ARTICLES OF INCORPORATION

OF

SAN MARQUI ESTATES HOMEOWNERS ASSOCIATION

The undersigned, for the purpose of forming an Arizona nonprofit corporation, hereby adopt the
following Articles of Incorporation

ARTICLE I

NAME The name of the corporation is San Marqui Estates Homeowners Association,
hereinafter called the Association

ARTICLE II

DEFINITIONS Unless specifically indicated otherwise, capitalized terms herein defined as

indicated in Article I of that certain Declaration of Covenants, Conditions and Restrictions (the
"Declaration") which is applicable to the property described in Article V herein and recorded at
Recorder's No 97-0014094, in the office of the Mancopa County Recorder and as the same may
be amended from time to time and which is incorporated herein as if set for the in its entirety

ARTICLE III

DURATION The Association shall exist perpetually

ARTICLE IV

PURPOSE The purpose for which the Association is organized is the transaction of any or all
lawful business for which nonprofit corporations may in incorporated under the laws of the State
of Arizona, as they may be amended from time to time, provided, however, that such section(s)
of the Internal Revenue Code All assets of the Association shall be dedicated to the exempt
purposes for which the Association or organized as described in the appropriate sections of the
Internal Revenue Code

ARTICLE V

NATURE OF BUSINESS AND POWERS The Association does not contemplate pecuniary
gain or profit to the members thereof, and the specific purposes for which it is formed are to
provide for acquisition, construction, management, maintenance, care and architectural control of
Association property and the residence Lots and Common Areas within that certain tract of
property described in Exhibit A attached hereto and fully incorporated as if set forth herein and
to promote the health, safety and welfare of the residents within the above-described property
and any additions thereto and subsequent phases as may hereafter be brought within the
jurisdiction of this Association, and for this purpose to
 (a)Exercise all the powers and privileges and to perform all of the duties and obligations
of the Association as set forth in the Declaration,

(b)fix, levy collect, and enforce payment of, by any lawful means. all charges or
assessments pursuant to the terms of the Declaration. pay all expenses in connection
therewith and all office and other expenses incident to the conduct of the business of the
Association, including all licenses, taxes, or governmental charges levied or imposed against
the property of the Association

(c)acquire (by gift, purchase or otherwise), own, hold, improve build upon, operate,
maintain, convey, sell, lease, transfer, dedicate for public use, or otherwise dispose of real or
personal property in connection with the affairs of the Association,

(d)borrow money, and with the proper assent as provided in the Declaration, mortgage,
pledge, deed in trust, or hypothecate any or all of its real or personal property as security for
money borrowed or debts incurred,

(e)dedicate, sell, or transfer all or any part of the Common Area to any public agency,
authority, or utility for such purposes and subject to such conditions as may be agreed to by
the members No such dedication or transfer shall be effective unless an instrument has been
signed as provided in the Declaration,

(f)participate in mergers and consolidations with other nonprofit corporations organized

for the same purposes, or annex additional residential property and Common Area, provided
that any such merger, consolidation, or annexation shall be approved as provided in the
Declaration,

(g)have and exercise any and all powers, rights, and privileges that a corporation
organized under the laws of the State of Arizona related to nonprofit corporations by law
may now or hereafter have or exercise

Other than as a direct result of its engaging in one or more exempt functions, no part of the net
earnings of the Association shall inure to the benefit of, or be distributed to, its members,
trustees, officers, directors, or other private persons No substantial part of the activities of the
Association shall be for the purpose of creating, authorizing, distributing, encouraging,
contributing to, approving, or otherwise participating in propaganda, or otherwise attempting to
influence legislation, and the Association shall not participate in any political campaign on
behalf of any candidate for public office, including the publishing or distribution of statements
Notwithstanding any other provision of these articles, the Association shall not carry on any
other activities not permitted to be carried on by a Association exempt from federal income tax
under the appropriate section(s) of the Internal Revenue Code

ARTICLE VI

STATUTORY AGENT The Association appoints R Quinn De Angelis, Jr, Two

North Central Avenue, Suite 1600. Phoenix, Arizona 85004, as its statutory agent in and for the
State of Arizona
 ARTICLE VII

BOARD OF DIRECTORS The Board shall consist of no less than three nor more than
nine directors, who must be Members of the Association or the designated representative(s) of
the Declarant or of a corporation, partnership, limited liability company, or other nonindividual
Owner The number of directors shall be designated in the Bylaws and may be changed by
amendment thereto The Board shall be elected at the annual meeting of the directors in such
manner as provided for in the Bylaws The names and addresses of the persons who are to serve
as the directors until the first annual meeting of the members or until their successors are elected
and qualified are

Todd P Belfer
6900 East Camelback, Suite 440
Scottsdale, Arizona 85251

Robert Kroger
6900 East Camelback, Suite 440
Scottsdale, Arizona 85251

David M Barnes
6900 East Camelback, Suite 440
Scottsdale, Arizona 85251

ARTICLE VIII

INCORPORATORS The names and addresses of the incorporators are

Todd P Belfer
6900 East Camelback, Suite 440
Scottsdale, Arizona 85251

Robert Kroger
6900 East Camelback, Suite 440
Scottsdale, Arizona 85251
 ARTICLE IX

LIMITATION OF DIRECTOR LIABILITY. No director of the Association shall be

personally liable to the Association or its members for monetary damages for breach of fiduciary
duty as a director, provided, however, that this Article shall no eliminate or limit the liability of a
director for (i) any breach of the director's duty of loyalty to the Association or its members, (ii)
acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) a violation of Arizona Revised Statutes Section 10-2326 (1996), or ay
subsequently enacted law of the State of Arnzona related to prohibited shares of stock and
dividends, (iv) any transaction from which the director derived an improper personal benefit, and
(v) a violation of Arizona Revised Statutes Section 10-2550 (1996), or any subsequently enacted
law of the State of Arizona related to director conflicts of interest

ARTICLE X

PLACE OF BUSINESS The principal place of business of the corporation shall be

6900 East Camelback, Suite 440, Scottsdale, Arizona 85251 The corporation may conduct its
business and maintain offices for such purpose in such other place or places, either within or
without the State of Arizona, as it may from time to time determine advisable

ARTICLE XI

MEMBERSHIP Every person or entity who is a record Owner of a fee or undivided

fee interest in any Lot that is subject by covenants of record to assessment by the Association,
including contract sellers, shall be a Member of the Association The foregoing is not intended
to include persons or entities who hold an interest merely as security for the performance of an
obligation Membership shall be appurtenant to and may not be separated from ownership of any
Lot that is subject to assessment by the Association There shall be no shareholders or capital
stock and no authority to issue shares of stock

ARTICLE XII

VOTING RIGHTS The Association shall have two classes of voting membership

(a) Class A Class A members shall be all Owners, except the Declarant, identified in
the Declaration (except Declarant shall be a Class A member upon the occurrence of
either contingency in sub-section (b) below), and, subject to the authority of the Board to
suspend an Owner's voting rights in accordance with Section 6 3 of the Declaration, shall
be entitled to one vote for each Lot owned When more than one person holds an interest
in any Lot, all such persons shall be Members The vote for the Lot shall be exercised as
its Owners may determine in accordance with Section 3 1 of the Declaration, but in no
event shall more than one vote be cast with respect to a Lot

(b) Class B The Class B member shall be the Declarant (as defined in Section 11 of
the Declaration), and shall be entitled to three votes for each Lot owned The Class B
membership shall cease and be converted to Class A membership on the happening of
one of the following events, whichever occurs earlier
 (1) the date upon which the total number of votes of the Class A members equals
fifty percent (50%) of the total number of Lots in the Subdivision, or

(2) the date which is five years after the date the Declaration is Recorded in the
official records of Mancopa County, Arizona, or

(c) the date on which Declarant Records a wntten notice electing to convert all of
its Class B membership to a Class A membership

ARTICLE XIII

DISSULUTION The Association may be dissolved with the assent given in writing and
signed as provided in Section 11 9 of the Declaration Upon dissolution of the Association, other
than incident to a merger or consolidation, the assets of the Association shall be dedicated to an
appropriate public agency to be used for purposes similar to those for which this Association was
created In the event that such dedication is refused acceptance, such assets shall be granted,
conveyed and assigned to any nonprofit corporation, association, trust or other organization to be
devoted to such similar purposes In the event of the dissolution of this Association, any assets
remaining after payment of creditors shall be distributed for one or more of the exempt purposes
of the Association or paid over to an organization or organizations described in Section 501©(3)
and exempt from taxation under Section 501(a) of the Internal Revenue Code of 1986. as
amended, as selected by the Board of Directors, or failing such selection, as selected by the
Superior Court of the County of Maricopa, State of Arizona In no event shall the assets be
distributed to any member. director or officer of the Association or any private individual

ARTICLE XIV

AMENDMENTS Amendment of these Articles shall require the assent of seventy-five

percent of each class of voting members identified in Article XII

ARTICLE XV

INDEMNIFICATION The power of indemnification under the laws of the State of

Arizona shall not be denied or limited by the Bylaws, provided, however. the power may be
expanded The private property of the incorporators, members, directors, and officers of the
Association shall be forever exempt from and not liable for, the debts and obligations of the
Association of any kind whatsoever The Association shall indemnify each person who is or was
an incorporator, member, director, or officer of the Association against all expenses incurred by
them, and each of them, including but not limited to legal fees, judgments, and penalties which
may be incurred, rendered, or levied in any legal action brought against any of them for or on
account of any action or omission alleged to have been committed while acting within the scope
of employment of the Association

Dated February 4, 1997

Todd Belfer
Robert Kroger Incorporators"
 BYLAWS

OF

SAN MARQUI ESTATES HOMEWONERS ASSOCIATION

ARTICLE 1
DEFINITIONS

Except as otherwise expressly provided herein, all capitalized terms shall have the meanings assigned
them in that certain Declaration of Covenants, Conditions and Restrictions (the "Declaration") for San Marqui
Estates Homeowners Association, an Arnzona nonprofit corporation, recorded on January 8. 1997 at Recorder's
No 97-0014094 in the office of the Maricopa County Arizona, County Recorder

ARTICLE 2
OFFICERS AND CORPORATE SEAL

2 1 Principal Office The Association shall maintain its prncipal office and know place of business at
6900 East Camelback Road, Suite 440, Scottsdale, Arnzona 8525 1, or at such other address as may be designated
by the Board

2 2 Other Offices The Association ma also maintain offices and places for conducting business at such
other place or places, both within and without the State of Arnzona, as by designated from time to time by the
Board, and the business of the Association my be transacted at such other offices with the same effect as that
conducted at the principal s office

2 3 Corporate Seal A corporate seal shall not be requisite to the validity of any instrument signed by or
on behalf of the Association, but nevertheless if in any instance a corporate seal be used, the same shall be a circle
having on the circumference thereof the name of the Association and in the center the words "corporate seal," the
year incorporated, and the state where incorporated

ARTICLE 3
MEMBERS

3 1 Membership The Members of the Association shall be detenmined in t he manner set for the in the
Articles of Incorporation (the "Articles") of the Association and the Declaration

3 2 Place of Members Meetings The annual meetings of Members shall be held at the principal office
of the Association or at such other place as may be fixed from time to time by the Board, or m the absence of
direction by the Board, by the president or secretary of the Association, and shall be stated in the notice of the
meeting or in a duly signed waiver of notice thereof

3 2 Annual Members Meetings The annual meeting of the Members shall be held on the second
Tuesday of December in each year, commencing with December 10, 1996 (or if that day shall be a legal holiday
then on the next succeeding business day), or at such other date and time as shall be designated from time to time
by the Board and stated in the notice of the meeting At each annual meeting the Members shall elect the Board
and transact such other business as may be properly be brought before the meeting

3 4 Special Meeting of Members Unless otherwise prescribed by Arizona statute or by the Articles,
special meetings of the Members, for any purpose or purposes, may be called by (1) the president, (b) a majonty
of the directors, or (c) Members having at least twenty-five percent of all Class "A' votes
Written notice stating the place, date and time of the meeting (and, in the case of a special meeting, the items on
the agenda, including, but not limited to, the general nature of any proposed amendment to the Declaration. the
Articles or the Bylaws, any budget changes and any proposal to remove a director or an officer) to be hand-
delivered or sent prepaid by United States mail to the last known mailing address of each Member, as shown in
the Association's records (or, in the case of a Member who is the Owner of a Lot to the mailing address of such
Lot) If mailed, the notice shall be deemed to be delivered when mailed Business transacted at any special
meeting of Members shall be limited to the items stated in the notice unless determied othenm ise by an
unanimous vote of the Members present at the meeting

3 6 Quorum Unless otherwise required by the Declaration, the Articles or applicable law, a quorum
shall be deemed present for all purposed throughout any meeting of Members if Members entitled to cast at least
fifty percent of all outstanding voter are present in person or by valid proxy at the beginning of the meeting
Further, except as otherwise provided in Section 14 1 of these Bylaws and except as may otherwise be provided
by the Declaration, the Articles of applicable law, the action by Members holding a majority of votes represented
at a meeting at which a quorum is present shall constitute the act of the full membership of the Association
Whether or not a quorum is present, a meeting may be adjourned from time to time by the vote of Members
holding a majority of the votes represented at the meeting, whether in person or by valid proxy, without notice
other than by announcement at the meeting of the time and place at which the adjourned meeting will be
reconvened and without further notice to any absent Members, provided. however, that if the adjournment is for
more than thirty days, notice of the time and place at which the adjourned meeting will be reconvened shall be
given to each Member in the manner provided in Section 3 5 above If a quorum is present at the time and place
the adjourned meeting is reconvened, any business may be transacted at the reconvened meeting that might have
been transacted at the meeting as originally notices

3 7 Voting The Members shall be entitled to the voting nghts set forth in the Articles and the
Declaration At every meeting of Members, the vote allocated to each Lot for a Class A membership and the
three votes allocated to each Lot for a Class B membership, pursuant to Article VII of the Articles and to Article 3
of the Declaration, shall be entitled to vote either (1) in person by the person designated in accordance with
Section 3 1 of the Declaration, or (b) by a proxy duly appointed by a written instrument signed by the Member,
dated not more than eleven months before the meeting (unless the instrument provided for a longer period not to
exceed twenty-five months from the date of its execution and states that it is coupled, within interest and is
irrevocable) The vote for directors and upon any question before the meeting shall be by ballot Except as
otherwise provided herein or by applicable Arizona law, the Declaration, or the Articles, all elections and other
matters to be determined by the Members shall be decided by Members (whether present in person or by proxy)
holding a majority of eligible votes represented at a meeting at which a quorum is present, and cumulative voting
shall be permitted

3 8 Freezing of List of Members of Fixing of Record Data For the purpose of determining Members
entitled to notice of or to vote at a meeting of Members. or to make a determination of Members for any other
proper purpose, the Board may provide that the list of Members shall be frozen for a stated penod not to exceed
ten days If the list of Members shall be frozen for the purpose of determining Members entitled to notice of or to
vote at a meeting of Members, the list shall be frozen for not more than ten days immediately preceding the
meeting In lieu of freezing the list of Members, the Board may fix in advance a date as the record date for any
such determination of Members, such date in any case to be not more than ten days before the date of the
particular meeting of Members or the date on which the particular action requiring such determination of
Members is to be take as applicable If the list of Members is not frozen and no record date is fixed for the
determination of Members entitled to notice of or to vote at a meeting of Members, the record date for such
determination of Members shall be four o'clock in the afternoon Phoenix, Arizona, time on the date before the
day on which notice of the meeting is mailed When a determination of Members entitled to vote at any meeting
of Members has been made as provided in this Section, the determination shall apply to any continuation of the
meeting following an adjournment
 3 9 Action without Meeting Any action required or permitted to be taken at any annual or special
meeting of Members may be taken without a meeting, without prior notice, and without a vote, if consent in
writing, setting forth the action so taken, shall be signed by all of the Members entitled to vote as provided in
Article VII of the Articles and to Article 3 of the Declaration

3 10 Waiver of Notice Whenever any notice is required to be given to any Member under the provisions
of the Articles, the Bylaws, the Declaration, applicable Arizona law, or otherwise, a waiver thereof in writing
signed by the person or persons entitled to such notices, whether before or after the time stated therein, shall be
equivalent to the giving of such notice Attendance of a person at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express purpose of objecting to the transaction of
any business because the meeting is not properly called or convened

3 11 Assessments As more particularly provided in the Declaration, the Association has the right, power
and authority to establish and levy Assessments against the Lots and parcels and the Owners thereof, and to
enforce the payments of such Assessments

