DECLARATION OF COVENANTS

TIMBERLINE RIM

Clackamas County, Oregon

This declaration is made this 23^rd day of December, 1968 by JACK E. BROWN ENTERPRISES, INC., herein called “Declarant.” The Declarant hereby adopts the following declaration of protective covenants, restrictions, conditions and reservations with relation to the real property in Clackamas County, Oregon herein referred to:

Whenever used in this declaration, the following terms have the following meanings unless the context clearly indicates otherwise:

(a) “Land” means all of the real property in Clackamas County, Oregon subject to this declaration.

(b) “Building” and “outbuilding” include the main portion of the structure and all projections of the structure, both vertical and horizontal.

(c) “Lot” means a numbered parcel on the plat or plats of the land as filed in the office of the County Clerk of Clackamas County, Oregon.

(d) “Street” means any street, public way, or thoroughfare shown on any of the plat maps of said land.

(e) “General Plan’ means the general plan of development and use as disclosed by the plat and this declaration.

(f) “Club” means Timberline Rim Recreation Club, Inc., a non-profit Oregon corporation.

(g) “Declarant” means Jack E. Brown Enterprises, Inc. and its successors in interest.

(h) “Structure” means anything constructed or erected which requires location on the ground or is attached to something having a location on the ground.

(i) “Architectural Committee” means the committee of three members initially designated as an architectural committee to carry out the functions of the Architectural Committee under this Declaration.

Declarant hereby declares established a general plan for the development, protection, maintenance and improvement of the land. In accordance with the general plan, the land and all its parts shall be held, used and conveyed upon and subject to the conditions herein set forth. It is the Declarant’s plan that the land shall be exclusively residential with only such community facilities as utilities and recreational club as are authorized pursuant to this declaration. This declaration and all provisions thereof shall apply and be enforceable as follows:

(a) The declaration is for the benefit of the owner of each and every part of the land.

(b) The declaration shall apply to and bind the Declarant and all of the Declarant’s successors in interest in each and every portion of the land.

(c) The provisions of this declaration shall be enforceable by and for the benefit of the Declarant and of all future owners of all lots and portions of the land, including the club and any successor in interest to the club.

(d) The declaration shall be run with and be binding upon said tract and all parts thereof.

III

The real property subject to this declaration is situated in Clackamas County, Oregon and is described as follows:

(a) Timberline Rim, Division No. 1, a townplat filed and recorded in the office of the County Clerk of Clackamas County, Oregon.

(b) Timberline Rim, Division No. 2, a townplat filed and recorded in the office of the County Clerk of Clackamas County, Oregon.

(c) The plats of land adjacent to the two townplats above referred to, which plats are as yet unfiled and will be known as Timberline Rim, Division No. 3 and Timberline Rim, Division No. 4. Immediately upon the filing and recording of either or both of said presently un-recorded plats, this declaration and all provisions thereof shall apply to said plats, except as may be provided by Declarant at time of such filing.

(d) This declaration may be made to apply to other adjacent lands in the future by the recording of a separate instrument by the Declarant so providing.

The Declarant has caused Timberline Rim Recreation Club, Inc., a non-profit Oregon corporation, to be formed for the purpose of functioning as a community club for the land. The Articles of Incorporation and by-laws of said corporation shall be binding upon and for the benefit of the present and future owners of all parts of the land. The club shall be responsible for the care and maintenance of the areas known as recreation areas, the water processing and distribution system, and the sewage collection and treatment system. The club shall continue to be responsible for such functions on a permanent basis. However, the club may divest itself of the responsibility of all or a portion of said functions by transferring one or more of the functions to a public agency having authority to perform and carry on such functions for the benefit of owners of lots within the land. The Declarant has constructed a clubhouse building on premises designated in the tract for a clubhouse. Said premises will be conveyed by appropriate deed to the club. The Declarant reserves the right to maintain a sales office in a portion of the clubhouse until January 1, 1971. Declarant also reserves the right to maintain a sales office elsewhere on the land.

