Page 1 DECLARATION OF PROTECTIVE COVENANTS AND RESTRICTIONS FOR FOREST LAKE SHORE SUBDIVISION Phase I WHEREAS, Forest Lake Shores, LLC (hereinafter referred to as "Developer"), is the owner of all of Lots in Forest Lake Shores Subdivision, and WHEREAS, it is desirable to secure the best use and Improvements of the lots therein, and to protect the owners of such lots against such use of other lots therein as would depreciate the value of such property, and to prevent the erection of poorly designed or constructed buildings, and to make the best use of and preserve the natural beauty of said property and to locate the buildings thereon with regard to topographic features; and WHEREAS, the Developer desires to create a finer quality residential subdivision having an architectural harmony, achieved through consistency of features such as color, texture, material type or exterior style, placement of landscape flora and the preservation of certain existing areas in their natural state providing for a pleasing view of the lake, and through relative consistency of design; and WHEREAS, to secure such objectives, said Developer desires to subject the lots in said subdivision to the following restrictions and covenants, including but not limited to methods of construction and maintenance as will secure a continuous standard for the proper development of said subdivision. NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that the lots in the subdivision shall be sold, transferred and conveyed subject to the following covenants and restrictions: 1. USE RESTRICTIONS The term "Building Site" as used in this Declaration shall mean any lot of record or portion thereof under a single ownership whether, owned by a trust, a partnership, a corporation, an individual individuals, including ownership in tenancy in common, joint tenancy and tenancy by the entirety, intended for use as or used as the site and location of a single family dwelling. Developer hereby creates an ARCHITECTURAL CONTROL COMMITTEE, composed of Phillip Lowe and appointees. In the event of the death or resignation of any member of said Committee, the remaining members shall appoint a member to fill the vacancy. The Architectural Control Committee shall have the right to prevent the clearing of a lot and subsequent excavation and grading prior to construction of the main residence upon such a lot according to the following: Prior to the construction of the main residence, a building site owner is required to seek approval of building plans and General Contractor through the Architectural Control Committee. The Committee shall consider quality of workmanship and materials, external design, location with respect to topography and finished grades, elevations and building lines, any and all structures including fences, location of driveways and walkways, landscape design, and the preservation of certain existing trees and wooded areas. To comply with this requirement, each building site owner, prior to any construction on the building site, shall first submit a preliminary plan to the Architectural Control Committee stating in general the type, style, size and general design of the residence to be Page 2 constructed, along with its location on the building site and the name of the building site owner's designated General Contractor. After approval in writing of the preliminary plan by the Architectural Control Committee, the building site owner shall then submit a set of the actual plans and specifications of the improvement to be constructed. Such plans and specifications shall include the floor plan, exterior color schemes, and materials, elevations and actual plat plan showing distances from easements and lot lines and the location of the finished grade height of the first floor. The building site owner agrees that he/she will not obtain a building permit until the Architectural Control Committee has approved the final plans. If no objections to the plans are raised by the Architectural Control Committee within ten (10) days of submission of the final plans to said Committee, the plans shall be deemed to have been approved by said Architectural Control Committee. The following minimum requirements shall apply to all residential improvements on lots of this subdivision: A. Minimum floor area of a single level dwelling shall be 2400 heated square feet. B. The minimum floor area of a two level dwelling shall be 2600 heated square feet. C. The minimum size yard square footage shall be 15,000 sq feet. No lots may be subdivided in parcels less than minimum without developer or board approval. Lots may be combined but only one single family dwelling is allowed. D. Each single-family dwelling shall have an attached garage suitable for the storage of at least two vehicles. Garages may not face the front street. No prefab, modular, or used homes may be erected. Set back lines for building are provided on plat. E. The roof shall have a slope approved by Architectural Committee. No structure shall be taller than three stories plus a roof. F. No tree larger than 6" in diameter shall be cut or removed unless written permission is received from the Architectural Control Committee. Care must be taken to not cover the root system of trees that may cause harm to the tree. This is especially important with seawall construction and during grading or filling. G. Vinyl and aluminum siding are not permitted on any exterior walls except gables, eves, and trim No more than 20% of all exterior surfaces may be vinyl or aluminum. All exposed flashing shall be copper or an approved substance and color. H. Construction of single family dwelling must begin within two years of lot purchase. Construction must continue in a timely fashion until completed in a reasonable time period as judged by the Board of the Homeowners Assn or Developer. If valid construction does not begin within said period, the developer or Board may, at it’s sole discretion, force purchase of the lot from buyer for the original sales price and deduct reasonable closing costs from purchase price. Developer may waive or delay this right if he believes