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1 We hereby certify thot this is a true copy of tho original filed as Land Court Document No. ~~ _ and I or record~ in the Bureau of ConveyancOi 01 Doc~nt.t~o..,[VV S -Op'(d- tp::;; on o(~.l't-::o'( at to I o'clock ~ T~:LE?~+~AlI' INCORPORATED After Recordation, Return by (X) Mail () Pick up To: Keauhou Heights Limited Partnership Hanama Place, Suite 104 Kailua-Kana, HI TOTAL NO. OF PAGES: _ AFFECTS TAX MAP KEY: (3) :2) ,13) :('3) ,./ (3) ~(3) , (3) ) ," (3) ~(3) ;(3) , (3) DECLARATION OF PROTECTIVE COVENANTS, CONDITIONS AND RESTRICTIONS FOR MAKALANI <0 Copyright 2005 Holualoa Management Corporation

2 DECLARATION OF PROTECTIVE COVENANTS, CONDITIONS AND RESTRICTIONS FOR MAKALANI Copyright 2005 Holualoa Management Corporation 2/15/2005 2

3 INDEX Page ARTICLE I - DEFINITIONS 1.1 Agricultural Uses and Activities Association Board Bylaws Common Area Common Expenses Declarant Declaration Design Committee Design Guidelines Excavation; Fill Existing Grade Farm Dwelling Garage Improvement Lot Maintenance Assessment Notice MAKALANI Owner Person Real Property Record Roads Single Family... 3 Copyright 2005 Holualoa Management Corporation 2/15/2005 i

4 Page 1.26 Subdivision or Subdivide Visible from a Neighboring Property... 3 ARTICLE II - PROPERTY SUBJECT TO DECLARATION ARTICLE III - USE RESTRICTIONS 3.1 Purpose Use of Lot Severability of Covenants Building Forms Maintenance of Lot Signs Construction of Accessory Structures Refuse Disposal Towers, Antennas and Other Facilities Power, Telephone and Utility Lines Parking Trailers, Outbuildings and Temporary Structures Animals Dust Noise Subdivision Garage Sales Monkeypod Trees Common Areas Uses Common Areas; Construction and Alteration of Improvements... 7 ARTICLE IV - DESIGN APPROVAL; STANDARDS 4.1 Lot; Space; Construction and Alteration of Improvements; Excavations; Etc Approval No Warranty Copyright 2005 Holualoa Management Corporation 2/15/2005 ii

5 Page ARTICLE V - DESIGN COMMITTEE 5.1 Design Committee; Organization, Power of Appointment and Removal of Members Design Committee Duties Design Committee Meetings, Actions, and Expenses Design Guidelines; Variances Non-Waiver Estoppel Certificate Liability ARTICLE VI - MAKALANI HOMEOWNERS ASSOCIATION 6.1 Organization Membership Voting Rights Duties and Obligations of the Association Powers and Authority of Association Subdivision Rules Liability of Members of the Board Exclusive Powers of the Association ARTICLE VII - FUNDS AND ASSESSMENTS 7.1 Operating Fund Maintenance Assessments Water Assessments Special Assessments Rollover of Fund Balances Default in Payment of Assessments Collection of Assessments; Interest Date of Commencement of Assessments Copyright 2005 Holualoa Management Corporation 2/15/2005 iii

6 Page 7.9 No Offsets Waiver of Use No Declarant Assessments Certification Regarding Assessments ARTICLE VIII ENFORCEMENT, MEDIATION AND ARBITRATION 8.1 Rights of Enforcement Notice to Resolve Violation Litigation Mediation and Arbitration Declarant s Right to Litigate Fines ARTICLE IX - GENERAL PROVISIONS 9.1 Compliance with Law; Severability Presumption of Compliance Limited Liability Declarant s and Association s Rights to Establish Easements Mortgage of Lots Failure to Enforce Provisions Construction Severability Word Usage Notices Notice to Multiple Owners Effect of Provision of Declaration Duration of Declaration Amendment; Restatement Conveyance or Designation of Common Areas Copyright 2005 Holualoa Management Corporation 2/15/2005 iv

7 EXHIBIT A EXHIBIT B 9.16 Condemnation of Common Areas Obligations of Owners, Avoidance, Termination Assignment of Powers The Real Property and Surrounding Properties Successors and Assigns Page Copyright 2005 Holualoa Management Corporation 2/15/2005 v

