Terra Lago CC&R'S, Terra Lago,

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    TELAGASSOCIATION GOVERNING DOCUM ENTS

    In compliance with amendments to California Civil Code and GovernmentCode, effective January 1, 2000, please attach this cover page to your copyof the association's governing docum ents,If this document contains any restriction based on race,color, religion, sex, familial status, marital status, disability,national origin, or ancestry, that restriction violates state andfederal fair housing laws and is void. Any person holding aninterest in this property may request that the county recorderremove the restrictive covenant language pursuant tosubdivision (c) of Section 12956.1 of the Government Code.

    TELAGASSOCIATIONGOVERNINGDOCUMENTS

    In compliance with amendmentsto CaliforniaCivil CodeandGovernmentCode, effectiveJanuary 1, 2000, pleaseattachthiscover pagetoyour copyof theassociation'sgoverningdocuments,If thisdocument containsanyrestrictionbasedonrace,color, religion, sex, familial status, marital status, disability,nationalorigin, orancestry, that restriction violates stateandfederalfair housinglaws and isvoid. Anypersonholdinganinterestinthispropertymayrequestthatthecountyrecorderremove the restrictive covenant language1 rsuant tosub&V ic ) ofSection 12956.1 oftheCover, enCode.

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    RECORDING REQUESTED 1W:FIDELITY NATIONAL TITLE COMPANY

    DOC 34 2006-00199701/10/2006C o n f o r m e d C o p y

    Has not been compared with originalL a r r y L I U a r d

    County of RiversideAssessor, County Clerk t3, Recorder

    WHEN RECORDED, MAIL TO:MANATT, PHELPS & PHILLIPS, LLP11355 West Olympic BoulevardLos Angeles, CA 90064-1614Attn: Justin X. Thompson, Esq.

    (Space Above for Recorder's Use)

    MASTER DECLARATION OFCOVENANTS, CONDITIONS, RESTRICTIONS

    AND RESERVATION OF EASEMENTSFOR

    TERRA LAGO

    4081.9698.8

    RECORDINGREQUESTEDIW:FIDELITYNATIONALTITLECOMPANY

    DOC342006-00199701/10/2006

    C o n f o rm e d C o p y Hasnot beencomparedwithoriginal

    L a r r y L I U a r d Countyof RiversideAsse ssor, County Clerk t3, Recorde r

    WHENRECORDED, MAILTO:MANATT,PHELPS&PHILLIPS,LLP11355WestOlympicBoulevardLos Angeles, CA 90064-1614Attn: JustinX. Thompson, Esq.

    (SpaceAboveforRecorder'sUse)

    MASTERDECLARATION OFCOVENANTS,CONDITIONS,RESTRICTIONS

    AND RESERVATIONOF EASEMENTSFOR

    TERRA LAGO

    40819698 .8

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    TABLE OF CONTENTS

    ARTICLE 11.11.2

    DEFINITIONS AND INTERPRETATIONDEFINITIONSINTERPRETATIONPageI 1ARTICLE 2 MASTER ASSOCIATION122.1. GENERAL DUTIES AND POWERS122.2 SPECIFIC DUTIES AND POW ERS122.3 PROHIBITED FUNCTIONS172.4 STAND ARD O F CARE . NONLIABILITY.,... .... , 17

    2.5 MEMBERSHIP192.6 VOTING RIGHTS212.7 DECLARANT'S VETO RIGHT222.8 ACTIONS SUBJECT TO DECLARANT'S VETO222.9 REPAIR AND MAINTENANCE22ARTICLE 3 DESIGN REVIEW COMM ITTEE 253.1 MEMB ERS OF COMMITTEE253.2 POWERS AND DUTIES253.3 REVIEW OF PLANS AND SPECIFICATIONS263.4 MEETINGS AND ACTIONS OF THE DESIGN REVIEWCOMMITTEE273.5 NO WAIVER OF FUTURE APPROVALS273.6 COMPENSATION OF MEMB ERS283.7 INSPECTION OF W ORK283.8 VARIANCES283.9 PRE-APPROVALS293.10 APPEALS29ARTICLE 4 RESIDENCE AND U SE RESTRICTIONS294.1 SINGLE FAMILY RESIDENCE2940819698.8

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    TABLE OF CONTENTS(continued)

    Page

    4.2 BUSINESS OR COMMERCIAL ACTIVITY294.3 NUISANCES314.4 SIGNS314.5 PARKING AND VEHICULAR RESTRICTIONS324.6 ANIMAL REGULATIONS334.7 AUTHORIZED ANTENNAE334.8 TRASI I344.9 IMPROVEMENTS344.10 INSURANCE354.11 FURTHER SUBDIVISION374.12 DRAINAGE384.13 WATER SUPPLY SYSTEM384.14 VIEW OBSTRUCTIONS384.15 INSTALLATION OF YA RD LAND SCAPING384.16 RESIDENTIAL LOT STREET TREES384.17 RIGHTS OF DISABLED384.18 TEMPORARY BUILDINGS394.19 MASTER COMMON PROPERTY394.20 DRILLING394.21 POLLUTANT CONTROL394.22 WINDOW COVERINGS: INSIDE INSTALLATIONS394.23 SOLAR ENERGY SYSTEMS394.24 COMPLIANCE WITH REPORTING REQUIREMENTS394.25 IMPROVEMENTS NEAR SLOPES......._ 404.26 GRADING404.27 SWIMMING, FISHING AND BOATING404.28 RECREATIONAL CLUB40ARTICLE 5 GOLF COURSE PROVISIONS415.1 GOLF COURSE4140819698.8

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    TABLE OF CONTENTS(continued)

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    ARTICLE 6ROPERTY EASEMENTS AND RIGHTS26.1 EASEMENTS26.2IGHT TO GRANT EASEMENTS46.3ELEGATION OF USE56.4IGHT OF ENTRY5ARTICLE 7 MASTER ASSOCIATION MAINTENANCE FUNDS ANDASSESSMENTS57.1ERSONAL OBLIGATION TO PAY ASSESSMENTS57.2ASTER ASSOCIATION M AINTENANCE FUNDS67.3URPOSE OF ASSESSMENTS67.4AIVER OF USE67.5IMITS ON ANNUAL ASSESSMENT INCREASES67.6NNUAL ASSESSMENTS87.7APITAL IMPROVEMENT ASSESSMENTS97.8PECIAL BENEFIT AREA ASSESSMENT9

    ARTICLE 8 DESTRUCTION OF IMPROVEMENTS08.1ESTORATION OF THE COMMUNITY08.2AMAGE TO RESIDENCES-RECONSTRUCTION08.3NTERIOR DAMAGE1ARTICLE 9 EMINENT DOMAINI9.1ONDEMNATION OF MASTER COMM ON AREA19.2ONDEMNA TION OF LOTS1

    ARTICLE 10 ENFORCEMENT110.1 ENFORCEMENT OF GOVERNING DOCUMENTS110.2 NONPAYMENT OF ASSESSMENTS.310.3 ENFORCEMENT OF BONDED OBLIGATIONS71.0.4 DISPUTE WITH DECLARANT PARTIES740819698.8 TABLE OF CONTENTS(continued) PageARTICLE 6ROPERTY EASEMENI S AND RIGHTS26.1 EASEMENTS26.2 RIGHT TO GRANT EASEMENTS46.3 DELEGATION OF USE56.4 RIGHT OF ENTRY5ARTICLE 7MASTER ASSOCIATION MAINTENANCE FUNDS ANDASSESSMENTS57.1 PERSONAL OBLIGATION TO PAY ASSESSMENTS ......57.2 MASTER ASSOCIATION MAINTENANCE FUNDS67.3 PURPOSE OF ASSESSMENTS67.4 WAIVER OF USE67.5 LIMITS ON ANNUAL ASSESSMENT INCREASES67.6 ANNUAL ASSESSMENTS87.7 CAPITAL IMPROVEMENT ASSESSMENTS97.8 SPECIAL BENEFIT AREA ASSESSMENT9ARTICLE 8 DESTRUCTION OF IMPROVEMENTS08.1RESTORATION OF THE COMMUNITY08.2 DAMAGE TO RESIDENCES-RECONSTRUCTION08.3 INTERIOR DAMAGE1ARTICLE 9 EMINENTDOMAIN19.1CONDEMNATION OF MASTER COMMON AREA19.2 CONDEMNATION OF LOTS1ARTICLE 10 ENFORCEMENT110.1ENFORCEMENT OF GOVERNING DOCUMENTS110.2 NONPAYMENT OF ASSESSMENTS.310.3 ENFORCEMENT OF BONDED OBLIGATIONS71.0.4 DISPUTE WITHDECLARANT PARTIES740g19698.8

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    TABLE OF CONTENTS(continued)

    Page

    .ARTICLE 11 DURATION AND AMENDMENT111.1. DURATION111.2 TERMINATION AND AMENDMENT2ARTICLE 12 GENERAL PROVISIONS312.1 MERGERS OR CONSOLIDATIONS312.2 NO PUBLIC RIGHT OR DEDICATION412.3 NOTICES412.4 CONSTRUCTIVE NOTICE AND ACCEPTANCE412.5 RIGHTS OF MORTGAGEES412.6 NO REPRESENTATIONS OR WARRANTIES4ARTICLE 13 ANNEXATION OF ADDITIONAL PROPERTY513.1 ADDITIONS BY DECLARANT OR NEIGHBORHOOD BUILDERS513.2 OTHER ADDITIONS513.3 RIGHTS AND OBLIGATIONS-ADDED TERRITORY513.4 NOTICE OF ADDITION513.5 POWER OF ATTORNEY613.6 DEANNEXATION AND AMENDMENT6ARTICLE 14 DECLARANT'S RIGHTS AND RESERVATIONS714.1 CONSTRUCTION RIGHTS714.2 SALES AND MARKETING RIGHTS714.3 CREATING ADDITIONAL EASEMENTS ...................... , ....714.4 ARCHITECTURAL RIGHTS714.5 USE RESTRICTION EXEMPTION814.6 ASSIGNMENT OF RIGHTS814.7 AMENDMENTS814.8 EXERCISE OF RIGHTS814.9 USE OF COMMUNITY814.10 PARTICIPATION IN MASTER ASSOCIATION8

