Covenants

[Note: The most recent version of these covenants were recorded in Deed Book 5460 at Page 423 in December 2006.]

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
OF
EAST CAMPUS HOMESITES

THIS DECLARATION is made effective the 5th day of August, 1998, by
Duke University ("Declarant").

RECITALS

A. Declarant is the Owner of real property located in the City of
Durham, Durham County, North Carolina, described in Exhibit "A"
(the "Property").

B. Declarant intends to develop and/or market the property for the
principle benefit and convenience of the Members of the Faculty and Staff of
Duke University. The principle objective is to strengthen the educational pro-
gram at Duke University by fostering an academic community near the campus,
creating affordable for-sale housing for members of the University's faculty
and staff, and assisting in the recruitment and retention of faculty and staff.

NOW, THEREFORE, Declarant hereby declares that the property shall
be held, sold and conveyed subject to the following Declaration as to conditions
and uses to which the property may be put, hereby specifying that the Declara-
tion shall operate for the mutual benefit of all Owners of the Property and shall
constitute covenants to run with the land, and shall be binding on and for the
benefit of the Property and each lot thereof, the Declarant, its successors and
assigns, and all subsequent owners of all or any part of the property, together
with their grantees, successors, heirs and assigns.

ARTICLE I - DEFINITIONS

The following definitions apply in construing the provisions of this
Declaration:

1. DECLARANT means Duke University, its successors and assigns.

2. DECLARATION means this Declaration of Covenants, Conditions and
Restrictions, together with any amendments, supplements or modifications hereto.

3. DEED OF TRUST shall mean any security device encumbering all or
a portion of the Property or any residential lot. The term "mortgage" shall be
synonymous with the term "deed of trust."

4. DUPLEX means a residence located at one of the following
addresses:

5. MORTGAGEE means a person or entity to whom a deed of trust is
made or who otherwise is the holder of a deed of trust.

6. OWNER means the Owner, whether one or more persons, of a
residential lot, but excluding those having merely a security interest. Owner
shall also include the Declarant.

7. PERSON means a natural person, corporation, estate, trust,
partnership, association or other legal or commercial entity.

8. PROPERTY means the real estate described on Exhibit "A",
including all residential lots.

9. RESIDENCE means a residential structure or structures, including
enclosed yards and garages or other appurtenant structures located on a
residential lot.

10. SINGLE FAMILY means one or more persons, each related to the
other by blood, marriage or legal adoption, or a group of not more than three
(3) persons not so related, together with his, her or their domestic servants,
maintaining a common household.

ARTICLE II

In addition to all other covenants, restrictions and limitations
contained herein, the use of the Property, and each residential lot located
therein, is subject to the following restrictions:

1. RESIDENTIAL LOTS. All lots within the Property shall be known
and described as residential lots and shall be used for residential purposes
only. No structure shall be erected on any lot except one (1) detached single
family dwelling (excepting those non-conforming structures currently located on
residential lots). No structure shall be used in any way for a business or other
non-residential purpose, except those allowed under applicable zoning ordinance.

2. OFFENSIVE ACTIVITIES. No Owner shall permit or suffer anything
to be done or kept upon or in his or her Residence which will increase the rate
of insurance thereof or will obstruct or interfere with the rights of other
Owners, their families, guests and invitees, nor annoy them by unreasonable
noises, vibrations, bright or flashing lights or otherwise, nor shall in any way
interfere with the quiet enjoyment of each of the Owners of his or her respective
Residence, nor will he or she commit or permit any nuisance, noxious, illegal or
offensive activity to be permitted thereon therein.

3. PROHIBITED RESTRICTIONS. No Owner shall execute or file for
record any instrument which imposes restrictions upon the sale, leasing or
occupancy of his or her Residence on the basis of race, color, religion, sex,
sexual orientation, age, marital status, or national origin.