8 DECLARATION OF PROTECTIVE COVENANTS, CONDITIONS AND RESTRICTIONS FOR MAKALANI THIS DECLARATION is made this 17th day of February, 2005, by KEAUHOU HEIGHTS LIMITED PARTNERSHIP, a Hawaii Limited Partnership, whose mailing address is Hanama Place, Suite 104, Kailua- Kona, Hawaii 96740, hereinafter referred to as the "Declarant." W I T N E S S E T H: WHEREAS, Declarant is the owner of certain real property situated at Laaloa 1 st, Laaloa 2 nd, and Kapalaalaea 1 st, North Kona, Island and County of Hawaii, State of Hawaii, more particularly described in Exhibit "A" attached hereto and made a part hereof; and WHEREAS, Declarant intends to develop the real property in a manner which, to the extent possible, will increase the economic value, desirability and attractiveness of the real property to the Owners (as hereinafter defined); NOW, THEREFORE, Declarant hereby declares that all of the real property now or hereinafter included in "MAKALANI" as hereinafter defined and described in Exhibit "A" attached hereto and made a part hereof shall, at all times, be owned, held, used and occupied subject to the provisions of this Declaration and to the covenants, conditions and restrictions herein contained, all of which are established and declared for the purpose of increasing the economic value, desirability and attractiveness of the real property and for the mutual benefit of the owners thereof. The covenants, conditions and restrictions set forth in this Declaration shall run with the land and shall be binding upon all Persons acquiring any right, title or interest in and to the real property, and be for the benefit of the Declarant and each Person who becomes an Owner of any part of MAKALANI, and each successor in interest of such Owner. ARTICLE I DEFINITIONS The following words when used in this Declaration, unless the context otherwise specifies or requires, shall have the following meanings: 1.1 Agricultural Uses and Activities. "Agricultural Uses and Activities shall mean those uses and activities permitted under Hawaii Revised Statutes Chapter 205, as amended from time to time, and shall includes the cultivation of crops, including, but not limited to, flowers, vegetables, foliage, fruits, forage and timber, and the raising of animals, including, but not limited to, bees, fish or other animals or aquatic life that are propagated for economic use. 1.2 Association. "Association" means the MAKALANI HOMEOWNERS ASSOCIATION, a Hawaii non-profit corporation described in Article VI, and its successors and assigns. 1.3 Board. "Board" means the Board of Directors of the Association. 1.4 Bylaws. "Bylaws" means the Bylaws of the Association, a copy of which are attached hereto as Exhibit "B," as such Bylaws may be amended from time to time. 1.5 Common Area. "Common Area" shall mean and refer to all areas and all structures, Improvements or facilities constructed or installed for the use and enjoyment by Owners of Lots in MAKALANI, whether owned by Declarant, the Association, an Owner or others, which are for common use or which are required to be maintained and/or operated by the Association pursuant to the provisions of this Declaration and include, without limiting the generality of the foregoing, the following: (i) the Roads (as hereinafter defined); (ii) the security stations and entry gates and the areas whereon the security stations and entry gates are located; and (iii) the landscaping, the dry wells and drainage basins and the utility facilities, equipment and service lines for water, electricity, telephone and television signal distribution, within the Roads, excluding, however, any such landscaping and utility and drainage facilities, equipment and lines which are Copyright 2005 Holualoa Management Corporation 2/15/2005 1

9 installed, owned, operated and/or maintained by any governmental authority, public utility, service company or the Owner of a Lot for the sole benefit of the Owner s Lot. 1.6 Common Expenses. "Common Expenses" shall mean and refer to all expenditures lawfully made or incurred by or on behalf of the Association, together with all funds lawfully assessed for the creation or maintenance of reserves, pursuant to the provisions of this Declaration. 1.7 Declarant. "Declarant" means KEAUHOU HEIGHTS LIMITED PARTNERSHIP, its successors and assigns, including any other Person or Persons who the Declarant may designate as having the powers and functions of Declarant or some of the powers and functions of Declarant. 1.8 Declaration. "Declaration" means this Declaration of Protective Covenants, Conditions and Restrictions, as the same may be amended from time to time. 1.9 Design Committee. "Design Committee" means the Committee created pursuant to Article V hereinafter set forth Design Guidelines. "Design Guidelines" means the guidelines and regulations adopted by the Declarant as provided in Section 5.4 hereof; as the same may be amended from time to time as provided in said Section Excavation; Fill. "Excavation" means any disturbance of the Existing Grade (except temporarily for planting) which results in the removal of earth or rock for a depth of more than eighteen (18) inches; Fill means any additional earth and rock added to the subject site which increases the Existing Grade Existing Grade. Existing grade means the grade of the Lot at the time of purchase from the Declarant without any Excavation or fill Farm Dwelling. "Farm Dwelling" shall have the meaning set forth in Hawaii Revised Statutes Chapter 205, as amended from time to time Garage. "Garage" means a completely enclosed structure used for parking vehicles, boats and/or trailers therein Improvement. "Improvement" means any structures or appurtenance thereto of every type and kind, including, without limitation, buildings, outbuildings, accessory buildings, dwelling units, Farm Dwellings, sidewalks, walkways, pavement, parkways, solar devices, driveways, fences, screening walls, block walls, retaining walls, perimeter walls, stairs, decks, decorative landscaping, awnings, antennae, the paint on all exterior surfaces, propane gas tanks, patio covers, railings, poles, signs, storage areas, exterior air conditioning or water softening fixtures or equipment, decorative drainage devices, garages, swimming pools, spas, recreational facilities, tennis or other sports courts, driveways, opening parking areas, mailboxes, drainage swales and other drainage facilities (excluding irrigation facilities and equipment), and exterior lighting, excluding, however, any Improvement that is constructed, placed, installed or erected solely in connection with Agricultural Uses and Activities conducted on a Lot. The fact that an item is referenced herein shall not be interpreted to mean that the item may be constructed on or added to a Lot Lot. "Lot" means a portion of the Real Property which is shown as a separately numbered Lot on the Subdivision Map for MAKALANI, excluding, however, any Road. Unless the context indicates otherwise, "Lot" also includes all Improvements thereon Maintenance Assessment. "Maintenance Assessment" means any assessment levied pursuant to Section Notice. "Notice" means a notice delivered pursuant to Section Copyright 2005 Holualoa Management Corporation 2/15/2005 2