3 12 Suspension As more particularly provided in the Declaration, the Board may impose sanctions for
violations of the Declaration and of the rules and regulations of the Association, which sanctions, may included
suspension of the right to vote, suspension of the nght to used recreational facilities on or constituting part of the
Common Area, if any, and, in certain instances, imposition of reasonable monetary fines The duration of any
suspension of Member's rights to vote or to use recreational facilities shall be limited as provided by the
Declaration

ARTICLE 4
DIRECTORS

4 1 Election The business and affairs of the Association shall be managed, conducted, and controlled by
the Board Except for the initial directors appointed in the Articles (who shall serve until their successors are duly
elected and qualified at the first regular annual meeting of Members), and except as provided in Section 4 3
below, each director shall be elected for a two year term and shall be elected at the annual meeting of Members
concurrent with the expiration of the term of the director he or she is to succeed, and, except as otherwise
provided in these Bylaws or in the Articles of the Declaration, shall hold office until his or her successors is
elected and qualified Nothing herein shall be construed to prevent the election by embers of any person or
persons to two or more terms as director, whether or not such terms shall be consecutive If, after election (a) any
director (except for a director designated by Declarant or by a corporate, partnership, limited liability company or
other nonindividual Owner) ceases to be a Member, he or she shall thereupon no longer be a director and his or
her office shall become vacant, or (b) a corporate, partnership, limited liability company or other nonindividual
Owner) ceases to be a Member, any director serving by virtue of having been designated by such coporate,
partnership, limited liability company or other nonindividual Owner shall thereupon no longer be a director and
his or her office shall become vacant

4 2 Number The number of directors which shall constitute the whole Board shall be three, provided
that, at any time after the Class B membership ceases to exist (as provided in the Declaration), such number may
be increased to a total not to exceed nine directors upon the affirmative vote of Members holding a majority of all
Class A votes represented in person or by proxy at the annual meeting of members or at a special meeting of
Members called for such purpose

4 3 Vacancies Vacancies and newly created directorships resulting from any increase in the authorized
number of directors may be filled by the affirmative vote of a majonty of the remaining directors then in office, or
by a sole remaining director, and the directors so chosen shall hold office, in the case of a vacancy, tor the
remaining term of their predecessors, and, in the case of an increase in the authorized number of directors, until
the next annual meeting of Members If there are no directors in office, any officer or Member may call a special
meeting of Members for the purpose of electing the Board
 4 4 Annual Board Meetings Within thirty days after each annual meeting of Members, the newly
elected directors shall meet forthwith for the purpose of organization, the election of officers, and the transaction
of other business and, if a quorum of the directors is present, no prior notice us such meeting shall be required to
be given, provided that the place and time of such first meeting of newly-elected directors may be changed by
written consent of all the directors

4 5 Special Board Meetings Special meeting of the Board may be called by the president or secretary
and must be called by either of them on the written request of any Member of the Board

4 6 Notice of Board Meetings Notice of all meetings of the Board, except as otherwise provided herein,
shall be given by mailing the same at least three days, or by otherwise causing the same to be delivered at least
one day, before the meeting to the usual business or residence address of each of the directors, but such notice
may be waived by any director Regular meetings of the Board may be held without notice at such time and place
as may be determined by the Board Any business may be transacted at any meeting of the Board Attendance of
a person at a meeting shall constitute waiver of notice of such meeting, except when the person attends the
meeting for the express purpose of objecting to the transaction of any business because the meeting is not
properly called or convened

4 7 Quorum One-half of the number of the directors then serving shall constitute a quorum at a meeting
of the Board (except that if three directors be then serving, a quorum shall be two and if one director be then
serving, a quorum shall be one) If at any meeting there is less than a quorum present, the directors present may
adjourn the meeting from time to time without further notice to any absent director

4 8 Action Without a Meeting Unless otherwise restricted by the Declaration, the Articles or these
Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may
be taken without a meeting. if all Members of the Board or Conumttee, as the case may be, consent to the action
in writing, such written consents shall be filed with the minutes of proceedings of the Board or committee

4 9 Powers Subject to the provisions of the Declaration, the Articles, these Bylaws and applicable law,
the Board shall have power

49 1 To Elect and remove the officers of the Association,

492 To administer the affairs of the Association and Common Area,
493 To engage the services of a manager or managing agent who shall manage and operate the
Common Area for all of the Members upon such terms, for such compensation, and with such
authority as the Board may approve,
4 9 4 To formulate policies for the administration management and operation of the Common Area,
4 9 5 To provide for the operation, maintenance, repair, and replacement of the Common Area and
payments therefore, and to approve payment vouchers or to delegate such approval to the officers
or the manager or managing agent,
4 9 6 To provide for the designation, hiring and remox al of employees and other personnel, including
accountants and attorneys, and to engage or contract for the services of others, and to make
purchases for the maintenance, repair, replacement, administration, management, and operation
of the Common Area, and to delegate any such powers to manager or managing agent (and any
such employees or other personnel who may be the employees of a managing agent),
4 9 7 To appoint or dissolve committees of the Board, to remove any director from a committee at any
time, and to delegate to such committees the Board's authority to carry out certain duties of the
Board
4 9 8 To estimate the amount of the annual budget, and to provide the manner of assessing and
collecting from the Owners their respective shares of such estimated expenses,
4 9 9 To exercise all of the rights, powers and duties granted to it by the Declaration,
4 9 10 Unless otherwise provided herein or in the Declaration, the Articles or applicable law, to comply
with the instructions of a majority of the Members as expressed in a resolution duly adopted at
any annual or special meeting of the Members, and
 4 9 11 To exercise for the Association all other powers, duties and authority vested in or delegated to the
Association

4 10 Removal and Resignation of Directors Any director or the entire Board may be removed, with or
without cause, by Members holding a majorty of all votes Any director may resign upon written notice pursuant
to Article 8 of these Bylaws

4 11 Place of Board Meeting The Board shall held meetings, both regular and special, in Maricopa
County, Arizona, or at such other place or places. and such meetings may be held by means of conference
telephone or similar communications equipment by means of which all persons participating in the meeting can
hear each other, and participation in a meeting pursuant to this Section 4 11 shall constitute presence in person at
such meeting

4 12 Waiver of Notice Whenever any notice is required to be given to any director of the Association
under the provisions of the Articles, these Bylaws, the Declaration, applicable Anzona law or otherwise a waiver
thereof in writing signed by the person or persons entitled to such notices, whether before or after the time stated
therein, shall be equivalent to the giving of such notice

4 13 Committees of the Board The Board by resolution adopted by a majonty of the full Board, may
designate from among its Members an executive committee and one or more other committees each of which, to
the extent provided in such resolution and permitted by law, shall have any may exercise all the authority of the
Board The Board, with or without cause, may dissolve any such committee or remove any member thereof at
any time The designation of any such committee and the delegation thereto of authority shall not operate to
relieve the Board, or any member thereof, of any responsibility imposed by law

4 14 Compensation Directors shall receive no compensation for their services unless expressly provided
for in a resolution duly adopted by Members holding, personally or by valid proxy, a majority of the votes then
entitled to be cast at a meeting expressly call for that purpose

ARTICLE 5
OFFICERS

5 1 Designation of Titles The officers of the Association shall be a president, vice president, secretary
and a treasurer, and shall be chosen by the Board No person may hold, at any time, more than one of such
offices, except that the offices of secretary and treasurer may be held by the same person

5 2 Election, Term of Office, Qualification Except for the initial officers chosen by the Board at its
first meeting following the incorporation of the Association (who shall sen e until their successors shall have been
duly chosen and shall qualify), each of the officers of the Association shall be chosen annually by a majority of
the Board, and shall hold office for one year or until his or her successors shall have been duly chosen and shall
quality, or until his or her death or until he or she shall resign or shall have been removed pursuant to these
Bylaws or the Articles or the Declaration No person shall be eligible tor election as an officer who is not at the
time of election a Member of the Association, except such persons as may be designated from time to time by
Declarant or by a corporate, partnership, limited liability company or other nonindividual Owner If, after
election (a) any officer (except for an officer designated by Declarant or by a corporate, partnership, limited
liability company, or other nonindividual Owner) ceases to be a Member, he or she shall thereupon no longer be
an officer and his or her office shall become vacant, or (b) a corporate, partnership, limited liability company
other nonindividual Owner ceases to be a Member, any officer serving by virtue of ha ing been designated by
such coporate, partnership, limited liabili8ty company or other nonindividual Owner shall thereupon no long be
an officer and his r her office shall become vacant

5 3 Subordinate Officers, Agents or Employees The Board may appoint such subordinate officers,
agents or employees as the Board may deem necessary or advisable, including one or more assistant Vice
Presidents, one or more assistant Treasurers and one or more assistant secretaries, each of who shall hold office
for such period, have such authority and perform such duties as are provided in these Bylaws or as the Board may
from time to time determine The Board may delegate to the president or any other commnttee of the Board the
poNN er to appoint any such additional officers, agents or employees Notwithstanding the foregoing, no assistant
treasurer shall have power or authority to collect, account for, or pay any tax imposed by any federal, state or city
government

5 4 Removal Any officer or agent may be removed by the Board whenever in its judgment the best
interest of the Association will be served thereby Election or appointment of an officer or agent shall not of itself
create contract nghts

5 5 Vacancies A vacancy in any office because of death, resignation, removal or any other cause, shall
be filled for the unexpired portion of the term in the manner prescribed in Sections 5 1, 5 2, and 5 3 for election or
appointment to such office

5 6 Chairman of the Board The Board may also choose a chairman of the Board The chairman of the
Board shall when present, preside at all meetings of the Board and shall in general perform such other duties as
shall be designated by the Board from time to time

5 7 President The president shall preside at all meeting of Members, and if a chairman of the Board
shall not have been appointed or, having been appointed, shall not be serving shall be absent, the president shall
preside at all meetings of the Board The president shall be the prncipal officer of the Association and, subject to
the control of the Board, shall generally supervise and control all of the business and affairs of the Association
The president may sign with the secretary of any other proper officer of the Association authorized by the Board,
deeds, mortgages, bonds, contracts or other instruments which the Board has authorized to be signed, except in
cases where the signing and execution thereof shall be expressly delegated by the Board or by the Declaration, the
Articles or these Bylaws to some other officer or agent of the Association, or shall be required by law to be
otherwise signed or signed, and in general shall perform all duties incident to the office of president and such
other duties as my be prescribed by the Board from time to time

5 8 Vice President The vice president shall have such power and perform such duties as the Board or
the president may from time to time prescribe and shall perform such other duties as may be prescribed by the
Declaration, the Articles or these Bylaws At the request of the president, or in case of the president's absence or
inability to act, the vice president shall perform the duties of the president, and when so acting shall have all
powers of, and be subject to all the restrictions upon, the president

5 9 Treasurer The treasurer shall be responsible for the charge and custody of funds and securities of
the Association, keeping full and accurate accounts of receipts and disbursements in books belonging to the
Association and depositing all monies and other valuable effects in the name of and to the credit of the
Association in such banks and other depositories as may be designated by the Board The treasurer shall be
responsible for disbursing the funds of the Association as may be ordered by the Board, taking proper vouchers
for such disbursements, and rendering to the president and to the directors at the regular meetings of the Board (or
at such other times as they may require it), a statement of all financial transactions and an account of the financial
condition of the Association, and, in general incident to the office of treasurer and such other duties as may from
time to time be assigned to the treasurer of the Board

5 10 Secretary The secretary shall (1) act as secretary of. and keep the mnutes of, all meeting of the
Board to be given notice of all meetings of the Members and of the Members, (b) cause and directors. (c) be
custodian of the corporate seal (if any) and shall affix the seal, or cause it to be affixed, to all proper instruments
when appropriate, (d) have charge of the books, records and papers of the Association relating to its organization
as a corporation (e) see that all reports, statements and other documents relating to the Association and required
by law are property kept or filed, and (f) in general, perform all the duties incident to the office of secretary The
secretary shall also have such powers and perform such duties as are assigned to the secretary by these Bylaws or
applicable law, and shall have such powers and perform such other duties, not inconsistent with these Bylaws as
the Board shall trom time to time prescnbe

5 11 Compensation The chairman of the Board and the officers shall receive no compensation for their
services, unless expressly provided for in a resolution duly adopted by Members holding a majority of outstanding
votes at a meeting expressly called for that purpose

5 12 Bonding Fidelity bond coverage shall be obtained and maintained by the Board in accordance with
the Declaration

ARTICLE 6
ASSESSMENTS

6 1 Assessments, Liens and Budgets Except as provided in the Declaration, each Member, as an Owner,
and each Lot and Parcel shall be subject to the Assessments provided for in the Declaration The Board shall
have all rights, powers, authorities and obligations as are conferred upon it by the Declaration and by
applicable law in connection with (a) the preparation and adoption of budgets, (b) computation, levying,
collection and enforcement of Assessments, and (c) adoption of reasonable charges for issuance of certificates
regarding Assessments

6 2 Capital Expenditures Except as may be provided to the contrary in the Declaration, the Board shall
not approve any capital expenditure (as opposed to a maintenance expense) in excess of $10,000 00 without
the prior approval of a majority of the votes represented and entitled to vote, personally or by valid proxy, at a
duly convened meeting of Members

6 3 Records and Statement of Account The Board shall cause to kept detailed, itemized and accurate
records of all receipts and expenditures of the Association Payment vouchers may be approved in such
manners as the Board may determine

6 4 Discharge of Liens The Board may cause the Association to discharge any mechanics lien or other
encumbrance that in the opinion of the Board may constitute a lien against the Common Area, rather than
against a particular Lot or Parcel only When less than all of the Owners are responsible for the existence of
any such lien, the Owners shall be jointly and severally liable for the amount necessary to discharge the same
and for all costs and expenses, including, without limitation, attorneys' fees incurred by reason of or in
connection with such lien

ARTICLE 7
PARLIAMENTARY RULES

The proceedings of all meetings of the Members, of the Board, and any committees of the Board shall be
governed and conducted as provided in the latest edition of Robert's Manual of Parliamentary Rules

ARTICLE 8
RESIGNATIONS

Any chairman, director or officer may resign his or her office at any time by giving written notice of such
resignation to the president or the secretary of the Association The resignation shall take effect at the time
specified therein or, if no time be specified therein, at the time of the receipt thereof, and the acceptance
thereof by the Board or Association shall not be necessary to make if effective

ARTICLE 9
FISCAL YEAR

The fiscal year of the Association shall be from January 1 to December 31

 ARTICLE 10
CONTRACTS, LOANS, CHECKS AND DEPOSITS

10 1 CONTRACTS Except as limited or restricted by the Declaration, the Articles, these Bylaws or
applicable law, the Board may authorize any officer or officers, agent or agents, to enter into any contract or
sign and deliver any instrument in the name of and on behalf of the Association, and such authority may be
general or confined to specific instances No contract or other transaction between the Association and one or
more of its directors or between the Association and any corporation, firm or association in which one or
more of the directors of the Association are directors, or are financially interested, is void or voidable because
such director or directors that authorize or authorized or approve or approves the contract or transaction or
because his, her or their votes are counted, if the contract or transaction if just and reasonable as to the
Association at the time it is authorized or approved Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board or a committee thereof which authorized,
approves, or ratifies a contract or transaction

10 2 LOANS No loans shall be contracted on behalf of the Association and no evidences or

indebtedness shall be issued in its name unless authorized by a resolution of the Board No loan approved by
the Board in an amount in excess of $10,000 00 shall be contracted until approved by Members holding one
half of the votes represented, personally or by valid proxy, at a duly convened meeting of the Members

10 3 CHECKS AND DRAFTS All checks, drafts, or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the Association shall be signed by such officer of officers,
agent or agents of the Association and in such manner as shall from time to time be determined by resolution of
the Board

10 4 Deposits All finds of the Association not otherwise employed shall be deposited from time to time
to the credit of the Association in such banks, trust companies, or other depositories as the Board may select

ARTICLE 11
VOTING UPON SHARES OF OTHER COPRPORATIONS

Unless otherwise ordered by the Board, the president shall have fill power and authonty on behalf of the
Association to vote either in person or by proxy at any meeting of shareholders of any corporation in which the
Association my hold shares of membership(s), and at any such meeting may possess and exercise all of the rights
and powers incident to the ownership or such share of membership(s) which, as the owner thereof, the
Association might have possessed and exercised if present The Board may confer like powers upon any other
person and may revoke any such powers as granted at its pleasure

