Condominium Plan, in any deed, or elsewhere, it shall be assumed that such reference is made to the Unit as a whole, including each of its component elements.

Section 2.1 Property Subject to Declaration.

All the real property previously described in the Preamble and the improvements thereon, shall be subject to this Declaration.

Section 2.2 Elements of Condominium.

Ownership of each Condominium within the Project shall include a Unit; an undivided interest in the Common Area, as specified in the deed to each owner; exclusive use Common Area as designated in the Condominium Plan; a membership in the Association; and any exclusive or nonexclusive easement or easements appurtenant to such Condominium over the Common Area as described in this Declaration, the Condominium Plan and the deed to the Condominium. No Owner may sell, assign, lease, or convey (i) his interest in the Common Area separate and apart from his Living Unit, nor (ii) his interest in any Exclusive Use Area separate and apart from his interest in the Common Area and his Living Unit, nor (iii) his Living Unit separate and apart from his Exclusive Use Areas.

Section 2.3 Right of Entry by Association.

Each Condominium and its Unit or the Common Area, as the case may be, shall be subject to the following rights of entry and use: The right of the Association, or its agents, to enter any of the Units to perform its obligations and duties under this Declaration, including obligations or duties with respect to construction, maintenance, or repair for the benefit of the Common Area or the owners in common; any and all inspections or repairs required by the federal, state, city or local government; watering, planting, cutting, removing, and otherwise caring for the landscaping upon the Common Area; and cleaning, repairing, replacing and otherwise maintaining underground utility lines serving each Unit. The rights shall be immediate in case of an emergency originating upon or threatening any Unit, whether or not its owner is present. In the case of a nonemergency entry, the owner shall be given a minimum of 24 hours notice, and entry shall only be permitted during normal business hours or except as agreed to by the owner.

Section 2.4 Nonexclusive Easements.

Each Member shall have a nonexclusive easement for use and enjoyment of the Common Area and for ingress, egress, and support over and through the Common Area. These easements shall be appurtenant to, and shall pass with the title to, each Unit and shall be subordinate to the exclusive easements granted elsewhere in this Declaration, as well as to the right of the Association to regulate time and manner of use, to charge reasonable admission fees, and to perform its obligations under this Declaration.

Section 2.5 Partition Prohibited.

The Common Areas shall remain undivided as set forth above. Except as provided by California Civil Code Section 1359 or authorized under this Declaration, no owner shall bring any action for partition of the Common Areas, it being agreed that this restriction is necessary in order to preserve the rights of the owners with respect to the operation and management of the Project. Judicial partition by sale of a single Condominium owned by two (2) or more persons and division of the sale proceeds is not prohibited hereby, but partition of title to a single Condominium is prohibited.

Section 2.6 Encroachments.

If any portion of the Common Area encroaches on any Unit or if any portion of a Unit encroaches on the Common Area, regardless of the cause, a valid easement exists for such encroachment and for the maintenance of it as long as it remains, and all Units and the Common Area are made subject to such easements. If any structure containing a Unit is partially or totally destroyed and then rebuilt and any encroachment on the Common Area results, a valid easement exists for such encroachment and for the maintenance of it as long as it remains, and all Units and the Common Area are made subject to such easements.

Section 2.7 Delegation of Use .

Any Owner may delegate his rights of use and enjoyment of the Project, including any recreational facilities, to the members of his family, his guests, tenants, employees, and invitees, and to such other persons as may be permitted by the Bylaws and the Association Rules, subject however, to this Declaration. However, if an Owner has sold his Condominium to a contract purchaser or has leased or rented it, the Owner, members of the Owner's family guests, tenants, employees, and invitees shall not be entitled to use and enjoy any of such rights in the Project, including the recreational facilities, while the Owner's Condominium is occupied by the contract purchaser or tenant. Instead, the contract purchaser, or tenant, while occupying such Condominium, shall be entitled to use and enjoy such rights, including the recreational facilities, and can delegate the rights of use and enjoyment in the same manner as if such contract purchaser or tenant were an Owner during the period of his occupancy.

