Document

EGS Palmer has Stiralion TUC-50 869-00-0687 ¥ 2001-035485 Vy DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR THE PALMER CREST SUBDIVISION THE STATE OF TEXAS § § | KNOW ALL MEN BY THESE PRESENTS: COUNTY OF MONTGOMERY & THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR THE PALMER CREST SUBDIVISION, is made and entered into this [ty day of MAY 2001, by THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P., a Texas limited partnership, hereinafter referred to as ("Declarant").

WITNESSETH: WHEREAS, Declarant is the owner of that certain 27.89 acres of land ("Property") in the A. Smith Survey, A-499, Montgomery County, Texas; and WHEREAS, Declarant has caused the Property to be subdivided and platted as a subdivision known as The Woodlands, Village of Cochran's Crossing, Section 55, Partial Replat Blocks 2, 3 & 4, a subdivision in The Woodlands, Montgomery County, Texas, according to the map or plat thereof recorded in Cabinet P, Sheet 123 of the Map Records of Montgomery County, Texas, commonly known as Palmer Crest Subdivision, reference to said map and the recording thereof being here made for all purposes; and WHEREAS, it is the intention of the Declarant to provide and adopt a general and uniform plan or scheme of covenants, conditions and restrictions to govern and control the development, improvement, sale, use and enjoyment of the Property as a residential subdivision and to enhance and protect the value, desirability and attractiveness of the subdivision for residential purposes; 869-00-0688 NOW, THEREFORE, Declarant hereby declares that the Property shall be developed, improved, held, used, sold and conveyed in accordance with and subject to the following covenants, conditions and restrictions, all of which are hereby adopted for and placed upon the

ll be developed, improved, held, used, sold and conveyed in accordance with and subject to the following covenants, conditions and restrictions, all of which are hereby adopted for and placed upon the Property and shall run with the title to the Property and be binding upon all parties now or at any time hereafter having or claiming any right, title or interest in the Property or any part thereof their heirs, executors, administrators, successors and assigns, regardless of the source of or manner in which any such right, title or interest is or may be acquired, and shall inure to the benefit of each owner thereof or any part thereof, to-wit: ARTICLE ONE DEFINITIONS Section 1. "Association" shall mean and refer to the Palmer Crest Homeowners Association, Inc., a Texas nonprofit corporation, its successors and assigns.

Section 2. "Board of Directors: or "Board" shall mean the body responsible for administration of the Association, selected or provided by the Bylaws and generally serving the same role as the Board of Directors under Texas corporate law.

Section 3. "By-Laws" shall mean and refer to the By-Laws of the Palmer Crest Homeowners Association, Inc. as they may be amended. A copy of the initial By-Laws is attached to this Declaration as Exhibit "A".

Section 4. "Common Areas" shall mean the street right of ways designated on the plat of The Woodlands, Village of Cochran's Crossing, Section 55, Partial Replat Bocks 2, 3 & 4, including the pavement thereon, Restricted Open Space Reserves and all property owned, leased, licensed or to be acquired by the Association for the common use and enjoyment of the Owners.

The Common Area shall include, but is not limited to, Restricted Open Space Reserve "J" and all 869-00-0689

icensed or to be acquired by the Association for the common use and enjoyment of the Owners.

The Common Area shall include, but is not limited to, Restricted Open Space Reserve "J" and all 869-00-0689 recreational facilities, community facilities, storage facilities, landscaping, sprinkler systems, pavements, access control features and walkways, but shall not include any portion of such locations hereinafter described as a Lot.

Section 5. "Declarant" shall mean and refer to The Woodlands Land Development Company, L.P., a Texas limited partnership, and its successors in interest and assigns.

Section 6. "Declaration" shall mean and refer to the Declaration of Covenants, Conditions, and Restrictions for Palmer Crest Subdivision.

Section 7. "Homeowner" or "Owner" shall mean and refer to the legal owner, whether one or more persons or entities, of fee simple title to any Lot, including contract sellers and any person or entity holding legal title as Trustee, but excluding those having such interests merely as security for the performance of an obligation.

Section 8. "Lot" shall mean and refer to each part or parcel of land out of the Property intended as and constituting the building site for one (1) residential house for individual use and ownership. There is excepted from this definition the Common Area.

Section 9. "Member(s)" shall mean and refer to each Owner who holds membership in the Association as set forth in Article Five.

Section 10. "Property" shall mean and refer to the surface estate only of that certain 27.89 acre tract of land hereinabove described which has been subdivided and platted into and comprises the subdivision known as The Woodlands, Village of Cochran's Crossing, Section 55,

that certain 27.89 acre tract of land hereinabove described which has been subdivided and platted into and comprises the subdivision known as The Woodlands, Village of Cochran's Crossing, Section 55, Partial Replat Blocks 2, 3 & 4, according to the map or plat thereof recorded as stated above, and any replat thereof, and additions thereto as are subject to this Declaration.

Section 11. "The Woodlands Covenants" shall mean and refer to the Covenants, Restrictions, Easements, Charges and Liens of The Woodlands contained in the Deed dated 869-00-0690 October 4, 1993, recorded under Film Code No 908-01-1737 in the Official Public Records of Real Property of Montgomery County, Texas, the Property having been annexed thereto by Annexation Agreement dated June 12, 1998. recorded under County Clerk's File No. 9842771 of the Official Public Records of Real Property of Montgomery County, Texas.

ARTICLE TWO MAINTENANCE AND REPAIRS The Association, as a common expense of all Homeowners, shall perpetually care for, maintain and keep in good repair the Common Area and all parts thereof, including but not limited to the streets, entry gates and fencing.

ARTICLE THREE PROVISION OF SERVICES The Association may provide, or provide for, services and facilities for the Owners and their Lots, and shall be authorized to enter into and terminate contracts or agreements with other entities, including Declarant, to provide such services and facilities. The Board may charge use or service fees for any such services and facilities, or may include the costs thereof in the Association's budget as a Common Expense and assess it as part of the Annual Assessment if provided to all Lots. By way of example, such services and facilities might include landscape

thereof in the Association's budget as a Common Expense and assess it as part of the Annual Assessment if provided to all Lots. By way of example, such services and facilities might include landscape maintenance, garbage collection, pest control service, cable television service, security, caretaker, transportation, fire protection, utilities, and similar services and facilities.

