DECLARATION OF COVENANTS, EASEMENTS,

CONDITIONS AND RESTRICTIONS

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TABLE OF CONTENTS Section Description Page ARTICLE 1 Definitions .........................................................................................................1 Section 1.1 "Act ..................................................................................................1 Section 1.2 "Annexation Property .......................................................................1 Section 1.3 "Common Residential Sidewalks ......................................................1 Section 1.4 "Community-Wide Standard .............................................................1 Section 1.5 “Declarant ........................................................................................2 Section 1.6 "Dwelling Unit .................................................................................2 Section 1.7 "Firefly Ridge Neighborhood ............................................................2 Section 1.8 "First Mortgage .................................................................................2 Section 1.9 "Gladstone Boulevard Median Area ..................................................2 Section 1.10 "Interior Monuments .........................................................................2 Section 1.11 "Interior Monument Easement Areas .................................................2 Section 1.12 "Island Townhomes Association .......................…………………….2 Section 1.13 "Lot ..................................................................................................2 Section 1.14 "Lot Eight Monument Easement Area ...............................................2 Section 1.15 "Lot Twenty Monument Easement Area ...........................................2 Section 1. 16 "Main Entrance Monuments .............................................................3 Section 1.17 "Main Entrance Monument Easement Areas .....................................3 Section 1.18 "Master Association ..........................................................................3 Section 1.19 "Master Association Board ...............................................................3 Section 1.20 "Master Association Period of Declarant Control ..............................3 Section 1.21 "Master Common Areas ...................................................................3 Section 1.22 "Master Common Expenses ..............................................................3 Section 1.23 "Master Common Wetland Areas .....................................................4 Section 1.24 "Master Parklands .............................................................................4 Section 1.25 "Meadows Neighborhood .................................................................4 Section 1.26 "Meadows Townhomes Association .................................................4 Section 1.27 "Member Association .......................................................................4 Section 1.28 "Member Association .......................................................................4 Section 1.29 "Owner .............................................................................................4 Section 1.30 "Recreational Equipment ..................................................................4 Section 1.31 "Residential Association ...................................................................5 Section 1.32 "Residential Association Board .........................................................5 Section 1.33 "Residential Association Period of Declarant Control .......................5 Section 1.34 "Residential Common Area ..............................................................5 Section 1.35 "Residential Common Expenses .......................................................5 Section 1.36 "Residential Pocket Parks .................................................................5 Section 1.37 "Single Family Residential Lot .........................................................6 Section 1.38 "Subject Property ..............................................................................6 Section 1.39 "Subsequent Amendment ..................................................................6 Section 1.40 "Total Gladstone Lots ………………………………………………..6

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Section 1.41 "Total Master Voting Power ..... ........................................................6 Section 1.42 "Townhome Lot …………………………………………................... 6 Section 1.43 "Woods Neighborhood……………………………………................. 6 ARTICLE 2 Membership and Voting Rights in the Master Association .................................6 Section 2.1 Membership .....................................................................................6 Section 2.2 Voting Rights ..................................................................................6 Section 2.3 Declarant Control ............................................................................7 ARTICLE 3 Membership and Voting Rights in the Residential Association ...........................7 Section 3. 1 Membership .....................................................................................7 Section 3.2 Voting Rights ..................................................................................7 Section 3.3 Declarant Control ............................................................................8 ARTICLE 4 Rights in Master Common Area .........................................................................8 Section 4.1 Master Association's Rights ...........………………………………….8 Section 4.2 Owners' Rights ................……………………………………………8 Section 4.3 Declarant Control ……………………………………………………9 ARTICLE 5 Rights in Residential Common Area ..................................................................9 Section 5.1 Residential Association's Rights ......................................................9 Section 5.2 Owners' Rights ................................................................................9 Section 5.3 Declarant Control ...........................................................................10 ARTICLE 6 Maintenance .....................................................................................................11 Section 6.1 Master Association's Responsibility ................................................11 Section 6.2 Residential Association's Responsibility .........................................11 Section 6.3 Owner's Responsibility ...................................................................12 ARTICLE 7 Condemnation ...................................................................................................12 Section 7.1 Condemnation of Master Common Area .........................................12 Section 7.2 Condemnation of Residential Common Area ..................................13 Section 7.3 Condemnation of Lot ......................................................................13 ARTICLE 8 Annexation of Additional Property ....................................................................13 Section 8.1 Annexation Without Approval of Class "A" Membership ...............13 Section 8.2 Effect of Annexation .......................................................................14 ARTICLE 9 Architectural Control ........................................................................................15

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Section 9.1 Architectural Control . . . . . . . . . . . . . . . ………………….. . . . . .. .15 Section 9.2 Architectural Control Committee: Membership . . . . . . . . . ……… .15 Section 9.3 Architectural Control Committee: Procedure . . . . . . . . . ………. . . 16 Section 9.4 Building Requirements ............................................. ………….….16 ARTICLE 10 Rights and Obligations of the Master Association ......................................... .18 Section 10.1 Master Common Area ................................................................... .18 Section 10.2 Personal Property and Real Property for Master Common Use ................ ……………………………………………18 Section 10.3 Rules and Regulations for Master Common Area .......................... .18 Section 10.4 Implied Rights .............................................................................. .18 Section 10.5 Governmental Interests ................................................................. .19 ARTICLE 11 Rights and Obligations of the Residential Association ................................... .19 Section 11.1 Residential Common Area ............................................................. .19 Section 11.2 Personal Property and Real Property for Residential Common Use ................................................................................. .19 Section 11.3 Interior Monument Easement Areas ............................................... .19 Section 11.4 Rules and Regulations for Residential Common Area .................... .19 Section 11.5 Implied Rights ............................................................................... .20 Section 11.6 Governmental Interests .................................................................. .20 ARTICLE 12 Assessments for Master Common Expenses . ................................................. .20 Section 12.1 Creation of Assessments … ........................................................... .20 Section 12.2 Master Association's Budget and Computation of Base Assessment .......................................................................... 21 Section 12.3 Special Assessments - Master Association .................................... 21 ARTICLE 13 Assessments for Residential Common Expenses ........................................... 21 Section 13.1 Creation of Assessments ................................................................ 21 Section 13.2 Residential Association's Budget and Computation of Base Assessment ............................................................................ 22 Section 13.3 Special Assessments - Residential Association ............................... 23 Section 13.4 Personal Liability of Transferees; Certificates;

Liability of First Mortgagee…………………………………………23 ARTICLE 14 Use ......... ..................................................................................................... 24 Section 14.1 No Temporary Structures .............................................................. 24 Section 14.2 Building Location ......................................................................... 24 Section 14.3 Easements for Utilities and Drainage ............................................ 24 Section 14.4 Nuisances ..................................................................................... 24 Section 14.5 Signs ............................................................................................ 24 Section 14.6 Livestock and Poultry ................................................................... 24

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Section 14.7 Garbage and Refuse Disposal . . . . . . . . . . . . . . . . . . . . ………….. .25 Section 14.8 Radio, Satellite and Television Antenna, etc . . . . . . . . . . . ………. .25 Section 14.9 Recreational Equipment . . . . . . . . . . . . . . . . . . . . . . . . …………….25 Section 14.10 Fencing and Vegetation . . . . . . . . . . . . . . . . . . . . . . …………….. ..25 Section 14.11 Casualty Damage . . . . . . . . . . . . . . . . . . . . . . . . . . …………………25 Section 14.12 Amendment and Duration . . . . . . . . . . . . . . . . . . . . . . . ……………26 Section 14.13 Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . ………………26 Section 14.14 Landscaping Requirements ........................................................... .26 ARTICLE 15 Insurance and Casualty Losses ........................................................... .......... 26 Section 15.1 Property Insurance -- Master Common Area . . . . . . . . . . . . ……….26 Section 15.2 Property Insurance - Residential Common Area ............................. 26 Section 15.3 Public Liability Insurance Master Association ................................ 27 Section 15.4 Public Liability Insurance Residential Association . . . . . . . ………..27 Section 15.5 Form of Associations' Insurance Coverages .................................... 27 Section 15.6 Additional Coverages for Master Association ................................. 28 Section 15.7 Additional Coverages for Residential Association . . . . . . . ……… . 29 Section 15.8 Insurance Trustee Master Association . . . . . . . . . . . . . . …………... 29 Section 15.9 Insurance Trustee Residential Association ...................................... 29 Section 15.10 Repair and Reconstruction of Master Common Area . . . . . . . ……...29 Section 15.11 Repair and Reconstruction of Residential Common Area . . : . ……. 30 ARTICLE 16 Effect and Enforcement ................................................................................. 31 Section 16.1 Benefited Parties ........................................................................... 31 Section 16.2 Notice of Default .......................................................................... 31 Section 16.3 Remedies ...................................................................................... 31 Section 16.4 Liability of Owners ....................................................................... 32 Section 16.5 Attorneys' Fees ............................................................................. 32 ARTICLE 17 Miscellaneous ..................................................................................... 32 Section 17. 1 Waiver of Default ........................................................................... 32 Section 17.2 Severability .................................................................................... 32 Section 17.3 Governing Law .............................................................................. 32 Section 17.4 Captions ......................................................................................... 32 Section 17.5 Time .............................................................................................. 32 Section 17.6 Binding Effect ................................................................................ 32 Section 17.7 Estoppel Certificate from Master Association ................................. 33 Section 17.8 Estoppel Certificate from Residential Association . . . . . ……... . . . 33 Section 17.9 Estoppel Certificate from Architectural Control Committee ..................................................................................... 33 Section 17.10 Notices ........................................................................................... 33

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DECLARATION OF COVENANTS, EASEMENTS, CONDITIONS AND RESTRICTIONS

THIS DECLARATION OF COVENANTS, EASEMENTS, CONDITIONS AND

RESTRICTIONS (the "Declaration") is made as of the 26th day of October, 1995, by Darrel A. Farr Development Corp., a Minnesota corporation ("Developer").

RECITALS:

WHEREAS, Declarant is the owner of real property located in the City of Maple Grove, Minnesota, that is herein defined as the "Subject Property"; and

WHEREAS, Declarant desires to provide for the preservation of the values and amenities

of the Subject Property and to this end desires to subject the Subject Property to the covenants, easements and restrictions hereinafter set forth, each and all of which is and are for the benefit of both the Subject Property and each Owner thereof.

NOW, THEREFORE, Declarant declares that the Subject Property is and shall be held,

transferred, sold, conveyed and occupied subject to the covenants, easements and restrictions hereinafter set forth (sometimes collectively referred to as "Covenants and Restrictions”), the burdens of which Covenants and Restrictions shall run with the Subject Property and be binding on all Owners of the Subject Property, and the benefits of which Covenants and Restrictions shall run with the Subject Property.

ARTICLE 1 Definitions

In addition to the definitions set forth elsewhere herein, the following words, when used

in this Declaration, shall have the following meanings:

Section 1. 1 "Act" shall refer to the Minnesota Common Interest Ownership Act, Minnesota Statutes Chapter 515B.

Section 1.2 "Annexation Property" shall refer to the real property legally described on

Exhibit "B" attached hereto. Section 1.3 "Common Residential Sidewalks" shall refer, collectively to all pedestrian

sidewalks constructed or installed by the City of Maple Grove upon any Residential Lot within ten (10) feet of, and parallel to, any lot line that adjoins a public street.

