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BOOK 2615 PAGE 233

DECLARATION OF COVENANTS, CONDIDONS AND RESTRICTIONS FOR UNITS 3A AND 3B

DENTON FARMS (EilERSLIE AT DELONG)

THIS DECLARATION OF COVENANTS, CONDIDONS AND RESTRICTIONS (hereinafter referred to as the "Declaration") is made this 3__ day of January, 2006, by DELONG ESTA TES DEVELOPMENT U.,C, a Kentucky limited liability company, whose address is 3473 Yorkshire Boulevard, Lexington, Kentucky 40509 (hereinafter referred to as "Declarant").

WITNESSETH:

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

WHEREAS, Declarant has heretofore caused to be recorded the Declaration of Covenants, Conditions and Restrictions For Units IA and IB Denton Farms (Ellerslie at Delong) which are of record in Deed Book 2540, page 30, in the Fayette County Clerk's Office; and

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

WHEREAS, the Declarations referred to above in the two preceding paragraphs anticipated that additional portions of the Properties would be submitted to similar covenants, conditions, restrictions, assessments, and obligations by Subsequent Amendment; and

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

WHEREAS, Declarant is the owner of a portion of the Properties known and refened to as Units 3A and 3B which real property is more particularly described on Exhibit "B" attached hereto and incorporated by reference herein; and

WHEREAS, Declarant intends from time to time to subject additional portions of the

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Properties to the terms of this Declaration as provided for hereinafter; and

WHEREAS, Declarant desires to provide for the maintenance of "Common Areas", as herein defined, and to provide an easement for access across the Properties to the extent necessary for the performance of such maintenance as hereinafter provided; and

WHEREAS, Declaranthas formed the Ellerslie at Delong Homeowners Association, Inc., a Kentucky non-profit association, for the purpose of maintaining and administering the Common Areas, administering and enforcing the covenants and restrictions herein, and collecting and disbursing the assessments and charges hereinafter created; and

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

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

ARTICLE I

DEFINITIONS

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

Section 1 "Area of Common Responsibility" shall mean and refer to the "Common Area", as herein defined, together with those areas, if any, which by the terms of this Declaration or by contract with any "Person", as herein defined, become the responsibility of the "Association", as herein defined. The office of any property manager employed by or contracting with the Association, if located on the "Properties", as hereinafter defined, may be part of the Area of Common Responsibility.

Section 2 "Articles of Incorporation" shall mean and refer to the Articles of

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Incorporation of the Ellerslie at Delong Homeowners Association, Inc. as filed with the Secretary of State for Kentucky.

Section 3 "Association" shall mean and refer to Ellerslie at Delong Homeowners Association, Inc., a Kentucky non-profit, non-stock corporation, its successors and assigns, which has been incorporated by the Declarant for the purposes of (i) maintaining and administering the Area of Common Responsibility, (ii) administering and enforcing the terms and conditions of this Declaration, and (iii) collecting the assessments and charges hereinafter created as all of the foregoing is more specifically hereinafter provided for. The use of the term "association" or "associations" in lower case shall refer to any condominium association or other owners association subsequently created and having jurisdiction (subordinate to this Declaration) over any part of the Properties.

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

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

Section 6 "By-Laws" shall mean and refer to the By-Laws ofEllerslie at Delong Homeowners Association, Inc. incorporated herein by reference, as they may be amended from time to time.

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

Section 8 "Common Area" shall mean (i) all real and personal property which the Association now or hereafter owns, leases, or otherwise holds for the common use and enjoyment of the "Owners", as herein defined; (ii) the Common Areas and/or rights-of-way which are not dedicated to the public and are shown and identified on the plats recorded by the Declarant or any Person including, but not limited to common open space as shown on the "Development Plan" as herein defined, or on one or more record plats of the Properties whenever recorded, private streets, conservation areas, detention basins, detention easements, fences, greenways, trails, buffer areas, signage easements, entry features, and pedestrian access easements, including without limitation, all improvements and facilities located thereon which shall be deeded to the association for the common use and benefit of the

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Owners; and (iii) areas within public right-of-ways as identified on record plats, including, but not limited to, roadways and medians upon which the Declarant has constructed and/or installed improvements for the common use. Common Areas shall not include any areas which have been or are subsequently dedicated to any governmental entity.

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

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

Section 11 "Declarant" shall mean and refer to Delong Estates Development LLC, a Kentucky limited liability company, or its successors, successors-in-title or assigns who take title to all or any portion of the undeveloped or unsold property described on Exhibit "B" for the purpose of development or sale and who are designated as the Declarant hereunder in a recorded instrument executed by the immediately preceding Declarant.

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

Section 13 "Landscape Amenity Easement" shall mean the Common Areas within which the Association shall have the right to install and maintain landscaping including, but not limited to, sprinkler systems and/or decorative features.

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

Section 15 "Maintenance Expenses" shall mean the actual and estimated expenses of maintaining, operating, insuring, and replacing the Area of Common Responsibility. The Maintenance Expenses me to be allocated among all Owners of property in Denton Farms in accordance with this Declaration.

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

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

Section 18 Mortgage.

Section 19

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

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

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

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

Section 22 "Properties" shall mean and refer to the real property depicted on and described in Exhibits "A" and "B" attached hereto and shall further refer to such additional property as is hereinafter subjected to this Declaration by Subsequent Amendment.

