GRAND RESERVE NEIGHBORHOODS COMBINED DISCLOSURE STATEMENT

GRAND RESERVE NEIGHBORHOODS COMBINED DISCLOSURE STATEMENT - FOR GRAND RESERVE, A SITE CONDOMINIUM AND TOWNES AT GRAND RESERVE, A TRADITIONAL ATTACHED CONDOMINIUM in the Township of Grand Blanc, Genesee County, Michigan Developed by: Pulte Land Company, LLC 450 W. Fourth Street Royal Oak, Michigan 48067 Disclosure Statement effective September, 2006, revised June 2007 GRAND RESERVE IS A TWO HUNDRED SEVENTY EIGHT (278) UNIT RESIDENTIAL SITE CONDOMINIUM LOCATED IN THE TOWNSHIP OF GRAND BLANC, GENESEE COUNTY, MICHIGAN, EXPANDABLE TO INCLUDE A TOTAL OF UP TO THREE HUNDRED NINETEEN (3 1 9) CONDOMINIUM UNITS. THE TOWNES AT GRAND RESERVE IS A ONE HUNDRED FIFTY NINE (159) UNIT TRADITIONAL ATTACHED CONDOMINIUM LOCATED IN THE TOWNSHIP OF GRAND BLANC, GENESEE COUNTY, MICHIGAN. Grand Reserve and Townes at Grand Reserve (referred to as "Neighborhoods" in this Disclosure Statement) are located adjacent to each other, and are part of the Grand Reserve Community. THIS DISCLOSURE STATEMENT IS NOT REQUIRED TO BE FILED, AND CONSEQUENTLY HAS NOT BEEN FILED WITH THE CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU, MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES, 6546 MERCANTILE WAY, LANSING, MICHIGAN 48913, NOR HAS THE DEPARTMENT UNDERTAKEN TO PASS ON THE VALUE OR MERITS OF THE DEVELOPMENT OR TO MAKE ANY RECOMMENDATIONS AS TO THE PURCHASE OF UNITS IN THIS DEVELOPMENT. THIS DISCLOSURE STATEMENT IS NOT A SUBSTITUTE FOR THE MASTER DEED OR OTHER LEGAL DOCUMENTS, AND ALL BUYERS SHOULD READ ALL DOCUMENTS TO FULLY ACQUAINT THEMSELVES WITH THE PROJECT AND THEIR RIGHTS AND RESPONSIBILITIES. IT IS RECOMMENDED THAT PROFESSIONAL ASSISTANCE BE SOUGHT PRIOR TO PURCHASING A CONDOMINIUM UNIT.

COMBINED DISCLOSURE STATEMENT GRAND RESERVE NEIGHBORHOODS (RESIDENTIAL CONDOMINIUM PROJECTS) TABLE OF CONTENTS SECTION PAGE 1. INTRODUCTION... 1 2. THE CONDOMINIUM CONCEPT... 2 2.1 Units and Common Elements... 2 2.2 Real Estate Taxes... 3 2.3 Grand Reserve Site Condominium; Insurance... 3 2.4 Townes at Grand Reserve Traditional Condominium; Insurance... 3 2.5 Community Center; Shared Improvements and Facilities; Master Association... 4 2.6 General... 4 3. DESCRIPTION OF THE NEIGHBORHOODS... 4 3.1 Size. Scope and Physical Characteristics of the Neighborhoods... 4... 3.2 Utilities; Possible Sanitary Sewer Reserve Tank 4 3.3 Private Roads; Township Rights; Muirfield Drive Access... 5 3.4 Reserved Rights of the Developer... 5 3.5 General... 7 3.6 Community Center; Recreational Facilities; Gate House... 7 3.7 Age Restriction... 7 3.8 Township Rights and Remedies... 8 3.9 Wetland Areas; Open Space Areas; Pathways... 8 3.10 Storm Water Drainage Facilities; Ponds; Fountains... 8 4. LEGAL DOCUMENTS... 9 4.1 General... 9 4.2 Master Deed... 9 4.3 Bylaws... 10 4.4 Condominium Subdivision Plan... 10 4.5 Declaration... 10 5. RIGHTS AND OBLIGATIONS BETWEEN THE DEVELOPER AND OWNERS... 10 5.1 Before Closing... 10 5.2 At Closing... 11 5.3 After Closing... 11 6. ESCROW AGREEMENT... 11 Error! Unknown document property name.

7. THE MASTER ASSOCIATION AND NEIGHBORHOOD ASSOCIATIONS... 12 7.1 The Master Association... 12 7.2 Neighborhood Associations... 12 8. BUDGET AND ASSESSMENTS... 13 8.1 Budget/Assessments... 13 8.2 Foreclosure of Lien... 13 9. RESTRICTIONS... 13 9.1 Restrictions on Ownership. Occupancy and Use... 13... 10.1 The Developer's Background and Experience... 15 10.2 Builder... 15 10.3 Management; Service Contracts... 15 10.4 Sales... 16 10. THE DEVELOPER AND OTHER SERVICE ORGANIZATIONS 15 11. INSURANCE... 16 11.1 Title Insurance... 16 11.2 Other Insurance... 16 12. POSSIBLE LIABILITY FOR ADDITIONAL ASSESSMENTS BY THE ASSOCIATION 17 13. PURPOSE OF DISCLOSURE STATEMENT... 17 14. PROPOSED ANNUAL BUDGET... 19 Error! Unknown document property name.