reasonable diligence is being pursued to build. It is the intent to not allow speculation on land within this subdivision so as to permit build-out of development at a similar time period. The Page 3 lot will be restored to it’s original sales condition at original buyer’s expense if repurchase is necessary. Speculation of homes is allowed. If resale of property is approved by board or developer, the original 2 year building requirements remain in effect for the new owner and does not start afresh. I. Dwelling may not be occupied until construction is completed. J. Owners are required to repair, restore or replace damaged dwellings to subdivision architectural standards and begin by two months after damage. Developer or Homeowner’s Board have the right to require insurance proceeds paid to owner due to damage, be applied to repair or replacement. All building structures shall be maintained and painted when necessary to keep the structure attractive, safe, and protected. K There shall be no firing of firearms. No setting of trash fires or outside burning. L. Vegetable gardens must be in rear of lot and no larger than 600 square feet. M. Piers have different requirements according to location. Property fronting water may have maximum pier dimensions of: 5 feet width from land to distal deck, 300 sq ft of deck at distal end, 112 foot elevation to top of deck (normal water elevation is 109 feet), rail height of four feet, no gazebos, no boathouses, no roofs, no blockage of more than 5 feet width of shoreline, one pier per house, pier lights must have a shade to prevent visibility of light source from land. No pier lights may be visible from land except during Christmas season, piers may not be built within 20 feet of property line (except corner lots on canal as later described), may not adjoin or exist within 20 feet of another pier(same exception), other than a light pole no structure may arise higher than a 116 foot elevation. Specific requirements: 1. Properties on the main body of Forest Lake, within 1000 feet of Knollwood Drive (including lots 1-7, 20,21) pier may not exceed 60 feet in length. 2. Properties on the main body of Forest Lake, farther than 1000 feet from Knollwood Drive, pier may not exceed 120 feet. 3. Properties with a waterway or canal on the side of their lot (such as lots 7 or 20) cannot place any structures or material in or over the waterway which would impede boat traffic within canal. 4. Properties with the waterway or canal in the rear of their lot may only extend the pier to a maximum of 15 feet from dry land or no closer than 10 feet to their rear lot line. Piers shall be built in a staggered fashion so as to not be built directly across from another pier and maintain a 20 foot side setback . 5. Corner properties on the waterway or canal (such as lots 13 or 14)may extend piers to the end of their rear lot line but must remain 10 feet from the adjoining corner lot property line. Pier may extend the full length of waterfront but must remain 10 feet from other corner lot property line. 6. No other structures shall impede boat traffic without approval of FLS Homeowner Association or Developer. The foregoing requirements shall be in addition to any other requirements set forth elsewhere herein. The Architectural Control Committee, at its option, may delegate the duties specified herein to the Forest Lake Shores Homeowner's Page 4 Association. In any event, the duties of the Architectural Control Committee shall become the responsibility of the Forest Lake Shores Homeowner's Association no later than the first day of January 2010. The duties of the Homeowner's Association as set forth herein shall also include the duties to review and approve additions and exterior modifications to any structure previously approved by the Architectural Control Committee or Homeowner's Association acting as the Architectural Control Committee. 2. RIGHTS OF WAY AND EASEMENTS Rights of way and easements for installation and maintenance of utilities, water retention facilities, signage, drainage facilities and boulevards are reserved as shown on the recorded plat. Canals are all deemed to be common areas for boat passage, recreation, and maintenance of canal depth. Buyers must allow access to canals for maintenance needs approved by Homeowner Board. Within these easements, no structure, fence, planting or other material, shall be placed or permitted to remain which may damage or impair the function or interfere with the installation and maintenance of utilities, or easements. Any improvements so located shall be removed upon the request of the Developer, its successors or assigns, or any public utility using said areas, at the expense of the owner of said building site or tract. The easement area of each building site and all improvements in it shall be maintained continuously by the owner of the building site, except those improvements for which a public utility or authority is obligated to maintain. Lot owners and building site owners are prohibited from altering, restructuring or redesigning drainage easement areas, except where grading or restructuring is necessary in connection with construction of improvements on the building site. Any such grading or restructuring shall not alter or impair the drainage easements and where re-grading and restructuring is necessary it shall not be done without prior approval of the Architectural Control Committee, and the lot owner or building site owner shall replant all easement areas to restore grass and vegetation removed during re-grading or restructuring. Lot owners are responsible for the final grading of the lot. Final grading shall provide for proper drainage of surface water from buyers lot. Construction plans for each plat provide elevations for drainage of surface and it is the lot owner's responsibility to maintain the proper grade so as not to disturb said drainage. If in the event that the lot owner does not grade their building site in a manner which allows for proper drainage of adjoining properties the Homeowners Association or Developer may grade as necessary to provide for proper drainage at