Section 1.4 "Community-Wide Standard" shall mean the standard of conduct,

maintenance or other activity generally prevailing in first-class residential communities of similar size and age and with similar amenities and quality of initial construction, in the suburban Minneapolis/St. Paul metropolitan area. Such standard may be more specifically determined by the Master Association Board, from time to time.

Section 1.5 "Declarant" shall refer to Developer, its successors, successors-in-title or assigns who take title to any one or more Lots and are designated as the Declarant hereunder in a recorded instrument executed by the immediately preceding Declarant.

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Section 1.6 "Dwelling Unit" shall refer to a townhome or single family structure

constructed upon a Lot. Section 1.7 "Firefly Ridge Neighborhood" shall refer, collectively, to the following

Single Family Residential Lots in the Subject Property:

Lots I through 9, Block 6, Gladstone; Lots 1 through 20, Block 7, Gladstone; Lots 1 through 8, Block 8, Gladstone; and Lots 1 through 10, Block 9, Gladstone.

Section 1. 8 "First Mortgage" shall mean a mortgage encumbering a Lot or other parcel

in the Subject Property which has been recorded so as to give constructive notice thereof, and the lien of which is prior to the Lien of any other mortgage on the real property described therein.

Section 1.9 "Gladstone Boulevard Median Area" shall refer to that certain portion of

Gladstone Boulevard that is legally described on Exhibit "E" attached hereto. Section 1.10 "Interior Monuments" shall refer to any monument signs that the.

Residential Association chooses, from time to time, to erect and maintain in any portions of the Interior Monument Easement Areas.

Section 1.11 "Interior Monument Easement Areas" refer, collectively, to the easement

areas that may be designated by the Declarant present to Section 11.3 hereof, and to any easement areas added pursuant to the annexation provisions of Article 8 hereof.

Section 1.12 "Island Townhomes Association" shall refer to The Island Townhomes

Association, Inc., a Minnesota non-profit corporation. Section 1.13 "Lot" shall refer to any separately subdivided plot of land included within

the Subject Property, as defined below, exclusive of any outlots. Section 1.14 "Lot Eight Monument Easement Area" shaU mean that portion of Lot 8,

Block 8, Gladstone, Hennepin County, Minnesota, that is legally described on Exhibit "D" attached hereto.

Section 1.15 "Lot Twenty Monument Easement Area" shall, mean that portion of Lot

20, Block 7, Gladstone, Hennepin County, Minnesota, that is legally described on Exhibit "C" attached hereto.

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Section 1.16 "Main Entrance Monuments" shall refer to the monument signs that the Master Association chooses, from time to time, to erect and maintain in any portions of the Main Entrance Monument Easement Areas.

Section 1.17 "Main Entrance Monument Easement Areas" refers, collectively, to the Lot Eight Monument Easement Area, the Lot Twenty Monument Easement Area and the Gladstone Boulevard Median Area. Section 1.18 "Master Association" shall refer to Gladstone Master Homeowners' Association, Inc., a Minnesota non-profit corporation. Section 1.19 "Master Association Board" shall mean the Board of Directors of the Master Association.

Section 1.20 "Master Association Period of Declarant Control" shall mean the period from the date of filing of the Articles of Incorporation of this Master Association until the earliest of: (i) voluntary surrender of control of the Master Association by Declarant, or (ii) a Master Association meeting which shall be held within sixty (60) days after conveyance to Owners other than Declarant, an affiliate of Declarant or the declarant under the declaration of the subject common interest community of seventy-five percent (75%) of the total number of Townhome Lots contained in all Member Associations created pursuant to the Act.

Section 1.21 "Master Common Areas" shall refer to the following portions of the Subject Property: (i) the Main Entrance Monument Easement Areas; (ii) the Master Common Wetland Areas; (iii) the Master Parklands; and (iv) any parcels added pursuant to the annexation provisions of Article 8 hereof. Notwithstanding the foregoing, although it is presently anticipated that title to the Gladstone Boulevard Median Area will be dedicated to the City of Maple Grove through the recording of the Gladstone plat and that the Master Association may not be granted a specific written easement by the City of Maple Grove for access thereto or improvement and maintenance thereof, it is nonetheless the Declarant's intention that the Master Association shall, subject to applicable City ordinances or policies, maintain, repair and replace the landscaping on the Gladstone Boulevard Median Area and that, notwithstanding any contrary provision herein, all costs and expenses so incurred by the Master Association shall be Master Common Expenses.

Section 1.22 "Master Common Expenses" shall mean and include the actual and estimated expenses of operating the Master Association, and of operating, maintaining, equipping, inspecting, insuring, protecting, replacing and repairing the Master Common Area and the Gladstone Boulevard Median Area, all as may be found to be necessary and appropriate by the Master Association pursuant to this declaration and the Bylaws of the Master Association. The term Master Common Expenses shall include, without limitation, the following costs and expenses: (i) real estate taxes, assessments and other governmental charges, general and special (including, without limitation, assessments for public improvements or benefits and interest on unpaid installments thereof), which may be levied, or become liens upon, any separate tax parcels that are entirely situated within the Master Common Area, or which may arise out of the use, occupancy or possession thereof; (ii) removal from the Master Common Area of ice, snow,

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trash, rubbish, debris, garbage and other refuse; (iii) management fees; (iv) gardening and landscaping the Master Common Area (including planting, replanting and replacing flowers and shrubs); (v) maintaining, repairing, and replacing the Main Entrance Monuments, and illuminating, irrigating, landscaping and maintaining c Main Entrance Monument Easement Areas; (vi) installing, maintaining, repairing and replacing landscaping, walkways, lighting, equipment and outdoor furniture, if any, in the Master Parklands and Master Common Wetland Areas; and (vii) maintaining liability and other forms of insurance upon, and in connection with, the ownership, use and maintenance of the Master Common Area.

Section 1.23 "Master Common Wetland Areas" shall refer, collectively, to the following portions of the Subject Property: Outlots D, M, and V, Gladstone; plus any parcels added through the annexation provisions of Article 8 hereof.

Section 1.24 "Master Parklands" shall refer, collectively, to the following portions of the Subject Property: Outlot I, Gladstone; plus any parcels added through the annexation provisions of Article 8 hereof. Section 1.25 "Meadows Neighborhood" s all refer, collectively, to the following Single Family Residential Lots in the Subject Property:

Lots 1 through 6, Block 1, Gladstone; Lots 1 through 5, Block 2, Gladstone; Lots 1 through 3, Block 3, Gladstone; Lots 1 through 5, Block 4, Gladstone; and Lots 1 and 2, Block 5, Gladstone.

Section 1.26 "Meadows Townhomes Association" shall refer to The Gladstone Meadows Townhomes Association, Inc., a Minnesota non-profit corporation. Section 1. 27 "Member Association" shall refer to each association which is a member of the Master Association pursuant to Section 2.10 hereof.

Section 1.28 "Member Association Voting Share" shall refer to a percentage that shall be determined separately for each Member Association, the numerator of which is the total number of votes available to the subject Member Association pursuant to the provisions of Section 2.02 hereof in matters determined by a vote of members of the Master Association, and the denominator of which is the Total Gladstone Lots.

Section 1.29 "Owner" shall refer to the record or equitable owner, whether one or more persons or entities, of the fee simple title or undivided fee simple title to any Lot, including contract for deed purchasers of a Lot but excluding contract for deed vendors of a Lot and persons or entities that own a mortgage or another interest in a Lot as security for a debt obligation. Section 1.30 "Recreational Equipment" shall refer to travel trailers, pickup campers or coaches, motorized dwellings, trailers, snowmobiles, fish houses, ATV's and boats.

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Section 1.31 "Residential Association" shall refer to Gladstone Neighborhoods' Association, Inc., a Minnesota non-profit corporation. Section 1.32 "Residential Association Board" shall mean the Board of Directors of the Residential Association.

Section 1.33 "Residential Association Period of Declarant Control" shall mean the period from the date of this Declaration until the earlier of: (i) voluntary surrender of control of the Residential Association by Declarant and (ii) such time as Declarant is no longer the Owner of any Single Family Residential Lot, including Single Family Residential Lots annexed pursuant to Article 8. Once the Residential Association Period of Declarant Control has ceased because the Declarant no longer is the Owner of any Single Family Residential Lot, that period shall not recommence, notwithstanding the subsequent annexation, pursuant to Article 8, of any additional Single Family Residential Lots owned by Declarant.

Section 1.34 "Residential Common Area" shall refer, collectively, to the following portions of the Subject Property: (i) all Residential Pocket Parks; (ii) all Interior Monument Easement Areas; (iii) all Common Residential Sidewalks; plus (iv) any parcels or areas added through the annexation provisions of Article 8 hereof.

Section 1.35 "Residential Common Expenses" shall mean and include the actual and estimated expenses of operating the Residential Association, and of operating, maintaining, equipping, inspecting, insuring, protecting, replacing and repairing the Residential Common Area, all as may be found to be necessary and appropriate by the Residential Association pursuant to this Declaration and the Bylaws of the Master Association. The term Residential Common Expenses shall include, without limitation, the following costs and expenses: (i) real estate taxes, assessments and other governmental charges, general and special (including, without limitation, assessments for public improvements or benefits and interest on unpaid installments thereof), which may be levied, or become liens upon any separate tax parcels that are entirely situated within the Residential Common Area, or which may arise out of the use, occupancy or possession thereof; (ii) dues or assessments levied or charged to the Residential Association by the Master Association; (iii) removal from the Residential Common Area of ice, snow, trash, rubbish, debris, garbage and other refuse; (iv) management fees; (v) gardening, irrigating and landscaping the Residential Common Area (including p1anting, replanting and replacing flowers and shrubs and flushing and maintaining irrigation systems); (vi) installing, maintaining, repairing and replacing landscaping, walkways, lighting equipment and outdoor furniture, if any, in the Residential Pocket Parks; (vii) installing, maintaining, repairing and replacing any Interior Monuments and maintaining, illuminating, irrigating and landscaping the Interior Monuments Easement Areas; (viii) maintaining, repairing and replacing all Common Residential Sidewalks and keeping same free from ice and snow; and (ix) all base assessments and special assessments charged to the Residential Association by the Master Association pursuant to Article 12 hereof.

Section 1.36 "Residential Pocket Parks" shall refer, collectively, to the following portions of the Subject Property: Outlots C, E, F, J, K and X, Gladstone; plus any parcels added through the annexation provisions of Article 8 hereof.

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Section 1.37 "Single Family Residential Lot" shall refer to any Lot within the Subject Property that is not a Townhome Lot or outlot and upon which the construction of a single, detached single family residence is permitted. Section 1.38 "Subject Property" shall refer to the real property legally described on Exhibit "A" attached hereto.

Section 1.39 "Subsequent Amendment" shall mean an amendment to this Declaration which may be executed solely by Declarant and which subjects additional property to this Declaration in accordance with Article 8 hereof.

Section 1.40 "Total Gladstone Lots" means the total number of Lots contained within the Subject Property, as the same may be increased from time to time, pursuant to the annexation provisions of Article 8 hereof, exclusive of any outlots.

Section 1.41 "Total Master Voting Power" shall mean the aggregate of all Member Association Voting Shares available hereunder, from time to time, to all Member Associations.

Section 1.42 "Townhome Lot" shall refer to any Lot within the Subject Property that is encumbered by the declaration of a common interest community recorded pursuant to the Act and upon which the construction of a single family residence that includes a party wall with one or more attached residences that are also subject to the same declaration, is permitted.