4. USE OF VEHICLES. No truck, boat, trailer, van, camper,
recreational vehicle or tent shall be used as a living area while located in the
Property. No truck, trailer, van or recreational vehicle may be stored, other
than within a garage of a Residence, within the Property by any Owner unless it
is that Owner's principal means of transportation. However, trailers or temporary
structures for use during the initial construction for the Property of the
initial sales of Residences may be maintained within the Property provided such
trailers or structures shall be promptly removed on completion of all initial
construction and sales. No vehicle repairs other than oil changes, minor tune-ups,
or simple repairs that can be completed within two hours shall be commenced
upon any driveway, parking area, or other visible place. No waste fluids, parts,
or other materials shall be dumped, in any drain, or on any part of the Property.

5. REMEDIES. The failure of any Owner to comply with the provisions
of this Declaration shall give rise to a cause of action in favor of any
aggrieved Owner for the recovery of damages, including attorney's fees, or for
injunctive relief, or both.

ARTICLE III - SPECIAL RESTRICTIONS UPON
POSSESSION, OCCUPANCY AND USE OF RESIDENCES

1. QUALIFIED USE. A principal purpose of this Declaration is to
create a residential community supportive of and consistent with the educational
and housing needs of the Declarant. Consequently no person shall possess, occupy
or use any Residence unless such person is a "Qualified Person" or a
"Conditionally Qualified Person" as defined in this Article III. Further, a
Qualified Person or Conditionally Qualified Person must possess, occupy or use
a Residence as his or her primary Residence, except for the limited right to
lease as more specifically set forth in Article IV(6.) of this Declaration.

2. QUALIFIED PERSON. A "Qualified Person" is a person determined
to be eligible in accordance with criteria to be developed by Duke University.
That policy is intended and dedicated to further the educational purposes of Duke
University by enhancing the quality of education through attention and
recruitment of faculty members and staff. Therefore, Duke University, may, in
its sole discretion, from time to time designate as Qualified Persons, those
employees of Declarant who are an integral part of the Duke University Community,
and with respect to whom Duke University shall have determined that providing
adequate housing is a priority. Without limiting the generality of the
foregoing, among those persons who shall be eligible for designation as Qualified
Persons shall be the following:

(a) Professor, Associate Professor or Assistant Professor in
tenure tract position;

(b) Professor, Associate Professor, Assistant Professor,
Lecturer, Research Associate or comparable non-tenure tract
position; and

Following designation as a Qualified Person, a person shall continue to be a
Qualified Person until his or her employment by Declarant terminates, at which
time he or she will no longer be a Qualified Person. Provided, however, that no
Owner who is a Qualified Person shall lose his or her status as a Qualified
Person because of a voluntary termination of employment as a result of disability
or retirement. For the purpose of this Section, "retirement" shall mean
voluntary termination of employment at a time when a person shall be eligible to
receive retirement benefits from Duke University.

3. CONDITIONALLY QUALIFIED PERSONS. The following persons
shall be considered to be Qualified Persons only upon the conditions and for the
periods of time specified in this subparagraph.

(a) Any Qualified Person/Owner shall continue to be qualified
until the expiration of a period equalling one (1) year for each
five (5) years employed by Duke University, following the date on
which such person shall cease to have been a Qualified Person as
defined in Section 2 above, but in no event less than a period of
one (1) year;

(b) A Qualified Person/Owner's spouse who shall possess,
occupy and use a residence as of the date of death such Qualified
Person/Owner shall continue to be a Qualified Person for so long as
he/she continues to possess, occupy and use a residence, or until
the expiration of one (1) year following the date on which he or she
ceases to possess, occupy and use a residence;

(c) An heir (other than a spouse) of a Qualified Person/Owner
who shall acquire ownership of a residence shall be a Qualified
Person for one (1) year from the date such heir shall acquire record
ownership of such residence;

(d) A Qualified Person/Owner's spouse who acquires sole right
of occupancy other residents pursuant to any marital settlement,
proceeding or decree shall be a Qualified Person for the period
he/she possesses, occupies and uses a residence, and for a period of
one (1) year, after he or she ceases to possess, occupy and use the
residence;

(e) A co-owner of a fifty percent (50%) or less undivided
interest in a residence who resides in such residence with and
during the lifetime of a Qualified Person/Owner shall be a Qualified
Person during the period of occupancy with the Qualified
Person/Owner and for a period of one (1) year from the death of such
Qualified Person; and

(f) Any lessee pursuant to Article IV, Section 7, shall be a
Qualified Person during the term of a lease thereunder.

