Village at Ledge Stone Condominium Owners Association, Inc.

Village at Ledge Stone Master Covenant

Village at Ledge Stone Master Covenant

Unofficial reading copy. This is a text version of the recorded instrument, provided for readability and accessibility. The authoritative version is the recorded instrument on file with the Hays County Clerk — Doc. No. 06034956, Official Public Records of Hays County, Texas (Vol. 3053, Pg. 816). If this copy and the recorded instrument differ, the recorded instrument controls.

Recorded PDF Hays County record ↗ All governing documents

After Recording Return To:
Robert D. Burton
Armbrust & Brown, L.L.P.
100 Congress Ave Ste 1300
Austin, Texas 78701-2744

Recording reference: Doc. No. 06034956, OPR, Vol. 3053, Pg. 816, Hays County, Texas.

VILLAGE AT LEDGE STONE
MASTER COVENANT
Hays County, Texas

Declarant: 290 EAST BUSH, INC., a Texas corporation

Table of Contents

This Village at Ledge Stone Master Covenant (the "Covenant") is made ______________, 2006 by 290 EAST BUSH, INC., a Texas corporation ("Declarant"), and is as follows:

Recitals

A. Declarant is the present owner of certain real property located in Hays County, Texas, as more particularly described on Exhibit" A" attached hereto and incorporated herein by reference (the "Property").

B. Declarant desires to create and carry out a uniform plan for the development, improvement, and sale of the Property.

C. By the filing of this Covenant, Declarant and Seller serve notice that the Property will be subjected to the terms and provisions of this Covenant.

NOW, THEREFORE, it is hereby declared: (i) that the Property will be held sold, conveyed, and occupied subject to the following covenants, conditions and restrictions which will run with all or any portion of the Property and will be binding upon all parties having right, title, or interest in or all or any portion of the Property, their heirs, successors, and assigns and will inure to the benefit of each owner thereof; and (ii) that each contract or deed conveying all or any portion of the Property will conclusively be held to have been executed, delivered, and accepted subject to the following covenants, conditions and restrictions, regardless of whether or not the same are set out in full or by reference in said contract or deed.

This Covenant uses notes (text set apart in boxes) to illustrate concepts and assist the reader. If there is a conflict between any note and the text of the Covenant, the text will control.

ARTICLE 1 — Definitions

Unless the context otherwise specifies or requires, the following words and phrases when used in this Covenant will have the meanings hereinafter specified:

"Additional Land" means that certain real property located in Hays County, Texas which is more particularly described on Exhibit "B", attached hereto and incorporated herein by reference.

"Approval or Consent" as used in the Master Restrictions means advance written approval or consent that may be granted or withheld in the sole discretion of the party whose consent or approval is required.

"Assessment" or "Assessments" means assessments imposed by the Association under this Covenant.

"Assessment Unit" has the meaning set forth in Section 5.09.

"Association" means the Village at Ledge Stone Property Owners Association, Inc., a Texas non-profit corporation, which will be created by Declarant to exercise the authority and assume the powers specified in Article 3 and elsewhere in this Covenant.

"Board" means the Board of Directors of the Association.

"Bulk Rate Contract" or "Bulk Rate Contracts" means one or more contracts which are entered into by the Association for the provision of utility services or other services of any kind or nature to the Lots and/or Condominium Units. The services provided under Bulk Rate Contracts may include, without limitation, cable television services, telecommunications services, internet access services, "broadband" services, security services, trash pick up services, natural gas service, lawn maintenance services and any other services of any kind or nature which are considered by the Board to be beneficial. The Board has no obligation to enter into any Bulk Rate Contract for the provision of services to Owners or residents.

"Bylaws" means the Bylaws of the Association as adopted and as amended from time to time.

"Certificate" means the Certificate of Formation of the Association, filed in the Office of the Secretary of State of Texas, as the same may be amended from time to time.

"Condominium Declaration" means any Declaration of Condominium Regime filed in accordance with Chapter 82 of the Texas Property Code or any successor statute which established a Regime within any portion of the Property and creates one or more Condominium Units.

"Condominium Unit" means an individual unit, including any common element assigned thereto, within a condominium regime, if any, established within the Property.

"Declarant" means 290 EAST BUSH, INC., a Texas corporation, and its successors or assigns; provided that any assignment(s) of the rights of 290 EAST BUSH, INC., a Texas corporation, as Declarant, must be expressly set forth in writing and recorded in the Official Public Records of Hays County, Texas.

The "Declarant" is the party who causes the Property to be developed for actual residential use. Declarant enjoys special privileges to help protect its investment in the Property. These special rights are described in this Covenant. Many of these rights do not terminate until either Declarant: (i) has sold all Lots or Condominium Units which may be created out of the Property; or (ii) voluntarily terminates these rights by a written instrument recorded in the Official Public Records of Hays County, Texas.

"Design Guidelines" means the standards for design, construction, landscaping, and exterior items placed on any Lot or Condominium Unit adopted pursuant to Section 6.05(b), as the same may be amended from time to time. The Design Guidelines may consist of multiple

written design guidelines applying to specific portions of the Property. Declarant [text obscured by recording stamp] the initial Design Guidelines applicable to the Property.

"Development Area" means any part of the Property (less than the whole), which Development Areas may be subject to Development Area Declarations in addition to being subject to this Covenant.

"Development Area Declaration" means, with respect to any Development Area, the separate instruments containing covenants, restrictions, conditions, limitations and/or easements, to which the property within such Development Area is subjected. A Development Area Declaration may take the form of a Condominium Declaration.

"Development Owner" refers to any Owner who acquires a Lot for the purpose of resale to a Homebuilder.

"Development Period" means the period in which Declarant owns or has the option to acquire all or any portion of the Property or the Additional Land.

"Homebuilder" refers to any Owner who is in the business of constructing residences for resale to third parties and intends to construct a residence on any portion of the Property for resale to a third party.

"Improvement" means every structure and all appurtenances of every type and kind, whether temporary or permanent in nature, including, but not limited to, buildings, outbuildings, storage sheds, patios, tennis courts, sport courts, recreational facilities, swimming pools, putting greens, garages, driveways, parking areas and/or facilities, storage buildings, sidewalks, fences, gates, screening walls, retaining walls, stairs, patios, decks, walkways, landscaping, mailboxes, poles, signs, antennae, exterior air conditioning equipment or fixtures, exterior lighting fixtures, water softener fixtures or equipment, and poles, pumps, wells, tanks, reservoirs, pipes, lines, meters, antennas, towers and other facilities used in connection with water, sewer, gas, electric, telephone, regular or cable television, or other utilities.

"Lot" means any portion of the Property designated by Declarant or as shown as a subdivided lot on a Plat other than Master Community Facilities or Special Common Area or a Lot on which a condominium regime that has been established pursuant to Chapter 82 of the Texas Property Code or any successor statute.

"Manager" has the meaning set forth in Section 3.06(h).

"Master Community Facilities" means property and facilities that the Association owns or in which it otherwise holds possessory or use rights for the common use or benefit of more than one Lot or Condominium Unit. The Master Community Facilities also include any property that the Association holds possessory rights under a lease, license, or any easement in favor of the Association. Some Master Community Facilities will be for the common use and enjoyment of the Property's residents, e.g., subdivision swimming pools or internal pocket

parks, while some portion of the Master Community Facilities _may also be [text obscured by recording stamp] enjoyment of the public (if the Association so elects). Open space, parks, and recreational facilities dedicated to the public may be classified as Master Community Facilities under this Covenant to permit the Association to provide maintenance services to such facilities.

"Master Restrictions" or "Documents" means the restrictions, covenants, and conditions contained in this Covenant, any Development Area Declaration, the Design Guidelines, Bylaws, or in any rules and regulations promulgated by the Association pursuant to this Covenant or any Development Area Declaration, as adopted and amended from time to time. See Table 1 for a summary of the Master Restrictions.

"Members" means every person or entity that holds membership privileges in the Association.

"Membership Agreement" means an agreement in the form specified by the Board for execution by each Member, evidencing such Member's acknowledgment of and agreement to be bound by the terms of this Covenant. As provided in Section 3.03(b) below, the Board must elect to require each Member to execute a Membership Agreement.

"Mortgage" or "Mortgages" means any mortgage(s) or deed(s) of trust securing indebtedness and covering any Lot or Condominium Unit.

"Mortgagee" or "Mortgagees" means the holder(s) of any Mortgage(s).

"Owner" means the person(s), entity or entities, including Declarant, holding all or a portion of the fee simple interest in any Lot or a Condominium Unit, but does not include the Mortgagee under a Mortgage prior to its acquisition of fee simple interest in such Lot or Condominium Unit pursuant to foreclosure of the lien of its Mortgage.

"Plat" means a subdivision plat of any portion of the Property as recorded in the Official Public Records of Hays County, Texas, and any amendments thereto.

"Property" means all of that certain real property described on Exhibit "Aff. attached hereto, subject to such additions thereto and deletions therefrom as may be made pursuant to Section 10.03 and Section 10.04 of this Covenant.

"Quasi-Governmental Entity" means (i) a public improvement district created pursuant to Chapter 372, Subchapter B of the Texas Local Government Code; (ii) a municipal utility district (including, without limitation, Hays County Municipal Utility District No. [text obscured by recording stamp] pursuant to Article XVI, Section 59 of the Constitution of Texas and Chapters 49 and 54, Texas Water Code; or (iii) any other similarly constituted quasi-governmental entity (including, without limitation, the Lower Colorado River Authority) created for the purpose of providing benefits or services to the Property.

[text obscured by recording stamp]

"Regime" means any condominium [sic — source OCR reads "cond ommmm"] regime established in accordance with Chapter 82 of the Texas Property Code or any successor statute.

"Service Area" means a group of Lots and/or Condominium Units designated as a separate Service Area pursuant to this Covenant for purpose of receiving benefits or services from the Association which are not provided to all Lots and Condominium Units. A Service Area may be comprised of more than one housing type and may include noncontiguous Lots. A Lot or Condominium Unit may be assigned to more than one Service Area. Service Area boundaries may be established and modified as provided in Section 2.04.

"Service Area Assessments" means Assessments levied against the Lots and/or Condominium Units in a particular Service Area to fund Service Area Expenses, as described in Section 5.05.

"Service Area Expenses" means the actual and estimated expenses which the Association incurs or expects to incur for the benefit of Owners within a particular Service Area, which may include a reasonable reserve for capital repairs and replacements and a reasonable administrative charge, as may be authorized pursuant to this Covenant.

"Special Common Area" means any interest in real property or improvements which is designated by Declarant in a Development Area Declaration, or in any written instrument recorded in the Official Public Records of Hays County, Texas (which designation will be made in the sole and absolute discretion of Declarant), as Master Community Facilities which benefits one or more, but less than all of the Lots or Condominium Units, Owners or Development Areas, and is or will be conveyed to the Association, or otherwise held by Declarant for the benefit of the Owners of property to which such Special Common Area benefits. The Development Area Declaration or written notice will identify the Lots, Condominium Units, Owners or Development Areas benefited by such Special Common Area. By way of illustration and not limitation, Special Common Area might include such things as private roadways or gates, entry features, walkways or landscaping which Declarant desires to dedicate for the exclusive use of certain Lots or Condominium Units. All costs associated with maintenance, repair, replacement, and insurance of Special Common Area will be assessed as a Special Common Area Assessment against the Owners of the Lots and/or Condominium Units to which the Special Common Area is assigned.

#Village at Ledge Stone Reviewer'' means Declarant or its designee until Declarant no longer owns or has the option to acquire all or any portion of the Property. When the Development Period has ended, the rights of the Village at Ledge Stone Reviewer will automatically be transferred to the Architectural Control Committee appointed by the Board. At that time, Village at Ledgestone Reviewer shall mean Architectural Control Committee.

TABLE 1: MASTER RESTRICTIONS Covenant Creates obligations that are binding upon Bllhe [text obscured by recording stamp] (recorded) Association and all present and [text obscured by recording stamp] Property. Development Area Declaration A recorded covenant which includes additional (recorded) covenants, conditions and restrictions governing portions of the Property. Certificate of Formation: The Certificate of Formation of the Association, which (filed with the Secretary of State) establish the Association as a not-for-profit corporation under Texas law. Bylaws: The Bylaws of the Association which govern the (adopted by the Association) Association's internal affairs, such as elections, meetings, etc. Design Guidelines: The design standards and architectural and aesthetics (adopted by Declarant, Village at guidelines adopted pursuant to Article 6, which govern Ledge Stone Reviewer or new construction of Improvements and modifications Architectural Control Committee) thereto. Rules: The use restrictions and rules of the Association (adopted by the Board of the adopted pursuant to Section 3.06(a), which regulate use Association) of property, activities, and conduct within the Property. Board Resolutions: The resolutions adopted by Board which establish (adopted by the Board of the rules, policies, and procedures for internal governance Association) and activities of the Association.

ARTICLE 2 — General Restrictions

GENERAL RESTRICTIONS

2.01 General

All Lots and Condominium Units within the Property will be owned,

held, encumbered, leased, used, occupied and enjoyed subject to: (i) the applicable conditions, restrictions, reservations, and easements contained in this Covenant; (ii) any applicable conditions, restrictions, reservations, and easements contained in the Development Area Declaration covering the Development Area in which such Lot or Condominium Unit is located;

(iii) the Design Guidelines, as amended or modified as to such Lots or Condominium Units; and

(iv) any rules and regulations adopted by the Board.

In addition to the terms of the Master Restrictions, the Property is also subject to any additional covenants, conditions, restrictions, and easements filed of record in the Official Public Records of Hays County, Texas. Ordinances, requirements and regulations imposed by applicable governmental and quasi-governmental authorities are applicable to. all Lots and Condominium Units within the Property. Compliance with this Covenant and the Design Guidelines is not a substitute for compliance with such ordinances. requirements and regulations. Please be advised that neither the Covenant nor the Design Guidelines purport to list or describe each restriction that may be applicable to a Lot or Condominium Unit located within the Property. Each Owner is advised to review all encumbrances affecting the use and improvement of their Lot or Condominium Unit prior to submitting plans to the Village at Ledge Stone Reviewer for approval. Furthermore, approval by the Village at Ledge Stone Reviewer should not be construed by the Owner that any Improvement complies with the terms and provisions of all encumbrances which may affect the Owner's Lot or Condominium Unit. Certain encumbrances may benefit parties whose interests are not addressed by the Village at Ledge Stone Reviewer.

NOTICE The Master Restrictions are subject to change from time to time. By owning or occupying a Lot or Condominium Unit, you agree to remain in compliance with the Master Restrictions, as they may [text obscured by recording stamp]

2.02 Incorporation of Development Area Declarations

Upon recordation of a

Development Area Declaration in the Official Public Records of Hays County, Texas, such Development Area Declaration will, automatically and without the necessity of further act, be incorporated into, and be deemed to constitute a part of this Covenant, to the extent not in conflict with this Covenant, but will apply only to the Development Area described in and covered by such Development Area Declaration.

