DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS

FOR PALM VALLEY COMMUNITY CENTER

             THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (hereinafter the "Declaration") is dated __________________ and is made by SUNCOR DEVELOPMENT COMPANY, an Arizona corporation (hereinafter "Declarant").

 R E C I T A L S

 A.        Declarant holds legal title to the Property described in Exhibit A to this Declaration, and this Declaration is being imposed upon said Property.

 B.         To promote the development of and to enhance the value and desirability of the Property, Declarant has deemed it desirable to develop a Community Center and to impose upon the Property mutually beneficial restrictions for the benefit of all owners of real property within the Property and to establish a method and procedure for the development, administration, maintenance, use and enjoyment of the Community Center.

 C.        Declarant reserves the right (but shall not be obligated) to annex from time to time, additional real property pursuant to this Declaration and thereby add additional real property (or portions thereof) to the Property, which real property is defined and described as "Annexable Property" in Article I.A. below.

 D.        Declarant desires to form a non-profit corporation (hereinafter the "Association") which will (1) own, manage and/or maintain the Community Center,   (2) levy, collect and disburse the Assessments and other charges imposed hereunder: and (3) as the agent and representative of Owners, enforce the provisions of this Declaration.

 E.         Declarant desires to establish for its own benefit and for the mutual benefit of all future Owners, or other holders of an interest in any portion of the Property, certain mutually beneficial covenants, restrictions and obligations with respect to the proper development, use and maintenance of the Community Center.

F.         Declarant desires and intends that the Owners, mortgagees, beneficiaries, trustees and other persons hereafter acquiring any interest in the Property, shall at all times enjoy the benefits of, and shall hold their interest subject to, the rights, easements, privileges, covenants and restrictions hereinafter set forth, all of which are declared to be in furtherance of a plan to promote and protect the value, desirability and attractiveness of the Property.

G.        Declarant therefore wishes to subject all of the Property to the covenants, conditions, restrictions, assessments, charges, servitudes, liens, reservations and easements (hereinafter collectively called "Covenants") hereinafter set forth.

 NOW, THEREFORE, DECLARANT hereby declares, covenants and agrees as follows:

 ARTICLE I

DEFINITIONS

Except as otherwise defined or provided for in this Declaration, capitalized terms shall have the meanings ascribed to them in the Master Declaration.

A.        "Annexable Property" shall mean any and all real property which is within three (3) miles of any point on the exterior of the Property described on Exhibit A attached hereto.

B.         "Annual Assessment" shall mean the charge levied and assessed each year against each Lot and Owner pursuant to Article VI, Section 3, hereof.

           C.        "Articles" shall mean the Articles of Incorporation of the Association as amended from time to time.

            D.        "Assessable Property" shall mean any Lot in the Property.

           E.         "Assessment" or "Assessments" shall mean an Annual Assessment, Special Assessment, Maintenance Charge, Reserve Contribution, Special Use Fee, or any other fees, fines or charges assessed hereunder. 

F.         "Assessment Lien" shall mean the lien created and imposed by Article VII. 

G         "Assessment Period" shall mean the term set forth in Article VII, Section 8. 

H.        "Association" shall mean the Arizona nonprofit corporation to be organized by Declarant to administer and enforce the Covenants and to exercise the rights, powers and duties set forth in this Declaration. and its successors and assigns.  Declarant intends to name the Association "PALM VALLEY COMMUNITY CENTER ASSOCIATION." 

I.          "Community Center” shall mean such part or parts of the Property, together with the buildings, structures and improvements thereon, and other real property which the Association now or hereafter owns in fee or in which the Association now or hereafter has a leasehold or easement interest, for as long as the Association is the owner of the fee, leasehold or easement interest.  From time to time, Declarant may convey easements, leaseholds, or other real property within the Property to the Association and upon such conveyance or dedication to the Association, such property shall be deemed accepted by the Association and thereafter shall be maintained by the Association at its expense for the benefit of all its Members. 

J.          "Board" shall mean the Board of Directors of the Association. 

K.        "Bylaws" shall mean the Bylaws of the Association as amended from time to time. 

L.         "Condominium Development" shall mean a portion of the Property which has been subjected to a declaration of condominium pursuant to Arizona law. 

M.        "Condominium Unit" shall mean a unit (as that term is defined in A.R.S. Section 33-1202(22) or any successor statute), together with any appurtenant interest in all common elements, which is created by a declaration of condominium established and recorded under Arizona law.  Such term shall not include a Rental Apartment in an Apartment Development. 

N.        "Covenants" shall mean the covenants, conditions, restrictions, assessments, charges, servitudes, liens, reservations and easements set forth herein. 

O.        "Declarant" shall mean SunCor Development Company, an Arizona corporation and the successors and assigns of the Declarant's rights and powers hereunder.  Any assignment of all or any portion of the Declarant's rights and powers shall be made by a recorded instrument executed by the assignor Declarant. 

P.         "Declaration" shall mean this DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR THE PALM VALLEY COMMUNITY CENTER, as amended or supplemented from time to time. 

Q.        "Land Use Classification" shall mean the classification established or to be established by the Declarant pursuant to Article IV, Section 1 of the Master Declaration, which designates the type of improvements which may be constructed at the Community Center and the purposes for which such improvements  may be used. 

            R.         “Master Declarant” shall mean SunCor Development Company, an Arizona corporation successors assigns of Master Declarant’s rights and powers under the Master Declaration. 

S.         "Lot" shall mean any (a) area of real property within the Property designated as a Lot on any subdivision plat recorded or approved by Declarant and limited by a Tract Declaration to either Single Family Residential Use or Cluster Residential Use and (b) any Condominium Unit within the Property which is limited to residential use by a Tract Declaration. 

T.         "Maintenance Charges" shall mean any and all costs assessed pursuant to Article IX, Sections 2 and 3. 

U.        "Member" shall mean any person holding a Membership in the Association pursuant to this Declaration. 

V.        "Membership" shall mean a membership in the Association and the rights granted to the Owners and Declarant pursuant to Article V to participate in the Association. 

W.       "Owner" (when so capitalized) shall mean the record holder of legal, beneficial or equitable title to the fee simple interest of any Lot including, without limitation, one who is buying a Lot under a recorded contract, but excluding others who hold such title merely as security.  Owner shall not include a lessee or tenant of a Lot.  In the case of a Lots the fee simple title to which is vested of record in a trustee pursuant to Arizona Revised Statutes, Section 33-801 et seq., legal title shall be deemed to be in the Trustor.  In the case of Lots the fee simple title to which is vested in a trustee pursuant to a trust agreement the beneficiary of any such trust entitled to possession shall he deemed to be the Owner.  An Owner shall include any person who holds record title to a Lot in joint ownership with any other person or holds an undivided fee interest in any Lot. 

X.        "Palm Valley" shall mean (for purposes of this Declaration) the Property (including such additional real property as may be annexed thereto pursuant to Article XII herein), and the planned community developed (or to be developed) as depicted on the Palm Valley Master Development Plan approved by the City of Goodyear, as the same may from time to time be amended.  

            Y.        “Master Association” shall mean Palm Valley Phases II and III Community Association, Inc, an Arizona non-profit corporation, its successors and assigns. 

Z.         "Property" shall mean the real property described on Exhibit A attached hereto, together with any additional property hereafter annexed thereto pursuant to Article XII, but excluding any property which is deleted from the Property pursuant to Article XII. 

Aa.       "Rental Apartments" shall mean dwelling units within a permanent improvement consisting of three (3) or more commercially integrated dwelling units under integrated management upon one or more contiguous Parcels, each of which is designed and utilized, otherwise than as a hotel or on some other transient basis, for rental or leased residential purposes to non-owners on a non-cooperative basis. 

Bb.       "Reserve Contribution" shall mean the charge levied and assessed pursuant to Article VI, Section 2. 

            Cc.       “Master Declaration” shall mean that certain Declaration of Covenants, Conditions and Restrictions for Palm Valley Phases II and III, dated October 16, 1998 and recorded on October 20, 1998 as Instrument No. 98-0936248 in the Official Records of Maricopa County, Arizona, as amended from time to time. 

Dd.      "Resident" shall mean: 

(1)         Each buyer under a contract of sale covering any part of the Assessable Property, regardless of whether the contract is recorded, and each owner, tenant or lessee actually residing or conducting a business on any part of the Assessable Property, and 

(2)         Members of the immediate family of each Owner, lessee, tenant and of each buyer referred to in sub-paragraph (1) actually living in the same household with such Owner, lessee, tenant or buyer. 

Subject to such rules and regulations as the Association may hereafter specify (including the imposition of special nonresident fees for use of the Community Center if the Association shall so direct), the term "Resident" also shall include the onsite employees, guests or invitees of any such Owner, lessee, buyer or tenant, if and to the extent the Board in its absolute discretion by resolution so directs. 

Ee.       "Rules" shall mean the rules and regulations for the Community Center adopted by the Board pursuant to Article IV, Section 3, Article XIV, Section 4, or any other provision of this Declaration. 

Ff.        "Single Family" shall mean an individual living alone, a group of two or more persons each related to the other by blood, marriage or legal adoption, or a group of not more than three (3) persons not all so related, who maintain a common household in a dwelling unit. 

Gg.       "Special Assessment" shall mean any assessment levied and assessed pursuant to Article VI, Section 6. 

Hh.       "Special Use Fees" shall mean special fees authorized by this Declaration which an Owner, Resident or any other Person is obligated to pay to the Association over, above and in addition to any Annual, Parcel and Special Assessments or Maintenance Charges imposed or payable hereunder.  The amount of any Special Use Fee shall be determined in the Board's sole discretion, provided all Special Use Fees must be fair and reasonable.

Ii.         "Tract Declaration" shall mean a tract declaration recorded pursuant to Article IV, Section 1 of the Master Declaration.

ARTICLE II

PROPERTY SUBJECT TO THIS DECLARATION

            Section 1.         General Declaration.  Declarant hereby declares that all of the Property (except any property which is hereafter excluded or abandoned pursuant to the provisions of this Declaration) is and shall be held, conveyed, hypothecated, encumbered, leased, occupied, built upon or otherwise used, improved or transferred, in whole or in part, subject to this Declaration as amended or modified from time to time. This Declaration is declared and agreed to be in furtherance of a general plan for the development of the Community Center, and is established for the purpose of enhancing and perfecting the value, desirability and attractiveness of the Property. All of this Declaration shall run with the Property for all purposes and shall be binding upon and inure to the benefit of Declarant, the Association, all Owners and Residents and their successors in interest. 