A conditionally Qualified Person, as defined in this Section, may continue to
possess, occupy and use a residence until the expiration of his or her
conditionally qualified status pursuant this Section.

4. OFFER OR SALE BY QUALIFIED PERSON OR CONDITIONALLY
QUALIFIED PERSON.

(a) Any Qualified Person and/or Conditionally Qualified
Person who owns a residence may, during the period of qualification,
either:

(i) Sell or transfer his or her entire ownership
interest in the residence to a Qualified Person
designated pursuant to Article III, Section 2, to be
eligible to purchase such residence; or

(ii) Upon the expiration of one (1) year following
the continued offer to sell the residence to a Qualified
Person, sell his or her entire ownership interest in the
residence to Declarant pursuant to the repurchase option
set forth in Article IV, Section 1; or

(iii) Sell the residence to any person, without
respect to their qualification under this Article III
if, after one year of attempting to sell to a Qualified
Person, Declarant does not exercise its option to
repurchase.

5. SINGLE FAMILY USE. No Residence shall, at any time, be
possessed, occupied or used by more than a Single Family, as herein defined.

6. ENFORCEMENT OF QUALIFIED USE RESTRICTION. Declarant or
the Association may enforce the provisions of this Article by appropriate action,
including, but not limited to, any remedy or remedies provided in Articles II and
III of this Declaration.

ARTICLE IV - LIMITATIONS ON TRANSFER

1. REPURCHASE OPTION. The Declarant shall have the option to
repurchase any Residence upon the occurrence of any one of the following events:

(a) Written notice from a Qualified Person, with supporting
documentation, that he or she has been unable to sell a residence to
another Qualified Person over a one (1) year period of time.

(b) Upon termination of a conditionally Qualified
Person/Owner's status as a conditionally Qualified Person as defined
under Article III, Section 3.

(c) Upon Declarant receiving written notification from a
Qualified Person/Owner under subparagraph (a), or upon Declarant
verifying termination of conditionally Qualified Person status under
subparagraph (b), Declarant is given the option to repurchase the
residence at the price and on the terms set forth in Section 2 of
this Article. This option may be exercised by Declarant giving the
Owner written notice of election to exercise the repurchase option
within sixty (60) days of the event triggering the purchase option,
as defined in this Section. In the event Declarant does not
exercise its option to repurchase the residence, or fails to close
on that purchase pursuant to the terms of Section 3 of this Article,
the Owner may sell the Residence to any person, without respect to
their qualification under Article III.

2. PURCHASE PRICE AND TERMS. The purchase price of any
residence offered or sold pursuant to this Article IV shall be the lesser of:

(a) The fair market value of the Residence as mutually
determined by the Owner and the Declarant; or

(b) The sum of: (i) the purchase price of the Residence or
Residential lot paid by the original Owner purchasing the Residence
from Declarant, plus (ii) the product of the purchase price of the
Residence or Residential lot paid by Owner and the fractional change
in the Consumer Price Index (as defined below), if greater than
zero, as published for the monthly immediately preceding the date on
which the Owner purchased the Residence and said Index as published
for the month preceding the date that triggers the repurchase option
pursuant to Section 1 of this Article, plus (iii) the cost of all
capital improvements to the Residence or Residential lot made by the
Owner and previous Owners, but only to the extent that each such
capital improvement exceeded $1,000 in cost and is supported by
written documentation, which documentation shall be subject to audit
and proof less (iv) the reasonable cost (calculated as of the date
of the sale) to cure any destruction of or failure to maintain the
Residence in excess of normal wear and tear. As used in this
Section "Consumer Price Index" means the National Consumer Price
Index (all items) as published by the United States Department of
Labor, Bureau of Labor Statistics, or, if such index ceases to be
published, then any comparable successor index which measures
changes in the prices of consumer items.