(a) The Architectural Committee shall consist of three members. The members of the Architectural Committee shall be appointed by the Declarant. If Declarant transfers to the club its right to make such appointment, the members of the Architectural Committee shall be appointed by the Board of Directors of the Club. Any member of the Architectural Committee may be removed at any time with or without cause by the entity having authority to appoint members to such committee. The Architectural Committee shall initially be composed of the following three person:

Werner S. Storch, Carl W. Poss, Jr., J. Scott Brown

A majority of the Architectural Committee shall be a quorum, and a majority shall control all committee decisions.

(b) No structure shall be erected, maintained, or permitted to remain on the land unless the plans and specifications for the same are approved by the Architectural Committee.

(c) Before any work is commenced on any structure two complete sets of plans and specifications for such structure including finished grading plans, plot plans showing location on the building site, floor and roof plan, exterior elevations and color schemes must be submitted to the Architectural Committee. The plans and specification shall be delivered to the Architectural Committee. The place for filing of such plans may be changed by the Declarant or the club as its successor by notice posted in the clubhouse.

(d) The Architectural Committee may give approval to the plans and specifications in writing. Such approval shall authorize the commencement of construction and work on the structure described in the plans and specifications. If the architectural Committee does not give written notice of disapproval of any plans and specifications within 20 days after the delivery of the same, the plans and specifications shall be deemed approved without any action on the part of any person.

(e) The Architectural Committee may disapprove the plans and specifications in whole or in part by reason of noncompliance with any of the provisions of this declaration and also by reason of reasonable dissatisfaction of said committee with all or some part of the proposed structure as disclosed by the plans and specifications. The Architectural Committee shall, in making its decision exercise reasonable judgement as to whether or not the proposed structure will be harmonious and in keeping with the general plan of improvement of the land as a recreational homesite area and with the structures erected on other lots. The Architectural Committee may adopt reasonable rules governing its procedure. If the Architectural Committee disapproves the plans and specifications in whole or in part, it shall give notice in writing to the lot owner or his designated representative stating in whole or in part in general terms the reason for disapproval.

(f) The approval by the Architectural Committee of any plans or specifications shall not be considered a waiver by said Committee of its right to object to any of the features or elements embodied in such plans and specifications, if or when the same features or elements are embodied in any subsequent plans and specifications submitted for approval for the same or any other lot.

(g) Erection or installation of any structure after plans and specifications have been approved shall conform exactly to the plans and specifications approved by the Architectural Committee. Any alterations in the structure without obtaining approval of the Architectural Committee shall be a violation of this declaration.

(h) Nothing in this declaration shall be construed to relieve any lot owner from complying with all laws and regulations of governmental and regulatory agencies concerning construction.

(i) The powers and duties of the Architectural Committee shall cease on December 31, 2010 unless prior to said date a written instrument shall be executed by the record owners of a majority of the platted lots in all plats subject to this declaration. Said instrument shall be acknowledged so as to entitle the same to be recorded in deed records. By said instrument the record owners aforesaid may extend the existence of the Architectural Committee.

(a) No said structure shall be placed or permitted to remain on any lot except as specifically permitted elsewhere in this declaration, other than one single family dwelling per lot. A single-family dwelling is a structure designed for not more than one family, together with reasonably appurtenant outbuildings. Land owned by the club is exempted from the foregoing requirement and may be used by the club for appropriate community purposes approved either by Declarant or by the club. Such purposes include but are not limited to establishment of a clubhouse and general community recreation facilities, public utility functions including but not limited to water, sewer, and electricity and like community uses. Land specifically designated on any plat in any of the divisions of the land for a specific use may be used for such specific use regardless of any provision in this declaration.

(b) Outbuildings or garages erected and maintained upon any lot shall conform generally in architectural design and exterior material to the finish of the dwelling houses to which they are appurtenant, and may be but need not be attached to said dwellings.

(c) No residence may be erected or maintained on the land which does not have a living area on the first floor of at least 600 square feet exclusive of carports, garages and covered porches.

(d) All buildings shall be subject to the following setback lines: 20 feet from street lot lines and 5 feet from side lot lines. On corner lots having frontage on more than one street, the owner may designate the front lot line, which shall be subject to the 20 foot setback and may then observe the 5 foot side lot line setback. Rooflines may extend to within three feet of side lot lines. On any waterfront lot, no building shall be erected or maintained nearer than 20 feet from the lot line on the waterfront side.