Each Owner shall notify the Secretary of the Association or designated management agent of the names of any contract purchasers or tenants of such Owner's Condominium, and shall include such tenants' work and home telephone numbers, vehicle(s) description and license numbers. Each Owner, contract purchaser, or tenant also shall notify the Secretary of the Association of the names of all persons to whom such Owner, contract purchaser, or tenant has delegated any rights of use and enjoyment and the relationship that each such person bears to the Owner, contract purchaser, or tenant. Any delegated rights of use and enjoyment are subject to suspension to the same extent as are the rights of Owners. No such delegation shall relieve an Owner from liability to the Association or to other Owners for payment of assessments or performance of the covenants, conditions and restrictions contained in this Declaration.

Any lease, rental agreement or contract of sale entered into between an Owner and a tenant or contract purchaser of a Condominium shall require compliance by the tenant or contract purchaser with all of the covenants, conditions and restrictions contained in this Declaration, which provision shall be for the express benefit of the Association and each Owner. The Association and each Owner shall have a right of action directly against any tenant or contract purchaser of an Owner, as well as against the Owner, for nonperformance of any of the provisions of this Declaration to the same extent that such right of action exists against such Owner.

Section 2.8 Leasing .

An Owner is permitted to lease or rent Owner's Condominium. However, any lease or rental agreement shall be in writing and any tenant shall abide by and be subject to all terms and provisions of this Declaration, the Articles of Incorporation, the Bylaws, and the Association Rules; and any lease or rental agreement shall comply with Section 2.7 of this Declaration and shall specify that failure to abide by such provisions shall be a default under the lease or rental agreement. No property shall be leased or rented for less than a thirty-day period.

No director, officer, committee member, employee, or other agent of the Association, including the Declarant or any agent of the Declarant when acting in such capacity, shall be liable to any owner or any other party, including the Association, for any damage, loss, or prejudice suffered or claimed on account of any act, omission, error, or negligence of any such person if such person has acted in good faith and in a manner such person reasonably believed to be in the best interests of the Association.

Section 6.1 Common Area and Recreation Area .

The Association shall be solely responsible for all maintenance, repair, upkeep and replacement of the Common Area. The Association is responsible for pest control of the Common Area and eradication of all wood-destroying pests or organisms located anywhere within the Project. No person other than the Association or its duly authorized agents shall construct, reconstruct, refinish, alter or maintain any improvement upon, or shall create any excavation or fill or change the natural or existing drainage of any portion of the Common Area and the Recreational Area. In addition, no person shall remove any tree, shrub or other vegetation from, or plant any tree, shrub, or other vegetation upon the Common Area or the Recreation Area without express approval of the Association.

The Association's responsibility for repair of plumbing shall be limited to the buildings' plumbing systems common, and rough plumbing lines within the structural Common Area wall airspace only.

Section 6.2 Owner Maintenance Responsibilities .

It is the Owners' responsibility to maintain and correct leaks and defects within the airspace of their units, including, but not limited to, supply and waste connections; shower head to faucet supply line; all shut-off valves; all sinks and tub faucets and supply lines; all drain line connections to common, rough plumbing; gaskets and seals for all plumbing fixtures; and caulking for flooring areas in the kitchen and bathroom Unit interior airspace.

The Board of Directors shall have the power to adopt reasonable rules and regulations setting forth procedures to be undertaken to resolve disputes between Unit owners and the Association with regard to plumbing leaks between adjacent Units.

Section 6.3 Recovery of Costs of Certain Repairs and Maintenance .

(a) In the event that the need for maintenance or repair, which would otherwise be the Association's responsibility hereunder is caused through the willful or negligent acts of an Owner, his or her family, guests, tenants, or invitees, and is not covered or paid for by Association insurance policies or any liability insurance maintained by the responsible Owner, the cost of such maintenance or repairs shall be subject to recovery by the Association through the imposition of an Individual Assessment against the offending Owner in accordance with Article IV, Section 4.9 hereof.

(b) In the event that an Owner fails to perform maintenance functions for which he or she is responsible, the Association may give written notice to the offending Owner with a request to correct the failure within 15 days after receipt thereof. If the Owner refuses or fails to perform any necessary repair or maintenance, the Association may exercise its rights under Article II, Section 2.3, to enter the Owner's Unit and perform the repair or maintenance so long as the Owner has been given notice and the opportunity for a hearing.

Section 6.4 Cooperative Maintenance Obligations .

