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DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS SCANNED SM L This Declaration of Covenants, Conditions and Restrictions for Silverado Hills is made on the date hereinafter set forth by Declarant (as hereinafter defined).

Declarant is the owner of the Property (as herein defined). Declarant desires to impose upon the Property mutually beneficial restrictions under a general plan of improvement for the benefit of the owners of each portion of the Property. The Declaration is intended to provide a flexible and reasonable procedure for the overall development, administration, maintenance, and preservation of the Property. In furtherance of such plan, Declarant has caused or intends to cause the Bexar County Silverado Hills Homeowners Association, Inc. to be formed as a Texas nonprofit corporation to own, operate, and maintain the Common Maintenance Areas (as defined herein) and to administer and enforce the provisions of this Declaration.

Declarant hereby declares that all of the Property shall be held, sold, used and conveyed subject to the easements, restrictions, covenants, and conditions contained in this Declaration, which shall run with the title to the Property. This Declaration shall be binding upon all parties having any right, title or interest in any portion of the Property, their heirs, successors, successors-intitle and assigns, and shail inure to the benefit of each owner of any portion of the Property.

ARTICLE | DEFINITIONS 1.1. "ACA" or"Architectural Control Authority" shall have the meaning provided such terms in Section 6.2 herein.

1.2. "ACA Standards" means standards adopted by the ACA regarding architectural and related matters, including, without limitation, architectural design, placement of improvements,

Section 6.2 herein.

1.2. "ACA Standards" means standards adopted by the ACA regarding architectural and related matters, including, without limitation, architectural design, placement of improvements, landscaping, color schemes, exterior finishes and materials and similar features which may be either recommended or required by the ACA for use within the Property.

1.3. "Articles" means the Articles of Incorporation of the Association.

1.4. “Association” means the Bexar County Silverado Hills Homeowners Association, Inc., a Texas nonprofit corporation established for the purposes set forth herein.

1.5. "Association Easement" means that certain easement described and/or depicted on Exhibit "A" attached hereto.

1.6. "Association Maintenance Fencing" means that certain fencing installed by Declarant on the Association Easement as described and/or depicted on Exhibit "B" attached DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 1 1.8. “Builder” means any person or entity who purchases one or more Lots for the purpose of constructing improvements for later sale to consumers in the ordinary course of such person's or entity's business.

1.9. "By-laws" means the by-laws of the Association.

1.10. "City" means the City of San Antonio.

1.11. "Common Area" and "Common Areas" shall mean and refer to the real property (including all improvements located thereon) owned or to be acquired by the Association, as more particularly described on Exhibit "C" attached hereto and incorporated herein for all purposes. The Common Area may include, without limitation, all recreational facilities, community facilities, islands,

icularly described on Exhibit "C" attached hereto and incorporated herein for all purposes. The Common Area may include, without limitation, all recreational facilities, community facilities, islands, storage facilities, trees, landscaping, sprinkler systems, pipes, wires, conduits, entry monument(s) and fences.

1.12. "Common Expenses" means the actual and estimated expenses incurred or anticipated to be incurred by the Association for the benefit of the Member(s) and/or the Common Maintenance Areas.

1.13. “Common Maintenance Areas" means the Common Areas, if any, and any areas within public rights-of-way, easements (public and private), portion of a Lot, public parks, private streets, landscaping, entry features, recreational facilities, islands, fence or similar areas described or depicted on Exhibit "D" attached hereto that either the Board deems necessary or appropriate to maintain for the common benefit of the Members or that is shown on a Recorded plat of the Property or portion thereof as being maintained by the Association.

1.14. “County” means the County of Bexar.

1.15. "Declarant" means Centex Homes, a Nevada general partnership, and its successors and assigns as provided in Section 12.12 herein.

1.16. “Declaration” means this Declaration of Covenants, Conditions and Restrictions for Silverado Hills, and any amendments and supplements thereto made in accordance with its terms.

1.17. "Designated Interest Rate" means the interest rate designated by the Board from time to time, subject to any interest limitations under Texas law. If the Board fails to designate an interest rate, then the interest rate shall be the lesser of 12% per annum or the highest rate permitted by Texas law. The Designated Interest Rate is also subject to the limitations in

o designate an interest rate, then the interest rate shall be the lesser of 12% per annum or the highest rate permitted by Texas law. The Designated Interest Rate is also subject to the limitations in Section 12.6 herein.

1.18. "Development Period" means the period commencing upon the date of this Declaration and expiring upon the earlier of (i) when Declarant does not own any real property within the Property, or (ii) when Declarant executes a document stating the Development Period has terminated, which termination document may be executed during the period when Declarant still owns real property within the Property.

1.19. "Dwelling" means any residential dwelling situated upon any Lot.

1.20. "Entry Signs" means the entry feature signs for the subdivision that may be placed by the Declarant or its agents on the Common Area and/or on the Association Easement.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 2 1.21. "Lot" means any separate residential building parcel shown on a Recorded subdivision plat of the Property, but only if such parcel has in place the infrastructure (including utilities and streets) necessary to allow construction of a single-family home thereon. Common Areas and areas deeded to a governmental authority or utility, together with all improvements thereon, shall not be included as part of a Lot.

1.22. "Member" means any person, corporation, partnership, joint venture or other legal entity that is a member of the Association pursuant to the terms in Article II| herein.

1.23. "Owner" means the record owner, whether one or more persons or entities, of fee

int venture or other legal entity that is a member of the Association pursuant to the terms in Article II| herein.

1.23. "Owner" means the record owner, whether one or more persons or entities, of fee simple title to any Lot, 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 for deed, then the purchaser (rather than the fee Owner) will be considered the Owner.

1.24. "Property" means the real property described on the Subdivision Plat (other than areas dedicated to the City or County), including without limitation the Lots and the Common Areas, together with such additional property as is brought within the jurisdiction of the Association and made subject to this Declaration.

1.25. “Record,” "Recording" or "Recorded" means the filing of a legal instrument in the Public Records of Bexar County, State of Texas, or such other place as may be designated as the official location for filing deeds, plats, and similar documents affecting title to real property.

1.26. "Subdivision Plat" shall mean those certain Recorded or to be Recorded subdivision plats, as amended, for Silverado Hills.

ARTICLE Il PROPERTY RIGHTS 2.1. Owners' Easements of Use and Enjoyment. Every Owner will have a right and non-exclusive easement of use, access and enjoyment in and to the Common Areas, subject to any limitations set forth herein, including, without limitation, the following: a. The right of the Association to charge reasonable admission fees and other fees and assessments for the right to use the Common Areas and other facilities owned or operated by the Association; b. The right of the Association to establish and publish rules and regulations

her fees and assessments for the right to use the Common Areas and other facilities owned or operated by the Association; b. The right of the Association to establish and publish rules and regulations governing the use of the Common Areas, the Lots, and/or other facilities owned and operated by the Association; c. The right of the Association to suspend the right of use of the Common Areas and right to use the recreational and other facilities owned or operated by the Association and a Member's voting rights (i) for any period during which any assessment against such Member's Lot or any other sum due the Association by such Member remains unpaid, and (ii) for a period not to exceed sixty (60) days for any infraction of its published rules and regulations; d. The right of the Association, subject to the provisions hereof, to dedicate, sell or transfer all or any part of the Common Areas; provided, however, no such dedication, sale or transfer will be effective unless there is an affirmative vote of 67% or greater of all outstanding votes entitled to be cast; and DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 3 e. The right of the Association, subject to the provisions hereof, to mortgage or lien all or any part of the Common Areas. However, the Common Areas cannot be mortgaged or liened without an affirmative vote of 67% or greater of all outstanding votes entitled to be cast.

2.2. Prohibitions on Easement of Use and Enjoyment. Each Owner's right and easement of use and enjoyment in and to the Common Area is further limited as follows: a. No Transfer Without Lot. An Owner's right and easement of use and

of Use and Enjoyment. Each Owner's right and easement of use and enjoyment in and to the Common Area is further limited as follows: a. No Transfer Without Lot. An Owner's right and easement of use and enjoyment in and to the Common Area shall not be conveyed, transferred, alienated or encumbered separate and apart from an Owner's Lot.

b. No Partition. Except as provided in Section 2.1(c) herein, the Common Area shall remain undivided and no action for partition or division of any part thereof shall be permitted.

2.3. Rightto Delegate Use and Enjoyment of Common Area. Any Owner may extend his or her right of use and enjoyment to the Common Areas and other facilities owned or operated by the Association to the members of his or her family, lessees and guests as applicable, subject to the terms in this Declaration, the By-laws and any reasonable rules of the Board. An Owner who leases his or her Dwelling is deemed to have assigned all such rights to the lessee of such Dwelling.

ARTICLE Ill MEMBERSHIP AND VOTING 3.1. Membership - Owners. Every Owner by virtue of ownership of a Lot will be a member of the Association. Membership will be appurtenant to and will not be separated from ownership of any Lot.

3.2. Voting Rights. The voting rights in the Association shall be as follows: a. Members other than Declarant. Except as provided in Section 3.2(b) below, Members shall be entitled to one vote for each Lot owned. However, when more than one person or Member holds an interest in any Lot, only one vote in total may be cast per Lot as the Owners of such Lot determine among themselves and advise the Secretary of the Association in writing prior to the vote being taken. The Association shall have no affirmative obligation to take any action to

of such Lot determine among themselves and advise the Secretary of the Association in writing prior to the vote being taken. The Association shall have no affirmative obligation to take any action to determine which Member is the person designated to cast the Lot's vote. If the Members fail to advise the Association of the person designated to cast the Lot's vote, then the Lot's vote shall be suspended if more than one person or entity seeks to exercise it.

b. Declarant. Declarant shall be entitled to ten (10) votes for each Lot owned by Declarant, regardless if the period is within or after the Development Period.

ARTICLE IV ASSESSMENTS 4.1. Obligation to Pay Assessments. Subject to and except as provided in this Article IV, each Owner of any Lot by acceptance of a deed therefor, whether or not it will be so expressed in such deed, is deemed to covenant and agree to pay to the Association: (i) annual assessments or charges as provided in Section 4.3 herein, (ii) special assessments as provided in Section 4.6 herein, and (iii) specific assessments as provided in Section 4.7 herein.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 4 4.2. Rate of Assessments. Both annual assessments and special assessments shall be fixed at a uniform rate for all Lots, regardless of a Lot’s location or size or the value of the dwelling; provided, however, vacant Lots shall be subject to a lower rate as provided herein.

a. Improved Lot. ALot that has thereon a Dwelling that has been occupied at any time (past or current) for residential purposes shall be assessed at the full rate.

b. Vacant Lot. A Lot that does not have thereon a Dwelling that has been

on a Dwelling that has been occupied at any time (past or current) for residential purposes shall be assessed at the full rate.

b. Vacant Lot. A Lot that does not have thereon a Dwelling that has been occupied at any time (past or current) for residential purposes shall be assessed at the rate of 25% of the full rate.

G. Lots Owned by Declarant- Exempt. Notwithstanding any provision herein, during the Development Period all Lots owned by Declarant shall be exempt from all assessments (annual assessments, special assessments and/or specific assessments) and Declarant shall not be obligated to pay any assessments for the Lots.

4.3. Annual Assessment — Increases. Until January ist of the year immediately following the conveyance of the first Lot to an Owner, the annual assessment shall be $200.00 per Lot. Thereafter, the annual assessment may be increased by the Board, provided that the Board gives written notice to the Members of the increase. The effective date of the increase shall not be sooner than 60 days from the date of the notice. No vote or other approval shall be required for the increase to be effective, unless the increase is more than 10% of the prior annual assessment. If the increase is more than 10%, then the increase may be disapproved by a 67% or greater vote of the votes cast, provided that the vote occurs within 60 days of the date of the increase notice.

4.4. Date of Commencement of Annual Assessments; Due Dates. The annual assessments provided for herein shall commence as to all Lots on the date of conveyance of the first Lot to an Owner (other than to a Builder or an entity that assumes the Declarant status as provided herein), unless the Board of Directors elects to commence the annual assessment earlier.

f the first Lot to an Owner (other than to a Builder or an entity that assumes the Declarant status as provided herein), unless the Board of Directors elects to commence the annual assessment earlier.

The first annual assessment shail be adjusted according to the number of months remaining in the calendar year. The Board of Directors shall fix the amount of the annual assessment against each Lot at least 30 days in advance of each assessment period. Written notice of the annual assessment shall be sent to an Owner of every Lot subject thereto. The due dates shall be established by the Board of Directors. The Board of Directors shall also establish whether the Annual Assessment shall be paid annually, quarterly or monthly.

4.5. Declarant’s Obligation to Pay Budget Deficits. Declarant hereby covenants and agrees that if the annual assessment fund revenues are insufficient to pay the operating expenses of the Association, it will provide the funds to make up the deficit; provided, however, Declarant shall not be obligated to pay more than an amount equal to the full assessment rate applicable to Improved Lots to make up the deficit. Declarant shall pay such deficit amount within 30 days of receipt of request for payment thereof from the Association, provided that if the deficit is the result of the failure or refusal of an Owner or Owners to pay their regular or special maintenance assessments, the Association will diligently pursue (the Declarant may also pursue at its option) all available remedies against such defaulting Owners, including the immediate institution of litigation to recover the unpaid assessments, and will reimburse the Declarant the amounts, if any, so collected.

ilable remedies against such defaulting Owners, including the immediate institution of litigation to recover the unpaid assessments, and will reimburse the Declarant the amounts, if any, so collected.