(e) A trailer, tent garage or other outbuilding may be used as a residence only temporarily during a period of construction of a dwelling house and then only with the approval of the Architectural Committee.

(f) No structure shall be moved onto any lot without first obtaining permission of the Architectural Committee in the same manner as new construction.

(g) No sign, advertisement, billboard, or other advertising structures may be erected or maintained upon any part of the land except as follows:

1. The Declarant or its duly authorized agent or successors in interest may erect such signs as they may desire until January 1, 1975;

2. An owner may place his own or his Realtor’s for sale sign on his property if the sign has a surface area no greater than 8 square feet;

3. A builder may place his sign on premises during construction of a dwelling house and during the period of its immediately subsequent offer for sale to a first owner and occupant.

(h) No fence, wall, hedge shall be planted, erected, located, or maintained upon any lot at such location or height as to obstruct unreasonably the view from any other lot or lots. Fences and hedges shall not be erected, located or maintained on any lot nearer than 15 feet from the front street lot line. On waterfront lots, no fence or hedge shall be maintained nearer than 20 feet from the waterfront lot line.

(i) Construction of docks or other structures extending into or over any body of water or stream must be approved by the Architectural Committee.

(j) The construction work on any and all structures shall be prosecuted diligently and continuously from commencement of construction until such structure is fully completed and painted. All structures shall be completed as to the external appearance including finished painting within 10 months from date of commencement of construction unless the owner of a lot is prevented from doing so by civil disturbance, war, strike, act of God, or other disaster.

(k) All persons using any part of the land shall take care to prevent the spread of fire. Outside fires may only be established in accordance with rules and regulations of appropriate governmental bodies having jurisdiction.

VII

(a) The owner of each lot shall be entitled to connect such lot to the private water system and sewage collection system to be established by Declarant and operated either by the club or an appropriate public organization. A reasonable connection charge may be made for each sewer connection. In addition, all expense of the actual connecting from any sewer or water main line in a street or easement to the premises served shall be borne by the owner of the lot served.

(b) The club or other entity operating the water service and operating the sewer service may make reasonable charges for such water and sewer service.

VIII

No horses, cattle, sheep, rabbits, pigs or other animals, fowl or poultry, shall be kept, raised or permitted on the land or any part thereof, except that domestic cats, dogs and birds may be kept as household pets upon the land, provided that they are not kept, bred or raised thereon for commercial purposes or in unreasonable quantities. The actual number permitted may be determined by the Architectural Committee.

Declarant hereby further reserves and declares the following:

(a) All the water rights in, under, or flowing over said property or appurtenant thereto, or to any part thereof, including the right to develop water thereon, transport or export water therefrom, are reserved. Upon conveyance to the club by the Declarant of the real property designated on the plat maps as club property, all of the rights referred to in this subparagraph shall automatically be deemed transferred to and owned by the club.

(b) All lots shall be subject to an easement five feet in width and parallel with and adjacent to all lot lines for the purposes of installation and maintenance of utilities and drainage. All conveyances of lots in the land are and shall be subject to such easements.

(c) The owner of each lot shall keep such lot clear of trash, rubbish and weeds. It is not intended that lot owners shall be required to disturb the natural state of the lots but once the same have been disturbed the lot owner in each case must do all things necessary and desirable to keep the premises in good order. If any owner fails to comply with the foregoing requirement, the Declarant, its successors and assigns and if the Declarant has conveyed and transferred the rights herein to the club, then the club may enter upon the property of such owner and remove rubbish and trash and weeds and do all things as may be necessary to place the property in a neat and orderly condition in accordance with this provision. An account shall be mailed to the owner stating the expense of such clean-up work and shall be due within five days after written demand is sent to the owner. Notice to the owner mailed to the address where tax statements are sent for property taxes shall be sufficient notice. If such claim is not paid within said time, the charges shall be a lien against the lot which may be foreclosed in the manner of foreclosure of a statutory lien and in such case the owner and said lot shall be liable for costs and reasonable attorney fees in addition to the expenses of clean-up work.

