WHOM IT MAY CONCERN:

WHEREAS, the undersigned is the legal and beneficial owner of in excess of seventy-five (75%) of the Lots in "LAKE SANS SOUCI SUBDIVISION - UNITS ONE AND TWO" as set forth on the Official Plats, and filed in the Office of the County Recorder of Bonner County, Idaho; and

WHEREAS, the undersigned desires to subject the lots within LAKE SANS SOUCI SUBDIVISION - UNITS ONE AND TWO to a general plan of improvement and to certain restrictions, conditions, covenants and agreements between the various lot owners as hereinafter set forth;

WHEREAS, the above-described property was subject to prior Covenants recorded on March 27, 1970, as Instrument No. 126602 at Book 40, Page 527, Records of Bonner County, Idaho, Amended Covenants recorded on June 21, 1971, as Instrument No. 133988 at Book 43, Page 505, Records of Bonner County, Idaho, and Second Amended Covenants recorded on September 23, 1971, as Instrument No. 135907 at Book 44, Page 228, Records of Bonner County, Idaho, all of which are completely amended and superseded hereby;

NOW, THEREFORE, the undersigned declares that the above-described property is held and shall be sold, conveyed, leased, occupied, resided upon, hypothecated and held subject to the following reservations, restrictions, conditions, covenants and agreements between itself and the several owners and purchasers of said property as between themselves and their heirs, successors and assigns;

1. DEFINITIONS:

1.1 Declaration shall mean and refer to this Revised and Restated Declaration of Reservations, Covenants, Agreements, Restrictions and Conditions.

1.2 Plat shall mean and refer to the subdivision plats of "LAKE SANS SOUCI - UNITS ONE AND TWO" as may be amended from time to time, and filed of record in the Office of the County Recorder of Bonner County, State of Idaho.

1.3 Subdivision shall mean and refer to the real property covered by the Amended Plats of LAKE SANS SOUCI - UNITS ONE AND TWO and the lots designated therein.

1.4 Lot or Lots shall mean and refer to, as applicable, a Lot or Lots designated in the Plats.

1.5 Owner shall mean and refer to any person or persons who are the owners of record, as set forth in the Official Records of the Office of the Recorder of Bonner County, State of Idaho of a fee or and undivided fee interest in any Lot. Notwithstanding any applicable theory with respect to mortgages, deeds of trust of like instruments, the term Owner shall not mean or include a mortgagee or a beneficiary or trustee under a deed of trust, or similar party, unless and until such party acquires title to a Lot pursuant to foreclosure or arrangement or proceedings in lieu thereof.

1.6 Association shall mean and refer to the LAKE SANS SOUCI PROPERTY OWNERS ASSOCIATION, INC., an Idaho non-profit corporation. For purposes of this Declaration, the Association shall be considered a "successor or assign" of the Declarant.

2. CONSTRUCTION COMMITTEE:

2.1 Committee Approval. No structure or improvement of any nature whatsoever shall be placed, erected, constructed or permitted to remain on any Lot nor shall any existing structure or improvement be remodeled, reconstructed, altered or added to without the prior written consent and approval of the Construction Committee hereinafter referred to as the Committee.

2.2 Committee Action. The Committee shall be composed of three (3) members, who need no possess any interest in any Lot. A member shall serve on the Committee until such member resigns, is removed or until new members are appointed as hereinafter provided. The Committee may act by any two (2) of its members, and any authorization, approval or power made by the Committee must be in writing and signed by at least two (2) members. The Committee may establish internal rules and procedures not contrary to the terms thereof.

2.3 Committee Membership. As long as the undersigned shall possess any interest in any Lot in the subdivision, it shall have the absolute right from time to time to appoint and remove members of the Committee. Thereafter, that it does hereby relinquish said right of appointment and removal, the Board of Directors of the Association shall have the rights to appoint and remove members of the Committee according to such rules as it may from time to time adopt.

2.4 Submission of Plans. Prior to any construction, reconstruction, alteration, remodeling, placing, erecting or addition of any structure or improvement on any Lot, or any later changes or additions after initial approval, there shall be submitted to the Committee, at such place as may be designated in writing to the Owners by the Committee, two (2) complete sets of plans and specifications for any and all proposed construction, reconstruction, alteration, remodeling, placing, erecting or addition, or any later changes or additions after initial approval, of any structure or improvement on any Lot. Such plans and specifications shall set forth construction or building details and specifications, elevations, location of the proposed structure and improvement on the Lot, materials to be used, roofs, exteriors, color scheme, landscaping, and such additional and further items as the Committee may deem necessary to evaluate and approve such plans and specifications, as provided herein. No structure or improvement shall be erected, altered, remodeled, placed, maintained or permitted to remain, until the plans and specifications therefor have been approved by the Committee.