            Section 2.         Association Bound.  Upon approval by the Arizona Corporation Commission of Articles of Incorporation of the Association, the Covenants shall be binding upon and shall benefit the Association.

ARTICLE III

EASEMENTS AND RIGHTS OF ENJOYMENT IN COMMON AREAS 

            Section 1.         Easements of Enjoyment.  Every Owner shall have a nonexclusive easement for the use and enjoyment in and to the Community Center which nonexclusive easement shall be appurtenant to and shall pass with the title to every Lot.  All Residents, other than Owners, shall have a nonexclusive, nontransferable temporary easement to use and enjoy the Community Center so long as they remain Residents.  The foregoing grant and rights are subject, among other things, to the following limitations:

            (a)        The right of the Association to charge reasonable admission and other Special Use Fees for the use of any recreational or other facility situated within the Community Center.

            (b)        The right of the Association to suspend the voting rights and right to use the Community Center by any Member (i) for any period during which any Assessment against his Lot remains delinquent; (ii) for a period not to exceed 60 days for any infraction of this Declaration or the Rules; and (iii) for successive 60 day periods if any such action is not corrected during any preceding 60 day suspension period.

            (c)        The right of the Association to dedicate or transfer all or any part of the Community Center to any public agency, authority or utility for such purposes and subject to such conditions as may be agreed to by the Association.  No such dedication or transfer shall be effective unless an instrument signed by the Owners of two-thirds (2/3) of the Memberships in each class of Members agreeing to such dedication or after has been recorded, except that the Board shall have authority without Membership approval to transfer to such public agencies, authorities or utilities, easements and rights-of-way which are intended to benefit the Community Center and which do not have any substantial adverse effect on the enjoyment of the Community Center by the Members.

            (d)        The right of the Association to regulate the use of the Community Center through the Rules and to prohibit access to portions of the Community Center such as landscaped areas, not intended for use by the Owners or Residents.

            (e)        The right of the Association to change the use of the Community Center and to change the size, shape or location of the Community Center as provided in Article X, Sections 4 and 5.

            Section 2.         Delegation of Use.  Any Owner may, in accordance with this Declaration and the Rules and the limitations therein contained, share and delegate his right of enjoyment in the Community Center and facilities with and to the members of his family, his tenants or lessees, his guests or invitees or to his tenant's family, guests or invitees.

            Section 3.         Rights of Ingress and Egress.  Every Owner shall have an unrestricted right of ingress and egress over the following areas (which right shall be perpetual and shall be appurtenant to and shall pass with the title to said Owner’s Lot(s):

            (a)        for pedestrian traffic over, through and across sidewalks, paths, walks and lanes that from time to time may exist upon or within the Community Center; and

            (b)        for pedestrian and vehicular traffic over, through and across the Community Center parking areas and roadways, if any, which are designated and paved for such purpose.

            Any Owner may, in accordance with this Declaration and the Rules, share and delegate his right of ingress and egress with and to the members of his family, his guests, and his tenants (including his tenant's family and guests).

ARTICLE IV 

ORGANIZATION OF ASSOCIATION

            Section 1.         Formation of Association.  The Association shall be a nonprofit Arizona corporation.  Upon incorporation, the Association shall be charged with the duties and invested with the powers described by law and set forth in the Articles, Bylaws and this Declaration.  Neither the Articles nor Bylaws shall, for any reason, be amended or otherwise changed or interpreted so as to be inconsistent with this Declaration.

            Section 2.         Board of Directors and Officers.  The affairs of the Association shall be conducted by the Board and such officers as the Board may elect or appoint in accordance with the Articles and the Bylaws as the same may be amended from time to time.  The Board may also appoint various committees and appoint a Manager who shall, subject to the direction of the Board, be responsible for the day-to-day operation of the Association.  The Board shall determine the compensation to be paid to the Manager and any employees of the Association.  The Board's responsibilities shall include, but shall not be limited to, the following:

(a)        administration;

            (b)        preparing and administering an operational budget;

            (c)        establishing and administering an adequate reserve fund;

            (d)        scheduling and conducting the annual meeting and other meetings of the Members;

          (e)       collecting and enforcing the Assessments (including, without limitation, any and all fines imposed pursuant to this Declaration, the Articles, the Bylaws, or the Rules);

            (f)         accounting functions and maintaining records;

(g)        promulgation and enforcement of the Rules;

            (h)        maintenance responsibilities as described in Article IX; and

           (i)        all the other duties imposed upon the Board pursuant to this Declaration, the Bylaws, the Articles and the Rules.

            Section 3.         Palm Valley Community Center Association Rules.  By a majority  vote of the Board, the Association may, from time to time and subject to the provisions of this Declaration, adopt, amend and repeal rules and regulations, which may be known as Palm Valley Community Center Association Rules and Regulations.  The Rules may restrict and govern the use of the Community Center by any Member or Resident, by the family of such Member, or by any invitee, licensee or tenant of such Member; provided, however, that the Rules shall not discriminate among Members and shall not be inconsistent with this Declaration, the Articles or the Bylaws. The authority granted herein to the Association to develop rules, Association and the enforcement powers of the Association, are given for the purpose of insuring that the Property is developed and used according to the general descriptions and intent as evidenced by this Declaration. The Board is specifically responsible for the administration and enforcement of the Rules. Upon adoption, the Rules shall have the same force and effect as if they were set forth in and were a part of this Declaration.  Copies of the Rules as adopted or amended shall be available for inspection at the office of the Association during reasonable business hours.

            Section 4.         Personal Liability.  No Board member, committee member, officer or employee of the Association shall be personally liable to any Member or to any other person or entity, including the Association, for any damage, loss or prejudice suffered or claimed on account of any act, omission, error or negligence; provided, however, the limitations set forth in this Section 4 shall not apply to any person who has failed to act in good faith or has engaged in or intentional misconduct.  The Association shall indemnify its committee members, directors and officers when acting on behalf of the Association, to the full extent permitted by law.

            Section 5.         Delinquency or Violation by Board or Committee Member.  Notwithstanding any other provision of this Declaration or of the Articles, the Bylaws or the Rules, but subject to applicable law, a member of the Board or of any committee of the Board shall not be entitled to cast any vote at a meeting of the Board or committee, as applicable, or otherwise participate in any such meeting or other action of the Board or committee during any period when:  (a) such member is delinquent in payment of any Assessments or other amounts owed by such member to the Association; or (b) such member, such member’s Lot, or any Resident, tenant or occupant of such member’s Lot, or any other person for whom such member is legally responsible is in breach or violation of this Declaration, the Articles, the Bylaws or the Rules and such breach or violation has not been cured or corrected after reasonable written notice and an opportunity to be heard.  This Section shall not apply to any member of the Board, or of any committee who was appointed or designated for appointment by Declarant.  The provisions of this Section are in addition to, and not in lieu of or in substitution for any other rights or remedies the Association may have with respect to such delinquency or such breach or violation.

ARTICLE V

MEMBERSHIPS AND VOTING

            Section 1.         Owners of Lots. Every Owner of a Lot which is subject to assessment shall be a Member of the Association.  Each such Owner shall have the following number of Memberships:

            (a)        One Membership for each Lot owned by the Member;

            (b)        One Membership for each residential Condominium Unit permitted by a recorded declaration of condominium;

                        Each such Membership shall be appurtenant to and may not be separated from ownership of the Lot to which the Membership is attributable.  There shall be only one Membership for each Lot, which Memberships shall be shared by any joint owners of, or owners of undivided interests in, a Lot.  Notwithstanding the foregoing provisions of this Section 1, in the event an Owner of two adjoining Lots, or an Owner of a Lot and a portion of an adjoining Lot, combines said areas for use as one residence, upon approval by the Master Association, the combined Lots or the combined Lot and adjoining property, as the case may be, shall be treated as one Lot hereunder and shall be entitled to one Membership and charged only one Annual Assessment.

            Section 2.         Tenants.  Tenants of Rental Apartments shall not be Members of the Association.  In the event Rental Apartments are converted to residential Condominiums. then at the time the declaration of condominium is recorded, for each residential Condominium Unit owned shall be entitled to one Membership in The Association in the event the Condominiums are annexed as provided in this Declaration.

            Section 3.         Declarant.  The Declarant shall be a Member of the Association for so long as the Declarant owns any real property in the Property or in the Annexable Property. 

            Section 4.         Voting.  The Association shall have two classes of voting Memberships:

                        Class A.  Class A Memberships shall be all Memberships except the Class B Memberships.  An Owner shall be entitled to one vote for each Class A Membership held by the Owner, subject to the authority of the Board to suspend the Owner's voting rights for violations of this Declaration as provided herein.

                        Class B.  The Class B Memberships shall be all Memberships held by the Declarant.  Except as otherwise provided in this Declaration, the Declarant shall be entitled to three (3) votes for each Class B Membership owned.  The Class B Member shall be deemed to be the owner of that number of Memberships which equals the maximum number of dwelling units permitted on the then current Palm Valley Master Development Plan less the number of Class A Memberships then held by Class A Members.  As of the date hereof, the Class B Memberships held by the Declarant are deemed to be 3000 (and as a result as of the date hereof, Declarant has 9000 votes).  In the event all or any portion of the Annexable Property is hereafter annexed under this Declaration pursuant to Article XII hereunder, then the number of Memberships attributable to the Class B Member pursuant to this Section shall be increased by the number of Memberships attributable to such Annexable Property, determined in the same manner as provided in the third sentence of this paragraph.  The Class B Memberships shall cease and be converted to Class A Memberships (on the basis of the number of Lots and Parcels owned by the Declarant) on the happening of the first of the following events:

                        (a)        One Hundred and Twenty days after the date when the total votes outstanding in the Class A Memberships equal the total votes outstanding in the Class B Memberships,

                        (b)        Fifteen (15) years from the date of the recording of this Declaration, or

                        (c)        When the Declarant notifies the Association, at Declarant's sole option, in writing, that it relinquishes its Class B Membership.

            Section 5.         Right to Vote.  No change in the ownership of a Membership shall be effective for voting purposes unless and until the Board is given actual written notice of such change and is provided satisfactory proof thereof.  The vote for each such Membership must be cast as a unit; fractional votes shall not be allowed.  In the event that a Membership is owned by more than one person or entity and such Owners are unable to agree among themselves as to how their vote or votes shall be cast, they shall lose their right to vote on the matter in question.  If any Member casts a vote representing a certain Membership, it will thereafter be conclusively presumed that he was acting with the authority and consent of all other Owners of the same Membership unless objection thereto is made to the Board, in writing, at or prior to the time the vote is cast.  In the event more than one vote is cast for a particular Membership, all said votes shall be deemed void.

