DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR KINGSTON SQUARE

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1 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR KINGSTON SQUARE THIS DECLARATION, made on the date hereinafter set forth by Knotts Landing Corporation, a Georgia Corporation hereinafter referred to as "Declarant", WITNESSETH: WHEREAS, Developer is the owner of certain real property located in Land Lots 1219, 1230, 1289, 1290 and 1291 of the l5th District, 2nd Section of Cherokee County, Georgia, which property is more particularly described in Exhibit "A" attached hereto and made a part of this Declaration. NOW THEREFORE, Declarant hereby declares that all of the property described in Exhibit "A" shall be held, sold and conveyed subject to the following easements, restrictions, covenants, and conditions, which are for the purpose of protecting the value and desirability of, and which shall run with, the real property, and be binding on all parties having any right, title or interest in the described property or any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each owner thereof. ARTICLE I DEFINITIONS Section 1. "Association" shall mean and refer to Kingston Square Homeowners and Recreation Association, Inc., a Georgia non-profit corporation, its successors and assigns. Section 2. "Owner" shall mean and refer to the record owner, whether one or more persons or entities, of a fee simple title to any Lot which is a part of the Property, including contract sellers, but excluding those having such interest merely as security for the performance of an obligation. Section 3. "Property" shall mean and refer to that certain real property hereinbefore described, and such additions thereto as may hereafter be brought within the jurisdiction of the Association. Section 4. "Association Property" shall mean all real property, if any, (including the improvements thereto) owned by the Association for the common use and enjoyment of the owners.

2 Section 5. "Lot" shall mean and refer to any plot of land shown upon any recorded subdivision map of the Property with the exception of the Declarant's Property or the Association Property. Section 6. "Declarant" shall mean and refer to Knotts Landing Corporation, its successors and assigns, if such successors or assigns should acquire more than one undeveloped Lot from the Declarant for the purpose of development. Section 7. "Additional Property" shall mean the additional property which may be added to the Property and made subject to these covenants pursuant to Article VI, Section 4(B) hereof. A description of the Additional Property is set forth on Exhibit "B" attached hereto and made a part hereof. Section 8. "Declarant's Property" shall mean and refer to that portion the Property owned by the Declarant and subject to this Declaration (excluding all Lots, as hereinbefore defined) designated for Developer use or shown as "Reserved Area" on those plats of survey of any portion of the Property which are recorded in the Office of the Clerk of the Superior Court of Cherokee County, Georgia. ARTICLE II PROPERTY RIGHTS IN THE DECLARANT'S PROPERTY AND IN ASSOCIATION PROPERTY Section 1. Member's Easements of Enjoyment in Association Property. Subject to the provisions of Sections 3 and 4 below, every member of the Association shall have a right and easement of enjoyment in and to any Association Property, and such right and easement shall be appurtenant to and shall pass with the title to every Lot subject to this Declaration. Section 2. Title to Declarant's Property and Association Property. (A) The Declarant shall retain legal title to and exclusive control of the Declarant's Property. The Declarant shall have the right at any time to sell, convey, transfer, assign, lease or mortgage the Declarant's Property or dedicate or transfer all or any part of thee Declarant's Property to any public agency or authority for such purposes and subject to such conditions as may be determined by the Dectarant. If, however, the Declarant conveys the Declarant's Property or any portion thereof to the Association, such property shall for all purposes of this Declaration from and after the date of such conveyance be, and be deemed to be, Association Property.

