[DISCOVERY MATTER]

STIPULATED PROTECTIVE ORDER RE CONFIDENTIAL INFORMATION

OSWALD PARADA, Magistrate Judge.

STIPULATION REGARDING CONFIDENTIAL INFORMATION

Defendants Centex Homes, Centex Real Estate Corporation, Centex Real Estate Holding, L.P. and Nomas Corp. ("Defendants") and plaintiff the Legacy Villas at La Quinta Homeowners Association ("Plaintiff" or "HOA") stipulate, through their respective attorneys of record and pursuant to Fed. R. Civ. P. 26(c) and 29, that upon entry of this Protective Order, discovery in this case of highly sensitive financial, confidential business, and/or trade secret information of the parties and non-parties to this action shall be conducted on the following terms and conditions:

1. PURPOSES AND STATEMENT OF GOOD CAUSE

The parties stipulate and petition the Court to enter the following Protective Order. This action concerns the operation of the Legacy Villas Homeowners Association, an association created for the maintenance and operation of a community of condominiums and town homes in La Quinta, California developed by defendant Centex Homes. The parties represent that this lawsuit will involve the discovery of highly sensitive financial, confidential business, and/or trade secret information of the parties, including but not limited to the discovery of sensitive and confidential information about the parties' finances, budgets, and operations with respect to the development, marketing, sale, and operation of the real property and homeowners association at issue in this lawsuit. The parties desire to enter into a protective order to protect against the unauthorized disclosure of confidential information, which would likely harm or prejudice the legitimate business, competitive, and privacy interests of the parties or third parties.

The parties acknowledge that this Protective Order does not confer blanket protections on all disclosures or responses to discovery and that the protection it affords extends only to the limited information or items that are entitled under the applicable legal principles to treatment as confidential. Designations by the parties should be limited to nonpublic information that the designating party believes in good faith will cause harm if disclosed. The parties further acknowledge, as set forth in Section 10, below, that this Protective Order creates no entitlement to file confidential information under seal; Central District of California Local Rule 79-5.1 sets forth the procedures that must be followed and reflects the standards that will be applied when a party seeks permission from the Court to file material under seal.

2. DEFINITIONS

2.1 Party: any party to this action, including its officers, directors, employees, consultants, retained experts, and outside counsel (and their support staff).

2.2 Disclosure or Discovery Material: all items or information, regardless of the medium or manner generated, stored, or maintained (including, among other things, documents, testimony, transcripts, audio/visual recordings or tangible things) that are produced or generated in disclosures, responses to discovery, or pretrial proceedings in this matter.

2.3 "CONFIDENTIAL" Information or Items: (i) trade secrets, financial and accounting information, profit margins, banking information, personal financial and personal banking information, and/or confidential proprietary business information not readily available to the general public; (ii) information subject to a right of privacy; (iii) information that the Producing Party has verified is subject to a pre-existing duty of confidentiality; or (iv) information that the Court, after appropriate notice and an opportunity for the parties to be heard, for good cause shown, rules shall be treated as CONFIDENTIAL pursuant to this Order. CONFIDENTIAL Information or Items shall be labeled as "CONFIDENTIAL" and thereby designated as CONFIDENTIAL pursuant to this Order.

2.5 Receiving Party: a Party that receives Disclosure or Discovery Material from a Producing Party.

2.6 Producing Party: a Party or non-party that produces Disclosure or Discovery Material in this action.

2.7 Designating Party: a Party or non-party that designates information or items that it produces in disclosures or in responses to discovery as "CONFIDENTIAL."

2.8 Protected Material: any Disclosure or Discovery Material that is designated as "CONFIDENTIAL."

2.9 Outside Counsel: attorneys (as well as their support staffs) who are not employees of a Party but who are retained to represent or advise a Party in this action or in the action between the parties involving construction defect claims with respect to the Legacy Villas development pending in the Superior Court for the State of California, County of Riverside, entitled Legacy Villas at La Quinta Homeowners Association v. Centex Homes, et al., Case No. INC10006723 (the "CD Action").