10 1.19 MAKALANI. "MAKALANI" means all of the Real Property described in Section 2.1 and all property from time to time annexed thereto pursuant to Section 2.2, and the Improvements now or hereafter located thereon Owner. means the Record owner including the Declarant, whether one or more Persons, of fee simple title, whether or not subject to any mortgage, to a Lot, including agreement of sale purchasers, but excluding those having such interest merely as security for the performance of an obligation. However, if a Lot is sold under a Recorded agreement of sale, or is leased for a term of twenty or more years under a Recorded lease, the purchaser or lessee (rather than the fee owner) will be considered the Owner, provided that the seller under an agreement of sale or the lessor under any such lease may reserve the ownership rights, including rights of membership and voting in the Association, as security for the obligations of the buyer or lessee thereunder Person. "Person" means a natural individual, corporation, partnership or any other legal entity capable of holding title to real property Real Property. "Real Property" means all of the real property constituting and being MAKALANI Record. Record, Recorded, Recording, Recordation or a like reference means an instrument of record in, or the act of recording or having recorded an instrument in, the Bureau of Conveyances of the State of Hawaii Roads. "Roads" means Lot 12 (TMK (3) ) within MAKALANI as shown on the Subdivision Map therefor and the access Improvements in any access easements used by more than one (1) Lot but excluding any access easement and the Improvements thereon used by only two (2) Lots for driveway access to the Lots Single Family. "Single Family" means one or more Persons, each related to the other by blood, marriage, or legal adoption, or a group of not more than five (5) Persons not so related, together with their transient guests. A transient guest is a Person who occupies the dwelling for no more than thirty (30) days every twelve (12) months Subdivision or Subdivide. "Subdivision" or "Subdivide" means the division or separation of a Lot into parcels as shown on a subdivision map approved pursuant to the subdivision ordinance of the County of Hawaii, or the submission of a Lot to a "Condominium Property Regime" pursuant to Hawaii Revised Statutes Chapter 514A, or the division of possession by a co-tenancy agreement, or any procedure of dividing or separating a Lot or the right to possession of any Lot Visible from a Neighboring Property. "Visible from a Neighboring Property" means, with respect to any given object or activity, that such object or activity can be seen from any Lot, including Roads, which adjoin the Lot where the object or activity is located. ARTICLE II PROPERTY SUBJECT TO DECLARATION 2.1 The property subject to this Declaration shall be the Real Property described in Exhibit "A" attached hereto and made a part hereof, which shall be known as "MAKALANI. 2.2 The Declarant reserves the right, at any time prior to thirty (30) years from the recordation of this Declaration, pursuant to the following provisions of this Section and without consent of the Association or any Owner of a Lot, or any other Person or corporation or entity holding any interest in the Lot, from time to time and in its sole discretion, to annex to MAKALANI additional real property adjacent to MAKALANI. The Association may annex property adjacent to MAKALANI upon the affirmative vote or written consent of not less than eighty percent (80%) of the Lots. (a) The annexation of such property shall become effective when and only when the Declarant or the Association shall have Recorded a declaration, which may consist of more than one document and which shall, among other things (i) describe the real property which is to be annexed to MAKALANI; (ii) set forth or refer to such Copyright 2005 Holualoa Management Corporation 2/15/2005 3

11 additional or other limitations, restrictions, covenants and conditions applicable to such property as provided in Section 2.2 (c); and (iii) declare that such property shall be held, sold, conveyed, encumbered, leased, occupied, and improved subject to this Declaration. (b) Upon the annexation becoming effective, the property subject to such annexation shall become and constitute a part of MAKALANI. (c) Any provision herein to the contrary notwithstanding, the declaration referred to in Section 2.2(a) above may, with respect to all or any part of the real property described in such declaration, provide for or refer to one or more of the following documents creating any or all of the following: (1) such new land classifications not provided for in this Declaration and such limitations, restrictions, covenants and conditions with respect to the use thereof as the Declarant or the Association, as the case may be, may deem to be appropriate for such property; (2) with respect to the new land classifications not provided for in this Declaration, such additional or different limitations, restrictions, covenants and conditions with respect to the use thereof as the Declarant or the Association, as the case may be, may deem to be appropriate thereto; and/or (3) A declaration of restrictions, subordinate to this Declaration and applicable exclusively to a specified area. This Declaration as applicable to such real property upon the annexation thereof to MAKALANI shall be deemed to include any and all additions and modifications thereto authorized by subparagraphs (1), (2) and (3) above and set forth or referred to the declaration described in subparagraph (3) above. (d) No property, except the Real Property described in Exhibit A attached hereto and any real property specifically annexed to MAKALANI as hereinabove provided, shall be deemed subject to this Declaration, whether or not shown on any subdivision map or file plan filed by the Declarant or described or referred to in any document executed or recorded by the Declarant. ARTICLE III USE RESTRICTIONS 3.1 Purpose. In order to preserve the natural setting and beauty of MAKALANI, to establish, preserve, and promote Agricultural Uses and Activities within MAKALANI, and to protect and promote the value of MAKALANI for the Owners, the Lots and all Improvements located thereon and therein shall be subject to the covenants, conditions and restrictions set forth in this Declaration, including the Design Guidelines. Each Person who becomes an Owner of any part of or acquires any interest in MAKALANI, and each successor in interest of such Person, agrees to abide and be bound by the terms and provisions of this Declaration and the Design Guidelines. 3.2 Use of Lot. Each Lot and the Improvements thereon shall comply with all State of Hawaii and County of Hawaii laws and regulations concerning permissible uses. At the time of the recordation of this Declaration, State of Hawaii Land Use Law does not authorize residential dwellings as a permissible use in an agricultural district unless the dwelling is a Farm Dwelling. It is the intent of this Declaration that it will not prohibit single family use to the extent such use is permitted under State and County laws and regulations, as the same are amended from time to time. Each Lot and the Improvements thereon shall be used exclusively for Agricultural Uses and Activities and Single-Family purposes as permitted under State and County laws and regulations. Each Lot must contain a farm or an agricultural activity which provides income to the family occupying the dwelling on the Lot. No more than one (1) Farm Dwelling, together with appurtenant outbuildings and a garage, if permitted under applicable County of Hawaii ordinance, shall be constructed on any Lot; provided, that all Improvements on any Lot shall be subject to the restrictions of this Declaration and to the architectural controls provided for in this Declaration and the Design Guidelines Except as may be prohibited by State and County laws and regulations, nothing in this Section 3.2 shall be deemed to prevent: Copyright 2005 Holualoa Management Corporation 2/15/2005 4

