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After Recording Return To: Daniel E. Pellar The Pellar Law Firm, PLLC 2591 Dallas Parkway, Ste. 300 Frisco, Texas 75034 ial DECLARATION OF COVENANTS CONDITIONS AND RESTRICTIONS FOR EMERALD HEIGHTS HOMEOWNERS ASSOCIATION Uno DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR EMERALD HEIGHTS HOMEOWNERS ASSOCIATION WHEREAS, Pointe Emerald Heights, LLC, a Texas Limited Liability Corporation ("Declarant) is the owner of the real property more particularly described on Exhibit “A” attached hereto ("Property") which is annexed into a certain master planned development located in Collin County, Texas ("Stonebridge Ranch"). This Declaration of Covenants, Conditions and Restrictions for Emerald Heights Homeowners Association ("Declaration") is intended to establish a Subordinate Association and Subordinate Declaration within Stonebridge Ranch to administer certain responsibilities with respect to the real property in Property.

THEREFORE, Declarant hereby declares that all the Property described in Exhibit "A" is hereby made subject to this Declaration and shall be held, sold, transferred, used and conveyed subject to this Declaration and the Master Declaration for Stonebridge Ranch (as defined in Article Hereof), which shall run with title to Property. This Declaration and the Master Declaration shall be binding on all parties having any right, title, or interest in the Property or any part thereof, their heirs, successors, successors in-title and assigns, and shall inure to the benefit of each Owner thereof.

This Declaration does not and is not intended to create a condominium within the meaning of Texas Property Code or under applicable Texas law.

Unow ARTICLE I DEFINITIONS

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benefit of each Owner thereof.

This Declaration does not and is not intended to create a condominium within the meaning of Texas Property Code or under applicable Texas law.

Unow ARTICLE I DEFINITIONS The terms and phrases used in this Declaration shall be given their commonly accepted definitions except as otherwise stated herein. Capitalized terms shall be defined as set forth below.

1.1 "Association": Emerald Heights Homeowners Association, Inc., a Texas non-profit corporation established for the purposes set forth in this Declaration, which is concurrent with and subordinate to the Master Association.

1 1.2 1.3 1.4 1.5 1.6 "Board of Directors": shall mean the Board of Directors of the Association, as set forth in Article VII herein.

"Builder": shall have the same definition as set forth in Section 1.9 of the Master Declaration.

"Bylaws": the Bylaws of the Emerald Heights Homeowners Association, Inc., attached hereto as Exhibit "B" as may be amended or supplemented from time to time.

"Common Area": all real and personal property, including easements, which the Association owns, leases or otherwise holds a possessory or right of use in for the common use and enjoyment of the Owners.

"Community-Wide Standard": the standard of conduct, maintenance, or other activity generally prevailing throughout the Property. Such standard is expected to evolve over time as development of the Property progresses and may be more specifically determined by the Declarant, the Board of Directors of the Association, and the Master Architectural Review Committee, but at a minimum shall be consistent with the standards of quality and class established by the Master Association.

Unof icial 1.7 1.8 "Declarant" means Pointe Emerald Heights, LLC, a Texas limited

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e, but at a minimum shall be consistent with the standards of quality and class established by the Master Association.

Unof icial 1.7 1.8 "Declarant" means Pointe Emerald Heights, LLC, a Texas limited liability company, its successors or assigns, provided any assignment(s) of the rights of Point Emerald Heights, LLC, as Declarant, must be expressly set forth in writing in accordance with Section 33 of this Declaration.

"Declaration": this Declaration of Covenants, Conditions, and Restrictions for the Emerald Heights Homeowners Association, as may be amended and supplemented from time to time, and which runs concurrent with and subordinate to the Master Declaration.

1.9 "Design Guidelines”: means the standards for design, construction.

Landscaping, and exterior items adopted pursuant to Section 8.5 of the Master Declaration, including the Master Design Guidelines, 2 Modification Design Guidelines and Subdivision Design Guidelines promulgated and published by the MARC.

1.10 "Development Period”: The Development Period is the period in which Declarant reserves the right to facilitate the development, construction, and marketing of the Property, and the right to direct the size, shape and composition of the Property and otherwise includes the period of time beginning on the date when this Declaration has been recorded in the Official Records of Collin County, Texas, and ending at such time as Declarant no longer owns any portion of the Property, or for a period of 10 years from date of recording in the Official Records, whichever is earlier. The Declarant may otherwise terminate the Development Period earlier by written instrument recorded in the Official Records.

ficia 1.11 "Governing Documents": preams this Declaration, the Bylaws, the

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The Declarant may otherwise terminate the Development Period earlier by written instrument recorded in the Official Records.

ficia 1.11 "Governing Documents": preams this Declaration, the Bylaws, the Articles of Formation, and the policies, rules and regulations promulgated by the Association 1.12 "Improvements”: shall mean every structure every and all appurtenances of every type and kind, whether temporary or permanent in nature, including but not limited to, buildings, outbuildings, sheds, patios, recreational facilities, swimming pools, golf courses, garages, driveways, parking areas and/or facilities, storage buildings, sidewalks, fences, gates, screening walls, retaining walls, stairs, patios, decks, walkway landscaping signs, antennae, exterior mechanical equipment or fixtures, exterior lighting fixtures, pumps, wells tanks, reservoirs, pipes, lines, meters, and all other facilities used in connection with water, sewer, gas, electric, telephone, regular cable television, or other utilities.

1.13 "Lot": a portion of the Property which may be independently owned and conveyed and which is intended for development, use and occupancy for single-family residential purposes consistent with this Declaration, any other applicable covenants, and applicable zoning.

The term shall include and refer to the real property depicted on a Plat of the Property and listed or designated as a separate lot number on 3 the Plat. The term shall refer to any improvements on a Lot. The term shall not include Common Area, or property dedicated to the public.

1.14 “Majority”: in the Governing Documents means more than half.

1.15 "Master Architectural Review Committee”: refers to the committee created by Section 8.2 of the Master Declaration (the "MARC")

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c.

1.14 “Majority”: in the Governing Documents means more than half.

1.15 "Master Architectural Review Committee”: refers to the committee created by Section 8.2 of the Master Declaration (the "MARC") which has the power to adopt Design Guidelines as more fully described in the Master Declaration and the right to approve plans and specifications for construction of proposed Improvements on the Dots and Property subject to the jurisdiction of this Declaration, as well as the right to approve plans and specifications for alteration or modification of Improvements on the Property 1.16 “Master Association”: the Stonebridge Ranch Community Association, Inc., a Texas non-profit corporation, its successors and assigns, which has the power, duty and responsibility for administering in enforcing the Master Declaration.

inofficial 1.17 "Master Declaration" shall mean and refer to the Second Amended and Restated Declaration of Covenants, Conditions and Restrictions for Stonebridge Ranch, recorded as Document No.

20080327000365660 in the Official Records of Collin County, Texas, and any supplements and amendments thereto.

18 "Member”: A Person subject to membership in the Association, as provided in Article VII of this Declaration.

1.19 "Modifications Committee”: refers to the committee created by Section 8.3 of the Master Declaration (the "MC") which has the full authority to review and approve or disapprove any proposed Improvement to existing structures or Improvements on a Lot, including additions, modifications, or alterations of existing structures or landscaping.

1.20 "Mortgage": means any mortgage(s) or deed(s) of trust securing indebtedness and covering any Lot.

1.21 “Mortgagee(s): means the holder(s) of any Mortgage(s).

f existing structures or landscaping.

1.20 "Mortgage": means any mortgage(s) or deed(s) of trust securing indebtedness and covering any Lot.

1.21 “Mortgagee(s): means the holder(s) of any Mortgage(s).

1.22 "Owner": one or more Persons who hold the record title to any Lot, (including contract sellers, the Declarant and any builders) but excluding in all cases any party holding an interest merely as security for the performance of an obligation. If a Lot is sold under a recorded contract of sale, then upon recording of such contract, the purchaser (rather than the fee owner) will be considered the Owner, if the contract specifically so provides.

cial 1.23 “Person": a natural person, a corporation, any other legal entity.