Notwithstanding the foregoing, the payment at the full assessment rate to make up the deficit does not relinquish Declarant’s right to be exempt from all assessments for subsequent years.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 5 4.6. Special Assessments. |n addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment to cover expenses which the Board determines, in its sole discretion, to more appropriately be handled outside of the regular operating budget, provided, that any such special assessment must have an affirmative vote of 67% or greater of all outstanding votes entitled to be cast.

4.7. Specific Assessments. The Association shall have the power to levy specific assessments against a particular Lot to (i) cover costs incurred in bringing a Lot into compliance with this Declaration, (ii) cover costs incurred as a consequence of the conduct (or the failure to act) of the Owner or occupant of a Lot, their agents, contractors, employees, licensees, invitees, or guests, and/or (iii) collect any sums due by the Owner to the Association (other than annual assessments or special assessments or interest or late charges related thereto), including, without limitation, fines.

4.8. Purpose of Annual and Special Assessments - Reserve. Annual assessments and special assessments levied by the Association shall be used for Common Expenses. The

luding, without limitation, fines.

4.8. Purpose of Annual and Special Assessments - Reserve. Annual assessments and special assessments levied by the Association shall be used for Common Expenses. The Association may establish and maintain a reserve fund for the periodic maintenance, inspection, repair and replacement of improvements to the Common Maintenance Areas or for amenities or other facilities that are or will be operated in whole or in part for the benefit of the Owners; and doing any other thing necessary or desirable in the opinion of the Board to keep and maintain the Property in neat and good order or which they consider of general benefit to the Owners or occupants of Silverado Hills.

4.9. Personal Obligation to Pay Assessments. Each assessment provided herein, together with interest at the Designated Interest Rate, late charges, collection costs and reasonable attorneys’ fees, shall be the personal obligation of the person who was the Owner of such Lot at the time when the assessment arose. Upon a transfer of title to a Lot, the grantee shall be jointly and severally liable for any assessments and other charges due at the time of conveyance. However, no mortgagee under a Recorded first purchase money mortgage or beneficiary of a Recorded first deed of trust (meaning any Recorded mortgage or deed of trust with first priority over other mortgages or deeds of trust), shall be liable for unpaid assessments which accrued prior to mortgagee's acquisition of title. In addition, no mortgagee shall be required to collect assessments.

4.10. Capitalization of Association - Payment. Upon acquisition of record title to a Lot by the first Owner thereof (other than Declarant or a Builder), a contribution shall be made by or on

essments.

4.10. Capitalization of Association - Payment. Upon acquisition of record title to a Lot by the first Owner thereof (other than Declarant or a Builder), a contribution shall be made by or on behalf of the purchaser to the working capital of the Association in an amount equal to two months of the full annual assessment per Lot for that year. This amount shall be in addition to, not in lieu of, the annual assessment and shall not be considered an advance payment of such assessment. This amount shall be deposited into the purchase and sales escrow and disbursed therefrom to the Association for use in covering operating expenses and other expenses incurred by the Association pursuant to this Declaration and the By-laws.

4.11. Failure to Pay Assessments; Remedies of the Association. With respect to any assessment or other sum due herein not paid within 10 days after the due date, the Association shall have the right to: (i) charge a late fee, in an amount determined by the Board; (ii) charge interest on the amount due at the Designated Interest Rate from the due date until the date the sum is paid; and/or (iii) charge costs and fees related to the collection of the sum due. In addition, the Association may bring an action at law against the Owner personally obligated to pay the same. No Owner may waive or otherwise escape liability for the assessments provided for herein by non-use of the Common Maintenance Areas or abandonment of his or her Lot. The failure to pay assessments shall not by the terms of this Declaration constitute a default under an insured mortgage, unless otherwise provided by the terms of such mortgage.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 6

this Declaration constitute a default under an insured mortgage, unless otherwise provided by the terms of such mortgage.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 6 4.12 Lien.

a. Creation of Lien. The Association shall hereby have a continuing lien against each Lot to secure payment of delinquent assessments (annual assessments, special assessments and specific assessments), as well as interest at the Designated Interest Rate, late charges, and costs of collection, including, without limitation, court costs and attorneys' fees, and any other fees or charges that are authorized under or pursuant to this Declaration. Although no further action is required to create or perfect the lien, the Association may, as further evidence and notice of the lien, execute and Record a document setting forth as to any Lot, the amount of delinquent sums due the Association at the time such document is executed and the fact that a lien exists to secure the payment thereof. However, the failure of the Association to execute and Record any such document shall not, to any extent, affect the validity, enforceability, perfection or priority of the lien.

b. Enforcement of Lien - Judicial or Nonjudicial. The lien may be enforced by judicial or nonjudicial foreclosure. Each Owner by accepting title to a Lot hereby grants to the Association, whether or not it is so expressed in the deed or other instrument conveying such Lot to the Owner, a private power of nonjudicial sale. The Board may appoint, from time to time, any person including an officer, agent, trustee, substitute trustee, or attorney, to exercise the

such Lot to the Owner, a private power of nonjudicial sale. The Board may appoint, from time to time, any person including an officer, agent, trustee, substitute trustee, or attorney, to exercise the Association's lien rights on behalf of the Association, including the power of sale. The appointment must be in writing and may be in the form of a resolution recorded in the minutes of a Board's meeting. A foreclosure must comply with the requirements of applicable law, such as Chapter 209 of the Texas Property Code, as amended. A nonjudicial foreclosure must be conducted in accordance with the provisions applicable to the exercise of powers of sale as set forth in Section 51.002 of the Texas Property Code, as amended, or in any manner permitted by law. In any foreclosure, the Owner is required to pay the Association's costs and expenses for the proceedings, including reasonable attorneys’ fees, subject to applicable provisions of the By-laws and applicable law, such as Chapter 209 of the Texas Property Code, as amended. The Association has the power to bid on the lot at foreclosure sale and to acquire, hold, lease, mortgage, and convey same.

Cc. Subordination of Lien. The lien of the assessments provided for herein is subordinate to the lien of any Recorded first purchase money mortgage or deed of trust against a Lot.

d. Effect of Conveyance. An Owner that conveys title to a Lot shall not be liable for assessments that are attributable to the period after the conveyance of the Lot, except as provided in Section 4.12(e) herein. However, a conveyance of title to a Lot shall not affect the assessment lien or relieve the Owner that conveys the Lot from personal liability for any assessments attributable to the period prior to the date of the conveyance, except as provided in

t affect the assessment lien or relieve the Owner that conveys the Lot from personal liability for any assessments attributable to the period prior to the date of the conveyance, except as provided in Section 4.12(e) herein.

e. Effect of Foreclosure. The foreclosure of a first purchase money mortgage, trustee's sale of a first deed of trust or a deed in lieu thereof will extinguish the lien of such assessment as to payments attributable to the period prior to the foreclosure, trustee's sale or deed in lieu thereof. However, a foreclosure of a first purchase money mortgage, trustee's sale of a first deed of trust or a deed in lieu thereof will not relieve such Lot or Owner thereof from liability for any assessment attributable to the period after the foreclosure, trustee's sale or deed in lieu thereof.

The foreclosure of a first purchase money mortgage, trustee's sale of a first deed of trust or a deed in lieu thereof shail not release the Owner whose Lot is being foreclosed, sold at a trustee's sale or conveyed pursuant to a deed in lieu from the Owner's obligation to pay assessments attributable to DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 7 the period prior to the date of such foreclosure, trustee's sale or deed in lieu thereof. For purposes of this Declaration, the use of the term first in connection with a mortgage or deed of trust shall refer to the lien priority as compared to other mortgages or deeds of trust.

ARTICLE V THE ASSOCIATION 5.1. The Association - Duties and Powers. The Association is a Texas nonprofit corporation charged with the duties and invested with the powers prescribed by law and set forth in

CLE V THE ASSOCIATION 5.1. The Association - Duties and Powers. The Association is a Texas nonprofit corporation charged with the duties and invested with the powers prescribed by law and set forth in the Articles, By-laws, and this Declaration. The Association shall continue to exist until the Association is dissolved, regardless if the corporate status expires or lapses. The Association shall have such rights, duties and powers as set forth herein and in the Articles and the By-laws.

5.2. Board of Directors. The affairs of the Association shall be conducted by the Board and such officers as the Board may elect or appoint, in accordance with the Articles and the Bylaws. The Board shall have the powers granted in this Declaration, the Articles, the By-laws, and all powers provided by Texas law and all powers reasonably implied to perform its obligations and/or duties provided herein.

5.3. Limitation on Liability. The liability of an officer, director or committee member of the Association shall be limited as provided in the Articles.

5.4. Indemnification. Subject to the limitations and requirements of the Texas Nonprofit Corporation Act, as amended, and in the By-laws, the Association shall indemnify every officer, director, and committee member against all damages and expenses, including, without limitation, attorneys’ fees, reasonably incurred in connection with any threatened, initiated or filed action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board) to which he or she may be a party by reason of being or having been an officer, director, or committee member, except that such obligation to indemnify shall be limited to those actions for

hen Board) to which he or she may be a party by reason of being or having been an officer, director, or committee member, except that such obligation to indemnify shall be limited to those actions for which a director's, officer's or committee member's liability is limited under the Articles. Additionally, subject to the limitations and requirements of the Texas Nonprofit Corporation Act, as amended, and in the By-laws, the Association may voluntarily indemnify a person who is or was an employee, trustee, agent or attorney of the Association, against any liability asserted against such person in that capacity and arising out of that capacity.

5.5. insurance.

a. Required Coverages. The Association, acting through its Board or its duly authorized agent, shall obtain and continue in effect, the following insurance coverage, if reasonably available: (i) Property Insurance — Common Area, Blanket property insurance covering loss or damage on a “special form" basis (or comparable coverage by whatever name denominated) for all insurable improvements on the Common Area and within the Common Maintenance Areas to the extent that the Association has assumed sien moniaeii a in the event of a casualty, regardless of ownership.

(ii) General Liability Insurance. Commercial general liability insurance on the Common Maintenance Areas, insuring the Association and its Members for damage or injury caused by the negligence of the Association or any of its Members, employees, agents, or contractors while acting on its behalf.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 8 b. Additional Insurance. The Board may obtain additional insurance as the

NS AND RESTRICTIONS (SILVERDO HILLS) PAGE 8 b. Additional Insurance. The Board may obtain additional insurance as the Board determines advisable, including, without limitation, directors and officers liability insurance, fidelity insurance and any insurance to comply with any applicable insurance requirements of any federal agency or secondary mortgage market entity, including, without limitation, the Federal Home Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage Association ("FNMA"), the U. S. Department of Veterans Affairs ("VA"), and the U.S. Department of Housing and Urban Development ("HUD"), to the extent applicable. In determining whether to obtain additional insurance and/or endorsements thereto that are discretionary the Board shall use its own business judgment to determine if such insurance and/or endorsement is advisable based on the cost and availability of the insurance and/or the endorsement compared to the risks associated therewith.

Cc. Review of Policies. The Board shall periodically review the types and amounts of insurance coverage for sufficiency.

5.6. Contracts; Management and Maintenance. The Association shall have the right to contract with any person or entity for the performance of various duties and functions. This right shall include, without limitation, the right to enter into management, operational, or other agreements with other persons or entities; provided, any such agreement shall require approval of the Board.

The Board may employ for the Association a management agent or agents at such compensation as the Board may establish, to perform such duties and services as the Board shall authorize. The

the Board.

The Board may employ for the Association a management agent or agents at such compensation as the Board may establish, to perform such duties and services as the Board shall authorize. The Board may delegate such powers as are necessary to perform the manager's assigned duties, but shall not delegate policymaking authority.

5.7. Books and Records. The books and records of the Association shall be made available to the Members for inspection as provided in the By-laws. In addition, Members may obtain copies, at a reasonable cost, of the books and records of the Association as provided in the By-laws.

5.8. Dissolution of Association; Conveyance of Assets. If the Association is dissolved other than incident to a merger or consolidation, the assets both real and personal of the Association, shall be conveyed as provided in the Articles.

5.9. Enforcement— Notice. The Association may impose sanctions for violation of this Declaration (including any rules, guidelines or standards adopted pursuant to the Declaration) in accordance with and subject to the applicable procedures set forth in this Declaration, the By-laws and applicable law, including Chapter 209 of the Texas Property Code, as amended. Specifically, written notice and opportunity for a hearing must be given prior to the Association exercising its remedies if such notice and hearing is required by this Declaration, the By-laws and applicable law, including Chapter 209 of the Texas Property Code, as amended. Such sanctions may include ail remedies available at law and/or in equity and all remedies herein, including, without limitation, the following: a. Fines. The Association may impose reasonable monetary fines which shall

include ail remedies available at law and/or in equity and all remedies herein, including, without limitation, the following: a. Fines. The Association may impose reasonable monetary fines which shall constitute a lien upon the Owner of the Lot related to or connected with the alleged violation. The Owner shall be liable for the actions of any occupant, guest, or invitee of the Owner of such Lot.

b. Suspension of Voting Rights. The Association may suspend an Owner's right to vote.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 9 Cc. Suspension of Rights to Use Common Area. The Association may suspend any person's or entity's right to use any Common Area, including but not limited to any recreational and other facilities owned or operated by the Association; provided, however, nothing herein shall authorize the Association to limit ingress or egress to or from a Lot.

d. Right of Self-Help. The Association may exercise self-help or take action to enter upon the Lot to abate any violation of this Declaration; e. Right to Require Removal. The Association may require an Owner, at the Owner's expense, to remove any structure or improvement on such Owner's Lot in violation of this Declaration and to restore the Lot to its previous condition and, upon failure of the Owner to do so, the Association or its designee shall have the right to enter the Lot, remove the violation, and restore the property to substantially the same condition as previously existed, without such action being deemed a trespass.

f. Levy Specific Assessment. The Association may levy a specific assessment to cover costs incurred by the Association in bringing a Lot into compliance with this

such action being deemed a trespass.

f. Levy Specific Assessment. The Association may levy a specific assessment to cover costs incurred by the Association in bringing a Lot into compliance with this Declaration.

g. Lawsuit; Injunction or Damages. The Association has the right, but not the obligation, to bring a suit at law or in equity to enjoin any violation or to recover monetary damages, or both.

h. Perform Maintenance. |n addition to any other enforcement rights, if an Owner fails to perform properly such Owner's maintenance responsibility with respect to a Lot and/or Dwelling, the Association may record a notice of violation in the Records and/or enter the Lot and perform such maintenance responsibilities and assess all costs incurred by the Association against the Lot and the Owner as a specific assessment.