To the extent necessary or desirable to accomplish the Association's maintenance obligations hereunder, individual Owners shall cooperate with the Association and its agents and maintenance personnel in the prosecution of its work.

Each Owner of a Condominium shall be responsible for ensuring that the Owner's family, guests, tenants and all occupants of the Owner's condominium comply with all provisions of this Declaration, the Bylaws and the Rules and Regulations of the Association. In addition to any rights the Association may have against the Owner's family, guests, tenants or occupants, the Association may take action under this Declaration against the Owner as if the Owner committed the violation in conjunction with the Owner's family, guests, tenants or occupants.

Section 7.1 Single-Family Dwelling .

Each Unit shall be improved, used and occupied only for private single-family dwelling purposes.

Section 7.2 Right to Decorate .

Each Owner shall have the exclusive right to (i) paint, repaint, tile, wax, paper or otherwise refinish and decorate the inner surfaces of the walls, ceilings, floors, doors and fences in or bounding such Owner's Unit, and (ii) alter such Owner's Unit, provided such alteration shall not affect the Common Area, any other Unit, or the structural portions of any building, wall or fence. Except for ground floor Units, and any Unit kitchen or bathroom floor area, only carpeting installed over at least 1/2" padding is allowed to be installed or utilized.

Section 7.3 Drapes, Blinds & Patio Screens.

All coverings visible from the Common Area shall be of a neutral color, made of materials approved by the Board, and be kept in good condition at all times.

Section 7.4 Offensive Conduct; Nuisances .

No Unit shall be occupied or used for any purpose or in any manner as to interfere with the enjoyment of occupants of other Units or to annoy them by unreasonable noises or otherwise; nor shall any nuisance, or illegal activity be committed or permitted to occur in any Unit. No noxious or offensive activity shall be carried on in the Common Area, nor shall anything be done therein which may be or become an annoyance or nuisance to the Owners.

Section 7.5 Insurance .

No Unit shall be occupied or used for any purpose or in any manner which shall cause any structure in the Project to be uninsurable against loss by fire or the perils of the extended coverage endorsement to the California Standard Fire Policy form, or cause any policy or policies representing such insurance to be cancelled or suspended or the company issuing the same to refuse renewal thereof.

Section 7.6 Pets .

No pet(s) or other animal(s) may be raised or kept anywhere in or on the Project except as permitted by regulations adopted by the Directors.

Section 7.7 Use of Common Area.

The Common Area, except buildings, shall be improved and used only for (i) vehicular parking, (ii) vehicular and pedestrian movement within the Project, including access to the Units, (iii) recreational use by the Owners and occupants of Units and their guests, subject to regulations adopted by the Directors, and (iv) beautification of the Project and providing privacy to the residents thereof through landscaping and such other means as the Directors shall deem appropriate.

No activity shall be carried on in the Common Area which shall be contrary to the regulations of the Directors relating to use of and activity in the Common Area.

Section 7.8 Structural Alterations .

Nothing shall be done in any Unit or in, on or to the Common Area which would impair the structural integrity of any building or which would structurally change any building except as is otherwise provided herein.

Section 7.9 No Drilling or Mining .

No drilling or mining operations of any kind shall be permitted upon or in any Unit or the Common Area.

Section 7.10 Trash Storage and Disposal .

All equipment, garbage cans and other containers shall be kept screened and concealed from view from neighboring Units, streets and the Common Area. All rubbish, trash and garbage shall be regularly removed from each Unit and shall not be allowed to accumulate thereon or on the adjacent Common Area.

Section 7.11 Patios, Balconies, and Rooftops .

A clean and neat appearance must be maintained at all times. Screening of the lower portion of the balconies, below the railing, is allowed with approval. These areas shall not be used for storage or have any items draped or hung over them, or have any type of equipment, recreational or otherwise, maintained on them. No clotheslines are allowed. Plants in these areas shall be hung or placed so that if they are overturned or fall, they will be contained in their own areas. Owners are responsible for any damage or injuries originating from items contained in their balconies. No storage of household items or bicycles is permitted. Patio furniture, including table and chairs and barbecue, are permitted. Owners are not permitted to walk or enter onto Association rooftops without the express authorization of the Board.

Section 7.12 Parking and Vehicle Restrictions.

