Declarations

DECLARATION OF COVENANTS, CONDITIONS AND

RESTRICTIONS FOR

HEATHERWILDE – SECTION ONE

ARTICLE I

CONSTRUCTION OF IMPROVEMENTS AND USE OF LOTS

Section 1.1 Residential Uses. All lots shall be used for single-family residential purposes only. No building shell be erected, altered, placed or permitted to remain on any lot other than one (1) detached single-family residence per lot, which residence may not exceed two (2) stories in height, and a private garage as provided below.

Section 1.2 Single-Family Use. Each residence may be occupied by only one (1) family consisting of persons related by blood, adoption or marriage or no more than three (3) unrelated persons living and cooking together as a single housekeeping unit, together with any household servants.

Section l.3 Garage Required. Each residence shall have a garage suitab1e for parking not less than one (1) or more than three (3) standard size automobiles, which garage conforms in design and materials with the main structure.

Section 1.4 Restrictions on Resubdivision. None of the lots shall be subdivided into smaller lots.

Section 1.5 Driveways. All driveways shall be surfaced with concrete, asphalt or similar substance approved by the Committee (which term is hereinafter defined).

Section 1.6 Uses Specifically Prohibited.

(a) No temporary dwelling, shop, trailer or mobile home of any kind or any improvement of a temporary character (except children's playhouses, dog houses, greenhouses, gazebos and buildings for storage of lawn maintenance equipment, which may be placed on a lot only in places which are not visible from any street on which the lot fronts) shall be permitted on any lot except that the builder or contractor may have temporary improvements (such as a sales office and/or construction trailer) on a given lot during construction of the residence on that lot. No building material of any kind or character shall be placed or stored upon the property until the owner thereof is ready to commence construction of improvements, and then such material shall be placed within the property lines of the lot upon which the improvements are to be erected.

(b) No boat, marine craft, hovercraft, aircraft, recreational vehicle, pick-up camper, travel trailer, motor home, camper body or similar vehicle or equipment may be parked for storage in the driveway or front yard of any dwelling or parked on any public street in the Addition, nor shall any such vehicle or equipment be parked for storage in the side or rear yard of any residence unless completely concealed from public view. No such vehicle or equipment shall be used as a residence or office temporarily or permanently. This restriction shall not apply to any vehicle, machinery or equipment temporarily parked and ill use for the construction, maintenance or repair of a residence in the immediate vicinity.

(c) Trucks with tonnage in excess of one (1) ton and any vehicle with painted advertisement shall not be permitted to park overnight within the Addition except those used by a builder during the construction of improvements.

(d) No vehicle of any size which transports inflammatory or explosive cargo may be kept in the Addition at any time.

(e) No vehicles or similar equipment shall be parked or stored in an area visible from any street except passenger automobiles, passenger vans, motorcycles, pick-up trucks and pick-up trucks with attached bed campers that are in operating condition and have current license plates and inspection stickers and are in daily use as motor vehicles on the streets and highways of the State of Texas.

(f) No structure of a temporary character, such as a trailer, basement, tent, shack, barn or other out-building shall be used on any property at any time as a dwelling house; provided, however, that any builder may maintain and occupy model houses, sales offices and construction trailers during the construction period.

(g) No oil drilling, oil development operation, oil refining, quarrying or mining operations of any kind shall be permitted in the Addition, nor shall oil wells, tanks, tunnels, mineral excavations or shafts be permitted upon or in any part of the Addition. No derrick or other structure designed for using in quarrying or boring for oil, natural gas or other minerals shall be erected, maintained or permitted within the Addition.

(h) No animals, livestock or poultry of any kind shall be raised, bred or kept on any property in the Addition except that dogs, cats or other household pets may be kept for the purpose of providing companionship for the private family. Animals are not to be raised, bred or kept for commercial purposes or for food. It is the purpose of these provisions to restrict the use of the property so that no person shall quarter on the premises cows, horses, bees, bogs, sheep, goats, guinea fowls, ducks, chickens, turkeys, skunks, reptiles or any other animals that may interfere with the quietude, health or safety of the community. NO more than four (4) pets will be permitted on each lot. Pets must be restrained or confined on the homeowner's back lot inside a fenced area or within the house. It is the pet owner's responsibility to keep the lot clean and free of pet debris. All animals must be properly tagged for identification.

