8.7Obligation for Assessments

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DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR ANTHEM COUNTRY CLUB

a. Personal Obligation. Each Owner, by accepting a deed or entering into a Recorded contract of sale for any Lot, is deemed to covenant and agree to pay all assessments authorized in the Governing Documents. All assessments, together with interest (computed from its due date at a maximum rate of 18% per annum or such higher rate as the Board may establish, subject to the limitations of Arizona law), reasonable late charges as determined by Board resolution (as limited by the Act), costs, and reasonable attorneys' fees, shall be the personal obligation of each Owner and a lien upon each Lot until paid in full. Upon a transfer of title to a Lot, the grantee shall be jointly and severally liable for any assessments and other charges due at the time of conveyance.

The Board's failure to fix assessment amounts or rates or to deliver or mail each Owner an assessment notice shall not be deemed a waiver, modification, or a release of any Owner from the obligation to pay assessments.. In such event, each Owner shall continue to pay Base Assessments on the same basis as during the last year for which an assessment was made, if any, until a new assessment is levied, at which time the Association may retroactively assess any shortfalls in collections.

No Owner may exempt himself from liability for assessments by non-use of Common Area, abandonment of his Lot, non-use of facilities or property owned, operated, or maintained by the Council, or any other means. The obligation to pay assessments is a separate and independent covenant on the part of each Owner. No diminution or abatement of assessments or set-off shall be claimed or allowed for any alleged failure of the Association or Board to take some action or perform some function required of it, or for inconvenience or discomfort arising from the making of repairs or improvements, or from any other action it takes.

Upon written request from an Owner, Mortgagee, or other Person designated by the Owner, the Association shall furnish a statement setting forth the amount of any unpaid assessment against such Owner's Lot The statement shall be binding upon the Association, the Board, and the Owners to the extent mandated by Arizona law. If the Association fails to provide such statement within 15 days of its receipt of a written request, any lien for unpaid assessments then due shall be extinguished to the extent mandated by Arizona law. The Association may require the advance payment of a reasonable processing fee for the issuance of such statement.

b. Declarant's Obligation.

i. Payment of the “Shortage”. During the Class “B” Control Period, and with respect solely to Association expenses (i.e., expenses which are not Anthem community-wide expenses incurred by the Council), Declarant shall not be obligated to pay assessments on its unsold Lots but, instead, shall be obligated to pay the “shortage” (i.e., operating deficit) for each fiscal year. A “shortage” shall exist if Income and Revenues (as defined below) for a particular fiscal year are less than Expenditures (as defined below) incurred for the same fiscal year. Income and Revenues and Expenditures are to be calculated using the accrual basis of accounting.

A. Income and Revenues are: the amount of all income and revenue of any kind earned by the Association during the subject fiscal year, including, but not limited to, assessments, use fees, subsidies (if any) provided by Declarant, and income from all other sources. For purposes of this Section, assessments for each Lot are deemed earned on the annual anniversary date of the commencement of assessments with respect to such Lot.

B. Expenditures are: the amount of all actual operating expenses incurred, or obligated for, by the Association during the subject fiscal year, including without limitation (1) any reserve contributions for such year, and (2) any budgeted or approved non-budgeted capital assets acquired during the fiscal year, but excluding (1) all non-cash expenses such as depreciation or amortization, (2) expenditures for or purchase of non-budgeted, non-approved items, (3) all expenditures made from reserve funds, and (4) any amounts levied by the Council relating to non-Association expenses. For purposes of this paragraph, “approved” shall mean prior written approval of Declarant ii. Timing of Payment Payment of the shortage shall exempt Declarant from payment of any portion of Base and Special Assessments not attributable to Council operations. Declarant's obligation for any Base and Special Assessments attributable solely to Council operations shall be governed by the Community Covenant iii. Option to Pay “Shortage” Following expiration or termination of the Class “B” Control Period, Declarant may annually elect either to pay the assessments described in Section 8.7 b i on each of its unsold Lots or to pay the shortage for such fiscal year. Declarant's election may be made separately with respect to Base Assessments and Benefited Assessments. If Declarant elects to pay assessments on each Lot and, after such payment, a shortage exists, Declarant may, but shall not be obligated to, pay such shortage. Unless Declarant otherwise notifies the Board in writing at least 60 days before the beginning of each fiscal year, Declarant shall be deemed to have elected to continue paying on the same basis as during the immediately preceding fiscal year. iv. Subsidies/“In Kind” Contribution The Association is specifically authorized to enter into subsidy contracts or contracts for “in kind” contribution of services, materials, or a combination of services and materials with Declarant or other entities for payment of Common Expenses. Declarant's payment of assessments may be reduced or abated by the agreed value of any such services or materials provided by Declarant, in accordance with any such contract or agreement with the Association.

C. Any shortage in a particular fiscal year is to be offset by any surplus from a previous fiscal year. A surplus is achieved when, using an accrual basis of accounting, Income and Revenues for a particular fiscal year exceed Expenditures for the same fiscal year.

8.8 Lien for Assessments

Subject to any limitations imposed by Arizona law, all assessments and other charges of the Association authorized in this Article or elsewhere in this Declaration shall constitute a lien against the Lot against which they are levied from the time such assessments or charges become due until paid. The lien shall also secure payment of interest (subject to the limitations of Arizona law), late charges (as limited by the Act), and costs of collection (including attorneys' fees, lien fees and administrative costs). Such lien shall be superior to all other liens, except any lien of the Council, the lien or charge of any Recorded first Mortgage (meaning a Recorded first Mortgage with first priority over other Mortgages) made in good faith and for value, and those deemed by Arizona law to be superior. The lien created by this Article shall have priority over any lien for assessments asserted by any other community or property owners association, except for the Council. The Association may enforce such lien, when any assessment or other charge is delinquent, by suit, judgment, and foreclosure; provided, if enforcement proceedings are not instituted within three years after the full amount of the assessment or other charge becomes due, the lien (but not the personal obligation of the subject Owner) shall be deemed extinguished.

The Association may assign its lien rights to third parties, including service providers as described in Section 7.8.

The Association may bid for the Lot at the foreclosure sale and acquire, hold, lease, mortgage, and convey the Lot. While a Lot is owned by the Association following foreclosure: (a) no right to vote shall be exercised on its behalf; (b) no assessment shall be levied on it; and (c) each other Lot shall be charged, in addition to its usual assessment, its pro rata share of the assessment that would have been charged such Lot had it not been acquired by the Association. The Association may sue for unpaid assessments and other charges authorized hereunder without foreclosing or waiving the lien securing the same.

The sale or transfer of any Lot shall not affect the assessment lien or relieve such Lot from the lien for any subsequent assessments. However, the sale or transfer of any

Lot pursuant to foreclosure of the first Mortgage shall extinguish the lien as to any installments of such assessments due prior to the foreclosure. The subsequent Owner to the foreclosed Lot shall not be personally liable for assessments on such Lot due prior to such acquisition of title. Such unpaid assessments shall be deemed to be Common Expenses collectible from Owners of all Lots subject to assessment under Section 8.6, including such acquirer, its successors and assigns.