2.5 Time for Consideration. The Committee shall approve or disapprove the plans and specifications within thirty (30) days from the receipt thereof. If the Committee fails to act within thirty (30) days of receipt of plans and specifications they shall be deemed to be approved. One (1) set of said plans and specifications and details with the approval or disapproval endorsed thereon by the Committee shall be returned to the person submitting them and the other copy thereof shall be retained by the Committee for its permanent files.

2.6 Disapproval. The Committee shall have the right, for the purpose of promoting a common scheme and the enforcement of the Declaration, to disapprove any plans, specifications or details submitted to it in the event the same are not in accordance with all of the provisions of this Declaration; if the design, contours, materials, shape, colors and general characteristics of the proposed structure, improvements, alteration or addition are not in harmony with the existing structures and general surroundings; if the plans and specifications submitted are incomplete; or in the event the Committee deems the plans, specifications or details or any part thereof to be contrary to the interest, welfare or rights of all or any part of the Owners of Lots in the Subdivision, or detract from or lessen the value of other Lots in the Subdivision, or deviate from a common scheme of development. In the event of a disapproval, the Committee shall give the applicant a written statement setting forth the reasons the application was denied. The decisions of the Committee shall be final.

2.7 Liability. Neither the Committee, the Association, nor any architect or agency thereof or of the undersigned shall be responsible in any way for defects in any plans or specifications submitted, revised or approved in accordance with the foregoing provisions, nor for any structural or other defects in any work done according to such plans and specifications.

3. USE OF LOTS:

3.1 Restrictions. Each and every lot shall be used only for residential purposes and purposes incidental thereto, except as otherwise provided. Any other use of the lots shall be prohibited including, but not limited to, the following:

(A) Commercial. No commercial trade, business, manufacturing, profession or enterprise for profit, or anything connected therewith or related thereto shall be conducted on any lot in the Subdivision except on Lots 1, 2 & 5 of Block 5, Unit One.

(B) Signs. No advertising signs or structures may be placed on a non-commercial lot. However, signs advertising the sale or lease of any Lot may be displayed, provided such signs do not exceed four (4) square feet.

(C) Offensive Activities. No obnoxious, offensive or illegal activities shall be carried on upon any Lot, nor shall anything be done on any Lot which shall cause an unreasonable annoyance or nuisance to occupants of other Lots in the Subdivision. The Association shall be sole judge of what shall constitute an annoyance or nuisance to the Subdivision.

(D) Garbage and Refuse Disposal. No Lot shall be used or maintained as a dumping ground for rubbish, trash, garbage or other waste. Such trash, rubbish, garbage or other waste shall be kept only

in sanitary containers. No rubbish, trash, papers, junk or debris shall be burned upon any Lot except that trash may be burned inside homes that are property equipped with inside incinerator units.

(E) Storage of Fuel and Refuse. Every tank for the storage of fuel installed outside any building in the Subdivision shall be buried below the surface of the ground or otherwise completely screened, to the satisfaction of the Committee. Every outdoor receptacle for ashes, trash, rubbish or garbage shall be installed underground, screened or so place and kept as not to be visible from any street, the golf course or the Lake with the Subdivision at any time.

(F) Sewage Disposal. The type and location of sewage disposal system shall be approved by both the Committee and the Idaho State Department of Health, prior to the construction of any dwelling on any Lot. Al septic tanks and drain fields are to be so approved for individual Lots. Each septic tank must have a capped riser to ground level through which inspection may be made.

(G) Water Supply. No individual water-supply system or well shall be used or permitted to be used on any Lot. Each Lot shall use the water system installed for use by the entire subdivision and owned by the STONERIDGE WATER AND SEWER COMPANY or any successor thereto.

(H) Animals. No animals, livestock or poultry of any kind shall be raised, bred or kept on any Lot. However, dogs, cats and other common household pets may be kept provided that such pets are not kept for any commercial or business purpose. No more than two (2) pets shall be kept at any time on a Lot and such pets shall at all times be kept on the Lot of the owner or on a leash under the control of the handler when take off the Lot.

