DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
                          FOR HILLTOP ESTATES


    THIS  DECLARATION  OF  COVENANTS,  CONDITIONS  AND  RESTRICTIONS 
(this "Declaration")   is made on this date hereinafter set forth by 
Dallas-Flower Mound Associates,   a California  limited  partnership 
qualified to  do business in Texas,   hereinafter referred to as the 
"Declarant".

                        W I T N E S S E T H


    WHEREAS,  the Declarant is the owner of certain real property in 
the Town of Flower Mound,  Denton County,  Texas, which is described 
in Exhibit "A"   attached  hereto  and  made  a  part  hereof   (the 
"Property").

    WHEREAS,   Declarant  desires  to  create  an  exclusive planned 
community known as  Hilltop  Estates  on the Property and such other 
land as may be  added thereto  pursuant to the  terms and provisions 
of this Declaration;

    NOW,  THEREFORE, the Declarant  declares that the Property shall 
be held,  sold and conveyed  subject to the restrictions,  covenants 
and  conditions  declared  below,   which  shall  be  deemed  to  be 
convenants  running with  the land  and imposed on  and  intended to 
benefit and  burden each Lot and  other portions of  the Property in 
order to maintain  within the  Property a  planned community of high 
standards,.   Such covenants shall  be binding on all parties having 
any right,   title or interest  therein or any part thereof,   their 
respective heirs,  personal representatives, successors and assigns, 
and shall inure to the benefit of each Owner thereof.

                           ARTICLE 1
                          DEFINITIONS

    Section 1.   "Property"   shall  mean  and  refer  to  the  real 
property  described  in  Exhibit "A",  and such additions thereto as 
may be brought  within  the  jurisdiction of  the Association and be 
made subject to this Declaration.

    Section 2.   "Association"    shall mean  and  refer to  Hilltop 
Estates  Homeowners  Association,   Inc.,   a  Texas  not-for-profit 
corporation established for the purpose set forth herein.

    Section 3.   "Lot"   shall mean  and  refer to  any plot of land 
indicated upon any recorded  subdivision map of Property or any part 
thereof creating single-family homesites,  with the exception of the 
Common Area  and  areas  deeded  to  the  governmental  authority or 
utility, together with all improvements thereon.

    Section 4.   "Unit"   shall  mean  and refer to  any residential 
dwelling situated upon a lot.

    Section 5.   "Owner"   shall mean and refer to the record owner, 
whether on  or more  persons or entities,   of a fee simple title to 
any Lot,  including contract seller,  but excluding those  having an 
interest merely as security for the performance of an obligation.

    Section 6.   "Declarant"   shall mean and refer to Dallas-Flower 
Mound  Associates,  a   California  limited  partnership,   and  its 
successors and assigns  who are designated as such in writing by the 
Declarant,   and  who  consent  in writing to assume  the duties and 
obligations of the Declarant  with  respect to the  Lots acquired by 
such successor or assign.

    Section 7.   "Common Areas" shall mean and refer to that portion 
of the Property,   if any  conveyed to  the  Association for the use 
and benefit of the Owners.

    Section 8.   "Common Maintenance Areas"  shall mean and refer to 
the Common Areas,   if any,  and the  entrance monuments,   drainage 
facilities,  detention  ponds,  right-of-way  landscaping,  and such 
other areas lying  within dedicated public easements or right-of-way 
as deemed  appropriate by the  Board of Directors of the Association 
for the  preservation,   protection and enhancement  of the property 
values and the general health, safety or welfare of the Owners.

    Section 9.   "Declaration"    shall  mean  and  refer   to  this 
Declaration of Covenants,   Conditions and  Restrictions for Hilltop 
Estates,   and any amendment,   annexations and  supplements thereto 
made in accordance with its terms.

                            ARTICLE II
             HILLTOP ESTATES HOMEOWNERS ASSOCIATION, INC.

    Section 1.   Membership.  The Declarant and every other Owner of 
a Lot  shall be a member of  the  Association.   Membership shall be 
appurtenant to  and  shall not be  separated  from  ownership of any 
Lot.   Every  member  shall have the  right to all  reasonable times 
during business hours to inspect the books of the Association.

    Section 2.   Funding.    Subject to the  terms of  this Article, 
Declarant,   for each Lot  owned by Declarant,   hereby covenants to 
pay,   and each Owner of any  Lot by acceptance  of a deed therefor, 
whether or not it shall be so expressed in such deed,  covenants and 
agrees to  pay to  the  Association:     (1) annual  assessments  or 
charges, and   (2) special assessment for capital improvements, such 
assessments   to  be   established   and  collected  as  hereinafter 
provided.   Such assessments will remain effective for the full term 
(and extended term, if applicable)  of this  Declaration. The annual 
and  special  assessments,   together  with interest,   costs,   and 
reasonable attorney's fees,  shall be a charge on the land and shall 
be a continuing lien upon the  Lot against which each such 
assessment is made. Each such assessment, together with the interest 
costs  and  reasonable attorney's  fees shall  also be  the personal 
obligation of the person who was  the Owner of such  Lot at the time 
when  the  assessment  fell  due.     The  personal  obligation  for 
delinquent  assessments shall not  pass to the successor in title of 
such Owner unless expressly assumed by them.

    Section 3.    Assessment.
        (a) Units  Owned by  Class A  Member.   Subject to the terms 
of this Article,   each Lot is hereby subject  to an initial maximum 
maintenance  charge of $10.00 per month of $120.00 per annum  (until 
such  maintenance  charge  shall be increased  in the Bylaws  of the 
Association),   for the purpose of creating a  fund to be designated 
and known as the  "maintenance fund",  which maintenance charges and 
assessments  will  be paid by  the Owner  or Owners of  each Lot  in 
advance in monthly an,quarterly or annual installments,commencing as 
to all lots as  of the completion  of the Unit thereon.  The rate at 
which each  Lot will be assessed  and  whether such assessment shall 
be payable monthly,  quarterly,  or annually,  will be determined by 
the Board of Directors of the Association at least thirty  (30) days 
in advance  of each  affected assessment  period.   Said rate may be 
adjusted  from time to time by the  Board of Directors as  the needs 
of the Association may,   in the judgment of the Directors, require. 
The assessment  for each lot shall be uniform  except as provided in 
Subsection  (b)  of  this  Section 3.   The Association  shall, upon 
Written  demand  and for reasonable charge,   furnish a  certificate 
signed by  an officer of the  Association  setting forth  whether or 
not the assessment has been paid for the assessment period.