3 (B) Declarant shall have the right to construct permanent improvements upon, and to develop the Declarant's Property as the Declarant, in its sole discretion, may elect. (C) Legal title in and to Association Property shall be vested in the Association for the benefit, use and enjoyment of its members. Section 3. Extent of Members' Easements. The rights and easements of enjoyment in and to the Association Property created hereby shall be subject to the following: (A) The right of the Association to take such steps as are reasonably necessary to protect Association Property against foreclosure; and (B) The right of the Association to suspend the enjoyment rights of any member in and to Association Property for any period during which any assessment remains unpaid, and for such period as it considers appropriate for any infraction of its published rules and regulations; and (C) The right of the Association to dedicate or transfer all or any part of Association Property to any public agency or authority for such purposes and subject to such conditions as may be agreed to by the members entitled to vote thereon, provided that no such dedication or transfer shall be effective unless an instrument agreeing to such dedication or transfer signed by 2/3rds of each class of members has been recorded; and (D) The right of the Association to grant such easements and rights-of-way to such utility companies or public agencies or authorities as it shall deem necessary for the proper service and maintenance of Association Property or other portions of the Property. Section 4. Extension of Rights and Benefits. Every member of the Association shall have the right to extend the right and easements of enjoyment vested in him under this Article II to each of his tenants and to each member of his family who resides with him within the Property and to such other persons as may be permitted by the Association's Board of Directors with respect to Association Property. ARTICLE Ill MEMBERSHIP AND VOTING RIGHTS Section I. Membership in the Association. Declarant and every person who is a record owner of a fee or undivided fee interest in any Lot shall automatically be a member of the Association; provided, however, that any person who holds such interest merely as security for the performance of an obligation shall not be a member. Other persons who shall be entitled to become members of the Association are those specified in the Association's By-Laws, as amended from time to time.

4 Section 2. Voting Rights. Subject to the following provisions of this Section 2, the Association shall have two classes of voting membership: Class A and Class B. (A) Class A. Every person who is an Owner with the exception of the Declarant except as otherwise set forth herein, shall be a Class A member. Class A members shall vote only on such matters and in such events as are hereinafter specified. Class A members shall be entitled to full voting privileges upon the earliest to occur of the following: (i) the Class B member no longer owns primarily for sale any of the Lots or any portion of the Additional Property intended for phased development, (ii) the Class B member so designates by notice in writing delivered to the Association or (iii) on January 1,1995. Before the earliest of these events, Class A members shall be entitled to vote only on (i) any proposal that an annual assessment be levied by the Association, (ii) any proposal to change the method of calculating the maximum amount of the annual assessments levied by the Association, (iii) any proposal that a special assessment be levied by the Association, except as otherwise provided by the By-Laws of the Association, (iv) any proposal to add additional properties to the jurisdiction of the Association pursuant to Article VI, Section 4(a) of this Declaration, (v) any proposal not to repair or reconstruct any damage or destruction to Association Properly and facilities, if any, (vi) any proposal to dedicate or transfer all or part of Association Property to any public agency or authority, other than as a result of or under the threat of condemnation, (vii) any proposal of merger, consolidation or dissolution (except a merger or consolidation of the Association and any similar nonprofit corporation under such circumstances whereby the proportionate charge of the assessments, charges and liens, if any, provided for herein shall not be increased), and (viii) any proposal to amend the Articles of Incorporation of the Association. When entitled to vote, each Class A member shall be entitled to one vote for each Lot in which he holds any interest required for membership by Section 1 of this Article III, except where more than one person is a Class A member by virtue of an ownership interest in the same Lot, in which case the vote for such Lot shall be exercised as they among themselves determine, but in no event shall more than one vote be cast with respect to any such Lot. In the event of disagreement among such persons and an attempt by two or more of them to cast the vote of such Lot, such persons shall not be recognized and the vote of such Lot shall not be counted. The membership of Class A members shall automatically terminate upon the member's sale of his Lot. However, no termination of Class A membership shall affect such member's obligation to pay assessments, as hereinafter provided for, due and payable for any period prior to the date of such termination, and there will be no refund for assessments paid for periods falling after the date of such termination.