(d) No commercial activity may be carried on upon any residential lot excepting essential activities in connection with the sale and development of the lots and the construction of buildings thereon. No noxious or offensive use may be made of any portion of the land and nothing shall be done thereon which will become a nuisance to the neighborhood. There shall be no hunting permitted on the land and the discharge of firearms and of compressed air powered rifles and pistols is prohibited.

(e) The owners of all lots, except as hereinafter provided, shall be bound by the Articles of Incorporation and By-laws of the club. The club may levy dues and assessments in accordance with the By-laws and Articles of Incorporation. Any such dues and assessments shall constitute a lien against lots and can be foreclosed by the club in the manner provided by law for the foreclosure of statutory liens and together with interest at the statutory rate with a due date and with reasonable attorney fees and Court costs. There is, however, excepted from the imposition of any such assessments and the liens thereof, any and all lots or portion of the land owned by the Declarant and any such property owned by the club and none of such property shall be subject to the levy of dues and assessments.

(f) It is the intention of the Declarant that in the development of the land there shall be the least interference with the natural state of the land as is reasonably possible. It is desired that the development of the land preserve the feel and beauty of the forest and of the mountains. Therefore, no person shall cut or remove any natural trees nor natural shrubs such as rhododendrons, vine maple and the like without first obtaining approval of the Architectural Committee. General clearing shall be done in accordance with a plot plan approved by the Architectural Committee, showing the area to be cleared and submit it to the Architectural Committee and approved or disapproved in the same manner as is provided under Article V of this Declaration. In case of prospective construction, such plot plan for clearing must be submitted at the time of submission of plans for construction.

(g) No overhead communications or electric power wires or conduits may be placed above the streets or any lot. All power and communications circuits shall be maintained underground. Temporary overhead wires for telephone and electricity may be maintained during periods of construction only.

(a) All provisions of this declaration shall run with the land and shall be binding upon the land and in full force and effect until December 31, 2010.

(b) The easements shall be perpetual unless released by the Declarant or its successor.

(c) The owners of record of lots compromising not less than 55% of the total number of the platted lots on the land, may at any time after January 1, 1975, modify, amend, cancel or annul all or any of the provisions herein contained excepting the easements. Before January 1, 1975, such number of the owners of lots of record may make such modification or amendment only with the consent of Declarant. Any amendments or supplements to this declaration must be made by instrument in writing signed by said owners and acknowledged by them so as to entitle the same to be recorded in the deed records of Clackamas County, Oregon.

(d) At any time prior to December 31, 2010, the owners of record of lots constituting not less than 55% of the total number of lots in the plat maps of the land may extend the term of the provisions of this declaration. Said term may be extended to December 31, 2025 by executing and acknowledging a written instrument of extension to that effect so as to entitle the same to be recorded in deed records of Clackamas County, Oregon and by causing the same to be recorded.

(a) No violation of any provision of this declaration shall work a forfeiture of any title nor interfere nor limit in any way the lien of any mortgage or other security interest on any lot or land. The violation or breach of any provision of this declaration shall give the Declarant, the club, and the owner or owners of any other lots the joint and individual right to bring a proceeding at law or equity against a person or persons who violate or attempt to violate any provision of this declaration. Said right shall include but is not limited to the right to bring a suit in equity to enjoin, abate, or otherwise remedy the default or breach of the provision and to enjoin any future breaches of the same. In any suit or action to enforce any provision of this declaration, the prevailing party herein shall be entitled to an award for a reasonable attorneys fee to be set by the Court to be paid by the unsuccessful party in any such suit or action.

(b) Failure of any person or party to prosecute a proceeding for breach of any provision hereof as to any provision or at any time shall not be construed to be a waiver of any other breach of the same nor of the covenant itself nor of any other covenant, agreements or provisions of this declaration.

XII

The Declarant may at any time by appropriate instrument in writing duly acknowledged and recorded transfer its right as Declarant herein to another corporation, person or legal entity. Also, by appropriate instrument, the corporation may transfer its rights hereunder to the club and in any event all of Declarant’s rights shall automatically be deemed transferred to the club after January 1, 1975.

IN WITNESS WHEREOF, the Declarant has caused its name to be hereunto subscribed by its duly authorized agents the day and year first hereinabove written.

JACK E. BROWN ENTERPRISES, INC.