        (b)Units or Lots by Declarant.Notwithstanding the foregoing, 
the   Declarant  shall  be  exempt   from  the  annual   maintenance 
assessment  charges  to  Owner  so  long  as  there  is  a  Class  B 
membership as set forth in  Section 6.   The Declarant hereby agrees 
that for  such period of time  as there is a  Class B  membership in 
effect and  Declarant's Lot  are exempt from  assessment as provided 
above,  that in the event that the annual  maintenance fund revenues 
are insufficient  to pay the operation  expenses of the Association, 
Declarant shall provide  the funds necessary to make up the deficit, 
within thirty (30)days of the receipt of request for payment thereof 
from  the Association,  provided  that if such deficit is the result 
of the failure or refusal  of an Owner or Owners to pay their annual 
maintenance  assessments,   the  Association shall diligently pursue 
all available  remedies  against such defaulting Owners,   including 
the  immediate   institution of litigation   to  recover  the unpaid 
assessments  and shall reimburse the Declarant the amounts,  if any, 
so collected.
        (c) Purpose of Maintenance  Fund.    The  Association  shall 
establish a maintenance fund composed of Owners'  annual maintenance 
assessments and shall  use the  proceeds of  such fund in  providing 
for   normal,   recurring   maintenance   charges   for  the  Common 
Maintenance  Areas  for the use and benefit  of all  members  of the 
Association.    Such  uses  and  benefits  to  be  provided  by  the 
Association  may   include,     by  way  of  clarification  and  not 
limitation, any  and  all  of  the  following:   normal,   recurring 
maintenance of  the Common  Maintenance  Areas   (including, but not 
limited to, mowing, edging, watering, clipping,  sweeping,  pruning, 
raking, and  otherwise  caring  for  existing landscaping)  and  the 
improvements to such  Common Maintenance  Areas,   such as sprinkler 
systems and private streets,  if any, provided the Association shall 
have  no obligation  (except as expressly  provided hereinafter)  to 
make capital  improvement to the  Common  Maintenance Areas; payment 
of all  legal and  other expenses incurred  in  connection with  the 
enforcement of all recorded covenants,  restriction  and  conditions 
affecting  the  property  to  which  the maintenance  fund  applies; 
payment of all reasonable and necessary expenses  in connection with 
the  collection and  administration  of the  maintenance  charge and 
assessment;   employment  of policeman and watchmen,  if any  caring 
for vacant lots; and doing  any  other thing or  things necessary or 
desirable  in  the   opinion  of  the  Board  of  Directors  of  the 
Association to keep the Property neat and  in good  order,  or which 
is  considered of  general benefit to the Owners of occupants of the 
Property,  it being  understood  that the  judgment of the  Board of 
Directors in the  expenditure of said funds and the determination of 
what constitutes normal,   recurring maintenance shall be  final and 
conclusive  so  long  as such  judgment is  exercised in good faith. 
The  association  shall, in  addition ,  establish  and  maintain an 
adequate  reserve  fund for the  periodic  maintenance,  repair  and 
replacement  of  improvements  of the  Common Maintenance Area.  The 
fund  shall be established  and maintained  out  of  regular  annual 
assessments

        (d)Special Assessment for Working Capital Fund. Nonrecurring 
Maintenance  and  Capital  Improvements.   In addition to the annual 
assessments  authorized  above,  the  Association  may  levy special 
assessments as follows:

        (i)  Upon  sales of  the first Lot by Declarant to a Class A 
        Member, a  special  assessment  equal  to  ten  (10)  months 
        estimated regular assessment may be  assessed which shall be 
        due  and  payable upon  conveyance of the  lot to  a Class A 
        Member.  Such  special assessment shall be available for all 
        necessary expenditures of the Association

        (ii)   In  any  assessment  year,   a   special   assessment 
        applicable to that  year only  for the purpose  of defraying 
        in   whole  or  in   part  the   cost  of  any  nonrecurring 
        maintenance ,   or    the     acquisition ,    construction, 
        reconstruction,    repair  or   replacement  of   a  capital 
        improvement upon  any  Common  Maintenance  Area,  including 
        fixtures and  personal  property related  thereto,   may  be 
        assessed.   The Association shall not commingle the proceeds 
        of  such special assessment with the maintenance fund.  Such 
        proceeds shall  be used solely  and exclusively  to fund the 
        nonrecurring maintenance or improvements in question.

    Section 4.   Non - payment  of  Assessment:    Remedies  of  the 
Association.    Any assessment not paid within  ten (10) days  after 
the due  date shall bear  interest from the  due date at the highest 
non - usurious  rate of interest  allowed  by Texas  Law or  18% per 
annum, whichever is less.  The Association shall have  the authority 
to  impose  late charges to compensate  for the  administrative  and 
processing costs of  late payments on such terms as it may establish 
by duly  adopted resolutions and the Association may bring an action 
at law against the Owner  personally obligated  to pay  the same, or 
foreclose  the lien retained  herein against such  Owner's property. 
No   Owner  may  waive   or  otherwise  escape  liability  for   the 
Assessments  provided  for  herein   by  non - use   of  the  Common 
Maintenance Area or abandonment of such Owners property