Section 1.43 "Woods Neighborhood" shall refer, collectively, to the following Single Family Residential Lots in the Subject Property: Lots 11 through 18, Block 9, Gladstone.

ARITCLE 2 Membership and Voting Rights

in the Master Association

Section 2.1 Membership. The members of the Master Association shall consist of the following: (i) the Residential Association; (ii) the Meadows Townhomes Association; (iii) the Island Townhomes Association; and (iv) any additional townhome association or other common interest community that may be formed in accordance with a declaration that is recorded pursuant to the Act against any real property that has been annexed pursuant to the provisions of Article 8 hereof.

Section 2.2 Voting Rights. The Member Association shall have the. following voting rights with respect to matters determined by a vote of members of the Master Association: the Residential Association shall have one vote for each Single Family Residential Lot situated within the Subject Property, as such number of Single Family Residential Lots may increase, from time to time, pursuant to the annexation, provisions of Article 8 hereof; and each Member Association that consists of a common interest community organized and administered in accordance with the Act shall have one vote for each Townhome Lot owned by an Owner who, solely by virtue of such ownership, is entitled q required to be a member of the subject common interest community. For example, but not by way of limitation, the total number of

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Townhome Lots comprising the Meadows Townhomes is fourteen (14) and, therefore, the total number of votes available to the Meadows Townhomes Association when acting in its capacity as a Member Association in votes by members of the Master Association shall be fourteen (14). Similarly, the total number of Townhome Lots comprising the Island Townhomes is twenty-six (26) and, therefore, the total number of votes available to the Island Townhome Association when acting in its capacity as a Member Association in votes by members of the Master Association shall be twenty-six (26).

Section 2.3 Declarant Control. Notwithstanding any contrary provision herein, Declarant hereby reserves exclusive and unconditional authority to exercise the following special declarant rights within the meaning of Section 515B.1-103 (31) of the Act throughout the Master Association Period of Declarant Control:

(a) Control of Master Association. To control the operation and administration of the Association, including without limitation the power to appoint and remove the members of the Master Association Board pursuant to Section 515B.3-103 of the Act. Notwithstanding the foregoing, Member Associations that constitutes common interest communities formed pursuant to the Act shall have the right to nominate and elect not less than thirty-three and one third percent (33 1/3%) of the Master Association directors at a meeting of the Member Associations which shall be held within sixty (60) days following the conveyance to Owners other than Declarant, an affiliate of Declarant or a declarant under the declaration of the subject common interest community of fifty percent (50%) of the total number of Townhome Lots authorized to be included in all Member Associations created pursuant to the Act.

(b) Consent to Certain Amendments. As long as Declarant owns any unsold

Lot for sale, Declarant's written consent shall be required for any amendment to this Declaration, the Master Association By-Laws, he Master Association Articles, or the Rules and Regulations of the Master Association, which directly or indirectly affects or may affect Declarant's rights under those documents or the Act.

ARTICLE 3

Membership and Voting Rights in the Residential Association

Section 3.1 Membership. Every person or entity who is an Owner of a Single Family

Residential Lot, including all Single Family Residential Lots that may be added pursuant to the annexation provisions of Article 8 hereof, all be a member of the Residential Association. Membership shall be appurtenant to, and may not be separated from ownership of, each Single Family Residential Lot. Ownership of such Single Family Residential Lot shall be the sole qualification for membership. No Owner shall have more than one membership for each Single Family Residential Lot owned. Section 3.2 Voting Rights. The Residential Association shall have two classes of membership, Class "A" and Class "B", as follows:

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(a) Class "A". Class "A" members of the Residential Association shall consist of all Owners of a Single Family Residential Lot except the Class "B" Member, if any. Each Class "A" member of the Residential Association shall be entitled to one (1) vote for each Single Family Residential Lot owned in all matters voted upon by the members of the Residential Association. When more than one person hold a portion of the interest of an Owner in any Single Family Residential Lot, all such persons shall be members of the Residential Association. The vote for such Single Family Residential Lot shall be exercised as they, among themselves, determine, but in no event shall more than one vote be cast with respect to any Single Family Residential Lot.

(b) Class "B". The Class "B" member of the Residential Association shall be the

Declarant, who shall be entitled to three (3) votes for each Single Family Residential Lot owned in all matters voted upon by the members of the Residential Association. The Class "B" membership shall cease and be converted to Class "A" membership upon the occurrence of either of the following events, whichever occurs earlier: (i) when the total votes outstanding in the Class "A" membership equal the total votes outstanding in the Class "B" membership; or (ii) the expiration of' the Residential Association Period of Declarant Control.

Section 3.3 Declarant Control. Notwithstanding any contrary provision herein,

Declarant hereby reserves exclusive and unconditional authority to exercise the following special declarant rights within the meaning of Section 515B.1-103 (31) of the Act throughout the Residential Association Period of Declarant Control:

(a) Control of Residential Association. To control the operation and administration of the Association, including without limitation the power to appoint and remove the members of the Residential Association Board.

(b) Consent to Certain Amendment. As long as Declarant owns any unsold Lot

for sale, Declarant's written consent shall be required for any amendment to this Declaration, the Residential Association By-Laws, the Residential Association Articles, or the Rules and Regulations of the Residential Association, which directly or indirectly affects or may affect Declarant's rights under those documents.

ARTICLE 4

Rights in Master Common Area

Section 4.1 Master Association's Rights. For the benefit of the Master Association, a non-exclusive easement and covenant shall exist permitting a non-exclusive right of access upon the use of the Master Common Area for all purposes reasonably necessary for the performance of the Master Association's Obligations hereunder and for use and enjoyment of, over and to the Master Common Area.

Section 4.2 Owners' Rights. Subject to the provisions of this Declaration, every Owner of a Lot in the Subject Property shall have, for itself and its tenants, agents and invitees, a non-exclusive easement of access, ingress, egress, use and enjoyment of, over and to the

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Master Common Area, and such easements and rights shall be appurtenant to and shall pass with title to every Lot in the Subject Property; provided, such easements and rights of the Owners shall be subject to the following: (i) the right of the Master Association, acting through the Master Association Board pursuant to Section 10.03 hereof, to establish uniform rules and regulations pertaining to the use of the Master Common Area; (ii) the right of the Master Association, acting through the Master Association Board, to consent to or otherwise cause the construction of improvements upon the Master Common Area, provided that no buildings shall be constructed upon the Master Common Area except shelters, gazebos, maintenance sheds, recreational facilities or similar structures that are constructed for the benefit of the Owners of Lots in the Subject Property or to facilitate the discharge of the Master Association's obligations hereunder; and (iii) the rights of the Master Association, acting through the Master Association Board, to consent to or join in the grant or conveyance of easements, licenses, or similar grants or conveyances on or over the Master Common Area or purposes not inconsistent with the intended use thereof.

Section 4.3 Declarant Control. Notwithstanding any contrary provision herein, Declarant hereby reserves exclusive and unconditional authority to exercise the following special declarant rights within the meaning of Section 515B.1-103 (31) of the Act throughout the Master Association Period of Declarant Control:

(a) Complete Improvements. To complete, and to make any alterations in, the Master Common Areas to accommodate its sales facilities.

(b) Sales Facilities. To construct, operate and maintain a sales office,

management office, and other development, sales and rental facilities within the Master Common Areas owned by Declarant from time to time, located anywhere on the Subject Property.

(c) Signs. To erect and maintain signs and other sales displays offering the Lots

for sale or lease, on the Master Common Areas,

(d) Easements. To have and use easements, for itself, its employees, contractors, representatives, agents and prospective purchase through and over the Master Common Areas for the purpose of exercising its special declarant rights.

ARTICLE 5

Rights in Residential Common Area

Section 5.1 Residential Association's Rights. For the benefit of the Residential Association, a non-exclusive easement and covenant shall exist permitting a non-exclusive right of access upon the use of the Residential Common Area for all purposes reasonably necessary for the performance of the Residential Association's Obligations hereunder and for use and enjoyment of, over and to the Residential Common Area.

Section 5.2 Owners' Rights. Subject to the provisions of this Declaration, every

Owner of a Single Family Residential Lot in the Subject Property shall have, for itself and its

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tenants, agents and invitees, a non-exclusive easement of access, ingress, egress, use and enjoyment of, over and to the Residential Common Area, and such easements and rights shall be appurtenant to and shall pass with title to every Single Family Residential Lot in the Subject Property; provided, such easements and rights of the Owners shall be subject to the following: (i) the right of the Residential Association, acting through the Residential Association Board pursuant to Section 11.03 hereof, to establish uniform rules and regulations pertaining to the use of the Residential Common Area; (ii) the right of the Residential Association, acting through the Residential Association Board, to consent to or otherwise cause the construction of improvements upon the Residential Common Area, provided that no buildings shall be constructed upon the Residential Common Area except shelters, gazebos, maintenance sheds, recreational facilities or similar structures that are constructed for the benefit of the Owners of Single Family Residential Lots in the Subject Property or to facilitate the discharge of the Residential Association's obligations hereunder; and (iii) the right, of the Residential Association, acting through the Residential Association Board, to consent to or join in the grant or conveyance of easements, licenses, or similar grants or conveyances on or over the Residential Common Area for purposes not inconsistent with the intended use thereof.

Section 5.3 Declarant Control. Notwithstanding any contrary provision herein, Declarant hereby reserves exclusive and unconditional authority to exercise the following special declarant rights throughout the Residential Association Period of Declarant Control:

(a) Complete Improvements. To complete all the Single Family Residential Lots and other improvements included in Declarant's development plans or allowed by the Declaration with respect to the Single Family Residential Lots and the Residential Common Areas, and to make alterations in the Single Family Residential Lots and Residential Common Areas to accommodate its ales facilities.

(b) Relocate Boundaries and Alter Units. To relocate boundaries between

Single Family Residential Lots and to otherwise alter Single Family Residential Lots owned by it.

(c) Sales Facilities. To construct, operate and maintain a sales office,

management office, and other development, sales and rental facilities within the Residential Common Areas owned by Declarant from time to time, located anywhere on the Subject Property.

(d) Signs. To erect and maintain signs and other sales displays offering the

Single Family Residential Lots for sale or lease; provided, such signs and displays, if any, shall be placed only on those Single Family Residential Lots owned by Declarant.

(e) Easements. To have and use easements, for itself, its employees, contractors,

representatives, agents and prospective purchasers through and over the Master Common Areas for the purpose of exercising its special declarant rights.