2.03 Conceptual Plans

All master plans, site plans, brochures, illustrations,

information and marketing materials relating to the Property (collectively, the "Conceptual Plans") are conceptual in nature and are intended to be used for illustrative purposes only. The land uses reflected on the Conceptual Plans are subject to change at any time and from time to time, and it is expressly agreed and understood that land uses may include uses which are not shown on the Conceptual Plans. Neither Declarant nor any homebuilder or other developer of

any portion of the Property makes any representation or warranty concerning and it is expressly agreed and understood that no Owner will be entitled to rely upon the Conceptual Plans in making the decision to purchase any land or Improvements within the Property. Each Owner who acquires a Lot or Condominium Unit within the Property acknowledges that the Property is a master planned community, the development of which is likely to extend over many years, and agrees that the Association will not have the authority to engage in, or use Association funds to support, protest, challenge, or make any other form of objection to changes in the Conceptual Plans.

The Property is a master planned community which will be developed over a number of ears. Chan es ma be made to the lans for the Pro e from time to time.

2.04 Provision of Benefits and Services to Service Areas

(a) Declarant, in any written notice recorded in the Official Public Records of Hays

County, Texas, may assign Lots and/or Condominium Units to one or more Service Areas (by name or other identifying designation) as it deems appropriate, which Service Areas may be then existing or newly created, and may require that the Association provide benefits or services to such Lots and/or Condominium Units in addition to those which the Association generally provides to the Property. Such benefits or services may include landscape maintenance. During the Development Period, Declarant may unilaterally amend any written notice that it has recorded in the Official Public Records of Hays County, Texas, to re-designate Service Area boundaries. All costs associated with the provision of services or benefits to a Service Area will be assessed against the Lots and/or Condominium Units within the Service Area as a Service Area Assessment.

(b) In addition to Service Areas which Declarant may designate, any group of

Owners may petition the Board to designate their Lots and/or Condominium Units as a Service Area for the purpose of receiving from the Association: (a) special benefits or services which are not provided to all Lots and/or Condominium Units, or (b) a higher level of service than the Association otherwise provides. Upon receipt of a petition signed by Owners of a majority of the Lots and/or Condominium Units within the proposed Service Area, the Board will investigate the terms upon which the requested benefits or services might be provided and notify the Owners in the proposed Service Area of such terms and the charge to made therefor, which may include a reasonable administrative charge in such amount as the Board deems appropriate (provided, any such administrative charge will apply at a uniform rate per Lot and/or Condominium Unit among all Service Areas receiving the same service). Upon written approval of the proposal by Owners of at least sixty-seven percent (67%) of the Lots and/or Condominium Units within the proposed Service Area and Declarant, the Association will provide the requested benefits or services on the terms set forth in the proposal. The cost and administrative charges associated with such benefits or services will be assessed against the Lots and Condominium Units within such Service Area as a Service Area Assessment.

2.05 Streets Within the Property

Some of the streets within the Property

streets to be maintained by applicable governmental authorities. Other streets within the Property are private and maintained by the Association. It is possible at a future time, streets that are currently public and maintained by Hays County may be assumed by the Association and made private.

(a) Private Streets. Private Streets within the Property are Master Community

Facilities and are maintained and administered by the Association. The Association, acting through the Board has the express authority to adopt, amend, repeal, and enforce the rules, regulations and procedures for use of private streets, including but not limited to:

(i) Identification of vehicles used by Owners and Residents and their guests.

(ii) Designation of parking or no-parking areas.

(iii) Limitations or prohibitions on curbside parking.

(iv) Removal or prohibition of vehicles that violate applicable rules and

regulations.

(v) Imposing and posting speed limits within the Property and enforcing

such speed limits through laser, radar monitoring, or like methods, as well as the creation of traffic calming devices (e.g., speed bumps) throughout the Property.

(vi) Fines for violations of applicable rules and regulations.

(b) Public Streets. Public streets are not Master Community Facilities, but may be

maintained and/or regulated by the Association to the extent they are not maintained or regulated by applicable governmental authorities. As to public streets, the Association, acting through the Board, is specifically authorized: (i) to accept from applicable governmental authorities any delegation of street-related duties; and (ii) to act as attorneyin-fact for the Owners in executing instruments required by public ordinance or public .law to impose, modify, or remove restrictions or traffic devices (such as speed bumps) on public streets serving and adjacent to the Property.

ARTICLE 3 — The Association

THE ASSOCIATION

3.01 Organization

The Association will be a non-profit corporation created for the

purposes, charged with the duties, and vested with the powers of a Texas non-profit corporation. Neither the Certificate nor Bylaws will for any reason be amended or otherwise changed or interpreted so as to be inconsistent with this Covenant.

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

3.02 Neighborhoods

Every Lot and Condominium Unit will be located within a [text obscured by recording stamp]

Neighborhood. Lots and Condominium Units are grouped into "Neighborhoods" [text obscured by recording stamp] ') facilitate a system of representative voting on matters which this Covenant or any Development Area Declaration require approval of the Association's membership; and (ii) to promote a sense of community and belonging by permitting Owners and residents within a Neighborhood to share, discuss and take action on issues unique to their Neighborhood. A Neighborhood may be comprised of any number of Lots or Condominium Units and may include Lots or Condominium Units of more than one type, as well as Lots or Condominium Units that are not contiguous to one another. Each Neighborhood will elect one "Neighborhood Delegate" to cast the votes allocated to all Lots and Condominium Units in that Neighborhood on matters requiring a vote of the Owners, as described below in this Article 3.

The initial Neighborhoods within the Property shall be as follows:

[text obscured by recording stamp] Lots 1 through 11, Block C, Bush Ranch, Phase 1, a subdivision of record in Hays County, Texas according to the map or plat thereof recorded in Volume 13, Pages 225-232, Plat Records of Hays County, Texas; and

[text obscured by recording stamp] 26, Block B, Bush Ranch, Phase 1, a subdivision of record in Hays County, Texas according to the map or plat thereof recorded in Volume 13, Pages 225-232, Plat Records of Hays County, Texas.

By executing a written notice (expressly including any Development Area Declaration), and recording same in the Official Public Records of Hays County, Texas, Declarant will be entitled to unilaterally: (i) amend any previously created Neighborhood to add additional portions of the Property to such Neighborhood, or to withdraw from any previously created Neighborhood any portion of the Property which has been previously designated as a part of such Neighborhood; (ii) create one or more new Neighborhoods within the Property, and designate any portion of the Property as a part of any such newly created Neighborhood.

3.03 Membership

(a) Any person or entity, upon becoming an Owner, will automatically

become a Member of the Association. Membership will be appurtenant to and will run with the ownership of the Lot or Condominium Unit that qualifies the Owner thereof for membership, and membership may not be severed from the ownership of the Lot or Condominium Unit, or in any way transferred, pledged, mortgaged or alienated, except together with the title to such Lot or Condominium Unit.

If you acquire a Lot or Condominium Unit you automatically become a member of the Association. Membership and the payment of Assessments are mandatory!

(b) Each Owner, other than Declarant, must execute a Membership

Agreement and deliver the same to the Association prior to or concurrently with the recording of a deed conveying fee title to a Lot or Condominium Unit to such Owner. Each Owner must notify the immediate transferee of his Lot or Condominium Unit of such transferee's [text obscured by recording stamp] obligation to execute and deliver a Membership Agreement, but the [text obscured by recording stamp] transferee will not relieve such transferee of his obligations under this Section 3.03(b). The failure to execute a Membership Agreement will not prevent any person from being a Member or Owner under the terms of the Certificate, Bylaws or Master Restrictions, or excuse any Member from the payment of Assessments. If a Membership Agreement is required by the Board, an Owner who has not executed and delivered a Membership Agreement will automatically forfeit his right to vote as a Member and additionally forfeit his right to the use and enjoyment of the Master Community Facilities and applicable Special Common Area. Such Owner will not be entitled to restoration of his voting privileges and rights in the Master Community Facilities or applicable Special Common Area until execution and delivery of a Membership Agreement by such Owner. However, the Board may, at the Board's sole discretion, provide that a Member will be entitled to the full privileges of membership in the Association, notwithstanding the failure to execute a Membership Agreement. In the event Members are entitled to an access card, membership card or other token evidencing or facilitating the right to use any Improvements erected or placed on the Master Community Facilities or Special Common Area, the Board may require any Member who has not executed a Membership Agreement to return the same to the Board immediately.

Within thirty [text obscured by recording stamp] Owner must provide the Association with: [text obscured by recording stamp] Owner has acquired title to the Lot or Condominium Unit; [text obscured by recording stamp] and mailing addresses, phone number, and driver's license number, if any; [text obscured by recording stamp] Mortgagee's name and address; [text obscured by recording stamp] the Owner; and [text obscured by recording stamp] operation of the Association.

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

You are required to execute a Membership Agreement before using any of the Association's property or voting on any Association matter. Your obligation to pay Assessments to the Association and comply with this Covenant, any applicable Development Area Declaration, the Design Guidelines, or the rules and regulations will not be affected by your failure to execute a Membership Agreement. Also, you must provide certain information to the Association upon acquiring a Lot or Condominium Unit.

(c) Every Member will have a right and easement of enjoyment in and to all

of the Master Community Facilities and an access easement by and through any Master Community Facilities, which easements will be appurtenant to and will pass with the title to such Member's Lot or Condominium Unit, subject to Section 3.03(b) above and subject to the following restrictions and reservations:

(i) The right of the Association, acting through its Board, to suspend the

Member's voting rights and right to use the Master Community Facilities

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

for any period during which any Assessment against such Member's Lot or Condominium Unit remains past due and for any period during which such member is in violation of any provision of this Covenant;

(ii) The right of the Association, acting through its Board, [text obscured by recording stamp]

dedicate or transfer all or any part of the Master Communfty-facillhes to any public agency, authority or utility for such purpose;

(iii) The right of the Association, acting through its Board, and Declarant to

grant easements or licenses over and across the Master Community Facilities to any third party;

(iv) The right of the Association, acting through its Board, to borrow money

for the purpose of improving the Master Community Facilities and, in furtherance thereof, mortgage the Master Community Facilities;

(v) The right of the Association, acting through its Board, to make reasonable

rules and regulations regarding the use of the Master Community Facilities and any Improvements thereon; and

(vi) The right of the Association, acting through its Board, to contract for

services with any third parties on such terms as the Association may determine.

(d) Each Owner of a Lot or Condominium Unit which has been designated as

a beneficiary of Special Common Area in a Development Area Declaration or other recorded written notice will have a right and easement of enjoyment in and to all of such Special Common Area, and an access easement by and through such Special Common Area, which easement will be appurtenant to and will pass with title to such Owner's Lot or Condominium Unit, subject to Section 3.03(b) above and subject to the following restrictions and reservations:

(i) The right of Declarant to restrict the use of the Special Common Area to

the. beneficiaries designated in a Development Area Declaration or other written notice recorded in the Official Public Records of Hays County, Texas;

(ii) The right of the Association, acting through its Board, to suspend the

Members voting rights and right to use the Special Common Area for any period during which any Assessment against such Member's Lot or Condominium Unit remains past due and for any period during which such Member is in violation of any provision of this Covenant;

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

(iii) The right of the Association, acting through its [text obscured by recording stamp]

transfer all or any part of the Special Common Area to any public agency, authority or utility for any purpose;

(iv) The right of the Association, acting through its Board, and Declarant to

grant easements or licenses over and across the Special Common Area to any third party;

(v) The right of the Association, acting through its Board, to borrow money

for the purpose of improving the Special Common Area, and, in furtherance thereof, mortgage the Special Common Area;

(vi) The right of the Association, acting through its Board, to make reasonable

rules and regulations regarding use of the Special Common Area and any Improvements thereon; and

(vii) The right of the Association, acting through its Board, to contract for

services with any third parties on such terms as the Association may determine.

3.04 Voting Rights

Due to the number of Lots and Condominium Units that may be

developed in the Property, this Covenant provides for a representative system of voting. The Owners of Lots and Condominium Units in each Neighborhood elect a "Neighborhood Delegate" and an alternative Neighborhood Delegate, in the manner provided below, to cast the votes of all Lots and Condominium Units in the Neighborhood on matters requiring a vote of the membership, except where this Covenant specifically requires a vote of the Owners. However, until such time as the Board first calls for election of a Neighborhood Delegate for a particular portion of the Property (whether or not such portion of the Property has yet been assigned to a Neighborhood), each Owner of a Lot or Condominium Unit within such portion of the Property shall be considered a "Neighborhood Delegate" and may personally cast the vote allocated to such Owner's Lot or Condominium Unit on any issue requiring a vote of the Neighborhood Delegates under this Covenant. Notwithstanding the foregoing or any provision to [text obscured by recording stamp] expiration or termination of the Development Period, Declarant will be entitled to appoint and remove all members of the Board.

Candidates for election as the Neighborhood Delegate and alternate Neighborhood Delegate from a Neighborhood shall be Owners of Lots or Condominium Units in the Neighborhood, spouses of such Owners, or residents of the Neighborhood. The Neighborhood Delegate and the alternate Neighborhood Delegate shall be elected on a biennial basis (once every two years), either by written ballot or at a meeting of the Owners within each Neighborhood, as the Board determines; provided, upon written petition signed by Owners holding at least ten percent (10%) of the votes within any Neighborhood, the election for such Neighborhood shall be held at a meeting. The presence, in person or by proxy, of Owners

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

representing at least forty percent (40%) of the total votes in a Neighborhood shall constitute a quorum at any Neighborhood meeting. The Board shall call for the first election of a Neighborhood [text obscured by recording stamp] Neighborhood not later than four [text obscured by recording stamp] Unit in the Neighborhood to a Person other than Declarant. Subsequent elections shall, if necessary, be held within thirty [text obscured by recording stamp] position who receives the greatest number of votes shall be elected to serve until his or her successor is elected.

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

Any Neighborhood Delegate may be removed, with or without cause, upon the vote or written petition of Owners holding a majority of the votes [text obscured by recording stamp] Condominium Units in the Neighborhood that the Neighborhood Delegate represents.

The Neighborhood Delegate or, in his or her absence, the alternate Neighborhood Delegate attends Association meetings and casts all votes allocated to Lots and Condominium Units in the Neighborhood that he or she represents on any matter as to which such Neighborhood Delegate is entitled to vote under this Covenant. A Neighborhood Delegate may cast all votes allocated to Lots and Condominium Units in the Neighborhood in such delegate's discretion and may, but need not, poll the Owners of Lots and Condominium Units in the Neighborhood which he or she represents prior to voting.

Neighborhood Delegates are subordinate to the Board and their responsibility and authority does not extend to policymaking, supervising, or otherwise being involved in Association governance beyond voting on matters put to a vote of the membership.