Nothing in this Section shall be construed as a representation by Declarant or the Association as to what, if any, services shall be provided. In addition, the Board shall be permitted to modify or cancel existing contracts for services in its direction, unless the provision of such services is otherwise required by this Declaration or the Articles of Incorporation or By869-00-0691 Laws of the Association. Non-use of services provided to all Owners as a Common Expense shall not exempt any Owner from the obligation to pay assessments for such services.

ARTICLE FOUR ASSESSMENTS Section 1. Charges and Assessments. Each and every Lot within the Property is hereby severally subject to and impressed with the following charges and assessments which shall run with the land and shall be in the same equal amounts for each Lot regardless of its size, value or cost, to wit: (a) A regular annual assessment in the amount of One Thousand Eight Hundered Dollars ($1,800.00) per annum per Lot, subject to increase or decrease and payable as provided in Section 2 below; and, (b) Special assessments as provided in Section 3 below.

Each Homeowner by his claim or assertion of ownership or by accepting a deed to a Lot, whether or not it shall be so expressed in such deed is hereby conclusively deemed to covenant and agree as a covenant running with the land to pay to the Association, its successors or assigns,

Lot, whether or not it shall be so expressed in such deed is hereby conclusively deemed to covenant and agree as a covenant running with the land to pay to the Association, its successors or assigns, each and all of the charges and assessments against his Lot as the same shall become due and payable, without demand. The charges and assessments herein provided for shall be a charge and a continuing lien upon each Lot, together with all improvements thereon, as hereinafter more particularly stated. Each assessment, together with interest, and the costs of collection thereof shall also be the personal obligation of the person who was the Owner of the Lot at the time payment of the assessment fell due, but no Homeowner shall be personally liable for the payment of any assessment made or becoming due and payable after his ownership ceases. No Homeowner shall be exempt or excused from paying any regular annual or special assessment by 869-00-0692 waiver of the use or enjoyment of the Common Area or any part thereof or by abandonment of his Lot or his interest therein.

Section 2. The Annual Assessment. Each Homeowner will pay the regular annual assessment on the terms hereof: (a) Following the calendar year in which the obligation to pay assessments commences, the regular annual assessment on each Lot shall be due and payable to the Association, annually, in advance, and without demand, on the first day of January of each calendar year. The obligation to pay assessments commences as to each Lot upon the recording of this Declaration. The first regular annual assessment levied on each Lot shall be adjusted according to the number of months remaining in the fiscal year at the time assessments commence on the Lot.

f this Declaration. The first regular annual assessment levied on each Lot shall be adjusted according to the number of months remaining in the fiscal year at the time assessments commence on the Lot.

(b) The Board of Directors may decrease or increase the amount of the regular annual assessment as follows: The maximum annual assessment may be increased over the maximum annual assessment imposed for the immediately preceding year by action of the Board of Directors, without approval of the Members, provided the amount of the assessment is not greater than one hundred ten percent (110%) of the assessment paid in the previous year. The Board of Directors must take action to increase the annual assessment by the adoption of a resolution for such purposes at least sixty (60) days prior to the end of the fiscal year of the Association. In the absence of action by the Board of Directors to increase such annual assessment as above authorized, the annual assessment shall be the same as it was during such immediately preceding fiscal year.

869-00-0693 (c) Nothing contained herein shall be deemed to limit the authority of the Board of Directors to increase the annual assessment in succeeding years so long as same are consistent with the following terms. The maximum annual assessment for each subsequent year may be increased by an amount in excess of that authorized in Section 2(b) by action of the Board of Directors ratified either by (i) the written assent of the Members of the Association who, in the aggregate, then own at least fifty-one percent (51%) of the Lots which are then subject to the annual assessment, if no meeting of the membership is held for ratification, or (ii) by the assent of at least fifty-one percent (51%) of the votes of the Members of

Lots which are then subject to the annual assessment, if no meeting of the membership is held for ratification, or (ii) by the assent of at least fifty-one percent (51%) of the votes of the Members of the Association who are present and voting in person or by proxy at a special meeting of the membership of the Association called for this purpose and at which a quorum is present. The written assent or the vote of the Members must be given prior to the effective date of the resolution of the Board of Directors. No increase in the annual assessment shall take effect retroactively.

If any resolution of the Board of Directors which requires ratification by the assent of the Members of the Association as above provided for shall fail to receive such assent, then the Board of Directors may still raise the annual assessment up to the limits provided for in Section 2(b). The Board of Directors may decrease the amount of the annual assessment without ratification by or assent of the Members of the Association.

Section 3. Special Assessments. The Board of Directors may from time to time, by the adoption of a resolution for such purpose, subject to ratification by the Members of the Association as hereinafter provided, levy and impose a special assessment against each Lot which is subject to the annual maintenance charge, for a specific and in an equal amount for each 869-00-0694 such Lot, for the purpose of purchasing equipment or facilities for the Common Area and/or for defraying in whole or in part the cost of constructing new capital improvements or altering, remodeling, restoring or reconstructing previously existing capital improvements upon the Common Area, including fixtures and personal property related thereto; provided, however, that

ts or altering, remodeling, restoring or reconstructing previously existing capital improvements upon the Common Area, including fixtures and personal property related thereto; provided, however, that before any such resolution shall become effective, it shall be ratified either (i) by the assent in writing of the Members of the Association who in the aggregate then own at least sixty-six percent (66%) of the Lots which are then subject to assessment if no meeting of the membership is held for ratification, or (i) by the assent of sixty-six percent (66%) of the votes of the Members of the Association who are present and voting in person or by proxy at a special meeting of the membership called for this purpose and at which a quorum is present. The Owner of each Lot subject to such assessment shall pay his special assessment to the Association at such time or times and in such manner as provided for in such resolution.

