This MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR STONERIDGE FKA LAKE SANS SOUCI - UNITS ONE AND TWO, a mixed use project, dated for reference May 1, 2001, is made and executed by CDS Stoneridge Land, L.C., a Utah limited liability company, whose principal address is 4885 South 900 East, Suite 100, Salt Lake City, Utah 84117.

RECITALS:

A. The Declaration of Covenants for Lake Sans Souci - Units One and Two was recorded in the office of the County Recorder of Bonner County, Idaho on or about March 27, 1970 as Instrument No. 126603 in Book 40 at Page 527 of the Official Records (the "Original Declaration").

B. The Original Declaration was amended by a written instrument known as the "Amended Covenants" recorded on June 21, 1971 in the office of the County Recorder of Bonner County, Idaho as Instrument No. 133988 in Book 43 at Page 505 of the Official Records (the "First Amendment").

C. The Original Declaration was amended by a written instrument known as the "Second Amended Covenants" recorded on September 23, 1971 in the office of the County Recorder of Bonner County, Idaho as Instrument No. 135907 in Book 44 at page 228 of the Official Records (the "Second Amendment").

D. The original Declaration was amended by a written instrument known as the "Revised and Restated Declaration of Reservations, Covenants, Agreements, Restrictions and Conditions for Lake Sans Souci - Units One and Two" recorded in the office of the County Recorder of Bonner County, Idaho on June 21, 1979 as Entry No. 215684 in Book 79 of Miscellaneous of the official records (the "Revised and Restated Declaration").

E. The undersigned is the successor in interest to the original Developer or Developer (the "Developer").

F. This document affects the real property located in Bonner County, Idaho, described with particularity on Exhibits "1-6," inclusive, attached hereto and incorporated herein by this reference (the "Property").

G. The Property is an area of unique natural beauty, featuring distinctive terrain;

H. By subjecting the Property to this Declaration, it is the desire, intent and purpose of Developer to create a community in which beauty shall be substantially preserved, which will enhance the desirability of living on that real estate subject to this Declaration, and which will increase and preserve the attractiveness, quality and value of the lands and improvements therein.

I. This Declaration of Covenants, Conditions and Restrictions affects that certain real property located in Bonner County, Idaho described with particularity in Article II below.

J. All of the voting requirements of Section 10.5 of the Revised and Restated Declaration have been satisfied.

K. Developer is the owner of the real estate located in located Bonner County, Idaho described with particularity on Exhibit "1" attached hereto and incorporated herein by this reference.

L. The Association is either the owner or the managing agent of the real estate located in Bonner County, Idaho described with particularity on the following Exhibits attached hereto and incorporated herein by this reference:

Exhibit 2-1 The Forest at Stoneridge

Exhibit 2-2 The Lakes at Stoneridge

Exhibit 2-3 The Meadows at Stoneridge

Exhibit 2-4 Pool and Clubhouse

M. There are two classes of physical improvements or assets governed by this document: (1) The Pool and Clubhouse Assets; and (2) The Non-Pool and Clubhouse Assets, including without limitation, all of the other Common Areas and Facilities, such as roads, lake, green areas, trails, parks, and the like.

N. This Declaration of Covenants, Conditions and Restrictions is created and filed pursuant to the law of the State of Idaho.

O. Developer intends, by recording this Declaration, to establish a general plan of development, which provides a flexible and reasonable procedure for the future expansion of the Property to include additional real property, as Developer deems appropriate, and provides for the overall development, administration, maintenance, and preservation of the real property now and hereafter comprising the Property. An integral part of the development plan is the creation of a master or umbrella owners association comprised of all owners of real property in the Property, to own, operate, and/or maintain various common areas and community improvements and to administer and enforce this Declaration and the other Governing Documents referenced in this Declaration.

P. Developer intends, by recording this Declaration, to create a master or umbrella association and a series of sub-associations, including without limitation the following:

The Forest at Stoneridge Homeowners Association

The Lakes at Stoneridge Homeowners Association

The Meadows at Stoneridge Homeowners Association

and such other and further commercial or residential sub-associations as the need arises.

Q. Developer has constructed, is in the process of constructing or will construct upon the Property a mixed use development, comprised of residential, commercial, time-share, resort and related parcels, which shall include Lot/Unit/Units, Common Area, Golf Course, Private Amenity, and other improvements. All of such construction has been, or is to be, performed in accordance with Idaho Law and plans contained in the Record of Plat Map to be recorded concurrently herewith.

R. Developer intends to sell to various purchasers fee title to the Lot/Unit/Units contained in the Tract, and a corresponding membership interest in the Association (which shall own the Common Area), subject to the Record of Survey Map, and the covenants, conditions and restrictions set forth herein.

S. Since the completion of the Project may be in phases, the completed Project will consist of the original phase and all subsequent phases.

T. Developer desires, by filing this Declaration and Record of Plat Map, to create an Association under Idaho Law and to submit Phase of the Tract and all improvements now or hereafter constructed thereon to the terms, covenants and conditions of this Declaration.

U. The Project is to be known as STONERIDGE a Golf and Recreation Community.

NOW, THEREFORE, Developer hereby declares that the Property is and shall henceforth be owned, held, conveyed, encumbered, leased, improved, used, occupied and enjoyed subject to the following uniform covenants, conditions, restrictions and equitable servitudes. The said covenants, conditions, restrictions and equitable servitudes are in furtherance of, and the same shall constitute a general plan for the ownership, improvement, sale, use and occupancy of the Property; they are also in furtherance of and designed to accomplish the desires, intentions, and purposes set forth above in the Recitals.

I. DEFINITIONS

It is the Developer’s intent to define key terms in a manner identical to or consistent with the terms used in Idaho Law. When used in this Declaration (including in that portion hereof entitled "Recitals"), each of the following terms shall have the meaning indicated unless the context clearly requires otherwise. In the event of any conflict, inconsistency or incongruity between the following definitions and those set forth in the Idaho Law, the latter shall in all instances govern and control.

1. Act shall mean and refer to the Idaho Condominium Property Act, Chapter 15, Sections 55-1501 et seq.

2. Activity Card shall mean and refer to cards issued by the Association, which confer upon the holder rights of access to and use of recreational facilities and other amenities within the Project (subject to the payment of membership, greens, admission, and other user fees established by the Board from time to time).

3. Additional Charges shall mean and refer cumulatively to all collection and administrative costs, including but not limited to any and all attorney's fees, late charges, service fees, filing and recordation fees, default interest, fines, and expenditures actually incurred or assessed by the Master Association or where the context so requires, any sub-association.

4. Additional Land shall mean and refer to real estate that may be annexed to the Project, described with particularity on Exhibit "4" attached hereto and incorporated herein by this reference.

5. Annexation shall mean and refer to the process by which additional real estate, tracts or parcels of land, not initially a part of the Project, are made subject to this Declaration.

6. Architectural Review Committee or ARC shall mean and refer to the committee established by the Board to review all plans and applications for the construction and modification of improvements on the Property (subject to the rights reserved to Developer) and to administer and enforce the architectural controls and guidelines.

7. Area of Common Responsibility shall mean and refer to all land and improvements within the Project, including the Common Area, which are the responsibility of the Association to maintain, repair and replace.

8. Area of Personal Responsibility shall mean and refer to all land and improvements within the Project, which are the responsibility of the Owners to maintain, repair and replace.

9. Area of Sub-association Responsibility shall mean and refer to all land and improvements within the Project, which are the responsibility of a sub-association to maintain, repair and replace.

10. Articles of Incorporation shall mean and refer to the Articles of Incorporation of the Association or where the context requires any sub-association.

11. Assessment shall mean and refer a charge, cost or fee, including Regular, Special, Benefited, and Individual Assessments.

12. Association shall mean and refer to the master or umbrella association of all of the Owners at STONERIDGE acting as a group in accordance with this Declaration.

13. Base Fee shall mean and refer to the maintenance charge assessed all Owners, and /or Units by the Association to pay for Common Expenses for the Non-Pool and Clubhouse Assets.

14. Base Sub-association Fee shall mean and refer to the additional maintenance charge assessed all Owners of a Lot/Unit or Unit governed by a sub-association, such as a NHOA Base Fee for a Residential Area or a CPOA Base Fee for a Commercial Area.

15. Board shall mean and refer to the duly elected and qualified Board of Directors of the Association.

16. Boat Dock shall mean and refer to the small boat dock or harbor designed to offer dockage, supplies and services for small watercraft.

17. Building shall mean and refer to any of the structures built in the Project and shall include all other appurtenances and improvements thereto or used in connection therewith.

18. Business and Trade shall mean and refer to any occupation, work, or activity undertaken on an ongoing basis which involves the provision of goods or services to persons other than the provider's family and for which the provider receives a fee, compensation, or other form of consideration, regardless of whether: (a) such activity is engaged in full or part-time; (b) such activity is intended to or does generate a profit; or (c) a license is required therefore. Anything to the contrary notwithstanding, the leasing of residential or commercial space shall not be considered a trade or business within the meaning of this subsection.

19. By-Laws shall mean and refer to the By-Laws of the Association, a copy of which are attached to this Declaration as Exhibit "11" and incorporated herein by this reference.

20. CDS Stoneridge Golf, L.C. shall mean and refer to the company or Private Amenity, which owns and operates the golf course, as that term is generally defined in its ordinary commercial meaning, located within the Project.

21. CDS Stoneridge Land, L.C. shall mean and refer to the Developer.

22. CDS Stoneridge Utilities, L.C. shall mean and refer to the company or Private Amenity which owns and operates the Utilities, as that term is generally defined in its ordinary commercial meaning, located within or serving the Project.

23. Capital Improvement shall mean and refer to a permanent addition to or the betterment of real property that enhances its capital value and improves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs.

24. Class B Control Period shall mean and refer to the period during which the Class "B" Votes exist. The Class "B" Control Period shall expire upon the first to occur of the following: (a) when 75% of the Maximum Lot/Units and Units have certificates of occupancy issued thereon and have been conveyed to Class "A" Members; (b) when the Class "B" membership terminates; (c) December 31, 2015; or (d) When the Class B Member executes and records a written Waiver of his right to control.

25. Commercial Area shall mean and refer to any designated portion of the Project zoned for commercial use.

26. CPOA or Commercial Property Owners Association shall mean and refer to a Commercial sub-association.

27. Committee shall mean and refer to the Board or, if the context requires, the ARC.

28. Common Areas or Common Areas and Facilities shall mean and refer to all real property governed by the Association for the common use and enjoyment of the Owners. The Common Area shall specifically include the areas designated upon the Plat Map of STONERIDGE as "Common Area," including that real property located within the Project deeded to the Association or in which the Association owns any right, title or interest for the common use and benefit of the Owners or their successors, assigns, tenants, families, guests and invitees, including but not limited to the following items: (a) The real property and interests in real property submitted hereby, including the entirety of the Tract and all improvements constructed thereon, excluding the individual Lot/Unit/Units; (b) All private streets or areas designated as "street" in the Plat Map or Maps; (c) All utility installations and all equipment connected with or in any way related to the furnishing of utilities to the Project and intended for the common use of all Owners, such as telephone, electricity, gas, water, and sewer; (d) All portions of the Project not specifically included within the individual Lot/Unit/Units; (e) Entry Monument and Park, signage and related facilities; and (f) All other parts of the Project normally in common use or necessary or convenient to the use, existence, maintenance, safety, operation or management of the real property owned by the Association for the common benefit of the Owners.

29. Common Expense shall mean and refer to the actual and estimated expenses of operating the Association, including without limitation (a) expenses of security, insurance, ad valorem taxes; (b) the cost of supplies, equipment and machinery; (c) utility costs for power, gas, water and sewer; (d) all sums lawfully assessed against the Owners; (e) expenses of administration, accounting and payroll, (f) expenses of snow removal, road repairs and replacement, landscaping, and maintenance, repair, or replacement of the Common Areas and Facilities; (g) expenses allocated by any Sub-association; (h) expenses agreed upon as common expenses by the Association; (i) any reasonable reserves required by the Association or governmental mandates; and (j) expenses declared common expenses by the Governing Documents.

30. Convertible Land shall mean and refer to that land which may later be converted into one or more Lot/Units, Units, Common Area, Limited Common Area, or Private Yard Areas.

31. Covenant to Share Costs shall mean and refer to any agreement, contract, declaration of easements, or covenant to share costs executed by Developer or the Association, which creates an easement, right of access, or right to use or share the use of property (real, personal or mixed) for the benefit of the Association and the present and future Owners, and which obligates the Association and such Owners to share the costs of maintaining, at least in part, such property.

32. Declaration shall mean and refer to this MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR STONERIDGE.

33. Dedicated Streets shall mean and refer to those streets within the Project formally dedicated to Bonner County, Idaho or any other municipal or governmental body politic, entity or agency.

34. Design Guidelines shall mean and refer to the written rules and standards attached as Exhibit "12" intended to promote both high quality architectural, design, engineering and building standards while incorporating a reasonable degree of variety and flexibility and maintaining an overall design and conceptual consistency congruent with the Master Plans.

35. Developer shall mean and refer to CDS Stoneridge Land, L.C., a Utah limited liability company, and its successors and assigns.

36. Dwelling shall mean and refer to a residential dwelling or living unit.

37. Eligible Insurer shall mean and refer to an insurer or governmental guarantor of a mortgage or trust deed who has requested notice in writing of certain matters from the Association in accordance with this Declaration.

38. Eligible Mortgagee shall mean and refer to a mortgagee, beneficiary under a trust deed, or lender who has requested notice in writing of certain matters from the Association in accordance with this Declaration.

39. Eligible Votes shall mean and refer to those votes available to be cast on any issue before the Association or, if the context requires, the Board or ARC. A vote, which is for any reason suspended, is not an "eligible vote".

40. Equestrian Tract shall mean and refer to that strip, parcel or area of land designed and intended for the use of horses as shown on the Plat Map.

41. Equity Membership shall mean and refer to the membership of an Equity Owner.

42. Equity Owner shall mean and refer to the proprietor of an interest in or to the Golf Course or other Private Amenity, excluding the interest of a mortgagee or lien holder.

43. Exclusive Common Area shall mean and refer to that portion of the Common Area intended for the exclusive use or primary benefit of one or more, but less than all, Residential Area or Commercial Area.

44. Existing Residential Areas or Commercial Areas shall mean and refer to:

• The Clubhouse, Swimming Pool, Indoor Golf Facility,

• The Forest at Stoneridge

• The Lakes at Stoneridge
• The Meadows at Stoneridge

45. Exterior Materials shall mean and refer to those construction materials used on the exterior surfaces of a Building, which shall be of a noncombustible material. The determination whether any specific material constitutes an acceptable Exterior Material shall be made by the Developer or ARC.

46. Facilities shall mean and refer to streets, entrances and other public ways, fences, gates, utilities, security systems, equipment, and structures used to house and maintain such equipment and associated real estate.

47. Family shall mean one of the following: (a) a single person living alone; (b) a group of natural persons related to each other by blood or legally related to each other by marriage or adoption, such as a parent, child, grandparent, grandchild, brother, sister, uncle, aunt, nephew, niece, great-grandparent or great-grandchild or (c) a group of not more than three unrelated persons who live together, cook together, and maintain a common household and single housekeeping unit, but not as a boarding or rooming house. An additional person or persons may be included within the definition of a "family" for domestic help or as a caretaker.

48. Golf Course shall mean and refer to the Stoneridge Golf Course as so designated in the Master Plan, on the Plat Map, or as presently constituted and as it may be improved from time to time.

49. Governing Documents shall mean collectively the documents governing the Project, including but not limited to the Act, this Declaration, By Laws, Rules and Regulations, and Articles of Incorporation.

50. Improved Lot/Unit means each Lot/Unit or part therein of said Lot/Unit as set forth on the Plat Map upon which a residential, commercial, or resort structure has been constructed and/or upon which a building permit or other similar authorization to begin construction thereon has been issued by an appropriate governmental entity and shall come into existence when preparation of the Lot/Unit for such construction has commenced.

51. Improvement shall mean and refer to every structure and all appurtenances thereto of every type and kind, including but not limited to, Buildings, patios, tennis courts, swimming pools, garages, mailboxes, aerials, antennas, satellite dishes, roads, driveways, parking areas, fences, screening walls, retaining walls, stairs, decks, landscaping, hedges, windbreak, planting, planted trees and shrubs, poles, signs, exterior air conditioning, water softener fixtures or equipment, pumps, wells, tanks, reservoirs, pipes, lines, meters, towers, and other facilities used in connection with water, sewer, gas, electric, telephone, regular or cable television, or other utilities.

52. Lake shall mean and refer to Lake San Souci or, if the context requires, any other body of water larger than a pool or pond within the Project.

53. Land shall mean and refer to all of the real property within the Project and subject to this Declaration.

54. Limited Common Areas shall mean and refer to those Common Areas designated in this Declaration or in the Record of Survey Map as reserved for the use of a certain Owner to the exclusion of the other Owners. Unless otherwise expressly stated, any portico, colonnade, entry, doorstep, landing, porch, balcony, deck, patio, garage, carport, assigned parking space, storage locker, or other improvement intended to serve only a single condominium Unit, shall constitute Limited Common Area appertaining to that Unit exclusively, whether or not the Survey Map makes such a designation.

55. Lot/Unit shall mean and refer to a portion of the Property, other than the Common Area, intended for any type of independent ownership and use as may be set out in this Declaration and as shall be shown on the Plat Map filed with this Declaration or amendments thereto. Where the context indicates or requires, the term Lot/Unit includes a condominium Unit, Dwelling, Building, physical structure, or improvement constructed on the Lot/Unit.

56. Lot/Unit Number shall mean and refer to the number, letter or combination thereof designating a particular Lot/Unit.

57. Lot/Unit Owner shall mean and refer to (a) the Person(s), including without limitation the Developer holding an aggregate fee simple interest in a Lot/Unit or, as the case may be (b) the purchaser of an aggregate fee simple interest in a Lot/Unit under an executory land sales contract. The term Lot/Unit Owner does not mean or include a mortgagee or a beneficiary or trustee under a deed of trust unless and until such party has acquired title pursuant to foreclosure or any arrangement or proceeding in lieu thereof.

58. Majority shall mean and refer to those eligible votes of Owners or other groups as the context may indicate totaling more than fifty (50%) percent of the total eligible number.

59. Manager shall mean and refer to the person or entity appointed or hired to manage and operate the Project.

60. Map shall mean and refer to the Plat Map on file in the office of the County Clerk of Bonner County, Idaho.

61. Master Declaration shall mean and refer to this instrument as it may be amended from time to time.

62. Master Plan or Plans shall mean and refer to the master development plan for the Project (as amended and expanded from time to time to include additional property annexed and to accommodate reasonable variations from the original master concepts and to meet the requirements of governmental authorities having jurisdiction over the development of the Project), which development plan has been created by the Developer, reviewed by and conceptually accepted by appropriate governmental authorities and includes projected varied residential uses, including single family detached residences, multi-family housing, condominium, townhouse and other residential uses, varied commercial uses, combined with certain recreational areas, open-space and a golf course.

63. Maximum Number of Lot/Unit/Units shall mean and refer to the maximum number of residential and commercial Lot/Unit/Units approved for development within this Project and contemplated under the Master Plan, including without limitation all Additional Land, as amended from time to time. The Developer currently intends to create or develop 621 Lot/Unit/Units, although that number may vary.

64. Member shall mean and refer to an Owner obligated, by virtue of his ownership of property in the Project to be a shareholder in the Association or where the context so requires, a NHOA or CPOA or a participant in a group, such as the Board or ARC.

65. Mortgage shall mean and refer exclusively to either a mortgage or deed of trust on any Lot/Unit/Unit, but shall not mean or refer to a uniform real estate contract, land sales contract or an executory contract of sale.

66. Mortgagee shall mean and refer exclusively to a mortgagee under either a mortgage or a beneficiary under a deed of trust on any Lot/Unit/Unit, but shall not mean or refer to a seller under a uniform real estate contract, land sales contract, or an executory contract of sale.

67. Neighborhood shall mean and refer to a Residential Area.

68. NHOA or Neighborhood Homeowners Associations shall mean and refer to a sub-association in a Residential Area.

69. Nonresidential Lot/Unit/Unit shall mean and refer to a portion of the Property subject to the Declaration which is intended for any type of independent ownership for use and occupancy as permitted hereby and the applicable zoning ordinances of Bonner County, Idaho. The term shall include all portions of the Lot/Unit/Unit owned including any structure thereon as well as unimproved property intended for such permitted development, and shall specifically include, without limitation, office, research, industrial and retail properties, each unit within an office condominium, hotels, rental apartment buildings, nursing homes, and similar community care facilities. For the purposes of this Declaration, a Nonresidential Lot/Unit/Unit shall come into existence when a supplemental declaration and/or map is recorded in the office of the County Recorder of Bonner County, Idaho.

70. Occupant shall mean and refer to any Person who is otherwise legally entitled to occupy and use any Building or Improvement on a Lot/Unit/Unit whether or not such right is exercised, including their heirs, personal representatives, successors and assigns.

