PROPERTY OWNERS' ASSOCIATION

DECLARATION OF RESERVATIONS

HORSESHOE BAY

COUNTIES OF LLANO AND BURNET, TEXAS


(incorporated changes from Supplement and First through Fourth Amendments)

        This declaration (“Declaration”) made this the 5th day of July, 1971, by Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, having its principal office at Marble Falls, Texas (“Declarant”).

        WHEREAS, Declarant may at any time and from time to time hereafter commit, cause or permit to be committed to this Declaration, certain land situated in Llano and Burnet Counties, Texas, as Declarant may elect in the exercise of its sole discretion; and, whereas, in the event Declarant elects to commit, cause or permit any such land to be committed to this Declaration, Declarant shall file, cause or permit to be filed of record in Llano County and such other county in which the applicable land is situated, one or more plats meeting the formal requirements set forth in this Declaration; and,

        WHEREAS, this Declaration shall cover and be applicable only to such land which Declarant shall commit, cause or permit to be committed to this Declaration by the filing of a plat or plats meeting the formal requirements set forth in this Declaration; and,

        WHEREAS, this Declaration shall not cover or be applicable to any land including, without limitation, land now owned or hereafter acquired by Declarant unless and until Declarant shall commit, cause or permit the same to be committed to this Declaration by the filing of a plat or plats meeting the formal requirements set forth in this Declaration; and, in such event, this Declaration shall only cover and be applicable to the lands actually committed to this Declaration in such plat or plats and all prior and subsequent plats meeting the formal requirements hereof; and,

        WHEREAS, this Declaration shall never be deemed to obligate Declarant to commit, cause or permit any land to be committed to this Declaration, unless and until Declarant, in the exercise of its sole discretion, elects to commit, cause or permit the same to be committed hereto;

        NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS THAT Declarant hereby certifies and declares that Declarant has and does hereby establish as a general plan (“Plan”) for the subdivision (“Subdivision”) known as “Horseshoe Bay” the following conditions (“Conditions”) for the protection, maintenance, development and improvement of all land (“Subdivision Land”) described in and covered by any plat or plats (“Plat” and/or “Plats”), which Declarant may at any time and from time to time hereafter file of record in the County in which the applicable land is situated, provided, each Plat shall meet the formal requirements (“Formal Requirements”) set forth below:

(1)        FORMAL REQUIREMENTS

1.1      The Formal Requirements of a Plat filed under and pursuant to this Declaration and for the purpose of committing the land covered thereby to this Declaration are as follows:

(1)      Section 1.1(a) of the Declaration is hereby amended and restated in its entirety as follows:

(a)       The Plat shall be executed by Declarant or by any person or entity acting by, through, or under the authority of Declarant as set forth herein, and filed of record in Llano County, Texas, and, if appropriate, any other county in which the land covered by the Plat is located. Declarant hereby grants to the Amenities Owner the right to commit Amenities Land to the Subdivision. Declarant hereby grants to Norman C. Hurd, Trustee #1, and his successors and assigns, the right to commit Future Development Land to the Subdivision.

(b)      The Plat shall contain the plat of a survey of the land covered thereby and shall be certified by a licensed public land surveyor or registered professional engineer of the State of Texas.

(c)      The Plat shall contain the following legend: “This Plat has been filed under and pursuant to that certain Declaration (“Declaration”) dated ______________, 1971, by Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, which Declaration is filed in Llano County under County Clerk’s File Number __________ and is recorded in the Records of Llano County, Texas; and is filed in Burnet County under County Clerk’s File Number ____________ and is recorded in the Records of Burnet County, Texas, and all land included in and covered by this Plat is hereby committed to the Declaration, which is incorporated herein and made a part hereof for all purposes.”

(d)       The Plat shall subdivide the land covered thereby into one or more lots (“Lot” and/or “Lots”), which shall be restricted R-1, R-2, R-4, R-6 and/or C-2 or otherwise, as set forth in the Conditions of this Declaration; and/or into one or more tracts (“Tract” and/or “Tracts”) which, subject to the provisions of Section 3.1 hereof, may be unrestricted at the time of filing of the Plat.

(e)       The Plat may dedicate to public or private use the applicable easements for roads, streets, utilities and the like in the sole discretion of Declarant.

(2)     The Declaration is hereby amended by the addition of the following new Section 1.1(f):

(f)      The Plat shall only be recorded in the county where the land covered thereby is located; provided, however, if the land covered by the Plat is located in more than one county, the Plat shall be recorded in each county where land covered by the Plat is located.

1.2     Any Plat meeting the Formal Requirements set forth above shall commit the land covered thereby to this Declaration, and such land shall then become and thereafter be part of the Subdivision Land, as herein defined.

1.3      All Subdivision Land shall be owned, held, leased, sold and/or conveyed by Declarant, and any subsequent owner of all or any part thereof or any right, title or interest therein, subject to this Declaration and the Conditions hereof. This Declaration and the Conditions hereof shall be binding upon and inure to the benefit of the Subdivision Land and/or any part thereof, including, without limitation, each and every Lot and/or Tract into which the same may be subdivided, and shall be binding upon and inure to the benefit of each and every Owner thereof, or any part thereof, or any right, title or interest therein. This Declaration and the Conditions hereof shall constitute covenants running with the applicable Subdivision Land and/or any part thereof, including, without limitation, each and every Lot and/or Tract into which the same may be subdivided as provided herein, and shall constitute a mutual covenant and equitable servitude burdening each part of said Subdivision Land and inuring to the benefit of each other part thereof and burdening each Lot and/or Tract in favor of each other Lot and/or Tract.

1.4     The term “Owner” shall mean the owner of fee simple title to the Subdivision Land or any part thereof, including, without limitation, any Lot and/or Tract. The term Owner shall include Declarant if and to the extent Declarant is owner of fee simple title to the Subdivision Land or any part thereof. In the case of a contract for deed or similar instrument (“Contract for Deed”) in which Declarant is the owner of fee simple title to the Lot or Land covered thereby and is grantor in said Contract for Deed and a third party is grantee in said Contract for Deed, Declarant shall be deemed to be the Owner of the Lot or Land covered by said Contract for Deed until the third party, or the heirs, successors, assigns or legal representatives of said third party have paid twenty-five percent (25%) of the total principal amount of the purchase price provided for in said Contract for Deed, whereupon said third party, or the heirs, successors, assigns or legal representatives of said third party, shall be deemed to be the Owner of said Lot or Lots so long as said Contract for Deed shall remain in good standing and no default shall occur thereunder.

(1)     Subsection 1.4 under Section (1) Formal Requirements is hereby supplemented and amended to add the following:

In the event Declarant sells or conveys any Lot or Land pursuant to a vendor’s lien deed, note and deed of trust in a transaction wherein the cash down payment, if any, by the grantee is less than twenty-five percent (25%) of the total purchase price for said Lot or Land, Declarant shall be deemed to be the Owner of said Lot or Land covered by said deed until the grantee, or the heirs, successors, assigns or legal representatives of the grantee, shall have paid twenty-five percent (25%) of the said purchase price, whereupon said grantee, or the heirs, successors, assigns or legal representatives of the grantee shall be deemed to be the Owner of said Lot or Land.

1.5     The term “Land” shall be synonymous with “Subdivision Land”, and shall mean Lot and/or Tract, as the case may be.

(3)       The Declaration is amended by the addition of the following new Section 1.6:

1.6   The term “Amenities” shall mean all recreational and resort facilities and properties and supporting facilities and properties owned by Lake LBJ Investment Corp., a Texas corporation, or its subsidiaries, successors or assigns, and operated by Horseshoe Bay Resort and Conference Center, Inc., a Texas corporation, or its subsidiaries, successors or assigns, or by Horseshoe Bay Management Company, or its subsidiaries, successors or assigns, including, but not limited to, the Horseshoe Bay Yacht Club and Conference Center, stables, tennis center, golf courses, and other recreational and resort facilities, present and future.

(4)     The Declaration is hereby amended by the addition of the following new Section 1.7:

1.7     The term “Club” shall mean Horseshoe Bay Resort and Conference Center, Inc., a Texas corporation, and Horseshoe Bay Management Company, a Texas corporation, and their subsidiaries, successors and assigns, as operator of the Amenities.

(5)       The Declaration is amended by the addition of the following new Section 1.8:

1.8      The term “Amenities Owner” shall mean Lake LBJ Investment Corp., a Texas corporation, or its subsidiaries, successors or assigns, as owner of all or substantially all of the Amenities. Notwithstanding any other provision of this Declaration to the contrary, any right or privilege which is granted to the Amenities Owner under this Declaration may be exercised by any assignee or delegate of the Amenities Owner, including, but not limited to, the Club.

(6)      The Declaration is hereby amended by the addition of the following new Section 1.9:

1.9      The term “Common Area” shall mean all land (including all structures, improvements and equipment located thereon) wherever located which is (a) owned by Horseshoe Bay Property Owners’ Association, Inc., a Texas non-profit corporation, or its successors or assigns, including, but not limited to, all land upon which streets and roads are located, which are in the Subdivision or serve the Subdivision, including, but not limited to, all land described in that certain Correction Deed Without Warranty (Horseshoe Bay Roads) from Lake Lyndon B. Johnson Improvement Corporation, et al., as grantors, to Horseshoe Bay Property Owners’ Association, Inc., as grantee, dated June 14, 1990, and recorded in Volume 371, pages 961-1007, of the Real Property Records of Llano County, Texas, (b) regardless of fee title ownership, all entrances to the Subdivision on FM 2147, (c) the Horseshoe Bay Lighthouse, and (d) regardless of fee title ownership, any other land so designated by the Amenities Owner.

(7)      The Declaration is hereby amended by the addition of the following new Section 1.10:

1.10    The term “Property Owners’ Association” shall refer to Horseshoe Bay Property Owners’ Association, Inc., a Texas non-profit corporation incorporated on March 4, 1974 (Charter No. 00338951-01).

(8)      The Declaration is hereby amended by the addition of the following new Section 1.11:

1.11    The term “Maintenance Fund Association” shall mean Horseshoe Bay Maintenance Fund, Inc., a Texas non-profit corporation incorporated on June 4, 1973 (Charter No. 00325737-01).

(9)     The Declaration is hereby amended by the addition of the following new Section 1.12:

1.12     The term “Terminating Event” shall mean any of the following occurring after January 1, 1992: (a) any event which is described as a Terminating Event in this Declaration, (b) the sale of any Lot or Tract at a foreclosure sale, other than a foreclosure sale by Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, and (c) the sale of any Lot or Tract at a judicial tax sale unless the purchaser at the judicial tax sale is Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation.

(10)     The Declaration is hereby amended by the addition of the following new Section 1.13:

1.13     The term “Primary Street” shall mean and include (a) Horseshoe Bay Boulevard, Clayton Nolen Boulevard, Hi Circle South, Horseshoe Bay West Boulevard, and (b) any other street or road in or serving the Subdivision which is so designated by the Amenities Owner.

(11)    The Declaration is hereby amended by the addition of the following new Section 1.14:

1.14    The term “Additional Land” means all additional land which has been committed or caused or permitted to be committed to the Subdivision since December 3, 1975, as well as all additional land which in the future is committed or caused or permitted to be committed to the Subdivision, and which additional land is out of that certain 2,496,857 acres, more or less, described in two deeds, both dated December 20, 1972, from Buena Vista Corporation of Beaumont, as grantor, to Norman C. Hurd, Trustee, and Wayne Hurd, Trustee, as grantees, and recorded respectively in Volume 186, page 333 et seq., of the Records of Llano County, Texas, and in Volume 186, page 343 et seq., of the Records of Llano County, Texas.

(12)     The Declaration is hereby amended by the addition of the following new Section 1.15:

1.15    The term “Annual Inflation Adjustment” shall mean an annual adjustment in the dollar amount stated in this Declaration, such annual adjustment to be made on January 1 of each year using the same formula and Index as set forth in Section 4.4(.7) of this Declaration.

(13)     The Declaration is hereby amended by the addition of the following new Section 1.16:

1.16   Whenever Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, is identified in this Declaration, it shall mean the Texas corporation of that name as well as such other corporation or corporations which shall succeed to ownership of all or part of the Subdivision Land inventory of Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, and which corporation or corporations shall be designated in an instrument filed of record in Llano and Burnet Counties, Texas, which instrument shall be executed by Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, and by Declarant in order to be effective.

(2) COMMITTEE OF ARCHITECTURE

2.1       Declarant shall appoint initially a Committee of Architecture (“Committee”) consisting of three (3) members (“Members”) who shall be natural persons.

2.2    The Members shall serve at will of Declarant, and the Declarant shall have the right and power at any time and from time to time to create and fill vacancies on the Committee.

2.3      Declarant shall have the right, at its election at any time, to transfer the power of appointment of the Committee to any persons or civic group. In such event, all rights and obligations of Declarant to appointment of the Committee shall thereupon terminate and shall thereafter be vested in the assignee of such power; provided, that in the event such assignee should fail or refuse to exercise the power, Declarant shall have the right but not the duty to exercise the power of appointment of the Committee.

2.4     It shall be the general purpose of the Committee to provide for maintenance of high standard of architecture and construction in such manner as to enhance the aesthetic properties and structural soundness of the developed subdivision.

2.5     The Committee may be guided by and, except when in their sole discretion good planning would dictate to the contrary, controlled by this Declaration. The judgment of the Committee shall be final, conclusive and binding. The Committee shall make available a copy of this Declaration to any Owner upon request, at the expense of said Owner.

2.6      The Committee shall determine whether the Conditions contained in this Declaration are being complied with; however, no act or failure or refusal of the Committee to initiate action to challenge a real or threatened violation of this Declaration and the Conditions or otherwise to act on its own initiative shall be deemed to constitute waiver of any right or duty of the Committee at any time or from time to time thereafter to initiate such action and/or enforce compliance with this Declaration and the Conditions. The Committee may act or refuse to act in any real or threatened violation of this Declaration and the Conditions, all in the exercise of its sole discretion.

2.7     The Committee shall adopt reasonable rules and regulations for the conduct of its duties. In this connection, without limitation, the Committee may fix the time and place for its regular meetings, and for such special meetings as may be necessary, and shall keep written minutes of its meetings, which shall be open for inspection to any Owner upon the written consent of any one of the Members of said Committee. Said Committee shall by a majority vote elect one of its members as Chairman and one of its members as Secretary, and the duties of such Chairman and Secretary shall be such as usually pertain to such offices. Any and all rules or regulations adopted by said Committee regulating its procedure may be changed by said Committee from time to time by majority vote and none of said rules or regulations shall be deemed to be any part of said Conditions.

(14)    The Declaration is hereby amended by the addition of the following new Section 2.8:

2.8     The Committee may grant a variance or exception to the building and setback restrictions contained in this Declaration when, in the sole judgment and discretion of the Committee, such variance or exception would not be inconsistent with the maintenance of a high standard of architecture and construction in the Subdivision and would not be inconsistent with the aesthetic standards of the Subdivision.