the lot owners expense. Lot owners are prohibited from grading on adjacent undeveloped lots for any reason without prior written consent of the Developer. If a lot owner or his contractor grades onto an adjacent undeveloped lot the Homeowners association or Developer may grade as necessary to correct any conditions at the lot owner's expense. Low lying vegetation may not interfere with visibility near intersections or curves in the roads. The canals are considered easements for boat traffic for all members of the FLS Homeowners Association. Members shall not leave unattended boats anywhere Page 5 accept approved locations on their own property. On canal property, boats shall be moored along the side of piers or attached to land and may not be moored in front of pier. 3. HOMEOWNERS' ASSOCIATION Every person or entity who is the record owner of a fee or undivided fee interest in any building site that is subject to this Declaration shall be deemed to have membership in the Forest Lake Shores Homeowners' Association. The foregoing is not intended to include person who holds an interest merely as security for the performance of an obligation, and the giving of a security interest shall not terminate the owner's membership. No owner, whether one or more persons, shall have more than one membership per building site. In the event of multiple owners of a building site, vote and rights of use and enjoyment shall be as provided herein. Membership shall be appurtenant to and may not be separated from ownership of any building site. Ownership of a building site shall be the sole qualification for membership. The rights and privileges of membership, including the right to vote and to hold office may be exercised by a member or the member's spouse, but in no event shall more than one vote be cast nor office held for each building site. The Developer has incorporated the Forest Lake Shores Homeowners' Association and has, executed and filed Articles of Incorporation and By-Laws for the Homeowners' Association consistent with the terms and conditions of this Declaration. Membership in the Forest Lake Shore Homeowners Association shall become automatically effective upon the sale of 75% of the lots or building site in Forest Lake Shores subdivision, first phase, or at such earlier time as the Developer shall elect, at Developer's sole option. The Developer reserves the right to add building sites and memberships located in additional contiguous property to membership in the Forest Lake Shore Homeowners Association as additional plats, if any, are added to Forest Lake Shores subdivision. Any such new members shall be subject to the same rights and obligations with respect to membership in the Homeowners Association as all current members at the time any such addition is made. Except as specifically provided, otherwise herein, each owner of a building site shall be liable for his proportionate share of the cost (based upon the percentage of all lots owned by an owner as to the total number of lots then subject to the provisions of this Declaration) for the proper maintenance of water retention facilities, drainage facilities and boulevards within the entire Forest Lake Shores subdivision, which water retention facilities, drainage facilities, canals, signage, seasonal decorations, fountains, gardens, spillways, dams, common areas, and boulevards are described below and which may be added to from time to time to include upon completion and inclusion of additional plats in the subdivision under these or subsequent protective covenants. Costs and fees shall be assessed by the Developer or Homeowners' Association based upon actual or reasonable projected costs for maintenance and payment thereof shall be mandatory. Any maintenance fee assessed by Developer or by the Homeowners' Page 6 Association and not paid within thirty (30) days of its assessment shall constitute a lien upon the property of the delinquent owner which lien shall be subject to enforcement of foreclosure in accordance with the provisions of S.C. law. Developer agrees that for one (1) year from the date of the recording of this instrument it will maintain the common areas in Forest Lake Shores subdivision, phase one. After one (1) year, the maintenance of the easement, or common areas shall be performed by the Homeowners' Association. Owners of individual building sites or portions thereof shall mow, landscape or otherwise maintain the surface of utility easements located upon their property. Any utility easements, or common area not located upon the property of an individual building site owner shall be mowed, landscaped and maintained by the Developer or, after one (1) year from the date of recording of this instrument, by the Homeowners' Association. The easement areas to be maintained by the Developer or the Homeowners Association referred to above are as follows: A. The entrance areas of Forest Lake Shores subdivision, buffer areas, and the planted areas on any of the entrances. B. Water retention facilities, dams, and spillways where constructed. C. Boulevards where constructed. D. Utility easements or common areas not located upon any individual building site or privately owned parcels. After twelve (12) months from the date of the first sale of a lot Homeowners' Association shall have the obligation to maintain all water retention facilities, canals, drainage facilities and boulevards in accord with the requirements of applicable ordinances of the City of Florence, SC or the developers requirements. E. Canals maintenance is the responsibility of Homeowner’s Association for unless an individual landowner is judged to be negligent in maintenance. 