            Section 6.         Membership Rights.  Each Member shall have the rights, duties and obligations set forth in this Declaration and such other rights, duties and obligations as are set forth in the Articles, Bylaws and the Rules as the same may be amended from time to time.

            Section 7.         Transfer of Membership.  The rights and obligations of the Owner of a Class A Membership in the Association shall not be assigned, transferred, pledged, delegated, conveyed or alienated in any way except upon transfer of ownership to an Owner's Lot and then only to the transferee thereof.  A transfer of ownership of a Lot may be effected by deed, intestate succession, testamentary disposition, foreclosure of a mortgage of record or such other legal process as permitted by Arizona law.  Any attempt to make a prohibited transfer shall be void.  Any transfer of ownership of a Lot shall automatically transfer the Membership(s) appurtenant to said Lot to the new Owner.  Upon the transfer of ownership of any Lot (excluding the initial sale by the Declarant) the Board, in its discretion, may assess a reasonable transfer fee to cover administrative costs associated with said transfer of ownership.

            Section 8.         Adjustment in Votes of Class B Member.  In the event this Declaration is hereafter amended to exclude real property from Exhibit A or in the event the general plan of development contemplated by the Palm Valley Master Development Plan (or a modification thereof) is not pursued to completion and an affirmative statement of abandonment of any or all parts of the Palm Valley Master Development Plan is recorded in the office of the County Recorder of Maricopa County, Arizona, then, in such event the number of Memberships deemed owned by the Declarant pursuant to Section 4 above shall be reduced by the number of Memberships attributable on the Palm Valley Master Development Plan to the area so abandoned.  In the event the Master Declarant shall make a "constructive abandonment" of the Palm Valley Master Development Plan, then the number of Memberships deemed owned by Master Declarant pursuant to Section 4 above shall be reduced by the number of Memberships attributable on the Palm Valley Master Development Plan to the area so abandoned.  For the purposes of this Section, a "constructive abandonment shall be deemed to have occurred when Master Declarant shall fail to record a Tract Declaration on any area in the Property for a period of five years and all onsite and off-site construction and sales activities at the Property shall have ceased for a period of five years and Master Declarant shall have made no substantial progress towards planning or preparation for continuation of the Palm Valley Master Development Plan for a period of five years.  A constructive abandonment shall not occur if the lack of recordation, construction and planning, or preparation shall be due to strikes, acts of God, war, riot, insurrection, or other acts which are beyond the control of Master Declarant.  Only areas not then covered by a Tract Declaration may be affirmatively or constructively abandoned.

ARTICLE VI 

COVENANT FOR ASSESSMENTS AND CREATION OF LIEN 

            Section 1.         Creation of Lien and Personal Obligation for Assessments and Maintenance Charges.  The Declarant, for each Lot, hereby covenants and agrees, and each Owner by acceptance of a deed therefor (whether or not it shall be so expressed in such deed) is deemed to covenant and agree, to accept and be subject to mandatory Membership in the Association, and to pay to the Association the following: (1) the Reserve Contribution, (2) Annual Assessments, (3) Special Assessments, (4) Maintenance Charges, and (5) Special Use Fees incurred by the Owner or any Resident occupying the Owner's Lot or any portion thereof.  The Reserve Contribution, Annual Assessments, Special Assessments, Maintenance Charges, Special Use Fees and other fees, fines and charges which are the obligation of an Owner hereunder, together with interest, costs, collection agency fees, and reasonable attorneys' fees of the Association incurred in connection with the enforcement and collection thereof or in otherwise enforcing this Declaration, shall be a charge and continuing servitude and lien upon the Lot against which each such Annual or Special Assessment, Maintenance Charge, Reserve Contribution or other charge is made and against the Lot of an Owner liable for a Special Use Fee or other charge and, in addition, shall be the personal obligation of the Owner of such Lot at the time when such payment becomes due and payable.  The Annual and Special Assessments against each Lot shall be based on the number of Memberships appurtenant to the Lot.  The personal obligation for delinquent Assessments and other charges shall not pass to the successors in title of the Owner unless expressly assumed by them, but the Lot shall remain subject to the lien of the delinquent assessment except as provided in Article VI, Section 3 below.  No Owner may waive or otherwise exempt himself from liability for the Assessments provided for herein, including, but not limited to, by non-use of the Community Center or abandonment of his Lot.  The obligation to pay Assessments is a separate and independent covenant on the part of each Owner.  No diminution, abatement or set-off shall be allowed by reason of any action or failure to act of the Board or Association.

            Section 2.         Reserve Contribution.  In order to initially provide for the uses and purposes specified in Article IX hereof, including the establishment of replacement and maintenance reserves, a Reserve Contribution is established in the amount of $50.00 per each Membership which shall be paid to the Association out of the sales proceeds upon the closing of the sale of each Lot to the original Owner of each said Lot.

            Section 3.         Annual Assessments.  In order to provide for the uses and purposes specified in Article IX hereof, including the establishment of replacement and maintenance reserves, in each year, commencing with the first Assessment Period, the Board shall prepare and adopt a budget and shall assess against each Lot an Annual Assessment.  Subject to the provisions of Section 4 hereof, the amount of the Annual Assessment shall be in the sole discretion of the Board but shall be determined with the objective of fulfilling the Association's obligations under this Declaration and providing for the uses and purposes specified in Article IX.

            Section 4.         Uniform Rate of Annual Assessment.  The amount of any Annual or Special Assessment or Reserve Contributions against each Lot shall be fixed at a uniform rate per Membership, except that the following Owners shall pay only twenty-five percent (25%) of the Annual Assessment otherwise attributable to his or its Membership during the periods hereafter specified:

            (a)        The Owner of a Lot shall pay only twenty-five percent (25%) of the Annual Assessment attributable to his Membership until the earlier of (i) the completion of a dwelling unit on the Lot or (ii) six (6) months after the commencement of construction of a dwelling unit on the Lot.

            (b)        The Owner of a Parcel which, under a Tract Declaration is to be used as a Condominium Development (and for which the declaration of condominium has not been recorded), shall pay only twenty five percent (25%) of the Annual Assessment otherwise attributable to each of his Memberships until a Condominium Development has either been completed on the Parcel or six (6) months have elapsed since construction of the building was commenced.

            (c)        Notwithstanding the foregoing, in the event that the Parcel designated by a Tract Declaration for Condominium Development is developed in distinctly separate phases (as determined by the Board), then with respect to each phase, the Owner shall pay only twenty-five percent (25%) of the Annual Assessments attributable his membership until the earlier of (i) the completion of that phase or (ii) six (6) months after commencement of construction of that phase.  For purposes of this Section 4, a dwelling unit or other building shall be deemed completed when, in the opinion of the Board, the building is ready for occupancy.  If the Owner of a Parcel or Lot ceases to  qualify for the reduced twenty-five percent (25%) rate during the period to which an Annual Assessment is attributable or the Parcel ceases to be a Parcel because it has been subdivided for Single Family Residential Use, the Assessment attributable to the Membership shall be prorated between the applicable rates on the basis of the number of days in the period that the Owner qualified for each rate; provided, however, the Owner of a Parcel which ceases to be a Parcel as a result of subdivision shall pay the reduced 25% assessment on each Lot as provided in subsection (a) above.  As long as the Declarant is a Class B Member and is paying a reduced Annual Assessment, the Declarant shall pay to the Association any deficiency in funds due to the Declarant having paid a reduced Annual Assessment and necessary for the Association to be able to timely pay its expenses.  This obligation may be satisfied in the form of a cash subsidy or by "in kind" contributions of services or materials or a combination of these.

            Section 5.         Maximum Annual Assessment.  The Annual Assessment to be established by the Board may not exceed a certain amount, hereinafter referred to as the "Maximum Annual Assessment," which Maximum Annual Assessment shall be determined and shall vary in accordance with the following provisions:

            (a)        Until the end of the first Assessment Period, the Maximum Annual Assessment against each Owner shall be Two Hundred Forty Dollars ($240.00) per each Membership, which is equivalent to Twenty Dollars ($20.00) per month.

            (b)        From and after the end of the first Assessment Period, and subject to applicable law, the Maximum Annual Assessment shall be automatically increased effective January 1 of each year without a vote of the Membership by an amount which is equal to the greater of:

                        (i)         ten percent (10%) of the Maximum Annual Assessment for the year just ended; or

                        (ii)        the increase during the preceding year and the Consumer Price Index published in the Monthly Labor Review by the United States Department of Labor, Bureau of Labor Statistics and designated "Consumer Price Index--U.S. City Average for All Urban Consumers, 1982-1984 equals 100, All Items."

            In the event the Bureau of Labor Statistics shall cease to publish the Consumer Price Index and such information is not available from any other source, public or private, then a new formula for determining the automatic annual increase of the Maximum Annual Assessment pursuant to subparagraph (b) (ii) shall be adopted by the Board.

            (c)        From and after the end of the first Assessment Period, the Maximum Annual Assessment may be increased above the Maximum Annual Assessment otherwise determined under Subsection (b) above by a vote of two-thirds (2/3) of each class of Members who are voting in person or by proxy at a meeting duly called for such purpose.

            (d)        Notwithstanding the foregoing limitations described in (a), (b) and (c) above, in the Board's discretion, the Maximum Annual Assessment may be increased as required by increased utility and water costs charged to the Association.  However, nothing in this Declaration shall be deemed to authorize or permit the Association or the Board to increase Assessments at a rate or in amounts greater than otherwise permitted by applicable law.

            Section 6.         Special Assessments for Capital Improvements and Extraordinary Expenses.  In addition to the Reserve Contribution and Annual Assessment authorized above, the Association may levy a Special Assessment for the purpose of defraying in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement to the Community Center, including fixtures and personal property related thereto, or for the purpose of defraying other extraordinary expenses, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of Members who are voting in person or by proxy at a meeting duly called for such purpose.  Owners qualifying for paying only twenty-five percent (25%) of the Annual Assessment attributable to their Memberships pursuant to Section 4 above shall also be required to pay only twenty-five percent (25%) of the Special Assessment otherwise attributable to each such Membership, unless such Owner is determined by the Board to be directly benefited by the capital improvement financed in whole or in part by such Special Assessment in which event the Owner shall pay the full amount of the Special Assessment attributable to his Membership.  The provisions of this Section are not intended to preclude or limit the assessment, collection or use of Annual Assessments for the aforesaid purposes.