(i) No lot or other area in the Addition shall be used as a dumping ground for rubbish or as a site for the accumulation of unsightly materials of any kind, including, but not limited to, broken or rusty equipment, disassembled or inoperative cars or other vehicles and discarded appliances and furniture. Trash, garbage or other waste shall not be kept except in sanitary containers. All equipment for the storage or other disposal of such material shall be kept in clean and sanitary condition. Materials incident to construction of improvements may be stored on lots during construction so long as construction progresses without undue delay.

(j) No individual water supply system shall be permitted in the Addition.

(k) No individual sewage disposal system shall be permitted in the Addition.

(l) No garage, garage house or other out-building (except for sales offices and construction trailers during the construction period) shall be occupied by any owner, tenant or other person prior to the erection of a residence.

(m) No air-conditioning apparatus shall be installed on the ground in front of a residence. No air-conditioning apparatus shall be attached to any front wall or window of a residence. No evaporative cooler shall be installed on the front wall or window of a residence.

(n) Except with the written permission of the Committee or as set forth herein, no antennas, discs or other equipment for receiving or sending sound or video messages shall be permitted in the Addition except antennas for AM or FM radio reception and UHF and VHF television reception. All antennas shall be located inside the attic of the main residential structure; provided, however, that one (1) antenna may be permitted to be attached to the roof of the main residential structure and to extend above said roof a maximum of five (5) feet. One (1) satellite disc or other instrument or structure may be placed in the backyard so long as it is completely screened from view from any street, alley, park or other public area.

(o) No lot or improvement shall be used for business, professional, commercial or manufacturing purposes of any kind. No activity, whether for profit or not, shall be conducted which is not related to single-family residential purposes. No noxious or offensive activity shall be undertaken within the Addition, nor shall anything be done which is or may become an annoyance or nuisance to the neighborhood. Nothing in this subparagraph shall prohibit a builder's temporary use of a residence as a sales office until such builder's last residence in the Addition is sold. Nothing in this subparagraph shall prohibit an owner's use of a residence for quiet, inoffensive activities such as tutoring or giving art or piano lessons so long as such activities are in compliance with all governmental and zoning requirements and do not materially increase the number of cars parked on the street or interfere with adjoining homeowners' use and enjoyment of their residences and yards.

(p) No fence, wall, hedge or shrub planting which obstructs sight lines at elevations between three (3) and six (6) feet above the roadway shall be placed or permitted to remain on any corner lot within the triangular area formed by the street right-of-way lines and a line connecting them at points ten (10) feet from the intersection of the street right-of-way lines, or, in the case of a rounded property corner, from the intersection of the street right-of-way lines as extended. The same sight-line limitations shall apply on any lot within ten (10) feet from the intersection of a street right-of-way line with the edge of a private driveway or alley pavement. No tree shall be permitted to remain within such distance of such intersections unless the foliage line is maintained at sufficient height to prevent obstruction of such sight lines.

(q) Except for children's playhouses, dog houses, greenhouses, gazebos and buildings for storage of lawn maintenance equipment, no building previously constructed elsewhere shall be moved onto any lot, it being the intention that only new construction be placed and erected thereon.

(r) Within easements on each lot, no structures, planting or materials shall be placed or permitted to remain which may damage or interfere with the installation and maintenance of utilities, which may change the direction of flow within drainage channels or which may obstruct or retard the flow of water through drainage channels.

(s) The general grading, slope and drainage plan of a lot may not be altered without the prior approval of all governmental agencies which have authority over such matters.

(t) No sign of any kind shall be displayed to the public view on any lot except one (1) sign of not more than five (5) square feet advertising the property for rent or sale or signs used by a builder to advertise the property during the construction and sales period. Declarant or its agents shall have the right to remove any sign, billboard or other advertising structure that does not comply with the above and in so doing shall not be subject to any liability for trespass or any other liability in connection with such removal.

(u) The drying of clothes in full public view is prohibited. The owners and occupants of any lots at the intersections of streets or adjacent to parks, playgrounds or other facilities where the rear yard is visible to full public view shall construct a drying yard or other suitable enclosure to screen from public view the equipment which is incident to normal residences, such as clothes drying equipment, yard equipment and storage piles.

(v) Except within fireplaces in the main residential dwelling and except for outdoor cooking, no burning of anything shall be permitted anywhere within the Addition.