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

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

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Section 1

ARTICIBII

PROPERTY RIGHTS

Right and Easement of Enjoyment; Exceptions

Every Owner shall have a right and easement of enjoyment in and to the Common Area for the purposes for which such areas are established, which shall be appurtenant to and shall pass with the title to every Lot subject to this Declaration, as it may be amended from time to time, and, subject to this Declaration, any other applicable covenants, and the terms of any restrictions or limitations contained in any deed conveying such property to the Association subject to the right of the Board to adopt rules regulating the use and enjoyment of the Common Area, the right of the Association to dedicate or transfer all or any part of the Common Area under Section 3 hereof to governmental entities, the right of the Association to mortgage or otherwise create a security interest in any or all of its real or personal property as security for money borrowed or obligations incurred and the right of the Association or the Declarant to grant additional easements over the Common Area and Lots as provided In Section 4 hereof.

Section 2 Delegation of Use

Any Owner may delegate his or her right of enjoyment to the Common Area and the improvements located thereon to the members of his or her family, lessees, social invitees, as applicable, subject to the rules of the Association. An Owner who leases his or her Lot shall be deemed to have delegated all such rights to the Lot's lessee. Membership in the Association may not be conveyed separately from the ownership of a Lot.

Section 3 Sale of Common Area

The Common Area shall not be sold or otherwise disposed of without first offering to dedicate such area to the appropriate governmental entity. This limitation neither applies to a transfer of the Common Area to an organization conceived and established to own and maintain the Common Area as a successor to the Association, nor to the easements, rights and privileges created by this Declaration.

Section 4 Title to Common Areas

The title to any portion of the Common Areas that is to be owned by the Association in fee simple shall be conveyed to the Association, prior to the expiration of the Class "B"

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Control Period, free and clear of all liens and encumbrances; provided, however, that the Declarant shall have the right from time to time to reserve for the purpose of development of the Properties all or any portion of the Common Area for various easements and rights-of-way, together with the right to dedicate same where applicable and customary and the right of ingress and egress across the Common Areas in connection with the development of the Properties. The Declarant' s rights hereunder shall not unreasonably interfere with the Owner's easement of enjoyment.

Section 5 Right to Grant Easements

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

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

Section 1

ARTICLE ID

MEMBERSHIP AND VOTING RIGHTS

Membership

Every Owner, as defined in Section 20 of Article 1 of this Declaration, shall be deemed to have a membership in the Association. No Owner, whether one or more persons,

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shall have more than one (1) membership per Lot owned. In the event the Owner of a Lot is more than one (1) Person, votes and rights of use and enjoyment shall be as provided herein. The rights and privileges of membership, including the right to vote, may be exercised by a Member or the Member's spouse, subject to the provisions of this Declaration and the By-Laws. The membership rights of a Lot owned by a corporation, partnership, or any other legal entity, shall be exercised by the individual designated in a written instrument provided to the Secretary of the Association, subject to the provisions of this Declaration and the By-Laws.

Section 2 Voting

The Association shall have two (2) classes of membership, Class "A" and Class "B," as follows:

A. Class "A" Members shall be all Owners with the exception of the Class "B" Member, if any. Each Class A" Member shall have one equal vote for each Lot in which he or she holds the interest required for membership under Section 1 of this Article; there shall be only one vote per Lot. Provided, however, that the owners of Phase II as shown on the Development Plan which is to be developed as multi-family units, and the owners of that portion of Phase ID as shown on the Development Plan which is to be developed as multi-family units, shall collectively have 60 of the total Class A votes to be voted by its association.

In any situation where a Member is entitled personally to exercise the vote for its Lot, and more than one ( 1) Person holds the interest in such Lot required for membership, the vote for such Lot shall be exercised as those persons determine among themselves and advise the secretary of the Association in writing prior to any meeting. In the absence of such advice, the Lot's vote shall be suspended if more than one ( 1) Person seeks to exercise it. These provisions shall also apply to the votes for the multi-family units.

B. Class "B" Member shall be the Declarant. The rights of the Class "B" Member, including the right to approve actions taken under this Declaration and the By-Laws, are specified elsewhere in this Declaration and the By-Laws. The Class "B" Member shall be entitled to one vote per Lot owned for the year in which the voting power is exercised, and, in addition, shall be entitled to appoint all members of the Board of Directors during the Class "B" Control Period as specified in the By-Laws. The Class B" membership shall terminate upon the expiration of the Class "B" Control Period and be converted to a Class "A" membership. The Class "B" Control Period shall expire six (6) years from the date of recording of this Declaration in the Fayette County Clerk's Office,

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unless sooner terminated by Developer.

Section I

ARTICLE IV

MAINTENANCE

Association's Responsibility

The Association shall maintain and keep in good repair the Common Areas, such maintenance to be funded as hereinafter provided. All Lots shall be subject to an access easement in favor of the Declarant and the Association for the purpose of maintaining the Common Area, including all improvements thereon, which access shall be reasonable, including use of driveways where feasible. This maintenance shall include, but not be limited to, maintenance, repair, and replacement, reconstruction, subject to any insurance then in effect, of all Common Areas, including all improvements thereto. The Association's maintenance responsibilities shall include mowing the multi-family Lots. Such lots shall be subject to an access easement in favor of Declarant and the Association for such purpose.

The Association shall assume responsibility for implementing and maintaining proper erosion measures, including without limitation, installation and maintenance of silt fence protection. Commencing with the recording of the initial final record plat of Lots, the Association shall em.ploy full-time personnel to make inspections of the silt fence and any other erosion control measures implemented by the Association. Such personnel shall be responsible for conducting inspections of the Properties immediately after a rainfall of one-half (½) inch or more, and weekly during periods ofless rain or dry conditions. A bobcat or similar equipment will be maintained by the Association at all times during development of the Properties and construction of residences in order to maintain the streets in a clear condition.

