DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONSFOR UNITS IG, 4A AND 4B

DENTON FARMS(ELLERSLIE AT DELONG)

BOOK 2671 PAGE 562

~~.cTHIS DECLARATION OF COVENANTS, CONDITIONS AND~ ~

RESTR.J{ip_~lihereinafter referred to as the "Declaration") is made this 23-day of~6, by DELONG ESTATES DEVELOPMENT LLC, a Kentuckylimited liability company, whose address is 3473 Yorkshire Boulevard, Lexington,Kentucky 40509 (hereinafter referred to as "Declarant"); JAMES T. NASHBUILDER, INC., a Kentucky corporation, whose address is 276 Blue SkyParkway, Lexington, Kentucky 40509 (hereinafter referred to as "Nash"); and CSIREALTY, whose address is 3325 Pepperhill Court, Lexington, Kentucky 40502(hereinafter referred to as "CSI"), and LILY CHOW, whose address is 3325Pepperhill Court, Lexington, Kentucky 40502 (hereinafter referred to as "Chow").

WITNESSETH:

WHEREAS, Declarant is developing certain property located in Lexington,Fayette County, Kentucky as a residential community known and referred to as"Denton Farms" (Ellerslie at Delong), which property is more particularlydescribed on Exhibit "A" attached hereto and incorporated by reference herein andis also referred to herein as the "Properties"; and

WHEREAS, Declarant has heretofore caused to be recorded theDeclaration of Covenants, Conditions and Restrictions For Units IA and IBDenton Farms (Ellerslie at Delong) which are of record in Deed Book 2540, page30, in the Fayette County Clerk's Office; and

WHEREAS, Declarant has heretofore caused to be recorded theDeclaration of Covenants, Conditions and Restrictions For Units IC, ID, IE, andIF Denton Farms (Ellerslie at Delong) which are of record in Deed Book 2540,page 71, in the Fayette County Clerk's Office; and

WHEREAS, Declarant has heretofore caused to be recorded theDeclaration of Covenants, Conditions and Restrictions For Units 3A and 3BDenton Farms (Ellerslie at Delong) which are of record in Deed Book 2615, page233, in the Fayette County Clerk's Office; and

WHEREAS, Declarant has heretofore caused to be recorded theDeclaration of Covenants, Conditions and Restrictions For Unit 3, Section A,Denton Farms (Ellerslie at Delong) which are of record in Deed Book 2635, page544, in the Fayette County Clerk's Office; and

Man1D:Jackson K"" PUCp.o. Box 2150 ...,;175 Easl Main StMLIaIII101LexingtDn. KY 40588-8&45

WHEREAS, the Declarations referred to above in the four precedingparagraphs anticipated that additional portions of the Properties would besubmitted to similar covenants, conditions, restrictions, assessments, andobligations by Subsequent Amendment; and

WHEREAS, this Declaration shall be considered a Subsequent Amendmentas defined therein; and

WHEREAS, Declarant is the owner (except as hereinafter set out) of aportion of the Properties known and referred to as Units IG, 4A and 4B which realproperty is more particularly described on Exhibit "B" attached hereto andincorporated by reference herein; and

WHEREAS, Declarant intends from time to time to subject additionalportions of the Properties to the terms of this Declaration as provided forhereinafter; and

WHEREAS, Declarant desires to provide for the maintenance of "CommonAreas", as herein defined, and to provide an easement for access across theProperties to the extent necessary for the performance of such maintenance ashereinafter provided; and

WHEREAS, Declarant has formed the Ellerslie at Delong HomeownersAssociation, Inc., a Kentucky non-profit association, for the purpose ofmaintaining and administering the Common Areas, administering and enforcingthe covenants and restrictions herein, and collecting and disbursing theassessments and charges hereinafter created; and

WHEREAS, the Properties will be comprised of several residentialneighborhoods some of which may be subjected to additional covenants,conditions, and restrictions in addition to those imposed by this Declaration andmay be governed by separate owners associations in addition to the Association;and

WHEREAS, Nash is the owner of Lot 27, Block "L", Unit 1G, which wasconveyed to Nash from Declarant by deed of record in Deed Book 2658, page 421,in the Fayette County Clerk's Office (the "Nash Lot");

WHEREAS, Chow is the owner of CSI which was conveyed Lot 8, Block"F", Unit 4B, from Declarant by deed of record in Deed Book 2660, page 686, inthe Fayette County Clerk's Office (the "CSI Lot");

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WHEREAS, at the time of the conveyance of the Nash Lot to Nash and theconveyance of the CSI Lot to CSI, Nash, CSI and Chow agreed to execute thisDeclaration thereby submitting their respective lots to the provisions set outherein;

WHEREAS, Nash, hereby agrees that the Nash Lot shall be held, sold, andconveyed subject to the covenants, conditions, and easements contained hereinwith the same force and effect as though this Declaration had been recorded priorto the conveyance of the Nash Lot;

WHEREAS, CSI and Chow hereby agree that the CSI Lot shall be held,sold, and conveyed subject to the covenants, conditions, and easements containedherein with the same force and effect as though this Declaration had been recordedprior to the conveyance of the CSI Lot;

NOW, THEREFORE, Declarant hereby declares that the real propertydescribed on Exhibit "B" attached hereto and incorporated by reference herein,shall be held, sold, and conveyed subject to the covenants, conditions, andeasements contained herein, which shall run with the title to such real property andshall bind all parties having any right, title or interest in said real property, theirheirs, successors, successors-in-title, and assigns, and shall inure to the benefit ofthe Association and each owner of the property.

ARTICLE I

DEFINITIONS

The terms in this Declaration and the "By-Laws" (as herein defined) shallbe construed to have their ordinary, generally accepted meanings unless otherwisespecifically defined herein or in the By-Laws.

Section I "Area of Common Responsibility" shall mean and refer to the"Common Area", as herein defined, together with those areas, if any, which by theterms of this Declaration or by contract with any "Person", as herein defined,become the responsibility of the "Association", as herein defined. The office ofany property manager employed by or contracting with the Association, if locatedon the "Properties", as hereinafter defined, may be part of the Area of CommonResponsibility.

Section 2 "Articles of Incorporation" shall mean and refer to theArticles of Incorporation of the Ellerslie at Delong Homeowners Association, Inc.as filed with the Secretary of State for Kentucky.

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Section 3 "Association" shall mean and refer to Ellerslie at DelongHomeowners Association, Inc., a Kentucky non-profit, non-stock corporation, itssuccessors and assigns, which has been incorporated by the Declarant for thepurposes of (i) maintaining and administering the Area of CommonResponsibility, (ii) administering and enforcing the terms and conditions of thisDeclaration, and (iii) collecting the assessments and charges hereinafter created asall of the foregoing is more specifically hereinafter provided for. The use of theterm "association" or "associations" in lower case shall refer to any condominiumassociation or other owners association subsequently created and havingjurisdiction (subordinate to this Declaration) over any part of the Properties.

Section 4 "Board of Directors" or "Board" shall be the elected body ofthe Association having its normal meaning under Kentucky corporate law.

Section 5 "Builder" shall mean and refer to any party who acquires oneor more developed Lots from the Declarant or some other party for the purpose ofresale to an Owner or for the purpose of constructing improvements thereon forresale to an owner.

Section 6 "By-Laws" shall mean and refer to the By-Laws of Ellerslieat Delong Homeowners Association, Inc. incorporated herein by reference, as theymay be amended from time to time.

Section 7 "Class "B" Control Period" shall mean and refer to the periodof time during which the Class "B" Member is entitled to appoint all members ofthe Board ofDirectors, as specified herein and in the By-Laws.

Section 8 "Common Area" shall mean (i) all real and personal propertywhich the Association now or hereafter owns, leases, or otherwise holds for thecommon use and enjoyment of the "Owners", as herein defined; (ii) the CommonAreas and/or rights-of-way which are not dedicated to the public and are shownand identified on the plats recorded by the Declarant or any Person including, butnot limited to common open space as shown on the "Development Plan" as hereindefmed, or on one or more record plats of the Properties whenever recorded,private streets, conservation areas, detention basins, detention easements, fences,greenways, trails, buffer areas, signage easements, entry features, and pedestrianaccess easements, including without limitation, all improvements and facilitieslocated thereon which shall be deeded to the association for the common use andbenefit of the Owners; and (iii) areas within public right-of-ways as identified onrecord plats, including, but not limited to, roadways and medians upon which theDeclarant has constructed and/or installed improvements for the common use.Common Areas shall not include any areas which have been or are subsequentlydedicated to any governmental entity.

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Section 9 "Common Expenses" shall mean and include the actual andestimated expenses of operating the Association, for general purposes, includingany reasonable reserve, all as may be found to be necessary and appropriate by theBoard pursuant to this Declaration, the By-Laws and the Articles of Incorporationof the Association.

Section 10 "Community- Wide Standard" shall mean the standard ofconduct, maintenance or other activity generally prevailing throughout theProperties. Such standard may be more specifically determined and set forth bythe Board of Directors.