71. Office of the County Recorder shall mean and refer to the Office of the County Clerk of Bonner County, Idaho.

72. Owner shall mean and refer to the owner of a Lot/Unit/Unit or any other portion of the Property.

73. Period of Developer’s Control shall mean and refer to a period of time commencing on the date this Declaration is recorded and terminating one hundred twenty (120) days after the occurrence of the earlier of the following events: (a) when 75% of the Maximum Lot/Unit/Units have certificates of occupancy issued thereon and have been conveyed to Class "A" Members; (b) December 31, 2015; or (c) When the Developer executes and records a written Waiver of his right to control.

74. Person shall mean and refer to a natural person, corporation, partnership, trust, limited liability company, or other legal entity.

75. Plans and Specifications shall mean and refer to any and all documents designed to guide or control the construction of an Improvement, or alterations, modifications, changes, additions and the like thereto, including without limitation all documents indicating the size, shape, configuration and/or materials, to be incorporated; all site plans, excavation and grading plans, elevation drawings, floor plans, techniques, samples of exterior colors, plans for utility services, and all other documentation or information relevant to the improvement or proposal in question.

76. Plat Map shall mean and refer to the "Record of Survey Map(s) for LAKE SANS SOUCI - UNITS ONE AND TWO on file in the office of the County Clerk of Bonner County, Idaho, as it may be amended from time to time. The Plat Map will show the location of the Lot/Unit/Units, Common Area, and other Improvements.

77. Pool and Clubhouse Asset Base Fee shall mean and refer to the maintenance charge assessed all Owners, and /or Units by the Association to pay for Common Expenses for the Pool and Clubhouse Assets.

78. Private Amenity shall mean and refer to certain real property and any improvements and facilities thereon located adjacent to, in the vicinity of or within the Project, which are privately owned and operated by Persons other than the Association for recreational and related purposes, on a club membership basis or otherwise. For example by way of illustration and not limitation, any Golf Course, Utility, and all related and supporting facilities and improvements which are owned and operated by Persons other than the Association shall be a Private Amenity.

79. Private Street shall mean all non-Dedicated Streets or streets designated as private upon the plat.

80. Private Yard Area or PYA shall mean and refer to those common areas and facilities designated in the Declaration as reserved for the use of a certain Lot/Unit or Lot/Units to the exclusion of the other Lot/Units.

81. Project shall mean and refer to STONERIDGE.

82. Property shall mean and refer to all of the land or real estate, improvements, and appurtenances submitted to this Declaration.

83. STONERIDGE shall mean and refer to this Project.

84. Recreational, Oversized or Commercial Vehicle shall mean and refer to any recreational, commercial or oversized vehicle, motor home, commercial vehicle, tractor, golf cart, mobile home or trailer (either with or without wheels), camper, camper trailer, boat or other watercraft, boat trailer, or any other recreational, oversized or commercial transportation device of any kind.

85. Reduced Common Areas shall mean and refer to those Common Areas and Facilities as reduced by the conversion of Convertible Land as permitted herein.

86. Repair shall mean and refer to merely correcting the damage done sometimes by accident or fire or other cause, but more often due to the ravages of time and the deterioration resulting from ordinary wear and tear, by substituting for the damage, decayed or worn-out parts, new material, usually similar to that replaced, and so restoring the structure to its original sound condition.

87. Residential Area shall mean and refer to any designated portion of the Project zoned for residential use.

88. Residential Lot/Unit/Unit shall mean and refer to any structure situated upon a portion of the Property intended for any type of independent ownership and for use and occupancy as a single family residence, and shall, unless otherwise specified, including within its meaning (by way of illustration, but not limitation) each unit within a residential condominium, living units, apartment units, patio or zero Lot/Unit line homes, and single family homes on separately platted Lot/Units, as may be developed, used and defined as provided in this Declaration or in supplemental declarations or amendments covering all or part of the Property; For purposes of this document, a Building or Dwelling shall come into existence when substantially completed or upon the issuance of a certificate of occupancy by the appropriate governmental agency.

89. Single-Family Dwelling or Residence shall mean and refer to both the architectural style of a Dwelling and the nature of the residential use thereof or activity permitted therein.

90. Size or shall mean and refer to the number of square feet of ground or floor space within or assigned to each Lot/Unit/Unit as computed by reference to the Plat Map and rounded off to a whole number, or the equivalent of such space as determined by the Developer using the formula set forth in Exhibit "13" attached hereto and incorporated herein by this reference. Certain spaces or physical characteristics within the Lot/Unit/Units, Buildings, or Dwellings, including without limitation the attic, basement, garage space, height, location, view, utility, amenities, equity membership, and special characteristics may but need not be omitted from the calculation of the Size Unit or be partially discounted by the use of a ratio, if the same basis of calculation is employed for all such Lot/Unit/Units, Buildings and Dwellings in the Project.

91. Sub-association shall mean and refer to an association of Owners in a particular Commercial Area or Residential Area.

92. Supplemental Declaration shall mean a Declaration, which adds contiguous properties to or converts the use of the Property covered by this Declaration. Such Supplemental Declaration may, but is not required to impose, expressly or by reference, additional restrictions and obligations, on properties submitted by that subsequent Declaration to the provisions of this Declaration.

93. Total Votes shall mean and refer to the total number of available votes in the Project or, if the context requires, a sub-association.

94. Trail shall mean and refer to, as the context requires, a walking trail, jogging trail, equestrian trail, or other similar trail.

95. Utility shall mean and refer to power, gas, water, sewer and similar utilities, and other Private Amenity or Amenities as may be designated by the Developer or CDS Stoneridge Utility, L.C., from time to time.

96. Unimproved Lot/Unit means each Lot/Unit upon which there is no residential, commercial or resort structure and for which no building permit or other similar authorization to begin construction thereon has been issued by an appropriate governmental authority and upon which no preparation for construction has begun.

97. Unimproved Unit means each Unit within a residential or commercial condominium, or part thereof, as set forth on the Plat Map upon which there is no residential, commercial or resort structure and for which no building permit or similar authorization to begin construction has been issued by an appropriate governmental authority, and upon which no preparation for construction has begun.

98. Unit shall mean and refer to each Unit within a residential or commercial condominium constituting a separate physical part of the Property intended for any type of independent use, including one or more rooms or spaces located in one or more floors or part or parts of floors in a Building, and any utility system exclusively serving such unit.

99. Unit Number shall mean and refer to the number, letter or combination of numbers and letters designating the Unit in the Declaration and the Record of Survey Map.

100. Use Restrictions shall mean and refer to the rules and use restrictions set forth below, as they may be modified, amended, repealed, canceled, limited, withdrawn or expanded.

101. Voting Group shall mean the Association or, where the context requires, a sub-association voting on a common slate (e.g., for the election of Members of the Board of Directors).

102. Wetlands shall mean and refer to those areas so designated by the U.S. Corp of Engineers or other local, state or federal agency or agencies, including without limitation those areas within the Project that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.

103. Wetlands Credits shall mean and refer to those tax credits or "bank" or banking of tax credits available to Developer as a result of the Wetlands within the Tract under any local, state or federal program, or combination thereof.

The Property, described with particularity on Exhibit "1" attached hereto and incorporated herein by this reference, is located in Bonner County, Idaho. The Property is situated within STONERIDGE. The Property is hereby submitted to the terms, covenants and conditions of, is hereby made subject to, and shall be governed and regulated by this Declaration and Idaho Law. In addition:

The foregoing submission is made upon and under the covenants, conditions, and restrictions, subject to the applicable provisions of Idaho law.

1. Description of Improvements. The significant improvements in the Project include, or shall include, residential areas, commercial areas, resort and mixed-use areas and structures, including without limitation single family detached homes, side-by-side structures, residential condominiums, commercial condominiums, stacked and terraced units, clusters, multi-family sites, retail and office spaces, convenience store, golf course and clubhouse, community center, swimming pool, boat dock, private amenities, restaurant, food center, shopping centers, and other related uses, together with Common Areas and Facilities, and other physical improvements. The Project will also contain other improvements of a less significant nature.

2. Exclusive Common Area. The Developer reserves the right to designate (or change a designation of) certain portions of the Common Area as Exclusive Common Area as long as it owns any of the Property. Exclusive Common Area shall be Common Area that is reserved for the exclusive use or primary benefit of Owners, occupants and invitees of Lot/Unit/Units within a particular Residential Area or Commercial Area. Exclusive Common Area may include, without limitation, recreational facilities, rights of way and medians, and other portions of the Common Area within a particular area. All particular costs associated with maintenance, repair, replacement and insurance of Exclusive Common Area shall be included in a NHOA or CPOA Base Fee unless otherwise determined by the Board. In addition, by recording a Supplemental Declaration, the Association may designate Common Area as Exclusive Common Area (or change a designation) upon a majority vote of the Class "A" Members in the Association, subject to the consent of the Developer so long as it owns any of the Property. The Association may permit Owners of Lot/Unit/Unit in other areas to use all or a portion of Exclusive Common Area, upon payment of a reasonable user fees.

3. Rights of Ownership, Possession and Easements of Enjoyment. Every Owner shall be entitled to exclusive ownership and possession of his Lot/Unit/Unit. Every Owner shall have a right and easement of enjoyment to the Common Areas and Facilities for the purpose for which it was designed and intended. Owners shall have a right and easement of enjoyment to appurtenant PYA for the purpose for which it was designed and intended, subject hereto and any rules and regulations that the Board may adopt from time to time.

4. Membership in the Association. Membership in the Association is mandatory and may not be severed, separated, or partitioned from Lot/Unit/Unit ownership.

5. Conveyancing. Any deed, lease, mortgage, deed of trust, or other instrument conveying or encumbering a Lot/Unit/Unit shall describe the interest or estate involved substantially as follows:

Regardless of whether or not the description employed in any such instrument is in the above-specified form, all provisions of this Declaration shall be binding upon and shall inure to the benefit of any party who acquires any interest in a Lot/Unit/Unit. Neither the membership in the Association, nor the right of non-exclusive use of a Common Area shall be separated from the Lot/Unit/Unit to which it appertains; and, even though not specifically mentioned in the instrument of transfer, such mandatory membership in the Association and such right of exclusive use shall automatically accompany the transfer of the Lot/Unit/Unit to which they relate.

6. Plan of Development, Applicability and Effect. Developer has established a general plan of development for the Project as a master planned community in order to protect all Owners' quality of life and collective interests, the aesthetics and environment within the Project and the vitality of and sense of community within the Project, all subject to the right of the Board and members to respond to changes in circumstances, conditions, needs, and desires within the Project. The Project is subject to the land development, architectural, and design provisions described herein, the other provisions of this Declaration governing individual conduct, and uses of or actions upon the Project, and the guidelines, rules, and restrictions promulgated pursuant hereto, as each may be amended from time to time, all of which establish affirmative and negative covenants, easements, and restrictions on the Project. Except as otherwise expressly provided herein, all provisions of this Declaration and any rules shall apply to all Owners, occupants, tenants, guests, and invitees of any Lot/Unit/Unit.

7. Existing Neighborhoods, Residential Areas, and Commercial Areas. The Association and Owners may, in their sole discretion, elect to prepare and record Supplemental or Amended Declarations for Existing Neighborhoods, Residential Areas, and Commercial Areas.

8. Delegation of Use. Any Owner may delegate the right of enjoyment to the Common Areas and Facilities to members of the Owner’s family and to tenants, renters, lessees, guests, visitors and invitees, except the Activity Card is non-transferable to other third persons, without the prior written consent of the Developer or, at the end of the Developer’s Period of Control, the Board.

9. Annexation of Private Amenities. If reasonably available, the Association may purchase and operate any Private Amenity and its facilities, infrastructure and easements as provided for or identified herein or in the Plat Map and Master Plan or, in the alternative, contract separately for such services.

10. Owners' Acknowledgment. Because each Owner by acceptance of a deed acknowledges and agrees that the use and enjoyment and marketability of his property can be affected by this Declaration and any amendment thereto, and that the use restrictions and rules may change from time to time, all Owners are given notice that: (a) their ability to use their privately owned property is limited hereby, (b) the Board and/or the Association may amend the Declaration, use restrictions, or adopt rules which modify, cancel, limit, create exceptions to, or expand the use, and (c) the Developer may add land, convert land, and/or amend the use restrictions or other portions of this Declaration.

B. USE RESTRICTIONS

The use of the Property is subject to the use restrictions set forth herein generally and in Exhibits "7," "8," and "9" in particular.

1. Board. The Association shall be managed by a Board, which shall be comprised of at least three (3) and no more than nine (9) members shall be elected by the Owners. Of the initial Board, one-half (1/2) of the Members shall be elected to serve two (2) year terms and the remaining members shall be elected for a one (1) year term. Thereafter, all Members shall be elected for two (2) year terms.

2. Status and General Authority of Board Any instrument executed by the Board that recites facts which, if true, would establish the Board's power and authority to accomplish through such instrument what is purported to be accomplished thereby, shall conclusively establish said power and authority in favor of any person who in good faith and for value relies upon said instrument. The Association shall, in connection with its exercise of any of the powers delineated below, constitute a legal entity capable of dealing in its Board name. The Board shall have, and is hereby granted, the following authority and powers:

a. To Enter. The power and authority to enter into or upon any Lot/Unit/Unit to make repairs and to do other work reasonably necessary for the proper maintenance and operation of the Project. Except in the case of an emergency, reasonable notice shall be given to the Occupants.

b. To Grant Easements. The authority, without the vote or consent of the Owners, Mortgagees, insurers or guarantors of any Mortgage, or of any other person, to grant or create, on such terms as it deems advisable, reasonable permits, licenses, and non-exclusive easements over, under, across, and through the Common Areas for utilities, roads, and other purposes reasonably necessary or useful for the proper maintenance, operation or regulation of the Project.

c. To Execute Documents. The authority to execute and record, on behalf of all Owners, any amendment to the Declaration or Plat Map which has been approved by the vote or consent necessary to authorize such amendment.

d. Standing. The power to sue and be sued.

e. To Enter Into Contracts. The authority to enter into contracts, which in any way concern the Project, so long as any vote or consent necessitated by the subject matter of the agreement, has been obtained.

f. To Transfer Interests in Real Property. The power and authority to exchange convey or transfer any interest in real property, so long as it has been approved by at least a Majority of Owners present, in person or by proxy, at a special meeting of the Association called for that purpose.

g. To Purchase. The power and authority to purchase, otherwise acquire, and accept title to, any interest in real property, so long as it has been approved by at least a Majority of Owners present, in person or by proxy, at a special meeting of the Association called for that purpose.

h. To Add Property. The power and authority to add any real property, or interest therein, obtained pursuant to subparagraph (g) above to the Project, so long as it has been approved by at least a Majority of Owners present, in person or by proxy, at a special meeting of the Association called for that purpose.

i. To Borrow Money. The power and authority to borrow money and pledge assets of the Association, so long as it has been approved by at least a Majority of Owners present, in person or by proxy, at a special meeting of the Association called for that purpose.

j. To Joint Venture or Coop. The power and authority to joint venture the ownership and/or operation of a Private Amenity, so long as it has been approved by at least a Majority of Owners present, in person or by proxy, at a special meeting of the Association called for that purpose.

k. To Promulgate Rules. The authority to promulgate, interpret and enforce rules and regulations.

l. To Establish Protocol for Meetings. The authority to establish procedures for the conducting of its meetings, including but not limited to the power to decide what portion of the meeting shall be open or closed to Members of the Association or occupants not on the Board, to retire to executive session. Any homeowner may record by video or audio any or all of the Board Meetings, excluding Executive Sessions.

m. To Assign or Lease Common Area. The power and authority to rent, lease, or make available any lawful purpose (including, without limitation, public meetings of governmental or quasi-governmental authorities) any portion of any clubhouse and other recreational facility or amenity within the Common Area on a short-term basis to any Person approved by the Association for the exclusive use of such Person and such Person's family, guests and/or invitees, for a fee.

n. To Require Valid Activity Card. The power and authority to require the use of a valid Activity Card issued by the Association to access and use recreational facilities and Private Amenities.

o. To Construct or Contract for Communications Facilities. The power and authority to (1) construct, erect, install, place or maintain a radio, television or satellite antenna, or other aerial, dish, transmitting device or reception structure for a master satellite, television or radio system (the "antenna facilities"), should any such master system or systems be utilized by the Association or Owners and require such fixtures; and (2) enter into an easement, lease or license agreement, or any combination thereof, with a utility company to provide space and access for communications holders for antennas facilities and related equipment in the Common Areas, if such is not in violation of local, state or federal law and is for the benefit of the Owners.

p. To Contract with Private Amenity. The power and authority to enter into an easement, lease or license agreement, or any combination thereof, with a Private Amenity.

q. To Provide or Broker Utility Services. If a public utility service is deregulated, the power and authority to provide, make available or broker utility services to the Association or the Owners, provided such is not in violation of local, state or federal laws and is for the benefit of the Owners.

r. Use of Common Area. The power and authority to change the nature of the use of the Common Areas and Facilities.

s. To Do All other Acts. The power and authority to perform any and all other acts, and to enter into any other transactions which may be reasonably necessary for the Board to perform its functions on behalf of the Owners.

3. Delegation of Management Responsibilities. The Board may delegate some of its management responsibilities to either a professional management company, an experienced on-site manager, independent contractors, through service contracts, or any combination thereof. The termination provision of any such contract must not require a termination penalty or any advance notice of more than ninety (90) days, no such contract shall be for a term greater than one (1) year.

4. Liability of Board. The Association shall indemnify every officer and member of the Board against any and all expenses, including but not limited to attorney's fees reasonably incurred by or imposed upon any officer or member of the Board in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board) to which he may be a party by reason of being or having been an officer or member of the Board. The officers and members of the Board shall not be liable for any mistake of judgment, negligent or otherwise, except for their own individual intentional, misconduct.

5. Classes of Membership and Voting Allocations. The Association shall have two (2) classes of membership:

a. Class A. The Class A Members shall be all members other than the Class B Members, including CDS Rainmaker Golf, L.C. Class A voting is subject to:

(1) One Vote. Each Lot/Unit/Unit shall have one (1) vote.

(2) Subject To Assessment. No vote shall be cast or counted for any Lot/Unit/Unit not subject to an Assessment.

(3) Multiple Owners. When more than one (1) person or entity holds such interest in a Lot/Unit/Unit, the vote for such Lot/Unit/Unit shall be exercised as those persons or entities themselves determine and advise the Secretary of the Association prior to any meeting. In the absence of such advice, the vote of the Lot/Unit shall be suspended in the event more than one (1) person or entity seeks to exercise it.

b. Class B. The Class B Member shall be the Developer and any successor of Developer who takes title to a Lot/Unit or other real estate within the Project for the purpose of development any portion of the Property, in whole or in part, including without limitation the sale of Lot/Unit, and who is designated as such in a recorded instrument executed by Developer. The Class B Member shall be entitled to 6 votes per Lot/Unit owned. The Class B membership shall terminate, and Class B membership shall convert to Class A membership, upon the termination of the Class B Control Period. From and after the termination of the Class B Control Period, the Class B Member shall be deemed to be a Class A Member entitled to one (1) vote for each Lot/Unit owned.

1. Easements: Drainage, Support, Maintenance and Repair. The following easements and rights of way are hereby RESERVED for and GRANTED to the Developer and, at the termination of the Developer’s Period of Control, the Association.

2. Easements of Encroachment. Developer reserves unto itself, so long as it owns any property in the Project, easements of encroachment, and for maintenance and use of any permitted encroachment, between each Lot/Unit and any adjacent Common Area and between adjacent Lot/Unit due to the unintentional placement or settling or shifting of the improvements constructed, reconstructed, or altered thereon (in accordance with this Declaration) 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 the Developer.

3. Easements for Utilities. Developer reserves unto itself so long as it owns any property in the Project, and grants to the Association an easement for the purpose of access and maintenance upon, across, over, and under all of the Property to the extent reasonably necessary to install, replace, repair, and maintain cable television systems, master television antenna systems, internet service, security and similar systems, roads, walkways, bicycle pathways, trails, lakes, ponds, wetlands, drainage systems, street lights, signage, and all utilities, including, but not limited to, water, sewer, meter boxes, telephone, gas, and electricity. The Developer and/or the Association may assign these rights to any local utility supplier, Cable Company, Security Company or other company providing a service or utility to the Project subject to the limitations herein. This easement shall not entitle the holders to construct or install any of the foregoing systems, facilities, or utilities over, under or through any existing Lot/Unit, and any damage to a Lot/Unit resulting from the exercise of this easement shall promptly be repaired by, and at the expense of; the Person exercising the easement. Developer specifically grants to the local utility suppliers easements across the Project for ingress, egress, installation, reading, replacing, repairing, and maintaining utility meters and boxes. However, the exercise of this easement shall not extend to permitting entry into the Lot/Unit, nor shall any utilities be installed or relocated on the Property, except as approved by the Board or Developer. The exercise of this easement by any party other than the Association shall be subject to prior notice to the Association, which shall be permitted to coordinate and supervise access to the Project by the grantee of the easement. The exercise of the easement also shall not unreasonably interfere with the use of any Lot/Unit and, except in an emergency, entry onto any Lot/Unit shall be made only after reasonable notice to the Owner or occupant.

