(PHASE 1)

THIS DECLARATION OF AMENDMENT IS MADE ON AUGUST 9, 1973, BY U.S. DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION ("U.S."), AND BY THE IRVINE COMPANY, A WEST VIRGINIA CORPORATION ("IRVINE"), COLLECTIVELY REFERRED TO HEREIN AS "DECLARANT".

1. IRVINE IS THE OWNER OF CERTAIN REAL PROPERTY (THE "PROPERTIES") IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS:

TRACT 8033, AS SHOWN ON A MAP RECORDED ON JANUARY 12, 1973, IN BOOK 315, PAGES 1 TO 7, INCLUSIVE; AND TRACT 8028, AS SHOWN ON A MAP RECORDED ON APRIL 5, 1973, IN BOOK 320, PAGES 1 TO 6, INCLUSIVE; OF MISCELLANEOUS MAPS IN THE OFFICE OF THE ORANGE COUNTY RECORDER.

2. U.S. IS THE OWNER OF A LEASEHOLD INTEREST IN THE PROPERTIES AND IS TENANT UNDER A GROUND LEASE BETWEEN U.S. AND IRVINE ON THE PROPERTIES, WHICH GROUND LEASE IS DATED DECEMBER 16, 1971. A MEMORANDUM OF SAID GROUND LEASE WAS RECORDED ON DECEMBER 20, 1971, IN BOOK 9933, PAGE 105, OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA.

3. DECLARANT HAS PREVIOUSLY EXECUTED A MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS DATED APRIL 12, 1973 (THE "DECLARATION"). THE DECLARATION WAS RECORDED ON APRIL 17, 1973, AS INSTRUMENT NO. 16481, BOOK 10649, PAGES 1 TO 36, INCLUSIVE, RECORDS OF ORANGE COUNTY, CALIFORNIA. THE DECLARATION, UPON ITS RECORDATION, BECAME BINDING UPON ALL OWNERS OF LOTS IN THE PATIO HOME AREA OF LAURELWOOD IN TUSTIN, AS SUCH AREA IS DEFINED IN THE DECLARATION.

4. DECLARANT HAS PREVIOUSLY EXECUTED A DECLARATION OF ANNEXATION OF TERRITORY OF LAURELWOOD IN TUSTIN (TOWNHOUSE PHASE I), DATED APRIL 18, 1973 (THE "DECLARATION OF ANNEXATION"). THE DECLARATION OF ANNEXATION WAS RECORDED ON MAY 1, 1973, AS INSTRUMENT NO. 1073, BOOK 10673, PAGES 432 TO 435, INCLUSIVE, RECORDS OF ORANGE COUNTY, CALIFORNIA. THE DECLARATION OF ANNEXATION, UPON ITS RECORDATION, MADE THE DECLARATION BINDING UPON ALL OWNERS OF LOTS IN THE TOWNHOUSE AREA OF LAURELWOOD IN TUSTIN, AS SUCH AREA IS DEFINED IN THE DECLARATION.

5. PURSUANT TO ARTICLE XI, SECTION 4 OF THE DECLARATION, DECLARANT HAS THE RIGHT AT ANY TIME PRIOR TO ACQUISITION OF TITLE BY A PURCHASER FROM DECLARANT TO AMEND THE DECLARATION. NO PURCHASER HAS ACQUIRED TITLE TO A LOT ON THE PROPERTIES, AS SUCH TERM IS DEFINED IN THE DECLARATION, AS OF THE DATES OF EXECUTION AND RECORDATION OF THIS DECLARATION OF AMENDMENT; AND DECLARANT DESIRES TO AMEND THE DECLARATION OF ANNEXATION MERELY TO CLARIFY SOME OF THE MAINTENANCE RIGHTS AND RESPONSIBILITIES OF THE LAURELWOOD HOMEOWNERS ASSOCIATION, WITH RESPECT TO PAVED, SURFACED PORTIONS OF THE COMMON AREA ADJACENT TO THE TOWNHOUSE AREA, AND TO ENSURE THAT THE PUBLIC HAS ACCESS OVER CERTAIN SIDEWALKS IN THE PROPERTIES.