12 (a) The leasing of the Farm Dwelling on any Lot from time to time by the Owner thereof, subject, however, to all of the restrictions of this Declaration, provided that no Lot or such Farm Dwelling shall be rented or leased for less than a six (6) month period of time nor used for "transient vacation rental" purposes as that term is defined in Hawaii Revised Statutes Chapter 514E (b) The construction of Improvements on a Lot as permitted hereunder and by applicable State and County laws and regulations. 3.3 Severability of Covenants. If it is determined that one or more of the use restrictions or architectural standards contained herein are void, voidable or limited in any way, all other use restrictions and architectural standards contained in this Declaration shall remain valid and in full force and effect. 3.4 Building Forms. The following forms are not allowed: (a) (b) (c) Round or Geodesic buildings or roofs; A Frames; Quonset huts or similar types of structures; (d) Flat roofs (except for shadehouses necessary for Agricultural Uses and Activities, covered walkways, and other minor coverings); (e) Vertical walls exceeding ten (10) feet are permitted only if broken by strong horizontal lines. 3.5 Maintenance of Lot. Each Lot, whether occupied or unoccupied, and any and all Improvements from time to time located thereon, shall be maintained by the Owner thereof in good and clean condition and repair and in such manner as not to create a fire, safety, health or erosion hazard to the Real Property or any part thereof, all at such Owner's sole cost and expense. Each Lot shall be kept free of pests (i.e. rats, mice, coqui frogs, etc.). Owner is responsible for all costs associated with the removal of pests from Lot. Each Lot must be kept clean of trash and rubbish. 3.6 Signs. No sign or billboard of any kind whatsoever Visible from a Neighboring Property shall be displayed upon any Lot except for: proceedings; each Lot; (a) (b) Any signs that may be required by or pursuant to a state statute, county ordinance or legal Dwelling identification signs of a combined total face area of two (2) square feet or less for (c) During the time of construction of any dwelling or other Improvement, job identification signs having a maximum face area of six (6) square feet per sign and of the type usually employed by contractors, subcontractors and tradesmen; (d) Not more than one (1) "For Sale" or "For Rent" sign, no greater than three (3) square feet in size, such sign to refer only to the Lot on which it is situated; and Lot. (e) Any signs associated with roadside stands for the sale of agricultural products grown on the Any signs which are permitted under the foregoing exceptions to be erected and maintained on a Lot shall be professionally prepared and shall be of attractive design in keeping with the overall character of the area. Copyright 2005 Holualoa Management Corporation 2/15/2005 5

13 3.7 Construction of Accessory Structures. Any structures constructed, placed or maintained upon a Lot for the security or storage of tools, supplies and/or materials related to the construction of the Farm Dwelling shall be immediately removed upon completion of the construction of the Farm Dwelling. 3.8 Refuse Disposal. No garbage or trash shall be permitted on any Lot except in closed receptacles screened from view from any adjoining Roads or neighboring Lots, and no accumulated waste plant materials will be permitted on any Lot, except as part of an established compost pile maintained in such a manner as not to be Visible from a Neighboring Property. 3.9 Towers, Antennas and Other Facilities. No radio and/or television towers, antennas, satellite dishes, aerials or other facilities for reception or transmission of radio or television broadcasts or other means of communication shall be erected or maintained or permitted to be erected or maintained on any Lot, except as otherwise permitted by law. Appliances, equipment or installations upon or over roofs of such structures such as solar heating systems, cooling systems, or heating systems shall be installed in a fashion so that they are not Visible from a Neighboring Property Power, Telephone and Utility Lines. All power, telephone or other utility lines (wire or conduit) must be placed underground Parking. No Owner shall park or keep any vehicle, boat or trailer on any Road or Common Area or on any portion of his Lot Visible from a Neighboring Property, except for vehicles and trailers in a garage or on a paved driveway area or boats in a garage Trailers, Outbuildings and Temporary Structures. Trailers, containers, mobile homes, tents, shacks, detached garages or other outbuildings erected, constructed or placed upon a Lot shall not be used as a residence temporarily or permanently, nor shall any structure of a temporary character be used as a residence Animals. Animals may be kept on any Lot as long as the animals do not become an annoyance or nuisance to Owners of other Lots. For purposes of this Declaration, the emission of noise or the generation of odors by any animal kept on a Lot, which noise or odor is readily detectable on any other Lot, shall be deemed to be an annoyance or nuisance. An adequate enclosure and shelter shall be provided for the purpose of keeping and containing any animal kept on any Lot and all such enclosures and shelters shall meet the design guidelines of this Declaration Dust. Each Owner, and any Person on or about a Lot, or using or constructing any Improvements thereon, shall take all reasonable measures to eliminate or reduce any dust or blowing dirt which is or will become an annoyance or nuisance to other Persons within MAKALANI. For purposes of this Declaration, activities or uses which blow dust or dirt onto other Lots on a daily basis shall be deemed an annoyance or nuisance Noise. Each Owner, and any Person on or about a Lot, or using or constructing any Improvements thereon, shall take all reasonable measures to restrict the operation or use of equipment or machinery which generates noxious noise that can be heard on any other Lot Subdivision. No Lot shall be Subdivided nor shall any Subdivision be permitted on any Lot Garage Sales. Garage sales are prohibited within MAKALANI Monkeypod Trees. Except to the extent approved as part of the plan approval for the construction, reconstruction or alteration of any Improvement pursuant to Article IV, no existing monkeypod tree shall be cut or removed from any Lot until and unless the Owner of such Lot first obtains the approval therefor from the Design Committee as herein provided and such Owner otherwise complies with all of the provisions of Section Common Areas Uses. The exclusive use of the Common Areas shall be reserved equally to all Owners, except as specifically provided in this Declaration or in any Recorded instrument granting, creating or reserving the same, and every Owner shall have a right and easement for enjoyment in and to the Common Areas, which right and easement shall be appurtenant to the Owner s Lot and shall pass with the title to the Lot, subject, however, to the following limitations and restrictions: Copyright 2005 Holualoa Management Corporation 2/15/2005 6

