DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS RELATING TO CASTLE WELLS ASSOCIATION AND AIRPORT SECTION ONE

WE, THE UNDERSIGNED, are the owners of the below-described real property located within Maricopa County, State of Arizona: (Note: A lengthy legal description of the property was included at this point. It is purposely deleted from this copy.)

NOW, THE UNDERSIGNED, desiring to establish the nature of use and enjoyment of the above-described real property, declare that all of said property is held and may be conveyed, hypothecated, encumbered, leased, occupied, built upon or otherwise used, improved, transferred in full or in part, subject to this declaration as amended or modified from time to time. This declaration is declared and agreed to be in furtherance of a general plan established for the purpose of enhancing and perfecting the value, desirability and attractiveness of the aforedescribed real property. This declaration shall run with all of the aforesaid real property for all purposes and shall be binding upon and inure to the benefit of the undersigned and the association of the undersigned and all owners, their heirs, successors in interest and assigns, for a period of forty (40) years and automatically extended for successive periods of ten years.

SECTION TWO DEFINITIONS:

A) “Common areas” shall mean all the general common elements existing at the time of the signing of this declaration.

B) “Declaration” shall mean this entire document as the same may be amended from time to time.

C) “Owners” shall mean the record owner of any parcel or the purchaser under a contract for the sale thereof. The foregoing does not include persons or entities who hold an interest in any parcel as security for the performance of an obligation.

D) “Premises” refers to all of the real property described

E) “Unit” shall mean a separate estate consisting of a lot and dwelling occupied by the owner.

F) “Single family” shall mean a group of one or more persons each related to the other by blood, marriage or legal adoption.

G) “Visible from neighboring property” shall mean with respect to any given object that such object is or would be visible to a person six feet tall standing on any part of the neighboring property at an elevation no greater than the elevation of the base of the object being viewed.

SECTION THREE RESTRICTIONS:

A) Mobile homes will be permitted during the construction of a permanent home, not to exceed two years from the time that it is located on the property.

B) No buildings, tiedowns, parked vehicles or fences shall be within 100 feet of the center of the runway, except that there may be a fence on the east side of the runway within twenty feet thereof.

C) All planes based at Castle Wells will be stored under cover or hangared.

D) All recreational vehicles, including motor homes, trailers, boats, etc., will be parked under cover or against permanent buildings.

E) No mechanical or structural repairs shall be made on any plane or vehicle unless the vehicle is registered to the property owner; for his own personal use.

F) Personally owned animals must be fenced in and kept off the runway. No commercial boarding of animals shall be permitted. Animals shall be limited to domestic pets, horses and chickens for personal use. No farm stock, e.g., cattle, swine, sheep or goats are permitted.

G) Grading of desert vegetation shall be limited to areas needed for homesite and appurtenant buildings; drive and taxiway; private yard area and parking; and septic field. The desert shall be left undisturbed where possible for esthetic value and dust control.

H) Irrigation shall be limited to private lawn and yard areas and around buildings; small garden areas and individual tree plantings. No extensive grass or pasture watering is permitted.

I) Fences shall be installed and paid for by the owners around the perimeter of the premises. This fence shall prevent grazing cattle from entering the property,discourage unauthorized entry to the runway, trespassing by outside persons, but not obstruct natural views or be considered unsightly by the majority of the property owners. Individual fences will be allowed around corrals, runs, arenas, pools, storage yards and around major building complexes. Fences between individual properties must be agreed upon by adjoining owners.

SECTION FOUR AIRCRAFT OPERATIONS:

A) Castle Well Runway will be private, restricted and closed to student and solo student traffic. All aircraft based at Castle Wells shall be registered to the parcel owners or a corporation, all of the stock of which is owned by a parcel owner. Guests are limited to pilots with proper ratings who shall comply with all the provisions of this declaration with respect to aircraft and otherwise. Visiting aircraft pilots, together with the occupants of their aircraft shall be permitted to remain as guests of any parcel owner for a period not to exceed two weeks in any six-month period.

B) All dismantled aircraft and parts will be hangared.

C) The landing surface of the runway will not be used for motor vehicular traffic and horses are not to be ridden on said landing surface.

D) Night landings will be limited to fair weather (VFR) conditions and only if landing light system is operational.