In any situation in which an Owner is entitled personally to exercise the vote allocated to such Owner's Lot or Condominium Unit, if there is more than one Owner of a Unit, the vote for such Unit shall be exercised as the co-Owners holding a majority of the ownership interest in the Lot or Condominium Unit determine among themselves and advise the Secretary of the association in writing prior to the close of balloting. Any co-Owner may cast the vote for the Lot or Condominium Unit, and majority agreement shall be conclusively presumed unless another co-Owner of the Lot or Condominium Unit protests promptly to the President or other person presiding over the meeting on the balloting, in the case of a vote taken outside of a meeting. In the absence of a majority agreement, the Lot or Condominium Unit's vote shall be suspended if two or more co-Owners seek to exercise it independently.

3.05 Vote Allocation

(a) The Owner of each Lot will be allocated one [text obscured by recording stamp]

owned. In the event of the re-subdivision of any Lot into two or more Lots: (i) the number of votes to which such Lot is entitled will be increased as necessary to retain the ratio of one ( vote for each Lot resulting from such re-subdivision, e.g., each Lot resulting from the resubdivision will be entitled to one [text obscured by recording stamp] subdivision will be allocated one [text obscured by recording stamp]

two [text obscured by recording stamp] and Assessments will continue to be determined according to the number of original Lots contained in such consolidated Lot. Nothing in this Covenant will be construed [text obscured by recording stamp] V p authorization for any re-subdivision or consolidation of Lots, such actions [text obscured by recording stamp] the conditions and restrictions of the applicable Development Area Declaration.

(b) The Owner of each Condominium Unit will be allocated one [text obscured by recording stamp]

each Condominium Unit so owned.

(c) In addition to the votes to which Declarant is entitled by reason of Section

3.05(a) and Section 3.05(b), for every one [text obscured by recording stamp] entity, Declarant will have four [text obscured by recording stamp] Development Period. Notwithstanding any provision to the contrary in this Covenant. until the expiration or termination of the Development Period. Declarant will be entitled to appoint and remove all members of the Board. Declarant may terminate its right as to the appointment and removal of one or all the Board members by the recordation of a termination. notice executed by Declarant and recorded in the Official Public Records of Hays County. Texas. In the event Declarant terminates its right to appointment and remove less than all of the Board members, the Board positions to which the termination applies will be elected by the Neighborhood Delegates. Each Board member elected by the Neighborhood Delegates in accordance with the foregoing sentence will be elected for a term of one [text obscured by recording stamp]

(d) When more than one person or entity owns a portion of the fee simple

interest in any Lot or Condominium Unit, all such persons or entities will be Members. The vote or votes (or fraction thereof) for such Lot or Condominium Unit will be exercised by the person so designated in writing to the Secretary of the Association by the Owner of such Lot or Condominium Unit (or in the Membership Agreement relating to such Lot or Condominium Unit if required by the Board), and in no event will the vote for such Lot or Condominium Unit exceed the total votes to which such Lot or Condominium Unit is otherwise entitled under this Section 3.05.

[This recorded copy bears a handwritten margin annotation at this point ("Deleted / Replaced IAW 2012 Amendment"), indicating the First Amendment to the Master Covenant (Doc. No. 11030431) later revised the adjacent provision. The annotation is not part of the originally recorded 2006 text; consult the recorded First Amendment for the operative language.]

(e) The right of any Owner to vote may be suspended by the Association,

acting through the Board, for any period during which any Assessment against such Owner's Lot(s) or Condominium Unit(s) remains past due, for any period during which such Owner or such Owners' Lot(s) or Condominium Unit(s) is in violation of this Covenant, and, as provided in Section 3.03(b) above, for any period during which such Owner has failed to execute and deliver a Membership Agreement. In addition, Declarant may suspend the right of any Owner to vote during the period such Owner's Lot or Condominium Unit is exempt from Assessments in accordance with Section 5.09(f).

3.06 Powers

The Association will have the powers of a Texas non-profit corporation.

It will further have the power to do and perform any and all acts that may be necessary or proper, for or incidental to, the exercise of any of the express powers granted to it by the laws

of Texas or this Covenant. Without in any way limiting the generality of [text obscured by recording stamp] sentences, the Board, acting on behalf of the Association, will have the following powers at all times:

(a) Rules and Bylaws. To make, establish and promulgate, and in its

discretion to amend from time to time, or repeal and re-enact, such rules, regulations, and Bylaws not in conflict with this Covenant, as it deems proper, covering any and all aspects of the Property (including the operation, maintenance and preservation thereof) or the Association.

When you acquire a Lot or Condominium Unit, you will be required to comply with the terms of the Master Restrictions. Yes, there are lots of rules!

(b) Insurance. To obtain and maintain in effect, policies of insurance that, in

the opinion of the Board, are reasonably necessary or appropriate to carry out the Association's functions.

(c) Records. To keep books and records of the Association's affairs, and to

make such books and records, together with current copies of the Master Restrictions available for inspection by the Owners, Mortgagees, and insurers or guarantors of any Mortgage upon written request. Appointments will be scheduled Monday - Friday between 9 a.m. and 5 p.m.

(d) Assessments. To levy and collect Assessments and to determine

Assessment Units, as provided in Article 5 below.

(e) Right of Entry and Enforcement. To enter at any time without notice in

an emergency (or in the case of a non-emergency, after twenty-four [text obscured by recording stamp] notice), without being liable to any Owner, upon any Lot and into any Improvement thereon or into any Condominium Unit, for the purpose of enforcing the Master Restrictions or for the purpose of maintaining or repairing any area, Improvement or other facility to conform to the Master Restrictions. The expense incurred by the Association in connection with the entry upon any Lot or Condominium Unit and the maintenance and repair work conducted thereon or therein will be a personal obligation of the Owner of the Lot or Condominium Unit so entered, will be deemed an Assessment against such Lot or Condominium Unit, will be secured by a lien upon such Lot or Condominium Unit, and will be enforced in the same manner and to the same extent as provided in Article 5 hereof for Assessments. The Association will have the power and authority from time to time, in its own name and on its own behalf, or in the name of and on behalf of any Owner who consents thereto, to commence and maintain actions and suits to enforce, by mandatory injunction or otherwise, or to restrain and enjoin, any breach or threatened breach of the Master Restrictions. The Association is also authorized to settle claims, enforce liens and take all such action as it may deem necessary or expedient to enforce the Master Restrictions; provided, however, that the Board will never be authorized to expend any Association funds for the purpose of bringing

. . agamst suit . . successors or assigns. Declarant, or their

The Association [text obscured by recording stamp] demolish any Improvements on any Lot or Condominium Unit other than Master Community Facilities or Special Common Area in enforcing this Covenant before a judicial order authorizing such action has been obtained by the Association, or before the written consent of the Owner(s) of the affected Lot(s) or Condominium Unit(s) has been obtained. EACH SUCH OWNER WILL INDEMNIFY AND HOLD HARMLESS THE ASSOCIATION, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ANY COST, LOSS, DAMAGE, EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION INCURRED OR THAT MAY ARISE BY REASON OF THE ASSOCIATION'S ACTS OR ACTIVITIES UNDER THIS SECTION 3.06(e) (INCLUDING ANY COST, EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION ARISING OUT OF THE ASSOCIATION'S NEGLIGENCE IN CONNECTION THEREWITH), EXCEPT FOR SUCH COST, LOSS, DAMAGE, EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION ARISING BY REASON OF THE ASSOCIATION'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. "GROSS NEGLIGENCE" DOES NOT INCLUDE SIMPLE NEGLIGENCE, CONTRIBUTORY NEGLIGENCE OR SIMILAR NEGLIGENCE SHORT OF ACTUAL GROSS NEGLIGENCE.

(f) Legal and Accounting Services. To retain and pay for legal and

accounting services necessary or proper in the operation of the Association.

(g) Conveyances. To grant and convey to any person or entity the real

property and/or other interest, including fee title, leasehold estates, easements, right-of-way or mortgages, out of, in, on, over, or under any Master Community Facilities or Special Common Area for the purpose of constructing, erecting, operating or maintaining the following:

(i) Parks, playgrounds or other recreational facilities or structures;

(ii) Roads, streets, sidewalks, signs, street lights, walks, driveways, trails and

paths;

(iii) Lines, cables, wires, conduits, pipelines or other devices for utility

purposes;

(iv) Sewers, water systems, storm water drainage systems, sprinkler systems

and pipelines; and/or

(v) Any similar improvements or facilities.

Nothing set forth above, however, will be construed to permit use or occupancy of any Improvement or other facility in a way that would violate applicable use and occupancy restrictions imposed by the Master Restrictions or by any governmental authority or any QuasiGovernmental Authority.

(h) Manager. To retain and pay for the services of a person [text obscured by recording stamp]

"Manager") to manage and operate the Association, including its property, to the extent deemed advisable by the Board. Personnel may be employed directly by the Association or may be furnished by the Manager. Each contract entered into between the Association and the Manager will be terminable by the Association. To the extent permitted by law, the Board may delegate any other duties, powers and functions to the Manager. In addition, the Board may adopt transfer fees, resale certificate fees, or any other fees associated with the provision of management services to the Association or its Members. THE MEMBERS HEREBY RELEASE THE ASSOCIATION AND THE MEMBERS OF THE BOARD FROM LIABILITY FOR ANY OMISSION OR IMPROPER EXERCISE BY THE MANAGER OF ANY SUCH DUTY, POWER OR FUNCTION SO DELEGATED.

(i) Property Services. To pay for water, sewer, garbage removal, street

lights, landscaping, gardening and all other utilities, services, repair and maintenance for any portion of the Property and any Master Community Facilities, including but not limited to private or public recreational facilities, easements, roads, roadways, right-of-ways, signs, parks, parkways, median strips, sidewalks, paths, trails and ponds.

G) Other Services and Properties. To obtain and pay for any other property and services, and to pay any other taxes or Assessments that the Association or the Board is required or permitted to secure or to pay for pursuant to applicable law (including the Texas Non-Profit Corporation Act) or under the terms of the Master Restrictions or as determined by the Board.

(k) Construction. To construct new Improvements or additions to any

property owned, leased, or licensed by the Association, subject to the approval of the Board.

[text obscured by recording stamp] with Declarant or any third party on such terms and provisions as the Board will determine, to operate and maintain any Master Community Facilities, Special Common Area, or other property, or to provide any service, including but not limited to cable, utility, or telecommunication services, or perform any function on behalf of Declarant, the Board, the Association, or the Members.

(m) Property Ownership. To acquire, own and dispose of all types of real and

personal property, including habitat, whether by grant, lease, easement, gift or otherwise.

(n) Authority with Respect to Development Area Declaration. To do any act,

thing or deed that is necessary or desirable, in the judgment of the Board, to implement, administer or enforce any Development Area Declaration. Any decision by the Association to delay or defer the exercise of the power and authority granted by this Section 3.06(n) will not subsequently in any way limit, impair or affect ability of the Association to exercise such power and authority.

(o) Membership Privileges. To establish rules and [text obscured by recording stamp]

limiting the use of the Master Community Facilities, Special Common Area, and any Improvements thereon.

3.07 Acceptance and Control of Master Community Facilities

(a) Transfers and Conveyance by Declarant. The Association may acquire, hold, and

dispose of any interest in tangible and intangible personal property and real property. Declarant and its designees may transfer or convey to the Association interests in real or personal property within or for the benefit of the Property, or the Property and members of the public, and the Association will accept such transfers and conveyances. Such property may be improved or unimproved and may consist of fee simple title, easements, leases, licenses, or other real or personal property interests. Such property, rights, and/or obligations will be accepted by the Association and thereafter will be maintained as Master Community Facilities or Special Common Area, as applicable, by the Association for the benefit of the Property and/or members of the public subject to any restrictions set forth in the deed or other instrument transferring or assigning such property to the Association. Upon the written request of Declarant, the Association will re-convey to the grantor thereof any real property, easement or license interest that was originally conveyed to the Association for no payment to the extent conveyed in error or needed to make minor adjustments in property lines.

(b) Management and Control. The Association is responsible for management,

operation, and control of all of the properties and facilities for which the Association has responsibility under the Master Restrictions, or for which the Association otherwise agrees to assume responsibility, regardless of who owns them (collectively, the" Area of Common Responsibility"). This obligation expressly includes, without limitation, the Master Community Facilities and all improvements thereon (including, without limitation, furnishings, equipment, and common landscaped areas), subject to any covenants set forth in the deed or other instrument transferring the property to the Association. The Association may enter into leases, licenses, or operating agreements with respect to portions of the Master Community Facilities, for payment or no payment, as the Board deems appropriate. The Association may permit use of Master Community Facilities by persons other than Owners and occupants of Lots or Condominium Units and may charge use fees, in such amount as the Board may establish, for such use.

(c) Maintenance of Areas of Common Responsibility. The Association shall

maintain the Area of Common Responsibility and keep it in good, clean, attractive, and sanitary condition, order, and repair consistent with this Covenant. The Area of Common Responsibility includes, but is not limited to:

(i) the Master Community Facilities which may include, but are not limited

to, landscaping and other flora, parks, ponds, signage, structures, and improvements, including any private streets (unless otherwise designated

as Special Common Area), and paths and trails, situated [text obscured by recording stamp] Community Facilities;

(ii) landscaping, sidewalks, street lights, and signage within public right-of-

way within or abutting the Property, except to the extent that responsibility therefore is assigned to the Owners of adjacent Lots in accordance with this Covenant (it being acknowledged that each Owner, and not the Association, will be obligated to maintain any landscaping located upon such Owner's Lot, as well as any landscaping located between such Owner's Lot and a right-of-way or sidewalk adjacent to such Owner's Lot);

(iii) such portions of any additional property as may be included within the

Area of Common Responsibility pursuant to this Covenant, any Development Area Declaration, or any covenant or agreement for maintenance entered into by, or otherwise binding on the Association; and

(iv) any property and facilities that Declarant owns and makes available, on a

temporary or permanent basis, for the primary use and enjoyment of the Association and some or all of its members. Declarant shall identify any such property and facilities by written notice to the Association, and they shall remain part of the Area of Common Responsibility and be maintained by the Association until Declarant revokes such privilege of use and enjoyment by written notice to the Association.

The Association may maintain other property it does not own, including, without limitation, Lots and property dedicated to the public.

Except as otherwise specifically provided herein, all costs associated with maintenance, repair, and replacement of the Area of Common Responsibility shall be a common expense to be included in the Assessments levied by the Association, without prejudice to the Association's right to seek reimbursement from the owner(s) of, or other Persons responsible for, certain portions of the Area of Common Responsibility pursuant to this Covenant, other recorded covenants, or agreements with the owner(s) thereof. All costs associated with maintenance, repair, and replacement of Special Common Area shall be a Service Area Expense assessed against the Service Area(s) to which the Special Common Area is assigned, notwithstanding that the Association may be responsible for performing such maintenance.

In the event that the Association fails properly to perform its maintenance responsibilities hereunder, during the Development Period Declarant may, upon not less than ten [text obscured by recording stamp] performed and in such event, shall be entitled to reimbursement from the Association for all costs incurred.