COMBINED DISCLOSURE STATEMENT GRAND RESERVE NEIGHBORHOODS GRAND RESERVE, A SITE CONDOMINIUM AND TOWNES AT GRAND RESERVE, AN ATTACHED CONDOMINIUM 1. INTRODUCTION Pulte Land Company, LLC, a Michigan limited liability company ("Developer") has established the Grand Reserve Community ("Community") which will initially consist of two (2) condominium projects, referred to as "Neighborhoods." The Neighborhood known as Grand Reserve will initially contain 278 site condominium Units and shall be expandable to include a total of up to 3 19 site condominium Units. The Neighborhood known as Townes at Grand Reserve will initially contain 159 attached condominium Units contained in duplex or triplex buildings. The Community may be expanded to include additional contiguous land. The Community will also contain certain amenities and services such as a Community Center, Pathways and Open Space Areas that may be used by all Owners within the Community as it may be expanded. These and other amenities and services of the Community, including Roads, Sidewalks, Entranceway and Landscaping Improvements, Storm Drainage Facilities, Utilities, Wetlands, Water Lines and Sanitary Sewer Lines are referred to as "Shared Improvements and Facilities." The Community Center and other Shared Improvements and Facilities will be administered, maintained and operated by an association of Neighborhood Unit Owners ("Owners"), referred to as the "Master Association" and described in the recorded Grand Reserve Community Declaration of Easements, Covenants, Conditions and Restrictions ("Declaration"). Each Owner will be a member of the Master Association and will be obligated to pay assessments levied by the Master Association for the costs associated with administration, maintenance and operation of the Shared Improvements and Facilities. The Master Association will also perform certain maintenance services on the Units such as snow removal and grass cutting. The Master Association and the Shared Improvements and Facilities are described in greater detail in the Community Declaration. The Grand Reserve Community is an age restricted Community and is intended for occupancy by persons 55 years of age or older as described in the Declaration and Section 3.7 below. Each Neighborhood will be subject to a Master Deed applicable only to the Owners of Units within such Neighborhood. As set forth in the Master Deeds, each Neighborhood will be governed by a separate condominium association in addition to the Master Association. The Declaration contains Community Standards and use restrictions that apply to all Owners and Units within the Community in addition to the use restrictions contained in each Neighborhood Master Deed.

Each Owner and prospective Owner is encouraged to become familiar with the Declaration and the Master Deed for the Neighborhood applicable to the Owner's Unit. Condominium development in Michigan is governed largely by Act 59 of the Michigan Public Acts of 1978, as amended, ("Condominium Act" or "Act"). This Disclosure Statement, together with copies of the legal documents required for the creation and operation of the applicable Neighborhood are furnished to each purchaser of a Unit in a Neighborhood pursuant to the requirement of Michigan law that the Developer of a Condominium Project disclose to prospective purchasers the characteristics of the Condominium Units which are offered for sale. The terms used in this Disclosure Statement have the same meaning as the same terms used in the Master Deeds and Community Declaration. THIS DISCLOSURE STATEMENT ALONG WITH THE MASTER DEEDS, DECLARATION AND OTHER LEGAL DOCUMENTS REQUIRED FOR THE CREATION AND OPERATION OF THE NEIGHBORHOODS AND THE GRAND RESERVE COMMUNITY DISCLOSURE STATEMENT AND DESIGN GUIDELINES, CONSTITUTE THE ONLY AUTHORIZED DESCRIPTION OF GRAND RESERVE, TOWNES AT GRAND RESERVE AND THE GRAND RESERVE COMMUNITY. DEVELOPER'S AND BUILDER'S SALES OR OTHER REPRESENTATIVES ARE NOT PERMITTED OR AUTHORIZED TO VARY FROM SUCH AUTHORIZED DESCRIPTION. 2. THE CONDOMINIUM CONCEPT 2.1 Units and Common Elements. A Condominium is a method of subdividing, describing and owning real property. A Condominium Unit has the same legal attributes as any other form of real property under Michigan law and may be sold, mortgaged or leased, subject only to restrictions contained in the Condominium Documents and Community Declaration or as otherwise may be applicable to the Neighborhood. Each Owner receives a conveyance of the Owner's individual Condominium Unit. Each Owner owns, in addition to the Owner's Unit, an undivided interest in the common areas and facilities ("Common Elements") of the Neighborhood. Title to the Common Elements is included as part of, and is inseparable from, title to the individual Condominium Units. Each Owner's proportionate share of the Common Elements is determined by the percentage of value assigned to the Owner's Unit in the Master Deed. All portions of a Neighborhood not included within the Units constitute the Common Elements. Limited Common Elements are those Common Elements which are set aside for use by less than all Unit Owners. General Common Elements are those Common Elements that serve or are designed for use by all Unit Owners. The General Common Elements in each Neighborhood are the land, roads, open space areas, sidewalks, utilities, water lines, sanitary sewer lines, storm drainage facilities and certain surface improvements, including entranceway and landscaping improvements, the beneficial interest in easements and other General Common Elements designated on the Condominium Subdivision Plan and described in the Master Deed for each Neighborhood. There are no Limited Common Elements in Grand Reserve. The Limited Common Elements in Townes at Grand Reserve are each Unit's driveway and

walkways, any patios, porches and decks, the air conditioner compressor, condenser, water heater and furnace, garage doors and garage door openers, doors and windows, external building lighting, interior walls, chimneys, ceilings, floors and surfaces. Some of the General Common Elements of the Neighborhoods are Shared Improvements and Facilities and are subject to use by all Owners of Units in the Neighborhoods. Each Neighborhood will be administered generally by a non-profit corporation of which all Neighborhood Unit Owners are members (the "Neighborhood Association"). The nature and duties of the Association are described more fully in Section 7 of this Disclosure Statement. 2.2 Real Estate Taxes. Except for the year in which the Neighborhood is established, real property taxes and assessments are levied individually against each Unit in the Neighborhood. The separate taxes and assessments cover the Unit and its proportionate share of the Common Elements. No taxes or assessments are levied independently against the Common Elements. The year in which the Neighborhood is established, the taxes and assessments for Units covered by the Master Deed are billed to the Neighborhood Association and are paid by the Owners of such Units in proportion to the percentage of value assigned to the Units owned by them. 2.3 Grand Reserve Site Condominium; Insurance. Grand Reserve is a site condominium in which the Units consist of only the individual building sites on which residential dwellings and other improvements may be built, and the Common Elements do not include the residential dwellings. Each Grand Reserve Condominium Unit consists of only the land within the perimeter of a Condominium Unit, together with any improvements, including the residential dwelling constructed on the land within the Unit, that are not designated by Developer as General Common Elements. In Grand Reserve, each Owner holds an absolute and undivided title to the Owner's Unit and to the dwelling and other improvements located on the Unit (to the extent such improvements are not designated in the Master Deed as Common Elements). Each Unit Owner in Grand Reserve will be responsible for maintaining fire and extended coverage insurance on the Owner's Unit and the dwelling and other improvements located on the Unit and appurtenant to it, as well as liability and other personal insurance coverage and insurance on personal property and fixtures within the Owner's Unit. The Grand Reserve Condominium Association (or the Master Association) will maintain only liability and property damage insurance coverage for damage to or occurrences on the General Common Elements and such other insurance on the General Common Elements and otherwise as is specified in the Condominium Documents. 2.4 Townes at Grand Reserve Traditional Condominium; Insurance. Townes at Grand Reserve is a traditional Condominium Project and the Units consist of the air space enclosed within each of the dwellings. The General Common Elements include the exterior structural components of the residential dwellings. Each Owner of a Unit in Townes at Grand Reserve will be responsible for the cost of insurance (liability and property damage), maintenance, repair and replacement of the Owner's Unit, all improvements, personal property and upgrades within or serving the Owner's Unit including utility improvements and certain Limited Common Elements as described in the Townes at Grand Reserve Master Deed. The Townes at Grand Reserve Condominium Association (or the Master Association) is responsible for insurance (liability and property damage), maintenance, repair and replacement of General 3

