By-Laws

BYLAWS
OF
MORNINGSIDE MEADOWS HOMEOWNERS ASSOCIATION, INC.


ARTICLE I.

Plan of Association

1.1 Lot Ownership. The property located in Union County, State of North Carolina, and more particularly described in the Declaration of Covenants, Conditions and
Restrictions of Morningside Meadows (the "Declaration") recorded in the Office of the Register of Deeds for Union County, North Carolina and shall be known as Morningside Meadows Homeowners Association, Inc.(the "Association").
1.2 Application. All present and future owners, mortgagees, lessees and occupants of Lots and their employees, and any other persons who may use the facilities of the Property in any manner are subject to the Declaration, these Bylaws and rules and
regulations made pursuant hereto, and any amendment to these Bylaws or the Declaration upon the same being passed and recorded in the manner set forth in the respective Association Documents.
The acceptance of a deed of conveyance or the entering into of a lease or the act of occupancy of a Lot shall constitute an agreement that these Bylaws (and any rules and
regulations made pursuant hereto) and the provisions of the Declaration, as they may be amended from time to time, are accepted, ratified and will be complied with.

ARTICLE II.

Lot Owners

2.1 Name and Nature of Association. MORNINGSIDE MEADOWS
HOMEOWNERS ASSOCIATION, INC. (the "Association") shall be a nonprofit
corporation, organized under the laws of the State of North Carolina, and the membership
shall be comprised of all of the Lot Owners as herein provided, which Association shall be governed by the Executive Board (the "Board") as herein provided.
2.2 Place of Meetings. All meetings of the Association shall be held at the Property, or at such other place, within the State of North Carolina, as shall be designated
in a notice of the meeting.



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2.3 Annual Meeting. There shall be a regular annual meeting of the Lot Owners
held each year during the same month of each succeeding year, for the purpose of electing members of the Board and for the transaction of such other business as may be properly brought before the meeting.

2.4 Substitute Annual Meetings. If the annual meeting shall not be held in the month designated by the Bylaws, a substitute annual meeting may be called in accordance with the provisions of Section 2.5 of this Article. A meeting so called shall be designated and treated for all purposes as the annual meeting.
2.5 Special Meetings. Special meetings of the Lot Owners may be called at any time by the Board, the Chairman or upon the written request of twenty percent (20 %) of the Lot Owners.
2.6 Notice of Meetings. Written or printed notice stating the place, day and hour of any meeting shall be delivered or mailed not less than ten (10) days nor more than fifty
(50) days prior to the date thereof, either personally or by postage prepaid mail, at the
direction of the Board, the Chairman or Lot Owners calling the meeting, to each person
entitled to vote at such meeting, and, to all First Mortgagees so requesting under the provisions of Article XII of the Declaration, who may request a representative to attend the meeting of Lot Owners.
Notice given to any one tenant-in-common, tenant by the entirety or other joint owner of a Lot shall be deemed valid notice to all joint owners of such Lot.

The notice of any meeting must state the time and place of the meeting and the items
on the agenda, including the general nature of any proposed amendment to the Declaration
or these Bylaws, and budget changes, and any proposal to remove Board members or officers.

When a meeting is adjourned for less than thirty (30) days in any one adjournment,
it is not necessary to give any notice of the adjourned meeting, other than by announcement at the meeting at which the adjournment is effective.
2.7 Quorum. The presence in person or by proxy at any meeting of the Voting Members (as defined in Section 2.8 of this Article) having at least ten percent (1F0%) of the total votes shall constitute a quorum. If there is no quorum at the opening of the
meeting of Lot Owners, such meeting may be adjourned from time to time by the vote of
a majority of the Voting Members present, either in person or by proxy. If the required
quorum is not present, another meeting may be called subject to the same notice
requirement and the required quorum at the subsequent meeting shall be one-half of the


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required quorum applicable to the meeting adjourned for lack of a quorum. The quorum requirement shall continue to be reduced by fifty percent (50%) from that required at the previous meeting, as previously reduced, until such time as a quorum is present and business can be conducted.

The Voting Members at a meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough Voting Members to leave less than a quorum.

2.8 Voting Rights. There shall be one person with respect to each Lot ownership who shall be entitled to vote at any meeting of the Lot Owners (the "Voting Member").
The Voting Member may be the Owner, or one of a group composed of all of the Owners of a Lot, or may be some other person designated by such Owner(s) to act as proxy on his
or their behalf, and who need not be an Owner. Each Lot Owner or group of Owners (including the Board, if the Board or its designee shall then hold title to one or more Lots)
shall be entitled to cast one (1) vote for each Lot owned by such Owner.

2.9 Majority Vote. The vote of a majority of the votes represented at a meeting at which a quorum shall be present, in person or by proxy, shall be binding upon all Lot Owners for all purposes except where a higher percentage vote is required by the Declaration, these Bylaws or by law.

2.10 Proxies. The Voting Members may vote either in person or by agents duly authorized by written proxy executed by such Lot Owner or his duly authorized attorney-in-fact. A proxy shall be valid only for the particular meeting designated therein, unless the person executing it specifies therein the length of time for which it is to continue in
force, which time shall not extend beyond eleven months from the date of its execution. Unless a proxy otherwise provides, any proxy-holder may appoint in writing a substitute to act in his place. In order to be effective, all proxies must be filed with the secretary or duly acting secretary of the Association, either during or prior to the meeting in question.

2.11 Waiver of Notice. Any Voting Member may, at any time, waive notice of any meeting of the Association in writing, and such waiver shall be deemed to be equivalent to the giving of such notice. Attendance by a Voting Member at any meeting of the Association shall constitute a waiver of notice by him of the time and place thereof, except where a Voting Member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called. If all of the Voting Members are present at any meeting of the Lot Owners, no notice shall be required, and any business may be transacted at said meeting.





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2.12 Informal Action by Lot Owners. Any action which may be taken at a meeting of the Association may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Voting Members and filed with the secretary of the Association to be kept in the Association's minute book.

ARTICLE III.

Executive Board

3.1 Number. The business and property of the Association shall be managed and directed by the Executive Board (the "Board"), composed of Three (3) persons, or by such executive committees as the Board may establish pursuant to the Bylaws; provided, however, that the Board may not act on behalf of the Association to amend the Declaration, to terminate the Association, to exercise the Association's right of first refusal under the Declaration, to elect members of the Executive Board, or to determine the qualifications, powers, duties or terms of office of Board members. The Board may, however, fill vacancies in its membership for the unexpired portion of any term.

3.2 Initial Members. The initial members of the Board (referred to as "directors" herein) shall be selected by the Declarant, and need not be Lot Owners. Such initial
directors shall serve at the election of the Declarant from the date upon which the Declaration is recorded in the Union County Public Registry, until such time as their
successors are duly elected and qualified.

3.3 Election. Except as provided herein, the directors shall be elected at the annual meeting of the Association, and those persons who receive the highest number of
votes shall be deemed to have been elected. Notwithstanding anything herein to the contrary, the Board shall consist of two (2) directors during the period that Declarant is entitled to appoint a majority of the directors. The Declarant shall have the right to
appoint all of the directors until the earlier of the following three dates: (a) within 120 days after the date by which 75 % of the Lots have been conveyed to Lot purchasers, or (b) the
date upon which Declarant surrenders control of the Association to the Lot Owners, or (c) two (2) years after all Declarants have ceased to offer Lots for sale in the ordinary course of business.
The Declarant can turn over control of the Association to such Lot Owners other than the Declarant prior to such dates in its sole discretion by causing all or part of its appointed directors to resign, whereupon it shall be the affirmative obligation of Lot Owners other than the Declarant to elect directors and assume control of the Association.
Provided at least thirty (30) days' notice of Declarant's decision to cause its appointees to
resign is given to Lot Owners, neither the Declarant, nor such appointees, shall be liable


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in any manner in connection with such resignations even if the Lot Owners other than the Declarant refuse or fail to assume control.


Within sixty (60) days after the Lot Owners other than the Declarant are entitled to elect such director or directors, or sooner if the Declarant has elected to accelerate such event as aforesaid, the Association shall call, and give not less than ten (10) days' nor more than fifty (50) days' notice of a meeting of the Lot Owners to elect such director or directors of the Board. The meeting may be called and the notice given by any Lot Owner if the Association fails to do so.
The size of the Board may be increased or decreased from time to time upon the affirmative vote of sixty-seven percent (67 %) of all Lot Owners, provided that said Board shall not be less than three (3) in number except for the initial Board which shall be two
(2) in number..

3.4 Term and Qualification. Each director shall hold office for the term for which he was elected, or until his death, resignation, retirement, removal, disqualification or until his successor is elected and qualified. At the meeting of the Association in which the Lot Owners other than the Declarant are entitled to elect a majority of the directors, the directors of the Board shall remain at three (3) and divided into three (3) classes, the first class to consist of one (1) director, the second class to consist of one (1) director, and the third class to consist of one (1) director. The director of the first class shall initially
hold office for a term of three years; the director of the second class shall initially hold office for a term of two years; and the director of the third class shall initially hold office
for a term of one year. At all annual elections thereafter, a number of directors shall be
elected by the Voting Members to succeed the director whose term then expires. Each such director shall serve for a three-year term. So long as Declarant shall own one or
more Lots, the director of the Board which Declarant has the right to designate shall be
a member(s) of the third class. Nothing herein contained shall be construed to prevent the
election of a director to succeed himself. Each director, except those selected by the Declarant pursuant to the Bylaws, shall be one of the Lot Owners or co-owners, or a spouse of a Lot Owner or co-owner, provided, however, that in the event a Lot Owner is a corporation, partnership, trust or other legal entity other than a natural person or persons, then an officer or director of such corporation, partner of such partnership, beneficiary of such trust or manager of such other legal entity, shall be eligible to serve
as a director.
3.5 Removal. Directors may be removed from office with or without cause by the affirmative vote of at least sixty-seven percent (67 %) of the votes entitled to be cast by all Voting Members present and entitled to vote at any meeting of the Voting Members at


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which a quorum is present. If any directors are so removed, new Board members may be

elected at the same meeting; provided, however, that the person(s) selected by Declarant cannot be removed without the prior written consent of Declarant.