(d) Discontinuation of Operation. The Association shall maintain the Master

Community Facilities in continuous operation unless Declarant during the Development [text obscured by recording stamp] Period and Members representing seventy-five percent (75%) of the [text obscured by recording stamp] Association consent in writing to discontinue such operation. If the property is Special Common Area, any discontinuation shall also require the approval in writing of at least seventy-five percent (75%) (or such higher percentage if a Development Area Declaration so requires) of the Owners to whom such Special Common Area is assigned, and Declarant during the Development Period. This Section shall not apply to restrict the Board's ability to establish reasonable operating hours, which may vary by season, or to preclude temporary closures or interruptions in operation as the Board may determine appropriate to perform maintenance or repairs. The Association, acting through the Board, may temporarily or permanently close portions of any such streets or roadways to control traffic or traffic flow, or to enhance privacy, or for similar purposes, without approval of the membership.

(e) Relationships with Other Properties and Entities. The Association may contract

with the owner of any neighboring property and any entity that provides services to all or any portion of the Members for the purpose of sharing costs associated with: (a) maintenance and operation of mutually beneficial properties [text obscured by recording stamp] provision of mutually beneficial services.

(f) Relationships with Quasi-Governmental Entities and Tax Exempt Organizations.

The Association may create, enter into agreements or contracts with, or grant exclusive and/or non-exclusive easements over the Master Community Facilities to QuasiGovernmental Entities or non-profit, tax-exempt organizations, the operation of which confers some benefit upon the Property, the Association, its members, or residents. The Association may contribute money, real or personal property, or services to such entity. Any such contribution shall be a common expense to be included in the Assessments levied by the Association and included as a line item in the Association's annual budget. For the purposes of this Section, a "tax-exempt organization" shall mean an entity which is exempt from federal income taxes under the Internal Revenue Code (the "Code"), such as, but not limited to, entities which are exempt from federal income taxes under Sections [text obscured by recording stamp] -501(c)( [text obscured by recording stamp]

The Association may maintain multiple-use facilities within the Property and allow use by tax-exempt organizations. Such use may be on a scheduled or "first-come, first-served" basis. A reasonable maintenance and use fee may be charged for the use of such facilities.

3.08 Indemnification

To the fullest extent permitted by applicable law but without

duplication (and subject to) any rights or benefits arising under the Certificate or Bylaws of the Association, the Association will indemnify any person who was, or is, a party, or is threatened to be made a party to any threatened pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is, or was, a director, officer, committee member, employee, servant or agent of the Association against expenses, including attorneys' fees, reasonably incurred by him in connection with such action, suit or

proceeding if it is found and determined by the Board or a Court that he [text obscured by recording stamp] and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Association, or [text obscured by recording stamp] believe his conduct was unlawful. The termination of any action, suit or proceeding by settlement, or upon a plea of nolo contendere or its equivalent, will not of itself create a presumption that the person did not act in good faith or in a manner which was reasonably believed to be in, or not opposed to, the best interests of the Association or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

3.09 Insurance

The Board may purchase and maintain, at the expense of the

Association, insurance on behalf of any person who is acting as a director, officer, committee member, employee, servant or agent of the Association against any liability asserted against him or incurred by him in any such capacity, or arising out of his status as such, whether or not the Association would have the power to indemnify him against such liability or otherwise.

3.10 Control by Declarant

Notwithstanding anything to the contrary, Declarant, or

its successors or assigns, will have the absolute right to appoint members of the Board and their successors (any appointment of a successor will be a deemed removal of the Board member being replaced by such appointment) until the expiration or termination of the Development Period. Declarant, at its option, may assign or delegate, in whole or in part, its rights and powers to the Association, the Board or any other entity provided such designation is in writing.

3.11 Bulk Rate Contracts

Without limitation on the generality of the Association

powers set out in Section 3.06 hereinabove, the Association will have the power to enter into Bulk Rate Contracts at any time and from time to time. The Association may enter into Bulk Rate Contracts with any service providers chosen by the Board (including Declarant, and/or any entities in which Declarant, or the owners or partners of Declarant are owners or participants, directly or indirectly). The Bulk Rate Contracts may be entered into on such terms and provisions as the Board may determine in its sole and absolute discretion and, unless prohibited by applicable law, in no event may an Owner then separately contract for services to be provided to such Owner pursuant to any Bulk Rate Contract. The Association may, at its option and election add the charges payable by such Owner under such Bulk Rate Contract to the Assessments against such Owner's Lot or Condominium Unit. Additionally, any QuasiGovernmental Entity providing services to the Property may bill for, and receive on behalf of the Association, the charges payable by an Owner under a Bulk Rate Contract, which amounts shall be paid to the Association promptly by such Quasi-Governmental Entity. In this regard, it is agreed and understood that, if any Owner fails to pay any charges due by such Owner under the terms of any Bulk Rate Contract, then the Association will be entitled to collect such charges by exercising the same rights and remedies it would be entitled to exercise under this Covenant with respect to the failure by such Owner to pay Assessments, including without limitation the right to foreclose the lien against such Owner's Lot or Condominium Unit which is reserved under the terms and provisions of this Covenant. In addition, in the event of nonpayment by any Owner of any charges due under any Bulk Rate Contract and after the lapse of at least

twelve [text obscured by recording stamp] i),3° 53 84 written notice to such Owner (which may run concurrently with such twelve [text obscured by recording stamp] in addition to all other rights and remedies available at law, equity or otherwise, terminate, in such manner as the Board deems appropriate, any utility service or other service provided at the cost of the Association and not paid for by such Owner (or the occupant of such Owner's Lot or Condominium Unit) directly to the applicable service or utility provider. Such notice will consist of a separate mailing or hand delivery at least five [text obscured by recording stamp] termination, with the title "termination notice" or similar language prominently displayed on the notice. The notice will include the office or street address where the Owner (or the occupant of such Owner's Lot or Condominium Unit) can make arrangements for payment of the bill and for re-connection or re-institution of service. No utility or cable television service will be disconnected on a day, or immediately preceding a day, when personnel are not available for the purpose of collection and reconnecting such services.

3.12 Maintenance of Condominium Regime Common Elements

A Condominium

Declaration may, but need not, grant to the Association an easement or other possessory interest in and to the Regime's "Common Elements" (as defined in the applicable Condominium Declaration), and provide that the Association will maintain such Common Elements and perform certain other maintenance responsibilities. Such Common Elements may include, without limitation, private roadways, sidewalks, and landscaped common areas. In such event: (i) the Association will be obligated to accept such maintenance responsibilities which have been allocated to it pursuant to the applicable Condominium Declaration, and will maintain such Common Elements, and discharge any such other maintenance obligations delegated to the Association pursuant to the applicable Condominium Declaration, all as set forth more fully in the applicable Condominium Declaration; and (ii) all costs incurred by the Association in connection with its discharging the maintenance obligations delegated to it pursuant to the applicable Condominium Declaration will be a common expense to be included in the Assessments levied by the Association and included as a line item in the Association's annual budget.

3.13 Community Technology

(a) Community Systems. Without limiting the generality of Section 3.06, the

Association is specifically authorized to provide, or to enter into contracts with other persons to provide, central telecommunication receiving and distribution systems (e.g. cable television, high speed data/Internet/i ntranet services, and security monitoring) and related components, including associated infrastructure, equipment, hardware, and software, to serve the Community ("Community Systems"). Any such contracts may provide for installation, operation, management, maintenance, and upgrades or modifications to the Community Systems as the Board determines appropriate. The Association will have no obligation to utilize any particular provider(s).

(b) Opportunities for Community Interaction. The Association may make use of

computers, the Internet, and expanding technology to facilitate community interaction and

encourage participation in Association activities. For example, the Association may sponsor a community cable television channel, create and maintain a community intranet or Internet home page,. maintain an [text obscured by recording stamp] II l related services and opportumties for Owners and occupants to mteract and parhcrpale m Association-sponsored activities. To the extent Texas law permits, and unless otherwise specifically prohibited in the Master Restrictions, the Association may send notices by electronic means, hold Board or Association meetings and permit attendance and voting by electronic means, and send and collect Assessment and other invoices by electronic means. The Board will specifically have the authority to adopt policies and procedures related to (i) Community Systems access by Owners, residents and other parties; (ii) using the Community Systems for the purpose of sending any notice required by the Master Restrictions; and (iii) electronic voting and the establishment of any quorum.

ARTICLE 4 — Insurance

INSURANCE

4.01 Insurance

Each Owner will be required to purchase and maintain Homeowners

Insurance on the Improvements located upon such Owner's Lot or Condominium Unit. The Association will not be required to maintain insurance on the Improvements constructed upon any Lot. The Association may, however, obtain such insurance as it may deem necessary, including but not limited to such policies of liability and property damage insurance as the Board, in its discretion, may deem necessary. Insurance premiums for such policies will be a common expense to be included in the Assessments levied by the Association. The acquisition of insurance by the Association will be without prejudice to the right and obligation of any Owner to obtain additional individual insurance.

ARE YOU COVERED? The Association will not provide insurance which covers an Owner's Lot or Condominium Unit, or an Im rovements or ersonal ro er located on or in a Lot or Condominium Unit.

4.02 Restoration

In the event of any fire or other casualty, the Owner will promptly

repair, restore and replace any damaged or destroyed structures to their same exterior condition existing prior to the damage or destruction thereof. Such repair, restoration or replacement will be commenced and completed in a good and workmanlike manner using exterior materials identical to those originally used in the structures damaged or destroyed. To the extent that the Owner fails to commence such repair, restoration or replacement of substantial or total damage or destruction within one hundred and twenty [text obscured by recording stamp] or destruction, and thereafter prosecute same to completion, or if the Owner does not clean up any debris resulting from any damage within thirty [text obscured by recording stamp] damage, the Association may commence, complete or effect such repair, restoration, replacement or clean-up, and such Owner will be personally liable to the Association for the cost of such work; provided, however, that if the Owner is prohibited or delayed by law, regulation or administrative or public body or tribunal from commencing such repair, restoration, replacement or clean-up, the rights of the Association under this provision will not

arise until the expiration of thirty [text obscured by recording stamp] Owner fails to pay such cost upon demand by the Association, the cost thereof (plus interest from the date of demand until paid at the highest rate allowed by applicable usury laws then in effect on the amount of the Assessment from the due date therefor (or if there is no such highest rate, then at the rate of 1 and 1/2% per month), together with all costs [text obscured by recording stamp] collection, including reasonable attorneys fees. Any such amounts added to the Assessments chargeable against a Lot or Condominium Unit will be secured by the liens reserved in the Covenant for Assessments and may be collected by any means provided in this Covenant for the collection of Assessments, including, but not limited to, foreclosure of such liens against the Owner's Lot or Condominium Unit. EACH SUCH OWNER WILL INDEMNIFY AND HOLD HARMLESS THE ASSOCIATION AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ANY COST, LOSS, DAMAGE, EXPENSE, LIABILITY, CLAIM OR CAUSE OF ACTION INCURRED OR THAT MAY ARISE BY REASON OF THE ASSOCIATION'S ACTS OR ACTIVITIES UNDER THIS SECTION 4.02, EXCEPT FOR SUCH COST, LOSS, DAMAGE, EXPENSE, LIABILITY, CLAIM OR COST OF ACTION ARISING BY REASON OF THE ASSOCIATION'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. "GROSS NEGLIGENCE" AS USED HEREIN DOES NOT INCLUOE SIMPLE NEGLIGENCE, CONTRIBUTORY NEGLIGENCE OR SIMILAR NEGLIGENCE SHORT OF ACTUAL GROSS NEGLIGENCE.

4.03 Mechanic's and Materialmen's Lien

Each Owner whose structure is repaired,

restored, replaced or deaned up by the Association pursuant to the rights granted under this Article 4, hereby grants to the Association an express mechanic's and materialmen' s lien for the reasonable cost of such repair, restoration, or replacement of the damaged or destroyed Improvement to the extent that the cost of such repair, restoration or replacement exceeds any insurance proceeds allocable to such repair, restoration or replacement and delivered to the Association. Upon request by the Board, and before the commencement of any reconstruction, repair, restoration or replacement, such Owner will execute all documents sufficient to effectuate such mechanic's and materialmen' s lien in favor of the Association.

ARTICLE 5 — Covenant for Assessments

COVENANT FOR ASSESSMENTS

5.01 Assessments

(a) Assessments established by the Board pursuant to the provisions of this

Article 5 will be levied against each Lot or Condominium Unit in amounts determined pursuant to Section 5.09 below. The total amount of Assessments will be determined by the Board pursuant to Section 5.03, 5.04, 5.05, 5.06 and/or 5.07 (or the Board upon the earlier expiration or termination of the Development Period) pursuant to Section 5.08.

(b) Each Assessment, together with such interest thereon and costs of

collection as hereinafter provided, will be the personal obligation of the Owner of the Lot or Condominium Unit against which the Assessment is levied and will be secured by a lien

hereby granted and conveyed by Declarant to the Association against [text obscured by recording stamp] Condominium Unit and all Improvements thereon (such lien, with respect to any Lot or Condominium Unit not in existence on the date hereof, will be deemed granted and conveyed at the time that such Lot or Condominium Unit is created). The Association may enforce payment of such Assessments in accordance with the provisions of this Article.

(c) Declarant may, but is not obligated to, reduce Assessments which would

otherwise be levied against Lots and Condominium Units for any fiscal year by the payment of a subsidy to the Association in an amount equal to the reduction in Assessments during such fiscal year. Any subsidy paid to the Association by Declarant may be treated as a contribution or a loan, in the sole and absolute discretion of Declarant. Any subsidy and the characterization thereof will be disclosed as a line item in the annual budget prepared by the Board and attributable to such Assessments. The payment of a subsidy in any given year will not obligate Declarant to continue payment of a subsidy to the Association in future years.

5.02 Maintenance Fund

The Board will establish one or more accounts into which

will be deposited all monies paid to the Association and from which disbursements will be made in performing the functions of the Association under the Master Restrictions and the Texas Non-Profit Corporation Act. The funds of the Association may be used for any purpose authorized by the Master Restrictions and the Texas Non-Profit Corporation Act, as each may be amended.

5.03 Regular Annual Assessments

Prior to the beginning of each fiscal year, the

Board will estimate the expenses to be incurred by the Association during such year in performing its functions and exercising its powers under this Covenant, including, but not limited to, the cost of all management, repair and maintenance, the cost of providing street and other lighting, the cost of administering and enforcing the covenants and restrictions contained herein, and will estimate the amount needed to maintain a reasonable provision for contingencies and an appropriate replacement reserve, and will give due consideration to any expected income and any surplus from the prior year's fund. The budget prepared by the Association for the purpose of determining Regular Annual Assessments will exclude the maintenance, repair and management costs and expenses associated with any Special Common Area. Assessments sufficient to pay such estimated net expenses will then be levied at the level of Assessments set by the Board in its sole and absolute discretion, and the Board's determination will be final and binding so long as it is made in good faith. If the sums collected prove inadequate for any reason, including nonpayment of any individual Assessment, the Association may at any time, and from time to time, levy further Assessments in the same manner. All such regular Assessments will be due and payable to the Association at the beginning of the fiscal year or during the fiscal year in such manner as the Board may designate in its sole and absolute discretion.