(I) Storage. There shall be no storage of any articles, materials, equipment or vehicles of any nature on any Lot prior to construction of a dwelling, except articles, materials, equipment and vehicles used directly in connection with construction of a dwelling on such Lot. After construction of a dwelling, regularly used cars and pickup trucks may be parked on the Lot of the owner in an area constructed for the purpose of parking such vehicles.

(J) Maintenance of Lots. All Lots, whether occupied or unoccupied, and any improvements placed thereon, shall be at all times be maintained in such a manner as to prevent their becoming unsightly by reason of unattractive growth on Lot or improvement thereon is not so maintained, the Association shall have the right, through its agents and employees, to enter thereon for any purpose of maintenance, restoration or repair, the cost of which shall be added to and become a part of the annual charge to which such Lot is subject.

(K) Excavation. There shall be no excavation or drilling for stone, gravel, soil, gas, oil, or any minerals of any nature on any Lot for any purpose except excavation directly connected or related to the construction of a permissible structure on the Lot, or as otherwise provided.

(L) Overnight Parking. No vehicle of any kind, including but not limited to, automobiles, trucks, buses, tractors, trailers, camping vehicles, boats, boat trailers, snowmobiles, mobile homes, two- and three-wheeled motor vehicles, or other wheeled vehicles shall be permitted to be parked on any street within the subdivision projects between the hours of 2:00 o'clock A.M. and 6:00 o'clock A.M. of any morning.

3.2 Structures. The following requirements and restrictions shall apply to all structures placed, erected, constructed or permitted to remain on any lot in the Subdivision.

(A) Architectural Restrictions.

(1) Style and Design. The residential structures on adjacent Lots shall complement each other. Variation in styles, while encouraged, shall only be allowed to the extent that such variation creates a pattern of consistency throughout the Subdivision. The Committee shall be permitted to make recommendations and shall approve or disapprove all designs. The judgment of the Committee shall be final with respect to all matters of design, architecture and style.

(a) In Blocks 1, 2, 3 & 4 of Unit One- and Blocks 21, 22, 23, 24, 25, 26 & 27 of Unit Two, the architectural style shall be consistent with that of the turn of the century era. Design motifs and use of materials consistent with Victorian, Tudor, Elizabethan, Vocco, French provincial and colonial and other turn of the century traditional styles of architecture shall be required.

(b) In Blocks 5, 6, 7, 8 & 9 of Unit One, the architectural style may be more rustic in appearance including natural wood finishes, log construction, etc.

(2) Conformity with Law. All construction shall conform to all applicable ordinances, codes, rules and regulations.

(B) Residential. No building other than one single family dwelling house, and appropriate outbuildings shall be erected on any of the non-commercial Lots (except for condominiums, as set forth below), nor shall any house constructed on any of said Lots be used for any purpose other than a dwelling house or appurtenant outbuildings. In the case of lake front Lots, a boat shelter, pier or other similar structure may be erected if approved by the Committee.

Each such dwelling shall be of single story construction, provided, however, that split level or two story residences may be constructed on Lots where, in the opinion of the Committee, the terrain of such Lot lends itself to such construction.

The Committee shall have the authority to establish regulations as to height and size requirements for all other types of buildings and structures, including fences, walls, doping, etc.

(C) Condominiums. Lots 1 through 13, Block 26 of Unit Two have been conditionally approved for construction of condominium units. Except as provided in Article 5, and except as to architectural restrictions, condominiums shall be governed by the Declaration of Condominium filled with respect to such Lots.

(D) Size. The minimum total square footage of finished living space, exclusive of porches and garages, for each dwelling shall be 1200 square feet, 580 square feet or more of which shall be on the ground floor. No structure on any Lot shall be more than two (2) stories, not including basement, or exceed a maximum height of twenty-eight (28) feet from the lowest finished grade level contiguous to such structure. No dwelling shall be less than one story above grade level.

(E) Garage. Each dwelling must contain a garage for at least one (1) but not more than three (3) passenger cars.

(F) Structure Placement. All structures constructed on any Lot shall have yards as follows:

(1) Side Yard:

(a) The minimum side yard for any dwelling or other building shall be ten (10) feet.

(b) The minimum side yard for a private garage or other accessory located at least ten (10) feet from the rear of the main building shall be five (5) feet.

(c) On corner Lots, the side yard which faces on a street for both main and accessory buildings shall not be less than fifteen (15) feet.