    40 9698.8iv-

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    TABLE OF CONTENTS(continued)

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    14.11 DECLARANT APPROVAL OF ACTIONS914.12 MARKETING NAME.9ARTICLE 15 DECLARANT AND NEIGHBORHOOD BUILDER INTERESTS,EXEMPTIONS AND RIGHTS915.1 INTERESTS OF DECLARANT AND NEIGHBORHOOD BUILDERS915.2 EXEMPTIONS AND RIGHTS OF DECLARANT ANDNEIGHBORHOOD BUILDERS1

    EXHIBIT AEGAL DESCRIPTION OF A/ThIEXABLE TERRITORYEXHIBIT BPPROXIMATE LOCATION OF COMMUNITY WALLS IN THEINITIAL COVERED PROPERTYEXHIBIT CASTER COMMON AREA IN THE INITIAL COVEREDPROPERTYEXHIBIT DPPROXIMATE LOCATIONS OF MASTER MAINTENANCEAREAS IN THE INITIAL COVERED PROPERTY

    408 19698. 8

    TABLE OF CONTENTS(continued)

    Page

    14.11 DECLARANT APPROVAL OF ACTIONS914.12 MARKETING NAME.9ARTICLE 15 DECLARANT AND NEIGHBORHOOD BUILDER INTERESTS,EXEMPTIONS AND RIGHTS915.1 INTERESTS OF DECLARANTAND NEIGHBORHOOD BUILDERS915.2 EXEMPTIONS AND RIGHTS OF DECLARANT ANDNEIGHBORHOOD BUILDERS1

    EXHIBITAEGAL DESCRIPTION OF A/ThIEXABLE TERRITORYEXHIBITBPPROXIMATE LOCATION OF COMMUNITY WALLS IN THEINITIAL COVERED PROPERTYEXHIBITCASTER COMMON AREAIN THE INITIAL COVEREDPROPERTYEXHIBITDPPROXIMATE LOCATIONS OF MASTER MAINTENANCEAREAS INTHEINITIAL COVERED PROPERTY

    4W 319698.S -V -

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    MASTER DECLARATION OFCOVENANTS, CONDITIONS, RESTRICTIONS

    AND RESERVATION OF EASEMENTSFOR

    TERRA LAGOTHIS MASTER DECLARATION OF COVENANTS, CONDITIONS,

    RESTRICTIONS AND RESERVATION OF EASEMENTS FOR TERRA LAGO is made byINDIO LAND VENTURES LLC, a Delaware limited liability company ("Declarant") andWOODSIDE PORTOFINO, INC., a California corporation ("First Neighborhood Builder").The capitalized teims used in the Recitals are defined in Article I.

    RECITALS:A. First Neighborhood Builder is the owner of real property ("Initial

    Covered Property") located in the City of Indio, Riverside County, California, described asfollows:

    Tract No. 31601-2, as shown on a Subdivision Map, Filed on sVi2005, in Book sg7Pages ,g 9 toinclusive, ofMaps, in the Office of the Riverside County Recorder.B. Declarant is the owner of real property ("Annexable Territory") locatedin the City of Indio, Riverside County, California, described on Exhibit A attached hereto.C. All of the Community will be developed with certain common objectives

    and Owners of Lots within the Community will have certain common interests. Any area of theAnnexable Territory added to the Community will be developed with objectives designed tobenefit all real property within the Community, even though the areas are of different character.This common development scheme created by Declarant imposes reciprocal burdens andbenefits on all of the Community, so that the Community is both burdened and benefited by theprovisions of this Master Declaration.

    D. Declarant has deemed it desirable, for the efficient preservation of theamenities in the Community, to create a "master planned development" as defined in Section2792.32 of Title 10 of the California Code of Regulations that is also a "common interestdevelopment" within the meaning of Section 1351(c) of the California Civil Code, pursuant tothe Davis-Stirling Common Interest Development Act. The Community is planned to constitutea "subdivision" as defined in Section 11000 of the California Business and Professions Codecontaining two (2) or more product types constructed by two (2) or more NeighborhoodBuilders. The general plan of development of the Community will include forming a corporation(the "Master Association") pursuant to the California Nonprofit Mutual Benefit CorporationLaw to which will be assigned the powers of (I) owning, maintaining and administering portionsof the Master Common Area, (2) administering and enforcing the Governing Documents, and (3)

    I40819698.8

    MASTERDECLARATION OFCOVENANTS, CONDITIONS, RESTRICTIONS

    AND RESERVATION OF EASEMENTSFOR

    TERRA LAGOTHIS MASTER DECLARATION OF COVENANTS, CONDITIONS,

    RESTRICTIONS AND RESERVATION OF EASEMENTS FOR TERRA LAGO is made byINDIOLAND VENTURES LLC, a Delaware limited liability company ("Declarant") andWOODSIDE PORTOFINO, INC., a California corporation ("First Neighborhood Builder").The capitalized teims used in the Recitals are defined in Article 1.

    RECITALS:A. First Neighborhood Builder is the owner of real property ("Initial

    Covered Property") located in theCityof Indio, Riverside County, California, described asfollows:

    Tract No. 31601-2, as shown on aSubdivision Map, Filedon sVi2005, in Book sg7Pages ,g 9 toinclusive, ofMaps, in theOffice of the RiversideCounty Recorder.B. Declarant isthe owner of real property ("Annexable Territory") locatedin the City of Indio, Riverside County, California, described on Exhibit A attached hereto.C. All of the Community will be developed with certain common objectives

    and Owners of Lots within the Community will have certain common interests. Any area of theAnnexable Territoryadded to the Community will be developed with objectives designed tobenefit all real propertywithin the Community, even though the areas are of different character.This commondevelopment scheme created by Declarant imposesreciprocal burdens andbenefits onall of the Community, so that the Community is both burdened and benefited by theprovisions of this MasterDeclaration.

    D. Declarant has deemed it desirable, for the efficient preservationof theamenities in the Community, to createa "master planned development"as defined in Section2792.32 of Title 10 of the California Code ofRegulations that is alsoa "common interestdevelopment" within the meaning of Section1351(c) of the California Civil Code, pursuant tothe Davis-Stirling Common Interest Development Act. The Community is planned to constitutea "subdivision" as defined in Section 11000 of the California Business and Professions Codecontaining two (2) or more product types constructed by two (2) or moreNeighborhoodBuilders. The general plan of development of the Community will include forming a corporation(the "Master Association") pursuant to the California Nonprofit Mutual Benefit CorporationLawto whichwill be assigned the powers of (I) owning, maintaining and administering portionsof the Master Common Area, (2) administering and enforcing the Governing Documents, and (3)

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    collecting and disbursing the Assessments and charges hereinafter created. In addition, theMaster Association will exercise such powers required by Section 1363 of the California CivilCode. The Members of the Master Association will be the Owners of Lots in the Community.

    E.eclarant hereby declares that the Community will be held, sold,conveyed, encumbered, hypothecated, leased, used, occupied and improved subject to theeasements, restrictions, reservations, rights, covenants, conditions and equitable servitudescontained in this Master Declaration, all of which are for the purpose of enhancing theattractiveness and desirability of the Community, in furtherance of a general plan for theprotection, maintenance, subdivision, improvement and sale of the Community or any portionthereof. The covenants, conditions, restrictions, rights, reservations, easements and equitableservitudes set forth herein will (1) run with and burden the Community and will be binding uponall Persons having or acquiring any interest in the Community or any part thereof, and their heirs,successors and assigns; (2) inure to the benefit of every portion of the Community and anyinterest therein; (3) inure to the benefit of and be binding upon Declarant, the NeighborhoodBuilders, and their respective successors-in-interest, each Owner and each Owner's successors-in-interest; and (4) may be enforced by Declarant, any Neighborhood Builder, any NeighborhoodAssociation, any Owner and the Master Association,

    ARTICLEDEFINITIONS AND INTERPRETATION

    1.1EFINITIONS. Unless otherwise expressly provided, the following words andphrases when used in this Master Declaration have the following meanings.1.1.1 Annexable Territory. Annexable Territory means the real propertydescribed in Exhibit A which may be made subject to this Master Declaration pursuant toArticle 13. Any references in this Master Declaration to Annexable Territory are references tothe Annexable Territory as a whole and to portions thereof.

    1.12 Annual Assessment. Annual Assessment means a charge against theOwners and their Lots representing their share of the Common Expenses. The AnnualAssessment is a "regular assessment" as described in. California Civil Code Section 1366.

    1.1.3 Articles. Articles means the Articles of Incorporation of the MasterAssociation currently in effect.

    1.1.4 Assessment. Assessment means any Annual Assessment, CapitalImprovement Assessment, Reconstruction Assessment and Special Assessment.

    1.1.5 Authorized Antenna. Authorized Antenna is (a) an antenna designed toreceive direct broadcast satellite service, including direct-to-home satellite service, that is one (1)meter or less in diameter, or (b) an antenna designed to receive video programming service,including multichannel multipoint distribution service, instructional television fixed service, andlocal multipoint distribution service, and is one (1) meter or less in diameter or diagonalmeasurement, or (c) an antenna designed to receive television broadcast signals, and includes (d)an antenna used to receive and transmit fixed wireless signals.

    2408E9698.8

    collecting anddisbursing the Assessmentsand chargeshereinafter created. In addition, theMaster Association will exercise suchpowers required by Section1363 of the California CivilCode. The Members of the Master Association will be the Owners of Lotsin theCommunity.