Section II "Declarant" shall mean and refer to Delong EstatesDevelopment LLC, a Kentucky limited liability company, or its successors,successors-in-title or assigns who take title to all or any portion of theundeveloped or unsold property described on Exhibit "B" for the purpose ofdevelopment or sale and who are designated as the Declarant hereunder in arecorded instrument executed by the immediately preceding Declarant.

Section 12 "Development Plan" shall mean and refer to the preliminaryor final, as appropriate, development plan or plans for the Properties most recentlyapproved by the Lexington-Fayette Urban County Government (hereinafterreferred to as "Government"), as such plan or plans may be amended from time totime.

Section 13 "Landscape Amenity Easement" shall mean the CommonAreas within which the Association shall have the right to install and maintainlandscaping including, but not limited to, sprinkler systems and/or decorativefeatures.

Section 14 "Lot" shall mean any subdivided tract of land shown upon thefinal record plats of the Properties. The term "Lot" shall also include remaining,vacant portions of the Properties intended for development but not included withany final record plat. The term shall include all portions of the lot owned,including any structure thereon.

Section 15 "Maintenance Expenses" shall mean the actual and estimatedexpenses of maintaining, operating, insuring, and replacing the Area of CommonResponsibility. The Maintenance Expenses are to be allocated among all Ownersofproperty in Denton Farms in accordance with this Declaration.

Section 16 "Member" shall mean and refer to a Person entitled tomembership in the Association, as provided herein.

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Section 17 "Mortgage" shall mean and refer to a first mortgage and adeed that includes the reservation of a first priority vendor's lien.

Section 18of a Mortgage.

Section 19Mortgage.

"Mortgagee" shall mean and refer to a beneficiary or holder

"Mortgagor" shall mean and refer to any Person who gives a

Section 20 "Owner" shall mean and refer to one (1) or more Persons whohold the record title to any Lot which is part of the Properties, but excluding in allcases any Person who is a Mortgagee or holds an interest merely as security forthe performance of an obligation.

Section 21 "Person" shall mean a natural person, a corporation, apartnership, a limited liability company, a limited liability partnership, a trustee orother legal entity.

Section 22 "Properties" shall mean and refer to the real property depictedon and described in Exhibits "A" and "B" attached hereto and shall further refer tosuch additional property as is hereinafter subjected to this Declaration bySubsequent Amendment.

Section 23 "Subsequent Amendment" shall mean an amendment to thisDeclaration which subjects additional property to this Declaration, withdrawsproperty from this Declaration, imposes, expressly or by reference, additionalcovenants, conditions, restrictions, assessments, and obligations on the landdescribed therein, or which substitutes a successor Declarant.

Section 24 "Unit" shall mean any contiguous portion of the Properties,whether improved or unimproved, other than the Common Area and propertydedicated to the public, which may be independently owned, conveyed, developed,and used for residential purposes. The term shall refer to the land, if any, which ispart of the Unit, as well as any improvements thereon.

ARTICLE II

PROPERTY RIGHTS

Section 1 Right and Easement ofEnjoyment; Exceptions

Every Owner shall have a right and easement of enjoyment in and to theCommon Area for the purposes for which such areas are established, which shall

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be appurtenant to and shall pass with the title to every Lot subject to thisDeclaration, as it may be amended from time to time, and, subject to thisDeclaration, any other applicable covenants, and the terms of any restrictions orlimitations contained in any deed conveying such property to the Associationsubject to the right of the Board to adopt rules regulating the use and enjoyment ofthe Common Area, the right of the Association to dedicate or transfer all or anypart of the Common Area under Section 3 hereof to governmental entities, theright of the Association to mortgage or otherwise create a security interest in anyor all of its real or personal property as security for money borrowed or obligationsincurred and the right of the Association or the Declarant to grant additionaleasements over the Common Area and Lots as provided In Section 4 hereof.

Section 2 Delegation of Use

Any Owner may delegate his or her right of enjoyment to the CommonArea and the improvements located thereon to the members of his or her family,lessees, social invitees, as applicable, subject to the rules of the Association. AnOwner who leases his or her Lot shall be deemed to have de Iegated all such rightsto the Lot's lessee. Membership in the Association may not be conveyedseparately from the ownership of a Lot.

Section 3 Sale of Common Area

The Common Area shall not be sold or otherwise disposed of without firstoffering to dedicate such area to the appropriate governmental entity. Thislimitation neither applies to a transfer of the Common Area to an organizationconceived and established to own and maintain the Common Area as a successorto the Association, nor to the easements, rights and privileges created by thisDeclaration.

Section 4 Title to Common Areas

The title to any portion of the Common Areas that is to be owned by theAssociation in fee simple shall be conveyed to the Association, prior to theexpiration of the Class "B" Control Period, free and clear of all liens andencumbrances; provided, however, that the Declarant shall have the right fromtime to time to reserve for the purpose of development of the Properties all or anyportion of the Common Area for various easements and rights-of-way, togetherwith the right to dedicate same where applicable and customary and the right ofingress and egress across the Common Areas in connection with the developmentof the Properties. The Declarant's rights hereunder shall not unreasonablyinterfere with the Owner's easement of enjoyment.

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Section 5 Right to Grant Easements

Declarant hereby reserves the right to grant on behalf of the Associationand/or the Owners and without the consent of the Association, or any Owner,easements across, through, or under the Common Areas. Such easements, whichshall be exclusive or non-exclusive, shall be limited to utility easements (includingcable television), greenway easements, sign easements, access easements, orroadway easements. Declarant's rights under this Section shall terminate uponexpiration of the Class "B" Control Period. The Association, without the consentof any Owner, shall have the right at any time to grant easements as set forth inthis paragraph.

Declarant hereby reserves the right to grant on behalf of the Associationand/or the Owners and without the consent of the Association or any Owner,easements across, through, or under the Common Area to a limited number ofOwners for the purpose of permitting each such Owner to landscape and/or fence adefined portion of the Common Area contiguous to such Owner's Lots. Thegranting of such easements, if any, shall be to enhance the aesthetics of theCommon Area as determined by Developer in its sole discretion. The granting ofsuch easement shall not create any ownership right or interest in and to theCommon Area in such Owner. The maintenance of any such area shall be theresponsibility of the Owner who shall maintain such area in accordance with theCommunity- Wide Standard. The Association shall not have the right at any timeto grant easements as set forth in this paragraph.

ARTICLE III

MEMBERSHIP AND VOTING RIGHTS

Section I Membership

Every Owner, as defined in Section 20 ofArticle I of this Declaration, shallbe deemed to have a membership in the Association. No Owner, whether one ormore persons, shall have more than one (I) membership per Lot owned. In theevent the Owner of a Lot is more than one (I) Person, votes and rights of use andenjoyment shall be as provided herein. The rights and privileges of membership,including the right to vote, may be exercised by a Member or the Member'sspouse, subject to the provisions of this Declaration and the By-Laws. Themembership rights of a Lot owned by a corporation, partnership, or any other legalentity, shall be exercised by the individual designated in a written instrumentprovided to the Secretary of the Association, subject to the provisions of thisDeclaration and the By-Laws.

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Section 2 v oting

The Associat ion shall have two (2) classes of membership. Class "A" andClass " 8 .Mas follows:

A. Class "A" Members shall be all Owners with the exception of theClass "S" Member. if any. Each Class A" Member shall have one equal vote foreaeh l.ot in which he or she holds the interest required for membership underSection I o f this Article: there shall be only one vote pc.-r Lot. Provided. however,that the owners of Phase II as shown on the Development Plan which is to bedeve loped as multi -family units , and the owners of that portion of Phase III asshown on the Developm ent Plan which is to be develo ped as multi-family units.shall collectively have 60 of the total Class A votes 10 be voted by its association.

In any situation where a Member is entitled personally 10 exerc ise the votefor its Lot. and more than one (I) Person holds the interest in such Lot required formembership. the vole for such Lot shall be exercised as those persons determi neamong themselves and advise the secretary of the Association in writing prior 10any meeting. In the absence o f such advice, the Lor' s vore shall be suspended ifmore than one ( I) Person seeks 10 exercise it. These provisions shall also apply tothe vores for the mult i-family units.

B. Class - U" Member shall be the Declarant. The rights of the Class"8 M Member. including the right to approve actions taken under this Declarationand the By-Laws. are specified elsewhere in this Declaration and the By-Laws.The Class "S - Member shall be entitled to one vore per Lot own ed for the year inwhich the voting power is exercised. and , in addit ion. shall be entitled to appoi ntall members of the Board of Directors durin g the Class "B" Control Period asspecified in the By-Laws. The Class BMmembership shall terminate upon theexpiration of the Class "RM Control Period and be convened to a Class "N'~embCrsh i p . The Class ·'8" Control Period shall expire six (6) years from thedate of recording of the Declara tion for Unit 1/\ in the Fayette County Clerk~Office. unless sooner tcnn lOated by Deve loper.

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ARTICLE IV

MAINTENANCE

Section I Association's Responsibility

The Association shall maintain and keep in good repair the Common Areas,such maintenance to be funded as hereinafter provided. All Lots shall be subjectto an access casement in favor of the Declarant and the Association for thepurpose of maintainin g the Common Area, including all improvements thereon.which access shall be reasonable, including use of driveways where feasible. Thismaintenance shalt include. but not be limited to, maintenance. repair, andreplacemen t, reconstruction, subject to any insurance then in effect. of allCommon Areas, includ ing all improvements thereto. The Association ' smaintenance responsibilities shillUnclude mowing the multi-family Lou . Suchlots shall be subject to an access easement in favor of Declarant and theAssociation for such purpost:.