(3) CONDITIONS

The additional conditions of this Declaration are as follows:

3.1 Platting, Lot Classification, Easements:

(15)    Section 3.1(a) of the Declaration is hereby amended and restated in its entirety as follows:

(a)       Each Plat shall subdivide the land covered thereby into one or more Lots or Tracts, which shall be identified by number in the case of Lots and letter in the case of Tracts.

(b)       Each Lot shall be restricted R-1, R-2, R-4, R-6 or C-2 or otherwise as permitted herein, by an appropriate identification on the face of the Plat and/or by a separate instrument filed of record by the Declarant, filed in the appropriate county at the time the Plat is filed of record in such County.

(c)       Each Tract shall constitute land committed to this Declaration but not subdivided into a Lot or Lots and not restricted at the time of filing of the Plat. Each Tract shall be deemed to be classified C-2 unless otherwise classified by Declarant. Declarant shall have the right but not the obligation at any time and from time to time thereafter to file of record a Plat or Plats subdividing any Tract or Tracts or any part thereof into one or more Lots and/or Tracts and restricting, classifying and/or reclassifying the same as set forth above.

(d)      Each Plat shall identify the land covered thereby as Horseshoe Bay, Lots __________ through and including __________, and/or Tracts __________ through and including __________, or similar identification, in order to eliminate confusion and/or duplication of the identification of Lots and/or Tracts in the Subdivision.

(16)     Section 3.1(e) of the Declaration is hereby amended and restated in its entirety as follows:

(e)       Each Lot or Tract shall be restricted to one of the following classifications (“Classifications”):

R-1 - Single Family Residential District
R-2 - Two Family Residential District
R-4 - Multiple Residential District
R-6 - Apartment, Townhouse and Cottage District
M-1 - Mobile Home District
C-2 - Commercial District
A-1 - Amenities Land
F-D - Future Development Land

Declarant may at any time and from time to time add additional Classifications by executing and recording one or more supplements to this Declaration, designating and defining such Classification, provided such supplement is filed at or prior to the use of such additional Classification. All supplements heretofore filed by Declarant are hereby ratified and confirmed.

Each Classification shall govern as to the permitted usage of the Lots and Tracts so classified, subject to the other provisions set forth in this Declaration and the Conditions.

(f)        Declarant reserves the right at any time and from time to time to resubdivide and/or reclassify any or all Lots and/or Tracts which are then owned by Declarant if and to the extent Declarant deems such action desirable, in the sole discretion of Declarant. In such event, Lots and/or Tracts shall be deemed to be resubdivided and reclassified when Declarant files an amended Plat reflecting such resubdivision and/or redesignation in Llano County and any other County in which the applicable Lots and/or Tracts are located. Declarant may exercise the right to resubdivide and/or reclassify Lots and/or Tracts which are then owned by Declarant even though Declarant shall have previously sold and/or contracted to sell other Lots or Land in the Subdivision.

C.        By amending the last sentence of Section 3.1(f) to read as follows:

“This subsection shall never be deemed to authorize Declarant to resubdivide and/or reclassify any Lot or Tract owned by Declarant which is subject to an outstanding Contract for Deed or similar instrument in favor of a third party, unless such resubdivision or reclassification is joined in by such third party.”

(17)     Section 3.1(f) of the Declaration is hereby amended and supplemented to add the following provisions thereto:

Any replat or reclassification of any Subdivision Land must be approved by Declarant, except as otherwise provided in Section 3.10 with respect to Amenities Land and in Section 3.11 with respect to Future Development Land. Notwithstanding the foregoing, the Amenities Owner and Norman C. Hurd, Trustee #1, and his successor or assign, shall each have the right to subdivide and/or reclassify at any time and from time to time any Lot or Tract or portion thereof which is owned by the Amenities Owner or Norman C. Hurd, Trustee #1, or his successor or assign, and the Lot or Tract or portion thereof shall be deemed to be resubdivided and/or reclassified when the Amenities Owner or Norman C. Hurd, Trustee #1, or his successor or assign, shall have filed an amended Plat reflecting such resubdivision and/or reclassification in the County in which the Lot or Tract or applicable portion thereof is located.

E.        By rewording the first paragraph of Section 3.1(g) to read as follows:

“(g)     Declarant hereby reserves a right-of-way and easement fifteen (15) feet wide along each lot line fronting a street, ten (10) feet wide along each back lot line, and five (5) feet wide along each side lot line, together with an unobstructed easement above the same for any or all utilities and drainage, including, without limitation, television and/or communication cables; provided, that where said utility and drainage easements are shown on the applicable plat if different widths and/or locations, the width and location of such easements on the plat shall be constant.”

Declarant further reserves an easement under and above all roads and streets in the Subdivision for the purpose of installing, operating and maintaining any and all improvements in connection with the utility and drainage easements.

Declarant reserves the right to assign and/or dedicate, assign and/or convey said utility and/or drainage easements and any rights and interests therein at any time and from time to time in Declarant’s sole discretion.

        This Declaration shall never be deemed to obligate Declarant to furnish, construct or maintain or cause to be furnished, constructed or maintained any road, street, utility and/or drainage easement and/or any improvements on any of the foregoing.

        Owners shall have no cause of action against Declarant, its successors or assigns, employees and/or agents, either at law or in equity, for any damage or otherwise caused by the installing, operating, maintaining, repairing and/or replacing the above utility and/or drainage easements and/or any improvement thereon.

3.2       IMPROVEMENT STANDARDS

The following provisions shall be applicable to all Subdivision Land regardless of classification.

A.(1)    Structural

No building, fence, patio, boat dock, or other structure shall be erected, altered, added to, placed or permitted to remain on any Lot or Land until and unless the plans showing floor areas, external design, structural details, and plot plan showing the ground location of the intended structure have been first delivered to the Committee and approved in writing and a building permit issued by the Committee as to, but not limited to, the external design including color and quality, the conformity and harmony with existing or proposed structures in the Subdivision and the height of the structure insofar as it may obstruct the view of the surrounding Lots, the location of the structure on the Lot, the quality and type of materials and aesthetic qualities. No alterations in the exterior appearance of an existing building or structure shall be made without approval of the Committee. These requirements also extend to boat docks, ornamental structures, fences, walls and piers, including but not limited to the location, design, height, length and type of construction and to any and all structures over or in the water, any bulkheads or moving of soil in, or out of the water, or on land, which in the opinion of the Committee is a significant moving of soil. No natural drainage shall be changed, altered or diverted, without approval of the Committee. The Committee may require a reasonable fee prior to checking or appraising said plans. On any structure submitted for approval, the Committee may require changes, deletions, or revisions in order that the architectural and general appearance of all such buildings and grounds be in keeping with the architecture of the neighborhood and otherwise comply with the Conditions. All structures shall conform to the requirements of the Uniform Building Code as published by the International Conference of Building Officials, current edition, and the requirements of the National Electrical Code, as published by the National Fire Protection Association, current edition, as a guide to sound construction and electrical installation practices and comply with the applicable laws, ordinances, rules and regulations of the governmental authorities having or asserting jurisdiction, including, without limitation, appropriate departments of the county in which property is located and the State of Texas, whichever are the more restrictive.

Notwithstanding any other provisions of this Declaration, it is and shall remain the right, prerogative and jurisdiction of the Committee to review applications and grant approvals and building permits for exceptions to and variations from this Declaration and the Conditions, Exceptions to and variations from this Declaration and the Conditions and, in general, other forms of deviations from these restrictions imposed by this Declaration may be made when and only when such exceptions, variations and deviations do not in any way detract from the appearance of the premises, and are not in any way detrimental to the public welfare or to the property of other persons located in the vicinity thereof, all in the sole opinion of the Committee. Any exception and/or variation made or permitted by the Committee shall apply only to the specific instance for which such exception or variation is made or permitted, and shall not be deemed to apply to any other similar situation. Without limitation, the designated maximum building height and maximum yard requirements and/or any other provision herein, may be waived by the Committee when, in their opinion, such structures relate to sound architectural planning and conform to the over-all design and pattern of the development.

(18)     Section 3.2 A.(1) of the Declaration is hereby amended to add the following as the last paragraph:

Declarant shall have the right to establish a schedule of charges to be imposed upon Owners for building permits for the construction of any structure or other improvement on any Lot or Tract. Declarant shall have the right and authority to collect such charges for building permits prior to the commencement of construction, and Declarant may delegate to the Committee the right to collect such charges. The amount of such charges shall be set in the sole discretion and determination of Declarant. Declarant shall also have the right and authority to inspect all construction underway on any Lot or Tract to verify compliance with the requirements and Conditions of this Declaration, and each Owner hereby grants to Declarant and Declarant’s agents, employees, representatives, successors and assigns, an irrevocable license and easement to come onto the Owner’s Lot or Tract for the purpose of inspecting construction. The charges collected for building permits shall be used to defray the costs and expenses of inspection of construction and for the costs of enforcement of this Declaration by the Declarant, with any excess funds being the property of Declarant.

(19)     Section 3.2 A.(2) of the Declaration is hereby amended and restated as follows:

A.(2)    Air Conditioning Units and Television Antenna

No air conditioning unit, evaporative cooler, or other object or device which, in the sole opinion of the Committee, is unsightly shall be placed upon or above the roof of any building, except and unless the same is architecturally concealed from view in accordance with plans submitted to and approved by the Committee prior to the installation thereof and then only when, to the satisfaction of the Committee, the same is not aesthetically or architecturally objectionable and is otherwise in conformity with the aesthetic standards of the Subdivision. No television antenna, radio antenna, radio receiver, satellite dish, or other similar device for receiving or transmitting radio, television or other electronic signals shall be erected on the Subdivision Land or on any building or other structure located on any Subdivision Land unless screened from view in a manner acceptable to the Committee in the exercise of its sole discretion. Roof-type television antennas may be installed provided, in the determination of the Committee, they are installed in such location and position that they cannot be seen against the skyline from any vantage point located off the applicable Lot or Tract. No form of radio or television signals, or other form of electromagnetic radiation or transmission shall be permitted to originate from any Lot or Tract which, in the sole determination of the Committee, unreasonably interferes with the reception of radio and television signals within the Subdivision. Notwithstanding the foregoing, Declarant, the Property Owners’ Association, Lake LBJ Municipal Utility District, the Club, and the Amenities Owner, and their respective assigns, shall not be prohibited from installing and operating equipment and related facilities necessary for master antenna, security, cable television, mobile radio, and other similar systems within the Subdivision.

A.(3)    Moorings, Piers or Docks

No mooring, pier, dock or other device for swimming or boating shall be erected or installed except with the approval of the Committee and in accord with the requirements of appropriate lake authorities and subject to the other terms and conditions of this Declaration. The maintenance and/or removal of any such device or installation shall at all times be subject to the requirements of said Committee or authorities. This Declaration shall never be deemed to authorize the construction of a mooring, pier, dock or other device where such construction or use is in violation of the property rights of others and/or the laws, rules and regulations of applicable governmental authorities.

A.(4)    Building Exterior

With the exception of buildings and structures constructed by Declarant, all structures must have exterior walls of at least fifty percent (50%) masonry on the street fronting walls and shall not have less than thirty percent (30%) masonry covering on the total of all exterior walls. The exterior portion of all walls that are not masonry shall be painted or stained immediately upon completion or shall have color mixed in the final structural application, excepting acceptable woods that are commonly used without such finishes, so that all such materials shall have a finished appearance.

A.(5)    Tanks, Butane, Etc.

No butane, or other tank, used for the storage of gases or liquids for fuel shall be placed on a Lot or Land unless the same is architecturally concealed from view. In the event natural gas is made available to any Lot or Land, then the Owner thereof shall promptly connect to the source of natural gas and discontinue the use of butane gas.

A.(6)    Fences, Walls and Hedges

No fence or wall or hedge shall be constructed on any Lot or Land nearer to any front street than is permitted for the house or building on said Lot or Land, nor nearer than thirty (30) feet of the 825’ contour of Lake Lyndon B. Johnson. The height, construction material and style of each fence or wall shall be subject to approval of the Committee, provided no fence or wall exceeding seven (7) feet in height shall be built on any Lot or Land.

A.(7)    Elevated Structure Design

Other than buildings and structures constructed by Declarant, no structure on any Lot or Land shall be constructed or placed upon “stilts”, pilings, piers, etc. unless same are enclosed with walls of continuity of design conforming with the principal structure. This Section does not cover mooring, piers, docks, etc. which are covered by Section A.3 hereof.

A.(8)    Yard Lighting

Structures constructed on all Lots or Land will be required, before completion, to place near the street serving the Lot or Land a decorative electric yard light. The type and location of light shall be selected and controlled by the Committee. Such light shall not exceed 6 ½ feet in height and shall be controlled by a light sensitive switch. Each yard light and light sensitive switch for same shall be maintained by the Owner in a manner so that the light shall burn all night.

F.        By such rewording Paragraph A.(9) of Section 3.2 to read as follows:

“All utilities and utility services on all lots or land shall be installed underground and no above-surface utility wires will be installed on any lot or land outside any structure, unless otherwise provided on any Plat or Plats filed of record covering such lot or land. This limitation shall not be applicable to the utilities and utility services of Declarant.”

A.(10)  Clothes Lines

Clothes lines shall be installed so as not to detract from the aesthetic values of the property and shall be so placed to be concealed from view from all public rights of way, and shall be subject to approval of the Committee.

A.(11)  Plumbing and Sewage

All structures shall have completed and approved plumbing and sewerage installations before occupancy. Such plumbing shall conform to the requirements of the Uniform Plumbing Code as published by the Western Plumbing Association, current edition, as a guide to sound plumbing practices, and shall comply with all laws, ordinances, rules and regulations of governmental authorities having and asserting jurisdiction.

Where a central sanitary sewerage system is made available to any Lot or Land on which a structure is located or being constructed, it is required that the structure be connected to and use such system. Where a central sanitary sewerage system is not available to any Lot or Land, the Owner may install a septic tank provided such septic tank and attached drain fields are acceptable and meet the requirements of the proper governmental authorities having or asserting jurisdiction with respect thereto. Any malfunction of any septic tank and/or drainage field system, after being reported to the Owner by Declarant or the appropriate authority, and not repaired within the time designated by such authority or seven (7) days, whichever occurs first, shall be cause for termination of water service to such Owner and/or the applicable Lot and/or Tract until such repairs are effected.

A.(12)  Drainage Structures

Drainage structures under private driveways shall always have a net drainage opening area of sufficient size, in the opinion of the Committee, to permit free flow of water without backwater.