Section 4. Liens to Secure Assessments. The regular annual assessment, and the special assessments, as hereinabove provided for, together with interest thereon and the costs of collection thereof, as herein provided for, shall each constitute and be secured by a separate and valid and subsisting lien, hereby created and fixed, and which shall exist upon and against each Lot and all improvements thereon, for the benefit of the Association and all Homeowners, which such liens shall be prior and superior to all other liens, except that the same shall be subordinate and inferior to (a) all liens for taxes or special assessments, levied by the county and state governments or any political subdivision or special district thereof, and (b)) all liens securing amounts due or to become due under any mortgage,

r special assessments, levied by the county and state governments or any political subdivision or special district thereof, and (b)) all liens securing amounts due or to become due under any mortgage, vendor's lien or deed of trust filed for record prior to the date payment of any such charges or assessments become due and payable, and (c) all liens, including but not limited to 869-00-0695 vendor's liens, deeds of trust and other security instruments which secure any loan made by any lender to a purchaser for any part of the purchase price of any Lot when the same is purchased from a builder. Any foreclosure of any such prior or superior lien under the power of sale of any mortgage, deed of trust or other security instruments, or through court proceedings in which the Association has been made a party, shall cut off and extinguish the liens securing charges or assessments which become due and payable prior to such foreclosure date, but no such foreclosure shall free any Lot from the liens securing assessments thereafter becoming due and payable, nor shall the personal obligation of the Homeowner foreclosed be extinguished by any foreclosure.

Section 5. Subordination of Lien to The Woodlands Covenants. The lien for common expenses payable by an Owner shall be subordinate to the liens provided for in Section 2.01 of The Woodlands Covenants. The sale or transfer of any Lot pursuant to a decree of foreclosure under the lien provided for in The Woodlands Covenants or any proceeding in lieu of foreclosure thereof, shall extinguish the lien hereunder as to payments thereof which become due prior to such sale or transfer. No sale or transfer pursuant to foreclosure of the lien provided for in The

closure thereof, shall extinguish the lien hereunder as to payments thereof which become due prior to such sale or transfer. No sale or transfer pursuant to foreclosure of the lien provided for in The Woodlands Covenants shall relieve such Lot from liability for any assessments thereafter becoming due or from the lien thereof.

Section 6. Effect of Nonpayment of Assessment. Any assessments or charges which are not paid when due shall be delinquent. If any regular annual assessment, or if any special assessment, is not paid within thirty (30) days from the due date thereof; the same shall hear interest from the due date until paid at the lesser of fifteen percent (15%) per annum or the maximum rate allowed by law, and if placed in the hands of an attorney for collection, or if suit is brought thereon, or if collected through probate or other judicial proceedings, there shall be 869-00-0696 paid to the Association an additional reasonable amount, but not less than ten percent (10%) of the amount owing, as attorney's fees. The Association, as a common expense of all Homeowners, may institute and maintain an action at law or in equity against any defaulting Homeowner personally to enforce collection as a debt and to enforce the lien by all methods available for the enforcement of such liens, including judicial foreclosure by an action brought in the name of the Association or through a non-judicial foreclosure pursuant to Section 51.002 of the Texas Property Code.

Section 7. Collection and Enforcement. Each Homeowner, by his assertion of title or claim of ownership or by his acceptance of a deed to a Lot, whether or not it shall be so recited in such deed, shall be conclusively deemed to have expressly vested in the Association, and in its

or claim of ownership or by his acceptance of a deed to a Lot, whether or not it shall be so recited in such deed, shall be conclusively deemed to have expressly vested in the Association, and in its officers and agents, the right, power and authority to take all action which the Association shall deem proper for the collection of assessments, regular or special from Owners, and/or for the enforcement and foreclosure of the liens securing the same.

Section 8. Common Fund. All funds collected by the Association from the regular annual assessment and from the special assessments as provided for in this Article, shall constitute and be known as the "Common Fund". The Common Fund shall be held, used and expended by the Association for the common benefit of all Homeowners for purposes to include, but not be limited to, at its sole discretion, to pay the expenses for the perpetual care, maintenance, repair and replacement of the Common Area, including, but not limited, to streets, curbs, perimeter fences, esplanades, walkways, entry gates, landscaping, maintaining rights of way, to pay the expenses for the taxes, insurance, replacement, reconstruction, management, supervision and operation of or for the Common Area and the improvements thereon, or any part thereof, and to pay for capital improvements to the Common Area; to pay the expenses of 10 869-00-0697 administration and management of the Association; to pay salaries of the employees of the Association, if any; to pay all taxes and other public dues or charges that the Association shall be required to pay; to pay for services provided to the Homeowners; and to pay all other charges, costs or expenses lawfully incurred by the Association. The Association in its sole discretion

n shall be required to pay; to pay for services provided to the Homeowners; and to pay all other charges, costs or expenses lawfully incurred by the Association. The Association in its sole discretion may give one or more of the aforesaid purposes preference over other purposes, and it is agreed that all expenses incurred and expenditures and decisions made by the Association in good faith shall be binding and conclusive on all Homeowners.

ARTICLE FIVE THE ASSOCIATION Section 1 Organization. Declarant has caused the Association to be organized and formed as a nonprofit corporation under the laws of the State of Texas.

Section 2. Purpose. The principal purposes of the Association are a) collection, expenditure, and management of the annual assessment and special assessments; b) providing for the maintenance, repair, preservation, upkeep and protection of the Common Area; c) enforcement of the Declaration; d) providing services to Owners; and e) those purposes as are stated in the Articles of Incorporation consistent with the provisions of this Declaration.

Section 3. Board of Directors. The Association will act through a Board of Directors which shall manage the affairs of the Association. Until the first annual meeting of the Members following the Conversion Date defined herein, the Board shall consist of three (3) directors whom shall be appointed by Declarant. Commencing with the first annual meeting following the Conversion Date, the Board of Directors of the Association shall consist of three (3) directors, all of whom shall be elected by the Members and will serve in accordance with the provisions of the Bylaws.

11 869-00-0698 Section 4. Members. Each Owner, whether one or more persons or entities, of a Lot

of whom shall be elected by the Members and will serve in accordance with the provisions of the Bylaws.

11 869-00-0698 Section 4. Members. Each Owner, whether one or more persons or entities, of a Lot which is subject to the annual assessment as provided for in this Declaration, shall upon and by virtue of becoming such Owner automatically become a Member of the Association and shall remain a Member thereof until his ownership ceases for any reason, at which time his membership in the Association shall be appurtenant to and shall automatically follow the legal ownership of each Lot and may not be separated from such ownership. Whenever the legal ownership of any Lot passes from one person to another, by whatever means, it shall not be necessary that any instrument provide for transfer of membership in the Association, as such membership is appurtenant to and automatically follows and passes with the legal ownership of a Lot. Membership in the Association is expressly limited to the Owners of Lots which are subject to the annual assessment charge as above stated. No certificate of membership will be issued.

