DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR THE VILLAS OF HOLLYTREE THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (this "Declaration") is made this 6th day of February,2008, by The Villas of Hollytree, LP, a Texas limited partnership (the "Declarant"). Recitals: A. Declarant is the owner of certain real property in the City of Tyler, Smith County, Texas, as more particularly described on Exhibit "A" attached hereto and made a part hereof for all purposes (the "Property"). B. Declarant desires to create an exclusive residential community of single family attached townhome units on the Property to be known as "THE VILLAS OF HOLLYTREE". C. Declarant will hereafter hold and convey title to the Property or any part thereof subject to the covenants, conditions, restrictions, easements, liens and charges hereinafter set forth. NOW, THEREFORE, Declarant hereby covenants, agrees and declares that all of the Property shall be owned, held, leased, sold, occupied and conveyed subject to the covenants, conditions, restrictions, easements, liens and charges hereinafter set forth, which shall run with the land and be binding on all parties having any right, title or interest in the Property or any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each owner thereof. ARTICLE I DEFINITIONS Section 1.1 "Amenity Center" shall mean Clubhouse Lot 1, Block 1540-J of the Subdivision, including the pool, the pool bath structure, the deck area, the pool equipment, the parking spaces, paving (including sidewalks), and all other improvements to be constructed on the 0.5763 acre, more or less, Clubhouse Tract as designated on the Plat. Section 1.2 "Architectural Committee" shall have the meaning set forth in Article VII below. Section 1.3 "Association" shall mean and refer to THE VILLAS OF HOLLYTREE OWNER'S ASSOCIATION, INC., a Texas non-profit corporation, its successors and assigns. A copy of the Association’s Certificate of Formation is attached hereto as Exhibit “B”. A copy of the Association’s initial set of Bylaws are attached hereto as Exhibit “C”. The Certificate of Formation and/or the Bylaws are subject to amendment

as otherwise provided by the organizational documents and/or the Texas Business Organizations Code. Updated copies may be obtained directly from the Association. Section 1.4 "Board of Directors" shall mean and refer to the Board of Directors of the Association. Section 1.5 "Capitalization Fee" shall have the meaning set forth in Article V Section 5.11 below. Section 1.6 "City" shall mean the City of Tyler, Texas. Section 1.7 "Common Area" shall mean any and all real and personal property and easements and other interests thereon, together with the improvements located thereon, if any, now or hereafter owned by the Association for the common use and enjoyment of the Owners, including, but not limited to, the following: (a) The Amenity Center; (b) Common Area Lot 5, Block 1540-K, of the Subdivision, designated as 0.1671 acre, more or less, Tract on the Plat; (c) Common Area Lot 6, Block 1540-K?, of the Subdivision, designated as 0.0348 acre, more or less, Tract on the Plat; (d) Common Area Lot 9, Block 1540-G, of the Subdivision, designated as 0.5208 acre, more or less, Tract on the Plat; (e) Common Area Lot 13, Block 1540-F, of the Subdivision, designated as 1.0159 acres, more or less, Tract on the Plat; (f) Common Area Lot 19, Block 1540-E, of the Subdivision, designated as 1.0404 acres, more or less, Tract on the Plat; (g) Common Area Lot 22, Block 1540-J, of the Subdivision, designated as 1.7488 acres, more or less, Tract on the Plat; (h) Common Area Lot 23, Block 1540-J, of the Subdivision, designated as 0.1537 acre, more or less, Tract on the Plat; (i) Common Area Lot 33, Block 1540-H, of the Subdivision, designated as 0.0405 acre, more or less, Tract on the Plat; (j) Common Area Lot 34, Block 1540-H, of the Subdivision, designated as 0.0461 acre, more or less, Tract on the Plat; (k) Common Area Lot 35, Block 1540-H, of the Subdivision, designated as 0.0746 acre, more or less, Tract on the Plat; (l) Common Area Lot 36, Block 1540-H, of the Subdivision, designated as 1.2043 acres, more or less, Tract on the Plat; and (e) Any areas of land, improvement or other property rights in the Property which are now or may hereafter be intended for or devoted to the common use or enjoyment of the members of the Association and which are designated as Common Areas by the Association together with any and all improvements which are now or may hereafter be constructed thereon.

Section 1.8 "County Real Property Records" shall mean and refer to the Real Property Records of Smith County, Texas. Section 1.9 "Cross Easements" shall have the meaning set forth on Article III, Section 3.5(a) below. Section 3.10 "Cross Easement Areas" shall have the meaning set forth in Article III, Section 3.5(b) below. Section 1.11 "Declarant" shall mean and refer to THE VILLAS OF HOLLYTREE, LP, a Texas limited partnership, its designated successors and designated assigns. Any successor or assignee who shall acquire for development or sale all or a portion of the remaining undeveloped or unsold portions of the Property and is designated as the "Declarant" hereunder in a instrument executed by the immediately preceding Declarant and recorded in the County Real Property Records, shall succeed to all the rights and obligations of "Declarant". It is understood that there shall be only one "Declarant" hereunder at any given time. Section 1.12 "Dwelling" shall mean the improvement located on each Lot that is designed to be or appropriate for use as a single-family residence, together with any garage incorporated therein, whether or not such residence is actually occupied. Section L13 "Lot" shall mean and refer to any plot of land shown upon any recorded subdivision map or plat of the Property, with the exception of the Common Area or any portion thereof, and shall include all improvements thereon. Section 1.14 "Member" shall mean and refer to an Owner who is a member of the Association pursuant to Article 1V of this Declaration. Section 1.15 "Owner" shall mean and refer to the record owner, whether one or more persons or entities, of fee simple title to any Lot, but excluding those having any interest merely as security for the performance of an obligation. Section 1.16 "Parking Tracts" shall mean those areas of the Subdivision, including but not limited to specific areas included in or adjacent to the Common Area, the Amenity Center, and/or the Street Tract, where it shall be designated or posted by the Association that parking of vehicles by owners, guests, and other members of the traveling public is not prohibited. However, nothing in this definition shall allow any person to park a vehicle in a time, place, or manner otherwise prohibited by this Declaration. Section 1.17 "Plat" shall mean or refer to the map or plat which has been filed with respect to the Property in the Map or Plat Records of Smith County, Texas, at Cabinet E, Slides 49A, 49B, and 49C, Plat Records of Smith County, Texas, as same may be amended from time to time.

Section 1.18 "Privacy Fence" shall have the meaning set forth in Article III, Section 3.5(a) below. Section 1.19 "Property", "Premises", "Subdivision" or "Development" shall mean or refer to that certain real property known as THE VILLAS OF HOLLYTREE and described in Exhibit "A" hereto. Section 1.20 “Street Tract” shall mean or refer to Lot 20, Block 1540-E, of the Subdivision, designated as 4.0935 acres, more or less, Tract on the Plat, and any additional property within the Subdivision, if any, now or hereafter owned by the Association and used for non-exclusive vehicular and pedestrian ingress to and egress from the Subdivision by way of adjacent public roadways and thoroughfares. Section 1.21 "Structure" shall refer to a building containing two (2) or more Dwellings that (i) is located on two (2) or more adjacent Lots, and (ii) has one (1) or more party walls separating the Dwellings comprising such building. ARTICLE II PROPERTY SUBJECT TO THIS DECLARATION Section 2.1 The Property. The Property shall be owned, held, leased, sold, occupied, and conveyed subject to this Declaration. Section 2.2 Replats. No Lot shall be resubdivided; provided, however, Declarant shall have and hereby reserves the right, at any time or from time to time, to file a replat of all or any part of the Property owned by Declarant to effect a reconfiguration of any Lots in the Property then owned by Declarant, subject to obtaining any necessary approval, joinder or consent of the appropriate governmental authorities. ARTICLE III PROPERTY RIGHTS Section 3.1 Street Tract, Common Area, Quiet Enjoyment of Lots: Limitations. Each Owner shall have a right and an easement to use and enjoy the Common Area and Street Tract, which right and easement shall be appurtenant to the Owner's Lot, and shall pass with the title to each Lot. In addition, each Owner shall have the right to the undisturbed and quiet enjoyment of the Owner's Lot. Likewise, each Owner shall have the CrossEasement rights described and created in Article III, Section 3.5 of this Declaration. Notwithstanding the forgoing, the Owner's right and easement to use and enjoy the Street Tract, Common Area, the Cross-Easement rights of each Owner described in Article III, Section 3.5, and the Owner's right to quiet enjoyment of the Owner's Lot and Dwelling shall be subject to the following: (a) The Association's right to charge reasonable admission and other fees for the use by any guests of Members of any recreational facility situated upon the Common Area (including the Amenity Center);

(b) The Association's right to suspend an Owner's membership and/or voting rights and right to use and enjoy recreational facilities located in the Common Area (including the Amenity Center): (i) during any period in which the Owner owes delinquent assessments to the Association, (ii) during any period the Owner is otherwise in default of its obligations under this Declaration, including but not limited to the obligation to comply with the architectural control provisions, protective covenants and restrictions contained herein, or (iii) during any penalty period, not to exceed sixty (60) days per violation, for any violation of the Association's published rules and regulations; (c) The Association's right to dedicate or transfer all or any part of the Street Tract and/or Common Area to any public agency, authority or utility for such purposes, and subject to such conditions as may be agreed to by the Members. No such dedication or transfer shall be effective unless approved by Members holding not less than two-thirds (2/3rds) of the outstanding votes under this Declaration or the Bylaws of the Association; (d) The Association's right to enter into licensing agreements with the City of Tyler or other governmental entities for the purpose of establishing or amending the Street Tract, parking areas on the Parking Tracts, and the further right to dedicate such Lots to the appropriate governmental entity if required to do so; (e) The right of the Association to limit the use of the recreational facilities (including the Amenity Center) by guests of Members; (f) The right of the Association, in accordance with its Articles and Bylaws to (i) borrow money for the purpose of improving the Street Tract, Common Area and/or the Cross-Easement Areas, (ii) borrow money for the purpose of repairing or renovating existing improvements in the Street Tract, Common Area and/or the CrossEasement Areas, or (iii) mortgage part or all of the Common Area in achieving said purpose(s); provided, however, that the rights of any mortgagee in any property so mortgaged shall be subordinate to the rights of the Owners hereunder; (g) The Association's right to adopt, publish and enforce rules and regulations as provided in Article IX; (h) The Association's right to enter any Lot or Dwelling in order to perform any maintenance, alteration, or repair required herein to be performed by the Association, and the Owner of any such Lot or Dwelling shall permit the Association's representative to enter for such purpose at reasonable times and with reasonable advance notice; such right of entry is hereby explicitly reserved by Declarant in the name of and for the benefit of the Association; (i) The Association's right, in the case of an emergency threatening any one or more Lots or Dwellings, or one or more persons located on or within any Lot or Dwelling, to have representatives or agents of the Association enter such Lot or Dwelling or any other Lot or Dwelling for the purpose of attempting to remedy or abate the cause of such emergency. Such right of entry shall be immediate and shall require no prior notice to the Owner or Owners of the Lot or Dwelling entered, although reasonable efforts will be made in all cases where it is practicable to do so to contact the Owner of the Lot or Dwelling entered. As used herein, the term "emergency" shall mean an event giving rise to a reasonable perception that, if immediate action is not taken, then substantial property damage, property destruction, loss of life or serious bodily injury is likely to result, or the severity of such damage or such injury is likely to be