Section 1.7 Minimum Floor Area. The total air-conditioned living area of the main residential structure, as measured to the outside of exterior walls but exclusive of open porches, garages, patios and detached accessory buildings, shall be not less than nine hundred (900) square feet or the minimum habitable floor area as specified by the City, whichever is the greater.

Section 1.8 Building Materials. The total exterior wall area of each building constructed or placed on a lot shall be not less than Fifteen Percent (15%) (or such higher percentage as may be required by the City) brick, brick veneer, stone, stone veneer, masonry or other material approved by the Committee; provided, however, that the exterior wall(s) that face a street(s) shall be not less than Twenty-Five Percent (25%) brick, brick veneer, stone, stone veneer, masonry et other material approved by the Committee. Windows, doors, openings, gables or other areas above the height of the top of standard height first-floor windows are excluded from the calculation of the total exterior wall area. Roofing shall be of a substance acceptable to the City, the Federal Housing Administration (“FHA"), the Veterans Administration ("VA") and the Committee.

Section 1.9 Side Line and Front Line Setback Restrictions. No dwelling shall be located on any lot nearer to the front lot line or nearer to the side lot line than the minimum setback lines shown on the Plat or required by the City. In any event, no building shall be located on any lot nearer than twenty (20) feet to, nor further than thirty (30) feet from, the front lot line or nearer than ten (10) feet to the structures on the lots that are located on either side of the said lot, except that structures on corner lots shall be no nearer than ten (10) feet to the side property line adjoining the street. For the purposes of these covenants, eaves and steps and open porches shall not be considered as a part of the building, provided, however, that this shall not be construed to permit any portion of a building on a lot to encroach upon another lot.

Section 1.10 Waiver of Front Setback Requirements. With the written approval of the Committee, any building may be located further back from the front property line of a lot than provided above, where, in the opinion of the Committee, the proposed location of the building will add to the appearance and value of the lot and will not substantially detract from the appearance of the adjoining lots.

Section 1.11 Fences and Walls. Any fence or wall must be constructed of masonry, brick, wood or other material approved by the Committee. No fence or wall shall be permitted to extend nearer to any street than the front building line of any residence. Fences or walls erected by Declarant shall become the property of the owner of the lot on which the same are erected and, as such, shall be maintained and repaired by such owner except as provided in Article III. No portion of any fence shall extend above eight (8) feet in height. All fence posts and poles must be on the inside of the fences and must not be visible from any public right-of-way.

Section 1.12 Sidewalks. All sidewalks shall conform to the City, FHA and VA specifications and regulations.

Section 1.13 Mailboxes. Any mailboxes located on the street shall be constructed of a material and design approved by the Committee.

ARTICLE II

ARCHITECTURAL CONTROL

Section 2.1 Appointment. Declarant shall designate and appoint an Architectural Control Committee (herein called the “Committee”) composed of three (3) individuals, each generally familiar with the residential and community development design matters and knowledgeable about Declarant's concern for a high level of taste and design standards within the Addition. The Committee shall use its best efforts to promote and ensure a high level of taste, design, quality, harmony and conformity throughout the Addition consistent with this Declaration of Covenants, Conditions and Restrictions for Heatherwilde - Section One ('Declaration').

Section 2.2 Successors. In the event of the death, resignation or removal by Declarant of any member of the Committee, the remaining member(s) shall appoint a successor member. In default of such appointment, Declarant shall have full authority to designate and appoint a successor. No member of the Committee shall be entitled to compensation for, or be liable for claims, causes of action or damages arising out of, services performed pursuant to this Declaration.

Section 2.3 Authority. No landscaping shall be undertaken arid no building, fence, wall or other structure shall be commenced, erected, placed, maintained or altered on any lot, nor shall any exterior painting of, exterior addition to, or alteration of, such items be made until all plans and specifications and a plot plan have been submitted to and approved in writing by a majority of the members of the Committee as to:

(a) quality of workmanship and materials, adequacy of site dimensions, adequacy of structural design, proper facing of main elevation with respect to nearby streets;

(b) conformity and harmony of the external design, color, type and appearance of exterior surfaces and landscaping lit relation to the various parts of the proposed improvements and in relation to improvements on other lots in the Addition; and

(c) the other standards set forth within this Declaration (and any amendments hereto) or matters in which the Committee has been vested with the authority to render a final interpretation and decision.

