DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS FOR TWO RIVERS SUBDIVISION, SALIDA, COLORADO

DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS FOR TWO RIVERS SUBDIVISION, SALIDA, COLORADO 1

Table of Contents 1. CREATION OF COMMON INTREST COMMUNITY 5 1.1. General Purposes.. 5 1.2. Declaration 5 1.3. Name of the Common Interest Community and the Association 5 1.4. Location and Type of Common Interest Community... 5 1.5. Planned Community... 5 1.6. Certain Definitions... 5 1.6.01: Assessments..... 5 1.6.02: Association... 5 1.6.03: Articles 6 1.6.04: Budget.... 6 1.6.05: Bylaws.... 6 1.6.06: Commercial Lots.... 6 1.6.07: Common Elements..... 6 1.6.08: Common Expenses.... 6 1.6.09: Common Expense Assessment.. 6 1.6.10: Declarant... 6 1.6.11: Declaration.... 6 1.6.12: Directors.... 6 1.6.13: Easements.. 6 1.6.14: Executive Board.... 6 1.6.15: Governing Documents.. 6 1.6.16: Guest.. 7 1.6.17: Improvements.... 7 1.6.18: Majority Vote..... 7 1.6.19: Manager..... 7 1.6.20: Map or Plat.... 7 1.6.21: Member..... 7 1.6.22: Owner.... 7 1.6.23: Person.... 7 1.6.24: Parkway....7 1.6.25: Property.. 7 1.6.26: Project.. 7 1.6.27: Residential Lot 7 1.6.28: Rules 7 1.6.29: Successor Declarant 8 1.6.30: Supplemental Declaration 8 1.6.31: Supplemental Map.. 8 2. PROPERTY OWNERS ASSOCIATION 8 2.1. Rights, Duties, Privileges, Powers, and Obligations. 8 2.1.1: General Purposes.... 8 2.1.2: Membership and Voting... 8 2.1.3: Authority... 8 2.2. Declarant Control of the Association 8 2.3. Purpose of Association..9 2.4. Purpose of Assessments 12 2.5. Common Areas..10 2.5.1: General Common Areas 10 2.5.2: Dedication of General Common Areas. 10 2

2.5.3: Management of General Common Areas. 10 2.5.4: Alleys 11 2.5.6. Parkways.. 113. DESIGN REVIEW COMMITTEE.. 11 3.1. Guidelines.. 11 3.2. Design Review Committee... 11 3.2.1: Committee Membership... 11 3.2.2: Purpose and Authority.. 12 3.2.3: Committee Discretion.. 12 3.3. Organization and Operation of Committee.. 12 3.3.1: Term. 12 3.3.2: Operations 12 3.3.3: Voting... 12 3.3.4: Expert Consultation.. 12 3.4. Expenses... 12 3.5. Other Requirements.. 12 3.6. Limitation of Liability.. 13 3.7. Enforcement. 13 3.7.1: Inspection. 13 3.7.2: Completion of Construction. 13 3.7.3: Certificate of Compliance 13 3.7.4: Deemed Nuisances... 13 3.8. Continuity of Construction.... 14 4. PROPERTY USE RESTRICTIONS.... 14 4.1. General Restrictions. 14 4.2. Residential Use of Lots 14 4.3. Commercial Use of Lots. 15 4.4. Combining Lots 15 4.5. Motorized vehicles 15 4.6. Electrical, Television and Telephone Service.. 15 4.7. Animals and Pets.. 15 4.8. Drainage 15 4.9. Trash. 15 4.10. Outside Clotheslines 16 4.11. Parking and Auto Repair. 16 4.12. Abandoned, Inoperable, or Oversized Vehicles & Boats... 16 4.13. Antennae.. 16 4.14. Lighting 16 4.15. Signs and Flags.. 16 4.16. Nuisance. 16 4.17. Mining. 17 4.18. Storage Tanks. 17 4.19. Subdivision of Lots. 17 4.20. Vacation of Lot Lines.. 17 5. OWNERS OBLIGATIONS FOR MAINTENANCE 17 5.1. Owner s Responsibility for Lot. 17 6. ASSESSMENTS... 17 6.1. Personal Obligation for Assessments 18 6.2. Annual Assessments. 18 6.2.1: Calculation 18 6.2.2 Appointment.. 18 3

6.2.3: Collection. 18 6.3. Special Assessments. 19 6.3.1: Specific Assessments 19 6.3.2: Determination by Board 19 6.3.3: Notice 19 6.4. Working Capital... 19 7. ENFORCEMENT OF ASSESSMENTS..... 19 7.1. Nonpayment of Assessments 19 7.2. Successors Liability for Assessment...... 20 7.3. Liens for Unpaid Assessments.. 20 8. INSURANCE AND ASSUMTION OF RISK..... 21 8.1. Authority to Purchase... 21 8.2. General Insurance Provisions... 21 8.3. Physical Damage Insurance on common Area. 21 8.4. Liability Insurance... 22 8.5. Provisions Common to Physical Damage, Liability, Fidelity Insurance. 22 8.6. Personal Liability Insurance of Officers and Directors 23 8.7. Workmen s Compensation Insurance... 23 8.8. Other Insurance. 23 8.9. Insurance Obtained by Owners. 23 9. DECLARANT RIGHTS AND EASEMENTS 24 9.1. Reservation of Withdrawal Rights.. 24 9.2. Other Reserved Rights. 24 9.3. Termination of Rights Reserved.. 24 9.4. Utility Easements. 24 9.5. Maintenance Easement.... 25 9.6. Drainage Easement.. 25 9.7. Emergency Access Easement...... 25 9.8. Easements.... 25 10. ENFORCEMENT... 25 10.1. Violation Deemed a Nuisance.... 25 10.2. Failure to Comply... 26 10.3. Who May Enforce.. 26 10.4. No Waiver.. 26 10.5. Attorney s Fees... 26 11. DURATION OF THESE COVENANTS AND AMENDMENT.. 27 11.1. Amendment 27 11.2. Declarant s Approval.. 27 11.3. Notice of Amendment. 27 11.4. Effective on Recording... 27 12. MISCELLANEOUS PROVISIONS... 27 12.1. Severability. 27 12.2. Limitation of Liability 27 12.3. Dispute Resolution 27 12.3.1: Bound Parties. 27 12.3.2: Claim.. 28 12.3.3: Process... 28 12.4. Conflicts between Documents... 29 12.5. Assignment 29 Exhibit A - Legal Description:.. 30 4