    E.eclarant hereby declares that the Community will be held, sold,conveyed, encumbered, hypothecated, leased, used, occupied andimproved subject totheeasements, restrictions, reservations, rights, covenants, conditions andequitable servitudescontained in this Master Declaration, all of which are for the purpose of enhancing theattractivenessand desirability of the Community, in furtheranceof a general plan for theprotection., maintenance, subdivision, improvement and saleoftheCommunityorany portionthereof. The covenants, conditions, restrictions, rights, reservations, easements and equitableservitudes set forth herein will (1) run withand burden theCommunityand will be binding uponall Persons having or acquiring any interest inthe Community or any part thereof, and their heirs,successors and assigns; (2) inure tothe benefit of every portion of the Communityand anyinterest therein; (3) inure to the benefit of and be bindingupon Declarant, the NeighborhoodBuilders, andtheir respective successors-in-interest, each Owner and each Owner's successors-in-interest; and(4) may be enforced by Declarant, any Neighborhood Builder, anyNeighborhoodAssociation, any Owner and the Master Association,

    ARTICLEDEFINITIONS AND INTERPRETATION

    1.1EFINITIONS. Unless otherwise expressly provided, the following words andphrases when usedin this Master Declaration have the following meanings.1.1.1 Annexable Territory. Annexable Territory means the real propertydescribed in Exhibit A whichmay be made subject to this Master Declaration pursuant toArticle13. Any references inthis Master Declaration to Annexable Territory are references tothe Annexable Territory as a whole and toportions thereof.

    1.1.2 AnnualAssessment. AnnualAssessment means acharge againsttheOwners and their Lots representingtheir share of the Common Expenses. The AnnualAssessment is a "regular assessment" as described in California Civil Code Section1366.

    1.1.3 Articles. Articles means the Articles of Incorporationof the MasterAssociation currently in effect.

    1.1.4 Assessment. Assessment means anyAnnual Assessment, CapitalImprovement Assessment, Reconstruction Assessment and Special Assessment.

    1.1.5AuthorizedAntenna. Authorized Antenna is(a)anantennadesignedtoreceive direct broadcast satellite service, including direct-to-home satellite service, that is one (1)meter orless in diameter, or (b) an antennadesignedto receive video programming service,includingmultichannel multipoint distribution service, instructional television fixed service, andlocalmultipoint distribution service,and isone (1) meter or less in diameter or diagonalmeasurement, or(c)anantenna designed to receivetelevision broadcast signals, and includes (d)anantenna used to receive andtransmit fixed wireless signals.

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    1.1.6 Authorized Vehicle. Authorized Vehicles means standard passengervehicles, including but not limited to automobiles, passenger vans designed to accommodate ten(10) or fewer people, motorcycles and pick-up trucks having a manufacturer's rating or payloadcapacity of one (1) ton or less.

    1.1.7 Board or Board of Directors. Board or Board of Directors means theMaster Association's Board of Directors.1.1_8 Budget. Budget means a written, itemized estimate of the Master

    Association's income and Common Expenses prepared pursuant to the Bylaws.1.1.9 Bylaws. Bylaws means the Bylaws of the Master Association as currently

    in effect.1.1.10 Capital Improvement Assessment. Capital Improvement Assessment

    means a charge against the Owners and their Lots representing their share of the MasterAssociation's cost for installing or constructing capital Improvements on the Master CommonProperty. Capital Improvements Assessments shall be levied in the same proportion as AnnualAssessments. Capital Improvement Assessments are "special assessments" as described inCalifornia Civil Code Section 1366.

    1.1.11 City. City means the City of Indio, California, and its variousdepartments, divisions, employees and representatives.

    1.1.12 Close of Escrow. Close of Escrow means the date on which a deed isRecorded conveying a Lot pursuant to a transaction requiring the issuance of a Final SubdivisionPublic Report by the DRE. Among other exempt transfers, the term "Close of Escrow" hereinshall not include the Recordation of a deed (i) between Declarant and (a) any successor to therights of Declarant hereunder, or (b) any Neighborhood Builder, or (ii) between twoNeighborhood Builders.

    1.1.13 Club. "Club" means and refers to the Community recreational facilitythat is intended to serve the Owners of the Residences in Terra Lago and the tenants, guests andinvitees of such Owners, in accordance with such rules and regulations regarding Club Facilitiesuse and operation as may be adopted from time to time by the Master Association.

    1.1.14 Club Charges. "Club Charges" means and refers to the charges related tothe Club to be paid by the Owners of Residences pursuant to this Master Declaration. ClubCharges are payable monthly by Owners of Residences for mandatory membership in the Cluband for the right to use the Club Facilities. Club Charges shall be established, budgeted, assessedand collected as a part of the Annual Assessments levied to operate and maintain the MasterComm on Property.

    1.1.15 Club Facilities. "Club Facilities" means the real property andImprovements that are owned by the Master Association, and any equipment and other amenitieslocated in or upon the Club's real property and Improvements.

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    1.1.16 Club Note. "Club Note" means and refers to the unsecured promissorynote between the Declarant and the Master Association pursuant to which the Master Associationis acquiring the Club Facilities. The Club Note shall establish the amount of the purchase priceat such time as Declarant's costs of constructing the Club Facilities are known. The MasterAssociation, acting by and through its Board of Directors, shall be obligated to execute anddeliver to the Declarant the Club Note contemporaneously with the Declarant's conveyance ofthe Club Facilities to the Master Association. Club Charges, as defined in Section 1.1.14, above,will include the installment payments for the Master Association's purchase of the ClubFacilities pursuant to the Club Note.

    1.1.17 Common Expenses. Common Expenses means those expenses for whichthe Master Association is responsible under this Master Declaration, including the actual andestimated costs of and reserves for maintaining, managing and operating (including amountsincurred for maintenance imposed on the Master Association by this Master Declaration) theMaster Common Property, including:

    (a) Master Common Area and Improvements thereon as describedherein;(b) Master Maintenance Areas as described herein;

    The cost and fees attributable to comply with post-constructionBMP's applicable to the Community, including distribution of educational literature to Ownersregarding reducing pollution and informing them of the purpose, function and limitations of thestructural BMP's applicable to the Community;

    (d) The cost and fees attributable to providing TelecommunicationFacilities and Services to the Community, including the cost of any TelecommunicationsContract;

    (e) The cost of all utilities and mechanical and electrical equipmentserving the Master Common Property;The costs and fees attributable to managing and administering the

    Master Association, compensating the Manager, accountants, attorneys and employees, allinsurance covering the Common Property and the Directors, officers and agents of the MasterAssociation, and bonding the members of the Board;

    (g) Unpaid Special Assessments, Reconstruction Assessments andCapital Improvement Assessments;

    (h) Amounts paid by the Master Association for discharge of any lienor encumbrance levied against the Community;

    (i) All other expenses incurred by the Master Association for theCommunity, for the common benefit of the Owners;

    (j).he Club Facilities; and4

    40819698.8

    1.1.16 Club Note. "Club Note" means and refers to the unsecured promissorynote between the Declarant and the Master Association pursuant to which the Master Associationis acquiring the Club Facilities. The Club Note shall establish the amount of the purchase priceat such time as Declarant's costs of constructing the Club Facilities are known. The MasterAssociation, acting by and through its Board of Directors, shall be obligated to execute anddeliver to the Declarant the Club Note contemporaneously with the Declarant's conveyance ofthe Club Facilities to the Master Association. Club Charges, as defined in Section 1.1.14, above,will include the installment payments for the Master Association's purchase of the ClubFacilities pursuant to the Club Note.

    1.1.17 Common Expenses. Common Expenses means those expenses for whichthe Master Association is responsible under this Master Declaration, including the actual andestimated costs of and reserves for maintaining, managing and operating (including amountsincurred for maintenance imposed on the Master Association by this Master Declaration) theMaster Common Property, including:

    (a) Master Common Area and Improvements thereon as describedherein;(b) Master Maintenance Areas as described herein;(c) The cost and fees attributable to comply with post-constructionBMP's applicable to the Community, including distribution of educational literature to Owners

    regarding reducing pollution and informing themof the purpose, function and limitations of thestructural BMP's applicable to the Community;

    (d) The cost and fees attributable to providing TelecommunicationFacilities and Services to the Community, including the cost of any TelecommunicationsContract;

    (e) The cost of all utilitiesand mechanical and electrical equipmentserving the Master Common Property;The costs and fees attributable to managing and administeringthe

    Master Association, compensating the Manager, accountants, attorneys and employees, allinsurance covering the Common Property and the Directors, officers and agents of the MasterAssociation, and bonding the members of the Board;

    (g) Unpaid Special Assessments, Reconstruction Assessments andCapital Improvement Assessments;

    (h) Amounts paid by the Master Association fordischarge of anylienor encumbrance levied against the Community;

    (i) All other expenses incurred bythe Master Association for theCommunity, for the common benefit of the Owners;(j )..he Club Facilities; and

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    (k)he costs and fees attributable to the Master Association'sobligations under the Club Note.1.1.18 Community. Community means (a) the Initial Covered Property, and (b)each Phase described in a Notice of Addition or a Supplemental Master Declaration. TheCommunity is a "common interest development" and a "planned development" as defined inSections 1351(c) and 1351(k) of the California Civil Code. Any references in this MasterDeclaration to the Community are references to the Community as a whole and to portionsthereof.

    1.1.19 Community Wall. Community Wall means any wall or fence constructedor installed by Declarant that is designated as a Community Wall in this Master Declaration, in aSupplemental Master Declaration or in a Notice of Addition. The approximate locations of theCommunity Walls in the Initial Covered Property are depicted on Exhibit Battached hereto.

    1,1.20 County_ County means Riverside County, California, and its variousdepartments, divisions, employees and representatives.

    1.1.21 Declarant. Declarant means Indio Land Ventures, LLC, a Delawarelimited liability company, its successors and any Person to which it shall have assigned any of itsrights by an express written assignment. As used in this Section, "successor" means a Personwho acquires Declarant or substantially all of Declarant's assets by sale, merger, reverse merger,consolidation, sale of stock or assets, operation of law or otherwise. Declarant shall determine inits sole discretion the time, place and manner in which it discharges its obligations and exercisesthe rights reserved to it under this Master Declaration. Declarant is a "builder" as described inCalifornia Civil Code Section 1375.

    1.1.22 Design Guidelines. Design Guidelines means the rules or guidelinessetting forth procedures and standards for submission of plans for Design Review Committeeapproval.