            Section 7.         Notice and Quorum for Any Action Authorized Under Sections 5 and 6. Written notice of any meeting called for the purpose of taking any action authorized under Sections 5 or 6 of this Article shall be sent to all Members no less than thirty (30) days nor more than sixty (60) days in advance of the meeting.  At the first such meeting called, the presence of Members or of proxies entitled to cast sixty percent (60%) of all the votes (exclusive of suspended voting rights) of each class of Membership shall constitute a quorum.  If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum at the subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting.  No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.

            Section 8.         Establishment of Assessment Period.  The period for which the Annual Assessment is to be levied (the "Assessment Period") shall be the calendar year, except that the first Assessment Period shall commence upon such date as the Board shall determine and shall terminate on December 31 of such year.  The Board in its sole discretion from time to time may change the Assessment Period.

            Section 9.         Billing and Collection Procedures.  The Board shall have the right to adopt procedures for the purpose of making, billing and collecting the Assessments provided that said procedures are not inconsistent with the provisions hereof.  Annual Assessments may be collected on a monthly, quarterly or annual basis as determined by the Board and Special Assessments may be collected as specified by the Board unless otherwise determined by the resolution of the Members of the Association approving the Special Assessment.  The failure of the Association to send a bill to a Member shall not relieve any Member of his liability for any Assessment or charge under this Declaration, but the Assessment Lien therefor shall not be foreclosed or otherwise enforced until the Member has been given not less than fifteen (15) days written notice prior to such foreclosure or enforcement at the address of the Member on the records of the Association, that the Assessment or any installment thereof is or will be due and of the amount owing.  Such notice may be given at any time prior to or after the delinquency of such payment.  Each Member shall be obligated to inform the Association in writing of any change of address.  The Association shall be under no duty to refund any payments received by it even though the ownership of a Membership changes during an Assessment Period; successor Owners of Lots shall be given credit for prepayments, on a prorated basis, made by prior Owners.  In case the Owner of a Membership becomes liable for payment of an increased sum pursuant to Section 4 of this Article during the Assessment Period, he shall notify the Association but his failure to notify the Association shall not relieve him of the liability for such amounts.  The amount of the Annual Assessments against Members who become such during an Assessment Period shall be prorated and such new Members shall not be liable for any previously paid Special Assessments.

            Section 10.       Collection Costs and Interest on Delinquent Assessment.  Any Assessment or installment thereof not paid when due shall be deemed delinquent and shall bear interest from ten (10) days after the due date until paid at a rate equal to the greater of (a) eighteen percent (18%) per annum, or (b) the rate set by the Board, and the Member shall be liable for all costs, including attorneys' fees, which may be incurred by the Association in collecting the same.  In addition, the Board may charge a late fee for all delinquent payments.  The Board may also record a Notice of Delinquent Assessment against any Lot as to which an Assessment is delinquent and constitutes a lien and may establish a fixed fee to reimburse the Association for the Association's cost in recording such Notice, processing the delinquency and recording a notice of payment, which fixed fee shall be treated as a collection cost of the Association secured by the Assessment Lien.  The Association shall not be obligated to release any notice recorded pursuant to this section until all Delinquent Assessments, interest and collection costs have been paid in full whether or not all of such amounts are set forth in the Notice of Delinquency.

            Section 11.       Evidence of Payment of Assessments.  Upon receipt of written request, and within a reasonable period of time thereafter, the Association shall issue to the requesting party a written certificate stating (a) that all Annual, and Special Assessments, Special Use Fees, Reserve Contributions and Maintenance Charges (including interest, costs and attorneys' fees, if any, as provided in Section 10 above) have been paid with respect to any specified Lot as of the date of such certificate, or (b) if such have not been paid, the amounts due and payable as of such date. The Association may make a reasonable charge for the issuance of such certificates, which charge must be paid at the time the request for any such certificate is made.  Any such certificate shall be conclusive and binding with respect to any matter therein stated as against any bona fide purchaser of, or lender on, the Lot or Parcel in question.

ARTICLE VII

ENFORCEMENT OF PAYMENT OF

ASSESSMENTS AND ASSESSMENT LIEN

            Section 1.         Association as Enforcing Body.  As provided in Article X, Section 2, the Association and the Members shall have the right to enforce the provisions of this Declaration.

            Section 2.         Association's Remedies to Enforce Payment of Assessments.  If any Member fails to pay the Annual, Special Assessments, Special Use Fees, Reserve Contributions  or Maintenance Charges when due, the Association may enforce the payment thereof by taking either or both of the following actions, concurrently or separately (and by exercising either of the remedies hereinafter set forth, the Association does not prejudice or waive its right to exercise the other remedy):

            (a)        Bring an action at law and recover judgment against the Member personally obligated to pay the Annual, Special Assessments, Special Use Fees, Reserve Contributions  or Maintenance Charges;

            (b)        Foreclose the Assessment Lien against the Lot in accordance with the then-prevailing Arizona law relating to the foreclosure of realty mortgages (including any right to recover a deficiency), and the Lot may be redeemed after a foreclosure sale as provided by law.  The Association may bid on the subject property at such a foreclosure sale.

            Notwithstanding subordination of an Assessment Lien as described in Section 3 of this Article VII, the delinquent Member shall remain personally liable for the Assessments and related costs after his Membership is terminated by foreclosure or deed in lieu of foreclosure or otherwise.

            Section 3.         Subordination of Assessment Lien.  The Assessment Lien provided for herein shall be subordinate to any first mortgage lien held by, or first deed of trust of which the beneficiary is, a lender who has lent funds, with the Lot as security, or held by the lender's successors and assigns, and shall also be subject and subordinate to liens for taxes and other public charges which by applicable law are expressly made superior.  Except as above provided, the Assessment Lien shall be superior to any and all charges, liens or encumbrances which hereafter in any manner may arise or be imposed upon each Lot.  Sale or transfer of any Lot shall not affect the Assessment Lien; provided, however, that if the sale or transfer is pursuant to foreclosure of a mortgage or a deed of trust to which the Assessment Lien is subordinate, or pursuant to any sale or proceeding in lieu thereof, the purchaser at the mortgage foreclosure or deed of trust sale, or any grantee taking by deed in lieu of foreclosure, shall take the Lot free of the Assessment Lien for all Annual and Special Assessments, Special Use Fees, Reserve Contributions and Maintenance Charges that have accrued up to the date of issuance of a sheriffs or trustee's deed or deed in lieu of foreclosure; provided, however, that such mortgage or deed of trust foreclosure sale purchaser or grantee shall take title subject to all Annual and Special Assessments, Special Use Fees, Reserve Contributions, Maintenance Charges and the Assessment Lien therefor accruing subsequent to the date of issuance of a sheriff's or trustee's deed or deed given in lieu of foreclosure.

ARTICLE VIII

USE OF FUNDS; BORROWING POWER

            Section 1.         Purposes for Which Association's Funds May Be Used.  The Association shall apply all funds and property collected and received by it (including the Annual and Special Assessments, Reserve Contributions, fees, loan proceeds, surplus funds and all funds and property received by it from any other source, for the common good and benefit of the Community Center and the Members and Residents by devoting said funds and property, among other things, to the acquisition, construction, alteration, maintenance, provision and operation, by any manner or method whatsoever, of any kind and all land, properties, improvements, facilities, services, projects, programs, studies and systems, within or without the Community Center, which may be necessary, desirable or beneficial to the general common interests of the Community Center, the Members and the Residents.  The following are some, but not all, of the areas which the Association may seek to aid, promote and provide for such common benefit social interaction among, Members and Residents, maintenance of Community Center landscaping and maintenance of liability insurance, communications, ownership and operation of recreational and other facilities, vehicle storage areas, transportation, health, utilities, public services, safety and indemnification of officers and directors of the Association.  Subject to this Declaration and the Articles and Bylaws, the Association may expend its funds in any manner permitted under the laws of the State of Arizona.

            Section 2.         Borrowing Power.  The Association may borrow money in such amounts, at such rates, upon such terms and security, and for such periods of time as is necessary or appropriate; provided, however, no loan in an amount in excess of Ten Thousand Dollars ($10,000.00) shall be contracted until approved by Members holding two-thirds  (2/3) of the votes represented, personally or by valid proxy, at a duly convened meeting of Members.

            Section 3.         Association's Rights in Spending Funds From Year to Year. The Association shall not be obligated to spend in any year all the sums received by it in such year (whether by way of Annual or Special Assessments, fees or otherwise), and may carry forward as surplus any balances remaining.  The Association shall not be obligated to reduce the amount of an Annual Assessment or Reserve Contribution in the succeeding year if a surplus exists from a prior year and the Association may carry forward from year to year such surplus as the Board in its discretion may determine to be desirable for the greater financial security of the Association and the accomplishment of its purposes.

            Section 4.         Eminent Domain.  The term "taking" as used in this Section shall mean condemnation by eminent domain or sale under threat of condemnation.  In the event of a threatened taking of all or any portion of the Association Land, the Owners hereby appoint the Board and such persons as the Board may delegate to represent all of the Members in connection with the taking.  The Board shall act in its sole discretion with respect to any awards made or to be made in connection with the taking and shall be entitled to make a voluntary sale to the condemnor in lieu of engaging in a condemnation action.  Any awards received on account of the taking shall be paid to the Association.  In the event of a total or partial taking, the Board may, in its sole discretion, retain any award in the general funds of the Association or distribute pro rata all or a portion thereof to the Owners and all holders of liens and encumbrances, as their interests may appear of record, at a uniform rate per Membership.

            Section 5.         Insurance.

            (a)        Authority to Purchase.  The Association shall maintain insurance against liability incurred as a result of death or injury to persons or damage to property on the Community Center or upon other areas maintained by the Association, or as a result of Association activities, in a total amount of not less than Two Million Dollars ($2,000,000).  If reasonably available, the Association shall obtain officers’ and directors’ liability insurance in an amount deemed prudent by the Board.  In addition, the Association may carry any other insurance coverage which the Board in its discretion deems necessary or desirable.  The deductible shall be paid by the party who would be liable for the loss or repair in the absence of insurance.

            (b)        Individual Responsibility.  It shall be the responsibility of each Owner and Resident or other person to provide for himself insurance on his property interests within the Community Center, including, but not limited to, his personal property therein, his personal liability to the extent not covered by the property and public liability insurance obtained by the Association, if any, and such other insurance as such person desires.  No person shall maintain any insurance which would limit or reduce in any manner the insurance proceeds payable under the casualty insurance maintained by the Association in the event of damage to the Community Center improvements or fixtures.  Neither the Association nor any Board member nor the Declarant shall be liable to any person or mortgagee if any risks or hazards are not covered by the insurance obtained by the Association or if the amount of insurance is not adequate.