3. CLOSING. If the repurchase option granted under this Article is
exercised by Declarant, the closing on the purchase of the Residence shall occur
within sixty days of the date the option is exercised, and the purchase price
shall be paid at closing, subject to normal and customary Seller's and Buyer's
closing costs and the satisfaction of all outstanding liens encumbering the
residence.

4. EXEMPTION FROM TRANSFER LIMITATIONS. The following
persons and transactions shall be exempted from the provisions of this Article
IV, except as provided in this Section:

(a) A Purchaser who acquires title to a Residence at a duly
advertised public sale, including, but not limited to, an execution
sale, foreclosure sale, judicial sale, or tax sale; but any such
Purchaser, other than a Qualified Person, shall take title subject
to the repurchase option granted Declarant pursuant to Section 1 of
this Article;

(b) A transfer of a Residence to, or a purchase of a
Residence by a mortgagee which acquires its title as a result of
holding a deed of trust upon the Residence concerned; but any such
mortgagee shall take title subject to the repurchase option granted
the Declarant under Section 1 of this Article.

5. CERTIFICATION OF STATUS. Upon written request of any Trans-
feree or Purchaser, Tenant of a Residence or of an existing or prospective Mort-
gagee, Transferee, or Beneficiary of any deed of trust encumbering a Residence,
Declarant shall, within fifteen days, issue a written acknowledgment, evidencing
if such be the case:

(a) With respect to a sale to a Qualified Person, that such
sale is permissible under the terms of this Declaration; or

(b) With respect to a proposed sale to a person who is not a
Qualified Person, that the option to repurchase was not exercised by
the Declarant following proper notice.

The written request required under this subparagraph shall be accompanied by
written documentation of the cost of all capital improvements to the residence
or residential lot made by the current Owner.

6. LEASING. An Owner may lease or rent Owner's Residence only on
the following terms and conditions:

(a) An Owner may lease a Residence in conjunction with an
academic leave approved by Duke University.

(b) An Owner may lease a residence for a period not to exceed
one (1) year provided he/she is a Conditionally Qualified Person as
defined under subparagraph 3 of this Article.

(d) An Owner may lease a garage apartment if the Owner
resides in the primary structure of the Residence.

(e) An Owner shall provide Duke University with a copy of any
written Lease Agreement prior to occupancy by a Tenant or Tenants.

(f) Execution by an Owner of any lease or rental agreement
for a Residence in violation of this Section shall trigger the right
of Declarant to repurchase the Residence in accordance with the
terms of Article IV.

7. UNAUTHORIZED SALES OR TRANSFERS. If any Owner shall
attempt to sale, assign or otherwise transfer the Owner's Residence in contraven-
tion of the terms of this Declaration, such attempted or purported sale, assign-
ment or transfer shall be wholly null and void and shall confer no title or interest
whatsoever upon the intended Purchaser or Transferee.

ARTICLE V - AMENDMENTS

1. AMENDMENT. This Declaration and any amendment to it may be
amended in any respect or revoked by the execution by Declarant of an instrument
amending or revoking the Declaration.

2. RECORDATION. Any amendment or revocation shall be evidenced by
an instrument, making appropriate reference to this Declaration and any consent
required hereunder, and shall be acknowledged and recorded in the Office of the
Register of Deeds of Durham County.