This Declaration is made this 24 th Day of June 2016 by 2-Rivers, LLC, a Colorado Limited Liability Company with the address of P.O. Box 745, Salida, Colorado, (herein the Declarant ). The purpose hereof is to include the Property (as defined below) under the Colorado Common Interest Ownership Act, C.R.S. 38-33.3-101, et seq. (the Act ). ARTICLE 1. CREATION OF COMMON INTEREST COMMUNITY 1.1 General Purposes. Declarant owns the real property interests legally described on Exhibit A attached hereto and by this reference incorporated herein ( the property ). Declarant desires to create pursuant to the provisions of the Colorado Common interest Ownership Act ( Article 33.3 of title 38 of Colorado Revised Statutes) as the same may be amended from time to time (the Act ) a common interest community (as such term is defined in the Act) on the property. Declarant further desires to establish a means to ensure the proper use and appropriate development of the Property as a high quality, aesthetically pleasing subdivision project by means of mutually beneficial covenants, conditions and restrictions imposed on the Property for the benefit of Declarant and all future Owners of any portion of the Property. 1.2 Declaration. To further the purposes expressed in Section 1.1 hereof, Declarant, for itself and its successors and assigns, hereby declares that the Property shall, at all times, be owned, held, used and occupied subject to the provisions of this instrument, to the covenants, conditions and restrictions contained herein and to all amendments and supplements hereto. 1.3 Name of the Common Interest Community and the Association. The name of the common interest community hereby created is TWO RIVERS Subdivision. The name of the lot owners association organized to govern and administer the common interest community hereby created is TWO RIVERS HOA, Inc., a Colorado nonprofit corporation (the Association ). 1.4 Location and Type of Common Interest Community. The common interest community hereby created is situated in Salida, Colorado. The common interest community hereby created is a Subdivision (as such term is defined in the Act). 1.5 Subdivision. The Property shall contain 58 Lots and Parcel 1 of Lot 2. The Property may be platted in multiple Phases, but is expected to be platted in two (2) phases: (i) Phase 1 shall include only Lots 1-19, Lots 28-58 and Parcel 1 of Lot 2. (ii) Phase 2 and any subsequent phases shall include the remainder of the Property; namely, lots 20-27. 1.6 Certain Definitions: Each capitalized term in this Declaration shall have the meaning specified or used in the Act, unless otherwise defined in this Declaration or the context requires otherwise: 1.6.01: Assessments. "Assessments" means the Annual, Special, Default Assessments levied pursuant to Article 6 below and shall include all Common Expense Assessments and any other expense levied pursuant to this Declaration or the Act, including interest, late fees, attorney fees, fines, and costs.. 1.6.02: Association. The "Association" is TWO RIVERS HOA, Inc., a Colorado nonprofit corporation, and its successors and assigns. It is the Association of Lot Owners, a 5

Common Interest Community, pursuant to Section 301 of the Act. The terms Association and Common Interest Community may be used interchangeably. 1.6.03: Articles. "Articles" shall mean the Articles of Incorporation of the Association. 1.6.04: Budget. "Budget" shall mean the plan for each fiscal year of the Association for the payment of the Common Expenses and for obtaining the funds required for such payment to be adopted by the Association in accordance with the provisions of Section 6.2.1 hereof. time. 1.6.05: Bylaws. "Bylaws" shall mean the Bylaws of the Association in effect from time to 1.6.06: Commercial Units. "Commercial Lots" means Lots which are specifically dedicated to commercial use. Declarant has not included any commercial Lots in the subdivision at the time of this Recording. 1.6.07: Common Elements. "Common Elements" shall mean all portions of the Property designated as such on the Plat. 1.6.08: Common Expenses. The "Common Expenses" are the expenses or financial liabilities made on behalf of and for the operation of the Association. These expenses include: (a) Expenses for the administration, maintenance, repair or replacement of the Common Elements; (b) Expenses declared to be Common Expenses by this Declaration or by the Act; (c) Expenses agreed upon as Common Expenses by the Association; and (d) Such reasonable reserves as may be established by the Association, whether held in trust or by the Association, for repair, replacement or addition to the Common Elements or any other real or personal property acquired or held by the Association. 1.6.09: Common Expense Assessment. "Common Expense Assessment" means the funds required to be paid by each Lot Owner in payment of his Common Expense liability. 1.6.10: Declarant. "Declarant" shall mean 7473 Crestone, LLC, and any party that is designated as a successor or assign of Declarant pursuant to the provisions of the Declaration. 1.6.11: Declaration. "Declaration" shall mean this instrument, the Plat and all amendments or supplements to this instrument and the Plat hereafter recorded in the real property records of Chaffee County, Colorado. 1.6.12: Directors. A "Director" is a member of the Executive Board. 1.6.13: Easements. "Easements" shall mean the easements shown on the Plat or designated or created by this Declaration. 1.6.14: Executive Board. The "Executive Board", or Board, is the Board of Directors of the Association, the body designated in the Governing Documents to act on behalf of the Association. 1.6.15: Governing Documents. The Governing Documents shall mean this Declaration, the Plat, the Articles of Incorporation, the Bylaws, the Design Guidelines, and any Rules and Regulations of the Association, as all of the foregoing may be amended from time to time. 6