significantly increased. Such right of entry is hereby expressly reserved by Declarant in the name of and for the benefit of the Association; (j) The easement rights reserved by Declarant in Article X of this Declaration; (k) The rights reserved by Declarant in Article Xl of this Declaration; (1) The Cross-Easement rights held by every Owner, as described in Section 3.5 of this Article III; (m) The Cross-Easement rights are limited to pedestrian access only and do not create any rights in a Member to utilize another Member's Lot for barbecuing, loitering, sunbathing, recreational activities, or the any other use inconsistent with pedestrian access; (n) The City of Tyler’s right (i) to access the Common Areas to abate any nuisance thereon and (ii) to attach a lien for the prorated cost of abatement upon each Lot, as described in Article X1V of this Declaration; and (o) No Owner shall engage in or permit any guest, licensee or invitee to engage in any activity or conduct on or in the Street Tract, Common Area, the Cross-Easement Areas, or such Owner's Lot that an Owner knows or reasonably should know would: (i) violate any applicable zoning ordinance or other law, (ii) cause waste to any part of the Common Area, or (iii) result in the cancellation of or an increase in the insurance premiums paid for, the insurance policies carried by the Association. Section 3.2 Title to the Street Tract and Common Area. The Declarant shall convey to the Association fee simple title to the Street Tract and Common Area, free and clear of all monetary liens and encumbrances, except those set forth in this Declaration and those already of record as of the date of this Declaration. Said conveyance shall occur when deemed appropriate by the Declarant or as may be required by government officials. Following said conveyance to the Association, Declarant shall be entitled to and shall receive a credit against future Association assessments, with the credit being equal to the unreimbursed Association expenses that Declarant has incurred (including insurance and real estate taxes). The Street Tract and Common Area shall be conveyed without any express or implied warranties, which warranties are hereby expressly disclaimed by Declarant. Except as otherwise expressly set forth herein to the contrary, Declarant shall at all times until the conveyance to the Association have and retain the right to effect minor redesigns or minor reconfiguration of the Street Tract and Common Area without the joinder of any other party. Section 3.3 Parking Rights. Each Owner shall have the following parking rights and limitations: (a) With respect to each Lot improved with a Dwelling, the garage contained within or constituting part of such Dwelling, and any appurtenant driveway on such Lot, shall be the designated parking area for such Lot and for the sole and exclusive use of the Owner of such Lot. (b) The Parking Tracts shall be used solely for guest parking and no Owner may park any vehicle on the Parking Tracts or use same for storage or for any other purpose.

(c) Except for fire, police, and other emergency vehicles, postal pickup and delivery, garbage pickup, and as otherwise expressly allowed in writing by the Declarant and/or the Association, absolutely no on street parking shall be allowed. As allowed by law, towing of any vehicles or other property located within the street right of way in violation of this Declaration may occur at the Lot Owner’s and/or the property owner’s sole cost and expense. As allowed by law, all applicable governmental entities may also cite or fine a violator of this Declaration for on street parking where such is not allowed. (d) The Declarant, the Association, and any applicable governmental entity (as may be allowed by law or this Declaration) may set additional reasonable rules and regulations relating to the parking of vehicles within the Property. Section 3.4 TV Antennas and Cable Television Service. The Association may, but is under no obligation to do so, provide one or more central television antennas and/or cable for the convenience of the Members, and the Association may recover the cost of same through annual or special assessments. The cost of cable television service is not included in the annual assessments. Subject to the provisions of Section 9.2 of this Declaration, Members may install miniature satellite television dishes at locations designated by the Association. The Association shall not unreasonably withhold its permission to install miniature satellite dishes at locations which are in compliance with Section 9.2 of this Declaration. Section 3.5 Owner Cross-Easements. The following shall apply to all Lots located within the Property: (a) Each Dwelling on a Lot shall be improved, prior to Declarant's conveyance of such Lot to an Owner, or as soon as reasonably possible after such conveyance, with a fence near the Dwelling at such location as Declarant may determine, in Declarant's discretion, provided that such fence may enclose and create a private yard adjacent to some portion of the Dwelling. As originally located and built by Declarant with respect to each Lot, such fence shall be referred to herein as the "Privacy Fence". All references to “Privacy Fence” in this Declaration are made for designation of certain areas which may contain fencing constructed in a type and manner within the sole and complete discretion of the Declarant. The term “Privacy Fence” should not be construed to express or imply any promise by or agreement of the Declarant to construct fencing which creates for any Owner or on any Lot space exclusively visible from such Lot or any area of a Lot not within the purview of the Street Tract, an adjacent Lot, or any other area within the Subdivision. Subject to the limitations and qualifications set forth in Section 3.1 of this Article, those portions of each Lot that are outside of the walls of the Dwelling and outside the yard area enclosed by such Lot's Privacy Fence shall be subject to reciprocal crosseasements held by every other Owner for the use and enjoyment of such property (the "Cross-Easements"). The Cross-Easements created herein shall be appurtenant to the Lot of each Owner, and each Owner's rights under said Cross-Easements shall pass with the title to said Lot. (b) The Association shall have the right to landscape and make, erect or install non-structural improvements (such as fences, walking or biking paths, and the like) in or on those portions of each Owner's Lot that are subject to the

Cross-Easements (the "Cross Easement Areas"), and the Association may recover the cost of same through annual or special assessments. The Association shall have the limited responsibility for tending and maintaining (i) the landscaped portions of the Cross-Easements Areas, and (ii) any non-structural improvements erected thereon by the Association. The Association shall not be responsible for maintaining or repairing any driveways, patios or other paved or concrete areas within the Cross-Easement Areas which were not originally constructed by the Association. (c) The Association shall indemnify and hold harmless each Owner against claims, causes of action and liability for personal injuries or property damage suffered or allegedly suffered by a person while such person was on the portion of such Owner's Lot that is subject to the Cross-Easement Areas, if such person is present at such location at the time of the injury or alleged injury by virtue of the Cross Easement rights created under this Declaration; provided, however, in no event shall the Association indemnify an Owner against liability arising as a result of such Owner's own negligence, gross negligence or intentional misconduct, including but not limited to liability arising as a result of an Owner's violation of this Declaration, or the Regulations or Bylaws of the Association. Section 3.6 Damage to the Street Tract and/or Common Area. Each Member shall be liable to the Association for any damage to any portion of the Street Tract and/or Common Area caused by the negligence or willful misconduct of the Member or the Member's family, guests, invitees, contractors or employees. ARTICLE IV ASSOCIATION MEMBERSHIP, VOTING RIGHTS AND PURPOSES Section 4.1 Every Owner shall be a Member of the Association. Membership shall be appurtenant to and may not be separated from ownership of a Lot. Section 4.2

Initially, the Association shall have two classes of voting membership:

Class A. So long as Declarant continues to be a Class B Member (as hereinafter defined), Class A Members shall be all Owners except the Declarant. Class A Members shall be entitled to one (1) vote for each Lot owned. When more than one person holds an ownership interest in any Lot, all such persons shall be Class A Members; however, the vote for such Lot shall be exercised as the Owners of such Lot jointly determine among themselves, and such vote shall not be counted if the Owners of such Lot cannot unanimously agree on such vote. In no event shall more than one (1) vote be cast with respect any Lot. Class B. The Class B Member(s) shall be the Declarant, and shall be entitled to (i) one (1) vote for each Lot owned, or (ii) two (2) votes for each Lot sold by Declarant, whichever is greater. Declarant’s status as a Member shall cease upon the sale of all Lots to Owners. Thereafter, only one class of voting membership shall exist and shall operate in the manner set forth for Class A members above.