The Committee is authorized and empowered to consider and review any and all aspects of construction and landscaping which may, in the reasonable opinion of the Committee, adversely affect the living enjoyment of one or more lot owners or the general value of lots in the Addition. In considering the harmony of external design between existing structures and the proposed building being erected, placed or altered, the Committee shall consider only the general appearance of the proposed building as that can be determined from front, rear and side elevations on submitted plans.

Section 2.4 Procedure for Approval. Final plans and specifications shall be submitted in duplicate by certified mail to the Committee. The plans and specifications shall show the nature, kind, shape, height, materials and location of all landscaping and improvements. The documents shall specify any requested variance from the setback lines or any other requirement set forth in this Declaration. Tile Committee is authorized to request the submission of samples of proposed construction materials. At such time as the plans and specifications meet the approval of the Committee, one complete set of plans and specifications will be retained by the Committee and the other complete set of plans shall be marked 'Approved', signed by a majority of the Committee and returned to the lot owner or his designated representative. If disapproved by the Committee, one set of such plans shall be returned marked 'Disapproved' and shall be accompanied by a reasonable statement of the reasons for disapproval, which statement shall be signed by a majority of the Committee. Any modification of the approved set of plans and specifications must again be submitted to the Committee for its approval. The Committee's approval or disapproval, as required herein, shall be in writing. If the Committee fails to approve or disapprove such plans and specifications within ninety (90) days after the date of submission, written approval of the matters submitted shall not be required and compliance with this Article shall be deemed to have been completed. In case of a dispute about whether the Committee responded within such time period, the person submitting the plans shall have the burden of establishing that the Committee received the plans. The Committee's receipt of the plans may be established by a signed certified mail receipt.

Section 2.5 Standards. The Committee shall have sole discretion with respect to taste, design and all standards specified herein. One objective of the Committee is to prevent unusual, radical, curious, odd, bizarre, peculiar or irregular structures from being built in the Addition. The Committee shall also have the authority to require a minimum 5-12 foot roof slope, to specify that chimney flues be covered with brick or masonry or wood, to prohibit the use or light-weight composition roof material, to require that the colors of roofing materials be earth tones, to require the use of anodized aluminum divided light windows, and generally to require that any plans meet the standards of the existing improvements on neighboring lots. The Committee may from time to time publish and promulgate bulletins regarding architectural standards, which shall be fair, reasonable and uniformly applied and shall carry forward the spirit and intention of this Declaration.

Section 2.6 Termination; Continuation. The Committee appointed by Declarant shall cease to exist on the earlier of: (a) the date on which all the members of the Committee file a document declaring the termination of the Committee, or (b) the date on which residences have been constructed on all lets in the Addition; provided, however, that the Committee can not be terminated without the prior written consent of MBank Austin, National Association ('Bank'), until all the lots that are covered by this Declaration are built out or until the loan from the Bank to the Declarant that is secured by the Addition that is subject to this Declaration has been paid. Notwithstanding the above provision, at any time after the termination of the Committee, the Association (which term is hereinafter defined), acting by the affirmative vote of two-thirds (2/3) of the members present and voting at a meeting of the members of the Association called for such purpose, shall have the authority to have a committee selected by the Board of Directors of the Association to continue the functions of the Committee. If there is no Committee or Association committee, no approval by the Committee or Association committee shall be required under this Declaration; variations from the standards set forth in this Declaration shall be made in accordance with the general development standards as reflected in the plans, construction materials, landscaping and other matters approved by the Committee or Association committee during their periods of control.

Section 2.7 Liability of Committee. The members of the Committee shall have no liability for decisions made by the Committee so long as such decisions are made in good faith and are not arbitrary or capricious. Any errors in or omissions from the plans or the site plan submitted to the Committee shall be the responsibility of the owner of the lot to which the improvements relate, and the Committee shall have no obligation to check for errors in or omissions from any such plans, or to check for such plans' compliance with the general provisions of this Declaration, City codes, state statutes or the common law, whether the same relate to lot lines, building lines, easements or any other issue. This Section shall also apply to the members of the Association committee, if such a committee comes into existence pursuant to Section 2.5 above.