    Section 5.   Subordinated Lien to Secure Payment.  To secure the 
payment of the maintenance  charge and assessment established hereby 
and to be levied on  individual  lots as above  provided,   there is 
hereby  reserved a lien for  the benefit of  the Association,   said 
lien to be  enforceable through appropriate proceedings at law or in 
equity  by  such  beneficiary;    however,   that   each  such  lien 
shall be specifically  made  secondary,  subordinate and inferior to 
all liens,  present and future,  given granted  and created by or at 
the insistence  and request of the Owner of  any such Lot  to secure 
the payment  of monies advanced or to be advanced  on account of the 
purchase  price and/or the improvement of any such lot;  and further 
provided that as a  condition precedent to any proceeding to enforce 
such lien upon any log  upon which there is an outstanding valid and 
subsisting first  mortgage lien,  said  beneficiary  shall give  the 
holder of such  first  mortgage sixty (60)  days  written notice  of 
such  proposed action,   such  notice,   which shall be  sent to the 
nearest  office of the lien  holder by prepaid U.S. registered mail, 
to contain  the statement of the delinquent maintenance charges upon 
which the proposed action  is based.   Upon  the request of any such 
first mortgage  lien holder,  and  beneficiary shall  acknowledge in 
writing  its obligation to give the foregoing notice with respect to 
the  particular property covered by such  first mortgage lien to the 
particular  property covered  by such first  mortgage lien to holder 
thereof. Sale or  transfer of a lot  shall not affect the assessment 
lien.    However,  the  sale or  transfer  of any  lot  pursuant  to 
mortgage  foreclosure  shall extinguish  the lien of such assessment 
as to payments which became due prior to such a sale or transfer. No 
sale,  foreclosure or transfer shall relieve such lot from liability 
for  any  assessments  thereafter  becoming  due or  from  the  lien 
thereof.   The Association  shall have  the right to file notices of 
liens  in favor  of  such  Association  in  the  Official Records of 
Denton County, Texas

    Section 6.   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  Declarant and shall  be entitled to  one (1)  vote for 
each Lot owned.   When more than on person  holds an interest in any 
lot,  all such persons shall be members,   but the vote for such lot 
shall be exercised  as they among  themselves determine,  and  in no 
event shall  more than one (1) vote be  cast with  respect to any Lot

    (b) Class B.    The  Class B member shall be the  Declarant  who 
shall be entitled to  three (3) votes for  each unoccupied lot owned 
by it.   The  Class B  membership  shall cease  and be  converted to 
Class  A  membership  one   hundred  twenty  (120)  days  after  the 
conveyance of  the  Lot which  causes the total votes outstanding in 
the  Class A  membership to equal the total votes outstanding in the 
Class B membership,  or ten (10) years after conveyance of the first 
Lot by the Declarant,  whichever occurs earlier.  Class B membership 
shall  be reinstated  at any  time before the  expiration of  twenty 
(20) years  from  the  date  of  conveyance  of  the  first  Lot  if 
additional  lots  owned  by  a Class B member  are  annexed to  this 
Declaration in sufficient numbers to restore a ratio of at least one 
Class B lot for each three Class A Lots in Property

    (c) Suspension.    All  voting  rights  of  an  Owner  shall  be 
suspended during  any period  in  which such  Owner is delinquent in 
the payment  of any  assessment duly established  pursuant  to  this 
Article or is otherwise in default hereunder  of under the Bylaws or 
Rules and Regulations of the  Association and such  suspension shall 
apply to the proxy authority of the voting representative, if any.

    Section 7.   Notice and Quorum.   Written notice  of any meeting 
called for the purpose of taking any action authorized here in shall 
be sent to all members,  or delivered to their residences,  not less 
then thirty (30) days  nor more  than sixty (60) days  in advance or 
the meeting.   At  any such meeting called,  the presence of members 
or of  proxies or voting  representative entitled to cast two-thirds 
(2/3)  of  all votes of each class  of membership  shall  constitute 
a  quorum.   If the  required quorum is not  present another meeting 
may  be  call  subject  to  the same  notice  requirement,  and  the 
required  quorum  at  such subsequent meeting  shall  be  two-thirds 
(2/3)  of the   quorum  requirement  for such  prior  meeting.   The 
Association  may call as  many subsequent meeting as may be required 
to  achieve a  quorum (the quorum requirement being reduced for each 
such  meeting). No such  subsequent  meeting shall be held more than 
sixty (60) days following the preceding meeting.

                            ARTICLE III
                   GENERAL POWERS AND DUTIES OF
               BOARD OF DIRECTORS OF THE ASSOCIATION

    Section 1.   Purpose of Maintenance Fund.   The  Board  for  the 
benefit  of  the  owners,   shall  provide  and shall pay out of the 
maintenance fund provided for in Article II above the following:

    (a)  Taxes and  assessments  and  other  liens and  encumbrances 
which shall  properly  be  assessed  or charged  against the  Common 
Areas rather than against the individual Owners, if any.

    (b)  Care and preservation of the Common Maintenance Area.

    (c)  The services of a professional person or management firm to 
manage  the  Association  or  any  separate  portion  thereof to the 
extent deemed  advisable by the  Board  (provided  that any contract 
for  management of  the  Association  shall be  terminable  bye  the 
Association,   with no penalty  upon ninety (90) days  prior written 
notice  to  the managing  party)   and  the services of  such  other 
personnel as  the  Board shall determine to the  necessary or proper 
for the  operation of the Association,  whether such  personnel  are 
employed directly by the Board or by the manager

    (d)  Legal and accounting services.

    (e)  A policy or policies of insurance  insuring the Association 
against any  liability  to  the public  or to  the  Owners   (and/or 
invitees or tenants) incident to the operation of the Association in 
any amount  or  amounts  as  determined by  the Board of  Directors, 
including a policy  or policies  of  insurance as provided herein in 
Article IV.

    (f)  Workers compensation insurance  to the  extent necessary to 
comply with any applicable laws.

    (g)  Such fidelity bonds as  may be required by the Bylaws or as 
the Board may determine to be advisable.

    (h)  Any other materials, supplies, insurance, furniture, labor, 
services,  maintenance,  repairs,  structural  alteration,  taxes or 
assessments  (including  taxes  or assessments  assessed  against an 
individual Owner)  which the  Board is required to obtain or pay for 
pursuant to the terms of this Declaration or by laws or which in its 
opinion shall  be necessary  or proper  for the enforcement  of this 
Declaration.

    Section 2.   Powers  and  Duties of Board.   The Board,  for the 
benefit of the Owners,  shall have  the following general powers and 
duties,  in addition to the specific powers  and duties provided for 
here in an in the Bylaws of the Association.

    (a)  To execute all declarations of ownership for tax assessment 
purposes with regard to the common Areas,  if any , on behalf of all 
owners.

    (b)  To borrow  funds  to pay  costs  of  operation  secured  by 
assignment  or pledge  of right against  delinquent  Owners,  if the 
Board sees fit.

    (c)  To enter into contract, maintain one or more bank accounts, 
and generally  to have all  the power necessary or incidental to the 
operation of management of the association.

    (d)  To protect or defined the  Common Areas from loss or damage 
by  suit  or   otherwise  and  to  provide  adequate   reserves  for 
replacements.