14 Common Areas. (a) No Owner shall allow unauthorized use (i.e. pass through traffic) of the gated entry or the (b) Section 6.6 below. The use of the Common Areas shall be subject to the Subdivision Rules adopted pursuant to (c) The use of the Common Areas shall be subject to such easements and rights-of-way reserved therefrom at the time of conveyance of a Lot by Declarant, to such road and public utility easements and rights-of-way as may from time to time be taken under the power of eminent domain, and to such other road and public and private utility easements as may from time to time be granted or conveyed by the Declarant or the Association. (d) No Improvement, Excavation or other work which in any way alters any Common Area from its natural or existing state shall be made or done except upon strict compliance with and within the restrictions and limitations set forth in Section (e) Except to the extent otherwise permitted pursuant to the provisions of paragraph (c) above and Section 3.20, there shall be no use of the Common Areas, exclusive of Roads, except natural recreational uses which do not injure or scar the Common Areas or the vegetation thereof, which increase the cost of maintenance thereof, or cause unreasonable embarrassment, disturbance or annoyance to Owners in their enjoyment of their Lots or the Common Areas; without limiting the generality of the foregoing: (1) There shall be no camping in Common Areas. (2) There shall be no fires started or maintained in the Common Areas, except fires started and controlled by the Association incidental to the maintenance and preservation of property within MAKALANI. (3) No animals shall be kept in the Common Areas. Areas. (4) No vehicles, boats or trailers of any type shall be parked or stored in the Common (f) The right to use and enjoy the Common Areas shall extend to the families of all Owners and to the Owner s invitees Common Areas; Construction and Alteration of Improvements. No Improvements, Excavation or work which in any way alters any Common Area from its natural or existing state on the date when such Common Area was designated shall be made or done, except in strict compliance with and within the restrictions and limitations of the following provisions of this Section: (a) Except to the extent otherwise provided in Section 3.19(c) above, no Person other than the Declarant or the Association shall construct, reconstruct, refinish, alter or maintain any Excavation or Fill upon, or change the natural or existing drainage of, or shall destroy or remove any tree, shrub or other vegetation from, or plant any tree, shrub or vegetation upon, any Common Area. (b) The Declarant or the Association may, at any time and from time to time: (1) Reconstruct, replace or refinish any Improvement or portion thereof upon a Common Area in accordance with plans therefor approved by the Design Committee, or if such Improvements existed upon the Common Area when such Common Area was designated, then in accordance with the original design, finish or standard of construction of such Improvement when such Common Area was designated. (2) Construct, reconstruct, replace or refinish any access Improvement upon any portion of the Common Areas designated for such purposes. Copyright 2005 Holualoa Management Corporation 2/15/2005 7