1.6.16: Guest. "Guest" shall mean any individual who is present at the Property at the express or implied invitation of an Owner including, without limitation, friends, relatives, agents, employees, tenants or business invitees of an Owner. 1.6.17: Improvements. "Improvements" shall mean any construction, structure, fixture or facilities existing or to be constructed on the land which is included in the Common Interest Community, including but not limited to: buildings, fencing, trees and shrubbery planted by the Declarant or the Association, paving, utility wires and services, pipes, light poles and signs that are not deeded to The City. 1.6.18: Majority or Majority of Lot Owners. The "Majority" or "Majority of Lot Owners" means the Owners of more than fifty percent (50%) of the votes in the Association or a greater percentage if required by this Declaration or by the Act. 1.6.19: Manager. A "Manager" is a person, firm or corporation employed or engaged to perform management services for the Association. Any Manager employed or engaged by the Association shall maintain the required licensing to perform such services. 1.6.20: Map, Plat or Plans. "Map", "Plat" or "Plans" shall mean the plat and map for the TWO RIVERS Subdivision Property which meets the requirements of Section 209 of the Act and which is recorded in the real estate records of Chaffee County, Colorado, contemporaneously with the recording of this instrument. 1.6.21: Member. "Member" means every person or entity that holds membership in the Association. 1.6.22: Owner or Lot Owner. "Owner" or "Lot Owner" shall mean any individual, corporation, partnership, limited liability company, joint venture, trust or other legal entity capable of holding title to real property in Colorado that is the record Owner of a fee simple interest in one (1) or more Lots according to the real property records of Chaffee County, Colorado. Declarant is the initial Owner of each Lot. Owner does not include a person having an interest in a Unit solely as security for an obligation. 1.6.23: Person. A "Person" is an individual, corporation, business trust, estate trust, partnership, association, joint venture, government, government subdivision or agency or other legal or commercial entity. 1.6.24: Parkway. A Parkway means that portion of the public right-of-way between the normal line of curb face and private property on either side of the street 1.6.25: Property. "Property" is the land, as shown on the Plat, and all its improvements, easements, rights and appurtenances which have been submitted to the provision of the Act by this Declaration. 1.6.26: Project. "Project" means the TWO RIVERS Subdivision and its Common Interest Community as created by this Declaration, consisting of the Lots, and the Common Elements. 1.6.27: Residential Lots. "Residential Lots", or Lots, means any plot of land shown upon any recorded Plat of the Property, with the exception of Common Areas, which are specifically dedicated to residential use. 7

1.6.28: Rules. "Rules" shall mean the rules and regulations in effect from time to time including any written instruments, however identified, which are adopted by the Executive Board, in a manner set forth in the Declaration or pursuant to the Articles and Bylaws, for the regulation and management of the Common Interest Community and/or clarification of the Governing Documents, including any amendment to those instruments. 1.6.29: Successor Declarant. "Successor Declarant" means any person or entity to whom Declarant specifically assigns any or all of its rights, obligations, or interest as Declarant, as evidenced by an assignment or deed of record executed by Declarant and recorded with the Clerk and Recorder, Chaffee County, Colorado. 1.6.30: Supplemental Declaration. "Supplemental Declaration" means an instrument which adds to or amends this Declaration. 1.6.31: Supplemental Map. "Supplemental Map" means a Map of the Project which depicts any change in the Project. ARTICLE 2. PROPERTY OWNERS ASSOCIATION 2.1. Rights, Duties, Privileges, Powers, and Obligations. TWO RIVERS HOA Inc., a Colorado nonprofit corporation, shall exercise all of the rights, duties, privileges, powers, and obligations as set forth in the Governing Documents. 2.1.1. General Purposes and Powers. The Association, through its Executive Board, shall perform functions, hold and manage property as provided in this Declaration so as to protect the value and desirability of the Common Interest Community and to further the interest of Owners of Lots in the Project. The Association shall be responsible for the maintenance, repair, replacement and improvement of any Common Area and any improvements thereon. The Association shall have all the powers necessary or desirable to effectuate such purposes. 2.1.2. Membership and Voting. The Owner of a Lot shall automatically be a member of the Association. Said membership is appurtenant to the Lot of said Owner, and title to the ownership of the membership for that Lot shall automatically pass with fee simple title Lot. If the fee simple title to a Lot is held by more than one person, the membership as to such Lot shall be joint, and a single membership for such lot shall be issued in the names of all Owners, and they shall designate to the Association in writing the name of one natural person 18 years of age or older who shall have the power to vote said membership at any meeting of members. Membership in the Association shall be limited to Owners of Lots in the TWO RIVERS Subdivision and each Lot shall be entitled to the voting rights allocated to that Lot in the Bylaws. 2.1.3. Authority of Association. The business affairs of the Community shall be managed by the Association. The Association shall be governed by the Act and the Governing Documents. All corporate or other powers of the Association, unless otherwise specified or expressly reserved to the Members in the Act or the Governing Documents, shall be exercised by or under the authority of the Board of Directors. The Association may exercise any right or privilege and shall perform all duties and obligations expressly granted or reasonably necessary or implied in the Governing Documents to affect such right or privilege or to satisfy such duty or obligation. 2.2. Declarant Control of the Association. 8