    1.1.23 Design Review Committee or Committee. Design Review Committeeor Committee means the Design Review Committee created in accordance with Article 3.

    1.1.24 DRE. DRE means the California Department of Real Estate and anydepartment or agency of the California state government which succeeds to the DRE's functions.

    1.1.25 Family. Family means natural individuals, related or not, who live as asingle household in a Residence.

    1.1.26 Fiscal Year. Fiscal Year means the fiscal accounting and reporting periodof the Master Association.

    1.1.27 Governing Documents. Governing Documents means this MasterDeclaration, the Articles, Bylaws, Design Guidelines, Rules and Regulations, SupplementalMaster Declarations and Notices of Addition.

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    (k)he costs and fees attributable to the 1 /tasterAssociation'sobligations under the Club Note.1.1.18 Community. Community means (a) theInitial Covered Property, and (b)each Phase described in a Notice of Addition or a Supplemental Master Declaration. TheCommunity is a "common interest development" and a "planned development" as defined inSections 1351(c) and 1351(k) of the California Civil Code. Any references in this MasterDeclaration to the Community are references to the Community as a whole and to portionsthereof.

    1.1.19Community Wall. Community Wall meansany wall or fence constructedor installed by Declarant that is designated as a Community Wall in this Master Declaration, in aSupplemental Master Declaration or in a Notice of Addition. The approximate locations of theCommunity Walls in the Initial Covered Property are depicted on Exhibit B attached hereto.

    1,1.20 County_ County means Riverside County, California, andits variousdepartments, divisions, employees and representatives.

    1.1.21 Declarant. Declarant means Indio Land Ventures, LLC, a Delawarelimited liability company, its successors and any Person to which it shall have assigned any of itsrights by an express written assignment. As used in this Section, "successor" means a Personwho acquires Declarant or substantially all of Declarant's assets by sale, merger, reverse merger,consolidation, sale of stock or assets, operation of law or otherwise. Declarant shall determine inits sole discretion the time, place and manner in which it discharges its obligations and exercisesthe rights reserved to it under this Master Declaration. Declarant is a "builder" as described inCalifornia Civil Code Section 1375.

    1.1.22 Design Guidelines. Design Guidelines means the rules or guidelinessetting forth procedures and standards for submission of plans for Design Review Committeeapproval.

    1.1.23 Design Review Committee or Committee. Design Review Committeeor Committee means the Design Review Committee created in accordance with Article 3.

    1.1.24 DRE. DRE means the California Department ofReal Estate and anydepartment or agency of the California state government which succeeds to the DRE's functions.

    1.1.25 Family.Family means naturalindividuals, related or not, who live asasingle household in a Residence.

    1.1.26 Fiscal Year.Fiscal Year means the fiscal accounting andreporting periodof the Master Association.

    1.1.27 Governing Documents. Governing Documents meansthis MasterDeclaration, the Articles, Bylaws, Design Guidelines, Rulesand Regulations, SupplementalMaster Declarations and Notices of Addition.

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    1.1.28 Improvement, Improvements. Improvement means any structure andany appurtenance thereto including a building, walkway, irrigation system, garage, road,driveway, parking area, fence, any type of wall, awning, stairs, deck, any type of landscaping andplanting, antenna, windbreak, the exterior surface of any visible structure and the paint on suchsurface, pole, sign, exterior air conditioning and water softener fixture or equipment. The DesignReview Committee may identify additional items that are Improvements.

    1.1.29 Include, Including. Whether capitalized or not, include and includingmean "include without limitation" and "including without limitation," respectively.

    1.1.30 Initial Covered Property. Initial Covered Property means all of the realproperty described in Paragraph A of the Preamble of this Master Declaration.

    1.1.31 Law, Laws. Whether capitalized or not, law and laws mean all federal,state and local laws, ordinances, rules, regulations and orders.

    1.1.32 Lot. Lot means a lot or parcel of land shown on a Recorded Subdivisionmap or recorded parcel map of any portion of the Community, except the Master Common Areaand any Neighborhood Property. Lot also means a condominium as defined in Sections 783 and1351(f) of the California Civil Code. A Notice of Addition annexing a condominium to thisMaster Declaration shall state that the condominium is a Lot for purposes of this MasterDeclaration.

    1.1.33 Maintain, Maintenance. Whether capitalized or not, maintain andmaintenance mean "maintain, repair and replace" and "maintenance, repair and replacement,"respectively; provided however, that maintain or maintenance shall not include repair andreplace(ment) where the context or specific language of this Master Declaration provides anothermeaning.

    1.1.34 Manager. Manager means the Person retained by the Master Associationto perfotn management functions of the Master Association as limited by the GoverningDocuments and the terms of the agreement between the Master Association and the Person.1.1.35 Master Association. Master Association means Terra Lago CommunityAssociation, a California nonprofit corporation (formed pursuant to the California NonprofitMutual Benefit Corporation Law), and its successors-in-interest. The Master Association is an"association" as defined in Section 1351 (a) of the California Civil Code.

    1.1.36 Master Association Maintenance Funds. Master AssociationMaintenance Funds means the accounts created for Master Association receipts anddisbursements pursuant to Article 7.

    1.1.37 Master Common Area. Master Common Area means real or personalproperty owned in fee by the Master Association or designated by the Declarant as MasterCommon Area and therefore made subject to the restrictions on Master Common Areaestablished in the Governing Documents. Any references in this Master Declaration to MasterCommon Area are references to the Master Common Area as a whole and to portions thereof.The Master Common Area satisfies the definition of "Common Area" in California Civil Code

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    1.1.28 Improvement, Improvements. Improvement means any structure andany appurtenance thereto includinga building, walkway, irrigation system, garage, road,driveway, parkingarea, fence, any type ofwall, awning, stairs, deck., any typeoflandscapingandplanting, antenna, windbreak, the exterior surface of any visible structureand the paint on suchsurface, pole, sign, exterior air conditioning and water softener fixture or equipment. The DesignReview Committee may identify additional items that areImprovements.

    1.1.29Include, Including. Whether capitalized ornot, include and includingmean "include without limitation" and "including without limitation," respectively.1.1.30 InitialCovered Property.Initial CoveredPropertymeans allof therealproperty described in Paragraph A of the Preambleof this Master Declaration.1.1.31 Law, Laws. Whether capitalizedor not, law and lawsmeanall federal,stateandlocal laws, ordinances, rules, regulations and orders.1.1.32 Lot. Lot meansa lot or parcel ofland shown on aRecorded Subdivisionmapor recorded parcel map ofanyportion of the Community, except the MasterCommon Areaand any NeighborhoodProperty. Lot also meansa condominium as defined inSections 783 and1351(f)of theCalifornia Civil Code. ANoticeof Additionannexing acondominiumto thisMaster Declaration shall state that the condominium is a Lot for purposes of this MasterDeclaration.1.1.33Maintain, Maintenance. Whether capitalizedor not, maintainandmaintenance mean "maintain, repair and replace" and "maintenance, repairandreplacement,"respectively;provided however,thatmaintain or maintenanceshallnot include repair andreplace(ment) where the contextor specificlanguage of this Master Declaration providesanothermeaning.1.1.34Manager. Managermeans the Personretained by theMaster Associationto perform management functionsofthe Master Associationas limited by the GoverningDocuments andthe terms ofthe agreement betweenthe Master Association and the Person.1.1.35 Master Association. MasterAssociationmeans TerraLagoCommunityAssociation,a California nonprofit corporation (formed pursuantto theCalifornia NonprofitMutualBenefit Corporation Law), and its successors-in-interest. The Master Association is an"association."as definedinSection 1351 (a)of the California Civil Code,1.1.36 Master Association Maintenance Funds. Master AssociationMaintenanceFunds means the accounts created forMaster Associationreceiptsanddisbursementspursuant toArticle 7.1.L37Master CommonArea. Master CommonArea meansreal or personalproperty ownedin feeby theMasterAssociationor designatedbytheDeclarant asMasterCommonAreaandtherefore madesubject to the restrictionson Master Common Areaestablished in theGoverning Documents.Any references in this MasterDeclaration to MasterCommonAreaare references tothe MasterCommonArea as a whole and to portions thereof.TheMaster CommonAreasatisfies the definitionof "Common Area" in California CivilCode

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    SectiOn 1351(b). The Master Common Area in the Initial Covered Property is described onExhibit C attached hereto. Additional Master Common Area may be annexed to the Communitypursuant to Article 13. The Master Common Area shall includ.e the Club at such time as theClub or Club Facilities are acquired by the Master Association in fee and the Club and ClubFacilities are annexed into the Community.

    1.1.38 Master Common Property. Master Common Property means the MasterCommon Area and Master Maintenance Areas. Any references to the Master Common Propertyare references to the Master Common Property as a whole and to portions thereof.

    1.1.39 Master Declaration. Master Declaration means this instrument ascurrently in effect.

    1.1.40 Master Maintenance Area. Master Maintenance Area means thoseImprovements in residential Lots or other real property which are not owned in fee by the MasterAssociation but which are designated for maintenance by the Master Association.

    (a)enerally. The Master Maintenance Areas in a Phase ofdevelopment may include one or more of the following:(i) The structural integrity, cap and exterior surface (facingaway from the residential Lot) of those portions of theCommunity Walls that are constructed on the residentialLots in the Phase;(ii) Certain landscaped slopes along parkways consisting ofsoftscape and irrigation equipment which are designated formaintenance by the Master Association;

    (iii) Parkways, medians and any street trees located thereonwhich are designated for maintenance by the MasterAssociation; and

    (iv) Entry monuments; and(v) Any and all lakes and/or clubhouses that are designated as

    Master Maintenance Areas at the time the property onwhich they are located is annexed.

    (b)aster Maintenance Areas in the Initial Covered Property.The Master Maintenance Areas in the Initial Covered Property are described on Exhibit D. TheMaster Association's obligation to maintain any areas described generally in subparagraph (a)above which are not applicable to the Initial Covered Property shall commence in accordancewith Section 2.9.3(a) below.