3.6 Vacancies. A vacancy occurring in the Board may be filled by a majority of the remaining directors, though less than a quorum, or by the sole remaining director;

but a vacancy created by an increase in the authorized number of directors shall be filled

only by election at an annual meeting or a special meeting of Lot Owners called for that purpose. The Voting Members may elect a director at any time to fill any vacancy not
filled by the Board.

In the event that Declarant, in accordance with the rights herein established, selects any person to serve on any Executive Board of the Association, Declarant shall have the absolute right at any time, in its sole discretion, to replace such person with another person to serve on any Board. Replacement of any person designated by Declarant to serve on the Board shall be made by written instrument delivered to any officer of the Association, which instrument shall specify the name of the person to be replaced and the name of the person designated as successor to the person so removed from the Board. The removal of any such Board member and the designation of his successor shall be effective immediately upon delivery of such written instrument by Declarant to any officer of the

Association.

3.7 Compensation. The Board shall receive no compensation for their services unless expressly allowed by the Board at the direction of the Lot Owners (other than the

Declarant) having sixty-seven percent (67 %) of the total votes.

Executive Committees. The Board may, by resolution adopted by a majority
3.8


of the number of directors fixed by these Bylaws, designate two or more of its members to constitute an executive committee, which committee, to the extent provided in such
resolution, shall have and may exercise all of the authority of the Board in the management of the Association.

The Board may, in like manner, create such other committees as it deems necessary and appropriate in aiding the Board to carry out its duties and responsibilities with respect to the management of the Association.

Powers and Duties. The Board shall have the powers and duties necessary
3.9


for the administration of the affairs of the Association, and may do all such acts and things, except such acts as by law or the Declaration or by these Bylaws may not be delegated to

the Board. Such powers and duties of the Board shall include, but shall not be limited to, the following:

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(a) Determining the Common Expenses required for the affairs of the
Association, including, without limitation, the operation and maintenance of the
Property.

(b) Collecting the Common Expenses from the Lot Owners.

(c) Supervising the operation, care, upkeep and maintenance of the
Common Elements.

(d) Employing and dismissing the personnel necessary for the
maintenance and operation of the Common Elements.

(e) Adopting and amending such reasonable rules and regulations as it
may deem advisable for the maintenance, conservation and beautification of the Property, and for the health, comfort, safety and general welfare of the owners and occupants of the Property. Written notice of such rules and regulations shall be given to all Lot Owners and occupants, and the entire Property shall at all times be maintained subject to such rules and regulations.

(f) Opening bank accounts on behalf of the Association and designating
the signatories required therefor.

(g) Selling, mortgaging, voting the votes appurtenant to or otherwise
dealing with Lots acquired by the Association, or its designee, corporate or otherwise, on behalf of all Lot Owners, subject to the Declaration and other
applicable restrictions, and organizing corporations to act as designees of the Board
in acquiring title to Lots on behalf of all Lot Owners.

(h) Maintaining and repairing any Lot, if such maintenance or repair is necessary in the discretion of the Board or by operation of applicable restrictions to protect the Common Elements, or any other portion of the Property, and a Lot
Owner has failed or refused to perform such maintenance or repair within a reasonable time after written notice of the necessity of said maintenance or repair
has been delivered or mailed by the Board to said Lot Owner; provided, that the Board shall levy a specific assessment against such Lot Owner for the costs of said maintenance or repair, including a reasonable amount of supervision.

(i) Signing all agreements, contracts, deeds, easement agreements, and vouchers for the payment of expenditures and other instruments in such manner as
from time to time shall be determined by written resolution of the Board. However,
any contracts or leases executed on behalf of the Association prior to the passage

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of control of the Board to the Association must be terminable by the Association without penalty on not more than ninety (90) days written notice. In the absence of such determination by the Board, such document shall be signed by the treasurer
and countersigned by the President.

(j) Obtaining insurance for the Property pursuant to the applicable
provisions of the Declaration.

(k) Making or contracting for repairs, additions and improvements to or alterations or restorations of the Property in accordance with the other provisions of these Bylaws and the Declaration, after damage or destruction by fire or other
casualty, or as a result of condemnation or eminent domain proceeding.

(1) Contracting for all goods, services and insurance, payment for which
is to be made from the Common Expense fund.
(m) Instituting, defending, or intervening in litigation or administrative proceedings in the name of or on behalf of the Association or two or more Lot Owners on matters affecting the Association.

(n) Borrowing money on behalf of the Association when required in connection with the operation, care, upkeep and maintenance of the Common Elements or the acquisition of property, and granting mortgages on and/or security interests in Association owned property; provided, however, that the consent of the Lot Owners of at least sixty-seven percent (67 %) the votes represented at a meeting at which a quorum has been attained in accordance with the provisions of these Bylaws shall be required for the borrowing of any sum in excess of $5,000.
(o) Imposing charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the Declaration, the Bylaws, or rules and regulations established by the Association, including the right to file a lien on a Lot.
(p) Exercising (i) all powers specifically set forth in the Declaration, the Articles of Incorporation and these Bylaws, (ii) all powers incidental thereto, and
(iii) all other powers of a non-profit North Carolina corporation.
(q) Suspending the right of any Lot Owner to vote or use the Common Elements of the Association as long as said Lot Owner is delinquent in the payment
of Common Expenses or is otherwise in violation of the Declaration or any exhibits
thereto or applicable rules and regulations.


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(r) Grant easements for the installation and maintenance of electrical,
natural gas, telephone, cable television, water and sewerage utilities and drainage facilities upon, over, under and across the Common Elements without the assent of the Lot Owners if such easements are requisite for the convenient use and enjoyment of the Association as determined in the sole discretion of the Board.

3.10 Managing Agent. The Board may engage the services of any person, firm, or corporation to act as managing agent at a compensation established by the Board, to perform such duties and services as the Board shall authorize, other than the powers set
forth in this Article III. Any management agreement for the Association shall be terminable by either party without cause and without payment of a termination fee or
penalty upon 90 days or less written notice thereof and the terms of such agreement may
not exceed one year, renewable by agreement of the parties for successive one year
periods. Any management agreement shall be terminable by either party for cause upon the giving of not more than thirty (30) days written notice. When professional
management has been previously required, any decision to establish self-management by
the Association shall require the prior consent of 67 percent (67 %) of the Lot Owners.

3.11 Duties of Declarant. Within a reasonable time after Lot Owners other than the Declarant elect a majority of the members of the Board (but not more than sixty (60)
days after such event), the Declarant shall deliver control of the Association and shall deliver to the Association all property owned by the Association held or controlled by the Declarant, including, if applicable:

(a) A copy of the Articles of Incorporation of the Association.

(b) A copy of the Bylaws of the Association.

(c) The minute books, including all minutes, and other books and records
of the Association.

(d) Any rules and regulations which have been adopted.

(e) Resignations of resigning officers and Board members.

(f) Association funds or the control thereof.

(g) Insurance policies.

(h) All written warranties of contractors, subcontractors, suppliers and
manufacturers, if any, that are still effective.


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(i) A roster of Lot Owners and their addresses and telephone numbers,
if known, as shown on the Declarant's records.

(j) Employment contracts or service contracts in which the Association
is one of the contracting parties, or service contracts in which the Association or Lot Owners have an obligation or responsibility, directly or indirectly, to pay some or all of the fee or charge of the person or persons performing the service.

(k) All other contracts to which the Association is a party.

ARTICLE IV.

Meetings of Directors

4.1 Organizational Meeting. The first meeting of the initial Board shall be held at such time as the Declarant shall determine, but in no event later than one year from the date of incorporation of the Association. The first meeting of a newly elected Board shall
be held within fifteen (15) days following the meeting of the Lot Owners at which the Board was elected. No notice shall be necessary to the newly elected members of the Board in order to legally constitute such meeting, providing that a quorum is present.

4.2 Regular Meeting. A regular meeting of the Board shall be held immediately after, and at the same place as, the annual meeting or substitute annual meeting of the Lot Owners. In addition, the Board may provide by resolution the time and place, either within or without the State of North Carolina, for the holding of a regular meeting of the Board.

4.3 Special Meetings. Special meetings of the Board may be called by or with the request of the chairman, or by any two (2) directors. Such meetings may be held either within or without the State of North Carolina.

4.4 Notice of Meetings. Regular meetings of the Executive Board may be held without notice. The person(s) who called a special meeting of directors shall, at least two
(2) days prior to said meeting, give notice thereof by any usual means of communication.
Such notice need not specify the purpose for which the meeting is called.
Attendance by a director at a meeting shall constitute a waiver of notice of such meeting except where a member attends the meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called. Meetings
of the Board shall be open to all Lot Owners and notices of meetings shall be posted




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conspicuously for the attention of Lot Owners in advance of the meeting, except for
regular meetings of the Board, which may be held without notice.

4.5 Waiver of Notice. Any member of the Board may at any time waive notice of any meeting of the Board in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a director at any meeting of the Board shall constitute a waiver of notice by him of the time and place thereof. If all of the directors are present at any meeting of the Board, no notice shall be required, and any business may
be transacted at such meeting.

4.6 Quorum. A majority of the number of directors fixed by these Bylaws shall be required for and constitute a quorum for the transaction of business at any meeting of
the Board.

4.7 Manner of Acting. Except as otherwise provided in this section, the act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. A vote of a majority of the number of directors fixed by these Bylaws shall be required to adopt a resolution constituting an executive committee. Vacancies in the Board may be filled as provided in Section 3.6 of these Bylaws.

4.8 Organization. Each meeting of the Board shall be presided over by the chairman, and in the absence of the chairman, by any person selected to preside by vote of the majority of the Board members present. The secretary, or in his absence, an assistant secretary, or in the absence of both the secretary and the assistant secretary, any
person designated by the chairman of the meeting shall act as secretary of the meeting.