The decision to pursue enforcement action, including the commencement of legal proceedings, in any particular case shall be left to the Association's sole and absolute discretion, except that the Association shall not be arbitrary or capricious in taking enforcement action. Without limiting the generality of the foregoing sentence, the Association may determine that, under the circumstances of a particular case: (i) the Association's position is not strong enough to justify taking any or further action; (ii) the covenant, restriction, or rule being enforced is, or is likely to be construed as, inconsistent with applicable law; (iii) although a technical violation may exist or may have occurred, it is not of such a material nature as to be objectionable to a reasonable person or to justify expending the Association's resources; or (iv) it is not in the Association's best interests,

occurred, it is not of such a material nature as to be objectionable to a reasonable person or to justify expending the Association's resources; or (iv) it is not in the Association's best interests, based upon hardship, expense, or other reasonable criteria, to pursue enforcement action. Sucha decision shall not be construed a waiver of the right of the Association to enforce such provision at a later time under other circumstances or preclude the Association from enforcing any other covenant, restriction or rule.

ARTICLE VI ARCHITECTURAL CONTROLS 6.1. Nolmprovements Unless Approved by Architectural Control Authority - Except Improvements by Declarant. No building, fence, wall, outbuilding, landscaping, pool, detached building, athletic or play equipment or facility, structure or improvement will be erected, altered, added onto or repaired upon any portion of any Lot without the prior written consent of the ACA.

However, ACA approval is not required for (i) any improvements constructed, erected, altered, DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 10 added onto or repaired by Declarant or a Builder designated in writing by Declarant to be exempt from the ACA approval requirements; (ii) any improvements to the interior of a Dwelling, except as provided herein; (iii) the painting or re-bricking of the exterior of any Dwelling in accordance with the same color or design as originally constructed by Declarant or in accordance with the approved color and design scheme approved by the ACA; (iv) improvements for which the Declaration expressly states that the ACA’s prior approval is not required; or (v) repair or replacement of worn

e approved color and design scheme approved by the ACA; (iv) improvements for which the Declaration expressly states that the ACA’s prior approval is not required; or (v) repair or replacement of worn out or damaged improvements if such repair or replacement is with substantially similar materials.

Any improvements pursuant to clauses (iii) and (v) immediately preceding must be in compliance with any applicable ACA Standards.

6.2. Architectural Control Authority. The ACA shall have the sole and exciusive authority to perform the functions contemplated by the ACA in this Declaration. The purpose of the ACA is to enforce the architectural standards of the Property and to approve or disapprove plans for improvements proposed for the Lots. The ACA will have the authority to delegate its duties or to retain the services of a professional engineer, management company, architect, designer, inspector or other person to assist in the performance of its duties. The cost of such services shall be included in the Common Expenses. The "ACA” or "Architectural Control Authority" shall be the following entity: a. Declarant - During Development Period. The Declarant shall be the ACA during the Development Period, unless the Declarant in writing has terminated its rights as the ACA.

Architectural Committee shall be the ACA after the Declarant's right to act as the ACA has either expired or voluntarily been terminated.

6.3. Architectural Committee. A committee to be known as the "Architectural Committee" consisting of a minimum of 3 members will be established after the Declarant's right as the ACA has terminated. The members of the Architectural Committee will be appointed, terminated

ural Committee" consisting of a minimum of 3 members will be established after the Declarant's right as the ACA has terminated. The members of the Architectural Committee will be appointed, terminated and/or replaced by the Board. The Architectural Committee will act by simple majority vote.

6.4. Submission of Plans. Unless specifically limited or waived in writing by the ACA, prior to the initiation of construction of any work required to be approved by the ACA as provided in Section 6.1 above, the Owner (excluding Declarant and any Builder designated in writing to be exempt from the ACA approval requirements as provided herein) will first submit to the ACA complete sets of plans and specifications for the proposed improvements, including site plans, grading plans, landscape plans, exterior elevations, specifications of materials and exterior colors, and any other information deemed necessary by the ACA for the performance of its function. In addition, the Owner will submit the identity of the individual or company intended to perform the work and projected commencement and completion dates. In connection with its application for approval of its plans, the Owner shall pay a plan review fee to the Association to cover the administrative costs associated with the review of the plans. The initial plan review fee shall be $25.00, which amount may be increased or decreased by the Board if circumstances warrant. For plan review of improvements excluding the principal residence, the ACA, in its sole discretion, may reduce or waive said plan review fee.

6.5. Receipt by ACA. No correspondence or request for approval shall be deemed to have been received until actually received by the ACA in form satisfactory to the ACA. It is the

said plan review fee.

6.5. Receipt by ACA. No correspondence or request for approval shall be deemed to have been received until actually received by the ACA in form satisfactory to the ACA. It is the responsibility of the Owner seeking approval from the ACA to determine and/or verify that the ACA has received a request for review and approval by the ACA.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 11 6.6. Address for Notice. Requests for ACA approval or correspondence with the ACA shall be addressed to Silverado Hills Architectural Control Authority and mailed, faxed or delivered in care of the principal office of Centex Homes in Bexar County, Texas, or such other address as may be designated from time to time by the ACA.

6.7 Plan Review.

a. Timing of Review and Response. Upon receipt by the ACA of all of the information required by this Article V!, the ACA will have 30 days in which to review said plans and other documents and materials submitted pursuant to Section 6.4 herein. No correspondence or request for approval will be deemed to have been received until all requested documents have actually been received by the ACA in form satisfactory to the ACA. If the ACA requests additional information and the applicant fails to provide such information prior to the date stated in the ACA's notice, then the application shall be deemed denied. If the applicable submittal is denied or deemed denied, then the applicant shall be required to re-apply if the applicant still desires to have the ACA consider the request. If the ACA fails to issue its written approval within 30 days after the ACA's

ied, then the applicant shall be required to re-apply if the applicant still desires to have the ACA consider the request. If the ACA fails to issue its written approval within 30 days after the ACA's receipt of all materials requested by the ACA to complete the submission, then such failure by the ACA to issue its written approval shall be deemed disapproved. The ACA may charge a reasonable fee for reviewing requests for approval.

b. Building Permit. \f the application is for work that requires a building permit from a governmental entity, the ACA's approval is conditioned on the governmental entity's issuance of the appropriate permit. The ACA's approval of plans and specifications does not mean that they comply with the City's and/or County’s requirements. Alternatively, approval by the City and/or County does not ensure ACA approval.

G. Approval Considerations - Aesthetics. The proposed improvements will be approved if, in the sole opinion of the ACA: (i) the improvements will be of an architectural style, quality, color and material that are aesthetically compatible with the improvements within the Property; (ii) the improvements will not violate any term herein or in the ACA Standards; and (iii) the improvements will not have an adverse impact on the Property. Decisions of the ACA may be based on purely aesthetic considerations. The ACA shall have the authority to make final, conclusive and binding determinations on matters of aesthetic judgment and such determination shall not be subject to review so long as the determination is made in good faith and in accordance with the procedures set forth herein. Each Owner acknowledges that opinions on aesthetic matters are subjective and

bject to review so long as the determination is made in good faith and in accordance with the procedures set forth herein. Each Owner acknowledges that opinions on aesthetic matters are subjective and opinions may vary as to the desirability and/or attractiveness of particular improvements and as the ACA and their members change over time.

6.8. Timing of Completion of Approved Items. All work approved by the ACA shall be completed within one year after the approval by the ACA or such shorter period that the ACA may specify in the notice of approval, unless the completion is delayed due to causes beyond the reasonable control of the Owner, as determined by the ACA. All work and related improvements shall be in compliance with the items approved by the ACA.

6.9. Improvements Impact on Drainage. WVith respect to any improvements performed on a Lot and/or any alterations to the grade of a yard, the Owner shall take proper precautions to insure that such improvements do not cause the surface water drainage on the Lot to (i) drain onto an adjoining Lot in an amount more than the drainage amount prior to the improvement or alteration, or (ii) collect near the foundation of the Dwelling. Although the ACA may comment on and/or deny the approval of plans because of the impact of the proposed improvements or alterations on surface water drainage, the ACA's comments or approval shall not constitute or be construed as a DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 12 representation, warranty or guaranty that adverse surface water drainage problems will not occur and shall not be relied upon as such. The Owner is responsible for taking the necessary actions in

doc representation, warranty or guaranty that adverse surface water drainage problems will not occur and shall not be relied upon as such. The Owner is responsible for taking the necessary actions in order to avoid any surface water drainage problems, including, without limitation, engaging the services of a qualified consultant.

6.10. No Waiver. The approval by the ACA of any plans, drawings or specifications for any work done or proposed, or for any other matter requiring the approval of the ACA under this Declaration, shall not be deemed to constitute a waiver of any right to withhold approval of any similar plan, drawing specification or matter subsequently submitted for approval.

6.11. Variances. The ACA may authorize variances from strict compliance with the requirements herein, in any ACA Standards or any required procedures: (i) in narrow circumstances where the design meets the intent of the provision from which variance is sought and where granting the variance would enhance design innovation and excellence; or (ii) when circumstances such as topography, natural obstructions, hardship, or aesthetic or environmental considerations so require.

For purposes of this Section 6.9, the inability to obtain approval of any governmental agency, the issuance of any permit, or the terms of any financing as the sole or primary reason for requesting a variance shall not be considered a hardship warranting a variance. No variance shall be contrary to the terms of this Declaration and no variance shall be effective unless in writing or estop the ACA from denying a variance in other circumstances.

6.12. Architectural Control Authority Standards. The ACA may, from time to time and

nd no variance shall be effective unless in writing or estop the ACA from denying a variance in other circumstances.

6.12. Architectural Control Authority Standards. The ACA may, from time to time and in its sole and absolute discretion, adopt, amend and repeal, by unanimous vote or written consent, ACA Standards. The ACA Standards may not conflict with the terms of this Declaration.

6.13. Enforcement; Non-Conforming and Unapproved improvements. lf there are any significant or material deviations from the approved plans in the completed improvements, as determined by the ACA, in their sole and absolute discretion, such improvements will be in violation of this Article VI to the same extent as if made without prior approval of the ACA. In addition to the Association's rights in Section 5.9 herein, the Association or any Owner may maintain an action at law or in equity for the removal or correction of (i) the non-conforming improvement or alteration, and/or (ii) any improvement or alternation to any improvement on any Lot that is not approved by the 6.14. Limitation of Liability. Neither the Declarant, the Association, the Board, nor the ACA shall bear any responsibility for ensuring the structural integrity or soundness of approved construction or modifications or the adequacy of soils or drainage, nor for ensuring compliance with building codes and other governmental requirements. Neither Declarant, the Association, the Board, the ACA nor any member of the foregoing shall be held liable for any injury, damages, or loss arising out of the manner or quality of approved construction on or modifications to any Dwelling and/or Lot. The ACA and its members shail be defended and indemnified by the Association as provided in Section 5.4 herein.

ARTICLE VII

ity of approved construction on or modifications to any Dwelling and/or Lot. The ACA and its members shail be defended and indemnified by the Association as provided in Section 5.4 herein.

ARTICLE VII USE RESTRICTIONS AND COVENANTS single-family residential purposes only and no trade or business may be conducted in or from any Lot and/or Dwelling, except that an Owner of the Dwelling may conduct business activities within the Dwelling so long as: (i) the existence or operation of the business activity is not apparent or detectable by sight, sound or smell from outside the Dwelling; (ii) the business activity conforms to DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 13 all zoning requirements for the Property; (iii) the business activity does not involve unreasonable visitation to or from the Dwelling by clients, customers, suppliers or other business invitees; and (iv) the business activity is ancillary to the residential use of the Dwelling and does not diminish the residential character of the Property or constitute a nuisance, or a hazardous or offensive use, or threatens the security or safety of the other residents in the Property. The determination of whether a business activity satisfies the foregoing requirements set forth in clauses (i) through (iv) above in this Section 7.1 shall be made by the Board in their sole and absolute discretion. The business activity prohibition will not apply to the use by Declarant or any Builder (i) of any Dwelling as a model home, construction office and/or sales office, or (ii) of any Lot as a site for a selection center trailer,

ibition will not apply to the use by Declarant or any Builder (i) of any Dwelling as a model home, construction office and/or sales office, or (ii) of any Lot as a site for a selection center trailer, construction office trailer and/or sales office trailer and/or parking lot; any of which uses may be for the benefit of real property owned by Declarant or any Builder located within or outside of the Property. This prohibition will not apply to "garage sales" conducted entirely on an Owner's Lot in accordance with guidelines (if any) established by the ACA provided that no Owner will conduct more than one (1) garage sale of no more than two (2) days duration during any six (6) month period.