Section 4.3 Purposes. The Association shall have the right, duty and responsibility to: (a) acquire, administer, maintain and care for the Street Tract, Common Area and the CrossEasement Areas, (b} administer, maintain and care for the guest and additional parking spaces located on the Parking Tracts, at the Amenity Center and as may hereafter be designated as Common Area parking areas on the Property, (c) construct or remove improvements in the Street Tract and Common Area, (d) construct or remove improvements in the Cross-Easement Areas, (e) paint. and/or stain the exterior of the Dwellings, (f) repair, replace and care for the roof of each Dwelling, (g) repair and replace Dwellings that suffer insured losses, (h) establish, levy and collect assessments, (i) disburse collected funds as permitted by this Declaration or the Bylaws of the Association, (j) enforce this Declaration, (k) make and enforce architectural standards, reasonable rules and regulations regulating use of the Lots, Street Tract, Common Area and Cross-Easement Areas, (l) engage contractors, vendors, employees or agents as it deems necessary to carry out the forgoing purposes, and (m) borrow money to be secured by a lien against the Street Tract and/or Common Area, subject and inferior to the rights of the Owners hereunder. In addition, the Association shall have the right but not the obligation to maintain property not owned by the Association, whether within or outside the Property, including, without limitation, the Structures, publicly owned property and property dedicated to public use, where the Board of Directors has determined that such maintenance is necessary or desirable to maintain the standards of the community. Section 4.4 Operating Restrictions. No part of the net earnings, if any, of the Association shall inure to the benefit of, or be distributable to the Declarant, the Association's Members, directors, officers or other private persons, except that the Association shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Section 4.3 of this Article IV. Section 4.5 Management Agreement. The Association shall be authorized to enter into management agreements with third parties in connection with the operation and management of the Subdivision and the performance of its obligations hereunder. A copy of all such management agreements shall be available to each Owner upon written request within sixty (60) days of receipt of such request at the offices of the Association. The Association may assume self management of the Subdivision. ARTICLE V COVENANT FOR MAINTENANCE ASSESSMENTS Section 5.1 Creation of the Lien and Personal Obligation of Assessments. The Declarant, for each Lot owned within the Property, hereby covenants, and each Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association annual assessments, special assessments, and other charges to be established and collected as provided herein. The obligation of each Owner(s) of a Lot to pay such assessments and charges, together with interest thereon for past due payments at a rate or rates of interest determined and established from time to time by the Association (which rate or rates shall in no event

exceed the maximum lawful rate of interest permitted under Texas law), late charges (in an amount or amounts determined and established from time to time by the Association), and costs incurred by the Association in connection with the collection of any of the foregoing assessments, charges and other sums, or in connection with the enforcement of this provision, including without limitation reasonable attorneys' fees incurred by the Association in connection therewith, shall be a continuing charge and lien upon each such Lot as a covenant running with the land, and any such assessments, interest, costs and other charges assessed or charged and remaining unpaid with respect to any Lot shall constitute a lien and encumbrance on such Lot until the same is paid in full. Declarant hereby reserves such a lien upon each Lot in the name of and for the benefit of the Association. Each such assessment or other charge, together with interest, late charges, costs of collection and reasonable attorney's fees, shall also be the personal obligation of the person who is the Owner of such Lot at the time the assessment or other charge comes due (the "Personally Obligated Owner"); but personal liability for payment of delinquent assessments or other charges shall not pass to successors in title to the Personally Obligated Owner unless expressly assumed by them. Section 5.2 Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety, and welfare of the residents of the Property and in particular for: (a) the improvement and maintenance of the Street Tract, Common Area, of the landscaped portion of the Cross-Easement Areas and of any improvements erected by the Association in the Cross-Easement Areas, such maintenance to include the cutting and removal of weeds and grass, the repair, maintenance and upkeep of the Privacy Fences, and any other maintenance necessary or desirable for the use and enjoyment of the Street Tract, Common Area and the Cross-Easement Areas as determined by the Association; (b) painting and/or staining the exterior of the Dwellings when needed as determined by the Association; (c) the maintenance, repair and reconstruction, when needed as determined by the Association, of (i) the roofs of Dwellings, (ii) irrigation lines and sprinklers serving any landscaped areas, (iii) water and/or sewer lines serving the Amenity Center, (iv) the Parking Tracts, and (v) the Amenity Center; (d) the payment of taxes and public assessments assessed against the Street Tract and/or Common Area; (e) the procurement and maintenance of insurance in accordance with this Declaration; (f) employment of or contracting for managing agents and other employees, agents, independent contractors as the Association may deem necessary or desirable; (g) the institution, defense, intervention, settlement, or compromise of litigation or other administrative proceedings on matters affecting the subdivision, including the collection of dues and assessments from Owners; (h) the costs and expenses relating to the operation of the subdivision and the Association; and/or

(i) such other needs as may arise in the performance of the Association's obligations under this Declaration, including restoration and replacement of other portions of the Street Tract, Common Areas or the Dwellings. The funds collected from the assessments the Association is authorized to levy under this Section 5.2 and under other applicable provisions of these Declarations shall be used for, but shall not be limited to, payment of, the costs and expenses incurred or to be incurred by the Association in managing, administering, paying for, performing or contracting for the performance of any of the items listed in subparagraphs (a) through (i) above. Section 5.3 Reserves. The Association may establish and maintain a reserve fund for (a) the periodic maintenance, repair, restoration and/or replacement of the roofs of the Dwellings, (b) the exterior painting and/or staining of the Dwellings, and (c) the periodic maintenance, repair, restoration and/or replacement of those other portions of the Property which the Association may be obligated to maintain. Section 5.4 Maximum Annual Assessment. (a) The Board of Directors shall cause to be prepared an estimated annual budget for each fiscal year of the Association, taking into account all anticipated common expenses, the amount (if any) to be set aside for unforeseen contingencies, the amount (if any) to be set aside for capital improvements, the anticipated income (if any) of the Association from sources other than assessments, and the existence of any surplus or deficit remaining from the preceding year's budget. The estimated annual budget for each fiscal year shall be approved and adopted by the Board of Directors. Copies of the proposed budget shall be furnished to all Owners at least thirty (30) days prior to the earlier to occur of (i) the day that the Directors adopt the Budget, or (ii) the beginning of each fiscal year of the Association. Copies of the proposed budget shall also be available to all Members for inspection during regular business hours at the Association's office during the same time periods. (b) Until January 1 of the year immediately following the conveyance of the first Lot by Declarant to an owner, the regular maximum annual assessment shall be $3,000.00 per Lot and shall be payable in monthly installments not to exceed $250.00 per month. From and after January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment may be increased by the Board of Directors effective January 1 of each year without a vote of membership, but subject to the following limitations: If an adopted budget requires a regular annual assessment against the Owners in any fiscal year which exceeds one hundred twenty percent (120%) of the regular annual assessment levied during the immediately preceding fiscal year, Owners holding at least twenty percent (20.00%) of the then existing votes of all Members of the Association may demand that a vote be taken to determine whether to reject said budget. Such demand shall be evidenced by delivering a written petition (signed by Owners comprising not less than twenty percent (20.00%) of the then existing votes of all Members of the Association) to the Board of Directors within fourteen (14) days after such budget was adopted. Following receipt of such

demand, the Board of Directors shall call a meeting of the Members of the Association to consider the budget. When the meeting is held, regardless of whether or not a quorum is actually present at such meeting, the budget shall be deemed ratified by the Members of the Association unless enough votes are cast at such meeting in favor of rejecting the budget to qualify as a majority of all the votes that could have been cast at such meeting, if all Members had been present in person or by proxy at such meeting. In the event that the Board of Directors does not approve an estimated annual budget or fails to determine new monthly assessments for any year, or is delayed in doing so, each Owner shall continue to pay each month the amount of such Owner's monthly assessment as last determined. (c) The Board of Directors may fix the monthly assessment at an amount not to exceed one-twelfth (1/12) of the maximum annual assessment determined under this Section 5.4, except as otherwise provided in subparagraph (d) of this Section 5.4. (d) Notwithstanding anything in this Section 5.4 to the contrary, if any amount is assessed against a Lot in accordance with Article VI, Section 6.1(b) as a result of damage that was caused to said Lot, the Structure that is located partially on such Lot, or to some other part of the Property by the willful or negligent act(s) of the Owner of the assessed Lot, such amount shall not be considered or counted in determining whether a maximum assessment has been made against such assessed Lot under subparagraphs (a) or (b) above. Section 5.5 Special Assessments. (a) 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 supplying reserve funds for the restoration and/or replacement of capital improvements or for defraying in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Common Area, non-structural improvements in or upon the Cross-Easement Areas, or the structural portions of any Dwelling(s) located on a Lot(s), provided that any such assessment shall have the assent of two-thirds (2/3rds) of the votes of the Members who are voting in person or by proxy at a meeting duly called for this purpose. (b) In the event that any construction, reconstruction, repair or replacement for which a special assessment may be assessed arises as a result of the negligence or fault of a specific Member or Members, then the Board of Directors, acting on behalf of the Association, may impose such special assessments on the Lot(s) owned by such Member(s) as more specifically provided in Section 6.1(b) below. The special assessments provided for in this Section 5.5(b) shall not require the approval or assent of the Members. Section 5.6 Notice and Quorum for any Action Authorized Under Sections 5.4 and 5.5. Written notice of any meeting called for the purpose of taking any action authorized

under Sections 5.4 or 5.5 shall be sent to all Members no less than thirty (30) days nor more than sixty (60) days in advance of the meeting. At a meeting called for the purpose of considering a special assessment under Section 5.5, the presence of Members or of proxies entitled to cast sixty percent (60.00%) of all the votes of each class 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 thirty percent (30.00%) of all the votes of each class of membership. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting. Section 5.7 No Offsets; Uniform Rate of Assessment. All assessments shall be payable in the amount specified by the Association, and, except as may otherwise be expressly provided herein, no offsets against such amount shall be permitted for any reason. Both annual and special assessments shall, except as otherwise specifically provided herein, be fixed at a uniform rate for all Lots and shall be collected on a monthly basis. Notwithstanding the foregoing, as long as Declarant is a Class "B" Member pursuant to Section 4.2 hereof, Declarant shall have the right (but not the obligation) to pay any resulting deficiency in the event the Association’s and/or the subdivision’s costs exceeds the amount of the assessments received from the Owners; provided, however, in such event, Declarant shall not otherwise be required to pay assessments of any type or for any purpose with respect to portions of the Property owned by Declarant; and further, provided, however, in no event shall Declarant be required to pay an amount which is in excess of one hundred percent (100%) of the established Assessment for each Lot it owns. Declarant, in its sole discretion, may cause the Association to borrow any deficiency amounts from a lending institution at the then prevailing rate for such a loan in Tarrant County, Texas. Section 5.8 Date of Commencement of Annual Assessments: Due Dates. (a) With respect to an Owner that purchases a Lot or Lots from Declarant, the annual assessments provided for herein shall commence as to each Lot on the day such Lot is conveyed by Declarant to Owner. Unless Declarant chooses to maintain Declarant’s Lots at Declarant’s sole cost and expense (which may be determined in Declarant’s sole and complete discretion), with respect to Declarant, the annual assessments provided forherein shall commence as to each Lot when both of the following have occurred: (i) at least one (1) Dwelling in a Structure that is located, in part, upon such Lot has been conveyed by Declarant to an Owner, and (ii) the remaining conveyed Dwellings that are part of the same Structure are substantially complete. For the purpose of this Section 5.8, a Dwelling shall be considered "substantially complete" when Declarant is capable of obtaining a certificate of occupancy for such Dwelling from the appropriate governmental authority. Until the two (2) conditions identified in subparts (i) and (ii) of this Section 5.8(a) have been satisfied and Declarant has chosen not to maintain its Lots at its sole cost and expense, Declarant shall have no obligation to pay assessments with respect to any Lot, whether or not such Lot has been improved by the construction of a Dwelling.