2.10 In-House Counsel: attorneys who are employees of a Party (as well as their support staffs).

2.11 Counsel (without qualifier): Outside Counsel and House Counsel (as well as their support staffs).

2.12 Expert: a person with specialized knowledge or experience in a matter pertinent to the litigation who has been retained by a Party or its counsel to serve as an expert witness or as a consultant in this action and who is not a past or a current employee of a Party or of a competitor of a Party, and who, at the time of retention, is not anticipated to become an employee of a Party or a competitor of a Party. This definition includes a professional jury or trial consultant retained in connection with this litigation.

3. SCOPE

The protections conferred by this Protective Order cover not only Protected Material (as defined above), but also any information copied or extracted therefrom, as well as all copies, excerpts, summaries, or compilations thereof, as well as testimony, conversations, or presentations by parties or counsel prior to trial that contain Protected Material.

4. DURATION

The provisions of this Protective Order shall continue to apply after termination of this action. Notwithstanding the foregoing, the parties understand and agree that this Protective Order shall not be applicable to such material and documents introduced into evidence at trial, and that the Parties may discuss, and with the Court's approval, implement, procedures to reasonably limit the dissemination of Protected Material introduced into evidence at trial.

5. DESIGNATING PROTECTED MATERIAL

5.1 Designating Material for Protection. Each Designating Party that designates information or items for protection under this Protective Order must limit any such designation to specific material that qualifies as "CONFIDENTIAL" Information or Items. A Designating Party should designate for protection only those parts of material, documents, items, or oral or written communications that qualify as confidential information under the appropriate standards.

If a Party or a non-party comes to believe that information or items that it designated for protection no longer qualify for protection, that Party or non-party must notify all other parties that it is withdrawing the designation within a reasonable period of time.

5.2 Manner and Timing of Designations. Except as otherwise provided in this Protective Order, or as otherwise stipulated or ordered, material that qualifies for protection under this Protective Order must be so designated before the material is disclosed or produced.

Designation in conformity with this Protective Order requires:

(a) For information in documentary form (apart from transcripts of depositions or other pretrial proceedings), that the Producing Party affix the legend "CONFIDENTIAL" on each page that contains "CONFIDENTIAL" Information or Items.

A Party or non-party that makes original documents or materials available for inspection need not designate them for protection until after the inspecting Party has indicated which material it would like copied and produced. After the inspecting Party has identified the documents it wants copied and produced, the Producing Party must determine which documents, or portions of the documents, qualify for protection under this Protective Order, then, before producing the specified documents, the Producing Party must affix the appropriate legend to each page that is designated as Protected Material.

(b) for testimony given in deposition or in other pretrial proceedings, (i) that the Party or non-party offering the testimony identify on the record all portions thereof that are designated as Protected Material, or (ii) that, within 10 days after a final version of the transcript and/or recording of the deposition or other pretrial proceeding becomes available, the Party or non-party offering the testimony identify by letter to all other Parties, and the stenographer or court reporter, all portions thereof that are designated as Protected Material. The entire transcript and/or recording of a deposition shall be presumptively deemed Protected Material for a period of 10 days after a final version of the transcript and/or recording becomes available.

Deposition, hearing or non-trial transcript pages containing Protected Material shall be marked by the court reporter as "CONFIDENTIAL" as instructed by the Party or nonparty offering or sponsoring the witness or presenting the testimony.

(c) for information produced in some form other than documentary, and for any other tangible items, that the Producing Party affix in a prominent place on the exterior of the container or containers in which the information or item is stored the legend "CONFIDENTIAL." If only portions of the information or item warrant protection, the Producing Party, to the extent practicable, shall identify the protected portions.