ARTICLE III

SPECIAL FENCING AND LANDSCAPING

Section 3.1 Fences, Walls and Sprinkler Systems. For a period of ten (10) years after the recording of this Declaration, Declarant shall have the right to erect, install, maintain, repair and/or replace fences, walls and/or sprinkler systems within that portion of any lot specified off Exhibit 'A', attached hereto and incorporated herein (the "Perimeter Lots"), which area (the "Restricted Area") is located outside the building lines as shown on the Plat. Any fence, wall or sprinkler system shall be the property of the owner of the lot or on which such fence, wall or sprinkler system is erected or installed, subject to the easements and rights of Declarant set forth below. No fence, wall or sprinkler system shall be erected or installed in the Restricted Area by the owner thereof without the prior written consent of Declarant.

Section 3.2 Landscaping. Declarant shall have the right to grade, plant and/or landscape and maintain, repair, replace and/or change such grading, planting and landscaping on any portion of the Restricted Area of a Perimeter Lot. In the event Declarant does not landscape the Restricted Area on any Perimeter Lot, the owner thereof may plant grass and, with the prior written consent of Declarant, may landscape and plant trees and shrubs in the Restricted Area.

Section 3.3 Easement. Declarant shall have, and hereby reserves, the right and easement to enter upon the Restricted Area of the Perimeter Lots for the purpose of exercising the discretionary rights set forth above.

Section 3.4 Maintenance by Individual Lot Owner. In the event Declarant does not maintain or repair any fences, walls, grading, planting or landscaping erected, installed or situated within the Restricted Area of any Perimeter Lot, then the owner of such Perimeter Lot shall, at his expense, perform such maintenance and repair work as is necessary to maintain such fences, walls, grading, planting and landscaping in a good and neat condition and appearance; provided, however, that the lot owner shall give Declarant ten (10) business days written notice before doing any maintenance other than mowing, edging and trimming. So long as the Restricted Area on any Perimeter Lot and any fences, walls, grading, planting and landscaping thereon are being reasonably maintained and repaired by Declarant, the owner of such Perimeter Lot shall not perform any maintenance or repair work within such Restricted Area without the prior written consent of Declarant. In no event shall the owner of any Perimeter Lot perform any maintenance or repair work on any sprinkler system within the Restricted Area without the prior written consent of Declarant.

Section 3.5 Declarant's Discretion. Notwithstanding any provisions herein to the contrary, Declarant shall never be obligated to erect, install, maintain, repair or replace any fences, walls, sprinkler systems, grading, planting or landscaping on any lots.

Section 3.6 Ten-Year Limitation. The provisions of this Article regarding Declarant's rights shall terminate and be of no further force and effect from and after that date which is ten (10) years after the recording of this Declaration unless, pursuant to Section 4.13, the homeowners elect to exercise Declarant's rights hereunder.

ARTICLE IV

MEMBERSHIP AND VOTING RIGHTS IN THE ASSOCIATION

Section 4.1 Membership. Every owner of a lot shall be a member of the Heatherwilde Homeowners' Association, a Texas Nonprofit Corporation, and its successors and assigns ("Association"). Membership shall be appurtenant to and shall not be separated from ownership of any lot which is part of the Addition. Every member shall have the right at all reasonable times during business hours to inspect the books of the Association.

Section 4.2 Voting Rights. The Association shall have two (2) classes of voting membership to be designated, respectively, Class A and Class B:

(a) Class A. The Class A Members shall be all lot owners with the exception of Declarant (until conversion of the Class B Membership into the Class A Membership as hereinafter provided), and shall be entitled to one (1) vote for each lot owned. When more than one person owns an interest in any lot, all such persons shall be Members of the Association, but the vote for such lot shall be exercised as the owners of the particular lot shall among themselves deter-mime. In no event shall more than one (1) vote be cast with respect to any lot.

(b) Class B. The Class B Member shall be the Declarant and shall be entitled to three (3) votes for each lot owned by it. The Class B Membership shall cease and be converted to Class A Membership on the happening of either of the following events, whichever first occurs:

(i) Thirty (30) days after the total votes outstanding in the Class A Membership with respect to the entire Addition equal or exceed the total votes outstanding in the Class B Membership; or

(ii) Ten (10) years following the earliest date upon which ownership of any lot becomes vested in a person other than the Declarant.