    (e)  To make reasonable  rules and regulation  for the operation 
of the  Common  Maintenance  Area  and to  amend them  from  time to 
time;  provided that,  any rule  or regulation  may  be  amended  or 
repealed by an instrument in writing signed by Owners constituting a 
majority of the votes  of the  Association,  or  with respect  to  a 
rule  applicable to less than all of the common Areas, by a majority 
of the votes of the Owners in the portions affected.

    (f)  To make available  for  inspection  by Owners  within sixty 
(60) days after  the end of each year  an annual  report and to make 
all  books  and records of  the Association available for inspection 
by Owners at reasonable times and intervals.

    (g)  To  adjust  the  amount,  collect  and  use  any  insurance 
proceeds to repair damages or replace lost property, and if proceeds 
are insufficient  to  repair damage  or replace  lost  property,  to 
assess the Owners in proportionate amounts to cover the deficiency

    (h)  To enforce the provisions of any rules mad hereunder and to 
enjoin  and  seek  damages  from  any  Owner  for  violation of such 
provisions or rules

    (i)  To collect  all assessments  and enforce  all penalties for 
non-payment including the filing  of liens and  institution of legal 
proceedings.

    Section 3.   Board Powers Exclusive.   The Board  shall have the 
exclusive right to  contract for all goods,  services and insurance, 
payment of which is to  be  made from  the maintenance fund and  the 
exclusive right  and obligation  to  perform  the  functions  of the 
Board except as otherwise provided herein.

    Section 4.   Maintenance Contracts.  The Board, on behalf of the 
Association, shall  have  full power and authority to  contract with 
any Owner or other person or  entity  for  the  performance  by  the 
Association of  services  which the  Board is not otherwise required 
to perform pursuant  to the  terms hereof, such contracts to be upon 
such terms and conditions  and for such  consideration  as the Board 
may deem  proper,   advisable  and  in  the  best  interest  of  the 
Association.

                              ARTICLE IV
                         TITLE TO COMMON AREAS

    Section 1.   Association to Hold   The Association  shall assume 
all maintenance obligations  with respect to  any Common Areas which 
may be  hereafter  established.    Nothing  contained  herein  shall 
create  an  obligation  on  the part  of  Declarant  o establish any 
Common Area.

    Section 2.  Liability Insurance.   From  and  after  the date on 
which  title  to  any  Common  Area  vests in the  Association,  the 
Association shall purchase and carry  a general comprehensive public 
liability  insurance  policy for the benefit  of the association and 
its members,   covering occurrences on the Common Areas.  The policy 
limits  shall be as  determined  by the  Board  of Directors  of the 
Association.   The  Association shall  use  its best  efforts to see 
that  such  policy  shall  contain,   if available,  cross-liability 
endorsements of other  appropriate provisions for the benefit of the 
members, Directors,  and the management company and  other insureds, 
as their interests may be determined.

    Section 3.  Condemnation.   In  the event of  condemnation  or a 
sale in lieu thereof of all or any portion of the  Common Areas, the 
funds  payable   with  respect  thereto  shall  be  payable  to  the 
Association  and   shall  be used by  the  Association  to  purchase 
additional Common  Areas to replace that which has been condemned or 
to take whatever steps  are it  deems reasonably necessary to repair
or correct any damage  suffered as a result  of the condemnation. In 
the event that the  Board of Directors of the Association determines 
that  the funds  cannot  be used  in  such a  manner  due to lack of 
available land for  additional  common areas of for whatever reason, 
any remaining  funds may  be  utilized by  the Association  for  the 
general maintenance fund.

                             ARTICLE V
                             EASEMENTS

    Section 1.  Utility Easements.  As long  as  Class B  membership 
shall be  in effect,   the  Declarant hereby  reserves the  right to 
grant  perpetual,  nonexclusive  easements  for the  benefit  of the 
Declarant or its designees,  upon,  across,  over, through and under 
any portion of the Common Area or  any portion of any Lot outside of 
the  permitted  building  area of  such Lot,  for  ingress,  egress, 
installation,  replacement,  repair, maintenance,  use and operation 
of all utility  and service  lines and  service systems,  public and 
private,    including,   without   limitation,   cable   television. 
Declarant,  for  itself and  its  designees,  reserves the  right to 
retain  title  to any  such  easements.   Upon  cessation of Class B 
membership,  the  Association  shall have  the  right  to  grant the 
easements described herein.

    Section 2.  Declarant's Easement of Correct Drainage.   As  long 
as Class B membership shall be in effect,  Declarant hereby reserves 
a  blanket  easement  on,   over and  under  the ground  within  the 
Property  to  maintain and  correct  drainage of surface waters  and 
other erosion controls in order to maintain reasonable standards  of 
health, safety and appearance and shall be entitled to remove  trees 
or vegetation, without liability  for replacement or damages, as may 
be necessary to  provide  adequate  drainage for  any portion of the 
Property.  Notwithstanding  the  foregoing,  nothing herein shall be 
interpreted  to  impose  any  duty  upon  Declarant  to  correct  or 
maintain any drainage facilities within the Property

    Section 3.    Easement  for  Unintentional  Encroachment.    The 
Declarant   hereby   reserves   an   exclusive   easement   for  the 
unintentional  encroachment by any  structure  upon the  Common Area 
caused  by or  resulting from,   construction,   repair,    shifting 
settlement  or  movement  of any portion  of  the  Property,   which 
exclusive easement  shall exist at  all times during the continuance 
of such encroachment as an  easement appurtenant  to the encroaching 
property to the extent of such encroachment.

    Section 4.  Entry Easement.   In  the  vent that the Owner fails 
to maintain  the  Lot  as  required  herein,  or  in  the  event  of 
emergency repairs and  to do  the  work reasonably necessary for the 
proper maintenance and  operation  of the Property.   Entry upon the 
Lot as provided  herein shall  not  be deemed  a trespass,  and  the 
Association shall not be  liable  for any  damage so created  unless 
such damage is  caused  by the  Association's  willful misconduct or 
gross negligence.