5.3 Inadvertent Failures to Designate. If corrected within a reasonable period of time, an inadvertent failure to designate information or items as "CONFIDENTIAL" does not, standing alone, waive the Designating Party's right to secure protection under this Protective Order for such material. If material is appropriately designated as "CONFIDENTIAL" after the material was initially produced, the Receiving Party, on timely notification of such designation, must make reasonable efforts to assure that the material is treated in accordance with the provisions of this Protective Order.

6. CHALLENGING CONFIDENTIALITY DESIGNATIONS

6.1 Timing of Challenges. A challenge to a Designating Party's confidentiality designation may be made at any time after receipt of the confidentiality designation.

6.2 Meet and Confer. A Receiving Party that wishes to challenge to a Designating Party's confidentiality designation must do so in accordance with the requirements of Central District of California Local Rule 37-1.

6.3 Judicial Intervention. If, after the parties meet and confer in accordance with Central District of California Local Rule 37-1, no agreement has been reached as to the Designating Party's Designation, the Receiving Party may seek a Court order setting aside the Designating Party's Designation pursuant to the discovery dispute procedures set forth in Central District California Local Rules 37-1 through 37-3.

The burden of persuasion in any such challenge shall be on the Producing Party. Until the court rules on any such challenge, all Parties shall continue to afford the material in question the protection to which it is entitled under this Protective Order.

7. ACCESS TO AND USE OF PROTECTED MATERIAL

7.1 Basic Principles. A Receiving Party may use Protected Material that is disclosed or produced by another Party or by a non-party only in connection with the prosecution or defense of this lawsuit or the CD Action. Such Protected Material may be disclosed only to the categories of persons and under the conditions described in this Protective Order. When both this litigation and the CD Action have been terminated, a Receiving Party must comply with the provisions of section 11, below (FINAL DISPOSITION).

Protected Material shall be stored and maintained by a Receiving Party at a location and in a secure manner that ensures that access is limited to the persons authorized under this Order.

7.2 Disclosure of "CONFIDENTIAL" Information or Items. Unless otherwise ordered by the Court or permitted in writing by the Designating Party, a Receiving Party may disclose any information or item designated CONFIDENTIAL only to:

(a) the Receiving Party's Outside Counsel of record in this action or in the CD Action, as well as employees of said Outside Counsel to whom it is essential to disclose the information for purposes of prosecuting or defending this litigation or the CD Action;

(b) the officers, directors, and employees (including In-House Counsel) of the Receiving Party to whom disclosure is essential for purposes of prosecuting or defending this litigation or the CD Action;

(c) Experts (as defined in this Order) of the Receiving Party to whom disclosure is essential for this purposes of prosecuting or defending this litigation or the CD Action;

(d) the Court and its personnel in this action or the CD Action;

(e) court reporters and their staff in this action or the CD Action;

(f) during their depositions, non-party witnesses in this action or the CD Action to whom disclosure is essential. Pages of transcribed deposition testimony, audio/visual recordings of deposition testimony, or exhibits to depositions that reveal Protected Material must be designated as "CONFIDENTIAL" by the court reporter and may not be disclosed except as permitted under this Protective Order;

(g) the author of the document or the original source of the information.

To the extent that anyone listed in Sections 7.2(c) or (f) is required to be shown any document designated as "CONFIDENTIAL," that person shall be required to sign the Acknowledgement and Agreement to Be Bound attached hereto as Exhibit A.

7.3 Use of Protected Material by the Designating Party. Nothing in this Order shall limit a Designating Party's use of its own CONFIDENTIAL Information, or of CONFIDENTIAL Information that it lawfully obtained other than through Disclosure or Discovery Material in this action.

7.4 Under Seal Filing: If the parties wish to file any designated materials with the Court, they will do so by way of an Under Seal filing in accordance with the Local Rules of this District, and the parties will work together to un-designate any designated materials as much as possible to eliminate or minimize the need to make any such under seal filings.