The Association shall erect and maintain a security fence along the Properties' boundary with Kentucky-American Water Company ("Kentucky-American"). The Association shall repair any openings or other damage to the fence within twenty-four hours of notification from Kentucky-American. The Association may impose sanctions pursuant to Article IX, Section 3, and may assess any Owner and create a lien against such Owner's Lot for habitually breaching such security fence.

The Association shall use its best efforts to enforce a prohibition against lawn care fertilizers once houses are constructed.

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Except as otherwise provided here, the Common Area shall not be reduced by amendment of this Declaration or any other means without prior written approval of Declarant so long as Declarant owns any property subject to the Declaration.

The Association shall be relieved of its responsibilities under this Article to the extent they are assumed by the Government or any other local, state or federal governmental agency or any private utility.

Section 2 Standard of Performance

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

Section 3 Owner's Responsibility

Each Owner shall maintain his or her Lot and all structures, parking areas, landscaping, and other improvements on the Lot in a manner consistent with the Community-Wide Standard and all applicable covenants. If any Owner fails properly to perform his or her maintenance responsibility, the Association may perform it and assess all costs incurred by the Association against the Lot and the Owner in accordance with Article X, Section 6, of this Declaration; provided, however, except when entry is required due to an emergency situation, the Association shall att:ord the Owner reasonable notice and an opportunity to cure the problem prior to entry. Provided, however, that if such Lot is also included within a separate owners association, such separate association shall have the sole authority to perform the maintenance and assess the costs as set forth herein.

ARTICLE V

INSURANCE AND CASUALTY LOSSES

Section 1 Insurance

The Association's Board of Directors, or its duly authorized agent, shall have the authority to obtain, on behalf of and for the benefit of the Association, its Members, officers and directors, such insurance coverages and/or bonds as the Board of Directors in its discretion determines, including, but not limited to, blanket all-risk coverage, fire and extended coverage, public liability, workers' compensation, director's and officer's liability

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and a fidelity bond. Premiums for all insurance and/or bonds obtained shall be Common Expenses and shall be included in the General Assessment, as more particularly described in Article X of this Declaration. If "all-risk" property insurance is not generally available at reasonable cost, then fire and extended coverage may be substituted in such form as the Board deems appropriate. The face amount of the policy shall be sufficient to cover the full replacement cost of all insurable structures.

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

Section 2 Disbursement of Proceeds

If the damage or destruction for which the proceeds of insurance policies are paid is to be repaired or reconstructed, the proceeds, or such portion thereof as may be required for such purpose, shall be disbursed in payment of such repairs or reconstruction as hereinafter provided. Any proceeds remaining after defraying such costs of repairs or reconstruction to the Common Area or, in the event no repair or reconstruction is made, shall be retained by and for the benefit of the Association and placed in a capital improvements account.

Section 3 Damage and Destruction

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

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Section 4 Repair and Reconstruction

If the damage or destruction to the Common Area for which insurance proceeds are paid is to be repaired or reconstructed, and such proceeds are not sufficient to defray the cost thereof, the Board of Directors shall, without the necessity of a vote of the Members, levy a Special Assessment, as herein defined, against all Owners responsible for the premiums for the applicable insurance coverage under Section 1 of this Article on the same basis as provided for the General Assessment. Additional assessments may be made in like manner at any time during or following the completion of any repair or reconstruction.

ARTICIB VI

NOPARTIT10N

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

ARTICIBVII

CONDEMNATION

Whenever all or any part of the Common Area shall be taken by any authority having the power of condemnation or eminent domain ( or conveyed in lieu of and under threat of condemnation, by the Board acting on the written direction of Members representing at least two-thirds(%) of the total Association vote and the Declarant, as long as the Declarant owns any property described on Exhibit "B"), each Owner shall be entitled to notice thereof. The award made for such taking shall be payable to the Association as trustee for all Owners to be disbursed as follows:

If the taking involves a portion of the Common Area on which improvements have been constructed, then, unless within sixty (60) days after such taking, the Declarant, so long as the Declarant owns any property described in Exhibit "B" of this Declaration, and Members, representing at least seventy-five percent (75%) of the total vote of the Association, shall otherwise agree, the Association shall restore or replace such improvements so taken on the remaining land included in the Common Area to the extent

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lands are available therefor, in accordance with plans approved by the Board of Directors of the Association. If such improvements are to be repaired or restored, the above provisions of Article V hereof regarding the disbursement of funds in respect to casualty damage or destruction which is to be repaired shall apply.

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

Section 1

ARTICIEVID

ANNEXATION OF ADDITIONAL PROPERTY; ADDIDONAL COVENANTS, ASSESSMENTS,

AND ASSOCIATIONS

Annexation Without Approval of Class "A" Membership

With the consent of the owner thereof (whether such ownership is in fee simple or is a leasehold estate), Declarant shall have the unilateral right, privilege and option, from time to time at any time until the Class "B" Control Period ends, to subject to the provisions of this Declaration and the jurisdiction of the Association all or any portion of the real property, as described in Exhibit "A", attached hereto and by reference made a part hereof, by filing in the Fayette County Clerk's Office, Lexington, Kentucky, a Subsequent Amendment annexing such property. Such Subsequent Amendment to this Declaration shall not require the consent of Members. Any such annexation shall be effective upon the filing for record of such Subsequent Amendment unless otherwise provided therein. Declarant shall have the unilateral right to transfer to any other Person the said right, privilege and option to annex additional property which is herein reserved to Declarant, provided that such transferee or assignee shall be the developer of at least a portion of the real property described in Exhibits "A" or "B" attached hereto and that such transfer is memorialized in a written, recorded instrument executed by the Declarant. The real property described in Exhibit "A", or any portion thereof, shall not be affected by this Declaration, either expressly or by implication, unless and until annexed as provided herein.