3.3       Land Use – General

The following provisions shall be applicable to all Subdivision Land regardless of Classification:

(1)      Section 3.3 B.(1) Land Use – General – Advertising is hereby supplemented, amended and restated as follows:

B.(1)    Land Use – General – Advertising

No sign, advertisement, billboard or other advertising structure of any kind (including but not limited to signs, advertisements, billboards or other advertising structures promoting sales of any Lots or Land) shall be erected or allowed on any of the unimproved Lots or Land and no sign shall be erected or allowed to remain on any Lots or Land, improved or unimproved, except as expressly provided in the Uses Permitted section of the particular type of Classification, and except as erected by or approved by Declarant. In addition and without limitation, no sign, advertisement, billboard or other advertising structure of any kind (including but not limited to signs, advertisements, billboards or other advertising structures promoting sales of Lots or Land) shall be erected or allowed on any right-of-way or easement, whether dedicated for public use or not, without prior written approval of the Committee, which approval may be withheld for any reason. It shall be the duty of the Committee to remove or cause to be removed any sign, advertisement, billboard or other advertising structure erected or allowed in violation of these restrictions; provided the Committee shall never be deemed liable for failing or refusing to exercise said duty.

B.(2)    Building Area

No Lot shall be resubdivided or reclassified, provided Declarant may resubdivide and/or reclassify Lots and/or Tracts as provided in Section 3.1 hereof. No structure shall be erected, placed or maintained on any portion of any Lot, which portion has an area of less than a full Lot as designated on the applicable Plat. If one structure is constructed on an area consisting of more than one Lot, the combined area, for the purpose of setback requirements shall be considered one Lot.

B.(3)    Garages and Carports

All Land classified as (R-1) Single Family and (R-2) Two Family shall provide for at least one garage or carport of no less than 200 square feet per dwelling unit and such structure shall be connected to the main structure. The connection may be by a breezeway. No garage that is not completely enclosed will open directly on the street. All garage and/or carport structures shall be enclosed on at least two sides, provided such structures located on corner lots shall be completely enclosed. No unsightly storage shall be permitted which is visible from the street. No trucks or unsightly vehicles or other matter shall be stored or kept for any purposes, including repair, on any Lots or Land or driveways, excepting that after the main dwelling has been completed, this provision shall not apply to boats and campers that are not used for occupancy within the subdivision. Such storage must be in enclosed garages or storage facilities protected from the view of the public and streets within the Subdivision and other residents of the Subdivision. This Section does not apply to buildings and facilities of the Declarant.

B.(4)    Water Supply

No individual water wells shall be allowed on any Lot or Land where water is made available to such Lot or Land from a central water system. The Owner of a Lot or Land shall use the water from a central water system where the system is made available to such Lot or Land from the central water system supply. Nothing herein contained shall be construed as prohibiting the Declarant from drilling a well or wells or permitting the drilling of same, on the reserved areas of said Subdivision, for the purpose of supplying water to the Owners of any Lot or Land in said Subdivision.

B.(5)    Occupancy, Parking and Mobile Occupancy

No mobile home, trailer, tent, lean-to, shack or other temporary structures of any nature shall be used for occupancy, or placed upon any Lot or Land or road or street that is not specifically designed for such usage by Declarant. No garage, servant’s quarters or guest cottage shall be constructed on any Lot prior to the construction of the main residence, residences, or commercial structures. No building material of any kind or character shall be placed or stored upon any Lot or Land until Owner has his plans and specifications approved by the Committee and has obtained a building permit from same and construction has commenced, and then such materials must be stored solely within the Lot lines.

(20)     The second paragraph of Section 3.3 B.(5) of the Declaration is hereby amended and restated in its entirety as follows:

No house trailer, camper, mobile home, motorhome, or other similar vehicle designed for living or camping and no commercial truck, tractor, tractor trailer, motorcycle, motorized bicycle, or other similar vehicle shall be parked within the Subdivision, either during the daytime or at night, except in such area, if any, as may be designated by Declarant for such purpose. No boat, boat trailer, or other watercraft shall be permitted to remain overnight on any street or driveway exposed to public view, but must be stored or placed in a boat slip, boathouse, or other suitable facility approved by and acceptable to the Committee in the exercise of its sole discretion.

Both prior to and after occupancy of a dwelling on any Lot, the Owner shall provide appropriate space for off-the-street parking for his vehicle or vehicles.

B.(6)    Construction of Private Boat Docks

No boats or vessels which in the opinion of the Committee are unsightly or detract from the appearance of the Subdivision shall be permitted to remain docked or moored at any pier, dock or mooring constructed for or used in connection with any Lot or Land in the Subdivision. This Section shall not be applicable to boats or vessels docked or moored at the Ancillary Facilities.

B.(7)    Dust and Erosion Control

Under no circumstances shall the Owner of any Lot or Land disturb the natural soil or grasses unless the Owner immediately thereafter constructs on, paves, gravels, or replants such disturbed areas with ground cover approved by the Committee.

B.(8)    Easements

Easements for installation, operation, maintenance, repair and replacement of utilities and drainage, including the trimming and/or removal of trees and brush for drainage facilities, are reserved as shown on the applicable Plat and/or as set out in the Declaration. Within these easements, no structure, fences, planting or other material shall be placed or permitted to remain which may damage or interfere with the installation and maintenance of utilities, or which may change the direction of flow of drainage channels in the easements or which may obstruct or retard the flow of water through drainage channels. The easements include, without limitation, the right of ingress and egress thereon at reasonable times to such easements for construction, maintenance, repair and replacement purposes, without consent or approval of the Owner of the applicable Lot or Land and without compensation or redress to the Owner of said Lot or Land by reason of such construction, maintenance, repair or replacement. Any improvements placed in the easement area by the Owner of any Lot or Land may be removed and replaced by the Declarant and/or any person or entity having any right, title or interest in the easement including, without limitation, any public authority or utility company, all without liability to and at the expense of the Owner of said Lot or Land. The easement area of each Lot or Land and all improvements thereon shall be maintained continuously by the Owner of the Lot or Land covered by such easement, except for those improvements which are owned by the Owner of the easement such as the applicable public authority or utility company.

B.(9)    Electrical Power

No source of electrical energy shall be brought to the Lot or Land or used upon any Lot or Land unless and until the Committee has approved plans and specifications for the erection of the permanent improvements to be located on said Lot or Land. The Owner of such Lot or Land shall pay for connecting charges by the utility company, including individual or semi-individual transformers and/or meters required.

B.(10)  Occupancy of Structures

(22)     Section 3.3 B.(10) is hereby amended and restated in its entirety as follows:

No structure shall be occupied or used for the purpose for which it is designed or built or for any other purpose until the exterior thereof shall have been completed and the structure connected to an acceptable sanitary sewer which has been approved by the Committee and a certificate to that effect shall have been issued by the Committee. Following issuance of a building permit by the Committee, the construction contemplated thereby shall be completed within one (1) year from the date of the building permit, with all construction materials and equipment, contractor’s temporary offices, chemical toilets, and any other temporary structures removed from the applicable Lot or Tract. Failure to complete all construction within one (1) year after issuance of a building permit, or within such longer period as may be approved by the Committee in the exercise of its sole discretion, shall constitute a Terminating Event with respect to the Lot or Tract upon which construction has commenced and has not been completed. In the event that construction has not commenced within six (6) months of the date of issuance of the building permit, the building permit shall be null and void and of no further force or effect, and it shall be necessary for the Owner to reapply for a new building permit to the Committee. Once commenced, construction shall be diligently prosecuted to completion.

B.(11)  Hunting and Firearms

No hunting shall be allowed in this Subdivision and any discharge of firearms is strictly prohibited except in such area or areas that the Declarant may designate or construct facilities suitable for such purposes.

B.(12)  Storage of Tools and Trash

The storage of tools, landscaping instruments, household effects, machinery or machinery parts, trailers, empty or filled containers, boxes or bags, trash, materials, or other items that shall, in the opinion of the Committee, in appearance detract from the aesthetic values of the property, shall be so placed and stored to be concealed from view of all public rights-of-way and the Owners of other Lots or Land. Trash for collection may be placed in enclosed sanitary containers at the street right-of-way line on regular collection days for a period not to exceed twelve hours prior to pick up. Trash, garbage or other waste and debris shall at all times be kept in enclosed sanitary containers. Any incinerator or other equipment for the storage or disposal of such material shall be kept in a clean, sanitary and sightly condition. Storage of junk, inoperative or unlicensed cars, and other unsightly objects on any Lot or Land is expressly prohibited.

B.(13)  Grass and Weeds

(23)     Section 3.3 B.(13) of the Declaration is hereby amended and restated in its entirety as follows:

The Owner of each Lot and Tract shall keep all grass, weeds, and vegetation (except as part of any landscaping plan approved by the Committee) trimmed and cut so that the same shall remain in a neat and attractive condition as determined in the sole discretion and judgment of the Committee. Upon the failure of any Owner to comply with this requirement, Declarant or the Committee may provide written notice to the Owner and if the Owner fails to remedy the condition within thirty (30) days after transmittal of the notice to the Owner, Declarant or the Committee or their respective agents may enter upon the Lot or Tract and remedy the violation and may charge the Owner the greater of $45.00 or the actual cost of remedying the violation. The sum of $45.00 stated in this Section shall be subject to an Annual Inflation Adjustment beginning in 1992 and each year thereafter. The failure of the Owner to pay the foregoing charge within ninety (90) days after the transmittal of a billing statement to the Owner by Declarant or the Committee shall be a Terminating Event under Section 4.2 of this Declaration.

B.(14)  Drilling and Mining

No water well, oil, gas or mineral mining, exploring, drilling, development, refining, quarrying or other operations of a related nature shall be permitted upon or in any Lot or Land without the prior written authorization of the Committee.

B.(15)  Easements

All Lots and Land in the Subdivision are and shall be expressly subject to any and all easements and rights-of-way of record and are subject to natural drainage easements.

B.(16)  Mineral Rights

(2)       Section 3.3 Land Use – General, B.(16) Mineral Rights: is hereby amended to read as follows:

The Subdivision Land is subject to outstanding mineral and/or royalty interests, if any, relative thereto, as reflected of record. Declarant makes no reservation unto itself of any minerals on, in and under any Lot or Land constituting part of the Subdivision Land.

(3)      Section 3.3 Land Use – General is hereby supplemented and amended to add the following additional Subsection:

B.(17)  Camping Areas

Declarant shall have the right to dedicate one or more areas in the Subdivision Land as Camping Areas. Camping Areas shall be designated as such on the applicable Plat or Plats covering the portion or portions of the Subdivision Land dedicated as Camping Area. Camping Areas may be utilized for camping upon and subject to such rules and regulations relating to the use thereof as may be prescribed from time to time in writing by the Declarant; provided that when the Association has been formed, upon and subject to such rules and regulations relating to the use thereof as may be prescribed by the Association. The rules and regulations, if any, in effect from time to time shall be posted in a conspicuous place at each entrance to each Camping Area. Notwithstanding any provision of the Declaration (including Section 3.3 B.(5) to the contrary, the rules and regulations applicable to the Camping Areas may permit the use thereof by house trailers, campers, mobile homes and any such vehicle designed for living or camping.

3.4       Land Use Areas – Residential

In addition to the preceding provisions, the following shall be applicable to all Land classified R-1, R-2, R-4 and R-6 as defined herein.

C.(1)   Livestock, Poultry and Pets

(24)     Section 3.4 C.(1) of the Declaration is hereby amended and restated in its entirety as follows:

No animals, livestock or poultry of any kind shall be raised, bred, or kept on any Lot, except that dogs, cats, and other household pets may be kept provided that they are not kept, bred, or maintained for any commercial purposes and are not kept in quantities which, in the sole discretion and judgment of the Committee, create an annoyance or nuisance. Pets shall be kept under leash when walked or exercised away from the Owner’s Lot. If in the sole discretion of the Committee it is determined that a particular animal constitutes a nuisance, such animal shall be removed from the Subdivision by the owner thereof, and if the owner thereof cannot be determined or is otherwise unknown, then the Property Owners’ Association is authorized and directed to remove the animal from the Subdivision.

C.(2)    Landscaping

No trees, plants, shrubs or foliage shall be planted, kept or maintained in such a manner as, in the opinion of the Committee, shall create a serious potential hazard to the other residents of the area.

C.(3)    Spaces Between Building – Passageways

Where more than one building or a multiple dwelling is located on a Lot, the following spaces and passageways shall be provided and maintained:

(a)       There shall be at least ten (10) feet between every one family dwelling, two family dwellings, multiple dwelling and any other building on the same Lot. These regulations do not apply to required spaces between accessory buildings and other buildings on the same Lot, which requirements are otherwise provided for by the provisions of C.(4) hereof.

(b)       There shall be a passageway at least ten (10) feet in width extending from a street to one entrance of each dwelling unit in a multiple dwelling, unless there is an entrance to the dwelling unit open onto the street or into a hallway opening onto the street.

(c)       Where dwellings or group dwellings arranged around a court, the average width of the court shall not be less than twenty (20) feet. Such court may serve as the passageway for rear buildings or as the space between buildings.

C.(4)    Accessory Buildings

The accessory buildings and structures necessary to such use may occupy not more than fifty percent (50%) of a required rear yard, may not be more than fifteen (15) feet in height, and must be located at least ten (10) feet from the nearest part of a main building. No accessory building shall be erected closer than fifteen (15) feet to the line of an abutting Lot to the rear and no such building shall occupy any portion of a required front or side yard.

Except for boat houses, if located at the water’s edge or over the water on waterfront Lots, all garages, guest houses, servant’s quarters, structures for storage, boat storage structures and other buildings erected on any Lot or Lots in conjunction with any one resident, must be attached to the main residence by a common wall or by covered breezeway or passageway.

C.(5)    Side Yard Setback – Reverse Corner Lots

In the case of a reversed corner Lot, there shall be a side yard setback on the street side of the corner Lot of not less than the front yard requirements for the Lots in the rear of such corner Lot.

3.5       R-1 Single Family Residential District

The following uses and regulations shall apply in the R-1 Single Family Residential District unless otherwise provided in these Reservations.

D.(1)    Uses Permitted

(a)       A one-family dwelling.

(b)      The accessory building and structures necessary to such use located on the same Lot.

(c)       Maintaining mail address for commercial, professional and business license purposes only. No commercial, professional or business use shall be permitted. Without limitation, no stock in trade, supplies, nuisance-producing apparatus or equipment shall be kept on the premises, and no employees or assistants shall be engaged for said services on the premises. Except as otherwise provided in this Section, no signs shall be displayed.

(d)      One professionally made sign of not to exceed one (1) square foot in area containing only the name and title or occupation of the occupant.

(e)      Temporary sign not to exceed six (6) square feet in area giving the names of the contractors, engineers and architects during construction period.

D.(2)    Maximum Building Height

(25)     Section 3.5 D.(2) of the Declaration is hereby amended and restated in its entirety as follows:

D.(2)    Maximum Building Height

The maximum building height shall be thirty-two (32) feet above the highest natural contour of the applicable Lot or Tract.