If at any time additional subdivisions of Heatherwilde are made subject to a substantially similar declaration of covenants, conditions and restrictions and the owners of lots therein have the right to become members of the Association (hereafter, Additional Areas'}, the voting rights of the Class B Member, if same have previously automatically converted to one (1) per lot owned, shall automatically be reverted to three (3) votes for each lot owned until such time as the total votes outstanding in the Class A Membership throughout the Addition and any duly annexed areas of Heatherwilde collectively shall equal or exceed the total votes outstanding in the Class B Membership throughout such total area, or until ten (10) years following the earliest date upon which ownership of any lot becomes vested in a person other than the Declarant, whichever date occurs the earliest, at which time Class B voting lots shall be automatically converted to one (1) vote for each lot.

Section 4.3 Board of Directors. The members of the Association shall elect the Board of Directors. The Board of Directors shall, by majority vote, conduct the business of the Association, except when membership votes are required pursuant to this Declaration or pursuant to the Articles of Incorporation and/or Bylaws of the Association.

Section 4.4 Bylaws. The Association may make whatever rules and Bylaws it deems desirable to govern the Association and its members: provided however, any conflict between the Bylaws and the provisions of this Declaration shall be controlled by the provisions of this Declaration.

ARTICLE V

ASSESSMENTS

Section 5.1 Creation of the Lien and Personal Obligation of Assessments. The Declarant, for each lot in the Addition, and each owner by acceptance of a deed to a lot, is deemed to covenant and agree to pay to the Association the following: (A) annual assessments or charges, and (B) special assessments for capital improvements, such assessments to be established and collected as hereinafter provided. The annual and special assessments, together with interest, costs and reasonable attorney's fees, shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made. Each such assessment, together with interest, costs and reasonable attorney's fees shall also be the personal obligation of the person who was the owner of such property at the time when the assessment came due. The personal obligation for delinquent assessments shall not pass to his successors in title unless expressly assumed by them.

Section 5.2 Annual Assessment. Each lot is hereby subjected to an annual maintenance charge and assessment not to exceed Two Hundred Forty Dollars ($240.00) per annum, for the purpose of creating a fund to be designated and known as the “Maintenance Fund", which maintenance charge and assessment will be paid by the owner or owners of each lot to the Association in advance annually. The rate at which each lot will be assessed will be determined annually by the Board of Directors of the Association at least thirty (30) days in advance of each annual assessment. The maximum annual assessment may be increased each year by an amount equal to not more than Ten Percent (10%) above the maximum annual assessment which could have been made without a vote of the membership in the case of the previous year. The maximum annual assessment may be increased to an amount in excess of Ten Percent (10%) of the maximum assessment for the previous year by a vote of two-thirds (2/3) of the members who are voting in person or by proxy at a meeting duly called for such purpose. The Board of Directors of the Association may fix the annual assessment at an amount not in excess of the maximum. The assessment for each lot shall be uniform except that the Board of Directors may charge and collect a fraction of the annual assessment on each lot owned by Declarant, a builder, or a building company, until the conveyance of said lot to a home owner, provided that, any such fractional charge shall not be less than Fifty Percent (50%). The Association shall, upon demand and for a reasonable charge, furnish a certificate signed by an Officer of the Association setting forth whether the assessments on a specified lot have been paid.

Section 5.3 Purposes. The Association shall use the proceeds of the Maintenance Fund for the use and benefit of all residents of the lots as well as those in the Additional Areas. Such uses and benefits to be provided by the Association may include, by way of example and not limitation, any and all of the following: maintaining the landscaping, lighting, sprinkler systems, walls, fences, signs and other features located in any areas owned by the Association ("Common Areas"), mowing the grass, maintaining the gravel and maintaining signs in or adjoining any rights-of-way or easements in the event the City or County fails to maintain such areas; payment of all legal charges and expenses incurred in connection with the enforcement of all recorded charges and assessments, covenants, conditions and restrictions affecting the property to which the Maintenance Fund applies; payment of all reasonable and necessary expenses in connection with the collection and administration of the maintenance charge and assessment: employing policemen and watchmen, caring for vacant lots and doing any other thing or things necessary or desirable in the opinion of the Association to keep the lots neat and in good order, or which are considered of general benefit to the owners or occupants Of the property, it being understood that the judgment of the Association in the expenditure of said funds shall be final and conclusive so long as such judgment is exercised in good faith.

Section 5.4 Special Assessments for Capital Improvements. In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Common Areas, including recreational facilities, walls, fences, lighting, signs and sprinkler systems, provided that any such assessment shall have tine consent of two-thirds (2/3) of the votes of the members who are voting in person or by proxy at a meeting duly called for this purpose not less than thirty (30) days nor more than sixty (60) days in advance of the meeting. At the first such meeting called, the presence of members or of proxies entitled to cast Sixty Percent (60%) of all the votes of membership shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum at the subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.