8.9 Limitation on Increases of Assessments

Notwithstanding any provision to the contrary, and except for assessment increases necessary for emergency situations or to reimburse the Association pursuant to Section 8.5, the Board may not impose a Base Assessment that is more than 20% greater than the Base Assessment for the immediately preceding fiscal year, without the approval of a majority of the Class "A" Members. Approval may be indicated by vote or written consent

An emergency situation is anyone of the following: a. an extraordinary expense required by an order of a court; b. an extraordinary expense necessary to repair or maintain the Properties or any part of them for which the Association is responsible where a threat to personal safety on the Properties is discovered; or c. an extraordinary expense necessary to repair or maintain the Properties or any part of them for which the Association is responsible which could not have been reasonably foreseen by the Board in preparing and distributing the pro forma budget pursuant to Section 8.1. However, prior to the imposition or collection of such an assessment, the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. Notice of such resolution shall be provided to the Members along with the notice of such assessment.

8.10 Exempt Property

The following property shall be exempt from payment of Base Assessments and Special Assessments: a. all Common Area and such portions of the Area of Common Responsibility which are not Lots; b. property owned or maintained by the Council and any other property not subject to this Declaration (e.g., any Country Club Amenity); c. any property dedicated to and accepted by any governmental authority or public utility; and d. property owned by a community or property owners association for the common use and enjoyment of its members, or owned by the members of a condominium association as tenants-in-common.

In addition, both Declarant and the Association shall have the right, but not the obligation, to grant exemptions to certain Persons qualifying for tax exempt status under Section 501(c) of the Internal Revenue Code so long as such Persons own property subject to this Declaration for purposes listed in Section 501(c).

8.11 Assignment of Rights and Authority to the Council

In an effort to minimize administrative costs and create an efficient assessment collection process, and subject to the limited revocation rights set forth below, the Association hereby assigns to the Council all of its rights and authority to invoice and collect assessments and other fees and charges provided for in this Article VIII. As such, the Association shall provide the Council with notice of all assessments levied within the same time period as required for notice to Owners. Such assignment shall include all collection and enforcement rights, including lien rights, but shall not include the right to prepare and approve the Association's budget. Pursuant to such assignment, the Council shall collect all assessments on behalf of the Association and shall allocate collected funds between Council Expenses and Association Common Expenses. Funds allocable to Association Common Expenses shall be disbursed to the Association by the Council subject to any agreements between the Council and the Association pertaining to the use of such funds.

The Association's assignment of invoice and collection rights and authority to the Council may be revoked, in whole or in part, only with the prior written consent of the Council, and, for so long as Declarant owns any property described on Exhibits “A” or “B”, Declarant. Following any partial or complete revocation, such rights and authority may be reassigned, in the Association's discretion, in any succeeding fiscal year.

Unless otherwise specified by the Council, payments received shall be applied, as between Council Expenses and Association Common Expenses, to the oldest outstanding balance. If no outstanding balance exists as between either Council Expenses or Common Expenses, funds shall be applied first to Council Expenses. In no event shall the Council be required to allocate assessments received in a manner specifically requested by an Owner or the Association.

8.12 Lifestyle Enhancement Fee

a. Authority As an additional funding source, the Association shall establish a fee to be collected upon each transfer of title to a Lot. Such fee shall be charged to the grantor of the property, shall be payable to the Association at the closing of the transfer, and shall be secured by the Association's lien for assessments Each Owner transferring a Lot shall notify the Association's Secretary at least seven days prior to the scheduled transfer. Such notice shall include the name of the buyer, the date of title transfer, and other information the Board reasonably may require. b. Fee Limit The Board shall have the sole discretion to specify the amount and method of determining the Lifestyle Enhancement Fee; provided, the Lifestyle Enhancement Fee shall not exceed 1/4% of the Gross Selling Price of the property. The fee may be based upon a sliding scale which varies in accordance with the "Gross Selling Price" of the property. The Gross Selling Price shall be the total cost to the purchaser of the property, excluding transfer taxes and title fees imposed by Maricopa County, Arizona, or other applicable governmental authority. c. Purpose Lifestyle Enhancement Fees shall be used for purposes which the Board deems beneficial to the general good and welfare of the Anthem Country Club Community. By way of example and not limitation, Lifestyle Enhancement Fees might be used to assist the Association or one or more tax-exempt entities in funding: i. preservation and maintenance of natural areas, wildlife preserves, or similar conservation areas, and sponsorship of educational programs and activities which contribute to the overall understanding, appreciation, and preservation of the natural environment within and surrounding the Anthem Country Club Community; ii. programs, services, and activities which serve to promote a sense of community within the Anthem Country Club Community, such as recreational leagues, cultural programs, educational programs, festivals and holiday celebrations and activities, and a community computer network; iii. social services, community outreach programs, and other charitable causes; iv. Association reserve accounts; and v. operating and maintenance costs. d. Exempt Transfers. Notwithstanding the above, no Lifestyle Enhancement Fee shall be levied upon transfer of title to property: i. by or to Declarant; ii. by a Builder holding title solely for purposes of development and resale; iii. by a co-owner to any Person who was a co-owner immediately prior to such transfer; iv. to the Owner's estate, surviving spouse, or heirs at law upon the death of the Owner; v. to an entity wholly owned by the grantor or to a family trust created by the grantor for the direct benefit of the grantor and his or her spouse and/or heirs at law; provided, upon any subsequent transfer of an ownership interest in such entity, the Lifestyle Enhancement Fee shall become due; or vi. to an institutional lender as security for the performance of an obligation pursuant to a Mortgage.

Part Four: COMMUNITY DEVELOPMENT

The Declaration reserves various rights to the developer in order to facilitate the smooth and orderly development of the Anthem Country Club Community and to accommodate changes in the master plan which inevitably occur as the community grows and matures.

Article IX. Expansion of the Community

9.1 Expansion by Declarant

Declarant may from time to time subject to the provisions of this Declaration all or any portion of the property described in Exhibit "B" by Recording a Supplemental Declaration describing the additional property to be subjected. A Supplemental Declaration Recorded pursuant to this Section shall not require the consent of any Person except the owner of such property, if other than Declarant.

Declarant's right to expand the community pursuant to this Section shall expire when all property described in Exhibit "B" has been subjected to this Declaration or 40 years after this Declaration is Recorded, whichever is earlier. Declarant may transfer or assign this right to any Person who is the developer of at least a portion of the real property described in Exhibits "A" or "B." Any such transfer shall be memorialized in a written, Recorded instrument executed by Declarant.

Declarant reserves the right, but not the obligation, to annex additional property not described in Exhibits "A" or "B” to the extent not prohibited under the Act. Nothing in this Declaration shall be construed to require Declarant or any successor to subject additional property to this Declaration or to develop any of the property described in Exhibit "B” in any manner whatsoever.

9.2 Expansion by the Association

The Association also may subject additional property to the provisions of this Declaration by Recording a Supplemental Declaration describing the additional property. Any such Supplemental Declaration shall require the affirmative vote of Members representing 67% of the Class "A" votes in the Association present in person or by proxy at a meeting duly called for such purpose, and the consent of the owner of the property. In addition, so long as Declarant owns property subject to this Declaration or which may become subject to this Declaration in accordance with Section 9.1, Declarant's consent is required. Any such Supplemental Declaration shall be signed by the President and Secretary of the Association, by the owner of the property and by Declarant, if Declarant's consent is required.