The following parking and vehicle restrictions shall apply within the Project:

(a) Unless otherwise permitted by the Association, no vehicle or trailer shall be parked or left within the Project other than within an assigned carport or parking space or in designated guest parking areas.

(b) Except as otherwise provided in subparagraph (f), below, only the following vehicles (authorized vehicles) shall be permitted to be parked by any Owner or resident within the Project: standard passenger vehicles, including Bronco or Blazer-type trucks, and trucks which do not exceed three-quarter tons in gross weight. Boats, trailers, campers, recreational vehicles, commercial vehicles and trucks in excess of three-quarter tons in gross weight are not authorized vehicles and shall only be permitted within the Project as provided in subparagraph (f), below.

(c) All carports shall be maintained in a neat and orderly condition. Carports are to be used for the parking of standard authorized vehicles and shall not be used for the storage of boats, trailers, campers or recreation vehicles which will preclude the parking of the Owner's or occupant's authorized vehicles within the carport.

(d) Designated guest parking areas within the Common Areas are to remain open for use by guests only and are not to be used by Owners or other residents, either permanently or temporarily, for the parking of their authorized vehicles or the storage of boats, trailers or similar items of personal property.

(e) No motor vehicle shall be constructed, reconstructed or repaired within the Project and no dilapidated or inoperable vehicle, including vehicles without wheel(s) or an engine, shall be stored on the Project; provided, however that the provisions of this section shall not apply to emergency vehicle repairs.

(f) Campers, boats, trailers, motorcycles, commercial vehicles and trucks in excess of three-quarter tons are not to be parked within the Project, except for periods not to exceed four (4) hours for the purpose of loading and unloading.

(g) The Board shall have the authority to tow, at the Owner's expense, any vehicle parked or stored in violation of this section. The Board shall post such notices or signs within the Common Area as may be required by law to effectuate this towing provision.

(h) The Board shall have the authority to promulgate further reasonable rules and restrictions of uniform application regarding parking and vehicles within the Project as may be deemed prudent and appropriate.

No building, fence, wall, obstruction, outside or exterior wiring, balcony, screen, patio, patio cover, tent, awning, carport, carport cover, improvement or structure of any kind shall be commenced, installed, erected, painted, repainted or maintained upon the property, nor shall any alteration or improvement of any kind be made thereto until the same has been approved in writing by the Architectural Review Committee (ARC) appointed by the Board, or the Board if none has been appointed.

Plans and specifications showing the nature, kind, shape, color, size, materials and location of such improvements, alterations, etc., shall be submitted to the Architectural Review Committee for approval as to quality of workmanship and design and harmony of external design with existing structures, and as to location in relation to surrounding structures, topography, and finish grade elevation. No permission or approval shall be required to repaint in accordance with Declarant's original color scheme, or to rebuild in accordance with Declarant's original plans and specifications. No permission or approval shall be required to repaint in accordance with a color scheme previously approved by the Board or the Committee, or to rebuild in accordance with plans and specifications previously approved by the Board or by the Committee. Nothing contained herein shall be construed to limit the right of an owner to paint the interior of his Unit any color desired.

The committee for the control of structural and landscaping architecture and design (Architectural Review Committee) within the subdivision shall consist of three members appointed by the Board or shall consist of the currently elected Board of Directors if a committee has not been previously appointed.

In the event the Committee fails to approve or disapprove plans and specifications within thirty (30) days after the same have been submitted to it, approval will not be required and the related covenants shall be deemed to have been fully complied with.

The Association shall obtain and maintain the following insurance:

(1) A casualty policy insuring the full replacement value of improvements and fixtures on the property;

(2) A comprehensive public liability insurance policy insuring the Association, its agents, and the owners and occupants of the condominiums and their respective family members, guests, invitees, and agents against any liability incident to the ownership or use of the Common Area or any other Association owned or maintained real or personal property;

(3) Worker's compensation insurance to the extent required by law;

(4) Officers and directors liability insurance;

(5) Appropriate fidelity bond coverage to protect against dishonest acts by the Association's officers, directors, employees, trustees, and all others who are responsible for handling funds of the Association; and,

(6) Such other insurance as the Board in its discretion considers necessary or advisable.

The amount, terms, and coverage of any policy required hereunder (including the type of endorsements, the amount of the deductible, the named insureds, the loss payees, standard mortgage clauses, and notices of changes or cancellations) shall be no less than that which is customary for similar policies on similar projects in the area.