4. Easement Reservation for Expansion. Developer hereby reserves to itself and for Owners in all future phases, a perpetual easement and right-of-way for access over, upon, and across the Property and for use of the Common Areas and Facilities throughout the Project. The Developer hereby reserves for itself and its successors, assigns, and Mortgagees, an easement over the Common Area for the purposes of enjoyment, use, access and development of any Additional Land, Convertible Land, real property annexed to the Project, or adjoining real property owned by the Developer, 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. Developer agrees that it and its assigns shall be responsible for any damage caused to the Common Area as a result of vehicular traffic connected with development of such property. Developer further agrees that if the easement is exercised for permanent access to such property and such property or any portion thereof is not made subject to this Declaration, the Developer shall enter into a reasonable agreement with the Association to share the cost of maintenance of any access roadway serving such property. The exact location of these easements and rights-of-way may be identified by recorded instruments.

5. Easements for Cross-Drainage. Every Lot/Unit and the Common Area shall be burdened with easements for natural drainage of storm water runoff from other portions of the Project; provided, no Person shall alter the natural drainage on any Lot/Unit to increase

materially the drainage of storm water onto adjacent portions of the Project without the consent of the Owner(s) of the affected property, the Board, and the Developer as long as it owns any property in the Project.

6. Easements for Maintenance and Enforcement. The Developer and, at the termination of the Developer’s Period of Control, the Association shall have the right, and a perpetual easement is hereby granted to enter all portions of the Project, including each Lot/Unit to (a) perform its maintenance responsibilities, and (b) make inspections to ensure compliance with this Declaration, any Supplemental Declaration, By-Laws, Rules and Regulations.

7. Rights to Surface Water, Groundwater, Stormwater Runoff, Effluent, and Water Stored Underground. Developer hereby reserves for itself and its designees all rights to surface water which are appurtenant to the Project, all of which surface water rights are to be consolidated by Developer for use on the golf course to be constructed within the Project and for storage in underground storage facilities to be located within the Project. Developer hereby reserves for itself and its designees all rights to groundwater, stormwater runoff, effluent, and water stored in all underground storage facilities located or produced within the Project. Each Owner agrees, by acceptance of a deed to a Lot/Unit, that Developer shall retain all such rights. Such rights shall include an easement over the Project 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 the Developer and the reservations made and rights created pursuant to this Section shall survive the termination of this Declaration. Neither the Developer nor any Owner shall be deemed by this reservation, or the consolidation of water rights to be made pursuant to this reservation, to abandon any right to water which is appurtenant to or which may be exercised in connection with the Project.

8. Non-Residential Properties; Easement and Covenant to Share Cost. The Board may enter into amenity agreements with adjoining properties. The Property may contain or be adjacent to certain Non-Residential Areas, including, without limitation, a Time Share Development, Golf Course, Utility, and other Private Amenities, which are not part of the Project or dedicated to the public, in whole or in part. The owners of Nonresidential Properties (other than the Developer) shall, to the extent they elect to purchase the right to use or benefit from the use of Common Areas and Facilities, be obligated to share in certain costs associated with the maintenance, repair, replacement, and insuring of said Common Area and Facilities, and shall be subject to pay their pro rata share of such costs.

9. Easement for Lake and Pond Maintenance and Flood Water. The Developer reserves for itself and its successors, assigns, and designees the nonexclusive right and easement, but not the obligation to enter upon the lakes, ponds, streams, and wetlands located within the Area of Common Responsibility to (a) install, keep, maintain, and replace pumps in order to provide water for the irrigation of any of the Areas of Common Responsibility; (b) construct, maintain, and repair and bulkhead, wall, dam, or other structure retaining water; and (c) remove trash and other debris therefrom and fulfill their maintenance responsibilities as provided in this Declaration. The Developer’s rights and easements provided in this Section shall be transferred to the Association at such time a the Developer shall cease to own any property subject to the Declaration, or such earlier time as Developer may elect, in its sole discretion, to transfer such rights by a written instrument. The Developer, the Association, and their designees shall have an access easement over and across any of the Community abutting or containing any portion of any of the lakes, ponds, streams, or wetlands to the extent reasonably necessary to exercise their rights under this Section.

There if further reserved herein for the benefit of Developer, the Association, and their designees, a perpetual, nonexclusive right and easement of access and encroachment over the Common Area and Lot/Units (but not the dwellings thereon) adjacent to or within fifty (50) feet of lake beds, ponds, and streams within the Project in order to (a) temporarily flood and back water upon, and maintain water over, such portions of the Community; (b) fill, drain, dredge, deepen, clean, fertilize, dye, and generally maintain the lakes, ponds, streams and wetlands within the Areas of Common Responsibilities; (c) maintain and landscape the slopes and banks pertaining to such lakes, ponds, streams, and wetlands; and (d) enter upon and across such portions of the Community for the purpose of exercising its rights under this Section. 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 Developer or any other Person liable for damage resulting from flooding due to hurricanes, heavy rainfalls, or other natural disasters.

1. Activity Cards. The Activity Card may not be separated from ownership of a Lot/Unit and is non-transferable. Any attempt to transfer an Activity Card shall void the Card.

a. Issuance To Owner. One Activity Card shall be allocated to each Owner, up to a maximum of two Activity Cards per Lot/Unit. No Activity Cards shall be allocated to any Lot/Unit, which is not occupied by a Owner. The Board shall determine entitlement to Activity Cards on an annual basis. If the Lot/Unit continues to be occupied by an Owner and all applicable Assessments and Additional Charges have been paid, the Activity Card(s) allocated to such Lot/Unit shall be renewed annually without charge. The Board of Directors may establish policies, limits, and charges with regard to the issuance of replacement cards and guest privilege cards.

b. Issuance to the Developer. As long as the Developer owns the Property, or any portion thereof, the Board shall provide the Developer, free of charge, with as many Activity Cards as the Developer, in its sole discretion, deems necessary for the purpose of marketing the Property. The Developer may transfer the Activity Card to prospective purchasers of Lot/Units, subject to such terms and conditions as it, in its sole discretion, may determine. Activity Cards provided to the Developer shall entitle the bearer to use all recreational facilities, Common Areas and Facilities, and Private Amenities (subject to the payment of greens fees, admission fees, or other use fees charged to Owners holding Activity Cards).

F. MAINTENANCE

1. Operation, Maintenance and Alterations. All of the property in the Project shall be maintained in a usable, clean, functional, safe, healthy, sanitary, attractive, and good condition.

2. The Maintenance Responsibility of the Association. The Association shall maintain and keep in good repair the Area of Common Responsibility, which shall include, but need not be limited to: (a) all Common Area; (b) the Entry Park and Monument; (c) the grounds and all landscaping and other flora, parks, signage, structures, parking areas, and improvements, including any bike and pedestrian pathways and trails, situated upon the Common Area; (d) all water service facilities and drainage facilities within the Area of Common Responsibility, including lakes, ponds, streams and other water features; (e) all common sidewalks; (f) all perimeter walls and fences constructed by the Developer or barriers constructed by Developer which separate a Lot/Unit, Common Area, golf course or any Private Amenity; (g) all common irrigation systems; (h) all streetlights; (i) any other item designated as a common responsibility or responsibility of the Association herein; (j) all Trails; (k) any property and facilities owned by the Developer and made available, on a temporary or permanent basis, for the primary use and enjoyment of the Association and its Members. Such property shall be identified by written notice from the Developer to the Association. The Association's responsibility shall terminate at such time as Developer revokes the privilege of use and enjoyment by written notice to the Association. The Association may, but shall not be obligated to, delegate maintenance responsibility for property within any Residential Area or Commercial Area to its NHOA or CPOA.

3. The Maintenance Responsibility of the Owner(s). Each Owner shall properly maintain his Lot/Unit in accordance with the Design Guidelines and use restrictions.

4. The Maintenance Responsibility of a Sub-association. The Board may, but is not obligated to, require a NHOA or CPOA to maintain certain Common Area and Facilities, within a particular Residential Area or Commercial Area, at its expense, and to allocate the cost thereof among the Members of such sub-association.

5. Changes to Areas of Responsibility. The Board may, in its sole discretion, add to or subtract items from the Areas of Responsibility upon at least thirty (30) days prior written notice to the interested parties.

6. Default. If an Owner or sub-association fails properly to perform his maintenance responsibility, the Association may perform such maintenance and charge the Owner or sub-association the cost thereof.

1. Party Walls and Party Fences. Each wall and fence built by the Developer as part of the original construction on any Lot/Unit shall constitute a party wall if: (a) any part is built upon or straddling the boundary line between two adjoining Lot/Units or (b) it is constructed within five (5) feet of the boundary line between adjoining Lot/Units and the Owners agree in writing that it is a party wall. The cost of maintaining, repairing or replacing the party wall shall be divided equally between the Owners.

1. Common Expenses. Each Owner shall pay his Assessments to the Association subject to and in accordance with the procedures set forth below.

a. Developer. Anything to the contrary notwithstanding, the Developer shall not be obligated to pay Assessments on any Lot/Units owned by it until such time as: (1) the physical structures are substantially completed; (2) certificates of permanent occupancy are issued and the Lot/Units are sold or rented; or (3) Developer elects in writing to pay the Assessments, whichever first occurs.

b. Purpose of Common Area Expenses. The Assessments provided for herein shall be used for the general purpose of operating the Project, promoting the recreation, health, safety, welfare, common benefit and enjoyment of the Owners and Occupants, including the maintenance of any real and personal property owned by the Association.

c. Creation of Assessments. Each Owner, by acceptance of a deed or other document of conveyance to a Lot/Unit, whether or not it shall be so expressed in such deed, covenants and agrees to pay to the Association in a timely manner all Assessments.

d. Budget. At least thirty (30) days prior to the Annual Meeting of the Association, the Board shall prepare and deliver to the Owners a proposed Budget which:

(1) Itemization. Shall set forth an itemization of the anticipated Common Expenses for the twelve (12) month calendar year, commencing with the following January 1. The Budget shall set forth the Base Fee, Pool and Clubhouse Base Fee, NHOA Base Fee or CPOA Base Fee, and any other foreseeable individual charges or add-ons for each Lot/Unit, Unit or property interest.

(2) Basis. Shall be based upon advance estimates of cash requirements by the Board to provide for the payment of all estimated expenses growing out of or connected with the maintenance and operation of the (a) Pool and Clubhouse Assets and (b) Non-Pool and Clubhouse Assets, and regulation of the Association, which estimate shall include but is not limited to expenses of management, grounds maintenance, taxes and special assessments, premiums for all insurance which the Association is required or permitted to maintain, common lighting and heating, water charges, trash collection, sewer service charges, carpeting, painting, repairs and maintenance of the Common Areas and replacement of those elements of the Common Areas that must be replaced on a periodic basis, wages for employees, legal and accounting fees, any deficit remaining from a previous period; the creation of a reasonable contingency reserve, surplus or sinking fund, capital improvement reserve, and other expenses and liabilities which may be incurred by the Association for the benefit of the Owners under and by reason of this Declaration. Until the Project is completed, and all Phases are added, this estimate may need to be adjusted periodically as each new Phase is completed.

e. Apportionment. The common profits, losses and voting rights of the Project shall be distributed among and the common expenses shall be charged to the Owners based upon their Size, as set forth in Exhibits "3" and "21," and shall consist of the Base Fee, a Pool and Clubhouse Base Fee, a NHOA Base Fee or CPOA Base Fee, and any other individual charges or add-ons as may be determined by the Board from time to time; provided, however (and anything to the contrary notwithstanding), the Equity Owner shall pay 100% of the Base Fee but shall only be required to pay 50% of the Pool and Clubhouse Base Fee for each Unit owned. The calculation, amount and apportionment of the Pool and Clubhouse Base Fee may not be changed without the prior express written consent of the Equity Owner.

f. Approval of Budget and Assessments. The proposed Budget and the Assessments shall become effective unless disapproved at the Annual Meeting by a vote of at least a Majority of the Owners. Notwithstanding the foregoing, however, if the owners disapprove the proposed Budget and Assessments or the Board fails for any reason to establish the Budget and Assessments for the succeeding year, then and until such time as a new Budget and new Assessment schedule shall have been established, the Budget and the Assessments in affect for the preceding year shall continue.

g. Payment of Assessments. The Board has the sole authority and discretion to determine how and when the annual Assessments are paid.

h. Personal Obligation of Owner. Owners are liable to pay all Assessments and Additional Charges due; provided, however, no first mortgagee or beneficiary under a first deed of trust (but not the Seller under a uniform real estate contract, land sales contract, or other similar instrument), who obtains title to a Lot/Unit pursuant to the remedies provided in the mortgage or trust deed shall be liable for unpaid Assessments which accrued prior to the acquisition of title.

i. Equitable Changes. If the aggregate of all monthly payments on all of the Lot/Units is too large or too small as a result of unanticipated income or expenses, the Board may from time to time effect an equitable change in the amount of said payments.

j. Reserve Account. The Board shall establish and maintain a reserve account or accounts to pay for unexpected operating expenses and capital improvements.

k. Statement of Assessments Due. Upon written request, the Board shall furnish to any Owner a statement of Assessments due, if any, on his Lot/Unit. Failure to provide the certificate within ten (10) days after the Secretary receives a written request shall be deemed conclusive evidence that all Assessments are paid current. The Association may require the advance payment of a processing charge not to exceed $15.00 for the issuance of such certificate.

l. Suspension of Right to Use Amenities for Non-Payment. At the discretion of the Board, the right to use any amenities in the Project may be suspended for up to ninety (90) days if the Owner is in arrears on his obligation to pay Assessments and has failed to cure or make satisfactory arrangements to cure the default after reasonable notice of at least ten (10) days.

m. Suspension of Right to Vote for Non-Payment. At the discretion of the Board, the right of an Owner to vote on issues concerning the Association may be suspended if the Owner is delinquent in the payment of his Assessments, and has failed to cure or make satisfactory arrangements to cure the default after reasonable notice of at least ten (10) days.

1. Collection of Assessments.

a. Time is of the Essence. Time is of the essence and all Assessments shall be paid promptly when due.

b. Default Interest. Any Assessments not paid within thirty (30) days after the due date shall bear interest from the due date at the lesser of: (1) the rate of eighteen percent (18%) per annum or (2) the maximum rate permitted by law.

c. Late Fee. Any Assessment not paid within ten (10) days of its due date shall incur a late charge of twenty-five dollars ($25.00) or five percent (5%) of the delinquent amount, whichever is greater.

d. Filing of Notice of Lien. If any Assessment is delinquent, then a notice of lien evidencing the security interest of the Association may be filed with the County Clerk for Bonner County, Idaho setting forth:

(1) The amount of the claim of delinquency,

(2) The default interest due thereon,

(3) The costs of collection, which have accrued thereon,

(4) The legal description of the property and street address, if any, of the Lot/Unit against which the lien is claimed, and

(5) The name of the Owner thereof.

Such Notice of Lien shall be signed and acknowledged by an officer or other duly authorized agent of the Association. The lien shall continue until the amounts secured thereby and all subsequently accruing amounts are fully paid or otherwise satisfied. When all amounts claimed under the Notice of Lien and all other costs and assessments which may have accrued subsequent to the filing of the Notice of Lien have been fully paid or satisfied, the Association shall execute and record a notice releasing the lien upon payment by the Owner of a reasonable fee as fixed by the Board to cover preparation and recordation of such release of lien instrument.

e. Liens Subordinate to Mortgages. The lien described above shall be considered subordinate to any mortgage recorded prior to the recording of a notice of lien, and each such mortgagee who obtains title to such Lot/Unit pursuant to the remedies provided in the deed of trust, mortgage or by judicial foreclosure shall take title to the Lot/Unit free and clear of any claims for unpaid Assessments or other charges against such Lot/Unit which accrued prior to the time such holder acquired title to such Lot/Unit. No such sale or transfer shall relieve such holder from liability for any Assessments or other charges or assessments thereafter becoming due or from the lien thereof. Any other sale or transfer of a Lot/Unit shall not affect the Association’s lien for Assessments or other charges or assessments. The Association shall make a good faith effort to give each such mortgagee thirty (30) days’ advance written notice of the Association’s proposed foreclosure of lien described above, which notice shall be sent to the nearest office of such mortgagee by prepaid U. S. Registered or Certified Mail, return receipt requested, and shall contain a statement of delinquent Assessments or other charges and assessments upon which the proposed action is based, provided the Association’s failure to give such notice shall not impair or invalidate any foreclosure conducted by the Association pursuant hereto.

f. Personal Obligation. Each Owner, by acceptance of a deed or as a party to any other type of conveyance, vests in the Association or its agents the right and power to bring all actions against him personally for the collection of the charges as a debt or to foreclose the lien in the same manner as mechanics liens, mortgages, trust deeds or encumbrances may be foreclosed, or both.

g. Foreclosure of Lien as Mortgage. The lien for nonpayment of Assessments may be enforced by sale or foreclosure of the Owner's interest in the Property. The sale or foreclosure shall be conducted in the same manner as foreclosures in mortgages or trust deeds, or in any other manner permitted by law. In any foreclosure or sale, the Owner shall pay the costs and expenses of such proceedings, including but not limited to the cost of a foreclosure report, reasonable attorney's fees, and a reasonable rental for the Lot/Unit during the pendency of the foreclosure action. The Association in the foreclosure action may require the appointment of a receiver to collect the rental without regard to the value of the mortgage security. The Board may bid for the Lot/Unit at foreclosure or other sale and hold, lease, mortgage, or convey the same.

h. No Waiver. No Owner may waive or otherwise exempt himself or herself from liability for the Assessments provided for herein, including but not limited to the non-use of Common Areas or the abandonment of his Lot/Unit.

i. Duty to Pay Independent. No reduction or abatement of Assessments shall be claimed or allowed by reason of any alleged failure of the Association or Board to take some action or perform some function required to be taken or performed by the Association or Board under this Declaration or the By Laws, or for inconvenience or discomfort arising from the making of repairs or improvements which are the responsibility of the Association, or from any action taken to comply with any law, ordinance, or with any order or directive of any municipal or other governmental authority, the obligation to pay Assessments being a separate and independent covenant on the part of each Owner.

1. Mortgagee Protection. The lien or claim against a Lot/Unit for unpaid Assessments levied by the Board or by the Association pursuant to this Declaration shall be subordinate to any Mortgage recorded on or before the date a notice of lien securing said debt is recorded in the office of the County Clerk of Bonner County, Idaho, subject to the following:

a. Effects of Voluntary and Involuntary Sale. The lien or claim against a Lot/Unit for such unpaid Assessments shall not be affected by any sale or transfer of such Lot/Unit, except that a sale or transfer pursuant to a foreclosure of the Mortgage affecting such Lot/Unit or the exercise of a power of sale available thereunder shall extinguish any debt payable prior to such sale or transfer. Nevertheless, any such unpaid Assessments, which are extinguished in accordance with the foreclosure or power of sale, shall not relieve the purchaser or transferee of such Lot/Unit from liability for, nor such Lot/Unit subject to the lien securing any Assessments becoming due thereafter.

b. Books and Records Available for Inspection. The Board or the Association shall make available to all Owners, Mortgagees and lenders, and to holders, insurers or guarantors of any Mortgage current copies of the Governing Documents, as well as the books, records, and financial statements of the Association. The term "available", as used in the paragraph, shall mean available for reasonable inspection upon request during normal business hours or under other reasonable circumstances. The Association shall have the right to recover its photocopying and service charges incurred in making the inspection and photocopying available.

c. Right to Financial Statement. The holder, insurer or guarantor of any Mortgage shall be entitled, upon written request, to a financial statement for the immediately preceding fiscal year. Any financial statement requested pursuant hereto shall be furnished to the requesting party within a reasonable time following such request.

d. Management Contracts. Any agreement for professional management of the Project, and any contract for goods or services, or any lease which is entered into by the Board or the Association shall provide or be deemed to provide hereby that either party may terminate the contract with or without cause upon at least thirty (30) days prior written notice to the other party thereto.

e. Eligible Mortgagee Designation. Upon written request to the Board or the Association by the holder, insurer, or guarantor of a Mortgage (which request identifies the name and address of such holder, insurer or guarantor and the Lot/Unit Number or address of the property encumbered by the Mortgage held or insured by such holder, insurer, or guarantor), such holder insurer, or guarantor shall be deemed thereafter to be

an "Eligible Mortgagee" or "Eligible Insurer" or "Eligible Guarantor," as the case may be, shall be included on the appropriate lists maintained by the Association, and shall be entitled to timely written notice of any of the following:

(1) Condemnation Loss or Award. Any condemnation loss or any casualty loss which affects a material portion of the Project or any Lot/Unit on which there is a Mortgage held, insured, or guaranteed by such Eligible Insurer or Guarantor.

(2) Delinquency. Any delinquency in the payment of Assessments owed by an Owner whose Lot/Unit is subject to a Mortgage held, insured or guaranteed by such Eligible Insurer or Guarantor, which delinquency remains uncured for a period of sixty (60) days.