1.24 "Plat”: the plat(s) recorded from time to time for the Property and any re-plat or amendment made from time to time.

66 1.25 “Property”: the real property described in Exhibit “A” together with such additional property as is subjected to this Declaration.

1.26 "Resident”: shall mean and refer to a Person who inhabits an Improvement/residence on a Lot, either permanently or temporarily, and may include, without limitation, an Owner or a lessee/tenant and their respective families, guests, invitees, servants or employees.

1.27 Subdivision Design Guidelines”: the specific design guidelines and development guidelines and architectural review procedures adopted for and applicable to all Lots within the Property, as they may be established or modified in accordance with Section 9.2(c) of this Declaration and Section 8.5 of the Master Declaration, as currently adopted attached hereto as Exhibit “C”.

ARTICLE II MASTER ASSOCIATION 2.1. Subordination. This Declaration, and all the covenants, easements,

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on and Section 8.5 of the Master Declaration, as currently adopted attached hereto as Exhibit “C”.

ARTICLE II MASTER ASSOCIATION 2.1. Subordination. This Declaration, and all the covenants, easements, restrictions, and provisions herein are intended to supplement and run concurrent 5 and subordinate to the Master Declaration and rights of the Master Association as it applies to the Property as part of Stonebridge Ranch. Every Owner, by acceptance of an interest in any Lot or portion of the Property, also acknowledges that he/she or it is subject to the Master Declaration, in addition to this Declaration, and will be an automatic Member of and subject to assessments levied by the Master Association in accordance with the Master Declaration, as well as Assessments levied by the Association.

In addition to all the rights and obligations which are conferred or imposed upon the Association pursuant to this Declaration, the Bylaws or the Articles of Formation, the Association shall be entitled to exercise any of the rights conferred upon it shall be subject to all the obligations imposed upon it pursuant to the Master Declaration and Bylaws of the Master Association. The Association and all committees thereof shall also be subject to all superior rights and powers which have been conferred upon the Master Association or its committees, pursuant to the Master Declaration. The Association shall take no action in derogation of the rights of, or contrary to the interests of the Master Association official ARTICLENII DECLARANT DEVELOPMENT RIGHTS 3.1. Declarant Rights. It is contemplated that the Property will be developed pursuant to a plan which may, from time to time, be amended or modified. Declarant reserves the right, but will not be obligated, to create and/or

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t is contemplated that the Property will be developed pursuant to a plan which may, from time to time, be amended or modified. Declarant reserves the right, but will not be obligated, to create and/or designate Lots and Common Area, and sub-divide same, with respect to any of the Property, pursuant to the terms of this Section, and subject to any limitations imposed on portions of the Property by any applicable Plat(s) or the Master Declaration. These rights may be exercised with respect to any portions of the Property prior to expiration of the Development Period. As each portion of the Property is developed or dedicated, Declarant may designate the use, classification such additional covenants, conditions and restrictions as Declarant may deem appropriate for the Property during the Development Period, subject only to the Master Declaration.

3.2. Special Declarant Rights. Notwithstanding any provision of this Declaration to the contrary, at all times, Declarant will have the right and privilege: (i) to erect and maintain advertising signs (illuminated or non-illuminated), sales flags, other sales devices and banners for the purpose of aiding the sale of Units or 6 any portion of the Property; (ii) to maintain, improvements upon Lots or a portion of the Property as sales, model, management, business and construction offices; and (iii) to maintain and locate construction trailers and construction tools and equipment within the Property. The construction, placement or maintenance of Improvements by the Declarant will not be considered a nuisance and the Declarant hereby reserves the right and privilege for itself to conduct the activities enumerated in this Section, until after the expiration or termination of the Development Period.

nuisance and the Declarant hereby reserves the right and privilege for itself to conduct the activities enumerated in this Section, until after the expiration or termination of the Development Period.

3.3 Transfer of Declarant Rights. Notwithstanding any provision in this Declaration to the contrary, Declarant may, by written instrument, assign in whole or in part, any of its privileges, as exemptions, rights and duties under Declaration to any person or entity and may permit the participation, in whole, in part, exclusively, or non-exclusively, by any other Person in any of its privileges, exemptions, rights and duties hereunder. An assignment of the Declarant's rights shall become effective only after recording of the written instrument in the Real Property Records of Collin County, Texas ficial 3.4. Use of Common Areas. The Declarant in its designee may maintain and carry on upon portions of the Common Area such facilities and activities as, in the sole opinion of Declarant, may be required convenient, or incidental to the construction, promotion of, or sale of Lots, including, but not limited to, maintenance of business offices, signs, model units, and sales offices. The Declarant and its designees, together with the Members, shall have an easement for access to such facilities. The Board of Directors may establish fees for access and use of the Common Area. The Declarant and its employees, agents and designee shall also have a right and easement over and upon all of the Common Area for the purpose of making constructing and installing such improvements to the Common Area as it deems appropriate in its sole discretion; provided such improvements are consistent with this Declaration.

3.5. Approval of Additional Covenants. No Person shall record any

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ts to the Common Area as it deems appropriate in its sole discretion; provided such improvements are consistent with this Declaration.

3.5. Approval of Additional Covenants. No Person shall record any Governing Documents, including a declaration of covenants, conditions and restrictions, or similar instrument affecting any portion of the Property without Declarant's review and written consent. Any attempted record such an instrument without such consent shall result in that instrument being void and of no force and effect unless subsequently approved by recorded consent signed by the Declarant.

7 3.6. Amendment. This Article may not be amended without the written consent of Declarant during the Development Period.

ARTICLE IV 4.1 PROPERTY RIGHTS Common Area. Every Owner shall have a right and nonexclusive easement of use, access, and enjoyment in and to the Common Area, subject to: (a) The Master Declaration, including the provisions contained in Article IV of the Master Declaration, this Declaration the Bylaws and any other applicable covenants; (b) Any restrictions or limitations contained in any deed conveying such property to the Association; (c) The right of the Board of Directors or Declarant to adopt, amend and repeal rules regulating the use and enjoyment of the Common Area: Unofficial (d) The right of the Association, acting through the Board of Directors, to dedicate or transfer all or any part of the Common Area, subject to such approval requirements as may be set forth in this Declaration (e) The right of the Declarant and/or Association to dedicate or transfer all or any part of the Common Area to any municipal corporation, public agency, governmental authority, or utility for such purposes and upon such conditions as may be agreed to by the

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ate or transfer all or any part of the Common Area to any municipal corporation, public agency, governmental authority, or utility for such purposes and upon such conditions as may be agreed to by the Declarant or the Association's Board of Directors.

(f) The right of the Association, acting through the Board of Directors, to mortgage or pledge any or all real or personal property it owns as security for money borrowed or debts incurred.

4.2. Private Streets. A special portion of the Common Area includes the private streets which are identified by name on the Plat, which private streets will 8 be dedicated to the Association at such time as the Declaration determines it is appropriate to do so. The Declarant and the Association will also have the right to, but absolutely no obligation to, prescribe regulations, rules and policies governing the use of the private streets which rules, regulations and policies may include speed limits governing the speed of motorized vehicles using the private streets, may prohibit parking and standing of vehicles or limit parking and standing of vehicles on private streets and may provide for the means for enforcing parking regulations, speed limits and use of the private streets by motorized vehicles and by Persons. Rules and policies may also be adopted by the Association governing traffic flow, which rules, regulations, and policies may provide for stop signs, require that certain traffic yield to other traffic and may dictate that certain areas are restricted to through traffic or are restricted regarding Uturns, left turns or right turns to provide for the proper flow of vehicular traffic within the private streets within the Property. In addition, pedestrian or bike paths may be

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restricted regarding Uturns, left turns or right turns to provide for the proper flow of vehicular traffic within the private streets within the Property. In addition, pedestrian or bike paths may be established and pedestrian or bike cross-areas may be established within the private streets. The proceeding is not intended to be an exclusive list regarding regulations, policies and rules which may be adopted by the Association governing the use of private streets and it is intended hereby that the Association be given broad authority to govern the use and operation of the private streets by persons or vehicles. The Association has absolutely no obligation to adopt an of the proceeding regulations or to enforce same if rules, regulations, or policies are adopted.