ARTICLE 12
PROHIBITION AGAINST SHARING
IN CORPORATE EARNINGS

None of the net earnings or pecuniary profit from the operations of the Association shall at any time inure
to any Member, director officer, or employee of, or member of, a committee of or person connected with, the
Association, or any other pnvate individual, provided that this Article shall not prevent the payment to any such
person of such reasonable compensation for services rendered to or for the Association in effecting any of its
purposes as shall be fixed by the Board and other payments and disbursements which may be made in furtherance
of one or more of its purposes To the extent that Members receive a benefit from the general maintenance
acquisition, construction, management and care of the common Area, this benefit shall not constitute an
inurement, to the extent a rebates of excess dues, fees or Assessments (and not net earnings) is paid to the
Members, such payment shall not constitute an inurement

ARTICLE 13
 INDEMNIFICATION OF DIRECTORS AND OFFICERS

13 1 Indemnification Except as provided in the Articles and these Bylaw s, the Association shall hold
harmless and indemnify each of its directors and officers ("indemnitee') against any and all liability and expenses
incurred by the mdemnitee in connection with any threatened or actual proceeding or legal action resulting from
indemnmtee's service to the Association or to another entity at the Associations' request Except insofar a
permitted by law, the Association shall not indemnify an indemnitee for acts listed in Arizona Revised Statutes
Section 10-2305 C 8, as amended

13 2 Procedure Indemnitee shall notify the Association promptly of the threat or commencement of any
proceeding or legal action with respect to which mndemnitee intends to seek indemnification The Association
shall be entitled to assume indemnitee's defense with counsel reasonable satisfactory to indemnittee, unless
rndemnitee provides the Association with on opinion of counsel reasonably concluding that there may be a
conflict of interest between indemnitee and the Association in the defense of the proceeding or legal action If the
Association assumes the defense, it shall not be liable to indeninitee for legal or other expenses subsequently
incurred by indemnittee

13 3 Expense Advances The Association shall advance automatically reasonable expenses. including
attorneys fees, incurred or to be incurred by indemnitee in defending a proceeding or legal action upon receipt of
notice and, if required by law, of an undertaking by or on behalf of indemnitee to repay all amounts advanced if it
is ultimately determined by final judicial decision (after expiration or exhaustion of any appeal rights) that
indemnitee is not entitled to be indemnified for such expenses

13 4 Settlement of Claims The Association shall not be obligated to indemnify indemitee for any
amounts incurred in settlement if the settlement is made without the Association's prior written consent The
Association shall not enter into any settlement if the settlement is made without the Association's prior written
consent The indemnitee's prior written consent Neither Association nor indemnitee will unreasonably withhold
consent to any proposed settlement

13 5 Effect of Repeal So that indemnitee may rely on the indemnification promised by this Section no
repeal or amendment of this Section shall reduce the right of an indemnitee to payment of expenses or
indemnification for acts of the indemnitee taken before the date of repeal or amendment

ARTICLE 14
REPEAL, ALTERATION OR AMENDMENT

14 1 Amendment Subject to the requirements of applicable law, these Bylaws may be repealed, altered
or amended, or substitute Bylaws may be adopted, only in accordance with the procedures set forth in the
Articles, provided, however, that any matter stated herein to be or which is in fact governed by the Declaration
may not be amended except as provided in the Declaration

14 2 Conflicts In the case of any conflict between the Articles and these Bylaws, the Articles shall
control, and in the case of any conflict between the Declaration and these Bylaws the Declaration shall control

The foregoing Bylaws were adopted by the Board of Directors of San Marqui Estates Homeox ners
Association effective as of February 4, 1997

1, Robert Kroger, Secretary of San Marqui Estates Homeowners Association, an Anzona nonprofit
corporation (the "Association"), do hereby certify that the foregoing is a true and correct copy of the
Association s Bylaws as adopted by the directors of the Association on February 4, 1997

IN 'AITNESS WHEREOF, I have hereunto set my hand on February 4, 1997

When recorded mail to illi IIIfll IIill
I1ill1il1 II1 111ft
IN l1l
OFFICIAL RECORDS OF
Heights 45 L L C MARICOPA COUNTY RECORDER
6900 E Camelback Road HELEN PURCELL
Swit440 98-0566007 07/01198 10:.1
Scottsdale, AZ 8525t2

AMENDED AND REINSTATED

DECLARATION
OF
COVENANTS, CONDITIONS AND RESTRICTIONS
FOR
SAN MARQUI ESTATES

Thus Declaration of Covenants, Conditions and Restrictions is Amended and Reinstated and is replacing
the previous Declaration of Covenants, Conditions and Restnctions for San Marqw Estates recorded January 8,
1997, in Docket # 97-0014094 in the records of the Mancopa County Recorder This Amended and Reinstated
Declaration of Covenants, Conditions and Restrictions is effective as of 1998, by Heights 45, L L C, an Arizona
limited liability company ("Declarant') with reference to the following a . 73 . 4Z
A Declarant is the owner of fee title to the Property

B Declarant intends by this Declaration to impose upon the Property mutually beneficial restrictions under a
general plan of improvement for the benefit of all owners of property witiun the Property Declarant desires to
provide a flexible (yet common) and reasonable procedure for the overall development of the Property, and to
establish a method for the admimstration, maintenance, preservation, use and enjoyment of the Property

NOW, THEREFORE, Declarant declares that the Property shall be held, sold and conveyed subject to the
following easements, restrictions, covenants and conditions, which are for the purpose of protecting the value and
desirability of the Property and which shall run with the real property now and hereafler subjected to this
Declaration and which shall be binding on all parties having any right, title or interest in said real property or any
part thereof, and their heirs, personal representatives, successors and assigns, and shall inure to the benefit of each
owner of all or any part thereof

ARTICLE I
DEFINMONS

Except as otherwise expressly provided in this Declaration, the following terms shall, for purposes of this
Declaration, have the meanings set forth below

I "Annual Assessments" shall mean the Assessments designated as such in this Declaration and
computed and levied as provided in Section 7 5 of this Declaration

12 "Architectural Committee" shall mean the committee established pursuant to Article 8 of this
Declaration

1.3 "Articles" shall mean the articles of incorporation of the Association, as the same may be
amended from time to time in accordance with the provisions thereof and with the applicable provisions of this
Declaration, the Bylaws and the statutes and regulations of the State of Arizona

14 "Assessments" shall mean the Annual Assessments, and the Special Assessments
 15 "Association" shall mean San Marqui Estates Hlomeowners Association, an Arizona nonprofit
corporation to be formed by Declarant not later than thirty days after Recordation of this Declamtion, and its
successors and assmps (provided, however, that if such corporate name is not ailable for use, another name may
be selected by Declarant in connection with the incorporation of the Association)

16 " Board' shall mean the group or body of persons elected in accordance with the provisions of
the Articles, the Bylaws and the statutes and reguations of the State of Azona, in which group or body is vested
the management of the affairs of the Association, and shall be eqwvalent in meaning to the term 'board of
directors," as defined in Section 10-2301 6 of the Anzona Revised Statutes

17 'Bylaws" shall mean the bylaws of the Association, as the same may be amended from time to
time in accordance with the provisions thereof and with the applicable provisions of this Declaration, the Articles
and the statutes and regulations of the State of Arizona

18 "City" shall mean the Town of Queen Creek Anzona

19 "Common Area" shall mean all real property (including the improvements thereto), if any,
owned by the Association for the common use and enjoyment of the Owners,

I 10 "Common Expenses" shall mean the actual and estimated expenses of operating the Association
and Common Aa, including any reasonable reserves, all as may be found to be necessary and-appropriate by the
Board pursuant to this Declaaotn and the Articles and the Bylaws.

I 11 "Declarant" shall mean Heights 45, L L C , an Arizona limited liability company, and any
assignee of the rights and duties granted or reserved to the Declarant herein, which assignment shall be evidenced
by a duly signed and acknowledged Recorded instrument signed by the assignsng Declarant. The term Declarast'
shall in no event mean or refer to a retail Lot buyer, unless and to the exlent expressly provided in a Recorded
instrument complyung with the immediately precedng sentence.

1 12 "Declaratlonl' shall mean this Declaraon of Covenants, Conditions and Restrictions, as the
same may be amended from time to tme

1 13 "Developer Owner shall mean a Person (other than Declarant) in the business of developing.
or selling real property and who has acquired one or more Lots m connection with, and in the course ot the
business, for the purpose of developing the Lots.

1.14 "Dwelling Unit" shall mean a single family residence and appurtenances thereto situated upon a
Lot and intended for use and occupancy as a residence by a Single Family

1 15 "Eligible Mortgage Holder" shall mean any holder (as evidenced bya Recorded document) of a
First Mortgage who or which shall have made written request to the Association for notice of any proposed action
or requires the consent of a spcfied percentage of Eligible Mortgage holders, that, pursuant to Section 11 2 or
Secton II 8, which written request mug contain the name and address of the Eligible Mortgage Holder and the
Lot number or street address of the Lot against which the Flirst Mortgage held by said Eligle Mortgage Holder is
Recorded.

1 16 "Hardscape" Hardscape is detined as a nonlandscape item that is placed in the front yard. The
following is a partial list of items that are not permissible
 Chairs, sawhorses, wagon wheels, donkey cams, sleeping figurnes, buck boards, plastic plant and
rope, nmlk cans, farm equmpmenit, farm utensdls, seahorses, steer skulls, coyotes, ducks, etc, all of which are
prolubited in front yards of Lots

Any ornamental additions to the front yard of a Lot require approval from the Architectural Control Comnuttee

1 17 " First Mortgage" shall mean a Mortgage Recorded against a Lot that has pnority over all other
Mortgages Recorded against that Lot

I 18 "Lot" shall mean and refer to a lot into which any part of the Property is subdivided as set forth
in a subcivwon plat now or hereafter Recorded with respect to all or any part of the Property For purposes of this
Declaration, a Lot shall be deemed to come into existence on and as of the date the plot depicting and establishing
the Lot is Recorded In no event shall the term "Lot' mean or refr to all or any part of the Common Area (or to all
or any part of any common area or common elements established by a declaration of covenants, conditions and
restrictions or other such instrument hereafter recorded

1 19 "Master Development Plan" shall mean the conceptual or site development plan at any time in
effect for San Marqm Estates and approved by the City or any other govenunental jursdiction having the authority
to approve and regulate master plans for planned area developments in the area where the Property s located, as
the same may be amended from time to time

1 20 "Maximrum Annual Asessment" shall mean the amount determined for each fiscal year of the
Assocation in accordance with Section 7 7 of this Declaration.

1 21 "Member" shall mean any Person entitled to membership in the Association, as provided in fts
Declaration and the Artcles,

1 22 "Mortgage" shall mean a mortgage or deed of rust Recorded against a Lot

1 23 "Mortgagee" shal mean a beneficiary under a deed of trust and a mortgagee under a mortgage,
which, in either case, is Recorded against a Lot.

1 24 "Occupant" shall mean any Person other than an Owner who occupies or is in possession of a
Lot whether as a lessee under a lease or otherwise.

1 25 "Owner" shall mean the Person or Persons who individually or collectively (a) own foe title to a
Lot (as evidenced by a Recorded document, or (b) hold the seller's or vendor's interest ti a Lot under a contract for
convyance, contract for deed, agreement for sale or similar contract through which a seller has conveyed to a
purchaser equitable title in property and under which the seller is obligated to convey to the purchaser the
remainder of the seller's title in the property, whether legal cir equitable, on payment in full of all sums due under
the contact The term "Owner" shall not include (i) any Person who holds an interest in a Lot merely as security
for the performance of an obligation, or (Ii) a lessee, tenant or other Occupant of a Lot Declarant shall be the
"Owner' of each Lot with respect to whih Declarant holds the interest required by this Section and, in addition,
shall be deemed to be the "Owner" of each Lot to which ttle is held by a trustee (other than the trustee under a
deed of trs) for the benefit of Declarant Notwithstanding par (a) of this Section, in the case of a Lot the fee title
to which is vested in a trustee under a deed of trust pursuant to Chapter 6 1 of Title 33 of the Arizona Revised
Statutes, the owner of the trustors interest under the deed of trust shall be deemed to Be the "Owner" of that Lot

1 26 "Person" means a natural person, corporation, partnership, trustee or other legal entity

1 27 "Pbase" shall mean any one of the groups of Lots within the Property described and identified by
a phase number or letter (or number and letter) attached hereto and incorporated herein by reference The numbers
 or letters (or numbers and letters) assigned to a Phase hereby are and shall be for reference only and shall not
control the order or tnumng of development or sale of Lots within any Phase or from Ptase to Phase

1 28 "Property" shall mean the real property described in Eiubit 'A: attached hereto

1 29 "Record," "Recording," "Recorded" and "Recordabozi" shall meam placing or having placed
a document or public record in the official records of Mancopa County, Anzona, or of such other governmental
authonty, office or official with wMuch or whom the applicable laws of the State of Arizona prescribe that
documents affecting title to real property in the area including the Property are to be placed of public record.

1 30 "Single Famil'y" shall mean a group of persons related by blood, rnamage or legal adoption or a
group of not more than three unrelated persons maintaining a mnmon household.

1 31 "Special Assessments" shall mean those Assessments levIed in accordance with Section 7 9
hereof

ARTICLE 2
PROPERTY RIGHTS

21 General. Every Owner shall have a nonexclusive right and easement of enjoyment in, to and
over the Common Area, subject to Pecorded instrument conveying to the Association or subjecting to this
Decmaration such property, and subject further to the reasonable rules and regulations of the Association Anv
Owner may only assign his, her or its right of enjoyment to (and share the samne with) the members of his or her
household and assign the same to and share the same with ins, her or its tenants and invitees. subject to the
provstons of thus Declaration and to reasonable regulation by the Board and othernise in accordance with such
procedures as the Board may adopt An Owner who leases his, her or its Lot shall be deemed to have delegated the
Owner's nghts and easements under this Article 2 to the lessee of the Lot or Parcel

ARTICLE 3
MEMBERSHIP AND VOTING RIGHTS

3} Votes of Owners of Lots Every Owner of a Lot or Parcel automatically shall be a Member of
the Association and shall remamn a Member for so long as such ownership continues Each Owner's membeship
in the Association shall be appwenant to and may not be separated from ownership of the Lot to which the
membership is attnibutable In the cvewn aLy Lot is owned by two or more Persons, whether byJoint enancy.
tenancy in comnon, coninuly property or otherwise, each such Person shall be considered a Member but the
membership as to such Lot shall be 1jo, and such Persons shall jointly designate to the Association in wnrtng one
of their number who shall have the power to vote said membership, aid, in the absence of such designation and
until such designation is made, the Board shall make such designation and such desgnation shall be binding for
all purposes, Notwithstanding the foregoin& so long as the Class B meinbersup is ini existence, no Class B
Member shall at the same time be a Class A Member, nor shal a Class B Member have any Class A votes and the
membership and number of votes of the Class B Member(s) shall be determined in accordance vith Section 3 3 2
below Each Owner (other than Declarant, so long as the Class B membershup is in existence) shall have one vote
for each Lot owned by the Owe

32 Declarant. Declarant shall be a Member of the Association for so long as it holds a Class A or
Class B membership

33 Voting Class. The Association shall have tio classes of voting Members whch shall be as
follows
 3 3 1 Class A. Class A Members shall be all Owners except Declarant (until the conversion
of Declaraxt'gs Class B membershup to Class A membership as provided below) Subject to the authority of the
Board to suspend an Owner's voting rights in accordance with the provisions hereof, and, except as provided in
this Subsection 3 3 1, a Class A Member shall have the number of votes provided in Section 3 1, and

3 3 2 Class B. The ClassB Member shall be the Declarant The Class B Member shall be
entitled to the number of votes equal to three times the number of votes that would otherwise be attributable to Lots
owned by Declarant as determined pursuant to Section 3 1 above Doclarant shall have the right, at any time and
from tume to tune, to assign all or any part of its voting rights appurtenant to its Class B membeiship (as well as all
or any other rights appurtenant thereto) to one or more Pesons acquiring, for purposes of development and sale,
any part of the Property Declart shall have the right, at any time and from time to time, to designate an
individual or individuals to exercise Declarant's voting nghts (whether appurtenant to Class A or Class B
membership), proided, however, that such designation shall not act as an assignment by Declarant of its
membershp or votng nghts hercunder The Class B membership automatically shall cease and be converted to a
Class A membershlp upon the happening of the first of the following events

(a) the date on which the total number of the Class A Members equals fifty percent
of the total number of Lots in the Subdrvision, or

(b) the date which is five years after the date this Declaration is Recorded in the
offiacal records of Mancopa County-, or

(c) - the date on which Declarant Records a written notice electing to convert all of
its Class B membership to a Class A membership

34 Right to Vote. No change in the ownership of a Lot shall be effectve for voting purposes until
the Board receives wntten notnce of the change together with satisfactory evidence thereof The vote(s) for each
Member must be cast as a single unt. Split oracidonal votes shal) not be allowd. If any Ownr casts a vote or
votes representing a certain Lot, that Owne will thereafter be conclusively presumed to be acting with the
authority and consent of all other Owners of the Lot unless and until obection thereto is made to the Board in
writing. Any Owner of a Lot that is leased or that is subject to a valid, outstanding and Recorded executory
agreement of sale may, in the lease, agreement of sale or other written instrument, assgp the voting right
appurtenant to the Lot, to the lessee thereof or to the purchaser thereof under such agreement of sale, as applicable,
provided that a copy of the written assignment of the votng rights is finished to the Secretary of the Association
before any meeting at which the lessee or purchaser seeks to excise the voting right

35 Members' Right. Each Mcmber 1 have the rights, duties and obligations set forth in this
Declaration, the Articles, the Bylaws, and the applicable Tract Declaration and any rules and regulations adopted
to any of the foregoing.

