WITNESSETH: ARTICLE I DEFINITIONS

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1 sr P7 rr /13/ :53:01 P11 M FILED, RECORDED, INDEXED c < jfr Bk: Pg: Pa9es:041 Rec Fee: St Fee: Co Fe& DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS FOR MERCHANT S GATE REGISTER OF DEEDS, ANDERSON CO. SC THIS DECLARATION is made on the date hereinafter set forth by Merchant s Gate, LLC hereinafter referred to as "Declarant". WITNESSETH: WHEREAS, Declarant is the owner ofcertain real property located in Pendleton Township, County of Anderson, State of South Carolina, which property is more particularly described in Exhibit A" attached hereto and made a part of this Declaration; and WHEREAS, Declarant intends to develop on the real property described above a development to be known as Merchant s Gate hereinafter referred to as the "Development" or the "Community"; and, WHEREAS, Declarant has caused the Association as hereinafter defined to be formed as a nonprofit civic organization to perform certain functions for the common good and general welfare of the Owners as hereinafter defined; NOW, THEREFORE, the Declarant hereby declares that all of the property described in Exhibit "A" shall be held, sold and conveyed subject to this Declaration of Covenants, Conditions and Restrictions, which is for the purpose of enhancingand protecting the desirability and attractiveness of said real property. Declarant further declares that this Declaration shall run with the title to said real property, and be binding on all parties having any right, title or interest in the described property or any part thereof, and shall, subject to all limitations herein provided, inure to the benefit of each Owner, his heirs, grantees, distributees, successors and assigns, and to the benefit of the Association. ARTICLE I DEFINITIONS The following words, when used in this Declaration of Covenants, Conditions and Restrictions, shall have the following meanings: 1.01 Association. "Association" means Merchant s Gate Property Owners Association, Inc. a nonprofit corporation organized under South Carolina Code Ann. Section et seq., its successors and assigns Board. "Board" means the Board of Directors of the Association Bylaws. "Bylaws" means the Bylaws ofthe Association Common Property. "Common Property" means all real property together with any and all improvements now or hereafter located thereon and all personal property now or hereafter owned by the Association or in certain instances over which the Association has been granted permanent easements, for the common use and enjoyment of the Owners.

2 1.05 Community. "Community" or "Development" means the property described on Exhibit "A" attached hereto, as well as any other property which may be annexed into Merchant s Gate pursuant to Article XII hereof 1.06 Declarant. "Declarant" means Merchant s Gate, LLC, its successors and assigns. The terms shall also be applied to any person, firm, corporation, partnership, association, trust, or other legal entity, or any combination thereof, which lawfully acquires the rights privileges and options of Declarant in accordance with this Section Should any of the Property become subject to a first mortgage given by Declarant as defined herein as security for the repayment of a loan to improve the Property for development as part of this residential community, then all rights, privileges and options herein reserved to the Declarant, if held by the Mortgagor under said Development Loan shall inure to the benefit of the holder of such first mortgage upon its becoming the actual owner of the Property then subject to such first mortgage through judicial foreclosure or by conveyance of a deed in lieu of foreclosure. The Declarant as hereinabove defined, may transfer all of its rights, privileges and options as Declarant to a successor-in-title to all or some portion of the Property, provided any such successor-in-title shall acquire for the purpose of development or sale all or some portion of such property, and provided further, that in a written instrument, such successor-in-title is expressly assigned all of Declarant s rights, privileges and options herein reserved to Declarant. Such an assignment may be included as a recital in any deed executed by Declarant which conveys any portion of the Property Declarant Control Period. "Declarant Control Period" means the period beginning with the date of the recording of this Declaration, and ending at such time as the first of the following events shall occur: i the expiration often 10 years from the date of the recording of this Declaration; ii the date upon which 100% of the Lots which may be devdloped on the Property shall have been conveyed, by Declarant to an individual Owner or Owners for residential occupancy; or iii the surrender by Declarant of the authority to appoint and replace directors by an express amendment to this Declaration executed and recorded by Declarant Declaration. Declaration" means this Declaration of Covenants, Conditions, Easements and Restrictions for Merchant s Gate Governing Documents. "Governing Documents" means this Declaration, the Articles of Incorporation of the Association and the Bylaws of the Association Lot. "Lot" means Lots 1-27 as shown on the Plat, as well as any other lots created by Declarant within Lot 28 as shown on said Plat, and annexed hereto pursuant to the provisions of Article XII hereof 1.11 Member. "Member" means any member of the Association Owner. "Owner" means the record owner including Declarant whether one or more persons or entities, of a fee simple title to any Lot, provided, however, that where fee simple title has been transferred and is being held merely as security for repayment of a loan, the person or entity who would own the Lot in fee simple if such loan were paid in full shall be considered the Owner. Page 2

3 1.13 Plat. The "Plat" is that certain plat entitled "Final Plat of Merchant s Gate" surveyed at the request of Merchant s Gate, LLC, prepared by F & S Engineers, Inc.,dated October 1, 2006, and recorded in the Office of the Clerk of Court for Anderson County, South Carolina, in Plat Slide 1655 at page Property. "Property" means that certain real property other than Common Property hereinabove described Restrictions. "Restrictions" means all covenants, restrictions, easements, liens and other obligations created or imposed by this Declaration Structure. "Structure" means: a any thing or object the placement of which upon any Lot may affect the appearance of such Lot, including by way of illustration and not limitation, any building or part thereof, garage, porch, shed, greenhouse or bathhouse, coop or cage, covered or uncovered patio, swimming pool, fence, curbing, paving, wall, tree, shrub, sign, signboard, temporary or permanent living quarters including any house trailer or any other temporary or permanent improvement to such Lot; b any excavation, grading, fill, ditch, diversion dam or other thing or device which affects or alters the natural flow of surface waters from, upon or across any Lot, or which affects the flow of any waters in any natural or artificial creek, stream, wash or drainage chairnel from, upon or across any Lot; and, c any change in the grade at any point on a Lot of more than six 6 inches, whether or not subsection b of this Section 1.16 applies to such change Vote of the Members. Except as otherwise required by law, "Vote of the Members" means a vote of the Members of the Association taken at any meeting of the Members of the Association called in accordance with the Bylaws, at which a quorum is present, or taken by mail or as otherwise provided for in the Bylaws of the Association. A "two-thirds Vote of the Members" means a vote taken at any meeting ofthe Members ofthe Association called in accordance with the Bylaws, at which a quorum is present, in which the vote passed by a 2/3 vote of those members entitled to vote and voting. Unless otherwise stated herein, a Vote of the Members requires passage by a majority vote Conveyance of Common Property. ARTICLE II COMMON PROPERTY a The Declarant may from time to time cause to be conveyed to the Association certain real property or grants of easements, as well as personal property, for the common use and enjoyment of the Owners such real and personal property having hereinafter collectively referred to as "Common Property". In addition, the Declarant may from time to time cause the conveyance of certain real property or grants of easements to the general public as may be Page3

4 required by the governing authorities in accordance with this Declaration. The Association hereby covenants and agrees to accept all such conveyances of Common Property. b The Declarant may, at Declarant s sole discretion, modify, alter, increase, reduce and otherwise change the Common Property contemplated to be conveyed to the Association in accordance with this Section 2.01 or otherwise at any time prior to conveyance of such Common Property to the Association. c In addition to the property described in subsection b of this Section 2.01, the Declarant may convey to the Association in accordance with this Section 2.01 such other real and personal property as the Declarant may determine to be necessary for the completion of the Development, or the enhancement thereof d Notwithstanding any legal presumption to the contrary, the fee title to, and all rights in, any portion of the Property owned by the Declarant and designated as Common Property or designated for public use shall be reserved to the Declarant until such time as the same shall be conveyed to the Association or to any municipality or other governmental body, agency or authority Right of Enjoyment. Every Owner shall have a right and easement to use and enjoy the Common Property, which right shall be appurtenant to and shall pass with the title to every Lot upon transfer; provided, however, that no Owner shall do any act which interferes with the free use and enjoyment of the Common Property by all other Owners. The right and easement of enjoyment granted or permitted by this Section 2.02 is subject to those items set forth in Section 2.03, which include suspension by the Association as provided in Sections 2.03 c and Rights of the Association. The rights and privileges conferred in Section 2.02 hereof shall be subject to the right of the Association acting through the Board to: a promulgate rules and regulations relating to the use, operation and maintenance of the Common Property; b charge reasonable fees in connection with the admission to and use of facilities or services; provided that in setting any such fee the Board may establish reasonable classifications which shall be uniform within each such class but need not be uniform between such classes; c suspend the voting rights of any Member, pursuant to Section 3.05, and the right of enjoyment granted or permitted by Section 2.02; d grant easements or rights of way over Common Property to any municipality or other govermnental body, agency or authority, to any quasi-public agency or to any utility company or cable television system; e enforce all applicable provisions of valid agreements of the Association relating to the Common Property or any part thereof 0 borrow money for the purpose of carrying out the activities of the Association, including the acquisition, construction, improvement, equipping and maintenance of Common Page 4

5 Property, and in aid thereof to encumber by mortgage or other security interest, any or all of the Association s property, including Common Property and revenues from assessments, user fees and other sources; g dedicate or transfer all or any part of the Common Property or interest therein to any municipality or other governmental body, agency or authority for such purposes and subject to such provisions and conditions as may be agreed upon by the Association and such grantee, including a provision that such property or interest shall cease to be subject to this Declaration or all or any part of the Restrictions while held by any such municipality or other governmental body, agency or authority; h to sell, lease or otherwise convey all or any part of its properties and interest therein; provided, however, that the Association shall not sell, encumber by security interest, convey, dedicate or transfer any Common Property or interest therein without the approval of a twothirds 2/3 Vote of the Members. i maintain the Common Property; j enforce this Declaration Types of Common Property. At the time of the conveyance of any real property or grant of easement by the Declarant to the Association to be used as Common Property, the Declarant shall designate in the deed of conveyance or easement that such real property is to be Common Property, and further may designate in the deed of conveyance or easement the specific or general purpose or purposes for which such real property or any portion thereof may be used, and in such event, such real property or portion thereof shall not, without a two-thirds 2/3 Vote of the Members, and the written consent of Declarant during the Declarant Control Period, be used for any different purpose or purposes without the prior written consent of the Declarant Entrance and Scenic Strip Landscaping Easements. It is contemplated that certain easements for the erection and maintenance of entrance monuments, subdivision signs, walls, fences, scenic strips and other structures intended to provide an attractive atmosphere or to provide privacy to Owners within the Development will be reserved by the Declarant and may be set forth on plats of survey of the Development recorded in the County Records. Such easements shall be perpetual in duration and shall include the right to erect, maintain, repair, replace and re erect any such structures within the easement areas, as well as the right to plant grass, plants, flowers, shrubs and trees, to tend and garden the same, and to generally landscape the area within said easements to keep them clean, attractive and uniform in appearance for the benefit of all Owners within the Development. All Owners taking title to any Lot upon which such an easement lies will take title subject to the easement rights set forth herein, as well as such rights as may be set forth in the deed conveying such easements to the Association. Such easements shall be Common Property. ARTICLE III THE HOMEOWNERS ASSOCIATION 3.01 Purposes, Powers and Duties of the Association. The Association shall be formed as a nonprofit organization for the primary purpose of performing certain functions for the common Page 5