6. DECLARANT HEREBY DECLARES THAT THE FOLLOWING LANGUAGE IS ADDED TO ARTICLE VIII, SECTION 2 OF THE DECLARATION, BETWEEN THE FIRST AND SECOND SENTENCES OF SAID SECTION:

"THE ASSOCIATION SHALL ALSO CONSTRUCT, RECONSTRUCT, REPLACE OR REFINISH ANY ROAD IMPROVEMENT OR SURFACE UPON ANY PORTION OF THE COMMON AREA DESIGNATED ON A SUBDIVISION MAP AS A PRIVATE ROAD OR AS A GARAGE LOT, INCLUDING THE INTERIOR PAVED SURFACES WITHIN THE CARPORT STRUCTURES ADJACENT TO THE TOWNHOUSE AREA."

7. DECLARANT FURTHER HEREBY DECLARES THAT THE FOLLOWING LANGUAGE IS ADDED TO ARTICLE XII, SECTION 6 OF THE DECLARATION, TO CONSTITUTE THE SECOND SENTENCE OF SAID SECTION:

"LAURELWOOD TOWNHOUSE ASSOCIATION IS HEREBY GIVEN THE RIGHT OF ENTRY ONTO THE CARPORT STRUCTURES IN THE TOWNHOUSE AREA AND OVER THE COMMON AREA, FOR PURPOSES OF CARRYING OUT AND ACCOMPLISHING ITS DUTIES AND MAINTENANCE AND EXERCISING ALL OF ITS RIGHTS, AS SUCH RIGHTS AND DUTIES ARE SET FORTH IN THE DECLARATION AND IN THE TOWNHOUSE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS REFERENCED IN ARTICLE I, SECTION 7 OF THE DECLARATION."

8. DECLARANT FURTHER HEREBY DECLARES THAT THE SECOND SENTENCE OF ARTICLE XII, SECTION 7 OF THE DECLARATION IS REVISED TO READ AS FOLLOWS:

"DECLARANT HEREBY RESERVES TO ITSELF, TOGETHER WITH THE RIGHT TO GRANT AND TRANSFER THE SAME TO EACH OWNER OF A LOT IN THE PATIO HOME AREA, AN EXCLUSIVE EASEMENT APPURTENANT TO THE LOT OWNED BY SUCH OWNER ("DOMINANT TENEMENT"), ON ONE SIDE OF THE DOMINANT TENEMENT FOR ACCESS TO AND USE OF AND OVER, BY SUCH OWNER, HIS GUESTS AND TENANTS, THAT RECTANGULAR PORTION ("EASEMENT AREA"), OF THE LOT ADJACENT TO THE DOMINANT TENEMENT, LYING GENERALLY BETWEEN THE DOMINANT TENEMENT AND THE PLANE OF THE FOUNDATION LINE OF THE DWELLING UNIT AS ACTUALLY CONSTRUCTED BY DECLARANT ON THE ADJACENT LOT ("SERVIENT TENEMENT")."

9. DECLARANT FURTHER HEREBY DECLARES THAT THE FIRST SENTENCE OF ARTICLE XII, SECTION 1 OF THE DECLARATION IS REVISED TO READ AS FOLLOWS:

"EASEMENTS OVER THE LOTS FOR ACCESS, INGRESS AND EGRESS AS NECESSARY TO PERMIT (I) USE OF ALL SIDEWALKS ADJACENT TO AND PARALLELING STREETS FRONTING THE HOUSES IN THE PATIO HOME AREA, AND (II) USE OF ALL SIDEWALKS FRONTING THE HOUSES IN THE TOWNHOUSE AREA, WHICH SIDEWALKS ARE ALL INTENDED FOR PUBLIC USE, ARE HEREBY RESERVED BY DECLARANT, TOGETHER WITH THE RIGHT TO GRANT AND TRANSFER THE SAME TO THE TOWNHOUSE ASSOCIATION, THE OWNERS AND THE CITY OF TUSTIN."

10. EXCEPT AS MODIFIED BY MODIFICATION OF THE DOCUMENT AS SET FORTH ABOVE, THE DECLARATION IS HEREBY RATIFIED AND CONFIRMED.

THIS DECLARATION OF AMENDMENT HAS BEEN EXECUTED TO BE EFFECTIVE ON THE DATE FIRST WRITTEN ABOVE.