ALL PERSONS, INCLUDING ALL OWNERS, ARE HEREBY ADVISED THAT NO REPRESENTATIONS OR WARRANTIES, EITHER WRITTEN OR ORAL, HAVE BEEN OR ARE MADE BY THE DECLARANT, THE ASSOCIATION, OR BY ANY OTHER PERSON ACTING ON BEHALF OF ANY OF THE FOREGOING, ABOUT THE NATURE OR SIZE OF ANY PRIVATE STREETS, THE CONTINUING OWNERSHIP OR OPERATION OF THE PRIVATE STREETS, OR CONCERNING THE SAFE USE OR OCCUPATION OF AN PERSON OR VEHICLE OF THE PRIVATE STREETS.

4.4. Real and Personal Property for Common Use. The Association, through its Board of Directors, may acquire, hold, and dispose of tangible and intangible personal property and real property, subject to such restrictions as are set forth herein, in the Bylaws and in the Articles of Formation. The Declarant may convey to the Association improved or unimproved land located within the Property, personal property, and leasehold or other property interests. Upon conveyance or dedication by the Declarant to the Association, such Common Area

proved or unimproved land located within the Property, personal property, and leasehold or other property interests. Upon conveyance or dedication by the Declarant to the Association, such Common Area shall be accepted by the Association and thereafter shall be maintained by the Association at its expense for the benefit of its Members, subject to any restrictions set forth in the deed of conveyance.

4.5. No Partition. Except as permitted in this Declaration, there shall be no judicial partition of the Common Area. No Person shall seek any judicial partition unless the property at issue has been removed from this Declaration. This Section shall not prohibit the Board of Directors from acquiring and disposing of tangible personal property nor from acquiring or disposing of real property which may or may not be subject to this Declaration.

4.6. Additional Property. The real property described in Exhibit D❞ may be made subject to this Declaration and become part of the Association and the Master Association at a future date, at the sole discretion of the Board for the Master Association, pursuant to the requirements of Article II, Section 2.2 of the Master Declaration, and subject to the consent of the owner of that real property.

V 5.1.

ARTICLE USE RESTRICTIONS General. All the Property shall be owned, held, encumbered, leased, used, occupied, and enjoyed subject to the Master Declaration, the Governing Documents, and the following additional limitations and restrictions: no (a) Authority to Promulgate Use Restrictions and Rules. Subject to the terms of this Article, such initial use restrictions may be adopted or modified in whole or in part, repealed or expanded as follows: (Subject to its duty to exercise business judgment on behalf of the

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erms of this Article, such initial use restrictions may be adopted or modified in whole or in part, repealed or expanded as follows: (Subject to its duty to exercise business judgment on behalf of the Association and its Members, the Board of Directors may adopt rules which create, modify, cancel, fimit, create exceptions to, or expand the use restrictions.

Any rule adopted by the Board of Directors shall become effective unless disapproved at a meeting of Member representing at least 67% of the votes in the Association and by the Declarant during the Development Period. The Board of Directors shall have no obligation to call a meeting of the Members to consider 10 disapproval except upon petition of the Members as required for special meetings in the Bylaws.

(2) The Members, at a meeting duly called for such purposes as provided in the Bylaws, may adopt rules to modify, cancel, limit, create exceptions to, or expand use restrictions and rules previously adopted by a vote of at least 67% of the Members in the Association and approval of the Declarant during the Development Period.

(3) notwithstanding the above, no amendment to or modification of any use restrictions and rules shall be effective without prior notice to a written approval of the Declarant so long as the Declarant owns any Lot or portion of the Property (4) Nothing in this Article shall authorize the Board of Directors or the Members to modify, repeal or expand the Master Design Guidelines of Subdivision Design Guidelines and may not conflict with the Master Declaration or reduce the authority of the Master Association. Article X of this Declaration shall govern all matters of architectural control and aesthetics.

(5) Abridging Existing Rights. If any rule would otherwise require Owners

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ity of the Master Association. Article X of this Declaration shall govern all matters of architectural control and aesthetics.

(5) Abridging Existing Rights. If any rule would otherwise require Owners or occupants of a Lot to dispose of personal property which they maintained in or prior to the effective date of such rule, and in compliance with all rules in force at that time, such rule shall not apply to any such Owners without their written consent unless the rule was in effect at the time such Owners or occupants acquired their interest in a Lot.

(b) Antenna and Satellite Dishes. No television, radio, or other electronic towers, aerials, antenna, satellite dishes or devices of any type for the reception or transmission of radio or television broadcasts or other means of communication shall be erected, constructed, placed or permitted to remain on any Lot or upon any improvements thereon, without the express written consent of the Master Architectural Review Committee, except that this prohibition shall not apply to those antenna specifically covered by the regulations promulgated under the Telecommunications Act of 1996, as amended from time to time. The Master Architectural Review Committee is empowered to adopt rules governing the types of antenna that are permissible into establish reasonable, non-discriminatory restrictions relating to safety, location, and maintenance of such antenna. To the extent that receipt of an acceptable signal would not be impaired, in antenna permissible pursuant to the rules of the Architectural Review Committee may only be installed in a location, not within public view, and integrated with the 11 Improvements or structure, as well as surrounding landscape. Antenna shall be

the Architectural Review Committee may only be installed in a location, not within public view, and integrated with the 11 Improvements or structure, as well as surrounding landscape. Antenna shall be installed in compliance with all state and local laws and regulations.

(c) Vehicles and Parking. The term "vehicles", as used herein, shall refer to all motorized vehicles including, without limitation, automobiles, trucks, motor homes, boats, trailers, motorcycles, minibikes, scooters, go-carts, campers, buses, vans, golf carts, or other powered vehicles as that term is commonly understood.

No vehicle may be parked or left upon or adjacent to any Unit or Commercial Tract, except in a garage or other area designated by the Board of Directors, and in driveways or parking lots designated on Plats or otherwise approved for such Lots.

The Board of Directors shall have the authority to promulgate rules for parking on the Property. Any vehicles parked or left not in accordance with this Section shall be considered a nuisance. No motorized vehicles shall be permitted on pathways or unpaved Common Area except for public safety vehicles and vehicles authorized by the Board of Directors. Additional requirements for vehicle parking will also apply as referenced in the Subordinate Declarations for the Property covered thereby.

ficia (d) Disposal of Trash. No trash, subbish, garbage, manure, debris, or offensive material of any kind shall be kept or allowed to remain on any Lot, nor shall any Lot be used and maintained as a dumping ground for such materials. All such matter or materials shall be placed in sanitary refuse containers constructed of metal, plastic or masonry materials with tightatting sanitary covers or lids and

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ng ground for such materials. All such matter or materials shall be placed in sanitary refuse containers constructed of metal, plastic or masonry materials with tightatting sanitary covers or lids and placed in an area adequately screened from public view by planting or fencing. All rubbish, trash, and garbage shall be regularly removed and not allowed to accumulate. Equipment used for the temporary storage and/or disposal of such material prior to the removal shall be kept in a clean and sanitary condition and shall comply with all current laws and regulations and those which may be promulgated in the future by any federal, state, county, municipal or other governmental body regarding environmental quality and waste disposal. In a manner consistent with good housekeeping, the Owner of each Lot shall remove such prohibited matter or materials from a Lot at regular intervals and at the Owner's expense.

(e) Weapons and Fireworks. The use of fireworks, firearms and other weapons within the Property is prohibited. Nothing contained in this Declaration shall be construed to require that the Association or Declarant to enforce this Section.