2.2.1 There shall be a period of Declarant control of the Association, during which Declarant, or persons designated by the Declarant, may appoint and remove the officers of the Association and Members of the Executive Board. The period of Declarant control shall terminate no later than the earlier of: (i) (ii) Sixty (60) days after conveyance of seventy-five percent (75%) of the Lots that may be created in the Common Interest Community to Lot Owners other than Declarant; or Two (2) years after the last conveyance of a Lot by the Declarant in the ordinary course of business. 2.2.2. Declarant may voluntarily surrender the right to appoint and remove officers of the Association and Members of Executive Board before termination of the period described above. In that event, the Declarant may require, for the duration of the period of Declarant control, that specified actions of the Association or Executive Board, as described in a recorded instrument executed by the Declarant, be approved by the Declarant before they become effective. 2.2.3. Not later than sixty (60) days after conveyance of twenty-five percent (25%) of the Lots that may be created to Lot Owners other than Declarant, at least one member and not less than twenty-five percent (25%) of the members of the Executive Board shall be elected by Lot Owners other than the Declarant. Not later than 60 days after conveyance of 50 percent of the Lots may be created to Lot Owners other than Declarant, not less than 33-1/3 percent of the Members of the Executive Board must be elected by Lot Owners other than the Declarant. 2.2.4. Not later than the termination of any period of Declarant control, the Lot Owners shall elect an Executive Board of at least three Members, at least a majority of whom shall be Lot Owners. The Executive Board shall elect the officers. The Executive Board Members and officers shall take office upon election. 2.2.5. Notwithstanding any provisions of this Declaration or the Bylaws to the contrary, following notice under C.R.S., 38-33.3-308, the Lot Owners, by a vote of 67 percent of all Lot Owners present and entitled to vote at a meeting of the Lot Owners at which a quorum is present may remove a Member of the Executive Board with or without cause other than a member appointed by the Declarant. 2.3. Purpose of Association. The purpose of the Association is to use its authority, as given in the Bylaws: 2.3.1. To enforce the protective covenants. 2.3.2. To assess Lot Owners annual assessments. 2.3.3. To provide upkeep and improvements to all common areas, not limited to, but including: landscaping of parkways and out lots, alley easements, the fences along the east boundary and adjacent to the out lots (buffer area) along Crestone, or as specified in the Briscoe Ditch agreement between Declarant, for and on behalf of the Association, and the Division of Parks and Wildlife. 2.3.4. To represent all Lot Owners in matters of mutual interest. 2.3.5. To manage and administer the common open space lands. 9

2.3.6. To engage employees or contracted personnel to accomplish specified Association services. All such persons shall be duly licensed if required by local or state laws and shall maintain appropriate insurance coverage as determined by the Board. 2.4. Purpose of Assessments. The purposes of the Assessments shall include, but not be limited to: 2.4.1. Repairs and maintenance of those common area improvements listed above in 2.3.3, and snow removal of alleys and shared access easements. 2.4.2. Expenses of management of the Association and its activities; 2.4.3. Taxes and special assessments upon the Association s real and personal property owned in common. 2.4.4. Premiums for all insurance which the Association is required or permitted to maintain; 2.4.5. Common services to Lot Owners that are approved by the Board; 2.4.6. Wages for Association employees and payments to Association contractors; 2.4.7. Legal and accounting fees for the Association; 2.4.8. Any deficit remaining from previous Assessment year; 2.4.9. The creation of reasonable contingency reserves for future major capital repairs and replacement expenses; and 2.4.10. Such other expenses that benefit Lot Owners in common. 2.4.11. Registrations. The Board is required to register annually with the HOA Information and Resource Center, a division of the Colorado State Department of Regulatory Agencies, as well as to file annual corporation reports with the Colorado Secretary of State. 2.5. Common Areas. 2.5.1. General Common Areas. General Common Areas shall include those areas described on the Plat as General Common Elements. 2.5.2. Dedication of General Common Areas. All General Common Areas within TWO RIVERS Subdivision are intended for the common use and enjoyment by the Owners within the TWO RIVERS Subdivision. The General Common Areas are hereby dedicated to the above and foregoing uses for the Owners, their families, tenants, guests, under the terms and conditions contained in the Governing Documents. 2.5.3. Management of General Common Areas. The Association shall be responsible for the management and control of the General Common Areas and all improvements thereon, and shall keep them in good, clean, attractive and pleasant condition and shall maintain and repair the 10

same consistent with the purposes and uses of the General Common Areas as set forth in the Governing Documents. 2.5.4. Private Alleys and Shared Access Easements: All appurtenant alleys and shared access easements shown on the Plat are to be maintained by the Association. This includes grading, resurfacing and removal of snow, as necessary. The alley surfaces shall be of compacted road base and kept dust free for the benefit of both neighbors and residents.. These alleys are for the benefit of all owners within TWO RIVERS Subdivision. 2.5.5. Parkways: The parkways within the City of Salida right of way shall be maintained by the Association. The landscaping design and standards shall be set forth by the Design Review Committee. 2.5.6. Out lots 1-4: The Out lots 1-4, shown on the plat, shall be maintained by the Association. The landscaping design and standards shall be set forth by the Design Review Committee. 2.5.7. Drainage Ponds: Easements are shown for Drainage Ponds on the plat. These ponds and surrounding landscape shall be maintained by the HOA. 2.5.8. River Access/Path: A 20 access easement between Lots 6 and 7 is shown on the plat. The path and landscaping on this easement shall be maintained by the HOA. 2.6.9. Gazebo: A 40 diameter gazebo shall be built for the benefit of the HOA by the Developer. This structure shall be maintained by the HOA. 2.6.10. Jetty/Beach Area: A boulder jetty shall be built by the Developer within the Arkansas River, as shown on the plat. This boulder structure and the associated beach shall be maintained by the HOA. ARTICLE 3. DESIGN REVIEW 3.1. Guidelines. The Executive Board shall establish an architectural control policy and guidelines ( Design Guidelines ). The Board may amend, repeal, and augment the Design Guidelines from time to time, in the Board s sole discretion. The Design Guidelines will be binding on all Owners and other persons governed by this Declaration. The Design Guidelines may include, among other things, those restrictions and limitations set forth below: 3.1.1. Procedures for making application to Design Review Committee for design review approval, including the documents to be submitted and the time limits in which the Design Review Committee must act to approve or disapprove any submission. 3.1.2. Time limitations for completion, within specified periods after approval, of the improvements for which approval is required under the Design Guidelines. 3.1.3. Landscaping regulations, with limitations and restrictions prohibiting the removal or requiring the replacement of existing trees, the use of plants indigenous to the locale, and other practices benefiting the protection of the environment, aesthetics and architectural harmony of TWO RIVERS Subdivision. 11