15 (3) Replace any destroyed trees or any other vegetation upon a Common Area and, to the extent the Declarant or the Association deems necessary for the conservation of water and soil, plant trees, shrubs and ground cover. (4) Place and maintain upon any Common Area such signs and markers as the Declarant or the Association may, in its discretion, deem necessary for the identification of the Association, for the regulation of traffic, including parking, or for the regulation and use of the Common Areas and for the health, welfare and safety of the Owners and the public. (c) Any Owner may, at any time and from time to time, install and maintain within a Common Area any subsurface utility system, provided the same is approved by the Design Committee and an easement therefor is obtained from the Association. ARTICLE IV DESIGN APPROVAL; STANDARDS 4.1 Lot; Space; Construction and Alteration of Improvements; Etc. The right of an Owner to construct, reconstruct, refinish, alter or maintain any Improvement upon, under, or above any Lot or to install any utility line (wire or conduit) thereon or thereover, shall be subject to all of the following conditions of this Section: (a) Design Approval. Except to the extent permitted by Section 4.1(a)(2)(ii), any construction or reconstruction of, or the refinishing or alteration of any part of the exterior of any Improvement on any Lot is prohibited until and unless the Owner of such Lot first obtains approval therefor from the Design Committee as herein provided, and otherwise complies with all of the provisions of this Section 4.1 and the Design Guidelines. (1) In addition to the enforcement provision set forth in Article VIII hereof, the Association may, in the event of any violation of the provisions hereof, and upon written notice to the Owner, and the Owner's failure to remedy such violation within sixty (60) days from the receipt of such notice, restore such Lot to its state existing immediately prior to such violation. The Owner of such Lot shall reimburse the Association for all expenses incurred by it in performing its obligations under this paragraph. (2) Any Owner proposing to construct or reconstruct or to refinish or alter any part of the exterior of any Improvement on or within his Lot, or to perform any other work which under the provisions of this Declaration requires prior approval of the Design Committee, shall apply to the Design Committee for approval thereof as follows: (i) The Owner shall submit to the Design Committee for approval prior to obtaining a building permit and commencement of any work requiring Design Committee approval, plans and specifications for the proposed work, which shall include, without limitation, floor, elevation, plot, grading, and drainage plans; specifications and samples for the principal exterior materials; descriptions and samples of exterior color schemes; provisions made for automobile parking; outside lighting plans, if any; and a detailed description of the location, character and method of utilization of all utilities. In addition, such plans and specifications shall include a decorative landscaping plan. The material required to be submitted includes all material required by the Design Guidelines. The Design Committee shall review any such plans and specifications within the time set forth in the Design Guidelines and shall return such material to the Owner either approved or disapproved, in which latter case the general nature of the objections shall be stated in writing. The Owner must secure a surety bond for the completion of construction before construction can commence. (ii) Nothing herein shall be deemed to require an Owner to obtain approval from the Design Committee as to any interior Improvements or alterations, nor shall an Owner be required to obtain approval from the Design Committee when simply refinishing in accordance with the color and design of Improvements previously approved by the Design Committee. Copyright 2005 Holualoa Management Corporation 2/15/2005 8

16 (iii) Upon the completion of any construction, reconstruction, alteration or refinishing, or the completion of any other work for which Design Committee approved plans are required pursuant to this Section, the Owner shall give written notice thereof to the Design Committee which shall, within thirty (30) days of receipt of the notice, inspect such Improvement to determine whether it was constructed, reconstructed, altered or refinished in substantial compliance with the approved plans and specifications. If the Design Committee finds that such construction, reconstruction, alteration or refinishing was not done in substantial compliance with the approved plans and specifications therefor, it shall notify the Owner in writing of such noncompliance and require the Owner to remedy such noncompliance. If the Owner fails to remedy the noncompliance within sixty (60) days from the date of such notification, or such longer time as may reasonably be required, provided that the Owner has in good faith commenced action to remedy the noncompliance within said sixty (60) day period, the Design Committee shall notify the Association of such failure, and the Association shall either remove the Improvement or remedy the noncompliance, and the Owner shall reimburse the Association for all expenses incurred in connection therewith. If for any reason the Design Committee fails to notify the Owner in writing of any noncompliance within thirty (30) days after receipt of the notice of completion thereof from the Owner, the Improvement shall be deemed to have been completed in accordance with said approved plans and specifications. (iv) In reviewing plans and specifications, the Design Committee shall consider the requirements set forth in this Declaration and the Design Guidelines, and also shall consider whether the proposed Improvement: (1) is compatible and in harmony with, as to quality and type of materials and workmanship, to existing structures and other Improvements within MAKALANI, and, with reference to the location of the proposed Improvement, the topography and ground elevation of the Lot; (2) constitutes a suitable and adequate development of the Lot; and (3) will not, because of its design, interfere with the light, air or view of adjoining Lots. (b) Design Standards -- Generally. The following standards are applicable to the construction, reconstruction, alteration and refinishing of any and all Improvements from time to time existing upon any Lot: (1) The Farm Dwelling, constructed on any Lot shall have a total floor area of not less than twenty-five hundred (2,500) square feet under roof of habitable area, exclusive of lanais, porches, patios, garages, exterior stairways and landings. The first floor of any two story dwelling must have a minimum total floor area of two thousand (2,000) square feet, exclusive of lanai, porches, patios, garages, exterior stairways and landings. (2) The maximum vertical elevation of any structure shall not exceed twenty-five (25) feet measured from the highest Existing Grade adjacent to the structure, prior to any Excavation or Fill, to the highest point on the roof, not including chimneys. In addition to the twenty-five (25) foot height limit described above, no portion of a structure or other Improvement (exclusive of chimneys) shall be more than thirty (30) feet high measured from the lowest Existing Grade adjacent to the structure prior to any Excavation or fill. In the event of a conflict between the foregoing twenty-five (25) foot and thirty (30) foot limitations, the lower limitation shall control. Chimneys may not exceed the above limits by more than six (6) feet. Chimneys shall not exceed six (6) feet in height as measured from the roof through which it projects and shall be in accordance with all appropriate building codes. (3) Every Farm Dwelling shall have a garage or garages sufficient to park not less than three (3) vehicles. Garage doors facing Roads are prohibited. All garage doors shall face side or rear yards unless the natural topography conceals such doors from view from the Roads. Garages must have solid operable doors. (4) No permanent exterior lighting of any sort, or floodlights for which the light source is Visible from a Neighboring Property, shall be installed, operated or permitted to remain on any Lot, unless such lighting is specifically approved in writing by the Design Committee. No light which is unreasonably bright or which causes unreasonable glare shall be emitted from any Lot. Provided, however, nothing in this Section shall prevent the Owner of any Lot from constructing and operating exterior lighting not in conformance with this Section which lighting is designed to be used, and is used, for emergency purposes only. Copyright 2005 Holualoa Management Corporation 2/15/2005 9