Section 5.5 Effect of Nonpayment of Assessments and Remedies of the Association. Any assessment that is not paid within thirty (30) days after the due date shall bear interest from the due date at the rate of fifteen Percent (15%) per annum. The Association may bring an action at law against the owner personally obligated to pay the same or foreclose the lien against the lot. No owner may waive or otherwise escape liability for the assessment provided for herein by nonuse of any Common Area or abandonment of his lot.

Section 5.6 Subordinated Lien to Secure Payment. The lien of the assessments provided for herein shall be subordinate to the liens of any valid mortgage or deed of trust. Sole or transfer of any lot shall not affect the assessment lien. However, the sale or transfer of any lot pursuant to mortgage or deed of trust foreclosure (whether by exercise of power of sale or otherwise) or any proceeding in lieu thereof, shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer. No sale or transfer shall relieve such lot from liability and liens for any assessments thereafter becoming due.

Section 5.7 Duration. The above maintenance charge and assessment will remain effective for the full term (and extended term, if applicable) of this Declaration.

ARTICLE VI

PROPERTY RIGHTS IN COMMON AREA

Section 6.1 Association's Rights. The Association and its assigns, contractors and employees shall have the right and easement to enter upon Common Areas for the purpose of exercising the rights of the Association as set forth in this Declaration.

Section 6.2 Common Area Easements. Every owner shall have a non-exclusive right and easement of enjoyment in and to any Common Area, which right shall be appurtenant to and shall pass with the title to every lot, subject to the following provisions:

(a) The right of the Association to charge reasonable admissions and other fees for the use of any recreational facility situated upon any Common Area;

(b) The right of the Association to suspend the voting rights and right to use of the recreational facilities by an owner for any period during which any assessment against his lot remains unpaid and for a period not to exceed sixty (60) days for any infraction of its published rules and regulations; and

(c) The right of the Association to dedicate or transfer all or any part of any Common Area to any public agency, authority or utility company for such purposes and subject to such conditions as may be agreed to by the members; provided, however, that no such dedication or transfer shall be effective unless an instrument signed by two-thirds (2/3) of the members agreeing to such dedication or transfer has been recorded.

Section 6.3 Delegation of Rights. Any owner may delegate, in accordance with the Bylaws of the Association, his right of enjoyment to the Common Area and facilities to the members of his family or to persons residing on the lot under a lease or contract to purchase from the owner.

ARTICLE VII

GENERAL PROVISIONS

Section 7.1 Easements. Easements for the installation and maintenance of utilities and drainage facilities are reserved as shown on the Plat and over the rear five (5) feet of each lot. Easements are also reserved for the installation, operation, maintenance and ownership of utility service lines from the property lines to the residences. Declarant reserves the right to make changes in and additions to the above easements for the purpose of most efficiently and economically installing improvements. By acceptance of a deed to any lot, the owner thereof covenants and agrees to mow weeds and grass and to keep and maintain in a neat and clean condition any easement which may traverse a portion of the lot.

Section 7.2 Recorded Plat. All dedications, limitations, restrictions and reservations shown on the Plat are incorporated herein and shall be construed as being adopted in each contract, deed or conveyance executed or to be executed by Declarant, conveying lots in the Addition, whether specifically referred to therein or not.

Section 7.3 Lot Maintenance. The owner and occupant of each lot shall cultivate an attractive ground cover or grass on all yards visible from the street, shall maintain the yards in a sanitary and attractive manner and shall edge the street curbs that run along the property line. Grass, weeds and vegetation on each lot must be kept mowed at regular intervals so as to maintain the property in a neat and attractive manner. No vegetables shall be grown in any yard that faces a street. No owner shall permit weeds or grass to grow to a height of greater than six inches (6”) upon his property. No foundation planting, shrub or other vegetation near the house shall be allowed to grow above the bottom of any window. Upon failure of any owner to maintain any lot, Declarant or its assigns or the Association may, at its option, have the grass, weeds and vegetation cut as often as necessary in its judgment, and the owner of such property shall be obligated, when presented with an itemized statement, to reimburse Declarant for the cost of such work. This provision, however, shall in no manner be construed to create a lien in favor of any party on any property for the cost of such work or the reimbursement for such work.