3.1.4. General Instructions for the construction, reconstruction, refinishing or alteration of any improvement, including any plan to excavate, fill or make any other temporary or permanent change in the natural or existing surface contour or drainage or any installation of utility lines or conduits on the Property, addressing matters such as, waste storage, trash removal, equipment and material storage, grading, transformers, utility meters. 3.2. Design Review Committee. There is hereby established a Design Review Committee, which will be responsible for the administration of Design Guidelines to facilitate the purposes and intent of this Declaration. 3.2.1. Committee Membership. The Executive Board shall appoint the Design Review Committee (also referred to herein as Committee ) to administer the architectural approvals required pursuant to the Declaration. It shall consist always of either three (3) or five (5) members. Absent a specific appointment by the Board, the members of the Board shall be members of the Design Review Committee. The Board may reduce the number of members of the Design Review Committee to three and increase it to five as often as it wishes. Members of the Design Review Committee may be removed at any time without cause by the Executive Board. From among the members of the Design Review Committee; the Board may appoint a Chairman of the Design Review Committee who shall coordinate the operation of the Design Review Committee. 3.2.2. Purpose and General Authority. The Committee will review, study, and either approve or reject proposed Improvements on the Property, all in compliance with this Declaration and as further set forth in the Design Guidelines and such rules and regulations as the Committee may establish from time to time to govern its proceedings. No Improvement will be erected, placed, reconstructed, replaced, repaired or otherwise altered, nor will any construction, repair or reconstruction, repair or reconstruction be commenced until plans for the Improvements shall have been approved by the Committee; provided, however, that Improvements that are completely within a Building may be undertaken without such approval. All Improvements will be constructed only in accordance with approval plans. 3.2.3. Committee Discretion. The Committee will exercise its best judgment to see that all Improvements conform and harmonize with any existing structures on the lot as to external design, quality and type or construction, The Committee, in its sole discretion, may excuse compliance with such requirements as are not necessary or appropriate in specific situations and may permit compliance with different or alternative requirements. 3.3. Organization and Operation of Committee. 3.3.1. Term. The term of office of each member of the Committee, subject to Section 3.2.1., will be two (2) years, and continuing until his successor is appointed. Should a Committee member die, retire, or become incapacitated, or in the event of a temporary absence of member, a successor may be appointed as provided in Section 3.2. 3.3.2. Operations. The Committee chairman will take charge of and conduct all meetings, in accordance with meetings of the Executive Board as provided for in the Bylaws, and will provide for reasonable notice to each member of the Committee prior to any meeting. The notice will set forth the time and place of the meeting, and notice may be waived by any member. Accurate records of all meetings shall be recorded by the Committee and retained by the 12

Secretary of the Association. The Committee acts for, and on behalf of, the Executive Board. The Committee chairman shall regularly report the Committee s activities to the Board. 3.3.3. Voting. The affirmative vote of a majority of the members of the Committee will govern its actions and be the act of the Committee. 3.3.4. Expert Consultation. The Committee may avail itself of technical and professional advice and consultants as it deems appropriate, and the Committee may delegate its plan review duties, except final review and approval, to one or more of its members or to consultants retained by the Committee. Notwithstanding, the Committee may not delegate its ultimate responsibilities. Upon the Delegation, the approval or disapproval of plans and specifications by such member or consultant will be equivalent to approval or disapproval by the entire Committee. 3.4. Expenses. Except as provided in this section below, all expenses of the Committee will constitute a Common Expense of the Association. 3.5. Other Requirements. Compliance with TWO RIVERS design review process is not a substitute for compliance with City of Salida zoning, and subdivision regulations, and any other applicable state, federal, or local code or regulation. Each Owner is responsible for obtaining all approvals, licenses, and permits as may be required prior to commencing construction. Furthermore, the establishment of the Design Review Committee and procedures for architectural design review will not be construed as changing any rights or restrictions upon Owner to maintain and repair their Lots and Improvement as otherwise required under the Governing Documents. 3.6. Limitation of Liability. The Committee will use reasonable judgment in accepting or disapproving all plans and specifications submitted to it. Neither the Committee nor any individual Committee member will be liable to any person for any official act of the Committee in connection with submitted plans and specifications. Approval by the Committee does not necessarily assure approval by the appropriate governmental board or commission for City of Salida. Notwithstanding that the Committee has approved plans and specifications, neither the Committee nor any of its members will be responsible or liable to any owner, developer or contractor with respect to any loss, liability, claim, or expense which may arise by reason of such approval or denial of the construction of the Improvements. Neither the Board, the Design Review Committee, nor any agent thereof, nor Declarant, nor any of its partners, employees, agents, or consultants will be responsible in any way for any defects in plans or specifications submitted, revised or approved in accordance with the provisions of the Governing Documents, nor for any structural of other defects in any work done according to such plans and specifications. In all events, the Committee will be defended and indemnified by the Association in any such suit or proceeding, which may arise by reason of the Committee s decision. 3.7. Enforcement. 3.71. Inspection. Any member or authorized consultant of the Design Review Committee, or any authorized officer, Director, employee or agent of the Association may enter upon any Lot at any reasonable time after 24 hour notice to the Owner, without being deemed guilty of trespass, in order to inspect Improvements constructed or under construction on the Lot to determine whether the Improvements have been or are being built in compliance with TWO RIVERS Governing Documents and the plans and specifications approved by the Design Review Committee. 3.7.2. Completion of Construction. Before any Improvements on a Lot may be occupied, 13