    Section 5.  Drainage Easements.   Easements for the installation 
and maintenance of utilities, stormwater  retention/detention ponds, 
and/or a  conservation area are  reserved  as  may be  sworn  on the 
recorded plat.  Within these  easement areas, no structure, plant or 
material shall be place or  permitted to  remain which may damage or 
interfere with the  installation  and  maintenance of utilities,  or 
which may hinder  or  change  the  direction  or  flow  of  drainage 
channels or slopes in  the easements.  The easement area of each Lot 
and  all   improvements   contained  therein   shall  be  maintained 
continuously by the Owner  of the Lot, except for those improvements 
for which a public authority,  utility company or the Association is 
responsible

    Section 6.  Temporary Completion Easement.  All  lots  shall  be 
subject to  easement  of  ingress and egress  for the benefit of the 
Declarant, its employees,  subcontractors,   successors and assigns, 
over an upon the front,   side and rear yards of the Property as may 
be  expedient  or  necessary  for  the  construction  servicing  and 
completion  of dwellings  and  landscaping upon lots adjacent to the 
Property,  provided that such easement shall terminates  twelve (12) 
months  after  the date such  Lot is  conveyed  to  the Owner by the 
Declarant.

                            ARTICLE VI
                         USE AND OCUPANCY

       All  Lots and  dwellings  shall  be  used  and  occupied  for 
single-family residence  purposes.   No  Lot or dwelling may be used 
for commercial,  institutional or  other  non-residential purpose if 
such use involves the attendance  or entry of non-residents upon the 
Lot or otherwise diminishes the  residential character of the Lot or 
neighborhood.   This prohibition  shall not apply to  "garage sales" 
conducted with  prior  written  consent of  the Association provided 
that no Owner  shall  conduct more  than two (2)  garage sales of no 
more than  two (2) days  duration  each during any twelve (12) month 
period.

                           ARTICLE VII
                         PROPERTY RIGHTS

    Section 1.  Owners' Easement of Enjoyment.   Every  Owner  shall 
have a right and  easement in  and to the  Common Areas and a right  
and easement of ingress and egress to,  from and through said Common 
Areas,  and such  easement  shall  be  appurtenant to and shall pass 
with the title to every Lot, subject to the following provisions.

    (a) The right of the Association to establish  and publish rules 
and regulations governing the use of the  Common Areas affecting the 
welfare of the association members;

    (b) The right of the Association  to suspend the right of use of 
the Common Areas and the  voting  rights of an  Owner for any period 
during which any  assessment against his lot remains unpaid; and for 
a  period not to  exceed  sixty (60) days for any  infraction of its 
published rules and regulations;

    (c) The right of the Association,   subject  to  the  provisions 
hereof,   to dedicate  or transfer  all or  any  part of the  Common 
Area,  if any, to any public agency,  authority  or utility for such 
purposes and  subject to the conditions as  may  be  agreed  by  the 
Association.   No such  dedication  or  transfer  shall be effective 
unless an instrument  signed by  Owners  entitled to cast two-thirds 
(2/3) of  the votes  of  each class of  membership has been recorded 
agreeing to such dedication or transfer;

    (d) All easements herein described are  easements appurtenant to 
and running with the Land;  they shall  at  all  times  inure to the 
benefit  of  and  be  binding  upon  the  Owners,  and  all of their 
grantees,    and  their  respective  heirs,    successors,  personal 
representatives and assigns, perpetually and in full force.

    Section 2.   Effect of Declaration.    Reference  in  any  deed, 
mortgage,   trust  deed  or  any  other  recorded  documents  to the 
easements,  restrictions and  covenants herein described  or to this 
Declaration   shall  be  sufficient  to   create  and  reserve  such 
easements and covenants to the  respective grantees,  mortgagees, or 
trustees  of  said  parcels  as  fully  and  completely  as if those 
easements,  restriction  and  covenants were fully  related and  set 
forth in their entirety in said documents.

    Section 3.   Rezoning Prohibited.  No  Lot shall b e rezoned  to 
any  classification  allowing  commercial,  institutional  or  other
nonresidential use without the express  consent  of the  Association 
and Declarant  (as long as Declarant  owns  any  Lot subject to this 
Declaration), which may be withheld in Declarant's  sole discretion. 
Declarant or the Association may enforce this  covenant by obtaining 
an injunction against any unapproved rezoning  at the expense of the 
enjoined party.

                        ARTICLE VIII
                       USE RESTRICTIONS

    Section 1.   Nuisances.  No noxious or offensive  activity shall 
be carried on upon any Lot,  nor shall anything be done which may be 
or may become an annoyance or nuisance to the neighborhood.

    Section 2.   Development Activity.   Notwithstanding  any  other 
provision herein,  Declarant and its successors and assigns shall be 
entitled  to  conduct  on   the  property  all  activities  normally 
associated with and convenient  to the  development  of the Property 
and the construction and sale of dwelling units on Property

    Section 3.   Temporary Structures.  No structures of a temporary 
character,  including,  without limiting the generality thereof, any 
trailer,  tent shack,  garage,  barn,  motor home or  mobile home or 
other  outbuilding,  shall  be  used  on  any Lot at any  time  as a 
residence, either temporarily or permanently.

    Section 4.   Signs and Picketing.  No sign or emblem of any kind 
may be kept or  placed upon any Lot or mounted,  painted or attached 
to any Unit,  fence or other improvement upon  such Lot so  as to be 
visible from public view except the following:

    (a) For Sale Signs.   An  Owner  may  erect  one  (1)  sign  not 
exceeding 2' x 3'  in area,  fastened only  to a stake in the ground 
and extending not more than three (3)  feet above the surface of the 
ground advertising the Property for sale.

    (b) Declarant's Sign.  Signs or billboards may be erected by the 
Declarant.

    (c) Political Signs.  Political signs may  be erected upon a Lot 
by the Owner  of such  Lot advocating  the  election of  one or more 
political candidates or the sponsorship of a political party, issued 
or proposal provided that such signs shall not be  erected more than 
ninety (90) days  in advance of the  election to which  they pertain 
and are removed within fifteen (15) days after the election.

    In addition to the foregoing, to protect the safety  and harmony 
of the community,  no person shall engage  in picketing  on any Lot, 
easement,  right-of-way  or  Common Area  within or  adjacent to the 
Property,  nor  shall  any vehicle  parked,  stored or  driven in or 
adjacent to  the  Property  bear  or  display  any  signs,  slogans, 
symbols,  words  or  decorations  intended  to  create  controversy, 
invite ridicule or  disparagement or  interfere  in any way with the 
exercise  of the property  rights,  occupancy or  permitted business 
activities of any Owner or Declarant.

