ARTICLE VI- PROPERTY RIGHTS IN RECREATION FACILITY.

By accepting any instrument of conveyance or by taking possession or occupying of any Dwelling Unit, each such person does agree to abide by and comply with all rules and regulations promulgated by the Association. It being understood that the compliance with such rules and regulations is necessary for the orderly enjoyment of the Recreation Facility.

Section 3. Limitations on Use. Each Lot Owner's permanent, lion-exclusive easement for the use and enjoyment in and to the Recreation Facility shall be subject to and limited by the following:

          (a) The right of the Association to suspend any Owner's right to use the Recreation Facility for any period during which an assessment against said Owner's Lot remains unpaid.

Section 4. Operation and Maintenance. Upon conveyance of the Recreation Facility to the Association as hereinafter provided for, and upon completion of "Developer Improvements" as previously defined, it shall become the Association's responsibility to operate and maintain the Recreation Facility and Developer Improvements. It shall the obligation of the Association to access, levy, enforce and collect any and all assessments from the members of the Association which are required in order to maintain, operate, administer and repair the Recreation Facility.

Section 5. Non-Exclusively. When the Developer installs a swimming pool and/or clubhouse, (hereinafter referred to as Facility), the Developer, at all times prior to the conveyance of the Recreation Facility and the Association thereafter, shall have the right to grant use rights to the Facility to all other lot owners of Armand Beach East Subdivision not included in The Hammock Beach Estates Neighborhood District, their families, guests, lessees and invitees in and to the Facility In that event the Developer or the Association as the case may be, shall establish fee schedules for membership and reasonable rules and regulations relating thereto to be paid and complied with by the Lot Owners of The Hammock Beach Estates Neighborhood District. Notwithstanding the foregoing, the granting of such use rights shall in no way invalidate any terms or provisions of this Declaration and shall not reduce or abate any assessment payments by Members of the Association.

Section 6. Rights of Developer. Developer as long as it is the Owner of the Lot, shall always have the right, both prior to and subsequent to any conveyance of the Recreation Facility to the Association, to use the Recreation Facility for all lawful purposes which right it includes, but is not limited to, the following:

            (a) The right to use, occupy, demonstrate and show all portions of the Recreational Facility for the purpose of promoting and aiding in the marketing, sale or rental or any portion of the real property subject to this Declaration Such rights may not be exercised in an unreasonable manner inconsistent with the rights of the Association and its members to use, occupy and enjoy the Recreation Facility. The exercise of such rights by Developer shall not reduce, abate or suspend in any way the obligation of Association and its members to maintain, operate, administer and repair the Recreation Facility.

           (b) Display and erect signs, billboards and placards; and store, keep, exhibit and distribute printed, audio and visual promotional materials in and about the Recreation Facility.

Section 7. Insurance.

           (a) Upon conveyance of the Recreation Facility to the Association, the Association shall carry, at its expense, public liability insurance on the Recreation Facility and improvements thereon, with limits of personal injury liability of not less than Five Hundred Thousand Dollars ($500,000.00) with respect to any one person, and One Million Dollars ($1,000,000.00) with respect to any one accident; the limits for property damage liability shall be in an amount not less than One Hundred Thousand Dollars ($100,000.00). The Developer shall be named as an additional insured under such policies until such time as it no longer owns any Lots encumbered by this Declaration. The Association's public liability policy shall include all necessary endorsements evidencing contractual coverage for this grant.

            (b) The Association shall deliver to the Developer a Certificate of insurance in compliance with the coverage obligations set forth herein together with evidence of payment hereof, including an endorsement which states that such insurance may not be changed, altered or cancelled except upon thirty (30) days prior written notice to the Developer.

            (c) Except for the Developer's negligence, and notwithstanding any insurance requirement set forth herein, the Association shall indemnify and save the Developer and its officers, agents, servants and employees, harmless from and against any and all liability, damage, penalty, claim, loss, lien, action, suit, proceedings, costs or judgments arising from the Association's and Developer's use of the Recreation Facility or from non-compliance with any law or regulation, or from injury or death to any person or injury to property sustained by anyone in and about the Recreation Facility, whether justifiable or not, including attorneys fees (appellate or otherwise) and any expense in connection therewith. The Association shall, at its own costs and expense, and at Developer's election, defend any and all suits or actions which may be brought against the Developer or its officers, agents, servants and employees.