(3) Lapse of Insurance. Any lapse, cancellation, or material modification of any insurance policy or fidelity bond maintained by the Board or the Association.

(4) Consent Required. Any proposed action that would require the consent of a specified percentage of Eligible Mortgagees.

f. No Right of First Refusal. The right of an Owner to sell, transfer, or otherwise convey his Lot/Units shall not be subject to any right of first refusal or similar restriction.

2. Lists of Lot/Units Owners, Eligible Mortgagees, and Eligible Insurers or Guarantors. The Board shall maintain up-to-date records showing: (a) the name of each person who is an Owner, the address of such Person, and the Lot/Unit which is owned by him; (b) the name of each Person who is an Eligible Mortgagee, the address of such Person, and the Lot/Unit which is encumbered by the Mortgage held by such Person; and (c) the name of each Person who is an Eligible Insurer or Guarantor, the address of such Person, and the Lot/Unit which is encumbered by the Mortgage insured or guaranteed by such Person. In the event of any transfer of a fee or undivided fee interest in a Lot/Unit, either the transferor or transferee shall furnish the Board with evidence establishing that the transfer has occurred and that the Deed or other instrument accomplishing the transfer is of record in the office of the County Clerk of Bonner County, Idaho. The Board may for all purposes act and rely on the information concerning Lot/Unit ownership in its records or, at its option, the records of said county Clerk. The address of any Owner shall be deemed to be the address of the Lot/Unit owned by such person unless the Board is otherwise advised in writing.

1. Amendment. This Declaration may be amended as follows:

a. Consent of the Owners. The affirmative vote of at least sixty-seven percent (67%) of the Owners shall be required and shall be sufficient to amend the Declaration or the Plat Map. Any amendment so authorized shall be accomplished through the recordation of an instrument executed by the Board. In such instrument the Board shall certify that the vote required by this Section for amendment has occurred, and, if approval of a specified percentage of Eligible Mortgagees is required for such amendment, that such approval has been obtained; and

b. Consent of Eligible Mortgagee. The consent of at least sixty-seven percent (67%) of the Eligible Mortgagees shall be required to any amendment which would terminate the legal status of the Project; and the consent of Eligible Mortgagees holding at least fifty-one (51%) percent of the undivided ownership interest in the Association shall be required to add to or amend any material provision of this Declaration or the Plat Map which establishes, provides for, governs, or regulates any of the following: (1) voting rights; (2) increases in Assessments that raise the previously assessed amount by more than 25%, Assessment liens, or the priority of Assessment liens; (3) reductions in reserves for maintenance, repair, and replacement of the common elements; (4) insurance or fidelity bonds; (5) limitations and restrictions on the right to use of the Common Areas; (6) responsibility for maintenance and repairs; (7) expansion or contraction of the Project or the addition, annexation or withdrawal of property to or from the Project; (8) the boundaries of any Lot/Units; (9) the percentages of ownership interest in the Association; (10) convertibility of a Lot/Unit into Common Area or Common Area into a Lot/Unit; (11) the imposition of any right of first refusal or similar restriction on the right of an Owner to sell, transfer, or otherwise convey his Lot/Unit; (12) express benefits or rights of Mortgagees, Eligible Mortgagees, or Eligible Insurers or Guarantors; and (13) the requirement that the Project be professionally managed rather than self managed. Any addition or amendment shall not be considered material for purposes of this Paragraph (b) if it is for the clarification only or to correct a clerical error. Notice of any proposed amendment to any Eligible Mortgagee to whom a written request to approve an addition or amendment to this Declaration or the Plat Map is required shall be mailed postage prepaid to the address for such Mortgagee shown on the list maintained by the Association. Any Eligible Mortgagee who does not deliver to the Board or the Association a negative response to the notice of the proposed amendment within thirty (30) days from the date of such mailing shall be deemed to have approved the proposal. The foregoing consent requirements shall not be applicable to amendments to this Declaration and the Plat Map or the termination of the legal status of the Project. If such amendments or such termination are made or accomplished in accordance with the provisions of this Declaration regarding Condemnation or Substantial Obsolescence. Anything to the contrary notwithstanding, if any financing or the guaranty of any financing on a Lot/Unit or Dwelling is provided by the Federal Housing Administration of the United States Department of Housing and Urban Development (FHA), the Federal Home Loan Mortgage Corporation or the Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA), Government National Mortgage Association (GNMA) or the Veterans Administration (VA), no material amendment, as defined above, to the Declaration, or merger, may become effective, as to said Agencies, without their prior express written consent.

c. Developer. So long as the Developer owns a Lot/Unit or any portion of the Property, its consent shall be required to amend the Declaration. Without any additional approval required, the Developer may amend the Plat Map or Declaration so long as it owns the land, real estate, or real property affected.

1. Consent in Lieu of Vote. In any case in which this Declaration requires the vote of an Owner for authorization or approval of an act or a transaction, such requirement may be fully satisfied by obtaining, with or without a vote at a meeting called for such purpose, consents in writing to such proposed act or transaction from Owners who collectively hold the required percentages, subject to the following conditions:

a. Ninety-Day Limit. All necessary consents must be obtained prior to the expiration of ninety (90) days from the time the first written consent is obtained; and

b. Change In Ownership. Any change in ownership of a Lot/Unit, which occurs after consent has been obtained from the Owner having an interest therein, shall not be considered or taken into account for any purpose.

M. DUE PROCESS

1. Due Process Requirements; Notice of Hearing; Opportunity to be Heard. In the event of a claimed violation of the Governing Documents, no fine, citation, suspension or penalty shall be imposed without the Board first giving the alleged violator written notice of the violation and an opportunity to be heard by the Board provided, however, nothing herein shall be construed to prevent the Board from (a) immobilizing, towing or impounding a motor vehicle in violation of this Declaration or the parking rules and regulations for which no additional notice is required, or (b) making any emergency repairs or taking any other emergency action it deems necessary and subsequently providing notice to the Owner or Occupant and giving them an opportunity to be heard.

N. COMBINATION OF LOT/UNITS

1. Combination of Lot/Units. An owner of two or more adjoining Lot/Units shall have the right upon approval of the Board and the mortgagees of said property to combine them, and to alter or amend the Declaration and Map to reflect such combination.

a) Such amendments may be accomplished by the Owner recording an amendment or amendments to this Declaration, together with an Amended Map or Maps containing the same information with respect to the altered Lot/Units as required in the initial Declaration and Map with respect to the initial Lot/Units. All costs and expenses required in such amendments shall be borne by the Owner desiring such combination.

b) All such amendments to the Declaration and map must be approved by attorneys employed by the Board to insure the continuing legality of the Declaration and the Map. The cost of such review by the attorneys shall be borne by the person wishing to combine the Lot/Units.

c) Any amendments of the Declaration or Map pursuant hereto shall reflect the changes occasioned by the alteration. Such changes shall include a change in the percentage of undivided interest in the Common Areas and Facilities, which are appurtenant to the Lot/Units involved in the alterations. The remaining combined Lot/Unit, if two or more Lot/Units are totally combined, will acquire the total of the percentage of undivided interest in the Common Areas and Facilities appurtenant to the Lot/Units that are combined as set forth in Exhibit "3." If a portion of one Lot/Unit is combined with another, the resulting Lot/Unit shall acquire a proportionate percentage of the total undivided interest in the Common Areas and Facilities of the Lot/Units involved in the combination on the basis of area remaining in the respective, combined Lot/Units. The percentage of undivided interest in the Common Areas and Facilities appurtenant to all other Lot/Units shall not be changed. All such amendments must, in all instances, be consented to by the Board and also all other Persons holding interest in the Lot/Units affected. The consent of other Owners need not be obtained to make such amendments or alterations valid, providing the percentages of undivided interest in the Common Areas and Facilities of the other Owners remain unchanged.

1. Wetlands. Altering, modifying, changing, damaging, destroying or otherwise interfering with Wetlands, without the prior express written consent of both the U.S. Army Corp of Engineers (or other responsible governmental agency or agencies) and the Developer or, after the termination of the Developer’s Period of Control, the Association, within the Project is expressly prohibited.

2. Wetland Credits. The Developer owns and hereby expressly reserves the ownership and control of all Wetland Credits, which are not transferred, conveyed or otherwise submitted hereby. The Developer may freely market, sell, trade, convey, transfer, exchange, hypothecate, lien, encumber or hold said Wetlands Credits from time to time and at any time. Neither the Association, Sub-association, Neighborhood Association or Owner nor any of their employees, agents or representatives shall interfere or attempt to interfere with Developer’s ownership or marketing of its Wetland Credits.

The following Exhibits are attached hereto and incorporated herein by this reference:

Exhibit 1 Legal Description of Property

Exhibit 2 Legal Description of Existing Neighborhoods, Residential Areas

and Commercial Areas

Exhibit 3 Percentages of Ownership Interests

Exhibit 4 Legal Description of Additional Land

Exhibit 5 Legal Description of Convertible Land

Exhibit 6 Legal Description of Common Area

Exhibit 7 General Use Restrictions

Exhibit 8 Residential Area Use Restrictions

Exhibit 9 Commercial Area Use Restrictions

Exhibit 10 Sub-associations

Exhibit 11 By-Laws

Exhibit 12 Design Guidelines

Exhibit 13 Architectural Controls

Exhibit 14 Application Procedure for Structural Alterations

Exhibit 15 Insurance

Exhibit 16 Destruction and Condemnation

Exhibit 17 Developer’s Rights

Exhibit 18 Expansion of the Project

Exhibit 19 Conversion of Land

Exhibit 20 Golf Course, Trails, and Private Amenities

Q. MISCELLANEOUS

1. Agent for Service of Process. After the termination of the Developer’s Period of Control, the President of the Association shall be the person to receive service of process in the cases authorized by the Act and the office. The initial Registered Agent shall be ____________________________________________. The Registered Office of the Registered Agent is_____________________________ .

2. Interpretation. To the extent Idaho law is consistent with this Declaration, such provisions shall supplement the terms hereof and are incorporated herein. The captions, which precede the sections of this Declaration, are for convenience only and shall in no way affect the manner in which any provision hereof is construed. Whenever the context so requires, the singular shall include the plural, the plural shall include the singular, the whole shall include any part thereof, and any gender shall include both other genders. The invalidity or unenforceability of any portion of this Declaration shall not affect the validity or enforceability of the remainder hereof.

3. Covenants to Run with Land. This Declaration and all the provisions hereof shall constitute covenants to run with the land or equitable servitudes, as the case may be, and shall be binding upon and shall inure to the benefit of Association, all other signatories hereto, all parties who hereafter acquire any interest in a Lot/Unit or in the Project, and their respective grantees, transferees, heirs, devisees, personal representative, successors, and assigns. Each Owner or occupant of a Lot/Unit shall comply with, and all interests in all Lot/Units shall be subject to the terms of this Declaration and the provisions of any rules, regulations, agreements, instruments, supplements, amendments, and determinations contemplated by this Declaration. By acquiring any interest in a Lot/Unit in the Project, the party acquiring such interest consents to, and agrees to be bound by, each and every provision of this Declaration.

4. Enforcement and Right to Recover Attorney's Fees. The Association, Board, or any aggrieved Owner may take action, at law or in equity, to recover damages, obtain injunctive relief, or enforce the terms, covenants or conditions of the Governing Documents. Should the Association, Board or Owner be required to take action to enforce the Governing Documents, or to pursue any remedy provided hereunder or by applicable law, whether such remedy is pursued by filing suit or otherwise, they may recover all Additional Charges, including a reasonable attorney's fee, which may arise or accrue.

5. Security. Portions of the private streets may have controlled, or otherwise limited, access for the construction and maintenance of security entrances. Owners, occupants, family members, guests, visitors and invitees shall cooperate with the security policies and procedures.

All emergency vehicles shall have precedence in accessing the Property without condition, hindrance or delay.

The Developer and/or Association shall have the right from time to time, but not the duty, to (a) install or construct electronic entrance security devises and gates; and (b) install electronic security devices on the perimeter fencing, subject to the approval of the ARC.

The Association may, but shall not be obligated to, maintain or support certain activities within the Project designed to make the Project safer than it otherwise might be. However, neither the Association nor the Board shall in any way be considered insurers or guarantors of security within the Project. Neither the Association nor the Board shall be held liable for any loss or damage by reason of failure to provide adequate security or ineffectiveness of security measures undertaken. All Owners and Occupants, their guests and invitees, as applicable, acknowledge that neither the Association nor the Board represent or warrant that any security measures undertaken will insure their safety. All Owners and Occupants, their guests and invitees, acknowledge and understand that the Association and Board are not insurers of their safety and they hereby assume all risks for loss or damage to their person or property and further acknowledge that the Association and Board have made no representations or warranties, nor have they relied upon any representations or warranties, expressed or implied, including any warranty or merchantability or fitness for any particular purpose, relative to any security measures undertaken within the Project.

1. Use of the Term "CDS" or "Stoneridge". No person shall use the term "CDS" or "Stoneridge" or any derivative thereof in any printed or promotional material without the prior written consent of the Developer. However, Owners may use the term "Stoneridge" in printed or promotional matter where such term is used solely to specify that particularly property is located with the Project.

7. Recycling Programs. If and when reasonably available, the Board may establish a recycling program and recycling center within the Project, and in such event all Owners and Occupants shall support such program by recycling, to the extent reasonably practical, all materials which the Association's recycling program or center is designed to accommodate. The Association may, but shall have no obligation to purchase recyclable materials in order to encourage participation, and any income received by the Association as a result of such recycling efforts shall be used to reduce Common Expenses.

8. Provision of Services. The Association may elect to provide goods, products, wares, services and facilities for Owners and Occupants, as well as their guests, lessees and invitees, and shall be authorized to enter into contracts or other similar agreements with other entities, including Developer, to provide such services and facilities. The costs of services and facilities provided by the Association may be funded by the Association as a Common Expense. In addition, the Board may charge additional use and consumption fees for such goods, products, wares, services and facilities. By way of example, some services and facilities, which may be provided, include snow removal, landscape maintenance, pest control service, cable television service, Internet services, security, caretaker, fire protection, utilities, and similar services and facilities. The Board may modify or cancel existing services or facilities at any time or provide additional services and facilities. Nothing contained herein shall be relied upon as a representation as to what services and facilities, if any, will be provided by the Association.

9. Relations with Adjacent Projects. Adjacent to or in the vicinity of the Project are projects, which have been or, in the future, may be developed as independent time-shares, residential, commercial, resort, or mixed-use developments or Private Amenity (including, but not limited to, rental apartments, life care facilities, and retail or other business areas). The Developer or the Association may enter into contracts with such adjacent projects, including without limitation amenity use agreements, reciprocal use agreements, cross easements, covenants to share costs provided there is a fair distribution of the cost of maintaining the property. Unless annexed in the manner set forth herein, the owners of real property adjacent to or nearby the Property shall not be entitled to vote on Association matters, and shall not be subject to Assessments or other conditions or restrictions set forth in this Declaration.

10. Liability of Owners and Occupants For Damages. Owners and Occupants shall be liable for any loss or damage caused to person or property in the Project by their carelessness and negligence.

11. Taxes. Unless otherwise required by Idaho law or Bonner County, each Lot/Unit and its percentage of undivided interest in the Common Areas and Facilities shall be considered to be a parcel and shall be subject to separate assessment and taxation by each assessing unit and special district for all types of taxes authorized by law, including ad valorem levies and special assessments. Neither the Building or Buildings, the property, nor any of the Common Areas and Facilities may be considered a parcel.

12. Effective Date. This Declaration, any amendment or supplement hereto, and any amendment or supplement to the Plat Map shall take effect upon its being filed for record in the office of the County Recorder of Bonner County, Idaho.

13. Duration. These restrictive covenants shall run with the land and shall be binding upon the owners thereof, their heirs, successors and assigns for a period of forty (40) years, after which time said covenants shall be automatically extended for successive periods of ten (10) years.

14. Conflict. In the event of any conflict, incongruity or inconsistency between the provisions of this Declaration and the provisions of the Idaho Law, the latter shall in all instances govern and control.

15. Severance. Any provision of this Declaration prohibited by the laws of the State of Idaho shall be ineffective to the extent of such prohibition without invalidating the remaining provisions of this Declaration.

Developer:

CDS STONERIDGE LAND, L.C.

By:

Title: Managing Member

STATE OF ___________ )

)ss.

COUNTY OF _________ )

On the ___ day of ____________, 2001, personally appeared before me __________________, who by me being duly sworn, did say that he is the manager of CDS STONERIDGE LAND, L.C., a Utah limited liability company, and that the within and foregoing instrument was signed in behalf of said company pursuant to the resolution of its members or its Articles of Organization, and said ___________________, duly acknowledged to me that said company executed the same.

______________________________________

Notary Public

Residing at:

EXHIBIT " 1 "

The Land comprising the Project described in the foregoing Declaration is located in Bonner County, Idaho and is described more particularly as follows:

EXHIBIT " 2-1 "

The Land comprising the Forest at Stoneridge described in the foregoing Declaration is located in Bonner County, Idaho and is described more particularly as follows:

The Land comprising the Lakes at Stoneridge described in the foregoing Declaration is located in Bonner County, Idaho and is described more particularly as follows:

The Land comprising the Meadows at Stoneridge described in the foregoing Declaration is located in Bonner County, Idaho and is described more particularly as follows:

The land described below is located in Bonner County, Idaho and is described more particularly as follows:

EXHIBIT " 3 "

Lot/Unit No. Phase Type of Area Size Unit Ownership Percentage

TOTALS 100%

The Additional Land referred to in the foregoing document is located in Bonner County, Idaho and is described more particularly as:

EXHIBIT " 6 "

The land referred to in the foregoing document as Common Area is located in Bonner County, Idaho and is described more particularly as follows:

LESS AND EXCEPTING THE FOLLOWING:

1. Similar Treatment. Similarly situated Owners and Occupants shall be treated similarly.

2. Religious and Holiday Displays. The rights of Owners and Occupants to display religious and holiday signs, symbols, and decorations on their Lot/Unit, except that the Board may adopt time, place, and manner reasonable restrictions regulating displays which are visible from outside the Lot/Unit.

3. Activities Within Lot/Units. No rule shall interfere with the activities carried on within the confines of a Building, except they must be appropriate to the area, be it residential, commercial, resort, or mixed, and it may restrict or prohibit any activities that create monetary costs for the Association or other Owners, that create a danger to the health or safety of other Occupants, that generate excessive noise or traffic, that create unsightly conditions visible from outside the Lot/Unit, or that create an unreasonable sounds of annoyance.

4. Allocation of Burdens and Benefits. No rule shall alter the basis for allocation of Common Expenses among the Lot/Units or rights to use the Common Area to the detriment of any Owner over that Owner's objection expressed in writing to the Association. Nothing in this provision shall prevent the Association from changing the use of the Common Area, from adopting generally applicable rules for use of Common Area, or from denying use privileges to those who abuse the Common Area, violate rules or this Declaration, or fail to pay Assessments.

5. Alienation. No rule shall prohibit or require consent of the Association or Board for the leasing or transferring of any Lot/Unit.

6. Reasonable Rights to Develop. No rule or action by the Association or Board shall impair or attempt to impair Developer's right to develop the Property in accordance with the Master Plans.

7. Nature and Restrictions on Ownership and Use in General. Each Owner shall have and enjoy the privileges of fee simple ownership of his Lot/Unit. There shall be no requirements concerning who may own a Lot/Unit, it being intended that they may and shall be owned as any other property rights. This is a mixed use community and, as such, each Lot/Unit and Common Area shall only be used in a manner consistent with the residential, commercial, or resort area in which it is located.

8. Joint, Common or Shared Utility Easements. The Developer, for itself and its successors and assigns hereby reserves the irrevocable and exclusive right, without any additional consent required, to enter into easement agreements with owners or developers of adjoining properties any and all reasonable and necessary utility easements or rights of way for gas, water, power, sewer, Private Amenities and other similar systems, over, under, across or through the Project.

9. Member's Easements and Rights of Way. Each Owner has the right and non-exclusive easement to use and enjoy the Common Area and Facilities. Such right and easement shall be appurtenant to and shall pass with the title to every Lot/Unit, subject to the right of the Association to (a) limit the number of guests and residents; (b) suspend the voting privileges; and (c) dedicate or transfer all or any part of the Common Area to any public agency, public authority or utility for the purpose of regulating transportation, maintaining the roadways, or providing utilities, and other similar or related purposes. During the Period of Developer’s Control, any such dedication or transfer shall be effective only if approved in writing by the Developer.

10. Signage. Posting of signs of any kind, including posters, circulars, campaign signs, political signs, and bills, except those required by law or permitted by the Board or ARC, in, on or about the Project is prohibited.

11. Subdividing Lot/Units. The subdividing of a Lot/Unit into two or more Lot/Units is prohibited, except the Developer may subdivide or change the boundary lines of any Lot/Unit or Lot/Units that it owns, without additional consent.