Section 5. Voting Rights. The Association shall have two (2) classes of voting membership: (a) CLASS A. The Class A Members shall be all Owners with exception of the Declarant. After the Conversion Date, Declarant shall also become a Class A Member to the extent Declarant is the Owner of a Lot.

(b) CLASS B. The Class B Member shall be the Declarant. The Class B membership of Declarant shall cease and become converted to Class A membership upon eqummence of the earlier of the following (the "Conversion Date:): 6) Ninety (90) days after Declarant has sold and conveyed by deed, one hundred percent (100%) of all Lots, including Lots in any annexations, to

f the earlier of the following (the "Conversion Date:): 6) Ninety (90) days after Declarant has sold and conveyed by deed, one hundred percent (100%) of all Lots, including Lots in any annexations, to unrelated third parties; or Gi) January 1, 2010; or 12 869-00-0699 Gii) Such earlier date as may be established by Declarant in a Supplemental Declaration to be recorded by Declarant.

Until the Conversion Date, the Class A Members shall not be entitled to vote (except as provided for the levying of certain assessments under Article Four, Sections 2 and 3 of the Declaration and amendments to the Declaration under Article Six, Section 3 therein). The Class B Member shall be entitled to one (1) vote for each Lot in which it holds the interest required for membership.

From and after the Conversion Date (and at anytime with respect to votes pertaining to certain assessments under Article Four, Sections 2 and 3 of the Declaration and amendments to the Declaration under Article Six, Section 3 therein, each Class A Member shall be entitled to one (1) vote for each Lot in which it owns the interest required for corporation membership.

Where more than one person or entity holds such interest in any Lot, all such persons collectively shall be a single member, and the vote for such Member shall be exercised as the several parties shall determine among themselves.

Section 6. Title to the Common Area. The Association shall hold title to the Common Area for the benefit of the Homeowners. Every Homeowner shall have a right and easement of enjoyment in and to the Common Area which shall be appurtenant to the title to every Lot, subject to: (a) The right of the Association to charge reasonable admission and other fees for the use of any recreational facility situated upon the Common Area;

ppurtenant to the title to every Lot, subject to: (a) The right of the Association to charge reasonable admission and other fees for the use of any recreational facility situated upon the Common Area; (b) The right of the Association to publish and enforce reasonable rules and regulations governing the use and enjoyment of the Common Area or any part thereof, all of which reasonable rules and regulations shall be binding upon and complied with by each Homeowner; (c) The right of the Association to suspend the voting rights and right to use of the recreational facilities by a Homeowner or the Homeowner's delegate for any period during which any regular annual assignment or special assessment against 13 869-00-0700 his Lot remains unpaid; and for a period not to exceed sixty (60) days for any infraction of its published rules and regulations; (d) The right of the Association to borrow money for the purpose of improving the Common Area and facilities and in aid thereof to mortgage said property; (e) The right of the Association to grant or dedicate easements in, on, under or above the Common Area or any part thereof to any public or governmental agency, authority, utility, or The Woodlands Community Association, Inc. or other community or civic association, for any service to the Property or subdivision or any part thereof, (f) No Homeowner shall plant, place, fix, install, or construct any vegetation, hedge, tree, shrub, fence, wall, structure or improvement or store any of his or her personal property in the Common Area or any part thereof without the written consent of the Association first obtained. The Association shall have the right to remove anything placed on the Common Area in violation of the provisions of

a or any part thereof without the written consent of the Association first obtained. The Association shall have the right to remove anything placed on the Common Area in violation of the provisions of this Section and to recover the cost of such removal from the Homeowner responsible; and (g) | The use of the Common Area shall be subject to and governed by the provisions of the Declaration, By-Laws and rules and regulations of the Association, and The Woodlands Covenants.

Section 7. Delegation of Use. Any Homeowner may delegate, in writing, in accordance with the By-Laws, his right of enjoyment to the Common Area and facilities to the members of his household, his co-owners, his tenants, or contract purchasers who reside on the Lot. All such delegates shall be subject to the rules and regulations of the Association and all provisions of the Articles of Incorporation and By-Laws of the Association and of this Declaration and The Woodlands Covenants to the same extent as the Homeowner, and the Association may take any action against such delegate to enforce such documents as it is authorized to take against the Owner, and the Owner and his delegate shall be bound thereby. The delegation of use hereunder to a resident tenant, contract purchaser, or co-owner shall divest the delegating Owner of his rights hereunder. Such delegation may be granted or revoked in accordance with the Bylaws.

14 869-00-0701 Section 8. Custodian. The Association shall be the custodian of and shall administer the Common Fund for the common benefit of all Homeowners for the purposes above mentioned. It is expressly agreed that the good faith judgment of the Association in the allocation and expenditure of such funds shall be binding and conclusive on all Homeowners. The purposes for

ve mentioned. It is expressly agreed that the good faith judgment of the Association in the allocation and expenditure of such funds shall be binding and conclusive on all Homeowners. The purposes for which the Common Fund may be used and expended as set forth in the Declaration are permissive, and the enumeration of specific purposes carried no obligation to so expend such or any part thereof; except to the extent that funds are actually available therefor. The Association in its good faith discretion may give one or more purposes priority over other purposes.

ARTICLE SIX ENERAL PROVISIONS Section 1. Prior Covenants. This Declaration is expressly made subject to The Woodlands Covenants. In the event of any conflict between the provisions hereof and The Woodlands Covenants, The Woodlands Covenants shall control. Specifically, but not by way of limitation, the rights herein established, imposed and created shall in all respects be: (a) inferior and subordinate to the easements and rights-of-way granted and/or reserved to The Woodlands Land Development Company, L.P., its designees, successors and assigns, under and by virtue of Article XI of The Woodlands Covenants; and no use or operation shall be conducted within the Common Area that would in any manner interfere with, obstruct, alter, affect or diminish the rights of The Woodlands Land Development Company, L.P., its designees, successors and assigns, pursuant to Article XI of The Woodlands Covenants.