5 (B) Class B. The Declarant shall be the sole Class B member. Class B membership shall be a full voting membership and, during its existence, the Class B member shall be entitled to vote on all matters and in all events, including those matters for which Class A members are granted voting rights in subsection (a) of this Section 2. The Class B member shall be entitled to twice the number of votes as cumulatively held by the Class A members. The Class B membership shall continue to exist until the earliest to occur of the following: (i) the Class B member no longer owns primarily for sale any of the Lots or any portion of the Additional Property intended for phased development; (ii) the Class B member elects by notice in writing to terminate its Class B membership; or (iii) January 1,1995; provided, however, that so long as Home Federal Savings and Loan Association of Atlanta holds a security interest in any portion of the Property, as security for a Development Loan to Declarant, the Class B membership shall not terminate without the prior written consent of Home Federal Savings and Loan Association of Atlanta. If at the time of termination of the Class B membership, Declarant still owns any Lots, then as to each Lot owned by Declarant, Declarant shall be deemed to be a Class A member. (C) Casting of Votes. The voles of the members shall be cast under such rules and procedures as may be prescribed in this Declaration or in the By-Laws of the Association, as amended from time to time, or by law. Section 3. Suspension of Membership Rights. The membership rights of any member, including the right to vote, may be suspended by the Association's Board of Directors pursuant to authority granted herein, or in the Association's Articles of Incorporation or By-Laws, as amended from time to time, during the period while any assessment or other obligation remains unpaid or unperformed, whether or not such member is personally obligated to pay such assessment or other obligation or for violation or any rule of the Association. Any such suspension shall not affect such member's obligation to pay any assessments coming due during the period of suspension and shall not affect the permanent charge and lien on the member's Lot in favor of the Association. Section 4. Meetings of the Membership. All matters concerning meetings of members of the Association, including the time and manner in which notice of any of said meetings shall be given to said members and the quorum required for the transaction of business at any of said meetings, shall be as specified in this Declaration or in the By-Laws of the Association, as amended from time to time, or by law. ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS Section 1. Creation of the Lien and Personal Obligations For Assessments. The Declarant, for each Lot owned within the Property hereby covenants, and each Owner

6 of any Lot by acceptance of a deed therefore, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association: (1) the initial assessment, (2) successive annual assessments or charges, and (3) special assessments for capital improvements, such assessments to be established and collected as hereinafter provided. The initial, annual and special assessments, together with interest, costs, and reasonable attorney's fees, shall be a charge on the land and shall be a continuing lien upon the property against which each such 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 property at the time when the assessment fell due. The personal obligation for delinquent assessments shall not pass to his successors in title unless expressly assumed by them. Section 2. Purpose of Assessments. The assessments levied by the Association shaii be used exclusively to promote the recreation, health, safety, and welfare of the residents in the Property and for the improvement and maintenance of the Association Property and of the homes situated upon the Property. Section 3. Initial Assessment. The initial assessment shall be One Hundred Fifty Dollars ($150.00) per Lot which amount shall be due and payable upon the earliest to occur of the following events: (a) At the time a Lot is first conveyed with a habitable dwelling located thereon; or (b) Upon the first habitation of a dwelling located on a Lot as a residence. This event shall not include the use of a dwelling by the Declarant as its sales office. In the case of event (a) occurring first, payment of the initial assessment shall be the responsibility of the person or entity conveying the Lot. In the case of event (b) occurring first, payment of the initial assessment shall be the responsibility of the Owner of the Lot at the time of its habitation. The initial assessment shall cover a period of one year from the date such assessment became due and payable, during which period the Owner shall not be responsible for the monthly payment of any regular annual assessment. Beginning on the first day of the month one year after the initial assessment became due and payable each Owner shall begin to make regular payments for the annual assessment in effect at that time in accordance with Sections 4 and 8. Each Owner shall only be responsible for those payments towards the annual assessment in effect which become due from that time onward. In no event shall an Owner be held responsible for an amount greater than the prorata portion of the annual assessment in effect over the remaining assessment period, nor for any annual assessments or portions thereof which become due for any assessment periods ending prior to the first day of the month one year after the initial assessment became due and payable. Section 4. Annual Assessments.

7 (A) From and after January I, 1985 until December 31, 1985, the annual assessment may be set by the Board of Directors in accordance with Section 8 but not at an amount in excess of One Hundred Twenty Dollars ($120.00). Unless otherwise set by the Board of Directors, beginning with January 1, 1985, the calendar year's annual assessment shall be set in the amount of One Hundred Twenty Dollars ($120.00). (B) From and after January 1, 1986 the maximum annual assessment may be increased each year not more than 10% above the maximum assessment for the previous year without a vote of the membership. (C) From and after January 1, 1986 the maximum annual assessment may be increased above 10% by a vote of two-thirds (2/3) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose. (D) The Board of Directors may fix the annual assessment at an amount not in excess of the maximum. Section 5. Special Assessments for Capital Improvements. In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Association Property, including fixtures and personal property related thereto, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of members who are voting in person or by proxy at a meeting duly called for this purpose. Section 6. Notice and Quorum for Any Action Authorized Under Section 4. Written notice of any meeting called for the purpose of taking any action authorized under Section 4 shall be sent to all members not less than 30 days nor more than 60 days in advance of the meeting. At the first such meeting called, the presence of members or of proxies entitled to cast sixty percent (60%) of all the votes of each class membership shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum at the subsequent meeting shall be one-half (l/2) of the required quorum at the preceding meeting. No such subsequent meeting shall be held more than 60 days following the preceding meeting. Section 7. Uniform Rate of Assessment. Both annual and special assessments must be fixed at a uniform rate for all Lots and may be collected on a monthly basis. Section 8. Date of Commencement of Initial and Annual Assessments: Due Dates. The initial assessments shall be payable in all events in accordance with Section 3. The annual assessments provided for herein shall commence as to all Lots on the first day of the month following the conveyance, if any, of the Association Property to the