Section 8. Title to Recreation Facility. The Developer may retain the legal title to the Recreation Facility until such time ,as it has completed improvements thereon, and until such time as, in the opinion of the Developer, the Association is able to administer the same but, notwithstanding any provision herein, the Developer hereby covenants for itself, its successors and assigns that it shall convey the Recreation Parcel and all improvements thereon, to the Association, at no cost and with no mortgage encumbering same, not later than six (6) months subsequent to the date of conveyance by the Developer of fee simple record title to the last Lot.

       Section 1 Every owner of a fee simple undivided interest in any Lot as described herein, shall automatically become a member of The Hammock Beach Estates home Owner' 5 Association, Inc., a Florida corporation not for profit, and shall be bound by the Articles of Incorporation and By-Laws and all actions taken by the Association.

        Section 2. The Association shall be organized for the purpose of maintaining and preserving the general aesthetic value of the Recreation Facility and Developer Improvements as herein defined by means of general and special assessments levied by the Association against the Lots.

        Section 3. In order to provide funds for the operation and maintenance of the Association, the Association shall have the right to make, levy and collect the assessments against each Lot. All regular assessments shall be payable in monthly installments in advance on or before the 10th day of the month and any delinquent assessments shall bear interest at the rate of ten (10%) percent per annum until paid. Further, a late charge of Five ($5.00) Dollars shall be assessed.

        Section 5. The Owner or Owners of any Lot shall be personally liable, jointly and severally, to the Association for the payment of any assessments arid the cost of collection, including but not limited to reasonable attorney's fees, whether suit be brought or riot. The Association shall be irrevocably granted the right to impose a lien against each Lot for the collection of the assessments levied, which lien shall secure the monies due for all assessments hereafter levied against the Owner of each Lot, which lien shall also secure all costs and expenses including reasonably attorneys fees which are incurred by the Association in enforcing the lien.

        Section 6. The lien granted to the Association may be foreclosed in the manner as a real estate mortgage may be foreclosed in the State of Florida. The lien shall be effective from and after the time of recording in the Public Records of Flagler County, Florida. A Claim of Lien stating the description of the property, the name of the record title owner of the property, and the amount due and date when due.

        Section 6(new) By-Laws.  In addition to the provisions outlined above, the By-Laws of the Hammock Beach Estates Home Owner's Association, Inc. as recorded at Official Records Book 422, Page 447, Public Records of Flagler County, Florida, contains provisions relating to the imposition and collection of various categories of assessments. Such provisions shall be as fully enforceable as if the same were reproduced herein.

        Section 7. The association shall determine and assess costs necessary for the are, preservation and maintenance of said road (Ocean Dune Circle) and shall collect same as provided in Article VII as a special assessment against lots 1-29 only. The Association shall have all lien and foreclosure rights for non-payment as provided in Article VII. At he discretion of  the Association, the costs of maintenance and  repair for the road may be budgeted as a capital expense item and collected in addition to the regular assessments; or alternatively, ay be assessed and collected as a special assessment as and when maintenance and repairs are necessary. Regardless of the method of collection, the Association shall collect and maintain separate records for all funds paid toward the care, preservation and maintenance of the road. Funds collected for road maintenance may be used only for said purpose; and said funds may not be co-mingled or use by the Association incident to other expenses. Likewise, no funds collected from regular assessments paid by all unit owners shall be used for the care, maintenance or preservation of the road identified as parcel B. At the discretion of the Board' of Directors of the Association, a three (3) member advisory committee consisting of three (3) lot owners from lots 1 through 29 inclusive, may be appointed by the Board of Directors of the association for purposes of providing direction to the Association on matters relating to the care, maintenance and preservation of the road, and expenses associated therewith.

        Section 1. General. For as long as the Developer owns any lot, no building, structure, alteration, addition or improvement of any character, including but not limited to, exterior painting and roofing, other than interior alterations riot affecting the external appearance of a building or structure, shall be permitted upon any portion of the properties unless and until a plan of such structure, alteration, addition or improvement shall have been approved by the Developer as to the quality of workmanship and materials, color, harmony of external design with surrounding structures, location with respect to topography and finished grade elevation, its effect on the outlook from surrounding property and all other factors which will, in the opinion of the Developer, affect the quality of the planning and design of the Subdivision and the improvements thereof . Said approval shall not be unreasonably withheld.

        Section 2. Review Process. Prior to the commencement of any improvements on said Lot, the Lot owner shall submit to the Developer a proposal for the intended improvements (including total available square footage). Said proposal shall include floor plan, all exterior elevations, a proposed site plan, a landscaping plan showing type, location and size of plants, and abbreviated specifications setting forth materials and colors for review and approval by the Developer. In the event that the Developer fails to approve or disapprove said plan within forty-five (45) days of receipt thereof, then such approval of the Developer shall not be required. The Developer shall have the power to promulgate rules and regulations and shall have the power to grant variances to any rule, regulation or restrictive covenant set forth herein. The submitted proposal shall be accompanied by a Fifty ($50.00) Dollar architectural review fee.