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ARTICLE 6 Maintenance

Section 6.1 Master Association's Responsibility. The Master Association shall

maintain and keep in good repair the Master Common Area; costs and expenses incurred in the performance of such duties shall be Master Common Expenses and shall be funded as hereinafter provided. The level and quality of maintenance services in the Master Common Area shall be consistent with the Community-Wide Standard and shall include, without limitation, the performance of the following services within the Master Common Area:

(a) Inspect, maintain, repair and replace the surface of any curbs and sidewalks,

keeping them level, smooth and evenly cov red with the type of surface material origirially installed thereon or such substitute erefor as shall, in all respects, be equal in quality, appearance and durability;

(b) Promptly remove all papers, debris, filth and refuse, and clear snow and ice from

sidewalk areas as required; (c) Clean, maintain, replace and repair the Main Entrance Monuments and Main

Entrance Monument Easement Areas as shall be reasonably required and in accordance with the practices prevailing under the Community-Wide Standard;

(d) Clean, maintain, replace and repair lighting fixtures and accessories as

needed; (e) Maintain, repair and replace under round irrigation systems; (f) Maintain, repair and replace the Master Parklands and all landscaping installed

thereon, as necessary, including irrigation, trimming, fertilization, mowing and the removal of all diseased plant materials, weeds, underbrush and other unsightly growth;

(g) Maintain, repair and replace any fountains, benches and other common use

facilities; (h) Paint all painted surfaces on a regular schedule as required to maintain exterior

appearance in a clean, neat and orderly manner; and (i) Maintain the Master Common Wetland Areas in their natural state and otherwise

in a manner that complies with municipal and other governmental ordinances and requirements. Section 6.2 Residential Association's Responsibility. The Residential Association

shall maintain and keep in good repair the Residential Common Area; costs and expenses incurred in the performance of such duties shall be Residential Common Expenses and shall be funded as hereinafter provided. The level and quality of maintenance services in the Residential

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Common Area shall be consistent with the Community-Wide Standard and shall include, without limitation, the performance of the following services within the Residential Common Area:

(a) Inspect, maintain, repair and replace the surface of any curbs and sidewalks, keeping them level, smooth and evenly covered with the type of surface material originally installed thereon or such substitute therefor as shall, in all respects, be equal in quality, appearance and durability;

(b) Promptly remove all papers, debris, filth and refuse, and clear snow and

ice from sidewalk areas as required;

(c) Clean, maintain, replace and repair the Interior Monuments and Interior Monument Easement Areas as shall be reasonably required and in accordance with the practices prevailing under the Community-Wide Standard;

(d) Clean, maintain, replace and repair lighting fixtures and accessories as

needed;

(e) Maintain, repair and replace any underground irrigation systems;

(f) Maintain, repair and replace the Residential Pocket Parks and all landscaping installed thereon, as necessary, including irrigation, trimming, fertilization, mowing and the removal of all diseased plant materials, weeds, underbrush and other unsightly growth;

(g) Maintain, repair and replace any fountains, benches and other common use

facilities; and

(h) Paint all painted surfaces on a regular schedule as required to maintain exterior appearance in a clean, neat and orderly manner.

Section 6.3 Owner's Responsibility. Each Owner of a Single Family Residential Lot

shall maintain and repair its Single Family Residential Lot and all improvements constructed thereon in a manner consistent with the Community-Wide Standard and all applicable ordinances and covenants.

ARTICLE 7 Condemnation

Section 7.1 Condemnation of Master Common Area. Subject to the provisions of

Section 7.03 hereof, in the event of a taking by eminent domain of any portion of the Master Common Area, or of a conveyance in lieu thereof, each Member Association shall be entitled to notice thereof and the Master Association Board shall represent all of the members of the Master Association in an action to recover any and all awards. Any award made for such taking shall be payable to the Master Association and used for such purposes as the Master Association Board shall determine.

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Section 7.2 Condemnation of Residential Common Area. Subject to the provisions of Section 7.03 hereof, in the event of a taking by eminent domain of any portion of the Residential Common Area, or of a conveyance in lieu thereof, each member of the Residential Association shall be entitled to notice thereof and the Residential Association Board shall represent all of the Owners of Single Family Residential Lots in an action to recover any and all awards. Any award made for such taking shall be payable to the Residential Association and used for such purposes as the Residential Association Board shall determine.

Section 7.3 Condemnation of Lot. Each Owner shall represent its respective interests in the event of a taking by eminent domain of all or a portion of its respective Lot, and shall have the exclusive right to claim all of any condemnation award made for such Owner's Lot and for the improvements situated thereon.

ARTICLE 8 Annexation of Additional Property

Section 8.1 Annexation Without Approval of Class "A" Membership. As the

owner thereof, or if not the owner, with the consent of the fee owner thereof, but subject to the prior written consent of the mortgagee thereof, Declarant shall have the option, from time to time and at any time until all property described on Exhibit "B" has been subjected to this Declaration, to deliver notice (the "Annexation Notice") to the Master Association of the Declarant's intent to subject to the provisions of this Declaration and the jurisdiction of the Master Association and/or Residential Association all or any portion of the real property described in Exhibit "B" attached hereto and by reference made a part hereof; provided, however, no such annexation shall be declared unless Declarant has received final plat approval from the City of Maple Grove with respect to the subdivision of the real property that is the subject of such annexation. It is intended that any such subdivision will, at Declarant's discretion, divide the Annexation Property into either or both a number of Townhome Lots and/or a number of Single Family Residential Lots, and that such Annexation Property may include additional Residential Common Area and/or additional Master Common Area. The Annexation Notice shall include the following:

(a) The legal description of that portion of the Annexation Property that is the subject of such Annexation Notice;

(b) A copy of the proposed plat or subdivision of that portion of the

Annexation Property that is the subject of such Annexation Notice and the proposed new legal description of such property;

(c) A designation of the number of new Single Family Residential Lots to be

included in that portion of the Annexation Property that is the subject of such Annexation Notice;

(d) A designation of the number of Townhome Lots to be included in that

portion of the Annexation Property that is the subject of such Annexation Notice and a designation of each new townhome association or other common interest community to

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be established in conjunction with the declaration that has been, or is to be, filed in connection with such designated Townhome Lots, which townhome association or other common interest community shall, upon the effectiveness of such annexation, become a Member Association;

(e) A designation of the nature and location of any additional Residential

Common Area, including any additional Residential Pocket Parks or Interior Monument Easement Areas, that Declarant may choose to include in that portion of the Annexation Property that is the subject of such Annexation Notice; provided, any such additional Residential Common Area shall be similar in nature and function to then-existing elements of the Residential Common Area and shall be subject to rights of all Owners of any Single Family Residential Lot pursuant to Section 5.02 hereof;

(f) A designation of the nature and location of any additional Master

Common Area, including any additional Master Parklands or Master Common Wetland Areas, that Declarant may choose to include in that portion of the Annexation Property that is the subject of such Annexation Notice; provided, any such additional Master Common Area shall be similar in nature and function to the then-existing elements of the Master Common Area and shall be subject to rights of all Owners of a Lot in the Subject Property pursuant to Section 4.02; and

(g) A designation, in Declarant's discretion, of: (i) any new or extended

Master Association Period of Declarant Control, which in no event shall exceed any applicable restrictions on the duration thereof pursuant to the Act, or (ii) any new or extended Residential Association Period of Declarant Control.

Such annexation shall be accomplished by a filing in the public records of Hennepin County, Minnesota, by the Declarant as owner of that portion of the Annexation Property that is the subject of such filing or, if Declarant is not the owner, with the consent of the fee owner thereof, of the following: (i) a Subsequent Amendment to this Declaration annexing such property, (ii) a deed conveying to the Master Association that portion of the annexed property, if any, constituting Master Common Area to be owned in fee by the Master Association; and (iii) a deed conveying to the Residential Association that portion of the annexed property, if any, constituting the Residential Common Area to be owned in fee by the Residential Association. Any such annexation shall be effective upon the filing for record of such Subsequent Amendment unless otherwise provided therein.

Section 8.2 Effect of Annexation. The Subsequent Amendment executed in connection with such annexation shall, without limitation, legally describe the new Lots and Master Common Area and Residential Common Area, if any, and shall designate any new Master or Residential Association Period of Declarant Control and any new Member Association. Any Subsequent Amendment executed and recorded for the purpose of subjecting additional property to this Declaration pursuant to this Article 8 may, but is not required to, impose, expressly or by reference, additional restrictions and obligations on the real property that is submitted by such Subsequent Amendment to the provisions of this Declaration.

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ARTICLE 9 Architectural Controls

Section 9.1 Architectural Control. No residence, building, fence, exterior wall or

other structure or improvement, including driveways, on the Subject Property shall be erected, placed, removed, altered on the exterior (including alterations in color or appearance) or enlarged, except such as are installed or approved by Declarant in connection with the initial construction of dwellings on the Subject Property, until plans and specifications showing in reasonable detail the nature, kind, shape, height, materials, location, colors and approximate cost of the same shall have been submitted to and approved in writing by the Architectural Control Committee as to quality of workmanship and materials, harmony of external design and appearance with other structures in the subdivision, and to location with respect to topography and finish grade elevation; provided, the provisions of this Section 9.01 shall not be applicable to the initial construction (but shall be applicable to subsequent alterations) of residences upon any of the Townhome Lots in the plat of "Gladstone 2nd Addition" (i.e., shall not be applicable to the initial construction of townhome residences in either the Gladstone Meadows Townhomes or the Island Townhomes). This provision should be liberally and inclusively construed to fulfill its purpose of providing a high degree of protection of Owners with regard to appearance, privacy, comfort and freedom from intrusive lights and improvements. No site grading or tree removal shall be performed on the Subject Property, except such site grading or tree removal as may be performed or approved by Declarant, until site and grading plans, including landscaping plans, have been submitted to and approved by the Architectural Control Committee in writing. Without limiting the generality of the foregoing, structures and improvements requiring submission to the Architectural Control Committee under this provision include high intensity lights, swimming pool or tennis court lights, dog kennels and runs, gazebos, maintenance buildings, basketball hoops and mailboxes. Approvals of lights may be granted conditioned upon restrictions on hours of use. Section 9.2 Architectural Control Committee Membership. The Architectural Control Committee (sometimes hereinafter referred to the "Committee") shall be composed of three (3) individuals appointed by Declarant. A majority of the Committee may designate a representative to act for it. In the event of the death or resignation of any member of the Committee, the remaining members shall have full authority to designate a successor. Neither the members of the Committee nor its designated representative shall be entitled to any compensation for services performed pursuant to this covenant. The individuals comprising the initial members of the Architectural Control Committee may be removed by Declarant in Declarant's sole discretion. In the event, and subject to the condition, of the conveyance of the last Lot in the Subject Property to an Owner other than a Declarant, the initial members of the Architectural Control Committee shall cease to be entitled to be members of the Committee ex-officio, but shall remain members until either (a) they resign; or (b) the Master Association, acting through the Master Association Board, shall, in writing, elect a new membership of the Committee. Such majority may thereafter remove and elect members of the Committee. Prior to the conveyance of the last Lot in the Subject Property the Master Association Board shall not have the authority to elect new members of the Committee.

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Section 9.3 Architectural Control Committee: Procedure. The Committee's approval or disapproval as required in these covenants shall be in writing. In the event the Committee, or its designated representative, fails to approve or disapprove such design and location within 15 days after plans and specifications have been submitted to it, or in any event, if no suit to enjoin the grading, construction, alteration or removal has been commenced within 45 days of such submission, such approval will be deemed to have been given and these covenants shall be deemed to have been fully complied with. If no such submission has been made to the Architectural Control Committee or its representative, suit to enjoin the grading, construction, alteration or removal may be instituted at any time within one year of the visible commencement of such construction, alteration or removal by any Owner, or (if a Declarant then owns a Lot within the Subject Property) by the Declarant. Section 9.4 Building Requirements. The consent of the Architectural Control Committee shall not be unreasonably withheld; provided, the following standards are met:

(a) Townhome Property. The Architectural Control Committee shall not withhold its consent to alterations of any residence situated upon a Townhome Lot, or to the construction or alteration of gazebos or other improvements by a townhome association or other common interest community that is a Member Association upon its property, if such alterations or improvements are in harmony of design, appearance and quality of materials with the other residences and improvements in the subject townhome association.