7.2. Parking of Motor Vehicles. No vehicles or similar equipment will be parked or stored in an area visible from any street within the Property, except passenger automobiles, motorcycles, passenger vans and pick-up trucks may be parked in any garage or driveway if such vehicle (i) has less than 1 ton carrying capacity; (ii) has less than 3 axles; (iii) is in operating condition; and (iv) is generally in daily use as a motor vehicle on the streets and highways of the State of Texas. No vehicles, trailers, implements or apparatus may be driven or parked in the Common Areas, the Common Maintenance Areas or on any easement unless such vehicle, trailer, implement or apparatus is in use for maintaining such area or easement, provided, however, that this restriction will not apply to any driveways, roads, parking lots or other areas designated by the Board as intended for such vehicular use. No abandoned, derelict or inoperable vehicles may be stored or located on any Lot or a street within the Property, except within an enclosed garage. No

by the Board as intended for such vehicular use. No abandoned, derelict or inoperable vehicles may be stored or located on any Lot or a street within the Property, except within an enclosed garage. No dismantling or assembling of motor vehicles, boats, trailers, recreational vehicles, or other machinery or equipment will be permitted in any driveway or portions of any Lot that are visible from any street within the Property.

7.3. Trailers, Boats, Commercial and Recreational Vehicles. No campers, boats, trailers, motor homes, travel trailers, camper bodies, golf carts, recreational vehicles, non-passenger vehicles, commercial vehicles with 3 or more axles or greater than 1 ton carrying capacity, and/or equipment or accessories related thereto may be kept on any Lot, unless such item is operable and such item is (i) kept fully enclosed within a garage located on such Lot; (ii) kept fully screened from view by a screening structure or fencing approved by the ACA; (iii) temporarily parked on any street within the Property or on a Lot for the purpose of loading or unloading; or (iv) a commercial vehicle that is in use for the construction, maintenance or repair of a Dwelling or Lot in the immediate vicinity. The Board will have the absolute authority to determine from time to time whether an item is in operable condition and complies with the requirements in clauses (i) through (iv) above in this Section 7.3. Upon an adverse determination by the Board, the Owner will cause the item to be removed and/or otherwise brought into compliance with this Section 7.3. Notwithstanding any provision herein, no trucks or vehicles of any size which transport inflammatory or explosive cargo may be kept on the Property at any time.

7.4. Fences.

nce with this Section 7.3. Notwithstanding any provision herein, no trucks or vehicles of any size which transport inflammatory or explosive cargo may be kept on the Property at any time.

7.4. Fences.

a. Type of Fencing. All perimeter fences will be privacy fences made of wood.

No other type of fencing, wails or other perimeter enclosures shall be permitted. All fencing shall comply in all respects (including size and location) with applicable governmental, municipal, county DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 14 and State requirements, including, without limitation the City. All perimeter fences shall be six (6) feet in height unless another height is approved by the ACA and shall be of natural wood color unless otherwise approved by the ACA.

Uniess approved by the ACA, fences may not be stained or painted, except that fences may be stained/sealed with a clear stain/seal or with the same color stain/seal as originally applied by the Declarant.

The portion of all fences which exterior or side faces a street adjoining such Owner's Lot (front, side or rear streets, but not alleys) or which exterior or side faces a Common Area, open space, park or other recreational area adjoining such Owner's Lot (which area may be separated by an alley) shall have the smooth surface of the fence materials facing the applicable street or Common Area. The fence posts and bracing boards on such front, side and rear fences shall face the interior of the fenced yard.

b. Location of Fence. Unless approved by the applicable governmental authority and the ACA, no fence will be placed (i) on any Lot in a location nearer the street than the

interior of the fenced yard.

b. Location of Fence. Unless approved by the applicable governmental authority and the ACA, no fence will be placed (i) on any Lot in a location nearer the street than the front corner of the Dwelling, (ii) on any Lot in a location nearer the street than the building setback line for such Lot, or (iii) on those certain corner Lots whose rear boundary line adjoins any portion of another Lot's front yard of a Lot behind the corner Lot, in a location nearer to the front building setback line for the street that is in front of the adjoining Lot. The foregoing shall not limit or restrict fences erected in conjunction with model homes or sales offices. In addition to the foregoing, easements may also restrict the placement of fences.

C Maintenance of Fencing. Except with respect to Association Maintenance Fencing, each Owner shall maintain the portion of fencing on such Owner's Lot in a presentable condition and shall make all repairs and replacements thereto (as deemed necessary by the Board, in its sole and absolute discretion), except that Owners adjoining a Common Fence (as provided in Section 7.4(e) herein shall share in the cost of such maintenance as provided in Section 7.4(e) herein. The Association shall be responsible to maintain the Association Maintenance Fencing.

d. No Changes / Repairs. A\l repairs and replacements to the perimeter fencing must be done using the same type and color of materials so that such fencing does not appear to have been repaired or replaced, except to the extent of the new appearance of the repaired or replaced materials. Except as provided in this Section 7.4(d), no fencing (including, without limitation, Association Maintenance Fencing) may be changed or modified without the prior

the repaired or replaced materials. Except as provided in this Section 7.4(d), no fencing (including, without limitation, Association Maintenance Fencing) may be changed or modified without the prior written consent of the ACA. This includes the prohibition against changing the height of the fencing and the fencing materials.

e. Common Fencing. Except for Association Maintenance Fencing, side and rear yard fences that are installed by Declarant or the builder of the Dwelling to separate adjacent Lots as a common boundary fence (the "Common Fence") shall be maintained jointly by the Owners whose Lot adjoins such Common Fence and the costs associated therewith shall be shared equally by said Owners. An Owner is not released from the joint maintenance obligation even if an Owner constructs a second fence along or near the Common Fence, unless the other Owner agrees in writing otherwise and the ACA's prior written approval is obtained. If the Owners disagree regarding the timing, cost or other applicable issue related to the repair or replacement of a Common Fence or portion thereof, then either Owner may (i) make the repair or replacement (provided any applicable ACA approval is obtained) and seek collection of one-half (1/2) of the cost of repair or replacement at Arbitration (as defined herein); and/or (ii) seek payment of one-half (1/2) of the cost of repair or replacement at Arbitration, subject to the repair or replacement being made.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 15 The term "Arbitration" shall mean binding arbitration pursuant to the rules of the American

S (SILVERDO HILLS) PAGE 15 The term "Arbitration" shall mean binding arbitration pursuant to the rules of the American Arbitration Association or such other person or entity approved by the applicable Owners.

7.5. Common Retaining Wall.

a. Maintenance of Common Retaining Wall. Any retaining walls that are installed by Declarant on a common boundary of two Lots or that are located on a Lot, but adjacent to (within 3 feet) and generally parallel with another Lot (a “Common Retaining Wall’) shall be maintained jointly by the Owner(s) whose Lot the Common Retaining Wall is located on and the Owner whose Lot is adjacent to the Common Retaining Wall (depending upon which is applicable) and the costs associated therewith shall be shared equally by said Owners. An Owner is not released from the joint maintenance obligation unless the other Owner agrees in writing to such release. The Common Retaining Wall shall be maintained in the same location, size, style and design and with the same materials, unless both Owners agree in writing otherwise and the ACA’s approval is obtained. If the Owners disagree regarding the timing, cost or other applicable issue related to the repair or replacement of a Common Retaining Wall and/or portion thereof, then either Owner may (i) make the repair or replacement (provided any applicable ACA approval is obtained) and seek collection of % of the cost of repair or replacement at Arbitration (as defined herein); and/or (ii) seek payment of 12 of the cost of repair or replacement at Arbitration, subject to the repair or replacement being made.

b. Easement for Common Retaining Wall. Common Retaining Walls may not

d/or (ii) seek payment of 12 of the cost of repair or replacement at Arbitration, subject to the repair or replacement being made.

b. Easement for Common Retaining Wall. Common Retaining Walls may not be located exactly on the common boundary line between two Lots. Therefore, there is hereby created an easement in and on the Lot where the Common Retaining Wall is actually located. The easement area shall be limited to the area that is within 3 feet of the common boundary line. The easement shall be for the benefit of the Owner of the Lot that adjoins the Common Retaining Wall so that such Owner can maintain the Common Retaining Wall as provided in Section 7.5(a).

7.6. Outbuildings, Sheds and Detached Buildings. No attached patio covers or detached accessory buildings, including, but not limited to, detached garages and storage buildings, and sheds shall be erected, placed or constructed upon any Lot, unless (i) the building is APPROVED BY THE ACA prior to the installation or construction of the building; (ii) such building is compatible with the Dwelling to which it is appurtenant in terms of its design and material composition; (iii) the exterior paint and roofing materials of such building shall be consistent with the existing paint and roofing materials of the Dwelling; (iv) the building is located within a backyard that has a fence that completely encloses the backyard; (v) the height of the walls (excluding the roof) is not greater than 8 feet; (vi) the total height of the building (including walls and roof) is not greater than 10 feet; and (vii) the building is less than 100 square feet of floor space. In addition, the Owner is required to comply with any applicable City requirements, including, without limitation, any necessary permits.

vii) the building is less than 100 square feet of floor space. In addition, the Owner is required to comply with any applicable City requirements, including, without limitation, any necessary permits.

7.7. Animals. No animals, livestock or poultry of any kind will be raised, bred or kept on any Lot, except that a reasonable number of cats, dogs or other generally recognized household pets may be permitted on any Lot; however, those pets which are permitted to roam free, or in the sole discretion of the Board, make objectionable noise, endanger the health or safety of, or constitute a nuisance or unreasonable source of annoyance to the occupants of other Lots shall be removed from the Lot upon the request of the Board. If the animal owner fails to remove the animal from the Lot after the Board's request, the Board may remove the animal, in addition to imposing such other sanctions as are authorized by the Declaration and the By-laws. All animals will be kept in strict accordance with all local laws and ordinances (including leash laws) and in accordance with all rules established by the Association. All persons bringing an animal onto the Common DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 16 Maintenance Areas shall be responsible for immediately removing any solid waste of said animal.

7.8. Signs. Except for Entry Signs, no sign or emblem of any kind may be kept or placed upon any Lot or mounted, painted or attached to any Dwelling, fence or other improvement upon such Lot so as to be visible from public view except the following: (i) an Owner may erect one (1)

placed upon any Lot or mounted, painted or attached to any Dwelling, fence or other improvement upon such Lot so as to be visible from public view except the following: (i) an Owner may erect one (1) sign on a Lot advertising the Dwelling for sale or rent, provided that the sign does not exceed two (2) feet by three (3) feet in size; (ii) an Owner may temporarily place one (1) sign on a Lot advertising the "open house" of the Dwelling, provided that the sign does not exceed two (2) feet by three (3) feet in size and the sign may only be displayed during actual open house hours; (iii) signs or billboards may be erected by the Declarant or any Builder designated in writing by the Declarant as having the right to erect such signs or billboards; (iv) an Owner may temporarily place 1 sign on a Lot advertising a "garage sale", provided that the sign does not exceed two (2) feet by three (3) feet in size and the sign may only be displayed during the garage sale hours; or (v) political signs may be erected upon a Lot by the Owner of such Lot advocating the election of one or more political candidates or the sponsorship of a political party, issue or proposal provided that such signs will not be erected more than 60 days in advance of the election to which they pertain and are removed within 15 days after the election. The ACA may in the ACA Standards permit additional signs and/or place additional restrictions or limitations on the signs permitted in this Declaration, provided that such additional restrictions or limitations do not conflict with the terms herein. The Association will have the right to remove any sign, billboard or other advertising structure that does not comply with

additional restrictions or limitations do not conflict with the terms herein. The Association will have the right to remove any sign, billboard or other advertising structure that does not comply with the foregoing. Removal shall not subject the Association to any liability in connection with such removal.

7.9. Trash; Containers and Collection. No garbage or trash shall be placed or kept on any Lot, except in covered sanitary containers. In no event shall such containers be stored, kept, placed or maintained on any Lot where visible from the location on the street that is immediately in the front of the Dwelling except solely on a day designated for removal of garbage, then such containers may be placed in the designated location for pick-up of such garbage and the container will be removed from view before the following day. Materials incident to construction of improvements may be stored on Lots during construction by Declarant or any Builder designated by Declarant.

7.10. Nuisances. No noxious or offensive activity, including, without limitation, unreasonable smells, noise or aesthetics, will be carried on upon any Lot, nor will anything be done thereon which the Board determines, in its sole and absolute discretion, is or may become an unreasonable source of annoyance or nuisance to the Property.

7.11. Antennae and Satellite Dishes. Except with the written permission of the ACA or as provided herein, exterior antennae, aerials, satellite dishes, or other apparatus for the transmission or reception of television, radio, satellite or other signals of any kind may not be placed on the exterior of any Dwelling or on any portion of the Lot outside the Dwelling, except that (i) antennas,

or reception of television, radio, satellite or other signals of any kind may not be placed on the exterior of any Dwelling or on any portion of the Lot outside the Dwelling, except that (i) antennas, satellite dishes or other apparatuses that are one meter or less in diameter and that are designed to receive transmissions other than television broadcast signals shall be permitted; and (ii) antennas or satellite dishes designed to receive television broadcast signals shall be permitted. Any of the foregoing permitted devices and any other device permitted by the ACA (a "Permitted Device"), must be located in an area where such Permitted Device is not visible (for aesthetic reasons) from any portion of the street in front of the applicable Lot with the apparatus. However, if the Owner determines that the Permitted Device cannot be located in compliance with the foregoing nonvisibility requirement without precluding reception of an acceptable quality signal, then the Owner may install the Permitted Device in the least conspicuous alternative location on the Lot where an acceptable quality signal can be obtained. The ACA in the ACA Standards may include rules or DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 17 provisions regarding the type of additional Permitted Devices and/or the placement of Permitted Devices, provided that such ACA Standards do not conflict with the terms of this Section 7.11 and do not unreasonably increase the cost of installation, maintenance or use of the Permitted Device.