4.9 Informal Action of Board. Action taken by a majority of the directors without a meeting is nevertheless Board action if written consent to the action in question is signed by all of the directors and filed with the minutes of the proceedings of the Board,
whether done before or after the action so taken.

4.10 Minutes. The Board shall keep minutes of its proceedings, which shall be available for inspection by the Lot Owners during reasonable business hours.

4.11 Liability of the Board and Officers. The directors and the officers provided for in this Article hereof shall not be liable to the Lot Owners for any mistake of judgment, negligence or otherwise, except for their own individual willful misconduct or bad faith. The Lot Owners shall indemnify and hold harmless each of the directors and the officers against all contractual liability to others arising out of contracts made by the Board or the
officers on behalf of the Association, unless any such contract shall have been made in bad
faith or contrary to the provisions of the Declaration or these Bylaws. It is intended that


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the directors or any officer shall have no personal liability with respect to any contract made by them on behalf of the Association, except to the extent that they are Lot Owners and have liability as such. It is also intended that the liability of any Lot Owner arising out of any contract made by the Board or the officers, or out of the aforesaid indemnity in favor of the directors or the officers, shall be limited to such proportion of the total liability thereunder as his interest in the Common Elements bears to the interests of all the Lot Owners in the Common Elements. Every agreement made by the Board, by the
managing agent or by the officers on behalf of the Association shall provide that the
members of the Board, the managing agent or the officers, as the case may be, are acting only as agents for the Lot Owners, and shall have no personal liability thereunder.

ARTICLE V.

Officers

5.1 Number. The principal officers of the Association shall consist of a President, Vice-President, a secretary, a treasurer, and such assistant secretaries, assistant treasurers and other officers as the Board may from time to time elect. Any two or more offices may be held by the same person, except the offices of chairman and secretary.

5.2 Election and Term. The officers of the Association shall be elected by the Board. The chairman, vice chairman, secretary and treasurer shall be elected from among the Board, and all other officers, if any, need only be a Lot Owner. The officers elected by the initial Board are not required to be Lot Owners. The election of officers may be held at the regular annual meeting of the Board.
Each officer shall hold office for a period of one year, or until his death, resignation, retirement, removal, disqualification, or until his successor is elected and
qualifies.

5.3 Removal. Any officer or agent elected or appointed by the Board may be
removed by the Board, with or without cause; but such removal shall be without prejudice
to the contract rights, if any, of the person so removed.

5.4 Compensation. No officer shall receive any compensation from the
Association for acting as such.

5.5 President of the Board. The President of the Board shall be the principal
executive officer of the Association; and, subject to the control of the Board, shall
supervise and control the management of the Association. The President shall, when
present, preside at all meetings of the Board and of the Lot Owners and, in general, shall


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perform all duties incident to the office of President of the Board, and such other duties as may be prescribed from time to time by the Board.

5.6 Vice-President. The Vice-President designated by the Board shall, in the absence or disability of the President, have the powers and perform the duties of said
office. In addition, each Vice-President shall perform such other duties and have such other powers as shall be prescribed by the President of the Board.

5.7 Secretary. The secretary shall keep accurate records of the acts and proceedings of all meetings of Lot Owners and directors. He shall give, or cause to be given, all notices required by law and by these Bylaws. He shall have general charge of
the minute books and records of both the Association and the Board. He shall sign such instruments as may require his signature, and, in general, shall perform all duties incident to the office of secretary, and such other duties as may be assigned him from time to time by the President of the Board or by the Board.

5.8 Treasurer. The treasurer shall have custody of all Association funds and securities, and shall receive, deposit or disburse the same under the direction of the Board.
He shall keep full and accurate accounts of the finances of the Association in books especially provided for that purpose. He shall cause a true statement of its assets and liabilities as of the close of each fiscal year, and of the results of its operations and changes in surplus for each fiscal year, all in reasonable detail, to be prepared and distributed to all Lot Owners and members of the Board on or before the 15th day of the third month
following the close of each fiscal year. The statement so filed shall be kept available for
inspection by any Lot Owner for a period of three (3) years. The treasurer shall also prepare and file all reports and returns required by federal, state or local law, and shall
generally perform all other duties as may be assigned to him from time to time by the President of the Board.

5.9 Assistant Secretaries and Treasurers. The assistant secretaries and assistant treasurers, if any, shall, in the absence of the secretary and treasurer, respectively, have all the powers and perform all of the duties of those officers, and they shall in general perform such other duties as shall be assigned to them by the secretary or the treasurer, respectively, or by the President of the Board or the Board.

ARTICLE VI.

Operation of the Property

6.1 Assessment and Determination of Common Expenses. The Board shall from time to time, and at least annually, prepare a budget for the Association, for the purpose


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of determining the amount of the Assessments to be collected from the Lot Owners in
order to provide for the Common Expenses of the Association, and allocate and assess such Common Expenses among the Lot Owners equally. The Common Expenses shall
include, without limitation, the expenses, costs and charges incurred in connection with the administration, operation and management of the Association Property; the cost of
maintenance, repair, replacement and restoration of the Common Elements, or any part thereof; the cost of water usage by Lot Owners and the Association; the cost of all
insurance premiums on all policies of insurance required to be or which have been obtained by the Board pursuant to the provisions of the Declaration; such amounts as the Board may deem proper for the convenience, comfort and well-being of the Lot Owners, and for the operation, management and maintenance of the Property, including, without limitation, an amount for working capital of the Association, for a general operating reserve, for a reserve fund for replacements, and to make up any deficit in the Common
Expenses for any prior year; in proper cases, the cost of administration and of maintenance and repair of the Limited Common Elements; and any other expenses lawfully agreed
upon.
In establishing a reserve fund for replacements, the Board shall take into account the number and nature of replaceable assets, the expected life of each asset, and the expected repair or replacement cost. The Board shall then set the required capital contribution in an amount sufficient to permit meeting the projected capital needs of the Association with respect to both amount and timing by equal annual installments over the applicable period.

Within thirty (30) days after adoption by the Board of any proposed budget for the
Association, the Board shall provide a summary of the budget to all Lot Owners and shall
give notice of a date for a meeting of the Lot Owners to consider ratification of the budget
not less than fourteen (14) nor more than thirty (30) days after mailing of the summary and
notice. A quorum need not be present at the meeting. The budget is ratified unless at the meeting a majority of all the Lot Owners present and entitled to cast a vote reject the
budget. In the event the proposed budget is rejected, the periodic budget last ratified shall be continued until such time as the Lot Owners ratify a subsequent budget proposed by the Board.
6.2 Payment of Assessments. All Lot Owners shall be obligated to pay (1) General Assessments for Common Expenses assessed by the Board from time to time, and at least quarterly; (2) special assessments to be established and collected as provided
herein, and (3) specific assessments against any Lot which are established pursuant to the terms of these Bylaws. A late payment charge in an amount to be determined by the Board
shall be assessed for any assessment installment not paid within fifteen (15) days of its due date. Any installment not paid within fifteen (15) days of its due date shall be subject to


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the late payment charge and shall accrue interest as provided in Section 6.5, and shall constitute a lien on the Lot as provided in Section 6.6 of this Article VI.

No Lot Owner shall be liable for the payment of any part of the Common Expenses assessed against his Lot subsequent to a sale, transfer or other conveyance by him (made in accordance with the provisions of the Declaration and applicable restrictions of record)
of such Lot. A purchaser of a Lot shall be jointly and severally liable with the seller for the payment of Assessments assessed against such Lot prior to the acquisition by the
purchaser of such Lot; provided, however the lien assessed against such Lot shall remain in full force and effect. Any such purchaser shall be entitled to a statement from the Board setting forth the amount of the unpaid Assessments against the seller, and the Lot conveyed
shall not be subject to a lien for any unpaid assessments in excess of the amount shown on the statement. Provided, however, that a First Mortgagee or other purchaser of a Lot at a foreclosure sale of such Lot or a First Mortgagee who takes a deed in lieu of foreclosure
shall not be liable for, and such Lot shall not be subject to, a lien for the payment of Common Expenses assessed prior to the foreclosure sale or deed in lieu of foreclosure. Such unpaid Common Expenses shall be deemed to be Common Expenses collectible from all of the Lot Owners, including such purchaser, his successors and assigns.

6.3 Special Assessments. The Association may levy Special Assessments for Common Expenses not covered by the General Assessment, applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruct-ion, repair or replacement of a capital improvement upon the Common Elements, including fixtures and personal property related thereto, provided that any such Assessment must be
approved by the vote of Owners of Lots to which at least two-thirds (2/3) of the votes in
the Association are allocated cast in person or proxy at a meeting duly called for this
purpose. Such Special Assessments shall be charged to the Lots equally. In addition, the Board may levy Special Assessments against one or more, but less than all, of the Lots to
cover repairs or maintenance for which such Lot Owner or Owners are responsible and
which they have failed to make, or for repairs or maintenance required of a Lot Owner or
Lot Owners which impair the value of the Common Elements or the Lot or Lots, or expenses which are incurred in the abatement of or as a result of a violation by a Lot Owner or Owners of the provisions of the Declaration, the Bylaws or the rules, regulations, or for fines levied for said violations, or where the Board has purchased a Lot on behalf of one or more Lot Owners. The period of assessment and manner of payment of such assessment shall be determined by the Board.

6.4 Collection of Assessments. The Board shall determine Common Expenses against the Lot Owners from time to time, at least quarterly, and may, as the Board shall
determine, take prompt action to collect any Assessments due from any Lot Owner which remain unpaid for more than fifteen (15) days from their due date.


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The Board shall notify First Mortgagees pursuant to the provisions of the
Declaration for which any amount assessed pursuant to these Bylaws remains unpaid for more than sixty (60) days from their due date, and in any other case where the Lot Owner of such Lot is in default with respect to the performance of any obligation hereunder for a period in excess of sixty (60) days.