the Owner of the Lot will be required to obtain a temporary certificate of compliance issued by the Design Review Committee indicating substantial completion of the Improvements in accordance with the plans and specifications approved by the Committee, and imposing such condition for issuance of a final certificate of compliance issued by the Design Review Committee as the Committee may determine appropriate in its reasonable discretion. Without limiting the generality of the proceeding sentence, if the construction and landscaping is not completed as scheduled, the Committee may apply and enforce such remedies as are available to the Association for failure of the Owner to comply with these covenants, including without limitation of the remedies set forth in Section 3.7.4. 3.7.3. Certificate of Compliance. Upon completion of construction, the Committee will issue an acknowledged certificate of compliance setting forth generally whether, to the best of the Committee s knowledge, the Improvements on a particular Lot are in compliance with the terms and conditions of the Design Guidelines. 3.7.4. Deemed Nuisances. Every violation of these Design Guidelines is hereby declared to be and to constitute a nuisance, and every public or private remedy allowed for such violation by law or equity against a Member will be applicable. Without limiting the generality of the foregoing, these Design Guidelines may be enforced as provided below. (i) Fines for Violations. The Board may adopt a schedule of fines for failure to abide by the Committee rules and the Design Guidelines, including fines for failure to obtain any required approval from the Committee. (ii) Removal of Nonconforming Improvements. The Executive Board, upon request of the Committee, and after reasonable notice to the offender and, if different, to the Owner, may enter upon any Lot at any reasonable time, after said 24 hour notice to the Owner, without being deemed guilty of trespass, and remove any Improvement constructed, reconstructed, refinished, altered, or maintained in violation of these Design Guidelines. The Owner of the Improvement will immediately reimburse the Association for all expenses incurred in connection with such removal. 3.8. Continuity of Construction. All Improvements commenced on a Lot will be prosecuted diligently to completion and will be completed within fourteen (14) months after commencement of on-site construction, unless an exception is granted in writing by the Committee. If an Improvement is commenced and construction is then abandoned for more than ninety (90) days, or if construction is not completed within the required 14 month period, then after appropriate notices, including an opportunity for a hearing, the Association may impose a fine of not less than $100.00 per day (or such other reasonable amount as the Association may establish in due course) to be charged against the Owner of the Lot until construction is resumed, or the Improvement is completed, as applicable, unless the Owner can prove to the satisfaction of the Executive Board that such abandonment is for circumstances beyond the Owner s control. ARTICLE 4. PROPERTY USE RESTRICTIONS 4.1. General Restrictions. The property will be used only for the purposes set forth in these Covenants, as permitted by the applicable ordinances of the City of Salida and the laws of the State of Colorado and the United States, and as set forth in the TWO RIVERS Governing Documents or other specific recorded covenants affecting all or any part of the Property. 14

4.2. Residential Use of Lots. 4.2.1. Lots in phases I & II (lots 1-58 and Parcel 1 of Lot 2) and improvements located thereon may only be used for residential purposes as defined in the Salida City code for associated underlying zone districts, except that Declarant may conduct sales and construction activities. 4.2.2. Residential purposes may include home occupations and rental of Lot improvements, so long as such activity does not: create excessive vehicular traffic to and from such Lot; employ persons for home occupation purposes at such Lot other than those residing as such Lot; require storage of any significant materials, machinery, inventory or other items at such Lot; require processing of materials and finish of products or the assembly of parts produced offsite; violate applicable City of Salida Municipal Code; require additional parking at such Lot, whether for customers, delivery or otherwise; or otherwise violate any provision of this Declaration or violate any City regulation governing home occupations. There shall be no exterior signage or advertising on the Lots in conjunction with any use of the Lot. This restriction shall be interpreted and enforced by the Executive Board. 4.2.3. It is not intention of this Declaration to restrict arts and crafts activity if the use complies with all provisions listed above except the processing of material clause. 4.2.4. No mobile home, portable home, or modular home shall be permitted to be placed on any Lot. 4.3 Commercial Use of Lots. 4.3.1 Lots 1-6, having an underlying zone district of RMU, shall meet the Use regulations and requirements as outlined in the Salida Municipal Code and the further restrictions given in 4.3.3. 4.3.2. Short Term Rentals: The HOA shall not create any restrictions on Short Term Rentals for Lots 1-28. All other Lots shall comply with City of Salida Code concerning this use. 4.3.3. Restrictions include the following: 1) the operation of a business which generates noxious fumes or undue noise; 2) the operation of any business which would allow or require the keeping of animals outdoors, 3) any use that is patently offensive in nature, 4) Under no circumstances is any business allowed amplified music after 10:00 pm. 4.4. Combining Lots. If an Owner combines two or more Lots with the intent of creating one Lot therefrom, such resulting Lot shall continue to have full share of Common Expenses originally assigned to the Lots so combined. 4.4.1. Subdivision of Lots: If an Owner subdivides a Lot into two or more Lots for the purpose of allowing another residential unit to exist, such resulting Lot shall have a full share of Common Expenses assigned to the originating Lot. 4.5. Motorized Vehicles. 4.5.1 No trucks, motorized trail bikes, recreational vehicles, motor homes, motor coaches, 15