Section 2 Acquisition of Additional Common Area

Declarant, if authorized by an affirmative vote of a majority of the members of the

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Board of Directors, may convey or cause to be conveyed to the Association additional real estate, improved or unimproved, located within the properties depicted on and described in Exhibits "A" and "B" which, upon conveyance or dedication to the Association, shall be accepted by the Association and thereafter shall be maintained by the Association at its expense for the benefit of all its Members.

Section 3 Additional Covenants and Easements

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

Section 4 Formation of Separate Owners Associations

The Declarant or its successors, with the written consent of the owner( s) of affected properties as specified herein, may create separate owners association( s) affecting a portion or portions of the Property which is to be developed into multi-family units. Such associations may impose and enforce use restrictions, may provide for the creation and maintenance of common areas, including the levying of assessments to pay for such maintenance, and may subject such portion or portions of the Property included within such owners association( s) to additional covenants, conditions, restrictions, and easements. Such separate owners association(s) shall be set forth in a separate Declaration(s) duly recorded in the Fayette County Clerk's Office and shall require the written consent of the Owners of the portion of the properties to be included within such separate association if not Declarant, or its successor Declarant(s). In no event shall the formation of a separate owners association(s) relieve a Member from the assessments or any other obligation, covenant, or restriction imposed by this Declaration.

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Section 1

ARTICLE IX

ASSOCIATION; RIGHTS AND OBLIGATIONS

Implied Rights

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

Section 2 Rules

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

Section 3 Enforcement

The Association may impose sanctions for violations of this Declaration, the By-Laws, or rules, including reasonable monetary fines (up to $100.00 per day), suspension of voting rights and the right to use any facilities within the Common Area. In addition, the Association may exercise self-help remedies to cure violations of the By-Laws, this Declaration, or the Rules, and may suspend any services it provides to the Lot of any Owner thirty (30) days or more delinquent in paying any assessment or other charge due to the Association. The Board may seek relief in any court. Board actions to impose or seek sanctions shall be governed by the By-Laws. The Association may require that any complaint requested by an Owner be submitted in writing accompanied by a $75.00 processing fee which amount may be increased by the Association.

Section 4 Common Area

The Association, subject to the rights of the Owners set forth in this Declaration, shall manage and control the Common Area and all improvements thereon, and shall keep it in good, clean, attractive, and sanitaiy condition, order, and repair, under the terms and conditions of this Declaration.

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Section 5 Dedication of Common Area

The Association, by Board resolution, may dedicate portions of the Common Area to any local, state, or federal governmental entity without a vote of the Members under Article ID hereof, when such conveyance is consistent with the Development Plan.

Section 6 Personal Property and Real Property For Common Use

The Association, through action of its Board, may acquire, hold, and dispose of tangible and intangible personal property and real property. Declarant may convey to the Association improved or unimproved real estate located within the properties described in Exhibits "A" and "B", personal property, easements, and other property interests. Such property shall be accepted and thereafter maintained by the Association at its expense for the benefit of its Members, subject to any restrictions set forth in the conveyance. Any acquisition, disposal, or acceptance of property by the Association as described herein shall require the affirmative vote of a majority of the members of the Board of Directors at a regular or special meeting.

Section 7 Utility Lines

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

Section 1

ARTICLEX

ASSESSMENTS

Creation of Assessments

There are hereby created assessments for the Common Expenses as may from time to time specifically be authorized by the Board of Directors to be commenced at the time and in the manner set forth in Section 7 of this Article. In addition to the Construction Period Assessment as described in Section 4 below, there shall be two types of assessments: ( 1) General Assessments to fund expenses for the benefit of all Members of the Association; and (2) Special Assessments as described in Section 6 below.

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General Assessments shall be levied equally on all Lots except for the multi-family lots which shall be assessed at one-half(½) of the amount of the General Assessments. For purposes of this Article, each unit within the multi-family lots shall be assessed as a separate Lot, as follows:

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

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

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

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

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

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

Assessments shall be paid in such manner and on such dates as may be fixed by the Board of Directors which may include, without limitation, acceleration of the annual assessments for delinquents. Unless the Board otherwise provides, the General Assessment shall be paid on an annual basis and shall be due and payable in advance on or before the due date established by the Board. Any assessment not paid on the due date shall be deemed

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delinquent without notice or demand.

No Owner may waive or otherwise exempt itself from liability for the assessments provided for herein, including, by way of illustration and not limitation, by non-use of Common Areas or abandonment of the Lot. No diminution or abatement of assessment or setoff shall be claimed or allowed by reason of any alleged failure of the Association or Board to take some action or perform some function required to be taken or performed by the Association or Board under this Declaration, or the By-Laws or for inconvenience or discomfort arising from the making of repairs or improvements which are the responsibility of the Association, or from any action taken to comply with any law, ordinance or with any order or directive of any municipal or other governmental authority, the obligation to pay assessments being a separate and independent covenant on the part of each Owner.

Section 2 Declarant

(a) During the Class "B" Control Period, Declarant shall not be required to pay assessments for Lots owned by Declarant. Upon expiration of the Class "B" Control Period, Declarant shall be obligated to pay assessments for Lots which it owns on the same basis as other owners.

(b) Until expiration of the Class "B" Control Period, Declarant or its nominee shalt administer the assessments and receipts therefrom which may only be used for purposes generally benefitting the Properties, as permitted in this Declaration.