(b) Annual assessments shall be paid ratably on a monthly basis. The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period. Written notice of the annual assessment shall he sent to every Owner subject thereto. The due dates shall be established by the Board of Directors. The Association shall, within ten (10) business days after a request therefor 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 5.9 Effect of Nonpayment of Assessments: Remedies of the Association. An administrative late charge of Twenty-Five and No/ 100 Dollars ($25.00) shall be added to any assessment not paid within fifteen (15) days after the due date, together with interest on the unpaid assessment from the due date until paid at a rate of interest per annum equal to the lesser of (i) ten percent (10%) or (ii) the maximum rate allowed by applicable law. The Association may bring an action at law against the Personally Obligated Owner and/or foreclose the lien against the Lot(s) subject to the unpaid assessments; and in either event, the Association shall be entitled to recover the Unpaid Assessment, the late charge and interest specified above, and any expenses and reasonable attorney's fees incurred by the Association in prosecuting such foreclosure and/or such collection. No Owner may waive or otherwise escape liability for the assessment provided for herein by non-use of the Street Tract, Common Area, non-use of the Cross-Easement Areas, or abandonment of his Lot. Section 5.10 Subordination of the Lien to Mortgages. Deeds of Trust and Ad Valorem Taxes. The Association's lien for unpaid assessments shall be subordinate to the lien of any mortgage or deed of trust made in good faith and for value, and also shall be subordinate to a lien for ad valorem taxes. Sale or transfer of any Lot shall not affect the assessment lien; however, the sale or transfer of any Lot pursuant to mortgage, deed of trust or tax foreclosure, or any transfer in lieu thereof, shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer. No such sale or transfer shall relieve such Lot from liability for any assessments thereafter becoming due or from the lien thereof, nor shall it relieve any Owner from personal responsibility for such assessments and other costs and expenses associated therewith. Section 5.11 Working Capital Fund. After the initial sale of a Lot by Declarant to an Owner, in addition to the regular annual assessment, every time a Lot in the Subdivision is sold by an Owner, an additional assessment equal to two (2) monthly assessments for such Lot (the "Capitalization Fee") shall be collected from the purchaser of such Lot and transferred to the Association to be held as a working capital fund. The purpose of said fund is to ensure that the Association will have adequate cash available to meet expenses contemplated herein, as well as unforeseen expenses, and to acquire additional equipment or services deemed necessary or desirable. Amounts so paid into the working capital fund shall not be considered an advance payment of regular assessments. The Capitalization Fee shall not be assessed at the initial sale of a Lot by Declarant to an Owner.

Section 5.12 Evidence of Lien. To evidence the Association's lien for unpaid assessments provided for in this Article V, the Association shall prepare a written notice of the lien setting forth the amount of the unpaid indebtedness, the name of the Owners) of the Lot covered by such lien, and a legal description of the Lot covered by such lien. Such notice shall be executed by an officer of the Association and shall be recorded in the County Real Property Records. Notwithstanding the foregoing, any failure by the Association to record a notice as provided herein with respect to any Lot shall not prevent or otherwise affect the Association's right or ability: (i) to seek collection of the assessment from the Personally Obligated Owner, or (ii) to enforce the lien against the Lot while title to such Lot remains in the name of any successor Owner who took such title with knowledge of the existence of the lien. Any successor Owner who takes title to a Lot after the written notice described above has been properly filed by the Association but before the lien evidenced thereby is discharged shall be deemed to have constructive knowledge of the Association's lien, and such successor Owner's Lot shall be subject to said lien as fully as if said successor Owner had actual knowledge of the lien at the time the Lot was acquired. ARTICLE VI EXTERIOR MAINTENANCE AND PARTY WALLS Section 6.1 Exterior maintenance; Use restrictions; Individual assessments for culpable acts: Creation of easement to perform. (a) The Association shall provide the exterior maintenance referenced in Section 5.2 upon each Lot as follows: paint and/or stain the exterior of the Dwelling, repair, replace and care for roofs, grass, trees and shrubs (including exterior irrigation of landscaped areas), and exterior fences, screening walls, patios, balconies, landings, and walkways installed by Declarant or the Association. If these outside components are most easily accessed through the interior of any dwelling unit located on a Lot, the Owner will cooperate in providing access to the outside components for the Declarant’s and/or Association’s agents and contractors. If requested by the Declarant or the Association, the Owner will remove all personal property from the outside components to facilitate any required maintenance, repair, or replacement. The Owner is liable to the Declarant and/or Association for any additional expense incurred as a result of the Owner’s failure or refusal to cooperate or act as provided herein. Notwithstanding the foregoing, the Association's exterior maintenance obligation shall not include glass surfaces, concrete or paved areas within the Cross-Easement Areas (unless constructed by the Declarant or the Association), any improvements installed by Owner for a previous Owner located within the yard area created by the Privacy Fence, or any vegetation planted within such yard area. No maintenance performed by an Owner shall reduce the assessment payable by him to the Association. An Owner shall not do any of the following without the prior written consent of the Board of Directors or the Architectural Committee: (i) plant any vegetation or install any improvement in any of the CrossEasement Areas, (ii) allow vegetation planted within the enclosed yard area to grow above the top of the Privacy Fence, or (iii) erect, build or construct improvements within

the enclosed yard area that extend above the top or beyond the boundaries of the Privacy Fence. (b) In the event that the need for an item or items of maintenance, restoration or repair is caused by the fault or negligent act or omission of the Owner, his family, guests or invitees, including but in no way limited to the Owner's willful or negligent failure to comply with any restriction, covenant or agreement contained in this Declaration, the cost of such maintenance, restoration and/or repairs shall be assessed only against the Lots owned, in whole or in part, by such Owner (i.e., not uniformly against all Lots), and the lien for any such assessment that is not paid when due shall attach to each Lot then owned by such Owner. Section 6.2 Party Walls. (a) General Rules of Law to Apply. Each wall which is built as a part of the original construction of the Dwellings upon the Property and placed on the dividing line between the Lots shall constitute a party wall, and, to the extent not inconsistent with the provisions of this Article, the general rules of law of the State of Texas regarding party walls and liability for property damage due to negligence or willful acts or omissions shall apply thereto. No alterations may be made to any party wall other than non-structural alterations to the interior surfaces of such walls (i.e., the surfaces of such walls facing the interior of a Dwelling); provided, however, that under no circumstances shall any alterations or attachments be made to any party wall surface that would create or result in the creation of any i n - w a l l alarms, whether as a part of a security system or otherwise, or any other device, item, component or system designed for the creation or emission of sound. (b) Sharing of Repair and Maintenance. The cost of reasonable repair and maintenance of a party wall shall be shared by the Owners who make use of the wall in proportion to such use. (c) Destruction by Fire or Other Casualty. If a party wall is destroyed or damaged by fire or other casualty, any Owner who has used the wall may restore it, and if the other Owners thereafter make use of the wall, they shall contribute to the cost of restoration thereon in proportion to such use without prejudice, however, to the right of any such Owners to call for a larger contribution from the others under any rule of law regarding liability for negligent or willful acts or omissions. In addition thereto, prior to the commencement of any repairs or restoration to the Lot, the Owner must comply with any and all provisions as are set forth in Article VIII below. (d) Weatherproofing. Notwithstanding any other provision of this Article, an Owner who by his negligent or willful act causes the party wall to be exposed to the elements shall weatherproof the exposed portion of the wall against the elements and shall bear the whole cost of such weatherproofing.

(e) Right to Contribution Runs with Land. The right of any Owner to contribution from any other Owner under this Article shall be appurtenant to the land and shall pass to such Owner's successors in title. (f) Dispute Resolution. In the event of any dispute arising concerning a party wall under the provisions of this Article, each such dispute will be resolved by means of the applicable dispute resolution provisions of Article XII of this Declaration. ARTICLE VII ARCHITECTURAL CONTROL Section 7.1 The Architectural Committee. An Architectural Committee (herein so called) shall be appointed by Declarant and shall be initially composed of three (3) members to provide for architectural control and design for the Property and to have and exercise the other powers granted to it hereunder. The Architectural Committee may designate a representative or representatives to act for it. So long as Declarant continues to be a Class B Member of the Association, Declarant shall have sole authority to (a) change the membership of the Architectural Committee; (b) designate a successor to the Architectural Committee; and (c) substitute another member in place of any member of the Architectural Committee who is for any reason unwilling or unable to serve. From and after the date that Declarant ceases to be a Class B Member, said authority shall vest in the Board of Directors. Neither the members of the Architectural Committee nor its designated representative shall be entitled to any compensation nor shall they be liable for damages, claims, or causes of action arising out of services performed by the Architectural Committee. Section 7.2 Architectural Control. The Architectural Committee shall specifically have the authority to grant the exceptions to the restrictions as described below. Except as may be provided under Article VI, Section 6.1 of this Declaration with respect to vegetation or improvements within the yard area enclosed by the Privacy Fence, no building, structure, landscaping, fence, wall, roof, antenna, satellite dish, spa, water feature, pool, or other improvement of any kind or nature shall be erected, placed or altered on any Lot until all plans and specifications have been submitted to and approved in writing by the Architectural Committee as to:

(a) quality of workmanship and materials; (b) conformity and harmony of the external design, color, location, shape, type and appearance of exterior surfaces and landscaping; (c) drainage solutions; (d) the observance of and compliance with applicable setback lines and easement areas and the enhancement of aesthetic views and visual corridors to and from the Common Area; and (e) the other standards set forth within this Declaration (and any amendments hereto), bulletins promulgated by the Architectural Committee, or matters in which the

Architectural Committee has been vested with the authority to render a final interpretation and decision. The Architectural Committee is authorized and empowered to consider and review any and all aspects of construction, location and landscaping, which may, in the reasonable opinion of the Architectural Committee, adversely affect the living enjoyment of one or more Owners or the general value of the Property. In the event the Architectural Committee, or its designated representative, fails to approve or disapprove plans and specifications within thirty (30) days after they have been submitted to it, the request shall be deemed to have been denied. Absent the written approval of the Architectural Committee, the proposed improvement may not be commenced. Section 7.3

General.