The Association shall assume responsibility for implementing andmaintainin g proper erosion measures. including without limitation, installation andmaintenance of silt fence protection, Commencing with the recording of the initialfinal record pial of Lots, the Association shall employ full-time personnel to mak~inspections of the silt fence and any other erosion e~trot measures im~mentcd_by the Association . --Sucli personnel shall be responsible for conductinginspections of the Properties immediately after a rainfall of one-half ( y~) inch ormore, and weekly during periods of less rain or dry conditions. •A bobcat orsimilar equipment will be maintained by the Association at all times ..Q!tringdevelopment of the Propert ies and construction of residences in order to maintainthe streets in a clear condillon. -

The Associati on shall erect and maintain a security fence along theProperties' boundary with Kentucky-American Water Company C'Kentucky-American") . The Association shall repair any openings or other damage to thefence within twenty-four hours of notification from Kentucky-American . TheAssociation may impose sanctions pursuant to Article IX. Section 3, and mayassess any Owner and create a lien against such Owner' s Lot for habituallybreaching such security fence.

The Assoc iation shall use its best efforts to enforce a prohibition againstlawn care fertilizers once houses are constructed.

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Except as otherwise prov ided here, the Common Area shall not be reducedby amendment of this Declaration or any other means without prior writtenapprova l of Declarant so long as Declarant owns any property subject to theDeclarat ion.

The Associat ion shall be relieved of its responsibilities under this Article tothe extent they are assumed by the Government or any other local, state or federalgove rnmenta l agency or any private utility.

Section 2 Standard of Performance

All maintenance of the Common Area shall be performed consistent withall applicab le covenants of this Declaration. Neither the Association, Declarant, orany Owner shall be liable for any damage or injury occurring on or arising out ofthe condition of property maintained by the Association.

Section 3 Own er's Responsib ility

Each Owne r shall maintai n his or her Lot and all structures. parking areas.landscaping, and other improvements on the Lot in a manner consistent with theCommunity-Wide Standard and all applicable covenants. If any Owner failsproperly to perform his or her maintenance responsibility, the Association m~

' perform it and assess atl costs incurred by the Association against the Lot and theQ\\.l1er in accordance With Article X, Section 6, of this Declaration: provided,however, excep t when entry IS requ ired due to an emergency situation, theAssoc iation shall afford the Owner reasonable notice and an opportunity to curethe problem prior to entry. Provided, however, that if such Lot is also includedwithin a separate owners associa tion, such separate associa tion shall have the soleauthority to perform the maintenance and assess the costs as set forth herein.

ARTIC LE V

INSURANCE AND CASUALTY LOSSES

Section I Insurance

The Assoc iation' s Board of Directors, or its duly authoriz-ed agent, shallhave the author ity to obtain. on behalf of and for the benefit of the Associat ion, itsMembers, officers and directors, such insurance coverages and/or bonds as theBoard of Directors in its discretion determines. including, bUI not limited to,blanket all-risk coverage, li re and extended coverage, public liability. workers'compensation, director' s and office r's liability and a fidelity bond, Premiums forall insurance and/or bonds obtained shall be Common Expenses and shall be

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included in the General Assessment, as more particularly described in Article X ofthis Declaration. If "all-risk" property insurance is not generally available atreasonable cost, then fire and extended coverage may be substituted in such formas the Board deems appropriate. The face amount of the policy shall be sufficientto cover the full replacement cost of all insurable structures.

The Board also shall obtain a public liability policy covering the Area ofCommon Responsibility, insuring the Association and its Members for all damageor injury caused by the negligence of the Association, any of its Members, itsemployees, agents, or contractors acting on its behalf. If generally available atreasonable cost, the public liability policy shall have at least a Five Million Dollar($5,000,000.00) combined single limit per occurrence and in the aggregate. TheAssociation shall also obtain, if reasonably available, an umbrella policy providingat least Five Million Dollars ($5,000,000.00) in additional coverage bringing totalliability coverage to at least Ten Million Dollars ($10,000,000.00). Premiums forall insurance on the Area of Common Responsibility shall be included in theGeneral Assessment.

Section 2 Disbursement of Proceeds

If the damage or destruction for which the proceeds of insurance policiesare paid is to be repaired or reconstructed, the proceeds, or such portion thereof asmay be required for such purpose, shall be disbursed in payment of such repairs orreconstruction as hereinafter provided. Any proceeds remaining after defrayingsuch costs of repairs or reconstruction to the Common Area or, in the event norepair or reconstruction is made, shall be retained by and for the benefit of theAssociation and placed in a capital improvements account.

Section 3 Damage and Destruction

Any damage or destruction to the Common Area shall be repaired orreconstructed unless the Members representing at least seventy-five percent (75%)of the total vote of the total Class "A" votes of the Association and the Class "B"Member, if any, shall decide within sixty (60) days after the casualty not to repairor reconstruct. If for any reason either the amount of the insurance proceeds to bepaid as a result of such damage or destruction, or reliable and detailed estimates ofthe cost of repair or reconstruction, or both, are not made available to theAssociation within said period, then the period shall be extended until suchinformation shall be made available; provided, however, such extension shall notexceed sixty (60) days. No Mortgagee shall have the right to participate in thedetermination of whether the Common Area damage or destruction shall berepaired or reconstructed.

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Section 4 Repair and Reconstruction

If the damage or destruction to the Common Area for which insuranceproceeds are paid is to be repaired or reconstructed, and such proceeds are notsufficient to defray the cost thereof, the Board of Directors shall, without thenecessity of a vote of the Members, levy a Special Assessment, as herein defined,against all Owners responsible for the premiums for the applicable insurancecoverage under Section I of this Article on the same basis as provided for theGeneral Assessment. Additional assessments may be made in like manner at anytime during or following the completion of any repair or reconstruction.

ARTICLE VI

NO PARTITION

Except as is permitted in this Declaration or amendments thereto, thereshall be no physical partition of the Common Area or any part thereof, nor shallany Person acquiring any interest in the Property or any part thereof seek anyjudicial partition. This Article shall not be construed to prohibit the Board ofDirectors from acquiring and disposing of tangible personal property nor fromacquiring title to real property which may be subject to this Declaration.

ARTICLE VII

CONDEMNATION

Whenever all or any part of the Common Area shall be taken by anyauthority having the power of condemnation or eminent domain (or conveyed inlieu of and under threat of condemnation, by the Board acting on the writtendirection of Members representing at least two-thirds (2!J) of the total Associationvote and the Declarant, as long as the Declarant owns any property described onExhibit "B"), each Owner shall be entitled to notice thereof. The award made forsuch taking shall be payable to the Association as trustee for all Owners to bedisbursed as follows:

If the taking involves a portion of the Common Area on whichimprovements have been constructed, then, unless within sixty (60) days aftersuch taking, the Declarant, so long as the Declarant owns any property describedin Exhibit "B" of this Declaration, and Members, representing at least seventy-fivepercent (75%) of the total vote of the Association, shall otherwise agree, theAssociation shall restore or replace such improvements so taken on the remainingland included in the Common Area to the extent lands are available therefor, inaccordance with plans approved by the Board of Directors of the Association. If

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such improvements are to be repaired or restored, the above provisions of ArticleV hereof regarding the disbursement of funds in respect to casualty damage ordestruction which is to be repaired shall apply.

If the taking does not involve any improvements on the Common Area, orif there is a decision made not to repair or restore, or if there are net fundsremaining after any such restoration or replacement is completed, then such awardor net funds shall be disbursed to the Association and used for such purposes asthe Board of Directors of the Association shall determine.

ARTICLE VIII

ANNEXATION OF ADDITIONAL PROPERTY;ADDITIONAL COVENANTS, ASSESSMENTS,

AND ASSOCIATIONS

Section 1 Annexation Without Approval ofClass "A" Membership

With the consent of the owner thereof (whether such ownership is in feesimple or is a leasehold estate), Declarant shall have the unilateral right, privilegeand option, from time to time at any time until the Class "B" Control Period ends,to subject to the provisions of this Declaration and the jurisdiction of theAssociation all or any portion of the real property, as described in Exhibit "A",attached hereto and by reference made a part hereof, by filing in the FayetteCounty Clerk's Office, Lexington, Kentucky, a Subsequent Amendment annexingsuch property. Such Subsequent Amendment to this Declaration shall not requirethe consent of Members. Any such annexation shall be effective upon the filingfor record of such Subsequent Amendment unless otherwise provided therein.Declarant shall have the unilateral right to transfer to any other Person the saidright, privilege and option to annex additional property which is herein reserved toDeclarant, provided that such transferee or assignee shall be the developer of atleast a portion of the real property described in Exhibits "A" or "B" attachedhereto and that such transfer is memorialized in a written, recorded instrumentexecuted by the Declarant. The real property described in Exhibit "A", or anyportion thereof, shall not be affected by this Declaration, either expressly or byimplication, unless and until annexed as provided herein.