Section 7.4 Maintenance of Improvements. Subject to the provisions of Article III, each lot owner shall maintain the exterior of all buildings, fences, walls and other improvements on his lot in good condition and repair, and shall replace worn and rotten parts, and shall regularly repaint all painted surfaces and shall not permit the roofs, rain gutters, downspouts, exterior walls, windows, doors, walks, driveways, parking areas or other exterior portions of the improvements to deteriorate in an unattractive manner.

Section 7.5 Mortgages. It is expressly provided that the breach of any of the foregoing conditions shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value, as to the same premises or any part thereof encumbered by such mortgage or deed of trust, but said conditions shall be binding thereto as to lots acquired by foreclosure, trustee's sale or otherwise, as to any breach occurring after such acquisition of title.

Section 7.6 Term. The foregoing covenants and restrictions shall run with and bind the land and shall remain in full force and effect for a term of thirty (30) years after this Declaration is recorded. They shall be automatically extended for successive periods of ten (10) years unless amended as provided herein.

Section 7.7 Severability. If any condition, covenant or restriction herein contained shall be invalid, which invalidity shall not be presumed until the same is determined by the judgment or order of a court of competent jurisdiction, such invalidity shall in no way affect any other condition, covenant or restriction, each of which shall remain in full force and effect.

Section 7.8 Binding Effect. Each of the conditions, covenants, restrictions and agreements herein contained is made for the mutual benefit of, and is binding upon, each and every person acquiring any part of the Addition, it being understood that such conditions, covenants, restrictions and agreements are not for the benefit of the owner of any land except land in the Addition. This Declaration, when executed, shall be filed of record in the deed records of the County so that each and every owner or purchaser of any portion of the Addition is on notice of the conditions, covenants, restrictions and agreements herein contained.

Section 7.9 Enforcement. The owner of any lot in the Addition shall have the easement and right to have each and all of the foregoing restrictions, conditions and covenants herein faithfully carried out and performed with reference to each and every lot in the Addition, together with the right to bring any suit or undertake any legal process that may be proper to enforce the performance thereof, it being the intention hereby to attach to each lot in the Addition, without reference to when it was sold, the right and easement to have such restrictions, conditions and covenants strictly complied with, such right to exist with the owner of each let and to apply to all other lots in the Addition whether owned by the undersigned, its successors and assigns, or others. Failure by any owner, including Declarant, to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter.

Section 7.10 Definition of "Owner”. As used herein, the term “owner" shall refer to the record owner, whether one or more persons or entities (including contract sellers), of the fee simple title to a lot on which there is or will be built a single-family residence, but not including those having an interest merely as security for the performance of an obligation.

Section 7.11 Other Authorities. If other authorities, such as the City or County, impose more demanding, expensive or restrictive requirements than those set forth herein, the requirements of such authorities shall be complied with. Other authorities' imposition of lesser requirements than those set forth herein shall not supersede or diminish the requirements herein.

Section 7.12 Addresses. Any notices or correspondence to an owner of a lot shall be addressed to the street address of the lot. Any notices or correspondence to the Committee shall be addressed to the address shown opposite the signature of Declarant below or to such other address as is specified by the Committee pursuant to an instrument recorded in the deed records of the County.

Section 7.13 Association's Election. If at any time the Association, acting as a result of the affirmative vote of two-thirds (2/3) of the members present and voting at a meeting of the members of the Association called for such purpose, elects to perform some or all of Declarant's landscaping, maintenance, approval, or other rights or functions hereunder, and if such decision is approved by Declarant, then the Association shall be entitled to all the discretion, authority, easements and rights of Declarant with respect to the matters as to which the Association elects to assume responsibility: provided, however, that this election shall not take place without the prior written consent of the Bank until the loan from the Bank to the Declarant that is secured by the Addition that is subject to this Declaration has been paid.

Section 7.14 Amendment. At any time, the owners of the legal title to Sixty-Six Percent (66%) of the lots within the Addition (as shown by the County records) may amend the covenants, conditions and restrictions set forth herein by recording an instrument containing such amendment(s), except that, for the ten (10) years following the recording of this Declaration, no such amendment shall he valid or effective without the joinder of Declarant; provided, however, that there shall be no amendment of this Declaration without the prior written consent of the Bank until the loan from the Bank to the Declarant that is secured by the Addition that is subject to this Declaration has been paid.