D.(3)    Minimum Yard Requirements

Except as specified to the contrary on the Plat, which specification shall control, the following shall apply:

(a)       Front yard setbacks shall conform to a minimum depth of twenty-five (25) feet from the front property line to the closest structural projection, including porches, but not including eaves, overhangs, planters or fireplaces.

(b)       A principal structure shall provide total side yards of not less than fifteen (15) feet with not less than five (5) feet on one (1) side. Corner Lots shall maintain a minimum setback of twenty-five (25) feet from the side street line.

(c)       A rear yard shall be maintained of at least fifteen (15) feet from the property line to the nearest building line.

(d)      Except boat docks and boat houses built at water’s edge or over water, no structure on any Waterfront Lot shall be located nearer the 825’ contour than 30’, without special permission from the Committee. The location of boat docks and boat houses etc. shall be subject to approval of the Committee. The Committee shall issue permission for variation of this requirement only when, in the sole opinion of the Committee, such variation is aesthetically and architecturally sound.

D.(4)    Maximum Area of Dwelling

Notwithstanding uses permitted herein, no more than fifty percent (50%) of the total Lot area shall be used for the Dwelling and other structures.

D.(5)    Minimum Dwelling Unit Size

All residences located North of R.M. or F.M. 2147 shall require not less than the following number of square feet of ground or first floor living area, excluding carport, garage, covered porches, covered contiguous patios or other similar appendages, on the Lots as specified below.

1800 square feet: for all Lots contiguous with any portion of the golf course including fairway and all Lots contiguous with the 825’ contour of Lake Lyndon B. Johnson, as well as the second row of Lots back from the golf course as described above, and the second row of Lots back from the 825’ contour of Lake Lyndon B. Johnson. The term “second row of Lots” as used herein shall mean all Lots which are not contiguous with but which either adjoin Lots contiguous with the 825’ contour of Lake Lyndon B. Johnson and/or the golf course or which are across the street from Lots which are contiguous with said 825’ contour or the golf course, as the case may be.

1200 square feet: for all other Lots located in this area, being North of R.M. or F.M. Road 2147.

All residences located South of R.M. or F.M. Road 2147 shall require not less than the following number of square feet of ground or first floor living area.

1800 square feet: excluding carport, garage, covered porches, covered contiguous patios or other similar appendages for all Lots fronting any portion of the golf course including fairways and the second row of Lots from the golf course as described above.

1200 square feet of ground or first floor area including carport, garage, covered porches, and contiguous patios, providing that a minimum of 80% of such floor area is enclosed dwelling portions, for all other Lots in this area being located South of R.M. or F.M. Road 2147.

3.6       R-2 Two Family Residential District

The following uses and regulations shall apply in the R-2 Two Family Residential District unless otherwise provided in these reservations.

E.(1)    Uses Permitted

(a)       Any use permitted in the R-1 area.

(b)       Two Family Dwelling or two (2) One Family Dwellings.

(c)       The accessory buildings necessary to such use located on the same Lot.

(d)      One (1) professionally made sign per dwelling unit of not to exceed one (1) square foot in area containing only the name and title or occupation of the occupant.

(e)      Temporary sign of not to exceed six (6) square feet in area giving names of the contractors, engineers and architects during construction period.

E.(2)    Maximum Building Height

(26)     Section 3.6 E.(2) of the Declaration is hereby amended and restated in its entirety as follows:

E.(2)    Maximum Building Height

The maximum building height shall be thirty-two (32) feet above the highest natural contour of the applicable Lot or Tract.

E.(3)    Minimum Yard Requirements

Except as specified to the contrary on the Plat, which specifications shall control, the following shall apply:

(a)       Front yard setbacks shall conform to a minimum depth of twenty-five feet from the front property line to the nearest structural projection, including porches, but not including eaves, overhangs, planters or fireplaces.

(b)       A side yard setback shall be maintained of at least five (5) feet in depth from all side property lines to the building line of any structure. Corner Lots shall maintain a minimum setback of twenty-five (25) feet from the side street line.

(c)       A rear yard shall be maintained of at least fifteen (15) feet from the property line to the nearest building line, excepting fences, walls and hedges when constructed as provided for in the preceding provisions.

E.(4)    Maximum Area of Dwelling

Notwithstanding uses permitted herein, no more than fifty percent (50%) of the total Lot area shall be used for the dwellings and other structures.

E.(5)    Minimum Dwelling Unit Size

All two family residences shall require not less than nine hundred fifty (950) square feet of floor area for each unit including carport, garage, covered porches, covered contiguous patios, etc., with a minimum area of seven hundred fifty (750) square feet for enclosed living area in the dwelling portion of each unit; provided that if such two-family residence is located on an R-2 Lot that is situated either contiguous to any portion of the golf course or the 825’ contour of Lake Lyndon B. Johnson or the second row of lots, as hereinbefore defined, then, and in such event, the enclosed living area in the dwelling portion of each unit shall be no less than nine hundred fifty (950) square feet.

3.7      R-4 Multiple Residential District

The following uses and regulations shall apply in the R-4 Multiple Residential District unless otherwise provided in these reservations.

F.(1)     Uses Permitted

(a)        Any use permitted in the R-1 and R-2 areas.

(b)        Multiple Family Dwellings and/or Apartment Houses.

(c)        The accessory buildings necessary to such use located on the same Lot.

(d)      One (1) professionally made sign of not to exceed three (3) square feet in area containing only the name and title or occupation of the occupant.

(e)       One (1) professionally made unlighted sign not to exceed six (6) square feet in area containing only the name of the apartment or dwelling structure.

(f)       Temporary sign of not to exceed six (6) square feet in area giving the names of the contractors, engineers and architects during the construction period.

F.(2)    Maximum Building Height

(27)     Section 3.7 F.(2) of the Declaration is hereby amended and restated in its entirety as follows:

F.(2)    Maximum Building Height

The maximum building height shall be thirty-two (32) feet above the highest natural contour of the applicable Lot or Tract.

F.(3)    Minimum Yard Requirements

Except where there is specifically called out on the Plat, which specification shall control, the following shall apply:

(a)       Front yard setbacks shall conform to a minimum depth of twenty-five (25) feet from the front property line to the closest structural projection, including porches, but not including eaves, overhangs, planters or fireplaces.

(b)       A side yard setback shall be maintained of at least five (5) feet in depth from all side property lines to the building line of any structure. Corner Lots shall maintain a minimum setback of twenty-five (25) feet wide from the side street line.

(c)       A rear yard shall be maintained to at least fifteen (15) feet from the property line to the nearest building line.

F.(4)    Maximum Area of Dwelling

Notwithstanding uses permitted herein, no more than fifty percent (50%) of the total Lot area shall be used for the dwelling and other structures.

F.(5)    Minimum Automobile Parking Requirements

One and one-half (1 ½) off-street parking spaces for each two (2) bedroom or more dwelling units or one (1) off-street parking space for each one (1) bedroom unit or bachelor apartment. A full parking space shall be provided in each instance where a fractional space would otherwise be required. Under no circumstances will any parking be permitted within the setback areas adjacent to streets or on the streets.

F.(6)    Minimum Dwelling Unit Size

Each and every dwelling unit on the premises shall consist of at least seven hundred fifty (750) square feet of living area for structures having less than twenty (20) living units. For structures containing over twenty (20) dwelling units, the Committee will set, in each individual instance, the minimum square footage area required for each dwelling unit.

3.8       R-6 Apartment, Townhouse and Cottage District

The following uses and regulations shall apply in the R-6 Apartment, Townhouse and Cottage District unless otherwise provided in these reservations.

G.(1)    Uses Permitted

(a)        (i)         Apartments;

(ii)         Townhouses; and

(iii)         Cottages.

(b)       Any uses permitted in the R-4 Area of this Declaration with the following exceptions:

(i)       All Lots shall be used for apartments, townhouses or cottages, individually owned or owned in condominium.

(ii)      Each apartment, townhouse and cottage residence may have appurtenant thereto a two-car carport and golf cart storage area or such carports and golf cart storage areas may be a part of the common elements.

(iii)       Accessory buildings or structures necessary to such use may be erected upon the same Lot or parcel subject to the approval of the Committee.

(iv)      Any signs erected shall conform to Paragraph 1 of the Requirements of Residential Land Use – General of these Regulations.

G.(2)    Maximum Building Height

(28)     Section 3.8 G.(2) of the Declaration is hereby amended and restated in its entirety as follows:

G.(2)    Maximum Building Height

The maximum building height shall be thirty-two (32) feet above the highest natural contour of the applicable Lot or Tract; provided that in the case of a multiple dwelling complex containing more than twenty (20) dwelling units, the Committee may increase the maximum building height in the exercise of its sole discretion.

G.(3)    Minimum Yard Requirements

Same as in the R-4 area except that front setback lines shall be twenty (20) feet and rear setback shall be fifteen (15) feet.

G.(4)    Maximum Area of Dwelling

Notwithstanding uses permitted herein, no more that sixty percent (60%) of the total Lot area shall be used for the dwelling units and other structures.

G.(5)    Minimum Automobile Parking Requirements

One and one-half (1 ½) parking spaces for each two (2) bedroom or more dwelling units or one (1) parking space for each one (1) bedroom unit or bachelor apartment. A full parking space shall be provided in each instance where a fractional space would otherwise be required. Under no circumstances will any parking be permitted within the setback area adjacent to streets or on the streets.

G.(6)    Minimum Dwelling Unit Size

The maximum living area of each dwelling unit in any one Multiple Dwelling complex having more than twenty (20) dwelling units shall be set in each instance by the Committee; provided the minimum size shall be no more than the minimum dwelling unit size for Multiple Dwelling complexes having less than twenty (20) units. For Multiple Dwelling complexes having less than twenty (20) units, the minimum dwelling unit size shall be as follows:

(a)      Apartments. Each and every dwelling on the premises shall consist of at least seven hundred fifty (750) square feet of living area.

(b)      Townhouses. Each and every dwelling unit on the premises shall consist of at least twelve hundred (1200) square feet of living area.

(c)       Cottages. Each and every dwelling unit on the premises shall consist of at least fourteen hundred (1400) square feet of living area.

3.9       C-2 General Commercial District

(29)      Section 3.9 of the Declaration is hereby amended and restated in its entirety as follows:

3.9       C-2 General Commercial District

In addition to the preceding provisions, the following uses and regulations shall apply in the C-2 General Commercial District.

H.(1)    Uses Permitted

(a)      Retail or wholesale stores or businesses not involving any kind of manufacture, processing, or treatment of products other than that which is clearly incidental to the retail or wholesale business conducted on the premises; provided, however, except with the express prior written permission of the Amenities Owner, (i) no retail or wholesale business engaged in the sale of golf and/or tennis equipment, merchandise, or services may be constructed or operated, and (ii) no health spa or health club or similar facility may be constructed or operated.

(b)       Automobile parking areas.

(c)       Automotive service stations where approved by the Committee.

(d)      Public utility or public service buildings and structures necessary to such use and approved by the Committee.

(e)      Restaurants, tea rooms and cafes, including on and off premises sale of alcoholic beverages, where the law provides, where approved by the Committee.

(f)      Theaters and auditoriums (except for drive-in theaters) where approved by the Committee.

(g)       Such other types of retail and wholesale businesses shall be permitted when in the sole discretion and determination of the Committee such use is compatible with the uses permitted above and the general scheme of development for the Subdivision Land; provided, however, in no event shall any hotel, motel, or other similar commercial lodging facility (including, but not limited to, any time-share program) be permitted unless owned and/or operated by the Amenities Owner and/or the Club.

(h)       Such accessory buildings and structures to be located on the same Lot or Tract as may be reasonably necessary and appropriate in the sole discretion and determination of the Committee.

H.(2)    Maximum Building Height

The maximum building height shall be thirty-two (32) feet above the highest natural contour of the applicable Lot or Tract.

H.(3)    Storage of Materials

The open or visible storage of supplies and equipment, boxes, refuse, trash, materials, machinery or machinery parts, or other items of any kind or character which in the sole discretion and determination of the Committee detract from the aesthetic values of the Subdivision is prohibited.

H.(4)    Maximum Area of Building

Building area shall not exceed sixty percent (60%) of the area of the Lot or Tract, unless the Committee determines in the exercise of its sole discretion that a greater percentage would not be incompatible with the aesthetic values of the Subdivision.

H.(5)    Signs

Prior to construction or installation thereof, all exterior signs, including the location, design, color, size, and lighting thereof, must be approved by Declarant and the Amenities Owner.

H.(6)    Landscaping

All commercial structures shall be landscaped with an automatic watering system. Prior to installation, all landscaping plans must be submitted to and approved by Declarant and the Amenities Owner. If landscaping is not maintained in accordance with the approved landscaping plan or otherwise to the satisfaction of Declarant and the Amenities Owner, then the Property Owners’ Association shall remedy the deficiencies at its cost, but the Property Owners’ Association may recover the cost thereof from the Owner of the applicable Lot or Tract.

(30)     The Declaration was previously supplemented by addition of the following new Section 3.10, which supplementation is hereby ratified, confirmed, and adopted by the Majority Owners, and the Declaration is hereby amended to include the following new Section 3.10:

3.10    A-1 Amenities Land

(a)       A Lot or Tract which is designated as Amenities Land shall be subject to such restrictions and reservations, if any, as may be imposed from time to time or at any time by the Amenities Owner, but otherwise such Lot or Tract shall be wholly unrestricted as to use, except for such restrictions, if any, as may have been imposed under Section 5.7 of this Declaration prior to the designation of the Lot or Tract as Amenities Land, and except for such other valid restrictions and covenants, if any, arising other than under this Declaration as may be binding upon the Lot or Tract at the time it is designated as Amenities Land. Notwithstanding any other provision in this Declaration to the contrary, and without limiting the foregoing, in no event shall the construction of any building, structure, or other improvement located on any Amenities Land ever be subject to approval by the Declarant, the Committee, any Owner, the Property Owners’ Association, or any other person or quasi-governmental entity or board, and further in no event shall any Amenities Land ever be subject to charge or imposition for any Maintenance Fee, Assessment, building permit fee, construction inspection fee, or other charge, fee, or assessment of any kind or character. The Amenities Owner shall have the absolute and irrevocable right, in the exercise of its sole discretion, to approve the design, construction, and location of all buildings, structures, and other improvements of any kind or character located on any Lot or Tract which is designated as Amenities Land, including but not limited to all landscaping and all signs located on Amenities Land.

(b)       The Amenities Owner shall have the right, but not the obligation, in the exercise of its sole discretion, to change at any time and from time to time the Classification of any Lot or Tract or any portion thereof which is Amenities Land by either (i) filing or causing to be filed an amended plat or plats to reclassify all or any portion of such Amenities Land, or (ii) filing in the Real Property Records of the County where the Lot, Tract, or applicable part thereof is located, a written notice of change of classification executed by the Amenities Owner and describing the property for which the reclassification is applicable; which reclassification shall, in either case, be effective upon filing of the plat or upon filing of the notice of change of classification with the applicable county clerk.