            (c)        Insurance Claims.  The Association is hereby irrevocably appointed and authorized by the Owners to adjust all claims arising under insurance policies purchased by the Association and to execute and deliver releases upon the payment of claims, and to do all other acts reasonably necessary to accomplish any of the foregoing.  The Board has full and complete power to act for the Association in this regard and may, at its discretion, appoint an authorized representative or committee, or enter into an insurance trust agreement wherein the trustee shall have authority, to negotiate losses under any policy purchased by the Association.  All proceeds from insurance acquired by the Association shall be payable to the Association.  Any proceeds resulting from damage to the Community Center shall be used to repair the damage, unless otherwise approved by a majority of the votes of each class of Members at a meeting called for such purpose.  Any excess proceeds may be retained by the Association as reserves or to reduce future assessments or, if distributed to Members, such proceeds shall be distributed to Members and their mortgagees as their interests may appear at a uniform rate per Membership.

            Section 6.         Capital Reserve Fund . 

            (a)     From the Annual Assessments and Reserve Contributions required under Article VI of this Declaration, and from such other revenue sources as the Board deems appropriate, the Board shall establish a reserve fund (the “Capital Reserve Fund”) for the repair, replacement and maintenance of Capital Assets (as defined below).  The Board shall, as part of the process of setting the Association’s budget each year, set the component for contributions to the Capital Reserve Fund for such year using a “cash flow method” calculation, and not a “fully funded method” calculation.  While there may be other methods of calculating reserves, Declarant, in preparing this Declaration, considered various such methods and determined that the “cash flow method” is an appropriate and reasonable method of calculating reserves given the circumstances and the goal, in providing for the establishment of the Capital Reserve Fund, of providing a mechanism reasonably designed to assure that sufficient funds will be available over time to meet the needs for maintenance, repair and replacement of Capital Assets as and when reasonably anticipated and scheduled.

            (b)        For purposes of this Declaration, the term “Capital Assets” shall mean any and all tangible property which both: (a) the Association owns or is obligated or has the right to maintain, operate, repair or replace; and (b) either (i) at the time acquired by the Association had an expected useful life of three (3) years or more and an initial value of at least $1,000, or (ii) is one of a collection of substantially similar items of tangible property, each item of which at the time acquired by the Association had an expected useful life of three (3) years or more but an initial value of less than $1,000, if the initial values of all items in such collection at the time they were acquired by the Association exceeded, in the aggregate, $1,000.  For example, but without limiting the generality of the foregoing, if the Association acquires 10 pool chairs having an expected useful life of five years at a cost of $175 dollars each, the aggregate initial value of the set of 10 pool chairs would be $1,750; thus, each of the 10 pool chairs would constitute a Capital Asset.

            (c)        The Board shall include in the budget for the Association for each fiscal year a contribution to the Capital Reserve Fund, which shall be shown as one or more separate line items in such budget.  The amount of the contribution to the Capital Reserve Fund each fiscal year shall be determined by the Board, in its reasonable, good faith discretion, based upon such factors as it deems relevant under the circumstances, which may include, without limitation, any results of or recommendations in any Reserve Studies or Reserve Analyses obtained by the Board pursuant to this Section 8.6.

            (d)        Each fiscal year, the Board shall have prepared by the independent manager of the Association, if any, or by another qualified independent property manager, property consultant or similar person, an analysis (individually, a “Reserve Analysis,” and collectively, “Reserve Analyses”) of the amount and adequacy of amounts currently in the Capital Reserve Fund, which analysis the Board shall endeavor to obtain in sufficient time to permit the Board to take into account the report and any recommendations in such analysis.  Each Reserve Analysis shall take into consideration the total cash on hand in the Capital Reserve Fund at the time such Reserve Analysis is conducted, as well as the total cash reasonably anticipated to be on hand in the Capital Reserve Fund at the end of the fiscal year in which such Reserve Analysis is conducted and the amounts reasonably anticipated to be required for the immediately following fiscal year for the maintenance, repair and replacement of Capital Assets.  Each Reserve Analysis shall include recommendations to the Board as to the amounts which should be included for contributions to the Capital Reserve Fund in the budget for the immediately following fiscal year and shall include a report of any adjustments the preparer of the Reserve Analysis recommends to the then-current reserve cash flow projections and requirements.

            (e)        Periodically, but in no event less frequently than every five (5) years, the Board shall cause to be prepared by a qualified, independent consultant or similar person (who shall not be related to or affiliated with the Association, any member of the Board, any officer of the Association, the Association’s independent property manager, if any, or the Declarant) a detailed study of the Capital Reserve Fund, Capital Assets, projected cash requirements for the maintenance, repair and replacement of Capital Assets and projected changes in the Capital Reserve Fund for the following twenty (20) years (individually, a “Reserve Study,” and collectively, “Reserve Studies”).  Each Reserve Study shall also include recommendations regarding projected future needs for maintenance, repair and replacement of Capital Assets, amounts reasonably anticipated to be necessary for the performance of such maintenance, repair and replacement over time, and changes in contributions for maintenance, repair and replacement of Capital Assets in Association budgets for subsequent fiscal years.

            (f)         The results, reports and recommendations in any Reserve Analysis or Reserve Study shall be advisory only and shall not be binding on the Board. The Board shall have the right to provide for reserves which are greater or less than those projected or recommended in any Reserve Analysis or Reserve Study.  In setting the Association’s budget for each fiscal year, and in determining the component of each such budget to be contributed to the Capital Reserve Fund, the Board shall have the right to consider any and all such factors as the Board deems relevant or appropriate, including without limitation the recommendations in any Reserve Study or Reserve Analysis, the past incidences of required repairs of Capital Assets, and projected funds available to the Association from any source (including, without limitation, anticipated proceeds of insurance).

            (g)        The Board, with the assistance of its independent property manager and such other qualified independent consultants or similar persons as the Board deems appropriate, shall make and annually update cash flow projections covering a period of at least twenty (20) years from the date of the projection or update.  Cash flow projections shall take into consideration cash on hand in the Capital Reserve Fund, reasonably anticipated Reserve Contributions pursuant to Section 6.2 of this Declaration, expected contributions to the Capital Reserve Fund from each fiscal year’s budget, and any other reasonably anticipated sources of funds for the Capital Reserve Fund (including, without limitation, reasonably anticipated proceeds of insurance on Capital Assets).

ARTICLE IX 

MAINTENANCE 

            Section 1.         Community Center and Public Rights-of-Way.

            (a)        Areas of Association Responsibility.  The Association, or its duly delegated representative, shall maintain and otherwise manage the Community Center facilities and the improvements thereon.  The Association shall not be required to maintain and/or upgrade (but may elect to maintain and/or upgrade) areas which (i) the City of Goodyear, an improvement district, or other governmental entity is or could be maintaining, or (ii) are areas the maintenance of which would, in the sole and absolute discretion of the Board, benefit the Association.  Specific areas to be maintained by the Association may be identified on recorded subdivision plats approved by the Declarant or in recorded Tract Declarations approved by the Declarant, and/or in deeds from the Declarant to the Association, or to a transferee of a Lot or Parcel, but the failure to so identify such areas shall not affect the Association's rights or responsibilities with respect to the Community Center.

            (b)        Standard of Care.  The Board shall use a reasonably high standard of care in providing for the repair, management and maintenance of the Community Center and other properties maintained by the Association, but the Board shall be the sole judge as to the appropriate maintenance of all such areas.  The Community Center, including, but not limited to, playground or other play areas or equipment finished or maintained by the Association shall be used at the risk of the user; and the Declarant and the Association shall not be liable to any person or entity for any claim, damage, or injury occurring thereon or related to the use thereof.

            (c)        Delegation of Responsibilities.  The Board may cause the Association to contract with others for the performance of the maintenance and other obligations of the Association under this Article IX and, in order to promote uniformity and harmony of appearance, the Board may also cause the Association to contract to provide maintenance services to Owners of Lots in exchange for the payment of such fees as the Association and Owner may agree upon.

            Section 2.         Assessment of Certain Maintenance Costs.  In the event that the need for maintenance or repair of Community Center, structures and other property maintained by the Association is caused through the or negligent act of any Owner, or that Owner's family, guests or tenants the cost of such maintenance or repairs shall he added to and become a part of the Assessment to which such Owner and the Owner's Lot is subject and shall be secured by the Assessment Lien.  Any charges or fees to be paid by the Owner of a Lot pursuant to Section l(c) of this Article IX in connection with a contract entered into by the Association with an Owner for the performance of an Owner's maintenance responsibilities shall also become a part of such Assessment and shall be secured by the Assessment Lien.

            Section 3.         Easement for Maintenance Responsibilities.  The Association shall have an easement upon, across, over and under the Lots and all other areas in the Property for the purpose of repairing, maintaining and replacing the Community Center, Community Center improvements, and other areas maintained by the Association for the purpose of performing all of the Association’s other rights, duties and obligations hereunder.

ARTICLE X

RIGHTS AND POWERS OF ASSOCIATION

            Section 1.         Association's Rights and Powers As Set Forth in Articles and Bylaws.  In addition to the rights and powers of the Association set forth in this Declaration, the Association shall have such rights and powers as are set forth in its Articles and Bylaws, which shall include all rights and powers as may be reasonably necessary in order to effect the purposes of the Association as set forth herein.  After incorporation of the Association, a copy of the Articles and Bylaws of the Association shall be available for inspection by Members, prospective purchasers, mortgagees and other persons or entities with an interest in the Property at the office of the Association during reasonable business hours.

            Section 2.         Enforcement of Provisions of This and Other Instruments.  The Association, as the agent and representative of the Owners, shall have the right (without obligation) to enforce, by any proceeding at law or in equity, the Covenants set forth in this Declaration, the Articles, Bylaws and the Rules and any and all covenants, restrictions, reservations, charges, servitudes, assessments, conditions, liens or easements provided for in any contract, deed, declaration or other instrument which (a) shall have been executed pursuant to, or subject to, the provisions of this Declaration, or (b) otherwise shall indicate that the provisions of such instrument were intended to be enforced by the Association or by Declarant.  The Association is authorized to impose sanctions for violations without court approval.  Such sanctions may include reasonable monetary fines and suspension of the right to vote or use any Community Center facilities as provided in Article III, Section l(b).  In the event suit is brought or arbitration is instituted or an attorney is retained to enforce the terms of this Declaration or other document as described in this Section 2, the prevailing party shall be entitled to recover, in addition to any other remedy, reimbursement for attorneys' fees, court costs, costs of investigation and other related expenses incurred in connection therewith and if the Association is the prevailing party, the above-described fines and also the Association's administrative costs and fees.  Attorneys' fees, costs and expenses adjudged against an Owner shall be the personal liability of the breaching Owner and shall also be secured by the Assessment Lien against said Owner's Lot.  If the Association shall fail or refuse to enforce this Declaration or any provision hereof for an unreasonable period of time after written request by a Member to do so, then any Member may enforce the provisions of the Declaration at his own expense by any appropriate action, whether in law or in equity.