Each owner appoints the Association or any insurance trustee designated by the Association to act on behalf of the owners in connection with all insurance matters arising from any insurance policy maintained by the Association, including, without limitation, representing the owners in any proceeding, negotiation, settlement, or agreements.

Any insurance maintained by the Association shall contain a waiver of subrogation as to the Association and its officers, directors, and members, the owners and occupants of the condominiums and mortgagees, and, if obtainable, a cross-liability or severability of interest endorsement insuring each insured against liability to each other insured. The Association shall periodically (and not less than once every three (3) years) review all insurance policies maintained by the Association to determine the adequacy of the coverage and to adjust the policies accordingly.

All individually owned insurance shall contain a waiver of subrogation as to the Association and its officers, directors, and members, of the owners and occupants of the condominiums and of mortgagees.

No condominium owner shall separately insure his or her condominium against loss by fire or other casualty covered by any insurance carried by the Association. If any owner violates this provision, any diminution in insurance proceeds otherwise payable under the Association's policies that results from the existence of such other insurance will be chargeable to the owner who acquired other insurance. Any owner can insure his or her personal property against loss and obtain any personal liability insurance that he or she desires. In addition, any improvements made by an owner within his or her Unit may be separately insured by the owner, but the insurance is to be limited to the type and nature of coverage commonly known as tenant's improvements.

Section 10.1 Destruction; Proceeds Exceed 85 Percent of Reconstruction

Costs. If there is a total or partial destruction of the improvements in the Project, and if the available proceeds of the insurance carried pursuant to Article IX plus reserve account funds designated for the repair or replacement of capital improvements which have been damaged are sufficient to cover not less than 85 percent of the costs of repair and reconstruction, the improvements shall be promptly rebuilt unless, within 90 days from the date of destruction, owners then holding at least 75 percent of the total voting power of owners present and entitled to vote, in person or by proxy, at a duly constituted meeting or voting by written ballot, determine that repair and reconstruction shall not take place. If such a meeting is called, the Association shall solicit and obtain bids from at least two reputable contractors to repair and reconstruct the improvements in accordance with the original plans and shall present this information to the owners at the meeting. If repair and reconstruction is to take place the Association shall be required to execute, acknowledge, and record in the office of the County Recorder of the County not later than 120 days from the date of destruction, a certificate declaring the intention of the owners to rebuild.

Section 10.2 Destruction; Proceeds Less Than 85 Percent of

If the proceeds of insurance carried pursuant to Article IX plus reserve account funds designated for the repair or replacement of capital improvements which have been damaged are less than 85 percent of the costs of repair and reconstruction, the improvements shall be promptly rebuilt, unless within 90 days from the date of destruction, owners then holding at least 66-2/3 percent of the total voting power of owners present and entitled to vote, in person or by proxy, at a duly constituted meeting or by written ballot, determine that repair and reconstruction shall not take place. If such a meeting is called, the Association shall solicit and obtain bids from at least two reputable contractors to repair and reconstruct the improvements in accordance with the original plans and shall present this information to the owners at the meeting. If repair and reconstruction are to take place, the Association shall execute, acknowledge, and record in the office of the County Recorder of the County not later than 120 days from the date of destruction a certificate declaring the intention of the owners to rebuild.

 If the owners determine to rebuild, pursuant to sections 10.1 and 10.2, above, each owner shall be obligated to contribute his or her proportionate share of the cost of reconstruction of restoration over and above the available insurance proceeds. The proportionate share of each owner shall be based upon the ratio that the square footage of the living area of his or her Unit bears to the total square footage of the living area of all Units. If any owner fails or refuses to pay his or her proportionate share, the Association may levy a Special Assessment against the Condominium of such owner, which may be enforced under the lien provisions contained in article IV or in any other manner provided in this Declaration.

If the owners determine to rebuild, the Board or its authorized representative shall, after obtaining bids from at least two reputable contractors as required by the paragraphs above, and award the repair and reconstruction work to the lowest bidder that otherwise meets the requirements set forth by the Board in soliciting bids. The Board shall have the authority to enter into a written contract with the contractor for the repair and reconstruction, and the insurance proceeds held by the trustee shall be disbursed to this contractor according to the terms of the contract. It shall be the obligation of the Association to take all steps necessary to assure the commencement and completion of authorized repair and reconstruction at the earliest possible date.