    (c)aster Maintenance Areas in the Annexable Territory. MasterMaintenance Areas in the Annexable Territory shall include the items listed in subparagraph (a)above as applicable to the Lots in each Tract of Annexable Territory. Declarant may designate7408/9698.8

    Section 1351(b). The Master Common Area in th.e Initial Covered Property is described onExhibit Cattached hereto. Additional Master CommonArea may be annexed to the Communitypursuant to Article 13. The Master Common Area shall include the Club at such time as theClub or Club Facilities are acquired by the Master Association in fee and the Club and ClubFacilities are annexed into the Community.

    1.1.38 Master Common Property. Master Common Property means the MasterCommon Area and Master Maintenance Areas. Any references to the Master Common Propertyare references to the Master Common Property as a whole and to portions thereof.

    1.1.39 Master Declaration. Master Declaration means this instrument ascurrentlyin effect.

    1.1.40 Master Maintenance Area. Master Maintenance Area means thoseImprovements in residential Lots or other real property which are not ownedin fee bythe MasterAssociation but which are designated for maintenance by the Master Association.

    (a)enerally. The Master Maintenance Areas in a Phase ofdevelopment may include one or more of the following:(i) The structural integrity, cap and exterior surface (facingaway from the residential Lot) of those portions of theCommunity Walls that are constructed on the residentialLots in the Phase;(ii) Certain landscaped slopes along parkways consisting ofsoftscape and irrigation equipment which aredesignated formaintenance by the Master Association;

    (iii) Parkways, medians and any street trees located thereonwhich are designated for maintenance by the MasterAssociation; and

    (iv) Entry monuments; and(v) Any and all lakes and/or clubhouses that are designated as

    Master Maintenance Areas at the time the property onwhich they are located is annexed.

    (b)aster Maintenance Areas in the Initial Covered Property.The Master Maintenance Areas in the Initial Covered Property are described onExhibit D. TheMaster Association's obligation to maintain any areas described generally in subparagraph (a)above which are not applicable tothe Initial Covered Property shall commence in accordancewith Section 2.9.3(a) below.

    (c)aster Maintenance Areas in the Annexable Territory.MasterMaintenance Areas in the Annexable Territory shall include the items listed in subparagraph (a)above as applicable to the Lots in each Tract of Annexable Territory. Declarant may designate7

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    additional Master Maintenance Areas in a Notice of Addition or a Supplemental MasterDeclaration.

    I . I.41 Membership. Membership means the voting and other rights, privileges,and duties established in the Governing Documents for members of the Master Association.

    1.1.42 Mortgage. Mortgage means any Recorded document, including a deed oftrust, by which a Lot, Master Common Area or Neighborhood Property is hypothecated to secureperformance of an obligation.

    1.1.43 Mortgagee. Mortgagee means a Person to whom a Mortgage is made, orthe assignee of the Mortgagee's rights under the Mortgage by a Recorded instrument. Forpurposes of this Master Declaration, the term Mortgagee shall include a beneficiary under a deedof trust.

    1.1.44 Mortgagor. Mortgagor means a person who has mortgaged his property.For purposes of this Master Declaration, the term Mortgagor shall include a trustor under a deedof trust.

    1.1.45 Neighborhood. Neighborhood means an area in the Community that issubject to a Neighborhood Declaration. A Neighborhood may include one or more Phases.

    1.1.46 Neighborhood Association. Neighborhood Association means anyCalifornia nonprofit corporation or unincorporated association, or its successors, established inconnection with a Neighborhood Declaration, the membership of which is composed of Ownersof condominiums within a condominium project or owners of Lots within a planneddevelopment within the Community.

    1.1.47 Neighborhood Builder. Neighborhood Builder means a Person who isdesignated by Declarant as a Neighborhood Builder in a Recorded document and who acquires aportion of the Community for the purpose of developing such portion for resale to the generalpublic. The term "Neighborhood Builder" includes the First Neighborhood Builder but does notinclude Declarant. Each Neighborhood Builder is a "builder" as described in California CivilCode Section 1375.

    1.1.48 Neighborhood Declaration. Neighborhood Declaration means theDeclaration of Covenants, Conditions and Restrictions which solely affects a Neighborhood.Neither this Master Declaration nor any Supplemental Master Declaration is a NeighborhoodDeclaration.

    1.1.49 Neighborhood Property. Neighborhood Property means real or personalproperty designated by the Declarant and Neighborhood Builder as Neighborhood Property inthis Master Declaration, in a Supplemental Master Declaration, or in a NeighborhoodDeclaration or Neighborhood Supplemental Declaration. Any references in this MasterDeclaration to Neighborhood Property are references to the Neighborhood Property as a wholeand to portions thereof. Neighborhood Property satisfies the definition of "Common Area" inSection 1351(b) of the California Civil Code.

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    additional MasterMaintenanceAreas ina Noticeof Addition or a Supplemental asterDeclaration.

    I .41 Membership. Membership means the voting and other rights, privileges,and duties established in the Governing Documents for members of the Master Association.

    1, I .42 Mortgage. Mortgage means any Recorded document, includinga deed oftrust, by which a Lot, Master Common Area or Neighborhood Property is hypothecated to secureperformance of an obligation.

    1.1.43 Mortgagee. Mortgagee means a Person to whoma Mortgage is made, orthe assignee of theMortgagee's rights under the Mortgage by a Recorded instrument. Forpurposes of this Master Declaration, the term Mortgagee shall include a beneficiary under a deedof trust.

    1.1.44 Mortgagor. Mortgagor means a person who has mortgaged his property.For purposes of this Master Declaration, the term Mortgagor shall include a trustor under a deedof trust.

    1.1.45 Neighborhood. Neighborhood means an area in the Community that issubject to a Neighborhood Declaration. A Neighborhood may include one or more Phases.

    1.1.46 Neighborhood Association. Neighborhood Association means anyCalifornia nonprofit corporation or unincorporated association, or its successors, established inconnection with a Neighborhood Declaration, the membershipof whichis composed of Ownersof condominiums within a condominium project or owners of Lots within a planneddevelopment within the Community.

    1.1.47 Neighborhood Builder. Neighborhood Builder means a Person who isdesignated by Declarant as a Neighborhood Builder in a Recorded document and who acquires aportion of the Community for the purpose of developing such portion for resale tothe generalpublic. The term "Neighborhood Builder" includes the First Neighborhood Builder but does notinclude Declarant. Each Neighborhood Builder is a "builder" as described in California CivilCode Section 1375.

    1.1.48 Neighborhood Declaration. Neighborhood Declaration means theDeclaration of Covenants, Conditions and Restrictions which solely affects a Neighborhood.Neither this Master Declaration nor any Supplemental Master Declaration isa NeighborhoodDeclaration.

    1.1.49 NeighborhoodProperty. Neighborhood Property means real or personalproperty designated by the Declarant and Neighborhood Builder as NeighborhoodProperty inthis MasterDeclaration, in a Supplemental Master Declaration, or in a NeighborhoodDeclaration or Neighborhood Supplemental Declaration. Any references in this MasterDeclaration to Neighborhood Property are references to the Neighborhood Property as awholeand to portions thereof. Neighborhood Property satisfies the definition of "Common Area" inSection 1351(b) of the California Civil Code.

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    1.1.50 Neighborhood Supplemental Declaration. Neighborhood SupplementalDeclaration means a Recorded instrument solely affecting a Neighborhood or a portion thereof,which imposes conditions, covenants, or restrictions or reserves easements in addition to theconditions, covenants, restrictions and easements established in the Neighborhood Declaration.A Neighborhood Supplemental Declaration may also annex real property to the coverage of theNeighborhood Declaration. A Supplemental Master Declaration is not a NeighborhoodSupplemental Declaration.

    1.1.51 Notice and Hearing. Notice and Hearing means written notice and ahearing before the Board as provided in the Bylaws.

    1.1.52 Notice of Addition. Notice of Addition means an instrument Recordedpursuant to Article 13 to annex additional real property to the Community. A Notice of Additionmay include a Supplemental Master Declaration.

    1.1.53 Operating Fund. Operating Fund means that portion of the CommonExpenses allocated for the daily operation of the Master Association,

    1.1.54 Owner. Owner means the Person or Persons, including Declarant andNeighborhood Builders, holding fee simple interest to a Lot. Each Owner has a Membership inthe Master Association. The term "Owner" includes sellers under executory contracts of sale butexcludes Mortgagees. The term "Owner" may be expanded in a Supplemental MasterDeclaration to include other Persons.

    1.1.55 Party Wall. Party Wall means each wall or fence constructed on theboundary between adjacent Lots.1.1.56 Person. Person means a natural individual or any legal entity recognized

    under California law. When the word "person" is not capitalized, the word refers only to naturalpersons.1.1.57 Phase. Phase means each of the following: (a) all the real property

    covered by a Notice of Addition for which a Final Subdivision Public Report has been issued bythe DRE, and (b) real property consisting solely of Master Common Area as described in aNotice of Addition or a Supplemental Master Declaration_ Declarant may otherwise define theterm "Phase" in a Notice of Addition or a Supplemental Master Declaration.

    1.1.58 Prohibited Vehicle. Prohibited Vehicle means any vehicle not classifiedas an Authorized Vehicle or Restricted Vehicle.

    1.1.59 Reconstruction Assessment. Reconstruction Assessment means a chargeagainst the Owners and their Lots representing their share of the Master Association's cost toreconstruct any Improvements on the Master Common Area. Such charge shall be levied amongall Owners and their Lots in the same proportions as Annual Assessments. ReconstructionAssessments are "special assessments" as described in California Civil Code Section 1366.

    1.1.60 Record or File. Record or File means, with respect to any document, theentry of such document in official records of the County Recorder.

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    1.1.61 Reserve Fund. Reserve Fund means that portion of the CommonExpenses allocated (a) for the future repair and replacement of, or additions to, structuralelements, mechanical equipment and other major components of Master Association-maintainedImprovements, and (b) amounts necessary to cover the deductibles under all insurance policiesmaintained by the Master Association.