3. CONFORMANCE WITH MORTGAGEE REQUIREMENTS. It is the
intent of Declarant that this Declaration and the Property in general, shall now
and in the future meet such requirements as are necessary to permit the guarantee
of any deed of trust of a Residence in the Property by the Federal Home Loan
Mortgage Corporation and the Federal National Mortgage Association. The
Declarant and each Owner shall take any action or shall adopt any resolutions
required to conform this Declaration and the Property to the requirements of
these entities.

ARTICLE VI - MORTGAGEE PROTECTION

1. DEED OF TRUST PERMITTED. Any Owner may encumber his or her
Residence with a deed of trust. Provided, the total obligations secured by a
deed of trust, or combination of deeds of trust, shall not at any time exceed the
purchase Price calculated in accordance with Article IV(2.) in connection with
Declarant's right to repurchase, without the written consent of Declarant.

2. SUBORDINATION. Any lien created or claimed under the provisions
of this Declaration is expressly made subject and subordinate to the rights of
any deed of trust that encumbers a Residence, made in good faith and for value;
and no such lien shall in any way defeat, invalidate or impair the obligation or
priority of such deed of trust unless the Mortgagee expressly subordinates the
interest, in writing, to such lien. Provided, upon foreclosure of the deed of
trust, the party taking title to the Residence shall be subject to the special
restrictions and limitations as set forth in Articles III and IV of this
Declaration.

ARTICLE VII - EXTERIOR PAINTING

Declarant, through its office of Real Estate Administration, shall
develop a preapproved list of colors for exterior painting or siding. The color
scheme of any exterior painting or siding which deviates from the preapproved
list of colors, must be approved by Declarant, through its Executive Vice-President,
or designee. An Owner must submit a written request for approval,
with a sample of the color proposed. Approval or denial of the color scheme will
be given to Owner within fifteen days of Declarant's receipt of the written
request.

ARTICLE VIII - DURATION

This Declaration shall continue in effect until December 31, 2028.
Thereafter, this Declaration shall automatically renew for consecutive periods
of ten (10) years each unless, terminated by the written consent of Owners
owning Ninety percent (90%) of the residential lots within the Property.

ARTICLE IX - MISCELLANEOUS PROVISIONS

1. SUCCESSORS AND ASSIGNS. This Declaration shall inure to the
benefit of and be binding upon the successor and assigns of Declarant, and on
the heirs, personal representatives, grantees, lessees, successors and assigns of the
Owners.

2. CUMULATIVE REMEDIES. Each remedy provided for in this
Declaration shall be cumulative and not exclusive. The failure to exercise any
remedy provided for in this Declaration shall not, under any circumstances, be
construed as a waiver of the remedy.

3. VIOLATIONS AS NUISANCE. Every act or omission in violation of
the provisions of this Declaration shall constitute a nuisance and, in addition
to all other remedies set forth, may be abated or enjoined by the Declarant or
any Owner.

4. ATTORNEY'S FEES. In the event of a violation of this
Declaration, the party seeking enforcement of the Declaration may recover all
legal costs associated with the enforcement action.

5. GOVERNING LAW. This Declaration shall be governed by and
construed in accordance with the laws of the State of North Carolina.

6. DELIVERY OF NOTICES. Any written notice required by this
Declaration may be delivered personally or by mail. If by mail, such notice
shall be deemed to have been delivered and received three (3) days after a copy
thereof is deposited in the United States mail, posted and fees prepaid,
addressed as follows:

(a) If to an Owner, other than Declarant, to the address of
the Owner's Residence.

(b) If to the Declarant, to:

Duke University
Director of Real Estate
402 Oregon Street
Durham, NC 27705

or any such other successor address as Declarant shall hereinafter indicate by
notice.

IN WITNESS WHEREOF, Declarant has executed this Declaration on the
day and year first above written.