36 Trander of Membership. Except as otherwise provided in this Declaration, the rights, duties
and obligations of a Class A member cannot and shall not be assigned, transferred, pledged, conveyed or alienated
in any way except with a transfer of ownership of the Cliss A Membe's Lot, and then only to the transferee
thereof An authorized transfer may be effected by deed, intestate succession, testamentary disposition, foreclosure
or other legal process authoreed under Arizona law, shall operate to transfer the membership appurtenant to a Lot
to the new Owner and any attempt to make any other form of transfer shall be void

ARTICLE 4
MAINTENANCE

41 Association's General Responsbilities. The Association shall maintain and keep in good repair
the Common Are (and certain other aras, as more expressly provided in this Section), and the costs of such
maintenance shall be Common EYpenses of the Association (subject to any insurance then in effect) This
maintenance shall inlmude, but not be limited to

4 1 1 maintenance, repair and replacement of all landscaping and other flora, structures and
improvements situated upon the Common Area

4 12 maintenance, repair and replacement of any electronic entry gate and any common area
perimeter wails

4 1 3 maintenance, repair and replacement of the side facing a strae or portion of the
Common Area of any boundary or perimeter wall situated within areas designated on subdivision plats or Tract
Declarations Recorded by, or bearing the written approval of; Doclarant (or, after termination of the Class B
membership, the Association) with respect to the Property as "wall easements" (or similar designations) to be
maintained by the Association, and

4 14 maintenance and repair of any dramage easements upon or across the Common Area

Notwithstanding the foregomng, except when otherwise provided in a Tract Declaration or other Recorded
document signed by, or bearing the written approval of, Decarant affecting any part of the Property, maintenance
of the side facing any public nght-of-way of any boundary or perimeter walls sithated upon the Property along
public nghts-of-way shall be the responsibdity of the Association while the maintenance of the side of such
boundary or perimeter walls (and of boundary or perimeter walls) between Common Area and an Owners Lot
facing an Owner's Lot shall be the responsibility of the Owner

42 Maintenance of Owner's Structures Each Owner shall be responsible for the maintenance,
cleaning, panting, repair and general care of all structures emstung or constructed upon the Owner's Lot and, in
particular each Owner shall cause the exterior of said structures to be maintained in good condition and repair and
in an attractive state consistent with general community standards within the Property In the event that the
Association shall determine, by the affirmative vote of a majonrt of the votes of each class of Members represented
in person or by valid proxy at a meeting called for such prose, that any Owner is in breach of the Owners
obligations under tie preceding sentence, the Association shall promptly gmve the Owner written notice of the
deternunation, including a reasonably detailed list or description ofthe repairs, maintenance or other work
required to cure th Owner's breach. In the ent the Owe does not cure the breach within thirty days afler the
date of the written notice, the Association shall cause the repairs, maintenance or other work to be performed so as
to cure the Owner's breach, and the Assocation's cost in doing so, together wvth interest from the date of
expenditUre at the rate set forth in

Section l1 7 of this Declaration, shall constitute a lien on the Owners Lot, which lien shall have the priority and
may be enforced in the manner described in Section 7.3 of the Declaration, the Association shall also have
standing and authority to request that a court of competent jurisdiction compel the Owner so cite the breach, and to
the extent not inconsistent with an order of such court, the Association may pursue either or both of the courses of
action descmbed in this sentence. The Association shall have an casement on. over, across and through each Lot to
permut it to carry out its duties and obligations under this Article 4

43 Publicly-Dedicated Area. Except as expressly provided in this Article 4 and except as may
otherwise be required by applicable law, the Association shall have responsibility to maintain any areas within the
Property (including, but not hinited to, public streets) that are not dedicated to or the responsibility of a
municipality or other governmental entity

44 No Discrimination. The provision of services in accordance with this Article shall not be
deemed to be discrimination in favor of or against any Owner
 ARTICLE 5
INSURANCE AND FIDELITY BONDS: CASUALTY LOSES

5 1 Insurance to be Obtained by the Association.

5 1 Hazard Insurance.

(a) The Board, acting on behalf of the Association, shall obtain and maintain at all
times insurance for all insurable improvements on the Common Area against loss or damage by fire or other
hazards, casualties and nrsks embraced wnltun the coverage of the standard "extended coverage" policy available
from tune to time in the State of Arizona, against all other penis customarily covered for simular types of projects
(including those covered by the standard "all risk" endorsement available from time to time in the State of
Anzona), and agarnst loss or damage due to vandalism and malicious mischlef. The insurance shall be in an
amount equal to one hundred percent of the current replacement cost, from time to time, without deduction for
depreciation, of all such insurable improvements (excluding land, foundations, excavations and other items usually
excluded from such insurance coverage, but including fixtures and building service equipment and personal
property and supplies owned by the Assocation), with such amount to be determined annually by the Board wVth
the assistance of the iner oi-insurers providing such coverage

(b) The policy or policies providing the insurance required by hs Subsection shall
provide that (i) any insurance trust ageement will be recognized, (ii) the insurer shall waive any nght of
subrogation against the Owners, the Board and the Association, and ther respective agents, tenants, servants,
employees, guests and household members, (oi) the insurance shall not be canceled, mvalidated or suspended by
reason of any act or onissions of any Owner (or of the Owners nvitees, agen% tenants, srants, employees,
guests or household members), or of any member, officer or employee of the Board without a prior wrtten demand
to the Board that any the act or omission be cured and without providing a sixty day period within which the Board
may cur the act or omission (or cause the same to be cured); (ty) the insurance coverage "Ibe primary, and shall
in no event be brought into contrution with my insurance maintained by indiidual Owners, their Mortgagees or
other lien holders, and (v) the coverage afforded by the policy or policies shall not be prejudiced by any act or
omission of any Owner or Occupant (or their agents) when the act or onussion is not within the control of the
Association

(c) The policy or policies provding the insurance required by this Subsection shall
also contain (if available at no additional cost or at such additonal cost as is not demonstrably unreasonable) the
following endorsements (or their equivalents) (i) "agreed amount* and "inflation protection' endorsemepts, (n)
"increased cost of construction' endorsement; (mii)"ontingent liability from operation of btulding laws or codes"
endorsement, and (IV)"demolition cost" endorsement

(d) Unless a higher maximum deductible amount is reqired tyf-pplicable law,

each policy providing the insurance coverage required by this Subsection shall provide for a deductible not to
exceed the lesser of S 10,000 or one percent of the face amount of the policy

5 12 Liability Insurance. The Board, acting on behalf of the Association, shall obtain and
maintain at all times a comprehensive general liability policy insumng the Assocation, each member of the Board
and each Owner (and, so long as Declarant, or any Person with whom Declarant contracts directly for the
performance of all or a substantial portion of Declarant's nghts and obligations hereunder, or for the construction
of substantial improvements on the Property, retains an interest in the Property or any Lot insuring Declarant and
such Person, if identified by Declarant to the Association, provided that any added premium cost or other expense
resulting from naming Declarant or such Person as insured shall be home by Declarant or such other Person),
against any liability to the public or to any Owner or Occupant (and such Owner's or Occupant's iuvitee, agents,
employees, tenants, guests, servants and household members) for death, bodily injury and property damage arising
out of or incident to the ownership or use of the Common Area arising out of or incident to the performance by the
Associatioc of its raanenance and other obligations heeunder 'Me Board, wth the assistance of tbe insure(s)
providing such coverage, shall review annually the amounts of coverage afforded by the comprehensive general
liability policy or policies and adjust the amounts of coverage as the Board deems appropriate, but in no event shall
the policy or policies provide coverage less than S1,000,000 00 for death, bodily mnjuy and property damage for
any single occurrence The policy or policies providing the insurance shall, by specific endorsement of-otherwnse,
preclude denial by the insurer(s) providing the insumance of a claim under the policy or policies because of
negligent acts or omissions of the Association or any Owner(s) (or of Declarant or any other Person named as an
insured or additional insured thereunder)

S 13 General Provisions Governing Insurance. The insurance required to be obtamned

under Subsections 5 1 1 and 5 1 2 shall be written in the name of the Association as trustee for each of the Owners
and for each Mortgagee (as their respective interests may appear) and shall be gomerned by the provisions
hereinafter set forth

(a) All policies shall be written with one or more companies authorized to provide
the insurance in the State of Arizona,

(b) Exclusive authority to adjust losses under policies in force on property owned or
insured by the Association shall be vested in the Board,

(c) In no event shall the insurance coverage obtained and maintained by the Board
hereunder be brought into contribution with insurance purchased by individual Ownersm Occupants or their
Mortgagees or other henholders and the insurance carned by the Assmation shall be prinmary,

(d) The Board shall be required to make reasonable efforts to secure insurince
policies that will provide for a waiver of subrogation by the insurer as to any claims against the Board or the
Owners and their respective tenants, servants, agents, emplyees, guests and household members,

(e) Each policy providing msuiance coverage required by Subsections 5 1 1 and

5 1 2 shall requize the applhcable insurr to gpvc not less than ten days prior written notice to the Association and to
each Mortgagee that has grven such insurer wnnen notice of such Mortgagees interest in a Lot (which notice must
mclude the name and address of the Mortgagee), of any cancellation, refusal to renew or material modification of
such policy, and

(M) To the extent reasonably available, each policy providing insurance coverage
required by Subsections 5 1 1 and 5 1 2 shall contain a waiver by the applicable insurer of its nghts to repair and
reconstruct instead of ping cash

5 14 Fidelity Bonds. The Board, acting on behalf of the Association, shall obtain and
marn1ian at all times adequate fidelity bond coverage to protect against dishonest acts on the parrof oficers,
directors and employees of the Association and all others who handle, or are responsible for handling. fuids held
or administered by the Association, whether or not such officers, directors, employees or others receive
compensation for services they render to or on behalf of the Association. Any independent management agent that
handles funds for the Assoation shall also obtain (and pay for) fidelity bond coverage with respect to its own
activties (and those of its directors, officers and employees, whether or not such diretoMs, officers or employees
receive compensation for savices rendered). The fidelity bonds- (a) shall name the Association as oblige, (b)
shall be issued by one or morc companies authorized to issue the bonds in the State of Arizona; and (c) shall be in
an amount sufficient to cover the maximunm total of funds reasonably expected by the Board to be in the custody of
the Association or the agent at any time while the bond is in force, but in no event shall the amount of such fidelity
bond coverage be less than the sum of three months' Annual Assessments on all Lots and Parcels, plus the total of
funds held in the Association's reserves Each such fidelity bond shall provide-that the issuer thereof shall provide
not less than ten days Pnor wnten notice to the Association and to each Eligible Mortgage holder before the bond
may be canceled or substantially modified for any reason

5 1 5 Workers' Compensation Insurance. The Board, acting on behalf of the Association,

shall obtain and maintain worker's compensation insurance if and to the extent necessary to meet the requirements
of applicable laws

5 16 Cost of Insurance. All premiums for the insurance or bonds required to be obtained by
the Board by this Section 5 1 shall be Common Expenses (except that, as provided in Subsection 5 1 4 above, the
cost of the fidelity bond required to be furnished by any independent management agent shall be paid by such
agent, and, as provided in Subsection 5 1 2 above, any added cost of naming Declarant, or any Person with whom
or which Declarant contracts directly for the performance of all or a substantial portion of Declarant's obligations
hereunder, or for the construction of improvements on the Property, shall be home by Declarant or such other
Person) The Board shall not be liable for failure to obtain or maintain any of the insurance coverage required by
this Section 5 1,or for any loss or damage resulting from the failure, if the failure is due to the unavailability of
the insurance coverage from reputable companies authorized to provide the insurance in the State of Arizona or if
such insurance coverage is available only at an unreasonable cost

5 17 Subsequent Changes in Insurance Requirements It is the intention of this Article

(and, in particular, of this Section S 1), to impose upon the Association the obligation to obtain and maintain in
full force and effect at least those types and amounts of unsurea as are required, at the time this Declaration is
Recorded, by the Federal National Mortgage Association of the Federal Home Loan Mortgage Corporation
However, notwithstanding any provion of this Declaration to the contrary, should any or all of said agencies
subsequently amend or modify their respective requirements regarding the insurance coverage required to be
maintained by the Association, the Board, acting on behalf of the Association, shall promptly upon receiving notice
of such amendment or modification from any such agency, from any Owner or Eligible Mortgage Holder or from
Declarant, obtain the additional, modified or amended policy or policies of insrance as may be necessary to
conform to the amended or modified requirements (provided, however, that the Board shall not be required to alter
the types or amounts of coverage if the amendments or modifications adopted by any such agency reduce or
eliminate required types or amounts of insurance) Should the requirements of any such agency conflict with the
requirements of any other such agency or vath applicable provisons of law, the Board, acting on behalf of the
Associaton, shall diligently work with the agency or agencies to resolve the conflict and shall thereafter obtain and
maintain the addional, modified or amended policy or policies of insurance as may be necessary to conform vwth
the requirements of the agencies, taking mto account the resolution of the conflict In the event the Board, after
exercise of such diligence, is unable to resolve the conflict, the Board, actng on behalf of the Assocation, shaU
exercise its good faith business judgment and obtain and maintain in full force and effect the insurance to conform
as closely as possible with the applicable requireents of all such agencies, and of law, taling into account the
conflict

52 Insurance to be Obtained by the Owner

5 2 1 Public Liability Insurance- It shall be the individual responsibility-of each Owner to

provide, as the Owner sees fit and at the Owners sole expense, such comprehensive public liability insurance as the
Owner may desire against loss or liability for damages and any expense of defending against any claim for
damages that might result form the ownership, use or occupancy of the Owner's Lot

5 2 2 Hazard and Contents Insurance. It shall be the individual responsibility of each

Owner to provide, as the Owner sees fit, and at the Owners sole expense adequate insurance for all insurable
improvements on the Owncers Lot against loss or damage by fire or other. hazards, casualties and nsks, including,
but not limited to insurance for any and all fixtures and personal property upon such Lot or in such Dwelling Unit
or other structure(s)
 53 Casualty Losses

53 1 Damage and Destruction.