4. ASSOCIATION BOARD; POWERS AND DUTIES The directors named in the Homeowners' Association's Articles of Incorporation constitute the Association's first Board which shall hold office and which shall hold and exercise all of the rights, duties, powers and functions of the Board set forth in this Declaration, and the By-Laws, until the first election of Directors by the members of the Association at the first annual membership meeting. The Board shall have all powers for the conduct of the affairs of the Association as provided by this Declaration, by applicable law, and by the Articles of Incorporation and By-Laws of the Association, which are not specifically reserved to the members or Developer herein. Without limitation thereon, the Board shall have the power and obligation to perform the following duties: A. Real and Personal Property. To acquire, own, hold, improve, maintain, manage, lease, insure, pledge, convey, transfer or dedicate real or personal property for the benefit of the Members in connection with the affairs of the Association, except the acquisition, mortgaging or disposal of common areas and/or improvements shall be subject to the conditions and limitations provided herein; and B. Rule Making. To establish, modify and enforce rules and regulations for the Page 7 use of the properties as provided herein, and to review, modify and approve standards as recommended by the Architectural Control Committee; and C. Assessment. To fix, levy and collect assessments as provided herein; and D. Easements. To Grant and convey easements to the common areas as may become necessary, subject to the conditions and limitations provided herein; and E. Employment of Agents. To employ, enter into contract with, delegate authority to and supervise such persons or entities as may be appropriate to manage, conduct and perform the business obligations and duties of the Association; and F. Enforcement of Governing Documents. To perform acts, as may be reasonably necessary or appropriate, including bringing suit, causing a lien to be foreclosed or suspending membership rights, and to enforce or effectuate any of the provisions of the Governing Document; and G. Membership Meetings. To call annual meetings of the members of the Association, in a written notice of which annual membership meeting shall be sent to the members at least ten (10) days in advance of such meeting. 5. OWNERS' RIGHTS Every owner shall have the right and easement of enjoyment in and to the common areas, which shall be appurtenant to and shall pass with the title to every building site, subject to the following: A. The right of the Association to charge reasonable admission and other fees for the use of any facility now or hereafter situated or constructed upon the common areas and to impose reasonable limits on the number of guests who may use the facility; and B. The right of the Association to suspend the voting rights and right to use the common areas and facilities by any owner for any period during which any assessment of the Association against said owner's building site remains unpaid, and for any infraction by an owner of the Association's published rules and regulations for the duration of the infraction, and for an additional period thereafter not to exceed sixty (60) days; and C. The right of the Developer with regard to the properties which may be owned for the purpose of development, to grant easements in and to the common areas contained within the properties to any public agency, authority or utility for such purposes as benefit the properties or parties thereof and owner of building sites contained therein; and D. The right of the Association by a majority vote of all of the members of the Board to borrow money for the purpose of improving the common areas, or any portion thereof, for acquiring additional common areas, or for constructing, repairing or improving any facilities located or to be located thereon, and to give as security for the payment of any such loan a mortgage covering all or any portion of the common areas, provided, however, that the lien and encumbrance of any such mortgage given by the Association shall be subject and subordinate to any and all rights, interests, options, easements and privileges herein reserved or established for the benefit of Developer or any owner, or any holder of any mortgage, irrespective of when executed, given by Developer or any owner encumbering any building site or other property located within the Page 8 properties; E. The right of the Association to dedicate or transfer all or any portion of the common areas to any public agency, authority or utility for such purpose and subject to such conditions as may be agreed to by the members of the Association. No such dedication or transfer shall be effective unless such dedication or transfer has been approved by at least 66-2/3 percent of: (1) The votes which the Class "A" members present or represented by proxies are entitled to cast at a meeting duly called for such purposes; and (2) The votes which the Class "B" member is entitled to cast whether present or represented by proxy at a meeting duly called for such purposes, so long as such Class "B" membership shall exist; and F. The right of the Association with regard to the properties which it may own to grant easements to Developer, any public agency, authority or utility for such purposes as benefit the properties or portion thereof and owners of building sites contained therein. 6 VOTING The Association shall have two classes of membership, Class "A" and Class "B" as follows: A. Class "A" Class "A" members shall be all owners with the exception of the Developer, any successor of the Developer who takes title for the purpose of development and sale and anyone holding one or more building sites for the purpose of development or sale. Class "A" members shall be entitled to one vote for each building site in which they hold the interest required for membership by Section 3 hereof. when more than one person holds such interest in any building site, the vote for such building site shall be exercised as those owners themselves determine and advise in writing to the secretary prior to any meeting. In the absence of such advice, the building site's vote shall be suspended in the event more than one person seeks to exercise it. If a building site is owned by a corporation, partnership or trust, such entity shall designate in writing the person authorized to vote in behalf of such entity. B. Class "B" The Class "B" member shall be the Developer. The Class "B" member shall be entitled to four votes for each building site in which it holds the interest required for membership by Section 3 provided that the Class "B" membership shall cease and become converted to Class "A" membership upon the happening of either of the following events, whichever occurs earlier: (1) When the total vote outstanding of the Class "A" membership equals the total votes outstanding of the Class "B" membership; or (2) At such time as Developer voluntarily relinquishes its Class "B" membership rights. 