(a) The Declarant and/or the Association and/or the Architectural Committee may, but has no obligation to, require any Owner to restore such Owner's improvements or alteration to the condition existing prior to the construction thereof (including, without limitation, the demolition and removal of any unapproved improvement) if such improvements or alterations were commenced or constructed in violation of this Article. In addition, the Declarant and/or the Association and/or the Architectural Committee may, but has no obligation to do so, cause such restoration, demolition and removal and levy the amount of the cost thereof as a special individual assessment against the Lot upon which such improvements or alterations were commenced or constructed. A material violation of these covenants shall be deemed to have occurred if no prior express written approval of the Architectural Committee has been obtained where it was originally required, even if hindsight reveals that the actual plans and specifications would have been approved by the Architectural Committee had they been properly and timely submitted. (b) Neither Declarant, nor the Association, nor the Architectural Committee, nor the Board of Directors, nor the officers, directors, managers, members, employees and agents of any of them, shall be liable in damages to anyone submitting plans and specifications to any of them for approval, or to any Owner of property affected by these restrictions by reason of mistake in judgment, negligence, or nonfeasance arising out of or in connection with the approval or disapproval or failure to approve or disapprove any such plans or specifications. No approval of plans and specifications shall be construed as representing or implying that such plans and specifications, if followed, result in properly designed improvements and/or improvements built in a good and workmanlike manner. Every person or entity who submits plans or specifications, and every Owner of each and every Lot, agrees that he will not bring any action or suit against Declarant, the Association, the Architectural Committee, the Board of Directors, or the officers, directors, managers, members, employees and agents of any of them, to recover any such damages and hereby releases, remises and quitclaims all claims, demands and causes of action arising out of or in connection with any judgment, negligence or nonfeasance and hereby waives the provisions of any law which provides that a general release does not extend to claims, demands and causes of action not known

at the time the release is given. The Architectural Committee shall have the power to grant variance, waivers, tolerances or modifications of the standards set forth in this Declaration under circumstances and conditions deemed reasonable, appropriate and prudent by the Architectural Committee. The Architectural Committee shall be entitled at any time, and from time to time, to seek and obtain professional advice and counsel from attorneys, architects, designers, engineers and landscape designers and technicians in connection with the performance of its duties, with all reasonable cost and expenses paid by the Association. The Association may in turn seek to recover such costs from the persons seeking review and approval of proposed plans and specifications. ARTICLE VIII INSURANCE AND INDEMNITY Section 8.1 provisions: (a)

Insurance coverage on the Property shall be governed by the following

Purchasing Policies: Primary Coverage.

(i) The Board of Directors or its duly authorized agent shall have the authority to purchase and shall purchase insurance policies upon the Property sufficient to provide the coverages required by this Article VIII, for the benefit of the Association and the Owners and their mortgagees, as their interest may appear, and provisions shall be made for the issuance of certificates of mortgage endorsements to the mortgagees of Owners. All policies shall be written with a company licensed to sell insurance in the State of Texas. (ii) Owners may, at their option, obtain insurance coverage at their own expense upon their own personal property and for their personal liability and living expense and such other coverage as they may desire, as those matters will not be covered by the Association's insurance policies. In no event shall the insurance coverage obtained and maintained by the Association hereunder be brought into contribution with insurance purchased by individual Owners, Lot occupants, or their mortgagees, and the insurance carried by the Association shall be primary. (b) Casualty. All buildings and improvement upon the Property and all personal property of the Association located in or upon the Property and/or used to maintain the Property (including but not limited to Dwellings and other improvements thereon) shall be insured in an amount equal to one hundred percent (100.00%) insurable replacement value as determined annually by the Association with the assistance of the insurance company providing coverage. Such coverage shall provide protection against: (i) Loss damage by fire and other hazards covered by a standard extended coverage endorsement; and (ii) Such other risks, as determined from time to time, as are customarily covered by casualty policies with respect to buildings of the type existing on the Property.

Notwithstanding anything to the contrary contained herein, the Association's insurance policies shall not be required to cover damage for mold or damage to the personal property of Owners, and the Owners expressly assume all liability therefor. (c) Liability. Public liability insurance shall be secured by the Association with limits of liability of not less than One Million Dollars ($1,000,000.00) per occurrence and shall include an endorsement to cover liability of the Owners as a group to a single Owner. There shall also be obtained such other insurance coverage as the Association shall determine from time to time to be necessary or desirable. (d) Policy Terms. The Association shall make every reasonable effort to ensure that all policies purchased by the Association contain clauses, endorsements or agreements providing: (i) for waiver of subrogation; (ii) that no policy may be canceled or substantially modified without at least ten (10) days' prior written notice to the Association; (iii) that no policy may be canceled, invalidated, or suspended as a result of or on account of the conduct of any director, officer or employee of the Association or its duly authorized agent without prior demand in writing delivered to the Association to cure the default or defect caused by such conduct, and the allowance of a reasonable time thereafter for the Association to effect such cure; and (iv) that the "other insurance" clause in any such policy excludes individual Owner's policies from consideration. (e) Premiums. Premiums for insurance policies purchased by the Association shall be paid by the Association and shall be charged to Owners as part of the annual assessment described in Article V above. (f) Proceeds. All insurance policies purchased by the Association shall be for the benefit of the Association and the Owners and their mortgagees, as their interest may appear, and shall provide that all proceeds thereof shall be payable to the Association as insurance trustee under this Declaration. Exclusive authority to adjust losses under policies obtained by the Association shall be vested in the Board of Directors; provided, however, that no mortgagee having an interest in such losses shall be prohibited from participating in the settlement negotiations, if any, related thereto. Upon the payment of proceeds to the Association under any policy, the sole duty of the Association as insurance trustee shall be to receive such proceeds as are paid and to hold the same in trust for the purpose stated herein or stated in the Bylaws and for the benefit of the Owners and their mortgagees in the following shares: (i) Proceeds on account of damage to the Common Area and facilities held for the Association. (ii) Proceeds on account of damage to Lots (including but not limited to that portion of each Lot that is part of the Cross-Easement Areas) shall be held in undivided

shares for the Owners of such damaged Lots in proportion to the cost of repairing the damage suffered by each Owner, which cost shall be determined by the Association. (iii) In the event a mortgagee or lender loss payable endorsement has been issued for any Lot, the share of the Owner shall be held in trust for the mortgagee and the Owner as their interests may appear. Section 8.2 Distribution of Insurance Proceeds. Proceeds of insurance policies received by the Association as insurance trustee shall be distributed to or for the benefit of the beneficial Owners in the following manner: (a) Expense of the Trust. All expenses of the insurance trustees shall be first paid or provisions made therefor. (b) Reconstruction or Repair. The remaining proceeds shall be paid to defray the cost incurred by the Association of performing or obtaining the performance of the repairs, reconstruction or replacement of the damaged improvement(s) or other property, and the Association shall ensure that all mechanic's liens, materialmen's liens or other such liens which may result from such reconstruction, replacement or repair work are waived, satisfied or otherwise removed. Any proceeds remaining after defraying such costs shall be distributed as provided in Section 8.1(f) of this Article. In the event that the proceeds are insufficient to fully restore; repair or replace the loss or damage, the Association may levy an assessment to cover the deficiency. Section 8.3 Fidelity or Bond Insurance. From and after the date that Declarant's status as a Class B Member has ceased as provided in Section 4.2 above, all persons responsible for or authorized to expend funds or otherwise deal in the assets of the Association or those held in trust shall first be bonded by a fidelity insurer to indemnify the Association for any loss or default in the performance of their duties in an amount equal to six (6) months' assessments, plus reserves accumulated. ARTICLE IX USE RESTRICTIONS Section 9.1 Rules and Regulations. The Board of Directors of the Association shall have the power to formulate, publish and enforce reasonable rules and regulations concerning the use and enjoyment of the Cross-Easement Area, the area on each Lot enclosed by the Privacy Fence, the Common Areas, the exterior of the Dwellings and landscaping visible-from the street. Such rules and regulations may provide for imposition or fines or penalties for the violation thereof, or for the violation of any of the covenants and conditions contained in this Declaration. Section 9.2 Antennas and Satellite Dishes. No television, radio, or other electronic towers, aerials, antennae, satellite dishes or device of any type for the reception or transmission of radio or television broadcasts or other means of communication shall hereafter be erected, constructed, placed or permitted to remain on any Lot or upon any improvements thereon, except that this prohibition shall not apply to those antennae