8. PROTECTED MATERIAL SUBPOENAED OR ORDERED PRODUCED IN OTHER LITIGATION

If a Receiving Party is served with a subpoena or an order issued in another litigation that would compel disclosure of any information or items designated in this action as "CONFIDENTIAL" the Receiving Party must so notify the Designating Party in writing no more than seven days after receiving the subpoena or order. Such notification must include a copy of the subpoena or court order.

The Receiving Party also must timely inform in writing the party who caused the subpoena or order to issue in the other litigation that some or all the material covered by the subpoena or order is the subject of this Protective Order. In addition, the Receiving Party must deliver a copy of this Protective Order promptly to the Party in the other action that caused the subpoena or order to issue.

The Receiving Party shall take reasonable steps to afford the Designating Party an opportunity to protect its confidentiality interests in the court or body from which the subpoena or order issued.

9. UNAUTHORIZED DISCLOSURE OF PROTECTED MATERIAL

If a Receiving Party learns that, by inadvertence or otherwise, it has disclosed Protected Material to any person or in any circumstance not authorized under this Protective Order, the Receiving Party must (a) notify in writing the Designating Party of the unauthorized disclosure, (b) use its best efforts to retrieve all copies of the Protected Material, and (c) inform the person or persons to whom unauthorized disclosure was made of the terms of this Protective Order.

10. FILING PROTECTED MATERIAL

A Party may not, without written permission from the Designating Party or an order of the Court secured after appropriate notice to the Designating Party and all other interested persons, file in the public record any Protected Material. A Receiving Party that seeks to file under seal any Protected Material must meet and confer with the Designating Party regarding the same at least five days prior to such filing, and must fully comply with Central District of California Local Rule 79-5.1.

11. FINAL DISPOSITION

Unless otherwise ordered by the Court or agreed in writing by the Producing Party, within ninety days after the final termination of both this action and the CD Action, each Receiving Party must either return all Protected Material (including all copies, abstracts, compilations, summaries or any other form of reproducing or capturing any Protected Material) to the Producing Party or, upon request of the Producing Party, certify that all such Protected Material has been destroyed. Notwithstanding this provision, Counsel are entitled to retain an archival copy of all pleadings, motion papers, transcripts, legal memoranda, correspondence or attorney work product, even if such materials contain Protected Material.

12. MISCELLANEOUS

12.1 Right to Further Relief. Nothing in this Protective Order affects the right of any person to seek its modification by the Court in the future.

12.2 Right to Assert Other Objections. By stipulating to the entry of this Protective Order, no Party waives any right it otherwise would have to object to disclosing or producing in discovery any information or item on any ground. To this end, nothing in this Protective Order affects a Party's right to, among other things, withhold documents based on privilege or other legally justifiable grounds. Similarly, nothing in this Protective Order affects a Party's right to object to the admissibility in evidence of any material covered by this Protective Order.

IT IS SO STIPULATED.

EXHIBIT A

ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND

I, ________________________________ [print or type full name], of ________________________________________________ [print or type full address], declare under penalty of perjury that I have read in its entirely and understand the Protective Order that was issued by the United States District Court for the Central District of California on the date cited on the first page of the Protective Order in the case of Legacy Villas at La Quinta Homeowners Association v. Centex Homes, et al., United States District Court for the Central District of California, EDCV 11 00845 VAP (OPx). I agree to comply with and to be bound by all the terms of this Protective Order and I understand and acknowledge that failure to so comply could expose me to sanctions and punishment in the nature of contempt. I solemnly promise that I will not disclose in any manner any information or item that is subject to this Protective Order to any person or entity except in strict compliance with the provisions of this Protective Order.

I further agree to submit to the jurisdiction of the United States District Court for the Central District of California for the purpose of enforcing the terms of this Protective Order, even if such enforcement proceedings occur after termination of this action.

I declare under penalty of perjury under the laws of the United States and the State of California that the foregoing is true and correct, and that this acknowledgement was executed the ___ day of __________________ [month] at _______________________ [city], ____________________ [state].