E) Unicom frequency is to be used on takeoff and landing and a pattern east of the runway is to be followed at all times. Luke Air Force Base Tower will be contacted after departure and upon arrival when the aircraft course passes within fifteen miles of Luke Air Force Base or any of its auxiliaries currently in use.

F) There will be a clear zone 100 feet from the center of the runway upon which no buildings, landscaping, fences or obstacles of any sort which might, in any way, be detrimental to the operation of aircraft will be placed.

SECTION FIVE PARCEL SIZE AND HOME CONSTRUCTION:

A) Construction shall be limited to one single-family residence for each five-acre parcel which residence may have, as an appurtenance thereto, a garage, a hangar, guest house and servants’ quarters.

B) Nothing may be constructed on any of the above-described property except for single family residences.

C) The minimum size for a single-family residence is 1600 square feet, for a guest house, 800 square feet, and for servants’ quarters, 500 square feet.

D) All residences and appurtenances thereto shall be constructed of conventional materials and there shall be no geodesic domes or buildings made entirely of corrugated metal.

E) All residences and appurtenances thereto shall be set back at least 100 feet from the center line of the runway.

F) Water service to each home will be metered and the expenses for electricity to deliver the water and maintenance shall be allocated on a usage basis. Water usage on any common areas shall also be metered and allocated equally among the lot owners.

SECTION SIX CASTLE WELLS ASSOCIATION:

There is hereby created an unincorporated Association consisting of all the owners to be known as Castle Wells Association (hereinafter referred to as the Association).

Subject to the provisions of the Declaration, the Association may:

A) Adopt and amend By-Laws and Rules;

B) Adopt and amend budgets for revenues, expenditures and collect assessments for common expenses from the owners;

C) Hire and discharge agents and other employees and independent contractors;

D) Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more owners on matters affecting the premises;

E) Make contracts and incur liabilities;

F) Regulate the use, maintenance, repair, replacement and modification of the runway, roadway-taxiway, water extraction, storage and delivery system, electrical distribution, and telephone service;

G) Cause additional improvements to be made for the benefit of the premises only;

H) Impose charges for late payments of assessments and after notice and opportunity to be heard, impose monetary penalties upon owners for violations of the Declarations, By-Laws and Rules of the Association;

I) Impose reasonable charges for the preparation and recordation of Amendments to the Declaration or statements of unpaid assessments; and,

J) Provide for indemnification of its officers, exercise any other powers conferred by the Declaration, additional By-Laws, all of the powers that may be exercised in the State of Arizona by unincorporated associations and all of the powers necessary and proper for the governance and operation of the Association.

K) A meeting of the Association shall be held on Saturday at least twice each year, beginning with meetings to be held at the premises on July 11, 1987, and on the first Saturday in January, 1988, which is more than six months after July 11, 1987, and in like fashion each six months thereafter. Each owner of a five-acre lot shali be entitled to one vote per five acres. Anything owned in excess of five acres but less than an additional five acres shall not entitle the owner to an additional vote, however, an additional vote will be authorized for each additional five-acre parcel owned by an owner. Special meetings may be called by members of the Association representing twenty-five (25%) percent or more of the authorized votes in the Association. Not fewer than ten (10) nor more than sixty (60) days in advance of any meeting the President of the Association shall cause to be mailed a notice of the meeting stating the time, place and items on the agenda of the meeting. A quorum is present throughout any meeting of the Association if persons entitled to cast at least forty-five (45%) percent of the votes in the Association are present in person or by proxy. At the first meeting of the Association and annually thereafter, the Association shall choose its officers, including a President, Yice-President, Secretary and Treasurer. The President shall manage the month-to-month operation of the Association, give notice of meetings, and shall have other duties such as are assigned to him annually or semi-annually by the Association. The Vice-President shall act in the absence of the President in matters of immediate need provided the President cannot be available to act as such within the emergency period and at such other times as the President may be unavailable for periods in excess of two weeks. The Secretary shall keep minutes of all Association meetings regularly scheduled and/or special and shall mail copies thereof, within ten (10) days of such meetings to all owners for their approval. Any owner disapproving minutes shall, within ten (10) days of receipt thereof, give written notice to the officers of the Association setting forth the particulars of the disapproval. The officers shall meet with the disapproving owner within ten (10) days and the majority of the officers and said owner will decide if the minutes accurately reflect the meeting; if so they be adopted; if not amended appropriately and adopted. The Treasurer shall maintain an assessment roll which shall include a separate account for each parcel owned and shall designate the name and address of the owner or owners thereof, the amount of each assessment against the owners and the parcel, due dates of all the assessments, the amounts paid by the owner and all unpaid assessments.