    1.1.62 Residence. Residence means the dwelling unit constructed on a Lot,excluding the garage area, which is designed and intended for use and occupancy as a residenceby a single Family.

    1.1.63 Restricted Vehicle. Restricted Vehicles means recreational vehicles,motor homes, travel trailers, camper vans, boats and similar vehicles.

    1.1.64 Right to Repair Law. Right to Repair Law means Division 2, Part 2,Title 7 (commencing with Section 895) of the California Civil Code.

    1.1.65 Rules and Regulations. Rules and Regulations means the current rulesand regulations for the Community.

    1.1.66 Special Assessment. Special Assessment means a charge against anOwner and his Lot representing a reasonable fine or penalty, including reimbursement costs, asprovided for in this Master Declaration.

    1.1.67 Special Benefit Area. Special Benefit Area means a group of Lots thatshare the costs of either (a) maintaining, repairing and replacing specified Improvements onportions of the Master Common Property or to Neighborhood Property, or (b) receiving certainservices provided by the Master Association. Special Benefit Areas may be identified byDeclarant in this Master Declaration or any Supplemental Master Declaration when Declarant, inits sole discretion, determines that a group of Lots benefits more from certain Improvements orservices than the Community as a whole. The Board may also designate Special Benefit Areasunder circumstances authorized in this Master Declaration or a Supplemental MasterDeclaration. There is no Special Benefit Area in the Initial Covered Property.

    1.1.68 Special Benefit Expenses. Special Benefit Expenses means thoseexpenses which are attributable solely to any Special Benefit Area and for which the MasterAssociation is responsible under this Master Declaration or pursuant to a Supplemental MasterDeclaration.

    1.1.69 Supplemental Master Declaration. Supplemental Master Declarationmeans an instrument Recorded by Declarant against all or a portion of the Community in order tosupplement, modify or clarify covenants, conditions and restrictions or easements establishedunder this Master Declaration. A Supplemental Master Declaration may affect one (I) or moreLots. Declarant, or a Neighborhood Builder with Declarant's consent, may record aSupplemental Master Declaration so long as Declarant or a Neighborhood Builder owns all ofthe real property to be encumbered by the Supplemental Master Declaration. A SupplementalMaster Declaration may modify this Master Declaration as it applies to the property encumberedby the Supplemental Master Declaration.

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    1.1.61 Reserve Fund. Reserve Fund means that portionof the CommonExpenses allocated (a) for the future repair and replacement of, or additions to, structuralelements, mechanical equipment and other major components of Master association-maintainedImprovements, and (b) amounts necessary to cover the deductibles under all insurance policiesmaintained by the Master Association.

    1.1.62 Residence. Residence means the dwelling unit constructed on a Lot,excluding the garage area, which is designed and intended for use and occupancy as a residenceby a single Family.

    1.1.63 Restricted Vehicle. RestrictedVehiclesmeans recreational vehicles,motor homes, travel trailers, camper vans, boats and similar vehicles.

    1.1.64 Right to Repair Law. Right to Repair Lawmeans Division 2, Part 2,Title 7 (commencing with Section 895) of the California Civil Code.

    1.1.65 Rules and Regulations. Rules andRegulations means the current rulesand regulations for the Community.

    1.1.66 Special Assessment.Special Assessment means a charge against anOwner and his Lot representing a reasonable fine or penalty, including reimbursement costs, asprovided forin this Master Declaration.

    1.1.67 Special Benefit Area. Special Benefit Area means a group of Lots thatsharethe costs of either (a) maintaining, repairing and replacing specified Improvements onportions of the Master Common Property or to Neighborhood Property, or (b) receiving certainservices provided by the Master Association. Special Benefit Areas may be identified byDeclarant inthis Master Declaration or any Supplemental Master Declaration when Declarant, inits sole discretion, determines that a group of Lots benefits more from certainImprovements orservices than the Community as a whole. The Board may also designate Special Benefit Areasunder circumstances authorized in this Master Declarationor aSupplemental MasterDeclaration. There is no Special Benefit Area in the Initial Covered Property.

    1.1.68 Special Benefit Expenses. SpecialBenefit Expenses means thoseexpenses which are attributable solely to any Special Benefit Area and for which the MasterAssociation is responsible under this Master Declaration or pursuant to a Supplemental MasterDeclaration.

    1.1.69 Supplemental Master Declaration. Supplemental Master Declarationmeans aninstrument Recorded by Declarant against all or a portion of the Community in order tosupplement, modify or clarify covenants, conditions andrestrictions or easements establishedunder this Master Declaration. A Supplemental Master Declaration may affect one (I) or moreLots. Declarant, or a Neighborhood Builder with Declarant's consent, may record aSupplemental Master Declaration so long as Declarant or aNeighborhood Builder owns all ofthe real property to be encumbered by the Supplemental Master Declaration. A SupplementalMaster Declaration may modify this Master Declaration as it applies to the property encumberedby the Supplemental Master Declaration.

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    1.1.70 Telecommunication Facilities. Telecommunication Facilities meansequipment, cables, conduits, inner ducts, vaults, connecting hardware, wires, poles, transmitters,towers, antennae and other facilities and structures necessary for, or used in, the provision ofTelecommunication Services.

    1.1.71 Telecommunications Services. Telecommunications Services meansTelecommunication Facilities, Improvements, and services for cable television, communications,telecommunications, antenna, high-speed data, telephony and all related vertical services,intranet, interact, information transfer, transmission, video and other similar services. Declarantmay expand this definition in any Supplemental Master Declaration.

    1.2 INTERPRETATION.1.2.1 General Rules. This Master Declaration shall be liberally construed to

    effectuate its purpose of creating a uniform plan for subdividing, maintaining, improving andselling the Community. As used in this Master Declaration, the singular includes the plural andthe plural the singular. The masculine, feminine and neuter each includes the other, unless thecontext dictates otherwise.

    1.2.2 Articles, Sections and Exhibits. The Article and Section headings areinserted for convenience only and may not be considered in resolving questions of interpretationor construction. Unless otherwise indicated, any references in this Master Declaration to articles,sections or exhibits are to Articles, Sections and Exhibits of this Master Declaration. Exhibitsattached to this Master Declaration are incorporated in this Master Declaration by this reference.The locations and dimension of any Improvements depicted on the Exhibits attached hereto andto any Notice of Addition are approximate only and the as-built location and dimension of anysuch Improvements shall control.

    1.2.3 Priorities and Inconsistencies. If there are conflicts or inconsistenciesbetween this Master Declaration and the Articles, Bylaws, Rules and Regulations, or DesignGuidelines, then the provisions of this Master Declaration shall prevail.

    1.2.4 Relationship to Other Governing Documents. As each Phase of theCommunity is developed, Declarant or Declarant and a Neighborhood Builder may, with respectthereto, Record one (1) or more Supplemental Master Declarations which shall designate the useclassifications within the areas affected and which may supplement this Master Declaration withsuch additional covenants, conditions, restrictions and land uses as Declarant may deemappropriate for the real property being annexed thereby. The provisions of any SupplementalMaster Declaration may impose such additional, different or more restrictive conditions,covenants, restrictions, land uses and limitations as Declarant may deem advisable, taking intoaccount the particular requirements of each Phase. Except as set forth in Section 10.1.4, if thereis any conflict between any Supplemental Master Declaration and the Master Declaration, theSupplemental Master Declaration shall control with respect to the real property annexed by suchSupplemental Master Declaration. If there is any conflict between any NeighborhoodDeclaration and the provisions of the Master Declaration or applicable Supplemental MasterDeclaration, the Master Declaration and applicable Supplemental Master Declaration shall

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    1.1.70 TelecommunicationFacilities. TelecommunicationFacilitiesmeansequipment, cables,conduits, inner ducts, vaults, connecting hardware, wires, poles, transmitters,towers, antennae and other facilities and structures necessary for, or used in, the provision ofTelecommunication Services.1.1.71 Telecommunications Services. Telecommunications Services meansTelecommunication Facilities, Improvements, andservices for cable television, communications,telecommunications, antenna, high-speed data, telephony and all related vertical services,intranet, interact, information transfer, transmission, videoand other similarservices. Declarantmayexpand this definition in any Supplemental Master Declaration.

    1.2INTERPRETATION.1.2.1 General Rules.This Master Declaration shall be liberally construed toeffectuateits purpose ofcreating auniform plan for subdividing, maintaining, improving andsellingthe Community. As used inthis Master Declaration, the singular includes the pluralandthe plural the singular. The masculine, feminine and neuter eachincludes the other, unless the

    context dictates otherwise.1.2.2Articles, Sections and Exhibits. The Article and Section headings areinsertedforconvenience only and may not be considered in resolving questions ofinterpretationor construction. Unless otherwise indicated, any references in this Master Declaration toarticles,sections or exhibits are to Articles, Sections and Exhibitsof thisMaster Declaration. Exhibitsattached to this Master Declaration are incorporated in thisMaster Declaration by this reference.The locations and dimension of any Improvements depicted on the Exhibits attached hereto andtoany Notice ofAddition are approximate onlyand the as-built locationand dimension ofanysuch Improvements shall control.

    1.2.3Prioritiesand Inconsistencies. If there are conflicts or inconsistenciesbetween this Master Declaration and the Articles, Bylaws, Rules and Regulations, orDesignGuidelines, then the provisions of this MasterDeclaration shall prevail.1.2.4 Relationship to Other Governing Documents. As eachPhaseof theCommunity isdeveloped, Declarant orDeclarantand a Neighborhood Builder may, with respectthereto, Record one (1) or moreSupplementalMaster Declarations which shall designate the useclassifications within the areas affected and which maysupplement this Master Declaration withsuch additional covenants, conditions, restrictions and landuses as Declarant may deemappropriate for the real property being annexed thereby. Theprovisions of any SupplementalMaster Declaration may impose such additional, different or more restrictive conditions,covenants, restrictions, land uses and limitations as Declarant maydeem advisable, taking intoaccount the particular requirements of each Phase. Except as set forth in Section 10.1.4, if thereis any conflict between any Supplemental Master Declarationand the Master Declaration, theSupplemental Master Declarationshall control withrespect tothereal property annexed by suchSupplemental Master Declaration. If there is any conflictbetween any NeighborhoodDeclaration and the provisionsof the Master Declaration or applicable Supplemental MasterDeclaration, the Master Declaration and applicable Supplemental Master Declaration shall

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    control. A Neighborhood Declaration may, but need not, provide for the establishment of aNeighborhood Association.