If the owners determine not to rebuild, then, subject to the rights of Mortgagees, any insurance proceeds then available for such rebuilding shall be distributed to each owner (of an uninhabitable damaged Unit which is not to be rebuilt) according to the relative fair market values of their Condominiums. The Board shall select an independent appraiser who shall be a member of the Society of Real Estate Appraisers (SREA) or other nationally recognized appraisers' organization and who shall determine such relative values in accordance with the standards of such organizations as of a date immediately prior to such destruction. The Association shall have the duty, within 120 days from the date of destruction, to execute, acknowledge, and record in the office of the County Recorder of the County, a certificate declaring the intention of the owners not to rebuild.

The Association shall have the duty to repair and reconstruct improvements, without the consent of owners and irrespective of the amount of available insurance proceeds, in all instances of partial destruction where the estimated cost of repair and reconstruction does not exceed $50,000 in the case of Common Area improvements. The Association can levy a Special Assessment for the cost of repairing and reconstructing improvements to the extent insurance proceeds are unavailable, such assessment to be levied as described in section 10.3, above, (but without the consent or approval of owners, despite any contrary provisions in this Declaration).

On recordation of a certificate described in Section 10.5, above, the right of any owner to partition through legal action as described in Article 2.5 shall revive immediately. In addition, each owner, by accepting a deed to a condominium, grants to the Association an irrevocable power of attorney to sell the entire Project for the benefit of the owners, to terminate the Declaration, and to dissolve the Association. The net proceeds following sale of the Project and dissolution of the Association shall be distributed to the owners in the same manner that insurance proceeds are distributed under Section 10.5, above, with all owners sharing in said proceeds as set forth therein.

If an action for condemnation of all or a portion of the Properties is proposed or threatened by any governmental agency having the right of eminent domain, then, on unanimous written consent of all the owners and after notice to all Mortgagees, the Properties, or a portion of it may be sold by the Board acting as irrevocable attorney-in-fact of all of the owners for a price deemed fair and equitable by the Board, but in no event less than the aggregate unpaid balance of all first mortgages encumbering condominiums within the Properties.

If a sale occurs under section 1, and the agreement of sale does not by its terms apportion the sale proceeds among the owners and their respective mortgagees, the Board shall select an independent SREA appraiser who shall determine the relative fair market values of the condominiums affected by the sale, in accordance with SREA standards. The sale proceeds shall then be apportioned among the owners, and their respective mortgagees according to such relative values.

If the Properties, or a portion of it, are not sold, but is instead taken, the judgment of condemnation shall by its terms apportion the award among the owners and their respective mortgagees.

If the judgment of condemnation does not by its terms apportion the award among the owners and their respective mortgagees, the Board shall select an independent SREA appraiser who shall determine the relative fair market values of the condominiums affected by the condemnation, in accordance with SREA standards. The award shall then be apportioned among the owners, and their respective mortgagees, according to such relative values.

Section 12.1 Rights of Lenders .

Except as set forth in this Article XII, neither the Owners nor the Association shall, by act or omission, without the prior written consent of at least 75% of all First Mortgagees (based upon one vote for each first mortgage or deed of trust owned), be entitled to:

(i) Abandon or terminate the condominium character of the project;

(ii) Change the pro rata interest or obligations of an individual Condominium for the purpose of levying assessments or charges, or allocating distributions of hazard insurance proceeds or condemnation awards, or determining the pro rata share of ownership of the Common Area which is to be appurtenant to and part of each Condominium;

(iii) Partition or subdivide any Condominium;

(iv) Abandon, partition, subdivide, encumber, sell or transfer the Common Area; or

(v) Use hazard insurance proceeds for losses to any Condominium property (whether to Units or to the Common Area) for other than the repair, replacement or reconstruction of such Condominium property, except as may be provided by statute or in case of substantial damage to the Units and/or the Common Area as described in Section 2.5 hereof.

Section 12.2 Right to Encumber Property .

Any Owner may voluntarily or involuntarily encumber his or her Condominium with or by a real property mortgage, deed of trust or other instrument of hypothecation.