9.3 Additional Covenants and Easements - Tract Declarations

Declarant may subject any portion of the Properties to additional covenants and easements, including covenants obligating the Association to maintain and insure such property or provide services and authorizing the Association to recover its costs through Benefited Assessments. Such additional covenants and easements may be set forth either in a Supplemental Declaration subjecting such property to this Declaration or in a separate Supplemental Declaration referencing property previously subjected to this Declaration. If the property is owned by someone other than Declarant, then the consent of the Owner(s) shall be necessary and shall be evidenced by their execution of the Tract Declaration. Any such Tract Declaration may supplement, create exceptions to, or otherwise modify the terms of this Declaration as it applies to the subject property in order to reflect the different character and intended use of such property.

A Tract Declaration also may designate portions of the Common Area as “Limited Common Area” which is reserved for the exclusive or primary benefit of particular Owners. By way of illustration and not limitation, Limited Common Areas may include entry features, recreational facilities, landscaped medians and cul-de-sacs, lakes, and other portions of the Common Area.

9.4 Effect of Filing Supplemental Declaration

Any Supplemental Declaration Recorded pursuant to this Article shall be effective upon Recording unless otherwise specified in such Supplemental Declaration. On the effective date of the Supplemental Declaration, all Lots made subject to this Declaration, whether initially described in Exhibit "A" or annexed pursuant to a Supplemental Declaration, shall have equal voting rights and an equal, pro rata share of liability for Base Assessments.

Article X. Additional Rights Reserved to Declarant

10.1 Withdrawal of Property

Declarant reserves the right to amend this Declaration so long as it has a right unilaterally to annex additional property pursuant to this Article, without prior notice and without the consent of any Person, for the purpose of removing property then owned by Declarant, its affiliates, or the Association from the coverage of this Declaration, to the extent originally included in error or as a result of any changes in Declarant's plans for the Properties. If the property so removed is owned by the Association, the Association shall convey such property to Declarant upon the request of Declarant. Notwithstanding the above, any withdrawal resulting from changes in Declarant's plans for development of the Properties shall not materially adversely affect the overall, uniform scheme of development for the Properties.

10.2 Marketing and Sales Activities

Notwithstanding any provision in this Declaration, including Exhibit "C," to the contrary, Declarant and Builders authorized by Declarant may construct and maintain upon portions of the Common Area and other property owned by Declarant or such authorized Builder such facilities, activities, and things as, in the sole opinion of Declarant, may be reasonably required, convenient, or incidental to the construction or sale of Lots. Such permitted facilities, activities, and things shall include, without limitation, business offices, signs, flags (whether hung from flag poles or attached to a structure), model Lots, sales offices, holding or sponsoring special events, and exterior lighting features or displays. In addition, if reasonably required, convenient, or incidental to construction or sales activities, Declarant and Builders may park vehicles in areas other than garages or driveways, including on streets. Declarant and authorized Builders shall have easements for access to and use of such facilities at no charge.

10.3 Right To Develop

Declarant and its employees, agents, and designees shall have a right of access and use and an easement over and upon all of the Common Area for the purpose of making, constructing, and installing such improvements to the Common Area and to the property described on Exhibit "B" as it deems appropriate in its sole discretion.

Each Person acquiring an interest in the Properties acknowledges that the Anthem Country Club Community is a master planned community, the development of which is likely to extend over many years, and agrees not to protest, challenge, or otherwise object to (a) changes in uses or density of property outside the Benefited Area in which such Person holds an interest, or (b) changes in the Master Plans as it relates to property outside the Benefited Area in which such Person holds an interest

10.4 Right To Designate Sites for Governmental and Public Interests

For so long as Declarant owns any property described in Exhibits "A" or “B," Declarant may designate sites within the Properties for government, education, or religious activities and interests, including without limitation, fire, police, and utility facilities, schools and educational facilities, houses of worship, parks, and other public facilities. The sites may include Common Area, in which case the Association shall take whatever action is required with respect to such site to permit such use, including dedication or conveyance of the site, if so directed by Declarant.

10.5 Right To Approve Additional Covenants

No Person shall Record any declaration of covenants, conditions, and restrictions, or declaration of condominium or similar instrument affecting any portion of the Properties without Declarant's review and written consent Any instrument Recorded without such consent shall be void and of no force and effect unless subsequently approved by written consent signed by Declarant and Recorded.

10.6 Right To Transfer or Assign Declarant Rights

Any or all of the special rights and obligations of Declarant set forth in this Declaration or the By-Laws may be transferred in whole or in part to other Persons; provided, the transfer shall not reduce an obligation nor enlarge a right beyond that which Declarant has under this Declaration or the By-Laws. No such transfer or assignment shall be effective unless it is in a written, Recorded instrument signed by Declarant. The foregoing sentence shall not preclude Declarant from permitting other Persons to exercise, on a one time or limited basis, any right reserved to Declarant in this Declaration where Declarant does not intend to transfer such right in its entirety, and in such case it shall not be necessary to Record any Written assignment unless necessary to evidence Declarant's consent to such exercise.

10.7 Easement to Inspect and Right to Correct

Declarant reserves for itself and others it may designate the right, but not the obligation, to inspect, monitor, test, redesign, and correct any structure, improvement, or condition which may exist on any portion of the Properties, including Lots, and a perpetual non-exclusive easement of access throughout the Properties to the extent reasonably necessary to exercise such right. Except in an emergency, entry onto a Lot shall be only after reasonable notice to the Owner and no entry into a dwelling shall be permitted without the consent of the Owner. The Person exercising this easement shall promptly repair, at such Person's own expense, any damage resulting from such exercise.

10.8 Right to Notice of Design or Construction Claims

No Person shall retain an expert for the purpose of inspecting the design or construction of any structures or improvements within the Properties in connection with or in anticipation of any potential or pending claim, demand, or litigation involving such design or construction unless Declarant and any Builder involved in the design or construction have been first notified in writing and given an opportunity to meet with the Owner to discuss the Owner's concerns and conduct their own inspection.

10.9 Exclusive Rights To Use Name of Development

No Person shall use the name "Anthem" or "Anthem Country Club" or any derivative of such name in any printed or promotional material without Declarant's prior written consent. However, Owners may use the name "Anthem" or "Anthem Country Club" in printed or promotional matter where such term is used solely to specify that particular property is located within "Anthem" and Anthem Country Club and the Association shall be entitled to use the words "Anthem Country Club" in its name.

10.10 Del Webb Marks

Any use by the Association of names, marks, or symbols of Del Webb Corporation or any of its affiliates (collectively "Del Webb Marks") shall inure to the benefit of Del Webb Corporation and shall be subject to Del Webb Corporation's periodic review for quality control. The Association shall enter into license agreements with Del Webb Corporation, terminable with or without cause and in a form specified by Del Webb Corporation in its sole discretion, with respect to permissive use of certain Del Webb Marks. The Association shall not use any Del Webb Mark without Del Webb Corporation's prior written consent.