Section 2 Acquisition of Additional Common Area

Declarant, if authorized by an affirmative vote ofa majority of the membersof the Board of Directors, may conveyor cause to be conveyed to the Associationadditional real estate, improved or unimproved, located within the propertiesdepicted on and described in Exhibits "A" and "B" which, upon conveyance or

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dedication to the Association, shall be accepted by the Association and thereaftershall be maintained by the Association at its expense for the benefit of all itsMembers.

Section 3 Additional Covenants and Easements

Declarant or its successors may subject any portion of the propertysubmitted to this Declaration to additional covenants, conditions, restrictions, andeasements, including covenants obligating the Association to maintain and insuresuch property on behalf of the Owners and obligating such Owners to pay thecosts incurred by the Association through assessments. Such additional covenantsand easements shall be set forth in a Subsequent Amendment duly recorded in theFayette County Clerk's Office filed either concurrent with or after the submissionof the subject property and shall require the written consent of the owners of suchproperty if not Declarant.

Section 4 Formation of Separate Owners Associations

The Declarant or its successors, with the written consent of the owner(s) ofaffected properties as specified herein, may create separate owners association(s)affecting a portion or portions of the Property which is to be developed into multi-family units. Such associations may impose and enforce use restrictions, mayprovide for the creation and maintenance of common areas, including the levyingof assessments to pay for such maintenance, and may subject such portion orportions of the Property included within such owners association(s) to additionalcovenants, conditions, restrictions, and easements. Such separate ownersassociation(s) shall be set forth in a separate Declaration(s) duly recorded in theFayette County Clerk's Office and shall require the written consent of the Ownersof the portion of the properties to be included within such separate association ifnot Declarant, or its successor Declarant(s). In no event shall the formation of aseparate owners association(s) relieve a Member from the assessments or anyother obligation, covenant, or restriction imposed by this Declaration.

ARTICLE IX

ASSOCIATION; RIGHTS AND OBLIGATIONS

Section 1 Implied Rights

The Association may exercise any other right or privilege given to itexpressly by this Declaration or the By-Laws, or which may be reasonably impliedfrom, or reasonably necessary to effectuate, any such right or privilege.

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Section 2 Rules

The Association, through its Board, may make, modify, and enforcereasonable rules governing the use of the Property (the "Rules"), consistent withthe rights and duties established by this Declaration and provided that such Rulesare substantially related to the Association's maintenance of the Common Area orits other responsibilities. Such rules shall be binding upon all Owners, occupants,invitees, and licensees until and unless repealed or modified in a regular or specialmeeting of the Board of Directors by the vote of a majority of the Board and, solong as such Membership exists, by the Class "B" Member.

Section 3 Enforcement

TheAssociation may impose sanctions. for violations of this_ Declaration,t!'te.. B..£~~~~~~r~~I~~~~rnCJu:ditl~!-eiiSj)_IlllEle~!i1~~~taiY.]illesi~...!Q_UQ

may convey to the Association improved or unimproved real estate located withinthe properties described in Exhibits "A" and "B", personal property, easements,and other property interests. Such property shall be accepted and thereaftermaintained by the Association at its expense for the benefit of its Members,subject to any restrictions set forth in the conveyance. Any acquisition, disposal,or acceptance of property by the Association as described herein shall require theaffirmative vote of a majority of the members of the Board of Directors at aregular or special meeting.

Section 7 Utility Lines

Each owner, occupant, guest, and invitee acknowledges that neither theAssociation, the Board nor Declarant shall in any way be considered insurers orguarantors of health within the Properties and neither the Association, the Board,nor Declarant shall be held liable for any personal injury, illness, or any other lossor damage caused by the presence or malfunction of utility lines or utilitysubstations adjacent to, near, over, or on the Properties.

ARTICLE X

ASSESSMENTS

Section I Creation ofAssessments

There are hereby created assessments for the Common Expenses as mayfrom time to time specificalIy be authorized by the Board of Directors to becommenced at the time and in the manner set forth in Section 7 of this Article. Inaddition to the Construction Period Assessment as described in Section 4 below,there shalI be two types of assessments: (I) General Assessments to fund expensesfor the benefit of alI Members of the Association; and (2) Special Assessments asdescribed in Section 6 below.

General Assessments shall be levied equally on all Lots except for themulti-family lots which shall be assessed at one-half (Y2) of the amount of theGeneral Assessments. For purposes of this Article, each unit within the multi-family lots shall be assessed as a separate Lot, as follows:

(a) one (I) townhouse lot shalI be assessed as one (1) Lot;

(b) four-plex lots shalI be assessed as four (4) Lots;

(c) condominium units shalI be assessed as a separate Lot.

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Special Assessments shall be levied as provided in Section 6 below. Each Owner,by acceptance of his or her deed or recorded contract of sale, whether or not itshall be so expressed in such deed or contract, is deemed to covenant and agree topay these assessments.

All assessments, together with a late fee in the amount of fifteen percent(15%) of any assessment not paid within fifteen (15) days of its due date, togetherwith interest at a rate not to exceed ten percent (10%) per annum or the highestrate allowed by Kentucky law as computed from the date the delinquency firstoccurs, costs and reasonable attorney's fees, shall be a charge on the land and shallbe a continuing lien upon the Lot against which each assessment is made. Eachsuch assessment, together with interest, costs and reasonable attorney's fees, shallalso be the personal obligation of the Person who was the Owner ofsuch Lot at thetime the assessment arose, and its grantee shall be jointly and severally liable forsuch portion thereof as may be due and payable at the time of conveyance, exceptto the extent the lien securing same may have been extinguished by judicialproceedings.

The Association shall, upon demand at any time, furnish to any Ownerliable for any type of assessment a certificate in writing signed by an officer of theAssociation setting forth whether such assessment has been paid as to anyparticular Lot. Such certificate shall be conclusive evidence of payment to theAssociation of such assessment therein stated to have been paid. The Associationmay require the advance payment of a processing fee not to exceed Fifty Dollars($50.00) for the issuance of such certificate.

Assessments shall be paid in such manner and on such dates as may befixed by the Board of Directors which may include, without limitation,acceleration of the annual assessments for delinquents. Unless the Board otherwiseprovides, the General Assessment shall be paid on an annual basis and shall be dueand payable in advance on or before the due date established by the Board. Anyassessment not paid on the due date shall be deemed delinquent without notice ordemand.

No Owner may waive or otherwise exempt itself from liability for theassessments provided for herein, including, by way of illustration and notlimitation, by non-use of Common Areas or abandonment of the Lot. Nodiminution or abatement of assessment or setoff shall be claimed or allowed byreason of any alleged failure of the Association or Board to take some action orperform some function required to be taken or performed by the Association orBoard under this Declaration, or the By-Laws or for inconvenience or discomfortarising from the making of repairs or improvements which are the responsibility ofthe Association, or from any action taken to comply with any law, ordinance or

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with any order or directive of any municipal or other governmental authority. theobligation to pay assessments being a separate and independent covenant on thepart of each Owner.

Section 2 Declarant

(a) During the Class "B " Control Period. Declarant shall not be requiredto pay assessments for Lots owned by Declarant. Upon expiration of the Class "B"Control Period, Declarant shall be obligated !O pay assessments for Lots which itowns on the same ba.sis as other owners .

(b) Until expiration of the Class " R" Control Period, Declarant or itsnominee shall administer the assessments and receipts therefrom which may onlybe U SL-d for purposes generally benefiting the Properties. as permitted in thisDeclaration.

Section 3 Initial Assessment

The Initial Assessment shall be three hundred nlncty-f .....e dollars ($395 .00)per Lot. paid on an annual basis until such time as the Board prepares a budget asprovided in Section 5 hereinafter, and increases. decreases. or eliminates theamount of the annual assessment.

Section 4 Construction Period Assessment

In addition to the Initial Assessment as provided in Section 3. each LOlshall be assessed the amount of Two Hundred Fifty Dollars ($250.00) per monthfor each month during the construction period which for purposes of thisassessment shall commence for a particular Lot upon the issuance of a buildingpermit for such Lot and end upon completion of construction as evidenced by thefinal grading and either laying of sod on such Lot. or completion of the drivewaywith installation of perimeter silt fence. For construction occurring during aportion of a calenda r month. such assessment shall be assessed on a pro-rated perday basis for such portion of that calendar month. All such Construction PeriodAssessments shall be d,.UL3!t_d~illle within ten (10) days from receipt of theAssociation's statement. The ~_I;.ssmcnLsha1Lb.t; segJn;d by a lien upon theslib$ o,;:t Lot which lien shall emoy the same priority and be enforceable in the samemanner as the lien of General Assessments. A lien is hereby created against eachLot owne by a Builder for all fines, penalties. or other amounts imposed againstDeclarant by federal, state, or local environmental protection agencies forviolations of any environmental statute, rule or regulation as a result of the actionso f such Builder and/or any of its subcontractors which lien shall enjoy the samepriority and be enforceable in the same manner as the lien of Genera l

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Assessments. There is also created against each Lot owned by a Builder a lien forthe cost to repair all damage to storm sewers. catch basins, and curbs as well as thecost to repair and/or adjust all manhole covers disturbed by such Builder whichlien shall also enjoy the same priority and be enforceable in the same manner asthe lien of General Assessments. Additionally, each Builder which constructsimprovements on a lot in the Subdivision shall be responsible for its proportionateshare of the costs incurred by Developer in maintaining the Subdivision. Theamount to be charged to each Builder shall be determined by Developer. A lien infavor of Developer is hereby created against all lots in the Subdivision for suchamounts. Such amounts shall be due and payable at the time Builder closes on thesale of the completed residence.