12. Time Sharing. Operation of a timesharing, fraction-sharing, or similar program whereby the right to exclusive use of a Lot/Unit rotates among participants in the program on a fixed or floating time schedule over a period of years is prohibited, except in a designated Time Share Neighborhood.

13. Wildlife. Capturing, trapping or killing wildlife within the Property is prohibited, except in circumstances posing an imminent threat to the safety of persons or pets using the Property, or when authorized and supervised by the Developer (so long as it owns a Lot/Unit and Board in accordance with a game management program; provided, the Developer or CDS Stoneridge Golf, L.C. shall have the right to remove water fowl from any golf course;

14. Vegetation. Activities which materially disturb or destroy the vegetation, wildlife, or air quality within the Property or which result in unreasonable levels of sound or light pollution are prohibited.

15. Hazardous and Toxic Materials. Unless allowed by law, the disposal of any oil, gas, or lubricants, and the storage or disposal of other hazardous materials anywhere within the Property is prohibited.

16. Electronic and Radio Transmitters. Unless allowed by law, no electronic or radio transmitter of any kind, other than garage door openers, shall be located or operated in or on any Improvement or on any Lot/Unit without the prior written consent of the Board, which consent shall not be unreasonably withheld, conditioned or delayed.

17. Dust and Debris. Behavior or activities, which cause erosion or unreasonable amounts of dust or pollen, are prohibited, although the Developer and all builders are exempt from this restriction during construction.

18. Dog Runs and Pens. Dog runs and animal pens of any kind are prohibited, except as installed or constructed by the Developer, or as approved in writing by the Board or ARC.

19. Exterior Lighting. Since exterior street lighting is provided throughout the Project, reflectors are not permitted, nor is any offensive or excessive exterior lighting or directional glare on any Lot/Unit, unless necessary for public safety purposes on or the lighting of Private Amenities or Common Area.

20. Storage Sheds. Temporary or permanent storage Buildings or sheds, whether prefabricated, metal or of any other construction whatsoever, which are visible from the Common Area or an adjoining Lot/Unit are prohibited; except as approved in writing by the Board of ARC.

21. Storing of Personal Property. The storing, in such a manner as to be visible from the Common Area or another Lot/Unit, of any personal property, furniture, fixtures, appliances, machinery, equipment, or other goods or chattels which are not in active use shall be prohibited; provided, however, this restriction shall not apply to the property of the Developer, Association, or any builder (to the extent approved by the Developer). Notwithstanding the foregoing, a gazebo, pergola, or similar structure may be permitted within the rear yard of a Lot/Unit if approved in writing by the Developer or Board. Firewood must be stacked in an area designated by the Developer or the Board.

22. Patio Furniture and BBQs. Outdoor patio furniture is allowed, although it must be maintained in a clean, tidy and neat manner. Bicycles, tricycles, motorcycles, household furniture and furnishings, equipment, machinery, tools, supplies, boxes, storage containers or other items of personal property may not be stored so as to be visible from the street, Common Area, or another Lot/Unit.

23. Mail and Newspaper Boxes. Mail, newspaper or other similar boxes installed or constructed on any Lot/Unit must be approved by the Developer and in accordance with U.S. Postal guidelines.

24. Fires and Incinerators. The burning of brush, trash or other materials; bonfires or incinerators; and open fires are prohibited, except in a contained outdoor fireplace or barbecue unit while attended and in use for cooking purposes, or within a safe and well designed interior fireplace approved by the Board in writing;

25. Landscaping. Natural vegetation and landscaping is encouraged.

26. Diseases and Insects. The creation or allowance of a condition, which is likely to or may induce, breed, or harbor infectious plant diseases or noxious insects is prohibited.

27. Firearms. The use or discharge of firearms, incendiary devices or the painting of graffiti within the Project is prohibited. For purposes of this subsection the term firearms includes guns, pistols, handguns, rifles, automatic weapons and semi-automatic weapons.

28. Improper Sight Distances and Unsafe Conditions. Fencing, walls and landscaping, which impair or obstruct safe sight on Lot/Units or property located at or near driveways, entrances, exits, walkways, paths and street intersections or corners is prohibited.

29. Energy Conservation Equipment. The construction or installation of solar energy collector panels, other energy conservation equipment or attendant hardware is prohibited without the prior written consent of the Board, which shall not be unreasonably withheld, conditioned or delayed.

30. Insurance. Doing or keeping anything in, on or about the Project, or any put thereof, which may result in the cancellation of the insurance on the Property or an increase in the rate of the insurance on the Project over what the Board, but for such activity, would pay, is prohibited.

31. Laws. Doing or keeping anything in, on or about the Project, or any part thereof, which would be a violation of any statute, rule, ordinance, regulation, permit or other validly imposed requirement of any governmental body is prohibited.

32. Damage or Waste. Causing, committing or allowing damage or waste to the Common Area and Facilities, golf course or any Private Amenity is prohibited.

33. Structural Alterations. Structural alterations to the Common Area or Facilities, golf course or any Private Amenity without the prior written consent of the Board, is prohibited.

34. Irrigation Systems. No sprinkler or irrigation system of any type which draw upon water from creeks, streams, rivers, lakes, ponds, canals, or other waterways within the Property shall be installed, constructed, or operated within the Property, without the prior written consent of the Developer and after the end of the Period of Developer’s Control, the Board or the ARC. All sprinkler and irrigation systems are subject to approval of the Developer and after the end of the Period of Developer’s Control, the Board or ARC.

35. Tree Removal. No tree with a caliper 2" or greater shall be removed, except for (a) diseased or dead trees; (b) if there are at least twenty (20) trees on a lot; and (c) trees needing to be removed to promote the growth of other trees or for safety reasons, without the prior written consent of the Developer, the Board and after the end of the Period of Developer’s Control, or the ARC.

36. Water Amenities. The lakes, ponds, streams, and bodies of water within the Property are primarily aesthetic amenities, although the following activities are permitted:

• Swimming
• Paddle boats
• Boats with electric motors
• Floatation devices
• Other items approved by the Board of Directors

Motorized vehicles are prohibited on the water amenities. This subsection shall not apply to prohibit use by the Developer of lakes, ponds or streams within the Property. Neither the Developer nor the Association shall not be responsible for any loss, damage, or injury to any person or property arising out of the authorized or unauthorized use of lakes, ponds, or streams within the Property. Nothing shall be done which disturbs or potentially disturbs wetlands within the Property in any manner. No dredging or filling shall be undertaken on any property adjacent to any water body or wetland.

37. Playground and Equipment. Playgrounds or other play areas or equipment furnished by the Developer or the Association, or erected within the Property, shall be used at the risk of the user, and neither the Developer nor the Association shall be held liable to any Person for any claim, damage, or injury to person or property occurring thereon or related to use thereof.

38. Motorized Vehicles. The operation of motorized vehicles on pathways or trails maintained by the Association is prohibited; however, golf carts may be operated on cart paths intended for such purposes.

39. Trails. Interfering with, obstructing, impairing or hindering the use or intended purpose of or damaging the Trails is prohibited.

40. Nuisance. The creation or maintenance of a nuisance is prohibited. For purposes of this section, a nuisance is behavior, an activity or condition that annoys, bothers or disturbs other Occupants or interferes with their right to the peaceful and quiet enjoyment of the Property. The violation of any use restriction set forth herein shall be considered a nuisance per se. Because of the equestrian track, horses, absent special circumstances, shall not be considered a nuisance.

41. Storage and Parking of Motor Vehicles. The driving, parking, standing and storing of motor vehicles in, on or about the Project shall be subject to the following:

a. Traffic Rules and Regulations. Any traffic and parking rules and regulations as may be adopted by the Board from time to time;

b. Recreational, Commercial and Oversized Vehicles. Recreational, Commercial and Oversized vehicles must be parked inside a garage (with the garage door shut) or on a "pad" approved by the Developer or, after the end of the Period of Developer’s Control, the Board or ARC.

c. Streets. No overnight parking is allowed on the streets within the Project.

d. Obstacles. No motor vehicle or trailer, including but not limited to any car, automobile, truck, van, minivan, or any other transportation device of any kind may be parked or stationed in such a manner so as to block access to any Building, Lot/Unit, structure, or driveway, or so as to create an obstacle or potentially dangerous condition;

e. Repairs and Restoration. No occupant shall repair or restore any vehicle of any kind in or on the Common Area, except for emergency repairs, and then only to the extent necessary to enable movement thereof to a proper repair facility. Disabled or inoperable motor vehicles must be stored so as not to be visible from the street, Common Area or another Lot/Unit.

f. Guest Parking. Areas designated as "Guest" or "Visitor" parking are for the use and benefit of visitors, guests and invitees, and are not to be used by Owners or Occupants.

g. Handicapped Parking. Areas designated as "Handicapped" parking are for the use and benefit of the handicapped.

h. Towing. A motor vehicle parked in violation of this Declaration or rules adopted by the Board or ARC may be immobilized, impounded, or towed, without further notice and at the Owner's sole risk and expense; and

i. Special Functions. Upon prior approval of the Board, guests, visitors and invitees may be permitted to park their vehicles on the streets within the Property at reasonable times before, during, and after special functions.

42. Satellite Dishes, Antenna and Aerials. Up to two satellite dish antenna having a diameter of not more than 40" installed adjacent to any residence and integrated with the structure and surrounding landscape, shall be permitted upon a Lot/Unit without any additional approval. Any other dish location and screening shall be reasonably determined by the Board so as not to impair reception and to ensure that the satellite dish is not visible, insofar as that is reasonably possible, from the street.

43. Pets. No pets, animals, livestock or poultry of any kind shall be bred in, on or about the Project, unless authorized by the Board in writing. Up to two (2) domestic pets per Lot/Unit are allowed; provided, however, pets must be properly licensed and registered (if required) with the appropriate governmental agencies, owners must pay the pet deposit to the Board, obtain a certificate of registration from the Association, and abide by all pet rules and regulations adopted by the Board from time to time, and local ordinances. Pets may not create a nuisance. The following acts of a dog may constitute a nuisance: (a) it causes damage to the property of anyone other than its owner; (b) it causes unreasonable fouling of the air by odors; (c) it causes unsanitary conditions; (d) it defecates on any common area and the feces are not immediately cleaned up by the responsible party; (e) it barks, whines or howls, or makes other disturbing noises in an excessive, continuous or untimely fashion; (f) it molests or harasses passersby by lunging at them or chasing passing vehicles; (g) it attacks people or other domestic animals; or (h) it otherwise acts so as to bother, annoy or disturb other reasonable occupants or interferes with their right to the peaceful and quiet enjoyment of their property.

44. Environmental Issues -- Compliance with law -- Licenses and Permits. Each Owner and Occupant shall obtain and maintain at all times during his ownership or use of the Property, all licenses and permits required to conduct or operate its business in and upon the Property which are required by any applicable governmental body or agency having jurisdiction over the premises, and shall pay the fee or charge imposed for assurance of any such license or permit. Each Owner or occupant shall renew any of these licenses and permits in accordance with the rules, codes, statutes or ordinances requiring the licenses or permits comply with all requirements and perform all necessary action required under any such rules, codes, statutes or ordinances for the issuance and continuance of the permits or licenses. If an Owner or Occupant breaches any environmental laws, or if the presence of hazardous material on the premises caused or permitted by Owner results in contamination of the Property, or if contamination of the Property by hazardous material otherwise occurs for which Owner is legally liable to Association for damage resulting from the same, then Owner by virtue of accepting a deed or other document of conveyance to a Lot/Unit and/or any occupant, by virtue of his taking possession of a Lot/Unit, shall be considered to have agreed to give the Board access to his property to investigate the violation and to indemnify, defend and hold Association harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including, but not limited to, diminution in value of the Property, damages for the loss or restriction on use of rentable or useable space or of any amenity of the premises, damages arising from any adverse impact on marketing of the Property, and sums paid in settlement of claims, attorneys’ fees, consultant fees and expert fees) which arise. This indemnification includes, but is not limited to, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of hazardous material present in the soil or ground water on or under the Property. Without limiting the above, if the presence of any hazardous material on the Property caused or permitted by an Owner or occupant results in any contamination of the Property, said Owner or occupant shall promptly take all actions at his sole expense as are necessary to return the Property to the condition existing prior to the introduction of any such hazardous material to the Property, provided that Association’s written approval of such action or actions shall first be obtained, which approval shall not be unreasonably withheld, delayed or conditioned so long as the action would not potentially have any material adverse long-term or short-term effect on the Property. As used in this section, the term "hazardous material" means any hazardous or toxic substance, material or waste, which is or becomes regulated by any local governmental authority, the State of Idaho or the United States Government. The term "hazardous material" includes, but is not limited to, any material or substance which is (a) defined as a "hazardous waste" or other hazardous material or substance under any of the laws of the State where the Property is located, (b) petroleum, (c) asbestos, (d) designated as a "hazardous substance" pursuant to the Federal Water Pollution Control Act, (e) defined as a "hazardous waste" pursuant to the Federal Resource Conservation and Recovery Act, as amended, or (f) defined as a "hazardous substance" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended.

45. Garbage and Refuse Disposal. The Property shall not be used or maintained as a dumping ground for rubbish, trash, garbage or other waste collectively, "Trash"). All Trash shall be kept at all times in sanitary containers. All Trash containers shall be kept in sanitary condition. No Trash containers, unsightly material or objects are to be stored on any portion of the Property in view of the general public, except in designated areas. Disposal of any oil, gas, or lubricants, and the storage or disposal of other hazardous materials anywhere within the Property is prohibited. If any Owner shall abuse the common trash containers provided in the Common Areas, the Association shall be empowered to (a) require such Owner to maintain at his own expense a separate garbage removal system in an area designated by the Association, or (b) charge such Owner such additional amount for garbage removal as the Association deems necessary or proper to defray the added cost of garbage removal resulting from such abuse. The term abuse as used herein shall mean any overuse of the garbage removal system or the dumping of anything prohibited (or resulting in an increased charge) by the garbage removal service in the judgment of the Association.

46. Liability of Owners and Occupants For Damages. Any Owner or occupant shall be liable to the Association or other Owners or Occupants for damages to person or property in the Community caused by his negligence.

47. Leases. There is no restriction on the right of any Owner to lease or otherwise grant occupancy rights to a Lot/Unit.

48. Miscellaneous Items. Such other items as may be set forth by the Board of Directors in Administrative or House Rules for the Association.

1. Sub-associations. Sub-associations may be established by the Developer or the Association to operate and control or to assist in the operation and control of a particular Residential Area or Commercial Area within the Project.

a. Types of Sub-associations. There may be two kinds of sub-associations unless otherwise determined by the Board, to wit: the NHOA and the CPOA.

b. Mandatory Membership. Membership in a sub-association is mandatory, appurtenant to the Lot/Unit and may not be separated therefrom.

c. Additional Covenants, Conditions and Restrictions. Subject to the Master Declaration, sub-associations may adopt additional covenants, conditions and restrictions governing a particular Commercial or Residential Area, which shall become effective upon recording in the Office of the County Clerk of Bonner County, Idaho.

d. Sub-association Fees. In addition to the Base Fee charged by the Association, a sub-association may charge the Owners in the sub-association a NHOA Base Fee or a CPOA Base Fee to pay for Common Expenses unique to the sub-association, which shall be assessed and collectible in the same manner as any other Assessment.

e. Incorporated Sub-association. Each sub-association shall be incorporated under the laws of the State of Idaho.

f. Management of the Sub-association. Each sub-association shall be governed by a Board of Directors duly elected and qualified, and comprised of Members of the sub-association.

g. Voting Groups. The Developer may, but is not obligated to, designate Voting Groups consisting of one or more sub-associations for the purpose of electing Members to the Board of Directors. Following termination of the Class "B" Control Period, the number of Voting Groups within the Project shall not exceed the total number of directors authorized by the Declaration. Members in each Voting Group shall vote on a separate slate of candidates for election to the Board of Directors, with each Voting Group being entitled to elect the number of directors specified in the Declaration. The Developer shall establish Voting Groups, if at all, not later than the date of expiration of the Developer's right to annex property pursuant hereto, by filing with the Association and in the Office of the County Clerk for Bonner County, Idaho, a Supplemental Declaration identifying the Neighborhoods within each Voting Group. Such designation may be amended from time to time by the Developer, acting alone, at any time prior to the expiration of Developer's right to annex property pursuant hereto. After expiration of the Developer's right to annex property pursuant hereto, the Association may amend such designation with the affirmative vote of at least a Majority of all Owners and a Majority of the Owners in the Voting Group or Groups to be affected. Until such time as Voting Groups are established, all of the Project shall constitute a single Voting Group.

After a Supplemental Declaration establishing Voting Groups has been filed, any and all portions of the Project, which are not assigned to a specific Voting Group, shall constitute a single Voting Group.

h. Powers of the Association Relating to Sub-associations. No sub-association may take any action or enter into any transaction which affects the Association, Common Areas and Facilities or Master Plan without the express prior written consent of the Developer (until the end of the Developer’s Period of Control) and the Association, which shall not be unreasonably withheld, conditioned or delayed.

EXHIBIT " 9 "

STANDARDS AND USE RESTRICTIONS FOR RESIDENTIAL AREA

1. Household Composition. No rule shall interfere with the freedom of Occupants of a Dwelling to determine the composition of their households, except that the Declaration limits residency in a Dwelling to a single family and no more than two (2) individuals per bedroom.

2. Detached Garages. Detached garages are not allowed unless approved by the Board and the ARC.

3. Clothes Lines. Outside laundry, laundry poles or lines are not allowed.

4. Business Use. The operation of a commercial trade or business in a designated Residential Area is prohibited unless: (1) the existence or operation of the business activity is not apparent or detectable by sight, sound, or smell from outside the residence; (2) the business activity conforms to all zoning requirements for the Project; (3) the business activity does not involve persons coming onto the Project who do not reside in the Project or door-to-door solicitation of occupants of the Project; (4) the business activity is consistent with the residential character of the area and does not constitute a nuisance, or a hazardous or offensive use, or threaten the security or safety of other residents; (5) all of the necessary licenses and permits have been obtained; and (6) the Board has been notified in writing of the commercial, trade and/or business activity;

5. Above Ground Pools. Above-ground pools erected, constructed or installed on any Lot/Unit are prohibited.

6. Air Conditioning Units. Except as may be permitted by the Developer and after the end of the Period of Developer’ Control, the Board or ARC, no window air conditioning units may be installed in any Dwelling.

7. Miscellaneous Items. Such other items as may be set forth by the Board of Directors in Administrative or House Rules for the Association.

1. Restriction Against Heavy Industry. No Owner or occupant shall erect or maintain, or permit to be erected or maintained, on any portion of the Property, any factory or facility or any kind or nature whatever for engaging in heavy industry.

2. Restriction Against Dangerous Industry. No Owner or occupant shall erect, make, establish, or carry on or permit, or cause or suffer to be erected, made, established, or carried on in any manner, on any part of the Property any structure for the manufacture or sale of any substance of an inherently dangerous nature.

3. Restriction Against Keeping Livestock. No cow, hog, goat, or similar animal shall be kept or maintained on the Property, or any portion of it, nor shall any chicken yard or similar facility be maintained on the Property. Horses are allowed.

4. Restriction Against Oil and Gas Wells. No well for the production of, or from which there may be produced, oil or gas shall be drilled or operated on the Property, nor shall any machinery, appliance, or structure be placed, operated, or maintained on the property in connection with or related to such activities.

5. Restriction Against Funeral Homes. No funeral homes, mortuary, undertaking establishment, establishment for storing and embalming bodies or performing autopsies, establishment for displaying caskets or containers for dead bodies, shall be established, kept, maintained, or used on the Property.

6. Restriction Against Outside Toilet Facilities. No outside toilet facilities shall be constructed or maintained on any portion of the Property. Septic tanks, sewage disposal systems, and drinking water facilities shall conform to all requirements established by the appropriate government agencies.

7. Restriction Against Mobile Homes, Trailers and Trailer Courts and Parks. No Owner or occupant shall erect, make, establish, keep, or maintain on the Property a mobile home, trailer home, or other movable structure used, or designed for use, even though not in actual use, as a residence, sleeping quarters, or as an out building.

8. Business Involving Hazardous and Toxic Materials. No business involving the use or storage of regulated hazardous materials is allowed.

9. Compliance with Law -- Generally. No Owner shall use the Property for any purpose in violation by any federal, state, or municipal statute or ordinance, or any regulation, order, or directive of a governmental agency, as such statutes, ordinances, regulations, orders, or directives now exist or may in the future provide, concerning the use and safety of the Property.

10. Flags. No sign, flag, lettering, display, or advertising device of any nature may be erected, displayed or maintained on any part of the project (including placement of signs within a Lot/Unit or other location of the Project which are visible from the common areas) without prior approval of the CPOA, except as may be necessary temporarily to caution or warn of danger or to provide directions as required by law, and such signs as Developer may erect or maintain incident to the original construction, legal requirements, and original sale of Lot/Units.

11. Littering Prohibited. No Owner or Occupant shall litter the Common Areas or Facilities and the Lot/Units shall be maintained so as not to endanger the health, safety or well-being of the other Owners and Occupants.