specifically covered by 47 C.F.R. Part 1, Subpart S Section 1.4000 (or any successor provision) promulgated under the Telecommunications Act of 1996, as amended from time to time or satellite dishes or devices under twenty inches (20") in diameter as long as they comply with the installation and other requirements set forth below. The Association shall be empowered to adopt rules governing the Types of antennae that are permissible hereunder and establishing reasonable, non-discriminatory restrictions relating to safety, location, installation, removal and maintenance of antennae. To the extent that reception of an acceptable signal would not be impaired, an antenna permissible pursuant to rules of the Association may only be installed within the area on each Lot enclosed by the Privacy Fence, not visible from the street, and integrated with the Dwelling and surrounding landscape. Antennae shall be installed in compliance with all state and local laws and regulations, including zoning, land-use, and building regulations. Section 9.3 Residential Purposes. No Lot or Dwelling shall be used for a business or for professional, commercial or manufacturing purposes of any kind. No business activity shall be conducted on the Property which is not consistent with single family residential purposes. No noxious or offensive activity shall be undertaken on the Property, nor shall anything be done which is or may become an annoyance or nuisance to the neighborhood. Nothing in this subparagraph shall prohibit an Owner's use of a residence for quiet, inoffensive activities such as an individual home office, tutoring, or giving art lessons as long as such activities (a) do not materially increase the number of cars parked on the street, (b) do not interfere with adjoining residents' peaceful use and enjoyment of their Lots, (c) are not apparent or detectable by sight, sound or smell from outside the Dwelling, (d) the activity does not involve regular visitation of the Lot by clients, customers, suppliers or other business invitees or door-to-door solicitation of Dwellings, and (e) the activity is consistent with the residential character of the community and does not constitute a nuisance or hazardous or offensive use or threaten the security or safety of other residents of the Subdivision, as may be determined in the sole discretion of the Board of Directors. Notwithstanding the above, the leasing of any Lot shall not be considered a business or trade within the meaning of this section. This section shall not apply to any activity conducted by the Declarant with respect to its development and sale of the Subdivision or its use of any Lots which it owns within the Subdivision. Section 9.4 Quiet Enjoyment. No obnoxious or offensive activity shall be carried on upon the Property, nor shall anything be done which may be or may become a nuisance or annoyance to the Subdivision. Section 9.5 Nuisances. No activity deemed noxious or offensive by the Board of Directors or the Architectural Committee shall be carried on within the Common Area, nor shall anything be done thereon which may be or may become an annoyance or nuisance to the Subdivision as determined by the Architectural Committee. Examples of such offensive activities shall include, but not be limited to, the origination or emission of any loud or disturbing noise or vibrations, the maintenance of an auto repair site, the maintenance of unsightly outdoor storage of personal property (including toys, motorcycles or other motor vehicles, tricycles, bicycles, wood piles or other

miscellaneous items) on porches, patios, terraces or yards, or similar unsightly activity not in keeping with the aesthetic character and high level of appearance of the Subdivision. Section 9.6 Parking of Vehicles and Use of Property. (a) No house trailer, boat trailer, camper, tent, shed, or any other such vehicle, trailer, vessel or temporary structure shall be permitted to be parked or placed within the Property except within area(s), if any, which may be specifically designated for such purposes by the Association; provided, however, temporary buildings, house trailers, campers, sheds and other structures shall be permitted during the construction period of Dwellings or other improvements by Declarant, or as a temporary real estate office of Declarant. No garage, outbuilding, or other appurtenant structure shall be used for residential purposes, either temporarily or permanently. (b) Except for fire, police, and other emergency vehicles, postal pickup and delivery, garbage pickup, and as otherwise expressly allowed in writing by the Declarant and/or the Association, absolutely no on street parking shall be allowed. As allowed by law, towing of any vehicles or other property located within the street right of way in violation of this Declaration may occur at the Lot Owner’s and/or the property owner’s sole cost and expense. As allowed by law, all applicable governmental entities may also cite or fine a violator of this Declaration for on street parking where such is not allowed. The Declarant, the Association, and any applicable governmental entity (as may be allowed by law or this Declaration) may set additional reasonable rules and regulations relating to the parking of vehicles within the Property. (c) All vehicles on the Property, whether owned or operated by an Owner, their family, their guests, and invitees, are subject to all rules and regulations concerning the type, size, number, condition, use, appearance, and location of vehicles on the Property. The Association may prohibit any vehicle which the Association deems to be a nuisance, unsightly, or inappropriate. The Association may prohibit the sale, storage, washing, repair, or restoration of vehicles on the Property. Vehicles that transport inflammatory, explosive, dangerous, or other hazardous materials are expressly prohibited on the Property. The Association may cause any vehicle in violation of this Declaration to be removed without liability and at the sole cost and expense of the owner or operator of such vehicle. Section 9.7 Non-Interference with Drainage. Within those easements on each Lot as designated on the Plat, no improvement, structure, planting or materials shall be placed or permitted to remain which might damage or interfere with the installation, operation and maintenance of public utilities, or which might alter the direction of flow within drainage channels or which might obstruct or retard the flow of water through drainage channels. Section 9.8 Signs. No sign of any kind or character shall be displayed to the public view on any Lot except for (a) one (1) professionally fabricated sign of not more than five (5) square feet advertising the property for rent or sale, (b) signs used by Declarant to

advertise the Property during the construction and sales period, and (c) political signs advocating the election of one or more political candidates or the sponsorship of a political party, issue or proposal provided that such signs shall not be erected more than a reasonable period of time (in no event to exceed thirty (30) days in advance of the election to which they pertain) and are removed within fifteen (15) days after the election. The Association 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. Section 9.9 Animals. No animals, livestock or poultry of any kind shall be raised, bred or kept on any Lot; provided, however, dogs, cats or other household pets may be kept, not to exceed two (2) such animals, provided they are not kept, bred or maintained for any commercial purposes. The foregoing limitation on the number of pets shall not apply to hamsters, small birds, fish or other constantly caged animals, nor shall it apply to require the removal of any litter born to a permitted pet prior to the time that the animals in such litter are three (3) months old. If any animal may, in the sole discretion of the Board of Directors or its designated committee, make an objectionable amount of noise, endanger the health of the occupants of other Lots, or otherwise constitute a nuisance or inconvenience to the Owners of other Lots, such animal shall be removed upon the request of the Board of Directors or its designated committee. If the Owner of such animal fails or refuses to honor such request, the animal may be removed at the direction of the Board or Directors. An Owner's failure to remove fecal matter or other solid waste left in any Common Area or in the Cross-Easement Area by an animal owned by an occupant of such Owner's Lot (or their guests or invitees) shall be conclusively deemed to be a nuisance, and shall subject such Owner to such reasonable penalties as may be determined by the Association, including without limitation, upon repeated violations, the removal of such animal as described above. The cost and expense of any removal of an animal under this Section 9.10 shall be the sole responsibility of the Owner of the Lot where the animal was kept (or was brought by a guest or invitee). In the event that such Owner fails to reimburse the Association for such cost and expense within twenty-one (21) days after the Association's demand for reimbursement, such cost and expense shall become part of the annual assessment against such Lot, and the amount of such cost or expense assessed against such Lot shall not be counted or considered in determining whether a maximum assessment has been made against such assessed Lot under Article V, Section 5.4 of this Declaration. Section 9.10 Control of Pets. Every person owning or having possession, charge, care, custody or control of any dog, cat or other caged pet shall keep such pet exclusively inside his own Dwelling or inside the confines of such Owner's Privacy Fence; provided, however, that such pet may be off the Owner's Lot if it is under the control of a competent person and restrained by a chain, leash or other means of adequate physical control. All Owners must control their pets at all times, whether or not such Owner is present, in a manner that will prevent any pet from (a) making noise at objectionable sound levels for extended periods of time, whether continuously or intermittently, (b) endangering the health or safety of other Owners, their families, guests or invitees, or creating fear in other Owners as to the safety of themselves, their families, guests or

invitees, or (c) otherwise constituting a nuisance or inconvenience to the Owner(s) of any other Lot; all of the foregoing as determined by the Association. Any pet identified by the Association as a potentially dangerous animal constituting an unreasonable risk or threat to any other Owner or as to other Owners generally, whether or not such risk or threat is deemed immediate or imminent, or as to the families, guests or invitees of any Owner or other Owners generally, whether due to the type, kind or species of such animal, or its size, natural proclivities or inherent nature, or as a result, whether in whole or in part, of the known tendencies, habits, disposition or history of such animal, or as a result of the manner in which such animal generally is supervised and controlled by its owner, or for any combination of any of the foregoing reasons, shall be subject to such further restrictions and control as the Association may in its absolute discretion deem appropriate, which further restrictions or control may include, without limitation, any one or more of the following additional requirements: (i) constant restraint of the animal by means of a cage, chain, leash or other means deemed appropriate and approved by the Association at all times while such animal is outside an Owner's Dwelling, even while such animal is in the area of such Owner's Lot within the Privacy Fence; (ii) limitations on the time periods or duration that such animal is permitted to be outside of its owner's Dwelling; (iii) prohibiting the animal to be outside at any time without its owner present; or (iv) permanent removal of the animal from the Property. No animal shall be left outside of any Dwelling unattended or overnight. Section 9.11, Garbage and Refuse Disposal. No Lot shall be used or maintained as a dumping ground for rubbish, and all trash, garbage or other waste shall be stored in sanitary containers in accordance with the rules and regulations of any health or public safety authority having jurisdiction over the Property. All incinerators or other equipment shall be kept in clean and sanitary condition. No trash, garbage or other waste may be placed within the Common Area or the Cross-Easement Areas, except in containers approved by the Board of Directors. Section 9.12 Oil and Mining Operations. No oil drilling, oil development operations, oil refining, quarrying or mining operations of any kind shall be permitted upon or in any Lot, nor shall oil wells, tanks, tunnels, mineral excavations or shafts be permitted upon any Lot or within the Common Area. No derrick or other structure designated for use in boring for oil or natural gas shall be erected, maintained or permitted upon any Lot or within the Common Area. Section 9.13 Balcony, Patio, and Enclosed Yard Use. Because balconies, patios, and enclosed yards provide significant architectural elements of the Property, the Association has the right to regulate every aspect of the use, appearance, and maintenance, including without limitation color, decorations, furniture, plants, planters, decking, water features, spas, pools, cooking apparatus, audio and video equipment, and storage units. Section 9.14 Garages. Garage doors are to be kept closed at all times except when a vehicle is entering or leaving. Garage space may not be used at any time for occupancy or as a residence.