Section 5 Preparation of Budget

After Declarant relinquishes control of the Common Area as provided forin Section 2 hereof: it shall be the duty of the Board, at least sixty (60) days beforethe beginning ofthe fiscal year and thirty (30) days prior to the meeting at whichthe budget shall be presented to the Members, to prepare a budget covering theestimated costs of operat ing the Associat ion during the coming year. The budgetshall include a capital contribution establ ishing a reserve fund in accordance witha capital budget separately prepared and shall separately list Common Expenses.The budget shall include a road reserve fund for the purpose of providing for therepairs and replacement of the private roads serving the estate lots. The amount sobudgeted shall be assessed only against the estate lots. The lots described inExhibit "8" are estate lots with the exception of Lots 36-41, inclusive, Block " L",Unit 4A. The amount of the General Assessment to be levied for the coming yearagainst each Lot subject to assessment under Section 7 below shall be computedso that the amount of the General Assessments for each of the one hundredseventy-five (175) multi-family lots shall be one-half (\11) of tbe amount of theGeneral Assessment for each of the three hundred twenty (320) single-family lots.For example, if the total operating budget is Twenty Thousand Dollars($20,000.00) , each single-fa mily lot would pay Forty-Nine Dollars and EightCents ($49.08) and each multi-family lot would pay Twenty-Four Dollars andFifty-Four Cents ($24.54) (175 ( \11 x) + 320 x = $20,000.00] . The Board shallcause a copy of the budget and the amount of the General Assessments to belevied against each Lot for the following year to be delivered to each Owner atleast fifteen (15) days prior to the meeting. The budget and the assessment sha llbecome effect ive unless disapproved at the meeting by a vote of Members or theiralternates representing at least a majority of the total Class "A" vote in theAssociation.

Notwithstanding the foregoing, however, in the event the proposed budgetis disapproved or the Board fails for any reason so to determine the budget for the

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succeeding year, then and until such time as a budget shall have been determinedas provided herein, the budget in effect for the then current year shall continue forthe succeeding year.

Section 6 Special Assessments

In addition to the assessments authorized in Section 1 of this Article, theAssociation may levy a Special Assessment or Special Assessments in any yearapplicable to that year only for defraying, in whole or in part, the cost ofconstruction, unexpected repair or replacement, or any other expenditure for themaintenance of the Common Area, which cost was not otherwise provided for inthe General Assessment. Provided, however, such assessment shall have theaffirmative vote of a majority of the Board.

The Association may levy a Special Assessment against any Member toreimburse the Association for costs incurred in bringing a Member and his Lotinto compliance with the provisions of the Declaration, any amendments thereto,the Articles, the By-Laws and/or the Association rules, which Special Assessmentmay be levied upon the vote of the Board after notice to the Member and anopportunity for a hearing. Provided however, that if such Lot is also includedwithin a separate owners association, such separate association shall have soleauthority to levy a Special Assessment against such Lot.

Section 7 Lien for Assessments

The General and Special Assessments and all other sums assessed againstany Lot pursuant to this Declaration (including, without limitation, the sumsassessed against all Lots during the period of construction pursuant to Section 4herein), together with late charges, interest, costs and reasonable attorney's feesactually incurred as provided herein, shall be secured by a continuing lien on suchLot in favor of the Association, which lien shall not be diminished in any way by atransfer, subdivision and/or consolidation that occurs after the 1st day of Januaryof each calendar year. Such lien shall be prior and superior to all other liens andencumbrances on such Lot except:

A. all taxes, assessments and other levies which by law would be superiorthereto, and

B. the lien or charge of any first Mortgage of record (meaning anyrecorded Mortgage with first priority over other Mortgages) made in good faithand for value, to which first Mortgages the lien created herein shall be subordinateand inferior in all respects.

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Such lien, when delinquent, may be enforced by suit, judgment andforeclosure.

The Association, acting on behalf of the Owners, shall have the power tobid for the Lot at foreclosure sale and to acquire and hold, lease, mortgage andconvey the same. During the period of time which a Lot is owned by theAssociation following foreclosure:

A. no right to vote shall be exercised on its behalf;

B. no assessment shall be assessed or levied on it; and

C. each other Lot shall be charged, in addition to its usual assessment,its equal pro rata share of the assessment that would have been charged such Lothad it not been acquired by the Association as a result of foreclosure.

Suit to recover a money judgment for unpaid assessments and attorney's fees shallbe maintainable without foreclosing or waiving the lien securing the same. Afternotice and an opportunity for a hearing, the Board may temporarily suspend thevoting rights of a Member who is in default in payment of any assessment.

All payments shall be applied first to costs and attorney's fees, then to latecharges, then interest, then to delinquent assessments, then to any unpaidinstallments of the General Assessments or Special Assessments which are not thesubject matter of suit, in the order of their coming due, and then to any unpaidinstallments of the General Assessments which are the subject matter of suit, in theorder of their coming due.

Section 8 Capital Budget and Contribution

After Declarant relinquishes control of the Common Area pursuant toSection 2 hereinabove, the Board of Directors shall annually prepare a capitalbudget to take into account the number and nature of replaceable assets, theexpected life of each asset and the expected repair or replacement cost. The Boardshall set the required capital contribution in an amount sufficient to permit meetingthe projected capital needs of the Association, as shown on the capital budget,with respect both to amount and timing by annual assessments over the period ofthe budget. The capital contribution shall be fixed by the Board and includedwithin and distributed with the budget and assessment as provided in Section 5 ofthis Article.

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Section 9 Date ofCommenceme nt ofAssessments

The assessments provided for herein shall commence as to each l ot on thedate of acquisition of record title to a lot by the first purchaser thereof other thanthe Declarant or an owner who purchases solely for the purpose of constructing adwelling thereon for resale. The assessment shall be: pro-rated for the balance ofthe calendar )'ear in which acquisition of record title to a l ot occurs as providedherein.

Section 10 Exempt Property

Notwithstanding anything to the contrary herein. the following propertyshall be exempt from payment of General Assessments and Special Assessments:

(a) all Common Areas; and

(b) all property dedica ted to and accepted by any governmentalauthority or public utility. including. without imitation. public schools. publicstreets and public parks.

Section II Failure to Assess

The omission or failure of the Board to fix the assessment amounts or ratesor to deliver or mail to each Owner an assessment notice shall not be deemed awaiver. modification. or a release of any Owner from the obligation to payassessments. In such event. each Owner shall continue to pay assessments on thesame basis as for the last year for which an assessment was made until a newassessment is made. at which time any shortfalls in collections may be assessedretroactively by the Association,

Section 12 Record keeping

The Association shall maintain or cause to be maintained full and accuratebooks of account with respect to the performance of its responsibilities hereunder.The books and records and related financial statements shall be made available forinspection and copying upon request by the Members during normal businesshours. Copying charges shall be paid by the Members when requestin g copies.

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ARTIC LE XI

USE RESTRICTIONS

Section I Primary Use Restrictio ns

No Lot shall be used except for private residential purposes. No structureshall be erected. placed. or altered or permiued to rema in on any Lot except onesingle-fam ily detached dwelling designed for the occupancy of one fam ily.provided. however, townhouse structures. Iour-plex structures and condomin iumsshall be permitt ed in those areas designated for such as shown on the DevelopmentPlan.

Sect ion 2 Garages

Except as hereinafter specifica lly excepted. each residence shall have anattached garage . Detached gara ges shall be permitted for those flve (5) two (2)acre (ap proxi mate ) Lots located in Unit I -F which back up 10Old Richmond Roadwith the specific written approval of the Declarant. All SIKh garages shall as aminimum contain sufficient space 10 accommodate two automo biles. No detachedgarag es shall be permitted without the speci fic ....rinen approval of the Declarant.

Sec tion 3 Nuisances

No noxious or offensive trade or activity shall be conducted on any Lot. norshall anyth ing be done which may be or become an annoyance or nuisance to theneighborhood .

Secti on 4 Use ofOther Structures and Vehicles

(a) No structure. temporary or permanent. including without limitationan out building. trail er. basement. tent. shack. storage shed. garage. bam . orstructure other than the main residence erected on a Lot shall be permitted on anyLot except temporary tool sheds or field offices used by a Builder or Decla ran t.wh ich shall be removed when construct ion or development is completed and nosuc h structure shall at any time be used as a residence temporari ly or permanently .

(b) Except for vehicles reasonabl y neces sary to be on or about the Lotsin the subd ivision during construction or alteration of any build ings or otherimprovement s upon a Lot. no trailer. motor home. boat. camper. truck orcommercial vehicle shall be parked or kept on any L OI at any lime unless housedin a gara ge. No automobile or motorcycle shall be perked or kept on any lot atany time unless located in a driveway or housed in a garage . No automob ile which

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is inoperable shall be habitua lly or repeatedly parked or kept on any' Lot exceptwithin an approved enclosed garage. No person shall engage in major car repairseither for himself or others at any time .