        Section 3. Purpose. It is the intention of the Developer that all improvements be architecturally reviewed to ensure quality of design, materials and harmony of the structures all in order to preserve and enhance the character of the Subdivision. Developer, in its sole discretion, may, at any time it deems circumstances appropriate, abandon and discontinue said architectural review, taking into consideration whether or not a sufficient number of structures have been constructed within the Subdivision to set the tone and character of the Subdivision and neighborhood for which these covenants arid restrictions are intended. In the alternative, the Developer, in its sole discretion, may assign the functions of architectural review to a review committee of not less than three (3) individuals who must be lot owners within the Subdivision. Should Developer elect to make such an assignment to any such committee, at that time Developer shall have the right to promulgate reasonable rules and regulations for the appointment of committee members, membership, rules of procedures, and duties of the committee by the filing of a document to that effect in the Public Records of Flagler County, Florida, as an amendment to this Declaration.

        Section 1. General. In an effort to maintain continuity of building types, the following minimum standards must be maintained throughout the Subdivision. All of the following must be included as part of the submittal process to the Developer for review and approval prior to construction.

        Section 2. Submittal Process; If the following information does not appear on the submittal plans the Developer may reject the submission in its sole discretion as incomplete. If the applicant is unclear as to what should be included on the submittal, he should then contact the Developer for clarification prior to submitting its documents.

        Section 3. Materials/Standards. the following is a list of materials and standards to be used as a guideline in preparing the site plans and building plans and elevations for submittal and approval to the Developer, and then the Association after such rights are assigned to it by the Developer.         

                 (a) Facade Treatment. All residential units shall be constructed of concrete block or wood. In no case shall modular pre-fab type units or mobile homes be permitted on any lot. Siding materials shall be limited to stucco, brick, stone, and various wood finishes, all of which must be approved by the Developer. In no event shall exposed concrete block be permitted. The exterior front of the residence shall be either rough wood, glass, brick, or stone or a combination with stucco.

                 (c) Colors. All building colors, including but not limited to, the following, roofs, walls, fences, trim, shall be submitted to the Developer for approval prior to installation.  Earth tones are recommended and should be used where feasible and practical to maintain neighborhood continuity. The Developer shall determine, in Developer's discretion, the color schemes acceptable for exterior roofs and painting. Developer shall make said determinations both initially and for any proposed color changes for so long as Developer owns any lots governed by these restrictive covenants. After Developer no longer owns any lots affected by these restrictive covenants, any exterior color changes either in roof color or exterior walls shall be submitted to the association for review and approval. The association shall endeavor to maintain the same general color schemes as established by the Developer."

         Section 4. Minimum Dwelling Unit Size. No dwelling unit shall contain less than 1600 square feet of air conditioned living area. An enclosed garage for a minimum of two cars shall be provided. The method of determining the square footage of the enclosed living area shall be to multiply together the horizontal dimensions of the walls forming the outer boundaries of the dwelling unit. Open porches, atriums, screened in patios, courtyards, garages and other similar type space, shall not be taken into account in calculating the minimum air conditioned enclosed living area square footage as required herein.

          Section 5. Grades and Elevations. In order to preserve and maintain proper drainage, no changes in grades or elevation of any portion of a Lot (including the swale area) shall be made without prior approval of Developer. Final floor elevations and all other applicable grades must be shown on the site plan and approved by the Developer prior to construction. The minimum ground floor elevation shall be 13 feet above sea level for lots 1 through 13 inclusive.  No living area shall be constructed below 13 feet above sea level for lots 1 through 13 inclusive.

          Section 6. Drainage Swale. The Lot Owner shall maintain the drainage swale within or adjacent to the Lot. The location for the culverts and their invert grades, width and depth shall be such that they do not interfere or obstruct the overall drainage of the Subdivision. No driveway shall be constructed, maintained, or permitted to exist on any Lot if it obstructs or would obstruct or otherwise impede tire flow of surface drainage from adjacent lots within the Subdivision. It shall be each Lot Owner's sole responsibility to construct and maintain proper grades and elevations so as not to interfere with the drainage in the Subdivision and neighboring lots.

          Section 7. Setbacks.