(2) Front Yard: The minimum depth of the front yard for all main buildings and accessory buildings except garages shall be twenty (20) feet. Garages shall be placed no closer than fifteen (15) feet.

(3) Rear Yard: The minimum depth of the rear yard for all main buildings shall be fifty (50) feet, and for the accessory buildings fifteen (15) feet except on corner Lots which rear upon the side yard of another Lot in which case the minimum depth of the rear yard shall be five (5) feet from such building. All buildings except boat shelters shall be located fifty (50) feet from the lake side property line.

(4) Accessory Buildings: Accessory buildings shall be located no closer than ten (10) feet to the main building.

In the event these requirements are less than those imposed by local governmental authorities the governmental restrictions shall apply.

For purposes of this Paragraph 3.2 (F), eaves, overhangs, and steps, shall be considered as part of a structure.

(G) Destruction. Any structure which is destroyed or damaged, in whole or in part, by or as a result of any cause, must be rebuilt or restored with reasonable diligence, and/or debris and waste materials must be removed from the Lot and the structure and/or Lot restored to a safe and sightly condition.

(H) Construction Time. All construction or alteration of any structure situated on any Lot shall be completed within one (1) year after commencement of such construction or alteration. No dwelling shall be occupied until all exterior construction and plumbing and electrical work has been substantially completed.

(I) Temporary and Prefabricated Buildings. No prefabricated or pre-erected dwelling shall be moved, placed or erected upon any Lot for the purpose of a permanent dwelling, except with the written consent of the Committee. No mobile homes, trailers, temporary houses, tents or similar structures and vehicles, of any nature or description, or any structure of a temporary character shall be placed, constructed, erected or permitted to remain upon and Lot.

(J) Walls, Fences, and Hedges. In order to preserve the natural quality and esthetic appearance of the existing

geographic areas within the Subdivision, all property lines abutting the lake shall be kept free and open and no fences shall be permitted on any such Lot lines except where, in the opinion of the Committee a fence or other enclosure, as a structure or esthetic feature of design concept, will contribute to and be in keeping with the character of the area.

(1) Materials. If fences or walls are allowed, they shall be of wood or brick. No fences or walls of chain link, wire mesh or unpainted concrete block shall be allowed.

(2) Height. The height of fences, walls or hedges shall not exceed (6) feet and such structures shall not extend beyond the front yard set back at any point except that a fence, wall or hedge not exceeding three (3) feet six (6) inches may enclose no more than one-half (1/2) the area beyond the front yard set back.

(3) Golf Course Lots. The above restrictions and covenants regarding fences shall apply to golf course lots with the additional restriction that no fence, wall or hedge shall extend beyond the rear yard set back except that a fence, wall or hedge not exceeding three (3) feet six (6) inches may enclose not more than one-half (1/2) the area beyond the rear set back line.

3.3 Underground Utilities. Owners shall install underground facilities for sewage, water, power and natural gas, and shall only use the facilities provided to the subdivision for sewage, water, power and natural gas.

3.4 Easements. Easements for the installation of transmission lines, pipe lines, and certain utility easements all as shown on the Plat are hereby reserved to the undersigned, its assigns and successors. Such easements shown on the Plat as utility easements may also be used as drainage easements and are hereby reserved for such purpose to the undersigned, its assigns and successors. The undersigned, its assigns and successors shall have the reasonable right to enter upon every Lot in the Subdivision and construct and maintain on the above stated easements public utilities, drainage facilities, and related improvements and items connected therewith or related thereto, whether underground or on the ground surface. No other structure of any nature shall be erected, placed, altered or permitted to remain on or over, or interfere with, said easements or the use and benefit thereof.

4. LAKE FRONTAGE LOTS:

4.1 Title. The water in and the land under any lake located within the boundaries of the Subdivision, whether now in existence or to be constructed, are hereby reserved by Declarant and under no theory of law or construction of the Declaration or otherwise shall any Owner be held to have acquired any interest, legal or equitable, in or to any water in or land under any such lake. The location of any such lake as well as its maximum water elevation at spillway level, shall be shown on the recorded map of each unit of the Subdivision. The title that will be acquired by a grantee of Declaration, and to any successors or assigns of such grantee, to any Lot contiguous to any such lake shall extend only to the rear Lot line. Notwithstanding anything to the contrary contained in any plat of deed, the rear Lot line of any Lot shall not extend beyond the maximum water elevation at spillway level.