            Section 3.         Contracts with Others for Performance of Association's Duties.  Subject to the restrictions and limitations contained herein, the Association may enter into contracts and transactions with others, including the Declarant and its affiliated companies, and such contracts or transactions shall not be invalidated or in any way affected by the fact that one or more directors or officers of the Association or members of any committee are employed by or otherwise connected with Declarant or its affiliates, provided that the fact of such interest shall be disclosed or known to the other directors acting upon such contract or transaction, and provided further that the transaction or contract is fair and reasonable.  Any such director, officer or committee member may be counted in determining the existence of a quorum at any meeting of the Board or committee of which he is a member which shall authorize any contract or transaction described above or grant or deny any approval sought by the Declarant, its affiliated companies or any competitor thereof and may vote thereat to authorize any such contract. transaction or approval with like force and effect as if he were not so interested.  Notwithstanding anything to the contrary herein, during the period when the Declarant has a Class B vote, any professional management contract entered into by the Association must be terminable with or without cause, upon no more than ninety (90) days written notice and without payment of any penalty.

            Section 4.         Procedure for Change of Use of the Community Center. Upon (a) adoption of a resolution by the Board stating that in the Board's opinion the then present use of a designated part of the Community Center or of the Association's interest in the Community Center is no longer in the best interests of the Owners and Residents and (b) the approval of such resolution by a majority of the votes of each class of Members at a meeting duly called for such purpose, the Board shall have the power and right to change the use thereof (and in connection therewith, construct, reconstruct, alter or change the buildings, structures and improvements thereon in any manner deemed necessary by the Board to accommodate the new use), provided such new use (i) shall be for the benefit of the Owners and Residents, and (ii) shall be consistent with any deed restrictions and zoning regulations restricting or limiting the use of the land. Alternatively, the Board upon satisfaction of subsection (a) above may, in lieu of calling a meeting, notify in writing all Owners of the proposed change of use and or their right to object thereto and, if no more than ten percent (10%) of the Class A Memberships eligible to vote object in writing within thirty (30) days after receipt of such notice, the proposed transaction shall be deemed approved by the Members and a meeting of the Members shall not be necessary. 

            Section 5.         Procedure for Alteration of the Community Center; Contracts Concerning the Community Center. The Association shall have the right to dedicate or transfer all or any part of the Community Center to any public authority or utility as provided in Article III, Section 1(c).  In addition, the Association shall have the right to change the size, shape or location of the Community Center, to exchange the Community Center for other property or interests which become Community Center facilities, and to abandon or otherwise transfer the Community Center (to a non-public authority) upon (i) the adoption of a resolution by the Board stating that ownership and/or use of the relevant Community Center facilities is no longer in the best interests of the Owners and Residents and that the change desired shall be for their benefit and shall not substantially adversely affect them and (ii) the approval of such resolution by a majority of the votes of each class of Members, voting in person or by proxy, at a meeting called for such purpose. Alternatively, the Board upon satisfaction of subsection (i) above may, in lieu of calling a meeting pursuant to subsection (ii) above, notify in writing all Owners of the proposed transaction and of their right to object thereto and, if no more than ten percent (10%) of the Class A Members eligible to vote object in writing within thirty (30) days after receipt of such notice, the proposed transaction shall be deemed approved by the Members and a meeting of the Members shall not be necessary.

            Section 6.         Purchase of Effluent.  The Association may be required to purchase and use sewage effluent generated from the Property or the Community Center which is adequately treated for use on lawns and landscaping.

ARTICLE XI 

TERM; AMENDMENTS; TERMINATION

            Section 1.         Term; Method of Termination.  This Declaration shall be effective upon the date of recordation hereof and, as amended from time to time, shall continue in full force and effect for a term of twenty (20) years from the date this Declaration is recorded.  From and after said date, this Declaration, as amended, shall be automatically extended for successive periods of ten (10) years each.  Subject to FHA and/or VA approval as provided in Section 11 of Article XIV below, this Declaration may be terminated at any time if seventy-five percent (75%) of the authorized votes of each class of Members shall be cast in favor of termination at an election held for such purpose.  If the necessary votes are obtained, the Board shall cause to be recorded with the County Recorder of Maricopa County, Arizona, a Certificate of Termination, duly signed by the President or Vice President and attested by the Secretary or Assistant Secretary of the Association, with their signatures acknowledged.  Thereupon these Covenants shall have no further force and effect, and the Association shall be dissolved pursuant to the terms set forth in its Articles.  Any Association funds remaining following such termination and dissolution shall be distributed to the Members and their mortgagees as their interests may appear at a uniform rate per Membership.  This Declaration and the Master Declaration shall be coterminous; accordingly, anything to the contrary in this Section 11.1 notwithstanding, this Declaration shall terminate automatically upon the expiration or earlier termination of the Master Declaration.

            Section 2.         Amendment of Declaration.  This Declaration may be amended by recording with the County Recorder of Maricopa County, Arizona, a Certificate of Amendment, duly signed and acknowledged as required for a Certificate of Termination in Section 1 of this Article.  The Certificate of Amendment shall set forth in full the amendment adopted, and, except as provided hereafter, shall certify that at an election duly called and held for this purpose pursuant to the provisions of the Articles and Bylaws, the Members casting seventy-five percent (75%) of the votes cast at the election voted affirmatively for the adoption of the amendment; provided, however, that for purposes of an election to amend this Declaration, the Declarant shall have only one vote per Class B Membership.  The Declaration may be amended with respect to all or any portion of the Lots covered hereby. So long as there is a Class B Membership, any amendment or termination of this Declaration shall require the approval of the FHA or VA, as applicable, if such agency has guaranteed or insured any loan on a Lot.  Within fifteen (15) years from the date of recording this Declaration and so long as the Declarant is the owner of any Lot in the Property, this Declaration may be amended or terminated only with the written approval of the Declarant.  This Declaration may not be amended to reduce or alter the rights of the Declarant without the approval of the Declarant.  The Declarant alone may amend this Declaration at any time (a) to annex additional property hereunder as provided in Article XII, (b) to exclude any property from Exhibit A, or (c) to amend as permitted in Section 3 hereafter.  In addition, at any time, the Declarant alone shall have the right to amend the Declaration to comply with applicable law or to correct any error or inconsistency in the Declaration if the amendment does not adversely affect the rights of any Owner.

            Section 3.         Amendment of Articles and Bylaws.  The Articles and Bylaws may only be amended by following the procedure set forth in this Section.  The Board shall adopt a resolution setting forth the proposed amendment and directing that it be submitted to a vote at a meeting of Members, which may be either an annual or a special meeting, and if approved by Members holding (either personally or by valid proxy) the Applicable Percentage (defined below) of the votes eligible to be cast on the amendment (including votes otherwise eligible to be cast but not represented personally or by valid proxy at such meeting), such amendment shall have been adopted: provided, however, that a copy of any such proposed amendment or a summary of the changes to be effected shall have been given to each Member in good standing at least ten (10) days prior to said meeting of the Members.  For purposes, hereof, the "Applicable Percentage" shall mean, in the case of an amendment to the Articles, sixty-seven percent (67%), and in the case of an amendment to the Bylaws, fifty-one percent (51%).  Any number of amendments may be submitted and voted upon at any one meeting.  Notwithstanding the foregoing, so long as the Class B membership is in existence, the following actions shall require the prior approval of the Federal Housing Administration and the Veterans Administration; (as) amendment of the Articles of the Bylaws; (b) dissolution of the Association; and (c) merger or consolidation of the Association with any other entity.

            Section 4.         Right of Amendment if Requested by Governmental Agency or Federally Chartered Lending Institutions. Anything in this Article to the contrary notwithstanding, Declarant reserves the right to amend all or any part of this Declaration, the Articles and/or the Bylaws, to such extent and with such language as may be requested by the Federal Housing Administration ("FHA"), the Veterans Administration ("VA"), the Federal Home Loan Mortgage Corporation ("FHLMC") or the Federal National Mortgage Corporation ("FNMA") and to further amend to the extent requested by any other federal, state or local governmental agency which requests such an amendment as a condition precedent to such agency's approval of the Declaration, or by any federally chartered lending institution as a condition precedent to lending funds upon the security of any Lot(s) or any portions thereof. Any such amendment shall be effected by the recordation by Declarant of the Amendment duly signed by or on behalf of the authorized agents of Declarant with their signatures acknowledged, specifying the federal, state or local governmental agency or the federally chartered lending institution requesting the amendment and setting forth the amendatory language requested by such agency or institution. Recordation of such Amendment shall be deemed conclusive proof of the agency's or institution's request for such an amendment and such Amendment, when recorded, shall be binding upon all of the Property and all persons having an interest therein. 

ARTICLE XII 

ANNEXATION AND DEANNEXATION 

            Section 1.         Reservation of Certain Annexation Rights. As of the date this Declaration is Recorded, Declarant contemplates that one or more portions (and perhaps all) of the Annexable Property may from time to time be annexed to the Property (and thereby subjected to the provisions of this Declaration), and, therefore, while Declarant shall have no obligation or duty to so annex all or any portion of the Annexable Property, Declarant hereby reserves the right privilege and option from time to time hereafter to add and annex to the Property (and thereby to subject to the provisions of this Declaration) any part(s) or all of the Annexable Property, without the vote of the Members and without notice to or approval of any holder, insurer or guarantor of any Mortgage or of any other Person, provided, however, that the right privilege and option reserved in this sentence shall expire and terminate at 11:59 p.m. local time on December 31 of the calendar year in which falls the fifteenth (15th) anniversary of the date this Declaration is Recorded.  Notwithstanding the foregoing sentence, no portion of the Annexable Property may be annexed to the Property unless, at the time of each and any such annexation either:  (a) the portion of the Annexable Property to be annexed is owned by Declarant; or (b) the owner of the portion to be annexed (if other than Declarant) consents in a written, Recorded instrument to such annexation.