Section 2. Covenants Running With the Land - Duration. This Declaration and the covenants and conditions herein contained shall constitute covenants running with the land, and shall bind the Declarant and its successors in title to each Lot comprising the Property, and shall 15 869-00-0702

and conditions herein contained shall constitute covenants running with the land, and shall bind the Declarant and its successors in title to each Lot comprising the Property, and shall 15 869-00-0702 inure to the benefit of Declarant and its respective successors in title to each Lot comprising the Property, until December 31, 2063, unless sooner repealed, amended or modified in the manner hereinbelow set forth. Thereafter, this Declaration and the covenants and conditions herein contained shall be automatically extended for successive periods of ten (10) years each unless, prior to December 31, 2063 (or thereafter, prior to the end of any such 10-year period), an instrument agreeing that this Declaration shall not be further extended is executed and acknowledged by the then Owners of seventy-five percent (75%) of all Lots comprising the Property, and filed for record in the Office of the County Clerk of Montgomery County, Texas.

Section 3. Amendments. Any or all of the covenants, conditions and restrictions contained in this Declaration may be repealed, amended or modified at any time by an instrument executed and acknowledged by the Owners of seventy-five percent (75%) of all Lots comprising the Property, and filed for record in the Office of the County Clerk of Montgomery County, Texas.

Section 4. Amendments by Declarant. Declarant shall have and hereby reserves the right at any time and from time to time, without the consent or joinder of any other party, to amend this Declaration by any instrument in writing duly signed, acknowledged and filed for record for the purpose of correcting any typographical or grammatical error, ambiguity, or inconsistency, appearing herein, provided that any such amendment shall be consistent with and in furtherance

record for the purpose of correcting any typographical or grammatical error, ambiguity, or inconsistency, appearing herein, provided that any such amendment shall be consistent with and in furtherance of the general plan and scheme of the development as evidenced by the Declaration, or any Supplemental Declaration, and shall not impair or affect the vested property or the rights of any Homeowner or his Mortgagee.

16 869-00-0703 Section 5 Severability. If any provision of this Declaration is held to be invalid by judgement, court order or otherwise, the invalidity of such provision shall not affect the validity of any of the remaining provisions hereof, which shall remain in full force and effect.

Section 6. Gender and Grammar. The singular and the plural, whereever used herein, shall be construed to mean or include one or more, when and as applicable, and the necessary grammatical changes required to make the provisions hereof apply to corporations (or other entities) or individuals, male or female, shall in all cases be assumed as though in each case fully expressed.

Section 7. Headings. The paragraph entitlement hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing the test of such paragraphs.

Section 8. Notices. Any notice required to be sent to any Owner under the provisions of this Declaration shall be deemed to have been properly sent when mailed, postpaid, to the last known address of the person who appears as a Member or Owner on the records of the Association at the time of such mailing.

Section 9, Enforcement. The Declarant, the Association, the Board of Directors, or any Owner shall have the right to enforce, by any proceeding at law or in equity, the covenants and

of such mailing.

Section 9, Enforcement. The Declarant, the Association, the Board of Directors, or any Owner shall have the right to enforce, by any proceeding at law or in equity, the covenants and restrictions contained herein. Failure of the Declarant, the Association, the Board of Directors, or any Owner to enforce any of the provisions herein contained shall in no event be deemed a waiver of right to do so thereafter.

Section 10. Security and Safety. Declarant or the Association may, but shall not be obligated to, maintain or support certain activities within its jurisdiction designed to make the Property safer than it otherwise might be.

17 869-00-0704 Neither the Declarant, nor the Association, or their respective agents, assigns, or employees shall in anyway be considered insurers or guarantors of security, or safety within the Property, nor shall any of them be held liable for any loss or damage by reason of failure to provide adequate security or ineffectiveness of security or safety measures undertaken. No representation or warranty is made that any safety measure or security system cannot be compromised or circumvented, nor that any such systems or measures undertaken will in all cases prevent loss or provide the detection or protection for which it is designed or intended. Each Owner, resident, guest, and invitee acknowledges and agrees that the Declarant and the Association, and their officers and directors and partners are not insurers and that each person using the Property assumes all risks for personal injury and loss or damage to property resulting from acts of third parties.

Section 11. Disclaimer of Warranty. Declarant makes no warranty, express or implied, regarding Palmer Crest, or the Palmer Crest development or any improvement to

resulting from acts of third parties.

Section 11. Disclaimer of Warranty. Declarant makes no warranty, express or implied, regarding Palmer Crest, or the Palmer Crest development or any improvement to or improvements on Palmer Crest, or the Palmer Crest development, the condition of Palmer Crest, or the Palmer Crest development, any safety or security matters, the sufficiency of utilities, the workmanship, design or materials used in any improvements, including without limitation any Common Area, and including, without limitation, any express or implied warranty of merchantability, liability, fitness, or suitability for any particular purpose or use or any warranty of quality.

Section 12. Release of Liability. It is agreed and understood by all Owners (and their heirs, legal representatives, successors, assigns, contractors, guests and invitees) that the Declarant and/or the Association, in the furtherance of their rights and duties hereunder, may retain the services of various independent contractors to provide services 18 869-00-0705 hereunder, including, but not limited to, landscaping services, management services, etc.

("Service Providers"). Neither the Association nor the Declarant, nor any of the Members, agents, officers or employees, shall be liable for the negligent or tortuous acts of such Service Providers unless it is determined by a court of competent jurisdiction that the hiring of said particular Service Provider was in and of itself, gross negligence on the part of the Declarant or the Association. Without such a judicial finding, any and all liability in connection with the acts of such Service Providers shall be between the party so injured or damaged and the person or party (and their employer, if appropriate) causing such

, any and all liability in connection with the acts of such Service Providers shall be between the party so injured or damaged and the person or party (and their employer, if appropriate) causing such damage or injury. Each Owner indemnifies and holds harmless the Declarant and the Association and their members, agents, officers, directors and employees, from any and all such claims, including claims arising out of the sole, joint, or comparative or concurrent negligence of any of said indemnified parties. This indemnity by the Members and Owners shall include the payment of reasonable necessary attorneys’ fees incurred by the Declarant or the Association defending any such action. The foregoing release of liability and indemnity provisions are intended to release and indemnify the Declarant, the Association, and the Board of Directors, and the Members thereof, as well as their agents, representatives, officers, directors and employees, against the consequences of their own negligence or fault as provided above when the Declarant, the Association, the Board of Directors, or its Members, or any of their agents, representatives, officers, directors or employees, are solely, jointly, comparatively, or concurrently negligent.