    Section 5.   Campers,  Trucks,  Boats and Recreational Vehicles.  
No campers, vans,  pickup trucks, boats, boat trailers, recreational 
vehicles and  other  types  of  non-passenger  vehicles,  equipment, 
implements or accessories  may  be kept on  any Lot unless  the same 
are fully  enclosed  within the  garage located  on such Lot  and/or 
said vehicles and accessories are screened from  view by a screening 
structure or  fence and  said vehicles and  accessories  are  in  an 
operable condition.

    Section 6.   Livestock and Poultry.  No  animals,   livestock or 
poultry of  any  kind shall  be  raised,  bred  or  kept on any Lot, 
except  that  dogs,  cats,  or other  household  pets  may  be kept, 
provided that they  are  not  kept,  bred,  or  maintained  for  any 
commercial purpose.

    Section 7.   Garbage and Refuse Disposal.  No Lot  shall be used 
or maintained as a dumping  ground for rubbish.   Trash,  garbage or 
other waste shall not  be kept except in  sanitary containers.   All 
incinerators or other equipment  for the storage or disposal of such 
material shall be kept in a clean sanitary condition.

    Section 8.   Sight Distance at Intersections.    No  fence  wall 
hedge or  shrub planing which  obstructs  sight lines at  elevations 
between two (2)  and six (6)  feet above the roadway shall be placed 
or permitted to remain  on any corner Lot within the triangular area 
formed by the street  boundary  lines an a  line  connecting  them a 
points  twenty-five (25) feet  from the intersection  of the  street 
boundary lines,  or in the case of the rounded property corner, from 
the intersection of the  street boundary lines  extended.   The same 
sight line limitations shall apply on any  Lot within  ten (10) feet 
from the intersection  of a street boundary line  with the edge of a 
driveway or  alley pavement.   No tree shall be permitted  to remain 
within such distances  of such intersections unless the foliage line 
is maintained at sufficient height to prevent an obstruction of such 
sight lines.

    Section 9.   Parking.   No vehicle,   trailers,   implements  or 
apparatus  may be driven or parked in the Common Maintenance Area or 
any easement.

    Section 10.   Commercial or Institutional Use.   No Lot,  and no 
building  erected  or  maintained  on  any  Lot  shall  be  used for 
manufacturing, industrial,  business,  commercial,  institutional or 
other non-residential purposes.

    Section 11.   Building Standards.   No building shall be erected 
or maintained  on any Lot  unless it complies  with  all  applicable 
standards, including any governmental ordinances.

    Section 12.   Detached Buildings.        No  detached  accessory 
buildings,   including,   but  not  limited  to detached garages and 
storage buildings,  shall be erected, placed or constructed upon any 
Lot without prior consent of the Association.

    Section 13.   Fences.  No fence,  wall or hedge shall be erected 
or maintained  on any lot nearer  to  the street  than the  building 
setback line for the front and side yards.

    Section 14.   Antennae,  Satellite  Dishes or Solar  Collectors. 
No Owner  may erect or  maintain a television  or radio receiving or 
transmitting  antenna,   satellite  dish  or  similar  implement  or 
apparatus,  or  solar  collector  panels or  equipment  upon any Lot 
unless such  apparatus is erected and  maintained in such a way that 
it is screen from  public view  at a  point  in the  center  of  the 
public right-of-way  directly in  front of the house erected on such 
Lot

    Section 15.   Chimney.  All  fireplace flues,  smoke stacks, and 
spark arrectors shall  be completely  enclosed  and  concealed  from 
public  view  in  finished  chimneys  of  materials  architecturally 
compatible with  the principle finish material of the exterior walls 
of the dwelling.

    Section 16.   Clothes hanging Devices.   Exterior cloths hanging 
devices shall not be permitted.

    Section 17.   Window Treatment.   No aluminum  foil,  reflective 
film or similar treatment shall be placed on window or glass doors. 

                            ARTICLE IX
                            ANNEXATION

    Section 1.   Annexation by Declarant.  At any  time  during  the 
initial  term of this  Declaration,  the Declarant may,  at its sole 
option,  annex additional property to this Declaration to be subject 
to the terms  hereof to  the same  extent as if originally  included 
herein  and  subject to  such other  terms,  covenants,  conditions, 
easements and restrictions as may be imposed thereon by Declarant.

    (a) Declaration of Annexation.  Annexation  shall  be  evidenced 
by  a  written  Declaration  of  Annexation  executed  by  Declarant 
setting  forth the legal description of  the property  being annexed 
and  the  restrictive  covenants  to  be  applied  to  such  annexed 
property.

    (b) FHA/VA Approval.  Declarant  shall submit a  written request 
for approval of any  annexation under  this Section  to the  Federal 
Housing   Administration   ("FHA")   and   Veterans   Administration 
("VA")   accompanied by a copy of the Declaration of Annexation.  If 
neither  FHA  nor  VA  notifies  Declarant  of  objections   to  the 
annexation  within   fifteen  (15)  days  of  the  date  Declarant's 
request for approval,   such  approval shall be deemed to  have been 
granted.

    Section 2.   Annexation by Action of Members.  At  any  time the 
Board of Directors  may  request approval of  the membership for the 
annexation  of  additional  property  into  the  Association  to  be 
subject  to all of the terms of  this Declaration to the same extent 
as if  originally  included  herein.   No such  annexation  shall be 
effective unless  approved in writing  by  members  entitled to cast 
two-thirds  (2/3)  of  a total votes in  both classes of membership, 
and by FHA and VA  as  set  forth in   Subsection  1(b) above.   Any 
property  that   is  contiguous  to   existing   property   to  this 
Declaration   may  be annexed  hereto  according  to  the  foregoing 
requirements,  provided  however,  that no such  annexation shall be 
effective without  the consent  and  join?? of  the  owners  of  the 
property  to  be  annexed.   Such annexation must be evidenced  by a 
Declaration of  Annexation as  set forth  in Subsection  1(a)  above 
executed by the parties herein described.

    Section 3.   No Duty to Annex.   Nothing  herein contained shall 
establish any duty  or  obligation on  the part  of the Declarant or 
any member  to annex any property  to  this Declaration and no owner 
of property  excluded from  the Declaration  shall have any right to 
have such property annexed hereto.