7. PURPOSE OF ASSESSMENTS The assessments levied by the Association shall be for the purpose of promoting the recreation, scenic enjoyment, health, welfare and safety of the residents and for protecting, advancing and promoting the environment of the properties for the common benefit and enjoyment of the owners and occupants of residences, improvement and maintenance of the common areas and other common Page 9 facilities and areas of common responsibilities, including but not limited to repair, replacement and additions thereto, and for the cost of labor, equipment and materials, management and supervision thereof, all as may be authorized from time to time by the Board of Directors. 8. CREATION OF LIEN AND PERSONAL CALCULATIONS OF ASSESSMENTS Each owner of a building site by acceptance of a deed or other conveyance thereof, whether or not it shall be so expressed in such deed or other conveyance, shall be deemed to covenant and agree to pay the Association: A. Initial assessment; B. Annual assessments; C. Special assessments and/or individual assessments against any particular building site, shall be established and collected pursuant to the terms of this Declaration, including but not limited to reasonable fines as may be imposed herein. All such assessments together with interest thereon, late charges and cost of collection thereof, including reasonable attorney's fees shall: (1) Be a charge and a continuing lien upon the building site against which any such assessment is made, and; (2) Be the joint and several personal obligation of each person who was an owner of said building site at the time when any such assessment made against said building site fell due. No owner shall be entitled to a refund of any portion of the membership fee, any annual or special assessment, or installment of a special assessment, paid by him, even though said owner's membership in the Association terminates prior to expiration of the period covered by any such assessment or installment theretofore paid by him. No owner may avoid or escape liability for the entering membership fee, or any annual or special assessment, or individual assessment, imposed or levied pursuant to this Declaration by abandonment of his property or by attempted waiver as a non-user of the benefits of membership in the Association, or of common areas and facilities. 9. ENTERING MEMBERSHIP FEE Each person or entity who holds an ownership interest in a building site, by acceptance of a deed thereof, whether or not it shall be so expressed in any such deed or other conveyance, shall be deemed to covenant and agree to pay to the Association at time of lot closing, an entering membership fee of Two Hundred Dollars ($2 00.00) to be used by the Association for the same purposes for which annual and special assessments may be levied, provided, however, that no person or entity shall be required to pay the entering membership fee more than once, without regard to the number of building sites in which said owner from time to time may hold an ownership interest, and without regard to the number of times said owner may again become a member of the Association after said owner's initial membership therein terminates 10. ANNUAL ASSESSMENTS It shall be the duty of the Board at least thirty (30) days prior to the Association's annual meeting to prepare a budget covering the estimated costs of operating Page 10 the Association during the coming year which may include a capital contribution or reserve in accordance with a capital budget separately prepared. The Board shall cause the proposed budget and the assessments to be levied against each building site for the following year to be delivered to the last known residence address of each member at least thirty (30) days prior to the meeting. The budget and assessment shall become effective unless disapproved at the annual meeting by a vote of at least fifty-one percent (51%) of the total Association membership votes including those votes of the Class "B" member(s). Notwithstanding the foregoing, however, in the event the members disapprove the proposed budget, or the Board fails for any reason so to determine the budget for the such time as a budget shall have been determined as provided herein, the budget in effect for the then current year shall continue for the succeeding year. Notwithstanding the other provisions of this Declaration, the annual assessment will be $175.00 per building site until such time as the first annual Association meeting is held. The $175.00 annual fee shall be paid by all owners of vacant building sites but Class "B" member. 11. SPECIAL ASSESSMENTS In addition to the annual assessment authorized above, the Association may levy in any calendar, year, a special assessment for the purpose of defraying in whole or in part, the cost of any construction or reconstruction, unexpected repair, replacement, or maintenance of a described capital improvement upon the common areas, dams and water control structures, including the necessary fixtures and personal property related thereto, provided, that any such assessment shall have the assent of two-thirds (2/3) of the votes of the total membership including the Class 'B' members who are voting in person or by proxy at the meeting duly called for this purpose, written notice of which shall be sent to all members not less than thirty (30) days in advance of the meeting setting forth the purpose of the meeting. The Board of Directors may make such special assessments payable in installments over a period which may, in the Board's discretion, extend in excess of the fiscal year in which adopted.