Section 9.15 Landscaping. No person may perform landscaping, planting, or gardening anywhere on the Common Elements without the Association’s prior written authorization. Section 9.16 Occupancy. The Association may adopt rules regarding the occupancy of each Lot. If the Association’s Rules fail to establish occupancy standards, no person under the age of 18 may occupy a Lot unless he or she lives with an Owner who is his spouse, parent, legal guardian, or a designee of his parent or legal guardian. Upon request by the Association, an Owner must provide satisfactory proof of the ages and relationships of all occupants of a Lot. If the Association’s Rules fail to establish occupancy standards, no more than two (2) person per bedroom may occupy a Lot, subject to the exception for familial status. In the event any mandatory law or regulation is less restrictive than this Section or the Association’s Rules regarding occupancy of a Lot, then such law or regulation shall control. Regardless, no person may occupy a Lot if such person constitutes a direct threat to the health or safety of other persons, of if such person’s occupancy would result in substantial physical damage to the property of others. Section 9.17 Window Treatments. The Property has been designed to have a uniform feel and appearance. Therefore, the color and condition of all window panes, window screens, and window treatments (both interior and exterior) must conform in all respects to standards set by the Declarant, the Association, or the Architectural Control Committee. All windows that are visible from any street or Lot must be maintained in good condition and must not detract from the appearance of the Property. The Association may require an Owner to change or remove a window treatment, window film, window screen, or window decoration that he Association determines to be inappropriate, unattractive, or inconsistent with the Property’s uniform feel and appearance. The Association may prohibit the use of certain colors or materials for windows and window treatments. 9.18 Garage Sales, Estate Sales, Liquidations, etc… Without the prior written permission of the Association, which may be withheld in its sole and complete discretion, there shall be no sales of personal property of any kind or type within the Subdivision. This prohibition shall include, but not be limited to, garage sales, estate sales, new product sales, automobile sales, liquidation sales, home business sales, and yard sales. Nothing herein shall prohibit or require the consent of the Association for the sale of any personal property by an Owner in conjunction with the sale of a Lot and any associated improvements within the Subdivision, so long as the party purchasing the personal property is the same party that is purchasing the Lot and improvements. ARTICLE X EASEMENTS All of the Property, including Lots, Street Tract, and Common Areas, shall be subject to such easements for driveways, walkways, parking areas, water lines, sanitary sewers, storm drainage facilities, gas lines, telephone, and electric power line and other public utilities as shall be established by the Declarant or by its predecessors in title, prior to the

subjecting of the Property to this Declaration; and the Association shall have the power and authority to grant and establish upon, over, under, and across the Street Tract and Common Areas conveyed to it, such further easements as are requisite for the convenient use and enjoyment of the Property. In addition, there is hereby reserved in the Declarant and its agents and employees an easement and right of ingress and egress across the Street Tract, all Common Areas and Cross-Easement Areas, now or hereafter existing, for the purpose of construction and repairing of improvements within the Property, including the right of temporary storage of construction materials on said Common Areas and Cross-Easement Areas. All Lots and the Common Area shall be subject to easements for the encroachment of initial improvements constructed on adjacent Lots by the Declarant to the extent that such initial improvements actually encroach including, but not limited to, such items as overhanging eaves, privacy fences and party walls. Declarant also reserves access easements over all Lots for construction, either for that Lot or any adjacent Lot or property, and easements over the Street Tract and all Common Areas for the installation of public or private utilities and storm drainage (whether subsurface or surface), which easements may serve the Property or any adjacent property or properties (whether such adjacent property is owned by Declarant or a third party). There are reserved cross-easements in favor of Owners of Lots that comprise a Structure for access to and from each other Lot comprising the Structure and the Common Area adjacent to the Lots comprising the Structure, including, but not limited to the transportation of rollout garbage containers; however, this does not include access to approved decks, patios or areas with approved fences. To the extent Declarant deems it necessary or appropriate to execute and file in the appropriate public records any instrument to specifically evidence, identify and/or establish of record any easement reserved generally herein, Declarant is and shall be authorized to grant such easements, in its own name or in the name of the Association, and to execute and record written evidence of the same, without the approval or joinder of any other party, including, but not limited to, the Association, so long as Declarant holds record title to the Common Area. After the conveyance by Declarant to the Association of record title to the Common Area, any such written easement shall be given, if at all, by the Association and shall require the signature of the President of the Association (or any other duly authorized officer of the Association) or, if not the President or other officer duly authorized, then all of its Directors. Any thirdparty relying on a written and recorded easement instrument granted either by the Declarant or by the Association shall be entitled to rely upon any and all recitations set forth therein as true and correct statements of fact as to ownership of the Common Area and the authority of the person or party executing such easement instrument, and the same shall be deemed presumptively true, correct and legally binding for all purposes on all properties affected thereby, including any Lots(s) or portion of the Common Area described therein or encumbered thereby. ARTICLE XI DECLARANT'S RIGHTS The right is reserved by Declarant, or its agents, to place and maintain on the Property all model homes, sales offices, advertising signs and banners and lighting in connection therewith and other promotional facilities at such locations and in such forms as shall be

determined by Declarant. There is also reserved unto Declarant and its agents and prospective purchasers and tenants, the right of ingress, egress and transient parking in and through the Property for such sales purposes. Declarant also reserves the right to maintain on the Property without charge (a) a general construction office for Declarant's contractors and (b) appropriate parking facilities for the employees of Declarant's agents and contractors. Declarant's aforesaid reserved rights shall exist at any time Declarant is engaged in the construction, sale or leasing of residences on any portion of the Property, and no charge shall he made with respect thereto. Notwithstanding any provision herein to the contrary, the rights and easements created under this Declaration are subject to the right of Declarant to execute all documents and take necessary actions affecting the Property, which in the Declarant's opinion, are required to implement any right of Declarant set forth in this Declaration (including the making of any dedications or conveyances to public use) provided any such document or act is not inconsistent with the then existing property rights of any Owner. ARTICLE XII DISPUTE RESOLUTIONS AND LIMITATIONS ON LITIGATION Section 12.1 Agreement to Limit Rights to Litigate Disputes. Claims, grievances, matters of dispute or disagreement between Owners and Members or residents with respect to interpretation or application of the provisions of this Declaration, the Bylaws, the Association rules or decisions of the Architectural Committee (collectively, the "Claims") shall be determined by the Board. These determinations (absent arbitrary and capricious conduct or gross negligence) shall be final and binding upon all Owners, Members and residents. Except for those Claims authorized in Section 12.2 of this Article XII, all Claims shall be resolved using the procedures set forth in Section 12.3 of this Article XII in lieu of filing suit in any court or initiating proceedings before any administrative tribunal seeking redress or resolution of such Claim. Section 12.2 Exempt Claims. The following Claims ("Exempt Claims") shall be exempt from the provisions of Section 12.3 of this Article XII: (a) Any suit by the Association to enforce the provisions of Article V (Assessments); (b) Any suit by the Association to obtain a temporary restraining order (or equivalent emergency equitable relief) and such other ancillary relief as the court may deem necessary in order to maintain the status quo and preserve the Association's ability to enforce the provisions of Article VII (Architectural Control) and Article IX (Use Restrictions); (c) Any suit between Owners (other than Declarant) seeking redress on the basis of a Claim which would constitute a cause of action under federal law or the laws of the State of Texas in the absence of a claim based on the Declaration, or on the Bylaws, Articles or rules of the Association, if the amount in controversy exceeds $5,000.00; (d) Any suit arising out of any written contract between Owners, or between the Declarant and any builder or contractor, which would constitute

a cause of action under the laws of the State of Texas in the absence of the Declaration, or the Bylaws or Articles of the Association; and (e) any suit in which all parties are not Owners, residents, the Declarant, the Association, or others subject to this Declaration. Any party having an Exempt Claim may submit it to the alternative dispute resolution procedures set forth in Section 12.3 of this Article XII, but there shall be no obligation to do so. The submission of an Exempt Claim involving the Association to the alternative dispute resolution procedures of Section 12.3 of this Article XII shall require the approval of the Association. Section 12.3 Mandatory Procedures for Non-Exempt Claims. All claims other than Exempt Claims shall be resolved using the following procedures: (a) Notice. Any party having a Claim ("Claimant") against any other bound party ("Respondent"), other than an Exempt Claim, shall notify each Respondent in writing of the Claim (the "Notice"), stating plainly and concisely: (i) The nature of the Claim, including date, time, location, persons involved and Respondent's role in Claim; (ii) The basis of the Claim (i.e., the provisions of this Declaration, the Bylaws, the Articles or rules or other authority out of which the Claim arises); (iii) What Claimant wants Respondent to do or not to do to resolve the Claim; and (iv) The Claimant wishes to resolve the Claim by mutual agreement with Respondent and is willing to meet in person with Respondent at a mutually agreeable time and place to discuss in good faith ways to resolve the Claim. (b)

Negotiation. (i) Each Claimant and Respondent (the "Parties") shall make every reasonable effort to meet in person and confer for the purpose of resolving the Claim by good faith negotiation. (ii) Upon receipt of a written request from any Party, accompanied by a copy of the Notice, the Board of Directors may appoint a representative to assist the Parties in resolving the dispute by negotiation, if in its discretion the Board of Directors believes such efforts will be beneficial to the Parties and to the welfare of the community. (c)

Mediation. (i) If the Parties do not resolve the Claim through negotiation within thirty (30) days after the date of the Notice (or within such other period as may be agreed upon by the Parties) ("Termination of Negotiations"), Claimant shall have thirty (30) additional days within which to submit the Claim to mediation under the auspices of any dispute resolution center or other such independent agency providing similar services in the City of Carrollton, Texas or in Denton County, Texas, or in the Dallas-Fort Worth metroplex area, upon which the Parties may mutually agree. (ii) If Claimant does not submit the Claim to mediation within thirty (30) days after Termination of Negotiations, Respondent shall lam-released and discharged from any and all liability to Claimant on account of such claim; provided, nothing herein shall

release or discharge Respondent from any liability to persons not a Party to the foregoing proceedings. (iii) If the Panics do not settle the Claim within thirty (30) days after submission of the matter to the mediation process, or within such time as determined reasonable or appropriate by the mediator, the mediator shall issue a notice of termination of the mediation proceeding ("Termination of Mediation"). The Termination of Mediation notice shall set forth when and where the Parties met, that the parties are at an impasse, and the date that the mediation was terminated. (iv) Each Party shall, within five (5) days after the Termination of Mediation, make a written offer of settlement in an effort to resolve the Claim as hereinafter provided. The Claimant shall make a final written settlement demand ("Settlement Demand") to the Respondent. The Respondent shall make a formal written settlement offer ("Settlement Offer") to the Claimant. If the Claimant fails to make a Settlement Demand, Claimant's original Notice shall constitute the Settlement Demand. If the Respondent fails to make a Settlement Offer, Respondent shall be deemed to have made a "zero" or "take nothing" Settlement Offer. (d)