(a) Immediately after any damage or destruction by fire or other casualty to all or
ary part of any property of the Association that is covered by insurance, the Board or its duly authorized agent
shall (i) proceed with the filing and adjustment of all claims arising under such insurance, (ii) obtain reliable and
detled estimates of the cost of repair or reconstruction of the damaged or destroyed property, and (tit) upon
receipt of the proceeds of the insurance, and except as is otherwise provided in tins Subsection 5 3 1, use such
proceeds to repair or reconstruct the damaged or destroyed property The terms Nrepwrl' and "reconstruction" (or
variants thereof), as used m tlus Article 5, Shall mean repairing or restoring the property in question to
substantially the same condition as that in which it existed before the fire or other casualty, or, where applicable,
replacing the damaged or destroyed property with property substantially similar to the damaged or destroyed
property as it existed before the damage or destruction

(b) Any major damage or destruction to the property required to be insured by the
Association under Section 5 I shall be repaired or reconstructed unless (i) at a special meeting of the Menbers of
the Association duly noticed and convened within sixty days after the occurrence of damage or destruction, the
Members determine, by a vote of Owners holding not less than seventy-five percnt of the votes in each class of
Members, not to so repair or reconstruct; and (11) Elgrble Mortgage Holders representing more than fufty percent of
all Lots subject to the First Mortgages held by Eligible Mortgage Holders concur in the determination not to repair
or reconstruct If for any reason either the amount of the inmsurance procoeds to be paid as a result of damage or
destruction or reliable and detailed estimates of the cost of repair or reconstruction, or both, are not made available
to the Association within said penod, then the period shall be extended until the iuformation shall be made or
become available, provided, however, that the extension shall not exceed an additional sixty days The Board, in
its sole discretion, shall deternmne whether ay minor damage or destruction to the Common Area should be
repaired or reconstructed

(c) In the event that it is determined in the manner described above that the
damage or destruction of any part of the Common Area shall not be repaired or reconstruced and no alternative
improvements are authonzed, then the poperty shall be maintained by the Association in a neat and attractive
condition as an undeveloped portion of the Cormon Area

5 3 2 Excess or Deficiency of Proceed& If the damage or destruction for which the

isurance proceeds are paid is to be repaired or reconstructed and the proceeds are not sufficient to pay the cost
thereof, the Board shall, without the necessity of a vote of the Members, levy assessments against the Owners of all
Los, which assessments shall be allocated among such owners in the same ratios as Annual Assessments are
allocated pursuant to Subsection 7 5 of this -Declaration. Additional assessments may be made in like manner at
any time during or following the completion of any repair or reconstruction Any assessments levied pursuant to
this Substwion 5 3 2 shall be deemed to be a part of the Assessments and shall be secured by the lien created by
Section 7 3 below If the funds available from insurance exceed the cost of repair, the excess shall be used to meet
Common Expenses or, in the discretion of the Board, placed in a reserve account for contingencies or capita
improvements

5 33 Repair or Reconstruction of Dwelling Units or Other Structures. in the event of the

destruction of a Dwelling Unit or other structure on a Lot, or of damage to the Dwelling Unit or other structure
which, in the reasonablejudgment of the Board, materially affects the exterior appearance thereof, the Board shall
have the nght, at its option, exerciable by written notice to the Owner of the Lot upon whuch the Dwelling-Unit or
other stmuture is situated, to requre the Owner to repair or reconstruct (or cause to be repaired or reconstructed),
at the Owner's expense (sublect to any insurance as the Owner may then or thereafter receive in respect of the
desruction or damage), such Dwelling thut or other structure within such reasonable period of time as shall be
specified by the Board in the notice (which period of time shall in be not less than eight months from the date of
 66 Implied Rights The Association may exercise any other right or pnvilege given to it expressly
by this Declaration, the Articles or the Bylaws, and every other right or privilege reasonably to be implied from the
existence of any right or privilege given to it herein or reasonably necessary to effectuate any such right or
privilege

ARTICLE 7
ASSESSMENTS

7 1 Creation of Assessment Right. To provide funds to enable the Association to meet its financial
and other obligations and to create and aintaim appropriate reserves, there is hereby created a right of assessment
exercisable on behalf of the Association by the Board Except as otherwise provided herei, Annual Assessments
and Special Assessments shall be for Common Expenses and shall be allocated among all Lots as provided in thus
Article 7

72 Covenants with Respect to Assessments. Each Owner, by acceptance of his, her or its deed
with respect to a Lot is deemed to covenant and agree to pay the Assessments levied pursuant to this Declaration
with respect to the Owner's Lot plus interest thereon from the date due at a rate equal to sixteen percent per annum,
plus costs and reasonable attorneys' fees as may be incurred by the Association mi seeking to collect Assessments
Each of the Assessments with respect to a Lot together with Interest, costs and reasonable attorneys' fees as
provided in this Section, shall be the personal obligation of the Person who or which was the Owner of the Lot at
the time the Assessment aroso-with respect to the Lot, provided, however, that the personal obligation for
delinquent Assessments shall not pass to a successor in title of the Owner unless expressly assigned by the
successor No Owner shall be relieved of his, her or its obligation to pay any of the Assessments by abandoning or
not using his, her or its Lot. However, upon transfer by an Owner of fee title to the Owners Lot, as evidenced by a
Recorded document, the transferring Owner shall not be hable for any Assessments thereafter levied agiunsl the
Lot The obligation to pay Assessments is a separate and independent covenant on the part of each Owner No
diminution is allowed by reason of the alleged failure of the Association or Board to take some action or perform
some function revqred to be taken or performed by the Association or Board under this Declaration, the Articles or
the Bylaws, or for iconvenience or discomfort ansmg from the making of repairs or impvements that are the
responsibility of the Association, or from any action taken to comply with any law or ordinance or with any order
or directive of any municipal or other gvernmmental authority

73 Lien for Assessments;- Foreclosure. 'Mere is hereby created and established a hen against each
Lot that shall secure payment of all present and fature Assessments assessed or levied against the Lot or the Owner
or Occupant thereof (together with any present or future charges, fines, penalties or other amounts levied against
the Lot or the Owner or Occupant thereof pusuant to this Declarantion or the Articles, the Bylaws, any applicable
Tract Declaration or the rules and regulations of the Association) The lien is and shall be prior and superior to all
other liens affecting the Lot in question, except (a) all taxes, bonds, assessments and other Imes that, by law,
would be superior thereto, and (b) the lien or charge of any First Mortgage made in good faith and for value Such
liens may

be foreclosed in the imanner-provided by law for the foreclosure of mortgages The sale and triafer of any Lot
pursuant to a mortgage foreclosure or any proceding in lieu thereof shall extinguish the lien of the Assessments as
to payments that became due before the sale or transfer, but no such sale or transfer Shall relieve the Lot from
liability for any Assessments becoming due after the sale or transfer, or frorn the lien thereof The Association
shall have the power to bid for any Lot at any Wale to foreclose the Association's lien on the Lot or Parcel, and to
acqure and hold, lease, mortgage and convey the ' same Durng the penod any Lot is owned by the Association,
no nght to vote shall be exercised with respect to the Lot and no Assessment (whether Annual or Special) shall be
assessed or levied on or with respect to the Lot, provided, however, that the Assocaation's acquisition and
ownership of the Lot under the circmstances shall not be deemed to convert the same into Common Area The
Association may maintain a stut to recover a money judgment for unpaid Assessments, rent interest and atorneys'
the destruction or damnage) The Board may exercise such nght and establish such time period notwithstanding the
Owner's failure to maintain hazard or casualty insurance upon the Owner's Lo( or any structures thereon and
notwithstanding any unavailability or delay in receipt of proceeds of any insurance policy or policies, although the
Board may take such matters into account in estabishling or extending the time penod within which the repair or
reconstruction must be completed. Any such repair or reconstruction work shall be performed in compliance with
all applicable provisions hereof, and the Owner of the Lot shall take such steps as are reasonably necessary to
prevent damage to surrounding property and injury to persons as may result from or anse in connection with the
destroyed or damaged Dwelling Unit or other structure or the repair or reconstruction activities with respect
thereto
ARTICLE 6
RIGHTS AND OBLIGATIONS OF THE ASSOCIATION

6 1 Commron Area. The Association, subject to the rights of the Owners set forth in this
Declaration, shall be responsible for the management and control of the Common Area and shall keep the
Common Area in good, clean, attractive and sarutary condition, order and repair, pursuant to the terms and
conditions hereof

62 Personal Property and Real Property for Common Use. The Association, through action of
the Board, may acquire, hold and dispose of tangible and intangible personal property and real property, except
that, no dedication, sale or transfer of all or any part of the Common Area shall be made or effective unless
approved by no less than two-thlrds of the votes of each class of Members represented in person or by valid proxy
at a meeting of Members duly called for such purpose The Board, acting on behalf of the Association, shall accept
any real or personal property,4easehold or other property interests within, adjacent to or related to all or any part of
the Property as may be conveyed or assigned to the Association by Declarant (including but not limited to, such
parts of the Common Area as may now or hereafter be held by Declarant)

63 Rules and Regulations. The Association, through the Board, may make and enforce reasonable
rules and regulations governing the use of the Property, which rules and regulations shall be consistent with the
nghts and duties established by ths D)claration Sanctions for violaton of the rules and regulations or of ts
Declaration may be imposed by the Board and may include suspension of the nght to vote at meetings of the
Members of the Association and the right to use the Common Area, and, where approved by a majority vote of
each class of Members represented in person or by valid proxy at a meeting of Members duly called for such
propose, may also include reasonable monetary fines No suspension of an Ownees right to vote or of the nght of
the Owner (or any Occupant of the Owner's Lot) to use the Common Area due to a violation of the rules and
regulations of the Association may be for a period longer than siEty days (except where the Owner or Occupant
fails or refuses to cease or correct an on-going vioation or commits fte sare or another violation, in which event
such susperion may be extended for additional periods not to exceed sixty days each until such violation ceases or
is corrected)

64 Availability of Books, Records and Other Documents. The Association shall maintain
complete and current copies of flus Declaration, the Articles, the Bylaws and all rules and regulations of the
Association (as well as any amendments to the foregoing) and of the books, records and financial statements of the
Association, and, upon the prior written request to the Association by any Owner or by any holder, insurer or
guarantor of a First Mortgage, shall make the same available for inspection (at no cost to the Asgociation), at
reasonable times and under reasonable circumstances, to the Owner or such holder, insurer or guarantor

65 UJnaudited Financial Statement. In the event any holder, insurer or guarantor of a First
Mortgage submits to the Association a written request for an unaudited financial statement of the Association for
the most recently concluded fiscal year of the Association, the Association shall promptly deliver the unaudited
financial statement to the holder, inmsurer or guarantor, and in the event no unaudited financial statement has been
prepared for the most recently concluded fiscal year, the Association shall cause the same to be prepared and
delivered to the holder, nSurer or corander as soon as reasonably possible The cost of prepanng the unaudited
financial statement shall be a Common Expense
fees without foreclosing or waiving the hen securing the same Recording this Declaration constitutes record
notice and perfection of the liens established hereby, and further Recordation of any claim of a lien for
Assessments or otber amounts payable hereunder shall not be required whether to establish or perfect the lien or to
fix the pnontv thereof, or otherwise The Board shall have the option to Record written notices of claims of lien in
the circumstances the Board may deem appropriate

74 Dates Assessments Commence. Assesments shall be payable in respect of a Lot (including any
Lot owned by Declarant) from the date upon which the Board determines in its sole and absolute discretion,
regardless of whether a Dwelling Unit or other structure shall be situated on the Lot on that date As to any Lot
conveyed by Declarant to a retail purchaser, Assessments as to the Lot shall be prorated as of the close of escrow
with respect to the Lot (or if no escrow is utilized, as of the date of Recordation of the deed conveying the Lot to a
retail purchaser)

75 Computation of Assessments; Annual Budget The Board shall prepare and adopt an estimated
annual budget for each fiscal year of the Association, which annual budget shall serve as the basis for determining
the Annual Assessments for the applicable fiscal year (subject to the limitations of Section 7 7 hereof) The annual
assessment for each Lot shall equal the total budget drvided by the number of Lots in the Association 'Me budget
shall take into account the estimated Common Expenses and cash requirements of the Association for the year.
'Me annual budget shall also take into account the estimated net available cash income for the year, if any, from the
operation or use of any of the Common Area The annual budget shall also provide for a reserve for contingencies
for the year (and for subsequent fiscal years) and a reserve for replacements, all in such reasonably adequate
amounts as shall be deterrmned by the Board, taking into account the number and nature of replaceable assets, the
expected life of each asset, and each asset's expected repair or replacement cost. Not later than sixty days
following the meeting of the Board at which the Board adopts the annual budget for the year in question, the Boa
shall cause to be delivered or mailed to each Owner a copy of the budget and a statement of the amount of the
Annual Assessnments to be levied against the Owneres tot or Parcel for the fiscal year in question In the event the
Board fis to adopt a budget for any fiscal year before the beginning of the fiscal year, then until and unless a
budget is adopted, the budget (and the amount of the Annual Assessments provided for therein) for the year
immediately preceding shall remain in effect Neither the annual budget (nor any amended budget) adopted by the
Board, nor any Assessment lowed pusuat thereto, shall be required to be ratified or approved by the Owners. It,
at any time during a fiscal year of the Association, the Board adopts a budget for the fiscal year, it may levy an
additional Annual Assessment for such year (subject to the limitations imposed by Section 7 7) or may call a
meeting of the Members to request that the Members approve a Special Assessment pursuant to Section 7 9
Within sixty days after adoption of an amended budget (if the Board elects to levy an additional Annual
Assessment), the Board sbalU cause a copy of the amended budget and a statement of the additioial Annual
Assessments to be Ievid againt the Lots to be delivered or mailed to each Owner. Ifn istead of adopting a budget
the Board elects to call a meeting of Members to seek approval of a Special Assessment, the Board shall cause a
copy of the amended budget proposed by te Board to be delivered or mailed to each Owner with the notice of the
meeting, If a Special Assessment is duly approved by the Members, the Board shall cause a statement of the
Special Assessment to be levied against each Lot to be promptly mailed or delivered to each Owner

76 Due Dates. Aniual Assessments for each fiscal year shall be due and payable m equal penodhc
installments, payable not more frequently than semn-annually nor less frequently than annually, as determined for
such fiscal year by the Board, with each such installment to be due and payable on or before the first day of the
applicable period during that fiscal year Special Assessments, if any, shall be paid in the manner and on the dates
as may be fixed by the Board. In addition to any other powers of collection or enforcement granted hereunder, in
the event any Assessments with rsect to a Lot are delinquent, the Board shall have the nght, in its sole
discretion, to accelerate the date on which all Assessments with respect to the Lot are due and payable For
purposes of this Declaration, Assessments shall be deemed 'paid' when actually received by the Assoctatioti or by
its manager or agent designated by the Association to collect the same (provided, however, that if any Assessments
are paid by check and the bank or other institution upon which the check is drawn thereafter dishonors and refuses
to pay the check, those Assessments shall not be deemed 'paid' and shall remain due and payable with interest
accruing from the date the Assessments were originally due
 77 Maximum Annual Assessment The Annual Assessments provided for herein shall not at any
time exceed the Maximum Annual Assessment, as determined in accordance with this Section 7 7 For the fiscal
year ending December 31, 1996, the Maximum Annual Assessment shall be $400 00 for each Lot and thereafter,
unless a greater increase is approved ty the affirmative vote of two-thurds of the votes of each class of Members
represented in person or by valid proxy at a meeting of Members duly called for such purpose, the Maximum
Annual Assessment for any fiscal year shall be equal to the Maximum Annual Assessment for the immediately
preceding fiscal year increased at a rate equal to the greater of (a) the percentage increase for the applicable fiscal
year over the immediately preceding fiscal year in the Consumer Price Index - All Urban Consumers - All Items
(1995-1996 Average 1GOBase) published by the Bureau of Labor Statistics of the U S Depalrtment of Labor (or
its successor governmental agency), or, if the index is no longer published by said Bureau or successor agency, in
the index most similar in composition to such index, or (b) five percent Notwithstanding the foregoing, the Board
may, without the approval of the Members, increase the Maxinum Annual Assessment for any fiscal year by an
amount sufficient to permit the Board to meet any increases over the preceding fiscal year in (1)premiums for any
insurance coverage requred by the Declaration to be maintaned by the Association, or (Xi) charges for utility
services necessary to the Association's perfotmance of its obligations under thus Declaration, in either cas (i) or
(ii) notwithstanding, the fact that the resulting increase in the Maximum Annual Assessment is at a rate greater
than otherwise permitted under the precding sentence Declarant may increase such Maximum Annual
Assessment, effective not earlier than the first sale to a retail purchaser of a Lot without the vote of the Members,
so long as the increase is in an amount and in accordance with a revised budget approved by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation Such new Maximum Annual
Assessment, if so approved, shall thereupon be substituted for the previously established Maximum Annual
Assessment for the applicablefiscal year of the Association. Nothng herein shall obligate the Board to levy, in
any fiscal year, Annual Assessments in the full amount of the Maxmmum Annual Assessment for the fiscal year,
and the election by the Board not to levy Annual Assessments in the full amount of the Maximum Annual
Assessments for any fiscal year shall not prevent the Board from levying Annual Assessments in the full amount of
the Maximum Annual Assessments for a subsequent fiscal year (as determined in accordance with this Section 7 7
In the event that, for any fiscal year, the Board elects to levy an Annial Assessment at less than the fIll amount of
the Maximum Annual Assessment for the fiscal year, the Board may, if in its reasonable discretion circumstances
so wan-ant, subequently levy a supplemental Annual Assessment duing the fiscal year so long as the total of the
Annual Assessments levied during the fiscal year does not exceed the Maximum Annual Assesnent for such fiscal
year

78 Notice and Quorum for Meetings to Consider Special Assessments and Certain Increases in
Annual Assessments. Notwithstanding any other provision hereof or of the Articles, Bylaws or niles and
regulations of the Association, wnrten notice of any meeting called for the purpose of (a) approving the
establishment or any Special Assessment as required by Section 7 9 hereof, or (b) approving any increase in the
Maximum Annual Assessment greater than that permitted by application of the formula as set forth in Section 7 7
hereof, shall be sent to all Members not less than thirty days nor more than sixty days before the date of the
meeting At the first meeting called to consider the particular Special Assessment or increase in the Maximum
Annual Assessment a quorum shall consist of two-thirds of the votes in each class of Members (whether
represented in person or by valid proxy), provided, however, that if a quorum, as so determuned, is not present at
the first meeting a second meeting may be called (subject to the same notice requirements as set forth above) to
consider the same issue, and a quorum at the second meeting shall be one-half of the rqured quorum at the first
meeting as described above The second meeting may not be held more than sixty days after the first meeting.