10.11 Equal Treatment

So long as Declarant owns any property described in Exhibits "A" or "B", neither the Association nor any other entity shall, without the prior written consent of Declarant, adopt any policy, rule, or procedure that: a. limits the access of Declarant, its successors, assigns, and/or affiliates or their personnel and/or guests, including visitors, to the Common Areas of the Association or to any property owned by any of them; b. limits or prevents Declarant, its successors, assigns, and/or affiliates or their personnel from advertising, marketing, or using the Association or its Common Areas or any property owned by any of them in promotional materials; c. limits or prevents purchasers of new residential housing constructed by Declarant, its successors, assigns, and/or affiliates in the Anthem Country' Club Community from becoming members of the Association or enjoying full use of its Common Areas, subject to the membership provisions of this Declaration and the By-Laws; d. discriminates against or singles out any group of Members or prospective Members or Declarant [this provision shall expressly prohibit the establishment of a fee structure (i.e.), assessments, Special Assessments and other mandatory fees or charges other than Benefited Assessments, chartered club dues, and use fees) that discriminates against or singles out any group of Members or Declarant, but shall not prohibit the establishment of Benefited Assessments]; e. impacts the ability of Declarant, its successors, assigns, and/or affiliates, to carry out to completion its development plans and related construction activities for the Anthem Country Club Community, as such plans are expressed in the Master Plans, as such may be amended and updated from time to time. Policies, rules, or procedures affecting the provisions of existing easements established by Declarant and limiting the establishment by Declarant of easements necessary to complete the Anthem Country Club Community shall be expressly included in this provision. Easements that may be established by Declarant shall include but shall not be limited to easements for development, construction, and landscaping activities and utilities; or f. impacts the ability of Declarant, its successors, assigns, and/or affiliates to develop and conduct customer service programs and activities in a customary and reasonable manner.

Neither the Association nor any other entity shall exercise its authority over the Common Areas (including, but not limited to, any gated entrances and other means of access to the Properties or the Exhibit "B" property) to interfere with the rights of Declarant set forth in this Declaration or to impede access to any portion of the Properties or the Exhibit "B" property over the streets and other Common Areas within the Properties.

10.12 Right To Use Common Area for Special Events

As long as Declarant owns any property described in Exhibits "A" or "B," Declarant shall have the right to use all Common Area to sponsor special events for charitable, philanthropic, political, or marketing purposes as determined by Declarant in its sole discretion. Any such event shall be subject to the following conditions: a. the availability of the facilities at the time a request is submitted to the Association; b. Declarant shall pay all costs and expenses incurred and shall indemnify the Association against any loss or damage resulting from the special event; and c. Declarant shall return the facilities and personal property owned by the Association and used in conjunction with the special event to the Association in the same condition as existed prior to the special events.

Declarant shall have the right to assign the rights contained in this Section 10.12 to charitable organizations or foundations selected by Declarant. Declarant's right to use the Common Area for special events shall be enforceable by injunction, by any other remedy in law or equity, and by the terms of this Declaration.

10.13 Termination of Rights

The rights contained in this Article shall terminate upon the earlier of (a) 40 years from the date this Declaration is Recorded, or (b) Recording by Declarant of a written statement that all sales activity has ceased. Thereafter, Declarant may continue to use the Common Areas for the purposes stated in this Article only pursuant to a rental or lease agreement between Declarant and the Association which provides for rental payments based on the fair market rental value of any such portion of the Common Areas. This Article X shall not be amended without the written consent of Declarant so long as Declarant owns any property described in Exhibits "A" or "B."

Part Five: PROPERTY RIGHTS WITHIN THE COMMUNITY

The nature of living in a planned community, with its wide array of properties and development types and its ongoing development activity, requires the creation of special property rights and provisions to address the needs and responsibilities of the Owners, Declarant, the Association, and others within or adjacent to the community.

Article XI. Easements

11.1 Easements in Common Area

Declarant grants to each Owner a non-exclusive right and easement of use, access, and enjoyment in and to the Common Area, subject to: a. the Governing Documents and any other applicable covenants (including, but not limited to, that certain Deed of Conservation Easement Between Anthem Arizona, L.L.C. and Del E. Webb Land Conservancy, Recorded on February 16, 1996 as Document Number 96-0105850, as it may be amended); b. any restrictions or limitations contained in any deed conveying such property to the Association; c. the authority and rights of the Council as set forth in this Declaration and the Community Covenant; d. the Board's right to: i. adopt rules regulating the use and enjoyment of the Common Area, including rules limiting the number of guests who may use the Common Area; ii. suspend the right of an Owner to use facilities within the Common Area:

A. for any period during which any charge against such Owner's Lot remains delinquent; and

B. for a period not to exceed 30 days for a single violation or for a longer period in the case of any continuing violation, of the Governing Documents after notice and a hearing pursuant to the By-Laws; iii. dedicate or transfer all or any part of the Common Area, subject to such approval requirements as may be set forth in this Declaration; iv. rent or lease any portion of any clubhouse or other recreational facilities within the Common Area on a short-term basis to any Person approved by the Board for such Person's exclusive use; v. permit use by Persons other than Owners, their families, lessees, and guests upon payment of admission charges, membership fees, of other use fees established by the Board; vi. mortgage, pledge, or hypothecate any or all of its real or personal property as security for money borrowed or debts incurred; and vii. create, enter into agreements with, and grant easements to tax-exempt organizations under Section 7.11; e. the rights of certain Owners to the exclusive use of those portions of the Common Area designated "Limited Common Areas," as described in a Tract Declaration; f. the Association's right to require Members, Owners, and/or their guests to present activity or use privilege cards, as may be issued by the Association, for access and use of amenities or facilities within the Properties; and g. the use of the entry facilities, including manned entry gates, and private streets within the Properties by Declarant, its affiliates, and their designees, and the owner, members, and other permitted users of the Country Club Amenity currently known as Anthem Country Club.

The initial Common Area shall be conveyed to the Association prior to or concurrent with the conveyance of the first Lot to a Class "A" Member other than a Builder.

Any Owner may extend his or her right of use and enjoyment to the members of his or her family, lessees, social invitees, and occupants of his or her Lot, as applicable, subject to reasonable regulation by the Board. An Owner who leases his or her Lot in its entirety shall be deemed to have assigned all such rights to the lessee of such Lot for the period of the lease.

11.2 Easements of Encroachment

Declarant grants reciprocal appurtenant easements of encroachment, and for maintenance and use of any permitted encroachment, between each Lot and any adjacent Common Area and between adjacent Lots due to the unintentional placement or settling or shifting of the improvements constructed, reconstructed, or altered thereon {in accordance with the terms of these restrictions) to a distance of not more than three feet, as measured from any point on the common boundary along a line perpendicular to such boundary. However, in no event shall an easement for encroachment exist if such encroachment occurred due to willful and knowing conduct on the part of, or with the knowledge and consent of, the Person claiming the benefit of such easement.