A Permitted Device that complies with the provisions of this Section 7.11 and the ACA Standards

1 and do not unreasonably increase the cost of installation, maintenance or use of the Permitted Device.

A Permitted Device that complies with the provisions of this Section 7.11 and the ACA Standards shall not require the ACA's approval prior to installation. However, the ACA shall be the sole and exclusive authority for purposes of determining if the item or device complies with the provisions of this Section 7.10 and the ACA Standards.

7.12. Air-Conditioning Units. Air-conditioning apparatuses must be installed on the ground behind the rear of the Dwelling or on the ground on the side of the Dwelling. No airconditioning apparatus or evaporative cooler may be attached to any wall or any window of any Dwelling.

7.13. No Solar Collectors. Except with the written permission of the ACA, no solar collector panels or similar devices may be placed on or around any Dwelling.

7.14. No Temporary Structures as a Residence. No structure of a temporary character, including, without limiting the generality thereof, any tent, shack, garage or barn will be used on any Lot at any time as a residence, either temporarily or permanently; except that camping out in a tent, that is erected in the back yard behind a fully screened fence, is permitted provided that such activity is on a temporary basis and does not become or constitute a nuisance or unreasonable source of annoyance to the occupants of other Lots as determined by the Board in its sole and absolute discretion. This restriction will not be interpreted to limit the right of Declarant or any Builder to use trailers or outbuildings as sales offices, selection center offices, construction offices or material storage facilities.

7.15. Driveways and Sidewalks.

it the right of Declarant or any Builder to use trailers or outbuildings as sales offices, selection center offices, construction offices or material storage facilities.

7.15. Driveways and Sidewalks.

a. Driveways. Driveways on each residential lot visible from a street must be construction of either broom finish concrete, pebble-finish concrete, stamped concrete, or brick pavers.

b. Sidewalks. All residential lot owners shall construct and maintain in good repair and condition, or cause to be constructed and so maintained, at such owner's expense, a sidewalk, along and adjoining that portion of the perimeter of the lot adjacent to the curb of any street, which shall be of a design and composition meeting all specifications of the City of San Antonio or governing municipality.

All sidewalks shall be constructed of broom-finished concrete. Sidewalks adjacent to the curb shall be at least four feet (4’) wide. Builders and contractors are required to clean streets immediately after sidewalks and driveways have been constructed. Upon acceptance of a deed to any residential lot, each owner shall be deemed to have granted an easement of use to the public as to any sidewalk on such residential lot, and shall execute any instrument necessary to evidence such easement grant.

c. General. Asphalt paving and loose gravel driveways or sidewalks are specifically prohibited. Builders and contractors are required to clean streets immediately after aggregate-finished sidewalks and driveways have been washed.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 18 7.16. Landscaping Maintenance. All yards must be sodded or grassed within a

AND RESTRICTIONS (SILVERDO HILLS) PAGE 18 7.16. Landscaping Maintenance. All yards must be sodded or grassed within a reasonable time period not to exceed seven (7) months after the initial conveyance of a Lot with a Dwelling thereon to an Owner other than a Builder. Decorative ground cover rock (excluding flower beds and planters with mulch rather than rock) in the front and side yard may not exceed 10% of the total area of the front and side yard. All landscaping located on any Lot, including grass lawns, must be properly maintained at all times by the Owner of such Lot in a trimmed, well-kept and clean condition, as determined by the Board, in its sole and absolute discretion. Each Owner will keep all shrubs, trees, grass, and plantings of every kind on his or her Lot cultivated, pruned, free of trash, and other unsightly material. In addition, each Owner shall on a regular basis remove weeds from the yard, including, without limitation, flower beds and planter areas. No hardscape, including, without limitation, edging may include any symbols, characters, numbers or letters, unless approved by the ACA.

7.17. Exterior Finish.

a. Masonry. The rear and side elevations of all residential buildings situated on certain Lots located in Silverado Hills, Units 1 and 6, which Lots abut Canyon Golf Road or the access road to Friesenhahn 2 Tract, as more particularly described in Exhibit “E” attached hereto (the "Masonry Lots"). The Masonry Lots shall be constructed with at least ninety percent (90%) masonry, rock, stucco, brick or masonry veneer. In determining compliance with the provisions of this Section, window and door openings surrounded by masonry shall be

ith at least ninety percent (90%) masonry, rock, stucco, brick or masonry veneer. In determining compliance with the provisions of this Section, window and door openings surrounded by masonry shall be considered as masonry. Masonry or masonry veneer includes stucco, ceramic tile, clay, brick, rock and all other material commonly referred to in Bexar County, Texas as masonry, but shall exclude any product, regardless of composition, which is manufactured to have a wood or other non-masonry appearance.

b. Siding. Subject to the limitations imposed in subsection (a) above, fiber cement siding may be used. No wood, vinyl or aluminum siding shall be allowed.

c. Roofing. The surface of roofs or principal and secondary structures on a residential Lot, including garages and domestic living quarters, shall be dimensional composition shingles.

7.18. Exterior Improvement Maintenance. A\l improvements upon any Lot will at all times be kept in good condition and repair and adequately painted or otherwise maintained by the Owner of such Lot in a presentable well-kept and clean condition, as determined by the Board, in its sole and absolute discretion.

7.19. Minimum Square Feet and Height Restrictions. Each residence shall contain a minimum of 1,200 contiguous square feet of living area, exclusive of open or screened porches, terraces, patios, driveways, carports, garages, and living quarters for domestic servants separated or detached from the primary living area. All residences shall be limited to no more than two (2) stories in height.

7.20. Garages. All garages must comply with City requirements. Garages may be used as Deciarant's or a Builder's sales offices prior to permanent occupancy of the main structure; however,

s in height.

7.20. Garages. All garages must comply with City requirements. Garages may be used as Deciarant's or a Builder's sales offices prior to permanent occupancy of the main structure; however, sales offices must be converted to garages prior to permanent occupancy. With the exception of periods when garages are used by the Declarant or Builder as sales offices, all garages will be maintained for the storage of automobiles, and no garage may be enclosed or otherwise used for habitation. No carports are permitted on a Lot.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 19 7.21. Clothes Hanging Devices. No clothes hanging devices exterior to a Dwelling are to be constructed or placed on the Lot, except within the Dwelling.

7.22. Window Treatment. No Aluminum foil, newspaper, reflective film or similar treatment will be placed on windows or glass doors of a Dwelling. Bed sheets and similar linens may only be used during the first 60 days after such Owner acquires title to the Lot.

7.23. Mining. No oil drilling, oil development operations, oil refining, quarrying or mining operation of any kind will be permitted upon or in any Lot, nor will oil wells, tanks, tunnels, mineral excavations, or shafts be permitted upon any Lot. No derrick or other structure designed for use in boring for oil or natural gas will be erected, maintained or permitted upon any Lot. No tank for the storage of oil or other fluids may be maintained on any of the Lots above the surface of the ground.

7.24. Mailboxes. Mailboxes shall be erected and maintained upon areas determined by the U.S. Postal Service in accordance with the current postal authority standards and the approval

ce of the ground.

7.24. Mailboxes. Mailboxes shall be erected and maintained upon areas determined by the U.S. Postal Service in accordance with the current postal authority standards and the approval of the ACA.

7.25. Athletic and Recreational Facilities. No outdoor athletic and recreational facilities such as playscapes, swing sets and sport courts may be placed on a Lot unless (i) such item is placed within a backyard that has a fence that completely encloses the backyard and the location and the item does not exceed 10 feet in height, or (ii) such item is a temporary and movable facility that is stored each night in the garage, the Dwelling or other fully screened area. Notwithstanding the foregoing, basketball goals and any other recreation equipment designated by the ACA may be located on any portion of the Lot (including side yards) that is behind any portion of the rear of the Dwelling.

7.26. Lighting; Exterior Holiday Decorations. Lighting and/or decorations on a Lot may not be used or placed in a manner which, in the Board's sole and absolute discretion, constitutes a nuisance or an unreasonable source of annoyance to the occupants of other Lots. Except for lights and decorations within the interior of a Dwelling that are not displayed in a window, lights and decorations that are erected or displayed on a Lot in commemoration or celebration of publicly observed holidays may not be displayed more than six (6) weeks in advance of that specific holiday and must be removed within 30 days after the holiday has ended.

7.27. Lawn Decorations and Sculptures. The Owner must have the approval of the ACA to place any decorations, sculptures, fountains, flags and similar items on any portion of such

he holiday has ended.

7.27. Lawn Decorations and Sculptures. The Owner must have the approval of the ACA to place any decorations, sculptures, fountains, flags and similar items on any portion of such Owner's Lot except the interior of the Dwelling, unless (i) such item is placed within a backyard completely enclosed by a fence which blocks the view of the item at ground level; and (ii) such item is no taller than the fence.

7.28. NoLot Consolidation or Division. No Owner, other than Declarant, may divide any Lot and/or consolidate any adjoining Lots and/or any portion thereof.

7.29. Drainage Alteration Prohibited. Unless approved by the ACA, no Owner will: (i) alter the surface water drainage flows of a Lot as originally established at the time of the initial construction of the Dwelling; or (ii) install landscaping or other improvements that may interfere with, obstruct or divert drainage flows established by the Declarant or any Builder. The foregoing shall not prevent or limit the Declarant from performing any grading work and/or changing any surface water drainage flow on any Lot.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 20 7.30. Construction Activities. This Declaration will not be construed so as to unreasonably interfere with or prevent normal construction activities during the construction or remodeling of or making of additions to improvements by an Owner (including Declarant) upon any Lot within the Property. Specifically, no such construction activities will be deemed to constitute a nuisance or a violation of this Declaration by reason of noise, dust, presence of vehicles or

any Lot within the Property. Specifically, no such construction activities will be deemed to constitute a nuisance or a violation of this Declaration by reason of noise, dust, presence of vehicles or construction machinery, posting of signs or similar activities, provided that such construction is pursued to completion with diligence and conforms to usual construction practices in the area. If construction upon any Lot does not conform to usual practices in the area as determined by the Board in its sole good faith judgment, the Board will have the authority to obtain an injunction to stop such construction. In addition, if during the course of construction upon any Lot, there is an excessive accumulation of debris of any kind that is offensive or detrimental to the Property or any portion thereof, then the Board may contract for or cause such debris to be removed, and the Owner of such Lot will be liable for all expenses incurred in connection therewith.

7.31. Declarant and Builder Development and Construction. Notwithstanding any other provision herein, Declarant, and its successors and assigns, and any Builders, will be entitled to conduct on the Property all activities normally associated with, and convenient to, the development of the Property and the construction and sale of Dwellings on the Property.

7.32. Burning. Except within fireplaces in the main residential dwelling and except for outdoor cooking, no burning of anything will be permitted anywhere on the Property.

7.33. Utilities. Except as to special street lighting or other aerial facilities which may be required by the City and/or County or by the franchise of any utility company or which may be installed by the Declarant pursuant to its development plan, no aerial utility facilities of any type

y be required by the City and/or County or by the franchise of any utility company or which may be installed by the Declarant pursuant to its development plan, no aerial utility facilities of any type (except meters, risers, service pedestals, transformers and other surface installations necessary to maintain or operate appropriate underground facilities) will be erected or installed on the Property whether upon individual Lots, easements, streets or rights-of-way of any type, either by the utility company or any other person or entity, including, but not limited to, any person owning or acquiring any part of the Property, and all utility service facilities (including, but not limited to, water, sewer, gas, cable, electricity and telephone) will be buried underground unless otherwise required by a public utility. No individual water supply system or sewage disposal system shall be permitted on any Lot, including but not limited to water wells, cesspools or septic tanks.

7.34. City and/or County Ordinances. |n ail circumstances where an applicable ordinance, rule or regulation of the City and/or County is more restrictive than the Declaration or any amendment or supplement thereto, the requirements of the City and/or County ordinance, rule or regulation shall apply and be enforced. The ACA may not approve a variance that contradicts an ordinance, rule or regulation of the City and/or County unless the City and/or County has previously approved the variance.

ARTICLE VIII COMMON AREAS 8.1. Association to Hold and Maintain. The Association will own all Common Areas in fee simple title. The Association shall maintain, at the Association's cost, the Common Area and any improvements (including any recreational facilities, if any) and landscaping thereon in good

eas in fee simple title. The Association shall maintain, at the Association's cost, the Common Area and any improvements (including any recreational facilities, if any) and landscaping thereon in good repair. The Association shall also maintain the Common Maintenance Areas, at the Association's cost, to the extent the Board determines that such maintenance is desirable. The costs of such maintenance for the Common Areas and Common Maintenance Areas shall be the Association's responsibility, regardless if such cost was incurred during the Development Period.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 21 8.2. Use of Common Areas at Own Risk. Each Owner, by acceptance of a deed to a Lot, acknowledges that the use and enjoyment of the Common Area and/or any recreational facility located within the Common Area, including, without limitation, swimming pools, basketball and tennis courts, and playscapes or playgrounds, if any, involves risk of personal injury or damage to property. Each Owner acknowledges, understands, and covenants to inform its tenants and all occupants of its Lot that the Association, its Board and committees, Declarant, and any Builder are not insurers of personal safety and that each person using the Common Area assumes all risks of personal injury and loss or damage to property, resulting from the use and enjoyment of any recreational facility or other portion of the Common Area.