6.5 Default in Payment of Assessment. In the event of default by any Lot Owner in paying to the Board any amounts assessed by the Board, such Lot Owner shall be obligated to pay a late payment charge as established by the Board from time to time, and interest at the rate of eight percent (8 %) on such amounts from their due date; together with all expenses, including attorneys' fees (if permitted by law), incurred by the Board in collecting such unpaid sums. If a Lot Owner shall be in default in payment of an installment of an Assessment, the Board may accelerate the remaining installments upon ten (10) days' written notice to such Lot Owner, whereupon the entire unpaid balance of such Assessment shall become due upon the date stated in such notice.

6.6 Lien and Personal Obli ate. Each Assessment provided for in this Article, together with late payment charges, interest and expenses, including attorneys' fees (as permitted by law), shall be a charge on and a continuing lien upon the Lot against which the Assessment is made when a notice of such lien has been filed of record in the office of the Clerk of Superior Court of Mecklenburg County, North Carolina, provided such notice of lien shall not be recorded until such sums assessed remain unpaid for a period of fifteen (15) days after the same shall become due. Said notice of lien shall also secure all
Assessments against the Lot becoming due thereafter until the lien has been satisfied. Said lien may be foreclosed in the manner as a deed of trust on real property. In addition, each Lot Owner shall be personally liable for any Assessment against his Lot becoming due and
payable while he is the Owner of such Lot.

6.7 Priority of Assessment Lien. The lien of the Assessments provided for in this Article shall be prior and superior to all other liens except (a) ad valorem taxes, and (b) all sums unpaid on deeds of trust, mortgages or other encumbrances against the Lot
prior to the docketing of the Assessment lien. The sale or transfer of any Lot shall not
affect the Assessment lien against such Lot. Provided, however, the sale of a Lot pursuant to the foreclosure sale or execution sale instituted by a superior lien holder or conveyance to a First Mortgagee by deed in lieu of foreclosure shall extinguish the inferior Assessment lien against the subject Lot but no such sale or transfer shall relieve each Lot from liability for any Assessments thereafter becoming due or for any future lien in connection
therewith. The Association shall share in the excess, if any, realized by the sale of any Lot
pursuant to a foreclosure or action instituted by a superior lien holder, to the extent of its lien.



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16







6.8 Owner's Non-Use. No Lot Owner may exempt himself from liability for
Assessments and his other obligations to the Association by waiver of the use or enjoyment of any portion of the Common Elements or by the abandonment or sale of his Lot.
6.9 Foreclosure of Liens for Unpaid Assessments. Following the institution of any action by the Board to foreclose on a Lot because of unpaid Assessments, the Lot
Owner shall pay a reasonable rental for the use of his Lot, and the plaintiff in such foreclosure action shall be entitled to the appointment of a receiver to collect the rental.
The Board, acting on behalf of the Association, or on behalf of any one or more individual Lot Owners, if so instructed, shall have the power to purchase such Lot at the foreclosure sale and to acquire, hold, lease, mortgage, vote the votes appurtenant to, convey or otherwise deal with the same, subject, however, to applicable restrictions of record. A suit
to recover a money judgment for unpaid Assessments shall be maintainable without foreclosing or waiver of the Assessment lien. Where a First Mortgagee or the purchaser of a Lot obtains title to the Lot as a result of foreclosure of the First Mortgage, such purchaser, its successors and assigns, shall not be liable for the share of the Common Expenses or Assessments by the Board chargeable to such Lot which became due prior to
the acquisition of title to such Lot by such purchaser. Such unpaid share of Common
Expenses or Assessments shall be deemed to be a Common Expense collectible from all Lot Owners, including such purchaser, its successors and assigns.

6.10 Statement of Common Expenses. The Board shall promptly provide any Lot Owner so requesting the same in writing with a written statement of all unpaid charges due from such Lot Owner, for which it may institute a reasonable charge at its discretion.

6.11 Abatement and Enjoinment of Violations by Lot Owners. The violation of any rule or regulation adopted by the Board or the breach of any bylaw contained herein,
or the breach of any provision of the Declaration, shall give the Board the right, in addition to any other rights set forth in these Bylaws: (a) to make any repairs, and to summarily abate and remove, at the expense of the defaulting Lot Owner, any structure,
thing or condition which may exist therein contrary to the intent and meaning of the provisions hereof, and the Board shall not thereby be deemed guilty in any manner of trespass; or, (b) to enjoin, abate, or remedy by appropriate legal proceedings, either at law or in equity, the continuance of any such breach at the expense of the defaulting Lot Owner; (c) in any case of flagrant or repeated violation by a Lot Owner, to require such Lot Owner to give sufficient sureties for his future compliance with such Association docu-ments; or (d) after notice and an opportunity to be heard, to levy reasonable assessments and fines for such violations. The failure of the Board to so act with respect to any such violation or breach shall not be deemed a waiver of the Board's right to act with respect
to the same or any other breach or violation.



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6.12 Duty to Report. Each Lot Owner shall promptly report to the Board or its
agent any defect or need for repairs or replacement the responsibility for which is that of
the Association.

6.13 Additions, Alterations or Improvements by the Association. Whenever in the judgment of the Board the Common Elements shall require additions, alterations or improvements, the Board shall proceed with such additions, alterations or improvements, and shall assess all Lot Owners for the costs thereof, as a Common Expense, subject, however, to the provisions of Sections 6.1 and 6.3 of this Article VI.

6.14 Use of Common Elements. A Lot Owner shall not interfere with the use of the Common Elements by the remaining Lot Owners and their guests and invitees.

6.15 Rules of Conduct. Rules and regulations concerning the use of the Lots and the Common Elements may be promulgated and amended by the Board. Such rules and
regulations shall be equally applicable to all Lot Owners similarly situated and shall be
uniform in their application and effect. Copies of such rules and regulations shall be
furnished by the Board to each Lot Owner prior to their effective date.

6.16 Remedies Cumulative. All rights, remedies and privileges granted to the Association or the Owner or Owners of a Lot pursuant to any terms, provisions, covenants
or condition of the Declaration or other above-mentioned documents, shall be cumulative,
and the exercise of any one or more shall not constitute an election of remedies, nor shall it preclude the party thus exercising the same from exercising such other and additional rights, remedies or privileges as may be available to such party at law or in equity.

6.17 Nonwaiver of Remedies.

(a) The failure of the Association or any Lot Owner to enforce any right,
provision, covenant or condition which may be granted by the Declaration or the other above-mentioned documents shall not constitute a waiver of the right of the Association or the Lot Owner to enforce such right, provision, covenant or condition in the future.

(b) The failure of Declarant to enforce any right, privilege, covenant or
condition which may be granted to it by the Declaration or other above-mentioned documents shall not constitute a waiver of the right of Declarant to thereafter enforce such right, provision, covenant or condition in the future.

(c) The failure of a First Mortgagee to enforce any right, provision,
privilege, covenant or condition which may be granted to it or them by the


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Declaration or other above-mentioned documents, shall not constitute a waiver of
the right of said party or parties to thereafter enforce such right, privilege, covenant or condition in the future.

ARTICLE VII.

Financial Records and Statements

7.1 Reports. The Board shall keep detailed records of the actions of the Board and the managing agent, minutes of the meetings of the Board, minutes of the meetings of the Association, and financing records and books of account of the Association, including a chronological listing of receipts and expenditures, as well as a separate account for each Lot, which, among other things, shall contain the amount of each Assessment against each Lot, the date when due, the amounts paid and the balance remaining unpaid. The financial records and books of account shall be available for examination by all Lot Owners, their
duly authorized agents or attorneys, and all lien holders, their attorneys and authorized agents, at convenient hours that shall be set and announced for general knowledge. A written annual summary of all receipts and expenditures of the Association shall be rendered by the Board to all Lot Owners on or before the 15th day of the third month following the close of each fiscal year. In addition, an annual report of the receipts and
expenditures of the Association shall be rendered by the Board to all Lot Owners and to all First Mortgagees who have requested the same, promptly after the end of each fiscal year.

7.2 Common Expense Funds. All sums collected by the Association, either as Assessments for the Common Expenses or Special Assessments may be commingled in a
single fund, but they shall be held for the Owners for the purposes for which they are paid, and shall, subject to the right of withdrawal or refund provided herein, be credited to accounts from which shall be paid the charges for which the Assessments are made. Such accounts shall include the following, or such other and further accounts as the Board from time to time shall determine:

(a) General Common Expense Account--to which shall be credited collection of that portion of the Common Expense Assessments received for defraying the costs of operating the Association on a day-to-day basis, including normal maintenance and repairs, insurance and related charges;

(b) Capital Reserve Account--to which shall be credited, all sums collected which are to be allocated for capital expenditures for the reconstruction,
repair and replacement of Common Elements at a future date.




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19








All sums collected by the Association, either as Assessments of the Common Expenses or Special Assessments, during any fiscal year and allocated to the General Common Expense Account or to any other account from which non-capital expenditures may be made, in excess of expenditures during such fiscal year made from or chargeable to said account or accounts shall be deemed contributions to capital at the end of said fiscal year, and shall be transferred to the Capital Reserve Account. All amounts credited to said
Capital Reserve Account shall be contributions to capital, and shall be held in trust by the Association for future expenditures of a capital nature, and shall serve to reduce the
Assessments required for said capital expenditures.

7.3 Records. All books of account and financial records shall be kept in accordance with good and acceptable accounting practices. The Board shall have a
certified public accountant prepared annual financial statement made available for
inspection by all Lot Owners and all First Mortgagees on or before the 15th day of the
second month following the close of each fiscal year.

ARTICLE VIII.

Amendments to Bylawsaws

8.1 Notice. Notice of the subject matter of a proposed amendment shall be included in the notice of a meeting at which a proposed amendment is to be considered.

8.2 Adoption. A resolution for the adoption of a proposed amendment may be proposed either by a majority of the Board or by not less than one-third (1/3) of the Voting
Members of the Association. Directors and members of the Association not present in
person or by proxy at the meeting considering the amendment may express their approval in writing, provided that such approval is delivered to the Secretary at or prior to the
meeting. The approval must be by not less than a majority of the votes of all Voting Members of the Association represented at a meeting at which a quorum has been attained;
however, HUD/Va has the right to veto amendments while there is a Class B membership.