(b) Firefly Ridge Neighborhood. Lots in the Firefly Ridge Neighborhood

shall be improved solely through the construction of detached single family residences that satisfy all of the following minimum requirements:

(i) each residence shall include a two car garage with a minimum

width of twenty-four feet (24’);

(ii) in the case of a one-story or rambler, the residence must comprise at least 1,500 finished square feet on the main level;

(iii) in the case of a two-story, the residence must contain at least 1,200

finished square feet on the main level and total of at least 2,200 finished square feet on the main and upper levels;

(iv) in the case of a split level, the residence must contain at least 1,550

finished square feet at or above grade level;

(v) the front of each residence shall be comprised of natural materials (i.e. wood, brick or stucco), without exception;

(vi) finish roofing materials shall consist solely of upgraded shingles

(e.g. Horizon Shangle, Timberline or Cedar Shakes); and

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(vii) roof pitches shall be 8-12 or greater.

(c) The Meadows Neighborhood. Lots in the Meadows Neighborhood shall be improved solely through the construction of detached single family residences that satisfy all of the following requirements:

(i) each residence shall include two car garage;

(ii) in the case of a one-story or rambler, the residence must comprise

at least 1,300 finished square feet on the main level;

(iii) in the case of a two-story, the residence must contain at least 900 finished square feet on the main level and a total of at least 1, 800 finished square feet on the main and upper levels;

(iv) in the case of a split level, the residence must contain at least 1,350

finished square feet at or above grade level;

(v) the front of each residence shall be comprised of natural materials (i.e. wood, brick or stucco), with exception permitted by the Architectural Control Committee in its discretion;

(vi) finish roofing materials shall reflect the architectural style and

color of the residence; and

(vii) roof pitches shall be 7-12 or greater.

(d) The Woods Neighborhood. Lots in the Woods Neighborhood shall be improved solely through the construction of detached single family residences that satisfy all of the following requirements:

(i) each residence shall include a two car garage;

(ii) in the case of a one-story or rambler, the residence must comprise

at least 1,600 finished square feet on the main level;

(iii) in the case of a two-story, the residence must contain at least 1,200 finished square feet on the main level and a total of at least 2,200 finished square feet on the main and upper levels;

(iv) in the case of a split level, the residence must contain at least 1,550

finished square feet at or above grade level;

(v) the front of each residence shall be comprised of natural materials (i.e. wood, brick or stucco), without exception;

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(vi) finish roofing materials shall consist solely of upgraded shingles (e.g. Horizon Shangle, Timberline and Cedar Shakes); and

(vii) roof pitches shall be 8-12 or greater.

The construction, exterior alteration and exterior remodeling of any structure shall be conducted with reasonable diligence and shall be completed no later than nine (9) months after commencement.

ARTICLE 10 Rights and Obligations of the Master Association

Section 10.1 Master Common Area. The Master Association, subject to the rights of

the Owners set forth in this Declaration, shall be responsible for the exclusive management and control of the Master Common Area and all improvements thereon (including, without limitation, furnishings and equipment related thereto and common landscaped areas), and shall keep it in good, clean, attractive and sanitary condition, order and repair, pursuant to the terms and conditions hereof and consistent with the Community-Wide Standard.

Section 10.2 Personal Property and Real Property for Master Common Use. The Master Association, through action of its Board of Directors, may acquire, hold and dispose of tangible and intangible personal property, the Master Common Area and other real property. Subject to Section 8.01, the Master Association Board, acting on behalf of the Master Association, shall accept any real or personal property, leasehold or other property interests conveyed to it by the Declarant.

Section 10.3 Rules and Regulations for Master Common Area. The Master Association, through its Board of Directors, may make and enforce reasonable rules and regulations governing the use of the Master Common Area, which rules and regulations shall be consistent with the rights and duties established by this Declaration. Sanctions may include reasonable monetary fines and suspension of the right to vote and the right to use all or any portion of the Master Common Area; provided, no such suspensions shall deprive any Lot of ingress, egress or utility services and any such suspension shall terminate, and the rights shall be reinstated, upon the acquisition of title to such defaulting Owner's Lot by a mortgagee or successor. Imposition of sanctions shall be as provided in the Master Association Bylaws and as provided elsewhere herein. The Master Association, through the Master Association Board, by contract or other agreement, shall have the right to enforce municipal or county ordinances or permit governmental authorities with jurisdiction to enforce ordinances on the Master Common Area for the benefit of the Master Association and its members.

Section 10.4 Implied Rights. The Master Association may exercise any other right or

privilege given to it expressly by this Declaration or its Bylaws, and every other right or privilege reasonably to be implied from the existence of any right or privilege given to it herein or reasonably necessary to effectuate any such right or privilege.

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Section 10.5 Governmental Interests. The Master Association shall permit the Declarant to designate sites within the Master Common Area for fire, police, water or sewer facilities.

ARTICLE 11 Rights and Obligations of the Residential Association

Section 11.1 Residential Common Area. The Residential Association, subject to the

rights of the Owners set forth in this Declaration, shall be responsible for the exclusive management and control of the Residential Common Area and all improvements thereon (including, without limitation, furnishings and equipment related thereto and common landscaped areas), and shall keep it in good, clean, attractive and sanitary condition, order and repair, pursuant to the terms and conditions hereof and consistent with the Community-Wide Standard.

Section 11.2 Personal Property and Real Property for Residential Common Use. The Residential Association, through action of its Board of Directors, may acquire, hold and dispose of tangible and intangible personal property and real property. Subject to Section 8.01, the Residential Association Board, acting on behalf of the Residential Association, shall accept any real or personal property, leasehold or other property interests conveyed to it by the Declarant.

Section 11.3 Interior Monument Easement Areas. It is Declarant's intention to install interior monuments on each of the following three parcels (collectively, the "Interior Monument Lots"): Lot 1, Block 1, Lot 1, Block 9, and Outlot Q, Gladstone, Hennepin County, Minnesota. Declarant has not, however, yet determined the specific location of the easement area on each respective parcel for such monuments. Notwithstanding any contrary provision herein, Declarant hereby reserves the right to establish an easement area on each of the Interior Monument Lots. Such easements shall be created by Declarant through the recording of an instrument against the title to the subject Interior Monument Lot, shall be for the benefit of the Residential Association and shall be for the purposes of the installation, operation, maintenance, repair, and replacement of interior monument signage. Declarant shall be entitled to declare only one such easement on each Interior Monument Lot and any easement so established by Declarant shall thereupon become part of the Residential Common Area.

Section 11.4 Rules and Regulations for Residential Common Area. The Residential Association, through its Board of Directors, may make and enforce reasonable rules and regulations governing the use of the Residential Common Area, which rules and regulations shall be consistent with the rights and duties established by this Declaration. Sanctions may include reasonable monetary fines and suspension of the right to vote and the right to use all or any portion of the Residential Common Area; provided no such suspensions shall deprive any Lot of ingress, egress or utility services and any such suspension shall terminate, and the rights shall be reinstated, upon the acquisition of title to such defaulting Owner's Lot by a mortgagee or successor. Imposition of sanctions shall be as provided in the Residential Association Bylaws and as provided elsewhere herein. The Residential Association, through the Residential Association Board, by contract or other agreement, shall have the right to enforce municipal or

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county ordinances or permit governmental authorities with jurisdiction to enforce ordinances on the Residential Common Area for the benefit of the Residential Association and its members.

Section 11.5 Implied Rights. The Residential Association may exercise any other right or privilege given to it expressly by this Declaration or its Bylaws, and every other right or privilege reasonably to be implied from the existence of any right or privilege given to it herein or reasonably necessary to effectuate any such right or privilege.

Section 11.6 Governmental Interests. The Residential Association shall permit the Declarant to designate sites within the Residential Common Area for fire, police, water or sewer facilities.

ARTICLE 12 Assessments for Master Common Expenses

Section 12.1 Creation of Assessments. The Master Association Board shall have the

power to, from time to time, levy assessments against the Member Associations to fund the cost of Master Common Expenses. There shall be two (2) types of assessments: (a) base assessments to fund expenses for the benefit of all Member Associations; and (b) special assessments, as described in Section 12.03 hereof. Base assessments shall be levied against all Member Associations and shall be levied in accordance with the relative voting power attributable to each respective Member Association. Special assessments shall be levied as provided in Section 12.03. Each Member Association, by acceptance of its deed to a portion of the Subject Property, shall be deemed to covenant and agree to pay these assessments. All such assessments, together with interest and reasonable attorneys' fees and costs, shall be separate, distinct and personal obligations of the entity that was the Member Association at the time the assessment was levied by the Master Association Board, and this personal obligation shall be binding upon said Member Associations' successors, assigns, heirs, devisees and personal representatives. Such assessments, with interest, costs, fees, charges, late charges and attorneys' fees, shall be a lien on any real estate located within the Subject Property that may be owned by any Member Association as of the date each such assessment is levied, and if any payment thereof becomes delinquent, the Master Association may, upon ten (10) days written notice to the Member Association, declare the entire amount of the assessment immediately due and payable in full, foreclose upon the lien and sell the said real estate, or obtain a money judgment against the entities liable therefor. The Master Association, or its authorized representative, shall have the power to bid in at the foreclosure sale and to acquire, hold, lease, mortgage, any convey any Lot or other real property so acquired. The Member Association, by the acceptance or assertion of any interest in any port on of the Subject Property, grants to the Master Association a power of sale and full authority to accomplish the foreclosure. The lien of the Master Association's assessments shall be deemed prior and superior to all other liens and encumbrances that may be of record against the real property owned by said defaulting Member Association, including all liens and encumbrances that may have been recorded against such real property prior to the effective date of the levy of said assessment; provided, however, the lien of the Master Association's assessment shall be subordinate to: (i) the lien of any First Mortgage recorded against the real property prior to the effective date of the levy of said assessment; and (ii) liens for real estate taxes and other governmental assessments or charges

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against such real property. No Member Association may waive or otherwise exempt itself from liability for the assessments provided for herein, including, by way of illustration and not limitation, by failure to use the Master Common Areas. The obligation to pay assessments is a separate and independent covenant on the part of each Member Association. Each such Member Association's obligation to pay base assessments and special assessments levied against it is an independent covenant and no diminution or abatement of assessment or set-off shall be claimed or allowed by reason of any alleged failure of the Master Association or Master Association Board under this Declaration or the Bylaws, or for inconvenience or discomfort arising from the making of repairs or improvements which are the responsibility of the Master 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. Section 12.2 Master Association's Budget and Computation of Base Assessment. It shall be the duty of the Master Association Board, at least thirty (30) days before the beginning of the fiscal year, to prepare the Master Association's Budget. The Master Association's Budget may include a capital or reserve contribution. The Master Association Board shall cause a copy of the proposed Master Association's Budget and the amount of assessments to be levied against each Member, association for the following year to be delivered to each Member Association at least thirty (30) days prior to the end of the current fiscal year. Upon, or within ten (10) days after, said delivery the Master Association's Budget, the Declarant or an officer of the Master Association shall call a special meeting of the Master Association Board for the purpose of voting upon the proposed Master Association's Budget. The Master Association's Budget and the assessments designated therein shall become effective if approved at such special meeting of the Master Association Board by the affirmative vote of a majority of the total voting power, of the Master Association Board. Notwithstanding the foregoing, however, in the event the Master Association's Budget is disapproved or the Master Association Board fails for any reason so to determine the Master Association's Budget for any year, then and until such time as the Master Association's Budget shall have been determined as provided herein, the Master Association's Budget in effect for the immediately preceding year shall continue for the current year. Section 12.3 Special Assessments - Master Association. In addition to the base assessments authorized in Section 12.01 hereof, the Master Association may levy a special assessment or special assessments; provided, authorization for any such special assessment shall require the affirmative vote of a majority of the total voting power of the Member Associations. Special assessments shall be payable in such manner and at such time as determined by the Master Association Board, and may be payable in installments extending beyond the fiscal year in which the special assessment is approved, if the Master Association Board so determines.