19 869-00-0706 IN WITNESS WHEREOF, the undersigned, the Declarant herein, has caused this instrument to be executed as of the day and year first hereinabove written.

THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P., a Texas limited partnership By: The Woodlands Operating Company, L.P. | a Texas limited partnership Its Authorized Agent pp STATE OF TEXAS § COUNTY OF MONTGOMERY § | ain ins t was acknowledged before me on VY QO é of Phe Woodlands Operating ea L.P., a Texas limited partnership, Authorized Agent of THE WOODLANDS LAND

ent pp STATE OF TEXAS § COUNTY OF MONTGOMERY § | ain ins t was acknowledged before me on VY QO é of Phe Woodlands Operating ea L.P., a Texas limited partnership, Authorized Agent of THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P., a Texas limited partnership, on behalf of said limited partnership.

N Public, State Xas Rl RL POR JILL IMHOFF e ER EN Notary Pubife, State of Texas k BAS My Commission Eones | 4 Ee MARCH 21, 2005, When recorded, Return to: The Woodlands Operating Co.- Ledwell P.O. Box 5050 Thw Woodlands, Texas 77380-5050 20 869-00-0707 BYLAWS OF PALMER CREST HOMEOWNERS' ASSOCIATION, INC.

ARTICLE I Members -- (Owners) Section 1. Eligibility. Membership in Palmer Crest Homeowners' Association, Inc.

("Association") shal] be as set forth in the Articles of Incorporation of the Association.

Section 2. Regular Meetings. The first meeting of the Members shall be held within thirty (30) days after the expiration of ninety (90) days from the Conversion Date as described in the Articles of Incorporation of Palmer Crest Homeowners’ Association, Inc. or sooner at the option of Declarant; thereafter, annual meetings of Members shall be held by June 1 of each year. All such meetings of Members shall be held at such place in Montgomery County Texas, and at such time as specified in the written notice of such meeting which shall be given to all Members at least ten (10) days, but not more than thirty (30) days, prior to the date of such meeting. At such meetings there shall be elected, by ballot of Members, a Board of Directors in accordance with the requirement of Article II, Section 1. of these Bylaws and transact such other business of the Association as may properly come before them.

llot of Members, a Board of Directors in accordance with the requirement of Article II, Section 1. of these Bylaws and transact such other business of the Association as may properly come before them.

Section 3. Special Meetings. Special meetings of the Members may be called by the President as directed by a resolution of the directors of the Board, or upon petition signed by a majority of Members and having been presented to the Secretary or Assistant Secretary of the Association. Said special meetings shall be called by delivering written notice to all Members not less than ten (10) days prior to the date of said meeting stating the date, time and place of said special meeting and the matters to be considered. Any such meetings shall be held after the first annual meeting and shall be held within thirty (30) days of receipt by the President of such resolution or petition.

Section 4. Delivery of Notice of Meetings. Notices of meetings may be delivered either personally or by mail to a Member at the address given to the Board by said Member for such purpose.

Section 5. Voting. Voting by the Membership shall be as set forth in the Declaration of Covenants, Conditions, and Restrictions for Palmer Crest Subdivision.

Section 6. Quorum. A quorum of Members for any meeting shall be constituted by Members represented in person or by proxy and holding at least ten percent (10%) of the votes entitled to be cast at said meeting.

Section 7. Rules of Meetings. The Board may prescribe reasonable rules for the conduct of all meetings of the Board and Members and in the absence of such rules, Robert's Rules of Order shall be used.

1 ey Exe @iT A 869-00-0708 Section 8. Proxies. Votes may be cast in person or by written proxy. No proxy shall be

d and Members and in the absence of such rules, Robert's Rules of Order shall be used.

1 ey Exe @iT A 869-00-0708 Section 8. Proxies. Votes may be cast in person or by written proxy. No proxy shall be valid after eleven (11) months from the date of its execution unless specifically provided in the proxy. All proxies must be filed with the Secretary of the Association before the appointed time of such meeting.

Section 9. Definitions. The words used in these By-Laws shall have the same meaning as set forth in the Declaration of Covenants, Conditions, and Restrictions for Palmer Crest Subdivision ("Declaration").

ARTICLE II Board of Directors Section 1. Number, Election and Term of Office. The Board of Directors of the Association ("Board"), shall consist of three (3) members ("directors"). Until the first meeting of the Association after the Conversion Date, the Board governing the affairs of the Association shall be appointed by the Declarant acting in its sole discretion and shall serve at the pleasure of the Declarant, unless the Declarant shall earlier surrender this right to appoint the directors. The names of the initial directors appointed by Declarant are set forth in the Articles of Incorporation of the Association. At the first meeting of the Association after the Conversion Date described in the Articles of Incorporation there shall be elected to the Board by vote of the Members any three (3) Members in good standing of the Association, who shall thereafter govern the affairs of the Association until their successors have been duly elected and qualified. Those candidates for election as director receiving the greatest percentage of the votes cast either in person or by proxy at the meeting shall be elected.

essors have been duly elected and qualified. Those candidates for election as director receiving the greatest percentage of the votes cast either in person or by proxy at the meeting shall be elected.

At the first meeting of the Association after the Conversion Date, the term of office of two (2) directors shall be fixed at two (2) years and the term of office of one (1) director shall be fixed at one (1) year, all directors holding office for such term and until the director's successor shall be elected and qualified.

The number of directors may be increased or decreased by amendment of these Bylaws; provided however, that the number of directors shall not be reduced to less than three (3) nor increased to more than seven (7).

Section 2. Qualifications. Each director shall be a Member (or, if a Member is a trustee of a trust, a director may be a beneficiary of such trust, and if a Member or such beneficiary is a corporation or partnership, a director may be an officer, partner or employee of such Member or beneficiary). If a director shall cease to meet such qualifications during his or her term, he or she shall thereupon cease to be a director and his or her place on the Board shall be deemed vacant.

Section 3. Vacancies. Any vacancy occurring on the Board shall be filled by majority vote of the remaining directors thereof, even though they may constitute less than a quorum. Any director so elected or appointed to fill a vacancy shall hold office for a term equal to the unexpired term of the director whom he or she succeeds.