8.3 Limitation. No amendment may be adopted which would eliminate, modify, prejudice, abridge or otherwise adversely affect any rights, benefits, privileges or priorities granted or reserved to the Declarant or First Mortgagees without the consent of said Declarant and First Mortgagees in each instance. No amendment shall be made that is in conflict with the Articles of Incorporation of the Association or Declaration without satisfaction of the requirements therein contained. No amendment to this Section shall be valid.





HTPL: 89167
20






8.4 Execution and Recording. A copy of each amendment shall be attached to
a certificate certifying that the amendment was duly adopted as an amendment to the Declaration and Bylaws, which certificate shall be executed by the Chairman or Vice Chairman and attested by the Secretary or Assistant Secretary of the Association with the formalities of a deed, or by the Declarant alone if the amendment has been adopted co-
nsistent with the provisions of the Declaration allowing such action by the Declarant. The
amendment shall be effective when the certificate and a copy of the amendment is recorded in the Register of Deeds for Union County, North Carolina.

ARTICLE IX.

Condemnation

9.1 General. Whenever all or any part of the Association Property shall be taken over by any authority having the power of condemnation or eminent domain, each Lot Owner and all First Mortgagees shall be entitled to notice thereof and to participate in the proceedings incident thereto unless otherwise prohibited by law. The award made for such taking shall be payable to the Association. Unless otherwise provided by law at the time
of such taking, any award made therefor shall be disbursed by the Association as provided in this Article IX.
9.2 Common Elements. If the taking is confined to the Common Elements on which improvements shall have been constructed, and at least ninety (90 %) per cent of the total vote of the members of the Association entitled to vote shall vote within sixty (60) days after such taking to replace the improvements, or any part thereof, on the remaining land included in the Common Elements and according to the plans therefor first approved
by the Association, then the Board shall arrange for such replacement and the Association shall disburse the proceeds of such award in the same manner as they are required to
disburse insurance proceeds where damage or destruction to the Common Elements is to be repaired or reconstructed as provided for in the Declaration or herein; subject,
however, to the right hereby reserved to the Association by a majority vote of the Voting Members, to provide for the disbursement by the Association of the remaining proceeds
held by it (after the payment of all costs incident to such replacement) to the Lot Owners equally. If at least ninety (90 %) per cent of the Voting Members shall not decide within sixty (60) days after such taking to replace said improvements or if the taking is confined to the Common Elements on which no improvements shall have been constructed, then the Association shall disburse the proceeds of the award in the manner hereinabove provided for the disbursement of the remaining proceeds of an award after payment of all costs incident to replacement of improvements taken has been made.





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ARTICLE X.

Miscellaneous
10.1 Ad Valorem Taxes. Each Lot is a separate parcel and shall be separately assessed and taxed. Each Lot Owner shall be liable solely for the amount of tax assessed
against his Lot. All tangible personal property owned by the Association in connection
with the maintenance, upkeep and repair of the Common Elements shall be listed for said taxes in the name of and paid by the Association. Each Lot Owner is also responsible for
his pro rata share of taxes assessed on the Common Elements.

10.2 Notification to Mortgagees. Any Owner who mortgages his Lot shall notify the Association of the name and address of the Mortgagee, and the Association shall maintain such information in a book entitled "Mortgagees of Lots." In addition to any other notification provided for in the Declaration or these Bylaws, the Association may, at the written request of a Mortgagee of any such Lot, report any unpaid assessments due from the Owner of such Lot.

10.3 Severability. Invalidation of any covenant, condition, restriction or other provision of the Declaration or these Bylaws shall not affect the validity of the remaining portions thereof which shall remain in full force and effect.

10.4 Successors Bound. The rights, privileges, duties and responsibilities set forth in the Declaration or these Bylaws, as amended from time to time, shall run with the ownership of the Association Property.

10.5 Gender, Singular. Plural. Whenever the context so permits, the use of the singular or plural shall be interchangeable in meaning and the use of any gender shall be deemed to include all genders.

10.6 Principal Office--Registered Office. The initial principal office and registered office of the Association shall be located at 2600 One First Union Center, 301
South College Street, Charlotte, North Carolina 28202.

10.7 Other Offices. The Association may have other offices at such other places within North Carolina as the Board may from time to time determine or as the affairs of
the Association may require.

10.8 Seal. The seal of the Association shall contain the name of the Association, the word "Seal", the year of incorporation and such other words and figures as is desired




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22







by the Board of Directors. When obtained, the seal shall be impressed in the margin of
this Section of the Bylaws.

10.9 Fiscal Year. The fiscal year of the Association shall be the calendar year.

10.10 Definitions. The Definitions contained in Article I of the Declaration are incorporated herein by this reference, unless the context clearly indicates a different meaning therefor.
**

CERTIFICATION

I, the undersigned, do hereby certify:

THAT I am the duly elected and acting secretary of The Morningside Meadows
Homeowners Association, Inc., a North Carolina non-profit corporation, and
THAT the foregoing Bylaws constitute the original Bylaws of said Association, as duly adopted at a meeting of the initial Executive Board thereof held on the 3rd.. day
of YY�w �. e�. 'tooo

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of said Association, this s„-a day of M &.v, , 1A920°n



Secretary





























HTPL: 89167

Covenants

This DECLARATION OF COVENANTS

CONDITIONS AND RESTRICTIONS FOR

MORNINGSIDE MEADOWS

THIS DECLARATION is made as of this 7^th day of Dec. ,
1999, by Knotts-Stallings, LLC, a North Carolina limited liability company,
referred to in this instrument as "Developer."

STATEMENT OF PURPOSE

Developer is the owner of those certain parcels of land which are known as

Morningside Meadows, located in Union County, North Carolina, more
particularly described on Plat recorded in Plat Cabinet F , File
844 in the Union County Public Registry (the "Submitted Property").

It is in the best interest of Developer, as well as to the benefit, interest
and advantage of each person or other entity later acquiring any property in
Morningside Meadows, that certain covenants, conditions, easements,
assessments, liens and restrictions governing and regulating the use and
occupancy of the same be established, fixed and set forth and declared to be
covenants running with the land.

Developer desires to provide for the preservation of the values and amenities
and the desirability and attractiveness of the real property in Morningside
Meadows and for the continued maintenance and operation of such recreational
and common areas as may be provided.

DECLARATION

In consideration of the premises and for the purposes stated, Developer hereby
declares that all of the Submitted Property shall be held, sold and conveyed
subject to the following easements, restrictions, covenants and conditions
(all of which are collectively referred to in this instrument as
"restrictions"), which restrictions shall be construed as covenants running
with the land and shall be binding on all parties having any right, title

Drawn by and Mail to: Cheryl D. Steele

Horack. Talley, Pharr & Lowndes, P.A.

301 South College Street, Suite 2600

Charlotte, North Carolina 28202-6038

or interest in the described real property or any part thereof, and their
heirs, successors and assigns, and shall inure to the benefit of each owner
thereof.

ARTICLE I: DEFINITIONS

The following words when used in this Declaration or any Supplemental

Declaration (unless the context shall prohibit) shall have' the following
meanings:

(1.1) "Association" shall mean Morningside Meadows Homeowners Association,

Inc., a non-profit corporation organized and existing under the laws of the
State of North Carolina and its successors and assigns.

(1.2) "Builder" shall mean the record owner of a fee simple title to any Lot
whose sole purpose in owing the Lot is to construct a residential dwelling to
be sold to a third party.

(1.3) "Owner" shall mean the record owner, whether one or more persons or
entities, of a fee simple title to any Lot which is a part of Morningside
Meadows but excluding those having such interest merely as security for the
performance of an obligation.

(1.4) "Properties" shall mean the Submitted Property and such real property as
may subsequently be brought within the jurisdiction of the Association.

(1.5) "Common Area" shall mean all real property and/or easements over real
estate acquired by the Association in Morningside Meadows for the common use
and enjoyment of members of the Association lying within the boundaries of the
Properties. Common Areas, with respect to the Properties subject to this
Declaration, shall be: (i) shown on the plats of Morningside Meadows recorded
in the Union County Public Registry and designated thereon as "Common Area" or
"Common Area Easements" or "Sign& Landscape Esmt." and (ii) all entrance
islands within the public rights of way, if any.

.

(1.6) "Lot" shall mean any numbered plot of land to be used for residential
purposes shown upon any recorded subdivision plat of the Properties subject to
this Declaration.

(1.7) "Developer" shall mean and refer to Knotts-Stallings, LLC and its
successors and assigns.

(1.8) "Person" shall mean a natural person, as well as a corporation,
partnership, firm, association, trust or other legal entity. The use of the
masculine pronoun shall include the neuter and feminine, and the use of the
singular shall include the plural where the context so requires. .

(1.9) "Morningside Meadows" shall mean the, Submitted Property, together with
such additions thereto as may from time to time be designated by Developer in
accordance with Article II hereof, whether or not such additions are
contiguous with or adjoin the boundary lines of the Submitted Property.

(1.10) "FHA and VA" shall mean and refer to the Federal Housing
Administration, U.S. Department of Housing and Urban Development, and the
Veteran's Administration, respectively. If either or both of these federal
agencies shall hereafter cease to exist or perform the same or similar
functions they now serve, references hereto to FHA, or VA shall be deemed to
mean and refer to such agency or agencies as may succeed to the duties and
services now performed by either or both of these departments.

ARTICLE II: PROPERTY SUBJECT TO THIS DECLARATION

(2.1) The Submitted Property shall be held, transferred, sold, conveyed and
occupied subject to this Declaration. Only the Submitted Property is hereby
made subject to this Declaration provided however, Developer shall have the
right to subject other real property to these restrictions as provided in
Section 2.2.