8 Association. The first annual assessment shall be adjusted according to the number of months remaining in the calendar year. The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period. Written notice of the annual assessment shall be sent to every Owner subject thereto. The due dates shall be established by the Board of Directors. The Association shall upon demand, and for a reasonable charge, furnish a certificate signed by an officer of the Association setting forth whether the assessments on a specified Lot have been paid. A properly executed certificate of the Association as to the status of assessments on a lot is binding upon the Association as of the date of its issuance. Section 9. Effect of Nonpayment of Assessments: Remedies of the Association. Any Assessment not paid thirty (30) days after the due date shall bear interest from the due date at the rate of twelve (12) percent per annum. The Association may bring an action at law against the Owner personally obligated to pay the same, or the Association may seek any other remedy allowable under Georgia law. No Owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the Association Property or abandonment of his Lot. Section 10. Subordination of the Lien to Mortgages. The lien of the assessments provided to herein shall be subordinate to the lien of any first mortgage. Sale or transfer of any Lot shall not affect the assessment lien. However, the sale or transfer of any Lot pursuant to mortgage foreclosure or any proceeding in lieu thereof, shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer. No sale or transfer shall relieve such lot from liability for any assessments thereafter becoming due or from the lien thereof. Section 1. Approval by Board of Directors. ARTICLE V ARCHITECTURAL CONTROL (A) No building, fence, wall or other structure shall be commenced, erected or maintained upon the Property nor shall any exterior addition to or change or alteration therein be made until complete and final plans and specifications showing the nature, kind, shape, height, materials, and location of the same shall have been submitted to and approved in writing as to harmony of external design and general quality with the existing standards of the neighborhood, and as to location in relation to surrounding structures and topography by the Board of Directors of the Association, or by an architectural committee composed of three (3) or more representatives appointed by the Board. In the event said Board, or its designated committee, fails to approve or disapprove such design and location within thirty (30) days after said plans and specifications have been submitted to it, approval will not be required and this Article will be

9 deemed to have been fully complied with. Nothing in this article shall be construed to permit any review of the architectural design and/or building decisions made by the Declarant with respect to any Lot before its initial sale. (B) Any builder or contractor of any home or improvement upon any lot subject to this Declaration must, before beginning construction of such home, be approved by the Board of Directors as to financial stability, building experience and ability to build houses. (C) The Declarant, the Board of Directors or the Architectural committee shall not be liable for any defects in any plans and specifications which it approves. ARTICLE VI GENERAL PROVISIONS Section 1. Enforcement. The Association, or any Owner, shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration. Failure by the Association or by any Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter. Section 2, Severability. Invalidation of any one of these covenants or restrictions by judgment or court order shall in no wise affect any other provisions which shall remain in full force and effect. Section 3. Amendment. The covenants and restrictions of this Declaration shall run with and bind the land, for a term of twenty (20) years from the date this Declaration is recorded, after which time they shall be automatically extended for successive periods of ten (10) years. This Declaration may be amended during the first twenty (20) year period by an instrument signed by not less than eighty percent (80%) of the Lot Owners, and thereafter by an instrument signed by not less than seventy-five (75%,) of the Lot Owners. Any such amendment shall become effective upon recordation. Section 4. Annexation. (A) Additional residential property and Association Property may be annexed to the Property with the consent of two-thirds (2/3) of each class of members. (B) Additional land within the area described in Exhibit "B" attached hereto and made a part hereof may be annexed by the Declarant and made