Section 5 Animals

No anima ls. including reptile s. livestock. or poultry of any kind. shall beraised. bred. or kept on any Lot except dogs. cats. or other household pets(mean ing the domestic pets traditionally recognized as household pets in thisgeographic area) may be kept (not to exceed rwo animals per Owner) providedthey are not kept. bred . or maintained for any commerc ial or breed ing purposes.

Section 6 Basketball Equipment . Clotheslines. Garbage Cans. Tanks.Etc.

All basketball hoops and backboards. garbage cans. trash and garbage rollcontainers. above ground tanks. and other similar items shall be located orscreened so as to be concealed from vlew of neighboring and adjacent property.l ots, and streets. as is reasonably practicable. All rubbish. trash. and garbage shallbe regularly remo ved from the l ot and shall not be allowed 10accumulate thereon.No clotheslines shall be permitted on any lot.

Secuon 7 Unsightly or Unkempt Conditions

It shall be the respons ibility of each Owner to prevent the development ofany unclean. unhea lthy. unsightly. or unkempt condit ion on his lot. The pursuit ofhobbies or other activities, including specifically. without limiting the generalityof the foregoing. the assembly of motor vehicles and other mechanical deviceswhich might tend to cause disorderly, unsightly. or unkempt conditions. shall notbe pursued or undertaken on any part of the properties.

Section 8 Antennas

No exterior antennas. aerials, satellite dishes. or other apparatus for thetransmission of television. radio. and/or reception of television, radio. or othersignals of any kind shall be placed. allowed . or maintained upon any portion of thePropert ies. including any Lot. without the prior wrinen consent of the Declarant orthe Association after it assumes control from the Declarant. However. satellitedishes shall be permitted on any Lot without the prior approval of the Declarant orthe Associat ion provided that they arc installed in compliance with the followingcriteria: (a) the diameter of the dish docs not exceed one (I) meter: (b) it isscreened from view of all adjacent l ots; and (C) it is either (i) attached to theresidence. or (ii) located on the Lot. The Declara nt and/or the Associat ion shall

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have the right, without obligation, to erect an aerial, satellite dish, or otherapparatus for a master antenna or cable system for the benefit of all or a portion ofthe Properties should any such master system or systems be utilized by theAssociation and require any such exterior apparatus.

Section 9 Subdivision of Lot

No Lot shall be subdivided or its boundary lines changed except with theprior written approval of the Board of Directors of the Association and theapproval of the appropriate government entity. Declarant, however, herebyexpressly reserves the right to replat any Lot or Lots which it owns prior toconveyance by Declarant. Upon completion of residences on the four-plex Lots asshown on the Development Plan, those Lots may be subdivided in order to createseparate units capable of individual ownership. Any such division, boundary linechange, or replatting shall not be in violation of the applicable subdivision and/orzoning regulations.

Section 10 Pools

No above ground pool shall be erected, constructed, or installed on any Lot.

Section 11 Tree Removal

No trees shall be removed from any portion of the Properties by any personother than the Declarant except with the prior written approval of the Declarant solong as the Class "B" Control Period continues.

Section 12 Sight Distance at Intersections

All property located at street intersections shall be landscaped so as topermit safe sight across the street comers. No fence, wall, hedge, or shrub plantingshall be placed or permitted to remain where it would create a traffic or sightproblem.

Section 13 Lighting

Except for seasonal Christmas decorative lights, which may be usedbetween December 1 and January 10 only, all exterior lights must be approved inaccordance with Article XII of this Declaration.

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Section 14 Artificial Vegetation, Exterior Sculpture and Similar Items

No artificial vegetation shall be permitted on the exterior of any portion ofthe Properties. Exterior sculpture, fountains, flags, and similar items must beapproved in accordance with Article XII of this Declaration.

Section 15 Energy Conservation Equipment

No solar energy collector panels or attendant hardware or other energyconservation equipment should be constructed or installed unless it is an integraland harmonious part of the architectural design of the structure as determined inthe sole discretion of the Declarant pursuant to Article XII hereof.

Section 16 Mailboxes

All mailboxes shall satisfy applicable postal regulations and shall conformto specifications established by the Declarant.

Section 17 Lakes

Any lakes, ponds, and streams within the Properties shall be aestheticamenities only and no other use thereof, including without limitation swimming,boating, playing, or use of personal flotation devices shall be permitted withoutwritten authorization of the Declarant. Neither the Declarant nor the Associationshall be responsible for any loss, damage, or injury to any Person or propertyarising out of the authorized or unauthorized use of lakes, ponds, or streams withinthe properties.

Section 18 Fences

No fences of any kind shall be permitted on any Lot except as approved inaccordance with Article XII of this Declaration. As a general rule Declarant willonly approve picket fences 42 inches in height, brick, stone, or wrought ironfences in the areas designated by Declarant as "Estate Lots". Vinyl fences will notbe approved for the Estate Lots.

Section 19 Signs

No sign of any kind shall be displayed on any Lot except one sign not morethan three square feet for advertising such Lot for sale or rent, house numbers, andname plates of standard sizes determined by the Declarant, and signs of theDeclarant located on the Common Areas or Lots of the Declarant advertising thesale of Lots by the Declarant.

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Section 20 Sidewalks

Anyone cutting onto or tunneling under or damaging in any manner thestreets, sidewalks, curbs, or roads serving the Properties shall repair and restorethe streets, sidewalks, curbs, or roads to their original condition, all at suchperson's own risk and expense. This paragraph shall not be construed as a grant ofpermission or consent by the Declarant and shall not create any liability on theDeclarant. Unless otherwise permitted by the Declarant, all Lots shall haveinstalled by the Owner within sixteen (16) months from the date of recording ofthe plat of such Lot, the sidewalk along the street.

ARTICLE XII

ARCHITECTURAL AND LANDSCAPE CONTROL

Section 1 Approval of Construction and Landscape Plans

(a) No building, fence, wall, or other structure shall be commenced,erected, or maintained upon the Properties, nor shall any addition to or change oralteration therein be made to the existing improvements until the plans andspecifications showing the nature, kind, shape, color, height, materials, andlocation of same shall have been submitted to and approved in writing as toharmony of external design and location in relation to surrounding structures,landscaping, and topography by the Declarant; nor shall any exterior paint color bechanged without the approval of the Declarant. After the Class B Membershipterminates and is converted to Class A Membership, the architectural control shallbe vested in the Board of Directors or in an architectural committee composed ofthree or more representatives appointed by the Board. In the event said Declarant,Board, or Board's designated committee, as the case may be, fails to approve ordisapprove such design and location within ninety (90) days after said plans andspecifications have been submitted to it, approval will not be required and thisARTICLE will be deemed to have been fully complied with. Prior to delivery ofarchitectural control to the Board of Directors, Declarant may vary the establishedbuilding lines in its sole discretion where not in conflict with applicable zoningregulations.

(b) References to "structure" in this ARTICLE shall include anybuilding (including a garage) fence, wall, antenna, and microwave and otherreceivers and transmitters, including those currently called satellite dishes.

(c) Declarant contemplates that the residences to be constructed shall beof a classic or traditional architectural character provided, however, in the sole

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discretion of the Declarant, other types of architectural designs may be approved ifdesirable, in the sole opinion of the Declarant, in order to take advantage ofunusual characteristics of a particular Lot brought about by slopes, location oftrees, or other unique characteristics. The Declarant retains the sole right andauthority in its discretion to approve or disapprove of the materials utilized in theconstruction of the improvements (references to improvements in this Article areintended to include without limitation the items specified hereinabove insubparagraph (b) and if there is any question as to the all-inclusive nature of thiscovenant, the judgment of Declarant in its sole discretion shall control). Onecomplete set of the plans and specifications shall be retained by the Declarant andthe duplicate copy initialed by the Declarant when approved shall be returned tothe Owner.

(d) In addition to and without limitation on the covenants contained inthe preceding subparagraphs, a plot plan shall be submitted in duplicate showingthe location of each and every improvement proposed, showing the boundary ofthe Lot, all easements and building lines, floor level elevations, the location anddimensions of all buildings, accessory buildings or structures, and any and everyimprovement and/or alteration to be made. If any trees are proposed to beremoved, such removal shall be approved by the Declarant as required by ArticleXI, Section 11 hereinabove, and, if desirable in the opinion of the Declarant, treesto be removed shall be relocated if reasonably feasible on other portions of theLot. As construction of the improvements is completed, each Lot shall belandscaped with the minimum number of trees in the front yard or the areabetween the sidewalk and the curb as required by the Lexington-Fayette UrbanCounty Government and the record plat for such Lot.

(e) Any proposed alterations to any of the improvements or additionsthereto, whether proposed to be made during the period of construction or afterconstruction of the improvements, shall be submitted to the Declarant for approvalon the same terms and conditions as herein imposed; provided, however, when theClass B membership terminates the Board or the Board's designated committeeshall have the authority to control future improvements or alterations on any of theLots within the subdivision.