                   (a) All setbacks shall conform to the recorded plats

                   (b) All swimming pools and sun decks shall conform to zoning restrictions and the recorded plats.

        Section 8. Maximum Width. The maximum width of a dwelling unit, including all garages, out buildings and other appurtenances of any kind, nature or description, on lots 1 through 13 inclusive, shall be a maximum width of 40 feet.  No dwelling unit (with accompanying garages or other out buildings or appurtenances) constructed on lots 1 through 13 inclusive, may exceed 40 feet in width.  This restriction does not apply to lots 14 through 29 inclusive.

ARTICLE X- EASEMENTS

        A. Perpetual easements for installation, construction, maintenance, operation and inspections of all utilities and drainage for the benefit of the adjoining land owners, the Developer or any authority, commission, district, municipality or other agency are reserved. Additionally, easements are hereby reserved to the Developer and its assigns for the installation, construction, reconstruction, maintenance, operation arid. inspection of any and all services and utilities, including but riot limited, cable television, sidewalks, drainage, or waterways, which easements shall be confined to a five (5) feet width along the interior boundaries of the rear and side lot lines and a ten (10) foot width along the front lot line of every lot. Also, easements in general in and over each lot for the installation of electric, gas and telephone facilities for service to the Dwelling Unit are reserved.

       B. Perpetual easements are reserved to The Hammock Beach Estate Home Owner's Association, Inc. for the maintenance and repair of any "Developer Improvements" which may be installed or placed upon any portion of said lot as well as an easement for ingress and egress of such lot for the purpose of obtaining access thereto.

Section 1. Annexation. All or any portion of the real property described in Exhibit "C" attached hereto may be annexed from time to time to the Properties by the Owner of all or any portion thereof, whether said Owner be the Developer or its successors, assigns, or devisees, without any consent of the Association or of the members of the Association being required. Upon any such annexation, the real property so annexed shall be subject to all of the terms, conditions, provisions, limitations, assessment and lien rights, easements and restrictions contained in this Declaration and the annexing party thereof and any Owners of residences thereon shall be entitled to all of the rights and privileges set forth in this Declaration and shall be subject to all of the burdens imposed by this Declaration including, but not limited to members in the Association.

Section 3. Recording. Any annexations to the Properties in accordance with this Article XL shall be made by recording a supplementary Declaration of Covenants, Conditions and Restrictions in the Public Records of Flagler County, Florida, which shall subject the real property described therein to the terms and conditions of this Declaration.

ARTICLE XII- TERMINATION AND AMENDMENT

In addition to the foregoing, the Owners of seventy-five (75%) percent of the Lots, with written consent of Developer, if the Developer then owns any Lots, may amend, modify or rescind such provisions of this Declaration as they deem necessary or desirable. Such amendments shall require the approval of at least two-thirds (2/3) of those Owners who are present at a meeting duly called at which a majority of members are present in person or by proxy. 

In the event of any amendment or termination hereunder, the President and Secretary of the Association shall execute a certificate under oath reciting that the amendment was properly adopted provided, however, that if such amendment or modification is made solely by the Developer as herein provided, it shall cause an appropriate certificate to be executed. The foregoing certificates evidencing approval of the amendment or modification to this Declaration shall be filed of record in the Public Records of Flagler County, Florida, along with the amendment or modification adopted. It shall not be necessary for Owners to join in any document to effectuate the amendment or modification.

Section 2. If in the future these covenants and restrictions are amended to create any "right of first refusal", any such right shall riot impair the rights of a first mortgagee to:

         (a) Foreclose or take title to a townhouse (SIC) pursuant to the remedies provided in the mortgage, or

         (b) Accept a deed (or assignment) in lieu of foreclosure in the event of default by a mortgagor, or

         (c) Sell or lease a townhouse (SIC) acquired by the mortgagee.

Section 3. Notwithstanding the provisions of Section 1, unless at least two-thirds (2/3) of the first mortgagees (based upon one vote for each first mortgage owned) or owners (other than the Developer) of the individual townhouses (SIC) have given their prior written approval, the Association shall riot be entitled to:

         (a) By act or omission seek to abandon, partition, subdivide, encumber, sell or transfer the Recreation Facility owned, director or indirectly, by such Home Owner's Association for the benefit of the Owners (the granting of easements for public utilities or for other public purposes consistent with the intended use of the Recreation Facility shall not be deemed a transfer within the meaning of this clause);

         (b) change the method of determining the obligations, assessments, dues or other charges which may be levied against any individual Lot Owner;

         (c) By act or omission change, waive or abandon any scheme or regulations or enforcement thereof, pertaining to the architectural design or the exterior appearance of units, the exterior maintenance of units, the maintenance of the Recreation Facility, party walls arid parking areas, or the upkeep of laws and plantings;

        (e) Use hazard insurance proceeds for losses to the Recreation Facility for other than the repair, replacement or reconstruction of the Recreation Facility.