8.3. Condemnation of Common Area. |n the event of condemnation or a sale in lieu thereof of all or any portion of the Common Areas, the funds payable with respect thereto will be

n of the Common Area.

8.3. Condemnation of Common Area. |n the event of condemnation or a sale in lieu thereof of all or any portion of the Common Areas, the funds payable with respect thereto will be payable to the Association and will be used by the Association as the Board determines, in its business judgment, including, without limitation, (i) to purchase additional Common Areas to replace that which has been condemned, (ii) to reconstruct or replace on the remaining Common Area any improvements that were on condemned Common Area, (iii) to pay for Common Expenses, or (iv) to be distributed to each Owner on a pro rata basis.

8.4. Damage to Common Area. If the Common Area or improvements on the Common Maintenance Areas are damaged and if there are insurance proceeds sufficient to repair such damage to its prior condition, then the Association shall cause such damage to be repaired or reconstructed unless there is a 67% or greater vote of all outstanding votes entitled to be cast within 90 days after the loss not to repair or reconstruct. If said 67% vote is cast not to repair or reconstruct such damage and no alternative improvements are authorized, the damaged property shall be cleared of all debris and ruins and thereafter shall be maintained by the Association in a neat and attractive condition. Any insurance proceeds remaining after paying the costs of repair or reconstruction, or after such settlement as is necessary and appropriate, shall be retained by and for the benefit of the Association.

8.5. Conveyance of Common Areas by Declarant to Association. Declarant shall have the right to convey title to any portion of the Property owned by Declarant, or any easement interest therein, to the Association as Common Area, and the Association shall be required to

nt shall have the right to convey title to any portion of the Property owned by Declarant, or any easement interest therein, to the Association as Common Area, and the Association shall be required to accept such conveyance. Property conveyed by Declarant to the Association as Common Area shall be conveyed free and clear of monetary liens and encumbrances other than taxes and assessments imposed by governmental entities or districts authorized by Texas law. Any such conveyance shall be effective upon recording the deed or instrument of conveyance in the Records.

8.6. Compliance with Local Law. Any improvements made to the Common Area shall comply with all local laws, ordinances, rules and regulations.

8.7. Annual Inspection of Common Area - Budget. From the period commencing at the expiration of the Development Period until 10 years thereafter, the Association shall at least annually examine the condition of the Common Area to evaluate the quality, frequency, and adequacy of maintenance performed during the preceding year, and to recommend maintenance for the upcoming year. The examination and report may be performed by one or more experts hired by the Association for this purpose, such as a professional property manager, an engineer, or professional contractors such as landscapers and brick masons. Within 15 days after performing the inspection, the expert should submit to the Board a written report with findings and recommendations. The Board should evaluate the Association's operating budget and reserve accounts for maintenance, repair, and replacement in light of the expert's findings and DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 22

t in light of the expert's findings and DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 22 recommendations. Any decision by the Board to reduce or defer recommended maintenance should be made with an evaluation of the potential consequences for future costs and deterioration.

An expert's report is a record of the Association that is available to Owners for inspection and copying.

8.8. No Representations or Warranties Regarding Pond/Creek/Drainage Area.

Declarant has informed the Association that the pond(s), creek(s), and/or drainage area(s) located on or to be constructed upon the Common Area (the "Water/Drainage Improvements") are intended primarily for drainage purposes and are not intended as a recreational feature or an amenity with certain specific aesthetic qualities. Declarant makes no representations or warranties regarding the Water/Drainage Improvements and Declarant hereby disclaims any and all representations and warranties regarding the Water/Drainage Improvements, including, without limitation, any implied warranties, including any warranty for fitness for a particular purpose and any warranty of good and workmanlike construction. THE ASSOCIATION HEREBY AGREES TO ACCEPT THE WATER/RELATED IMPROVEMENTS IN THEIR "AS-IS" CONDITION.

8.9. No Representations or Warranties Regarding Open Space. No Representations or Warranties Regarding Open Space. Declarant has informed the Association that the Common Area or portions thereof as depicted and/or described on Exhibit "F" attached hereto (the "Open Space Area") is intended primarily as an unimproved open space to be maintained in a natural or

e Common Area or portions thereof as depicted and/or described on Exhibit "F" attached hereto (the "Open Space Area") is intended primarily as an unimproved open space to be maintained in a natural or semi-natural condition and not as a recreational feature or an amenity with certain specific aesthetic qualities. Declarant makes no representations or warranties regarding the Open Space Area and Declarant hereby disclaims any and all representations and warranties regarding the Open Space Area, including, without limitation, any implied warranties, including any warranty for fitness for a particular purpose and any warranty of good and workmanlike construction. THE ASSOCIATION HEREBY AGREES TO ACCEPT THE OPEN SPACE AREA IN ITS "AS-IS" CONDITION.

8.10. The Common Area shall not be used for any commercial purposes; however, this provision shall not preclude the Association from charging reasonable fees for the use of the recreational facilities that are part of the Common Area.

ARTICLE IX EASEMENTS 9.1. Easement for Utilities on Common Area. During the Development Period, the Declarant, on behalf of itself, reserves the right to grant perpetual, nonexclusive easements for the benefit of Declarant or its designees, upon, across, over, through and under any portion of the Common Area for the construction, installation, use and maintenance for utilities, including, without limitation, water, sewer, electric, cable television, telephone, natural gas and storm water and drainage related structures and improvements. The Association will also have the right to grant the easements described in this Section 9.1.

9.2. Easement to Correct Drainage on Property. For a period of 5 years after the

ctures and improvements. The Association will also have the right to grant the easements described in this Section 9.1.

9.2. Easement to Correct Drainage on Property. For a period of 5 years after the Development Period, Declarant hereby reserves for the benefit of Declarant and any Builder, a blanket easement on, over and under the ground within the Property (excluding the area where the Dwelling is located) to maintain and correct drainage of surface waters and other erosion controls in order to maintain reasonable standards of health, safety and appearance, and will be entitled to remove trees or vegetation, without liability for replacement or damages, as may be necessary to provide adequate drainage facilities. Notwithstanding the foregoing, nothing herein will be interpreted to impose any duty upon Declarant or any Builder to correct or maintain any drainage facilities within the Property. Any damage to a Lot caused by or due to the exercise of the foregoing DECLARATION OF COVENANTS, CONDITIONS ANDO RESTRICTIONS (SILVERDO HILLS) PAGE 23 drainage easement rights, shall be promptly repaired by the party exercising such easement rights after completing its construction activities in the damaged area.

9.3. Easement for Right to Enter Lot. \f the Owner fails to maintain the Lot as required herein, or in the event of emergency, the Association will have the right to enter upon the Lot to make emergency repairs and to do other work reasonably necessary for the proper maintenance and operation of the Property so as to bring the Property into compliance with the Declaration. Entry upon the Lot as provided herein will not be deemed a trespass, and the Association will not be liable

operation of the Property so as to bring the Property into compliance with the Declaration. Entry upon the Lot as provided herein will not be deemed a trespass, and the Association will not be liable for any damage so created unless such damage is caused by the Association's willful misconduct or gross negligence.

9.4. Easement for Right to Enter and Inspect Common Area. For a period of 10 years after the date of the expiration of the Development Period, Declarant shall have the right, but not the obligation, to enter upon the Common Area for purposes of inspecting and repairing the Common Area and/or any improvements thereon at Declarant's expense; provided; however, nothing contained herein shall obligate Declarant to make any inspections or repairs.

9.5. Temporary Easement to Complete Construction. A\l Lots will be subject to an easement of ingress and egress for the benefit of the Declarant, its employees, subcontractors, successors, and assigns, over and upon the front, side and rear yards of the Lots as may be expedient or necessary for the construction, servicing and completion of Dwellings and landscaping upon adjacent Lots, provided that such easement will terminate as to any Lot 24 months after the date such Lot is conveyed to an Owner other than a Builder. Any damage to a Lot caused by Declarant due to exercise of the foregoing completion easement rights, shall be promptly repaired by the party exercising such easement rights after completing its construction activities in the damaged area.

9.6. Association Easement. Declarant hereby reserves the Association Easement for the benefit of the Declarant and the Association for the purpose of placing, constructing and

ies in the damaged area.

9.6. Association Easement. Declarant hereby reserves the Association Easement for the benefit of the Declarant and the Association for the purpose of placing, constructing and maintaining the Entry Signs, Association Maintenance Fencing, and landscaping located within or on a Lot. The real property subject to the Association Easement shall be conveyed subject to the Association Easement.

ARTICLE X ANNEXATION AND WITHDRAWAL 10.1. Annexation by Declarant. While Declarant owns any real property subject to this Declaration, Declarant may, at its sole option, amend and expand the definition of Property by annexing real property into the Association and subjecting such real property to the terms hereof; provided; however, Declarant shall not have the right to annex real property that is located more than one (1) mile from the Property (as such term may be amended), without a vote as provided in Section 10.2 below.

10.2. Annexation by Association. The Association may annex any real property into the Association and subject such real property to the terms hereof by an affirmative vote of 67% or greater of all outstanding votes that are entitled to be cast.

10.3. Recording of Annexation. The annexation of such real property shall be evidenced by a written Recorded document.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 24 10.4. No Duty to Annex. Nothing herein contained shall establish any duty or obligation on the part of the Declarant or any Member to annex any real property, and no owner of any property excluded from the Association shall have any right to have such property annexed thereto.

obligation on the part of the Declarant or any Member to annex any real property, and no owner of any property excluded from the Association shall have any right to have such property annexed thereto.

10.5. Withdrawal of Property. While Declarant owns any real property subject to this Declaration, Declarant may amend this Declaration to withdraw any real property that does not have a Recorded plat from the definition of the Property and from the coverage of this Declaration, provided that the owner of real property to be withdrawn consents to such withdrawal.

ARTICLE XI DISPUTE RESOLUTION 11.1. Introduction & Definitions. The Association, the Owners, Declarant, and all persons subject to this Declaration (individually a “Party” and collectively, the "Parties") agree to encourage the amicable resolution of disputes involving the Property and to avoid the emotional and financial costs of litigation if at all possible. Accordingly, each Party hereby covenants and agrees that this Article XI applies to all claims as hereafter defined. As used in this Article XI only, the following words, when capitalized, have the following specified meanings: a. "Claim" means any claim, grievance, or dispute between the Parties arising from this Declaration, the By-laws or the Articles for the Property or related to the Common Areas, except Exempt Claims as defined below, and including without limitation: (i) Claims arising out of or relating to the interpretation, application or enforcement of the Documents; (ii) Claims relating to the rights and/or duties of Declarant as Declarant under the Documents; and (iii) Claims relating to the design, construction or maintenance of the Property.

b. "Claimant" means any Party having a Claim against any other Party.

Declarant as Declarant under the Documents; and (iii) Claims relating to the design, construction or maintenance of the Property.

b. "Claimant" means any Party having a Claim against any other Party.

C. “Exempt Claims" means the following claims or actions, which are exempt from this Article: (i) the Association's claim for assessments, and any action by the Association to collect assessments; (ii) an action by a Party to obtain a temporary restraining order or equivalent emergency equitable relief, and such other ancillary relief as the court deems necessary to maintain the status quo and preserve the Party's ability to enforce the provisions of this Declaration; (iii) enforcement of the easements, architectural control, maintenance, and use restrictions of this Declaration; (iv) a suit to which an applicable statute of limitations would expire within the notice period of this Article, unless a Party against whom the Claim is made agrees to toll the statute of limitations as to the Claim for the period reasonably necessary to comply with this Article; and (v) a dispute that is subject to alternate dispute resolution - such as mediation or arbitration - by the terms of a public law or another instrument, such as a contract or warranty agreement, in which case the dispute is exempt from this Article, unless the Parties agree to have the dispute governed by this Article.

d. “Respondent” means the Party against whom the Claimant has a Claim.

11.2. Mandatory Procedures. Claimant may not file suit in any court or initiate any proceeding before any administrative tribunal seeking redress or resolution of its Claim until Claimant has complied with the procedures of this Article.

11.3. Notice. Claimant must notify Respondent in writing of the Claim (the "Notice’),

ibunal seeking redress or resolution of its Claim until Claimant has complied with the procedures of this Article.

11.3. Notice. Claimant must notify Respondent in writing of the Claim (the "Notice’), stating plainly and concisely: (1) the nature of the Claim, including date, time, location, persons involved, and Respondent's role in the Claim; (2) the basis of the Claim (i.e., the provision of the DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 25 Declaration, By-laws or Articles other authority out of which the Claim arises); (3) what Claimant wants Respondent to do or not do to resolve the Claim; and (4) that the Notice is given pursuant to this Section 11.3.

11.4. Negotiation. Claimant and Respondent will make every reasonable effort to meet in person to resolve the Claim by good faith negotiation. Within 60 days after Respondent's receipt of the Notice, Respondent and Claimant will meet at a mutually-acceptable place and time to discuss the Claim. At such meeting or at some other mutually-agreeable time, Respondent and Respondent's representatives will have full access to the property that is subject to the Claim for the purposes of inspecting the property. If Respondent elects to take corrective action, Claimant will provide Respondent and Respondent's representatives and agents with full access to the property to take and complete corrective action.