(f) If construction is not begun within one (I) year after approval of theplans by the Declarant or its successor in authority, the approval shallautomatically terminate.

(g) The front, side, and rear yard of any Lot shall be finished, graded,and sodded within thirty (30) days after the completion of the main residenceprovided, however, this period may be extended if the sodding cannot beaccomplished because of inclement weather.

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(h) The plans and specifications shall include all details of constructionand materials, including without limitation the color of the brick and/or paint to beused on the exterior and the style of the roof shingles.

Section 2 Exterior Maintenance

It shall be the duty of each Owner of a Lot to maintain his or her Lot andimprovements thereon and to keep the grass on the Lot properly cut, to keep theLot free from weeds and trash, and to keep it otherwise neat and attractive inappearance. Should any Owner fail to do so, then in addition to maintenance of theCommon Area, the Association, upon approval by a majority of the Board ofDirectors, shall be authorized, but not obligated, to perform exterior maintenanceupon each Lot which is subject to assessment hereunder as follows: paint, repair,replace and care for roofs, gutters, downspouts, exterior building surfaces, trees,shrubs, grass walks, and other exterior improvements. In addition, upon the failureof any Owner to comply with any condition or requirement of Article XI or thisArticle, for actions or failure to act arising prior to vesting of architectural controlin the Board of Directors, the Declarant may take such action as is necessary tocomply therewith and the Owner on demand shall reimburse Declarant for theexpense incurred in so doing. For actions or failure to act arising after architecturalcontrol is turned over to the Board of Directors by the Declarant as set forth inSection I hereof, all such enforcement provisions shall be vested in the Board ofDirectors who may, by a majority vote, authorize work to remedy thenoncomplying conditions and add the cost of such work to the assessment towhich the subject Lot is subject.

Section 3 Setbacks, Building Lines, etc.

There shall be a thirty-five (35') foot building line across the front of eachlot (and also along the side of any corner lot), notwithstanding the fact that thefinal record plat for a lot indicates a different building line. Declarant reserves theright to reduce the thirty-five (35') foot building line on a lot by lot basis in its solediscretion. Except as set forth hereinabove, the Lots shall be subject to allbuilding lines, setbacks, including sideyard requirements, easements, and allrestrictions of record pertaining to the Properties, including those reflected on thefinal record subdivision plats of the Properties. With respect to the sideyardrequirements, the sideyard may be reduced from seven and one-half (7 Y2') feet tofive (5') feet for any Lot upon which a residence is to be constructed so long assuch reduction will result in no less than a minimum of seventeen (17') feetbetween such residence and the residence sharing the common sideyard boundary.In other words, for every foot (or portion thereot) that an existing residence setsaway more than nine and one-half (9 Yz') feet from the shared common sideyard

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boundary, the residence to be constructed may reduce the required sideyard alongthe shared common sideyard boundary by the same distance, down to a minimumof a five (5') feet sideyard set back. No building line or setback, includingsideyard requirements as reflected on the final record subdivision plat, shall bevaried or modified without the prior written approval of the Declarant during theClass "B" Control Period, and the appropriate governmental entity. Afterexpiration of the Class "B" Control Period, such variances may only be obtainedwith the approval of the appropriate governmental entity, but shall not require theapproval of the Association.

Section 4 Minimum Building Requirements

Notwithstanding any other provision in this Article or any right in theDeclarant, its successors and assigns, or the Association, to approve constructionand landscape plans, or to amend this Declaration with respect to constructionstandards, or to amend this Declaration with respect to the applicability of thisDeclaration to any portion of the Property, pursuant to Article XIII, or otherwise,the following minimum building requirements shall not be amended, eliminated orwaived in whole or in part, except by Declarant in isolated instances so long assuch changes are in keeping with the character of the subject neighborhood.

A. Residences shall be subject to the following requirements:

1. Construction and Area. The minimum floor area of a single familystructure, exclusive of porches, garages and basements shall be as follows:

(a) One (1) Story: 2,700 square feet plus a two (2) car attachedgarage, except for Lots 36-41, inclusive, Block "L", Unit 4A, which shall be 1,900square feet plus a two (2) car attached garage.

(b) Two (2) Story: 3,400 square feet plus a two (2) car attachedgarage, except for Lots 36-41, inclusive, Block "L", Unit 4A, which shall be 2,300square feet plus a two (2) car attached garage.

(c) One and one-half (I Y2) Story: 3,200 square feet (1900 squarefeet minimum on first floor) plus a two (2) car attached garage, except for Lots 36-41, inclusive, which shall be 2,300 square feet plus a two (2) car attached garage.

Garages with side entry are preferred. Garages with front entry shall onlybe allowed with the prior written approval of Declarant.

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2. Roof. (a) The pitch of the main portion of a two (2) storyresidence's roof shall be not less than 7 on 12.

(b) The pitch of the main portion of a one (1) or a one and one-half(l Y2) story residence's roof shall be not less than 9 on 12.

3. Eaves and Overhangs. All residences shall have 12 inch minimumeaves and overhangs.

4. Brick Requirements; Use of Siding; Stone.

(a) All brick shall be of a rough or tumbled nature.

(b) Residences shall be all brick exterior except as follows:

(i) areas directly above a front or rear porch may beconstructed with siding;

(ii) the rear second floor area may be constructed withsiding;

(iii) siding may be used on gable ends.

(iv) all residences shall have coin corners across the front.

In all instances where siding is allowed, an eyebrow approved by theDeclarant must be used in order to transition the siding and brick.

(c) All siding must be the "5" - "6" siding of a beaded nature orcedar shake unless otherwise approved by the Declarant.

(d) The use of stone shall only be allowed with the prior writtenapproval of Declarant.

5. Reverse Gables and Off-sets. Unless otherwise approved by theDeclarant, the front of all residences shall have a minimum of one off-set and onereverse gable. All reverse gables shall be a minimum of 8 on 12 pitch unlessotherwise approved by the Declarant.

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6. Shingles. All shingles must be dimensional.

ARTICLE XIII

AMENDMENT

Section 1 General

Prior to the conveyance of the first Lot, Declarant or its successor mayunilaterally amend any portion of this Declaration. After such conveyance, theDeclarant or its successor may unilaterally amend any provision of thisDeclaration, so long as it still owns property depicted on and described in Exhibits"A" or "B" for development and so long as the amendment has no materialadverse effect upon the substantive right of any Owner; thereafter and otherwise,and except as otherwise provided in this Declaration, this Declaration may beamended only by the affirmative vote of a majority of the Board of Directorspresent at a meeting duly called for such purpose and of the Declarant so long asDeclarant owns property subject to this Declaration. However, the percentage ofvotes necessary to amend a specific clause shall not be less than the prescribedpercentage of affirmative votes required for action to be taken under that clause.Any amendment must be recorded in the Fayette County Clerk's Office,Lexington, Kentucky. Notwithstanding the foregoing, the Declarant or itssuccessors may amend this Declaration to provide for imposition of additionalcovenants, restrictions, and easements, and the formation of separate ownersassociations, as provided for in and pursuant to Article VIII hereof.

If an Owner consents to any amendment to this Declarant or the By-Laws,it will be conclusively presumed that such Owner has the authority to so consentand no contrary provision in any Mortgage or contract between the Owner and athird party will affect the validity of such amendment.

No amendment may remove, revoke or modify any right or privilege ofDeclarant without the written consent of Declarant or the assignee of such right orprivilege.

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ARTICLE XIV

GENERAL PROVISIONS

Section I Tenn

The covenants and restrictions of this Declaration shall run with and bindthe real property described in Exhibit "B" and shall inure to the benefit of andshall be enforceable by the Declarant, the Association or the Owner of anyProperties subject to this Declaration, their respective legal representatives, heirs,successors and assigns for a term of forty (40) years from the date this Declarationis recorded, after which time they shall be automatically extended for successiveperiods often (10) years unless an instrument in writing, signed by the Owners ofa majority of the Lots in the Properties, has been recorded within the yearpreceding the beginning of each successive period of ten (10) years agreeing toterminate said covenants and restrictions, in which case this Declaration shall beterminated as specified therein.

Section 2 Indemnification, Liability of Directors

A. It is the policy of this Association that, subject to any restriction orlimitation of applicable law, each person who is or was a member, director,trustee, officer, committee member, or employee of the Association, whetherelected or appointed, including the heirs, executors, administrators, or estate ofany such person, and who has acted in good faith and reasonably believed thattheir conduct was in the best interest of the Association, shall be indemnified bythe Association to the full amount against any liability, and the reasonable cost orexpense (including reasonable attorney fees, monetary or other judgments, fines,excise taxes, or penalties and amounts paid or to be paid in settlement) incurred bysuch person in such person's capacity as a member, director, trustee, officer,committee member, or employee, or arising out of such person's status as amember, director, trustee, officer, committee member, or employee; provided,however, no such person shall be indemnified against any such liability, cost, orexpense incurred in connection with any action, suit, or proceeding in which suchperson shall have been adjudged liable on the basis that personal benefit wasimproperly received by such person, or if such indemnification would beprohibited by law. This right of indemnification shall also provide that themember, director, trustee, officer, committee member, or employee shall not beliable for any mistake of judgment, negligent or otherwise, except for their ownindividual willful misfeasance, malfeasance, misconduct or bad faith. TheAssociation shall, to the extent pennitted by applicable law, maintain insurance, asa Common Expense, to protect itself and any such person against any suchliability, cost, or expense, whether or not the Association would have the power to

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indemnify such person against such liability, cost, or expense under the KentuckyNonprofit Corporation Acts or under this Article XIV, if such insurance isreasonably available. The indemnification provided by this Article XIV shall notbe deemed exclusive of any other rights which those seeking indemnification mayhave or hereafter acquire under any bylaw, agreement, statute, vote of members orboard of directors, or otherwise. If this Article XIV or any portion thereof shall beinvalidated on any ground by any court of competent jurisdiction, then theAssociation shall nevertheless indemnify each such person to the full extentpermitted by any applicable portion of this Article XIV that shall not have beeninvalidated or by any other applicable law.