(c)       A Lot or Tract which is classified as Amenities Land may be withdrawn from the Declaration at any time, in whole or in part, by the Amenities Owner filing, in the Real Property Records of the county where the applicable Amenities Land is located, a written instrument executed and acknowledged by the Amenities Owner, which shall describe the Amenities Land to be withdrawn from the Declaration and shall state that the land is withdrawn from the Declaration. The consent or approval of Declarant, any Owner, the Property Owners’ Association, or any other person or any governmental entity, shall not be necessary for the withdrawal of the land from the Declaration. Upon the recording of the instrument of withdrawal from the Declaration by the Amenities Owner, such land shall no longer be a part of the Subdivision, such land shall no longer be Subdivision Land within the meaning of the Declaration, and the provisions of this Declaration shall not apply in whole or in part to such land; provided, however, if the land being withdrawn was already subject to the Special Restrictions under Section 5.7 at the time it was originally designated as Amenities Land, it shall still be subject to such Special Restrictions after its withdrawal from the Declaration.

(31)     The Declaration was previously supplemented by addition of the following new Section 3.11, which supplementation is hereby ratified, confirmed, and adopted by the Majority Owners, and the Declaration is hereby amended to include the following new Section 3.11:

3.11      F-D Future Development Land

(a)       A Lot or Tract of land which is designated as Future Development Land shall be restricted in accordance with Section 3.2 of the Declaration, but otherwise shall be unrestricted as to use until such time as such Lot and/or Tract, or portion thereof, is reclassified by the then owner thereof by the filing of an amended plat or plats showing such Lot and/or Tract or portion thereof and the new classification thereof; provided, however, the restrictions imposed under Section 3.2 shall not be applicable to any existing buildings, structures, or other improvements located on the Lot or Tract at the time it is designated as Future Development Land. Without limiting the foregoing, any Lot or Tract or portion thereof which is classified as Future Development Land shall, while so classified, not be subject to the provisions of Section 3.3 of the Declaration.

(b)      The then fee title owner of a Lot or Tract or applicable portion thereof which is classified as Future Development Land shall have the right, but not the obligation, in the exercise of such fee title owner’s sole discretion, to change at any time and from time to time the Classification of any Lot or Tract or any portion thereof which is Future Development Land by either (i) filing or causing to be filed an amended plat or plats to reclassify all or any portion of such Future Development Land, or (ii) filing in the Real Property Records of the County where the Lot, Tract, or applicable part thereof is located a written notice of change of classification executed by the then fee title owner and describing the property for which the reclassification is applicable; which reclassification shall, in either case, be effective upon filing of the plat or upon filing of the notice of change of classification with the applicable county clerk.

(c)      A Lot and/or Tract which is classified as Future Development Land may be withdrawn from the Declaration at any time, in whole or in part, by the then fee title owner thereof filing in the real property records of the county where the land is located a written instrument executed by the then fee title owner of the land, which instrument shall describe the land to be withdrawn from the Declaration and shall state that the land is withdrawn from the Declaration. The consent or approval of the Declarant, any Owner, the Property Owners’ Association, or any other person or any governmental entity shall not be necessary for the withdrawal of the land from the Declaration. Upon the recording of the instrument of withdrawal from the Declaration by the then owner of the land, such land shall no longer be a part of the Subdivision, such land shall no longer be Subdivision Land within the meaning of the Declaration, and the provisions of the Declaration shall not apply in whole or in part to such withdrawn land.

(4)        Special Provisions

4.1        Lake Bottom

(4)        Section 4.1 Lake Bottom is hereby amended to read as follows:

The Declarant states that the lake bottom abutting this Subdivision up to the 825’ contour is privately owned by third parties not the Declarant, subject to a recorded easement in favor of the Lower Colorado River Authority for flooding purposes; and to a recorded non-exclusive use easement in favor of Declarant, its successors and assigns, covering a strip twenty-five (25) feet wide lakeward from the 825’ contour for the limited purpose of providing access to the water and for the construction of docks, piers and the like, subject to the conditions stated in said easement. Subject only to the foregoing, the owner of the lake bottom up to the 825’ contour has reserved all rights and privileges of ownership relative to said lake bottom to the 825’ contour including, without limitation, the right to construct structures on and over the lake. The rights of Declarant and each Owner are and shall be expressly subject to the foregoing.

4.2       Ancillary Facilities and Club Membership

(32)      Section 4.2 of the Declaration is hereby amended and restated in its entirety as follows:

4.2       Amenities and Club Membership

(a)       The Amenities Owner is the owner of the Amenities and has the right to operate and control the Amenities as it sees fit in the exercise of its sole and absolute discretion. The Amenities Owner and the Club may impose and collect such fees and charges for the use of the Amenities or any part thereof as the Amenities Owner determines to be appropriate in the exercise of its sole and absolute discretion without limitation. All moneys so collected are the sole property of the Amenities Owner or the Club, as applicable, and may be used, expended, distributed, transferred, loaned, given, paid, or disposed of in the exercise of the sole and absolute discretion of the Amenities Owner and the Club without limitation.

(b)      The Amenities Owner has the right to sell, lease, convey, rent, mortgage, pledge, assign, transfer, restrict, dedicate, encumber, demolish, restore, rebuild, reconstruct, rehabilitate, terminate, or otherwise deal with all or any portion of the Amenities without restriction or restraint of any kind or character.

(c)       The Amenities Owner shall be under no obligation to operate or maintain all or any portion of the Amenities.

(d)       No land owned by the Amenities Owner shall be deemed to be a part of the Subdivision Land unless it is covered by a plat meeting the requirements of this Declaration and filed of record in the county where the land is located. Notwithstanding any other provision to the contrary contained in this Declaration, the Amenities Owner shall not be responsible for the payment of any Maintenance Fees, Assessments, or other charges.

(e)       The Owner of a Lot or Tract has no rights with respect to the Amenities except and only as set forth in this Section 4.2. Without limiting the foregoing, the Owner of a Lot or Tract has no equitable rights, licenses, servitude, easements, rights of use or access, or other rights with respect to the Amenities, except and only as specifically granted in this Section 4.2 and not otherwise.

(f)       The Amenities Owner is not required to operate the Amenities or any portion thereof as a public facility, and the Amenities Owner may restrict access to the Amenities to members in good standing of any private club operated by the Amenities Owner or the Club or any successor thereto (any such private club being hereinafter referred to as a “Country Club”). The Amenities Owner may without restriction create such classes of membership in any Country Club, including temporary memberships extended to guests staying in lodging owned, operated and/or managed by the Amenities Owner, the Club, or any affiliated company, without restriction. No owner of a Lot or Tract has a right to be a member in any Country Club, whether operated presently or in the future by the Amenities Owner or the Club, and admission to and continuation of membership in any Country Club shall in all events be within the sole and absolute discretion of the Amenities Owner and the Club. Admission as a member in any Country Club does not create in the member any property interest or right of any kind or character, either vested or contingent, with respect to the Amenities or the Country Club. All memberships in any Country Club shall be owned by the Club and members are provided only the use of a membership while they are members.

(g)      In the event that the Amenities Owner or the Club or any successor thereto extends an invitation to membership in any Country Club, whether operated presently or in the future by the Amenities Owner or by the Club or any successor thereto, to any Owner of a Lot or Tract or dwelling unit thereon, the Amenities Owner or the Club shall have the right to charge an initiation fee in such amount as determined by the Amenities Owner or the Club in the exercise of its sole discretion, and the Amenities Owner or the Club may establish such different classes of membership and charge such different initiation fees for such classes of membership as the Amenities Owner or the Club determines in the exercise of its sole discretion, and the Amenities Owner or the Club may impose such monthly and other periodic dues and charges, assessments, and other fees and charges upon the members in the Country Club as are deemed appropriate by the Amenities Owner or the Club in the exercise of its sole discretion; provided, however, that prior to January 1, 2011 A.D., and provided that the applicable Lot, Tract, or dwelling unit has not been the subject of a Terminating Event, the Amenities Owner may not charge an initiation fee to (i) any Owner (hereinafter referred to as a “First Owner”) who purchased or in the future purchases his Lot, Tract, or dwelling unit from Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, (ii) any Owner who purchased or in the future purchases his Lot, Tract, or dwelling unit thereon from a First Owner, (iii) any other Owner who owns a Lot, Tract, or dwelling unit in the Subdivision on the effective date of the Fourth Amendment to this Declaration (hereinafter referred to as a “Current Owner”), and (iv) any Owner who in the future purchases his Lot, Tract, or dwelling unit in the Subdivision from a Current Owner. If at any time prior to January 1, 2011 A.D., any Owner commits or any Lot, Tract, or dwelling unit thereon is the subject of a Terminating Event, then the Lot and/or Tract or dwelling unit owned by such Owner shall no longer be eligible for the waiver of the initiation fee as provided herein, whether still owned by the Owner who was guilty of the Terminating Event or who owned the Lot or Tract or dwelling unit at the time of the Terminating Event or whether owned by an immediate or mediate successor to such Owner. Notwithstanding any other provision herein to the contrary, the foregoing provisions with respect to waiver of initiation fees shall only be applicable with respect to the use of Amenities which are in existence on January 1, 1992, and shall not apply to the use of any future Amenities.

(h)       In the event that the Amenities Owner should grant any privilege with respect to the Amenities to the Owners of the Subdivision Land, or any part thereof, as a class, one and only one family shall be entitled to the privilege of Owner with respect to each Lot, Tract, or dwelling unit thereon. The term “family” shall mean the individual Owner of the applicable Lot, Tract, or dwelling unit thereon, as well as the spouse and any children under 21 years of age, natural or adopted, of the one individual Owner. In case there exists more than one individual Owner of the Lot, Tract, or dwelling unit thereon, only one of said individual Owners shall be entitled to the privilege of Owner for the purposes of this subsection. In the event that the Owner of the Lot, Tract, or dwelling unit thereon is a corporation, partnership, association, or other entity other than an individual, the family entitled to the applicable privilege with respect to the Amenities shall be the immediate family of the one individual who is designated in writing by the Owner as the individual entitled to the applicable privilege. In the event that the Owner of the Lot, Tract, or dwelling unit thereon is a combination of one or more individual Owners and entities other than individual Owners, only the family of one individual (who must be an individual Owner or a shareholder, partner, or owner of an entity which is also an Owner and who is designated in writing by all Owners of the Lot, Tract, or dwelling unit thereon) shall be the family entitled to the applicable privilege. In case the Owner of the Lot, Tract, or dwelling unit thereon is other than one individual, the Owner shall have the right, subject to the other terms hereof, to change the family of the individual designated as being entitled to the applicable privilege; provided said right to change the designation may not be exercised more often than once every twelve (12) months noncumulative without the prior written consent of the Amenities Owner, which consent may be withheld in the sole discretion of the Amenities Owner. In the case of a conflicting claim to entitlement to the privilege, the privilege may be withheld until the dispute is resolved to the satisfaction of the Amenities Owner. All written designations required hereunder shall be in such form as required by the Amenities Owner, shall be executed by such persons and/or entities as may be required by the Amenities Owner, and shall not be effective unless and until received by the Amenities Owner.

(i)       The Amenities Owner owes no legal duties or responsibilities, fiduciary or otherwise, to the Property Owners’ Association or to the Maintenance Fund Association.

4.3       Nuisances

No noxious or offensive activities shall be carried on upon any Lot or Land, nor shall anything be done thereon which may be or may become an annoyance or nuisance to the Subdivision.

(33)     Section 4.4 of the Declaration is hereby amended and restated in its entirety as follows, and the provisions thereof shall be immediately effective in all respects, except that the amount of the Base Maintenance Fee and the Additional Base Maintenance Fee for January 1, 1992, and the allocation thereof between Lake LBJ Investment Corporation., a Texas corporation, Horseshoe Bay Assessment Association, Inc., a Texas non-profit corporation, and Horseshoe Bay Property Owners’ Association, Inc., a Texas non-profit corporation, shall be determined for the year 1992 in accordance with the provisions of the Third Amendment to the Declaration, and beginning January 1, 1993, the amount of the Base Maintenance Fee and the Additional Base Maintenance Fee, and the allocation thereof between Lake LBJ Investment Corporation, a Texas corporation, Horseshoe Bay Maintenance Fund, Inc., a Texas non-profit corporation, and Horseshoe Bay Property Owners’ Association, Inc., a Texas nonprofit corporation, shall be determined in accordance with the provisions of Section 4.4 of the Declaration as amended and restated by this Amendment:

4.4       Maintenance Fees and Assessments

(.1)      Base Maintenance Fee. Each Lot and Tract or dwelling unit thereon in the Subdivision, except those owned by Declarant or the Amenities Owner, shall be subject to an annual maintenance fee (“Base Maintenance Fee”), as hereinafter provided, payable January 1, in advance each year.

The initial dollar amount of the Base Maintenance Fee is hereby established at $132.00 (United States dollars). If more than one dwelling unit is located upon any Lot or Tract, then each dwelling unit is subject to a Base Maintenance Fee. Office buildings and commercial buildings shall be subject to a Base Maintenance Fee for each 1,200 square feet of air conditioned and/or heated space or fraction thereof.

The Base Maintenance Fee is the personal obligation of the Owner of each Lot, Tract, or dwelling unit on January 1 of the applicable year.

Commencing January 1, 1993, the Base Maintenance Fee shall be increased or decreased automatically (but in no event decreased in any year below $132.00) based upon application of the Annual Inflation Adjustment. The dollar amount of the Base Maintenance Fee after the Annual Inflation Adjustment is hereinafter referred to for all purposes as the “Minimum Base Maintenance Fee Amount”.

The right and authority to establish, collect, and distribute the Base Maintenance Fee is reserved by and unto the Maintenance Fund Association.

(.2)      Assessments. Each Lot and Tract or dwelling unit thereon in the Subdivision, except those owned by Declarant or the Amenities Owner, shall be subject to any Assessment made by the Property Owners’ Association as hereinafter provided. If more than one dwelling unit is located upon any Lot or Tract, then each dwelling unit shall be subject to the full amount of any Assessment.

Any Assessment shall be the personal obligation of the Owner of the Lot, Tract, or dwelling unit thereon determined as of January 1 after the Assessment is established by the Property Owners’ Association.

The right and authority to establish, collect, and expend any Assessment is reserved by and unto the Property Owners’ Association.

(.3)     Additional Base Maintenance Fee. Each Lot and Tract or dwelling unit thereon in the Subdivision, which constitutes or is located upon Additional Land, except those owned by Declarant or by the Amenities Owner, shall be subject to an additional annual maintenance fee (“Additional Base Maintenance Fee”), as hereinafter provided, payable January 1 in advance each year.

The initial dollar amount of the Additional Base Maintenance Fee is hereby established at $212.86 (United States dollars). If more than one dwelling unit is located upon any Lot or Tract which constitutes Additional Land, then each dwelling unit is subject to the Additional Base Maintenance Fee. Office buildings and commercial buildings shall be subject to an Additional Base Maintenance Fee for each 1,200 square feet of air conditioned and/or heated space or fraction thereof.