    1.2.5 Severability. The provisions of this Master Declaration are independentand severable, A determination of invalidity, partial invalidity or unenforceability of any oneprovision of this Master Declaration by a court of competent jurisdiction does not affect thevalidity or enforceability of any other provisions of this Master Declaration.

    1.2.6 Statutory References. All references made in this Master Declaration tostatutes are to those statutes as currently in effect or to subsequently enacted replacementstatutes.

    ARTICLE 2MASTER ASSOCIATION

    2.1ENERAL DUTIES AND POWERS. The Master Association has the dutiesand powers listed in the Governing Documents and also has the general and implied powers of anonprofit mutual benefit corporation, generally to do all things that a corporation organizedunder the laws of the State of California may lawfully do which are necessary or proper inoperating for the general welfare of the Owners, subject only to the limits on the exercise of suchpowers listed in the Governing Documents including the exemptions of Declarant andNeighborhood Builders herein, and the Supplemental Master Declarations. Unless otherwiseindicated in the Articles, Bylaws, this Master Declaration, or the Supplemental MasterDeclarations, the powers of the Master Association may be exercised by the Board.

    2.2PECIFIC DUTIES AND POWERS. In addition to its general powers andduties, the Master Association has the following specific powers and duties.

    2.2.1 Master Common Property. The power and duty to accept, maintain andmanage the Master Common Property. The Master Association may install or remove CapitalImprovements on the Master Common Property. The Master Association may reconstruct,replace or refinish any Improvement on the Master Common Property.

    2.2.2 Utilities. The power and duty to obtain, for the benefit of all theCommunity, all commonly metered water, gas and electric services, and the power, but not theduty, to provide for trash collection, recycling and cable or master television service.

    2.2.3 Granting Rights. The power to grant exclusive or nonexclusiveeasements, licenses, rights of way or fee interests in the Master Common Area owned by theMaster Association, to the extent any such grant is reasonably required (a) for improvements toserve the Community, (b) for purposes of conformity with the as-built location of Improvementsinstalled or authorized by Declarant, Neighborhood Builders or the Master Association, (c) inconnection with any lawful lot line adjustment, or (d) for other purposes consistent with theintended use of the Community. The Master Association may deannex any portion of theCommunity from the encumbrance of the Master Declaration in connection with any lawful lotline adjustment.

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    control. A Neighborhood Declaration may, but need not, provide for the establishment of aNeighborhood Association.

    1.2,5 Severability. The provisions of this Master Declaration are independentand severable. A determination of invalidity, partial invalidityor unenforceability of any oneprovision of this Master Declaration by a court of competent jurisdiction does not affect thevalidity or enforceability of any other provisions of this Master Declaration.

    1.2.6 StatutoryReferences. All referencesmade inthis Master Declaration tostatutes are to those statutes as currently in effect or to subsequently enacted replacementstatutes.

    ARTICLE 2MASTER ASSOCIATION

    2.1ENERAL DUTIES AND POWERS. The Master Associationhas the dutiesand powers listed in the Governing Documents and also has the general and implied powers of anonprofit mutual benefit corporation, generally to do all things that a corporation organizedunder the laws of the State of California may lawfully do which are necessary or proper inoperating for the general welfare of the Owners, subject only to the limits on the exercise of suchpowers listed in the Governing Documents includingthe exemptions of Declarant andNeighborhood Builders herein, and the Supplemental Master Declarations. Unless otherwiseindicated in the Articles, Bylaws, this Master Declaration, or the Supplemental MasterDeclarations, the powers of the Master Association may be exercised by the Board.

    2.2PECIFIC DUTIES AND POWERS. In addition to its general powers andduties, the Master Association has the following specific powers and duties.

    2.2.1 Master Common Property. Thepower and duty to accept, maintain andmanage the Master Common Property. The Master Association may install or remove CapitalImprovements on the Master Common Property. The Master Association may reconstruct,replace or refinish anyImprovement on the Master Common Property.

    2.2.2 Utilities. The power and duty to obtain, for the benefit of all theCommunity, all commonlymetered water, gas andelectric services, and the power, but not theduty, to provide for trash collection, recycling and cable or master television service.

    2.2.3 Granting Rights. The power to grantexclusive or nonexclusiveeasements, licenses, rights of way or fee interests inthe Master Common Area owned by theMaster Association, tothe extent any such grant is reasonably required (a) for Improvements toserve the Community, (b) for purposes of conformity withthe as-built location of Improvementsinstalled or authorized by Declarant, Neighborhood Builders or theMaster Association, (c) inconnection with any lawful lot line adjustment, or (d) for other purposes consistent withtheintended use of the Community. The Master Association may deannex any portion of theCommunity from the encumbrance ofthe Master Declarationin connectionwithany lawful lotline adjustment.

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    2.2.4 Employ Personnel. The power, but not the duty, to employ Personsnecessary for the effective operation and maintenance of the Master Common Property,including legal, management and accounting services.

    2.2.5 Insurance. The power and duty to keep insurance for the MasterCommon Area in accordance with this Master Declaration.

    2.2.6 Sewers and Storm Drains. The power and duty to maintain any privatesewer systems, private storm drains, or private drainage facilities in the Master CommonProperty in accordance with the Governing Documents.

    2.2.7 Lakes and Related Maintenance. The power and the duty to maintainany private lakes, wells, pumps, drainage and other items associated therewith.

    2.2.8 Maintenance Guidelines. The power and duty to adopt and to operate,maintain and inspect the Master Common Property and its various components in conformancewith any maintenance guidelines for necessary or appropriate revisions no less than annuallyafter the Board has prepared the Budget.

    2.2.9 Rules and Regulations. The power, but not the duty, to createexceptions, adopt, amend, repeal, the Rules and Regulations provided that the following criteriaare satisfied:

    (a) Standards for Enforceability. The exceptions, amendments,repeal and the resulting Rule and Regulations are in writing and comply with all applicable laws.

    (b) Areas of Regulation. The Rules and Regulations may concernuse of the Community, Master Common Property (including any clubhouses and/or lakesincluded therein), signs, parking restrictions, minimum standards of property maintenance, use ofgolf carts and neighborhood electric vehicles within the Community and any other matter underthe Master Association's jurisdiction.

    (c) Limits on Regulation. The Rules and Regulations must applyuniformly to all Owners and must comply with this Master Declaration and all applicable stateand local laws.

    (d) Procedure for Adorition, Amendment and Repeal. Rules orprocedures concerning (i) the use of Master Common Property, (ii) the use of a Lot, includingany aesthetic standards or Design Guidelines that affect Lots, (iii) member discipline, includingany schedule of monetary penalties for violation of the Governing Documents, (iv) anyprocedure for the imposition of penalties, (v) any standards for delinquent assessment paymentplans, and (vi) any procedures adopted by the Master Association for resolution of assessmentdisputes (each, a "Covered Rule") may only be adopted, amended or repealed in accordancewith the following procedure:

    (i)he Board must provide written notice ("Rule ChangeNotice") of a proposed change in a Covered Rule to themembers at least thirty (30) days before making the change,13

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    2.2.4 Employ Personnel. Thepower,butnottheduty,toemploy Personsnecessary for the effective operationandmaintenanceof the Master CommonProperty,including legal, management andaccountingservices.

    2.2.5 Insurance. The powerand dutyto keep insurancefor the MasterCommonArea in accordancewiththis Master Declaration.

    2.2.6 Sewers and Storm Drains. Thepowerand dutytomaintainanyprivatesewer systems, privatestormdrains,or private drainage facilities intheMaster CommonPropertyinaccordance withtheGoverningDocuments.

    2.2.7 Lakes andRelated Maintenance. Thepowerandthe dutytomaintainany private lakes, wells, pumps, drainage and other items associatedtherewith.

    2.2.8 Maintenance Guidelines. Thepower anddutytoadopt andtooperate,maintainand inspect the Master CommonProperty andits variouscomponents inconformancewithanymaintenanceguidelinesfor necessary or appropriaterevision

    sno lessthanannuallyafter theBoard has prepared the Budget.

    2.2.9 Rules andRegulations. Thepower,butnot theduty, to createexceptions, adopt,amend,repeal,theRules andRegulations provided that thefollowingcriteriaare satisfied:

    (a) Standards for Enforceability. The exceptions, amendments,repeal andthe resultingRuleandRegulationsareinwritingand complywith allapplicablelaws.

    (b) Areasof Regulation.The Rules and Regulations mayconcernuseof the Community, Master CommonProperty (including anyclubhouses and/or lakesincludedtherein), signs,parking restrictions,minimum standards ofpropertymaintenance, use ofgolf cartsand neighborhoodelectric vehicleswithintheCommunity andany othermatterundertheMaster Association'sjurisdiction.

    (c) Limits on Regulation.The Rules and Regulations must applyuniformlyto allOwners andmustcomply withthis Master Declaration andall applicablestateandlocal laws.