11.3 Easements for Utilities, Etc

a. Installation and Maintenance. Declarant reserves for itself, so long as Declarant owns any property described in Exhibit "A" or "B" of this Declaration, and grants to the Association, the Council, and all utility providers designated by Declarant, perpetual nonexclusive easements throughout all of the Properties (but not through a structure) to the extent reasonably necessary for the purpose of: i. installing utilities and infrastructure to serve the Properties and other portions of Anthem, cable and other systems for sending and receiving data and/or other electronic signals, security and similar systems, walkways, pathways and trails, drainage systems, street lights, and signage on property which Declarant owns or within public rights-of-way or easements reserved for such purpose on Recorded plats; ii. inspecting, maintaining, repairing and replacing the utilities, infrastructure and other improvements described in Section 11.3 a.i ; and iii. access to read utility meters. b. Specific Easements Declarant also reserves for itself the non-exclusive right and power to grant and Record such specific easements as may be necessary, in the sole discretion of Declarant, in connection with the orderly development of any property described in Exhibits “A” and "B." The location of any such easement shall be subject to the written consent of the Owner of the burdened property, which approval shall not unreasonably be withheld, delayed, or conditioned. c. Minimal Interference All work associated with the exercise of the easements described in subsections a and b of this Section shall be performed in such a manner as to minimize interference with the use and enjoyment of the burdened property. Upon completion of the work, the Person exercising the easement shall restore the property, to the extent reasonably possible, to its condition prior to the commencement of the work. The exercise of these easements shall not extend to permitting entry into the structures on any Lot, nor shall it unreasonably interfere with the use of any Lot and, except in an emergency, entry onto any Lot shall be made only after reasonable notice to the Owner or occupant of the Lot.

Notwithstanding the above, Declarant reserves the right to deny access to any utility or service provider, to the extent permitted by law, or to condition such access on the payment of reasonable consideration.

11.4 Easements To Serve Additional Property

Declarant hereby reserves for itself and its duly authorized agents, successors, assigns, and mortgagees, an easement over the Common Area for the purposes of enjoyment, use, access, and development of the property described in Exhibit "B," whether or not such property is made subject to this Declaration. This easement includes, but is not limited to, a right of ingress and egress over the Common Area for construction of roads and for connecting and installing utilities on such property.

Declarant agrees that it and its successors or assigns shall be responsible for any damage caused to the Common Area as a result of vehicular traffic connected with development of such property. Declarant further agrees that if the easement is exercised for permanent access to such property and such property or any portion thereof benefiting from such easement is not made subject to this Declaration, Declarant, its successors or assigns shall enter into a reasonable agreement with the Association to share the cost of any maintenance which the Association provides to or along any roadway providing access to such Property.

11.5 Easements for Maintenance, Emergency, and Enforcement

Declarant grants to the Association and the Council easements over the Properties as necessary to fulfill the maintenance responsibilities described in Section 7.2. Such easements shall include the right, but not the obligation, to enter upon any Lot for emergency, security, and safety reasons, to perform maintenance and to inspect for the purpose of ensuring compliance with and enforcing the Governing Documents. Such right may be exercised by the duly authorized agents and assignees of the Association and the Council, and all emergency personnel in the performance of their duties. Except in an emergency situation, entry shall be only during reasonable hours and after notice to the Owner.

Declarant grants to the Association and the Council, an easement and the right to enter a Lot to abate or remove, using such measures as may be reasonably necessary, any structure, thing or condition which violates the Governing Documents. All costs incurred, including reasonable attorney fees, shall be assessed against the violator as a Benefited Assessment.

11.6 Easements for Lake and Pond Maintenance and Flood Water

Declarant reserves for itself, the Association, the Council, and their successors, assigns, and designees, the non-exclusive right and easement, but not the obligation, to enter upon bodies of water and wetlands located within the Area of Common Responsibility to (a) install, operate, maintain, and replace pumps to supply irrigation water to the Area of Common Responsibility; (b) construct, maintain, and repair structures and equipment used for retaining water; and (c) maintain such areas in a manner consistent with the Community-Wide Standard. Declarant, the Association, the Council, and the successors, assigns and designees of each shall have an access easement over and across any of the Properties abutting or containing bodies of water to the extent reasonably necessary to exercise the rights under this Section.

Declarant further reserves for itself, the Association, the Council, and their successors, assigns and designees, a perpetual, non-exclusive right and easement of access and encroachment over the Common Area and Lots (but not the dwellings thereon) adjacent to or within 100 feet of bodies of water within the Properties, in order to (a) temporarily flood and back water upon and maintain water over such portions of the Properties; (b) alter in any manner and generally maintain the bodies of water within the Area of Common Responsibility; and (c) maintain and landscape the slopes and banks pertaining to such areas. All Persons entitled to exercise these easements shall use reasonable care in and repair any damage resulting from the intentional exercise of such easements. Nothing herein shall be construed to make Declarant or any other Person liable for damage resulting from flooding due to heavy rainfall or other natural occurrences.

11.7 Easements for Cross-Drainage

Every Lot and the Common Area shall be burdened with easements for natural drainage of storm water runoff from other portions of the Properties; provided, no Person shall alter the natural drainage on any Lot to increase materially the drainage of storm water onto adjacent portions of the Properties without the consent of the Owner(s) of the affected property, the Board, and Declarant as long as it owns any property described in Exhibits "A” or "B" to the Declaration.

11.8 Rights to Stormwater Runoff, Effluent, and Water Reclamation

Declarant hereby reserves for itself and its designees all rights to ground water, surface water, storm water runoff, and effluent located or produced within the Properties, and each Owner agrees, by acceptance of a deed to a Lot, that Declarant shall retain all such rights. Such rights shall include the reservation of an easement over the Properties for access, and for installation and maintenance of facilities and equipment to capture and transport such water, runoff, and effluent This Section may not be amended without the consent of Declarant and the rights created in this Section shall survive termination of this Declaration.

11.9 Easements for Golf Course

a. The Properties are burdened with an easement permitting golf balls unintentionally to travel over and come upon such areas, and for golfers at reasonable times and in a reasonable manner to come upon the Common Area to retrieve errant golf balls. The existence of this easement shall not relieve golfers of liability for damage caused by errant golf balls.

Under no circumstances shall any of the following Persons be held liable for any damage or injury resulting from errant golf balls or the exercise of this easement: Declarant; the Association or its Members (in their capacities as such); the Council; the owner(s), operator, or lessee of any golf course, or assigns; any Builder or contractor (in their capacities as such); any officer, director, or partner of any of the foregoing, or any officer or director of any partner.

b. The owner of any golf course within or immediately adjacent to the Properties, its agents, successors, and assigns, shall at all times have a right and nonexclusive easement of access and use over those portions of the Common Areas reasonably necessary to the operation, maintenance, repair, and replacement of its golf course.

c. Any portion of the Properties immediately adjacent to a golf course is hereby burdened with a non-exclusive easement for overspray of water from the irrigation system serving such golf course. Under no circumstances shall the Association or the golf course owner be held liable for any damage or injury resulting from such overspray or the exercise of this easement d. The owner of any golf course within or immediately adjacent to the Properties, its successors and assigns, shall have a perpetual, exclusive easement of access over the Properties for the purpose of retrieving golf balls from bodies of water within the Common Areas lying reasonably within range of golf balls hit from its golf course.

Article XII. Party Walls and Other Shared Structures

12.1 General Rules of Law to Apply

Each wall, fence, driveway, or similar structure built as a part of the original construction on a Lot, other than a perimeter wall or fence as provided in Section 5.1 and Section 7.2, which serves and/or separates any two adjoining Lots shall constitute a party structure. To the extent not inconsistent with the provisions of this Section, the general rules of law regarding party walls and liability for property damage due to negligence or willful acts or omissions shall apply thereto.