869-000-0709 Section 4. Meetings. A regular annual meeting of the Board shall be held within ten (10) days following the regular annual meeting of Members. Special meetings of the Board shall be held

869-000-0709 Section 4. Meetings. A regular annual meeting of the Board shall be held within ten (10) days following the regular annual meeting of Members. Special meetings of the Board shall be held upon a call by the President or by a majority of the Board on not less than forty-eight (48) hours notice in writing to each director, delivered personally or by mail or telegram. Any director may waive notice of a meeting, or consent to the holding of a meeting without notice, or consent to any action proposed to be taken by the Board without a meeting. A director's attendance at a meeting shall constitute his or her waiver of notice of said meeting.

Section 5. Removal. Any director may be removed from office for cause by a majority vote of Members entitled to vote at any annual or special meeting of the Association, duly called.

Section 6. Compensation. Directors shall receive no compensation for their services as directors, unless expressly provided for in resolutions duly adopted by a majority of the Members.

Section 7. Board of Directors’! Quorum. At all meetings of the Board, a majority of the directors shall constitute a quorum for the transaction of business, and the acts of the majority of the directors present at a meeting at which a quorum is present shall be the acts of the Board. If at any meeting of the Board, there be less than a quorum present, the majority of those present may adjourn the meeting from time to time for periods of no longer than 30 days until a quorum is obtained or until a conclusion can be reached. At any such adjourned meeting, any business which might have been transacted at the meeting as originally called may be transacted without further notice.

btained or until a conclusion can be reached. At any such adjourned meeting, any business which might have been transacted at the meeting as originally called may be transacted without further notice.

Section 8. Voting. An affirmative vote of a majority of those directors present at a meeting at which a quorum is in attendance shall be necessary to transact business.

Section 9. Powers and Duties. The Board shall have the following powers and duties: (a) to elect and remove the officers of the Association as hereinafter provided; (b) to administer the affairs of the Association and the Property; (c) to formulate policies for the administration, management and operation of the property held for the use and benefit of all Members ("Common Area"); (d) to adopt rules and regulations, with written notice thereof to all Members, governing the administration, management, operation and use of the Common Area, and to amend such rules and regulations from time to time; (e) to provide for the maintenance, repair and replacement of the Common Area and payments therefor, and to approve payment vouchers or delegate such approval to the officers or a Managing Agent; ( to provide for the designation, hiring and removal of employees and other personnel, including accountants and attorneys, and to engage or contract for the services of others, and to make purchases for the maintenance, repair, replacement, administration, management and operation of 869-00-0710 the Common Area and to delegate any such powers to a Managing Agent (and any such employees or other personnel who may be the employees of a Managing Agent); (g) to appoint committees of the Board and to delegate to such committees the Board's authority to carry out certain duties of the Board;

other personnel who may be the employees of a Managing Agent); (g) to appoint committees of the Board and to delegate to such committees the Board's authority to carry out certain duties of the Board; (h) to determine the fiscal year of the Association and to change said fiscal year from time to time as the Board deems advisable; (i) to collect all assessments and charges provided for in any covenants and restrictions imposed in Palmer Crest Subdivision and to use the proceeds therefrom for the purposes set forth in such covenants and restrictions and in the Articles of Incorporation of the Association.

Gj) to establish bank accounts which are interest bearing or non-interest bearing, and to otherwise invest the funds of the Association, as may be deemed advisable by the Board; (k) to enter such contracts and agreements relating to the providing of maintenance, management and operational services as the Board may deem advisable; (i) to enter such leases of portions of the Common Area as the Board may deem advisable; and (m) to exercise all powers and duties of the Members as a group referred to in the Texas Nonprofit Corporation Act, and all powers and duties of the Board referred to in these Bylaws; and (n) in general, to carry on the administration of the Association and to do all of those things necessary and/or desirable in order to carry out the governing and operating of the Association.

Section 10. Non-Delegation. Nothing in this Article or elsewhere in these Bylaws shall be considered to grant to the Board, the Association or to the officers of the Association any powers or duties which, by law, have been delegated to the Members.

Section 11. Telephone Attendance. At any meeting of the Board, a director may attend by

on or to the officers of the Association any powers or duties which, by law, have been delegated to the Members.

Section 11. Telephone Attendance. At any meeting of the Board, a director may attend by telephone, radio, television or other similar means of communication, provided the means permit the director personally to participate in the meeting. A director so attending shall be deemed to be present at the meeting for all purposes, including a determination as to whether a quorum is present.

ARTICLE DI Officers Section 1. Designation. At each regular annual meeting of the Board, the directors present at said meeting shall elect the following officers of the Association by a majority vote: 869-00-0711 (a) a President who shall be a director and who shall preside over the meetings of the Board and of the Members, and who shall be the chief executive officer of the Association; (b) a Secretary, who shall keep the minutes of all meeting of the Board and of the Members, and who shall, in general, perform all the duties incident to the office of Secretary, and who may be a representative of the Managing Agent and who may also be Treasurer; (c) a Treasurer, who shall be responsible for financial records and books of account and the manner in which such records and books are kept and reported; (d) such additional officers as the Board shall see fit to elect.

Section 2. Powers. The respective officers shall have the general powers usually vested in such officers; provided that the Board may delegate any specific powers to any other officer or impose such limitations or restrictions upon the powers of any officer as the Board may see fit.

Section 3. Term of Office. Each officer shall hold office for the term of one year and until

officer or impose such limitations or restrictions upon the powers of any officer as the Board may see fit.

Section 3. Term of Office. Each officer shall hold office for the term of one year and until his successor shall have been appointed or elected and qualified.

Section 4. Vacancies. Vacancies in any office shall be filled by the Board by a majority vote of the Board at a special meeting of said Board. Any officer so elected to fill a vacancy shall hold office for a term equal to the unexpired term of the officer he succeeds. Any officer may be removed for cause at any time by vote of a majority of the total membership of the Board at a special meeting thereof.

Section 5. Compensation. The officers shall receive no compensation for their services as officers, unless expressly provided for in a resolution duly adopted by a majority of the Members.

ARTICLE IV Amendments The Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by the majority vote of the Board of Directors; and the provisions of these Bylaws which are covered by the Articles of Incorporation of the Association may not be amended except as provided in the Articles of Incorporation or applicable law.

ARTICLE V Fiscal Year The fiscal year of the Association shall be fixed by the Board from time-to-time.