Common Elements and certain Limited Common Elements as specified in the Townes at Grand Reserve Master Deed. 2.5 Community Center; Shared Improvements and Facilities; Master Association. Developer intends to construct the Community Center and other Shared Improvements and Facilities to serve the Grand Reserve Community. Each Owner of a Unit in a Neighborhood will become a Member of the Master Association. The recorded Community Declaration describes the administration of the Master Association and the assessments of all Community Members for the use, operation, administration, insurance, repair, maintenance and replacement of the Community Center and the Shared Improvements and Facilities. The Community Center is intended to include some or all of the following: an indoor/outside pool, tennis/bocce courts, a fitness center, a library, a social room, offices, a kitchen, meeting rooms, an arts and crafts room and other similar amenities which are to be insured, maintained, repaired and replaced by the Master Association. Each Owner of a Unit in the Community will be assessed charges for maintenance of the Shared Improvements and Facilities through the Neighborhood Association or the Master Association. The nature of the Community Center and the duties of the Master Association are more fully described in Section 3.6 below and the Declaration. 2.6 General. Although the foregoing is generally accurate as applied to most residential Condominium developments, the details of each development may vary substantially. Accordingly, each purchaser is urged to review carefully all of the documents contained in the Neighborhood Purchaser Information Booklet, as well as any other documents that have been delivered to the purchaser in connection with the Community. Any purchaser having questions pertaining to the legal aspects of the Community or the Neighborhood is advised to consult a lawyer or other professional advisor. 3. DESCRIPTION OF THE NEIGHBORHOODS 3.1 Size, Scope and Physical Characteristics of the Neighborhoods. Each Neighborhood is located in the Township of Grand Blanc, Genesee County, Michigan. The Master Deed for Grand Reserve includes 278 Condominium Units expandable to include 3 19 Units. The Master Deed for Townes at Grand Reserve consists of 159 Units contained in duplex or triplex buildings. A more detailed description of each Neighborhood is found in the Condominium Subdivision Plan which is attached to each Neighborhood Master Deed. Each Unit in Grand Reserve consists only of the land within the perimeter of the Unit boundaries, and any improvements constructed on the Unit. Each Unit in Townes at Grand Reserve consists of the air space enclosed within each of the dwellings. 3.2 Utilities; Possible Sanitaw Sewer Reserve Tank. The Neighborhoods are served by public water, sanitary and storm sewers, gas, electric and telephone service. Gas service is furnished by Consumers Energy, electric service is furnished by Consumers Energy, cable television service is furnished by Comcast Cablevision, and telephone service is provided by AT&T. Utilities will be metered to each Unit and paid for by the Owner of the Unit. Developer has reserved the right to establish permanent easements in favor of Grand Blanc Township in, over, under and through the Community for the development, construction, maintenance, repair and replacement and operation of a water supply system and sanitary sewer system. Each Owner of a Unit in the Community will be billed for costs associated with such water supply and 4

sanitary sewer services in accordance with the requirements of the Township and any agreement related to the provision of such services. The Utilities in each Neighborhood also serve the other Neighborhoods in the Community and easements for use of the utilities in the Community have been established as set forth in the Declaration. As part of the Shared Improvements and Facilities Developer reserves the right to install a sanitary sewer reserve tank and related facilities on certain designated Units or Open Space Areas within the Community in a manner approved by applicable governmental authorities. Developer has presently reserved the right to install an underground sanitary sewer reserve tank and related above ground facilities on Unit 18 1 and Unit 182 of the Grand Reserve Neighborhood or on a nearby Open Space Area, to be used for the purpose of detaining sanitary sewer flows during major storm events. If installed and operated, the sanitary sewer reserve tank and facilities will produce noise and odors. 3.3 Private Roads; Township Rights; Muirfield Drive Access. The Roads serving the Community are private roads and are not required to be maintained by the Genesee County Road Commission ("Road Commission"). All expenses of insurance, maintenance, repair and replacement of the private Roads must be paid by the Unit owners through assessment by the Neighborhood Association or the Master Association as set forth in the Neighborhood Bylaws and the Declaration. The Roads in each Neighborhood also serve the other Neighborhoods in the Community, and easements for use of the Roads have been established as set forth in the Declaration. The Township and emergency service providers have been granted easements for access over the private Roads in the Community. The Township has certain rights to repair and maintain the Roads if the Master Association fails to do so, and to bill the Unit Owners for the costs incurred. As shown on the Grand Reserve Condominium Subdivision Plan, Muirfield Drive is presently designed to provide access to land adjacent to the Community on the west. 3.4 Reserved Rights of the Developer 3.4.1 Conduct of Commercial Activities. The Developer has reserved the right, until all of the Units in the Community have been sold to maintain on the Community a sales office, a business office, model Units, storage areas, reasonable parking incident to the use of such areas, and such access to, from and over the Community as may be reasonable to enable development and sale of the entire Community. The Developer is obligated to restore the areas so used to habitable status upon termination of use. Developer intends to construct model homes and maintain a model home area in the Community. Developer reserves the right to limit access to those private Roads in the Community in the area of the model homes during the period of development, construction and sale of homes and Units in the Community, as it may be expanded. 3.4.2 Right to Amend. The Developer has reserved the right to amend each Neighborhood Master Deed and exhibits without approval from such Neighborhood Owners and mortgagees for the purpose of correcting errors, including correction of Unit lines if any construction encroaches outside the Unit perimeter, and for any other purpose. Any such amendment that would materially change the rights of an Owner or 5