79 Special AssessmentL In addition to the Annual Assessments authorized by this Article 7, the
Association may levy Special Assessments ftom time to time, provided, however, that any Special Assessment shall
be effective only with the approval of not less than two-thirds of the votes of each class of Members represented in
person or by valid proxy at a meeting of Members duly called and convened to consider such Special Assessment
Subject to Subsection 7 4, Special Assessments shall be allocated among all Lots in the ratio established in this
document.
 7 10 Certificates The Association shall, upon the written request of any Owner or the holder, insurer
or guarantor of any Mortgage, or of an mortgage or deed of trust affecing any Parcel, and upon payment of such
reasonable charge as may be determined by the Board, fiunish to the requestng party a certificate, signed by an
officer of the Association, stating the date to which Assessments wvith respect to such Owner's Lot (or the Lot
against which tbe Mortgage or the mortgage or deed of trust, as applicable, is Recorded) have been paid and the
amount, if any, of any Assessments that have been levied with respect to the Lot and that remain unpaid as of the
date of the certificate

7 11 Surplus Mones. Unless otherwise expressly determined by the Board, any surphls monies of the
Association shall be held by the Association and placed in one or more reserve accounts as determined by the
Board, and shall not be pawd to the Owners or credited against the Owners' respechtve liabilities for Assessments

7 12 Declarant's Obligation for Deficiencies So long as the Class B membership exists, Declarant
shall pay and contnbute to the Association, within thirty days after the end of each fiscal year of the Association, or
at such other times as may be requested by the Board, the funds as may be necessary, when added to the
Assessments levied by the Association pursuant to this Declaration, to provide for (a) the operation and
maintenance of the Common Area, (b) the maintenance of adequate reserves, and (c) the performance by the
Association of all other obligations of the Association under this Declaration or the Articles or Bylaws Declarant's
obligations under this Section may be satisfied in the form of a cash subsidy or by 'in land' contnbutuons of
services or matenals, or by a combination of both

7 13 Common Expenses Resulting from Misconduct. Notwihstanding any other provision of this
Article 7, if any Common Expense is caused by the nusconduct of any Owner (or of any Occupant, tenant,
employee, servant agent, guest or invitee for whose actions the Owner is responsible under applicable law), the
Association may aSsess that Common Expense exclusively against the Owner and the Owner's Lot

ARTICLE 8
ARCHITECTURAL COMMITEE

8 1 Appointment of Architectural Committee; Standing to Enforce. All property that is now or

may hereafter be subject to this Declaration shall be subect to architectural, landscaping and aesthetic review as
provided for herein. Thls review shall be i accordance with this Article S and the standards promulgated by the
Arclutectual Committee, winch is hereby estabhshed Authority and standing on behalf of the Association to
enforce in any court of competentjunsdhction deions of the Architectural Committee and the provisions of this
Article 8 shall be vested m the Board, provided, however, that so long as Declarant has the right to appoint the
Architectural Committee under this Section 8 1, Declarant shall have the right, but not the obligation, to enforce
decisions of the Architectural Committee and the provisions of this Article 8, on behalf of the Association, in
courts ofcompetentuisdiction So long asDeclarant owns any part of the Property, the Architctual Comnumttee
shall consist of three individuals appointed by Declarant At such time as either (a) neither Declarant owns any
part of the Property or (b) Declarant Records a written waiver of its nght to appoint the Architectural Commince,
the Board shall have the number of members (but not less than three) as the Board may elect, from time to time
Each member of the Architectu-a Comminttee shall serne in such capacity until (a) so long as Declarant has the
right to appoint the Architectural Connuttee pursuant to this Section, such member is removtiiby Declamant, (b)
so long as the Board has the right to appoint the Architectural Committee pursuant to this Section, the member is
removed by the Board, or () the member restgus from the position or dies Before appointing the inital rnembers
of the Architectural Conmtttee, and at any time when there isno one serving on the Architectural Committee
(whether due to death, resignation or removal), the Board shall have and exercise any and all nghts, povers, duties
and obligations of the Architectural Committee

82 Jurisdiction of the Architectural Committee; Promulg2tion of Standards. The Arclutectural

Committee shall have exclusive jurisdiction over all original construction and any modifications, additions or
alterations to improvements on any portion of the Property (including, but not limited to, the construction or
installation of, or modifications, additions or alterations to (a) fences, (b) heating, ventilation, air conditiomng and
cooling units, (c) solar panels, (d) paint, (e) exterior lighting, or (I) any other constniction, modficaton, addition
or alteration affecting the exterior appearance of any structure on a LOtL Further, the Architectural Coninutlee
shall also have exclusivejunsdiction over all original landscaping including Hardscape on the Property and any
modfications, additions or alterations thereto (except that such Jurisdiction shall not extend to any landscaping
that is not visible to a person six feet tall standing at ground level on any adjacent Lot street or portion of the
Common Area). The Architectunra Committee shall promulgate architectural and landscaping standards and
application procedures and shall make the same available to Owners, bailders and developers who seek to engage
in development of or construction or landscaping upon any portion of the Property and Shall conduct its operations
in accordance thereith Without in any way lmting the generality of the Architectural Comminttee'sjunsdicion
or authonty under this Article, the Architectur Committee, in its discretion, may adopt and provide to Owners
and other appropriate persons lists of permitted or prolbited plants and trees, restrictions on the percentage of
property within Lots that may be planted and maintained with various types or categories of trees and other plants
(such as, by way of example rather than limitation, indigenous versus non-midlgenous trees and other plants)

83 Submission and Review of Plans. No original construction, landscaping, modification,

alteration or addition that is subject to the Architectural Commtee'sjunsdicton shall begin until it has been
approved or deemned approved by the Architectural Committee as provided herein Any Owner or other Person
seeking to construct any new improvements or install any landscaping to make any modification, alteration or
addition to any existing improvement upon any portion of the Property or a Lot (or to cause same to be constructed,
installed or made) shall first submit to the Architectural Comnuttee detailed plans, specfications and elevations
relating to the proposed construction, landscaping, modification, alteration or addition The plans, specifications
and elevations shall be sent bX (a) personal delivery, in whuch case the Person delivering the same shall obtain a
signed and dated receipt from the recipient there of (in which event they shall be deemed received as of the date
indicated by the recipient on the receipt), or (b) by U S mad, postage paid, certified m ail return receipt requested
(in which event theN shall be deemed received as of the date indcated on the return receipt) The Architectural
Committee shall have thirty days after receiving the plans, specifications and elevations to approve or disapprove
the proposed construction, landscaping, modfcation, alteration or addition or to request additional information,
and, if the Architectural Committee disapproves, to give the Owner or other Person reasonably detailed written
reasons for the disapproval In the event the Architectural Committee fails to approve or disapprove the proposed
construction, landscaping, modlfication, alteration or addition (or to request additional information) within the
thirty day pernod, it shall be deemed approved The Architectural Comnuttee, in its dscretion, may exempt from
the procedures described in this Section any modifications to existing landscaping that consists of replacing dead
or diseased plants or trees with healthy, but substantially similar plants or trees Further, normal tsrmng, care,
weeding and other mamntenance of existng landscaping m accordance with its type and plant culture shall not be
subject to the procedures prescribed m this Section 8 3

84 Changes to Interiors of Dwelling Units or Other StructureL Nothing contained herein shall
be construed to limit the nght of an Owner to remodel the mtenor of his, her or its Dwelling Unit or other structe
on the Owner's Lot or to paint the interior of his, her or its Dwelling Unit or such other structure any color dcstred,
except to the extent the remodeling or painting is visible from outside the Dwelling Unit or other structure or
affects the extenor appearance of the Dwelling Unit or other structure

85 Other Approvals: Liability. No approval by the Architectural Comnumttee Qf any proposed

construction, landscaping, modification, addition or alteration shall be deemed to replace or be substituted for any
building permit or similar approval required by any applicable governmental authority, nor shall any such approval
be deemed to make the Architectural Comnuttee (or the Board or the Association) liable or responsible for any
damage or injury resulting or ansing from any such construction, landscaping, modification, addition or alteration
None of Declarant, the Association, the Board or the 'Architectural Comnuttee (nor any member thereof) shall be
liable to the Association, any Owner or any other party for any damage, loss or prejudice suffered or claimed on
account of-
 85 1 the approval or disapproval of any plans, drawings or specifications, whether or not
defective,

8 5 2 the construction or performance of any work, whether or not pursuant to approved plans,
drawings and specifications or

8 53 the development of any Lot

86 Fee. The Board may establish a reasonable processing fee to defer the costs of the Architectural
Conurmittee in considering any request for approvals submitted to the Architectural Committee or for appeals to the
Board, wluch fee shall be paid at the time the request for approval or review is subnmtted

87 Inspection. Any member or authorized consultant of the Architecture Conrruttee, or any

authorized officer, directors, employee or agent of the Assocation, may at any reasonable time and without being
deemed guilty of trespass enter upon any Lot after reasonable notice to the Owner or Occupant of the Lot to inspect
the improvements constructed or being constructed on the Lot to ascerain thal the improvements have been, or are
being, built in compliance with this Declaration, any applicable Tract Declaration, the standards, rules and
regulations adopted by te Architectural Cornmttee and any approved plans, drawings or specifications

88 Nonapplicability to Decla rant The provisions of this ArticieS shall not apply to any portions
of the Property owned by Declarant or any Person affi lated with Declarant so long as any improvements
constructed or landscaping installed thereon (or any additions, modifications alterations to any such improvements
or landscaping) are constructed, installed or made in good and workmanlike fashion and are generally comparable
in terms of quality of construction or landscaping to other improvements, installed theretofore constructed or
installed by Declarant or any Person affiliated with Declarant on the Property (or on other property adjacent to or
near the Property) Further, this Artcle 8 may not be amended without Deelarant's written consent so long as
Declarant owns any of the Property

89 Requirements The plans, specifications and elevations shall provide for

8 9 1 One Dwelling Unit contamnng a minimum livable are of 1,400 square feet on grade
level, wivth or without basement A-1I square footage requrements shall be exclusive of open porches, pergolas or
garages

8 9 2 Except as permitted by the Architectural Commuttee, all penmanent stmUCaures on all

Lots shall comply with the greater of- (a) the minimum yard setback requirements esblished by the zoning
ordinances of the Town of Queen Creek, as amended, and (b)the following requirements 30' from the front
property line, 30' from the rear property line, 10' from the side propety line without a street, and 15 feet from the
side property line with a street All permanent structures shall not cover more than 25% of the Lot

ARTICLE 9
USE RESTRICTIONS AND OTHER COVENANTS,
CONDITIONS AND EASEMENTS

9 1 Residential and Recreational Purpose The Property shall be used only for residential,
recreational and related purposes No Lot, or any other part of the Property shall be used, directly or indirectly, for
any business, commercial, manufacturnng, industrial, mercantile, vending or other similar purpose, except for use
by Declarant (or an affiliate or assignee of Declarant) or a Developer Owner directly in connection with their
respective construction and sales activities with respect to the Property (including, but not linuted to, maintenance
and operation of or portions thereof) A Dwelling Unit may contain a home office that satisfies each of the
following conditions (a) it is acllary to a business engaged primarily at a location that is not on the Property, (b)
it does not cause members of the public to enter onto the Property, (c) it does not cause delivery vehicles to enter
onto the Property to deliver items that are in excess of the typical deliveries of mail (with respect to types and
quantities) that a typical Owner of a Lot would receive if he, she or it lived on the Owner's Lot, (d) it complies vith
all applicable zoning orchnaancesand laws

92 Garages and Dnveways. The interior of all garages situated upon the Property shall be
maxntained by the respectIve Owners or Occupants in a neat, clean and sightly condition The garages shall be
used for parking vehicles and storage only, and shall not be used or converted for living or recreatonal activities
All driveways or Lots shall be of concrete constructon.

93 Temporary Structures. No temporary residence, structure or garage shall be placed or erected

upon any part of the Property, except as may othervnse be permutted y Section 9 4 or Sectuon 9 20 Except with
the express wvrtten approval of Declarant, no Dwelling Unit or other structure on any Lot shall be occupied in any
manner while in the course of ongual construction or before ussanoe by the appropnate locl governmental
authority of a certificate of occupancy (or other similar document) with respect to the Dwelling Unit or other
structure

94 New Construction. All buildings or structures erected on the Property shall be of new
construction and the buildings and structures may not have been moved to the Property from other locations
(except for temporary construction and/or sales facilities placed or maintained on the Property by Delarant or an
affiliate or assignee of Declarant in connection with the construction and sales activities of Declarant of such
affiliate or assignee of Declarant and except for temporay construction facilities placed or maintained on a Lot by
the owner of the Lot in connection with the Owner's constructon activities on the -Lot

95 Signs. No billboards or signs of any type or character shall be erected or permitted on any pan of
the Property or on any Lot, except for sigps used by Declarant (or an affiliate or assignee of Declarant) to advertise
the Property during the construction and sales penod Nothing herein shall be deemed to prohibit attachment to
the exterior of a Dwelling Unmt of a single nameplate and a single address plate identyng the occupant and the
address of the Dwelling Unit or the placmg upon the exterior of any Dwelling Unit (or upon the Lot containing the
Dwelling Urut) of a single "For Sale" or For Lease" sign, provided that the nameplates and address plates shall be
subect to the rules and regulations of the Architecural Committee, and except that the 'For Sale' or 'For Lease'
sign shall not have dimensions exceedig three feet by three feeLt Futher, nothmg herein shall be deesned to
prohibit installation and maintenance of directional signs, subdision identification signs, street signs or sular
signs as may be approved by the Architectural Committee for installation or maintenance by the Association

96 Heating, Ventlating and Air Conditioning Unit. No heating, air conditioning or evaporative
cooling units or equipment shall be placed, constructed or maintained upon the Property, including. but not limuted
to, upon the roof or exterior walls of any structure on any part of the Property unless (a) where the uit or
equipment is installed upon the roof of any structure upon the Property, the unit or equipment is fully screened
from ground level view from any adjacent properties and streets by a parapet wall that coonforms architecturally
with the structure, or (b) in all other case, the unit or equpment is attractively screened or concealed fron ground
level view from adjacent properties and steets Tlhe means ostceenrng or concealment shall, in either case (a) or
(1), be subject to the regulation and approval of the Architectural Committee

97 Solar Collecting Panels or Devices. Declarant recognizes the benefits to be gained by

permnitting the use of solar enery as an alternative source of electrical power for residential use At the same time,
Declarant desires to promote and preserve the attractive appewance of the Property and the improvements thereon,
thereby protecting the value generally of the Property and the various portions thereof, and of the various owners'
respective investments therein Therefore, subject to prior approval of the plans therefor by the Architectural
Committee pursuant to Article 8 above, solar collecting panels and devices may be placed, constructed or
maintained upon any Lot within the Property (including upon the ro of any structureupon any), so long as either
(a) such solar collecting panels and devices are placed, constructed and maintained so as not to be visible from
ground level view from adjacent propertes and streets, or (b) such solar correcting panels and devices are placel,
constructed and maintained in such location(s) and with such means of screening or concealments the
Architectural Comnuttee may reasonably deem appropriate to limnt the v>sual impact of such solar collecting
panels and devices

98 Antennas, Poles and Towers No television, radio short-wave or other antenna, pole or tower or
satellite dish shall be placed, constructed or maintained upon the Property (including, but not limited to, upon the
roof or exterior walls of any Dwelling Unit or other structure), unless. (a) where the antenna, pole or tower or
satellite dish is installed upon the roof of a Dwelling Urut or other structure, the antenna, pole or tower or satellite
dish is filly screened and concealed from view from ground level view from adjacent properties and streets by a
parapet wall that conforms architecturally wth the structure of the Dwelling Unit or other strucmr, or (b) in all
other cases, the antenna, pole or tower or satellite dish is filly and attractively screened or concealed from view
from ground level view from adjacent properties and streets, whuch means of screening or concealment from view
from adjacent properties, shall, in either case (a) or (b), be subject to the regulations and approval of the
Architectural Committee