12 (f) Temporary Buildings. Temporary buildings or structure shall not be permitted on any Lot; provided, however, Declarant may permit temporary toilet facilities, sales and construction offices, and storage areas to be used by builders or contractors in connection with the construction and development of the Property.

(g) Landscaping. The Owner of each Lot shall install or cause to be installed grass, shrubbery, and other landscaping in accordance Article and the procedures for review and approval by the Master Architectural Review Committee and applicable Design Guidelines.

to be installed grass, shrubbery, and other landscaping in accordance Article and the procedures for review and approval by the Master Architectural Review Committee and applicable Design Guidelines.

(h) Traffic Site Areas. Lots located at street intersections shall be landscaped in a manner which will permit safe site across the street corners. No fence, wall, hedge, shrub planning or other similar obstruction, shall be placed or permitted to remain where this would create a traffic or site problem.

(i) Private Utility Lines. All electrical, telephone, telecommunication, natural gas and other utility lines and facilities which are located on a Lot that are not owned by a government entity or a public utility company shall be installed underground unless otherwise approved in writing by the Master Architectural Review Committee.

Dofficial (j) Signs. Except as set forth below, no signs, billboards, posters, or advertising devices of any kind shall be permitted on any Lot or Common Area without the prior written consent of the Master Architectural Review Committee, other than signage prescribed by the Master Declaration, the Design Guidelines, or other Governing Documents, if any, which do not require prior approval. The Declarant reserves the right and may construct and maintain, or allow Builders to construct and maintain, signs on Lots they own and on Common Area as is customary in connection with the sale of developed Lots. In addition, the Declarant and the Association shall have the right to erect and maintain identifying signs and monuments at entrances to portions of the Property in addition to any other remedies provided for herein, the Board of Directors or its duly authorized agent

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o erect and maintain identifying signs and monuments at entrances to portions of the Property in addition to any other remedies provided for herein, the Board of Directors or its duly authorized agent shall have the power to enter upon a Lot to remove any sign which violates of this Section, provided the violating Owner has been given forty-eight (48) hours' written notice by the Association, or such period of time otherwise required by law, of its intent to exercise self-help. All costs of self-help shall be collected as provided for herein for the collection of Assessments and shall be considered part of said Assessments.

13 (k) Single Family Use. Lots shall be used solely for single-family residential purposes and may not be used for any other purpose. No professional, business, or commercial activity to which the general public are invited shall be conducted on any portion of a Lot, except an Owner may conduct business activities within a residence so long as: (1) such activity complies will all applicable zoning ordinances (if any); (ii) participation in the business activity is limited to the Owner(s) of the residence on the Lot; (iii) the existence or operation of the business activity is not apparent or detectable by sight, i.e., no sign may be erected advertising the business within the Property, sound, or smell outside the residence; (iv) the business activity does not involved door-to-door solicitation of residents within the Property; (v) the business does not, in the Board of Director's judgement, generate a level of vehicular or pedestrian traffic on a number of vehicles parked within the Property which is noticeably greater than which is typical of residences in which no business activity is being conducted; (vi) the

ular or pedestrian traffic on a number of vehicles parked within the Property which is noticeably greater than which is typical of residences in which no business activity is being conducted; (vi) the business activity is consistent with the residential character of the Property and does not constitute a nuisance, or hazardous or offensive use for threaten the security or safety of other Owners and residents within the Property as may be determined by the sole discretion of the Board of Directors; and (vii) the business does not require the installation of any machinery other than that customary to normal household operations. Furthermore, the purpose of obtaining any business.

or commercial license, neither the residence nor the Lot will be considered open to the public. Leasing shall not be considered a Business within the meaning of this subsection, however, any leasing activity must otherwise comply with the requirements set forth in the Master Declaration or elsewhere in this Declaration or the Governing Documents.

Declarant and builders may construct and maintain upon their Lots, such facilities and conduct such activities which in the Declarant's sole opinion, may be reasonably required, convenient, or incidental to the construction or sale of single family residences constructed upon the Lots, including, but not limited to, business offices, signs, model homes, and sales offices.

(1) Prohibited Activities. No noxious or offensive activity of any kind which may constitute or become an annoyance or nuisance shall be permitted.

(m) Conflicts. The Common Areas and Lots will be governed by this Declaration, except to the extent that there is a conflict between the Declaration and Master Declaration, in which case the Master Declaration shall control and

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reas and Lots will be governed by this Declaration, except to the extent that there is a conflict between the Declaration and Master Declaration, in which case the Master Declaration shall control and supersede this Declaration.

14 (n) Owners' Acknowledgment. ALL OWNERS AND OCCUPANTS OF A LOT ARE GIVEN NOTICE THAT USE OF THEIR LOTS ARE LIMITED BY THE USE RESTRICTIONS AND RULES AS THEY MAY BE CREATED, AMENDED, AND EXPANDED AND OTHERWISE MODIFIED HEREUNDER AND BY THE MASTER ARCHITECTURAL REVIEW COMMITTEE. EACH OWNER, BY ACCEPTANCE OF A DEED OR ENTERING A RECORDED CONTRACT OF SALE, ACKNOWLEDGES, AND AGREES THAT THE USE AND ENJOYMENT IN THE MARKETABILITY OF ITS LOT MAY BE AFFECTED BY THIS PROVISION AND THAT THE USE RESTRICTIONS AND RULES MAY CHANGE FROM TIME TO TIME.

icial 6.1.

ARTICLE VI, MAINTENANCE Maintenance of Improvements Subject to the provisions of this Article, each Owner shall maintain the exterior of all buildings, fences, walls, and other improvements on their Lot in good condition and repair, to replace worn and rotten parts, shall regularly repaint all painted surfaces shall not permit the roofs, rain gutters, downspouts, exterior walls, windows, doors, walks, driveways, parking areas or other exterior portions of the Improvements on their Unit to deteriorate. Upon failure of the Owner of any Lot to maintain the exterior of all buildings, fences, walls and other improvements on their Lot, the Association may, at its option, perform such maintenance as often as necessary in their judgment, any Owner of such Lot shall be obligated, when presented with an itemized statement to reimburse the Association for the costs of such maintenance work.

To the extent the Association performs such maintenance, this provision shall be

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ligated, when presented with an itemized statement to reimburse the Association for the costs of such maintenance work.

To the extent the Association performs such maintenance, this provision shall be construed to create a lien in favor of the Association against such Lot and shall be considered part of the Assessment obligation thereof for the cost of such work or the reimbursement sought for such work performed on such Lot.

6.2. Party Wall/Fences. A fence or wall located on or near the dividing property line between two (2) Lots and intended to benefit both Lots constitutes a “Party Wall” and, to the extent not inconsistent with the provisions of this Section 6.2, is subject to the general rules of law regarding party walls and liability for property damage due to negligence, willful acts, or omissions.

15 (a) Encroachments & Easements. If the Party Wall is on one Lot due to an error in construction or placement, the party Wall is nevertheless deemed to be on the dividing line for purposes of this Section 6.2. Each Lot sharing Party Wall is subject to an easement for the existence and continuance of any encroachment by the Party Wall because of construction, repair, shifting, settlement, or movement in any portion of the Party Wall, so that the encroachment may remain undisturbed as long as the Party Wall stands. Each lot is subject to a reciprocal easement for maintenance, repair, replacement, or reconstruction of the Party Wall.

jera (b) Right to Repair. If the Party Wall is damaged or destroyed from any cause, the Owner of either Lot may repair or rebuild the Party Wall to its previous condition, and the Owners of both Lots, their successors, and assigns, have the right to the full use of the repaired or rebuilt Party Wall.

er Lot may repair or rebuild the Party Wall to its previous condition, and the Owners of both Lots, their successors, and assigns, have the right to the full use of the repaired or rebuilt Party Wall.