4.2 Use of Water. No such grantee, nor any of such grantee's successors or assigns, shall have any right with respect to any stream that is a tributary to any such lake or with respect to any such lake, the land thereunder, the water therein, or its or their elevation, use or condition and none of said Lots shall have any riparian rights or incidents appurtenant thereto; provided, further, that title shall not pass by reliction or submergence or changing water levels.

4.3 Right to Remove Accretion. Declarant, its successors and assigns, shall have the right at any time to dredge or otherwise remove any accretion or deposit from any Lot in order that the shoreline of the lake to which such Lot is contiguous may he moved toward or to, but not inland beyond, the location of said shoreline as it would be established on the date hereof if the water elevation in such lake were one (1) vertical foot above the maximum water elevation in such lake were one (1) vertical foot above the maximum water elevation at spillway level indicated in the recorded map of the unit in the Subdivision in which it is located and title shall pass with such dredging or other removal as by erosion.

4.4 Liability for Damages Due to Erosion. Neither the owner, operator or lessee of the lake, nor Declarant nor any of its successors or assigns shall be liable for damages caused by erosion, washing or other action of the water of any lake within the boundaries of the Subdivision.

4.5 Reservation of Right to Raise and Lower Water Level. Declarant reserves to itself, its successors and assigns, the owner, operator or lessee of the lake, the right to raise and lower the water level of the lake; provided, however, that such right shall not be construed as permitting the elevation of the water level to a point beyond that indicated on the recorded maps of the Subdivision by increasing the height of any dam or spillway or otherwise.

5. CONDOMINIUMS:

5.1 Property Dedicated. Lots 1 through 13 in Block 26 of Unit Two, plus certain additional land have been conditionally approved by Bonner County, Idaho, for construction of condominium units. Said Lots and additional property are hereby dedicated for the use and construction of condominiums upon the terms and conditions imposed by Bonner County. In the event that Bonner County revokes its approval of said use, said Lots and additional property shall in all respects be governed by all the provisions of the Declaration as though this Article 5 were not a part of this Declaration.

5.2 Condominium Owners Association. There shall be established the LAKE SANS SOUCI CONDOMINIUM OWNERS ASSOCIATION, to be regulated and governed in accordance with its own Articles of Incorporation and By-Laws. The Condominium Owners Association shall be a member of the Association and shall have thirteen (13) votes in the Association, which votes shall be exercised in the manner provided for in the By-Laws of the Condominium Owners Association.

5.3 Exemptions from Provisions of this Declaration. Condominium units shall be exempt from the provisions of Article 2 hereof, Subsections 3.2 (A), (B), (D), (E) and (F) hereof, but shall be subject to all of the other provisions of this Declaration.

6. LAKE SANS SOUCI PROPERTY OWNERS ASSOCIATION, INC:

6.1 Membership. Every person, including Declaration, who acquires title, legal or equitable, to ay Lot in the Subdivision shall become a member of the LAKES SANS SOUCI PROPERTY OWNERS ASSOCIATION, INC. an Idaho nonprofit corporation, (herein referred to as "Association") a copy of the Articles of Incorporation and By-Laws of which are attached hereto and are hereby incorporated by reference; provided, however, that such membership is not intended to apply to those persons who hold an interest in any such Lot merely as security for the performance of an obligation to pay money, e.g. mortgages, deeds of trust, or real estate contract purchases. Declarant's membership (by reason of its ownership of unsold Lots) need not be evidenced by certificates of membership as provided in the Association's By-Laws.

6.2 Purpose and Meetings. The general purpose of the Association is to further and promote the community welfare of property Owners in the Subdivision and to operate common services and utilities if necessary. So as to assure the opportunity to all Owners to acquire full knowledge of said Association's activities, each such Owner shall be notified not less than ten (10) days nor more than thirty-five (35) days prior to any meeting of Association members. Said notice shall specify a reasonable place, date and hour, and in the case of a special meeting, the general nature of the business to be conducted.

6.3 Responsibility for Maintenance of Public Facilities. The Association shall be responsible for the maintenance, repair, and upkeep of the private streets and parks, and pedestrian easements within the Subdivision. Said maintenance, repair and upkeep shall be done in a continual and workmanlike manner. The Association shall also be the means for the promulgation and enforcement of all regulations necessary to the governing of the use and enjoyment of such streets and parks and such other properties within the Subdivision as it may from time to time own. The Association shall also be responsible for the maintenance and operation of such facilities as may be acquired by the Association from the Declarant. The Association shall also be the means for the promulgation and enforcement of all regulations necessary to the governing of the use and enjoyment of such facilities.