            Section 2.         Limitations on Other Annexations.  Additional property not included within the Annexable Property may be annexed to the Property only:  (a) by the affirmative vote of two-thirds (2/3) of the votes of each class of Members represented in person or by valid proxy at a meeting of Members duly called for that purpose; and (b) with the express written consent of each owner of all or any part of the property proposed to be annexed.  Further, so long as the Class B membership is in existence no additional property may be annexed to the Property without the prior approval of the Federal Housing Administration or the Veterans Administration.

            Section 3.         Recordation of Annexation Instrument.  Upon approval pursuant to this Article XII of any annexation of property to the Property, Declarant, in the case of annexation of all or any part of the Annexable Property, or the President and Secretary of the Association, in the case of any other annexation, shall execute, acknowledge and Record an instrument evidencing such annexation (which instrument shall also be duly executed and acknowledged by each owner of all or any part of the property being annexed), and such annexation shall be deemed effective only upon such Recordation.  Such instrument (or a separate instrument Recorded by the Association against any property annexed to the Property pursuant to this Article XII and executed by the owner of such annexed property) may subject the annexed property to such additional covenants, conditions, restrictions and easements as the owner thereof and Declarant or the Association, as applicable, may deem appropriate or desirable, provided, however, that any and all such additional covenants, conditions, restrictions and easements shall be subordinate and subject to the provisions of this Declaration.

            Section 4.         No Obligation to Annex.  Nothing herein shall constitute a representation, warranty or covenant that Declarant, any successor or assign of Declarant, or any other Person will subject any additional property (whether or not a part of the Annexable Property) to the provisions of this Declaration, nor shall Declarant, any successor or assign of Declarant, or any other Person be obligated so to do, and Declarant may, by Recorded instrument executed by Declarant, waive its rights so to do, in whole or in part, at any time or from time to time.

            Section 5.         De-Annexation.  Notwithstanding any other provision of this Declaration, Declarant shall have the right from time to time, at its sole option and without the consent of any other Person (except as provided in this Section 5), to delete from the Property and remove from the effect of this Declaration one or more portions of the Property, provided, however, that: (a) a portion of the Property may not be so deleted and removed unless at the time of such deletion and removal such portion is owned by Declarant or Declarant executes and Records an instrument approving such deletion and removal; or (b) a portion of the Property may not be so deleted and removed unless at the time of such deletion and removal no Community Center facilities have been constructed thereon.  Declarant may exercise its rights under this Section 5 by executing and Recording an instrument which identifies the portion of the Property to be so deleted and removed and which is executed by each owner of such portion (if other than Declarant), and the deletion and removal of such portion of the Property shall be effective upon the later of:  (i) the date such instrument is Recorded; or (ii) the effective date specified in such instrument, if any, whereupon the portion of the Property so deleted and removed shall thereafter for all purposes be deemed not a part of the Property and not subject to this Declaration, and the owner(s) thereof (or of interests therein) shall not be Owners or Members or have any other rights or obligations hereunder except as members of the general public.  No such deletion and removal of a portion of the Property shall act to release such portion from the lien for Assessments or other charges hereunder which have accrued prior to the effective date of such deletion and removal, but all such Assessments or other charges shall be appropriately prorated to the effective date of such deletion and removal and no Assessments or other charges shall thereafter accrue hereunder, with respect to the portion of the Property so deleted and removed.  Each portion of the Property deleted and removed pursuant to this Section 5 shall thereafter be deemed to be a part of the Annexable Property unless otherwise expressly provided to the contrary in the instrument Recorded by Declarant to effect such deletion and removal.

ARTICLE XIII

DISPUTE RESOLUTION

Section 1.         Procedures.

(a)        Dispute Notification and Resolution Procedure.  All actions or claims (i) by the Association against any one or more of the Development Parties (as defined below), (ii) by any Owner(s) against any one or more of the Development Parties, or (iii) by both the Association and any Owner(s) against any one or more of the Development Parties, relating to or arising out of the Community Center, including, but not limited to, this Declaration, the Articles, Bylaws or other Association document, including, but not limited to, any contracts, agreements, reserve studies or financial reports (the “Association  Documents”), the use or condition of the Community Center or the design or construction of or any condition on or affecting the Community Center, including, but not limited to, construction defects, surveys, soils conditions, grading, specifications, or disputes which allege negligence or other tortious conduct, breach of contract or breach of implied or express warranties as to the condition of the Community Center or any Improvements (collectively, “Dispute(s)”) shall be subject to the provisions of this Article XIII.  The Declarant, each Developer and each Owner acknowledge that the provisions set forth in this Article XIII shall be binding upon current and future Owners, Members and Residents and upon the Association, whether acting for itself or on behalf of any Owner(s), Members or Residents.  For purposes hereof, the term “Development Parties” means, collectively, the Declarant, its affiliates and related entities, and any and all contractors, subcontractors, brokers, engineers, architects or surveyors hired by any of the foregoing, and any and all their agents, officers, members, directors, partners, representatives or employees of any of the foregoing, and the term “Development Party” means any of the Development Parties.

(b)        Notice.  Any Person (including the Association) with a Dispute claim shall notify the affected Development Party in writing of the claim, which writing shall describe the nature of the claim and any proposed remedy (the “Claim Notice”).

(c)        Attempt to Resolve; Right to Inspect and Right to Corrective Action.  Within a reasonable period after receipt of the Claim Notice, which period shall not exceed sixty (60) days, the claimant and each affected Development Party shall meet at a mutually acceptable place within or reasonably convenient to the Project to discuss the claim. At such meeting or at such other mutually agreeable time, the affected Development Party and its representatives shall have full access to the property that is the subject of the claim and shall have the right to conduct inspections, testing and/or destructive or invasive testing the same in a manner deemed appropriate by the affected Development Party or its representatives (provided the affected Development Party shall repair or replace any property damaged or destroyed during such inspection or testing), which rights shall continue until such time as the Dispute is resolved as provided in this Section 1(c).  The parties shall negotiate in good faith in an attempt to resolve the claim. If the affected Development Party elects to take any corrective action, the affected Development Party and affected Development Party’s representatives and agents shall be provided full access to the Community Center and the property which is the subject of the claim to take and complete corrective action.

(d)        No Additional Obligations, Irrevocability and Waiver of Right.  Nothing set forth in Section 1(c) shall be construed to impose any obligation on the affected Development Party to inspect, test, repair or replace any item of the Community Center for which the affected Development Party is not otherwise obligated under applicable law or any limited warranty provided by the affected Development Party in connection with the construction or maintenance of the Community Center. The right of the affected Development Party to enter, inspect, test, repair and/or replace reserved hereby shall be irrevocable and may not be waived or otherwise terminated except by a written instrument executed and Recorded by the affected Development Party.

(e)        Mediation.  If the parties to the Dispute cannot resolve the claim pursuant to the procedures described in Section 1(c), the matter shall be submitted to mediation pursuant to the mediation procedures adopted by the American Arbitration Association (except as such procedures are modified by the provisions of this Section 1(e)) or any successor thereto or to any other entity offering mediation services that is acceptable to the parties.  No person shall serve as a mediator in any dispute in which the person has any financial or personal interest in the result of the mediation, except by the written consent of all parties. Prior to accepting any appointment, the prospective mediator shall disclose any circumstances likely to create a presumption of bias or to prevent a prompt commencement of the mediation process. No litigation or other action shall be commenced against any Development Party without complying with the procedures described in this Section 1(e).

(i)               Position Memoranda, Pre‑Mediation Conference.  Within ten (10) days of the selection of the mediator, each party shall submit a brief memorandum setting forth its position with regard to the issues that need to be resolved. The mediator shall have the right to schedule a pre‑mediation conference and all parties shall attend unless otherwise agreed. The mediation shall be commenced within ten (10) days following the submittal of the memoranda and shall be concluded within fifteen (15) days from the commencement of the mediation unless the parties mutually agree to extend the mediation period. The mediation shall be held in Maricopa County, Arizona.

(ii)              Conduct of Mediation.  The mediator has discretion to conduct the mediation in the manner in which the mediator believes is most appropriate for reaching a settlement of the dispute. The mediator is authorized to conduct joint and separate meetings with the parties and to make oral and written recommendations for settlement. Whenever necessary, the mediator may also obtain expert advice concerning technical aspects of the dispute, provided the parties agree and assume the expenses of obtaining such advice. The mediator does not have the authority to impose a settlement on the parties.

(iii) Exclusion Agreement.  Any admissions, offers of compromise or settlement negotiations or communications at the mediation shall be excluded in any subsequent dispute resolution forum.

(iv)             Parties Permitted at Sessions.  Persons other than the parties, the representatives and the mediator may attend mediation sessions only with the permission of both parties and the consent of the mediator. Confidential information disclosed to a mediator by the parties or by witnesses in the course of the mediator while serving in such capacity shall be confidential. There shall be no stenographic, audiotape or videotape record of the mediation process.

(v)              Expenses.  The expenses of witnesses for either side shall be paid by the party producing such witnesses. All other expenses of the mediation, including, but not limited to, the fees and costs charged by the mediator and the expenses of any witnesses or the cost of any proof or expert advice produced at the direct request of the mediator, shall be borne equally by the parties unless they agree otherwise. Each party to the mediation shall bear its own attorneys’ fees and costs in connection with such mediation.

(f)         Arbitration.  Should mediation pursuant to Section 1(e) not be successful in resolving a Dispute, such Dispute shall be resolved by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association as modified or as otherwise provided in this Section 1(f).  The parties shall cooperate in good faith to attempt to cause all necessary and appropriate parties to be included in the arbitration proceeding. Subject to the limitations imposed in this Section 1(f), the arbitrator shall have the authority to try all issues, whether of fact or law.

(i)               Place.  The proceedings shall be heard in Maricopa County, Arizona.

                                                1.         Arbitration.  A single arbitrator shall be selected in accordance with the rules of the American Arbitration Association from panels maintained by the Association with experience in relevant real estate matters or construction. The arbitrator must not have any relationship to the parties or interest in the Community Center. The parties to the Dispute shall meet to select the arbitrator within ten (10) days after service of the initial complaint on all defendants named therein.

                                                2.         Commencement and Timing of Proceeding.  The arbitrator shall promptly commence the proceeding at the earliest convenient date in light of all of the facts and circumstances and shall conduct the proceeding without undue delay.