6 good and general welfare of the Development. To the extent necessary to carry out such purpose, the Association a shall have all ofthe powers of a corporation organized under the South Carolina Nonprofit Corporation Code, and b shall have the power to exercise all of the rights, powers and privileges of the Association as set forth in this Declaration Membership in the Association. Every Owner shall automatically be a Member of the Association and such membership shall terminate only as provided in this Declaration of Covenants, Conditions, Easements and Restrictions Voting Rights. The Association shall have two 2 types of regular voting memberships: TYPE "A" - Type "A" Members also known as Class "A" Members shall be all those Owners of Lots other than the Declarant. A Type "A" Member shall be entitled to one 1 vote for each Lot which he owns; provided, that in the event that more than one lot has been consolidated into one building site, such lots, in the aggregate, shall be considered one Lot for voting purposes, and shall entitle the owner thereof to only one vote, for so long as such additional lot is a part of such consolidated building site. TYPE "B" - Type "B" Members also known as Class "B" Members shall be the Declarant. The Declarant shall be entitled to three 3 votes for each Lot owned by the Declarant, plus one 1 additional vote: NOTWITHSTANDING THE FOREGOING, DURING THE DECLARANT CONTROL PERIOD, ALL VOTES BY TYPE "A" MEMBERS SHALL BE ADVISORY ONLY, AND SUCH ADVISORY VOTES SHALL NOT BE COUNTED IN DETERMINING ANY VOTE OF THE MEMBERS, CONSENT BY THE MEMBERS OR OTHER ACTION OR DETERMINATION BY THE MEMBERS. DURING SUCH DECLARANT CONROL PERIOD, ONLY VOTES BY TYPE "B" MEMBERS SHALL BE COUNTED IN DETERMINING ANY VOTE OF THE MEMBERS, CONSENT BY THE MEMBERS OR OTHER ACTION OR DETERMINATION BY THE MEMBERS. UPON THE EXPIRATION OF THE DECLARANT CONTROL PERIOD, BOTH TYPE "A" AND TYPE "B" MEMBERS SHALL BE ENTITLED TO HAVE THEIR VOTES COUNTED IN DETERMINING ANY VOTE OF THE MEMBERS, CONSENT BY THE MEMBERS OR OTHER ACTION OR DETERMINATION BY THE MEMBERS Board of Directors and Officers. a Board. The affairs of the Association shall be managed by a Board of Directors. The number of directors and the method of election of directors shall be as set forth in this Declaration and in the Bylaws of the Association. Except to the extent otherwise expressly required or authorized by the South Carolina Nonprofit Corporation Code or this Declaration, the Association s Bylaws or Articles ofincorporation, the powers inherent in or expressly granted to Page 6

7 the Association may be exercised by the Board, acting through the officers of the Association, without any further consent or action on the part of the Members. b Officers. The number of officers and the method of election of officers shall be as set forth in this Declaration and the Bylaws of the Association. Notwithstanding any other language or provision to the contrary in this Declaration, in the Articles of Incorporation, or in the Bylaws ofthe Association, officers ofthe Association shall be appointed by the Board until such time as Declarant no longer has the right to appoint members to the Board of Directors. c Casting of Votes. The votes of the Members shall be cast under such rules and procedures as may be prescribed in the Bylaws of the Association, as amended from time to time, or by law Suspension of Membership. The Board may suspend the voting rights of any Member and the right of enjoyment of the Common Property of any person who: a shall be subject to the Right of Abatement, as defined in Section 8.02 by reason of having failed to take the reasonable steps to remedy a violation or breach of this Declaration as herein defined within thirty 30 days after having received notice ofthe same pursuant to the provisions of Section 5.15, 6.02 or 8.02 hereof b shall be delinquent in the payment of any assessment, fine or penalty levied by the Association pursuant to the provisions of this Declaration; or c shall be in violation of the rules and regulations of the Association relating to the use, operation and maintenance of Common Property; Any suspension shall be for the balance ofthe period in which said Member or person shall remain in violation, breach or default, as aforesaid, except that in the case of a violation described in subsection c of this Section 3.05, the suspension may be for a period not to exceed sixty 60 days after the cure or termination of such violation. No such suspension shall prevent an Owner s ingress to or egress from his Lot Voting Procedures. The procedures for the election of Directors of the Association and the resolution of such other issues as may be brought before the membership ofthe Association shall be governed by this Declaration, the South Carolina Nonprofit Corporation Code, the Articles of Incorporation of the Association, and the Bylaws of the Association, as each shall from time to time be in force and effect Control by Declarant and Appointment of the Board. Until such time as Declarant no longer has the right to appoint members to the Board, the Board of the Association shall consist of one 1 member. Notwithstanding any other language or provision to the contrary in this Declaration, in the Articles ofincorporation, or in the Bylaws of the Association, the Declarant hereby retains the right to appoint all members to the Board. The right of Declarant to appoint members of the Board also includes the right to remove and replace appointees until such time as Declarant s right to appoint members to the Board ceases. Declarant shall retain the right to appoint and remove members of the Board until the expiration of the Declarant Control Period. Upon the final expiration of all rights ofdeclarant to appoint and replace directors of the Page 7

8 Association a special meeting ofthe Association shall be called. At such special meeting the Owners shall elect a new Board of Directors ofthree 3 directors, which shall undertake the responsibilities of the Board, and Declarant shail deliver the books, accounts, and records, if any, which Declarant has kept on behalf of the Association, and any agreements or contracts executed by or on behalf of the Association during such period, which Declarant has in its possession. Each Owner by acceptance of a deed to or other conveyances of a Lot vests in Declarant such authority to appoint and replace directors and officers of the Association as provided in this Section Implied Rights. The Association may exercise any other right or privilege given to it expressly by this Declaration or by law and any other right or privilege reasonably to be implied from the existence of any right or privilege given to it herein or reasonably necessary to effectuate any such right or privilege. ARTICLE IV ASSESSMENTS AND MAINTENANCE CHARGES 4.01 Covenant for Assessments and Creation of Lien and Personal Obligations. Each Owner, jointly and severally, for himself, his heirs, distributees, legal representatives, successors and assigns, by acceptance of a deed for a Lot whether or not the covenants contained herein shall be expressed in any such deed, hereby covenants and agrees as follows: a to pay to the Association the annual assessments which may or shall be levied by the Association pursuant to this Declaration against all Lots owned by him; b to pay to the Association any special assessments and any fines, penalties or other charges which may or shall be levied by the Association pursuant to this Declaration against all Lots owned by him; c that there is hereby created a continuing charge and lien upon all Lots owned by him against which all assessments, fines, penalties and other charges are made to secure payment of such items and any interest thereon as provided in Section 4.06 hereof and costs of collection including reasonable attorneys fees; d that such continuing charge and lien on such Lots binds such Lots in the hands of the then Owner, and the Owner s heirs, devisees, legal representatives, successors and assigns. Such charge and lien is superior to any and all charges, liens, or encumbrances which may hereafler in any manner arise or be imposed upon such Lots whether arising from or imposed by judgment or decree or by any agreement, contract, mortgage, deed to secure debt, or other instrument, except i such liens for taxes or other public charges as are by applicable law made superior, and ii the lien of any first mortgage. The sale of any Lot pursuant to mortgage foreclosure, shall extinguish the lien of such assessments as to payments which become due prior to such sale or transfer; e that no sale or transfer at foreclosure shall relieve any Lot or Lots from liability for any assessment thereafler assessed; Page 8

9 0 that all annual and special assessments together with interest thereon as provided in Section 4.06 of this Declaration and costs of collection including reasonable attorneys fees levied against any Lot or Lots owned by him during the period that he is an Owner shall be in addition to being a continuing charge and lien against such Lot or Lots and all other lots owned by him in the development, as provided in Section 4.01c of this Declaration a personal obligation which will survive any sale or transfer ofthe Lot or Lots owned by him Purpose of Assessment. The assessments levied by the Association shall be used exclusively for the purpose of providing for the common good and general welfare of the Development, including, but not limited to, and in addition to other purposes set forth in this Declaration, security, the acquisition, construction, improvement, maintenance and equipping of Common Property, the enforcement ofthis Deciaration, the payment of operating costs and expenses of the Association and the payment of all principal and interest when due on all debts owned by the Association Accumulation of Funds Permitted. The Association shall not be obligated to spend in any calendar year all the sums collected in such year by way of annual assessments or otherwise, and may carry forward, as surplus, any balances remaining; nor shall the Association be obligated to apply such surplus to the reduction ofthe amount of the Annual Assessments in any succeeding year, but may carry forward from year to year such surplus as the Board may deem to be desirable for the greater financial security of the Association and the effectuation of its purposes Annual Assessment a Until December 31, 2007, the annual assessment shall be two hundred and no/i 00 s $ dollars per Lot excluding the Lots held by the Declarant. A full year payment of the prevailing annual assessment is due at the time of transfer ofthe Lot from the Declarant to the new Lot Owner, which shall be applicable to the calendar year of closing. Assessments for the year of closing shall not be prorated, but shall be paid in full by the purchaser of the Lot. b From and after January 1, 2007, the annual assessment may be increased by the Board each year not more than ten 10% above the assessment for the previous year without a Vote ofthe Members. c After consideration ofthe current maintenance costs and future needs of the Association, the Board of Directors of the Association may fix the annual assessment at an amount not in excess of the maximum set forth herein Special Assessment for Nonrecurring Items. 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 nonrecurring maintenance, construction, reconstruction, repair or replacement of a capital improvement upon the Common Area, including fixtures and property related thereto, or other extraordinary non-recurring item, provided that any such assessment must be approved by a Vote of the Members. Page 9