5.04 Special Common Area

Assessments. Prior to the beginning of each fiscal year,

the Board will prepare a separate budget covering the estimated expenses to be incurred by the

Association to maintain, repair, or manage any Special Common Area. The budget will be an estimate of the amount needed to maintain, repair and manage such Special Common Area including a reasonable provision for contingencies and an appropriate replacement reserve, .W-d [text obscured by recording stamp] will give due consideration to any expected income and surplus from the prior [text obscured by recording stamp] level of Special Common Area Assessments will be set by the Board in its sole and absolute discretion, and the Board's determination will be final and binding so long as it is made in good faith. If the sums collected prove inadequate for any reason, including non-payment of any individual Special Common Area Assessment, the Association may at any time, and from time to time, levy further Special Common Area Assessments in the same manner as aforesaid. All such Special Common Area Assessments will be due and payable to the Association at the beginning of the fiscal year or during the fiscal year in equal monthly installments on or before the first day of each month, or in such other manner as the Board may designate in its sole and absolute discretion.

5.05 Service Area Assessments

Prior to the beginning of each fiscal year, the Board

will prepare a separate budget for each Service Area reflecting the estimated Service Area Expenses to be incurred by the Association in the corning year. The total amount of estimated Service Area Expenses for each Service Area will be allocated equally among all Lots and/or Condominium Units in the benefited Service Area and will be levied as a Service Area Assessment. All amounts that the Association collects as Service Area Assessments will be held in trust for and expended solely for the benefit of the Service Area for which they were collected and will be accounted for separately from the Association's general funds.

5.06 Special Assessments

In addition to the regular annual Assessments provided

for above, the Board may levy Assessments whenever in the Board's opinion such Assessments are necessary to enable the Board to carry out the functions of the Association under this Covehant. The amount of any Assessments will be at the reasonable discretion of the Board. In addition to the Assessments authorized above, the Association may, in any fiscal year, levy a Assessment applicable to that fiscal year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Master Community Facilities or Special Common Area. Any Assessment levied by the Association for the purpose of defraying, in whole or in part, costs of any construction, reconstruction, repair or replacement of capital improvement upon the Master Community Facilities will be levied against all Owners based on Assessment Units. Any Assessments levied by the Association for the purpose of defraying in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon any Special Common Area will be levied against all Owners who have been designated as a beneficiary of such Special Common Area and will be allocated among such Owners based on Assessment Units.

5.07 Individual Assessments

In addition to any other Assessments, the Board may

levy an Individual Assessment against an Owner and the Owner's Lot or Condominium Unit. Individual Assessments may include, but are not limited to: interest, late charges, and collection costs on delinquent Assessments; reimbursement for costs incurred in bringing an Owner or the Owner's Lot or Condominium Unit into compliance with the Master Restrictions; fines for

[text obscured by recording stamp] violations of the Master Restrictions; transfer-related fees and resale [text obscured by recording stamp] estoppel letters and project documents; insurance deductibles; reimbursement for damage or waste caused by willful or negligent acts of the Owner, the Owner's guests, invitees or residents of the Owner's Lot or Condominium Unit; common expenses that benefit fewer than all of the Units, which may be assessed according to benefit received; fees or charges levied against the Association on a per-Lot/Condominium Unit basis; costs and fees imposed upon an Owner by the Association to replace an access control device which the Owner has lost, misplaced or stolen; and "pass through" expenses for services to Lots and/or Condominium Units provided through the Association and which are equitably paid by each Lot and/or Condominium Unit according to benefit received.

5.08 Working Capital Assessment

Each Owner (other than Declarant) of a Lot or a

Condominium Unit will pay a one-time Assessment to the Association in such amount as may be determined by the Board from time to time in its sole and absolute discretion. Such Assessment need not be uniform among all Lots and/or Condominium Units, and the Board is expressly authorized to levy Assessments of varying amounts depending on the size, use and general character of the Lots and/or Condominium Units then being made subject to such levy. The initial Assessment will be $150.00 payable to the Association at the time a Lot or Condominium Unit is conveyed from Declarant to any Owner; provided, however, that Declarant may, at any time, amend the amount required to be paid as a Assessment, or the Lots and/or Condominium Units to which it applies, upon the recordation in the Official Public Records of Hays County, Texas of a written notice, signed by a duly authorized officer of the Association, setting forth the amount of the Assessment and the Lots and/or Condominium Units to which it applies.

Notwithstanding the foregoing provision, the following transfers will not be subject to the Assessment: (i) foreclosure of a deed of trust lien, tax lien, or the Association's Assessment lien; (ii) transfer to, from, or by the Association; (iii) voluntary transfer by an Owner to one or more co-owners, or to the Owner's spouse, child, or parent. Additionally, an Owner who (i) is a Homebuilder; or (ii) a Development Owner will not be subject to the Assessment; however, the Assessment will be payable by any Owner who acquires a Lot and/or a Condominium Unit from a Homebuilder or Development Owner for residential living purposes or by any Owner who: (i) acquires a Lot and/or a Condominium Unit and is not in the business of constructing single-family residences for resale to a third party; or (ii) who acquires the Lot for any purpose other than constructing a single-family residence (including a Condominium Unit) thereon for resale to a third party. In the event of any dispute regarding the application of the Assessment to a particular Owner, Declarant' s determination regarding application of the exemption will be binding and conclusive without regard to any contrary interpretation of this Section 5.13. The Assessment will be in addition to, not in lieu of, any other Assessments levied in accordance with this Article 5 and will not be considered an advance payment of such Assessments. The Assessment hereunder will be due and payable to the Association immediately upon each transfer of title to the Lot or Condominium Unit, including upon transfer of title from one Owner of such Lot or Condominium Unit to any subsequent purchaser or transferee thereof. The Association will have the power to waive the payment of any Assessment attributable to a

Lot or Condominium Unit by the recordation in the Official Public Records [text obscured by recording stamp] Texas of a waiver notice executed by a majority of the Board members of the Association.

5.09 Amount of Assessment

(a) The Board will levy Assessments against each Lot and Condominium

Unit on the basis of the" Assessment Units" (as defined in Section 5.09(b) below) allocated to such Lot or Condominium Unit. Unless otherwise provided in this Covenant, Assessments levied pursuant to Section 5.03 and Section 5.06 will be levied uniformly against each Assessment Unit. Special Common Area Assessments levied pursuant to Section 5.04 will be levied uniformly against each Assessment Unit allocated to a Lot that has been designated as a beneficiary of the Special Common Area to which such Special Common Area Assessment relates. Service Area Assessments levied pursuant to Section 5.05 will be levied uniformly against each Assessment Unit allocated to a Lot that has been included in the Service Area to which such Service Area Assessment relates.

(b) Each Lot will constitute one [text obscured by recording stamp]

(c) Each Condominium Unit will constitute 0.75 "Assessment Units".

(d) Notwithstanding anything in this Covenant to the contrary, no

Assessments will be levied upon Lots or Condominium Units owned by Declarant.

(e) Declarant may, in its sole discretion, elect to: (i) exempt any platted, un-

platted, improved or unimproved portion of the Property, Lot or Condominium Unit from Assessments; or (ii) delay the levy of Assessments against any platted, un-platted, unimproved or improved portion of the Property, Lot or Condominium Unit.

5.10 Late Charges

If any Assessment, whether regular or special, is not paid by the

due date applicable thereto, the Owner responsible for the payment may be required by the Board, at the Board's election at any time and from time to time, to pay a late charge in such amount as the Board may designate, and the late charge (and any reasonable handling costs) will be levied as an Individual Assessment against the Lot or Condominium Unit owned by such Owner, collectible in the manner as provided for collection of Assessments, including foreclosure of the lien against such Lot or Condominium Unit; provided, however, such charge will never exceed the maximum charge permitted under applicable law.

5.11 Owner's Personal Obligation for Payment of Assessments

Assessments levied

as provided for herein will be the personal and individual debt of the Owner of the Lot or Condominium Unit against which are levied such Assessments. No Owner may exempt himself from liability for such Assessments. In the event of default in the payment of any such Assessment, the Owner of the Lot or Condominium Unit will be obligated to pay interest on the amount of the Assessment at the highest rate allowed by applicable usury laws then in effect on the amount of the Assessment from the due date therefor (or if there is no such highest rate, then at the rate of 1 and 1/2% per month), together with all costs and expenses of collection,

including reasonable attorneys fees. Such amounts will be levied as an [text obscured by recording stamp] against the Lot or Condominium Unit owned by such Owner.

5.12 Application of Payments

The Association may adopt and amend policies

regarding the application of payments. After the Association notifies the Owner of a delinquency, any payment received by the Association may be applied in the following order: Individual Assessments, Deficiency Assessments, Special Assessments, and (lastly) Regular Assessments. The Association may refuse to accept partial payment, i.e., less than the full amount due and payable. The Association may also refuse to accept payments to which the payer attaches conditions or directions contrary to the Association's policy for applying payments. The Association's policy may provide that endorsement and deposit of a payment does not constitute acceptance by the Association, and that acceptance occurs when the Association posts the payment to the Owner's account.

5.13 Assessment Lien and Foreclosure

The payment of all sums assessed in the

manner provided in this Article 5 is, together with late charges as provided in Section 5.10 and interest and all costs of collection, including attorneys' fees as herein provided, secured by the continuing Assessment lien granted to the Association pursuant to Section 5.01(b) above, and will bind each Lot and Condominium Unit in the hands of the Owner thereof, and such Owner's heirs, devisees, personal representatives, successors or assigns. The aforesaid lien will be superior to all other liens and charges against such Lot or Condominium Unit, except only for tax liens and all sums secured by a first mortgage lien or first deed of trust lien of record, to the extent such lien secures sums borrowed for the acquisition or improvement of the Lot or Condominium Unit in question, provided such Mortgage was recorded in the Official Public Records of Hays County, Texas before the delinquent Assessment was due. The Association will have the power to subordinate the aforesaid Assessment lien to any other lien. Such power will be entirely discretionary with the Board, and such subordination may be signed by an officer of the Association. The Association may, at its option and without prejudice to the priority or enforceability of the Assessment lien granted hereunder, prepare a written notice of Assessment lien setting forth the amount of the unpaid indebtedness, the name of the Owner of the Lot or Condominium Unit covered by such lien and a description of the Lot or Condominium Unit Such notice may be signed by one of the officers of the Association and will be recorded in the Official Public Records of Hays County, Texas. Each Owner, by accepting a deed or ownership interest to a Lot or Condominium Unit subject to this Covenant will be deemed conclusively to have granted a power of sale to the Association to secure and enforce the Assessment lien granted hereunder. Such lien for payment of Assessments may be enforced by the non-judicial foreclosure of the defaulting Owner's Lot or Condominium Unit by the Association in like manner as a real property mortgage with power of sale under Tex. Property [text obscured by recording stamp] designated as trustee for the benefit of the Association, with the Association retaining the power to remove any trustee with or without cause and to appoint a successor trustee without the consent or joinder of any other person.) The Assessment liens and rights to foreclosure thereof will be in addition to and not in substitution of any other rights and remedies the Association may have by law and under this Covenant, including the rights of the Association to institute

suit against such Owner personally obligated to pay the Assessment and/or for foreclosure of the aforesaid lien judicially. In any foreclosure proceeding, whether judicial or non-judicial, such Owner will be required to pay the costs, expenses and reasonable attorney's fees incurred. The Association will have the power to bid (in cash or by credit against the amount secured by the lien) on the property at foreclosure or other legal sale and to acquire, hold, lease, mortgage, convey or otherwise deal with the same. Upon the written request of any Mortgagee, the Association will report to said Mortgagee any unpaid Assessments remaining unpaid for longer than thirty [text obscured by recording stamp] or transfer of any Lot or Condominium Unit; except, however, that in the event of foreclosure of any first-lien Mortgage securing indebtedness incurred to acquire such Lot or Condominium Unit, the lien for any Assessments that were due and payable before the foreclosure sale will be extinguished, provided that past-due Assessments will be paid out of the proceeds of such foreclosure sale only to the extent that funds are available after the satisfaction of the indebtedness secured by the first lien Mortgage. The provisions of the preceding sentence will not, however, relieve any subsequent Owner (including any Mortgagee or other purchaser at a foreclosure sale) from paying Assessments becoming due and payable after the foreclosure sale. Upon payment of all sums secured by a lien of the type described in this Section 5.13, the Association will upon the request of the Owner execute a release of lien relating to any lien for which written notice has been filed as provided above, except in circumstances in which the Association has already foreclosed such lien. Such release will be signed by an officer of the Association. NOTWITHSTANDING ANY PROVISION IN THIS SECTION 5.13 TO THE CONTRARY, THE ASSOCIATION WILL NOT HAVE THE AUTHORITY TO FORECLOSE ON A CONDOMINIUM UNIT FOR NON-PAYMENT OF ASSESSMENTS IF THE ASSESSMENTS CONSIST SOLELY OF FINES. In addition to the lien hereby retained, in the event of nonpayment by any Owner of any Assessment and after the lapse of at least twelve (1 days since such payment was due, the Association may, upon five [text obscured by recording stamp] (which may run concurrently with such twelve [text obscured by recording stamp] all other rights and remedies available at law, equity or otherwise, terminate, in such manner as the Board deems appropriate, any utility or cable service, provided through the Association and not paid for directly by a Owner or occupant to the utility provider. Such notice will consist of a separate mailing or hand delivery at least five [text obscured by recording stamp] with the title "termination notice" or similar language prominently displayed on the notice. The notice will include the office or street address where the Owner or the Owner's tenant can make arrangements for payment of the bill and for reconnection of service. Utility or cable service will not be disconnected on a day, or immediately preceding a day, when personnel are not available for the purpose of collection and reconnecting such services. Except as otherwise provided by applicable law, the sale or transfer of a Lot or Condominium Unit will not relieve the Owner of such Lot or Condominium Unit or such Owner's transferee from liability for any Assessments thereafter becoming due or from the lien associated therewith. If an Owner conveys its Lot or Condominium Unit and on the date of such conveyance Assessments against the Lot or Condominium Unit remain unpaid, or said Owner owes other sums or fees under this Covenant to the Association, the Owner will pay such amounts to the Association out of the sales price of the Lot or Condominium Unit, and such sums will be paid in preference to any

other charges against the Lot or Condominium Unit other than a first lien Mortgage or Assessment Liens and charges in favor of the State of Texas or a political subdivision [text obscured by recording stamp] taxes on the Lot or Condominium Unit which are due and unpaid. The Owner [text obscured by recording stamp] Lot or Condominium Unit will remain personally liable for all such sums until the same are fully paid, regardless of whether the transferee of the Lot or Condominium Unit also assumes the obligation to pay such amounts. The Board may adopt an administrative transfer fee to cover the administrative expenses associated with updating the Association's records upon the transfer of a Lot or Condominium Unit to a third party; provided, however, that no administrative transfer fee will be due upon the transfer of a Lot or Condominium Unit from Declarant to a third party.