9 9 Easements. In addition to any other easement recorded on the property or descnred herein, the
Declarit and the Association shall have the follovwng rights of way and easements over, across and through the
Property

99 1 Easements for Utilities. There is hereby reserved to the Association a utility easement
as shown on the plat Recorded in Book, page _, records of Maricopa County, Aflzona and the power to gmnt
blanket easements upon, across, over and under all of the Property for installation, replacement, repair, and
maintenance of master television antenna systems, secunty and similar systems, and all utilities, including, but not
limited to, water, irrigation, sewers, telephones, cable television, gas and electricity, and for delivering or
providing public or municipal services such as refuse collection and fire and other emergency vehicle access
(which easements shall also include appropriate rights of ingress and egress to facilitate the installation,
replacement, repair and maintenance, and the delivery or provision of the public, muicipal or emergency services)
provided, that no such easement shall intfere with a Dwelling Unit or its reasonable use or with Declarant's
construction and sales activities and the easements shall require the holder of the easement to repar any damage
caused to the property of any Owner. Should any entity furimshmg a service covered by the general easement
heren provided request a specific easement by separate Recordable document, the Association shall have the right
to grant such easement on said property in accordance wvth these terms

992 Non-vehicular Easement Declarant hereby reserves for and on behalf of itself and the
Association, a nonexclusive, non-vehicular easement for Ingress and egress on, over, across and through those
portions of Lots I through 10, 15 and 23 as shown on the plat Recorded m Book _. page , records of Maricopa
County, Arizona for the purpose of providing pedestrian acess to the Property

99 3 Permanent Fence, landscaping and Sign EasementL Declarant hereby grants,

establishes and reserves for and on behalf of itself and the Assocbiaton, private, exclusive fence and sign casements
over such portion of the -Property as necessary or reasonable, in the sole discretion of Declarant, for the purpose of
constructing boundary fences and walls, imgation, lighting, landscaping and signs

994 Declarant's Easements. Declarant shall have the right and an easement on and over
the Property to construct all improvements the Declarant may deem necessary and to use the Property for
construction or renovation and related purposes including the storage of tools, machinery, equipment, building
materials, appihances, supplies and iixtures, and the performance of work respecting the Property

9 9 5 Temporary Sign Vasemnent Declarant shall ha'e a temporary easement over, upon
and across those portions of the Prpey adjacent to private or publicly dedicated streets and roadways for purposes
of installing and maintaining signs identfying Persons building upon or developing portions of the Property The
easement reserved hereby shall expire and termninate upon completion of Declarant's construction and sales
activities upon the Property
 9 10 Vehicles. Automobiles of the private passenger class and pickup trucks not exceeding three-
quarter ton may be parked on the side of any Lot, provided that any such parking area shall comply with the same
setback requirements as the residential dwellings and be subject to required approval by the Architectural
Committee Motorcycles, mobile homes, motor homes, boats, recreational vehicles, trailers, truck, campers,
permanent tents or sirmilar vehicles or equipment may be parked on the back of any Lot, provided that any such
parking shall be atractively screened or concealed from neighboring Lots, roads or streets, and then only with the
pnor approval of the Arcutecutu Commnttee All other etrucks, vehicles and equipment shall not be kept on any
Lot or seet excpt in a pvate garage orbarn No vehicle (mcluchng but not hmted to, thosenumeratedabove
shall be constructed, reconstructed or repaired upon the Property or any roadway adjacent thereto except wihlun a
fully enclosed garage

9 11 Underground Facilities No cesspool or well may be dug or installed on the Property without the
pnor written approval of the Board. No part of the Property shall be used for purposes of boring. mining.
exploring for or removing oil or other hydrocarbons, minerals, gravel or earth (except to the limited extent
required in connection with the normal construction activities of Declarant or an affiliate or assignee of Doclarant)

9 12 Outdoor Burning. There shall be no outdoor burrung of trash or other debris on the Propertyj
provided, however, that the foregoing shall not be deemed to prohibit the use of normal residential barbecues or
other similar outside cooling gills or outdoor fireplaces

9 13 Sanitation Garbage and refuse facilities, containers and the like shall be attractively screened
and camouflaged in such manner as to conceal them from the view of neighbonng Lots, Dwelling Units, property,
roads or streets (except for reasonable penods as necessary to permit the collection thereof by the applicable public
or private samtation service) All equipment for the storage or disposal of garbage or other waste shall be kept in a
clean and sanitary condiLion. All rubbish, trash and garbage shall be kept only in containers meeting applicable
municipal sanitation requirements (and any applicable reasonable rules and regulations of the Association), shall
be regularly removed from the Property and shall not be allowed to accumulate thereon

9 14 Fences, Interferences and Obstractions

9 14 1 All fences shall be constructed of (a) block (b) wrought iron, or (c)a combination
thereof (except as may be otherwise perimtted with the prior wrntten consent of the Arclutectural Committae), and
shall be painted or colored to match the exterior of the structare(s) (on all areas facing a street or streets), enclosed
by or upon the same Lot a such fence No fence shall exceed six feet in height from the sfrounding terrain,
provided that no fence vwthin fifteen feet of the front property lme of a Lot shall exceed three feet in height The
foregomng shall not apply to boundary walls or fences consrcted by Declarant along property lines bounding
public nights-of-way, provided, however, that the boundary walls or fences shall be constructed so as to comply
with applicable municipal zoning and other laws and ordinances No fence shall be permitted to mterfere with
existing recorded restrictions, drainage or easements. Except as otherwise provided by applicable law or
governmental rule or regulation, and subject to any applicable restrictions or requirements set forth in any recorded
plat of all or any part of the Property, fences may be constructed in or over a recorded utility casement, provided,
however, that should the utility companies ever require access to the easement, it shall be the responsibility of the
Owner of the applicable Lot, at his, her or its sole expense, to remove and replace the fence

9 14 2 No strxcture, shrubbezy or other vegetation shall permitted to exist on any Lot, or other
portions of the Property, the height or location of which shall be deemed by the Architectural Committee either to
constitute a traffic hazard or to be unattractive in appearance or unreasonably detnmental to any person or to
adjoinig property As an aid to free movement of vehicles at- and near et intersections and to protect the
safety of pedestrians and the operators of vehicles andfor property, the Board or Architectural Committee rmay
impose further lmnitations on the height of fences, walls, gateways, ornamental structures, hedge shnabbeiy and
other fixtures, and construction and planting on comer Lots at the intersection of two or more streets or roadways
 9 15 Nuisance. No rubbish or debris of any land shall be placed on any portion of the Property, and
no odors shall be permitted to arise therefrom so as to render the Property or any portion thereof unsaxutaxy,
unsightly or offensive or detrimental to any other portion of the Property in the vicnity thereof or to its occupants
No noxious, destructive or offensive activity, or any activity constituting an unreasnable source of annoyance,
shall be conducted on any Lot, the Common Area. Without Inuting the generality of any of the foregoing
provisions, no exterior speakers, hons, whiles, bells or other sound devices, except ordinary intercom and/or
sound systems or security devices used exclusively for security purposes, shall be located, used or placed on the
Property The Board in its discrceon shall have the right to detemune the existence of any such activity or item
The Association shall have the standing and authority to initiate legal proceedings to abate such activity or to
secure the removal of the item Furthenrore, the Board shall have the right to remove any such acuvity or item at
the expense of the Owner responsible for such activity or item (or at the expense of the owner whose tenant,
Occupant or guest is responsible for such activity or item) Each Owner and Occupant shall refrain from any act
on or use of his, her or its Lot or the Common Area, that could reasonably cause embarrassment, discomfort or
annoyance to other Owners or Occupants, and the Board shall have the power to make and enforce reasonable rules
and regulations in furtherance of this provision

9 16 Drainage Alteration: Easements. No vegetation (except suitable ground cover) may be planted
or permitted to remain on areas subject to drainage easements, as shown on Recorded plats, in such manner as to
interfere with drainage or that shall be deemed by the Board to be a detriment to utilities located under or near te
vegetation Except as otherwise provided heren, orby applicable governmental rnle, regulation or ornance the
owner of property subject to Recorded easements shall be responsible for maintaining the property

9 17 Clothes Drying Facilities. Outside clotheslines or other outside facilities for drying or airing
clothes shall not be erected, placed or maintained on any part of the Property unless they are erected, placed or
maintained exclusively within a fenced yard or otherwise concealed and shall not be visible from ground level view
from adjacent properties and streets

9 18 Pets. No animals, livestock or poultry of any klnd shall be raised, bred or kept on the Property,
provided, however, that nothing herein shall be construed as prohibiting the keeping of a reasonable number of
ordinary household pets in or on a Lot subject to rules and regulations adopted by the Board, provided that such
pets are not kept, bred or maintained for any commercial purpose Notwithstanding the foregoing, no pet(s) may
be kept upon the Property if the Board determines that the pet(s) are or may be annoying or obnoxaous to Owners
or Occupants of other nearby Lots

9 19 Leasing: Obligations of Tenants and Other Occupants.

9 19 1 All ases for any mterest m a Lot shall be iwnting and shall provide that the terms of
the lease shall be subject in all respects to the provisions of this Declaration, the Articles, the Bylaws and the rules
and regulations of the Association All tenants with an interest in a Lot shall be subject to the terms and conditions
of this Declaration, the Articles, the Bylaws and the rules and regulations of the Association as though the tenants
were Owners (except that a tenant shall not have any voting rights appurtenant to the Lot occupied by the tenant
except pursuant to an express written assignment complying with Sechon 3 4 hereof) Each Owner shall cause his,
her or its tenants or other Occupants of a Lot to comply With this Declaration, the Articles, the Bylaws and the
rules and regulations of the Association and, to the extent permitted by applicable law, shall be responsible and
liable for all violations and losses caused by the tenants or Occupants, notwithstanding the fact that the tenants or
Occupants are also fully liable for any niolations of each and all of those documents '

9 19 2 In the event that a tenant or other Occupant of a Lot violates any provision of this
Declaration, the Articles, the Bylaws and the rules and regulations of the Association, the Association shall have
the power to brng an action or suit again the tenant or other Occupant to recover sums due for damages or
injunctive relief, or for any other remedy available at law or equity The Association's costs in doing so, including,
but not limited to, reasonable attorneys' fees, together with interest as provided in Section 11 7, shall be reimbursed
by the tenant or other Occupant to the Association (or, in the absence of reimbursement by the tenant or other
Occupant, or at the election of the Board, by the Owner of the Lot occupied by the tenant or other Occupant),
which liabilities shall constitute a lien on the applicable Lot that shall have the pnority, and may be enforced in the
manner, described in Section 7 3 hereof

9 19 3 The Board shall also have the power to suspend the right of the tenant or other Occupant
of a Lot to use the Common Area for any violations by the tenant or other Occupant of any duty imposed under this
Declaration, the Articles, the Bylaws or the rulcs and regulations of the Association and, where approved by
Members holding a majority of the votes in each class of Members duly called for such purpose, to impose
reasonable moneta fines upon the tenant or the Owner of the applicale Lot or both No suspension hereunder of
the right of a tenant or other Occupant to the Common Area may be for a period longer than sixty days except
where the tenant or other Occupant fis or refuses to cease or correct an oin-going violation or commits tt same
or another violation ceases or is corrected, the foregoing limitation shall not affect or prevent termination of the
applicable lease if permntted by the terms of the lease or otherwise by applicable law

9 19 4 No Owner may lease less than his, her or its entire Lot No Lot may be leased for an
irutial penod of less than six months Upon leasing his, her or its Lot, or upon any change in a lease, an Owner
shall promptly notify the Association of the comencement and terminalhon dates of the lease and the names of
each tenant or other Person who will occupy the Lot during the term of the lease

9 19 5 The provisions of this Section shall not apply to Decldrant's use of Lots owned by (or
leased to) Declarant as a model home or office or for marketing purposes pursuant to Section 9 1

9 20 Storage and Tool Sheds or Structures No storage or tool sheds or similar structures shall be
placed, erected or mnaintained upon any pan of the Property except. (a) where the storage or tool shed or similar
structure is constructed as an integral part of a Dwelling Umt (including materials, color and the like), (b) where
the storage or tool shed or similar structure is temporarily placed on the Property by Declarant or (c) under 6', not
visible from read and located in rear yard of a Dwelling Unit ( as permitted with pnor written consent of the
Archutectural Comnumtee)

9 21 Landscaping and Maintenauce, Within sidy days of occupying a Lot, each Owner (other than
the Declarant, or a Developer Owner) shal landscape, if not already landscaped, the Lot and any public right-of-
way areas (other than sidewalks or bicycle paths) lying between the front, back or side boundaries of the Lot and an
acbacent street, except where the installtion or maintenance (or both) of landscaping Within any public right-of-
way area is designated on a Recorded plat Recorded by or with the wnrtten approval of Declarant as being the
responsibility of the Association Landscaping shall be subject to the provisions of Article 8 of this Declaration
and any regulations restncuons or -standards adopted by the Architectural Comuttee pursuant thereto Each
Owner shall maintain the landscaping on the Owner's Lot and any public right-of-way areas lng between the
front, back or side boundaries of the Lot and an adjacent street and shall keep the land free of debris and weeds at
all times and promptly repair portions of the landscaping that has been damnaged. Each Owner Shall maintain the
aforementioned landscaping and eoxenor of the Owner's Dwelling Unit in accordance with standards prescribed by
the Board and otherwise in a manner and to a level not less than the standards of quality established by the Board
with respect to the quality, quantity and frequency of watering, mowng, weeding, trimming, fertilizing, painting
and the like In the event any Owner fails to perform the obligations provded herein, the Associataon may, at the
discretion of the Board, perform those obligations at the expense of the Owner, which expenset bgether with
attorneys' fees and interest as provided in Section 11 7 hereof, shall be 'secured by the lien on the Owner's Lot as
applicable, established by Section 7 3 hereof 'Me provisions of this Section shall not apply to any Lot or other
property owned by Declarant

9 22 Miscellaneous. The Board, in its good faith discretion, is hereby authorized to grant such
waivers of the restnctions containeod in this Article 9 as it shall deem appropriate in the circumstances, so long as
the use permitted by the waiver shall not result in an unsafe, unsanitary or aesthetically displeasing condition and
shall not result, in the Board's discretion, in a substantial departure from the common plan of development
contemplated by this Declaration. In addition, all portions of the Property shall continue at all times to be subject
to any and all applicable 7oning laws and ordinances, provided, however, that where the provisions of this
Declaration are more restnctrve than such laws or ordinances, the provisions of this Declaration shall control

ARTICLE 10
PARTY WALLS

10 1 General -Rules of Law to Apply Each wall or fence that is located between two Lots, or
between a Lot and Common Area shall constitute a party wall, and, to the extent not inconsistent with the
provisions of this Article 10, the general rules of law regarding party walls and liability for property damages due
to negligent or willful acts or omiusons shall apply thereto For purposes of this Article 10 only, in the case of a
party wall between a Lot and Contmon Area, in interpreting the provisions of this Article, the Common Area
bounded by the wall shall be deemed to be a "Lot" and the Association shall be deemed to be the 'Owner' of the
deemed "Lot "

10 2 Repair and Maintenance. No Owner or Occupant of any Lot (or any tenant, guest, invitee,
employee or agent of the Owner or Occupant) shall do or permit any act (or omit to do any act) that will or does
damage, destroy or impair the structural soundness or integrity of any party wall, or that would cause any party
wall to be exposed to the elements, and, in the event any Owner, Occupant tenant, gues, invitee, employee or
agent does or pernuts any such act (or so omrits to do any act), the Owner's or Occupant's liability with respect to
any damage, destruction, impairment or exposure shall be determuned in accordance with applicable law

10 3 Sharing of Repair and Maintenance. In the event any repair, maintenance or reconstruction of
any party wall shall be necessary (other than due to the negligence or willful act or onussion of the Owner or
Occupant of one Lot or the Ownees or Occupanfs tenants, guests, anvitee, employees or agents) the cost thereof
shall be borne equally by the Owners andfor Occupants of the Lot(s) having in common the party wall, and in the
event any Owner (or Occupant) fails or refuses timely to pay the Owner's (or Occupant's) share of the cost, the
other Owner (or Occupant) shall have the right to pay the cost in fill and recover from the Owner (or Occupant)
the Owner's (or Occupant's) share of the cost (together with interest as provided in Section 11 8 of this
Declaration)