10 4.06 Specific Assessments. The Association shall have the power to levy Specific Assessments against a particular Lot, to cover costs incurred in bringing the Unit into compliance with the Governing Documents, or costs incurred as a consequence of the conduct of the Owner or occupants ofthe Lot, their agents, contractors, employees, lessees, licensees, invitees, or guests; provided, the Board shall give the Lot Owner prior written notice and an opportunity for a hearing, in accordance with the By-Laws, before levying any Specific Assessment under this subsection a Effect ofnonpayment of Assessments. If any assessment or installment is not paid within fifteen 15 days after the Due Date there shall be imposed a late or delinquency charge in the amount of the greater of Ten Dollars $10.00 or ten 10% percent of the amount of each assessment or installment not paid when due. Any assessment or installment, and any late charge connected therewith, which is not paid within thirty 30 days after the Due Date of the assessment shall bear interest from the Due Date with respect to the assessment or installment, and the date such charge was imposed with respect to the late charge, at the rate of twelve 12% percent per annum or at such rate as the Board may from time to time establish; provided, however, that in no event shall the Board have the power to establish a rate of interest in violation of the laws of the State of South Carolina. Ifany one or more installment of any assessment is not paid within thirty 30 days after the Due Date the Board may declare any remaining balance ofthe assessment at once due and payable. In the event that an Owner shall fail to pay fully any portion of any assessment or installment on or before the date on which payment is due, such unpaid portion including any remaining balance declathd immediately due and payable in accordance with the preceding sentence, together with any delinquency charges, interest, and costs of collection, including court costs, the expenses of sale, any expense required for the protection and preservation of the Lot, and reasonable attorney s fees, shall be a binding personal obligation of such Owner, as well as a lien on all Lots owned by such Owner within the Development, enforceable in accordance with the provisions ofthis Declaration. In addition to the above, if any Owner has not paid any assessment or installment, or any late charges or expenses related thereto, within sixty 60 days after the Due Date of the assessment or installment, the Association shall have the right to notify any or all mortgagees having a security interest in such Owner s Lot or Lots that such Owner is in default in the performance of his obligations under these Restrictions, and of those actions taken or proposed to be taken by the Association as a result of the default Certificate of Payment. Upon written demand by an Owner, the Association shall within a reasonable period of time issue and furnish to such Owner a written certificate stating that all assessments including penalties, interest and costs, if any have been paid with respect to any Lot owned by said Owner as of the date of such certificate, or that all assessments, interest and costs have not been paid, setting forth the amount then due and payable. The Association may make a reasonable charge for the issuance of such certificate. Any such certificate, when duly issued as herein provided, shall be conclusive and binding with regard to any matter therein stated as between the Association and any bona fide purchaser of or lender on, the Lot in question Declarant Not Responsible for Paying Assessments. Notwithstanding any other provision hereof, Declarant shall not be responsible for paying any assessments whether regular, Page 10

11 special or other type ofassessment to the Association with respect to any Lots owned by Declarant, unless Declarant constructs a residence on a Lot and resides in said residence. ARTICLE V ARCHITECTURAL AND LANDSCAPING REVIEW 5.01 Architectural Review. a The purpose of the architectural review process is to rekindle and maintain an appreciation for the Southern architecture employed from when Pendleton was enjoying the height of its importance as the seat of the Pendleton District. Reestablishing the vernacular building traditions ofthis period will facilitate the development of an endearing and enduring place. The use of Federal, Greek Revival, Farmhouse, and Georgian architectural styles are recommended. Other styles of architecture may or may not be approved by the ARB for construction within the Development. b Many different individuals design and build the houses in Merchant s Gate. In order to work together to create a community, the design of each house should respond to the character of the street or civic form that it faces. This calls for a coordinated approach to the design ofthe houses so that they are harmonious with each other and form civic spaces and streetscapes of the highest quality. c In order to facilitate the design of harmonious and timeless architecture and to ensure the visual integrity and spirit of Merchant s Gate, the Merchant s Gate Architectural Review Board ARB has established the Architectural Review Guidelines. In addition, all property owners are bound by the provisions in the Declaration of Covenants, Conditions, and Restrictions. d In order to preserve the natural beauty of the Development and its setting, to maintain a pleasant and desirable environment, to establish and preserve a harmonious design for the Development, and to protect and promote the value of property: I No building, fence, wall, sign, swimming pool, landscaping, mail box, roof, exterior, or other Structure or improvement shall be erected, placed, added to, or altered on any Lot; 2 No staking, clearing, excavation, grading, or other site work shall be performed on any Lot; and 3 No trees having a diameter of over four 4" inches measured 48" above the ground shall be removed or significantly pruned collectively, the "Activities" unless and until the proposed building plans, specifications including height, color and composition of roof, siding, or other exterior materials and finish, plot plan showing the proposed location of such building or structure, drives and parking areas, landscape plan, drainage plan, tree removal plan, builder and other applicable plans and construction schedule Page 11

12 shall have been submitted and approved in writing by the Architectural Review Board as hereinafter provided No approval shall be required to repaint the exterior of a structure in accordance with the originally approved color scheme or to rebuild in accordance with originally approved plans and specifications This Article shall not apply to Declarant s activities, nor to the Association s activities after the Declarant Control Period In reviewing and acting upon any request for approval, Declarant or its designee shall act solely in Declarant s interest and shall owe no duty to any other person The Declarant shall establish an Architectural Review Board such b6ard hereinafter referred to as the "Architectural Review Board" or "ARB" which shall consist of one 1 member during the Declarant Control Period, and three 3 members thereafter. The one 1 member of the ARB shall be appointed by the Declarant during the Declarant Control Period, unless such right of appointment is earlier terminated in a written instrument executed and recorded by Declarant. The regular term of office for each member shall be one 1 year. Any member appointed by the Declarant may be removed with or without cause by the Declarant at any time by written notice to such appointee. A successor or successors appointed to fill such vacancy shall serve the remainder of the term of the former members. Control of the Architectural Review Board shall be transferred to the Association upon the expiration of the Declarant Control Period. When control of the Architectural Review Board functions is transferred to the Association, members of the Architectural Review Board shall be elected by the Board of Directors of the Association and any member so elected may resign or be removed by the Board in the same manner as provided in the By-Laws of the Association for the resignation and removal of officers ofthe Board The Architectural Review Board shall select its own Chairman and such Chairman, or in his absence, the Vice-Chairman, shall be the presiding officer of its meetings: All meetings shall be held upon call of the Chairman; all meetings shall be held at the offices of the Association in Anderson County, South Carolina or at such other places in Anderson County as may be designated by the Chairman. Two 2 members shall constitute a quorum for the transaction of business. The affirmative vote of a majority of the members of the Architectural Review Board present at the meeting at which there is a quorum shall constitute the action of the Architectural Review Board on any matter before it. The Architectural Review Board shall operate in accordance with its own rules ofprocedure and guidelines which shall be filed with the Association and maintained in the records of the Association The Architectural Review Board is hereby authorized to retain the services of one or more consulting architects, landscape architects, urban designers, and/or attorneys, and other professional consultants as it determines necessary to advise and assist the Architectural Review Board in performing the design review functions herein prescribed: 5.08 Design Review Procedure. Page 12

13 a Preliminary Plan Approval. The owner of any Lot may request a preliminary review of the design of its proposed Improvements upon the submission to the ARB of the following: I. Architectural Review Fee of $200.00, or such other amount as may be set from time to time by the Board; 2. Schematic site plan at a scale of 1"=lO showing two 2 foot contour topography, building and driveway locations and dimensions, and all areas of the Lot outside the Building Envelope in which any vegetation is to be cut or removed; 3. Schematic floor plans at a scale of ¼ inch equals one 1 foot; 4. Schematic elevations, showing all sides, exterior materials and exterior colors and accurate grade including entrance areas, decks, steps, ramps and retaining walls, at a scale of one-quarter ¼ inch equals one 1 foot; 5. Owner s address or the address of the Owner s authorized agent to which the ARB should mail its written notice of approval or disapproval ofthe items that the Owner submits to the ARB under these guidelines. The ARB shall review such preliminary plans and return one set to the Owner marked "Approved" or "Disapproved" as the case may be. As to any preliminary plans marked "Approved" by the ARB, Final Plans produced thereafter must be in substantial conformity therewith, provided, however, that the ARB s approval of the preliminary plans shall in no way bind or obligate the ARB to approve the subsequent Final Plans. The ARB may refuse approval of preliminary plans, location and style of Improvements, exterior colors or finishes or other specifications for any reason including purely aesthetic reasons, in the sole discretion of the ARB. b Final Plan Approval. Final plans and specifications hereinafter, the "Final Plans" for all improvements proposed to be constructed on any Lot shall be submitted in duplicate to the ARB for approval or disapproval. Final Plans submitted for approval must be accompanied by the Architectural Review Fee set forth above if such Fee has not already been paid. In addition, the following items must be submitted prior to the ARB beginning the Final Plan review process: 1. Submission of final site plan at a scale of 1 "=10 showing two 2 foot topography, building location and dimensions, and all areas ofthe Lot more than five 5 feet outside the building foundation in which any vegetations is to be cut or removed. The ARB may also require the Owner to stake the location of the construction drive, the house, driveway, decks, and other proposed Improvements. The staking shall consist of stakes driven at each major corner of the Improvement, connected with string or colored tape to clearly indicate the Improvement location. The driveway location shall also be indicated by stakes, and string or tape. Any erosion control measures required for construction should be shown on the site plan. Page 13

14 2. Final floor plans at a scale of one-quarter 1/4 inch equals one 1 foot, including calculations showing heated and unheated square footage on a floor by floor basis. 3. Final elevations, showing all sides, exterior materials and exterior colors and accurate grade at a scale of one-quarter 1/4 inch equal one 1 foot Location and dimensions of utility lines and equipment, walks, drives, walls, terraces, decks, heating and air conditioning equipment, etc. 5. Any samples of proposed constructions materials required by the ARB such as brick, stucco, siding, shingles, paint colors, etc. 6. Owner s name and address or the address of Owner s authorized agent to which the ARB should mail its written notice of approval or disapproval of the items Owner submits to the ARB under these Guidelines. 7. The name and address of the Builder that will construct the Improvements. If found not to be in compliance with these Guidelines or if found to be otherwise unacceptable to the ARB, one set of the Final Plans shall be returned to the Owner marked "Disapproved" accompanied by a written statement of items found not to be in compliance with these guidelines or otherwise unacceptable. The ARB may impose an additional review fee for each re-submittal of Final Plans to the ARB. At such time as the Final Plans meet the approval of the ARB, one complete set of Final Plans will be retained by the ARB and the other complete set of Final plans will be marked "Approved" and returned to the Owner. Once the ARB has approved the Final Plans, Improvements must be commenced within 12 months and diligently pursued to completion. If such construction is not commenced within twelve 12 months following the date of approval of the Final Plans therefore by the ARB, such approval shall be deemed rescinded unless a different expiration time is specifically stated in the approval. Before construction of Improvements can thereafter be commenced on the portion of the property in question, the Plans therefore must again be approved by the Committee. Any modification or change to the "Approved" set of Final Plans must again be submitted in duplicate to the ARB for its review and written approval, and an additional review fee may be required. The ARB may refuse approval of Final Plans, location and style of Improvements, exterior colors or finishes or other specifications for any reason including purely aesthetic reasons, in the sole discretion of the ARB. c Failure of the Board to Act. If the ARB fails to approve or disapprove any Final Plans or other submittals which conform and which relate to Improvements which will conform with the requirement hereof or to reject them as being inadequate or unacceptable within thirty 30 calendar days after receipt thereof, and provided such submittal was a full and complete submittal, in accordance with these Guidelines, of all items that were to have been submitted to Page 14