mortgagee may be made only with the approval of sixty-six and two-thirds percent (66 213%) of the Owners and first mortgagees. The Developer has also reserved the right to amend the Master Deed to modify types and sizes of unsold Units, to amend the Bylaws, to correct arithmetic, survey or plan errors or deviations in construction, to clarify the Master Deed, to comply with the Act, rules or regulations, or requirements of governmental authorities or Lenders, to create or limit easements, and to record "As Built" drawings, even if such amendment is material, so long as the amendment does not change the method or formula used to determine the percentage of value of Units in the Project for other than voting purposes, or alter an Owner's Unit dimensions or any appurtenant Limited Common Elements, without that Owner's consent. Further, certain provisions of the Neighborhood Master Deeds cannot be amended without the Developer's approval or approval of Grand Blanc Township. 3.4.3 Easements 3.4.3.1 For Maintenance, Repair and Replacement. The Developer has reserved easements over each Condominium Neighborhood (including all Units and Common Elements) as may be required to perform any of Developer's maintenance, repair, decoration or replacement rights. 3.4.3.2 For Use of Utilities. The Developer has further reserved easements for utility purposes over the Community and the right to grant easements or dedicate utilities to appropriate governmental agencies or utility companies and transfer title of utilities to state, county or local governmental authorities. 3.4.3.3 For Use of Roads. The Developer has reserved easements and rights of use over the Roads and Sidewalks in the Community for the purpose of ingress and egress to and from all or any portion of the Community. 3.4.3.4 Additional Easements. The Developer has reserved for itself and its agents, employees, representatives, guests, invitees, independent contractors, successors and assigns, the right, at any time prior to the expiration of the Construction and Sales Period to reserve, dedicate andlor grant public or private easements over, under and across the Neighborhoods for the construction, installation, repair, maintenance and replacement of rights-of-way, walkways, bicycle paths, nature trails, water mains, sanitary sewers, stom drains, retention basins, water wells serving common elements, electric lines, telephone lines, gas mains, cable television and other telecommunication lines and other public and private utilities, including all equipment, facilities and appurtenances relating thereto. 3.4.3.5 Termination of Easements. Developer has reserved the right, during the Construction and Sales Period, to terminate and revoke any utility or other easement granted in or pursuant to the Neighborhood Master Deeds at such time as the particular easement has become unnecessary.

3.4.4 Sole Right to Approve Improvements. No dwelling or other improvement in the Community may be constructed until the Developer approves the plans and specifications for the improvement. 3.4.5 Expansion, Contraction, Conversion, Subdivision and Consolidation. Developer has reserved the right to contract each Neighborhood to withdraw land areas, including the road rights-of-way upon dedication to the Road Commission, Common Elements, or Units as set forth in Article 9 of each Neighborhood Master Deed. Developer has also reserved the right to convert the Project Units and Common Elements as set forth in Article 8 of each Neighborhood Master Deed, and to expand each Neighborhood or the Community as set forth in Article 10 of each Neighborhood Master Deed and Article XI1 of the Declaration. Developer has also reserved the right to subdivide, consolidate and modify Units or Common Elements and to construct amenities as described in each of the Neighborhood Master Deeds. 3.5 General. In the Condominium Documents and in the Condominium Act, certain rights and powers are granted or reserved to the Developer to facilitate the development and sale of the Community, including the power to approve or disapprove a variety of proposed acts and uses and the power to secure representation on the Board of Directors of the Association. 3.6 Community Center; Recreational Facilities; Gate House. Developer intends to establish certain recreational facilities and amenities in the Community, including the Community Center, for the use and benefit of the Owners and occupants of Units in the Grand Reserve Community. The Grand Reserve Community is presently intended to consist of Grand Reserve and the Townes at Grand Reserve. The Community Center and other amenities will be used for the common enjoyment of the Owners and occupants of Units in the Community. The Community Center and other amenities such as pathways, benches and open space areas, if constructed, are to be administered, operated, insured, maintained, repaired and replaced by the Master Association. The Master Association will have the right to establish non-discriminatory rules and regulation as the board of directors of the Master Association may deem necessary or desirable for the safe, orderly and convenient operation and use of the Community Center and amenities and for the proper maintenance, repair and replacement of the Community Center and amenities. The Master Association Members will be assessed charges for maintenance of the Community Center and amenities through each Neighborhood Association or the Master Association. The Master Association has the right to levy charges and assessments against each Unit Owner other than Developer for the operation, insurance, maintenance, repair and replacement of the Community Center and amenities. The Declaration provides procedures for arbitration of disputes between or among Community Members or the Master Association. The gate house at the entry to the Community along Baldwin road is not designed to and will not house an attendant. There will be no gate restricting entrance to the Community as the gate house is designed purely for landmark and aesthetic purposes. 3.7 Age Restriction. The Community is intended to provide housing primarily for persons 55 years of age or older, subject to the rights reserved to Developer in the Declaration. The Community is to be operated as an age restricted community in compliance with all applicable Michigan and federal laws.