Section 12.3 Breach Does Not Invalidate Mortgage.

A breach of any of the foregoing limitations, restrictions, conditions or covenants (except as provided in this Article with respect to a breach by failure to pay any assessment) shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to a Condominium; provided, however, such limitations, restrictions, conditions and covenants shall be binding upon and effective against any person whose title to said Condominium is acquired by foreclosure, trustee's sale or otherwise.

Section 12.4 Subordination of Liens .

Each and every lien created by or pursuant to this Declaration, including but not limited to, the assessment liens described in the Article IV entitled Assessments, is and shall be subordinate, inferior and subject to the lien and charge of any (i) real property mortgage or deed of trust of recorded prior to the date of said assesssment lien encumbering any Condominium and given for value and (ii) any blanket construction (including acquisition) mortgage(s) or deed(s) of trust encumbering all or any part of the Project which mortgage(s) or deed(s) of trust may have been expressly subordinated to this Declaration.

Section 12.5 Title After Foreclosure Sale.

Any person who acquires title to any Condominium by purchasing the same at a foreclosure or trustee's sale, shall take title to such Condominium free of any claims by or on behalf of the Association for unpaid assessments, charges and/or fines (if any) levied by the Association which accrue prior to the time such purchaser takes title to such Condominium, and any assessment lien and/or other lien of the Association then encumbering any such Condominium shall be subordinate, inferior and subject to said purchaser's title to such Condominium. Such unpaid assessments shall be reallocated among the Owners (other than said purchaser).

Section 12.6 Mortgage Given After Foreclosure Sale.

In the event any Mortgagee (i) shall acquire title to any Condominium by judicial foreclosure or exercise of power of sale contained in any real property mortgage or deed of trust and (ii) shall thereafter sell and convey such Condominium, any real property mortgage or deed of trust received by such lender as security for all or a portion of the purchase price of such Condominium shall be incontrovertibly deemed "given for value." Notwithstanding the provisions of Section 12.4 above, any lien created by or pursuant to this Declaration, which lien arises from the failure to pay assessment(s) accruing during the period of time such Mortgagee's holding of title to said Condominium, shall be a lien superior to the lien of said real property mortgage or deed of trust received to secure a portion of said purchase price.

Section 12.7 Notification to Lender of Owner's Breach

In the event of any breach or default hereunder by any Owner, and in the further event such breach or default is not cured within 60 days after its occurrence, the Board shall, if any first Mortgagee of such Owner shall have so requested of the Association, immediately notify, in writing, such first Mortgagee of said default; provided, however, failure to give such notice shall in no way affect any right or remedy of any enforcing person under Article XIII.

Section 12.8 Right to Attend Meetings

Each first Mortgagee shall be entitled, upon request. to (i) receive notice of any and all meetings of the Association and (ii) designate a representative to attend such meetings on its behalf.

Section 12.9 Conflict Between Documents

In the event there shall be any express or implied conflict between any provision of this Article XII and any other provision of this Declaration, the provisions of this Article XII shall govern and prevail.

Section 13.1 Enforcement.

The Association, or any member, or the successor-in-interest of any member shall have the right to enforce by proceedings at law or in equity, all restrictions, conditions, covenants, Association Bylaws and rules and regulations, reservations, liens and charges now or hereafter imposed by the provisions of this Restated Declaration or any amendment thereto, including the right to prevent the violation of any such restrictions, conditions, covenants or reservations, the right to recover damages or other dues for such violation; provided, however, that with respect to assessment liens, the Association shall have the exclusive right to the enforcement thereof. Failure to enforce any covenant, condition or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter. Should the Association incur attorneys' fees in order to enforce the covenants, conditions and restrictions or the Association Bylaws or rules and regulations, it shall be entitled to recover such expenses from the responsible members.

Prior to the commencement of a civil action to enforce the Governing Documents, the party initiating the case shall comply with Civil Code Section 1354(b) by serving a Request for Resolution on the other party in accordance with this statute.

The Association and members' right of enforcement shall be subject to the provisions of Section 13.2 of this Declaration.

Section 13.2 Court Actions, Mediation, Arbitration .

Section 13.2.1

Court actions to enforce the Governing Documents may only be initiated on behalf of the Association upon approval of the Board.