15 the ARE, and provided the ARB shall again fail to approve or disapprove of such Final Plans or other submittals within ten 10 business days after additional written request to act on such items is delivered to the ARB following the passage of the above-described thirty 30 calendar day period, it shall be conclusively presumed that the ARB has approved such conforming Final Plans and other submittals, EXCEPT that the ARB has neither the right nor the power, either by action or failure to act, to waive or grant any variances relating to any mandatory requirements specified in the Declaration, except where variances shall be expressly permitted herein. Only the Board can grant a variance from the provisions ofthis Declaration, and no such variance shall be implied by any lapse of time or failure to act on the part of the Board. If Final Plans or other submittals are not sufficiently complete or are or may approve or disapprove a portion of the Final Plans, conditionally or unconditionally, and reject the balance. d Notice. 1. Each notice, document or submittal collectively, "notice" required or permitted to be given under these Guidelines must comply with the requirements ofthis Paragraph. Each notice shall be in writing. 2. Any notice to be given to the ARB shall be deemed to have been duly served and to be effective only when a receipt acknowledging such delivery such as a registered mail, overnight express service or hand delivery receipt is signed by a member or authorized representative ofthe ARB. 3. Any notice to be given to an Owner shall be deemed to be duly served when picked up by the Owner at the ARB s offices; or when delivered to the Owner s Address; or on the day the notice is mailed to the Owner s address by regular US Mail Service. The address of an Owner shall be as set forth in the Owner s preliminary plans, or if different, then as set forth in its final plans. 4. Either party may change its address for notices by written notice to the other party designating the new address. 5. Address of ARE. The address of the ARB for the delivery of notices shall be as follows: 135 Micasa Drive, Pendleton, SC No Waiver of Future Approvals. Each Owner acknowledges that the persons reviewing applications under this Article will change from time to timne and that opinions on aesthetic matters may vary accordingly. In addition, each Owner acknowledges that it may not always be possible to identify objectionable features until work is completed, in which case it may be unreasonable to require changes to the improvements involved, but the Architectural Review Board may refuse to approve similar proposals in the future. Approval of applications or plans, or in coimection with any other matter requiring approval, shall not constitute a binding precedent in any other matter or waiver of the right to withhold approval as to any similar applications, plans, or other matters subsequently or additionally submitted for-approval Variances. The Architectural Review Board may authorize variances from compliance with any of its guidelines and procedures, when circumstances such as topography, obstructions, hardship, or aesthetic or environmental considerations require, but only in Page 15

16 accordance with the covenants and restrictions contained herein only the Board may grant a variance from compliance with the covenants and restrictions herein. No variance shall a be effective unless in writing; b be contrary to this Declaration; or c estop the Architectural Review Board from denying a variance in other circumstances. For purposes hereof, the inability to obtain approval of any governmental agency, the issuance of any permit, or the terms of any financing shall not be considered a hardship warranting a variance Limitation of Liability. The standards and procedures this Article establishes are intended as a mechanism for maintaining and enhancing the overall aesthetics of the Development; they do not create any duty to any person. Review and approval of any application pursuant to this Article may be based on aesthetic considerations only. The Architectural Review Board shall not bear any responsibility for ensuring a the structural integrity or soundness of approved construction or mnodifications, b compliance with building codes and other governmental requirements, c that residences are of comparable quality, value, size, or of similar design, aesthetically pleasing, or otherwise acceptable to neighboring property owners, d that views from any other residences or the Common Property are protected, d that drainage problems do not occur on any lot; or e that no defects exist in approved construction. Plans and specifications are not reviewed for engineering or structural design or quality of materials, and by approving such plans and specifications neither the ARB, the members thereof, nor the Association assumes liability or responsibility therefor, nor any defect in any structure constructed from such plans and specifications. Neither Declarant, the Assoéiation, the ARB, the Board, nor the officers, directors, members, employees, and agents of any of them shall be liable in damages to anyone submitting plans and specifications to any of them for approval, or to any Owner of property affected by this Declaration by reason of mistake in judgment, negligence, or nonfeasance arising out of or in connection with the approval or disapproval or failure to approve or disapprove any such plans or specifications. Every person who submits plans or specifications and every Owner agrees that he will not bring any action suit against Declarant, the Association, the ARE, the Board, or the officers, directors, members, employees, and agents of any of them to recover any such damages and hereby releases, remises, quitclaims, and covenants not to sue for any judgment, negligence, or nonfeasanc&and hereby waives the provisions of any law which provides that a general release does not extend to claims, demands, and causes of action not known at the timne the release is given Certificate of Compliance. Any Owner may request that the Architectural Review Board issue a certificate ofarchitectural compliance certifying that such Owner s Let has no known violations of this Article. The Association shall either grant or deny such request within 30 days after receipt ofa written request and may charge a reasonable administrative fee for issuing such certificate. Issuance of such a certificate shall estop the Associatibn from taking enforcement action with respect to any condition as to which the Association had notice as of the date of such certificate View Impairment. Neither Declarant nor the Association guarantee or represent that any view over and across any portion of the Development or any adjacent property will be preserved without impairment. Any additions or changes, whether occurring in the course of developing or maintaining the Development, may diminish or obstruct any view from Lots, and Page 16

17 any express or implied easements for view purposes or for the passage of light and air are hereby expressly disclaimed Inspection Rights. Any employee or agent of the Association or the ARB may, after reasonable notice, at any reasonable time or times enter upon any Lot or Structure thereon for the purpose of ascertaining whether the installation, construction, alteration or maintenance of any Structure or the use of any Lot or Structure is in compliance with the provisions of this Declaration; and neither the Association, nor the ARE, nor any such agent shall be deemed to have committed a trespass or other wrongful act solely by reason of such entry or inspection, provided such inspection is carried out in accordance with the terms of this Section. Entry may be made on any Lot or any Structure on any Lot while the initial residence on such Lot is being constructed, so long as such residence is not locked and no-one is residing therein Violations. If any Structure shall be erected, placed, maintained or altered upon any Lot, otherwise than in accordance with the plans and specifications approved by the ARB pursuant to the provisions of this Article, such erection, placement, maintenance or alteration shall be deemed to have been undertaken in violation ofthis Article and without the approval required herein. If in the opinion ofthe ARB such violation shall have occurred, the ARB shall notify the Association. If the Board shall agree with the determination of the ARB with respect to the violation, or if the Board shall independently determine that there has been a violation of this Article, then the Board shall provide written notice to the Owner by certified mail, setting forth in reasonable detail the nature of the violation and the specific action o actions required to remedy the violation. If the Owner shall not have taken reasonable steps toward the required remedial action within thirty 30 days after the mailing of the aforesaid notice ofviolation, then the Association shall have the Right ofabatement as provided in Section 8.02 hereof. The ARB shall also have the authority, if such violation is not corrected by the Owner within such 30 day period, to assess a fine of up to $ per day against such Owner, until such violation is cured by such Owner Declarant. The provisions contained in this Article, as well as all other architectural control provisions contained in the Development documents shall not apply to Declarant. This Section 5.16 may only be amended with the prior written consent of the Declarant Landscaping a Landscape Design. Merchant s Gate has been planned as a Tree Sanctuary with the respect of maintaining Mature Trees foremost in the design. Various hardwoods and dogwoods are plentiful in the community, and it is the ARB s intention to maintain this integrity. Landscape design should always complement and account for the architecture and location of the residence. When reviewing specific landscape plans, the ARB will consider the various relationships of house to site, house to house, views, prevailing breeze, solar orientation, and historical envelope. When reviewing specific landscape plans to ensure the overall beauty of Merchant s Gate is preserved and enhanced, the ARB has the authority to approve or disapprove landscape plans for individual residences. b Landscape Plan. Page 17

18 A Landscape Plan must be submitted and approved no later than prior to the start of the installation of the outside finish on the residence. The landscape plan must show all proposed site structures and features including drives and turnarounds, walks, patios, decks, fences, pools, spas, mailboxes, utility boxes, trees to be removed and other site features. Utility, trash, air conditioning screens and other visual screens should also be noted. Existing vegetation to remain should be specifically located and labeled. The location, type and quality ofall proposed planting must be accurately described in the plan. A complete plant list is required indicating the size, quality and spacing of the proposed plantings. Areas to be mulched or planted as lawn should also be shown. Mulching is required for all planted areas. The mulched areas provide a smooth transition to the existing natural vegetation. Irrigation systems, although not required, are strongly encouraged. d Landscaping. Landscaping shall be installed within thirty 30 days of substantial completion of the residence on the Lot including sod, mulch, and base plantings as necessary. If the Lot or Unit Owner defaults, then the ARB may cause the work to be performed and shall be paid a reasonable charge for such services by the Owner of the Lot and/or Unit immediately upon the request therefore. If the Owner fails to pay said charge, then said charge shall become a lien and a special assessment and the Owner shall be responsible for paying the same and any costs and attorneys fees for collection thereof or associated therewith. All landscaping shown on the plan must be completed prior to the occupancy of the home on the Lot, unless approved by the ARB. Any deviations in landscaping as installed from that shown on the plan are not allowed, unless approved by the ARB Tree Sanctuary. Merchant s Gate is a Tree Sanctuary and, except for very limited exceptions, the cutting of any tree is subject to approval by the ARE. Please see Section 6.52 below for requirements and restrictions relating to tree removal Drainage. a At the time the Owner submits Owner s final plans to the ARE for approval, such Owner shall also submit a drainage plan to the ARB for approval. Such drainage plan should be consistent with the Master Paving and Drainage Plan prepared by F&S Engineers, Inc, and the Site Grading Plan prepared by F&S Engineers, Inc, which plans have been submitted by Developer to the Pendleton Planning Commission. All construction and grading shall be accomplished consistent with the drainage plan approved by the ARB. b In order to achieve proper drainage, each Owner shall be responsible to grade, elevate and fill his Lot in accordance with and as required by these restrictions and the Site Grading Plan. Each Owner shall also be responsible to maintain the elevation of his Lot so that Page 18

19 water shall drain over and through his Lot in accordance with said Site Grading Plan, or as otherwise approved in writing by the ARB. c In no event shall the ARB, any mnember thereof, or the Declarant have any liability to any Owner for any alleged negligence or other breach of duty in approving or disapproving any drainage plan, and each Owner hereby agrees to.hold the ARB, its members and the Declarant harmless against any liability therefor Architectural, Landscape, and Construction Guidelines. a Declarant may prepare Architectural, Landscape, and Construction Guidelines "Architectural Guidelines" applicable to Lots which may contain general provisions applicable to all Lots as well as specific provisions which vary among the Lots according to location, use, or other factors. The Architectural Guidelines may contain, without limitation, square footage requirements, lot setbacks, height restrictions, construction material restrictions and requirements, landscaping requirements or other requirements andlor restrictions on construction, modification or maintenance of improvements in the Community. The Architectural Guidelines are intended to provide guidance to Owners regarding matters of particular concern to the Architectural Review Board in considering applications hereunder. The Architectural Guidelines are not the exclusive basis for the Architectural Review Board s decisions, and compliance with the Architectural Guidelines does not guarantee approval of any application. b Declarant shall have sole and full authority to amend the Architectural Guidelines during the Declarant Control Period, notwithstanding a delegation of reviewing authority, unless Declarant also delegates the power to amend. Upon termination or delegation of Declarant s right to amend, the Architectural Review Board shall have the authority to amend the Architectural Guidelines with the Board s consent. Any amendments to the Architectural Guidelines shall be prospective only and shall not apply to require modifications to or removal of structures previously approved once the approved construction or modification has commenced. There shall be no limitation on the scope of amendments to the Architectural Guidelines, and such amendments may remove requirements previously imposed or otherwise make the Architectural Guidelines less restrictive. c The Association shall maintain a copy of the Architectural Guidelines, as they may exist from time to time, and shall make them available to Members or Owners for inspection and copying upon reasonable notice during the Association s business hours. In Declarant s discretion, such Architectural Guidelines may be recorded, in which event the recorded version, as it may be amnended, shall control in the event of any dispute as to which version of the Architectural Guidelines was in effect at any particular time The Architectural Review Board may by resolution exempt certain activities from the application and approval requirements ofthis Article, provided such activities are undertaken in strict compliance with the requirements of such resolution Approved Builders. Only builders who are on Declarant s list of approved builders may build houses or perform construction services within the Development. For all Page 19