ARTICLE 13 Assessments for Residential Common Expenses

Section 13.1 Creation of Assessments. The Residential Association Board shall have

the power to, from time to time, levy assessments against the members of the Residential Association to fund the cost of Residential Common Expenses; provided, notwithstanding any contrary provision herein, no Single Family Residential Lot, or Owner thereof, shall be subject

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to any base assessments until such time as a building permit is issued in connection with the construction of a dwelling thereon. There shall be two (2) types of assessments: (a) base assessments to fund expenses for the benefit of all members of the Residential Association; and (b) special assessments, as described in Section 13.03 hereof. Base assessments shall be levied in an equal amount against all Single Family Residential lots that are subject to base assessments hereunder and shall be payable by the Owners thereof. Special assessments shall be levied as provided in Section 13.03. Each member of the Residential Association, by acceptance of his or her deed to a Single Family Residential Lot, shall be deemed to covenant and agree to pay these assessments. Except as provided in Section 13.04 hereof, all such assessments, together with interest and reasonable attorneys' fees and costs, shall be separate, distinct and personal obligations of the Owner that was the member of the Residential Association at the time the assessment was levied by the Residential Association Board, and this personal obligation shall be binding upon said Owner's successors, assigns, heirs, devisees and personal representatives. Such assessments, with interest, costs and attorneys' fees, shall be a lien on any Single Family Residential Lot that may be owned by said Owner as of the date each such assessment is levied, and if any payment thereof becomes delinquent, the lien may be foreclosed and said real estate sold, or a money judgment obtained against the persons liable therefor, all as set forth in the Bylaws. The lien of the Residential Association's assessments shall be deemed prior and superior to all other liens and encumbrances that may be of record against the Single Family Residential Lot owned by said defaulting member, including all liens and encumbrances that may have been recorded against such real property prior to the effective date of the levy of said assessment; provided, however, the lien of the Residential Association's assessment shall be subordinate to the lien of any First Mortgage recorded against the real property prior to the effective date of the levy of said assessment. No member of the Residential Association may waive or otherwise exempt itself from liability for the assessments provided for herein, including, by way of illustration and not limitation, by the failure to use the Residential Common Areas. The obligation to pay assessments is a separate and independent covenant on the part of each member of the Residential Association. Each such member's obligation to pay base assessments and special assessments levied against it is an independent covenant and no diminution or abatement of assessment or set off shall be claimed or allowed by reason of any alleged failure of the Residential Association or Residential Association Board under this Declaration or the Bylaws, or for inconvenience or discomfort arising from the making of repairs or improvements which are the responsibility of the Residential Association, or from any action taken to comply with any law, ordinance or with my order or directive of any municipal or other governmental authority.

Section 13.2 Residential Association's Budget and Computation of Base Assessment. It shall be the duty of the Residential Association Board, at least thirty (30) days before the beginning of the fiscal year, to prepare the Residential Association's Budget. The Residential Association's Budget may include a capital or reserve contribution. The Residential Association Board shall cause a copy of the proposed Residential Association's Budget and the amount of assessments to be levied against each member of the Residential Association for the following year to be delivered to each member at least thirty (30) days prior to the end of the current fiscal year. Upon, or within ten (10) days after, said delivery of the Residential Association's Budget, the Declarant or an officer of the Residential Association shall call a special meeting of the Residential Association Board for the purpose of voting upon the proposed

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Residential Association's Budget. The Residential Association's Budget and the assessments designated therein shall become effective if approved at such special meeting of the Residential Association Directors by the affirmative vote of a majority of the Directors. Notwithstanding the foregoing, however, in the event the Residential Association's Budget is disapproved or the Residential Association Board fails for any reason so to determine the Residential Association's Budget for any year, then and until such time as the Residential Association's Budget shall have been determined as provided herein, the Residential Association's Budget in effect for the immediately preceding year shall continue for the current year.

Section 13.3 Special Assessments - Residential Association. In addition to the base assessments authorized in Section 13.01 hereof, the Residential Association may levy a special assessment or special assessments; provided, authorization for any such special assessment shall require the affirmative vote of a majority of the members of the Residential Association Board. Special assessments shall be payable in such manner and at such time as determined by the Residential Association Board, and may be payable in installments extending beyond the fiscal year in which the special assessment is approved, if the Residential Association Board so determines.

Section 13.4 Personal Liability of Transferees; Certificate, Liability of First Mortgagee.

(a) In the event of any voluntary or involuntary transfer of a Single Family Residential Lot, the transferee thereof shall be jointly and severally liable with the transferor for all unpaid assessments against such Single Family Residential Lot up to the time of transfer, without prejudice to the transferee's right to recover from the transferor the amounts paid by the transferee thereof.

(b) Any transferee referred to in (a) above shall be entitled to an estoppel letter

from the Residential Association Board, pursuant to Section 17.08 hereof, and such transferee's Single Family Residential Lot shall not be subject to a lien for any unpaid assessments against such Single Family Residential Lot in excess of the amount therein set forth.

(c) Notwithstanding the provisions of Sections 13.04(a) and 13.04(b) hereof, any

First Mortgagee (which for the sole purpose of this Section 13.04(c) shall include a wholly-owned subsidiary of a First Mortgagee) who obtains title to a Single Family Residential Lot pursuant to the remedies provided in the First Mortgage, or through a conveyance in lieu of foreclosure, shall only be liable for assessments that are levied on and after the earlier of the following three events; (i) the date upon which a receiver or trustee has been appointed by court order to protect the First Mortgagee's interests in the Single Family Residential Lot and said First. Mortgagee has the authority to exercise all voting power available to the Owner of such encumbered Single Family Residential Lot in matters arising before the Residential Association; or (ii) the date the First Mortgagee acquires fee title to the Single Family Residential Lot; or (iii) the date of any foreclosure of judicial sale of the Single Family Residential Lot at which the First Mortgagee is the successful bidder.

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(d) In the event of any voluntary or involuntary transfer of a Single Family Residential Lot, the transferor thereof shall be liable for all unpaid assessments that are levied against such Single Family Residential Lot prior to the date the transferee acquires fee title to the Single Family Residential Lot free from any right of the transferor to redemption.

(e) Without releasing the transferor from any liability thereof, the Residential

Association Board may designate any unpaid portion of assessments for which the First Mortgagee is not liable under this Section 13.04 hereof as a Residential Common Expense.

ARTICLE 14

Use

Section 14.1 No Temporary Structures. Except as provided for in Paragraph 21 hereof, no trailer, basement, tent, shack, garage or any other structure, of a temporary character shall be used on any Lot at any time as a temporary or permanent residence.

Section 14.2 Building Location. No building shall be located on any Lot nearer to a rear lot line, an interior side lot line or a side street right of way line, if any, than the applicable ordinance of the City of Maple Grove shall allow without use of a variance.

Section 14.3 Easements for Utilities and Drainage. No building, structure, planting, fill or other material shall be placed or permitted to remain, which may damage or interfere with the installation and maintenance of utilities situated within, or which may change the direction or impede the flow of water over, any drainage or utility easements reserved or dedicated in any plat of a portion of the Subject Property. Such easements shall be maintained continuously by the Owner of the Lot which is subject to said easements except that such Owner shall not be responsible for those improvements for which a public authority or utility company has assumed responsibility.

Section 14.4 Nuisances. No noxious or offensive activity shall be carried on upon any Lot, nor shall anything be done thereon which is or may become an annoyance or nuisance to the Owner of any other Lot within the Subject Property.

Section 14.5 Signs. Except Main Entrance Monuments and Interior Monuments, no sign of any kind shall be displayed to the public view on any Lot within the Subject Property, except one sign of not more than two square feet advertising the property for sale, or signs used by a builder or Declarant to advertise the property during the construction and sales period, which Declarant and builder signs shall not be subject to such area limitation.

Section 14.6 Livestock and Poultry. No animals, livestock or poultry of any kind shall be raised, bred or kept on any Lot except that dogs, cats and other household pets may be kept provided that they are not kept, bred or maintained for any commercial purpose. Dog kennels are prohibited except when they meet the following requirements: exterior dog kennels or runs shall be located so as to be screened from streets and from neighboring lots, and the

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fencing or outside run area shall be adjacent to the main structure and (except where otherwise approved by the Architectural Control Committee) shall not exceed 100 square feet in fenced area with a maximum eight foot high fence and the color, design and materials utilized in the construction of any such enclosure shall be approved, in advance, by the Architectural Control Committee.

Section 14.7 Garbage and Refuse Disposal. Trash, garbage or other waste shall be kept in sanitary containers. All equipment for storage or disposal of such material shall be kept in a clean and sanitary condition, and screened from public view.

Section 14.8 Radio, Satellite and Television Antenna, etc. Except with the prior written approval of the Architectural Control Committee, no exterior television, radio, satellite, or microwave antenna of any sort shall be erected or maintained upon any Lot. The Architectural Control Committee may choose to prohibit all such antennae, or to prohibit only certain kinds and locations of antennae, and to change its regulations from time to time, all in its discretion. Without limiting the generality of the foregoing, it shall not be deemed arbitrary or an abuse of such discretion if the committee were to:

(a) Permit existing antennae to continue t be maintained, while at the same time banning new antennae of the same type or location;

(b) Prohibit antennae to be placed so as to be visible from the street side of a lot,

but permit the same antennae if not so visible; or

(c) Place height or size restrictions on antennae.

Section 14.9 Recreational Equipment. No trailer, motor home or similar recreational equipment situated upon any Lot within the Subject Property shall be used for living or housekeeping purposes for a period in excess of twenty-four (24) hours. No such recreational equipment shall be stored upon a Lot unless it is completely enclosed in a garage or attached accessory structure or unless the recreational equipment is otherwise screened from the view of the public traveling upon the street located in front of the subject Lot.

Section 14.10 Fencing and Vegetation. All fencing or decorative walls constructed upon the Subject Property shall be constructed and located subject to the provisions of Article 9 hereof and in accordance with the ordinances of the City of Maple Grove, Minnesota. No clear cutting of trees shall be permitted without approval o the Architectural Control Committee except that a minimum number of trees may be removed for purposes of locating dwellings and roadways. Maximum preservation of the existing trees and natural site character is to be a continuing goal of the Architectural Control Committee.

Section 14. 11 Casualty Damage. In the event of damage or destruction by fire or other casualty to any improvements located upon the Subject Property, the Owner shall repair or rebuild such damage or destroyed improvements in a good and workmanlike manner, within a reasonable time not to exceed one (1) year and in accordance with the provisions of these

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covenants. All debris must be removed and the Subject Property shall be restored to an orderly condition within sixty (60), days of the date of such damage or casualty.

Section 14.12 Amendment and Duration. At any time following conveyance of one hundred percent (100%) of the Lots to Owners other than Declarant, this Declaration and any provision herein contained may be terminated, extended, modified or amended by recording an instrument signed by Owners of at least two-thirds (2/3) of the Lots that are then subject to this Declaration. This Declaration and each covenant and restriction created hereby shall continue until amended or terminated pursuant to the foregoing sentence.