Final and Binding Arbitration. (i) If the Parties do not agree in writing to accept either the Settlement Demand, the Settlement Offer, or otherwise resolve the Claim within fifteen (15) days after the Termination of Mediation, the Claimant shall have fifteen (15) additional days to submit the Claim to arbitration administered by the American Arbitration Association under its Arbitration Rules for the Rea! Estate Industry (as in effect from time to rime; and as the same may be amended), or the Claim shall be deemed abandoned and Respondent shall be released and discharged from any and all liability to Claimant arising out of such Claim, provided, nothing herein shall release or discharge Respondent from any liability to persons not a Party to the foregoing proceedings. (ii) This subsection (d) is an agreement of the Bound Parties to submit to a final and binding arbitration all Claims (except Exempt Claims) that have remained unresolved due to the inability or refusal of the Parties to a Claim to resolve the same through negotiation or mediation as provided above, and is specifically enforceable under the applicable arbitration laws of the State of Texas. The arbitration award (the "Award") shall be final and binding, and judgment may be entered upon it in any court of competent jurisdiction to the fullest extent permitted under the laws of the State of Texas. Section 12.4 Allocation of Costs of Resolving Claims. (a) Each Party shall bear its own costs incurred prior to and during the proceedings described in Section 12.3 (a), (b) and (c) of this Article XII, including the fees of its attorney or other representative. Each Party shall share equally all charges rendered by the mediators) pursuant to Section 12.3(c). (b) Each Party shall bear its own costs (including the fees of its attorney or other representative) incurred after the Termination of Mediation under Section 12.3(c) and shall share equally in the costs of conducting the arbitration proceeding (collectively, ("Post Mediation Costs"), except as otherwise provided in subsection Section 12.4 (c) of this Article XH.

(c) Any Award which is equal to or more favorable to Claimant than Claimant's Settlement Demand shall add such Claimant's Post Mediation Costs to the Award, such Costs to be borne equally by all Respondents. Any Award which is equal to or less favorable to Claimant than Respondent's Settlement Offer to that Claimant shall also award to such Respondent its Post Mediation Costs, such Costs to be borne by all such Claimants. Section 12. Enforcement of Resolution. If the Parties agree to a resolution of any Claim through negotiation or mediation in accordance with Section 12.3 of this Article XII and any Party thereafter fails to abide by the terms of such agreement, or if any Parry fails to comply with the terms of any Award following arbitration, then any other Party may file suit or initiate administrative proceedings to enforce such agreement or Award without the need to again comply with the procedures set forth in Section 12.3 of this Article XII. In such event, the Party taking action to enforce the agreement or Award shall be entitled to recover from the non-complying Party (or if more than one non-complying Party, from all such Parties on a joint and several liability basis) all costs incurred in enforcing such agreement or Award, including, without, limitation, attorney's fees and court costs. Section 12.6 Commencement of Litigation. Any litigation by the Association, other than litigation of one or more of the "Exempt Claims" set out in Section 12.2 of this Article XII, shall require affirmative vote of seventy-five percent (75.00%) of the outstanding votes of all Members of the Association prior to the institution of such litigation. ARTICLE XIII GENERAL PROVISIONS Section 1.3.1 Enforcement.

(a) Subject to the provisions of Article XII above, in the event of any default by any Owner under the provisions of this Declaration, the Bylaws or rules and regulations of the Association, the Declarant and/or the Association shall have each and all of the rights and remedies which may be provided for in this Declaration, the Bylaws and said rules and regulations, and those which may be available at law or in equity, and may prosecute any action or other proceedings against such defaulting Owner and/or others for enforcement of any lien, statutory or otherwise, including foreclosure of such lien and the appointment of a receiver for the Lot and ownership interest of such Owner or for damages or injunction, or specific performance or for 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 shall be deemed mutually exclusive of any other such remedies. All expenses of the Declarant and/or 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, 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 his/its Assessment (to the same extent as the lien provided herein for unpaid Assessments), upon

the Lot and upon all of his/its additions and improvements thereto, and upon all of his/its 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 Declarant and/or the Association. (b) Should the Declarant or the Association fail or refuse to maintain the Common Area to the City's specifications for an unreasonable time, not to exceed ninety (90) days after written request to do so, the City, by and through a majority of the City Council members, shall have the right, power and authority as is herein given to the Declarant and/or the Association and the Board of Directors to enforce this Declaration and levy Assessments in the manner set forth herein. It is understood that in such event, the City may elect to exercise the rights and powers of the Declarant and/or the Association or the Board of Directors, to the extent necessary to take any action required and levy any Assessment that the Declarant and/or the Association might have, either in the name of the Declarant and/or the Association, or otherwise, to cover the cost of maintenance of such Common Area. Should the City exercise its rights as specified above, the Declarant and/or the Association shall indemnify and hold harmless the City from any and all costs, expenses, suits, demands, liabilities or damages, including reasonable attorneys' fees and costs for suit, incurred or resulting from the Declarant and/or Association's failure or refusal to maintain the Common Area to the City's specifications. Section 13.2 Severability. Invalidation of any one of the covenants or restrictions of this Declaration by judgment or court order shall in no way affect any other provisions of this Declaration which shall remain in full force and effect. Section 13.3 Term and Amendment to Declaration. The covenants and restrictions of this Declaration shall run with and bind the Property, for a term of twenty (20) years from the date this Declaration is recorded, after which time they shall be automatically extended for successive periods of ten (10) years. This Declaration may be unilaterally amended by the Declarant at any time prior to the expiration of four (4) years from the date this Declaration is recorded. During the remainder of the initial twenty (20) year term (commencing from the date this Declaration is recorded), this Declaration may only be amended or terminated by an instrument signed by the Owners of not less than ninety percent (90.00%) of the Lots. Thereafter, this Declaration may only be amended or terminated by an instrument signed by the Owners of not less than seventy-five percent (75.00%) of the Lots. If a lender holding a first lien mortgage or deed of trust against one or more Lots does not give prior written consent to such amendment or termination, to the extent required by any such lenders' loan documents, then such amendment or termination shall not be binding on such lender. Section 13.4 Rights of Note Holders. Any institutional holder of a first mortgage on a Lot (a "Mortgage Holder") will, upon request, be entitled to (a) inspect the books and records of the Association during normal business hours, (b) receive an annual financial statement of the Association within ninety (90) days following the end of its fiscal year, (c) receive written notice of all meetings of the Association and the right to designate a representative to attend any such meetings, (d) receive written notice of any

condemnation or casualty loss that affects either a material portion of the project or the Lot securing its mortgage, (e) receive written notice of any sixty-day delinquency in the payment of assessments or charges owed by the owner of any Lot on which such Mortgage Holder holds the mortgage, (t) receive written notice of a lapse, cancellation, or material modification of any insurance policy or fidelity bond maintained by the Owners' Association, (g) receive written notice of any proposed action, if any, that requires the consent of a specified percentage of Mortgage Holders, and (h) be furnished with a copy of the master insurance policy. Section 13.5 Notices. Any notice required or desired to be given under the provisions of this Declaration shall be deemed to have been properly delivered when deposited in the United States mail, postage prepaid, directed to the last known Owner, Mortgage Holder or other party entitled to notice, at the last known address for each such parry, all as shown on the books and records of the Association at the time such notice is given. Section 13.6 Exculpation. It is expressly understood and agreed that nothing contained in this Declaration shall be interpreted or construed as creating any liability whatsoever, directly or indirectly, against Declarant or any of its officers, members, managers, employees, agents or attorneys, or any of its or their heirs, executors, legal representatives, successors or assigns (collectively the "Declarant Related Parties"), for monetary relief or damages. In particular, and without limiting the generality of the foregoing, if any proceeding shall be brought to enforce the provisions of this Declaration, the party instituting such proceeding shall not be entitled to take any action to procure any money judgment against any of the Declarant Related Parties. Section 13.7 Indemnity. The Association shall indemnify, defend and hold harmless the Declarant, the Board of Directors, the Architectural Committee, and each director, officer, employee and agent of the Declarant, the Board of Directors, the Architectural Committee from all actions, suits, proceedings, judgments, penalties (including excise and similar taxes), fines, settlements and reasonable expenses (including attorneys' fees) incurred by such indemnified person under or in connection with this Declaration or the Property to the fullest extent permitted by applicable law, such indemnity to include matters arising as a result of the sole or concurrent negligence of the indemnified party, to the extent permitted by applicable law, but such indemnity is not intended to include indemnification of the indemnified party for acts of willful misconduct or bad faith. Section 13.8 Usury. It is the express intent of the Declarant that this Declaration and any Association documents, including Articles of Formation, organizational documents, and rules and regulations, shall at all times comply with the usury laws of the State of Texas. In no event shall any interest charged hereunder or in any of the other documents set forth above that exceeds the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the principal of any debt or, if that has been paid, refunded. This provision overrides any conflicting provisions in this and all other instruments concerning the charging of interest.

IN WITNESS WHEREOF, the undersigned, being the Declarant herein, has caused this instrument to be executed by the authority of its partner, they day and year first above written.

CONSENT AND SUBORDINATION BY LENDER The undersigned, Southside Bank, a _________ Bank, is the holder of a first lien deed of trust and security agreement on the Property, and joins in the execution of this Declaration solely for the purposes of (a) evidencing its consent to the tenors, conditions and provisions of the Declaration, and (b) subordinating all of its liens on the Property to the Declaration, and agreeing that if its said liens are foreclosed against the Property, that such foreclosure shall not affect this Declaration which shall continue in full force and effect thereafter. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

DECLARANT: THE VILLAS OF HOLLYTREE, LP By:

Trike Partners, LLC, its General Partner By: ____________________, its

STATE OF TEXAS

)

COUNTY OF ___________

)

, 200_, This instrument was acknowledged before me on of Trike Partners, LLC, a by ____________________________, Texas limited liability company, on behalf of The Villas of Hollytree, LP, a Texas limited partnership.

Notary Public, State of Texas

LENDER: SOUTHSIDE BANK, A ___________________ Bank

By: Peter Boyd, its Executive Vice President

STATE OF TEXAS

)

COUNTY OF ___________

)

This instrument was acknowledged before me on by Peter Boyd, as its Executive Vice President.

, 200_,

Notary Public, State of Texas