20 purposes hereunder, a builder may be disapproved by the Declarant for inclusion on its list of approved builders if a Declarant determines, in its sole discretion, that the builder has failed to comply with this Declaration in the past, or similar governing documents in other developments, or b in the opinion of the Declarant, in its sole discretion, the builder does not have substantial experience building extremely high quality houses in Anderson and/or Pickens Counties; c if the Declarant believes, in Declarant s sole discretion, that the builder has failed to maintain a good reputation for the quality of its work, or that the builder has failed to meet its obligations to its customers, including its warranty obligations; or d Declarant is not satisfied, in its sole discretion, with the quality of construction of any residence or other improvement constructed by the builder within the Development or any other development; or e if Declarant believes, in Declarant s sole discretion, that the Builder does not have sufficient experience or financial net worth to provide reasonable assurance that it will meet its obligations to the Owner and/or to the community, or 0 if for any other reason Declarant believes, in its sole discretion, that it would not be in the best interest of the Development to add such builder to Declarant s list of approved builders. Declarant may limit the number of builders Declarant includes on its list of approved builders, in Declarant s sole discretion Completion of Improvements. Unless otherwise approved by the ARB in writing, no residence constructed on any Lot shall be occupied until such residence, together all other improvements to be constructed pursuant to Owner s final plans as approved by the ARB, has been completed in accordance with such final plans. - ARTICLE VI GENERAL COVENANTS AND RESTRICTIONS Application. The covenants and restrictions contained in this Article VI shall pertain and apply to all Lots and to all Structures erected or placed thereon Maintenance. Each Owner shall keep and maintain each Lot, the exterior of the dwelling and all Structures owned by him, as well as all landscaping located thereon, in good condition and repair, including, but not limited to i the repairing and painting or other appropriate external care of and otherwise caring for the dwelling and all other Structures; ii the seeding, fertilizing, weeding and watering of all lawns and the mowing, edging, clipping, sweeping, pruning, raking and otherwise caring for all lawns; iii the pruning and trimming of all trees, hedges and shrubbery so that the same are not obstructive of a view by motorists or pedestrians of street traffic; and iv the maintenance, repair and painting of all fences on the Lot. If in the opinion of the ARB, any Owner shall fail to perform the duties imposed by this Section, the ARB shall notify the Association. If the Board shall agree with the determnihation ofthe ARB with respect to the failure of said Owner to perform the duties imposed by this Section, or if the Board shall make an independent determination thereof, then the Board shall give written notice to the Owner to remedy the condition in question, setting forth in reasonable detail the nature of the condition and the specific action or actions needed to be taken to remedy such condition. If the Owner shall fail to take reasonable steps to remedy the condition within thirty 30 days after the mailing of said written notice by certified mail, then the Association shall have the Right to Abatement as provided in Section 8.02 hereof Page 20

21 6.03. Restriction of Use. Subject to the exceptions in this Section 6.03, Lots may be used for single-family residential use only and for no other purpose, provided that Declarant may operate a Sales Office and/or Model Home and construction trailer on a Lot or Lots designated by the Declarant. No Lot may be used for any business, trade, garage sale, moving sale, rummage sale, or similar activity, except that an Owner or occupant residing in a Lot may conduct business activities within the Lot so long as: i the existence or operation ofthe business activity is not apparent or detectable by sight, sound, or smell from outside the Lot; ii the business activity conforms to all zoning requirements for Merchant s Gate; iii the business activity does not involve door-to-door solicitation of residents of Merchant s Gate; iv the business activity does not, in the Board s judgment, generate a level of vehicular or pedestrian traffic or a number of vehicles being parked within Merchant s Gate which is noticeably greater than that which is typical of Units in which no business activity is being conducted; and v the business activity is consistent with the residential character of the community anddoes not constitute a nuisance, or a hazardous or offensive use, or threaten the security or safety of other residents within Merchant s Gate, as may be determined in the sole discretion of the Board. The terms "business" and "trade" shall be construed to have their generally accepted meanings and shall include, without limitation, any occupation, work, or activity undertaken on an ongoing basis which involves the provision of goods or services to persons other than the provider s family and for which the provider receives a fee, compensation, or other form of consideration, regardless of whether: i such activity is engaged in full or part-time, ii such activity is intended to or does generate a profit, or iii a license is required. Leasing ofan Owner s Lot shall not be considered a business or trade within the meaning of this subsection. This subsection shall not apply to any activity conducted by Declarant or a Person authorized by Declarant with respect to its development, sale or re-sale ofreal property situate in Anderson County, South Carolina, or Declarant s use of any Lots which Declarant owns within Merchant s Gate Resubdivision of Property. No Lot may be split, divided, or subdivided for sale, resale, gift, transfer, or otherwise, or its boundary lines changed, without the prior written approval of the Board of plans and specifications for such split, division or subdivision; except, however, Declarant shall have the right without the consent of the Board to subdivide or resubdivide Lots, or to revise the boundary lines between Lots Erosion Control. No activity which may create erosion or siltation problems shall be undertaken on any Lot without the prior written approval ofthe ARB of plans and specifications for the prevention and control of such erosion or siltation. The ARB may, as a condition or approval of such plans and specifications, require the use of certain means of preventing and controlling such erosion or siltation. During any clearing, grading and construction activities on a Lot, all run-off, erosion, and sediment beyond that which occurs in the natural, undisturbed condition of the Lot must be contained within the setback ofthe Lot. In addition, individual trees or groups of trees on the Lot which are designated for preservation must also be protected from run-off, erosion or sediment damage Landscaping. No construction or alteration of any Structure shall take place without the prior written approval by the ARB of plans and specifications for the landscaping to accompany such construction or alteration. Page 21

22 6.07. Signs. a No signs whatsoever including but not limited to commercial and similar signs shall, without the ARE s prior written approval of plans and specifications therefor, be installed, altered or maintained on any Lot, or on any portion of a Structure visible from the exterior thereof except: i such signs as may be required by legal proceedings; ii not more than one "For Sale"sign, such sign having a maximum face area oftwo square feet; provided, however, that if, at the time of any desired use of such sign, the Association is making "For Sale" signs available for the use of Owner, the signs made available by the Association must be used; iii directional signs for vehicular or pedestrian safety in accordance with plans and specifications approved by the ARB; and iv such signs that the Declarant may deem necessary to advertise the Development and to promote the sale of Lots and homes in Merchant s Gate. b In no event during approved construction of any Structure shall more than one job identification sign containing not more than five square feet be approved by the ARB Fences. No fence or wall of any kind shall be erected, maintained, or altered on any Lot without the prior written approval of the ARB of plans and specifications for such fence or and wall. Fences or walls erected at the rear yards shall not be higher than six 6 feet Roads and Driveway. No road or driveway shall be constructed or altered on any Lot without the prior written approval of the ARB of plans and specifications for such road or driveway Antennae. No radio, television, C.B., ham or other antennas, or other receiving device, outside lines, above ground improvements or hanging devices, shall be placed, constructed, maintained or installed on any Lot and/or Unit or upon the improvements of any Lot and/or Unit without the prior written consent of the ARB. However, one 1 satellite disc of not more than twenty-four 24" inches in diameter is permissible. Satellite dishes which measure twenty-four 24" inches or smaller in diameter mnust be submitted to the ARB for approval prior to installation; and must be installed by the Lot owner on the rear of its residence Front Yard Areas. The front yard areas shall be kept neat and clean. All equipment, garbage cans, and woodpiles shall be kept in the garage or screened by adequate planting or approved fencing so as to conceal them from view by neighboring residences and streets. No clothes-lines shall be permitted Recreational Commercial Vehicles and Trailers. No school bus, truck or commercial vehicle over one 1 ton capacity, house trailer, mobile home, motor home, recreational vehicle, camper, truck with camnper top, habitable motor vehicle of any kind, boat or boat trailer, trailers of any kind, or like equipment shall be permitted on any Lot provided, Page 22

23 however, any such vehicle, boat or trailer will be permitted if stored within the garage with the garage door closed; further provided, nothing herein contained shall be deemed to prohibit an Owner from parking a recreational vehicle temporarily on a Lot so long as may be reasonably required to permit transferring personal belongings between a residence and the recreational vehicle. Any trash, firewood, wood scraps, building materials contained in any vehicle or trailer shall be covered from view. The provisions of this Section shall not apply to Declarant while constructing a Structure on any Lot Recreational Equipment. Recreational and playground equipment shall not be placed or installed in the front or side yard area and may only be placed in the rear of a Lot as approved by the ARB Animals. No animals, including, livestock, poultry, insects, and reptiles, shall be permitted or kept upon any Lot except household pets, such as dogs, cats or birds, which may be kept subject to the following restrictions. a Such pet must be housed in the dwelling and shall not be permitted outside of the dwelling except when the homeowner is present in the home. b No animal shall be permitted to become a nuisance to others. c No more than three 3 animals shall be kept on any Lot at any time. d No animal shall be permitted outside of any dwelling unless securely restrained upon the Owner s property so as to prevent encroachment upon adjoining properties. 1 No structure for the care, housing or confinement of any animal shall be constructed, placed or maintained on any Lot. g No dangerous dog or other dangerous animal may be kept or maintained within the Development, including, but not limited to, Rottweilers or Doberman Pinschers, any and all "pit bulldog" breeds, including, but not limited to, Staffordshire Bull Terriers, Bull Terriers, Pit Terriers, and American Pit Bull Terriers and Rottweiler "Pure" Bred canines and all varieties of Chow "Pure" Bred canines. The Board shall have the right to designate additional animal species which are proscribed in its discretion. In order to preserve the aesthetic qualities of the Development, to maintain sanitary conditions on the Development, to prevent the spread of worms and infectious diseases on the Development, to maintain a proper respect for other Owners and users of the Development, and to maximize the overall use and enjoyment ofthe Development, each person who keeps a pet within a Unit shall abide by rules and regulations established by the Declarant or the Association from time to time. The breach of any ofthese rules and regulations shall be a noxious and offensive activity constituting a nuisance Solid Waste. a No person shall dump or burn rubbish, garbage, or any other form of solid waste on any Lot or on Common Property except Declarant during development and construction of the Development. Page 23