(c) Maintenance Costs. The Owners of the adjoining Lots share equally the costs of repair, reconstruction, or replacement of the Party Wall subject to the right of one Owner to call for larger contribution from the other funder any rule of law regarding liability for negligence of willful acts or omissions. If an Owner is responsible for damage to or destruction of the Party Wall, that Owner will bear the entire cost of repair, reconstruction, of replacement. Each Owner has a right of contribution for costs of repair, reconstruction or replacement against the other Owner sharing the Party Wall and this right of contribution shall be appurtenant to the Lots sharing the Party Wall and shall pass to such Owner's successors-in-title.

(d) Arbitration. In the event of any dispute, disagreement or controversy between Owners pertaining to a Party Wall, resolution of such shall be governed by and resolved in accordance with the Arbitration provisions contained in Section 10.9(F) of the Master Declaration.

6.3. Destruction. In the event of any fire or other casualty, the Owner will promptly repair restore, and replace any damaged or destroyed structures or Improvements to their same exterior condition existing prior to the damage or destruction thereof. Such repair, restoration or replacement will be commenced and completed in a good and workmanlike manner using exterior materials identical to those originally used in the structures damaged or destroyed. To the extent the Owner fails to commence such repair, restoration or replacement of substantial or

Page 18

using exterior materials identical to those originally used in the structures damaged or destroyed. To the extent the Owner fails to commence such repair, restoration or replacement of substantial or total damage or destruction within thirty (30) days after the occurrence of such damage or destruction, and there after follow same through to completion, or if the Owner does not clean up any debris resulting from any damage within thirty (30) 16 days after the occurrence of such damage, the Association may, but is not required to, commence, complete or affect such repair, restoration, or replacement or cleanup, and such Owner will be personally liable to the Association for the cost of such work. If the Owner fails to pay such cost upon demand by the Association, the cost thereof (plus interest from the date of demand until paid at the rate of one and onehalf percent (1%) per month will be assessed against and chargeable to the Owner's Lot, or at the maximum lawful interest rate allowed by law. Any such amounts assessed and chargeable against a portion of the Property will be secured by the lien reserved in this Declaration for Assessments and may be collected by any means provided in this Declaration for the collection of Assessments, including, but not limited to foreclosure of such lien against such Lot 6.4. Standard of Performance. Maintenance, as such term is used in this Article, shall include, without limitation, repair and replacement as needed, as well as such other duties which may include irrigation, as the Board of Directors may determine necessary or appropriate to satisfy the Community Wide Standard. All maintenance and irrigation shall be performed in a manner consistent with the Community-Wide Standard and all applicable covenants and restrictions.

Pages 18–19

opriate to satisfy the Community Wide Standard. All maintenance and irrigation shall be performed in a manner consistent with the Community-Wide Standard and all applicable covenants and restrictions.

official 6.5. Common Area Maintenance. Except as may be otherwise provided by this Declaration, the Association shall manage, maintain, and keep in good repair the Common Area.

ARTICLE VII ASSOCIATION MEMBERSHIP AND VOTING RIGHTS 7.1. Function of the Association. The Association will be a non-profit corporation The Association shall be the primary entity responsible for enforcement of this Declaration and such rules regulating use of the Property as the Board of Directors or the membership may adopt pursuant to Declaration. The Association shall perform its functions in accordance with this Declaration, the Bylaws, the Articles of Formation, other Governing Documents, and Texas law.

7.2. Membership: Every Owner shall be a Member of the Association.

There shall be only one (1) membership per Lot. If a Lot is owned by more than one Person, all co-Owners shall share the privileges of such membership, subject to the Board of Directors regulation and the restrictions on voting set forth in Section 7.5 and in the Bylaws, and all co-Owners shall be jointly and severally 17 obligated to perform the responsibilities of Owners. The membership rights and privileges may be exercised by the Owner, if a natural person, or, in the case of an Owner which is a corporation, partnership, or other legal entity, by any officer, director, partner, or trustee, or by any other individual designated by the Owner from time to time in a written instrument provided to the Secretary of the Association.

7.3. Board of Directors.

(a) The Owners of the Lots shall elect the Board of Directors subject to

d by the Owner from time to time in a written instrument provided to the Secretary of the Association.

7.3. Board of Directors.

(a) The Owners of the Lots shall elect the Board of Directors subject to provisions of Section 7.3(b) hereof, and the Board of Directors shall by Majority rule, conduct all the business of the Association.

(b) Notwithstanding anything contained in Section 7.4(a) br elsewhere in this Declaration to the contrary, until one hundred and twenty (120) days after the 10th anniversary of the date this Declaration is recorded in the Real Property Records of Collin County, Texas, the Declarant will have the sole right to appoint and remove all members of the Board of Directors. Within one hundred and twenty (120) days after the 10th anniversary of the date this Declaration is recorded in the Real Property Records of Collin County, Texas, or sooner as determined by the Declarant, the Board of Directors will call a meeting of the Members of the Association for the purposes of electing onethird of the Board (the "Initial Member Election Meeting"), which Board member(s) must be elected by Owners other than the Declarant. Declarant shall continue to have the sole right to appoint and remove two-thirds of the Board of Directors after the Initial Member Election Meeting until expiration or termination of the Development Period.

7.4. Bylaws. The Association may make whatever rules and Bylaws it deems desirable to govern the Association and Members; provided, however, any conflict between the Bylaws or rules and the provisions of this Declaration shall be controlled by the provisions of this Declaration, as amended or supplemented.

7.5. Voting. The right to cast votes and the number of votes which may be

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and the provisions of this Declaration shall be controlled by the provisions of this Declaration, as amended or supplemented.

7.5. Voting. The right to cast votes and the number of votes which may be cast for election of members to the Board of Directors (except as provided for in by Section 7.3) and on all other matters to be voted on by the Members will be calculated as set forth below.

owned.

(a) The Owner of each Lot will have one (1) vote for each Lot so 18 (b) In addition to the votes to which Declarant is entitled by reason of Section 7.05(a), for every one (1) vote outstanding in favor of any other person or entity, Declarant will have four (4) additional votes until the expiration or termination of the Development Period.

(c) When more than one Person owns a portion of the fee simple interest in any Lot, all such Person will be Members. The vote of votes (or fraction thereof) for each Lot will be exercised by the Person so designated in writing to the Secretary of the Association by the Owner of such Lot, and in no event will the vote for such Lot exceed the total votes to which such Lot is otherwise entitled under this Section 7.5.

(d) Written notice of the purpose, time, and place of any meeting of the Members of the Association shall be given to all Members entitled to vote at such meeting, not less than ten (10) days nor more than sixty (60) days in advance of such meeting. At any meeting of the Members of the Association, the presence of Members and/or their proxies entitled cast at least ten percent (10%) of all the votes entitled to be cast at such meeting shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the previously mentioned notice

Pages 20–21

nt (10%) of all the votes entitled to be cast at such meeting shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the previously mentioned notice requirement, but the required quorum for such subsequent meeting shall be one-half (1/2) of the quorum required at the proceeding meeting; provided, however such subsequent meeting must be held within sixty (60) days following the proceeding meeting.

7.6. Association Powers. The Association will have the powers of a Texas non-profit corporation. It will further have the power to do and perform all acts that may be necessary or proper, for or incidental to, the exercise of any of the express powers granted to it by the Declaration, its Certificate of Formation and Texas law, specifically including but not Imited to powers and duties vested in non-profit corporations pursuant to the Texas Business Corporations Act. Without limiting the general powers described in the proceeding sentences, the Board of Directors, acting on behalf of the Association, will have the following powers at all time: (a) Rules and Bylaws. To make, establish and promulgate, and in its discretion to amend from time to time, or repeal and re-enact, such rules, regulations, Bylaws, and policies not in conflict with this Declaration, the Governing Documents, and the Master Declaration, and as the Board of 19 Directors deems proper, covering all aspects of the Property (including the operation, maintenance, and preservation thereof) or the Association. Any rules, regulations or policies, or amendment to any existing rules, regulations, policies, or the Bylaws proposed by the Board of Directors must be approved in writing by the Declarant until expiration of the Development Period.

es, or amendment to any existing rules, regulations, policies, or the Bylaws proposed by the Board of Directors must be approved in writing by the Declarant until expiration of the Development Period.