Section 3 Initial Assessment

The Initial Assessment shall be three hundred ninety-five dollars ($395.00) per Lot, paid on an annual basis until such time as the Board prepares a budget as provided in Section 5 hereinafter, and increases, decreases, or eliminates the amount of the annual assessment.

Section 4 Construction Period Assessment

In addition to the Initial Assessment as provided in Section 3, each Lot shall be assessed the amount of Two Hundred Fifty Dollars ($250.00) per month for each month during the construction period which for purposes of this assessment shall commence for a particular Lot upon the issuance of a building permit for such Lot and end upon completion of construction as evidenced by the final grading and either laying of sod on such Lot, or completion of the driveway with installation of perimeter silt fence. For construction occuning during a portion of a calendar month, such assessment shall be assessed on a pro-

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rated per day basis for such portion of that calendar month. All such Construction Period Assessments shall be due and payable within ten (10) days from receipt of the Association's statement. The assessment shall be secured by a lien upon the subject Lot which lien shall enjoy the same priority and be enforceable in the same manner as the lien of General Assessments.

Section 5 Preparation of Budget

After Declarant relinquishes control of the Common Area as provided for in Section 2 hereof, it shall be the duty of the Board, at least sixty ( 60) days before the beginning of the fiscal year and thirty (30) days prior to the meeting at which the budget shall be presented to the Members, to prepare a budget covering the estimated costs of operating the Association during the coming year. The budget shall include a capital contribution establishing a reserve fund in accordance with a capital budget separately prepared and shall separately list Common Expenses. The budget shall include a road reserve fund for the purpose of providing for the repairs and replacement of the private roads serving the estate lots. The amount so budgeted shall be assessed only against the estate lots. The lots described in Exhibit "B" are not estate lots. The amount of the General Assessment to be levied for the coming year against each Lot subject to assessment under Section 7 below shall be computed so that the amount of the General Assessments for each of the one hundred seventy-five (175) multi-family lots shall be one-half(½) of the amount of the General Assessment for each of the three hundred twenty (320) single-family lots. For example, if the total operating budget is Twenty Thousand Dollars ($20,000.00), each single-family lot would pay Forty-Nine Dollars and Eight Cents ($49.08) and each multi-family lot would pay Twenty-Four Dollars and Fifty-Four Cents ($24.54) [175 (½ x) + 320 x = $20,000.00]. The Board shall cause a copy of the budget and the amount of the General Assessments to be levied against each Lot for the following year to be delivered to each Owner at least fifteen (15) days prior to the meeting. The budget and the assessment shall become effective unless disapproved at the meeting by a vote of Members or their alternates representing at least a majority of the total Class "A" vote in the Association.

Notwithstanding the foregoing, however, in the event the proposed budget is disapproved or the Board fails for any reason so to determine the budget for the succeeding year, then and until such time as a budget shall have been determined as provided herein, the budget in effect for the then current year shall continue for the succeeding year.

Section 6 Special Assessments

In addition to the assessments authorized in Section 1 of this Article, the Association

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may levy a Special Assessment or Special Assessments in any year applicable to that year only for defraying, in whole or in part, the cost of construction, unexpected repair or replacement, or any other expenditure for the maintenance of the Common Area, which cost was not otherwise provided for in the General Assessment. Provided, however, such assessment shall have the affirmative vote of a majority of the Board.

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

Section 7 Lien for Assessments

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

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

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

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

The Association, acting on behalf of the Owners, shall have the power to bid for the Lot at foreclosure sale and to acquire and hold, lease, m011gage and convey the same. During the period of time which a Lot is owned by the Association following foreclosure:

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

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

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

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

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

Section 8 Capital Budget and Contribution

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

Section 9 Date of Commencement of Assessments

The assessments provided for herein shall commence as to each Lot on the date of acquisition of record title to a Lot by the first purchaser thereof other than the Declarant or an owner who purchases solely for the purpose of constructing a dwelling thereon for resale. The assessment shall be pro-rated for the balance of the calendar year in which acquisition of record title to a Lot occurs as provided herein.

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Section 10 Exempt Property

Notwithstanding anything to the contrary herein, the following property shall be exempt from payment of General Assessments and Special Assessments:

(a) all Common Areas; and

(b) all property dedicated to and accepted by any governmental authority or public utility, including, without imitation, public schools, public streets and public parks.

Section 11 Failure to Assess

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

Section 12 Record keeping

The Association shall maintain or cause to be maintained full and accurate books of account with respect to the performance of its responsibilities hereunder. The books and records and related financial statements shall be made available for inspection and copying upon request by the Members during normal business hours. Copying charges shall be paid by the Members when requesting copies.

Section 1

ARTICLE XI

USE RESTRICTIONS

Primary Use Restrictions

No Lot shall be used except for private residential purposes. No structure shall be erected, placed, or altered or permitted to remain on any Lot except one single-family detached dwelling designed for the occupancy of one family, provided, however, townhouse structures, four-plex sttuctures and condominiums shall be permitted in those areas designated for such as shown on the Development Plan.

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Section 2 Garages

Except as hereinafter specifically excepted, each residence shall have an attached garage. Detached garages shall be permitted for those five (5) two (2) acre (approximate) Lots located in Unit 1-F which back up to Old Richmond Road with the specific written approval of the Declarant. All such garages shall as a minimum contain sufficient space to accommodate two automobiles. No detached garages shall be permitted without the specific written approval of the Declarant.

Section 3 Nuisances

No noxious or offensive trade or activity shall be conducted on any Lot, nor shall anything be done which may be or become an annoyance or nuisance to the neighborhood.