24 b Except for building materials employed during the course of construction of any Structure approved by the ARB, no lumber, metals, bulk materials or solid waste ofany kind shall be kept, stored, or allowed to accumulate on any Lot unless screened or otherwise handled in a maimer approved by the ARB. c If rubbish, garbage, or any other form of solid waste is to be disposed of by being collected on a regular and recurring basis, containers may be placed in the open on.any day that a pickup is to be made, in order to provide access to persons making such pick-up. At all other times such containers shall be screened or enclosed Nuisances. No noxious or offensive activity shall be carried on upon any Lot, nor shall anything be done thereon which may be or may become an annoyance or nuisance to this community Exteriors. The ARB shall approve and coordinate exterior materials on the dwellings as they are built. Unless approved by the ARB, such exterior materials and colors shall thereafter be maintained and shall not be changed Air Conditioning Units. No window air conditioning units shall be placed in any dwelling Solar Panel Units. No solar panel units shall be placed, allowed or maintained upon any portion of a Structure or lot without the written consent of the ARB Access through Subdivision Streets Only. No Lot may be accessed except by way of Old Compton Street.! Without limiting the foregoing, no Lot may be accessed by way of Micasa Drive, Robert Drive, or through any other property adjoining the Development New Construction Only. No residence may be moved from outside the development onto any Lot in the Development without the approval of the ARE. Only structures which may be deemed historical in nature will be considered by the ARE for inclusion in Merchant s Gate. All residences or other structures constructed in the Development must be of new, stick built construction Construction Completion. The Owner of each Lot must obtain ARE approval of Owners plans and commence construction of a residence on said Lot within 18 months of the Owner s purchase of the Lot from Declarant. The Owner must complete construction thereof within 18 months after commencement of construction. This subparagraph shall not apply to the first owner of Lot 6, which shall not be required to build on said Lot in any prescribed timetable. The Owner of Lot 20 must comnmence construction thereof within 24 months after said Owner s purchase of its Lot. However, if the initial owners of Lot 6 and/or Lot 20 should convey same to another party, such grantee shall meet the requirements ofthis subparagraph, with the 18 month commencement period to begin to run on the date of the conveyance by the original owner of said Lots 6 and/or 20, as the case mnay be Single Family Dwelling. No building shall be erected, constructed, reconstructed, altered, placed or permitted to remain on any Lot other than one single family dwelling excepting as hereinafter provided, a private garage for not more than three 3 cars, outbuildings and other Page 24

25 accessories incidental to residential use of said Lots, such as swimming pools, bathhouses and/or gazebos. Each of the aforementioned structures must be approved by the ARE. Detached servants quarters or any other detached structure may be constructed only with the prior written approval of the ARB. Additional living quarters maybe constructed over a garage, provided that same is used only as short-term guest quarters or for residence by a family member, and is not leased or rented Grade of Lots. No Lot may be filled to a level higher than twenty-four 24" inches above the curb of the street fronting such Lot. All infill shall be at the discretion of the Architectural Review Board to ensure the continuity of the streetscape Temporary Structures. No building or structure of a temporary character, such as a shed, shack, barn, tent, trailer, mobile, modular or prefabricated home, or any other structure or building shall be placed or maintained on any Lot in the Subdivision either temporarily or permanently. No dwelling on any Lot in the Subdivision shall be occupied while in the course of construction nor until made to comply with all conditions set forth herein and all applicable statutes, laws, codes, regulations and ordinances Parking. No vehicle of any kind shall be parked on any portion of any Lot except on the paved driveway thereof Each Lot shall have paved parking for a minimum oftwo 2 additional vehicles outside the garage. Visitors may park on the street for a short period oftime while visiting one ofthe Lots in the Development, if there is insufficient room for such visitor in the driveway parking on the Lot, but there shall be no parking on the street by any Owner or other person who resides at the Lot. No driveway shall be used for storage of boats, trailers, campers, unused or inoperable automobiles or any other items. The utilization of any portion of any Lot and/or Unit forperforming repair work on any vehicle is expressly prohibited. No trucks, trailers, automobiles or other commercial vehicles bearing advertisements shall be parked on the street except when making a delivery Address Numbers. Address Numbers will be displayed on the mailboxes. An additional address may be placed on the front of the house. All address number designs and locations shall be in accordance with the Architectural Guidelines and approved by the ARB Flagpoles. Flagpoles and flags to be displayed shall be in accordance with the Architectural Guidelines and approved by the ARB Basketball Goals, Sports or Recreational Equipment. Basketball goals, sports or recreational equipment are permitted, but must be located on the driveway behind the front facade of the home or in an area otherwise approved by the ARB Windows. No foil or other reflective material shall be used on any windows for sunscreens, blinds, shades or other purposes, nor shall window mounted heating or air conditioning units be permitted Wall Mounted Hetjng Air Conditioning Units. No wall mounted heating/air conditioning units are permitted on any residence/improvements within the subdivision. Page 25

26 6.31 Removal of Dirt. Excepting for the purposes of actual construction upon any Lot, no sand, gravel or soil shall be dug or removed from any Lot in the Subdivision; provided, however, that the Declarant, its successors, assigns or legal representatives, in carrying out the improvement and development of the Property, shall have the right to remove or add to any soil on any Lot in the Subdivision, and shall have the right of ingress and egress upon all Lots for the purpose of grading and excavating thereon, or constructing and completing the street improvements, installing the public utilities, and to do any and all other things necessary to complete the Development Plan. Unless suitable retaining walls are constructed to support the earth, the natural angle of response of the ground shall not be altered by excavation within five 5 feet of any boundary line of any Lot in the Subdivision by other than a slope of one and onehalf horizontal to one foot vertical; provided, however, that nothing in this Paragraph shall be construed to prevent any such alteration in any manner, with or without retaining walls, by the Declarant, its successors, assigns or legal representatives, in carrying out the development and improvement of the Property Sightlines. No fence, wall, hedge or shrub planting which obstructs sightlines at elevations between two 2 and six 6 feet above the roadways shall be placed or permitted to remain on any corner Lot within the triangular area formed by the street property lines and a line connecting them at points fifteen 15 feet from the intersection of the street lines, or in the case of a rounded property corner from the intersection of the street property lines etended. The same sightline limitations shall apply on any Lot within ten 10 feet from the Intersection of a street property line with the edge of a driveway or alley pavement. No tree shall be permitted to remain within such distance of such intersections unless the foliage line is maintained at sufficient height to prevent obstruction of such sightlines Garbage and Refuse Disposal. All Lots and/or Units shall at all times be kept in a healthful, sanitary and attractive condition. No Lot shall be used or maintained as a dumping ground for garbage, trash, junk, debris, grass cutting and lawn debris, or other waste matter. All garbage, trash, junk, debris, grass cutting and lawn debris or other waste matter shall be kept in adequate containers constructed of metal, plastic or masonry materials, with tightly-fitting lids, which shall be maintained in a clean and sanitary condition and screened from public view. No Lot or Unit shall be used for open storage ofany materials whatsoever, except that new building materials used in the construction of Improvements erected on any Lot may be placed upon such Lot at the time construction is commenced and may be maintained thereon for a reasonable time, so long as the construction progresses without unreasonable delay, until completion of the Improvements, after which these materials shall either immediately be removed from the Lot and/or Unit, or stored in a suitable enclosure on the Lot and/or Unit. No garbage, trash, junk, debris, grass cutting and lawn debris or other waste matter of any kind shall be burned on any Lot Protection of Trees and Vegçjion. a Prior to disturbing any trees or vegetation, an Owner must submit to the ARB for approval a cutting and clearing plan designating any trees or vegetation outside the Building Envelope which is to be cut or removed. The "Building Envelope" is defined as the area on a Lot fifteen 15 feet or more outside the Page 26

27 exterior foundation line ofthe principal structure including attached garages, stoops, porches, or cormected decks. b Equipment used for the removal of fallen trees shall be operated in a manner to avoid damage to vegetation outside the designated clearing area. Ropes or cables shall not be fastened to any tree outside the clearing area except to support or stabilize the tree. All such supports shall be of a type to eliminate the possibility of damage to the tree. c Outside the Building Envelope. All trees, shrubs, and ground cover outside the Building Envelope are considered to be "protected" vegetation in that cutting and clearing generally is not permitted outside the Building Envelope without ARB approval. The practical exceptions to this rule are that dead or diseased trees limbs may be removed, poisonous plants may be removed, underbrush may be selectively cleared, understory may be thinned to provide better views, individual trees may be limbed up, and approved grass or ground covers may be planted. d Mature trees outside the Building Envelope may not be cut down or otherwise removed without the specific written approval of the ARB. "Mature Trees" for the purposes of these Guidelines shall mean the following: Tree Type Evergreen Deciduous Dogwoods or other Flowering trees Diameter 6" or greater 6" or greater 1.5" or greater e Prqjig Trees. No Mature Tree may be pruned without the approval of the ARB, except that minor pruning of lower branches having a diameter of less than 4" shall be allowed without ARB approval. t Fines for Unauthorized Cutting. In the event of a breach or violation of this provision, Declarant may levy a fine upon the Owner in the amount of One Thousand and No/100 s $1, dollars per tree, or in such other amount as may be set from time to time by the Board Swimming Pools. a Swimming pools, patios and decks shall be located on the rear portion of the Lot. b Swimming pools, patios and decks shall be constructed in the ground and shall be at normal ground level. No above-ground pools shall be allowed. Page 27

28 c A fence of a design approved by the ARB, and in compliance with Anderson County regulations, shall completely enclose any swimming pool Combining Lots. Nothing in these restrictions shall prohibit an Owner of any two 2 adjoining Lots from erecting a residence on the two 2 Lots, which shall be considered, for the purpose of these restrictions, more particularly for assessments, as two 2 Lots, even if said Lots are re-subdivided into one I larger Lot. Any such combination of Lots shall require the written consent of the ARB, which shall, before consenting, confirm that such combination will not interfere with any existing or planned utilities along the sideline between the two lots to be combined. If such consent is granted by the ARB, then the utilities easement reserved herein along the line between the two lots to be combined shall cease and terminate Construction Rules a Applicability. These Rules shall apply to all Lot Owners and builders at Merchant s Gate, and any reference herein to an Owner shall also apply to the Owner s builder and subcontractors. b Rubbish and Debris. In order to maintain a neat and orderly appearance at all times throughout Merchant s Gate, the following rubbish and debris rules must be strictly followed: 1 Domestic Refuse. At least one 1 lidded trash container must be located at all times inside each residence under construction. All domestic refuse such as food scraps and packaging, cups, plates, napkins, and similar items which at any time exists in the residence or on the lot must be placed in the trash container. The trash container shall be emptied regularly and its contents properly disposed of off the Lot and outside Merchant s Gate. 2 Interior Construction Debris. All parties are strongly encouraged to frequently clean up and remove rubbish and construction debris located within the walls of a residence. 3 Exterior Construction Debris. With regard to all construction debris located on a lot outside the walls ofa residence, the following rules apply: a. By the end of each day on which work occurs on the Lot, all lightweight, easily blown construction debris such as roofing paper, insulation bags, foam sheathing, polyethylene, etc, must be placed in a steel dumpster unit provided by a trans disposal company and located on the Lot; b. By the end of the day on each Friday, all construction debris such as wood scraps, shingles, brick bands, drywall, bricks and masonry blocks must be gathered and placed in a steel dumpster; c. All steel dumpsters must be emptied and the debris hauled away on an as-needed basis and before it is filled to overflowing. Page 28