(b) Insurance. To obtain and maintain in effect, policies of insurance that, in the opinion of the Board of Directors, are reasonably necessary of appropriate to carry out the Association's function.

(c) Records. To keep books and records of the Association's affairs, and to make such books and records, together with current copies of the Declaration and Governing Documents, available for inspection by the Owners, Mortgagees, and insurers or guarantors of any Mortgage upon request during normal business hours.

official (d) Assessments. To levy and collect assessments, as provided in Article VIII herein.

(e) Right of Entry and Enforcement. To enter at any time without notice in an emergency (or in the case of a non-emergency, after twenty-four (24) hours written notice), without being liable to an Owner or resident, upon any Lot and into any Improvement thereon for the purpose of enforcing the Declaration, Governing Documents, or for the purpose of maintaining or repairing any ared, Improvement, or other facility to conform to the Declaration or Governing Documents. The expense incurred by the Association in connection with the entry upon any Lot or into an Improvement thereon, as well as the maintenance and repair work conducted thereon or therein, will be a personal obligation of the Owner of the Lot so entered, and will be deemed to be an Individual Special Assessment against such Lot and will be secured by the lien upon such Lot and will be enforced in the same manner and to the same extent as provided in Section 8.7 of this

Page 22

to be an Individual Special Assessment against such Lot and will be secured by the lien upon such Lot and will be enforced in the same manner and to the same extent as provided in Section 8.7 of this Declaration. The Association will have the power and authority, to commence and maintain actions and suites to enforce, by mandatory injunction or otherwise, or to restrain and enjoin, any breach or threatened breach of the Declaration or Governing Documents, provided however, that the Board of Directors will never be authorized to expend Association funds for the purpose of brining suit against the Declarant or its successors or 20 20 assigns. EACH OWNER AND RESIDENT IN THE PROPERTY WILL INDEMNIFY AND HOLD HARMLESS THE ASSOCIATION, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ANY COST, LOSS, DAMAGE, EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION INCURRED OR THAT MAY ARISE BY REASON OF THE ASSOCIATION'S ACTS OR ACTIVITIES UNDER THIS SECTION 7.6(e) (INCLUDING ANY COST, EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION ARISING BY REASON OF THE ASSOCIATION'S NEGLIGENCE IN CONNECTION THEREWITH) BUT EXCEPT FOR SUCH COST, LOSS, DAMAGE EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION ARISING BY REASON OF THE ASSOCIATIONS GROSS NEGLIGENCE” DOES NOT INCLUDE SIMPLE NEGLIGENCE, CONTRIBUTORY NEGLIGENCE OR SIMILAR NEGLIGENCES SHORT OF ACTUAL GROSS NEGLGIENCE ORC (f) Legal and Accounting Services. To retain and pay for legal and accounting services necessary or proper in the operation of the Association.

Proper (g) Conveyances. To grant and convey to any person or entity the real property and/or other interest, including fee title, leasehold estates, easements, rights-of-way, or mortgages, out of in, on, over, or under any Common Area for

Pages 22–23

onvey to any person or entity the real property and/or other interest, including fee title, leasehold estates, easements, rights-of-way, or mortgages, out of in, on, over, or under any Common Area for constructing, erecting, operating or maintain the following: Parks, parkways or other recreational facilities, Improvements or structures; Uno (ii) Roads, streets, sidewalks, signs, street lights, walks, driveways, trails, and paths; (iii) Lines, cables, wires, conduits, pipelines or other devices for utility paths; (iv) Sewers, water systems, storm water drainage systems, sprinkler systems and/or; (v) any similar Improvements or facilities.

(h) Manager. To retain and pay for the services of a person or firm (the "Manager") which may include Declarant or any other affiliate of the Declarant, to 21 manage and operate the Association, including its property, day-to-day administrative duties, to the extent deemed advisable by the Board of Directors.

To the extent permitted by Texas law, the Board of Directors may delegate any other duties, powers, and functions to the Manager. In addition, the Board of Directors may adopt transfer fees, resale certificate fees or any other fees associated with the provision of the management services to the Association or its Members. THE MEMBERS HEREBY RELEASE THE ASSOCIATION AND THE MEMBERS OF THE BOARD OF DIRECTORS AND COMMITTEE MEMBERS FROM LIABLITY FOR ANY OMISSIONS OR IMPROPER EXERCISE BY THE MANAGER OF ANY SUCH DUTY, POWER OR FUNCATION SO DELEGATED.

ficial (I) Property Services. To pay for water, sewer, garbage removal, street lights, street repair, landscaping, and other utilities, services repair, and maintenance for any portion of the Property Common Area, including the private

Pages 23–24

y for water, sewer, garbage removal, street lights, street repair, landscaping, and other utilities, services repair, and maintenance for any portion of the Property Common Area, including the private streets, recreational facilities, easements, right-of-way, signs, parks, parkways, median strips, sidewalks, paths, trails, ponds, and lakes.

(j) Contracts and Other Services. To enter into contracts or licenses with the Declarant or a third party on such terms as the Board of Directors will determine, to operate and maintain any Common Area or other part of the Property, or to provided and pay for any other services and property, and to pay any other taxes or assessments that the Association, or the Board of Directors is required or permitted to secure or to pay for pursuant to Texas law or under the terms of this Declaration or as determined by the Board of Directors.

(k) Construction on Common Area. To construct new Improvements or additions to any property owned, leased, or licensed to the Association, subject to the approval of the Board of Directors and the Declarant until expiration of the Development Period.

(1) Property Ownership. To acquire, own and dispose of all manner of real and personal property, whether by grant, lease, easement, gift, or otherwise.

During the Development Period, all acquisitions and dispositions of the Association hereunder must be approved in advance and in writing by the Declarant.

(m) Borrowing. To borrow funds secured by such assets of the Association as deemed appropriate by the lender and the Board of Directors.

22 (o) Enforcement and Fines. To enforce the provisions of this Declaration and Governing Documents and to enjoin and seek damages from any Owner or Resident for violation of any such provisions. The Board of Directors is

d Fines. To enforce the provisions of this Declaration and Governing Documents and to enjoin and seek damages from any Owner or Resident for violation of any such provisions. The Board of Directors is specifically authorized and empowered to establish (and to revise and amend from time to time) a monetary fining system or policy which may include incremental steps such as notice of violation letters or warnings, due process hearings, appeals and a flat rate or discretionary range of fines or escalating fines for repeat offenders, which when pronounced, shall be considered to be a Special Individual Assessment as set forth in Section 8.7 of this Declaration, secured by a lien against the Lot and a personal obligation of the Owner of the Lot.

7.7. Board Authority. The Board of Directors shall have the right and obligation to perform the function of the Board of Directors on behalf of the Association without a vote of the membership unless otherwise provided for in the Governing Documents.

7.8. Protection of Declarant's Interests. Despite any assumptions of control of the Board of Directors by Owners other than Declarant, until expiration of the Development Period, the Board of Directors is prohibited from taking any action which would discriminate against Declarant, or which would be detrimental to the sale of Lots owned by Declarant. Declarant shall be entitled to determine, in its sole and absolute discretion, whether any such action discriminates or is detrimental to Declarant. The Board of Directors will be required to continue the same level and quality of maintenance, operations, and services as provided immediately prior to assumption of control of the Board of Directors other than Declarant, until the expiration or termination of the Development Period.

Ung 8.1.

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operations, and services as provided immediately prior to assumption of control of the Board of Directors other than Declarant, until the expiration or termination of the Development Period.

Ung 8.1.