Section 14.13 Business Activities. No business may be continuously conducted or operated in or from a Lot which causes inconvenience, excessive traffic, excessive parking congestion or undue annoyance to the neighborhood; provided, those businesses which are in the business of the first time sale of lots and homes situated in the Subject Property are exempt from this restriction. Notwithstanding any provision contained herein to the contrary, Declarant and its assigns shall be entitled to maintain a trailer for the purposes of conducting first-time sales of lots and homes situated in the Subject Property.

Section 14.14 Landscaping Requirements. All Single Family Residential Lots upon which a house has been completed (certificate of occupancy granted) between September 1 and March 30 must have a fully sodded lot and at a minimum foundation landscaping by the first June 30 following the date the occupancy certificate is granted. All Single Family Residential Lots upon which a house has been completed (certificate. of occupancy granted) between May 1 and August 31 must have a fully sodded lot and at a minimum foundation landscaping within sixty (60) days from the date the certificate of occupancy is granted. The landscaping requirements of model homes will be governed by the Architectural Control Committee. Notwithstanding the foregoing provisions of this Section 14.14, the Architectural Control Committee, at its sole discretion, may allow the rear or heavily wooded portions of some Lots to be exempt from being sodded after review and approval of a landscape plan.

ARTICLE 15 Insurance and Casualty Losses

Section 15.1 Property Insurance--Master Common Area. The Master

Association shall maintain property insurance, if reasonably available, for all insurable improvements on the Master Common Area. Such insurance coverages shall be maintained in the name of, and the proceeds thereof shall be payable to, the Master Association, as trustee for all Member Associations. Such insurance shall be in such amounts, insure against such risks and contain such provisions as the Master Association Board from time to time shall determine including, if the coverages are available, the so-called "all risk" form for 100% of the full replacement cost of the insured improvements.

Section 15.2 Property Insurance-Residential Common Area The Residential Association shall maintain property insurance, if reasonably available, for all insurable improvements on the Residential Common Area. Such insurance coverages shall be maintained in the name of, and the proceeds thereof shall be payable to, the Residential Association, as

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trustee for all members. Such insurance shall be in such amounts, insure against such risks and contain such provisions as the Residential Association Board from time to time shall determine including, if the coverages are available, the so-called "all risk" form for 100% of the full replacement cost of the insured improvements.

Section 15.3 Public Liability Insurance- Master Association. The Master

Association shall maintain public liability insurance for the benefit of the Owners, the Master Association, the Master Association Board, any manager retained by the Master Association Board, the Declarant, and their respective officers, directors, agents and employees, in such amounts and with such coverages as shall be determined by the Master Association Board; provided that the public liability insurance shall, if available, be for at least Two Million Dollars ($2,000,000.00) combined single limit per occurrence with broad form commercial general liability including bodily injury, property damage, blanket contractual, personal injury and automobile liability (any auto) coverage. Said insurance shall contain a severability-of-interest endorsement precluding the insurer from denying liability because of the negligent acts of any insured; insure all of such benefited parties against such liability arising out of or in connection with the use, ownership or maintenance of the Master Common Area and the performance of the Master Association's rights and obligations hereunder. The Master Association Board shall periodically review and, if appropriate, adjust the nature and amount of such liability coverage to maintain the existence of reasonably sufficient coverages under changing circumstances; provided, however, in no event shall the Master Association Board reduce the amount of the coverages provided herein.

Section 15.4 Public Liability Insurance -- Residential Association. The Residential Association shall maintain public liability insurance for the benefit of the Owners, the Residential Association, the Residential Association Board, any manager retained by the Residential Association Board, the Declarant, and their respective officers, directors, agents and employees, in such amounts and with such coverages as shall be determined by the Residential Association Board; provided that the public liability insurance shall, if available, be for at least Two Million Dollars ($2,000,000.00) combined single limit per occurrence with broad form commercial general liability including bodily injury, property damage, blanket contractual, personal injury and automobile liability (any auto) coverage. Said insurance shall contain a severability-of-interest endorsement precluding the insurer from denying liability because of the negligent acts of any insured; insure all of such benefited parties against such liability arising out of or in connection with the use, ownership or maintenance of the Residential Common Area and the performance of the Residential Association's rights and obligations hereunder. The Residential Association Board shall periodically review and, if appropriate, adjust the nature and amount of such liability coverage to maintain the existence of reasonably sufficient coverages under changing circumstances; provided, however, in no event shall the Residential Association Board reduce the amount of the coverages provided herein.

Section 15.5 Form of Associations' Insurance Coverages. All insurance coverages obtained by the Master Association and the Residential Association pursuant to this Article 15 shall be governed by the provisions hereinafter set forth:

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(a) All policies shall be written with an insurer licensed to do business in Minnesota which holds a Best's rating of A or better, if reasonably available, or, if not available, the most nearly equivalent rating.

(b) In no event shall the insurance coverage obtained and maintained hereunder be

brought into contribution with insurance purchased by individual members, Owners, or their First Mortgagees.

(c) All property insurance policies shall have an inflation guard endorsement, if

reasonably available, and an agreed amount endorsement with an annual review by one or more qualified persons, at least one of whom must be in the real estate industry and familiar with construction in the Hennepin County, Minnesota area.

(d) Every reasonable effort shall be made to secure insurance policies that will

provide for the following:

(i) a statement that no policy may be cancelled, invalidated, suspended or subject to non-renewal on account of the conduct of any one or more individual members or Owners;

(ii) a statement that no policy may be cancelled, invalidated, suspended or

subject to non-renewal on account of the conduct of any member of the Master Association Board or Residential Association Board, officer or employee of either of said Associations or their respective duly authorized managers without the delivery to the insured Association of a prior written demand, to cure the defect and the allowance of a reasonable time thereafter within which the defect may be cured by the insured Association, its manager, or any Owner;

(iii) that any "other insurance" clause in any policy excludes individual

Owners' policies from consideration; and

(iv) that the Owners or members shall be given at least thirty (30) days' prior written notice of any cancellation, substantial modification and non-renewal.

Section 15.6 Additional Coverages for Master Association. In addition to the

other insurance required by this Article, the Master Association Board shall obtain worker's compensation insurance, if and to the extent required by law, directors' and officers' liability coverage, if reasonably available, and a fidelity bond or bonds on directors, officers, employees and other persons handling or responsible for the Master Association’s funds, if reasonably available. The premiums payable for such additional coverages, and the premiums payable for the coverages contemplated in Section 15.01 and 15.03 hereof, shall be a Master Common Expense. The amount of fidelity coverage shall be determined in the Master Association Board's best business judgment but, if reasonably available, may not be less than one (1) year's base assessments, plus reserves on hand. Any bonds shall contain a waiver of all defenses based upon the exclusion of persons serving without compensation and shall require at least thirty (30)

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days' prior written notice to the Master Association of any cancellation, substantial m6dification or non-renewal.

Section 15.7 Additional -Coverages for Residential Association. In addition

to the other insurance required by this Article, the Residential Association Board shall obtain worker's compensation insurance, if and to the extent required by law, directors' and officers' liability coverage, if reasonably available, and a fidelity bond or bonds on directors, officers, employees and other persons handling or responsible for the Residential Association's funds, if reasonably available. The premiums payable for such additional coverages, and the premiums payable for the coverages contemplated in Section 15.01 and 15.03 hereof, shall be a Residential Common Expense. The amount of fidelity coverage shall be determined in the Residential Association Board's best business judgment but, if reasonably available, may not be less than one (1) year's base assessments, plus reserves on hand. Any bonds shall contain a waiver of all defenses based upon the exclusion of persons serving without compensation and shall require at least thirty (30) days' prior written notice to the Residential Association of any cancellation, substantial modification or non-renewal.

Section 15.8 Insurance Trustee -- Master Association. The Master

Association, acting through the Master Association Board, is hereby appointed and shall be deemed trustee of the interests of all named insureds under policies of insurance purchased and maintained by the Master Association. The Master Board shall have full power to receive and receipt for the proceeds and to deal therewith as provided herein. The Master Association Board may engage, and pay as a Master Common Expense, any appropriate person to act as an insurance trustee to receive and disburse insurance proceeds upon such terms as the Master Association Board shall determine, consistent with the provisions of this Declaration.

Section 15.9 Insurance Trustee - Residential Association. The Residential

Association, acting through the Residential Association Board, is hereby appointed and shall be deemed trustee of the interests of all named insureds under policies of insurance purchased and maintained by the Residential Association. The Residential Board shall have full power to receive and receipt for the proceeds and to deal therewith as provided herein. The Residential Association Board may engage, and pay as a Residential Common Expense, any appropriate person to act as an insurance trustee to receive and disburse insurance proceeds upon such terms as the Residential Association Board shall determine, consistent with the provisions of this Declaration.

Section 15.10 Repair and Reconstruction of Master Common Area.

(a) Any damage or destruction to improvements situated upon the Master Common

Area shall be repaired or reconstructed unless the directors of the Master Association Board representing at least seventy-five percent (75%) of the total voting power of the Master Association Board of Directors shall decide within sixty (60) days 'after the casualty not to repair or reconstruct. If for any reason either the amount of the insurance proceeds to be paid as a result of such damage or destruction, or reliable and detailed estimates of the cost of repair or reconstruction, or both, are not made available to the Master Association within said period, then the period shall be extended until such

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information shall be made available; provided, ho ever, such extension . shall not exceed sixty (60) days.

(b) In the event that it should be determined by the Master Association in the

manner described above that the damage or destruction to improvements situated upon the Master Common Area (for which the Master Association is responsible) shall not be repaired or reconstructed and no alternative improvements are authorized, then and in that event the affected portion of the Master Common Area shall be restored to its natural state and maintained by the Master Association in a neat and attractive condition consistent with the Community-Wide Standard and the insurance proceeds, if any, shall be retained by the Master Association.

(c) In the event that it is determined by the Master Association in the manner

described in Section 15. 10(a) that the damage or destruction to improvements situated upon the Master Common Area shall be repaired, or reconstructed, it shall be the duty of the Master Association to restore and repair the same to its former condition, as promptly as practicable. If the damage or destruction to the Master Common Area for which the proceeds of insurance policies are paid is to be repaired or reconstructed, the proceeds, or such portion thereof as may be required for such purpose, shall be disbursed in payment of such repairs or reconstruction as hereinafter provided. Any proceeds remaining after defraying such costs of repair or reconstruction to the Master Common Area shall be retained by and for the benefit of the Master Association and placed in a capital improvements account. If the damage or destruction to the Master Common Area for which insurance proceeds are paid is to be repaired or reconstructed, and such proceeds are not sufficient to defray the cost thereof, the Master Association Board may levy a special assessment against all Member Associations on the same basis as provided for base assessments. Additional assessments may be made in like manner at any time during or following the completion of any repair or reconstruction.

Section 15.11 Repair and Reconstruction of Residential Common Area.

(a) Any damage or destruction to improvements situated upon the Residential Common

Area shall be repaired or reconstructed unless the directors of the Residential Association Board representing at least seventy-five. percent (75%) of the total voting power of the Residential Association Board of Directors shall decide within sixty (60) days after the casualty not to repair or reconstruct. If for any reason either the amount of the insurance proceeds to be paid as a result of such damage or destruction, or reliable and detailed estimates of the cost of repair or reconstruction, or both, are not made available to the Residential Association within said period, then the period shall be extended until such information shall be made available; provided, however, such extension shall not exceed sixty (60) days.