12. Compliance with Environmental Laws. Owner, at his cost and expense, shall comply with all applicable laws, statutes, ordinances, rules and regulations of any governmental authority having jurisdiction concerning environmental matters, including but not limited to, any discharge into the air, waterways, sewers, soil or ground water of any hazardous or toxic substance or "pollutant."

13. Restriction Against Pollution of Water. In the interest of public health and sanitation, and so that the Property and all other land in the same locality may be benefited by a decrease in the hazards of stream pollution and by the protection of water supplies, recreation, wild life, and other public uses of such property, no Owner or occupant shall use the Property for any purpose that would result in the pollution of any waterway that flows through or adjacent to the Property by refuse, sewage, or other material that might tend to pollute the waters of any such streams or otherwise impair the ecological balance of the surrounding lands.

14. Restriction Against Excavation and Grading. No excavation for stone, gravel, or earth shall be made on the Property, except for walls, basements, or cellars of Buildings. However, the Developer reserves the right at any time prior to the End of the Period of Developer’s Control to excavate and grade on the Property, and to remove material from or deposit material on the Property in connection with the development of the Property.

15. Deliveries. Deliveries, loading, and transport activity must be restricted so as not to interfere with the other Owners’ use of their Lot/Units or the Common Areas.

16. Miscellaneous Items. Such other items as may be set forth by the Board of Directors in Administrative or House Rules for the Association.

The administration of the Association shall be governed by these Bylaws, subject to the Declaration.

1. Application of Bylaws.

All present and future Lot/Unit owners, mortgagees, lessees and occupants of Lot/Units and their employees, and any other persons who may use the facilities of the property in any manner are subject to the Declaration, these Bylaws and all rules made pursuant hereto and any amendment thereof. The acceptance of a deed or conveyance or the entering into of a lease or the act of occupancy of a Lot/Unit shall constitute an agreement that the provisions of the Declaration and these Bylaws (and any rules and regulations made pursuant thereto), as they may be amended from time to time, are accepted, ratified and will be complied with.

2. Board of Directors.

a). The administration of the property on behalf of the Association shall be conducted by a Board of Directors of three (3) to nine (9) natural individuals.

b). The Lot/Unit owners shall elect the members of the Board of Directors for the forthcoming year. At least thirty (30) days prior to any annual meeting of the Association, the Board of Directors shall elect from the Lot/Unit owners a nominating committee of not less than three (3) members (none of whom shall be members of the then Board of Directors) who shall recommend to owners present at the annual meeting one nominee for each position on the Board of Directors to be filled at that particular annual meeting. Nominations for positions on the Board of Directors may also be made by petition filed with the secretary of the Association at least seven (7) days prior to the annual meeting of the Association, which petition shall be signed by ten (10) or more Lot/Unit owners and signed by the nominee named therein indicating his willingness to serve as a member of the Board of Directors, if elected. Members of the Board of Directors shall be required to be Lot/Unit owners, and must be natural individuals and occupants of the State of Idaho.

c). Members of the Board of Directors shall serve for a term of two (2) years. The terms of no more than three (3) members will end each year. The members of the Board of Directors shall serve until their respective successors are elected, or until their death, resignation or removal. Any member of the Board of Directors who fails to attend three (3) consecutive Board of Directors meetings or fails to attend at least 25% of the Board of Directors meetings held during any calendar year shall forfeit his membership on the Board of Directors.

d). Any member of the Board of Directors may resign at any time by giving written notice to the president of the Association, or the remaining Board of Directors members. Any member of the Board of Directors may be removed from membership on the Board of Directors by a two-thirds majority vote of the Association. Whenever there shall occur a vacancy on the Board of Directors due to death, resignation, removal or any other cause, the remaining members shall elect a successor member to serve until the next annual meeting of the Association, at which time said vacancy shall be filled by the Association for the unexpired term, if any.

e). The members of the Board of Directors shall receive no compensation for their services unless expressly approved by a majority of the Association; provided, however, that any member of the Board of Directors may be employed by the Association in another capacity and receive compensation for such employment.

f). The Board of Directors, for the benefit of the property and the Association, shall manage the business, property and affairs of the property and the Association and enforce the provisions of the Declaration, these Bylaws, the house rules and the administrative rules and regulations governing the property. The Board of Directors shall have the powers, duties and responsibilities with respect to the property as contained in the act, the Declaration and these Bylaws.

g). The meetings of the Board of Directors shall be held at such places within the State of Idaho as the Board of Directors shall determine. A majority of the members of the Board of Directors shall constitute a quorum, and if a quorum is present, the decision of a majority of those present shall be the act of the Board of Directors. The Board of Directors shall annually elect all of the officers of the Association. The meeting for the election of officers shall be held at the first meeting of the Board of Directors immediately following the annual meeting of the Association.

h). Special meetings of the Board of Directors may be called by the president or by any two (2) Board of Directors members.

i). Regular meetings of the Board of Directors may be held without call or notice. The person or persons calling a special meeting of the Board of Directors shall, at least ten (10) days before the meeting, give notice thereof by any usual means of communication. Such notice need not specify the purpose for which the meeting is called; if an agenda is prepared for such a meeting, the meeting need not be restricted to discussions of those items listed on the agenda.

j). Any member of the Board of Directors may, at any time, waive notice of any meeting of the Board of Directors in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a member of the Board of Directors at a meeting shall constitute a waiver of notice of such meeting except if a Board of Directors member attends the meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called. If all the members of the Board of Directors are present at any meeting of the Board of Directors, no notice shall be required and any business may be transacted at such meeting.

k). The fiscal year shall be determined by the Board of Directors.

3. Meetings of the Association.

a). The presence in person or by proxy at any meeting of the Association of fifty percent (50%) of the Lot/Unit owners in response to notice of all Lot/Unit owners of record properly given shall constitute a quorum. In the event that fifty percent (50%) of the Lot/Unit owners are not present in person or by proxy, the meeting shall be adjourned for twenty-four (24) hours, at which time it shall reconvene and any number of Lot/Unit owners present at such subsequent meeting shall constitute a quorum. Unless otherwise expressly provided in the Declaration, any action may be taken at any meeting of the Lot/Unit owners upon a majority vote of the Lot/Unit owners who are present in person or by proxy and who are voting.

b). Unless otherwise determined by the Board of Directors, the annual meeting of the Association shall be held on the second Thursday of June at 7:00 p.m. at the property or at such other reasonable date, time and place (not more than sixty (60) days before or after such date) as may be designated by written notice by the Board of Directors delivered to the Lot/Unit owners not less than fifteen (15) days prior to the date fixed for said meeting. At or prior to an annual meeting, the Board of Directors shall furnish to the Lot/Unit owners: (a) a budget for the coming fiscal year that shall itemize the estimated common expenses of the coming fiscal year with the estimated allocation thereof to each Lot/Unit owner; and (b) a statement of the common expenses itemizing receipts and disbursements for the previous and current fiscal year, together with the allocation thereof to each Lot/Unit owner. Within ten (10) days after the annual meeting, that budget statement shall be delivered to the Lot/Unit owners who were not present at the annual meeting.

c). Special meetings of the Association may be held at any time at the property or at such other reasonable place to consider matters which, by the terms of the Declaration, require the approval of all or some of the Lot/Unit owners, or for any other reasonable purpose. Special meetings shall be called by written notice, signed by a majority of the Board of Directors, or by Lot/Unit owners representing at least one-third (1/3) in interest of the undivided ownership of the common areas and facilities and delivered to all Lot/Unit owners not less than fifteen (15) days prior to the date fixed for said meeting. The notices shall specify the date, time and place of the meeting, and the matters to be considered.

d). Robert's Rules of Order (latest edition) shall govern the conduct of the Association's meeting when not in conflict with the Declaration or these Bylaws.

4. Officers.

a). All officers and employees of the Association shall serve at the will of the Board of Directors. The officers shall be a president, secretary and treasurer. The Board of Directors may appoint such other assistant officers, as the Board of Directors may deem necessary. No officer shall receive compensation for serving as such. Officers shall be annually elected by the Board of Directors and may be removed and replaced by the Board of Directors.

b). The president shall be the chief executive of the Board of Directors and shall preside at all meetings of the Lot/Unit owners and of the Board of Directors and may exercise the powers ordinarily allocable to the presiding officer of an Association, including the appointment of committees. The president shall exercise general supervision over the property and its affairs. He shall sign on behalf of the Association all conveyances, mortgages and contracts of material importance to its business. He shall do and perform all acts, which the Board of Directors may require.

c). The secretary shall keep minutes of all proceedings of the Board of Directors and of the meetings of the Association and shall keep such books and records as may be necessary and appropriate for the records of the Lot/Unit owners and the Board of Directors. In the absence or inability of the president, the secretary shall perform the functions of the president.

d). The treasurer shall be responsible for the fiscal affairs of the Association, but may delegate the daily handling of funds and the keeping of records to a manager or managing company.

5. Litigation.

a). If any action is brought by one or more but less than all Lot/Unit owners on behalf of the Association and recovery is had, the plaintiffs expenses, including reasonable counsel's fees, shall be a common expense; provided, however, that if such action is brought against the Lot/Unit owners or against the Board of Directors, the officers, employees, or agents thereof, in their capacities as such, with the result that the ultimate liability asserted would, if proved, be bourn by all the Lot/Unit owners. The plaintiffs expenses, including counsel fees, shall not be charged to or borne by the other Lot/Unit owners, as a common expense or otherwise.

b). Complaints brought against the Association, the Board of Directors or the officers, employees or agents thereof, in their respective capacities as such, or the property as a whole, shall be directed to the Board of Directors, which shall promptly give written notice thereof to the Lot/Unit owners and any mortgagees and shall be defended by the Board of Directors, and the Lot/Unit owners and mortgagees shall have no right to participate other than through the Board of Directors in such defense. Complaints against one or more, but less than all Lot/Unit owners shall be directed to such Lot/Unit owners, who shall promptly give written notice thereof to the Board of Directors and to the mortgagees affecting such Lot/Units, and shall be defended by such Lot/Unit owners.

6. Abatement and Enjoinment of Violations by Lot/Unit Owners.

The violation of any house rules or administrative rules or regulations adopted by the Board of Directors or the breach of any provision contained herein, or the breach of any provision of the Declaration, shall give the Board of Directors the right, in addition to any other rights set forth in these Bylaws:

a). To enter the Lot/Unit in which or as to which such violation or breach exists and to similarly abate and remove, at the expense of the defaulting Lot/Unit owner, any structure, thing or condition that may exist therein contrary to the intent and meaning of the provisions hereof, and the Board of Directors shall not thereby be deemed guilty in any manner of trespass; or

b). To enjoin, abate or remedy by appropriate legal proceedings, either at law or in equity, the continuance of any such breach.

7. Accounting.

a). The books and accounts of the Association shall be kept in accordance with generally accepted accounting procedures under the direction of the treasurer.

b). At the close of each fiscal year, the books and records of the Board of Directors shall be audited by a certified public accountant if requested by a Majority of the members of the Association. The Association shall provide for an annual unaudited independent review of the accounts of the Association. Copies of the review shall be made available to any Member who requests a copy in writing and pays the reasonable cost of photocopying the same.

c). The books and accounts of the Association shall be available for inspection at the office of the Association by any Lot/Unit owner or his authorized representative during regular business hours.

8. Special Committees.

The Board of Directors by resolution may designate one or more special committees, each committee to consist of two (2) or more Lot/Unit owners, which to the extent provided in said resolution, shall have and may exercise the powers set forth in said resolution. Such special committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. Such special committees shall keep regular minutes of their proceedings and report the same to the Board of Directors when required. The members of such special committee or committees designated shall be appointed by the Board of Directors or the president. The Board of Directors or the president may appoint Lot/Unit owners to fill vacancies on each of said special committees occasioned by death, resignation, removal or inability to act for any extended period of time.

9. Amendment of Bylaws.

These Bylaws may be amended by a majority affirmative vote of the Association at a meeting duly called for such purposes. Any material amendment to these Bylaws must be approved in writing by all mortgagees as defined in the Declaration. Upon such an affirmative vote, the Board of Directors shall acknowledge the amended Bylaws, setting forth the fact of the required affirmative vote of the Lot/Unit owners and mortgagees where necessary and the amendment shall be effective upon recording.

10. Severability.

The provisions hereof shall be deemed independent and severable, and the invalidity or partial invalidity or unenforceability of any one provision or portion hereof shall not affect the validity or enforceability of any other provision hereof.

11. Captions.

The captions herein are inserted only as a matter of convenience and for reference and in no way to define, limit or describe the scope of these Bylaws nor the intent of any provision hereof.

12. Effective Date.

These Bylaws shall take effect upon recording of the Declaration of which they are a part.

EXECUTED the day and year first above written.

Developer:

CDS STONERIDGE LAND, L.C.

By:

Title: Managing Member

STATE OF ___________ )

)ss.

COUNTY OF _________ )

On the ___ day of ____________, 2001, personally appeared before me __________________, who by me being duly sworn, did say that he is the manager of CDS STONERIDGE LAND, L.C., a Utah limited liability company, and that the within and foregoing instrument was signed in behalf of said company pursuant to the resolution of its members or its Articles of Organization, and said ___________________, duly acknowledged to me that said company executed the same.

Notary Public

Residing at:

EXHIBIT " 12 "

1. Basic Building Restrictions. The following basic building restrictions shall be binding upon the construction of Improvement in or on the Property:

a. Use of Property. Each Lot/Unit shall be used solely for residential, commercial, resort or mixed-use purposes depending upon the nature of the area in which the Lot/Unit is located.

b. ARC Approval. The Plans and Specifications, including the location of all improvements, must be approved in writing by ARC prior to commencement of any construction.

d. Property Line Setbacks. Property line setbacks shall comply with county standards and the requirements of any NHOA or CPOA.

e. Floor Space. The minimum size of each Dwelling or Building shall comply with county standards and the requirements of any NHOA or CPOA within which the Lot/Unit is located.

f. Exterior Materials. All Exterior Surfaces of any building shall be of construction materials and of colors approved by ARC, and shall comply with county standards and the requirements of any NHOA or CPOA.

g. Roofs. All roofs and roof overhangs shall be constructed in accordance with county standards and the requirements of any NHOA or CPOA.

h. Height. With the exception of the clubhouse and related Buildings, no Building shall exceed 30 feet in height in the front of the structure or 35 feet in height measured from the highest natural ground level adjacent to such Building to the highest point of the ridge line of such Building.

i. Garages. All Garages must meet the criteria of and comply with county standards and the requirements of any NHOA or CPOA.

j. Garage Doors. All Garage doors shall meet the criteria of and comply with county standards and the requirements of any NHOA or CPOA.

k. Foundations. A maximum of 8 inches of exposed concrete foundation shall be permitted. A maximum of 18 inches of exposed concrete shall be permitted on elevations where the grade slopes along any Building. Concrete Masonry Units (CMU) used for foundation purposes shall be painted to match the main structure.

l. Windows. A minimum of one window on each elevation of a Dwelling shall be required.

m. Decks. Decks shall be integrated with the architecture of the main Building. Covered deck roof forms shall be consistent with the slope of the main roof on the Building. Deck supporting posts shall be 8 inches or greater. Exposed wood deck elements shall be painted or stained.

n. Construction Time Requirement. Construction must be commenced and finished within 18 months. All work of construction shall be prosecuted diligently and continuously from the time of commencement until completed.

o. New Construction. All Buildings shall be of new construction and no Building may be moved onto a Lot/Unit without the prior written approval of ARC.

p. Storage of Building Materials. No building materials shall be stored on any Lot/Unit except temporarily during construction of an improvement or its alteration, renovation or remodeling, and then only when a building permit is in force.

q. Occupancy During Construction. No Improvement or structure shall be occupied in the course of original construction until the appropriate governmental authorities have issued all required certificates of occupancy.

r. Temporary Structures. No trailer, mobile home, tent, shack or other temporary building, improvement or structure shall be placed upon any property without the prior approval of ARC, except that Developer may maintain temporary structures necessary for storage of tools and equipment and for office space for architects, sales personnel, builders and foremen during actual construction without the prior approval of ARC.

s. Construction Activities. This Declaration shall not be construed so as to unreasonably interfere with, or prevent normal construction of Improvements by any Owner, provided that when completed such Improvements shall in all ways conform to this Declaration. Specifically, no such construction activities shall be deemed to constitute a nuisance or a violation of this Declaration by reason of noise, dust, presence of vehicles or construction machinery, posting of signs, or similar activities, provided that such construction is pursued to completion with reasonable diligence and is in compliance with applicable federal, state and local laws and ordinances and any rules and regulations adopted pursuant thereto, and conforms to usual construction practices in the area. In the event of any dispute, a temporary waiver of the applicable provision, including but not limited to any provision prohibiting temporary structures, may be granted by the ARC, provided that such waiver shall be only for the reasonable period of such initial construction. Such waiver may, but need not, be recorded or in recordable form.

t. Driveways. Driveways for dwellings shall be large enough to accommodate at least 2-parked automobiles.

2. Utilities. Each Owner shall be and is hereby made subject to all easements that now or in the future may be used for gas, electric, telephone, cable television, cable for computers, water, sewer, and other lines present or in the future, as are necessary to provide utility services to a Lot/Unit, adjoining Lot/Units and the Improvements thereon. Each Owner by accepting a deed or other document of conveyance agrees to execute such further grant(s) or other instruments as may be required by any utility or other company or public governmental or quasi-governmental entity for such purposes. Subsequent to the date of the execution of this Declaration, any necessary electrical, telephone, gas, water, sewer, cable television, cable for computers, and other utility conduits, lines and pipes on any Lot/Units shall be placed underground. No transformer, or electric, power, gas, water or other meter or device of any type, or any other apparatus shall be located on any pole within the Property. All utility installations must be approved by ARC in writing. Each Owner shall abide by all applicable rules and regulations of all utility and other companies, governmental entities or quasi-governmental entities, which supply or provide utilities or related services to the Property.

3. Landscaping and Drainage. The following restrictions apply to all landscaping and drainage in the Project.

a. Generally. Landscaping must be approved by ARC. Priority is to be given to natural vegetation and zeroscape landscaping.

b. Completion of Landscaping. Landscaping must be completed within 9 months of the issuance of a certificate of occupancy.

c. Trees. When a Lot/Unit is improved with a Dwelling and is landscaped, the following criteria for tree planting shall be followed:

(1) A minimum of 3 trees shall be planted on each Lot/Unit.

(2) Of the 3 trees minimum to be planted, at least 1 deciduous tree with a minimum 1-inch caliper (the diameter of the tree 10 inches above the top of root-ball), shall be planted.

(3) Of the 3 trees, 1 additional deciduous tree of a minimum one- half (1/2) inch caliper shall be planted elsewhere on the Lot/Units; provided, however, on corner Lot/Units, 2 trees shall be 1 inch caliper and planted in the front or side yard areas.

d. Fences and Walls. All fences and walls must be approved by ARC.

e. Maintenance of Unimproved Lot/Units. Owners shall maintain unimproved Lot/Units free and clear of weeds, trash and debris in accordance with county standards. Each unimproved Lot/Unit shall be mowed at least twice per year or as many additional times as may be necessary to maintain growth below 12 inches in height.

f. Drainage. No material change may be made in the ground level, slope, pitch or drainage patterns of any Lot/Unit as fixed by the original finish grading except after first obtaining the prior written approval of ARC. Grading shall be maintained at all times so as to conduct irrigation and surface waters away from Buildings and so as to protect foundations and footings from excess moisture. Any drainage flows directed to adjacent Lot/Units should not exceed historic flows. Owners shall not impede or retain water flow in any of the natural drainage gulches.

g. Entries and Monuments. Entry structures may be placed on footprint easements on the entry Lot/Units. The Association shall maintain such structures. The Association or its designated agents have right of access to perform maintenance. Owners may not obstruct the view; attach any improvement, including fencing, to, against, or in front of such structures. Owners shall maintain their Lot/Units adjacent to the entry structures so as to maintain a clear view. The Association shall maintain all entries including landscaping, monuments, walls, and the like.

1. Approval Required. No construction, alteration, modification, removal or destruction of any Improvements of any nature whatsoever, whether real, personal or mixed, shall be initiated or be permitted to continue or exist within the Project without the prior written consent of the ARC.

2. Composition of the Architectural Review Committee. The ARC shall consist of five (5) persons. Each person shall hold office until he has resigned or has been removed, but in any event, until his successor has been appointed. Members of the ARC may be removed at any time with or without cause.

3. Appointment of Members of the Architectural Review Committee. The Members of the ARC shall be appointed by the Board.

4. Compensation. The Members of the ARC may receive compensation for services rendered upon execution of an agreement with the Board relative thereto, and may be reimbursed for actual expenses incurred in the performance of their duties hereunder.

5. Limitation of Liability. Neither the ARC nor any Member of said Committee shall bear any responsibility for ensuring the structural integrity or soundness of approved construction or modifications, nor for ensuring compliance with building codes and other governmental requirements, and they shall not be held liable for any injury, damages, or loss arising out of the manner or quality of approved construction on or modifications to any Building or Lot/Unit, and in all such matters, they shall be defended, saved, held harmless and indemnified by the Association.

