SUB-ASSOCIATION/ARMAND BEACH ESTATES     (Nov 13, 2001)

The owners of Lots 1 to and including 29 of Armand Beach Estates per Map or Plat recorded in Plat Book 29, Pages 17 & 18, Public Records of Flagler County, Florida (hereinafter "Lots 1-29") shall have the right to establish a separate Homeowner's Association hereinafter "Armand Beach Estates Homeowners Association") or take over control of said association, if it has been incorporated at no cost to the homeowners to include as its members only the owners of Lots 1-29 with a 2/3 vote in favor of above. A meeting shall be called to vote on this issue, and in person or by proxy each lot owner shall have one vote. if the association is approved by a 2/3 vote (20 lots), a Board of Directors made up of three homeowners from Lots 1-29 shall be voted on within thirty days of the above vote, and subsequently establish the first annual budget.

If such Homeowners Association is established, Lots 1-29 shall, in all respects still remain encumbered by this Declaration of Covenants and Restrictions, as amended from time to time, and in the case of conflict between the terms of this Declaration and any governing documents utilized to create the Armand Beach Estates Association, the terms of this Declaration shall control.

If created, the Armand Beach Estates Association, shall, from that time forward determine the costs necessary to properly maintain, repair and replace Ocean Dune Circle and any other capital improvements and shall assess the same against Lots 1-29 either through an annual fee or special assessment.

if the Armand Beach Estates Association is created, and if the governing documents used to create that association contain the power to assess in accordance with this Declaration of Covenants and Restrictions, Article VII Section 5 and 6, and through Article VII of the Declaration of Covenants and Restrictions as it was amended to apply to Lots 1-29 by that document entitled Amendment To Declaration of Covenants, Restrictions And Easements, Hammock Beach Estates, dated October 16, 1990 and recorded on October 19, 1990 in Official Records Book 0439, Page 1238, and re-recorded on November 6,1990 in Official Records Book 0440, Page 0831, both being in the Public Records of Flagler County, Florida shall be of no force and effect as to Lots 1-29.