17 (5) All driveways shall be paved with asphaltic concrete material or concrete so long as an approved darkening agent is used and the dark tone is continuously maintained. Colored concrete or other paving materials depending upon their appearance and quality, e.g. paving stones, brick, or quartzite may also be approved by the Design Committee. roof type. (6) All buildings, including outbuildings, shall be similar in material, color, style and 4.2 Approval No Warranty. Approval of Plans by the Design Committee is not a warranty or representation of the soundness or feasibility of the proposed design, nor the appearance, placement, and quality of the Improvement. Approval of plans is not a warranty or representation that County of Hawaii Building Codes and Regulations have been complied with. ARTICLE V DESIGN COMMITTEE 5.1 Design Committee; Organization, Power of Appointment and Removal of Members. (a) There shall be a Design Committee consisting of three (3) members. The Design Committee is authorized to retain the services of consulting architects, landscape architects, engineers, inspectors, and/or attorneys in order to advise and assist the Design Committee in performing its functions set forth herein. Each member of the Design Committee may be paid a stipend or honorarium as from time to time determined by the Board. (b) The following Persons are hereby designated as the initial members of the Design Committee: (1) Lynn Taube; (2) Ken Lundy; and (3) David Sullivan. (c) Each of the aforesaid persons shall hold office until such time as he has resigned, been removed or his successor has been appointed, as herein set forth. (d) Except as provided in Section 9.18 and Subsection (e) below, the right from time to time to appoint and remove members of the Design Committee shall be and is hereby reserved and vested solely in the Declarant. (e) Except as provided in Section 9.18, from and after the conveyance of all of the Lots by the Declarant, the Board shall have the right to appoint and remove the members of the Design Committee. (f) Any member of the Design Committee may at any time resign from the Design Committee upon written notice delivered to the Declarant or the Association, whichever shall then have the right to appoint and remove members. (g) If at any time there shall cease to be a Design Committee duly constituted as provided by this Declaration, the Board shall thereupon become and act for all purposes as the Design Committee. 5.2 Design Committee Duties. It shall be the duty of the Design Committee to consider and act upon such proposals or plans from time to time submitted to it pursuant to the provisions of this Declaration and the Design Guidelines and to perform such other duties from time to time delegated to it by the Declarant or the Board. 5.3 Design Committee Meetings, Actions, and Expenses. The Design Committee shall meet from time to time as necessary to properly perform its duties hereunder. The vote or written consent of any two (2) members shall constitute the act of the Design Committee, unless the unanimous action of its members is otherwise required by this Copyright 2005 Holualoa Management Corporation 2/15/

18 Declaration. The Design Committee shall keep and maintain a record of all actions from time to time taken by the Design Committee at such meetings or otherwise. Members of the Design Committee shall be entitled to reimbursement from the Association for reasonable expenses incurred in connection with their performance of any Design Committee function. 5.4 Design Guidelines; Variances. The Declarant shall establish guidelines and regulations to be known as the "Design Guidelines" which, among other things, interpret or implement the provisions of this Declaration pertaining to the design of Improvements. Thereafter, the Design Committee may, from time to time, with the approval of the Board, amend and/or repeal the Design Guidelines in whole or in part. With the approval of the Board, except as may otherwise provided in this Declaration, the Design Committee shall have the right at any time, for good cause, to amend, modify, waive, grant variances to, or not enforce, any of the provisions and requirements of this Declaration or the Design Guidelines with respect to any Lot or Lots without any liability whatsoever to the Owners of the Lot to which the waiver, variance or non-enforcement applies, or to the Owner or Owners of any other Lot or Lots, or to any other Person, and without impairing or otherwise affecting the application or enforcement of such provisions or requirements with respect to any other Lot. A copy of the Design Guidelines, as they may from time to time be adopted, amended or repealed, shall be kept available at all times at the office of the Association or at the office of Declarant, for the inspection of any Owner, or any architect or agent of an Owner. 5.5 Non-Waiver. The approval by the Design Committee of any plans and specifications for any work done or proposed, or in connection with any other matter requiring the approval of the Design Committee under this Declaration, shall not be deemed to constitute a waiver of any right to withhold approval as to any similar plan, drawing, specifications or matter whatsoever subsequently or additionally submitted for approval. 5.6 Estoppel Certificate. Within thirty (30) days after written request therefor is delivered to the Design Committee by any Owner, and upon payment to the Association of a reasonable fee from time to time to be fixed by the Association, the Design Committee shall deliver to such Owner an estoppel certificate executed by any two (2) of its members certifying with respect to the Lot of said Owner that, as of the date thereof, either (a) all Improvements and other work made or done upon or within said Lot comply with this Declaration and the Design Guidelines, or (b) such Improvements and/or work do not so comply, in which event the certificate shall also (i) identify the noncomplying Improvements and/or work, and (ii) set forth with particularity the cause or causes for such noncompliance. Any purchaser or lessee from the Owner, or mortgagee or other encumbrancer of the Lot, shall be entitled to rely on said certificate with respect to the matters set forth therein, such matters being conclusive as between the Association, Declarant and all Owners and such purchaser, lessee, mortgagee or other encumbrancer. Said certificate does not represent or infer that compliance with this Declaration and the Design Guidelines is compliance with any applicable governmental laws, rules, or ordinances. 5.7 Liability. Neither the Design Committee nor any member thereof shall be liable to the Association or to any Owner or to any other Person for any damage, loss or prejudice suffered or claimed on account of (a) the approval of any plans, drawings and specifications, whether or not defective, (b) the construction or performance of any work, whether or not pursuant to approved plans, drawings and specifications, (c) the development or manner of development of any property within MAKALANI, or (d) the execution of an estoppel certificate pursuant to Section 5.6, whether or not the facts therein are correct, provided, however, that such member has, with the actual knowledge possessed by him, acted in good faith. ARTICLE VI MAKALANI HOMEOWNERS ASSOCIATION 6.1 Organization. The Association has been incorporated as a nonprofit corporation to serve as the governing body for all of the Owners for the protection, improvement, alteration, maintenance, repair, replacement, administration and operation of MAKALANI, the assessment for and the payment of expenses, the disposition of casualty insurance proceeds, and all other matters as provided in the Articles of Incorporation of the Association (the Articles ), this Declaration and the Bylaws. The Association shall not be deemed to be conducting a business of any kind, and all funds received by the Association shall be held and applied by it for the benefit of the Owners in accordance with the provisions of this Declaration and the Bylaws. Copyright 2005 Holualoa Management Corporation 2/15/