11.5. Mediation. \f the Parties negotiate but do not resolve the Claim through negotiation within 120 days from the date of the Notice (or within such other period as may be agreed on by the Parties), Claimant will have 30 additional days within which to submit the Claim to mediation under

within 120 days from the date of the Notice (or within such other period as may be agreed on by the Parties), Claimant will have 30 additional days within which to submit the Claim to mediation under the auspices of a mediation center or individual mediator on which the Parties mutually agree. If Claimant does not submit the Claim to mediation within the 30-day period, Claimant is deemed to have waived the Claim, and Respondent is released and discharged from any and all liability to Claimant on account of the Claim.

11.6. Termination of Mediation. \f the Parties do not settle the Claim within 30 days after submission to mediation, or within a time deemed reasonable by the mediator, the mediator will issue a notice of termination of the mediation proceedings indicating that the Parties are at an impasse and the date that mediation was terminated. Thereafter, Claimant may file suit or initiate administrative proceedings on the Claim, as appropriate.

11.7. Allocation of Costs. Except as otherwise provided in this Section 11.7, each Party bears all of its own costs incurred prior to and during the proceedings described in the Notice, Negotiation, and Mediation sections above, including its attorneys’ fees. Respondent and Claimant will equally divide all expenses and fees charged by the mediator.

11.8. Enforcement of Resolution. Any settlement of the Claim through negotiation or mediation will be documented in writing and signed by the Parties. If any Party thereafter fails to abide by the terms of the agreement, then the other Party may file suit or initiate administrative proceedings to enforce the agreement without the need to again comply with the procedures set forth in this Article. In that event, the Party taking action to enforce the agreement is entitled to

tive proceedings to enforce the agreement without the need to again comply with the procedures set forth in this Article. In that event, the Party taking action to enforce the agreement is entitled to recover from the non-complying Party all costs incurred in enforcing the agreement, including, without limitation, attorneys fees and court costs.

11.9. General Provisions. Arelease or discharge of Respondent from liability to Claimant on account of the Claim does not release Respondent from liability to persons who are not a party to Claimant's Claim. A Party having an Exempt Claim may submit it to the procedures of this Article.

11.10. Litigation Approval and Settlement. |n addition to and notwithstanding the above alternate dispute resolution procedures, the Association may not initiate any judicial or administrative proceeding without the prior approval of Owners of at least 75 percent of the Lots, except that no such approval is required (1) to enforce provisions of this Declaration, including collection of assessments; (2) to challenge condemnation proceedings; (3) to enforce a contract against a contractor, vendor, or supplier of goods or services to the Association; (4) to defend claims filed against the Association or to assert counterclaims in a proceeding instituted against the Association; DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 26 or (5) to obtain a temporary restraining order or equivalent emergency equitable relief when circumstances do not provide sufficient time to obtain the prior consents of Owners in order to preserve the status quo. Also, the Association may not initiate any judicial or administrative

lief when circumstances do not provide sufficient time to obtain the prior consents of Owners in order to preserve the status quo. Also, the Association may not initiate any judicial or administrative proceeding against Declarant without the approval of Owners of at least 75 percent of the Lots. The Board, on behalf of the Association and without the consent of Owners, is hereby authorized to negotiate settlement of litigation, and may execute any document related thereto, such as settlement agreements and waiver or release of claims. This Section 11.10 may not be amended without the approval of Owners of at least 75 percent of the Lots.

ARTICLE XIl MISCELLANEOUS 12.1. Declaration Term - Perpetual. Unless 90% of all outstanding votes that are entitled to be cast approve the termination of this Declaration, the provisions of this Declaration shall run with and bind the land and shall be and remain in effect perpetually to the extent permitted by law. A written instrument terminating this Declaration shall not be effective unless Recorded.

12.2. Amendments/Supplements to Declaration.

a. Amendment/Supplement by Declarant. While Declarant owns any real property subject to this Declaration, Declarant, at its sole discretion and without a vote or the consent of any other party, shall have the right to amend and/or supplement this Declaration for the following purposes: (i) to add real property to the Property and to impose additional use restrictions on such real property, (ii) to withdraw real property from the Property, (iii) to create lots, easements, common areas, common maintenance areas, fencing and signage, (iv) to modify the use and covenant restrictions in Section Vil herein, (v) to comply with the requirements of any governmental

easements, common areas, common maintenance areas, fencing and signage, (iv) to modify the use and covenant restrictions in Section Vil herein, (v) to comply with the requirements of any governmental authority or institutional lender or underwriting lender, (vi) to resolve conflicts, clarify ambiguities and to correct misstatements, errors or omissions in this Declaration, and (vii) for any other purpose, provided, that such amendment made pursuant to this clause has no material adverse effect on any right of an Owner.

b. Amendment/Supplement by Association. The Association may amend and/or supplement this Declaration by an affirmative vote of 67% or greater of all outstanding votes entitled to be cast.

12.3. Declarant’s Special Rights. Notwithstanding any other provision contained in this Deciaration, during the Development Period, Declarant shall have the following special rights: a. This Declaration gives Declarant certain rights during the Development Period to ensure a complete and orderly buildout and sellout of the Property, which is ultimately for the benefit and protection of Owners and mortgagees. Declarant may not use its control of the Association and the Property for an advantage over the Owners by way of retention of any residual rights or interests in the Association or through the creation of any contractual agreements which the Association may not terminate without cause with 90 days' notice. Declarant reserves the following easements and rights, exercisable at Declarant's sole discretion, at any time during the Development Period.

b. The Property is subject to expansion. During the Development Period, Declarant may - but is not required to - annex any real property: (1) any portion of which is

ime during the Development Period.

b. The Property is subject to expansion. During the Development Period, Declarant may - but is not required to - annex any real property: (1) any portion of which is contiguous with, adjacent to, or within one mile of any real property that is subject to this Declaration, or (2) in any addition or subdivision platted as a phase or section of Silverado Hills DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 27 Subdivision. Declarant annexes real property by recording a Declaration of Annexation, executed by Declarant, in the County’s real property records. The Declaration of Annexation must include a description of the additional real property or a reference to the recorded plat that describes the additional real property. Declarant’s right to annex land is for a term of years and does not require that Declarant own land in Silverado Hills at the time or times Declarant exercises its right of annexation.

C. During the Development Period, Declarant may withdraw from the Property any portion of the real property (1) that is not platted with house Lots or (2) that is platted as a section of Silverado Hills, provided that no Lot in the phase to be withdrawn has been conveyed to an Owner other than Declarant.

d. Declarant may modify the initial development plan to respond to perceived or actual changes and opportunities in the marketplace. Subject to approval by the City or County, Declarant may change the sizes, dimensions, and configurations of Lots and streets; change the minimum dwelling size; change the building setback requirements; and eliminate or modify any other feature of the Property.

ge the sizes, dimensions, and configurations of Lots and streets; change the minimum dwelling size; change the building setback requirements; and eliminate or modify any other feature of the Property.

e. Declarant may require its approval (which may not be unreasonably withheld) of all documents and materials used by a Builder in connection with the construction and sale of homes, including without limitation promotional materials; deed restrictions; forms for deeds, Lot sales, and Lot closings. Without Declarant's prior written approval, a builder may not use a sales office or model in the Property to market houses, Lots, or other products located outside the Property.

f. During the Development Period, the ACA appointed by the Association may not involve itself with the approval of new homes on vacant Lots owned by Declarant.

Notwithstanding the foregoing, the Association may appoint or serve as the ACA to respond to modifications of completed homes that are owned by persons other than Declarant or to respond to new homes on vacant Lots owned by persons other than Declarant.

During the Development Period, Declarant may amend this Declaration, without consent of other Owners or any mortgagee, for the following limited purposes: (1) To add real property to the Property.

(2) To withdraw real property from the Property.

(3) To create Lots, easements, and Common Areas within the Property.

(4) To subdivide, combine, or reconfigure Lots.

(5) To convert Lots into Common Areas.

(6) To modify the construction specifications of this Declaration.

(7) To merge the Association with another property and/or homeowners association.

(8) To comply with requirements of an underwriting lender.

(9) To resolve conflicts, clarify ambiguities, and to correct misstatements, errors,

ion with another property and/or homeowners association.

(8) To comply with requirements of an underwriting lender.

(9) To resolve conflicts, clarify ambiguities, and to correct misstatements, errors, or omissions in this Declaration.

(10) To enable any reputable title insurance company to issue title insurance coverage on the Lots.

(11) To enable an institutional or governmental lender to make or purchase mortgage loans on the Lots.

(12) To change the name or entity of Declarant.

(13) To change the name of the Association.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 28 (14) For any other purpose, provided the amendment has no material adverse effect on any right of any Owner.

Each Owner hereby makes, constitutes and appoints Declarant, with full power of substitution, as the Owner's lawful attorney-in-fact, with power to execute, acknowledge, file and record with any governmental authority any appropriate documents for the purpose of vacating one or more plats, replatting any portion of the Property, replatting any portion of the Property without vacating any existing plat, and amending any plat, or any one or more of the above. The foregoing power (i) is coupled with an interest, (ii) is irrevocable, (iii) shall survive the death or dissolution of any Owner, (iv) may be exercised for each Owner individually or by listing all of the Owners and executing any instrument with a single signature as attorney-in-fact for all of them, and (v) shall be binding upon all heirs, successors and assigns of each Owner.

(h) During the Development Period, Declarant has the right to complete or make

ature as attorney-in-fact for all of them, and (v) shall be binding upon all heirs, successors and assigns of each Owner.

(h) During the Development Period, Declarant has the right to complete or make improvements indicated on the Plat; the right to sell or lease any Lot owned by Declarant; and an easement and right to erect, construct, and maintain on and in the common area, Common Maintenance Area, and Lots owned or leased by Declarant whatever Declarant determines to be necessary or advisable in connection with the construction, completion, management, maintenance, leasing, and marketing of the Property.

(i) During the Development Period, Declarant reserves for itself the right, but not the duty, to inspect, monitor, test, redesign, correct, and relocate any structure, improvement, or condition created by Declarant that may exist on any portion of the Property, including the Lots, and a perpetual nonexclusive easement of access throughout the Property to the extent reasonably necessary to exercise this right. Declarant will promptly repair, at its sole expense, any damage resulting from the exercise of this right. By way of illustration but not limitation, relocation of a screening wall located on a Lot may be warranted by a change of circumstance, imprecise siting of the original wall, or desire to comply more fully with public codes and ordinances. This section may not be construed to create a duty for Declarant or the Association.

(j) During the Development Period, Declarant reserves for itself an easement and right to place or install signs, banners, flags, display lighting, potted plants, exterior decorative items, seasonal decorations, temporary window treatments, and seasonal landscaping on the

ment and right to place or install signs, banners, flags, display lighting, potted plants, exterior decorative items, seasonal decorations, temporary window treatments, and seasonal landscaping on the Property, including items and locations that are prohibited to other Owners and residents, for purposes of promoting, identifying, and marketing the Property and/or Declarant's houses, Lots, developments, or other products located outside the Property. Declarant reserves an easement and right to maintain, relocate, replace, or remove the same from time to time within the Property.

Declarant also reserves the right to sponsor marketing events - such as open houses, MLS tours, and brokers parties - at the Property to promote the sale of Lots, and to maintain models and sales offices. During the Special Declarant Rights Period, Declarant also reserves the right to permit builders who buy Lots from Declarant to place signs and promotional materials on the Property and the right to exempt builders from the sign restriction in this Declaration.

(k) During the Development Period, Declarant reserves for itself the right to use Units owned or leased by Declarant as models, storage areas, and offices for the marketing, management, maintenance, customer service, construction, and leasing of the Property and/or Declarant's developments or other products located outside the Property. Also, Declarant reserves for itself the easement and right to make structural changes and alterations on and to Lots and Units used by Declarant as models, storage areas, and offices, as may be necessary to adapt them to the uses permitted herein.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 29

apt them to the uses permitted herein.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 29 (I) During the Development Period, Declarant has an easement and right of ingress and egress in and through the Property for purposes of constructing, maintaining, managing, and marketing the Property. Declarant also has the right to provide a reasonable means of access for the homebuying public through an existing or future gate, if any, that restricts vehicular access to the Property in connection with the active marketing of Lots and Units by Declarant, including the right to require that the gate be kept open during certain hours and/or on certain days. This provision may not be construed as an obligation or intent to gate the Property.

(m) During the Development Period, Declarant may grant permits, licenses, and easements over, in, on, under, and through the Property for utilities, roads, and other purposes necessary for the proper development and operation of the Property. Declarant reserves the right to make changes in and additions to the easements on any Lot, as shown on the Plat, to more efficiently or economically install utilities or other improvements. Utilities may include, but are not limited to, water, sewer, trash removal, electricity, gas, telephone, television, and security.

(n) Declarant may designate one or more Successor Declarants for specified designated purposes and/or for specified portions of the Property, or for all purposes and all of the Property. To be effective, the designation must be in writing, signed and acknowledged by Declarant and Successor Declarant, and recorded in the real property records of Travis County,

and all of the Property. To be effective, the designation must be in writing, signed and acknowledged by Declarant and Successor Declarant, and recorded in the real property records of Travis County, Texas. Declarant (or Successor Declarant) may subject the designation of Successor Declarant to limitations and reservations. Unless the designation of Successor Declarant provides otherwise, a Successor Declarant has the rights of Declarant under this section and may designate further Successor Declarants.

12.4. Enforcement by Association and/or Owner. The Association or any Owner will have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges imposed now or in the future by the provisions of this Declaration. Failure of the Association or any Owner to enforce any covenant or restriction of this Declaration will in no event be deemed a waiver of the right to do so in the future.