10 subject to this Declaration without the consent of members within six (6) years of the date of this instrument. ARTICLE VII USE RESTRICTIONS The following shall be restrictions on the use of the Property and Association Property which shall run with and bind the land, to-wit: (A) All lots subject to this Declaration shall be used for residential purposes only. No building or structure shall be erected, altered, placed or permitted to remain on any lot other than one single-family dwelling with garage facilities and other outbuildings incident to residential use of the lot. (B) No Business activities shall be conducted on any portion of the Property or any facility located thereon; provided, however, the foregoing restriction shall not apply to the business activities signs and billboards of the Declarant, its agents or assigns during the sale period. This provision shall not prevent residents from maintaining and using private offices. (C) No noxious or offensive activity shall be carried on upon the Property or any facility located thereon, nor shall anything be done thereupon which may become a nuisance to the neighbors, nor shall anything be done thereupon which could result in the cancellation of insurance on any portion of the Association Property or the amenities and facilities thereon. (D) No boats, boat trailers, trucks of a capacity of one ton or more or unlicensed vehicles may be parked in streets, driveways or front yards for more than twenty-four hours. (E) No temporary building, trailer, garage or building in the course of construction shall be used, temporarily or permanently, as a residence on any Lot. (F) No sign of any kind other than those of the Declarant, builder or their designated agent, shall be displayed to the public view on any lot except that one sign of not more than two (2) square feet advertising the Lot for sale or rent will be permitted. (G) No above-ground swimming pools shall be permitted. (H) No outside clotheslines shall be permitted.

11 (I) All mailboxes and mailbox posts shall be standard and shall be furnished by the Builder of the dwelling erected upon a Lot. (J) Fences shall not be permitted to be erected forward of the rear foundation wall of the house. The planting of trees, shrubs, or any other type of plantings that would afford privacy may be used in lieu of constructing additional fencing, provided, however, that they are maintained in accordance with the provisions set forth elsewhere in this Declaration. (K) No animals, livestock, or poultry of any kind shall be raised, bred or kept on any Lot, except that a reasonable number of dogs, cats or other household pets may be kept provided they are kept in accordance with any "leash law" or similar laws regarding the maintenance of animals which is now or hereinafter enacted by the governmental authority having jurisdiction over such matters and with any duly adopted Rules and Regulations of the Association; and provided further, they are not kept, bred or maintained for any commercial purpose. (L) No lumber, materials, bulk materials, refuse or trash shall be kept, stored, or allowed to accumulate on any Lot except building materials during the course of construction, maintenance, or repair by the Declarant of any approved structure. Trash, garbage or other waste shall not be kept except in sanitary containers and such shall not be permitted to remain in public view except on days of trash collection. All containers or other equipment for the storage or disposal of such materials shall be kept in a clean and sanitary condition. During construction, all debris, stumps and other waste must be removed from each house as often as necessary to keep the house and lot clean and attractive. Such waste will not be dumped in any area of the Property unless approved by the Declarant. If a central trash collection area is designated by the Association, then these areas will be under the control of the Association and all members will abide by the current regulations regarding the use of these trash enclosures. (M) No water pipe, gas pipe, sewer pipe or drainage pipe shall be installed or maintained on any Lot above the surface of the ground. Easements have been reserved for sewers, drainage and utility installations and maintenance for such purposes and uses as are shown on the recorded plat for the Properties. Within these easements no structure, 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 or flow of drainage channels in the easements, or which may obstruct or retard the flow of water through drainage channels in the easements.

12 (N) No fence, wall, sign, hedge or shrub which obstructs sight lines at street intersections shall be permitted. ARTICLE VIII EXTERIOR MAINTENANCE In the event an owner of any Lot in the Properties shall fail to maintain the premises and the improvements situated thereon in a manner satisfactory to the Board of Directors, the Association, after approval by two-thirds (2/3) vote of the Board of Directors, shall have the right, through its agents and employees, to enter upon said parcel and to repair, maintain, and restore the Lot and the exterior of the buildings and any other improvements erected thereon. The cost of such exterior maintenance shall be added to and become part of the assessment to which such Lot is subject.

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