(2.2) Without further assent or permit, Developer hereby shall have the right,
within seven (7) years from the date of this Declaration, exercisable from
time to time, to subject other real property within the area described on
Exhibit A attached hereto in order to extend the scheme of this Declaration to
other property to be developed as part of Morningside Meadows and thereby
bring such additional properties within the jurisdiction of the Association
(provided that the FHA and the VA determine that the annexation of such area
is in accord with Developer's general plan of development of Morningside
Meadows as previously approved by them, if such determination and approval are
necessary).

(2.3) Any addition of-real property shall be made by filing of record one or
more Supplemental Declarations in respect to the property to be then made
subject to this Declaration, and the jurisdiction of the Association shall
thereby then extend to such property and subject such addition to the
assessments provided in this instrument for a just and proportionate 'share of
the Association's expenses. Each Supplemental Declaration may contain such
complementary additions and modifications of the covenants, conditions and

restrictions contained herein as may be necessary to reflect the different
character of the added properties and as are not inconsistent with the
provisions of this Declaration.

ARTICLE III: PROPERTY RIGHTS

(3.1) Owner's Easements of Enjoyment. Every Owner shall have a
nonexclusive right and easement of enjoyment in and to the Common Area which
shall be appurtenant to and shall pass with the title to every Lot subject to
the provisions of this Declaration, including but not limited to the
following:

(a) The right of the Association to limit the use of the Common Area to
Owners, their families and guests;

(b) . The right of the Association to suspend the voting rights of an Owner
for any period during which any assessment against his Lot remains unpaid, or
for any infraction of the Association's published rules and regulations, if
any;

(c) The right of the Association to dedicate or transfer all or any part of
the Common Area to any public agency, authority or utility for such purposes
and subject to such conditions as may be agreed to by the Association members.
No such dedication or transfer shall be effective unless the members entitled
to at least two-thirds (2/3) of the vote appurtenant to Class A Lots and Class
B Lots agree to such dedication or transfer and signify their agreement by a
signed and recorded written document, provided that this paragraph shall not
preclude the Board of Directors of the Association from granting easements for
the installation and maintenance of electrical, telephone, cablevision, water
and sewerage utilities' and drainage facilities upon, over, under and across
the Common Area without the assent of the membership if such easements are
requisite for the convenient use and enjoyment of the Properties.

(3.2) Delegation and Use. The right and easement of enjoyment granted
to every Owner in Section 3.1 of this Article may be exercised by members of
Owner's family and guests thereof. An Owner may delegate to his tenants his
rights of enjoyment in and to the Common Area and such facilities thereon as
may be provided, in accordance with the Association's Bylaws and rules and
regulations, if any.

ARTICLE IV: MEMBERSHIP AND VOTING RIGHTS

(4.1) Membership. Every Owner of a Lot which is subject to assessment
shall be a member of the Association. Membership shall be appurtenant to and
may not be separated from ownership of any Lot which is subject to assessment.

(4.2) Voting and Voting Rights. The Association shall have two classes
of voting membership:

(a) Class A. Class A members shall be all Owners with the exception of

Developer and shall be entitled to one vote for each Lot owned. When more than
one person holds an interest in any Lot, all such persons shall be members.
The vote for such Lot shall be exercised as they among themselves determine;
but in no event shall more than one vote be cast with respect to any Lot. .

(b) Class B. The Class B member shall be Developer and shall be entitled to
three (3) votes for each Lot owned. The Class B membership shall cease and be
converted to Class A membership on the happening of any of the following
events, whichever first occurs:

(i) When the total votes out Standing in the Class A membership equator exceed
the total votes .outstanding in Class B membership; or

(ii) . Seven (7) years from the date of recording of this Declaration; or

(iii) When the Developer voluntarily relinquishes majority control of the
Association by a duly recorded instrument.

(4.3) Suspension of Rights. During any period in which a member shall
be in default in the payment of any annual, special or other periodic
assessment levied by the Association, the voting rights of such member may be
suspended by the Board of Directors until such assessment, is paid. In the
event of violation by a member of any rules or regulations established by the
Board of Directors, such member's voting rights may be suspended by the board
after a hearing. Such hearings shall only be held by the board or a committee
thereof after giving a member ten (10) days prior written notice specifying
each alleged violation and setting the time, place and date of the hearing.
Determination of the violation shall be made by a majority vote of the board
or the committee thereof.

ARTICLE V: COVENANT FOR MAINTENANCE ASSESSMENTS.

(5.1) Purpose of Assessment. The assessments levied by the Association
shall be used: (a) to provide funds for maintenance" upkeep, landscaping and
beautification of the Common Area in Morningside Meadows; (b) to provide
services for the association members to promote the health, safety and welfare
of the residents of Morningside Meadows, and in particular for the
acquisition, improvement and maintenance of properties, services and
facilities related to the use and enjoyment of the Common Area,

including but not limited to the cost of repair, replacement and additions
thereto; (c) for the payment of taxes assessed against the Common Area, for
insurance. related to Use Common Area, for the employment of attorneys,
accountants and other professionals to represent the Association when
necessary or useful, the employment of security personnel; (d) the provision
of any service which is not readily available from any governmental authority
related to the use, occupancy and enjoyment of the properties and which the
Association shall decide to provide; and (e) for the payment of monthly
electric and water bills and other expenses resulting from the maintenance or
beautification of entrance monuments, signs, and landscaping.

(5.2) Creation of the Lien and personal Obligation of Assessments. The

Developer, for each Lot owned within the Property, hereby covenants, and each
Owner of any Lot by acceptance of a Deed there for whether or not it shall be
so expressed in said Deed, is deemed to covenant and agree to pay to the
Association;

(a) Annual assessments ("Annual Assessments") for the purposes specified in
Section 5.1 in the amount hereinafter set forth; and

(b) Special assessments ("Special Assessments") for the purposes specified in
Section 5.1 as may be approved by the members, to be established, and
collected as provided herein.

In order to secure payment of the Annual and Special Assessments, such charges
as may be levied by, the Association against any Lot, together with interest,
costs of collection and reasonable attorney's fees, shall be a continuing lien
upon the Lot against which each such assessment or .charge is made. Each such
assessment, together with interest, late charges, costs of collection and
reasonable attorney’s fees shall also be the personal obligation of the person
who is the Owner of such Lot .at the time when the assessment fell due. The
personal obligation for delinquent assessments shall not pass to an Owner's
successor in title unless expressly assumed by them. Such assumption shall not
relieve an Owner of his obligation.

(5.3) Exempt property. The assessments, charges and liens created under
this

Article shall not apply to the Common Area, nor shall they apply to any Lot
the title to which is vested either in any first mortgagee subsequent to
foreclosure or in the Secretary of Housing and Urban Development or the
Administrator of Veterans Affairs or any other state or federal governmental
agency which acquires title by reason of such agency’s guarantee or insurance
of a foreclosed mortgage loan; provided, however. That upon the resale of such
property by such first mortgagee or such governmental agency the assessments
shall again accrue on such Lot. Any Lot which Developer may hereafter
designate for common use as part of the Common Areas shall also be exempt and
all land

granted to or used by a utility company shall be exempt from the assessments
created herein.

(5.4) Maximum Annual Assessments. Until January 1 of the year
immediately following the conveyance of the first Lot to an Owner, the maximum
Annual Assessment shall be Two Hundred Forty and No/lOO Dollars ($240.00) on
each Lot.

(a) From and after January 1 of the year immediately following the conveyance
of the first Lot to an Owner, the maximum Annual Assessment may be increased
each year above the maximum assessment for the previous year without a vote
'of the membership not more than the greater of (1) ten percent (10%) or (2)
the increase in the Consumer Price Index from the previous year.

(b) From and after January 1 of the year immediately following the, conveyance
of the first Lot to an Owner, the maximum Annual Assessment may be increased
above the greater of ten percent (10%) or the previous year increase in the
Consumer Price Index by a vote of two-thirds (2/3) of each class of members
who are voting in person or by proxy, at a meeting duly called for this
purpose.

(c) The Board of Directors may fix the Annual Assessment at an amount not in
excess of the maximum herein provided.

(5.5) Special Assessments. In addition to the annual assessment
authorized above, the Association may levy, in any assessment year, a Special
Assessment applicable to that year only provided that any such assessment
shall have the assent of two-thirds (2/3) of the votes of each Class of the
Association members who are voting in person or by proxy at a meeting duly
called for this purpose. .

(5.6) Notice and Quorum for Any Action Authorized Under Sections 5.4 and
5.5. Written notice of any meeting called for the purpose of taking any
action authorized under Sections 5.4 and 5.5 of this Article shall be sent to
all members not less than ten (10) days or more than fifty (50) days in
advance of the meeting. At the first such meeting called the presence in
person or by proxy of members entitled to cast ten percent (10%) of all the
votes of each class shall constitute a quorum. If the required quorum is not
present, another meeting may be called subject to the same notice requirement
and the required quorum at the subsequent meeting shall be one-half of the
required quorum applicable to the meeting adjourned for lack of a quorum. The
quorum requirement shall continue to be reduced by fifty percent (50%) from
that required at the previous meeting, as previously reduced, until such time
as a quorum is present and business can be conducted.

(5.7) Date of Commencement of Annual Assessments; Due Dates; Certificate of
Payment. The Annual Assessments shall commence as to all Lots on the later
to occur of the first day of the month following the date such property is
submitted to the provisions of this Declaration or when activated by the
Developer. From the date on which the

Annual Assessments commence on a Lot until the date on which the Lot is sold
by the

Developer, the Developer shall be liable for Annual Assessments at a rate
which is one third of the rate otherwise payable except that Developer shall
not be liable for Annual Assessments on any Lots if the Association is
operating without a deficit. The first Annual Assessment shall be adjusted
according to the number of months remaining in the calendar year when filed.
At least thirty (30) days before January 1 of each year, the Board of
Directors shall fix the amount of the Annual Assessment against each Lot and
in the event the Board elects not to fix such assessment rate as herein
provided, the amount of the prior year's Annual Assessment shall be the fixed
amount. Written notice of any change in assessment rate shall be sent to every
owner. The Annual Assessments shall be due and payable in advance on January 1
of each year unless the Board of Directors votes to collect such assessments
on a' monthly basis and the due dates for the payment of Special Assessments
shall be established by the Board of Directors. The Association shall, upon
demand and for a reasonable charge, furnish a certificate signed by an officer
of the Association setting forth whether the assessments on a specified Lot
have been paid to date.