12.5. Remedies; Cumulative. |nthe event any Lot does not comply with the terms herein or any Owner fails to comply with the terms herein, the Association and/or any Owner will have each and all of the rights and remedies which may be provided for in this Declaration, the By-laws and any rules and regulations, and those which may be available at law or in equity, including, without limitation, enforcement of any lien, damages, injunction, specific performance, judgment for payment of money and collection thereof, or for any combination of remedies, or for any other relief. No remedies herein provided or available at law or in equity will be deemed mutually exclusive of any other such remedy, but instead shall be cumulative. All expenses of the Association in connection

No remedies herein provided or available at law or in equity will be deemed mutually exclusive of any other such remedy, but instead shall be cumulative. All expenses of the Association in connection with any such actions or proceedings, including court costs and attorneys’ fees and other fees and expenses, and all damages, liquidated or otherwise, together with interest thereon at the maximum rate permitted by law but, with reference to any Lots financed by the Federal Housing Administration ("FHA") insured loans, not in excess of the maximum rate of FHA loans at the time of delinquency, from the due date until paid, shall be charged to and assessed against such defaulting Owner, and shall be added to and deemed part of the Owner's respective regular assessment (to the same extent as the lien provided herein for unpaid assessments), upon the Lot and upon all of the Owner's additions and improvements thereto, and upon all of his personal property upon the Lot.

Any and all of such rights and remedies may be exercised at any time and from time to time, cumulatively or otherwise, by the Association or any Owner.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 30 12.6. Notice to Association of Sale or Transfer. Any Owner (other than Declarant) desiring to sell or otherwise transfer title to his or her Lot shall give the Board written notice of the name and address of the purchaser or transferee, within 30 days after the date of such transfer of title, and such other information as the Board may reasonably require. With the Board's approval a number of independent fees may be charged in relation to the transfer of title to a Lot, including but

itle, and such other information as the Board may reasonably require. With the Board's approval a number of independent fees may be charged in relation to the transfer of title to a Lot, including but not limited to fees for resale certificates, estoppel certificates, copies of this Declaration, the Bylaws, and/or Articles, compliance inspections, ownership record changes, and priority processing, provided the fees are customary in amount, kind, and number for the local marketplace. Transferrelated fees are not refundable and may not be regarded as a prepayment of or credit against regular or special assessments. Transfer-related fees do not apply to the following transfers unless a party to the transfer requests the corresponding documentation: foreclosure of a deed of trust lien, tax lien, or the Association's assessment lien; transfer to, from, or by the Association; voluntary transfer by an owner to one or more co-owners, or to the owner's spouse, child, or parent. Transferrelated fees may be charged by the Association or by the Association's managing agent, provided there is no duplication of fees. Transfer-related fees charged by or paid to a managing agent must have the prior written approval of the Association, are not subject to the Association's assessment lien, and are not payable by the Association. This Section 12.6 does not obligate the board or the manager to levy transfer-related fees.

12.7. Limitation on Interest. All agreements between any Owner and the Association and/or Declarant are expressly limited so that the amount of interest charged, collected, or received on account of such agreement shall never exceed the maximum amount permitted by applicable

ciation and/or Declarant are expressly limited so that the amount of interest charged, collected, or received on account of such agreement shall never exceed the maximum amount permitted by applicable law. If, under any circumstances, fulfillment of any provision of this Declaration or of any other document requires exceeding the lawful maximum interest rates, then, ipso facto, the obligation shall be reduced to comply with such lawful limits. If an amount received by the Association and/or Declarant should be deemed to be excessive interest, then the amount of such excess shall be applied to reduce the unpaid principal and not to the payment of interest. If such excessive interest exceeds the unpaid balance due to the Association and/or Declarant, then such excess shall be refunded to Owner.

12.8. Construction and Interpretation. This Declaration shall be liberally construed and interpreted to give effect to its purposes and intent, except as otherwise required by law.

12.9. Notices. Except as otherwise provided in the By-laws or this Declaration, all notices, demands, bills, statements and other communications under this Declaration shall be in writing and shall be given personally or by mail. Notices that are mailed shall be deemed to have been duly given three (3) days after deposit, unless such mail service can prove receipt at an earlier date.

Owners shall maintain one mailing address for a Lot, which address shall be used by the Association for mailing of notices, statements and demands. If an Owner fails to maintain a current mailing address for a Lot with the Association, then the address of that Owner's Lot is deemed to be such Owner's mailing address. If a Lot is owned by more than one person or entity, then notice to

t mailing address for a Lot with the Association, then the address of that Owner's Lot is deemed to be such Owner's mailing address. If a Lot is owned by more than one person or entity, then notice to one co-owner is deemed notice to all co-owners. Attendance by a Member at any meeting shall constitute waiver of notice by the Member of the time, place and purpose of the meeting. Written waiver of notice of a meeting, either before or after a meeting, of the Members shall be deemed the equivalent of proper notice 12.10. Not_a Condominium. This document does not and is not intended to create a condominium within the meaning of the Texas Uniform Condominium Act, Tex. Prop. Code Ann., Section 82.001, et seq.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 31 12.11. Severability. \nvalidation of any one of these covenants, conditions, easements or restrictions by judgment or court order will in no manner affect any other provisions which will remain, in full force and effect.

12.12. Rights and Obligations Run With Land. The provisions of this Declaration are covenants running with the land and will inure to the benefit of, and be binding upon, each and all of the Owners and their respective heirs, representatives, successors, assigns, purchasers, grantees and mortgagees. No Lot is exempt from the terms set forth herein. By the recording or the acceptance of a deed conveying a Lot or any ownership interest in the Lot whatsoever, the person to whom such Lot or interest is conveyed will be deemed to accept and agree to be bound by and subject to all of the provisions of this Declaration, whether or not mention thereof is made in said

rson to whom such Lot or interest is conveyed will be deemed to accept and agree to be bound by and subject to all of the provisions of this Declaration, whether or not mention thereof is made in said deed. Notwithstanding any provision herein, the rights of Declarant as provided herein shall not run with the land, but instead may only be transferred or assigned as provided in Section 12.13 herein.

12.13. Assignment of Declarant's Rights. Declarant may assign, in whole or in part, its rights as Declarant by executing a document assigning such rights. There may be more than one Declarant, if Declarant makes a partial assignment of the Declarant status.

12.14. Disclaimer Regarding Security. Neither the Association nor Declarant shall in any way be considered insurers or guarantors of security 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 of ineffectiveness of security measures undertaken. No representation or warranty is made that any fire protection system, burglar alarm system or other security system can not be compromised or circumvented, nor that any such systems or security measures undertaken will in all cases prevent loss or provide the detection or protection for which the system is designed or intended. Each Owner acknowledges, understands and covenants to inform its tenants, invitees, and licensees that the Association, its Board and committees and the Declarant are not insurers and that each person using any portion of the Property assumes all risks for loss or damage to persons, to Lots and to the contents of Lots resulting from acts of third parties.

12.15. Attorneys' Fees and Court Costs. If litigation is instituted to enforce any provision

ks for loss or damage to persons, to Lots and to the contents of Lots resulting from acts of third parties.

12.15. Attorneys' Fees and Court Costs. If litigation is instituted to enforce any provision herein, then the prevailing party shall be entitled to all attorneys’ fees and court costs related to such legal action.

12.16. Gender. All personal pronouns used in this Declaration, whether used in the masculine, feminine or neuter gender, will include all other genders, and the singular will include the plural, and vice versa.

12.17. Headings. The headings contained in this Declaration are for reference purposes only and will not in any way affect the meaning or interpretation of this Declaration.

12.18. Partial Invalidity. The invalidation of any one of these covenants by judgment or court order shall in no way affect any of the other provisions, which shall remain in full force and effect.

12.19. Conflicts. |In the event of conflict between this Declaration and any By-laws, rules, regulations or Articles, this Declaration will control.

12.20. Exhibits. All exhibits referenced in this Declaration as attached hereto are hereby incorporated by reference.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS) PAGE 32 IN WITNESS WHEREOF, the Declarant has caused this instrument to be executed on the day and year written below.

EXHIBITS: Exhibit "A" — Association Easement Exhibit "B" - Association Maintenance Fencing Exhibit "C" — Common Areas Exhibit "D" - Common Maintenance Areas Exhibit "E" —- Masonry Lots Exhibit “F” - Open Space Areas DECLARANT: CENTEX HOMES, a Nevada general partnership By: Centex Real Estate Corporation, a Nevada corporation, its managing

aintenance Areas Exhibit "E" —- Masonry Lots Exhibit “F” - Open Space Areas DECLARANT: CENTEX HOMES, a Nevada general partnership By: Centex Real Estate Corporation, a Nevada corporation, its managing general partner ivision Controller STATE OF TEXAS § § COUNTY OF BEXAR § The foregoing instrument was acknowledged before me on this the 22 day of February, 2007, by J.B. Gonzales (personally known to me), Division Controller of the San Antonio Division of Centex Real Estate Corporation, a Nevada corporation, on behalf of the corporation in its capacity as managing general partner of Centex Homes, a Nevada general partnership.

‘ an AFTER RECORDING RETURN TO: Centex Homes go 1354 No. Loop 1604 E., Suite 108 igen, SCHEIDEMAN San Antonio, Texas 78232 hip Eon Attention: Barbara Kanute DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERDO HILLS PAGE 33 EXHIBIT "A" ASSOCIATION EASEMENT Rear of Lots 1-5, 10-12, and 34, Block 130, CB 4847 and Lots 1-2, Block 133, CB 4847 adjacent to Canyon Golf Rd; Side of Lot 1, Block 130, CB 4847 and Lot 1, Block 133, CB 4847 adjacent to Silverado Way, of Silverado Hills, Unit-1, a subdivision in Bexar County, Texas, according to the plat thereof recorded in Volume 9572, Page 140 of the Plat Records of Bexar County, Texas.

Both sides of Canyon Golf Road and any islands located within the right-of-way of such road, to the extent such road is within Canyon Springs, Unit-12E, a subdivision in Bexar County, Texas according to the plat thereof recorded in Volume 9572, Page 115 of the Plat Records of Bexar County, Texas.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS) EXHIBIT "A"

y, Texas according to the plat thereof recorded in Volume 9572, Page 115 of the Plat Records of Bexar County, Texas.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS) EXHIBIT "A" EXHIBIT "B" ASSOCIATION MAINTENANCE FENCING Rear of Lots 1-5, 10-12, and 34, Block 130, CB 4847 and rear of Lots 1-2, Block 133, CB 4847 adjacent to Canyon Golf Rd; Side of Lot 1, Block 130, CB 4847 and side of Lot 1, Block 133, CB 4847 adjacent to Silverado Way, of Silverado Hills, Unit-1, a subdivision in Bexar County, Texas, according to the plat thereof recorded in Volume 9572, Page 140 of the Plat Records of Bexar County, Texas.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS) EXHIBIT "B" EXHIBIT "C" COMMON AREAS Lot 34 Block 130, CB 4847, which is a Water Quality Control Easement; Silverado Hills, Unit-1, a subdivision in Bexar County, Texas, according to the plat thereof recorded in Volume 9572, Page 140 of the Plat Records of Bexar County, Texas.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS) EXHIBIT "C" S22 ne emcees EXHIBIT "D" COMMON MAINTENANCE AREAS The parkway and islands along both sides of Canyon Golf Rd; the rear of Lots 1-5, 10-12, and 34, Block 130, CB 4847; and the rear of Lots 1-2, Block 133, CB 4847 adjacent to Canyon Golf Rd; the side of Lot 1, Block 130 and Lot 1, Block 133, CB 4847 adjacent to Silverado Way and any islands within the rights-of-way in the Silverado Hills, Unit-1 subdivision; and the whole of Lot 34, Block 130,

ide of Lot 1, Block 130 and Lot 1, Block 133, CB 4847 adjacent to Silverado Way and any islands within the rights-of-way in the Silverado Hills, Unit-1 subdivision; and the whole of Lot 34, Block 130, CB 4847; Silverado Hills, Unit-1, a subdivision in Bexar County, Texas, according to the plat thereof recorded in Volume 9572, Page 140 of the Plat Records of Bexar County, Texas.

Both sides of Canyon Golf Road and any islands located within the right-of-way of such road, to the extent such road is within Canyon Springs, Unit-12E, a subdivision in Bexar County, Texas according to the plat thereof recorded in Volume 9572, Page 115 of the Plat Records of Bexar County, Texas.

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS) EXHIBIT "D" STA UNIT 6 CAT-103' DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS) WESTYÝM TASK B DET (4 * UNIT 1.

VOROLAZIET PAL EXHIBIT "E" EXHIBIT "E" MASONRY LOTS --KOLORY + CAST * UNIT F EXHIBIT "EF" OPEN SPACE AREA Lot 34, Block 130, CB 4847, Silverado Hills, Unit-1, a subdivision in Bexar County, Texas, according to the plat thereof recorded in Volume 9572, Page 140 of the Plat Records of Bexar County, Texas.

Doc# 20070046159 Fees: $168 .00 02/27/2007 11:35AM # Pages 39 ; Filed & Recorded in the Official Public Records of BEXAR COUNTY GERRY RICKHOFF COUNTY CLERK i ee thin Inetrament wee FILED in File Number Sequence on RECORDED FEB 2 7 2007 Ang baby COUNTY CLERK BEXAR COUNTY, TEXAS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS

Y CLERK i ee thin Inetrament wee FILED in File Number Sequence on RECORDED FEB 2 7 2007 Ang baby COUNTY CLERK BEXAR COUNTY, TEXAS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (SILVERADO HILLS EXHIBIT "E"