10 4 Consents to Modification. No Owner or Occupant shall alter or modify any party wall in any
respect without having first obtained the written consent of the Owner of the other Lot adjoining such party wall,
provided that the consent shall not be requred in the case of repair or restoration of a party wall to its condition
prior to any damage or destruction if the negligence or wilfiul act or ormission of the Owner or Occupant of the
other Lot was the cause of the damage or destruction and the Owner or Occupant fails or refuses to repair or restore
the party sall promptly upon the request of the other Owner or Occupant Any consent required by this Section
10 4 shall be in addition to and not in substitution for the consents or approvals of the municipal or other
governmental body having jurisdiction over the Property

ARTICLE II
GENERAL PROVISIONS

11 I Tenn. The covenants, conditions and restrictions of this Declaration (a) shall run with and bind
the Property, (b) shall inure to the benefit of and shall be enforceable by the Association or by the owner of any
property subject to this Declaration, their respective legal representatives, heirs, successors and assigns; and (c)
shall remain in full force and effect until December 31, 2046, at which time the conditions, covenants and
restrictions, unless revoked by an affirmative vote of Members owning not less than two thirds of all Lots, shall
automatically be extended for successive penods of twenty-five years each, until revoked in the manner provided
above Notwithstanding any revocation of this Declaration, each Owner of a Lot (and such Owner's Occupants,
tenants, agents, guests and invitee) shall nevertheless have a permanent easement across the Common Area for
access to the appropriate Lot and for access to and use of the Common Area at the time of the revocation

11 2 Amedment. Except as otherwise provided herein (and subject to the provisions of Section
I11 o. 1111 and 11 12), tis Declamon may be amend only by the afflrmatve vote (i person or by Proxy) or
written consent of Members owning at least seventy-five percent of all Lots No amendment to this Declaration
shall be effective unless and untl such amendment is Recorded. In addition to and notwithstanding the foregoing
(a) so long as the Class B membershlp exists, no amendment to tils Declaration (or to the Articles or the Bylaws)
shall be effective unless approved by Eligible Mortgage Holders representing at least fifly-one percent of all Lots
subject to First Mortgages held by Eligible Mortgage Holders k change to any of the following would be
considered to be a change of a material nature

11 2 1 provisions relating to voting rights in the Association,

11 2 2 provisions relating to Assessments, Assessment liens or subordination of Assessments,

11 2 3 provisions relating to reserves for maintenance and repairs,

}I 2 4 provisions relating to Owners' rights to use the Common Area,

11 2 5 boundaries of any Lot,

11 2 6 conversion of any Lot into Common Area or vice versa,

11 2 7 addition or annexation of property to, or withdrawal of property from, the Property, or

addition or
annexation of any property to, or withdrawal of any property from, the Common Area

11 2 8 provisions relating to ussurance or fidelity bonds,

11.2 9 provsions relating to the leasing of Ltos (or Dwelling Umts thereon),

11.2 10 provisions relating to the right of an Owner to sell or transfer the Owners Lot,

11 2 11 restoration or repair of any structures or improvements on the Common Area

following a hazard damage or condemnation in a manner other than as specified in this Declaration,

11 2 12 anv action to dissolve or otherwise terminate the Association or the legal status of the
Property after substantial destruction or condemnation of improvements on the Property occurs; or

11 2 13 any provisions that expressly benefit the holders, insurers or guarantors of Mortgages
In the event a proposed addition, amendment or change to this Declarabon, the Articles or the Bylaws is deemed
by the Board as not being of a matenal nature, the Association shall nevertheless provide written notice to each
Eligible Mortgage Holder of the proposed addition, amendment or change (and of the Board's determination that
the same is not of a material nature), and each Eligible Mortgage Holder that shall not have made written negative
response to the notice within thirty days after the date of the notice shall automatically be deemed to have approved
the proposed addition, amendment or chance

11 3 Indemnificalion, The Association shal indemn4 each and eveiy officer and director of the
Association (including, for purposes of tus Section, former officers and directors of the Association) against any
and all expenses, including attorneyst fees, reasonably incurred by or imposed upon any officer or director of the
Association in connection with any action, Suit or proceeding, if approved by the Board serving at the time of the
settlement) to which he or she may be a party by reason of being or having been an officer or director of the
Association, except for their own indvidual willful misfeasance, malfeasance, msconduct or badfaith The
officers and directors shall have no personal liability with respect to any contract or other commitment made by
them, in good faith, on behalf of the Association (except indirectly to the extent that such officers or directors may
also be Members of the Association and therefore subject to Assessments hereunder to fund a liability of the
Association), and the Association shall indemnify and forever hold each of its officers and directors free and
harmless from -and against any and all liability to others on account of any such contract or commitment. Any
Nght to indemnification provided for herein shall not be exclusive of any other rights to which any officer or
director, or former officer or director of the Association, may be entitled. If the Board deems it appropriate, in its
sole discretion, the Association may advance funds to or for the benefit of any director or officer (or former director
or officer) of the Association who may be entitled to inderminification hereunder to enable the Person to meet on-
going costs and expenses of defending himself or herself ini any action or proceeding brought against such Person
by reason of his or her being, or having been, an officer or director of the Association In the event it is ultimately
determined that a current or former officer or director to whom, or for whose benefit, finds were advanced
pursuant to the preceding sentence does not qualify for indemnificaton pursuant to this Section I 1 3 or otherwise
under the Articles, Bylaws or applicable law, the current or former officer or Director shall promptly upon demand
repay to the Association the total of such funds advanced by the Association to him or her, or for his or her benefit,
with interest (should the Board so elect) at a rate not to exceed ten percent per annum from the date(s) finds were
advanced until the debt is repaid.

11 4 No Parttion. No Person acquineg any interest in the Property or any part thereof shall have a
right to, nor shall any person seek, any judicial partition of the Common Area, nor shall any Owner sell, convey,
transfer, assign, hypothecate or othenwise alienate all or any of such Owner's interest in the Conumon Area or any
funds or other assets of the Association, except in connection with the sale, conveyance or hypothecation of the
Owner's Lot or Parcel (and only appurtenant thereto), or except as otherwise expressly permnitted herein. This
Section shall not be consumed to prohibit the Board from acquwnng and disposing of tangible personal property nor
from acquinng or disposing of tide to real property (other than disposition of title to the Common Area) that may
or may not be subject to this Declaration.

11 5 Severability; Interpretation; Gender. Invalidation of any one of these covenants or restrictions

byjudgmnent or court order shallmi no way affect any other provision that shall remain m full force and effect The
provions hereof shall be construed and interpreted with reference to the laws of the State of Anzona Where the
context hereof so requires, any personal pronouns used herein, whether used in the masculine, feminine or neuter
gender, shall inchide all genders, and the singular shall include the plural and vice versa. Titles of Articles and
Sectons are for convenience only and shall not affect the interpretation hereof

11 6 Perpetuities. If any of the covenants, conditions, restrictions or other provisions of this

Declaration shall be unlawful void or voidable for violation of the rule against perpetwties, then the provisions
shall continue only until twenty-one years after the death of the last survivor of the now living descendants of
William Clintori, President of the, United States

11 7 Enforcement, Subject to Section 8 1, the Association shall have the standing and power to
enforce the provisions of this Declaration, the Articles, the Bylaws, and the rules and regulationi of the
Association, and the provisions of any other Recorded document pertaining to any Lot or Lots, and its costs in
doing so, including, but not Limited to, reasonable attoneys' fees, together with interest thereon from the dale the
costs are expended at a r ate equal to ten percent per anniun, shall constitute a lien on all Lots owned by the Owner
or Owners against whom the action is taken), which lien shall have the pnonty and may be enforced in the manner
described in Section 7 3 Further, any Owner shall have the standing and the right to bring an action agaiis the
Association for any violation or breach by the Association of any provision hereof or of the Articles or the Bylaws
In addition, any Owner or Owners shall have the standing and power to enforce the provisions of this Declaration,
the Articles and the Bylaws, and the prevailing party or parties in any action by an Owner or Owners to enforce
any such provisions shall be entitled to recover from the other party or parties its or their costs in the action
(including reasonable attorneys' fees), together with interest thereon at the rate of ten percent per anrnum, and shall
further be entitled to have all such costs (including the interest) included in any judgment awarded to the
Association or the Owner The failure of any Owner to take anN such enforcement action shall in no event be
deemed a vwaiver of the rights to do so thereafter

11 8 Notices to Certain Mortgage Holders Insurers Guarantors. The Association shall give timely
written notice of any of the following actions, events or occurrences to any holder, insurer or guarantor of a
Mortgage who or which, before the action, event or occurrence shall have made Nvniten request to the Association
for the notice (which wrntten request shall state the name and address of the holder, insurer or guarantor and the
Lot-number or street address of the Lot to which the applicable Mortgage pertains)

11 8 1 Any condemnation or casualty loss that affects either a material portion of the Property
or the Lot secunng the applicable Mortgage,

I} 8 2 Any delinquency lasting sixty days or more in payment of any Assessments or other
charges owed to the Association by the Owner of the Lot securing the applicable Mortgage, or any other breach or
default hereunder by the Owner of the Lot securing the applicable Mortgage which is not cured within sixty days
after notice thereof from the Association to the Owner,

11 8 3 Any lapse, cancellation or material modification of an) insurance policy or fidelity bond
maintained bv the Association, Or

11 84 Any proposed action that requires the consent of a specified percentage of Eligible
Mortgage Holders as provided in Section It 2 hereof

I1 9 Dissolution or Termination of the Association or LegAl Status of the Propert) No action to

dissolh e or otherwise terminate the Association or the legal status of the Property for any reason other than the
substantial destruction or condemnation of the Property shall be taken without the consent of Eligible Mortgage
Holders representing not less than sixty-seven percent of all Lots subject to First Mortgages held by Eligible
Mortgage Holders

11 10 Amendments Requested by Governmental Agency. Notwithstanding any other provision of

this Declaration, Deciarant shall have the right to amend all or any part of this Declaration to such extent and with
such language as may be requested by the Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation or other governmental or quasi-governmenal ageuc that issues, guarantecs, insures or purchases
Mortgages (or secunties or other debt instruments backed or Secured by Mortgages), or otherwise governs
transactions involving Mortgages or instruments evidencing same, or otherwise governs development of the
Property, as a condition to such agencys approval of this Declaration or of the development encompassing the
Propert Any such amendment shall be effected by Declarant's Recording an instrument signed by Declarant and
appropnately acknowledged, specifying the governmental or quasi-governmental agency requesting the
amendment and setting forth the appropriate amendatory language Recording the amendment shall constitute
conclusive proof of the governmental or quasi-governmental agency's request for the amendment The amendment
shall be effective, without the consent or approval of any other Person, on and as of the date the same is Recorded.
and shall thereupon and thereafter be binding upon any and all Owners or other Persons having an) interest in all
or any part of the Property Except as expressly provided in this Section, neither Declarant nor any other Person(s)
shall have the right to amend this Declaration except in accordance with and pursuant to the other provisions and
requirements of this Declaration

II 11 Number of Days, In computing the number of days for purposes of any provision of thisT
Declaration or the Articles or Bvlaws, all days shall be counted including Saturdays, Sundays and holidays,
provided however, that if the final day of any time penod falls on a-Saturda), Sunday or legal holiday, then the
final day shall be deemed to be the next day that is not a Saturday. Sunday or legal holiday
 11 12 Declarant's Right to use Similar Name. The Association hereby irrevocably consents to the use
by any other nonprofit corporation that may be formed or incorporated-by Dedarant of a corporate name that is the
same as or deceptively similar to the name of the Associabon, provided, one or more words are added to the name
of the other corporation to make the name of the Assoation distinguishable from the name of the other
corporation Within five days after being requested to do so by he Declarant, the Association shall sign such
letters documents or other writings as may be required by the Anzona Corporation Comirussion in order for any
other nonprofit corporation formed or incorporated by the Declarant to use a corporate name that is the same or
deceptively similar to the name of the Association

11 13 Notice of Violation The Association shall hase the ngit toRecorda wntter notice of a
violation by any Owner or Occupant of any restricuon or provision of this Declaration, the Articles, the Bylaws or
the rules and regulations of the Association The notice shall be signed and acknowledged by an officer of the
Association and shall contain substantially the following information (a) the name of the Owner or Occupant, (b)
the legal description of the Lot against which the notice is being Recorded, (c) a bnef description of the nature of
the violation, (d) a statement that the notice is being Recorded by the Association pursuant to this Declaration, and
(e) a statement of the specific steps that must be taken by the Lot Owner or Occupant to cure the violation
Recordation of a notice of violation shall serve as a notice to the Owner and Occupant, and to any subsequent
purchaser of the Lot that there ISsuch a violation If, after the Recordation of the notice, it is determined by the
Association that the violation referred to in the notice does not exist or that the violation referred to in the notice of
has been cured, the Association shall Record a release of the notice of violation Notwithstanding the foregoing,
failure by the Association to Record a notice of violation or to release a Recorded notice of violation shall not
constitute a vaiver of any existing violation or evidence that no violation exists

1I 14 Declarant's Disclaimer of Representations. Notvithstanding anything to the contrary herein,

Declarant makes no "arranties or representations whatsoever that the plans presently envisioned for the complete
development of San Marqui Estates can or will be earned out, or that any real property now owned or hereafer
acquired by Declarant is or will be subjected to ths Declaration, or that any such real property (whether or not it
has been subjected to this Declaration) is or will be committed to or developed for a particular (or any) use, or that
if such real property is once used for a particular use, the use will continue in effect Whule Declarant has no
reason to believe that any of the restnctive covenants contained in this Declaration are or may be invalid or
unenforceable for any reason or to any extent, lDeclarant makes no iarranty or representation as to the present or
future validity or enforceability of any' such restrictive covenant Any Owner acquring a Lot m reliance on one or
more of the restrictive covenants contained heren shall assume all risks of the validity and enforceability thereof
and by accepting a deed to the Lot agrees to hold Declarant and Declarant's agents, employee's, officers, managers,
owners, and attorneys harmless therefrom

11 15 Declarant's Rights. Any or all of the special rights and obligations of the Declarant may be
transferred to other Persons, provided that the transfer shall not reduce an obligation nor enlarge a right beyond
that contained herein, and provided, fuirther, that no such transfer shall be effective unless it is evidenced by a
written Instrument signed by the Declarant and duly Recorded Nothing in this Declaration shall be construed to
require Declarant or any successor Io develop any of the Property in any manner whatsoever Notwithstanding any
provisions contained in this Declaration to the contrary, so long as construction and initial sale of Lots shall
continue, it shall be expressly permissible for Declarant to maintain and carry on upon portions of the Common
Area such facilities and actities as, in the sole opimion of Declarant, may be reasonably required, convenient or
incidental to the construction or sale of such Lot including, but not limited to, business offices, signs, model units
and sales offices, and Declarant shall have an easement for access to such facilities The right to maintain and
carry on such factiles and actiiities shall include specifically the right to use Lots owned by Declarant as models,
sales offices and other proposes related to Developer's sales activ'ties on the Property So long as Declarant
continues to have rights under this Section, no Person shall Record any subdivision plat or map, conditions and
restrictions, any or any similar instrument affecting any portion of the Property without Declarant's review and
written consent thereto, and any attempted Recordation without compliance herewith shall result in such
subdivision plat or map, declaration of condominium or similar instrument being void and of no force and effect
unless subsequently approved by Recorded consent signed by Declarant This Section may not be amended without
the express wrntten consent of Declarant, provided, however, the rights contained in this Section shall terminate
upon the earlier of (a) the date as of which Declarant no longer owns any portion of the Property, or (b) upon
Recordang by Declarant of a writnen statement that all construction and sales activities have ceased

11 16 Amendments Affecting Declarant Rights. Notwithstanding any other provision of this

Declaration, no provision of this Declaration (includtng butt not limited to, this Section) which grants to or confers
upon Declarant any rights, privileges, casements, benefits or exemptions (except for rights, privileges easements,
benefits, or exemptions granted to or conferred upon Owners generally) shall be modified, amended or revoked in
any way, so long as Declarant owns any portion of the property

IN WITNESS WHEREOF, the undersigned have signed this Declaration to be effective as of the day and year first
set forth above

HEIGHTS 45, L L C, an Arizona

limited liablhty company,

PBleManaging Mermber
"Declarant"

STATE OF ARIZONA
)Ss
County of Mancopa )

The foregoing instrument was acknowledged before me on n 1998, 1 Todd P Belfer,

managing member of Heights 45. L L C, an Arizona limited liability company. on behalf of the eclarant

INWI1XS I l
WHEREOE hereunto set my hand and official seal

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