Yes, the Association can foreclose on your Lot or Condominium Unit! If you fail to pay Assessments to the Association, you may lose title to your Lot or Condominium Unit if the Association forecloses its Assessment lien.

5.14 Exempt Property

The following area within the Property will be exempt from

the Assessments provided for in this Article:

(a) All area dedicated and accepted by public authority, by the recordation of an

appropriate document in the Official Public Records of Hays County, Texas;

(b) The Master Community Facilities and the Special Common Area; and

(c) Any portion of the Property or Development owned Declarant.

5.15 Fines and Damages Assessment

The Board may assess fines against an Owner

for violations of any restriction set forth in this Covenant, any Development Area Declaration, the Design Guidelines, or any rules adopted by the Board which have been committed by an Owner, an occupant of the Owner's Lot or Condominium Unit, or the Owner or occupant's family, guests, employees, contractors, agents or invitees. Any fine and/or charge for damage levied in accordance with this Section 5.15 will be considered an Assessment pursuant to this Covenant. Each day of violation may be considered a separate violation if the violation continues after written notice to the Owner. The Board may assess damage charges against an Owner for pecuniary loss to the Association from property damage or destruction of Master Community Facilities or Special Common Area or any facilities located by the Owner or the Owner's family, guests, agents, occupants, or tenants. The Manager will have authority to send notices to alleged violators, informing them of their violations and asking them to comply with the rules and/or informing them of potential or probable fines or damage Assessments. The Board may from time to time adopt a schedule of fines.

The procedure for Assessment of fines and damage charges will be as follows:

(a) The Association, acting through an officer, Board member or Manager,

must give the Owner notice of the fine or damage charge not later than thirty [text obscured by recording stamp] the Assessment of the fine or damage charge by the Board;

(b) The notice of the fine or damage charge must describe the violation or

damage;

(c) The notice of the fine or damage charge must state the amount of the fine

or damage charge;

(d) The notice of a fine or damage charge must state that the Owner will have

thirty [text obscured by recording stamp] the fine or damage charge; and

(e) the notice of a fine must allow the Owner a reasonable time, by a.

specified date, to cure the violation and avoid the fine unless the Owner was given notice and a reasonable opportunity to cure a similar violation within the preceding six [text obscured by recording stamp]

Fine and/or damage charges are due immediately· after the expiration of the thirty (3 day period for requesting a hearing. If a hearing is requested, such fines or damage charges will be due immediately after the Board's decision at such hearing, assuming that a fine or damage charge of some amount is confirmed by the Board at such hearing.

The payment of each fine and/or damage charge levied by the Board against the Owner of a Lot or Condominium Unit is, together with any late charges as provided in Section 5.10 and interest and all costs of collection, including attorneys' fees as provided in Section 5.11 hereof, secured by the lien granted to the Association pursuant to Section 5.01(b) of this Covenant. Unless otherwise provided in this Section 5.12, the fine and/or damage charge will be considered an Assessment for the purpose of this Article, and will be enforced in accordance with the terms and provisions governing the enforcement of Assessments pursuant to this Article 5.

5.16 Collection of Assessments Levied by Condominium Association

In the event

that the Board of Directors of a Condominium Association so elects, the Board may collect any Assessments provided for under the applicable Condominium Declaration. In such event, the Board will cooperate with the Condominium Association to obtain information associated with the Condominium Association assessments and will deposit in the Association's account, for the benefit of the Condominium Association, all assessments payable to the Condominium Association upon collection. The Association will remit to the Condominium Association, by check drawn on the Association's account, on at least a monthly basis, all assessments collected on behalf of the Condominium Association and deposited in the Association's account.

ARTICLE 6 — Village at Ledge Stone Reviewer

VILLAGE AT LEDGE STONE REVIEWER

6.01 Purpose

This Covenant creates rights to regulate the design, use, and

appearance of the Lots in order to preserve and enhance the [text obscured by recording stamp] harmony. One purpose of this Article is to promote and ensure the level of taste, design, quality, and harmony by which the Property is developed and maintained. Another purpose is to prevent Improvements and modifications that may be widely considered to be

radical, curious, odd, bizarre, or peculiar in comparison to the then existing improvements. A third purpose is to regulate. the appearance of every aspect of proposed or existing Improvements, including but not limited to dwellings, buildings, fences, landsca:g!lD.g; [text obscured by recording stamp] retaining walls, yard art, sidewalks, and driveways, and further including [text obscured by recording stamp] modifications of original construction or installation. During the Development Period, a primary purpose of this Article is to reserve and preserve Declarant's right of architectural control. Until expiration of the Development Period, a primary purpose of this Article is to reserve and preserve Declarant's right of architectural control.

6.02 Architectural Control By Declarant

During the Development Period, neither

the Association, the Board, nor a committee appointed by the Association or Board (no matter how the committee is named) may involve itself with the approval of any Improvements. Until expiration of the Development Period, the Village at Ledge Stone Reviewer for Improvements is Declarant or its designee.

(a) Declarant's Rights Reserved. Each Owner, by accepting an interest in or

title to a Lot, whether or not it is so expressed in the instrument of conveyance, covenants and agrees that Declarant has a substantial interest in ensuring that the improvements within the Property enhance Declarant' s reputation as a community developer and do not impair Declarant's ability to market its property. Accordingly, each Owner agrees that during the Development Period no Improvements will be started or progressed without the prior written approval of Declarant, which approval may be granted or withheld at Declarant' s sole discretion. In reviewing and acting on an application for approval, Declarant may act solely in its self-interest and owes no duty to any other person or any organization. Declarant may designate one or more persons from time to time to act on its behalf in reviewing and responding to applications.

(b) Delegation by Declarant. During the Development Period, Declarant may

from time to time, but is not obligated to, delegate all or a portion of its reserved rights under this Article to an architectural control committee appointed by the Board or a committee comprised of architects, engineers, or other persons who may or may not be members of the Association. Any such delegation must be in writing and must specify the scope of delegated responsibilities. Any such delegation is at all times subject to the unilateral rights of Declarant to: (a) revoke such delegation at any time and reassume jurisdiction over the matters previously delegated; and (b) to veto any decision which Declarant in its sole discretion determines to be inappropriate or inadvisable for any reason.

6.03 Architectural Control by Association

Unless and until such time as Declarant

delegates all or a portion of its reserved rights to the Board, or the Development Period is terminated or expires, the Association has no jurisdiction over architectural matters. On termination or expiration of the Development Period, or earlier if delegated in writing by Declarant, the Association, acting through the Architectural Control Committee (the "ACC") will assume jurisdiction over architectural control and will have the powers of the Village at Ledge Stone Reviewer hereunder.

(a) ACC. The ACC will consist of at least three [text obscured by recording stamp]

3 i% persons appointed by the Board, pursuant to the bylaws of the Association. Members of the ACC serve at the pleasure of the Board and may be removed and replaced at the Board's discretion. At the Board's option, the Board may act as the ACC, in which case all references in the Documents to the ACC will be construed to mean the Board. Members of the ACC need not be Owners or Residents, and may but need not include architects, engineers, and design professionals whose compensation, if any, may be established from time to time by the Board.

(b) Limits on Llability. The ACC has sole discretion with respect to taste,

design, and all standards specified by this Article. The members of the ACC have no liability for the ACC' s decisions made in good faith, and which are not arbitrary or capricious. The ACC is not responsible for: (i) errors in or omissions from the plans and specifications submitted to the ACC; (ii) supervisin g construction for the Owner's compliance with approved plans and specifications; or (iii) the compliance of the Owner's plans and specifications with governmental codes and ordinances, state and federal laws.

6.04 Prohibition of Construction, Alteration and Improvement

No Improvement,

or any addition, alteration, improvement, installation, modification, redecoration, or reconstruction thereof may occur unless approved in advance by the Village at Ledge Stone Reviewer. The Village at Ledge Stone Reviewer has the right but not the duty to evaluate every aspect of construction, landscaping, and property use that may adversely affect the general value or appearance of the Property. Notwiths tanding the foregoing, each Owner will have the right to modify, alter, repair, decorate, redecorate, or improve the interior of an Improvement, provided that such action is not visible from any other portion of the Property.

6.05 Architectural Approval

(a) Submission and Approval of Plans and Specifications. Construction

plans and specifications or, when an Owner desires solely to re-subdivide or consolidate Lots, a proposal for such re-subdivision or consolidation, will be submitted in accordance with the Design Guidelines or any additional rules adopted by the Village at Ledge Stone Reviewer together with any review fee which is imposed by the Village at Ledge Stone Reviewer in accordance with Section 6.05(b). Contact information for the Village at Ledge Stone Reviewer will be set forth in the Design Guidelines. No re-subdivision or consolidation will be made, nor any Improvement placed or allowed on any Lot, until the plans and specifications and the builder which the Owner intends to use to construct the proposed structure or Improvement have been approved in writing by the Village at Ledge Stone Reviewer. The Village at Ledge Stone Reviewer may, in reviewing such plans and specifications consider any information that it deems proper; including, without limitation, any permits, environm ental impact statements or percolation tests that may be required by the Village at Ledge Stone Reviewer or any other entity; and harmony of external design and location in relation to surround ing structures, topograph y, vegetation, and finished grade elevation. The Village at Ledge Stone. Reviewer may postpone its review of any plans and

specifications submitted for approval pending receipt of any information or material which the Village at Ledge Stone Reviewer, in its sole discretion, may require. Site plans must be approved by the Village at Ledge Stone Reviewer prior to the clearing of any Lot, o:itihe 0 [text obscured by recording stamp] 3 construction of any Improvements. The Village at Ledge Stone Reviewer [text obscured by recording stamp] approve plans and specifications for proposed Improvements, or for the re-subdivision or consolidation of any Lot on any grounds that, in the sole and absolute discretion of the Village at Ledge Stone Reviewer, are deemed sufficient, including, but not limited to, purely aesthetic grounds.

(b) Design Guidelines. Declarant will have the power to adopt the initial

Design Guidelines. The Village at Ledge Stone Reviewer will have the power, from time to time, to adopt (unless previously adopted by Declarant), amend, modify, or supplemen t the Design Guidelines. In the event of any conflict between the terms and provisions of the Design Guidelines and the terms and provisions of this Covenant, the terms and provisions of this Covenant will control. In addition, the Village at Ledge Stone Reviewer will have the power and authority to impose a fee for the review of plans, specifications and other documents and information submitted to it pursuant to the terms of this Covenant. The Village at Ledge Stone Reviewer will not be required_ to review any plans until a complete submittal package, as required by this Covenant and the Design Guidelines, is assembled and submitted to the Village at Ledge Stone Reviewer. The Village at Ledge Stone Reviewer will have the authority to adopt such additional procedural and substantive rules and guidelines (including, without limitation, the imposition of any requirements for a compliance deposit, certificates of compliance or completion relating to any Improvement, and the right to approve in advance any contractor selected for the construction of Improvements), not in conflict with this Covenant, as it may deem necessary or appropriate in connection with the performance of its duties hereunder.

(c) Failure to Act. In the event that any plans and specifications are

submitted to the Village at Ledge Stone Reviewer as provided herein, and the Village at Ledge Stone Reviewer fails to either approve or reject such plans and specifications for a period of sixty [text obscured by recording stamp] deemed disapprove d.

(d) Variances. The Village at Ledge Stone Reviewer may grant variances

from compliance with any of the provisions of this Covenant or any Development Area Declaration, including, but not limited to, restrictions upon impervious cover, height, size, shape, floor areas, land area, placement of structures, setbacks, building envelopes, colors, materials, or land use, when, in the opinion of the Village at Ledge Stone Reviewer, in its sole and absolute discretion, such variance is justified. The Village at Ledge Stone Reviewer will have the power and authority to impose a fee for the review of plans, specifications and other documents and information submitted to it in connection with the granting of any variance. All variances must be evidenced in writing and, if Declarant has assigned its rights to the ACC, must be approved by at least a majority of the members of the ACC. Each variance may (but need not) also be recorded in the Official Public Records of Hays County,

Texas; provided, however, that failure to record a variance will not affect the validity thereof or give rise to any claim or cause of action against the Village at Ledge Stone Reviewer, Declarant, the Board or the ACC. If a variance is granted, no violation of the covenants, [text obscured by recording stamp] conditions, or restrictions contained in this Covenant or any Development [text obscured by recording stamp] will be deemed to have occurred with respect to the matter for which the variance was granted. The granting of such variance will not operate to waive or amend any of the terms and provisions of this Covenant, or any Development Area Declaration, for any purpose except as to the particular property and in the particular instance covered by the variance, and such variance will not be considered to establish a precedent for any future waiver, modification, or amendment of the terms and provisions of this Covenant or any Development Area Declaration.

(e) Duration of Approval. The approval of the Village at Ledge Stone

Reviewer of any final plans and specifications, and, unless otherwise specified by the Village at Ledge Stone Reviewer, any variances granted by the Village at Ledge Stone Reviewer will be valid for a period of ninety [text obscured by recording stamp] and specifications or variance is not commenced within such ninety. [text obscured by recording stamp] other period as the Village at Ledge Stone Reviewer may specify, and diligently prosecuted to completion thereafter, the Owner will be required to resubmit such final plans and specifications or request for a variance to the Village at Ledge Stone Reviewer, and the Village at Ledge Stone Reviewer will have the authority to re-evaluate such plans and specifications in accordance with this Section 6.05(e) and may, in addition, consider any change in circumstances which may have occurred since the time of the original approval.

(f) No Waiver of Future Approvals. The approval of the Village at Ledge

Stone Reviewer to any plans or specifications for any work done or proposed in connection with any matter requiring the approval or consent of the Village at Ledge Stone Reviewer will not be deemed to constitute a waiver of any right to withhold approval or consent as to any plans and specifications on any other matter, subsequently or additionally submitted for approval by the same or a different person, nor will such approval or consent be deemed to establish a precedent for future approvals by the Village at Ledge Stone Reviewer.

(g) Non-Liability of Village at Ledge Stone Reviewer. THE VILLAGE AT LEDGE

STONE REVIEWER WILL NOT BE LIABLE TO ANY OWNER OR TO ANY OTHER PERSON FOR ANY LOSS, DAMAGE OR INJURY ARISING OUT OF THE PERFORMANCE OF THE VILLAGE AT LEDGE STONE REVIEWER'S DUTIES UNDER THIS COVENANT, UNLESS SUCH LOSS, DAMAGE, OR INJURY IS DUE TO THE WILLFUL MISCONDUCT OR BAD FAITH OF THE VILLAGE AT LEDGE STONE REVIEWER OR ONE OR MORE INDIVIDUALS ACTING ON ITS BEHALF, AS THE CASE MAYBE.