29 4 Materials Storage. Non-construction materials, equipment or debris of any kind may be stored on any street, curb, sidewalk or area between streets and sidewalks, on any adjacent Lots or otherwise than in the locations approved of by the ARB. 5 Construction Access. During the time a residence or other Improvements are being built, all construction access shall be confined to the approved driveway for the Lot unless the ARB approves an alternative access way. 6 Cleaningpf Equipment. Concrete suppliers, painting subcontractors and all others may clean their equipment only inside the Building Envelope. 7 Common Areas. No builder or contractor personnel are allowed in the Common Areas and no construction access will be allowed across the Common Areas. 8 Roadway and Homesite Construction Entrance. At the start of any earthdisturbing operation, a stone construction entrance shall be installed on the building site the "construction entrance". The Construction Entrance shall be installed in the same location as the proposed driveway so as to minimize the amount of disturbed area and extend a minimum of 50 feet. 9 Silt Control Devices. A diversion ditch, rock check dam, and/or silt fencing shall be constructed as necessary and appropriate and maintained on the building site collectively "Silt Control Devices". The Silt Control Devices shall be located at the boundary of the estimated disturbed areas and shall be constructed, preserved and replaced as necessary Rules and Regulations. All Owners, contractors, lessees and others visiting the development shall abide this Declaration and such other rules as the ARB and/or the Board may establish from time to time Miscellaneous. The following additional covenants and restrictions shall be applicable to all Lots within Merchant s Gate: ano changing oil of any vehicle or equipment b No carrying and/or discharging any type of firearms, except by law enforcement officials and security personnel authorized in writing by the Declarant or the Association c No careless disposition of cigarettes and other flammable material. d Garage Doors. Garage Doors are to remain closed unless in use for lawn maintenance or outdoor activities. e Trash Receptacles. Trash receptacles are not to be left on the curbside before 8pm the evening before trash pickup and must be removed from the curbside by 6pm the following day. Page 29

30 I Newspapers and Mail. In the event Owner is to be absent from Owner s residence, Owner must make arrangements for mail to be collected or held by the post office, and for newspapers, etc. to be collected or held by the newspaper carrier. More than two days of accumulation of newspapers and/or mail is prohibited. g Hclidav Decorations. Holiday decorations of any sort must be removed within 30 days of the date of the referenced holiday. f Animal Waste. All Owners must be responsible for the disposal of all waste created by their animals while in their own yard or in the community on a leash. This waste must be "scooped" or disposed of in an appropriate maimer to a waste container or other appropriate locations consistent rules to be established by the Board. Breach of this provision may result in a fine levied by the Board in an amount to be determined by it, but no more than $100 per violation. g Porch Furniture. Only furniture deemed by the ARB to be porch or outdoor furniture shall be allowed on the porches. No fully upholstered furniture is to be placed on the porches. Wicker, rattan, or teak furniture is recommended. No plastic furniture is to be allowed Easements. ARTICLE VII EASEMENTS, ZONING AND OTHER RESTRICTIONS a Declarant hereby expressly reserves to the Declarant, its successors and assigns forever, allocable and divisible easements for the following purposes: i The erection, installation, construction and maintenance of wires, lines, conduits and poles, underground utilities and the necessary or proper attachments in connection with the transmission of electricity, telephone, cable television and other utilities and similar facilities; ii the erection, installation, construction and maintenance of storm-water drains, land drains, public and private sewers, irrigation systems, pipelines for supplying gas, water and heat, and for any other public or quasi-public facility, service orfunction; iii slope control purposes, including the right to grade and plant slopes and to prevent the doing of any activity which might interfere with slopes or which might create erosion or sliding problems or which might change, obstruct or retard drainage flow; iv drainage; b Such easements shall run over the area within eight 8 feet of the side, rear and front lot lines of each Lot. Page 30

31 c The easements created in this Article VII are in addition to any easements or rights created elsewhere in this Declaration or in other easements of record. d the easements created in this Article VII shall also benefit Lot Entry. The Declarant and its employees, agents, successors and assigns, shall have the right at all reasonable times to enter upon all parts ofeach Easement Area for any of the purposes for which such Easement Area is reserved without being deemed to have committed a trespass or wrongful act solely by reason of such entry and the carrying out of such purposes. [he Declarant and its employees, agents, successors and assigns shall be responsible for leaving each Lot in good condition and repair following any work or activity undertaken by the same in an Easement Area pursuant to the provisions of Section 7.01 and Zoning and Private Restrictions. None of the covenants, restrictions or easements created or imposed by this Declaration shall be construed as permitting any action prohibited by applicable zoning laws, or by the laws, rules or regulations of any governmental body. In the event of any conflict between such laws, rules or regulations and the covenants, restrictions and easements created or imposed by this Declaration, the most restrictive provision shall govern and control. ARTICLE VIII ENFORCEMENT 8.01 Right of Enforcement. This Declaration and the Restrictions contained herein shall inure to the benefit of and shall be enforceable by i the Declarant so long as it is an Owner, ii the Association, iii each Owner, his legal representatives, heirs, successors and assigns. a Every Owner and occupant of a Unit shall comply with the Governing Documents. The Board may impose sanctions for violating the Governing Documents after notice and an opportunity for a hearing in accordance with the procedures set forth in Section 3.23 of the By-Laws. Such sanctions may include, without limitation: i imposing reasonable monetary fines which shall constitute a lien upon the violator s Unit. In the event that any occupant, guest, or invitee of an Owner violates the Governing Documents and a fine is imposed, the fine shall first be assessed against the violator; however, if the violator does not pay the fine within the time period the Board sets, the Owner shall pay the fine upon notice from the Board; ii suspending an Owner s right to vote; iii suspending any services the Association provides to. an Owner or the Owner s Unit if the Owner is more than 30 days delinquent in paying any assessment or other charge owed to the Association; iv exercising self-help or taking action to abate any violation of the Governing Documents in a non-emergency situation; Page 31

32 v requiring an Owner, at its own expense, to remove any structure or improvement on such Owner s Unit that violates Article V and to restore the Unit to its previous condition and, upon the Owner s failure to do so, the Board or its designee shall have the right to enter the property, remove the violation, restore the property to substantially the same condition as previously existed, and levy a Specific Assessment against the Owner s Unit in accordance with Section 4.06 for the cost of same, including a reasonable administrative fee. Any such action shall not be deemed a trespass; vi without liability to any Person, precluding any contractor, subcontractor, agent, employee, or other invitee of an Owner who fails to comply with the terms and provisions of Article V and the Architectural Guidelines, or any other provision ofthis Declaration or the other Governing Documents, from continuing or performing any further activities in the Community; and viii levying a Specific Assessment against an Owner in the manner provided in Section 4.06 to collect any costs the Association incurs in curing any violation, plus a reasonable administrative fee, or to collect any line that remains unpaid for a period of 10 days or more. In addition, the Board may take the following enforcement procedures to ensure compliance with the Governing Documents without the necessity of complying with the procedures set forth in Section 3.23 of the By-Laws: exercising self-help in any emergency situation speeifically including, but not limited to, the towing ofvehicles that are in violation of parking rules and regulations; and bringing suit at law or in equity to enjoin any violation or to recover monetary damages or both. ix requiring any Owner to reimburse the Association for any costs incurred by the Association in enforcing this Declaration or the other Governing Documents, or in responding to any litigation or claim instituted by such Owner, including any attorneys fees, expenses oflitigation or costs incurredby the Declarant or the Association for such enforcement, and/or levying a Special Assessment against such Owner for same; In no event shall Declarant be subject to any fine or other sanction under this Section. In addition to any other enforcement rights, if an Owner fails to perform his or her maintenance responsibility properly, the Association may perform such maintenance responsibilities and assess all costs the Association incurs against the Unit and the Owner as a Specific Assessment pursuant to Section Except in an emergency situation, the Association shall provide the Owner reasonable notice and an opportunity to cure the problem prior to taking such enforcement action. All remedies set forth in the Governing Documents shall be cumulative of any remedies available at law or in equity. In any action to enforce the Governing Documents, if the Association prevails, it shall be entitled to recover all costs, including, without limitation, attorneys fees and court costs, reasonably incurred in such action. Page 32

33 b The decision to pursue enforcement action in any particular case shall be left to the Board s discretion, except that the Board shall not be arbitrary or capricious in taking enforcement action. Without limiting the generality of the foregoing sentence, the Board may determine that, under the circumstances of a particular case: i the Association s position is not strong enough to justify taking any or further action; ii the covenant, restriction, or rule being enforced is inconsistent with applicable law; iii although a technical violation may exist or may have occurred, it is not of such a material nature as to be objectionable to a reasonable person or to justify expending the Association s resources; or iv that it is not in the Association s best interests, based upon hardship, expense, or other reasonable criteria, to pursue enforcement action. Such a decision shall not be construed a waiver of the Association s right to enforce such provision at a later time or under other circumstances, or preclude the Association from enforcing any other covenant, restriction, or rule Right of Abatement a Except where different notice provisions are provided in Sections 5.15 and 6.02, in the event of a violation pr breach of any Restriction contained in this Declaration the Association shall give written notice by certified mail to the Owner setting forth in reasonable detail the nature of such violation or breach and specific action or actions needed to be taken to remedy such violation or breach. If the Owner shall fail to take reasonable steps to remedy such violations or breach within thirty 30 days after the mailing of such written notice, then the Association shall have the Right of Abatement. If any assessment, interest, cost or charge required by this Declaration is not paid within sixty 60 days after such assessment is due or such charge is imposed, the Association shall have the right to notify any or all mortgagees who have a security interest in the Owner s Lot or Lots that such Owner is in default In the performance of his obligations under these Restrictions, and ofthose actions taken or proposed to be taken by the Association as a result of the default. b The Right of Abatement, as used in this Section and Sections 5.15 and 6.02 hereof, means the right of the Association, through its agents and employees, to enter at all reasonable times upon any Lot or Structure, as to which a violation, breach or other condition to be remedied exists, and to take the actions specified in the notice to the Owner to abate, extinguish, remove, or repair such violation, breach or other conditions which may exist thereon contrary to the provisions hereof, without being deemed to have committed a trespass or wrongful act solely by reason of such actions are carried out in accordance with the provisions of this Section, and with the cost thereof, including the costs of collection and reasonable attorneys fees, together with interest thereon at the lower of the highest rate permitted by law or 18% to be a binding personal obligation of such Owner enforceable in law, as well as a lien on such Owner s Lot enforceable pursuant to the provisions of Section 8.04 hereof Such lien shall be superior to any Page 33