Section 4 Use of Other Structures and Vehicles

(a) No structure, temporary or permanent, including without limitation an out building, trailer, basement, tent, shack, storage shed, garage, barn, or structure other than the main residence erected on a Lot shall be permitted on any Lot except temporary tool sheds or field offices used by a Builder or Declarant, which shall be removed when construction or development is completed and no such structure shall at any time be used as a residence temporarily or permanently.

(b) Except for vehicles reasonably necessary to be on or about the Lots in the subdivision during construction or alteration of any buildings or other improvements upon a Lot, no trailer, motor home, boat, camper, truck or commercial vehicle shall be parked or kept on any Lot at any time unless housed in a garage. No automobile or motorcycle shall be parked or kept on any Lot at any time unless located in a driveway or housed in a garage. No automobile which is inoperable shall be habitually or repeatedly parked or kept on any Lot except within an approved enclosed garage. No person shall engage in major car repairs either for himself or others at any time.

Section 5 Animals

No animals, including reptiles, livestock, or poultry of any kind, shall be raised, bred, or kept on any Lot except dogs, cats, or other household pets (meaning the domestic pets traditionally recognized as household pets in this geographic area) may be kept (not to exceed two animals per Owner) provided they are not kept, bred, or maintained for any commercial or breeding purposes.

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

All basketball hoops and backboards, garbage cans, trash and garbage roll containers, above ground tanks, and other similar items shall be located or screened so as to be concealed from view of neighboring and adjacent property, Lots, and streets, as is reasonably practicable. All rubbish, trash, and garbage shall be regularly removed from the Lot and shall not be allowed to accumulate thereon. No clotheslines shall be permitted on any Lot.

Section 7 Unsightly or Unkempt Conditions

It shall be the responsibility of each Owner to prevent the development of any unclean, unhealthy, unsightly, or unkempt condition on his Lot. The pursuit of hobbies or other activities, including specifically, without limiting the generality of the foregoing, the assembly of motor vehicles and other mechanical devices which might tend to cause disorderly, unsightly, or unkempt conditions, shall not be pursued or undertaken on any part of the properties.

Section 8 Antennas

No exterior antennas, aerials, satellite dishes, or other apparatus for the transmission of television, radio, and/or reception of television, radio, or other signals of any kind shall be placed, allowed, or maintained upon any portion of the Properties, including any Lot, without the prior written consent of the Declarant or the Association after it assumes control from the Declarant. However, satellite dishes shall be permitted on any Lot without the prior approval of the Declarant or the Association provided that they are installed in compliance with the following criteria: (a) the diameter of the dish does not exceed one (1) meter; (b) it is screened from view of all adjacent Lots; and (C) it is either (i) attached to the residence, or (ii) located on the Lot. The Declarant and/or the Association shall have the right, without obligation, to erect an aerial, satellite dish, or other apparatus for a master antenna or cable system for the benefit of all or a portion of the Properties should any such master system or systems be utilized by the Association and require any such exterior apparatus.

Section 9 Subdivision of Lot

No Lot shall be subdivided or its boundary lines changed except with the prior written approval of the Board of Directors of the Association and the approval of the appropriate government entity. Declarant, however, hereby expressly reserves the right to replat any Lot or Lots which it owns prior to conveyance by Declarant. Upon completion of residences on

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the four-plex Lots as shown on the Development Plan, those Lots may be subdivided in order to create separate units capable of individual ownership. Any such division, boundary line change, or replatting shall not be in violation of the applicable subdivision and/or zoning regulations.

Section 10 Pools

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

Section 11 Tree Removal

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

Section 12 Sight Distance at Intersections

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

Section 13 Lighting

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

Section 14 Artificial Vegetation, Exterior Sculpture and Similar Items

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

Section 15 Energy Conservation Equipment

No solar energy collector panels or attendant hardware or other energy conservation equipment should be constructed or installed unless it is an integral and harmonious part of the architecturnl design of the structme as determined in the sole discretion of the Declarant pmsuant to Article XII hereof.

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Section 16 Mailboxes

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

Section 17 Lakes

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

Section 18 Fences

No fences of any kind shall be permitted on any Lot except as approved in accordance with Article XII of this Declaration. As a general rule Declarant will only approve picket fences 42 inches in height, brick, stone, or wrought iron fences in the areas designated by Declarant as "Estate Lots". Vinyl fences will not be approved for the Estate Lots.

Section 19 Signs

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

Section 20 Sidewalks

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

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Section 1

ARTICLE XII

ARCHITECTIJRAL AND LANDSCAPE CONTROL

Approval of Construction and Landscape Plans

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

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

( c) Declarant contemplates that the residences to be constructed shall be of a classic or traditional architectural character provided, however, in the sole discretion of the Declarant, other types of architectural designs may be approved if desirable, in the sole opinion of the Declarant, in order to take advantage of unusual characteristics of a particular Lot brought about by slopes, location of trees, or other unique characteristics. The Declarant retains the sole right and authority in its discretion to approve or disapprove of the materials utilized in the construction of the improvements (references to improvements in this Article are intended to include without limitation the items specified hereinabove in subparagraph (b) and if there is any question as to the all-inclusive nature of this covenant, the judgment of Declarant in its sole discretion shall control). One complete set of the plans and specifications shall be retained by the Declarant and the duplicate copy initialed by the Declarant when approved shall be returned to the Owner.

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

(e) Any proposed alterations to any of the improvements or additions thereto, whether proposed to be made during the period of construction or after construction of the improvements, shall be submitted to the Declarant for approval on the same terms and conditions as herein imposed; provided, however, when the Class B membership terminates the Board or the Board's designated committee shall have the authority to control future improvements or alterations on any of the Lots within the subdivision.