(5.8) Effect of Non-Payment of Assessment: Remedies of the Association.
Any

Assessment not paid within thirty (30) days after the due date shall be
assessed a late charge as determined by the Board of Directors and bear
interest from the due date at an annual rate of eight percent (8%) but in no
event above the then maximum legal rate, and to the extent allowed by law. The
Association, or its agent or representative, may bring an action at law
against the Owner personally obligated to pay the same or foreclose the lien
against the Lot to which the assessment relates, and interest costs and
reasonable attorney’s fees for such action or foreclosure shall be added to
the amount of such assessment to the extent allowed by law. No Owner may waive
or otherwise escape liability for the assessments provided for herein by
non-use of the Common Area or abandonment of his Lot. .

(5.9) Subordination of the Lien to First Mortgages. The lien of the
assessments provided for herein shall be subordinate to the lien of any first
priority deed of trust or first mortgage. Sale or transfer of any Lot shall
not affect the assessment lien. However the sale or transfer of any Lot which
is subject to any first mortgage pursuant to a foreclosure thereof or under a
power of sale or any proceeding in lieu of foreclosure thereof shall
extinguish the lien of such assessment as to payments which became due prior
to such sale or transfer. No sale or transfer shall relieve such Lot from
liability for any assessment thereafter becoming due or from the lien thereof.

(5.10) Collection Upon Sale by Developer of Builder. Upon the sale of a
Lot by

Developer or Builder, the purchaser shall pay to the Association at the
closing of the sale that amount of money that is equal to that portion of the
Annual Assessment attributable to the balance of the period in which the
closing takes place. After receipt of said payment, any amounts prepaid by the
Developer or Builder shall be refunded by the Association. Any Special
Assessment made before, but falling due after, the date of closing of the sale
of a Lat by Developer or Builder shall be paid in full to the Association by
the purchaser at the closing of the sale.' In addition each original purchaser
shall pay an amount equal to the Annual Assessment as a contribution to the
Working Capital Fund of the Association.

ARTICLE VI: ARCHITECTURAL. MAINTENANCE AND USE RESTRICTIONS

(6.1) Architectural Control Committee. Developer shall appoint an
Architectural

Control Committee consisting of not less than three members to serve as
representatives of the Association’s Board of Directors and enforce the
restrictions hereafter set forth.

Prior to the formation of said Committee, Developer shall have the
responsibility

of enforcing the restrictions set forth in this Article. Upon the later of the
following two.

dates, the Architectural Cantral Committee shall be appointed by the Board of
Directors:

(1) Upon the Developer voluntarily relinquishing control of the Architectural
Control

Committee; or (2) seven (7) years following the date of recording of this
Declaration.

Reference herein to the Committee shall mean the Developer until such
Committee is appointed. The following architectural, maintenance and use
restrictions shall apply to each and every Lot now or hereafter subject
to.this Declaration.

(6.2) Approval of Plans and Architectural Control Committee. No
construction, reconstruction, remodeling, alteration, roofing or addition to
any structure, building, fence, wall, drive or walkway, or exterior color
change, shall be conunenced or maintained upon any Lot, nor shall any exterior
addition to or change or alteration therein be made after completion of
construction of said dwelling, unless and until the plans and specifications
showing the nature, kind, shape, height, color, material and location of the
same shall have been mailed to.the Architectural Cantral Committee by
certified mail with return receipt requested and approved in writing as
to.harmany of external design and location in relation to.surraunding
structures and topography by the Architectural Cantral Committee If the
Architectural Cantral Committee fails to.approve or disapprove such design and
location within thirty (30) days after said plans and specifications shall
have been submitted"to.it, further approval will not be required and this
Article will be deemed to have been fully complied with. Upon giving approval
to.such plans and specifications, construction shall be started and prosecuted
to completion promptly and in strict

conformity with such plans as have been previously approved by the
Architectural Control Committee. The Architectural Control Committee or the
Board of Directors of the Association shall be entitled to stop any
construction in violation of these restrictions.

(6.3) Residential Use. All Lots shall be used for residential purposes
only.

(6.4) Building Line Requirements. No building shall be located nearer
to the front property line than the front building setback line as shown on
the recorded maps of the Property, and no building shall be located nearer to
the side street line than the side street setback line shown on the recorded
maps of the Property. It is provided however that eaves, steps, stoops,
porches and chimneys shall not be considered a part of the building for
purposes of interpreting this paragraph of this Declaration. Minimum setback
lines which may be shown on any recorded plat of the Properties are not
necessarily intended to create uniformity of setbacks; they are meant
primarily to avoid overcrowding and monotony. It is intended that setbacks may
be staggered where appropriate so as to preserve the trees and other natural
vegetation, and to insure each Owner the greatest benefit and enjoyment of
his/her Lot. Any deviation from the building line requirements not in excess
of ten (10) percent thereof shall not be construed as a violation of the
building line requirements. .

(6.5) Building Requirements. No dwelling shall be erected or placed on
any Lot having a heated living area (exclusive of uncovered porches, stoops,
terraces, attached garages or carports) of less than 1500 square feet. All
homes shall have at a minimum, a single enclosed garage and a concrete
driveway to the street. All homes shall have a minimum roof pitch of 6/12 for
the majority of the roof areas. All slab foundations shall have a brick face
on the slab.

(6.6) Walls, Fences and Hedges. No fence, hedge or wall of any type or
kind shall be erected or maintained on a Lot except such fences, hedges or
walls as may be installed, constructed or erected with the initial
construction of the main dwelling located on said Lot, or as may later be
approved by the Architectural Control Committee as described in Paragraph
(6.2) above. No metal fences, except for a 2 x 4 wire mesh inside of an
approved wooden fence to contain pets, are allowed on a Lot. No solid fence is
allowed on the perimeter of any Lot. All perimeter fences on a Lot must be
rail type or picket fences with at least 50% of surface area open. Privacy
fences are permitted around pools or patios with a maximum height of six (6)
feet. Fences shall be no closer to the right-of-way of any street than the
front comer of the house upon any such Lot. The Architectural Control
Committee shall have the authority to grant exceptions to the above referenced
fence and wall guidelines.

(6.7) Use of Outbuildings and Similar Structures. No structure of a
temporary nature shall be erected or allowed to remain on any Lot, and no
trailer, shed, tent, garage; carport, or any other structure of a similar
nature shall be used as a residence either temporarily or permanently.
Provided, however, this paragraph shall not be construed to prevent the
Developer or Builder from using sheds or other temporary structures during
construction for such purposes as Developer or Builder deems necessary or
later approved by the Association. No television satellite dishes shall be
erected on any Lot, except that a television satellite dish not exceeding 30
inches in diameter which is attached to the house and is not visible from the
street shall be permitted. No radio or television antenna shall be allowed on
the roof of any house or structure located on a Lot and no separate towers for
antenna shall be erected on any Lot. No metal storage buildings, metal sheds,
metal trailers or metal garages shall be permitted on any Lot. All other types
of storage buildings, sheds, trailers or garages shall not be allowed on a Lot
unless approved by the Architectural Control Committee as described in
Paragraph (6.2) above.

(6.8) Animals and Pets. No animals, livestock or poultry of any kind
shall be raised, bred, pastured, or maintained on any Lot, except household
pets which may be kept thereon in reasonable numbers as pets for the sole
pleasure and use of the occupants, but not for any commercial use or purpose.
All household pets shall be kept under Owner's control so as not to be a
nuisance to other Owners. Birds shall be confined in cages.

(6.9) Signs. No advertising signs of any type or kind shall be erected,
placed or

permitted to remain upon or above any Lot or Common Area with the exception of
a single sign "For Rent" or "For Sale," which sign shall not exceed two feet
by two feet in dimension and shall refer only to the premises on which
displayed, there being only one

Sign to a Lot. Notwithstanding the above, the Developer or Builder may erect
and place permanent and temporary signs on or above any unsold Lot. Developer
or Builder shall also have the right of ingress, egress and regress over the
aforesaid Lots in order to maintain and replace any such signs until 100% of
the Lots have been sold.

(6.10) Nuisances. No offensive or illegal activity shall be carried on
upon any Lot, nor shall anything be done thereof which is or may become an
annoyance or nuisance to any other Owner. No Lot shall be used in whole or in
part for storage of rubbish of any character whatsoever, nor for the storage
of any property or thing that will cause such Lot to appear in any unclean or
untidy condition or that is unsightly; nor shall any substance, thing or
material be kept upon any Lot that will emit a foul odor or that will cause
any noise that will or might disturb the .peace and quiet of the occupants of
surrounding Lots.

No trash, rubbish, stored materials, wrecked, unlicensed or inoperable
vehicles, boats and/or trailers, recreational vehicles or similar unsightly
items shall be allowed to remain on any Lot outside an enclosed structure.
However, the foregoing shall not be construed to prohibit temporary deposits
of trash, rubbish and other such debris for pick up by

governmental and other similar garbage and trash removal service units. In the
event any

Owner fails or refuses to keep his Lot free from unsightly objects, weeds or
underbrush in a manner satisfactory to a majority of the Association Board of
Directors, the Association may, through its agent or representative, five days
after posting a notice on such Lot or mailing a notice to the Owner thereof at
his property requesting the Owner to comply with the requirements of this
paragraph, enter and remove all such unsightly objects, debris or other
vegetation at Owner's expense and Owner by acquiring any Lot subject to this
Declaration, agrees to pay such costs incurred by the Association in the
enforcement of this paragraph promptly upon demand. The Association or its
agent or representative may bring an action at law against the Owner
personally obligated to pay the same or foreclose the lien against the Lot and
interest costs and reasonable attorney's fees for such action or foreclosure
shall be added to the amount due to the extent allowed by law. No such entry
as provided herein shall be deemed a trespass. The foregoing provisions shall
not apply to the Developer while constructing residences upon any Lots.