    Section 4.   Effect of  Annexation  on  Class B Membership.   In 
determining  the number of  Lots owned by  Declarant for the Purpose 
of  Class B Membership  status  according to Article II,  Section 6, 
the total number of Lots covered  by the Declaration  including  all 
Lots annexed  thereto  shall  be considered.   If Class B Membership 
Has  previously   expired  but  annexation  of  additional  property 
restores  the  ration  of  Lots  owned  by  Declarant  to the number 
required  for  Class B Membership,  such Class B Membership shall be 
reinstated.

                            ARTICLE X
                             GENERAL

    Section 1.   Remedies.  In the event of any default by any Owner 
under  the  provisions  of  the  Declaration,  Bylaws  or  rules and 
regulations of the Association,  the Association and any Owner shall 
have each  and  all the rights and  remedies  which may be  provided 
for in this Declaration,  the Bylaws and said rules and regulations, 
and those  which  may be available  at  low or in  equity,  and  may 
prosecute and  action or other  proceedings against such  defaulting 
Owner and/or  others  for  enforcement  of  any lien,  statutory  or 
otherwise,  including foreclosure of such lien  and the  appointment 
of a receiver  for the Lot  and ownership interest of such Owner, or 
for  damages or injunction, or specific performance, or for judgment 
for the  payment of the  money  and  collection thereof,  or for any 
combination of the remedies,  or for any other relief.   No remedies 
herein  provided or  available at laws or in  equity shall be deemed 
mutually exclusive of any  other  such remedy.   All expenses of the 
Association  in  connection  with  any  such actions or proceedings, 
including  court  costs  and  attorney's  fees  and  other  fees and 
expenses, and all damages,  permitted by law but,  with reference to 
any  Lots  financed by FHA  insured  loans,   not in  excess of  the 
maximum rate  of FHA loans at the time of delinquency,  from the due 
date until paid,  shall  be  charged to  and assessed  against  such 
defaulting  Owner,   and  shall  be  added  to  an  deemed  part  of 
respective  maintenance  assessment  (to the same extent as the lien 
provided  herein for unpaid assessments),  upon the Lot and upon all 
of his  additions and  improvement thereto,  and  upon  all  of  his 
personal  property upon the Lot.    Any  and all of  such rights and 
remedies  may  be  exercised at  any  time  and  from time  to time, 
cumulatively or otherwise, by the Association or any Owner.

    Section 2.     Term  and  Amendments.      The   covenants   and 
restrictions  of this  Declaration  shall run with and bind the land 
for a term of  twenty-five (25) years from the data this Declaration 
is recorded,  after which time they  shall be automatically extended 
for  successive  periods  of  ten (10) years,   unless  seventy-five 
percent  (75%)  of  the  votes   outstanding  shall  have  voted  to 
terminate  the  covenants and  restriction  of this  Declaration and 
prior approval has been obtained from the  Town of Flower Mound upon 
the expiration of  the initial  twenty-five (25) year  period or any 
extension thereof,  which termination shall be by written instrument 
signed  by  seventy-fie percent  (75%)  of  the  Owners and  counter 
signed by a  duly  authorized  representative of the  Town of Flower 
Mound  and  properly  recorded  in  the  Denton  County,  Texas land 
records.   This Declaration  may be amended  by an instrument signed 
by Owners  constituting not less than  seventy-five percent (75%) of 
the votes of the  Association,  provided that as long as  there is a 
Class B  membership,  such amendment  has been  approved by the U.S. 
Department  of Housing  and  Urban Development   (acting through the 
area office  having jurisdiction  over the Association)   and by the 
prior written  consent of the  Town of Flower Mound.   Any amendment 
must be recorded.

    Section 3.   Severability.   Invalidation of  any  one  of these 
covenants  or  restrictions by  judgment or  court order shall in no 
way affect any  other provisions  which shall remain,  in full force 
and effect.

    Section 4.   Right  and  Obligations.   The  provision  of  this 
Declaration and  the Articles  of  Incorporation and  Bylaws and the 
rights and obligations  established  thereby shall  be  deemed to be 
covenants running  with the  land and  shall inure to the benefit of 
and  be  binding  upon,  each  and  all  of  the  Owners  and  their 
respective heirs,  representatives, successors, assigns, purchasers, 
grantees and mortgagees.    By the recording or  the acceptance of a 
deed  conveying  a  Lot  of any   ownership   interest  in  the  Lot 
whatsoever,   the  person  to whom such Lot  or interest is conveyed 
shall be  deemed  to  accept and agree  to be bound by an subject to 
all of  the  provisions  of  this  Declaration  and the  Articles of 
Incorporation and Bylaws,  whether or not mention thereof is main in 
said deed.

    Section 5.   Miscellaneous Provisions.   Any  provisions of this 
Declaration  or  of  the Articles of Incorporation and Bylaws to the 
contrary notwithstanding, the following provisions shall control:

    (a) FHA/VA Approval.  If any prospective  Owner  applies for FHA 
or VA mortgage  financing and  receives a  commitment therefor,  the 
following  actions will  require  approval  of  the  Federal Housing 
Administration  and  the Veterans Administration as applicable:  (1) 
addition  of  properties  except  as  set  forth  in  Article X, (2) 
dedication of Common Areas, and (3) amendment of this Declaration

    (b) The   following   actions   will   require   notice  to  all 
institutional  holders of first  mortgage liens:  (1) abandonment or 
termination  of the  Association;  or (2) material amendment  to the 
Declaration.

    (c) Upon the  request of  any first mortgagee of a dwelling on a 
lot,   the Association  shall furnish to such  mortgagee  a  written 
notice of  any  default  by  the  Owner  of  such  dwelling  in  the 
performance of such  Owner's  obligations under  this Declaration or 
the Bylaws of  Association rules and regulations  which is not cured 
within thirty (30)  days.    Any first  mortgagee of a  dwelling who 
comes into  possession of such  dwelling  pursuant to  the  remedies 
provided in  the  mortgage a  foreclosure of the mortgage,   or deed 
(or assignment)  in lieu of foreclosure,  shall take  such  property 
free of  any claims  for unpaid  assessments or charges  in favor of 
the Association  against the mortgaged  dwelling which accrued prior 
to the time such holder comes into possession of the dwelling.