19 6.2 Membership. (a) Every Owner of a Lot within MAKALANI, including Declarant, shall be a member of the Association. Membership in the Association is mandatory and no Person other than an Owner may be a member of the Association. The Person who constitutes the Owner of a Lot shall automatically be the holder of the membership in the Association appurtenant to that Lot, and such membership shall automatically pass with title to that Lot. No Owner, whether one or more Persons, shall have more than one membership per Lot owned, but all of the Persons owning each such Lot shall be entitled to rights of membership and of use and enjoyment appurtenant to ownership of that Lot, subject to any limitations relating to multiple party ownership of Lots set forth in this Declaration, the Bylaws or the Subdivision Rules. Membership shall be appurtenant to and may not be separated from ownership of any Lot. In the event ownership of a Lot is transferred or otherwise conveyed, the membership in the Association which is appurtenant thereto shall automatically pass to such transferee, notwithstanding any failure of the transferor to endorse to his transferee evidence of such membership. The foregoing provision relating to membership does not include mortgagees or any other Persons who hold an interest in a Lot merely as security for the performance of an obligation. (b) The rights, duties, privileges and obligations of an Owner as a member of the Association shall be those set forth in, and shall be exercised and imposed in accordance with, the provisions of this Declaration and the Bylaws. 6.3 Voting Rights. There shall be only one (1) vote per Lot which shall be exercised by all of the Persons owning such Lot. In any situation where there is more than one Person as the Owner of a Lot, the vote for such Lot shall be exercised as such Persons among themselves determine and the secretary of the Association shall be notified in writing of such determination not less than one week prior to any meeting. In the absence of such notification, the vote for such Lot may be exercised by any Person owning such Lot. 6.4 Duties and Obligations of the Association. Subject to the terms and provisions of this Declaration, the Bylaws and the Articles, the Association shall have the duty and obligation to do and perform each and every one of the following for the benefit of the Owners and for the maintenance and improvement of MAKALANI. (a) The Association shall accept all Owners as members of the Association. (b) The Association shall accept title to any property, real or personal, conveyed to it by the Declarant, whether designated as a Common Area or otherwise. The Association may also accept title to Common Areas and other property from time to time conveyed to it pursuant to Section The Association may also acquire and accept title to any other property, real, personal or mixed; nothing herein contained is to be construed to authorize the Association to acquire or invest in property simply for the purpose of acquiring income or otherwise making a financial profit therefrom, and the Association shall not carry on any business, trade, association or profession for profit, but nothing herein shall prevent the Association from charging reasonable fees to Owners for use by the Owners and their families and guests of the facilities on the Common Areas, if any, to help defray the costs of construction, maintenance, repair or operation of such facilities, or of other facilities owned by the Association. (c) The Association shall maintain or provide for the maintenance of the Common Areas and any other property owned by the Association, including without limitation, all Roads, entrance gates and walls, telephone system, drainage facilities, mail and newspaper receptacle facilities, security systems, and all other Improvements of whatever kind and for whatever purpose, from time to time located on the Common Areas, if any, and all other such property, in good order and repair, provided, however, that notwithstanding the foregoing, the Association shall have no obligation to maintain in good order and repair, any Improvements approved by the Association and constructed upon the Common Areas by an Owner, but may use all legal means to assure that such Owner maintains the same. (d) MAKALANI is a master water-metered subdivision. Three (3) water units have been assigned to each five (5) acre Lot. Two (2) water units have been assigned to each one (1) acre Lot. Each Owner is responsible for payment of all water bills (including all fees, charges, and taxes) for water usage for the Owner s Lot. Each Owner is responsible for the installation of a water submeter, a backflow preventer, and, if required, a pressure reducing valve. The Association shall provide for the reading of all water submeters and for billing Owners for water usage of all Lots as the Association is billed by the Department of Water Supply. The assessment for water usage is Copyright 2005 Holualoa Management Corporation 2/15/