(f) If construction is not begun within one (1) year after approval of the plans by the Declarant or its successor in authority, the approval shall automatically terminate.

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

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

Section 2 Exterior Maintenance

It shall be the duty of each Owner of a Lot to maintain his or her Lot and improvements thereon and to keep the grass on the Lot properly cut, to keep the Lot free from weeds and trash, and to keep it otherwise neat and attractive in appearance. Should any Owner fail to do so, then in addition to maintenance of the Common Area, the Association, upon approval by a majority of the Board of Directors, shall be authorized, but not obligated,

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to perform exterior maintenance upon each Lot which is subject to assessment hereunder as follows: paint, repair, replace and care for roofs, gutters, downspouts, exterior building surfaces, trees, shrubs, grass walks, and other exterior improvements. In addition, upon the failure of any Owner to comply with any condition or requirement of Article XI or this Article, for actions or failure to act arising prior to vesting of architectural control in the Board of Directors, the Declarant may take such action as is necessary to comply therewith and the Owner on demand shall reimburse Declarant for the expense incurred in so doing. For actions or failure to act arising after architectural control is turned over to the Board of Directors by the Declarant as set forth in Section 1 hereof, all such enforcement provisions shall be vested in the Board of Directors who may, by a majority vote, authorize work to remedy the noncomplying conditions and add the cost of such work to the assessment to which the subject Lot is subject.

Section 3 Setbacks, Building Lines, etc.

The Lots shall be subject to all building lines, setbacks, including sideyard requirements, easements, and all restrictions of record pertaining to the Properties, including those reflected on the final record subdivision plats of the Properties, provided however, the required side yard shall be four ( 4') feet each side unless otherwise approved in writing by Declarant. No building line or setback, including sideyard requirements as reflected on the final record subdivision plat, shall be varied or modified ( except as noted in the preceding sentence) without the prior written approval of the Declarant during the Class "B" Control Period, and the appropriate governmental entity. After expiration of the Class "B" Control Period, such variances may only be obtained with the approval of the appropriate governmental entity, but shall not require the approval of the Association.

Section 4 Minimum Building Requirements

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

A. Residences shall be subject to the following requirements:

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

(a) One (1) Story: 1,900 square feet plus a two (2) car attached garage.

(b) Two (2) Story: 2,300 square feet plus a two (2) car attached garage.

(c) One and one-half (1 ½) Story: 2,300 square feet plus a two (2) car attached garage.

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

(b) The pitch of the main portion of a one (1) or a one and one-half ( 1 ½) story residence's roof shall be not less than 9 on 12.

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

4. Brick Requirements: Use of Siding: Stone.

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

(b) Brick requirements for each residence shall be set by Declarant using the following general guidelines.

(i) non-greenway lots and greenway lots shall be brick on all sides except the rear second floor area may be constructed with siding;

(ii) Ranch (one story) residences shall be brick on all sides (greenway and non-greenway lots).

(c) Exceptions to the brick requirements are as follows:

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

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

(iii) siding may be used on gable ends.

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

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

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

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

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

6.

Section 1

Shingles. All shingles must be dimensional.

General

ARTICIEXID

AMENDMENT

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

If an Owner consents to any amendment to this Declarant or the By-Laws, it will be

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conclusively presumed that such Owner has the authority to so consent and no contrary provision in any Mortgage or contract between the Owner and a third party will affect the validity of such amendment.

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

Section 1 Term

ARTICLEXN

GENERAL PROVISIONS

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

Section 2 Indemnification, Liability of Directors

A. It is the policy of this Association that, subject to any restriction or limitation of applicable law, each person who is or was a member, director, trustee, officer, committee member, or employee of the Association, whether elected or appointed, including the heirs, executors, administrators, or estate of any such person, and who has acted in good faith and reasonably believed that their conduct was in the best interest of the Association, shall be indemnified by the Association to the full amount against any liability, and the reasonable cost or expense (including reasonable attorney fees, monetary or other judgments, fines, excise taxes, or penalties and amounts paid or to be paid in settlement) incurred by such person in such person's capacity as a member, director, trustee, officer, committee member, or employee, or arising out of such person's status as a member, director, trustee, officer, committee member, or employee; provided, however, no such person shall be indemnified against any such liability, cost, or expense incuned in connection with any action, suit, or proceeding in which such person shall have been adjudged liable on the basis that personal benefit was improperly received by such person, or if such indemnification would be

32

prohibited by law. This right of indemnification shall also provide that the member, director, trustee, officer, committee member, or employee shall not be liable for any mistake of judgment, negligent or otherwise, except for their own individual willful misfeasance, malfeasance, misconduct or bad faith. The Association shall, to the extent permitted by applicable law, maintain insurance, as a Common Expense, _to protect itself and any such person against any such liability, cost, or expense, whether or not the Association would have the power to indemnify such person against such liability, cost, or expense under the Kentucky Nonprofit Corporation Acts or under this Article XIV, if such insurance is reasonably available. The indemnification provided by this Article XIV shall not be deemed exclusive of any other rights which those seeking indemnification may have or hereafter acquire under any bylaw, agreement, statute, vote of members or board of directors, or otherwise. If this Article XIV or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Association shall nevertheless indemnify each such person to the full extent permitted by any applicable portion of this Article XIV that shall not have been invalidated or by any other applicable law.