ARTICLE VIII ASSESSMENTS Creation of Assessments. In addition to assessments levied by the Master Association, the following shall provisions shall apply and govern levy and collection of Assessments (as defined in this Article VIII): (a) Authorized by Board of Directors. The Association Board of Directors shall establish Regular Assessments, Special Assessments and Individual Special Assessments as defined in and pursuant to this Article (hereinafter singularly or collectively "Assessments"). Said Assessments shall be levied against each Lot in 23 amounts determined pursuant to this Article. The total amount of Assessments will be determined by the Board of Directors pursuant to Section 8.2, 8.6 and 8.7.

(b) Owner's Personal Obligation and Lien. Assessments, together with interest, costs of collection, fines, late fees, and reasonable attorneys' fees shall be a personal obligation of the Owner of the Lot against which the Assessment is levied and, if unpaid, shall constitute a continuing lien upon the Lot against which such unpaid Assessment and the listed other charges are made. The personal obligation for delinquent Assessment and listed charges shall not pass to such Owner's successor in title unless expressly assumed by them, however, the lien for such Assessments and listed charges shall continue as a lien against the Lot and may be enforced against the Lot.

(c) Optional Subsidies by Declarant. The Declarant may, but is not required to, reduce Assessments which would otherwise be levied against the Lots for any

Pages 25–26

the Lot and may be enforced against the Lot.

(c) Optional Subsidies by Declarant. The Declarant may, but is not required to, reduce Assessments which would otherwise be levied against the Lots for any fiscal year by payment of a subsidy to the Association. Any subsidy paid to the Association by the Declarant may be treated as a loan or a contribution, as determined at the sole discretion of the Declarant. Payment of a subsidy by the Declarant in any given year shall not obligate the Declarant to continue payment of a subsidy to the Association in future years.

nofficial 8.2. Regular Assessments.

(a) Prior to the beginning of each fiscal year, the Board of Directors will estimate the expenses to be incurred by the Association during such year in performing its functions and exercising its powers under the Declaration, including, but not limited to, the cost of all management, repair and maintenance, the cost of providing for street maintenance, street and other lighting, the administrative expenses required for enforcing the Declaration and amount needed for contingencies, replacement reserves. The Board of Directors will give due consideration to the forecast or expected income and any surplus funds remaining from the prior year funding. Assessments sufficient to pay for the estimated expenses will then be levied at a rate or level of Assessments that the Board of Directors, in its sole discretion, shall determine is necessary ("Annual Assessment”). The Board of Director's determination of the Annual Assessment will be final and binding so long as it is made in good faith. If the sums collected for the Annual Assessment prove to be inadequate for any reason, including nonpayment of the Regular Assessment, the Association's Board of Directors may 24

s made in good faith. If the sums collected for the Annual Assessment prove to be inadequate for any reason, including nonpayment of the Regular Assessment, the Association's Board of Directors may 24 at any time, and from time to time, levy a further Regular Assessment in the same manner prescribed herein to make up the shortfalls.

(b) No Owner may exempt itself from liability for assessments by non-use of Common Areas, abandonment of their Lot or any other means. The obligation to pay Assessments is a separate and independent covenant on the part of each Owner. No diminution or abatement of Regular Assessments or set-off shall be claimed or allowed for any alleged failure of the Association or Board of Directors to take some action or perform some function required of it, or for inconvenience or discomfort arising from the making of repairs or improvements, or from any other action it takes. The Association is specifically authorized to enter subsidy contracts or contracts for "in-kind" contribution of services, materials, or a combination of services and materials with the Declarant or other entities for payment of Assessments.

8.3.

official Purpose/Common Expense. The Association shall use the proceeds of the Regular Assessments for the use and benefit of the Association. Such uses and benefits shall be considered the common expenses of the Association (the "Common Expense"), and may include, by way of example and not limitation, any of the following: (a) Hiring a Manager for the purpose of carrying out duties of the Board of Directors; (b) maintaining the Common Area, including operating, managing, repairing, replacing, or improving any Common Area, parkways, entryways, irrigation systems and other landscaping, lighting, sprinkler systems, walls, fences,

Page 27

mmon Area, including operating, managing, repairing, replacing, or improving any Common Area, parkways, entryways, irrigation systems and other landscaping, lighting, sprinkler systems, walls, fences, monuments, signs, perimeter access gates, and streets and other features located in the Common Area of the Property; (c) Paying legal charges and expenses incurred in connection with the enforcement of this Declaration and Governing Documents affecting the Property; (d) Paying reasonable and necessary expenses in connection with the collection and administration of the Assessments for the Association; (e) Paying insurance premiums for liability and fidelity coverage for Declarant, the Board of Directors and/or the Association and/or their officers and directors, pulling policeman and watchmen, caring for vacant Lots and doing any other things which are necessary or desirable in the opinion of the Board of Directors, to keep the Lots neat, secure and in good order, or which are considered 25 of general benefit to the Owners or occupants of the Property, it being understood that the judgment of the Board of Directors, in the expenditure of said funds shall be final and conclusive so long as such judgment is exercising good faith; (f) Creating a capital reserve fund for the long-term repair and replacement of, capital items within the Common Area (such as, but not limited to monuments, parkways, private streets, irrigation systems and landscaping); and (g) Re-payment of money borrowed by and for the Association for the foregoing purposes.

8.4. Reserve Budget and Capital Contribution. The Board of Directors may annually prepare a reserve budget which takes into account the number and nature of replaceable assets within the Common Area, the expected life of each

apital Contribution. The Board of Directors may annually prepare a reserve budget which takes into account the number and nature of replaceable assets within the Common Area, the expected life of each asset, and the expected repair or replacement cost. The Board of Directors may set the required capital contribution, if any, in an amount sufficient to permit meeting the projected capital needs of the Association, as shown on the reserve budget, with respect to both the amount and timing by Regular Assessments over the budget Period.

Roficial 8.5. Annual Budget. The Beard of Directors will prepare and approve and estimated annual budget for each fiscal year. The budget will consider the estimated income and Common Expense for the year, contributions to a reserve fund, and a projection for uncollected receivables. The Board of Directors will make the budget or its summary available for an Owner of each Lot, although failed to receive a budget on summary does not affect and at Owner's liability for Assessments. The Board of Directors will provide copies of the detailed budget to Owners who make written request and pay reasonable copy charge.

8.6.

Special Assessments (a) In addition to the Regular Assessment authorized above, the Association's Board of Directors may levy in any calendar year, a Special Assessment, applicable to that year only, for the purpose of defraying in whole or in part, the cost of any indemnification set forth in this Declaration, the Certificate of Formation or Bylaws for the Association, and any construction, reconstruction, repair or replacement of a capital improvement on or to the Common Area of the Association in the same or immediately subsequent calendar year.

(b) Any Special Assessment levied by the Board of Directors in accordance

Page 28

ment of a capital improvement on or to the Common Area of the Association in the same or immediately subsequent calendar year.

(b) Any Special Assessment levied by the Board of Directors in accordance with 9.6(a) must also have the approval of Members voting in person or by proxy 26 at a meeting duly called for this purpose not less than ten (10) days nor more than fifty (50) days in advance of such meeting.

8.7. Individual Special Assessments. In addition to Regular and Special Assessments, the Board of Directors may levy an Individual Special Assessment against a Lot and its Owner. Individual Special Assessments may include, but are not limited to: reimbursement for costs and fines incurred in bringing an Owner or his/her Lot into compliance with the Declaration or other Governing Documents; for reimbursement for damage or waste caused by willful or negligent acts of an Owner or his/her guests, invitees or tenants; or for expense incurred by the Association for services requested by fewer to all of the Lots and which may be assessed equitably according to the benefit received on a per-Lot basis.