    (d) Unless at least  seventy-five  percent  (75%) of  the  first 
mortgagees  (based upon one vote for each mortgage) have given their 
prior  written  approval,  neither  the  Association  nor the Owners 
shall be entitled to:

          (i)    by  act  or  omission  seek to  abandon,  partition 
                 encumber, or transfer the Common Areas,  if any, or 
                 any portion thereof of interest therein;

                 (The granting of easements  for public utilities or 
                 other public purposes  consistent with the intended 
                 use  of  such   property  shall  not  be  deemed  a 
                 transfer within the meaning of this clause)

         (ii)    substantially change the method  of determining the 
                 obligations,   assessments,   dues or other charges 
                 which   may  be levied  against  an  Owner  by  the 
                 Association;

        (iii)    by act or omission change,  waive,  or abandon  any 
                 scheme   of   regulation  or   enforcement  thereof 
                 pertaining  to  the  architectural  design  or  the 
                 exterior appearance  of the dwelling or maintenance 
                 of the dwelling or Lots;

         (iv)    fail to maintain  liability and  extended  coverage 
                 insurance on  insurable  property comprising a part 
                 of the  Common Area  on a current  replacement cost 
                 basis  in  an  amount  not  less  than  one hundred 
                 percent (100%)  of  the  insurable  value (based on 
                 current replacement costs).

    (e) All  personal  pronouns  used  in  this Declaration, whether 
used  in  the  masculine,    feminine  or  neuter   gender,    shall 
include  all  other  genders;    the  singular   shall  include  the 
plural, and vice versa.

    Section 6.   Headings.    The   headings   contained   in   this 
Declaration are for reference purposes only and shall not in any way 
affect the meaning or interpretation of this document.

    Section 7.   Conflicts.   In the event  of conflict  between the 
terms of  this Declaration  and the  Bylaws, rules,   regulations or 
Articles of  Incorporation  of  the Association,   this  Declaration 
shall control.

    Section 8.   Failure of  Association to Perform Duties.   Should 
the  Association fail  to carry out its duties  as specified in this 
Declaration, the  Town of Flower Mound  or  its lawful  agents shall 
have the right and ability,  after due notice to the Association, to 
remove any landscape systems,  features or elements that cease to be 
maintained by the Association;   to perform the responsibilities  of 
the Association   if the Association fails,   to do so in compliance 
with any of the provisions of this  Declaration or of any applicable 
Town codes or regulation;   to assess the  Association for all costs 
incurred by the  Town in  performing said  responsibilities  if  the 
Association fails to do so;   and/or will avail itself  of any other 
enforcement  actions available to  the Town pursuant to state law or 
Town codes and regulations.   Should the Town exercise its rights as 
specified above,  the  Association shall indemnify and hold harmless 
the  Town of Flower Mound from any and all costs,  expenses,  suits, 
demands, liabilities or damages, including attorney's fees and costs 
of suit,   incurred  or  resulting  from  the Town's  removal of any 
landscape systems,  features or elements that cease to be maintained 
by  the   Association  or   from  the  Town's   performance  of  the 
responsibilities   of  the Association   due  to  the  Association's 
failure to perform said duties.

    IN WITNESS WHEREOF,  the Declarant has caused this instrument to 
be executed  on its behalf,  attested  and  its corporate seal to be 
hereunto affixed as of the day and year first above written.

                                DECLARANT:

                                DALLAS-FLOWER MOUND ASSICIATES
                                A California limited partnership,

                                By:____________________________
                                     Lewis E. Cook, Jr.,
                                     Its General Partner






STATE OF   California    

COUNTY OF  San Francisco 

    The foregoing instrument was acknowledged before me this  7th  
day of      October     ,  1992,  by Lewis E. Cook,  Jr.,  General 
Partner of  Dallas-Flower Mound Associates,  a California  limited 
partnership, on behalf of said limited partnership.


     THIRD AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS
             AND RESTRICTIONS  FOR HILLTOP ESTATES

      THIS THIRD AMENDMENT TO DECLARATIONS OF COVENANTS, CONDITIONS
AND RESTRICTIONS FOR HILLTOP ESTATES (this "Amendment") is executed
effective  as of the 3rd day of may,  1995,  by DALLAS-FLOWER MOUND
ASSOCIATES, a California Limited partnership ("Declarant").

                       W I T N E S S E T H

      WHEREAS,  Declarant has heretofore  executed and entered into
that certain Declaration of Convenants, conditions and restrictions
for  hilltop estates  ( as heretofore amended,  the "Declaration" )
Which was  recorded in Volume 3445,  Page 0260 of the Real Property 
Records of Denton County, Texas, and

      WHEREAS,  Declarant  desires  that the Declaration be further
modified and amended in certain respects.

      NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS that Declarant 
does hereby declare as follows:

      1.  The second (2nd) sentence of article II, Section 7 of the 
Declaration is hereby  amended to  read in its entirety as follows: 
"At any such meeting called,  the presence of members or of proxies 
or voting  representative entitled to cast ten percent (10%) of all 
of the votes outstanding shall constitute a quorum."

      2. Any  and all terms  and  provision  of the Declaration are 
hereby amended and modified wherever  necessary and even though not 
specifically  addressed herein, so  as to conform  to the amendment 
set forth in the preceding paragraph hereof.

      3. Any   and   all  of   the  terms  and   provision  of  the 
Declaration shall, except as expressly amended and modified hereby, 
remain in full force and effect.

      EXECUTED effective as of the date first above written.

                            DECLARANT:

                            DALLAS-FLOWER MOUND ASSOCIATES,
                            a California limited partnership




                            By: ( SIGNATURE ON ORIGINAL )  
                                    Lewis E. Cook, Jr.
                                    its General Partner



STATE OF CALIFORNIA

COUNTY OF MARIN    
    
      This instrument was acknowledged before me on the 3rd day of 
May, 1995 , by Lewis E. Cook, Jr., General Partner of Dallas-Flower 
Mound Associates, a California limited partnership, on behalf of 
said limited partnership.



                             ( SIGNATURE ON ORIGINAL )   
                            Notary Public in and for the 
                            State of California




My commission Expires:           JUDITH C LEACHMAN            
     10/01/98               Printed Name of Notary