869-00-0712 ARTICLE VI Indemnification Section 1. When Indemnification is Required Permitted and Prohibited.

(a) The Association shall indemnify a director, officer, committee member, employee, or agent of the Association who was, is, or may be named defendant or respondent in any proceeding as a result of his or her actions or omissions within the scope of his or her official capacity in the

r agent of the Association who was, is, or may be named defendant or respondent in any proceeding as a result of his or her actions or omissions within the scope of his or her official capacity in the Association. For the purposes of this article, an agent includes one who is or was serving at the request of the Association as a director, officer, partner, venturer, proprietor, trustee, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise. However, the Association shall indemnify a person only if he or she acted in good faith and reasonably believed that the conduct was in the Association's best interests. In a case of a criminal proceeding, the person may be indemnified only if he or she had no reasonable cause to believe that the conduct was unlawful. The Association shall not indemnify a person who is found liable to the Association or is found liable to another on the basis of improperly receiving a personal benefit. A person is conclusively considered to have been found liable in relation to any claim, issue, or matter if the person has been adjudged liable by a court of competent jurisdiction and all appeals have been exhausted.

(b) The termination of a proceeding by judgment, order, settlement, conviction or on a plea of nolo contendere or its equivalent does not necessarily preclude indemnification by the corporation.

(c) The Association shall pay or reimburse expenses incurred by a director, officer, member, committee member, employee, or agent of the Association in connection with the person's appearance as a witness or other participation in a proceeding involving or affecting the Association when the person is not a named defendant or respondent in the proceeding.

ection with the person's appearance as a witness or other participation in a proceeding involving or affecting the Association when the person is not a named defendant or respondent in the proceeding.

(d) In addition to the situations otherwise described in this paragraph, the Association may indemnify a director, officer, member, committee member, employee, or agent of the Association to the extent permitted by law. However, the Association shall not indemnify any person in any situation in which indemnification is prohibited by the terms of Section 1(a) above.

(e) Before the final disposition of a proceeding, the Association may pay indemnification expenses permitted by the bylaws and authorized by the Association. However, the Association shall not pay indemnification expenses to a person before the final disposition of a proceeding if: the person is a named defendant or respondent in a proceeding brought by the Association or one or more members or the person is alleged to have improperly received a personal benefit or committed other willful or intentional misconduct.

(f) If the Association may indemnify a person under the bylaws, the person may be indemnified against judgments, penalties, including excise and similar taxes, fines, settlements, and reasonable expenses (including attorney's fees) actually incurred in connection with the proceeding.

However, if the proceeding was brought by or on behalf of the Association, the indemnification is 869-000-0713 limited to reasonable expenses actually incurred by the person in connection with the proceeding.

Section 2. Procedure Relating to Indemnification Payments.

(a) Before the Association may pay any indemnification expenses (including attorney's

curred by the person in connection with the proceeding.

Section 2. Procedure Relating to Indemnification Payments.

(a) Before the Association may pay any indemnification expenses (including attorney's fees), the Association shall specifically determine that indemnification is permissible, authorize indemnification, and determine that expenses to be reimbursed are reasonable, except as provided in Section 2(c) below. The Association may make these determinations and decisions by any one of the following procedures: (i) Majority vote of a quorum consisting of directors who, at the time of the vote, are not named defendants or respondents in the proceeding.

Gi) Ifsuch a quorum cannot be obtained, by a majority vote of a committee of the Board of Directors, designated to act in the matter by a majority vote of all directors, consisting solely of two or more directors who at the time of the vote are not named defendants or respondents in the proceeding.

(iii) Determination by special legal counsel selected by the Board of Directors by vote as provided in Section 2(a)(i) or 2(a)(ii) or if such a quorum cannot be obtained and such a committee cannot be established, by a majority vote of all directors.

(iv) Majority vote of members, excluding directors who are named defendants or respondents in the proceeding.

(b) The Association shall authorize indemnification and determine that expenses to be reimbursed are reasonable in the same manner that it determines whether indemnification is permissible. If the determination that indemnification is permissible is made by special legal counsel, authorization of indemnification and determination of reasonableness of expenses shall be made in the manner specified by Section 2(a)(iii) above, governing the selection of special legal

gal counsel, authorization of indemnification and determination of reasonableness of expenses shall be made in the manner specified by Section 2(a)(iii) above, governing the selection of special legal counsel. A provision contained in the articles of incorporation, the bylaws, or a resolution of members or the Board of Directors that requires the indemnification permitted by Section 1, above, constitutes sufficient authorization of indemnification even though the provision may not have been adopted or authorized in the same manner as the determination that indemnification is permissible.

(c) The Association shall pay indemnification expenses before final disposition of a proceeding only after the Association determines that the facts then known would not preclude indemnification and the Association receives a written affirmation and undertaking from the person to be indemnified. The determination that the facts then known to those making the determination would not preclude indemnification and authorization of payment shall be made in the same manner as a determination that indemnification is permissible under Section 2(a) above. The person 5 written affirmation shall state that he or she has met the standard of conduct necessary for indemnification under the bylaws. The written undertaking shall provide for repayment of the amount paid or reimbursed by the Association if it is ultimately determined that the person has not met the requirements for indemnification. The undertaking shall be an unlimited general obligation of the person, but it need not be secured and it may be accepted without reference to financial ability 869-000-0714 to make repayment.

(d) Any indemnification or advance of expenses shall be reported in writing to the

secured and it may be accepted without reference to financial ability 869-000-0714 to make repayment.

(d) Any indemnification or advance of expenses shall be reported in writing to the Members of the Association. The report shall be made with or before the notice or waiver of notice of the next membership meeting, or with or before the next submission to members of a consent to action without a meeting. In any case, the report shall be sent within the 12-month period immediately following the date of the indemnification or advance.

In case of any conflict between the Articles of Incorporation and these Bylaws, the Articles shall control. Should all or part of any Article of these Bylaws be in conflict with the provisions of the Texas Non-profit Corporation Act or any other Texas law, such act or law shall control.

ATE. OF oe . See ees het He pee ¥ and wins duly RECORDED a the official Publi "Seconds of Real Property ° Montgomery Comnty Texas MAY - 2 2001 Pw. Jumbo COUN | SSO ERY COUNTY, TEXAS