As described in the Declaration, each occupied dwelling is to be occupied by an Age Qualified Occupant. However, once a dwelling is occupied by an Age Qualified Occupant, other Qualified Occupants of that dwelling may continue to occupy the dwelling in the absence of an Age Qualified Occupant so long as such continued occupancy does not affect the Community's compliance with applicable state and federal laws. At all times, at least eighty percent (80%) of the Units within the Community must be occupied by at least one person 55 years or older. Persons under 19 years of age may stay overnight in a dwelling for up to, but not exceeding, ninety (90) days during any twelve (12) consecutive months. The board of directors of the Master Association must establish policies and procedures to maintain the Community's status as an age restricted community under state or federal law. However, Developer has the right to sell Units to or for occupancy by persons between the ages of 50 and 55, provided that such sales do not affect the Community's compliance with applicable state and federal laws pertaining to age restricted communities. 3.8 Township Rights and Remedies. The Township has reserved certain rights and remedies to ensure maintenance of the Roads in the Community by the Master Association. If the Master Association fails to properly maintain the Roads, the Township has certain rights to undertake such repairs and collect the costs from Unit Owners as described in the Declaration. In addition, the Township has the right to approve certain amendments to the Master Deed and other actions by Developer, the Neighborhood Association or the Master Association as set forth in the Neighborhood Master Deeds. 3.9 Wetland Areas; Open Space Areas; Pathways. As described in the Neighborhood Master Deeds, a portion of the Community consists of regulated Wetlands and wetland buffers. A portion of the Wetlands or buffers may be located on the Site Condominium Units. There shall be no use, occupancy or modification of any Wetlands or any related wetland buffers without the prior written approval of the Developer, the Neighborhood Association, the Master Association and applicable governmental authorities. The Open Space Areas are subject to the authority of the Master Association, and no Owner or occupant shall modify or alter the Open Space Areas without the prior written approval of Developer. The Pathways located within the Community's northwest Open Space Area will consist of woodchips and will be maintained by the Master Association. However, there will be no snow or ice removal from the woodchip Pathways. 3.10 Storm Water Drainage Facilities; Ponds; Fountains. Storm water drainage easements and facilities are established to assure the perpetual functioning of the storm water drainage system across the Community. A portion of the storm water drainage easements may be located on the Units. No modification, use or occupancy of such areas is allowed without prior written approval of the Developer, the Master Associations and applicable governmental authorities. The Master Association is responsible for maintenance of the storm water drainage easements and facilities of the Community and the cost of such maintenance shall be assessed to the Owners of Units in the Community through the Master Association or the Neighborhood Association. Some ponds in the Community will be equipped with fountains as determined by Developer. The timing and use of the fountains will be determined by Developer or the Master Association. The fountains will not be operated in the winter months. Ponds will be treated for algae as determined by the Master Association.

4. LEGAL DOCUMENTS 4.1 General. Each Neighborhood was established as a condominium pursuant to the Neighborhood Master Deed recorded in the Genesee County Records and contained in the Neighborhood Purchaser Information Booklet. Each Neighborhood Master Deed includes the Bylaws as Exhibit A and the Condominium Subdivision Plan as Exhibit B. 4.2 Master Deed. The Master Deed for each Neighborhood contains the definitions of certain terms used in the Condominium Documents, the percentage of value assigned to each Unit in the Condominium Project, a general description of the Units and Common Elements included in the Project and a statement regarding the relative responsibilities for maintaining the Common Elements. Article 4 describes the General and Limited Common Elements, Article 5 describes the Units, Article 6 covers easements and Article 7 covers the provisions of amending the Master Deed. 4.2.1 Conversion. Article 8 of each Neighborhood Master Deed provides for conversion of Convertible Areas. All present and future Common Elements and Units are designated as Convertible Areas and the land area within which the Units and Common Elements may be expanded and modified and within which Limited Common Elements may be created. No additional Units may be created in the Convertible Area, and Units may be expanded, modified or decreased. No portion of a Unit owned by a Owner other than Developer can be converted without such Owner's consent. All improvements constructed or installed within the Convertible Areas are restricted exclusively to residential use and to Common Elements compatible with residential use. 4.2.2 Contraction. Article 9 of each Neighborhood Master Deed provides for Contraction. Developer has reserved the right to withdraw from the Condominium the portion of certain rights of way adjacent to the Community upon dedication to the Road Commission, any present or future Units of the Condominium, and any General Common Element land areas of the Condominium. The consent of any Unit owner to the contraction of such Owner's Unit must be obtained prior to contraction of a Unit owned by an Owner other than Developer. 4.2.3 Expansion. Article 10 of each Neighborhood Master Deed provides for expansion. Forty-one (41) Units may be added to the Grand Reserve Site Condominium, for a total of three hundred nineteen (3 19) Units. Presently, the Townes at Grand Reserve has no area of future expansion. Additional Units, if any, will be established upon all or some portion of the future development areas described in the Neighborhood Master Deed. The location, nature, appearance, design (interior and exterior) and structural components of the dwellings and other improvements to be constructed within the area of future development will be determined by Developer subject to approval by the Township, but all such improvements will be reasonably compatible with the existing structures in the Project. No Unit will be created within the area of Future Development that is not restricted exclusive to residential use. 4.2.4 Consolidation, Relocation, Amenities. Article 1 1 of each Neighborhood Master Deed provides that Developer has the right to consolidate under single ownership 9

two (2) or more Units which are located adjacent to one another, to eliminate one or more Units and/or relocate the boundaries between adjoining Units. The consolidation of Units, the elimination of Units and/or the relocation of Unit boundaries shall be by amendment to the applicable Master Deed. Such amendment will recalculate the percentages of value so that the total of the percentages of value of the applicable Neighborhood continues to equal one hundred (1 00%) percent and each Unit within such Neighborhood shall continue to have an equal percentage of value. Such amendment shall also contain such further definitions of the Common Elements as may be necessary to adequately describe the units in the applicable Neighborhood as modified. Such amendment will not require the consent of any Owners or their mortgagees. Article 11 also provides that Developer has the right to construct certain amenities within the Common Elements of a Neighborhood such as jogging trails, fences, walls, benches, tables, signs, nature trails and other structures and improvements and the Unit Owners will be required to pay the cost of maintenance of such amenities. 4.2.5 Assignment. Article 12 of each Neighborhood Master Deed provides that the Developer may assign to the Association or to another entity any or all of its rights and powers granted or reserved in the Condominium Documents or by law. 4.3 Bylaws. The Bylaws attached to each Neighborhood Master Deed contain provisions relating to the operation, management and fiscal affairs of the Condominium and the Community and, in particular, set forth the provisions relating to assessments of the Neighborhood Association members for the costs of operating the Condominium and the Community. The Bylaws contains certain restrictions upon the ownership, occupancy and use of each Neighborhood and the Community, and contain provisions permitting the adoption of rules and regulations governing the Common Elements and the Shared Improvements and Facilities. The Bylaws of each Neighborhood are the bylaws of the Condominium and the Neighborhood Association. The Declaration contains further restriction in use of the Neighborhoods. 4.4 Condominium Subdivision Plan. The Condominium Subdivision Plan for each Neighborhood is a survey and plan depicting the physical location and boundaries of each of the Units and all of the Common Elements in the Project. 4.5 Declaration. The Declaration empowers the Master Association to insure, manage, maintain, repair, replace, operate and administer the Shared Improvements and Facilities and obligates the Owners of Units in the Community to pay a pro rata share of the cost of maintenance, insurance, repair and replacement of the Shared Improvements and Facilities. Attached to the Declaration as Exhibit B is a plan depicting the Community Center and the other Shared Improvements and Facilities. 5. RIGHTS AND OBLIGATIONS BETWEEN THE DEVELOPER AND OWNERS 5.1 Before. The obligations of Developer to Owners of Units in each Neighborhood are set forth in the Neighborhood Master Deed, the Exhibits to the Master Deed and the Articles of Incorporation of the Neighborhood Association. The obligations of Developer and the purchaser of a condominium Unit in the Community prior to closing are set forth in the Purchase Agreement and the accompanying Escrow Agreement. Those documents 10