B. The liability of each and all of the directors of this Association shallbe and is hereby limited to the greatest extent permitted by law and no director ofthe Association shall be liable to the Association for monetary damages for breachof such director's duties as a director, except for the following (which exceptionsshall be construed as narrowly as legally permissible):

I. For any transaction in which the director's personal financialinterest is in conflict with the financial interests of the Association;

2. For acts or omissions not in good faith or which involveintentional misconduct or are known to the director to be a violation of law; or

3. For any transaction from which the director derives animproper personal benefit.

In addition to the limitation on a director's liability stated hereinabove, noaction taken as a director and no failure to take action as a director shall be thebasis for monetary damages or injunctive relief unless:

a. The director has breached or failed to perform theduties of the director's office in compliance with the general standards fordirectors as set forth in KRS 273.215; and

b. In the case of an action for monetary damages, thebreach or failure to perform constitutes willful misconduct or wanton or recklessdisregard for human rights, safety or property.

If the Kentucky Nonprofit Corporation Acts are amended after approval ofthis Article XIV to authorize corporate action further eliminating or limiting thepersonal liability of directors, then the liability of a director of the Associationshall be deemed to be eliminated or limited by this provision to the fullest extentthen permitted by the Kentucky Nonprofit Corporation Acts, as so amended. Any

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repeal or modification of this Article XIV shall not adversely affect any right orprotection of a director of the Association existing at the time of such repeal ormodification.

Section 3 Board of Directors Meetings

Except as otherwise provided herein, meetings of the Board of Directorsshall comply with the requirements of the By-Laws including, but not limited to,notice, quorum, and voting requirements.

Section 4 Easement for Maintenance

Subject to the provisions of this Declaration, Declarant hereby and byrecording this Declaration grants and conveys to the Association, and itssuccessors, successors-in-title, and assigns, a perpetual easement and right ofaccess across the Properties for the purpose of maintaining, repairing, andreplacing the Common Areas, and any and all other items it is responsible formaintaining, repairing and replacing, including any improvements or landscapingwithin the Common Areas in accordance with this Declaration. Where feasible,such access shall be limited to public rights-of-way and to paved accessways,driveways, and/or streets whether public or private.

The continued existence of the easements created hereunder is expresslymade subject to the conditions and restrictions contained herein which shallconstitute covenants running with the title to, and both benefiting and burdening,the Properties.

Section 5 Severability

Invalidation of anyone of these covenants or restrictions by judgment orcourt order shall in no way affect any other provisions which shall remain in fullforce and effect.

Section 6 Perpetuities.

If any of the covenants, conditions, restrictions or other provisions of thisDeclaration shall be unlawful, void or voidable for violation of the rule againstperpetuities, then such provisions shall continue only until twenty-one (21) yearsafter the death of the last survivor of the now living descendants of Elizabeth II,Queen of England.

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Section 7 Litigation

No judicial or administrative proceeding shall be commenced or prosecutedby the Association unless approved by a vote of a majority of the Board ofDirectors. Any meeting called for such purpose shall be subject to the same noticeand quorum requirements and other procedures as provided in the By-Laws formeetings of the membership. This Section shall not apply, however, to:

A. actions brought by the Association to enforce the provisions of thisDeclaration (including, without limitation, the foreclosure of liens),

B. the imposition and collection of assessments as provided in ArticleX hereof,

C. proceedings involving challenges to ad valorem taxation, or

D. counterclaims brought by the Association in proceedings institutedagainst it.

This Section shall not be amended unless such amendment is made by theDeclarant or is approved by the percentage votes and pursuant to the sameprocedures necessary to institute proceedings as provided above.

Section 8 Security

The Declarant and/or the Association is not forrned for the purpose of andshall not be obligated to, undertake any measures designed to increase safety orsecurity in the Property. NEITHER THE ASSOCIATION NOR THEDECLARANT SHALL IN ANY WAY BE CONSIDERED INSURERS ORGUARANTORS OF SECURITY WITHIN THE PROPERTY AND NEITHERTHE ASSOCIATION NOR THE DECLARANT SHALL BE HELD LIABLEFOR ANY LOSS OR DAMAGE BY REASON OF FAILURE TO PROVIDESECURITY. ALL OWNERS, TENANTS, GUESTS AND INVITEES OF ANYOWNER, AS APPLICABLE, ACKNOWLEDGE THAT THE DECLARANT,THE ASSOCIATION AND ITS BOARD OF DIRECTORS ANDCOMMITTEES DO NOT REPRESENT OR WARRANT THAT ANY FIREPROTECTION SYSTEM OR BURGLAR ALARM SYSTEM WILL BEINSTALLED ON THE PROPERTIES BY THE DECLARANT AND/OR THEASSOCIATION. EACH OWNER, TENANT, GUEST OR INVITEE OF ANOWNER, AS APPLICABLE, ACKNOWLEDGES AND UNDERSTANDSTHAT THE DECLARANT, THE ASSOCIATION, THE BOARD OFDIRECTORS AND COMMITTEES ARE NOT INSURERS AND THAT EACHOWNER, TENANT, GUEST AND INVITEE ASSUMES ALL RISKS FOR

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LOSS OR DAMAGE TO PERSONS, TO LOTS AND TO THE CONTENTS OFLOTS AND FURTHER ACKNOWLEDGES THAT DECLARANT, THEASSOCIATION, THE BOARD OF DIRECTORS AND COMMITTEES HAVEMADE NO REPRESENTATIONS OR WARRANTIES NOR HAS ANYOWNER, TENANT, GUEST OR INVITEE RELIED UPON ANYREPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED,INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESSFOR ANY PARTICULAR PURPOSE, THAT ANY SECURITY MEASURESWILL BE UNDERTAKEN BY DECLARANT AND/OR THE ASSOCIATION.

Section 9 Headings and Gender

Headings of Articles and Sections are inserted only for convenience and arein no way to be construed as a limitation on the scope of the particular Articles andSections to which they refer. Where required for proper interpretation, words inthe singular shall include the plural, and vice versa, and the masculine gender shallinclude the neuter and feminine, and vice versa.

ARTICLE XV

DECLARANT'S RIGHTS

Any or all of the special rights and obligations of the Declarant may betransferred to other Persons, provided that the transfer shall not reduce anobligation nor enlarge a right beyond that contained herein, and provided further,no such transfer shall be effective unless it is in a written instrument signed by theDeclarant and duly recorded in the Fayette County Clerk's office, Lexington,Fayette County, Kentucky.

Notwithstanding any provisions contained in this Declaration, the By-Laws,Articles of Incorporation, use restrictions, rules and regulations, design guidelines,and amendments thereto, so long as construction and initial sale of Lots shallcontinue, it shall be expressly permissible for Declarant, its successors andassigns, and any builder or developer approved by Declarant, to maintain andcarry on sales and promotional activities on Lots owned or leased by Declarant, itssuccessors and assigns, or such builder or developer; and to construct and operatebusiness offices, signs, construction trailers, and sales offices on such Lots.

No rights, privileges and easements granted or reserved herein shall bemerged into the title of the Properties but shall be held independent of such titleand no such right, privilege or easement shall be surrendered, conveyed orreleased except by delivery of a quitclaim deed from Declarant releasing suchright, privilege or easement by express reference thereto.

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So long as Declarant continues to have rights under this Article, no Personshall record any declaration of covenants, conditions and restrictions ordeclaration of condominium or similar instrument affecting any portion of theProperty without Declarant's review and written consent thereto, and anyattempted recordation without compliance herewith shall result in such declarationof covenants, conditions and restrictions or declaration of condominium or similarinstrument being void and of no force and effect unless subsequently approved byrecorded consent signed by the Declarant.

This Article may not be amended without the express written consent of theDeclarant; provided, however, the rights contained in this Article shall terminateupon the earlier of (a) ten (10) years or (b) when Class "B" Control Period ends.

ARTICLE XVI

CONSENTS AND APPROVALS

Whenever the consent or approval of any party is required pursuant to thisDeclaration, such consent or approval shall not be unreasonably withheld.

Nash, CSI and Chow have executed this Declaration for the purpose ofsubmitting their respective lots to this Declaration.

IN WITNESS WHEREOF, Declarant, Nash, CSI and Chow have executedthis Declaration of Covenants, Conditions and Restrictions as of the day and yearfirst above written.

DELONG ESTATES DEVELO