The Additional Base Maintenance Fee is the personal obligation of the Owner of the applicable Lot, Tract, or dwelling unit determined on January 1 of the applicable year.

Commencing January 1, 1993, the Additional Base Maintenance Fee shall be increased or decreased automatically (but in no event decreased in any year below $212.86) based upon application of the Annual Inflation Adjustment. The dollar amount of the Additional Base Maintenance Fee after the Annual Inflation Adjustment is hereinafter referred to for all purposes as the “Adjusted Additional Base Maintenance Fee Amount”.

The right and authority to establish, collect, and distribute the Additional Base Maintenance Fee is reserved by and unto the Maintenance Fund Association.

(.4)      Maintenance Fund Association. The Maintenance Fund Association is hereby charged with the following rights, authorities, duties, and responsibilities with respect to Base Maintenance Fees and Additional Base Maintenance Fees (hereinafter collectively referred to as “Maintenance Fees”):

(a)       calculation and verification of the Minimum Base Maintenance Fee Amount and the Adjusted Additional Base Maintenance Fee Amount based upon the Annual Inflation Adjustment;

(b)      determination of whether the Base Maintenance Fee for any year should be in an amount greater than the Minimum Base Maintenance Fee Amount, and if the determination is in the affirmative, then setting the amount of the Base Maintenance Fee; provided that the Property Owners’ Association shall have the right to request an increase of the Base Maintenance Fee above the Minimum Base Maintenance Fee Amount, which request shall be considered by the Maintenance Fund Association, but the Maintenance Fund Association shall have the discretion to accept or reject the request of the Property Owners’ Association;

(c)      collection of all Maintenance Fees, including the power to bring suit in its name to collect Maintenance Fees, employ attorneys to prosecute such suits, and pursue all legal and equitable remedies, including foreclosure, as are or may be available under applicable law to enforce the obligation of payment of Maintenance Fees imposed upon each Owner under this Declaration, and the Maintenance Fund Association shall at all times use its best efforts to collect when due all Maintenance Fees; and

(d)       such other incidental rights, authorities, duties, and responsibilities as may be necessary for the performance of the specific rights, authorities, duties, and responsibilities stated above.

The Maintenance Fund Association is prohibited from ever decreasing the Base Maintenance Fee to an amount less than the Minimum Base Maintenance Fee Amount.

The Maintenance Fund Association is prohibited from ever increasing or decreasing the Additional Base Maintenance Fee to an amount greater or less than the Adjusted Additional Base Maintenance Fee Amount.

The Base Maintenance Fee and any Assessment must be uniform as to all Lots and Tracts or dwelling units thereon. The Additional Base Maintenance Fee shall be uniform as to all Lots, Tracts, and dwelling units subject thereto. Any increase in the dollar amount of the Base Maintenance Fee above the Minimum Base Maintenance Fee Amount shall become effective on January 1 after adoption of the increase by the Maintenance Fund Association.

The Maintenance Fund Association shall maintain separate books, records, and accounts with respect to the performance of its duties. These books, records, and accounts shall be available to Declarant and the Amenities Owner and their representatives at reasonable times during normal business hours. Upon request of Declarant or the Amenities Owner, the Maintenance Fund Association shall cause said books, records, and accounts to be audited annually at the expense of the party requesting such audit; provided that in the event the audit reflects a material irregularity, the Maintenance Fund Association shall pay for the audit.

(.5)     Maintenance Fee Funds. All Maintenance Fees collected by the Maintenance Fund Association shall be allocated between two (2) separate and distinct funds (collectively called “Funds” and singularly called “Fund”) to be known as the “Property Owners’ Association Fund” and the “Amenities Maintenance Fund”.

After payment of current expenses of collection, and funding of an expense reserve account in an amount determined to be sufficient by the Maintenance Fund Association in the exercise of its sole discretion, the Maintenance Fund Association shall distribute no less often than monthly all Base Maintenance Fees collected in accordance with the following percentage allocation:

(a)       45.6% shall be allocated to the Property Owners’ Association Fund, which amount shall be paid to the Property Owners’ Association to be used by the Property Owners’ Association in accordance with the restrictions stated in this Declaration and not otherwise; and

(b)       54.4% shall be allocated to the Amenities Maintenance Fund, which amount shall be paid to the Amenities Owner to be used by the Amenities Owner in accordance with the restrictions stated in this Declaration and not otherwise.

After payment of current expenses of collection, and funding of an expense reserve account in an amount determined to be sufficient by the Maintenance Fund Association in the exercise of its sole discretion, the Maintenance Fund Association shall distribute no less often than monthly all Additional Base Maintenance Fees collected in accordance with the following percentage allocation:

(a)      12.7% shall be allocated to the Property Owners’ Association Fund, which amount shall be paid to the Property Owners’ Association to be used by the Property Owners’ Association in accordance with the restrictions stated in this Declaration and not otherwise; and

(b)      87.3% shall be allocated to the Amenities Maintenance Fund, which amount shall be paid to the Amenities Owner to be used by the Amenities Owner in accordance with the restrictions stated in this Declaration and not otherwise.

The Maintenance Fund Association collects that portion of the Maintenance Fees which are allocated to the Property Owners’ Association Fund for the use by the Property Owners’ Association as the agent for the Property Owners’ Association. The Maintenance Fund Association collects that portion of the Maintenance Fees which are allocated to the Amenities Maintenance Fund for use by the Amenities Owner as the agent for the Amenities Owner.

(.6)      Property Owners’ Association. The Property Owners’ Association shall be entitled to exercise any and all functions provided for in the Declaration to be exercised by the Property Owners’ Association; provided the Property Owners’ Association shall not exercise or have any of the rights, authorities, duties, or obligations of the Maintenance Fund Association.

(.7)      Maintenance Fee Escalation. Commencing on January 1, 1993, and on January 1 of each and every consecutive calendar year thereafter, the dollar amount of the Minimum Base Maintenance Fee shall be increased or decreased automatically if and to the extent that application of the formula set forth below results in any such increase or decrease. The amount of the increase or decrease, if any, shall be computed by multiplying the dollar amount of the current Minimum Base Maintenance Fee by a fraction, the numerator of which shall be X amount and the denominator of which shall be Y amount. X amount in this fraction shall be equal to the Index Figure (hereinafter defined) for July 1 of the calendar year (the “Current Year”) immediately prior to the calendar year for which the Minimum Base Maintenance Fee is being calculated (the “New Year”). Y amount in this fraction shall be equal to the Index Figure for July 1 of the calendar year immediately prior to the Current Year (the “Prior Year”) (such that for the first such calculation to be made for January 1, 1993 {the New Year}, the X amount shall be the Index Figure for July 1992 {the Current Year} and the Y amount shall be the Index Figure for July 1991 {the Prior Year}). In the event Y amount exceeds X amount the Minimum Base Maintenance Fee for the New Year shall be decreased in such calendar year by application of this Section; provided, however, that in no event shall the Minimum Base Maintenance Fee ever be decreased below $132.00. In the event Y amount is less than X amount, the Minimum Base Maintenance Fee for the New Year shall be escalated in such calendar year by application of this Section.

Commencing on January 1, 1993, and on January 1 of each and every consecutive calendar year thereafter the dollar amount of the Additional Base Maintenance Fee shall be increased or decreased automatically if and to the extent that application of the formula set forth below results in any such increase or decrease. The amount of the increase or decrease, if any, shall be computed by multiplying the dollar amount of the current Additional Base Maintenance Fee by a fraction, the numerator of which shall be X amount and the denominator of which shall be Y amount. X amount in this fraction shall be equal to the Index Figure (hereinafter defined) for July 1 of the calendar year (the “Current Year”) immediately prior to the calendar year for which the Additional Base Maintenance Fee is being calculated (the “New Year”). Y amount in this fraction shall be equal to the Index Figure for July 1 of the calendar year immediately prior to the Current Year (the “Prior Year”) (such that for the first such calculation to be made for January 1, 1993 {the New Year}, the X amount shall be the Index Figure for July 1992 {the Current Year} and the Y amount shall be the Index Figure for July 1991 {the Prior Year}). In the event Y amount exceeds X amount the Additional Base Maintenance Fee for the New Year shall be decreased in such calendar year by application of this Section; provided, however, that in no event shall the Additional Base Maintenance Fee ever be decreased below $212.86. In the event Y amount is less than X amount, the Additional Base Maintenance Fee for the New Year shall be escalated in such calendar year by application of this Section.

The “Index Figure” referred to above shall be the Index Figure for the Consumer Price Index for All Urban Consumers, U.S. City Average, All Items, 1982-1984=100 (“Index”) issued by the Bureau of Labor Statistics of the United States Department of Labor. Should the Bureau of Labor Statistics change the manner of computing the above, the Bureau of Labor Statistics shall be requested to furnish a conversion factor designed to adjust the new Index to the Index previously in use, and the new Index shall be adjusted on the basis of the conversion factor. If the described Index shall no longer be published, another generally recognized as authoritative shall be substituted by Declarant.

(.8)     Assessment. The Declarant and the Property Owners’ Association, acting jointly, may establish the Assessment for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of capital improvements located upon Common Areas, including the necessary fixtures and personal property related thereto, provided that any such Assessment shall have the assent of two-thirds in number of the Owners of Lots and Tracts or dwelling units thereon in the Subdivision, voting in person or by proxy, at a meeting duly called for such purpose. The Declarant and the Amenities Owner shall each have the right to call a meeting of the Property Owners’ Association for the purpose of considering an Assessment, notwithstanding any contrary provision of the Bylaws of the Property Owners’ Association. Written notice of any such meeting shall be given to all members of the Property Owners’ Association in the manner provided for in the Bylaws of the Property Owners’ Association at least thirty (30) days in advance and shall set forth the purpose of the meeting. An Assessment may be made applicable to up to a total of five (5) calendar years, one of which shall be the calendar year in which the Assessment is established. The Assessment shall be uniform as to all Lots and Tracts or dwelling units thereon in the Subdivision excluding the properties which are not subject to the Assessment as provided herein.

(.9)      Amenities Maintenance Fund. Promptly upon receipt thereof, and so long as the Amenities Owner shall maintain and operate or cause to be maintained and operated at least one (1) 18-hole Golf Course, the Maintenance Fund Association shall pay the proceeds of the Amenities Maintenance Fund to the Amenities Owner; which proceeds may be used by the Amenities Owner for the purpose of paying and reimbursing the Amenities Owner for the cost and expense of Amenities Maintenance, Operation, and Ownership, hereinafter defined. The term “Amenities Maintenance, Operation and Ownership” shall mean any activity or function customarily and reasonably associated with the maintenance, operation and ownership of the Amenities, without limitation, and shall include the maintenance and operation of any facilities, buildings, structures, and improvements, including landscaping and signs, and any Golf Courses which are a part of the Amenities, including without limitation, maintenance of fairways, greens, tees and roughs, lakes and ponds, roads, paths, landscaping and the like; purchase, maintenance, repair, replacement and operation of improvements, fixtures, furniture and furnishings, including without limitation, maintenance buildings, pro shop, pro shop trade fixtures, and water supply and irrigation systems, including those for any Golf Course operated by the Amenities Owner or the Club; purchase, maintenance, repair, replacement and operation of machinery and equipment, tools, materials, and supplies for maintenance and operation of the Amenities, including the Golf Courses, and specifically including golf carts for the Golf Courses; payment of ad valorem taxes and assessments; utility charges; insurance premiums; food and beverage service; purchase and sale of merchandise; defense and/or payment of applicable tort and/or contract claims; administration and supervision; legal, accounting, and other professional fees and expenses and all other activities and functions customarily and reasonably associated with the maintenance, operation and ownership of the Amenities; and shall further include maintenance, repair, operation, and restoration of the Amenities. The determination whether an expenditure is appropriate for Amenities Maintenance, Operation and Ownership shall in all events be within the sole and absolute discretion of the Amenities Owner, and shall never be subject to the approval or control of the Property Owners’ Association or the Maintenance Fund Association. The Amenities Maintenance Fund shall be owned solely by the Amenities Owner. Neither the Maintenance Fund Association nor the Property Owners’ Association shall have any right, title, or interest of any kind or character in or to the Amenities Maintenance Fund or any portion or part thereof.

Subject to the terms and conditions hereof, and without limitation, the Amenities Owner shall have the right, in its sole discretion, to assign, lease and/or sublease any or all of its rights and privileges, duties and obligations hereunder or in whole or in part at any time and from time to time to any other party or parties.

In addition and without limitation, the receipt and use of proceeds of the Amenities Maintenance Fund shall never be deemed to impose any duty or obligation on Declarant and/or the Amenities Owner to maintain or operate or cause the Amenities or any part thereof to be maintained or operated.

(.10)    Property Owners’ Association Fund. The proceeds of the Property Owners’ Association Fund shall be deposited in one or more accounts to be maintained and used by the Property Owners’ Association for the purpose of paying or reimbursing the Property Owners’ Association for the cost and expense of performing the Property Owners’ Association Function herein defined. It is the duty and obligation of the Property Owners’ Association to expend the Property Owners’ Association Fund in the performance of the Property Owners’ Association Function herein defined. The term Property Owners’ Association Function shall mean improving, maintaining, and beautifying all Common Areas in a first class manner, security protection, owning, maintaining and operating all land and improvements now owned or hereafter acquired by the Property Owners’ Association; installing, maintaining, and repairing all streets and roads within the Subdivision, including without limitation, all Primary Streets; owning, maintaining and operating all vehicles, machinery and equipment necessary or appropriate to perform its function and all other functions reasonably incident to maintenance of the safety, health, and welfare of the property owners and residents of the Subdivision. The term “owning’ shall embrace all functions associated with ownership of the applicable land, improvements, machinery, equipment and the like, including, without limitation, maintenance, repair, removal, addition, and replacement. Without limiting the foregoing, the Property Owners’ Association Function shall also include (i) the repair and maintenance of all fencing along a Primary Street, (ii) the mowing of and removal of debris from any Lot or Tract located on any Primary Street which has become unsightly in the opinion of the Amenities Owner because of the failure of the Owner to keep the Lot mowed and/or free from debris; provided however the Property Owners’ Association shall have the right to obtain reimbursement from the Owner for the cost of mowing and debris removal, (iii) animal control and removal; (iv) removal of any signs erected in violation of this Declaration.

It shall be the duty of the Property Owners’ Association to enforce compliance with this Declaration by all Owners in the Subdivision and the Property Owners’ Association shall promptly take remedial action, including the bringing of suit if necessary, to enforce compliance with this Declaration by Owners in the Subdivision. The Property Owners’ Association may employ counsel to bring suit in the name of the Property Owners’ Association for the purpose of enforcing compliance with the Declaration by an Owner. The foregoing shall be deemed to be a part of the Property Owners’ Association Function under this Declaration.