contain, among other provisions, the provisions relating to the disposition of earnest money deposits advanced by the purchaser prior to closing and the anticipated closing adjustments, and other important matters. The Escrow Agreement provides, pursuant to Section 103b of the Condominium Act, that the escrow agent shall maintain sufficient h ds or other security to complete improvements shown as "MUST BE BUILT" on the Condominium Subdivision Plan until such improvements are substantially complete. In each Neighborhood, the Roads and utility mains to serve the Units shown on the Condominium Subdivision Plan "MUST BE BUILT." All other improvements, including the Community Center, "NEED NOT BE BUILT." Funds retained in escrow pertaining to a Unit are not to be released to the Developer (except in the event of purchaser's default) until issuance of a Certificate of Occupancy, if applicable, and conveyance of title to the Unit to a purchaser and confirmation by the escrow agent that all improvements labeled "MUST BE BUILT" are substantially complete, or adequate security provided therefore. 5.2 At Closing. Each purchaser will receive by warranty deed or land contract followed by warranty deed, fee simple title to the purchaser's Unit, subject to no liens or encumbrances other than those provided by the Condominium Documents and those other easements, rights-of-way, restrictions and other matters as are specifically set forth in the Condominium Documents and title insurance commitment. 5.3 After Closing 5.3.1 General. Subsequent to the purchase of the Unit, relations between the Developer and the Owner are governed by the Master Deed and the Condominium Act, except to the extent that any provisions of the purchase Agreement are intended to survive the closing. 5.3.2 Condominium Project Warranties. The Developer is warranting with respect to each Neighborhood only that the Roads and utility mains that are labeled "must be built" on the Condominium Subdivision Plan have been or will be installed to serve each Neighborhood. Developer provides no other warranty of any sort with respect to the Units. Express warranties are not provided unless specifically stated in the Purchase Agreement. 6. ESCROW AGREEMENT The Developer has entered into an Escrow Agreement with Metropolitan Title Company which provides that all deposits made under Purchase Agreements for the purchase of a Unit be placed in escrow. The Escrow Agreement provides for the release of an escrow deposit to any purchaser who withdraws from a Purchase Agreement in accordance with the Purchase Agreement. Such a withdrawal is permitted by each Purchase Agreement if it takes place within nine (9) business days after the purchaser has received all of the Condominium Documents (unless the purchaser waives such withdrawal right), or if the Purchase Agreement is conditional upon obtaining a mortgage and purchaser is unable to do so. The Escrow Agreement also provides that a deposit will be released to the Developer if the purchaser defaults on any obligation under the Purchase Agreement after the Purchase Agreement has become binding upon the purchaser. The Escrow Agreement also provides that deposits will be released to the 11

Developer when the Escrow Agent has received certification from an engineer or architect that any structures or improvements on the Condominium Plan that are labeled "MUST BE BUILT," are substantially complete. 7. THE MASTER ASSOCIATION AND NEIGHBORHOOD ASSOCIATIONS 7.1 The Master Association. The Master Association is responsible for the general management and maintenance of the Community. The Master Association's Articles of Incorporation and Bylaws are contained in the Purchaser Information Booklet. The Community Declaration and Bylaws include provisions that govern the procedural operations of the Master Association. The Master Association is governed by its Board of Directors. Initially, the Developer will serve as the sole director of the Master Association. After Developer resigns, the Board of Directors will consist of three (3) directors from the Grand Reserve Neighborhood and two (2) directors from the Townes of Grand Reserve Neighborhood. When Developer is no longer the sole director the actions of the Master Association board will require the vote of (4) four directors. 7.2 Neighborhood Associations. The common affairs of each Neighborhood will be managed by the Neighborhood Association for each Neighborhood, a Michigan non-profit corporation. As each individual purchaser acquires title to a Unit, the purchaser will also become a member of the Neighborhood Association. The manner in which each Neighborhood Association will be run by its members, its officers and its Board of Directors is set forth in each of the Neighborhood Condominium Documents which are included with each Purchaser Information Booklet. Each Neighborhood Association is governed by its Board of Directors, the initial members of which are designees of the Developer. Within one hundred twenty (120) days after closing the sale of twenty-five (25%) percent of the Units which may be created in a Neighborhood, one of the directors will be selected by non-developer owners; and within one hundred twenty (120) days after closing the sales of seventy-five (75%) percent of the Units which may be created in a Neighborhood, the nondeveloper owners will elect all of the directors, except that the Developer will have the right to designate at least one director as long as it owns at least ten (1 0%) percent of the Units which may be created in the Neighborhood. Regardless of the number of Units conveyed, fifty-four (54) months after the first conveyance of a Unit in a Neighborhood, non-developer Owners of Units in such Neighborhood may elect directors in proportion to the number of Units that they own. The First Annual Meeting of a Neighborhood Association may be convened (at Developer's discretion) any time after fifty (50%) percent of the Units in the Neighborhood that may be constructed have been sold, and must be held on or before the expiration of one hundred (120) days after seventy-five (75%) percent of the Units which may be created in the Neighborhood have been sold or within fifty-four (54) months after conveyance of the first Unit in the Neighborhood, whichever first occurs. At the First Annual Meeting, the members of the Neighborhood Association will elect directors, and the directors in turn will elect officers of the Neighborhood Association.