12.2 Maintenance; Damage and Destruction

The cost of reasonable repair and maintenance of a party structure shall be shared equally by the Owners who make use of the party structure.

If a party structure is destroyed or damaged by fire or other casualty, then to the extent that such damage is not covered by insurance and is not repaired out of the proceeds of insurance, any Owner who has used the structure may restore it. If other Owners thereafter use the structure, they shall contribute to the restoration cost in equal proportions. However, such contribution will not prejudice the right to call for a larger contribution from the other users under any rule of law regarding liability for negligent or willful acts or omissions.

Article XIII. Country Club Amenities

13.1 Right to Use the Country Club Amenities

Except as may otherwise be provided in a separate covenant or agreement executed by or on behalf of the owner of any Country Club Amenity, neither membership in the Association nor ownership or occupancy of a Lot shall automatically confer any right to use any Country Club Amenity, including, without limitation, private club known as the Anthem Golf and Country Club. Rights to use any Country Club Amenity will be granted only to such Persons, and on such terms and conditions, as may be determined from time to time by the owner of any Country Club Amenity. The owner of any Country Club Amenity shall have the right, from time to time in its sole and absolute discretion and without notice, to amend or waive the terms and conditions of use of any Country Club Amenity, including, without limitation, eligibility for and duration of use rights, categories of use and extent of use privileges, and number of users, and shall also have the right to reserve use rights and to terminate use rights altogether, subject to the terms of any written membership agreements or documents.

13.2 Conveyance of Country Club Amenities.

All Persons, including all Owners, are hereby advised that no representations or warranties have been or are made by Declarant, the Association, any Builder, or by any Person acting on behalf of any of the foregoing, with regard to the continuing ownership or operation of any Country Club Amenity. No purported representation or warranty in such regard, either written or oral, shall be effective unless specifically set forth in a written instrument executed by the record owner of any Country Club Amenity. The ownership or operation of any Country Club Amenity (or any portion of a Country Club Amenity) may change at any time. Consent of the Association or any Owner shall not be required to effectuate any change in ownership or operation of any Country Club Amenity, for or without consideration and subject to or free of any mortgage, covenant, lien, or other encumbrance.

13.3 Assumption of Risk and Indemnification

Each Owner, by purchasing a Lot in the vicinity of a Country Club Amenity, hereby expressly assumes the risk of noise, personal injury, or property damage caused by maintenance and operation of such Country Club Amenity, including, without limitation: (a) noise from maintenance equipment (it being specifically understood that such maintenance typically takes place around sunrise or sunset), (b) noise caused by golfers, (c) use of pesticides, herbicides, and fertilizers, (d) use of effluent in the irrigation of the golf course, (e) reduction in privacy caused by constant golf traffic on the golf course or the removal or pruning of shrubbery or trees on the golf course, (f) errant golf balls and golf clubs, and (g) design or redesign of the golf course.

Each such Owner agrees that Declarant, the Association, the Council, any Country Club Amenity owner(s), and any of Declarant's affiliates or agents shall not be liable to Owner or any other Person claiming any loss or damage, including, without limitation, indirect, special or consequential loss or damage arising from personal injury, destruction of property, trespass, loss of enjoyment or any other alleged wrong or entitlement to remedy based upon, due to, arising from or otherwise related to the proximity of Owner's Lot to the golf course or other Country Club Amenity, including, without limitation, any claim arising in whole or in part from the negligence of Declarant, any of Declarant's affiliates or agents, the Association, or the Council. The Owner hereby agrees to indemnify and hold harmless Declarant, Declarant's affiliates and agents, and the Association against any and all such claims by Owner's visitors, tenants, and others upon such Owner's Lot.

13.4 View Impairment

Neither Declarant nor the Association guarantees or represents that any view over and across any golf course from adjacent Lots will be preserved without impairment No provision of this Declaration shall create an obligation of the Association, Declarant, or any Country Club Amenity owner to relocate, prune, or thin trees or other landscaping except as provided in Article V. Any Country Club Amenity owner may, in its sole and absolute discretion, add trees and other landscaping to such golf course from time to time. In addition, any Country Club Amenity owner may, in its sole and absolute discretion, change the location, configuration, size and elevation of the tees, bunkers, fairways, and greens on such golf course from time to time. Any such additions or changes to such golf course may diminish or obstruct the view from the Lots. Any express or implied easements for view purposes or for the passage of light and air are hereby expressly disclaimed.

13.5 Rights of Access and Parking

There is hereby established for the benefit of any Country Club Amenity and its members (regardless of whether such members are Owners hereunder), guests, invitees, employees, agents, contractors, and designees, a right and non-exclusive easement of access and use over all roadways and golf cart paths, if any, located within the Properties reasonably necessary to travel between an entrance to the Properties and the Country Club Amenity and over those portions of the Properties (whether Common Area or otherwise) reasonably necessary to the operation, maintenance, repair, and replacement of the Country Club Amenity. Without limiting the generality of the foregoing, members, guests and invitees of any Country Club Amenity shall have the right to park their vehicles on the roadways located within the Properties at reasonable times before, during, and after tournaments and other similar functions held by or at the Country Club Amenity to the extent that the Country Club Amenity has insufficient parking to accommodate such vehicles.

13.6 Limitations on Amendments

In recognition of the fact that the provisions of this Article are for the benefit of the Country Club Amenities, no amendment to this Article, and no amendment in derogation of any other provisions of this Declaration benefiting any Country Club Amenity, may be made without the written approval of the affected Country Club Amenity owner. The foregoing shall not apply, however, to amendments made by Declarant.

13.7 Jurisdiction and Cooperation

It is Declarant's intention that the Association and the Country Club Amenities shall cooperate to the maximum extent possible in the operation of Anthem and the Country Club Amenities. Each shall reasonably assist the other in upholding the CommunityWide Standard as it pertains to maintenance and the Design Guidelines. The Association shall have no power to promulgate Use Restrictions affecting activities on or use of any Country Club Amenity without the prior written consent of the owners of the Country Club Amenity affected thereby.

Part Six: RELATIONSHIPS WITHIN AND OUTSIDE THE COMMUNITY

The growth and success of the Anthem Country Club Community as a community in which people enjoy living, working, and playing requires good faith efforts to resolve disputes amicably, attention to and understanding of relationships within the community and with our neighbors, and protection of the rights of others who have an interest in the community.

Article XIV. Dispute Resolution and Limitation on Litigation

14.1

Prerequisites

to Actions Against Declarant

Prior to filing a civil action, undertaking any action in accordance with Section 14.4, or retaining an expert for such actions against Declarant, or any Builder or subcontractor of any portion of the Anthem Country Club Community, the Board shall notify and meet with the Members to discuss the alleged problem or deficiency. Moreover, prior to taking any action, the Board shall notify the potential adverse party of the alleged problem or deficiency and provide such party a reasonable opportunity to inspect and repair the problem.