U.S. DEVELOPMENT CORPORATION,

A CALIFORNIA CORPORATION

BY D. G. ZELLNER

ITS PRESIDENT

BY W. LEE CHESTER

ITS VICE PRESIDENT

THE IRVINE COMPANY,

A WEST VIRGINIA CORPORATION

BY FRANK E. HUGHES

ITS VICE PRESIDENT

BY SHELDON SMART

ITS ASSISTANT SECRETARY.

THE SIGNATURES OF D. G. ZELLNER AND W. LEE CHESTER NOTARIZED ON AUGUST 9, 1973 BY JENNIFER L. COTTER.

THE SIGNATURES OF FRANK E. HUGHES AND SHELDON SMART NOTARIZED ON AUGUST 10, 1973 BY ELEANORE B. NELSON.

Declaration Of Amendment 2

WHEREAS, A MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS HAS HERETOFORE BEEN RECORDED IN THE COUNTY OF ORANGE IN BOOK 10649, PAGE 1, ET.SEQ., OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA; AND

WHEREAS, SAID DECLARATION HAS HERETOFORE BEEN AMENDED, WITH SAID AMENDMENT RECORDED IN BOOK 10849, PAGE 877, ET.SEQ.; AND

WHEREAS, SAID DECLARATION WAS FURTHER AMENDED BY AMENDING ARTICLE VI, SECTION (3) TO ALLOW 30% OF RECORDED LOT OWNERS OF TRACTS 7794, 8033, 8034 AND 8035, TO AMEND SAID DECLARATION (FROM 75%); SAID AMENDMENT WAS RECORDED IN BOOK 13619, PAGES 1082 TO 1171, INCLUSIVE, OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA; AND

WHEREAS, PURSUANT TO ARTICLE IV, SECTION 3 OF SAID DECLARATION, MORE THAN 30% OF RECORDED LOT OWNERS OF TRACTS 7794, 8033, 8034, AND 8035 HAVE SIGNED A PETITION TO AMEND SECTIONS 3 (A) AND 3 (B) OF ARTICLE IV OF THE MASTER DECLARATION HEREINAFTER DESCRIBED.

NOW, THEREFORE, SAID MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS ARTICLE IV, SECTIONS 3 (A) AND (B) ARE AMENDED TO READ AS FOLLOWS:

SECTION 3. (A) FROM AND AFTER JANUARY 1 OF THE YEAR IMMEDIATELY FOLLOWING THE CONVEYANCE OF THE FIRST LOT TO AN OWNER, THE MAXIMUM ANNUAL ASSESSMENT MAY BE INCREASED EACH YEAR, AT ANY TIME DURING THE YEAR, NOT MORE THAN 9% ABOVE THE MAXIMUM ASSESSMENT FOR THE PREVIOUS YEAR WITHOUT A VOTE OF THE MEMBERSHIP.

SECTION 3. (B) FROM AND AFTER JANUARY 1 OF THE YEAR IMMEDIATELY FOLLOWING THE CONVEYANCE OF THE FIRST LOT TO AN OWNER, THE MAXIMUM ANNUAL ASSESSMENT MAY BE INCREASED ABOVE NINE (9%) PERCENT BY THE VOTE OR WRITTEN ASSENT OF FIFTY-ONE (51%) PERCENT OF EACH CLASS OF MEMBERS.

I, MARGARETTE THOMPSON, DECLARE THE FOLLOWING UNDER PENALTY OF PERJURY:

1. THAT I AM THE PRESIDENT OF THE LAURELWOOD MASTER ASSOCIATION’S BOARD OF DIRECTORS.

2. THAT I CERTIFY THAT AT LEAST 30% OF THE LOT OWNERS OF LAURELWOOD MASTER ASSOCIATION HAS SIGNED A PETITION TO AMEND THE MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS DESCRIBED HEREIN.

EXECUTED THIS 2^ND, DAY OF FEBRUARY 1981, IN TUSTIN, CALIFORNIA.

(SIGNED)

MARGARETTE THOMPSON

BOARD PRESIDENT, LAURELWOOD

HOMEOWNERS ASSOCIATION

THE SIGNATURE OF MARGARETTE THOMPSON WAS NOTARIZED ON FEBRUARY 2, 1981 BY ELOISE CASTANON.

Declaration Of Amendment 3