Voting rights are set forth in detail in Article 8 of each Neighborhood's Bylaws, and purchasers should be carefully review these provisions. All of the Owners of a Unit are entitled to only one vote at meetings of the Neighborhood Association for each Unit owned, and the value of each vote is equal regardless of the percentage of value. Within one (1) year after the first conveyance of a Unit in the Neighborhood, or one hundred twenty (120) days after conveyance of one-third (1/3) of all the Units which may be created in the Neighborhood, whichever occurs first, an advisory committee of Owners will be established to facilitate communication and aid transition of control of the Neighborhood Association to the Neighborhood Unit Owners. 8. BUDGET AND ASSESSMENTS 8.1 Bud~et/Assessments. The budget required to conduct the business of the Master Association and the Neighborhood Associations has been estimated by the Developer. A copy of the estimated budget for the first year of operation of each Neighborhood and the Community is attached to this Disclosure Statement. The initial Neighborhood assessments charged to members are based upon this budget; however, it must be kept in mind that this is an estimate only, and there can be no guarantee that the budget will be sufficient to meet the expenses of the Associations. It is normal for Neighborhood Association and Master Association expenses to increase on a regular basis. Each Association's only source of revenue to fund its budget is the assessment of its members. Each Owner must pay to the Master Association and the Owner's Neighborhood Association an annual assessment which is determined in part by dividing the projected budget by the member's percentage of value which is stated in the Master Deed. The percentage of value for all Units in each Neighborhood is equal. The annual assessment must be paid to the Neighborhood Association (or to the Master Association as collection agent) by each Owner in monthly installments in advance. In the event that an Association incurs expenses which are not anticipated in the budget, such Association may also levy special assessments to cover such expenses. Any special assessments would be allocated to the Owners in accordance with the percentages of value stated in the Master Deed. The Developer will not pay Neighborhood Association or Master Association assessments or user fees except with respect to Units it owns consisting of a completed and occupied dwelling. 8.2 Foreclosure of Lien. The Master Association and the Neighborhood Association have the right to place liens on each Unit to secure payment of Association assessments. The Declaration and the Neighborhood Master Deeds provide that the Master Association and the Neighborhood Associations may foreclose their liens in the same fashion that mortgages may be foreclosed by court action or by advertisement under Michigan law. By closing on the purchase of a Unit, each purchaser waives notice of any proceedings brought by the Associations to foreclose their liens by advertisement and notice of a hearing prior to the sale of such Unit. 9. RESTRICTIONS 9.1 Restrictions on Ownership, Occupancy and Use. The Declaration and the Neighborhood Master Deeds and Bylaws contain restrictions on the ownership, occupancy and use of Units. It is impossible to paraphrase these restrictions without risking the omission of some provision that may be of significance to a purchaser. THEREFORE, EACH PURCHASER SHOULD EXAMINE THE RESTRICTIONS WITH CARE TO BE SURE THAT THEY DO 13

NOT INFRINGE ON AN IMPORTANT INTENDED USE OF A CONDOMINIUM UNIT. The following is a list of a few significant restrictions: 9.1.1 Units are to be used for residential purposes only. 9.1.2 No buildings, structures, fences, walls or improvements may be constructed or altered except in compliance with the Community Design Guidelines and the architectural review provisions of the Declaration. 9.1.3 Developer has retained architectural control over the construction and alteration of all buildings and improvements in the Neighborhoods. 9.1.4 There are substantial limitations upon physical changes that may be made to the Common Elements and the Units and upon the uses to which the Common Elements and the Units may be put. 9.1.5 Unit Owners must disclose their intention to lease a Unit and provide a copy of the exact lease form to the Master Association at least ten (10) days before presenting the lease to a potential lessee. No Unit may be leased for a term of less than twelve (12) months unless approved by the Master Association. 9.1.6 Reasonable regulations may be adopted by the Master Association governing the use of the Shared Facilities and Improvements and by each Neighborhood Association governing the use of the Common Elements within such Neighborhood. 9.1.7 Wetland areas, wetland buffers, open space areas and drainage facilities may not be modified, occupied or used without approval of Developer and applicable governmental authorities. 9.1.8 No home occupation or profession or commercial activity that requires members of the public to visit an Owner's home or requires commercial vehicles to travel to and from an Owner's home shall be conducted. No Owner shall create a nuisance or annoyance. 9.1.9 No swimming pools may be constructed on any Unit. The foregoing does not apply to indoor or outdoor jacuzzis and hot tubs included within a deck of a site condominium Unit screen from view from the neighboring Units and installed with the prior written approval of the Developer or Architectural Review Committee, as applicable. 9.1.10 No trailer, mobile home, bus, boat trailer, boat, camping vehicle, motorcycle, recreational vehicle, commercial or inoperative vehicle of any description shall at any time be parked, stored or maintained on any Unit, unless stored fully enclosed within an attached garage or similar structure; provided, however, that builders' sales and construction trailers, trucks and equipment may be parked and used on any Unit during construction operations. No commercial vehicle lawfully upon any Unit for business shall remain on such Unit except in the ordinary course of business and in conformity with all applicable laws and/or ordinances. 14

9.1.11 Each Unit or residential building will have designated areas located in the rear yards within which the Owner may plant flowers, small trees, bushes and other landscaping, in accordance with the Design Guidelines established under Article XI of the Declaration ("Designated Planting Areas"). The Owner installing such landscaping will be solely responsible for maintaining such landscaping. In the event an Owner fails to properly maintain an Owner's plantings in the Designated Planting Areas, the Master Association may undertake such maintenance and assess the costs to the delinquent Owner. 9.1.12 No external air conditioning unit shall be placed in or attached to a window or wall of any Unit. No compressor or other component of a central air conditioning system (or similar system, such as a heat pump) shall be so located on any Unit so as to be visible from the public street on which the Unit fronts, and, to the extent reasonably possible, all such external equipment shall be so located on any Unit so as to minimize the negative impact thereof on any adjoining Unit, in the terms of noise and appearance. 9.1.13 The driveways in the Community will be constructed of asphalt material. No additions to the driveways by Unit Owners are allowed. Unit Owners are advised that asphalt can be damaged by heavy loads, such as large lumber loads and that the driveways should be protected from such damage. Repair of any damage to driveways caused by the Unit Owner's use, occupancy or construction activities will be the sole responsibility of the Unit Owner. Owners are advised that the asphalt driveways will be seal coated by the Master Association as determined by the Master Association. None of the restrictions apply to the commercial activities or signs of Developer or the Builder. 10. THE DEVELOPER AND OTHER SERVICE ORGANIZATIONS 10.1 The Developer's Background and Experience. Developer itself and, previously doing business as Pulte Homes of Michigan Corporation, developed and sold units in the following condominium developments: The Bridgewater Community in Bridgewater Township, The Preserve of Grand Blanc in Genesee County, Country Club Village in Northville, Michigan, Country Club Village in Plymouth, Michigan and Copper Creek Village Condominium, Cross Creek Village Condominium, and Maple Ridge Creek Village Condominium in the City of Rochester. Developer has also developed Silvercreek Condominium in Genesee Township, Woodlands South in Northville, The Villas of Riverside, The Woodlands of Riverside and The Preserve of Riverside and The Gardens of Riverside in Holly Township, Stirling Lake Estates in the City of Pontiac, and The Hamlet and The Villas at Hamlet in Canton Township. 10.2 Builder. The licensed residential builder for the Grand Reserve Community is Pulte Homes of Michigan, LLC ("Builder"), an affiliate of Developer, whose address is 450 W. Fourth Street, Royal Oak, Michigan 48067. 10.3 Management; Service Contracts. As of the date of this statement, Developer has not entered into a contract to manage the Condominium Association. The bylaws permit the 15