6. No Waiver of Future Approvals. Each Owner acknowledges that the members of the ARC will change from time to time and that interpretation, application and enforcement of the Design Guidelines may vary accordingly. Approval of proposals, plans, specifications or drawings for any work done or proposed, or in connection with any other matter requiring approval, shall not be deemed to constitute a waiver of the right to withhold approval as to any similar proposals, plans, specifications, drawings, or other matters subsequently or additionally submitted for approval.

7. Variance. The ARC may authorize variances in writing from its guidelines and procedures, but only: (a) in accordance with duly adopted rules and regulations, (b) when unique circumstances dictate, such as unusual topography, natural obstructions, hardship or aesthetic or environmental considerations, and (c) when construction in accordance with the variance would be consistent with the purposes of the Declaration and compatible with existing and anticipated uses of adjoining Project. Inability to obtain a permit or license, or the terms or conditions of any governmental approval or any financing shall not he

considered a hardship warranting a variance. Notwithstanding the above, the ARC may not authorize variances without the written consent of the Developer, as long as it owns any of the Property or has a right to annex any Additional Property or convert Convertible Land.

8. Enforcement. The ARC, upon approval by the Board, shall be authorized on behalf of and in the name of the Association to commence such legal or equitable proceedings as are determined by it to be necessary or proper to correct or enjoin any activity or condition existing within the Project, the continuation of which violates the provisions of this Declaration, Design Guidelines or approved plans and specifications. The authority of the ARC shall include the power to retain legal counsel and expert witnesses, pay filing fees, deposition costs, witness fees and all other ordinary and necessary expenses incurred in commencing and carrying out said legal or equitable proceedings, all of which costs shall be paid by the Association. If an attorney is hired to interpret or enforce architectural controls, the prevailing party shall be entitled to recover his reasonable attorney’s fees and costs, regardless of whether a lawsuit is filed.

9. Additional Damages /Costs, expenses and damages determined by the Board to be proximately caused by an Owner’s deviation from or violation of the architectural controls, or the costs and expenses incurred by the Association to correct the same shall be considered an Individual Assessment against the Owner and the Lot/Unit owned by said Owner, which Assessment shall be due and payable at such time or in such installments as determined by the Board, in its sole discretion

10. Non-Exclusive Remedy The right of the Association to levy an Individual Assessment shall not be deemed to be an exclusive remedy of the Association and it may, in its sole discretion, without waiver of any other legal or equitable remedy, pursue enforcement of the lien securing said Individual Assessment, proceed to collect any amount due directly from the Owner and/or pursue any other remedies available at law or in equity.

11. Private Rights The Association shall not have the right to mediate or litigate private disputes between Owners where there is a legal or equitable remedy available to resolve said dispute when, in the sole discretion of the Board, the interests of the Association or a substantial number of the Owners would not be benefited thereby.

12. Application. The application process is outline on Exhibit "14" attached hereto and incorporated herein by this reference.

13. Design Guidelines. The Design Guidelines are set forth on Exhibit "12" attached hereto and incorporated herein by this reference.

EXHIBIT " 14 "

1. Submission of Plans and Specifications. Plans, specifications, drawings, proposals and the like shall be submitted to the ARC as follows, unless otherwise determined by said Committee.

a. Submittal. Prior to commencing any construction, an Owner shall submit an application for approval of the proposed improvement or work (the "Proposed Improvement") to the ARC. Such application shall be in the form required by ARC and shall include such information as required under the Design Guidelines, such as plans showing site layout, structural design, exterior elevations, exterior materials and colors, signs, landscaping, drainage, lighting, irrigation, utility facilities layout and screening therefore, and other features of proposed construction, as applicable. Before the Owner may begin construction of the proposed Improvement, ARC must approve the application in writing.

b. Preliminary Architectural Drawings, Plans and Specifications. The ARC may require, as a minimum, the following:

(1) Plot/Unit plan to scale of entire site with buildings located and elevation of floors shown above or below a designated point on the street.

(2) Floor plans of each floor level to scale.

(3) Elevations to scale of all sides of the Dwelling or Structure.

(4) One major section through Dwelling or Structure.

(5) A perspective (optional).

(6) Specifications of all outside materials to be used on the exterior of the Dwelling.

c. Review. In reviewing each submission, ARC may consider quality of workmanship and design, visual and environmental impact, ecological compatibility, natural platforms and finish grade elevation, harmony of external design with surrounding structures and environment, and location in relation to surrounding structures and plant life. ARC may require protection of native plants within the construction site, the installation of an irrigation system for the landscaping, and zeroscape landscaping and the inclusion of natural plant life on the Lot/Unit as a condition of approval of any submission. Approval by ARC shall not constitute approval of or waiver of approvals or reviews required by the Developer, or any other governmental agency or entity having jurisdiction over architectural or construction matters. The ARC shall not require permits or other approvals by local government entities other than those issued by such entities in the usual course of business. ARC shall within thirty (30) days advise the party submitting the Plans, in writing, at an address specified by such party at the time of submission, of (1) the approval of Plans, or (2) the segments or features of the Plans which are deemed by ARC to be inconsistent or not in conformity with this Declaration and/or the Design Guidelines, and the reasons for such finding, and suggestions, if appropriate, for the curing of such objections. In the event ARC fails to advise the submitting party by written notice within the period specified of either the approval or disapproval and suggestions for curing the objections of the committee of the Plans, approval shall be deemed to have been given. Notice (for purposes of this Section only) shall be deemed to have been given at the time the envelope containing such notice, properly addressed, and postage prepaid, is deposited with the U.S. Postal Service. Personal delivery of such written notice shall, however, be sufficient and shall be deemed to have been given at the time of delivery to the submitting party.

d. Commencement. ARC, as part of the Plan approval, may require that construction in accordance with approved Plans be commenced and/or completed within a specified time period. In such event, if construction is not commenced or completed in a timely manner, then such approval shall be deemed withdrawn, and it shall be necessary for the Owner to resubmit the Plans to ARC for reconsideration. If construction is not completed on a Proposed Improvement for which Plans have been approved within such period, such approval shall be deemed withdrawn, and such incomplete construction shall be deemed to be in violation of this Declaration.

e. Final Plans and Specifications and Working Drawings. The ARC may require, as a minimum, the following:

(1) Plot/Unit plans to scale showing the entire site, building, garages, walks, drives, fence, carriage lights, retaining walls, with elevations of the existing and finished grade and contours including those at the outside corners of the buildings and at adjacent property lines and street fronts, and elevations of floors from a designated point on the street.

(2) Detailed floor plans.

(3) Detailed elevations, indicating all materials and showing existing and finished grades.

(4) Detailed sections, cross and longitudinal.

(5) Details of cornices, porches, windows, doors, garages, garden walls, steps, patios, fences, carriage lights, etc. Specifications shall give complete description of materials to be used with supplements, addendums or riders noting the colors of all materials to be used on the exterior of the Dwelling.

1. Insurance. The Board shall at all times purchase, maintain in force, and pay the premiums for, if reasonably available, insurance on the Common Areas satisfying at least the following requirements:

a. Property Insurance. Blanket property insurance using the standard "Special" or "All-Risk" building form. Loss adjustment shall be based upon replacement cost. For purposes of this subsection, the term "casualty insurance" shall not mean or refer to "earthquake" or other special risks not included in a standard PUD, Condominium, or Cooperative Housing property or casualty policy. The Board may add additional coverage, as it deems necessary or proper.

b. Public Liability Insurance. Public liability insurance with adequate limits of liability for bodily injury and property damage, consistent with that of similarly situated P.U.D.’s in Bonner County, Idaho. If possible, the policy should be written on the comprehensive form and shall include not-owned and hired automobile liability protection.

c. Director's and Officer's Insurance. Adequate director's and officer's liability insurance, sometimes known as errors and omissions insurance.

d. Fidelity Bond. A separate fidelity bond in a reasonable amount to be determined by the Board to cover all non-compensated officers as well as all employees for theft of Association funds.

e. Agents. Furthermore, where the Board or the Association has delegated some or all of the responsibility for the handling of funds to a management agent, such bonds are required for the management agent's officers, employees and agents handling or responsible for funds of, or administered on behalf of, the Board or the Association.

f. Amount of Coverage. The total amount of fidelity bond coverage required shall be based upon the Board's best business judgment, but shall not be less than the estimated maximum amount of funds, including reserve funds, in the custody of the Board, the Association, or the management agent, as the case may be, at any given time during the term of each bond. Nevertheless, in no event may the amount of such bonds be less than a sum equal to three (3) months aggregate Assessments on all Lot/Units, plus reserve funds.

g. Quality of Coverage. The bonds required shall meet the following additional requirements:

(1) they shall name the Board, the Owners Association, and the Property Manager as obligee;

(2) if the insurance contract or bond excludes coverage for damages caused by persons serving without compensation, and may use that exclusion as a defense or reason not to pay a claim, the insurance company shall, if possible, be required to waive that exclusion or defense;

(3) the premiums on all bonds required herein for the Board and the Association (except for premiums on fidelity bonds maintained by a management agent for its officers, employees and agents) shall be paid by the Board or the Association as part of the Common Expenses; and

(4) the bonds shall provide that they may not be canceled or substantially modified, including cancellation for nonpayment of premium, without at least ten (10) days' prior written notice to the Board and the Association, to any Insurance Trustee, and to each service of loans on behalf of any Mortgagee.

h. Earthquake Insurance shall not be required unless requested by a least seventy five percent (75%) of the Members of the Association.

i. Miscellaneous Items. The following provisions shall apply to all insurance coverage:

j. Quality of Carrier. A "B" or better general policyholder’s rating or a "6" or better financial performance index rating in Best’s Insurance Reports, an "A" or better general policyholder’s rating and a financial size category of "VIII" or better in Best’s Insurance Reports -- International Edition, an "A" or better rating in Demotech’s Hazard Insurance Financial Stability Ratings, a "BBBq" qualified solvency ratio or a "BBB" or better claims-paying ability rating in Standard and Poor’s Insurers Solvency Review, or a "BBB" or better claims-paying ability rating in Standard and Poor’s International Confidential Rating Service -- if the carrier is issuing a master policy or an insurance policy for the common elements in the Project.

k. The Insured. The name of the insured under each policy required to be maintained hereby shall be set forth in the name of the "Association for the use and benefit of the Owners."

l. Designated Representative. The Association may designate an authorized representative of the Association, including any Insurance Trustee with whom the Association has

entered into an Insurance Trust Agreement, or any successor to such Trustee, for the use and benefit of the individual Owners.

m. Beneficiary. In any policy covering the entire Project, each Owner and his Mortgagee, if any, shall be beneficiaries of the policy in an amount equal to the Owner's percentage of undivided ownership interest in the Common Areas and Facilities.

n. Certificate of Insurance. Evidence of insurance shall be issued to each Owner and Mortgagee upon request.

o. Mortgage Provisions. Each policy shall contain a standard mortgage clause or its equivalent and shall provide that the policy may not be canceled or substantially modified without at least ten (10) days prior written notice to the Association and to each Mortgagee.

p. Miscellaneous Provisions. Each insurance policy shall contain at least the following additional miscellaneous items:

(1) Waiver of Subrogation. A waiver of the right of a subrogation against Owners individually;

(2) Individual Neglect. A provision that the insurance is not prejudiced by any act or neglect of any individual Owner; and

q. Deductible. The deductible on a claim made against the Association's Property Insurance Policy shall be paid for by the party responsible for the loss.

r. Individual Insurance. Each Owner and occupant shall purchase and maintain adequate liability and property insurance on his Lot/Unit, personal property and contents; provided, however, no Owner shall be entitled to exercise his right to maintain insurance coverage in such a way as to decrease the amount which the Association, on behalf of all the Owners and their mortgagees, may realize under any insurance policy which the Association may have in force on the Property at any particular time.

s. Primary Coverage. The insurance coverage of an Owner shall, in the event the Association also has insurance covering the loss, be primary and the insurance of the Association shall be secondary.

t. Prompt Repair. Each Owner further covenants and agrees that in the event of any partial loss, damage or destruction of his Lot/Unit, the Owner shall proceed promptly to repair or to reconstruct the damaged structure in a manner consistent with the original construction.

u. Disbursement of Proceeds. Proceeds of insurance policies shall be disbursed to repair promptly and reasonably the damages. Any proceeds remaining thereafter shall be placed in the Capital Improvement Reserve Account and retained by and for the benefit of the Association. This is a covenant for the benefit of the Association and any Mortgagee of a Lot/Unit and may be enforced by them.

v. Special Endorsements. Each policy shall also contain or provide those endorsements commonly purchased by other Associations in similarly situated P.U.D.’s in Bonner County, Idaho, including but not limited to a guaranteed replacement cost endorsement under which the insurer agrees to replace the insurable property regardless of the cost and, or a Replacement Cost Endorsement under which the insurer agrees to pay up to 100% of the property’s insurable replacement cost, but no more, and, if the policy includes a coinsurance clause, an Agreed Amount Endorsement which waives

the requirement for coinsurance; an Inflation Guard Endorsement when it can be obtained, a Building Ordinance or Law Endorsement, if the enforcement of any building, zoning or land-use law will result in loss or damage, increased cost of repairs or reconstruction, or additional demolition and removal costs, and increased costs of reconstruction.

w. Restrictions on Policies. No insurance policy shall be maintained where:

(1) Individual Assessments Prohibited. Under the term of the carrier's charter, By-Laws, or policy, contributions may be required from, or assessments may be made against, an Owner, Mortgagee, the Board, or the Association.

(2) Payments Contingent. By the terms of the Declaration, By-Laws, or policy, payments are contingent upon action by the carrier's Board, policyholder, or member; or

(3) Mortgagee Limitation Provisions. The policy includes any limited clauses (other than insurance conditions), which could prevent the party entitled (including, without limitation, the Board, Association, or Owner) from collecting insurance proceeds.

2. Intent. The foregoing provisions shall not be construed to limit the power or authority of the Association, Board or Owners to obtain and maintain insurance coverage, in addition to any insurance coverage required hereunder, in such amounts and in such forms as the Board or Association may deem appropriate from time to time.

1. Destruction, Condemnation, and Obsolescence. The following provisions shall apply with respect to the destruction, condemnation, or obsolescence of the Project.

a. Definitions. Each of the following terms shall have the meaning indicated:

(1) "Substantial Destruction" shall exist whenever, as a result of any damage or destruction to the Project or any part thereof, the excess of the estimated cost of restoration over the funds available is Twenty five percent (25%) percent or more of the estimated restored value of the Project.

(2) "Partial Destruction" shall mean any other damage or destruction to the Project or any part thereof.

(3) "Substantial Condemnation" shall exist whenever a complete taking of the Project or a taking of part of the Project has occurred under eminent domain or by grant or conveyance in lieu of condemnation, and the excess of the estimated cost of restoration over the funds available is Twenty five (25%) percent or more of the estimated restored value of the Project.

(4) "Partial Condemnation" shall mean any other such taken by eminent domain or grant or conveyance in lieu thereof.

(5) "Substantial Obsolescence" shall exist whenever the Project or any part thereof has reached such a state of obsolescence or disrepair that the excess of the estimated cost of restoration over the funds available is Twenty five percent (25%) percent or more of the estimated restored value of the Project.

(6) "Partial Obsolescence" shall mean any state of obsolescence or disrepair, which does not constitute Substantial Obsolescence.

(7) "Restored Value" shall mean the fair market value of the Project after Restoration as determined by an MAI or other qualified appraisal.

(8) "Estimated Cost of Restoration" shall mean the estimated costs of restoring the Project to its former condition.

(9) "Available Funds" shall mean any proceeds of insurance, condemnation awards, payments in lieu of condemnation, and any uncommitted funds of the Board or Association. Available Funds shall not include that portion of insurance proceeds legally required to be paid to any party other than the Association, including a mortgagee, or that portion of any condemnation award or payment in lieu of condemnation payable to the Owner or Mortgagee for the condemnation or taking of the Lot/Units in which they are interested.

b. Determination by Board. Upon the occurrence of any damage or destruction to the Project or any part thereof, or upon a complete or partial taking of the Project under eminent domain or by grant or conveyance in lieu thereof, the Board shall make a determination as to whether the excess of Estimated Costs of Restoration over Available Funds is twenty-five percent (25%) or more of the estimated Restored Value of the Project. In addition, the Board shall, from time to time, review the condition of the Project to determine whether Substantial Obsolescence exists. In making such determinations the Board may retain and rely upon one or more qualified appraisers or other professionals.

c. Restoration of the Project. Restoration of the Project shall be undertaken by the Board promptly without a vote of the Owners in the event of Partial Destruction, Partial Condemnation, or Partial Obsolescence and shall also be undertaken in the event of Substantial Destruction, Substantial Condemnation, or Substantial Obsolescence unless the failure to make Restoration is consented to by Owners collectively holding at least sixty-seven percent of the Project's undivided ownership interest and is further consented to by Eligible Mortgagees holding Mortgages on Lot/Units which have appurtenant at least fifty-one (51%) percent of the undivided ownership interest in the Common Areas and Facilities which is then subject to Mortgages held by Eligible Mortgagees.

d. Notices of Destruction or Obsolescence. Within thirty (30) days after the Board has determined that Substantial Destruction, Substantial Condemnation, or Substantial Obsolescence exists, it shall send to each Owner and Eligible Mortgagee a written description of the destruction, condemnation, or state of obsolescence involved, shall take appropriate steps to ascertain the preferences of the Eligible Mortgagees concerning Restoration, and shall, with or without a meeting of the Owners (but in any event in accordance with the applicable provisions of this Declaration), take appropriate steps to determine the preferences of the Owners regarding Restoration.

e. Excess Insurance. If the insurance proceeds condemnation awards, or payments in lieu of condemnation actually received by the Board or Association exceed the cost of Restoration when Restoration is undertaken, then the excess funds shall be placed in the Capital Improvement Reserve Account and retained by and for the benefit of the Association. This covenant is also for the benefit of the Association and any Mortgagee, and, therefore, may also be enforced by them. Payment to any Owner whose Lot/Unit is the subject of a Mortgage shall be made jointly to such Owner and the interested Mortgagee.

f. Inadequate Insurance. In the event the cost of Restoration exceeds Available Funds, all of the Lot/Units shall be assessed for the deficiency on the basis of their respective percentages of undivided ownership interest in the Common Areas.

g. Reallocation in Event of Partial Restoration. In the event that all or any portion of one or more Lot/Unit will not be the subject of Restoration (even though the Project will continue) or is taken in a condemnation proceeding or pursuant to any agreement in lieu thereof, the undivided ownership interest in the Common Areas and Facilities shall be immediately reallocated to the remaining Lot/Units.

h. Sale of Project. Unless Restoration is accomplished as set forth above, the Project shall be sold in the event of Substantial Destruction, Substantial Condemnation, or Substantial Obsolescence. In the event of such sale, ownership under this Declaration and the Plat Map shall terminate and the proceeds of sale and any Available Funds shall be distributed by the Board to the Owners in proportion to their respective undivided interests in the Common Areas. Payment to any Owner whose Lot/Unit is then the subject of a Mortgage shall be made jointly to such Owner and the interested Mortgagee.

i. Authority of Board to Represent Owners in Condemnation or to Restore or Sell. The Board, as attorney-in-fact for each Owner, shall represent all of the Owners and the Association in any condemnation proceeding or in negotiations, settlements, and agreements with the condemning authority for the acquisition of all or any part of the Common Areas and Facilities.

j. Settlement Proceeds. The award in any condemnation proceeding and the proceeds of any settlement related thereto shall be payable to the Association for the use and benefit of the Owners and their mortgagees as their interests may appear.

k. Restoration Power. The Board, as attorney-in-fact for each Owner, shall have and is hereby granted full power and authority to restore or to sell the Project and each Lot/Unit therein whenever Restoration or sale, as the case may be, is undertaken as hereinabove provided.

l. Right of Entry. Such authority shall include the right and power to enter into any contracts, deeds or other instruments, which may be necessary or appropriate for Restoration or sale, as the case may be.

1. Developer's Sales Program. Notwithstanding anything to the contrary, until the termination of Period of Developer’s Control, neither the Owners, Association nor the Board shall interfere or attempt to interfere with the completion of improvements and sale of the remaining Lot/Units or Property, and Developer shall have the following rights in furtherance of any sales, promotions or other activities designed to accomplish or facilitate the sale of all Lot/Units or Property owned by Developer:

a. Sales Office and Model Lot/Unit. Developer shall have the right to maintain one (1) or more sales offices and one (1) or more model Lot/Unit, Building or Dwelling at any one time. Such office and/or models may be one or more of the Lot/Units, Buildings or Dwellings owned by it, or one or more of any separate structures or facilities placed on the Property for the purpose of aiding Developer's sales effort, or any combination of the foregoing;

b. Promotional. Developer shall have the right to maintain a reasonable number of promotional, advertising and/or directional signs, banners or similar devices at any place or places on the Property.

c. Common Area Use. Developer shall have the right to use the Common Areas of the Project, Golf Course, Community Center, Clubhouse, Recreational Amenities, and Private Amenities to facilitate sales.

d. Relocation and Removal. Developer shall have the right from time to time to locate or relocate any of its sales offices, models, or signs, banners or similar devices, but in connection with each such location or relocation shall observe the limitations imposed by the preceding portion of this Section. Within a reasonable period of time after the sale of all of Developer’s Lot/Units or interests in the Property, Developer shall have the right to remove from the Project any signs, banners or similar devices and any separate structure or facility which was placed on the Property for the purpose of aiding Developer's sales effort.