                                                3.         Pre‑hearing Conferences.  The arbitrator may require one or more pre‑hearing conferences.

                                                4.         Discovery.  The parties shall be entitled only to limited discovery, consisting of the exchange between the parties of only the following matters: (i) witness lists; (ii) expert witness designations; (iii) expert witness reports; (iv) exhibits; (v) reports of testing or inspections of the property subject to the Dispute, including but not limited to, destructive or invasive testing; and (vi) trial briefs. The parties shall also be entitled to conduct further tests and inspections as provided in Section 1(c). Any other discovery shall be permitted by the arbitrator upon a showing of good cause or based on the mutual agreement of the parties. The arbitrator shall oversee discovery and may enforce all discovery orders in the same manner as any trial court judge.

a.         Limitation on Remedies/Prohibition on the Award of Punitive Damages.  The arbitrator shall not have the power to award punitive or consequential damages. As further provided below, the right to punitive and consequential damages is waived by the parties. The arbitrator shall have the power to grant all other legal and equitable remedies and award compensatory damages in the proceeding.

b.         Motions.  The arbitrator shall have the power to hear and dispose of motions, including motions to dismiss, motions for judgment on the pleadings and summary judgment motions, in the same manner as a trial court judge, except the arbitrator shall also have the power to adjudicate summarily issues of fact or law including the availability of remedies, whether or not the issue adjudicated could dispose of an entire cause of action or defense.

c.         Arbitration Award.  The arbitrator’s award may be enforced as provided for in the Uniform Arbitration Act, A.R.S. § 12‑1501, et seq., or such similar law governing enforcement of awards in a trial court as is applicable in the jurisdiction in which the arbitration is held.

(g)        Waivers.  NOTICE: BY ACCEPTANCE OF A DEED TO OR BY ACQUIRING ANY OWNERSHIP INTEREST IN ANY PORTION OF THE PROPERTY, EACH PERSON, FOR HIMSELF, HERSELF OR ITSELF, AND HIS, HER OR ITS HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNS, AGREES TO HAVE ANY DISPUTE RESOLVED ACCORDING TO THE PROVISIONS OF THIS ARTICLE XIII AND WAIVES THE RIGHT TO PURSUE ANY DISPUTE IN ANY MANNER OTHER THAN AS PROVIDED IN THIS ARTICLE XVI.  THE ASSOCIATION, EACH OWNER AND DECLARANT ACKNOWLEDGE THAT BY AGREEING TO RESOLVE ALL DISPUTES AS PROVIDED IN THIS ARTICLE XIII, THEY ARE GIVING UP THEIR RESPECTIVE RIGHTS TO HAVE SUCH DISPUTES TRIED BEFORE A JURY. THE ASSOCIATION, EACH OWNER AND DECLARANT FURTHER WAIVE THEIR RESPECTIVE RIGHTS TO AN AWARD OF PUNITIVE AND CONSEQUENTIAL DAMAGES RELATING TO A DISPUTE. BY ACCEPTANCE OF A DEED TO OR BY ACQUIRING ANY OWNERSHIP INTEREST IN ANY PORTION OF THE PROPERTY, EACH OWNER HAS VOLUNTARILY ACKNOWLEDGED THAT HE, SHE OR IT IS GIVING UP ANY RIGHTS HE, SHE OR IT MAY POSSESS TO PUNITIVE AND CONSEQUENTIAL DAMAGES OR THE RIGHT TO A TRIAL BEFORE A JURY RELATING TO A DISPUTE.

(h)        Statutes of Limitation.  Nothing in this Article XIII shall be considered to toll, stay, reduce or extend any applicable statute of limitations.

Section 2.         Legal Action.

(a)        Required Consent of Owners for Legal Action.  Notwithstanding anything to the contrary in this Declaration, no action or claim may be instituted by the Association against any one or more of the Development Parties, relating to or arising out of the Community Center, this Declaration or any other Association Documents, the use or condition of the Community Center or the design or construction of or any condition on or affecting the Community Center, including, but not limited to, construction defects, surveys, soils conditions, grading, specifications, or disputes which allege negligence or other tortious conduct, breach of contract or breach of implied or express warranties as to the condition of the Community Center, unless such action or claim has first been approved by Owners representing seventy‑five percent (75%) of the votes in the Association who are voting in person or by proxy at a meeting duly called for such purpose.

(b)        Notice to Owners.

           (i)          Prior to obtaining the consent of the Owners in accordance with Section 2(a), the Association must provide written notice to all Owners, which notice shall (at a minimum) include (1) a description of the nature of any action or claim (the “Claim”), (2) a description of the attempts of the affected Development Party to correct such Claim and the opportunities provided to the affected Development Party to correct such Claim, (3) a certification from an engineer licensed in the State of Arizona that such Claim is valid along with a description of the scope of work necessary to cure such Claim and a resume of such engineer, (4) the estimated cost to repair such Claim, (5) the name and professional background of the attorney proposed to be retained by the Association to pursue the Claim against the affected Development Party and a description of the relationship between such attorney and member(s) of the Board of Directors (if any), (6) a description of the fee arrangement between such attorney and the Association, (7) the estimated attorneys’ fees and expert fees and costs necessary to pursue the Claim against the affected Development Party and the source of the funds which will be used to pay such fees and expenses, (8) the estimated time necessary to conclude the action against the affected Development Party, and (9) an affirmative statement from the Board that the action is in the best interest of the Association and its members.

            (ii)        In the event the Association recovers any funds from the affected Development Party (or any other person or entity) to repair a Claim, any excess funds remaining after repair of such Claim shall be paid into the Association’s reserve fund.

Section 3.         Notification to Prospective Purchasers.  In the event that the Association commences any action or claim, all Owners must notify prospective purchasers of such action or claim and must provide such prospective purchasers with a copy of the notice received from the Association in accordance with Section  2(b).

(a)        Required Consent of Declarant to Modify .  Notwithstanding anything to the contrary in this Declaration, this Article XIII shall not be amended except in accordance with Article XI of this Declaration and with the express written consent of the Declarant.

ARTICLE XIV 

MISCELLANEOUS 

            Section 1.         Interpretation of the Covenants.  Except for judicial construction, the Association, by its Board, shall have the exclusive right to construe and interpret the provisions of this Declaration.  In the absence of any adjudication to the contrary by a court of competent jurisdiction, the Association's construction or interpretation of the provisions hereof shall be final, conclusive and binding as to all persons and property benefited or bound by the Covenants hereof.

            Section 2.         Severability.  Any determination by any court of competent jurisdiction that any provision of this Declaration is invalid or unenforceable shall not affect the validity or enforceability of any of the other provisions hereof.

            Section 3.         Change of Circumstances.  Except as otherwise expressly provided in this Declaration, no change of conditions or circumstances shall operate to extinguish, terminate or modify any of the provisions of this declaration.

            Section 4.         Rules and Regulations.  In addition to the right to adopt, amend, revoke and replace rules and regulations on the matters expressly mentioned elsewhere in this Declaration, the Association (through its Board) shall have the right to adopt, amend, revoke and replace rules and regulations with respect to all other aspects of the Association's rights, activities and duties, provided said rules and regulations are not inconsistent with the provisions of this Declaration.

            Section 5.         Declarant's Disclaimer of Representations.  Anything to the contrary in this Declaration notwithstanding, and except as otherwise may be expressly set forth on a recorded plat or other instrument recorded in the office of the County Recorder of Maricopa County, Arizona, Declarant makes no warranties or representations whatsoever that the plans presently envisioned or the complete development of the Property can or will be carried out, or that any land now owned or hereafter acquired by the Declarant is or will be subjected to this Declaration or any other declaration, or that any such land (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 if that land is once used for a particular use, such use will continue in effect.

            Section 6.         No Warranty of Enforceability.  While Declarant has no reason to believe that any of the Covenants contained in this Declaration are or may be invalid or unenforceable for any reason or to any extent, Declarant makes no warranty or representation as to the present or future validity or enforceability of any such Covenants.  Any Owner acquiring a Lot in the Property in reliance on one or more of the Covenants shall assume all risks of the validity and enforceability thereof and by acquiring any Lot agrees that Declarant shall have no liability therefor.

            Section 7.         References to the Covenants in Deeds.  Deeds or any instruments affecting any part of the Property may contain the Covenants herein set forth by reference to this Declaration; but regardless of whether any such reference is made in any Deed or instrument, each and all of the Covenants shall be binding upon the grantee Owner or other person claiming through any instrument and his heirs, executors, administrators, successors and assigns.

            Section 8.         Gender and Number.  Wherever the context of this Declaration so requires, words used in the masculine gender shall include the feminine and neuter genders; words used in the neuter gender shall include the masculine and feminine genders; words in the singular shall include the plural; and words in the plural shall include the singular.

            Section 9.         Captions and Titles.  All captions, titles or headings of the Articles and Sections in this Declaration are for the purpose of reference and convenience only and are not to be deemed to limit, modify or otherwise affect any of the provisions hereof or to be used in determining the intent or context thereon.

            Section 10.       Notices.  If notice of any action or proposed action by the Board or of any committee or of any meeting is required by applicable law, this Declaration or resolution of the Board to be given to any Owner or Resident then, unless otherwise specified herein or in the resolution of the Board, such notice requirement shall be deemed satisfied if notice of such action or meeting is published once in any newspaper in general circulation within the City of Goodyear or the Property.  This Section shall not be construed to require that any notice be given if not otherwise required, and shall not prohibit satisfaction of any notice requirement in any other manner.  If notice is made by mail, it shall be deemed to have been received twenty-four (24) hours after a copy of the same has been deposited in the United States mail, postage prepaid, addressed to such person at the address given by that person to the Association for the purpose of service of such notice, or to the address of the Lot owned by such person if no address has been given.  Notice to the Board shall be delivered or sent certified mail to the office of the Association.

            Section 11.       FHA/VA Approval.  If this Declaration has been initially approved by FHA or VA in connection with any loan programs made available by FHA or VA and any loans have been made which are insured or guaranteed by FHA or VA, then as long as there is a Class B Membership, the dedication of Common Areas (except where such dedication is required as of the date hereof to the City of Goodyear), the annexation of Annexable Property, and the termination or amendment of this Declaration will require the prior approval of FHA or VA, as applicable, unless the need for such approval has been waived by FHA or VA.

            Section 12.       Litigation.  No judicial or administrative proceeding shall be commenced or prosecuted by the Association unless approved by Members holding seventy-five (75%) percent of the outstanding votes.  This Section shall not apply, however, to (a) actions brought by the Association to enforce the provisions of this Declaration (including, without limitation, the foreclosure of liens), (b) the imposition and collection of Assessments as provided in Article VI hereof, (c) proceedings involving challenges to taxation, or (d) counter-claims brought by the Association in proceedings instituted against it.  This Section shall not be amended unless such amendment is made by the Declarant or is approved by the percentage votes necessary to institute proceedings as provided above.

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Last modified: 10/10/08