snowmobiles, campers, trailer, boats, or boat trailers or similar vehicles other than passenger automobiles or pickup or utility trucks with a capability of one ton or less, or any other motorized vehicles will be parked, stored or in any manner kept or placed on any portion of the Public streets or Lot except within a solid fenced in area off the private alleys or shared access easements to allow for screening. Overnight guests are permitted to park on the street for a period not to exceed 7 consecutive days. Notwithstanding this restriction, the Board may grant exception(s) when reasonable and appropriate. 4.5.2 Emergency Vehicles. If the occupant of a Lot is a bona fide member of a volunteer fire department or is employed by a primary provider of emergency firefighting, law enforcement, ambulance or medical services, the parking of the occupant s vehicle is permitted in the driveway or on the road adjacent the occupant s Home, provided (i) the vehicle has a gross vehicle weight rating of ten thousand pounds or less; (ii) the vehicle bears an official emblem or other visible designation of the emergency service provider; (iii) the parked vehicle does not obstruct other emergency access or interferes with the reasonable needs of other owners or residents to use their driveways, the roads, or parking areas. 4.6. Electrical Television and Telephone Service. All electrical, television and telephone service installations will be placed underground. 4.7. Animals and Pets. No animals will be kept, raised, or bred on any portion of the Lot, except as permitted by the City of Salida Municipal Code. 4.8. Drainage. No Owner will do or permit any work, place any landscaping or install any other Improvements or suffer the existence of any condition whatsoever which will alter or interfere with the drainage pattern for the Lot, except to the extent such alteration and drainage pattern is approved in writing by the Committee or the Executive Board, and except for the rights reserved by the Declarant to alter or change drainage patterns. 4.9. Trash. No trash, ashes, garbage construction materials or other refuse will be thrown or dumped on any land or area within the Property. The Association will cooperate in and encourage programs to recycle trash and other refuse. There will be no burning or other disposal of refuse out of doors. Each Owner will provide suitable receptacles for the temporary storage and collection of refuse and recyclables, and all such receptacles will be screened from public view and protected from the wind and from animal and other disturbance. Trash receptacles are allowed on street or alley on trash pick-up days only. 4.10. Outside Clotheslines. Laundry hung outside will be screened from the road(s) and public s view. 4.11. Parking and Auto Repair. Lot Owners will park vehicles in garages, carports, or designated parking areas overnight. No work on automobiles or any other vehicles other than routine maintenance will be performed in any visible or exposed portion of the subdivision, specifically including the rebuilding or restoration of such vehicles. 4.12. Abandoned, Inoperable, or Oversized Vehicles& Boats. No abandoned or inoperable vehicles of any kind will be stored or parked outside of a garage or in public sight on any portion of the Lot, except as provided below. Abandoned or inoperable vehicle is defined as any vehicle which has not been driven under its own propulsion for a period of four (4) weeks or longer; provided, however, this will not include vehicles parked by Owners while on vacation or residing away from the TWO RIVERS Subdivision. A written notice describing the abandoned 16

or inoperable vehicle and requesting its removal may be personally served upon the Owner or posted on the unused vehicle. If such vehicle has not been removed with seventy-two (72) hours after notice has been given, the Association will have the right to remove the vehicle without liability, and the expense of removal will be charged against Owner. All unsightly or oversized vehicles, snow removal equipment, garden maintenance equipment, and all other unsightly equipment and machinery may be required by Declarant or the Executive Board to be stored out of public sight. Oversized vehicles, for purposes of this Section, will be vehicles which are too high to clear the entrance to a residential garage. 4.13. Antennae. No towers or exposed radio, television, or other electronic antennae (including satellite dishes) shall be allowed on any parcel except any satellite dish or similar antennae which when installed is less than thirty-six (36) inches in diameter and which is directly attached to the exterior of the residence. Only one (1) satellite dish per residence allowed. 4.14. Lighting. All exterior lights and light standards, and all exterior sound generating or emitting systems on parcels shall be subject to approval by the Design Review Committee for harmonious development and prevention of lighting and sound nuisances to other parcels within the Property. No light shall be emitted from any location within the subdivision which is unreasonably bright or causes unreasonable glare. All exterior lights shall be fully shielded from above, and directed downward only, to reduce excessive glare and light trespass to adjoining property. The Design Review Committee shall interpret and enforce this paragraph. 4.15. Signs and Flags. Billboards, poster boards, or advertising signs or structures of any kind are not permitted on the Property, with the exception of real estate for sale or for rent signage as determined by the Executive Board from time to time. Notwithstanding, in compliance with the Act, the Association cannot prohibit the display of the American flag, a service flag of an active military immediate relative, or current sign of political affiliation. However, the Board, also in compliance with the Act, may adopt reasonable policies regarding the size, manner and time period of display of such signage or flags. 4.16. Nuisance. No activity shall be conducted which generates noises which are excessively loud, odors which are offensive, nor any activity be conducted which is or may become a nuisance or cause significant disturbance or annoyance to others, nor would violate local, state or federal laws. No activity shall be conducted within the Subdivision and no improvements may be constructed within the Subdivision which are or might be unsafe or hazardous to any person or property. Without limiting the generality of the foregoing, no hunting shall be allowed within the Subdivision, and no firearms shall be discharged within the Subdivision; and no open fire shall be lighted or permitted within the Subdivision except (i) in contained barbeque unit while attended and used for cooking purposes, (ii) within a safe and well-designed interior stove or fireplace, or exterior patio fireplace or stove or chimney. No owner of any Lot shall cause, permit, or allow anything which will increase the rate charged for or cause the cancellation of any insurance maintained by Declarant or the Association, or any activity which would violate any law. 4.17. Mining. No portion of the Subdivision shall be used for purposes of mining, quarrying, drilling, boring, or exploring for removing oil, gas, or other hydrocarbons, mineral, rocks, stones, gravel, or earth. 4.18. Storage tanks. Buried tanks are allowed for irrigation purposes only. No elevated or visible tanks are allowed without board approval. 17