Section 13.2.2

Before instituting any judicial action, arbitration, or other proceeding arising out of any Owner's or resident's failure or alleged failure to comply with any provision of Section 2.7, ("Delegation of Use"), Article VIII ("Architectural Control"), or Article VII ("Use Restrictions"), the Association or Owner who desires to initiate such action ("Complaining Party") must make a good faith attempt to mediate the dispute.

Section 13.2.3

If mediation is unsuccessful at resolving any failure or alleged failure to comply with any provision of Section 2.7 ("Delegation of Use"), Article VIII ("Architectural Control"), or Article VII ("Use Restrictions"), the dispute shall be submitted to, and conclusively determined by, binding arbitration in accordance with this subparagraph, provided, however, that the provisions of this subparagraph shall not preclude any party from seeking injunctive or other provisional or equitable relief in order to preserve the status quo of the parties pending resolution of the dispute, and the filing of an action seeking injunctive or other provisional relief shall not be construed as a waiver of that party's arbitration rights.

The arbitrator shall be selected and the arbitration conducted in accordance with the Commerical Arbitration rules of the American Arbitration Association.

The arbitrator's decision shall pertain, and shall be limited to the granting of damages not to exceed any party's actual out-of-pocket expenses and the costs of undertaking any repairs, maintenance, or reconstruction relating to the dispute, the award of any injunction or other equitable relief, and award of reasonable attorney's fees and costs to the prevailing party. In no event shall the arbitrator's award include any component for punitive or exemplary damages. Costs of the arbitration proceeding shall be borne as determined by the arbitrator.

Invalidation of any one of these covenants, conditions and restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect.

The covenants, conditions and restrictions of this Declaration shall run with and bind the Units, and shall inure to the benefit of and be enforceable by the Association or the owner of any Unit subject to this Restated Declaration, their respective legal representatives, heirs, successors, and assigns.

The provisions of this Restated Declaration shall be liberally construed to effectuate its purposes of creating a uniform plan for the maintenance of a residential community of common recreational facilities and common areas. Paragraph headings have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction.

This Declaration may be amended only by the affirmative vote in person or by proxy, or written consent of Members representing a majority of the total voting power of the Association, and the amendment shall become effective upon the recording with the Office of the County Recorder of San Diego County, California; provided, however, that any change which would impair the security interest of the institutional lenders or would change the percentage interest of the Owners is subjected to prior written approval of 75% of the institutional lenders (based on one vote for each first mortgage owned.)

Whenever the context of this Restated Declaration requires same, the singular shall include the plural and the masculine shall include the feminine.

Section 13.8 Non-liability of Association for Water Damage.

The Association shall not be liable for damage to property in the project resulting from water which may leak or flow from outside of any Unit or from any part of the building, or from the fire protection sprinkler system, or from any pipe, drains, conduits, appliances or equipment, or from any other place or cause, unless caused by the gross negligence of the Association, its Board, officers, the manager or their staff.

Section 13.9 Notice of Breach

In the event of a breach of the Declaration, the Association may, but is not required as a prerequisite to pursuing enforcement, record with the County Recorder's Office a Notice of Breach. The Notice shall contain the name of the owner of the property, address and legal description along with a brief description of the breach making specific reference to that portion of the Declaration which is alleged to have been breached by the owner. The Notice shall specify additionally the actions necessary on the part of the owner to cure the breach. If the owner complies with the actions listed in the Notice of Breach, they will be entitled to have it immediately released by the Association.

Section 13.10 Violations Constitute Nuisance

The result of or condition caused by any violation of any of said limitations, restrictions, conditions or covenants is and shall be a nuisance, and every remedy at law or in equity now or hereafter available against a public or private nuisance may be exercised by an enforcing person.

Section 13.11 Service of Notice.

Notices required by the Declaration, or desired to be given, shall be conclusively deemed served (i) if personally served, at the time of such service, and (ii) 48 hours after deposit thereof in the United States Mail, postage prepaid, addressed to the person(s) to whom such notice is to be given at the last known address of such person(s).

IN WITNESS WHEREOF, PARKWAY POINTE CONDOMINIUMS, by and through its Board of Directors, hereby certifies that this Restated Declaration of Covenants, Conditions and Restrictions was duly adopted.

PARKWAY POINTE CONDOMINIUMS