14.2 Initiation of Litigation by Association

In addition to compliance with the foregoing alternative dispute resolution procedures, if applicable, the Association shall not initiate any judicial or administrative proceeding unless first approved by a vote of Members entitled to cast 75% of the total Class "A” votes in the Association, except that no such approval shall be required for actions or proceedings: a. initiated during the Class "B" Control Period; b. initiated to enforce the provisions of this Declaration, including collection of assessments and foreclosure of liens; c. initiated to challenge ad valorem taxation or condemnation proceedings; d. initiated against any contractor, vendor, or supplier of goods or services arising out of a contract for services or supplies; or e. to defend claims filed against the Association or to assert counterclaims in proceedings instituted against it.

This Section shall not be amended unless such amendment is approved by the same percentage of votes necessary to institute proceedings.

14.3 Alternative Method for Resolving Disputes

Declarant, the Association and its officers, directors, and committee members, all Persons subject to this Declaration, and any Person not otherwise subject to this Declaration who agrees to submit to this Article (collectively, "Bound Parties") agree to encourage the amicable resolution of disputes involving the Properties, without the emotional and financial costs of litigation. Accordingly, each Bound Party covenants and agrees that those claims, grievances or disputes described in Sections 14.4 shall be resolved using the procedures set forth in Section 14.5 in lieu of filing suit in any court.

14.4 Claims

As used in this Article, the term "Claim" shall refer to any claim, grievance, or dispute arising out of or relating to: i. the interpretation, application, or enforcement of the Governing Documents; ii. the rights, obligations, and duties of any Bound Party under the Governing Documents; or iii. the design or construction of improvements within the Properties, other than matters of aesthetic judgment under Article IV, which shall not be subject to review.

Notwithstanding the above, the following shall not be considered "Claims" unless all parties to the matter otherwise agree to submit the matter to the procedures set forth in Section 14.5: i. any suit by the Association or the Council to collect assessments or other amounts due from any Owner; ii. any suit by the Association to obtain equitable relief (e.g , temporary restraining order, injunction, or specific performance) and such ancillary relief as the court may deem necessary in order to maintain the status quo and preserve the Association's ability to enforce the provisions of Part Two of this Declaration (relating to creation and maintenance of community standards); iii. any suit between Owners, which does not include Declarant or the Association as a party, if such suit asserts a cause of action independent of the Governing Documents; iv. any suit in which any indispensable party is not a Bound Party; and v. any suit as to which any applicable statute of limitations would expire within 180 days of giving the Notice required by Section one 14.5 a., unless the party or parties against whom the Claim is made agree to toll the statute of limitations as to such Claim for such period as may reasonably be necessary to comply with this Article.

14.5 Mandatory Procedures

a. Notice The Bound Party asserting a Claim ("Claimant") against another Bound Party ("Respondent") shall give written notice to each Respondent and to the Board, stating plainly and concisely: (i) the nature of the Claim, including the Persons involved and Respondent's role in the Claim; (ii) the legal basis of the Claim (i.e., the specific authority out of which the Claim arises); (iii) Claimant's proposed resolution or remedy; and (iv) that Claimant will meet with Respondent to discuss good faith ways to resolve the Claim. b. Negotiation and Mediation The Claimant and Respondent shall make every reasonable effort to meet in person and confer for the purpose of resolving the Claim by good faith negotiation. If requested in writing, accompanied by a copy of the Notice, the Board may appoint a representative to assist the parties in negotiating a resolution of the Claim. c. Allocation of Costs of Resolving Claims Each party shall bear its own costs, including attorneys’ fees, and each party shall share equally all charges rendered by the mediator(s).

If the parties do not resolve the Claim through negotiation within 30 days of the date of the notice described above (or within such other period as the parties may agree upon), Claimant shall have 30 additional days to submit the Claim to mediation with an entity designated by the Association (if the Association is not a party to the Claim) or to an independent agency providing dispute resolution services in the Maricopa County, Arizona area.

If Claimant does not submit the Claim to mediation within such time, or does not appear for mediation when scheduled, Claimant shall be deemed to have waived the Claim, and Respondent shall be released and discharged from any and all liability to Claimant (but not third parties) on account of such Claim.

Any settlement of the Claim through mediation shall be documented in writing by the mediator and signed by the parties. If the parties do not settle the Claim within 30 days after submission of the matter to the mediation, or within such time as determined reasonable by the mediator, the mediator shall issue a notice of termination of the mediation proceedings indicating that the parties are at an impasse and the date that mediation was terminated.

14.6 Enforcement of Resolution

After resolution of any Claim, if any party fails to abide by the terms of any settlement, then any other party may file suit or initiate administrative proceedings to enforce such settlement without the need to again comply with the procedures set forth in Section 14.5. In such event, the party taking action to enforce the settlement shall be entitled to recover from the non-complying party (or if more than one non-complying party, from all such parties in equal portions) all costs incurred in enforcing such settlement, including, without limitation, attorneys’ fees and court costs.

14.7 Attorneys' Fees

In the event of an action instituted to enforce any of the provisions contained in the Governing Documents, the party prevailing in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys' fees and costs, including administrative and lien fees, of such suit In the event the Association or Council is a prevailing party in such action, the amount of such attorneys' fees and costs shall be a Benefited Assessment with respect to the Lot(s) involved in the action.

ANTHEM COUNTRY CLUB COMMUNITY ASSOCIATION, INC. DISPUTE RESOLUTION TIMELINE

Claim Between Bound Parties

Day 1 Days 1-30

Days 30-60

Days 60-90+

Notice of Claim Negotiations Start Mediation Mediation

 Factual Basis

 Legal Basis

 Propose a resolution

 Propose a meeting

 Good faith effort  Claimant must submit Claim

 Parties meet within the Properties

 May request Board assistance

 If unsuccessful, written termination sent by Claimant to Respondent and Board

 Mediator assigned by agency

 If Claim is not submitted, it is waived

 Agency supplies rules

 Fee split between parties

 Written summary from each side

 Supervised negotiation

 Send by hand delivery or First class mail

 Send copy to Board

Article XV. Mortgagee Provisions

 Contractual settlement or

 Termination of mediation

The following provisions are for the benefit of holders, insurers and guarantors, of first Mortgages on Lots. The provisions of this Article apply to both this Declaration and to the By-Laws, notwithstanding any other provisions contained therein.

15.1 Notices of Action

An institutional holder, insurer, or guarantor of a first Mortgage which provides a written request to the Association (such request to state the name and address of such holder, insurer, or guarantor and the street address of the Lot to which its Mortgage relates, thereby becoming an "Eligible Holder"), will be entitled to timely written notice of: a. Any condemnation loss or any casualty loss which affects a material portion of the Properties or which affects any Lot on which there is a first Mortgage held, insured, or guaranteed by such Eligible Holder; b. Any delinquency in the payment of assessments or charges owed by a Lot subject to the Mortgage of such Eligible Holder, where such delinquency has continued for a period of 60 days, or any other violation of the Governing Documents relating to such Lot or the Owner or occupant which is not cured within 60 days; c. Any lapse, cancellation, or material modification of any insurance policy maintained by the Association; or d. Any proposed action which would require the consent of a specified percentage of Eligible Holders.

15.2 No Priority

No provision of this Declaration or the By-Laws gives or shall be construed as giving any Owner or other party priority over any rights of the first Mortgagee of any Lot in the case of distribution to such Owner of insurance proceeds or condemnation awards for losses to or a taking of the Common Area.