ARTICLE 7 — Mortgage Provisions

MORTGAGE PROVISIONS

The following provisions are for the benefit of holders, insurers and guarantor s of first Mortgages on Lots and Condominium Units within the Property. The provisions of this Article apply to the Covenant and the Bylaws of the Association.

7.01 Notice of Action

An institution al holder, insurer, or guarantor of a first

Mortgage which provides a written request to the Association (such request to state the name and address of such holder, insurer, or guarantor and the street address of the Lot or Condominium Unit to which its Mortgage relates (thereby becoming an "Eligible Mortgage Holder"), will be entitled to timely written notice of:

(a) Any condemnation loss or any casualty _loss which affects a material

portion of the Property or which affects any Lot or Condominium Unit on which there is an Eligible Mortgage held, insured, or guarantee d by such Eligible Mortgage Holder; or

(b) Any delinquency in the payment of Assessments or charges owed for a

Lot or Condominium Unit subject to the Mortgage of such Eligible Mortgage Holder, where such delinquency has continued for a period of sixty [text obscured by recording stamp] Master Restrictions relating to such Lot or Condominium Unit or the Owner or occupant which is not cured within sixty [text obscured by recording stamp]

(c) Any lapse, cancellation, or material modification of any insurance policy

which the Association is required hereunde r to maintain.

7.02 Examination of Books

The Association will permit Mortgagees to examine the

books and records of the Association upon written request. Appointments will be scheduled Monday - Friday between 9 a.m. and 5 p.m.

7.03 Taxes, Assessments and Charges

All taxes, Assessments and charges that may

become liens prior to first lien mortgage s under applicable law will relate only to the individua l Lots or Condominium Units and not to any other portion of the Property.

ARTICLE 8 — General Provisions

GENERAL PROVISIONS

8.01 Term

The terms, covenants, conditions, restrictions, easements, charges, and

liens set out in this Covenant will run with and bind the portion of the Property described in such notice, and will inure to the benefit of and be enforceable by the Association, and every Owner, including Declarant, and its legal representatives, heirs, successors, and assigns, for a term beginning on the date this Covenant is recorded in the Official Records of Hays County, Texas, and continuing through and including January 1, 2056, after which time this Covenant will be automatically extended for successive periods of ten [text obscured by recording stamp] word "change" meaning a termination, or change of term or renewal term) is approved in a

resolution adopted by Members entitled to cast at least seventy percent (70%) of the total number of votes of the Association, voting in person or by proxy at a meeting duly called for such purpose, written notice of which will be given to all Members at least thirty [text obscured by recording stamp] advance and will set forth the purpose of such meeting; provided, however, [text obscured by recording stamp] will be effective only upon the recording of a certified copy of such resolution m the [text obscured by recording stamp] Public Records of Hays County, Texas. Notwithstanding any provision in this Section 8.01 to the contrary, if any provision of this Covenant would be unlawful, void, or voidable by reason of any Texas law restricting the period of time that covenants on land may be enforced, such provision will expire twenty one [text obscured by recording stamp] descendants of Elizabeth II, Queen of England.

8.02 Eminent Domain

In the event it becomes necessary for any public authority to

acquire all or any part of the Master Community Facilities or Special Common Area for any public purpose during the period this Covenant is in effect, the Board is hereby authorized to negotiate with such public authority for such acquisition and to execute instruments necessary for that purpose. Should acquisitions by eminent domain become necessary, only the Board need be made a party, and in any event the proceeds received will be held by the Association for the benefit of the Owners. In the event any proceeds attributable to acquisition of Master Community Facilities are paid to Owners, such payments will be allocated on the basis of Assessment Units and paid jointly to the Owners and the holders of first Mortgages or deeds of trust on the respective Lot and/or Condominium Unit. In the event any proceeds attributable to acquisition of Special Common Area are paid to Owners who have been designated as a beneficiary of such Special Common Area, such payment will be allocated based on Assessment Units and paid jointly to such Owners and the holders of first Mortgages or deeds of trust on the respective Lot and/or Condominium Unit.

8.03 Amendment

This Covenant may be amended or terminated by the recording in

the Official Public Records of Hays County, Texas, of an instrument executed and acknowledged by: (i) Declarant; or (ii) by the president and secretary of the Association setting forth the amendment and certifying that such amendment has been approved by Declarant (unless Declarant has relinquished such right by written instrument recorded in the Official Public Records of Hays County, Texas) and Members entitled to cast at least seventy percent (70%) of the number of votes entitled to be cast by members of the Association. No amendment will be effective without the written consent of Declarant or its successors or assigns until expiration of the Development Period. Specifically, and not by way of limitation, Declarant, acting alone, may unilaterally amend this Covenant and any Development Area Declaration: (a) to bring any provision into compliance with any applicable governmental statute, rule, regulation, or judicial determination; (b) to enable any reputable title insurance company to issue title insurance coverage on any Lot or Condominium Unit; (c) to enable any institutional or governmental lender, purchaser, insurer or guarantor of mortgage loans, including, for example, the Federal Home Loan Mortgage Corporation, to make, purchase, insure or guarantee mortgage loans on Lots and/or Condominium Units; or (d) to comply with any requirements promulgated by a local, state or governmental agency, including, for example, the Department of Housing and Urban Development.

8.04 Roadway and Utility Easements

Declarant reserves the right to locate, relocate,

construct, erect, and maintain or cause to be located, relocated, constructed, erected, and maintained in and on any streets maintained by the Association, or areas [text obscured by recording stamp]

Association, or areas reserved or held as Master Community Facilities or Special [text obscured by recording stamp] roadways, sewer lines, water lines, electrical lines and conduits, and other pipelines, conduits, . wires, and any public utility function beneath or above the surface of the ground with the right of access to the same at any time for the purposes of repair and maintenance.

8.05 Enforcement

The Association and Declarant will have the right to enforce, by a

proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens, charges and other terms now or hereafter imposed by the provisions of this Covenant. Failure to enforce any right, provision, covenant, or condition granted by this Covenant will not constitute a waiver of the right to enforce such right, provision, covenants or condition in the future.

8.06 Higher Authority

The terms and provisions of this Covenant are subordinate to

federal and state law, and local (including county) ordinances. Generally, the terms and provisions of this Covenant are enforceable to the extent they do not violate or conflict with local, state, or federal law or ordinance.

NOTICE Users of this Covenant, any Development Area Declaration, and the Design Guidelines should periodically review statutes and court rulings that may modify or nullify the terms and provisions of those documents or their enforcement, or which may create rights or duties not contemplated therein.

8.07 Severability

If any provision of this Covenant is held to be invalid by any court

of competent jurisdiction, such invalidity will not affect the validity of any other provision of this Covenant, or, to the extent permitted by applicable law, the validity of such provision as applied to any other person or entity.

8.08 Conflicts

If there is any conflict between the provisions of this Covenant, the

Certificate of Formation, the Bylaws, or any rules and regulations adopted pursuant to the terms of such documents, or any Development Area Declaration, the provisions of this Covenant will govern.

8.09 Gender

Whenever the context so requires, all words herein in the male gender

will be deemed to include the female or neuter gender, all singular words will include the plural, and all plural words will include the singular.

8.10 Acceptance by Grantees

Each grantee of· Declarant of a Lot, Condominium

Unit, other real property interest in the Property, by the acceptance of a deed of conveyance, or each subsequent purchaser, accepts the same subject to all terms, restrictions, conditions, covenants, reservations, easements, liens and charges, and the jurisdiction rights and powers created or reserved by this Covenant or to whom this Covenant is subject, and all rights, benefits and privileges of every character hereby granted, created, reserved or declared.

Furthermore, each grantee agrees that no assignee or successor to Declarant [text obscured by recording stamp] have any liability for any act or omission of Declarant which occurred prior to the effective date of any such [text obscured by recording stamp] constitute covenants running with the land within the Property, and will bind any person having at any time any interest or estate in the Property, and will inure to the benefit of each Owner in like manner as though the provisions of this Covenant were recited and stipulated at length in each and every deed of conveyance.

8.11 Damage and Destruction

(a) Promptly after damage or destruction by fire or other casualty to all or

any part of the Master Community Facilities or Special Common Area covered by insurance, the Board, or its duly authorized agent, will proceed with the filing and adjustment of all claims arising under such insurance and obtain reliable and detailed estimates of the cost of repair of the damage. Repair, as used in this Section 8.11(a), means repairing or restoring the Master Community Facilities or Special Common Area to substantiall y the same condition as existed prior to the fire or other casualty.

(b) Any damage to or destruction of the Master Community Facilities or

Special Common Area will be repaired unless a majority of the Board decides within sixty [text obscured by recording stamp] proceeds to be paid as a result of such damage or destruction, or reliable and detailed estimates of the cost of repair, or both, are not made available to the Association within said period, then the period will be extended until such information will be made available.

(c) In the event that it should be determined by the Board that the damage or

destruction of the Master Community Facilities or Special Common Area will not be repaired and no alternative Improvements are authorized, then the affected portion of the Master Community Facilities or Special Common Area will be restored to its natural state and maintained as an undevelope d portion of the Master Community Facilities by the Association in a neat and attractive condition.

(d) If insurance proceeds are paid to restore or repair any damaged or

destroyed Master Community Facilities, and such proceeds are not sufficient to defray the cost of such repair or restoration, the Board will levy a Special Assessment, as provided in Article 5, against all Owners. Additional Assessments may be made in like manner at any time during or following the completion of any repair.

(e) If insurance proceeds are paid to restore or repair any damaged or

destroyed Special Common Area, and such proceeds are not sufficient to defray the cost of such repair or restoration, the Board will levy a Assessment, as provided in Article 5, against all Owners designated as a beneficiary of such Special Common Area. Additional Assessments may be made in like manner at any time during or following the completion of any repair.

as

(f) In the event that any proceeds of insurance policies are paid to Owners

such payments a result of any damage or destruction to any Master Community Facilities, and the holders will be allocated based on Assessment Units and paid jointly to the Owners of first Mortgages or deeds of trust on their Lots or Condom inium Units.

as

(g) In the event that any proceed s of insurance policies are paid to Owner s

ts will be a result of any damage or destruction to Special Common Area, such paymen who have been allocated based on Assessment Units and will be paid jointly to the Owners first Mortgages designa ted as a beneficiary of such Special Common Area and the holders of or deeds of trust on their Lots or Condom inium Units. ,

(h) In the event that any proceed s of insurance policies are paid to Owners

be paid jointly to the such payments will be allocated based on Assessment Units and will Condom inium Owners and the holders of first Mortgages or deeds of trust on their Lots or Units. ents

8.12 No Partition

Except as may be permitt ed in this Covena nt or amendm

Common Area or thereto, no physical partitio n of the Master Community Facilities or Special in the Property or any any part will be permitted, nor will any person acquiring any interest remove d from the part seek any such judicial partitio n unless the Property in question has been Section 8.12 will not be provisions of this Covena nt pursua nt to Section 10.04 below. This l property or constru ed to prohibi t the Board from acquiri ng and disposi ng of tangible persona Covenant, nor will from acquiring title to real property that may or may not be subject to this inium regime in this provisi on be constructed to prohibi t or affect the creation of a condom accordance with the Texas Uniform Condom inium Act. by this

8.13 Notices

Any notice permitt ed or require d to be given to any person

mail. If delivery is Covena nt will be in writing and may be deliver ed either personally or by day (other than a made by mail, it will be deemed to have been delivered on the third [text obscured by recording stamp] United States mail, Sunday or legal holiday) after a copy of the same has been deposit ed in the to the Association postage prepaid , address ed to the person at the address given by such person to time by notice for the purpos e of service of notices. Such address may be change d from time in writing given by such person to the Association. ee or

8.14 View Impairment

Neither the Declarant nor the Association guarant

or any open space represent that any view over and across the Lots and/or Condom inium Units, and the Association within the Property will be preserv ed without impairment. The Declarant The Association shall have no obligation to relocate, prune, or thin trees or other landscaping. the right to add trees (with respect to any Common Area or Special Common Area) will have be no express or and other landsca ping from time to time, subject to applicable law. There shall implied easements for view purposes or for the passage of light and air. respective

8.15 Safety and Security

Each Owner and occupa nt of a Unit, and their

l safety and the security of their guests and invitees, shall be responsible for their own persona

property in the Community. The Association may, but shall not be obligated to, maintain or support certain activities within the Community designed to promote or enhance the level of safety or security which each person provides for himself or herself and his or her property. However, neither the Association nor the Declarant shall in any way be considered insurers or guarantors of safety or security within the Community, nor shall either be held liable for any loss or damage by reason of failure to provide adequate security or ineffectiveness of security measures undertaken.

No representation or warranty is made that any systems or measures, including security monitoring systems or any mechanism or system for limiting access to the Community, cannot be compromised or circumvented; or that any such system or security measures undertaken will in all cases prevent loss or provide the detection or protection for which the system is designed or intended. Each Owner acknowledges, understands, and shall be responsible for informing any tenants and other occupants of such Owner's Unit that the Association, its Board and committees, and the Declarant are not insurers or guarantors of security or safety and that each Person within the Community assumes all risks of personal injury and loss or damage to property, including Units and the contents of Units, resulting from acts of third parties.

ARTICLE 9 — Easements

EASEMENTS

9.01 Right of Ingress and Egress

Declarant and its agents, employees and designees

will have a right of ingress and egress over and the right of access to the Master Community Facilities or Special Common Area to the extent necessary to use the Master Community Facilities or Special Common Area and the right to such other temporary uses of the Master Community Facilities or Special Common Area as may be reasonably desirable in connection with the construction and development of the Property.

9.02 Reserved Easements

All dedications, limitations, restrictions and reservations

shown on any Plat and all grants and dedications of easements, right-of-way, restrictions and related rights made by Declarant prior to the Property becoming subject to this Covenant are incorporated herein by reference and made a part of this Covenant for all purposes as if fully set forth herein, and will be construed as being adopted in each and every contract, deed or conveyance executed or to be executed by or on behalf of Declarant. Declarant reserves the right to relocate, make changes in, and additions to said easements, right-of-way, dedications, limitations, reservations and grants for the purpose of most efficiently and economically developing the Property.

9.03 Development Easements

Declarant hereby reserves a perpetual non-exclusive

easement over and across the Property for: (i) the installation, operation and maintenance of utilities and associated infrastructure to serve the Property and any other property owned by Declarant; (ii) the installation, operation and maintenance of cable lines and associated infrastructure for sending and receiving data and/or other electronic signals, security and similar services to serve the. Property and any other property owned by Declarant; and (iii) the

installation, operation and maintenance of, walkways, pathways and trails, [text obscured by recording stamp] street lights and signage to serve the Property and any other property owned by Declarant. Declarant will be entitled to unilaterally assign the easements reserved hereunder to any third party who owns, operates or maintains the facilities and improvements described in (i) through

(iii) of this Section 9.03. The exercise of the easement reserved herein will not extend to

permitting entry into any residence, nor will it unreasonably interfere with the use of any Lot or residence or Improvement constructed thereon.