In the event that Declarant, the Amenities Owner, or the Property Owners’ Association determines that an Owner is in violation of the provisions of this Declaration, or that such Owner’s Lot, Tract, or dwelling unit is in violation of the provisions of this Declaration, and should such violation continue for a period of ninety (90) days after notice of the violation is mailed or otherwise transmitted to the Owner at the last known address of the Owner as reflected on the records of Declarant, the Amenities Owner, or the Property Owners’ Association, then such violation of the provisions of this Declaration shall constitute a Terminating Event with respect to such Owner’s Lot, Tract, and/or dwelling unit at the end of said ninety (90) day period. Each of Declarant, the Amenities Owner, and the Property Owners’ Association shall have the authority to declare that a violation of this Declaration exists and to mail or otherwise transmit the notice of violation to the Owner.

In the event of any disagreement between the Property Owners’ Association and the Amenities Owner as to whether a particular expense is required in the performance of the Property Owners’ Association Function by the Property Owners’ Association, the determination of the Amenities Owner shall be controlling and the Property Owners’ Association shall in all events be bound by the determination of the Amenities Owner.

The proceeds of an Assessment, if any, dedicated in the Assessment to be paid to the Property Owners’ Association, shall be deposited by the Property Owners’ Association into one or more accounts to be maintained and used by the Property Owners’ Association for the purpose of paying and/or reimbursing the Property Owners’ Association for the cost and expense of the capital improvements for which the Assessment was established.

On or before 120 days after the end of each calendar year, the Property Owners’ Association shall furnish an annual statement to Declarant and the Amenities Owner relative to the Property Owners’ Association Fund for the prior calendar year.

The Property Owners’ Association shall maintain separate books, records and accounts with respect to the Property Owners’ Association Fund. Said books, records and accounts shall be available to Declarant and the Amenities Owner and their representatives at reasonable times during normal business hours. Upon request of Declarant or the Amenities Owner, the Property Owners’ Association shall cause said books, records and accounts to be audited annually at the expense of the party requesting such audit; provided that in the event the audit reflects a material irregularity by the Property Owners’ Association, the Property Owners’ Association shall pay for the audit.

Subject to the terms and conditions hereof, and only with the prior written approval of Declarant and the Amenities Owner, the Property Owners’ Association shall have the right to assign its rights and privileges, duties and obligations hereunder in whole or in part at any time and from time to time to any third party or parties; provided such assignment shall never relieve the Property Owners’ Association from its duties or liabilities hereunder. The Property Owners’ Association may not sell, transfer, or convey any of its real or personal property without the prior written consent and approval of Declarant and the Amenities Owner.

Notwithstanding any other provision in this Declaration to the contrary, the Property Owners’ Association shall be prohibited from (a) using any portion of the Property Owners’ Association Fund to purchase land and/or buildings or to construct any buildings with a cost in excess of $10,000 (subject to the Annual Inflation Adjustment); (b) borrowing money; (c) accumulating any one or more reserve accounts which singularly or in the aggregate exceed $50,000 in amount unless such funds are budgeted for expenditure during the current calendar year for the performance of the Property Owners’ Association Function by the Property Owners’ Association; (d) erecting or constructing or causing to be erected or constructed any sign which has not been previously approved in writing by the Amenities Owner as to size, color, materials, content, design or location.

Notwithstanding any other provision to the contrary contained in this Declaration or otherwise, the Property Owners’ Association shall in all events be bound and obligated to perform all obligations, duties, covenants, and undertakings contained in or arising under or by virtue of that certain Correction Deed Without Warranty (Horseshoe Bay Roads) from Lake Lyndon B. Johnson Improvement Corporation, et al., as grantors, to the Property Owners’ Association, as grantee, dated June 14, 1990, and recorded in Volume 371, pages 961-1007, et seq., of the Real Property Records of Llano County, Texas, including, but not limited to, those contained in that certain Easement, Covenant, and Declaration of Restrictions dated March 15, 1990, and recorded in Volume 368, pages 60-141, of the Records of Llano County, Texas, and in Volume 476, pages 329-410, of the Records of Burnet County, Texas, all of which are hereby included as a part of the Property Owners’ Association Function.

Declarant and the Amenities Owner shall have the right to approve in advance the design, location, and construction of any buildings, structures, or other improvements located upon the Common Areas, including all landscaping and signs.

The powers of the Property Owners’ Association are limited to those specified in the Declaration, together with such other incidental rights, authorities, duties, and responsibilities as may be necessary for the performance of the specific rights, authorities, duties, and responsibilities expressly stated in this Declaration.

(.11)    Lien to Secure Maintenance Fees and Assessments. The obligation to pay the Base Maintenance Fee and any Assessments, whether or not it shall be so expressed in any contract, deed or conveyance, shall be a charge and lien on each Lot and Tract and dwelling unit thereon and shall be a continuing lien on each such Lot and Tract and dwelling unit thereof in favor of the Maintenance Fund Association, as agent for the Amenities Owner and the Property Owners’ Association, but it is expressly provided such lien shall in all respects be subordinate and inferior to any and all liens previously or subsequently voluntarily placed on said Lots and Tracts, or dwelling units thereon, provided any foreclosure of said voluntary liens by judicial or non-judicial foreclosure shall be expressly subject to the liens securing the Base Maintenance Fees and Assessments provided for herein and provided such judicial or non-judicial foreclosure shall never extinguish or be deemed to extinguish the lien securing any Base Maintenance Fee or Assessment which may then be due or become due thereafter. Each such Base Maintenance Fee or Assessment, together with such lawful interest, if any, as may accrue unpaid thereon and the cost of collection thereof, including attorney’s fees, shall also be the personal obligation of the person or entity who was the Owner of such property at the time the Base Maintenance Fee or Assessment becomes due (i.e., January 1 of each calendar year).

The obligation to pay the Additional Base Maintenance Fee as to Additional Land, whether or not it shall be so expressed in any contract, deed or conveyance, shall be a charge and lien on each Lot and Tract and dwelling unit thereon located on Additional Land and shall be a continuing lien on each such Lot and Tract and dwelling unit thereof in favor of the Maintenance Fund Association, as agent for the Property Owners’ Association and the Amenities Owner, but it is expressly provided such lien shall in all respects be subordinate and inferior to any and all liens previously or subsequently voluntarily placed on said Lots and Tracts, or dwelling units thereon, provided any foreclosure of said voluntary liens by judicial or non-judicial foreclosure shall be expressly subject to the liens securing the Additional Base Maintenance Fees provided for herein and provided such judicial or non-judicial foreclosure shall never extinguish or be deemed to extinguish the lien securing any Additional Base Maintenance Fee which may then be due or may become due thereafter. Each such Additional Base Maintenance Fee, together with such lawful interest, if any, as may accrue unpaid thereon and the cost of collection thereof, including attorney’s fees, shall also be the personal obligation of the person or entity who was the Owner of such Lot, Tract, or dwelling unit thereon at the time the Additional Base Maintenance Fee becomes due (i.e., January 1 of each calendar year).

(.12)     Miscellaneous. Section 4.4 is subject to the following additional terms and conditions:

(a)      The following portions of the Subdivision Land will be subject to the Base Maintenance Fees and Assessments:

(i)       All Lots and Tracts or dwelling units thereon located in the Subdivision fee title to which is vested in others than Declarant, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or the Amenities Owner regardless of the amount paid toward the purchase price thereof. Said Lots and Tracts shall become subject to Base Maintenance Fee and any Assessment commencing January 1 after conveyance thereof by Declarant, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or the Amenities Owner. Dwelling units shall become subject to Maintenance Fees and Assessments as hereinafter provided.

(ii)      Lots and Tracts or dwelling units thereon fee title to which is vested in Declarant or Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, subject to valid contracts for deed regardless of the amount paid toward the purchase price thereof. Said Lots and Tracts or dwelling units thereon shall become subject to the Base Maintenance Fee and any Assessment commencing January 1 after the date of the applicable contract for deed, and the contract vendee shall be the party obligated to pay the Base Maintenance Fee and any Assessment.

(iii)      In the case of an office or other commercial building, duplex, triplex, motel, hotel, apartment, condominium or other structure containing more than a single dwelling unit, and if construction is actually commenced thereon, the Base Maintenance Fee and any Assessment shall become effective on January 1 following the earlier of 180 days after issuance of a building permit by the Committee or completion of the applicable structure as determined by the Committee in the exercise of its sole discretion. In the case of a structure containing more than a single dwelling unit, the Base Maintenance Fee and any Assessment shall constitute a charge and lien against the structure and the applicable land based on the number of dwelling units therein, and each dwelling unit shall be subject to the Base Maintenance Fee and any Assessment; provided in the case of a structure containing more than a single dwelling unit which constitutes a condominium under the Texas Condominium Law, the Base Maintenance Fee and any Assessment shall constitute a charge and lien against each condominium unit and its interest in the general and limited common elements of the condominium.

(iv)       In the event an Assessment is in effect on January 1 when any Lot, Tract or dwelling unit thereon becomes subject to Base Maintenance Fee and Assessment, said Lot, Tract or dwelling unit shall be subject only to the Assessment and/or installments thereof due on said January 1 and thereafter.

(b)       The following portions of the Subdivision Land will be subject to the Additional Base Maintenance Fee:

(i)       All Lots and Tracts or dwelling units thereon located in the Subdivision on Additional Land fee title to which is vested in others than Declarant, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or the Amenities Owner regardless of the amount paid toward the purchase price thereof. Said Lots and Tracts shall become subject to Additional Base Maintenance Fee commencing January 1 after conveyance thereof by Declarant, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or the Amenities Owner. Dwelling units shall become subject to an Additional Base Maintenance Fee as hereinafter provided.

(ii)       Lots and Tracts or dwelling units thereon on Additional Land fee title to which is vested in Declarant or Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, subject to valid contracts for deed regardless of the amount paid toward the purchase price thereof. Said Lots and Tracts or dwelling units thereon on Additional Land shall become subject to the Additional Base Maintenance fee commencing January 1 after the date of the applicable contract for deed, and the contract vendee shall be the party obligated to pay the Additional Base Maintenance Fee.

(iii)      In the case of an office or other commercial building, duplex, triplex, apartment, condominium or other structure containing more than a single dwelling unit located on Additional Land, and if construction is actually commenced thereon, the Additional Base Maintenance Fee shall become effective on January 1 following the earlier of 180 days after issuance of a building permit by the Committee or completion of the applicable structure as determined by the Committee in the exercise of its sole discretion. In the case of a structure containing more than a single dwelling unit, the Additional Base Maintenance Fee shall constitute a charge and lien against the structure and the applicable land based on the number of dwelling units therein, and each dwelling unit shall be subject to the Additional Base Maintenance Fee; provided in the case of a structure containing more than a single dwelling unit which constitutes a condominium under the Texas Condominium Law, the Additional Base Maintenance Fee shall constitute a charge and lien against each condominium unit and its interest in the general and limited common elements of the condominium.

(c)      The following portions of the Subdivision Land will not be subject to Base Maintenance Fees, Additional Base Maintenance Fees, or Assessments:

(i)       Lot and Tracts or dwelling units thereon fee title to which is vested in the Amenities Owner, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or in Declarant not subject to a contract for deed. In the event Declarant or Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, as owner of fee title to any Lots or Tract or dwelling unit thereon cancels a contract of sale as to such Lot or Tract or dwelling unit thereon fee title to said Lot or Tract or dwelling unit thereon or forecloses upon same or purchases same at any judicial sale, then such Lot, Tract, or dwelling unit thereon shall be vested in Declarant or Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, free and clear of any lien or charge for any Maintenance Fees or Assessment whether due or past due, and in no event shall Declarant, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or the Amenities Owner, or any purchaser from Declarant, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, or the Amenities Owner ever have any liability for any such unpaid Maintenance Fees or Assessments owed at the time of such contract termination, foreclosure, or judicial sale, regardless of the amount thereof or the number of years for which they are unpaid. Declarant and Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, shall never be deemed liable for any Maintenance Fee or Assessment whether due or past due in the event of cancellation of a contract for deed.

(ii)       Any portion of the Subdivision Land fee title to which is vested in the Property Owners’ Association.

(iii)      Any portion of the Subdivision Land fee title to which is vested in the Amenities Owner and/or the Club.

(iv)      Any Subdivision Land dedicated to and accepted by a governmental body, agency, or authority, or owned by any charitable or non-profit organization exempt from ad valorem taxes under the laws of the State of Texas.

(d)       If fee title to a Lot or Tract or dwelling unit thereon is vested in Declarant or Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, subject to a lien, mortgage, deed of trust, mineral reservation, easement, restriction or other encumbrance, fee title thereto shall be deemed to be vested in Declarant or Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, as applicable, for purposes hereof.

(e)      The failure of an Owner to pay a Base Maintenance Fee or an Additional Base Maintenance Fee prior to July 1 of the applicable year to which the Base Maintenance Fee or Additional Base Maintenance Fee applies shall be a Terminating Event. The failure of an Owner to pay an Assessment within 180 days of the date when payment is due shall be a Terminating Event.

(.13)    General Limitation. In addition and without limitation of the foregoing, the collection, enforcement and use of Maintenance Fees shall never be deemed to impose any duty or obligation on Declarant, the Amenities Owner, the Property Owners’ Association, or the Maintenance Fund Association to perform beyond use of the proceeds of such Maintenance Fees to which each is entitled and which is on hand and available for such use after allowing for reasonably anticipated future expenses of like nature and contingencies.

(.14)         The Maintenance Fees and Assessments provided for in the Third Amendment to the Declaration of Reservations of Horseshoe Bay shall be and remain effective until the Maintenance Fees provided for in the Fourth Amendment to the Declaration of Reservations of Horseshoe Bay becomes effective.

4.5         Minerals and Royalties

This Declaration is expressly subject to the oil, gas, and/or minerals and/or royalty interest, if any, which are outstanding of record affecting the applicable portions of the Subdivision Land.

4.6         Certain Rights of Declarant

Declarant shall have the right but not the obligation at any time and from time to time to cause or permit the owners of other land adjoining or in the vicinity of the Subdivision to commit said lands or any part thereof to this Declaration and the Conditions thereof, and in such event Declarant may delegate any or assign all or part of the rights and privileges, duties and obligations of the Declarant under this Declaration to the owner of such other land, subject to the following terms and conditions: In the event Declarant exercises the rights herein reserved, Declarant shall execute and deliver to the owner of such other land an instrument in writing and in recordable form wherein Declarant shall grant said right to said owner. Said instrument shall contain a legal metes and bounds description of the land as to which said right is granted and said instrument shall contain a specific grant of any and all rights and privileges, duties and obligations of the Declarant under this Declaration which may be delegated and/or assigned to the owner of said other land with respect to said other land if and to the extent the owner thereof shall commit the same to this Declaration. All rights and privileges and all duties and obligations of the Declarant not expressly delegated and/or assigned in such instrument shall be deemed to be reserved to and may be exercised by Declarant as to such other land if and to the extent owner thereof shall commit the same to this Declaration. Upon receipt of the above instrument and at any time and from time to time thereafter the owner of such other land shall have the right but not the obligation to commit any or all of such other land to this Declaration by filing a Plat meeting the Formal Requirements hereof, except that such Plat shall be executed by such other owner and/or the successors and assigns of such other owner in lieu of Declarant.