2. Limitation on Improvements by Association. Until the sale of all of Developer’s Lot/Units or interests in the Property, neither the Association, Board, nor Owners shall, without the written consent of Developer, make any improvement to or alteration in any of the Common Areas and Facilities created or constructed by Developer, other than such repairs, replacements, or similar matters as may be necessary to properly maintain the Common Areas as originally created or constructed by Developer.

3. Withdrawal or Conversion of Property. The Developer reserves the unilateral right to amend this Declaration at any time so long as it holds an unexpired option to expand the Project pursuant hereto, without prior notice and without the consent of any Person, for the purpose of removing certain portions of the land submitted to the Project, or to convert the use of said land, provided it is owned by the Developer, to the extent

originally included in error or as a result of any changes whatsoever in the plans for the Project desired to be effected by the Developer, provided such withdrawal or conversion is not unequivocally contrary to the overall, uniform scheme of development for the Project.

4. Developer’s Reservation of Rights. Developer reserves for itself and its assigns the right to vary the timing, mix, type, use, style, and number of Lot/Units, the nature of the Lot/Units, the materials and other such details of construction in adding phases to this Declaration. If additional uses, such as, by way of explanation and not limitation, light industrial or additional commercial, are permitted by zoning, Developer shall have the right to add such uses to this Declaration.

5. Developer's Rights Assignable. All of the rights of Developer under this Declaration may be assigned or transferred either by operation of law or through a voluntary conveyance, transfer or assignment. Any Mortgage covering all Lot/Units or Buildings in the Project title to which is vested in Developer shall, at any given point in time and whether or not such Mortgage does so by its terms, automatically cover, encumber, and include all of the then unexercised or then unused rights, powers, authority, privileges, protection and controls which are accorded to Developer (in its capacity as Developer) herein.

6. Transfer of Management and Control. At the expiration of the Developer’s Period of Control, the Developer shall cause an instrument transferring control of the ARC and the Board to be filed of record in the office of the Clerk of Bonner County, Idaho. The instrument shall include the "Control Transfer Date."

7. Certain Provisions Applicable to Developer. Notwithstanding any other provision herein contained, for so long as Developer continues to own any of the Lot/Units the following provisions shall be deemed to be in full force and effect, none of which shall be construed so as to relieve the Developer from any obligations of an Owner to pay Assessments, except as herein otherwise provided, as to each Lot/Unit owned by Developer.

a. Developer specifically disclaims any intent to have made any warranty or representation in connection with the Project or the Declaration except as specifically set forth herein or in any agreement for sale of a Lot/Unit, and no person shall rely upon any warranty or representation not so specifically made therein.

b. No amendment may be made to the Declaration without the written consent of Developer so long as Developer retains the ownership of a Lot/Unit or Property within the Project.

c. Normal construction activities and parking in connection with the building of Improvements on a Lot/Unit shall not be considered a nuisance or otherwise prohibited by this Declaration. Supplies of brick, block, lumber and other building materials shall be piled only in such areas as may be approved by the Developer or, at the end of Developer’s Period of Control, the Association.

1. Reservation of Option to Expand. Developer hereby reserves the option to expand the Project to include additional Lot/Units. This option to expand may be exercised from time to time, at different times, and in any order; provided, however, the option shall expire ten (10) years from the date following the first conveyance of a Lot/Unit in Phase I to a purchaser unless sooner terminated by Developer’s recorded Waiver of such option, there being no other circumstances which will cause the option to expire prior to said ten (10) years. Such right to expand the Project and annex Additional Land is subject to the prior written affirmative consent of at least two-thirds (2/3rds) of the members of the Association. Any such additional Lots/Units shall only be constructed on Additional Land.

2. Supplemental Declarations and Supplemental Maps. Such expansion may be accomplished by the filing for record by Developer in the office of the County Clerk of Bonner County, Idaho, no later than ten (10) years from the date this Declaration is recorded, a Supplement or Supplements to this Declaration containing a legal description of the site or sites for new Lot/Units, together with supplemental Map or Maps containing the same information with respect to the new Lot/Units as was required on the Map with respect to the Phase I Lot/Units. The expansion may be accomplished in phases by successive supplements or in one supplemental expansion.

3. Expansion of Definitions. In the event of such expansion the definitions used in this Declaration automatically shall be expanded to encompass and refer to the Project as so expanded. The term "Property" shall mean the real property initially submitted under the Declaration, plus any Additional Land added to the Project by a Supplemental Declaration or by Supplemental Declarations, and reference to this Declaration shall mean this Declaration as so supplemented. All conveyances of Lot/Units after such expansion shall be effective to transfer rights in the Project, with additional references to the Supplemental Declaration and the Supplemental Map. The recordation in the office of the Clerk of Bonner County, Idaho of a Supplemental Map incident to any expansion shall operate automatically to grant, transfer, and convey to then Owners of Lot/Units in the Project as it existed before such expansion the respective undivided interests in the new Common Areas added to the Project as a result of such expansion. Such recordation shall also operate to vest in any then mortgagee of any Lot/Units in the Project as it existed, interest so acquired by the Owner of the Lot/Units encumbering the new Common Areas added to the Project as a result of such expansion.

4. Declaration Operative on New Lot/Units. The new Lot/Units, upon recording the Supplemental Map and Supplemental Declaration in the said office of the Clerk of Bonner County, Idaho, shall be subject to all the terms and conditions of the Idaho Law and this Declaration, as amended or supplemented from time to time.

5. Right of Developer to Adjust Ownership Interest in Common Areas. Each deed of a Lot/Unit shall be deemed to irrevocably reserve to the Developer the power to appoint to Owners, from time to time, the percentages in the Common Areas set forth in Supplemental or Amended Declaration. The proportionate interest of each Owner in the Common Areas after any expansion of the Project shall be an undivided interest of the Project as expanded. A power coupled with an interest is hereby granted to the Developer, its successors and assigns, as attorney in fact to shift percentages of the Common Areas in accordance with Supplemental or Amended Declarations recorded pursuant hereto and each deed of a Lot/Unit in the Project shall be deemed a grant of such power to the Developer. Various provisions of this Declaration and deeds and mortgages of the Lot/Unit may contain clauses designed to accomplish a shifting of the Common Areas. None of said provisions shall invalidate the other, but each shall be deemed supplementary to the other toward the end that a valid shifting of the Common Areas can be accomplished. Notwithstanding anything to the contrary herein, no change in the percentage of undivided interest in the Common Areas may be effected more than ten (10) years after the effective date of the Declaration. Accordingly, upon the recordation of a Supplemental Declaration and Supplemental Map incident to any expansion, the revised schedule of undivided interests in the Common Areas contained therein shall automatically become effective for all purposes and shall fully supersede any similar schedule which was contained in any declaration associated with any prior phase. In the event the provisions of the separate instruments relating to the Project conflict irreconcilably, the terms of that instrument which was recorded most recently shall control.

6. Other Provisions Concerning Expansion. If the Project is expanded as hereinbefore contained, then it is further provided that: (1) All or any part of the Additional Land may be added to the Project without any limitations whatsoever save and except that all additional Lot/Units created must be restricted to residential, commercial, resort or mixed-use; (2) Portions of the Additional Land may be added to the Project at different times without any limitations; (3) Developer shall have the right without further conveyance or documentation to build roads and access ways to the Additional Land through the easement areas as shown on the Map. The Association shall not allow anything to be built upon or interfere with said easement areas; and (4) No assurances are made concerning: (a) The locations of any Improvement that may be made on any portion of the Additional Land that may be added to the Project; (b) The type, kind or nature of Improvement which may be created on any portion of the Additional Land, except that the Improvements will be of a similar quality of materials and construction to those in the first phase of development and will be substantially completed prior to annexation; (c) Whether any Improvements created on any portion of the Additional Land will be substantially identical to those within the initial Project except that the Improvements will be constructed of an equal or better quality of materials and construction than those in the first phase of development; and (d) The type, size, or maximum number of private yard areas which may be created within any portion of the Additional Land added to the Project; and (5) Notwithstanding anything to the contrary which may be contained herein, the Declaration is not intended, and shall not be construed so as to impose upon Developer any obligation respecting, or to restrict Developer in any way with regard to: (a) The submission of any portion of the Additional Land to the provisions of this Declaration; (b) The creation, construction, or addition to the

Project of any additional property; (c) The carrying out in any particular way or within any particular time of any development which may be undertaken except as herein mentioned; or (d) The taking of any particular action with respect to the Additional Land, the Project, or any other real estate.

EXHIBIT " 19 "

The Developer reserves the right to supplement this Declaration and the Plat Map at any time to designate Convertible Land within Additional Land annexed to the Project, without additional approval required. This option to convert land, for such purposes as enclosing a patio or extending a deck, may be exercised from time to time, at different times and in any order, without limitation, provided however, the option shall expire ten (10) years from the date following the first conveyance of a Lot/Unit/Unit in a Block with Convertible Land to a purchaser unless sooner terminated by Developer's recorded Waiver of such option, there being no other circumstances which will cause the option to expire prior to said ten (10) years.. To do so, Developer when it adds land to the Project shall note on the Supplemental Plat Map the Convertible Land, if any. Then, at such time as the Developer elects to convert any such Convertible Land, it shall prepare and file with the County Clerk for Bonner County, Idaho, a Supplemental Declaration and Supplemental Map showing any new Lot/Unit/Unit, LCA, PYA or Common Area created within such Convertible Land. After the expiration of Developer’s Period of Control, sixty-seven percent (67%) of the Owners may elect in writing to convert such Convertible Land into a new Lot/Unit/Unit, LCA, PYA or Common Area by an affirmative vote and recording a Supplemental Declaration and Plat Map. At such time as any of the Convertible Land is converted to a new Lot/Unit/Unit, LCA, PYA or Common Area, and should a material Size change occur, the percentages of ownership interest in the Association may be reallocated among all Owners. In the event the Convertible Land or any portion thereof is converted, the definitions used in this Declaration shall automatically be expanded to encompass and refer to the Project as so modified. Notwithstanding anything to the contrary which may be contained in this Declaration, this Declaration is not intended, and shall not be construed so as, to impose upon the Developer or any other Person or entity the obligation to designate or convert Convertible Land into any new Lot/Unit/Unit, LCA, PYA or Common Area.

1. Golf Course. There is a golf course within the Project which is a separate entity privately owned and controlled by CDS Stoneridge Golf, L.C. It is a Private Amenity. Developer and CDS Stoneridge Golf, L.C. reserve the irrevocable right to own and/or operate the golf course (a) privately, (b) as a joint venture with a third party, including, (c) as a semi-private venture in which private equity or other memberships are sold and the public has access to the course, or some combination.

2. Other Private Amenities. There are or may be other Private Amenities, separately owned and operated, located off-site or within the Project, including without limitation (and in some instances subject to deregulation or public utility laws) a utility, water, sewer, sanitation, telecommunications, cable, internet service and related companies and facilities which may be owned and operated (a) privately, (b) as a joint venture with a third party, (c) as a semi-private venture in which private equity or other memberships are sold and public access is provided, (d) coop, or some combination.

3. Rights of the Association and Owners. Neither the Association nor any Owner shall have any ownership interest in the Golf Course or any other Private Amenity, unless expressly granted in a recorded deed or other instrument of conveyance. No Owner shall have any ownership interest in any such Golf Course or other Private Amenity solely by virtue of his membership in the Association or ownership of a Lot/Unit. The Association, by a majority vote of its Board may, if the opportunity arises, enter into a purchase, lease or license agreement with the owner of the Golf Course or other Private Amenity, although such owner or operator is under no obligation to sell.

4. Inherent Risks. Each Owner understands and agrees that his Lot/Unit is or may be adjacent to or near a Golf Course, Trail, or other Private Amenity. Each Owner, by acceptance of a deed or other document of conveyance of a Lot/Unit: (a) acknowledges that the location of his Lot/Unit within the Property may result in nuisances, hazards, risks, and dangers to persons and property in, on or about his Lot/Unit, and expressly assumes this risk; (b) covenants for himself and his heirs, successors, successors-in-title, and assigns not to sue the Developer, CDS Stoneridge Golf, L.C., or the Association for property damage or personal injury arising out of or caused by stray golf balls or actions incidental to activities related to the use of a Golf Course, Trail, or Private Amenity; and (d) agrees to indemnify, save and hold harmless the Developer, CDS Stoneridge Golf, L.C., and the Association from any liability, claims, or expenses, including attorney’s fees, arising from such property damage or personal injury. Each Owner further covenants that the Association and Developer shall have the right, in the nature of an easement, to subject all or any portion of the Property to nuisances incidental to the maintenance, operation, or use of the Golf Course, Trail, and Private Amenities, and to the carrying out of such related activities. Such risks include but are not limited to: (1) Noise, including noise from maintenance equipment (it being specifically understood that such maintenance at the Golf Course typically takes place around sunrise or sunset), (2) noise caused by golfers or boaters, (3) use of pesticides, herbicides and fertilizers, (4) use of affluent in the irrigation of the Golf Course, (5) reduction in privacy caused by traffic to and from the golf and dock traffic; (5) the removal or pruning of shrubbery or trees on the Golf Course, (6) errant golf balls and golf clubs, and (7) design of the Golf Course, Trail, or Private Amenity. The loss or damage contemplated is all compensatory, indirect, special, incidental, 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/Unit to the Golf Course, Trail, or Private Amenity, including, without limitation, any claim arising in whole or in part from their negligence.

5. Views. Neither the Developer CDS Stoneridge Golf, L.C., or the Association guarantees or represents that any view over and across any Golf Course, Trail,, Lake, Boat Dock, Common Area or other Private Amenity from adjacent Lot/Unit will be preserved without impairment. No provision of this Declaration shall be deemed to create an obligation of the Developer CDS Stoneridge Golf, L.C., or the Association to prune or thin trees or other landscaping except as otherwise expressly provided herein. Each Owner acknowledges and agrees that trees and other landscaping may be added to any Golf Course, Trail, or other Private Amenity from time to time. In addition, the location, configuration, size, and elevation of the tees, bunkers, fairways, and greens on any Golf Course may be changed from time to time, in the discretion of the owner or operator of the Golf Course. Any such additions or changes to such Golf Course, Trail, or Private Amenity may diminish or obstruct any view from a Lot/Unit and any express or implied easements for view purposes or for the passage of light and air are hereby expressly disclaimed. Any such addition or change to any Golf Course, Trail or Private Amenity may not adversely affect drainage flow across the Project.

6. Golf Balls. The Property is burdened with an easement permitting golf balls unintentionally to come upon the Property, including any Lot/Unit or the Common Area, and for golfers at reasonable times and in a reasonable manner to come upon the Property to retrieve errant golf balls. The existence of this easement shall not relieve golfers of liability for damage caused by errant golf balls; however, 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: the Developer, CDS Stoneridge Golf, L.C., the Association or Board.

7. Water Over-spray The Property is hereby burdened with a non-exclusive easement for over-spray of water, materials used in connection with fertilization, and affluent from any irrigation system serving such golf course.

8. Operation of Golf Course, Trail or Private Amenity. All persons, including all Owners, are hereby advised that no promises, guarantees, representations, or warranties have been or are made by the Developer, CDS Golf Course, L.C., the Association, or any other Person with regard to the continuing ownership or operation of the Golf Course, Trail, or other Private Amenity, regardless of its depiction upon any land use plan or other marketing display or plat. No purported promise, guaranty, representation, or warranty, written or oral, in such regard shall ever be effective unless it is reduced to writing, signed by the parties to be bound, or without an amendment hereto executed or joined into by the Developer. Further, the ownership or operational duties of and as to the Golf Course, Trail, or Private Amenity may change at any time and from time to time by virtue of, but without limitation, (1) the sale or assumption of operations of the Golf Course, Trail, or Private Amenity to/by an independent person or entity, (2) the conversion of the Golf Course, Trail, or Private Amenity membership structure to an equity club or similar arrangements whereby the members of the Golf Course, Trail, or Private Amenity or an entity owned or controlled thereby become the owner(s) and/or operator(s) of the Golf Course, Trail, or Private Amenity, (3) the conveyance, pursuant to contract, option, or otherwise, of the Golf Course, Trail, or Private Amenity to one or more affiliates, shareholders, employees, or independent contractors of Developer or (4) the conveyance of the Golf Course, Trail, or Private Amenity to the Association, with or without consideration and subject or not subject to a mortgage(s) or other encumbrances. As to any of the foregoing or any other alternative, no consent of the Association, any sub-association, or any Owner shall be required to effectuate such transfer, even in the case of a conveyance to the Association, for or without consideration and subject to or not subject to any mortgage, covenant, lien, or other encumbrance on the applicable land and other property. No person shall have any ownership interest in the Golf Course, Trail, or Private Amenity solely by virtue of his membership in the Association or ownership of a Lot/Unit.

9. Rights of Access and Parking. The Golf Course, Trail, and Private Amenity (and their members (regardless of whether such members are Owners hereunder), employees, agents, contractors, or designers) shall at all times have and are hereby granted a perpetual right and nonexclusive easement of access and use over all streets, driving lanes and parking areas located within the Property as reasonably necessary to travel to and from the Golf Course, Trail, or Private Amenity and, further, over those portions of the Property (whether Common Areas or otherwise) reasonably necessary to access or for the operation, maintenance, repair, and replacement of the Golf Course, Trail, or Private Amenity, and their facilities. Without limiting the generality of the foregoing, members or patrons of the Golf Course, Trail, or Private Amenity shall have the right to park their vehicles on the streets, parking Lot/Units and Common Areas at reasonable times before, during, and after using the Golf Course, Trail, or Private Amenity.

10. Temporary Closure. The Golf Course, Trail, or Private Amenity may be closed temporarily for maintenance and repair.

11. Architectural Control. Neither the Association, nor any Owner shall approve or permit any construction, addition, alteration, change, or installation on or to any portion of the Property which is adjacent to, or otherwise in the direct line of sight from the Golf Course, Trail, or Private Amenity for the depth of one Lot/Unit, without giving the operator of the Golf Course, Trail, or Private Amenity at least fifteen (15) days prior notice of his intent to approve or permit such work together with copies of the request therefor and all other documents and information finally submitted in such regard. The Golf Course, Trail, or Private Amenity operator shall then have ten (10) days in which to voice its approval or disapproval, which opinion shall be considered but shall not be binding in the final decision. The failure of the Golf Course, Trail, or Private Amenity operation or respond to the aforesaid notice within the ten (10) day period shall constitute a waiver of the right of the operator of the Golf Course, Trail, or Private Amenity to object to the matter so submitted.

12. Limitations on Amendments Affecting the Golf Course, Trail, or Private Amenity. In recognition of the fact that the provisions of this Article are for the benefit of the owner of the Golf Course, Trail, and Private Amenity, no amendment to this Article and no amendment in derogation of this Article to any other provisions of this Declaration may be made without the written approval thereof by the owner(s) of the Golf Course, Trail, or Private Amenity, or in the case of a corporate owner, by its board of directors. The foregoing shall not apply, however, to amendments made by the Developer.

13. Golf Cart Path Easement. There may be golf car path easements designated as such on a plat of the Property, which shall be used for golf cart paths, pedestrian walkways, maintenance and vehicle access, and unhindered access between said paths, and the Golf Course. Nothing shall be placed or maintained in any golf cart path easement, which shall interfere with utilization thereof as a playable part of the Golf Course, and all landscaping and other improvements within a golf cart path easement shall require the approval of the ARC. The owner of the Golf Course as well as its members, guests, invitees, employees, contractors and patrons shall at all times have a right and non-exclusive easement of access and use over the golf cart paths, if any, located within the Property, as reasonably necessary for the use and enjoyment of the Golf Course.

14. Rights Reserved to Developer. Notwithstanding any provisions of this Declaration to the contrary, the Developer, and any successor who takes the rights in a written instrument, shall have the following reserved rights in relation to the Golf Course, Trail, and Private Amenity:

(a) Reasonable access to the Golf Course, Trail, and Private Amenity for the purposes of promotion, marketing, and sale of the Property and/or services;

(b) Right to develop the air rights over or any loft area within any structure, including the right, at its sole cost and expense, to construct and to operate or to contract or to lease for operation a restaurant and the right to reasonable use at reasonable times of parking facilities in support thereof.

EXHIBIT " 21 "

Nature of Property Interest Value

Standard Residential Lot/Unit (one per Lot/Unit) 1

Standard Commercial Lot/Unit (one per Lot/Unit) 1

Standard Residential Condominium Unit (one per Unit) 1

Standard Commercial Condominium Unit (one per Unit) 1

Golf Course (one per acre) 100