Amendment 2 To

Design Guidelines For

Villa Capistrano II The Second Amendment to the Design Guidelines for Villa Capistrano II is executed on this 8th day of September, 2005 by the Members of the Design Review Committee.

RECITALS

A. A Declaration of Covenants, Conditions and Restrictions for Villa Capistrano II, (the “Declaration”) was recorded as Instrument no. 86 667923 records of Maricopa County, Arizona, imposing certain Covenants, Conditions, and Restrictions upon real property located in Maricopa County, Arizona.

B. The Declaration provides that the Association shall have a Design Review

Committee and that the Design Guidelines are incorporated into the Codes, Covenants, and Restrictions and made a part thereof.

C. The Design Review Committee may from time to time and in its sole discretion,

adopt, amend and repeal rules and regulations to be incorporated into the Design Guidelines.

Now, THEREFORE, the Design Guidelines are amended as follows:

1. Section 1.15 shall be added as follows: The term “Property” means the combination of the owner’s Lot, Residence and Structures.

2. Section 3.1.4 shall now read as follows: Parking Space. Each Residence shall contain parking space within the Lot for at least two automobiles in an enclosed garage which shall either be attached to or detached from the main structure of the Residence. No on-street parking will be permitted.

3. Section 3.1.15 shall be added to the Design Guidelines for Villa Capistrano II. Completion of Landscape Remodel Projects. Any approved front yard landscape remodeling or enhancement project must be completed within 90 days of the start of actual landscape construction.

4. Section 3.2.2 shall be replaced with the following language: Height of Structures. The Design Review Committee shall discourage, and has the right to prohibit, the construction of any Residence or other structure which would appear excessive in height when viewed from the street or other Lots anywhere in the Project. Only single story buildings shall be permitted in the project and the maximum height for any such Residences shall not exceed thirty (30) feet. Height shall be measured from the natural grade on the highest side of the improvement to the highest point of the roof or any projection there from. Two story Residences or Structures are not permitted in the Project. Chimneys may not exceed two feet above the highest point of the roof. A maximum of three chimneys are permitted on a Residence.

5. Section 3.2.3 (in the original Design Guidelines and in the April 6, 1990 Amendment) shall be replaced with the following language: Size. Each residence shall contain at least 3,500 square feet of actual living area and may not exceed 7000 square feet of actual living area, unless special circumstances or unique design solutions are approved by the Design Review Committee.

6. Section 3.2.8 shall now read as follows: Antenna and Satellite Dishes. The 1996 FCC Over-the-Air Reception Devices Rule (OTARD) now prohibits restrictions that impair the installation, maintenance or use of antennas used to receive video programming including direct-to-home satellite dishes, TV antennas, wireless cable antennas, and customer end antennas that receive and transmit fixed wireless signals. The rule states that these antennas must be less than one meter in diameter or diagonal length. The rule does state that homeowners associations can specify the placement of such antennas on the property. The Villa Capistrano Design Guidelines will now specify that the placement of these antennas will be such that the antennas are not visible from the street or neighboring properties. Any exception to this must be approved by the Design Review Committee in advance of installing the antenna. The FCC ruling does not include antennas used for AM/FM radio, amateur (“HAM”) radio, Citizens Band (“CB”) radio and Digital Audio Radio. Antennas used for these purposes will be prohibited within Villa Capistrano II. Under no conditions, will an antenna exceed the one meter diameter/length rule.

7. Section 3.2.11 shall now read as follows: Solar Application. Solar collectors are not permitted unless they are installed in such a manner that they are not visible from the street or neighboring properties.

8. Section 3.2.17 shall be added to the Design Review Guidelines. Section 3.2.17 Size of guest houses and other non-Residence Structures. Any guest house or non-Residence Structure built within the Project shall not exceed a total of 2000 square feet under roof. Any proposed exception must be approved by the Design Review Committee.

9. Section 3.2.18 shall be added to the Design Guidelines for Villa Capistrano II. Impact of Structures on Neighboring Properties. In the judgment of the Design Review Committee, the Committee will reject plans for Residences, additions to Residences or any Structures if the placement of that Residence, addition to a Residence or Structure materially impacts views from neighboring Properties or if placement of such Residence, addition to Residence or Structure will materially impact the value of neighboring Properties.

10. Section 3.2.19 shall be added to the Design Review Guidelines. Section 3.2.19 Setbacks for Accessory Structures (defined by City of Scottsdale as garages and guesthouses). Any Accessory Structure built in the Project shall be built within the setbacks defined by the City of Scottsdale, however, the Design Guidelines will override the City of Scottsdale’s rear and side setback rule for detached Accessory Structures and will mandate a rear and side setback of a minimum of 10 feet.