(b) In the event that it should be determined by the Residential Association in the

manner described above that the damage or destruction to improvements situated upon the Residential Common Area (for which the Residential Association is responsible) shall not be repaired or reconstructed and no alternative improvements are authorized,

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then and in that event the affected portion of the Residential Common Area shall be restored to its natural state and maintained by the Residential Association in a neat and attractive condition consistent with the Community-Wide Standard and the insurance proceeds, if any, shall be retained by the Residential Association.

(c) In the event that it is determined by the Residential Association in the manner

described in Section 15.11(a) that the damage or destruction to improvements situated upon the Residential Common Area shall be repaired or reconstructed, it shall be the duty of the Residential Association to restore and repair the same to its former condition, as promptly as practicable. If the damage or destruction to the Residential Common Area for which the proceeds of insurance policies are paid is to be repaired or reconstructed, the proceeds, or such portion thereof as may be required for such purpose, shall be disbursed in payment of such repairs or reconstruction as hereinafter provided. Any proceeds remaining after defraying such costs of repair or reconstruction to the Residential Common Area shall be retained by and for the benefit of the Residential Association and placed in a capital improvement account. If the damage or destruction to the Residential Common Area for which insurance proceeds are paid is to be repaired or reconstructed, and such proceeds are not sufficient to defray the cost thereof, the Residential Association Board may levy a special assessment against all members of the Residential Association on the same basis as provided for base assessments. Additional assessments may be made in like manner at any time during or following the completion of any repair or reconstruction.

ARTICLE 16

Effect and Enforcement

Section 16.1 Benefited Parties. The burdens and benefits of these Covenants and Restrictions shall bind and "run" with the Subject Property.

Section 16.2 Notice of Default. An Owner of a Lot or Member Association shall not be in default under this Declaration unless such Member Association or Owner has received written notice specifying the nature of the default and has failed to cure or commence appropriate action to cure such default within the times, if any, specified in Section 16.03 hereof.

Section 16.3 Remedies. In the event of a violation or threatened violation of any provision of this Declaration by an Owner of a Lot or Member Association, in addition to the right to collect damages, an Owner of any Lot shall have the right to enjoin such violation or threatened violation or to compel performance of the Declaration in a court of competent jurisdiction. Prior to the commencement of any such action, fourteen (14) days' prior written notice of the violation shall be given to the defaulting party, unless an emergency situation has arisen that necessitates prior action for the avoidance imminent bodily injury or significant property damage.

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Section 16.4 Liability of Owners. In the event more than one person or entity shall be an Owner of a Lot, the liability of all such persons and entities for the performance of such Owner hereunder shall be joint and several.

Section 16.5 Attorneys' Fees. If any Owner institutes any action or proceeding against another Owner relating to the provisions of this Declaration or any default hereunder, the unsuccessful party shall reimburse the prevailing party therein for the reasonable amount of attorneys' fees and costs incurred by the prevailing party.

ARTICLE 17 Miscellaneous

Section 17.1 Waiver of Default. No waiver of any default by any party will be

implied from the failure by any other party to take any action in respect of such default. No express waiver of any default will affect any default or other performance other than as specified in such express waiver. One or more waivers of any default in the performance of any provision of this Declaration will not be deemed a waiver of any subsequent default in the performance of the same provision or any other provision. The consent to or approval of any act or request by any party will not be deemed to waive or render unnecessary the consent to or approval of any subsequent similar act or request. The rights and remedies provided by this Declaration are cumulative, and no right or remedy will be exclusive of any other, or of any other right or remedy, at law or in equity, which any party might otherwise have by virtue of a default under this Declaration, and the exercise of any right or remedy by any party will not impair such party's standing to exercise any other right or remedy.

Section 17.2 Severability. If any provision of this Declaration is, to any extent, declared by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Declaration (or the application of such provision o persons or circumstances other than those in respect of which the determination of invalidity or unenforceability was made) will not be affected thereby, and each provision of this Declaration will be valid and enforceable to the fullest extent permitted by law.

Section 17.3 Governing Law. This Declaration will be construed in accordance with the laws of the State of Minnesota.

Section 17.4 Captions. The captions of the paragraphs of this Declaration are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained.

Section 17.5 Time. Time is of the essence of this Declaration.

Section 17.6 Binding Effect. The provisions of this Declaration will be binding on each Owner, and each common interest community that is comprised of Owners, and their respective successors, assigns and mortgagees to the extent herein provided.

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Section 17.7 Estoppel Certificate from Master Association. The Master Association shall, from time to time, upon written request of any Member Association, Owner or First Mortgagee, execute and deliver a certificate recordable form stating whether the requesting party or any Owner is then in compliance or default in the performance of its obligations to the Master Association and, if such default is identified, designating the nature thereof. All reasonable and necessary costs of preparing and recording any such certificate shall be the sole responsibility of the party requesting that the certificate be executed.

Section 17.8 Estoppel Certificate from Residential Association. The Residential Association shall, from time to time, upon written request of any Owner or First Mortgagee, execute and deliver a certificate in recordable form stating whether any Owner is then in compliance or default in the performance of its obligations to the Residential Association and, if such default is identified, designating the nature thereof. All reasonable and necessary costs of preparing and recording any such certificate hall be the sole responsibility of the Owner or First Mortgagee requesting that the certificate be executed.

Section 17.9 Estoppel Certificate from Architectural Control Committee.

The Architectural Control Committee shall, from time to time, upon written request of any Owner or First Mortgagee, execute and deliver a certificate in recordable form stating whether any Owner is then in compliance or default in the performance of its obligations to the Architectural Control Committee and, if such default is identified, designating the nature thereof. All reasonable and necessary costs of preparing and recording any such certificate shall be the sole responsibility of the Owner or First Mortgagee requesting that the certificate be executed.

Section 17.10 Notices. Except as otherwise provided in this Declaration, in each

instance in which notice is to be given to an Owner, the same shall be in writing and may be delivered personally to the Owner, in which case personal delivery of such notice to one or more co-owners of a Lot shall be deemed delivery to all co-owners. Personal delivery of such notice to any officer or agent for the service of process on a corporation shall be deemed delivery to the corporation. In lieu of the foregoing, such notice may be delivered by regular United States mail, postage prepaid, addressed to the Owner at the most recent address furnished by such Owner to the party obligated to provide such notice. Such notice shall be deemed delivered seventy-two (72) hours after the time of such mailing, except for notice of a meeting of any Board of Directors in which case the notice provision; of the Bylaws of the Association shall control. Any notice to be given to the Master Association may be delivered personally to any member of the Master Association Board, or sent by United States Mail, postage prepaid, addressed to the Master Association at such address as shall be fixed from time to time and circulated to all Owners. Any notice to be given to the Residential Association may be delivered personally to any member of the Residential Association Board, or sent by United States Mail, postage prepaid, addressed to the Residential Association at such address as shall be fixed from time to time and circulated to all Owners.

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EXHEBIT "A"

Legal Description of Subject Property

The phrase "Subject Property" in this Declaration shall collectively refer to the following real property, all being situated in Hennepin County, Minnesota:

Lots 1 through 6, Block 1, Gladstone; Lots 1 through 5, Block 2, Gladstone; Lots 1 through 3, Block 3, Gladstone; Lots 1 through 5, Block 4, Gladstone; Lots 1 and 2, Block 5, Gladstone; Lots 1 through 9, Block 6, Gladstone; Lots 1 through 20, Block 7, Gladstone; Lots 1 through 8, Block 8, Gladstone; Lots 1 through 18, Block 9, Gladstone; Outlots C through F, I through K, M, V and X, Gladstone; Lots 1 through 7, Block 1, Gladstone 2nd Addition; Lots 1 through 9, Block 2, Gladstone 2nd Addition; Lots 1 through 8, Block 3, Gladstone 2nd Addition; Lots 1 through 20, Block 4, Gladstone 2nd Addition; and Outlot A, Gladstone 2nd Addition.

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EXHIBIT “B”

Legal Description of Annexation Property The phrase “Annexation Property" in this Declaration shall collectively refer to the following real property, all being situated in Hennepin County, Minnesota.

Outlots A, B, L, N, O, P, Q, R, S, and U, Gladstone

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EXHIBIT "C"

Lot Twenty Monument Easement Area The phrase "Lot Twenty Monument Easement Area" in this Declaration shall refer to the following portion of Lot 20, Block 7, Gladstone, Hennepin County, Minnesota:

Commencing at the northwest corner of said Lot 20; thence on an assumed bearing of South 00 degree 34 minutes 31 seconds West, along the west line of said Lot 20, a distance of 60.71 feet to the point of beginning; thence South 89 degrees 25 minutes 29 seconds East 30.46 feet; thence South 28 degrees 42 minutes 49 seconds East 83.09 feet; thence South 00 degree 34 minutes 31 seconds West 31.70 feet to the intersection with the south line of said Lot 20; thence westerly and northerly along the southerly and westerly line of said Lot 20 a distance of 174.18 feet to the point of beginning.

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EXHIBIT "D"

Lot 8 Monument Easement Area The phrase "Lot 8 Monument Easement Area" in this Declaration shall refer to the following portion of Lot 8, Block 8, Gladstone, Hennepin County, Minnesota:

Commencing at the Northeast comer of said Lot 8, for the purpose of this description the east line of said Lot 8 has an assumed bearing of North 12 degrees 33 minutes 48 seconds West; thence westerly 36.37 feet along a curve, concave to the north, having a radius of 430. 00 feet and a central angle of 04 degrees 50 minutes 44 seconds, the chord of said curve bears South 79 degrees 51 minutes 34 seconds West, to the point of beginning; thence South 04 degrees 46 minutes 30 seconds East 31.56 feet; thence South 23 degrees 41 minutes 15 seconds West 83.09 feet; thence south 84 degrees 23 minutes 55 seconds West 30.47 feet to the intersection with the west line of said Lot 8; thence northerly and easterly, along the westerly and northerly line of said Lot 8 a distance of 170.55 feet to the point of beginning.

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EXHIBIT "E"

Gladstone Boulevard Median Area That part of Gladstone Boulevard as dedicated on GLADSTONE, according to the recorded plat thereof, Hennepin County, Minnesota, described as follows:

Commencing at the intersection of the west line of said GLADSTONE with the westerly extension of the centerline of said Gladstone Boulevard; thence on an assumed bearing of North 89 degrees 01 minute 05 seconds East, along said extension and said centerline, 58.00 feet; thence North 00 degree 52 minutes 40 seconds West 4.53 feet to the point of beginning; thence North 89 degrees 07 minutes 20 seconds East 13.10 feet; thence easterly 44.46 feet along a tangential curve, concave to the north, having a radius of 394.66 feet and a central angle of 06 degrees 27 minutes 18 seconds; thence easterly, southerly and westerly 23.69 feet along a reverse curve, concave to the west, having a radius of 7.54 feet and a central angle of 180 degrees 00 minute 00 second; thence westerly 46.16 feet along a compound curve, concave to the north, having a radius of 409.74 feet and a central angle of 06 degrees 27 minutes 18 seconds; thence South 89 degrees 07 minutes 20 seconds West, tangent to last described curve, 13.10 feet; thence westerly, northerly and easterly 23.69 feet along a tangential curve, concave to east, having a radius of 7.54 feet and a central angle of 180 degrees 00 minutes 00 second to the point of beginning.