10, 8.8. Effect of Nonpayment of Assessments. Any Regular Assessment, Special Assessment, or Individual Special Assessments which are not paid in full by the date specified by the Board of Directors shall be delinquent. Any such delinquent Assessment shall commence to bear interest on the due date at the lesser of eighteen percent (18%) per annum of such other interest rate as the Board of Directors may from time to time determine of the maximum lawful rate of interest and shall also be subject to an administrative late fee if levied by the Board of Directors. If the Assessment is not paid when due, the lien herein retained and

Pages 28–29

of the maximum lawful rate of interest and shall also be subject to an administrative late fee if levied by the Board of Directors. If the Assessment is not paid when due, the lien herein retained and created against the affected Lot shall secure the Assessment due, interest thereon from the date due and payable, any late fees, all costs of collection, fines, costs of enforcement of this Declaration, or other recorded covenants and/or rules, costs of court, reasonable attorneys fees actually incurred, and any other amount provided or permitted by law. In the event the Assessment remains unpaid after ninety (90) days, the Association may as the Board of Directors shall determine, initiate suit for collection against the Owner personally obligated to pay the Assessment or foreclose the lien created and reserved hereby against the Lot covered by and subject to the delinquent Assessment.

The Association's lien is created by recordation of this Declaration in the Official Records, which constitutes record notice and perfection of the lien. No other recordation of a lien or notice of lien shall be or is required. By acquiring a Lot, in Owner grants to the Association a power of a sale in connection with the Association's lien. By written resolution, the Board of Directors may appoint, from time to time, an officer, agent, trustee, or attorney of the Association to exercise the power of sale on behalf of the Association. The Association shall exercise its power of sale pursuant to Section 51.002 of the Texas Property Code, and any 27 applicable revision(s), amendment(s), are recodifications thereof in effect at the time of the exercise of such power of sale. The Association has a right to foreclose

Texas Property Code, and any 27 applicable revision(s), amendment(s), are recodifications thereof in effect at the time of the exercise of such power of sale. The Association has a right to foreclose its lien judicially or by non-judicial foreclosure pursuant to the power of sale created hereby. Cost of foreclosure may be added to the amount owed by the Owner to the Association. The Association may bid for and purchase the Lot at the foreclosure sale utilizing funds of the Association. The Association may own, lease, encumber, exchange, sell, or convey a Lot. The purchaser at any foreclosure sale shall be entitled to sue for recovery of possession of the Lot, by an action of forcible detainer without the necessity of giving any notice to the former Owner or the Owners of the Lot sold at foreclosure. Nothing herein shall prohibit the Association from taking a deed in lieu of foreclosure or from filing suit to recover a money judgment for sums that may be secured by the lien. At any fine before a non-judicial foreclosure sale, an Owner of a Lot may avoid foreclosure by paying all amounts due to the Association.

ficial No Owner may waive or otherwise exempt himself from liability for the Assessments provided for herein, by non-use of the Common Areas or abandonment of the Lot owned by such Owner. No diminution or abatement of Assessment or set-off shall be claimed or allowed by reason of any alleged failure of the Association or the Board of Directors to take some action or perform some function required to be taken or performed by the Association or Board of Directors under this Declaration or the Bylaws, or for inconvenience or discomfort arising from the making of repairs or improvements which are the responsibility of

Page 30

med by the Association or Board of Directors 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 Association, or from any action taken to comply with any law, ordinance, or with any order or directive of any municipal or other governmental authority, the obligation to pay Assessments being a separate and independent covenant on the part of Declarant in each other Owner.

In All payments shall be applied first to costs and attorneys' fees, then to interest, then to late fees and then to delinquent Assessments to the fullest extent permitted by applicable law.

8.9.

Subordinated Lien to Secure Payment. The lien on any particular Lot created because of the non-payment of any Assessment provided for herein shall only be subordinate to the liens of any valid first lien mortgage and deed of trust secured by such Lot. Sale or transfer of any Lot shall not impair the enforceability or priority of the Assessment lien against such Lot.

28 8.10. Duration. Assessment created for herein will remain effective for the full term (and extended term, if applicable) of the Declaration.

8.11. Declarant Not Liable for Association Deficits. Notwithstanding anything contained in this Declaration to the contrary, Declarant shall not be liable for any liabilities, obligations, damages, causes, causes of action, claims, debts, suits, or other matters incurred by or on behalf of the Association or Owners or for any deficits or shortfalls incurred or realized by or on behalf of the Association or Owners in connection with the Property or this Declaration. Declarant's sole liability and obligation hereunder shall be limited to the Assessments assessed against any Lots owned by the Declarant.

or Owners in connection with the Property or this Declaration. Declarant's sole liability and obligation hereunder shall be limited to the Assessments assessed against any Lots owned by the Declarant.

8.12. Exempt Property. The following property shall be exempt front payment of Assessments: (a) All Common Area in such portions of the Property: (b) Any Lots or portion of the Property owned by the Declarant; and (c) Property dedicated to and accepted by any governmental authority or public utility.

Unofficia 8.13. Capitalization of the Association. Upon initial acquisition of record title to a Lot by a Person other than the Declarant, and for any subsequent resale of the Lot where record title and ownership changes, the Association shall require a contribution be made by or on behalf of such Owner to the working capital of the Association in an amount to be one-sixth (1/6th) of the Annual Assessment for the Lot for that year, as determined by the Board of Directors. This amount shall be in addition to not in lieu of, the Regular Assessment levied on the Lot and shall not be considered an advanced payment of any portion thereof. This amount shall be to cover Common Expenses incurred by the Association pursuant to the terms of this Declaration and the Bylaws.

8.M. Late Charges. If any Assessment is not paid by the due date applicable thereto, the Owner responsible for payment of the Assessment, may be required by the Board of Directors, at the Board of Directors' election at any time and from time to time, to pay a late charge in such amount as the Board of Directors may designate, and the late charge (and any reasonable handling costs) will be levied as an Individual Special Assessment against the Lot owned by such

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charge in such amount as the Board of Directors may designate, and the late charge (and any reasonable handling costs) will be levied as an Individual Special Assessment against the Lot owned by such Owner, collectible in the manner provided for collection of Assessments in this Article, and said fines and late charges shall be part of the lien created herein and 29 subject to foreclosure of the lien against such Lot; provided, however, such charge will never exceed the maximum charge permitted under Texas or other applicable law.

ARTICLE IX ARCHITECTURAL REVIEW 9.1 Construction Improvements. As set forth in Article VIII of the Master Declaration, no Improvements shall be placed, erected, modified or installed upon any Lot or portion of the Property subject to this Declaration, and no Lot may be re-subdivided or consolidated with other Lots, without prior written approval of the Master Architectural Review Committee (the "MARC") and/or in compliance with the Master Declaration.

9.2. Approval Process.

ficia (a) Submission of Plans and Specifications. Construction plans and specifications for a Lot shall be submitted in accordance with the requirements of Article VIII of the Master Declaration and the Design Guidelines, if any, or any additional rules adopted by the MARC together with any review fee which is imposed by the MARC of the Master Declaration. No improvements shall be made, nor any improvements placed or allowed on any Lot, until the plans and specifications such Owner intends to construct and all proposed structures or Improvements thereon have submitted and approved in writing by the MARC or the MC. The MARC and MC may, in reviewing such plans and specifications consider any information that it deems proper; including, without limitation, any

bmitted and approved in writing by the MARC or the MC. The MARC and MC may, in reviewing such plans and specifications consider any information that it deems proper; including, without limitation, any permits, environmental impact statements or percolation test that may be required by the MARC or any other entity; and harmony of external design and location in relation to surrounding structures, topography, vegetation, finished grade elevation, and the Community-Wide Standard. The MARC or MC may postpone its review of any plans and specifications submitted for approval pending receipt of any information of material which that Reviewing Body (as that term is defined in the Master Declaration), in its sole discretion, may require.

(b) Design Guidelines. The Design Guidelines include the Master Design Guidelines, Modification Design Guidelines and Subdivision Design Guidelines promulgated and published by the MARC in accordance with Section 8.5 of the Master Declaration (collectively "Design Guidelines"). The Property and Lots therein are subject to these Guidelines. The initial Subdivision Design Guidelines 30