9.04 Subdivision Entry and Fencing Easement

Declarant reserves for itself and the

Association, an easement over and across the Property for the installation, maintenance, repair or replacement of certain subdivision entry facilities and fencing which serves the Property. Declarant will have the right, from time to time, to record a written notice in the Official Public Records of Hays County, Texas, which identifies the subdivision entry facilities fencing to which the easement reserved hereunder applies. Declarant may designate all or any portion of the subdivision entry facilities and/or fencing as Master Community Facilities or Special Common Area by written notice recorded in the Official Public Records of Hays County, Texas. The exercise of the easements reserved hereunder will not extend to permitting entry into any residence, nor will it unreasonably interfere with the use of any Lot or residence or Improvement constructed thereon.

9.05 Easements for Special Events

Declarant reserves for itself and the Association,

and their successors, assigns, and designees, a perpetual, nonexclusive easement over the Master Community Facilities for the purpose of conducting sporting, and other events; educational, cultural, artistic, musical and entertainment activities; and other activities of general community interest at such locations and times as Declarant or the Association, in their reasonable discretion, deem appropriate. Each Owner, by accepting a deed or other instrument conveying any interest in a Lot or Condominium Unit, acknowledges and agrees that the exercise of this easement may result in a temporary increase in traffic, noise, gathering of crowds, and related inconveniences, and each Owner agrees on behalf of itself and the occupants of its Lot or Condominium Unit to take no action, legal or otherwise, which would interfere with the exercise of such easement.

9.06 Declarant as Attorney-in-Fact

To secure and facilitate Declarant's exercise of

the rights reserved by Declarant pursuant to the terms and provisions of this Covenant, each Owner, by accepting a deed to a Lot or Condominium Unit and each Mortgagee, by accepting the benefits of a Mortgage against a Lot or Condominium Unit, and any other third party by acceptance of the benefits of a mortgage, deed of trust, mechanic's lien contract, mechanic's lien claim, vendor's lien and/or any other security interest against any Lot or Condominium Unit, will thereby be deemed to have appointed Declarant such Owner's, Mortgagee's, and third party's irrevocable attorney-in-fact, with full power of substitution, to do and perform, each and every act permitted or required to be performed by Declarant pursuant to the terms of this Covenant. The power thereby vested in Declarant as attorney-in-fact for each Owner, Mortgagee and/or third party, will be deemed, conclusively, to be coupled with an interest and will survive the dissolution, termination, insolvency, bankruptcy, incompetency and death of an

Owner, Mortgagee and/or third party and will be binding upon the legal representatives, administrators, executors, successors, heirs and assigns of each such party.

ARTICLE 10 — Development Rights

DEVELOPMENT RIGHTS

10.01 Development by Declarant

It is contemplated that the Property will be

developed pursuant to a coordinat ed plan, which may, from time to time, be amended or modified. Declarant reserves the right, but not the obligation, to designate Development Areas, to create and/or designate Lots and Condominium Units, Special Common Areas and Master Community Facilities and to subdivide with respect to any of the Property pursuant to the terms of this Section 10.01, subject to any limitations imposed on portions of the Property by any applicable Plat. As each area is developed or dedicated, Declarant may record one or more Development Area Declarations and designate the use, classification and such additional covenants, conditions and restrictions as each may deem appropriate for that area. Any Development Area Declaration may provide its own procedure for the amendment of any provisions. All lands, Improvements, and uses in each area so developed will be subject to both this Covenant and the Development Area Declaration, if any, for that Development Area.

10.02 Special Declarant Rights

Notwiths tanding any provision of this Covenant to

the contrary, at all times Declarant will have the right and privilege: (i) to erect and maintain advertisin g signs (illuminated or non-illuminated), sales flags, other sales devices and banners for the purpose of aiding the sale of Lots and/or Condominium Units in the Property; (ii) to maintain Improvements upon Lots as sales, model, management, business and construction offices; and (iii) to maintain and locate construction trailers and construction tools and equipmen t within the Property. The construction placemen t or maintenance of Improvements by Declarant will not be considered a nuisance, and Declarant hereby reserves the right and privilege for itself to conduct the activities enumerat ed in this Section 10.02 until two [text obscured by recording stamp] after Declarant no longer owns any portion of the Property.

10.03 Addition of Land

Declarant may, at any time and from time to time, add

additional lands to the Property (including, without limitation, the Additiona l Land). Upon the filing of a notice of addition of land, such land will be considere d part of the Property for purposes of this Covenant and will be subject to this Covenant and the terms, covenants, conditions, restrictions and obligations set forth in this Covenant, and the rights, privileges, duties and liabilities of the persons subject to this Covenant will be the same with respect to such added land as with respect to the lands originally covered by this Covenant. To add lands to the Property, Declarant will be required only to record in the Official Public Records of Hays County, Texas, a "Notice of Addition of Land" (which notice may be contained within any Development Area Declaration affecting such land) containing the following provisions:

(a) A reference to this Covenant, which reference will state the volume and

initial page number of the Official Public Records of Hays County wherein this Covenant is recorded;

(b) A statement that such land will be considered Property [text obscured by recording stamp]

3 [text obscured by recording stamp] this Covenant, and that all of the terms, covenants, conditions, restrictions and obligations of this Covenant will apply to the added land; and

(c) A legal description of the added land.

10.04 Withdrawal of Land

Declarant may, at any time and from time to time, reduce

or withdraw from the Property, and remove and exclude from the burden of this Covenant and the jurisdiction of the Association: (i) any portions of the Property which have not been included in a Plat; (ii) any portion of the Property included in a Plat if Declarant owns all Lots described in such Plat; and (iii) any portions of the Property included in a Plat even if Declarant does not own all Lot(s) described in such Plat, provided that Declarant obtains the written consent of all other Owners of Lot(s) described in such Plat. Upon any such withdrawal and renewal this Covenant and the covenants conditions, restrictions and obligations set forth herein will no longer apply to the portion of the Property withdrawn. To withdraw lands from the Property, Declarant will be required only to record in the Official Public Records of Hays County, Texas, a "Notice of Withdrawal of Land" containing the following provisions:

(i) A reference to this Covenant, which reference will state the

volume and initial page number of the Official Public Records of Hays County wherein this Covenant is recorded;

(ii) A statement that the provisions of this Covenant will no longer

apply to the withdrawn land; and

(iii) A legal description of the withdrawn land.

10.05 Assignment of Declarant's Rights

Notwithstanding any provision in this

Covenant to the contrary, Declarant may, by written instrument, assign, in whole or in part, any of their respective privileges, exemptions, rights, and duties under this Covenant or under a Development Area Declaration to any person or entity and may permit the participation, in whole, in part, exclusively, or non-exclusively, by any other person or entity in any of its privileges, exemptions, rights, and duties hereunder.

ARTICLE 11 — Dispute Resolution

DISPUTE RESOLUTION

11.01 Agreement to Encourage Resolution of Disputes Without Litigation

(a) Declarant, the Association and its officers, directors, and committee

members, all parties subject to this Covenant (collectively, the "Bound Parties"), agree that it is in the best interest of all concerned to encourage the amicable resolution of disputes involving the Property without the emotional and financial costs of litigation. Accordingly, each Bound Party agrees not to file suit in any court with respect to a Claim described in

subsection (b }, unless and until it has first submitted such Claim to the altenfa'fiVe aispute resolution procedure s set forth in Section 11.02 in a good faith effort to resolve such Claim.

(b) As used in this Article, the term "Claim" will refer to any claim, grievance

or dispute arising out of or relating to:

(i) the interpretation, application, or enforcement of the Covenant, any

Development Area Declaration, the Design Guidelines, the Certificate, Bylaws, and rules and regulations adopted by the Board; or

(ii) the rights, obligations, and duties of any Bound Party under the

Covenant, any Development Area Declaration, the Design Guidelines, the Certificate, Bylaws, and rules and regulations adopted by the Board; or

(iii) the design or construction of improvements within the Property, other

than matters of aesthetic judgment under Article 61 which will not be subject to review.

(c) The following will not be considered "Claims" unless all parties to the

matter otherwise agree to submit the matter to the procedure s set forth in Section 11.02:

(i) any suit by the Association to collect Assessments or other amounts due

from any Owner; and

(ii) any suit by the Association to obtain a temporary restrainin g order (or

emergenc y equitable relief) and such ancillary relief as the court may deem necessary in order to maintain the status quo and preserve the Association's ability to enforce the provision s of this Covenant; and

(iii) any suit which does not include Declarant or the Association as a party, if

such suit asserts a Claim which would constitute a cause of action independent of the Covenant, any Development Area Declaration, the Design Guidelines, the Certificate, Bylaws, and rules and regulations adopted by the Board; and

(iv) any suit in which any indispensable party is not a Bound Party; and

(v) any suit as to which any applicable statute of limitations would expire

within one hundred and eighty [text obscured by recording stamp] by Section 11.02 (a), unless the party or parties against whom the Claim is made agree to toll the statute of limitations as to such Claim for such period as may reasonably be necessary to comply with this Article.

11.02 Dispute Resolution Procedures

(a) Notice. The Bound Party asserting a Claim ("Claimant") [text obscured by recording stamp]

Bound Party ("Respondent") will give written notice to each Respondent and to the Board stating plainly and concisely:

(i) the nature of the Claim, including the Persons involved and the

Respondent's role in the Claim; and

(ii) the legal basis of the Claim (i.e., the specific authority out of which the

Claim arises); and

(iii) the Claimant's proposed resolution or remedy; and

(iv) the Claimant's desire to meet with the Respondent to discuss in good

faith ways to resolve the Claim.

(b) Negotiation. The Claimant and Respondent will make every reasonable

effort to meet in person and confer for the purpose of resolving the Claim by good faith negotiation. If requested in writing, accompanie d by a copy of the Notice, the Board may appoint a representative to assist the parties in negotiating a resolution of the Claim.

(c) Mediation. If the parties have not resolved the Claim through negotiation

within thirty [text obscured by recording stamp] other period as the parties may agree upon), the Claimant will have thirty [text obscured by recording stamp] days to submit the Claim to mediation with an entity designated by the Association (if the Association is not a party to the Claim) or to an independen t agency providing dispute resolution services in Hays County, Texas.

If the Claimant does not submit the Claim to mediation within such time, or does not appear for the mediation when scheduled, the Claimant will be deemed to have waived the Claim, and the Respondent will be relieved of any and all liability to the Claimant (but not third parties) on account of such Claim.

If the Parties do not settle the Claim within thirty [text obscured by recording stamp] matter to mediation, or within such time as determined reasonable by the mediator, the mediator will issue a notice of termination of the mediation proceedings indicating that the parties are at an impasse and the date that mediation was terminated. The Claimant will thereafter be entitled to file suit or to initiate administrative proceedings on the Claim, as appropriate.

Each Party will bear its own costs of the mediation, including attorney's fees, and each Party will share equally all fees charged by the mediator.

(d) Settlement. Any settlement of the Claim through negotiation or

mediatio n will be documented in writing and signed by the parties. If any . by the terms of such agreement, then any other party may file suit or initiate . to abide fails administrative proceedings to enforce such agreement without the need to again comply with the procedures set forth in this Section. In such event, the party taking action to enforce the agreement or award will, upon prevailing, be entitled to recover from the non-complying ons) party (or if more than one noncom plying party, from all such parties in equal proporti n, all costs incurred in enforcing such agreement or award, including, without limitatio attorney s' fees and court costs.

11.03 Initiation of Litigation by Association

In addition to compliance with the

will not foregoing alternative dispute resolutio n procedures, if applicable, the Association of the initiate any judicial or administrative proceed ing unless first approve d by a vote ion, excludin g Members entitled to cast seventy-five percent (75%) of the votes in the Associat or the votes held by Declarant, except that no such approva l will be required for actions proceedings:.

(a) initiated while Declarant owns any portion of the Property or the

Property; or

(b) initiated to enforce the provisions of the Covenant, any Develop ment

ns Area Declaration, the Design Guidelines, the Certificate, Bylaws, and rules and regulatio adopted by the Board, including collection of Assessments and foreclosure of liens; or

(c) initiated to challenge ad valorem taxation or condem nation proceedings; or

(d) initiated against any contractor, vendor, or supplier of goods or services

arising out of a contract for services or supplies; or

(e) to defend claims filed against the Association or to assert counterclaims in

proceedings institute d against it.

This Section will not be amende d unless such amendment is approve d by the same also be percentage of votes necessary to institute proceed ings except any such amendment will approve d by Declarant until the expiration or terminat ion of the Develop ment Period.

[SIGNATURE PAGE FOLLOWS]

EXECUTED to be effective on the date this instrument is recorded in [text obscured by recording stamp] Records of Hays County, Texas.

DECLARANT:

290 EAST BUSH, INC., a Texas corporation

B Date: November 15th , 2006

STATE OF TEXAS

COUNTY OF HAYS

This instrument was acknowledged before me on this 15 day of November , 2006 by th

Michael L. Schoenfeld, Vice President of 290 East Bush, Inc., a Texas corporation , on behalf of

h i!J__.e said corporation .

THOMAS M. ARMSTADTER [notary seal, partly obscured] Notary Publlc. State of Texas My Commission Expires 8-23-2010 _ Notary Public, State o Texas

CONSENT OF MORTGAGEE

The undersigned, being the sole owner and holder of deed of trust lien dated February 28 2006, recorded as Document No. 6005774, Official Public Records of Hays County, Texas, th,

securing a note of even date therewith, executes this Covenant solely for the purpose of evidencing its consent to this Covenant.

REGIONS BANK An Alabama state-c

By: CJ:, Printed Name: enkins Title: Senior Vi e President

STATE OF TEXAS

COUNTY OF ANGELINA

This instrument was acknowledged before me on this 13 th day of November, 2006 by Codie Jenkins, Senior Vice President of Regions Bank, an Alabama state-chartered bank, on behalf of said bank.

SUSAN K. EOFF Notary Public, State of Texas My Commission Expires DECEMBER 19, 2008 Notary Public Signature

EXHIBIT "A" — Description of Property

All Lots located within Bush Ranch, Phase 1, a subdivision located in Hays County, Texas, according to the map or plat recorded in Vol. 13, Page 225, et. seq., in the Plat Records of Hays County, Texas (collectively, the "Subdivision"), SAVE AND EXCEPT Lots 1, 2 and 63, Block A, Lot 1, Block D, and Lots 1 through 4, Block E in the Subdivision.

EXHIBIT "B" — Site / Vicinity Map

The recorded instrument includes a scanned site / vicinity map exhibit that is a graphic image and cannot be reproduced as text. The legible labels on the map are transcribed below; see the recorded instrument for the actual map.

Recording / Filing Information

Filed for Record in Hays County — Nov. 16, 2006, at 12:06 — Document Number 06034956 — Terry Kleen, Deputy; Lee Carlisle, County Clerk, Hays County, Texas. (Fee and receipt details appear on the recorded instrument.)

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