    (d) Procedure for Adoption, Amendment and Repeal.Rulesorprocedures concerning(i)theuseofMasterCommon Property, (ii)theuseofaLot, includingany aesthetic standardsorDesignGuidelines thataffectLots,(iii) memberdiscipline, includingany schedule of monetarypenaltiesforviolationofthe Governing Docume

    nts, (iv) anyprocedure fortheimpositionofpenalties,(v) anystandards for delinquentassessment paymentplans, and(vi) anyproceduresadoptedby the Master Associationfor resolution of assessmentdisputes(each, a"CoveredRule")may onlybeadopted,amendedorrepealed inaccordancewiththefollowingprocedure:

    (i) he Board must providewrittennotice("RuleChangeNotice") ofa proposedchangeinaCovered Ruletothemembersat leastthirty(30) daysbeforemakingthechange,1340 19 696 8

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    except for an Emergency Rule Change (defined below).The Rule Change Notice must include the text of theproposed change and a description of the purpose andeffect of the proposed change (a Rule Change Notice is notrequired if the Board determines that an immediate changeis required to address an imminent threat to public health orsafety, or an imminent risk of substantial economic loss tothe Master Association);

    (ii) The decision on a proposed change shall be made at aBoard meeting after consideration of comments made bythe members of the Master Association;

    (iii) The Board shall deliver a notice of the adopted change("Adopted Rule Notice") to every member of the MasterAssociation within fifteen (15) days of adoption. If thechange was an Emergency Rule Change, the Adopted RuleNotice shall include the text of the Emergency RuleChange, a description of the purpose and effect of theEmergency Rule Change, and the date on which theEmergency Rule Change expires;

    (iv) If the Board determines that an immediate Rule change isrequired to address an imminent threat to public health orsafety, or an imminent risk of substantial economic loss tothe Master Association, it may make the change on anemergency basis ("Emergency Rule Change") and it neednot send a Rule Change Notice under Section 2.2.9(d)(i)above. An Emergency Rule Change is effective for onehundred-twenty (120) days, unless the adopted changeprovides for a shorter effective period. Any change that isadopted as an Emergency Rule Change may not be re-adopted under authority of this subpart;

    (v) A Rule Change Notice or an Adopted Rule Notice requiredby this Section 2.2.9(d) is subject to California Civil CodeSection 1350.7; and

    (vi) A change to the Rules and Regulations made pursuant tothis Section 2.2.9(d) may be reversed as provided inCalifornia Civil Code Section 1357.140.

    The foregoing procedure does not apply to Rules and Regulations that do notmeet the definition of Covered Rules above, nor to decisions of the Board regarding maintenanceof Master Common Property, a decision on a specific matter that is not intended to applygenerally, a decision setting the amount of an Annual Assessment or a Special Assessment, aRule change that is required by law if the Board has no discretion as to the substantive effect of

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    the changes, or issuance of a document that merely repeats existing law or the governingdocuments.

    2.2.10 Borrowing. The power, but not the duty, to borrow money for purposesauthorized by the Articles, Bylaws, Master Declaration, any Supplemental Master Declarationsor any Notice of Addition, and to use the Master Common Area owned by the MasterAssociation as security for the borrowing.

    2.2.11 Contracts. The power, but not the duty, to enter into contracts. Thisincludes contracts with Owners or other Persons to provide services or to maintainImprovements in the Community and elsewhere which the Master Association is not otherwiserequired to provide or maintain by this Master Declaration.

    2.2.12 Telecommunications Contract. The power, but not the duty, to enterinto, accept an assignment of, or otherwise cause the Master Association to comply with theterms and provisions of an exclusive telecommunications services contract("Telecommunications Contract") with a telecommunications service provider ("ServiceProvider"), pursuant to which the Service Provider shall serve as the exclusive provider ofTelecommunications Services to each Lot in the Community. The Board shall only enter into,accept an assignment of, or otherwise cause the Master Association to comply with the terms andprovisions of the Telecommunications Contract if the Board determines, in its sole discretion,that such action is in the best interests of the Master Association. Although not exhaustive, theBoard shall consider the following factors in making such a determination:

    (a) Initial Term and Extensions. The initial term of theTelecommunications Contract should not exceed five (5) years, and, if the TelecommunicationsContract provides for automatic extensions, the length of each such extension should also notexceed five (5) years.

    (b) Termination. The Telecommunications Contract should providethat: (i) at least six (6) months prior to the expiration of either the initial or any extended term ofthe Telecommunications Contract, the entire Membership of the Master Association may,without cause, by a sixty percent (60%) vote of the Class A Members, prevent any automaticextension that the Telecommunications Contract may provide for, and thereby allow theTelecommunications Contract to expire, and (ii) at any time, the Board may terminate theTelecommunications Contract if, in the sole discretion of the Board, the Service Provider fails toprovide quality, state-of-the-art Telecommunications Services.

    (c) Fees. Whether the monthly fee charged to the Master Associationby the Service Provider for the provision of the Telecommunications Services to all of the Lotsrepresents a discount from the comparable retail fees charged by the Service Provider in thegeneral geographic area in which the Community is located, and, if so, the amount of suchdiscount.

    (d) Installation of Telecommunications Facilities. Whether theService Provider is solely responsible for the installation, and the cost thereof, of all of theTelecommunications Facilities necessary to provide Telecommunications Services to each Lot.

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    the changes, or issuance of a document that merely repeats existing law or the governingdocuments.2.2.10Borrowing. Thepower, but not theduty, toborrow moneyfor purposesauthorized by the Articles, Bylaws, Master Declaration, any Supplemental Master Declarations

    or anyNotice of Addition, and to usethe MasterCommon Area ownedby the MasterAssociation as security forthe borrowing.2.2.11 Contracts. The power, but notthe duty, to enter into contracts. Thisincludes contractswith Owners or other Persons to provide services or to maintainImprovements in theCommunity andelsewhere whichthe MasterAssociation is not otherwiserequiredto provide or maintain by this Master Declaration.2.2.12 Telecommunications Contract. The power, but not the duty, to enterinto, accept an assignment of, or otherwise cause the Master Associationto comply with theterms and provisions of an exclusive telecommunications services contract("TelecommunicationsContract")with a telecommunicationsservice provider ("ServiceProvider"), pursuant to which the Service Provider shall serve as the exclusive provider ofTelecommunications Services to each Lot in the Community. The Board shall only enter into,accept an assignment of,orotherwise cause theMaster Association tocomplywith theterms andprovisionsofthe Telecommunications Contract ifthe Board determines,in itssole discretion,that such action is in the best interests of the Master Association. Although not exhaustive, theBoardshall consider the following factors in making such adetermination:

    (a) InitialTerm and Extensions. Theinitial term of theTelecommunications Contractshould notexceed five (5) years, and, if the TelecommunicationsContractprovides for automatic extensions, the length of eachsuch extension shouldalso notexceed five(5) years.(b) Termination. TheTelecommunications Contract should providethat: (i) at least six (6) months prior to the expiration of eitherthe initial or any extended term ofthe Telecommunications Contract, the entire Membership of the Master Association may,without cause, by a sixty percent(60%) vote of the Class A Members, prevent any automaticextension that the Telecommunications Contract may provide for, and thereby allow theTelecommunications Contract to expire, and (ii)atany time, the Board mayterminate theTelecommunications Contract if, in the sole discretionofthe Board,the ServiceProvider failstoprovide quality,state-of-the-art Telecommunications Services.(c) Fees. Whether the monthlyfee charged to the Master Associationby the Service Provider for the provision of theTelecommunications Services to all of theLotsrepresents a discount from the comparable retail fees charged bythe ServiceProvider in thegeneral geographic areainwhich the Communityis located, and, if so, the amount of suchdiscount.(d) Installation ofTelecommunicationsFacilities. Whether theService Provideris solely responsible for theinstallation, and the cost thereof, of all of theTelecommunications Facilities necessaryto provide Telecommunications Services to each Lot.

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    (e)emoval of Telecommunications Facilities. Whether the ServiceProvider has the right to remove the Telecommunications Facilities upon expiration ortermination of the Telecommunications Contract.2.2.13 Resale Program. The power, but not the duty, after Declarant no longer

    owns a Lot or portion of the Annexable Territory, or, prior to such period, with Declarant'sconsent, to provide services related to the sale of real property and may own, operate and staff acenter for the purpose of facilitating sale of real property in the Community. Any such centershall be operated in accordance with policies and procedures adopted by the Master Association.

    2.2.14 Indemnification.(a) For Master Association Representatives. To the fullest extent

    authorized by law, the power and duty to indemnify Board members, Master Associationofficers, Design Review Committee members, and all other Master Association committeemembers for all damages, pay all expenses incurred, and satisfy any judgment or fine levied as aresult of any action or threatened action brought because of performance of an act or omissionwithin what such person reasonably believed to be the scope of the Person's Master Associationduties ("Official Act"). Board members, Master Association officers, Design ReviewCommittee members, and all other Master Association committee members are deemed to beagents of the Master Association when they are performing Official Acts for purposes ofobtaining indemnification from the Master Association pursuant to this Section. The entitlementto indemnifcation under this Master Declaration inures to the benefit of the estate, executor,administrator and heirs of any person entitled to such indemnifcation.

    (b) For Other Agents of the Master Association. To the fullestextent authorized by law, the power, but not the duty, to indemnify any other Person acting as anagent of the Master Association for damages incurred, pay expenses incurred, and satisfy anyjudgment or fine levied as a result of any action or threatened action because of an Official Act.

    (c) Provided by Contract. The power, but not the duty, to contractwith any Person to provide indemnifcation in addition to any indemnification authorized by lawon such tens and subject to such conditions as the Master Association may impose.2.2.15 Annexing Additional Property. The power, but not the duty, to annex,pursuant to Section 13.2, additional property to the Community encumbered by this MasterDeclaration.

    2.2.16 License and Use Agreements. The power, but not the duty, to enter intoagreements with Declarant, Neighborhood Builders, any Neighborhood Association or anyhomeowners association having jurisdiction over the Annexable Territory to share facilitieslocated on the Master Common Area (the "Facility") with the Owners of Residences in theAnnexable Territory that is not annexed to the Community. Any such agreement shall be inform and content acceptable to Declarant, any involved Neighborhood Builder or NeighborhoodAssociation, the Board of Directors (without the approval of Owners) and the board of directorsof any adjacent homeowners association and shall include provisions regarding use and sharingof maintenance costs for the Facility.

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    22.17 Club Facilities Acquisition and Club Note. The Master Association hasthe right and power to enter into an agreement with Declarant to acquire the Club Facilities thatcalls for payment for those Club Facilities by the Master Association pursuant to the terms of theClub Note. The approval of the Memb ership shall not be required for the M aster Association toacquire the Club Facilities or to execute and deliver the Club Note.

    2.2.18 Operation and Management of The Club. The Mas