B. The liability of each and all of the directors of this Association shall be and is hereby limited to the greatest extent permitted by law and no director of the Association shall be liable to the Association for monetary damages for breach of such director's duties as a director, except for the following ( which exceptions shall be construed as narrow 1 y as legally permissible):

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

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

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

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

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

b. In the case of an action for monetary damages, the breach or

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failure to perform constitutes willful misconduct or wanton or reckless disregard for human rights, safety or property.

If the Kentucky Nonprofit Corporation Acts are amended after approval of this Article XIV to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Association shall be deemed to be eliminated or limited by this provision to the fullest extent then permitted by the Kentucky Nonprofit Corporation Acts, as so amended. Any repeal or modification of this Article XIV shall not adversely affect any right or protection of a director of the Association existing at the time of such repeal or modification.

Section 3 Board of Directors Meetings

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

Section 4 Easement for Maintenance

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

The continued existence of the easements created hereunder is expressly made subject to the conditions and restrictions contained herein which shall constitute covenants running with the title to, and both benefitting and burdening, the Properties.

Section 5 Severability

Invalidation of any one of these covenants or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect.

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Section 6 Perpetuities.

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

Section 7 Litigation

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

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

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

C. proceedings involving challenges to ad valorem taxation, or

D. counterclaims brought by the Association in proceedings instituted against it.

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

Section 8 Security

The Declarant and/or the Association is not formed for the purpose of and shall not be obligated to, undertake any measures designed to increase safety or security in the Property. NEITHER THE ASSOCIATION NOR THE DECLARANT SHALL IN ANY WAY BE CONSIDERED INSURERS OR GUARANTORS OF SECURITY WITIDN THE PROPERTY AND NEITHER THE ASSOCIATION NOR THEDECLARANT SHALL BE HELD LIABlE FOR ANY LOSS OR DAMAGE BY REASON OF FAILURE TO PROVIDE SECURITY. ALL OWNERS, TENANTS, GUESTS AND INVITEES OF ANY OWNER, AS APPLICABlE, ACKNOWIEDGE THAT THE DECLARANT, THE ASSOCIATION AND ITS BOARD OF DIRECTORS AND COMMITTEES DO NOT REPRESENT OR WARRANT THAT ANY FIRE PROTECTION SYSTEM OR

35

BURGLAR ALARM SYSTEM WilL BE INSTALLED ON TIIE PROPERTIES BY TIIE DECLARANT AND/OR THE ASSOCIATION. EACH OWNER, TENANT, GUEST OR INVITEE OF AN OWNER, AS APPLICABLE, ACKNOWLEDGES AND UNDERSTANDS THAT TIIE DECLARANT, THE ASSOCIATION, TIIE BOARD OF DIRECTORS AND COMMITIEES ARE NOT INSURERS AND THAT EACH OWNER, TENANT, GUEST AND INVITEE ASSUMES ALL RISKS FOR LOSS OR DAMAGE TO PERSONS, TO LOTS AND TO THE CONTENTS OF LOTS AND FURTIIER ACKNOWLEDGES THAT DECLARANT, THE ASSOCIATION, TIIE BOARD OF DIRECTORS AND COMMITTEES HAVE MADE NO REPRESENTATIONS OR WARRANTIES NOR HAS ANY OWNER, TENANT, GUEST OR INVITEE RELIED UPON ANY REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THAT ANY SECURITY MEASURES WIIL BE UNDERTAKEN BY DECLARANT AND/OR THE ASSOCIATION.

Section 9 Headings and Gender

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

ARTICLE XV

DECLARANT' S RIGHTS

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

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

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Lots.

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

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

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

ARTICLE XVI

CONSENTS AND APPROVALS

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

IN WITNESS WHEREOF, the undersigned Declarant has executed this Declaration of Covenants, Conditions and Restrictions this~ day of January, 2006.

DELONG ESTA1ES DEVELOPMENTLLC, a Kentucky limited liability company

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STATE OF KENTUCKY COUNTY OF FAYETTE

The foregoing Declaration of Covenants, Conditions and Restrictions were subscribed, sworn to, and acknowledged before me this~ day of January, 2006, by John Barlow as Manager of Delong Estates Development ILC, a Kentucky limited liability company, for and on behalf of said limited liability company.

My Comntjssiop Expires: f?'/Ji'2./P7

PREPARED BY:

W. RODES BROWN JACKSON KEU.Y PILC ATTORNEYS AT LAW 17 5 East Main Street, Suite 500 Lexington, Kentucky 40507 Telephone: (859) 255-9500 L0378166

»:~fr-NOTARY PUBLIC, STATE AT LARGE

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EXIDBIT ''A''

Being all of Tract# 1, Tract #2, Tract #3, as shown on the Corrected Amended and Easement Minor Record Plat of Denton Farms, Inc. 3 900-4070 Rkhmond Road, Lexington, Fayette County, Kentucky, of record in Plat Cabinet M, Slide 182, in the Fayette County Clerk's Office, to which plat reference is hereby made for a more particular description.

EXIDBIT "B"

Being all of Units 3A and 3B, Denton Farms Inc. (Ellerslie at Delong) as shown on the final record plats thereof of record in Plat Cabinet M, Slide 73 7, and Plat Cabinet M, Slide 736, respectively, in the Fayette County Clerk's Office, to which plats reference is hereby made for a more particular description.

DEED BOOK 2615 PAGE 273

I, Donald W Blevins, County Court Clerk of Fa_yette County, Kentucky, hereby certify that the foregoing instrument has been duly recorcl.ed 1n my office.

By: DOUG BRADLEY , de

200601090248

January 9, 2006 14:37:09 PM

Fees $83.00 Tax $.00

Total Paid $83.00

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