Section 4. The Developer intends that the provisions of this Declaration meet and be consistent with the Federal Home Loan Mortgage Corporation (FHMLC) Secondary Mortgage Market requirements in effect on the date hereof. Unless at least two-thirds (2/3) of the first mortgagees (based upon one vote for each first mortgage owned) or owners (other than the Developer) have given their prior. written approval, not to be unreasonably withheld, no amendment would disqualify or preclude the purchase of first mortgages on the FHMLC secondary Mortgage market.

ARTICLE XIII- GENERAL PROVISIONS

Section 1. The covenants, conditions and restrictions of this Declaration shall constitute covenants running with the land and each shall constitute an equitable servitude upon the Owner of each Lot and the appurtenant undivided interest in the Recreation Parcel and upon the heirs, personal representatives, successors and assigns of each Owner. This Declaration shall be binding and of full force and effect for a period of thirty (30) years from the date this Declaration is recorded in the Public Records of Flagler County, Florida, after which time this Declaration shall automatically be extended for successive twenty (20) year periods, unless an instrument signed by not less than seventy-five (75%) percent of the then record Owners of the Lots is recorded containing an agreement of said Owners with respect to the alteration, change, modification or termination, in whole or in part, of the provisions of this Declaration.

Section 3. Notices. Ally notices, demands, requests, consents or other communications required or permitted to be sent to any Member or Owner under the provisions of this Declaration shall be deemed to have been properly sent when mailed, postage paid, to the last known address of the person or entity who appears as Member or Owner on the records of the Association at the time of such mailing.

Section 4. Enforcement. Enforcement of the terms, conditions, restrictions, covenants, reservations, liens and charges in this Declaration shall be by any proceeding at law or in equity against any person or entity vi6lating or attempting to violate any of same, either to restrain violation or to recover damages, or against any real property subject to this Declaration or to enforce any lien rights hereunder. Any such proceeding, action or suit may be brought by this Association, any Owner or the Developer. Failure by any Owner, the Association or the Developer, to enforce any covenant or restriction contained herein for any period of time shall in no event be deemed a waiver or estoppels of the right to enforce same. Should it become necessary to institute legal action against a member of the Association to enforce compliance with this Declaration, the Articles and By-Laws of the Association, or the Rules and Regulations of the Association, upon a binding by a court in favor of the Association, Owner or Developer, the defendant member shall reimburse the said party of its costs of suit, including reasonable attorney's fees at both trial and appellate level incurred by it in bringing such action.

Section 5. Transferability of Developer's Rights. All rights and privileges of the Developer under this Declaration shall be fully assignable and transferable. The Developer shall assign all such rights and privileges granted under this Declaration to the Association not later than date of conveyance by the Developer of fee simple record title to the one hundred thirty third (133rd) lot encumbered hereby.  In the event of such transfer or assignment, the term "Developer" as used herein shall be deemed to include such assignee or transferee

.Section 6. Severability. Invalidation of any one of the provisions of this Declaration by judgment or court order shall in no way affect any provision which shall remain in full force and effect.

Section 7. Title and Captions. Section titles or other captions contained iii this Declaration are inserted only as a matter or convenience and for reference purposes and in no way define, limit, extend or describe the scope of the Declaration or the intent of any provision hereof.

Section 8. Person or Gender. whenever the singular number is used in this Declaration and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders.

Section 9. Applicable Law. The provisions of this Declaration and any dispute arising hereunder shall be governed by the laws of the State of Florida.

Section10. Enforcement by Means of Fines.

In addition to all other remedies. a fine or fines may be imposed upon an Owner for failure of the Owner, his family, guests, invitees, tenants, or employees (hereinafter "Owner"') to comply with any covenant, restriction or provision contained in any of the Hammock Beach Estates governing documents or any rule or regulation promulgated by the Board of Directors (hereinafter "violation"). Provided the limits on the amounts of fines and due process procedures required by Florida Statute 720.305, as amended from time to time, are adhered to.

Fines imposed hereunder shall be paid not later than thirty (30) days after the decision of the Fining Committee is mailed to the Owner. All such fines shall be treated as an individual assessment secured by a lien and otherwise subject to the provisions of Article V of this Declaration.