(6.11) Clotheslines. Garbage Cans. Etc. All clotheslines, garbage cans,
lawnmowers and equipment shall be kept, in an enclosed structure or screened
by adequate planting or fencing so as to conceal same from the view of
neighboring Owner and Streets. Incinerators for garbage, trash or other refuse
shall not be used nor permitted to be erected or placed on any Lot.

(6.12) Use of Common Areas. No planting or gardening by individual
Owners shall be done upon any Common Area without approval of the Board of
Directors. Except for the right of easement of enjoyment in and to the Common
Areas herein given to each Owner, Owners are hereby prohibited and restricted
from using any of the Common Area except as may be allowed and prescribed by
the Association Is Board of Directors or as expressly provided for herein. It
is Developer's intent that this paragraph inure to the mutual benefit of all
Owners within the Properties.

(6.13) Maintenance.

(a) Exterior maintenance, upkeep and repair to the main dwelling on each Lot,
yard, fence, walkway and shrubbery shall be the sale responsibility and
expense of the Owner of the Lot subject to such reasonable requirements as may
from time to time be established by the Committee to insure the continuity and
harmony of exterior design of Morningside Meadows. Should a majority of the
Association Board of Directors determine that any Owner has failed or refused
to discharge properly his obligations with respect to such maintenance, upkeep
and repairs, the Association, through its agent or representative, may provide
same as it may deem necessary and proper.

(b) All Lots, together with the exterior of all improvements thereon, shall be
maintained in a neat and attractive condition by their respective Owners. Such
maintenance shall include, but shall not be limited to, painting, repairing,
replacing or caring for roofs, gutters, downspouts, building surfaces, trees,
shrubs, walks or other exterior improvements. In the event an Owner shall fail
to maintain the premises and the improvements thereon in a manner satisfactory
to the Association Board of Directors, the Association may, through its agent
or representative, after approval by two-thirds (2/3) vote of the Board, have
the right to enter upon said Lot and repair, maintain and restore the Lot and
the exterior of the buildings and any other improvements thereon. The cost of
such exterior maintenance shall be added to and become part of the assessment
to which such Lot is subject and the Owner shall be personally liable to the
Association for the costs of such maintenance, and the cost, until paid, shall
be a permanent charge and lien upon such Lot, enforceable to the same extent
and collectible as provided for in Article V. Such entry as provided herein
shall not be a trespass, nor shall the Association be liable for doing
anything reasonably necessary or appropriate in connection with carrying out
those provisions, provided such entry shall be at reasonable times and places
so as not to interfere with the right of quiet enjoyment of the individual Lot
Owner.

(6.14) Above Ground Swimming Pools. No above ground swimming pools,
except for small wading pools, are permitted on any Lot.

(6.15) Decorative Structures. No decorative statues, birdbaths,
fountains, or figurines, or any other decorative structures or items are
permitted in the front or side yards of any Lot.

(6.16) Boats, Commercial Vehicles and Recreational Vehicles. No boats,
boat

Trailer, Commercial vehicles larger than a full-size pickup truck or full-size
van, or recreational vehicles shall be permitted on any Lot except in an
enclosed garage or

Screened area approved by the Architectural Control Committee.

(6.17) Mailboxes. Mailboxes on each Lot shall conform to specifics set
forth by the Architectural Control Committee.

ARTICLE VII: EASEMENTS

(7.1) General. Each Lot now or hereafter subjected to this Declaration
shall be subject to .all easements shown or set forth on the recorded plat or
plats of survey upon which such Lot is shown. No structure of any type shall
be erected or placed upon any

part of a Lot or the Common Area which will interfere with rights and use of
any and all easements shown on said recorded plat.

(7.2) Utility and Drainage. An easement on each Lot is hereby reserved
by

Developer for itself and its successors and assigns along, over, under and
upon a strip of land ten feet (10') in width parallel and contiguous to the
rear or back Lot line of each Lot and easements five feet (5') in width over,
under and along the side lot lines of each Lot, in addition to such other
easements as may appear on a recorded subdivision plat for Morningside
Meadows. The purpose of these easements shall be to provide, install,
maintain, construct and operate drainage facilities now or in the future and
utility service lines to, from or for each of the Lots. Within these
easements, no structure, planting or other material shall be placed or
permitted to remain which may damage or interfere with the installation or
maintenance of utilities, or which may change the direction or flow of
drainage channels in the easements without approval of the Architectural
Control Committee. The easement area of each and all improvements in it shall
be maintained continuously by Owner, except for those improvements for which a
public authority or utility company is responsible. With ten (10) days prior
written notice to Owner, Developer may exercise the right to remove
obstructions in such easements upon Owner's failure to do so. For the purpose
of this covenant, Developer reserves the right to modify or extinguish the
herein reserved easements along any Lot lines when in its sale discretion
adequate reserved easements are otherwise available for the installation of
drainage facilities and/or utility service lines. For the duration of these
restrictions, no such utilities shall be permitted to occupy or otherwise
encroach upon any of the easement areas reserved without first obtaining the
prior written consent of Developer; provided, however, local service from
utilities within easement areas to residences constructed upon any such Lots
may be established without first obtaining separate consents there for from
Developer. The Association may likewise reserve and grant easements for the
installation and maintenance of sewerage, utility and drainage facilities in,
across, under and over the Common Area.

(7.3) Emergency. There is hereby reserved without further assent or
permit and to the extent allowed by law, a general easement to all firemen,
ambulance personnel, policemen and security guards employed by Developer and
all similar persons to enter upon the Properties or any portion thereof, in
the performance of their respective duties.

(7.4) Entry Monuments. Signs and Landscaping Easements. Declarant
hereby grants the Association perpetual easements over the portion of those
Lots which are designated "Sign & Landscape Esmt." or "Common Open Space"
on all recorded maps of Morningside Meadows. Easements over these areas shall
be for the purpose of the installation, maintenance and repair of all
Morningside Meadows entry monuments, walls, signs and landscaping and the
Association is also granted a perpetual easement for ingress,

egress and regress over these areas to fulfill these purposes. Declarant also
hereby grants perpetual easements over all entrance islands within public
rights of way and the easement over these areas shall be for the installation
and maintenance of landscaping on the entrance islands.

ARTICLE VIII: GENERAL PROVISIONS

(8.1) Covenants Running with the Land. All provisions of this
Declaration shall be construed to be covenants running with the land, and with
every part thereof and interest therein, and every Owner or any other person
or legal entity claiming an interest in any Lot, and his heirs, executors,
administrators, successors and assigns, shall be bound by all of-the
provisions of this Declaration.

(8.2) Duration. The covenants, conditions and restrictions of this
Declaration shall be binding for a term of twenty (20) years from the date
this Declaration is recorded after which time they shall be automatically
extended for successive and additional periods of ten (10) years each.

(8.3) Amendments and Termination. This Declaration may be terminated
during the first twenty (20) year period by an instrument signed by not less
than ninety percent (90%) of the Owners, and thereafter may be terminated by
an instrument signed by not less than seventy-five percent (75%) of the
Owners. This Declaration may be amended upon the affirmative vote or written
consent, or any combination thereof, of at least sixty-seven percent (67%) of
the Owners and the consent of the Developer; provided, however, that the
Developer may amend this Declaration to correct minor and clerical errors, as
determined by the Developer, without approval of Owners arid should the FHA,
VA, Federal National Mortgage Association (FNMA) or the Federal Home Loan
Mortgage Corporation (FHLMC) subsequently delete any of their requirements
which necessitate certain provisions of this Declaration or make any such
requirements less stringent, the Developer, without approval of Owners, may
amend this Declaration to reflect such changes. Any such amendment or
termination shall not be effective until an instrument evidencing such change
has been filed of record in the Union County Public Registry.

(8.4) FHA/VA Approval. In the event the Declarant has arranged for and
provided purchasers of Lots with FHA insured or VA mortgage loans, then as
long as any Class B lot exists, as provided in Article VI hereof, the
following actions will require the prior approval of the Federal Housing
Administration or the Veterans Administration: annexation of additional
properties, other than as provided in Article n hereof, deeding, mortgaging or
dedication of Common Area to persons other than the Association and amendment
of this Declaration.

(8.5) Enforcement. If any Owner shall violate or attempt to violate any
of these restrictions, failure to comply with any of the same shall be grounds
for an action to recover sums due, for damages or injunctive relief, or both,
maintainable by the Board of Directors on behalf of the Association, or, in
proper case, by an aggrieved Owner. Any failure by Association or any other
Owner to enforce any of the foregoing restrictions or other provisions shall
in no event be deemed a waiver of their right to do so thereafter.
Invalidation of any covenant condition or restriction or other provision of
this declaration shall not affect the validity of the remaining portions
thereof which shall remain in full force and effect.

(8.6) Headings. Headings are inserted only for convenience and are in
no way to be constructed as defining, limiting, extending or otherwise
modifying or adding to the particular paragraphs to which they refer.

(8.7) Unintentional Violation of Restrictions. In the event of
unintentional violation of any of the foregoing restrictions with respect to
any Lot, the Developer or its successors reserves the right (by and with the
mutual written consent, of the then Owner or Owners of such Lot) to change,
amend, or release any of the foregoing restrictions as the same may apply to
that particular Lot.

(8.8) Severability. The provisions of this Declaration are severable
and the invalidity of one or more provisions hereof shall not be deemed to
impair or affect in any manner the validity, enforceability or effect of the
remainder hereof.

IN WITNESS WHEREOF, the Developer has caused this Declaration to be executed
under seal on the day and year first above written.

Knotts-Stallings, LLC, a North Carolina limited

liability company

BY:________________________________(SEAL)

#CCR-MORNINGSIDE 1