Association to enter into a management agreement, but professional management is not required by the Condominium Documents. The Master Association and each Neighborhood Association may enter into service contracts under which the Master Association will act as collection agent for the Neighborhood Association, and under which the Master Association may perform the maintenance responsibilities of the Neighborhood Association. 10.4 Sales. Builder will be handling all sales for the Neighborhoods. Builder and its principals have prior experience in sales. 11. INSURANCE 11.1 Title Insurance. The purchase Agreement for a Unit provides that the Developer will furnish each purchaser a title commitment for an owner's title insurance policy issued by Pulte Title Agency of Michigan, LLC (which is an entity related to Developer) prior to closing, and that the policy itself will be provided within a reasonable time after closing. The Developer will pay the cost of the commitment and policy. Each purchaser should review the title insurance commitment with a qualified advisor of his or her choice prior to closing to make certain that it conforms to the requirements of the Purchase Agreement. 11.2 Other Insurance. The Condominium Documents of each Neighborhood require each Neighborhood Association to carry fire and extended coverage for vandalism and malicious mischief and liability insurance and workers' compensation insurance, if applicable, with respect to all of the General Common Elements of the Project, except for those Shared Improvements and Facilities that will be insured by the Master Association as described in the Declaration. The insurance policies have deductible clauses and, to the extent thereof, losses will be borne by the Neighborhood Association. Each Association Board of Directors is responsible for obtaining insurance coverage. Each Owner's pro rata share of the annual Neighborhood Association and Master Association insurance premiums is included in the Neighborhood Association or Master Association assessments. Each Association's insurance policies are available for inspection during normal working hours. A copy of the certificate of insurance with respect to each Neighborhood or the Community will be furnished to each Unit Owner upon request. Each Owner in Grand Reserve must obtain fire, extended coverage, vandalism and malicious mischief insurance coverage at the Owner's expense upon the Owner's Unit and any dwelling and structures constructed on the Unit, any and all improvements, personal property and upgrades located within or upon such Unit, and any appurtenant Limited Common Elements. It is also each Owner's responsibility to determine by personal investigation or from such Owner's insurance advisors the nature and extent of insurance coverage needed, to obtain insurance coverage for the dwelling, structures and improvements constructed on the Unit and the Owner's personal property and the upgrades, fixtures, appliances, equipment and trim located within the Owner's Unit or elsewhere on the Condominium, and any appurtenant Limited Common Elements, and for the Owner's personal liability for occurrences within the Owner's Unit or upon Common Elements, and also for alternative living expense in the event of fire or other casualty. The Associations shall have no responsibility for obtaining such coverages. Each Owner is responsible for obtaining fire and extended coverage and vandalism and malicious mischief insurance at Owner's expense upon Owner's Unit and any and all other 16

improvements, personal property and upgrades located within or upon the Owner's Unit and the appurtenant Limited Common Elements which are the Owner's responsibility to maintain. It is also each Owner's responsibility to determine by personal investigation or from such Owner's insurance advisors the nature and extent of insurance coverage needed (generally Form H06), to obtain insurance coverage for the Owner's personal property and the upgrades, fixtures, appliances, equipment and trim located within the Owner's Unit or elsewhere on the Condominium, including appurtenant Limited Common Elements which are the Owner's responsibility to maintain, and for the Owner's personal liability for occurrences within the Owner's Unit or upon Limited Common Elements appurtenant to the Unit. Each Owner is also obligated to obtain personal liability insurance and for alternative living expense in the event of a fire. The Association shall have no responsibility for obtaining such coverages. 12. POSSIBLE LIABILITY FOR ADDITIONAL ASSESSMENTS BY THE ASSOCIATION It is possible for Owners to become obligated to pay a percentage share of assessment delinquencies incurred by other Owners. This can happen if a delinquent Owner defaults on a first mortgage and if the mortgagee forecloses. The delinquent assessments then become a common expense which is re-allocated to all the Owners, including the first mortgagee, in accordance with the percentages of value in the Master Deed. Article 2, Section 2.6 of each Neighborhood Bylaws provides in part: "Liability of Mortgagee. Notwithstanding any other provisions of the Condominium Documents, the holder of any first mortgage covering any Unit in the Project which comes into possession of the Unit pursuant to the remedies provided in the mortgage or by deed (or assignment) in lieu of foreclosure, or any purchaser at a foreclosure sale, shall take the property free of any claims for unpaid assessments or charges against the mortgaged Unit which accrue prior to the time such holder comes into possession of the Unit except for claims for a pro rata share of such assessments or charges resulting from a pro rata reallocation of such assessments or charges to all Units including the mortgaged Unit, and except for assessments that have priority over the first mortgage as provided in Section 108 of the Act." 13. PURPOSE OF DISCLOSURE STATEMENT This Disclosure Statement and the Builder's Supplement to Disclosure Statement was prepared in compliance with the Michigan Condominium Act. This statement paraphrases various provisions of the Condominium Documents, including the Purchase Agreement, Escrow Agreement, and Master Deed. This statement only highlights certain provisions of such documents and by no means contains a complete statement of all of the provisions of those documents which may be important to purchasers. In an attempt to be more readable, this statement omits most legal phrases, definitions and detailed provisions of the other documents. This statement is not a substitute for the legal documents from which it draws information, and the rights of purchasers and other parties will be controlled by the other legal documents and not by this Disclosure Statement. All of the documents referred to in this statement should be carefully reviewed by prospective purchasers, and it is advisable to have professional assistance in making this review.