4.19. Subdivision of Lots. Subdivision of lots are only permitted per City of Salida Municipal Code. 4.20. Vacation of lot lines. Vacation of lot lines are only permitted per City of Salida Municipal Code. 4.21. Townhomes. Notwithstanding anything in the Declaration to the contrary and subject to the City of Salida Municipal Code, Townhomes are not prohibited within TWO RIVERS Subdivision. Townhomes shall be governed by Party Wall Agreements in a form acceptable to the Design Review Committee. Such Improvements shall not diminish the Assessment paid per lot. ARTICLE 5. OWNERS OBLIGATIONS FOR MAINTENANCE 5.1. Owner s Responsibility for Lot. Except as provided in the TWO RIVERS Governing Documents, or by written agreement with the Association, all maintenance of a Lot and the Improvements located on it will be the sole responsibility of the Owner of the Lot. Each Owner will maintain his Lot in accordance with the community wide standard of TWO RIVERS Subdivision. The Association will, at the discretion of the Board, assume the maintenance responsibilities of such Owner if, in the opinion of the Board, the level and quality of maintenance being provided by such Owner does not satisfy such standard. Before assuming the maintenance responsibilities, the Board will notify the Owner in writing of its intention to do so, and if the Owner has not commenced and diligently pursued remedial action within thirty (30) days after the mailing of such written notice, then the Association will proceed. The expenses of such maintenance as engaged by the Board will be reimbursed by the Owner within the thirty (30) day period that follows the Board s action. ARTICLE 6. ASSESSMENTS 6.1. Personal Obligation for Assessments. Declarant, for each Lot owned within the property which is subjected to this Declaration, hereby covenants, and each Owner of any Lot, by accepting a deed for a Lot, is deemed to covenant to pay to TWO RIVERS Subdivision: (i) the Annual Assessments imposed by the Executive Board as necessary to fund the maintenance of the Common Areas (as shown on the Plat of the TWO RIVERS Subdivision) and to generally carry out the functions of the Association; (ii) Special Assessments for capital improvements and other purposes as stated in this Declaration; (iii) Default Assessments, violation fines, late fees, and other charges which may be assessed against a Lot pursuant to the TWO RIVERS Governing Documents for the Owner s failure to perform an obligation under the TWO RIVERS Governing Documents or because the Association has incurred an expense on behalf of the Owner under the TWO RIVERS Governing Documents; and (iv) Working Capital Assessments as further defined herein. Such amounts shall be the personal obligation of the Owner of such Lot at the time when the Assessment or other charges became due. Assessments shall be a continuing lien upon the Lot against which each such Assessment or charge is made. If any Assessment is payable in installments, only the amount due is a lien from the time it becomes due. The personal obligation to pay any past due sums owed to the Association shall not pass to a successor in title unless expressly assumed by them. No Owner may become exempt from liability for payment of the Assessments for Common Expenses by waiver of the use or enjoyment of the Common Area or by abandonment of the Lot against which the Assessments are made. All Assessments shall be payable in the amounts specified in the levy thereof, and no offsets or reduction thereof, except as 18

provided in this Declaration, shall be permitted by any reason including, without limitation, any claim that the Association or the Board of Directors is not properly exercising its duties and powers under this Declaration. 6.2. Annual Assessments. 6.2.1. Calculation of Annual Assessments. The Executive Board shall adopt a budget prior to the beginning of each fiscal year of the Association sufficient to determine, levy, and assess the Association s Assessments for the following year in accordance with the Colorado Common Interest Ownership Act, as now existing or as the same may be amended, modified, or changed. Annual Assessments for Common Expenses will be based upon the estimated net cash flow requirements of the TWO RIVERS Subdivision to cover items including, without limitation, the cost of routine maintenance, repair and operation of the private roads and Common Areas; expenses of management; and premiums for insurance coverage as deemed desirable or necessary by the Association; snow removal, landscaping, care of grounds and Common Areas; routine renovations within the TWO RIVERS Subdivision roads and Common Areas; wages; common water and utility charges for the Common Areas; legal and accounting fees; management fees; expenses and liabilities incurred by the Association under or by the reason of this Declaration; payment of any deficit remaining from a previous Assessment period; and the supplementing of the reserve fund for general, routine maintenance, repairs and replacement of improvements within the Common Areas on a periodic basis. Within ninety (90) days after adoption of any proposed budget, the Board will mail, by ordinary first class mail, or otherwise deliver a summary of the budget to all Owners and will set a date for a meeting of the Owners to consider ratification of the budget. The budget proposed by the Board will be deemed approved by the Owners at that meeting unless a majority of all Owners vote to veto the budget. In the event the proposed budget is vetoed, the last budget not vetoed by the Owners must be continued until such time a subsequent budget is ratified. 6.2.2. Appointment of Assessments. Each Owner will be responsible for that Owner s share of the common Expenses, which will be divided equally among the Lots included in the Subdivision under this Declaration from time to time. Accordingly, at any given time, an Owner s share of Common Expenses will be determined as a fraction, the numerator of which is the number of Lots owned by the Owners, and the denominator of which is the number of lots then platted and incorporated in the Subdivision. 6.2.3. Collection. Assessments will be collected quarterly ( Quarterly Assessments ), or as the Board may determine from time to time, but until the Board directs otherwise, they will be payable in advance on the first day of each quarter, namely the first each day of January, April, July, and October, following the conveyance of a Lot, and delivered to the Association at the most recent address as provided by the Association Secretary. Should a Lot be conveyed midquarter, that quarter s Assessment shall be prorated from and including the date of conveyance. 6.3. Special Assessments. 6.3.1. Specific Assessments. Specific Assessments may be established from time to time by the Board for costs related to and for the use of specific Lots within the Property. 6.3.2. Determination by Board. The Executive Board may levy in any fiscal year one or more Special Assessments, applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, repair or replacement of a described capital 19