SECTION SEVEN ASSESSMENTS AND LIENS:

All owners shall be subject to assessments as levied by the Association for the purpose of maintaining the runway, common areas, roadways and utilities and for other purposes as determined by the Association from time to time and the owners shall be liable to the Association for the payment of such assessments. Each assessment, together with interest accruing thereon and all costs, including a reasonable attorney’s fee incurred in enforcing or collecting the assessment with or without suit shall be and remain a lien upon the lot owned by the assessed owner which lien may be foreclosed in the manner provided by law for the foreclosure of trust deeds by a trustee’s sale or for the foreclosure of mortgages by judicial proceedings or in any manner provided for by law for the foreclosure of liens on real property in the State of Arizona. Each assessment not paid within thirty (30) days of the assessment will be charged interest at the rate of ten percent (10%) per month compounded monthly. Each of the owners is obliged to pay a pro-rata portion of the amounts payable to Lawrence and/or Evelyn Graves in respect of the purchase of all of the aforesaid real property which is payable monthly through the Association. If any owner fails to pay the monthly payment due on the purchase price then the Association will, ten (10) days after the due date, have the option of making said payment and in that event the Association shall have a lien against the owner’s property for the amount of said payment plus costs, attorney fees, recordation fees and other expenses attendant upon recordation, if any, of said lien plus interest on, all said sums, and on the total monthly payment due Graves for that month at the rate of three percent (3%) per month compounded monthly from the date said expenses were incurred or due until paid. The foreclosure of assessment liens by the Association for payments made by the Association for the monthly purchase price to be paid by an owner may be foreclosed in the same fashion as assessment liens. All assessments against an owner’s property for common expenditures as more specifically set out hereinabove and monthly payments upon the purchase price as more specifically set forth hereinabove, shall, from the time of said assessment and/or payment become liens against the defaulting owner’s property simply by virtue of this declaration and no further perfection is needed. However, if the Association deems it necessary, the liens created hereby may be recorded in the Maricopa County Recorder’s Office setting forth the name of the owner, the legal description of the real property affected, the amounts owed and the interest rate. The notice shall be signed by the President, Vice-President, Secretary or Treasurer of the Association and a copy thereof shall be mailed to the defaulting owner at the last known address of said owner. A lien for assessments or for the payment of monthly installments on total purchase price may be foreclosed by the Association not less than thirty (30) days after such lien arises and shall be foreclosed anytime after ninety (90) days after such lien arises.

AMENDMENT OF AND ADDENDUM TO DECLARATION OF COVENANTS, CONDITlONS AND RESTRICTIONS RELATING TO CASTLE WELLS ASSOCIATION AND AIRPORT

1. AMENDMENT

The Declaration is amended so that all references to Castle Wells shall now be Castle Well and by way of illustration and not limitation, the former Declaration now reads Declaration of Covenants, Conditions and Restrictions Relating to Castle Well Association and Airport, and Castle Wells Association now reads Castle Well Association.

2. ADDENDUM

There is hereby added to the Declaration of Covenants, Conditions and Restrictions Relating to Castle Well Association and Airport the following paragraphs to the Sections indicated:

SECTION FIVE

G) No residence or appurtenance thereto shall be constructed, the top of which is higher than the top of the hill which comprises a portion of the real property described in Section One, Parcels 1 through 7, except, however, the ruins currently at the top of the hill which ruins, however, may not be expanded or improved in any way whatsoever.

H) Notwithstanding the provisions of Section Five, paragraph A, Parcel number 1 comprising approximately three acres may be sold and one single family residence together with appurtenances thereto may be constructed thereon, however, this exception relates only to Parcel number 1 and shall not be in any way construed to relate to any of the other Parcels described in Section One hereinabove.

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