6.4 Maintenance Charges. For the purpose of proportionately dividing the Association's expenses incurred in the maintenance of its properties and in furthering and promoting its purposes, the Association shall have all the powers that are set forth in its Articles of Incorporation and By-Laws or that belong to it by operation of law, including the power to levy against every Lot in the Subdivision uniform annual charges as set forth in its By-Laws for the operation and maintenance of the streets, parks, pedestrian easements, utilities and for the operation and maintenance of the recreational facilities to be acquired.

6.5 Lien for Charges. Every such charge made shall be paid by the Owner to the Association on or before the date established by its Board of Directors pursuant to the resolution adopted by such Board fixing the amount of the annual charge. Written notice of the charge so fixed and the date of payment shall be sent to each Owner. Said charges shall remain a lien upon the property of the respective member until paid. Upon the adoption of a resolution of charges, the Association shall forthwith cause a notice thereof and of the lien created thereby to be signed and acknowledged by it and recorded in the Office of the County Recorder of Bonner County, Idaho. Such recorded notice shall embody said resolution and state the rate of the charge, the time payable, and when it becomes a lien. When paid, the Association shall from time to time execute, acknowledge and record in the Office of the County Recorder of Bonner County, Idaho, a release or releases of lien with respect to the property for which payment has been made. Full receipts shall be issued to Lot Owners upon payment. Each Lot Owner in the Subdivision shall, by acceptance of a deed thereto or the signing of a contract or agreement to purchase the same, whether from Declarant or a subsequent Owner of such Lot, bind himself, his heirs, personal representatives and assigns to pay all such charges determined and levied upon such Lot, including interest thereon and collection costs thereof, if any, including attorneys' fees; and the obligation to pay such charges, interest and costs thereby constitutes an obligation running with the land. Sale or transfer of any lot shall not affect any lien for charges provided for herein. All liens herein provided for shall be enforceable by foreclosure and sale proceedings in the manner provided by law for the foreclosure and sale of mortgages and/or trust deeds; provided, however, that no proceeding for foreclosure shall be commenced except upon expiration of two (2) months from and after the date the charge giving rise to such lien becomes due and payable.

6.6 Use of Funds. The funds arising from such charges so far as may be sufficient, shall be applied toward the payment of expenses incurred by the Association in the maintenance of its properties, utilities and in furthering and promoting the community welfare of the property owners in the Subdivision, all as set forth and provided in its Articles of Incorporation and By-Laws.

7. OWNERSHIP, USE AND ENJOYMENT OF STREETS:

7.1 Ownership. Each of the streets in the Unit or Subdivision designated on the Plat, except Blanchard Road is a private street. An easement for the use and enjoyment of each said streets and areas designated on the recorded Plat as pedestrian easements is reserved to Declarant, Declarant's successors and assigns; to the persons who are, from time to time, members or of any multi-family residential building, guesthouse, in or hotel facilities, and all other kinds of residential structures that may be erected within the boundaries of the Subdivision and other adjacent property currently owned by Declarant, to the owners and/or operators of the dam, lake facility and golf course, their successors and assigns, and to the invitees of all of the aforementioned persons.

7.2 Power of Association. The Association may request the inclusion of said streets into the County System or a special improvement district system at any time provided, however, that such request shall not be made by said Association except upon a tow-thirds (2/3) vote of its members entitled to vote. In such event, the Association will comply with all County requirements leading to inclusion.

7.3 Covenant by Declarant. Declarant, its successors, or assigns, will convey fee simple title to the streets to the Association within (5) years after their completion, subject only to reserved easements of record and utility rights.

7.4 Regulations. Speed limits and parking regulations and restrictions on such private streets shall be promulgated from time to time by the Association.

8. ANNEXATION OF SUBSEQUENT UNITS OR PARCELS:

8.1 Power to Annex. Declarant, its successors in interest or assigns, may, from time to time, and in its sole discretion, annex into the Subdivision all or any part of any other real property, or add additional subdivisions, condominiums and related adjacent land, the owners of which shall become members of the Association.