15.3 Notice to Association

Upon request, each Owner shall be obligated to furnish to the Association the name and address of the holder of any Mortgage encumbering such Owner's Lot.

15.4 Failure of Mortgagee to Respond

Any Mortgagee who receives a written request from the Board to respond to or consent to any action shall be deemed to have approved such action if the Association does not receive a written response from the Mortgagee within 30 days of the date of the Association's request, provided such request is delivered to the Mortgagee by certified or registered mail, return receipt requested.

Part Seven: CHANGES IN THE COMMUNITY

Communities such as Anthem Country Club are dynamic and constantly evolving as circumstances, technology, needs and desires, and laws change over time. The Anthem Country Club Community and its governing documents must be able to adapt to these changes while protecting the things that make the community unique.

Article XVI. Changes in Ownership of Lots

Any Owner, other than Declarant, desiring to sell or otherwise transfer title to his or her Lot shall give the Board and the Council's designee written notice at least 14 days prior to the pending sale or transfer. The written notice shall include the name and address of the purchaser or transferee, the date of such transfer of title, and such other information as the Board may reasonably require to comply with the Act's notice and statement requirements. The Association may charge the Owner a reasonable fee to pay for the costs incurred in preparing the statement pursuant to the Act.

The transferor shall continue to be jointly and severally responsible with the transferee for all obligations of the Owner of the Lot, including assessment obligations, until the date upon which such notice is received by the Board, notwithstanding the transfer of title.

Article XVII. Changes in Common Area

17.1 Condemnation

Whenever any part of the Common Area shall be taken or conveyed under threat of condemnation by any authority having the power of eminent domain, the Board shall determine, in the exercise of its business judgment, whether each Owner shall be entitled to notice thereof. The Board may convey Common Area under threat of condemnation only if approved in writing by at least 67% of the Class "A" Members in the Association and Declarant, as long as Declarant owns any property described in Exhibits "A" or "B."

The award made for such taking shall be payable to the Association as trustee for all Owners to be disbursed as follows:

If the taking involves a portion of the Common Area on which improvements have been constructed, the Association shall restore or replace such improvements on the remaining land included in the Common Area to the extent practicable, unless, within 60 days after such taking, the Declarant, so long as the Declarant owns any property described in Exhibits "A" or "B" of this Declaration, and at least 67% of the total Class "A” Members in the Association shall otherwise agree. Any such construction shall be in accordance with plans approved by the Board. The provisions of Section 7.3 regarding funds for the repair of damage or destruction shall apply.

If the taking does not involve any improvements on the Common Area, or if a decision is made not to repair or restore, or if net funds remain after any such restoration or replacement is complete, then such award or net funds shall be disbursed to the Association and used for such purposes as the Board shall determine.

17.2 Partition

Except as permitted in this Declaration, the Common Area shall remain undivided, and no Person shall bring any action partition of any portion of the Common Area without the written consent of all Owners and Mortgagees. This Section shall not prohibit the Board from acquiring and disposing of tangible personal property nor from acquiring and disposing of real property which may or may not be subject to this Declaration.

17.3 Transfer or Dedication of Common Area

The Association may dedicate portions of the Common Area to Maricopa County, Arizona, or to any other local, state, or federal governmental or quasi-governmental entity.

Article XVIII. Amendment of Declaration

18.1 Corrective Amendments

In addition to specific amendment rights granted elsewhere in this Declaration, until conveyance of a Lot to a Class "A" Member other than a Builder, Declarant may unilaterally amend this Declaration for any purpose. Thereafter, Declarant, or the Board with consent of the Declarant, may unilaterally amend this Declaration if such amendment is necessary (a) to bring any provision into compliance with any applicable governmental statute, rule, regulation, or judicial determination; (b) to enable any reputable title insurance company to issue title insurance coverage on the Lots; (c) to enable any institutional or governmental lender, purchaser, insurer or guarantor of mortgage loans, including, for example, the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, to make, purchase, insure or guarantee mortgage loans on the Lots; or (d) to satisfy the requirements of any local, state, or federal governmental agency. However, any such amendment shall not adversely affect the title to any Lot unless the Owner shall consent in writing.

In addition, so long as Declarant owns property described in Exhibits "A" or “B" for development as part of the Properties, it may unilaterally amend this Declaration for any other purpose, provided the amendment has no material adverse effect upon any right of any Owner.

18.2 By Members

Except as otherwise specifically provided above and elsewhere in this Declaration, this Declaration may be amended only by the affirmative vote or written consent, or any combination thereof, of Members representing 67% of the Class "A" votes in the Association, and the consent of Declarant, so long Declarant owns any property subject to this Declaration or which may become subject to this Declaration in accordance with Section 9.1.

Notwithstanding the above, the percentage of votes necessary to amend a specific clause shall not be less than the prescribed percentage of affirmative votes required for action to be taken under that clause.

18.3 Validity and Effective Date

No amendment may remove, revoke, or modify any right or privilege of Declarant without the written consent of Declarant (or the assignee of such right or privilege). Additionally, no amendment may remove, revoke, or modify any right or privilege of the Council without the Council's written consent.

If an Owner consents to any amendment to this Declaration or the By-Laws, it will be presumed conclusively that such Owner has the authority to consent, and no contrary provision in any Mortgage or contract between the Owner and a third party will affect the validity of such amendment.

Any amendment validly adopted by the Association shall be certified by the President or Secretary of the Association, and shall become effective upon Recording, unless a later effective date is specified in the amendment Any procedural challenge to an amendment must be made within six months of its Recording or such amendment shall be presumed to have been validly adopted. In no event shall a change of conditions or circumstances operate to amend any provisions of this Declaration.

Nothing in this Article shall be construed to permit termination of any easement created in this Declaration or Supplemental Declaration without the consent of the holder of such easement.

18.4 Exhibits

Exhibits "A" and "B" attached to this Declaration are incorporated by this reference and amendment of such exhibits shall be governed by this Article. Exhibit "C" is incorporated by this reference and may be amended pursuant to Sections 18.1 and 18.2, or as provided in Article III.

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the undersigned Declarant has executed this Declaration the date and year first written above.

Anthem Arizona, L.L.C., an Arizona limited liability company

By:

Name:

Title:

STATE OF ARIZONA ) ) s.s COUNTY OF MARlCOPA )

The foregoing instrument was acknowledged before me this 14th day of January 1999 by Thomas E. Lucas , as the manager of ANTHEM ARIZONA, LLC., an Arizona limited liability company.

By:

Name: Title: Notary Public

EXHIBIT "A"

Land Initially Submitted

Anthem Country Club Unit 1 Amended, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 490, Page 42.

Anthem Country Club Unit 2 Amended, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 490, Page 23.

Anthem Country Club Unit 3 Amended, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 490, Page 24.

Anthem Country Club Unit 4 Amended, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 490, Page 25.

Anthem Country Club Unit 5 Amended, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 490, Page 26.

Anthem Country Club Unit 6 Amended, according to the plat of record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 490, Page 22.

Anthem Club Drive, according to a Corrective Map of Tract Dedication record in the office of the County Recorder of Maricopa County, Arizona, recorded in Book 485, page 09.

EXHIBIT “B”

Land Subject to Annexation

All real property lying and being within 25 miles from any portion of any boundary line outlining the Properties.