34 an all charges, liens or encumbrances which may in any manner arise or be imposed upon the Lot after such entry whether arising from or imposed by judgment or decree or by any agreement, contract, mortgage, deed to secure debt, or other instrument, excepting only i such liens for taxes or other public charges as are by applicable law made superior, ii the liens created by Section 8.04 hereof and iii any first mortgage on the Lot Specific PerfonflancQ. Nothing contained in this Declaration shall be deemed to affect or limit the rights of the Declarant, the Association or any Owner to enforce the Restrictions by appropriate judicial proceedings or to recover damages. However, it is hereby declared that it may be impossible to measure accurately in money the damages which will accrue to a beneficiary hereof, its transferees, successors or assigns, by reason of a violation of, or failure to perform any of the obligations provided by, this Declaration; and therefore, any beneficiary hereof shall be entitled to relief by way of injunction or specific performance, as well as any other relief available at law or in equity, to enforce the provisions hereof Collection of Assessments and Enforcement of Lien. a If any assessment, interest, cost or other charge is not paid as required by this Declaration, the Association may bring either an action at law against the Owner personally obligated to pay the same, or an action to foreclose any lien created by this Declaration against the Lot or Lots subject to the lien, or both, for the purpose of collecting such assessment, cost or charge, plus any interest thereon and costs of collection, including reasonable attorneys fees No Waiver. The failure ofthe Declarant, the Association, or the Owner of any Loy, his or its respective legal representative, heirs, successors and assigns, to enforce any Restrictions herein contained shall in no event be considered a waiver of the right to do so thereafter, as to the same violation or breach or as to any violation or breach occurring prior or subsequent thereto Costs of Enforcement. In the event that the Association or any Owner brings suit to enforce the provisions of this Declaration, the prevailing party shall be entitled to recover, in addition to any other relief, the reasonable attorneys fees, expenses of litigation and costs incurred by said party in said action. Further, in the event that any Owner institutes any litigation against the Association, the Architectural Review Board, the members ofthe Architectural Review Board, or the Declarant, or any officer or member of any of said bodies, and such Owner does not substantially prevail, such Owner shall reimburse the Association, Architectural Review Board, officers or members thereof, and/or Declarant, as the case may be, for the reasonable attorneys fees, expenses of litigation and costs incurred by said party in said action. If any Owner is found to be liable for any amount under the provisions of this subparagraph, such amount shall be secured by a lien on all Lots owned by such Owner within the Development in the same manner as a lien for assessments hereunder. Page 34

35 9.01 Duration and Perpetuities. ARTICLE IX DURATION AND AMENDMENT a The provisions of this Declaration shall run with and bind the land fpr a period of twenty five 25 years from the date this Declaration is filed for record in the Office of the Clerk of Court for Anderson County, South Carolina after which time such provision shall automatically be extended, if permitted by law for successive periods often 10 years, unless an instrument, signed by at least sixty-six and one-third 66 1/3% percent of the then owners of record and the holders of first mortgagees on their lots has been recorded in the Office of the Clerk of Court, agreeing to terminate or change such provisions in whole or in part. Every purchaser or grantee of any interest in any portion of the Property, by acceptance of a deed or other conveyance thereof, thereby agrees that the provisions of these Covenants may be extended and renewed as provided in this Section. b If any of the covenants, conditions restrictions, easements 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 ofthe survivor of those descendants of Her Majesty Queen Elizabeth II, the Queen ofengland, which are living as of the date this Declaration is executed Amendment. So long as Declarant owns at least one 1 Lot held primarily for sale, this Declaration may be amended unilaterally at any time and from time to time by Declarant i if such amendment is necessary to bring any provision hereof into compliance with any applicable govermnental statute, rule or regulation or judicial determination which shall be in conflict there with, ii if such amendment is necessary to enable any reputable title insurance company to issue title insurance coverage with respect to the Lots subject to these Restriction, iii if such amendment is required by an institutional or governmental lender or purchaser of mortgage loans, including, for example, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, to enable such lender or purchaser to make or purchase mortgage loans on the Lots subject to these Restrictions, or iv if such amendment is necessary to enable any governmental agency, such as the Veterans Administration, or reputable private mortgage insurance company to insure mortgage loans on the Lots subject to these Restriction. This Declaration may also be amended by a two-thirds 2/3 s Vote of the Members. Written notice of such proposed amendments shall be given to all Owners at least twenty 20 days in advance. Approved amendments shall be recorded duly executed by a the requisite number of such Owners required to effect such amendment; or, b by the Assdciation, in which latter case, such amendment shall have attached to it a copy of the resolution of the Board attesting to the affirmative action of the requisite number of such Owners to effect such amendment, certified by the Secretary of the Association. ARTICLE X LEASES Application. In order to assure a community of congenial Owne?s and thus protect the value of Lots within the Development, the leasing ofa Lot, or any portion thereof, by any Page 35

36 Owner other than as provided herein for certain mortgagees and Declarant shall be prohibited, except in the following circumstances: a b c If the Owner of a Lot certifies in writing that because of business or personal requirements, he will be unable to occupy the residence on said Lot for a period of at least one 1 year and not more than two 2 years, and that said Owner intends to personally re-occupy said property as the Owner s principal residence within such two 2 year period, then the residence on said Lot may be leased for a period of not more than two 2 years, provided the other requirements of this Article are met. Any such lease shall be subject to all of the requirements of this Declaration. No such lease shall be made to any student at Clemson University or other educational facility; provided, that this paragraph shall not prevent any such student from living with his parents in such residence provided such parents are the lessees of such property and full time residents therein, and no person other than the immediate family of such lessees resides therein. d Only one lease of any Lot under this Article shall be allowed during any five 5 year period. e In no event shall the residence on any Lot be occupied under any Lease for a period of less than one 1 year, nor more than two 2 years. 0 For the purposes of this Article, the term "lease" shall include any similar arrangement whereby any person other than the Owner occupies the residence on any Lot and the Owner is not a full-time resident therein Required Lease Provisions. Any leases and lessee are subject to the provisions of the Declaration and Bylaws. The Owner must make available to the tenant a copy ofthis Declaration. Any lease of a Lot, or a portion thereof, shall be deemed to contain the provisions of this Article whether or not said provisions are expressly stated therein, and each Owner covenants and agrees that any lease of his Lot shall incorporate by reference the provisions of this Declaration, and further, that if such language is not expressly contained therein, then such language shall be incorporated into the lease by existence ofthis covenant on the Lot. Any lessee, by occupancy of a Lot, agrees to the applicability of this covenant and its incorporation as part of the lease along with the following provisions: a In order to enforce those provisions made for the benefit of the Association, the Association may bring an action against Lessee for recovery of damages or for injunctive relief, or may impose any other sanctions authorized by the Declaration and Bylaws, as they may be amended from time to time, or which may be available at law or equity, including but not limited to, all remedies available to a landlord upon breach or default of a lease agreement by a lessee. Failure by the Association to enforce any of its rights shall in no event be deemed a waiver of the sight to do so thereafter. Page 36

37 b Lessee shall comply strictly with all provisions ofthe Declaration, Bylaws, and with the administrative rules and regulations adopted pursuant thereto, as any of the foregoing may be lawfully amended from time to time. Lessee shall control the conduct of his or her family and guests in order to assure compliance with the foregoing and shall indemnify and hold Lessor and the Association harmless for any such person s failure to comply. Lessee acknowledges that the violation by Lessee or any occupant or person living with Lessee of any provisions of the Declaration, Bylaws, or rules and regulations adopted thereunder shall constitute a default under the lease. Lessee further acknowledges that the Association has the right to act on its own behalf, or where necessary on behalf of Lessor, as Lessor s attorney-in-fact, to seek any remedies which are available to a landlord upon breach or default of a lease agreement by Lessee. The provisions of this Article shall not apply to any institutional mortgagors of any Lot which come into possession of such Lot as or a result of a foreclosure sale or other judicial sale or as a result of any other proceeding in lieu of foreclosure. ARTICLE XI INSURANCE Insurance Policies. At all times during the term ofthis Declaration, the Association, its successors and assigns, shall be required to maintain public liability insurance in such amounts as shall be determined by the Board of Directors as appropriate for the type of activities which shall be allowed on the Common Property. Any such policies of insurance shall require that the certificate holders and insured be given thirty 30 days prior written notice of any cancellation of such policies Other Insurance. In addition to the coverage described hereinabove, the Association shall obtain such additional amounts and types of insurance as may be required from time to time, by either the Federal Home Loan Mortgage Corporation, Veterans, Administration or Federal Housing Administration, their successors and assigns, for similar type residential subdivision communities. ARTICLE XII ANNEXATION Property to be Annexed. At the option of Declarant, the Declarant may annex Lot 28 into the Development Manner of Annexation. The Declarant shall effect such annexation by recording a Plat of the real property to be annexed and by recording a Supplemental Declaration which shall: a b Describe the real property being annexed and designate the permissible uses thereof; Describe and define the boundaries of any lots created by the subdivision of Lot 28. Page 37

38 c d Set forth any new or modified restrictions, covenants, setbacks, and/or easements which may be applicable to such annexed property, the contents of same to be in the sole discretion of Declarant; and, Declare that such annexed property is held and shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the provisions of this Declaration, as same may be modified by Declarant with respect to Lot 28. Upon the recording of such Supplemental Declaration, the annexed area shall become a part of the Development, as fully as if such area were part of the Development on the date of recording of this Declaration. Upon such annexation, lots created by the subdivision oflot 28 shall be Lots for all purposes as set forth in this Declaration The Crescent. It is anticipated by Declarant that Lot 28 will be developed as townhomes within a separate planned unit development PUD to be known as "The Crescent," created within Lot 28. Except for the private portion of Old Compton Street, it is contemplated that the portions of Lot 28 which lie outside the lots created therein shall be common areas of The Crescent. The number, location and dimensions of lots within The Crescent shall be in the sole discretion of The Declarant, and the Declarant reserves the right to change the number, size or location of same from those shown on the Plat. The Crescent shall have a separate property owners association for the maintenance ofthe exterior portions of the townhomes within The Crescent, for the maintenance of the common areas ofthe Crescent, and for such other purposes as Declarant may deem appropriate. The Owners of Lots within The Crescent shall be members of both the Association and the Crescent Association, and shall be responsible for the payment of assessments to both of said associations, and shall have all of the rights and obligations of an Owner under both this Declaration and the declaration of The Crescent. Decla rant reserves nonexclusive easements for ingress, egress, access, regress and utilities over the streets of Merchant s Gate, as well as all of the Common Property thereof, to provide access and utilities to Lot 28. ARTICLE XIII STREETS Public and Private Portions of Old Compton Street. The portion of Old Compton Street which lies within Lot 28, as shown on the plat "Compton Street - Private Portion" shall at all times be a private street, and shall not be dedicated to public use. The portion of Old Compton Street which is The remainder of Old Compton Street shall be known as "Old Compton Street - Public Portion." Old Compton Street - Private Portion, and Old Compton Street - Public Portion, shall be known in the aggregate herein as "Old Compton Street". Notwithstanding the private nature of Old Compton Street - Private Portion, there is hereby granted and established by designation in favor of each and every Lot in the Subdivision, each and every present and future Owner of a Lot in the Subdivision, their heirs and assigns, a non exclusive perpetual easement for ingress, egress, access and regress over and across Old Compton Street, and, for ingress, egress, access and regress to and from the Lots. Said easement shall be exercisable by the Owner of such Lot or grantee and his agents, employees, contractors, licensees, invitees, and guests. Page 38