8.2 Uses. Any portion of such property available for annexation into the Subdivision may, at the option of Declarant, its successors or assigns, be so annexed as additional subdivided property, a condominium, or for use as a multiple-family residential, guesthouse, country club, tennis, racquet, swimming or other sports club, inn or hotel facility. Should property related to any of such uses not be so annexed, the owners thereof shall nevertheless have the right to the use and enjoyment of the private streets within the Subdivision, upon payment of a reasonable charge for maintenance, repair and upkeep or in return for the reciprocal use and enjoyment of common areas of such property or facilities, or a combination of both.

9. REMEDIES:

The undersigned, the Association or any party to whose benefit these Restrictions, may inure may proceed at law or in equity to prevent the occurrence, continuation or violation of any of the Restrictions and may recover damages and/or seek, other relief for from or against such violations. The remedies hereby specified are cumulative, and this specification of them shall not be taken to preclude an aggrieved party's resort to any other remedy at law, in equity, or under any statute. No delay or failure on the party to invoke an available remedy in respect of a violation of any of this Declaration shall be held to be a waiver by that part of (or an estoppel of that party to assert) any right available to him upon the recurrence or continuance of said violation or the occurrence of a different violation. A waiver of a breach of any of the restrictive covenants contained herein shall not be construed as a waiver of any succeeding breach or violation thereof or any other restrictive covenant. In the event legal action is necessary to enforce any of the provisions of this Declaration, such as conformance to a restriction or payment or a charge, then the party bringing such action shall be entitled to expenses of enforcement, including reasonable attorney's fees, if relief is granted by a court pursuant to such proceedings.

10. MISCELLANEOUS PROVISIONS:

10.1 Covenants to Run With Land. The covenants, conditions and restrictions, herein set forth shall run with the land described above and be binding on all persons claiming any interest in the Lots or any part thereof.

10.2 Acceptance of Restrictions. Any person or entity who shall acquire any interest in any Lot subject to the coverage of the Declaration, by acceptance of such interest whether from the undersigned or a subsequent owner of any interest in any Lot, shall accept such interest upon and subject to each and all of the covenants, conditions and restrictions of the Declaration and such person or entity and any heirs, personal representatives, successors and assigns, covenants, consents and agrees to and with the undersigned, and to and with subsequent owners of any interest in any Lot within the Subdivision to keep, observe, comply with and perform the covenants, conditions and restrictions of the Declaration.

10.3 Variances. The Committee may allow reasonable variances and adjustments of these Restrictions in order to overcome practical difficulties and prevent unnecessary hardships in the application of the provisions contained herein; provided, however, that such is done in conformity with the intent and purposes hereof and provided also that in every instance such variance or adjustment will not be materially detrimental or injurious to other property or improvements in the neighborhood, the Unit or Subdivision.

To the extent that structures built and existing on Lots at the time of filing this Declaration do not conform to the restrictions set forth herein they are except. Any future improvements to the structures or lots must, however, be approved by the Committee and to the extent possible conform to the restrictions contained herein.

10.4 Saving Clause. Invalidation of any of the reservations, agreements, covenants, conditions, and restrictions hereinbefore set forth, as a result of any conflict with a statute or ordinance, or by judgment or court order of other official decree shall in no way affect any of the other provisions hereof which will remain in full force and effect during the term thereof or any renewals or extension thereof.

10.5 Amendment. The Declaration may be amended, changed, modified, waived or terminated upon the written consent of two-thirds (2/3) of the Owners of Lots in the Subdivision. For purposes of determining such a vote when a Lot is owned by more than one (1) person or entity, each such owner shall be counted as a fraction equal to the fractional interest possessed in such Lot. For purposes of this section, the undersigned shall be deemed the Owner of each Lot of which it possesses record title, including title retained under a contract to sell, or similar instrument. Such written consent of the Owners shall be filed with the Committee and upon receipt by the Committee of the requisite written consents, it shall file with the Office of the Recorder of Bonner County, Idaho, notice of the action taken under or pursuant to this section. No such amendment shall affect or alter the easement and rights to use of streets, the restrictions regarding protection of the appearance of the use of streets, the restrictions regarding protection of the appearance of the course, lake or other recreational facilities or amenities and the lots adjacent thereto without the prior written approval of the owner of the golf course, other recreational facility or amenity, and/or lake as the case may be.

DECLARANT:

BONNER COMPANY, a Limited Partnership

BY: 68 SOUTH MAIN, INC., a general

Partner

/s/ GREG F. SCHENK /s/ EUGENE L. KIMBALL