(34)         Section 4.6 of the Declaration is hereby amended and supplemented to add the following:

In addition to Declarant, the Amenities Owner and Norman C. Hurd, Trustee #1, and his successors and assigns, shall each have the right, but not the obligation, at any time and from time to time to commit other land to the Subdivision and this Declaration (“Other Land”), and as to such Other Land, the Amenities Owner or Norman C. Hurd, Trustee #1, as applicable, shall have all rights, privileges, powers, duties, and obligations of Declarant under this Declaration without limitation. With respect to Other Land, the Amenities Owner or Norman C. Hurd, Trustee #1, as applicable, shall be authorized to execute the Plat committing such Other Land to the Subdivision. Other Land need not be Additional Land as defined in Section 1.14 of this Declaration.

(5)         General Provisions

5.1         Duration

(35)         Section 5.1 of the Declaration is hereby amended and restated in its entirety as follows:

The covenants and Conditions of this Declaration shall run with the Subdivision Land and shall be binding upon all parties and persons claiming under them until January 1, 2015 A.D. The covenants and Conditions of this Declaration may not be terminated prior to January 1, 2015, except by an instrument of termination which shall be in writing and which shall be executed and acknowledged by one hundred percent of the then Owners of fee title to the Subdivision Land (excluding the Common Areas and any land in the Subdivision owned by a governmental or quasi-governmental entity), which instrument of termination must be filed of record in Llano and Burnet Counties, Texas, and which shall be effective upon the date of filing in Llano and Burnet Counties, Texas. After January 1, 2015, and unless previously terminated in accordance with this Section 5.1, the covenants and Conditions of this Declaration shall be automatically extended for successive periods of ten (10) years unless terminated by an instrument of termination which shall be in writing and which shall be executed and acknowledged by the then Owners of eighty percent (80%) of fee title to the Subdivision Land (excluding the Common Areas and any land in the Subdivision owned by a governmental or quasi-governmental entity), which instrument of termination must be filed of record in Llano and Burnet Counties, Texas, and which instrument of termination shall not be effective until the end of the ten (10) year renewal period during which it is filed of record. This Section 5.1 of the Declaration may not be amended.

5.2         Amedments

(36)         Section 5.2 of the Declaration is hereby amended and restated in its entirety as follows:

This Declaration and any or all of the covenants and Conditions set out herein may be amended by an instrument of amendment meeting the following requirements: The instrument of amendment shall be in writing and shall be executed and acknowledged by the then Owners of (a) eighty percent (80%) of the fee title of the Subdivision Land (excluding the Common Areas and any land in the Subdivision owned by a governmental or quasi-governmental entity), or (b) twenty-five percent (25%) of the fee title of the Subdivision Land (excluding the Common Areas and any land in the Subdivision owned by a governmental or quasi-governmental entity) if Declarant and the Amenities Owner are among the Owners joining in the execution of the instrument of amendment. The instrument of amendment must be filed of record in Llano and Burnet Counties, Texas. The instrument of amendment shall be deemed to be effective on the date the instrument is filed in Llano and Burnet Counties, Texas. Any amendment to this Declaration shall be binding on all Lots and Tracts after the effective date thereof, but shall not apply to any buildings, structures, or other improvements for which approval of the Committee has been obtained and construction has actually commenced.

5.3         Notices

Any notice required to be sent to any Owner under the provisions of this Declaration shall be deemed to have been properly sent when mailed postpaid to the last known address of the person who appears as Owner on the records of Declarant (or after 50% of the Lots in the Subdivision have been deeded to the Owners thereof, excluding Declarant, the records of the Association) at the time of such mailing. This Section shall never be deemed to obligate Declarant and/or the Association to maintain records of addresses or to give notices. It shall be the duty of each Owner to keep Declarant and/or the Association currently advised as to the address of Owner.

5.4         Declarant

(37)         Section 5.4 of the Declaration is hereby amended and restated in its entirety as follows:

The term “Declarant” shall mean (a) from July 5, 1971, until October 7, 1986, Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, (b) since October 7, 1986, Wayne Hurd, of Llano County, Texas, acting pursuant to that certain Delegation of Rights Under Declaration of Reservations, such Delegation being dated October 7, 1986, and recorded in Volume 331, page 938 et seq., of the Records of Llano County, Texas, and in Volume 379, page 162 et seq., of the Records of Burnet County, Texas (being hereinafter referred to for all purposes as the “Delegation”), except with respect to Amenities Land and Future Development Land, (c) the Amenities Owner with respect to all Amenities Land, and (d) the fee title owner from time to time with respect to any Future Development Land so long as it is classified as Future Development Land.

The Delegation and all actions heretofore taken by Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, and Wayne Hurd as Declarant are hereby ratified, confirmed, and approved for all purposes under this Declaration.

Immediately upon the occurrence of the earlier of (i) the termination or cancellation of the Delegation, (ii) the death of Wayne Hurd, or (iii) the filing in Llano County and Burnet County, Texas, of a signed and acknowledged statement of Wayne Hurd renouncing his rights as Declarant, and without any further action being required under this Declaration or otherwise, the term “Declarant” shall henceforth mean the Amenities Owner, and the Amenities Owner shall have and possess without limitation all rights, privileges, powers, authorities, duties, and obligations of the Declarant under this Declaration. Upon becoming the Declarant under this Declaration, the Amenities Owner shall have the right, but not the obligation, to assign or delegate in whole or in part any rights, privileges, powers, authorities, duties, or obligations of the Declarant under this Declaration, in whole or in part, to any person, corporation, or civic group, including, but not limited to, the Club or the Property Owners’ Association. Immediately upon any such assignment or delegation, the Amenities Owner shall be relieved and discharged from any further responsibility under the Declaration for the right, privilege, power, authority, duty, or obligation which is the subject of the assignment or delegation. To be effective, any assignment or delegation by the Amenities Owner of any right, privilege, power, authority, duty, or obligation shall be in writing, shall be executed and acknowledged by the Amenities Owner, and shall be filed of record in Llano County and Burnet County, Texas, and such assignment or delegation shall be effective upon such recording in Llano County and Burnet County, Texas. Notwithstanding any other provision hereof to the contrary, the Amenities Owner shall, immediately upon becoming the Declarant hereunder and at all times thereafter, and in addition to all other rights, privileges, powers, authorities, duties, and obligations hereunder, have the right and power to appoint the Members of the Committee of Architecture under this Declaration, which shall include the right to remove any Members of the Committee of Architecture then serving and replace them with new Members selected by the Amenities Owner.

This Section 5.4 of the Declaration may not be amended unless the Amenities Owner consents in writing to the amendment.

5.5         Severability

In the event that any of the provisions of this Declaration conflict with any other provisions hereof and/or with the applicable Plat, the more restrictive provisions shall govern.

In this connection, without limitation, Declarant shall have the right at its election to impose additional special conditions on any Lot or Lots which special conditions, if any, shall be set forth on the face of the Plat and/or in a separate instrument filed at the same time and in connection with said Plat. Said additional special conditions shall be binding on the particular Lot or Lots covered thereby and shall be deemed to be part of the Conditions of this Declaration.

If any paragraph, section, sentence, clause or phrase of the Conditions and covenants herein contained shall be or become illegal, null or void for any reason or shall be held by any court of competent jurisdiction to be illegal, null or void, the remaining paragraphs, sections, sentences, clauses or phrases of this Declaration shall continue in full force and effect and shall not be affected thereby. It is hereby declared that said remaining paragraphs, sections, sentences, clauses and phrases would have been and are imposed irrespective of the fact that any one or more other paragraphs, sections, sentences, clauses or phrases shall become or be illegal, null or void.

5.6         Enforcement

If any Owner of any Lot or Land shall violate or attempt to violate this Declaration or any of the Conditions or covenants herein, it shall be lawful for Declarant, the Committee or any Members thereof, the Association, or any Owner of any Lot or Land in the Subdivision to prosecute any proceeding at law or in equity against the person or persons violating or attempting to violate this Declaration or any such Conditions or covenants and to prevent such violation or threat of violation and/or to recover damages for such violation or threat of violation, including reasonable attorney’s fees and in general to pursue and seek such other remedies and/or relief as may be permitted at law and/or in equity, including, without limitation, specific performance. Without limitation, in order to enhance and protect the value of the Lots described herein, the right to prosecute any proceeding at law or in equity against any person or persons violating or attempting to violate any Conditions either to prevent such violations or to recover damages or other dues for each violation is also expressly reserved to Declarant; however, this Section shall never be deemed to obligate Declarant to threaten or prosecute any proceeding in law or in equity, or otherwise enforce this Declaration or the Conditions.

Breach of any of the Conditions or covenants hereof by any Owner shall not in anywise affect any valid mortgage or lien made by said Owner or a predecessor or successor in title of such Owner; provided said mortgage or lien was made in good faith and for value and not made for the purpose of defeating the purposes of such Conditions or covenants.

(38)         Section 5.6 of the Declaration is hereby amended by the addition of the following:

The Property Owners’ Association shall indemnify and hold harmless (a) any of its officers, directors, and employees who are acting in such capacity, (b) the Maintenance Fund Association and its officers, directors, employees, and other agents, (c) Declarant, (d) the Amenities Owner and its officers, directors, employees, and other agents, (e) the Club and its officers, directors, employees, and other agents, and (f) Lake Lyndon B. Johnson Improvement Corporation, a Texas corporation, and its officers, directors, employees, and other agents, from and against any claim, cause of action, suit, proceeding, or judgment brought, maintained, or obtained by any person or entity under this Section 5.6 of the Declaration or otherwise involving the enforcement, interpretation, construction, or validity of this Declaration or any provision hereof. The obligation of indemnity provided for herein shall include the obligation to reimburse the indemnified party for all attorney’s fees and other expenses and costs of litigation. Performance of the foregoing obligation of indemnity by the Property Owners’ Association shall be deemed to be included within the Property Owners’ Association Function under this Declaration.

5.7         Special Restrictions

(.1)         In addition to the other terms and conditions hereof, for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lake Lyndon B. Johnson Improvement Corporation, owner of fee simple title to the Burdened Land hereinafter described, subject to outstanding liens, easements, reservations and encumbrances of record, hereby imposes the following special restrictions (“Special Restrictions”) upon the Horseshoe Bay Golf Course, Horseshoe Bay Clubhouse and Marina, Horseshoe Bay Stable and Horseshoe Bay Airstrip, which tracts and parcels of land are identified as such respectively on the Plat marked Exhibit “A” and made a part hereof for all purposes (hereinafter called “Burdened Land”):

(a)         The Horseshoe Bay Golf Course is hereby restricted for Golf Course Use.

(b)         The Horseshoe Bay Clubhouse and Marina is hereby restricted for Clubhouse and Marina Use.

(c)         The Horseshoe Bay Airstrip is hereby restricted for Airstrip Use.

(.2)         The above terms shall be defined as follows for purpose of the Special Restrictions:

(a)         The term “Golf Course Use” shall mean use as a golf course, including without limitation, any and all uses usually and customarily associated with a golf course and golf pro shop, including without limitation, food, beverage and/or liquor service, any and/or all of which may be on a commercial basis.

(b)         The term “Clubhouse and Marina Use” shall mean use as a clubhouse and marina, including without limitation, any and all uses usually and customarily associated with the clubhouse and marina of a real estate and resort development, including without limitation, food, beverage and/or liquor service, tennis and swimming, any and/or all of which may be on a commercial basis.

(c)         The term “Airstrip Use” shall mean use as an airstrip and aircraft facility, including without limitation, any and all uses usually and customarily associated with an airstrip and aircraft facility, any and/or all of which may be on a commercial basis. The term “aircraft facility” may include, without limitation, facilities for any or all of the following: runways, taxiways, aprons, hangars, fuel storage and service, maintenance and repair, manufacture, sales, instruction, rental of aircraft and/or vehicles, automobile and/or aircraft service.

The term “commercial basis” shall mean that charges may be made for the use of the applicable facility, the services thereof, the availability thereof and/or any activity related thereto, any and/or all of which may be for profit.

(.3)         The Special Restrictions shall be binding upon the Burdened Land for the duration of this Declaration and shall be enforceable by Declarant, Association, the Committee and any other person or entity empowered to enforce the restrictions contained in the Declaration. The Special Restrictions may be amended or modified in any manner provided in the Declaration for the amendment or modification thereof. The Special Restrictions shall constitute covenants running with the Burdened Land for the duration of this Declaration as set forth above.

(.4)         The term “Golf Course” as defined in Section 5.7(.1) of the Second Amendment is hereby supplemented to include any golf course and/or golf courses upon which the Declarant, its successors or assigns, shall impose, cause, or permit to be imposed the Special Restrictions restricting the same to Golf Course Use all as defined in the Declaration and any prior or subsequent amendment thereof. Any and all such golf courses shall be deemed to be the Golf Course for all purposes of the Declaration. Without limitation, in the event there shall exist more than one Golf Course, the allocation of the Golf Course Maintenance Fund (i.e. the portion of the Maintenance Fee and any Additional Base Maintenance Fee allocated to the Golf Course Maintenance Fund) between or among the Golf Courses shall be solely in the discretion of the Golf Course Owner.

(39)         The Declaration is hereby amended to delete therefrom Section 5.7(.1)(c) as added by the Second Amendment to the Declaration, and is further amended so that Section 5.7(.1)(d) as added by the Second Amendment to the Declaration is hereby renumbered as Section 5.7(.1)(c).

(40)         The Declaration is hereby amended to delete therefrom Section 5.7(.2)(c) as added by the Second Amendment to the Declaration, and is further amended so that Section 5.7(.2)(d) as added by the Second Amendment to the Declaration is hereby renumbered as Section 5.7(.2)(c).

(41)         Section 5.7 of the Declaration as added by the Second Amendment to the Declaration is hereby supplemented to add the following sentence:

Without limiting the foregoing, the term “Golf Course” shall also include any golf course which the Amenities Owner commits to the Special Restrictions for Golf Course Use.

General Provisions

Defined terms used herein are defined as said terms are defined in the Declaration, subject to any qualification thereof for specific purposes as provided herein. The covenants and restrictions of the Declaration, as amended hereby, shall run with and bind the Subdivision Land, and, without limitation, shall inure to the benefit of and be enforceable by Declarant, Horseshoe Bay Maintenance Fund, Inc., the Association, the Committee and/or any Owner of the Subdivision Land or any part thereof for the term thereof upon and subject to the terms and conditions thereof.


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