DUKE UNIVERSITY

By _________________________________
_______ President

ATTEST:

___________________________
________ Secretary

(CORPORATE SEAL)
NORTH CAROLINA

COUNTY OF ___________

I, a Notary Public of the County and State aforesaid, certify
that _______________________, personally came before me this day and acknow-
ledged that ___he is the ________ Secretary of DUKE UNIVERSITY, a North
Carolina Corporation, and that by authority duly given and as the act of the cor-
poration, the foregoing instrument was signed in its name by its ________ President,
sealed with its corporate seal and attested by ____ as its __________ Secretary.

Witness my hand and official stamp or seal, this, the ____ day of
____________, 1998.

____________________________________
Notary Public

My commission expires: ______________________

EXHIBIT "A"

DESCRIPTION OF THE PROPERTY

Parcel 1:

BEING Lot 9 in Block 12 of the Property of the West Durham Land Company,
as per plat and survey thereof now on file in the Office of the Register of Deeds
of Durham County in Deed Book 18 at Page 431. Also being the property pur-
chased by Duke University by Deed recorded in Deed Book 312 at Page 383 of
the Durham County Registry and known as 814 Onslow Street.

Parcel 2:

BEING Lot 8 and the northern one-half of Lot 10 in Block 12 as per plat and
survey entitled "West Durham Land Company", of record in Deed Book 18 at Page
431. Also being the property purchased by Duke University by Deed recorded in
Deed Book 356 at Page 156 of the Durham County Registry and known as 817
Lancaster Street.

Parcel 3:

BEGINNING at a stake on the eastern side of Fourth Street (now Berkley Street)
at the northwest corner of Lot No. 21, Block 11, and running thence in an
easterly direction with the line of said Lot 140 feet to a stake in the western
line of a 20-foot alley; thence in a northerly direction with said alley 75 feet
to a stake; thence in a westerly direction 140 feet to a stake in the eastern
line of Fourth Street (now Berkley Street); thence in a southerly direction with
the eastern line of Fourth Street (now Berkley Street) 75 feet to the point and
place of beginning. Also being the property purchased by Duke University by
Deed recorded in Deed Book 291 at Page 507 and known as 802/804 Berkley
Street.

Parcel 4:

BEING all of Lots 22 and 24 in Block 11 of the Property of West Durham Land
Company, as per plat and survey thereof now on file in the Office of the Register
of Deeds of Durham County in Deed Book 18 at Page 431. Also being the pro-
perty purchased by Duke University by Deed recorded in Deed Book 1174 at Page
821 and known as 801/803 Onslow Street.

Parcel 5:

BEING Lots 16 and 18, Block 11 as per plat and survey of the lands of West Durham
Land Company, recorded in Deed Book 18 at Page 431 of the Register of Deeds of
Durham County. Also being the property purchased by Duke University by Deed
recorded in Deed Book 325 at Page 590 and known as 807 Onslow Street.

Parcel 6:

BEING Lot 12, Block 11 of the West Durham Land Company Property as per plat of
record in Deed Book 18 at Page 431 of the Register of Deeds of Durham County.
Also being the property purchased by Duke University by Deed recorded in Deed
Book 335 at Page 364 and known as 813 Onslow Street.

Parcel 7:

BEING Lot 4, Block 11, as per plat and survey of property of West Durham Land
Company, recorded in Deed Book 18 at page 431 of the Register of Deeds of Durham
County. Also being the property purchased by Duke University by Deed recorded
in Deed Book 334 at Page 500 and known as 821 Onslow Street.

Parcel 8:

BEING the western 65 feet of Lots 21 and 23, Block 11, as shown on plat of
Property of West Durham Land Company recorded in Deed Book 18 at Page 431 of the
Register of Deeds of Durham County. Also being the property purchased by Duke
University by Deed recorded in Deed Book 334 at Page 500 and known as 1410/1412
Markham Avenue.

Parcel 9:

BEING a part of the E. W. Whitaker Property as shown on the plat of said Property
made by E. L. Culbreth, Engineer, dated June 26, 1926 and recorded in the Office
of the Register of Deeds of Durham County, North Carolina, in Plat Book 7 at Page
152 of the Register of Deeds of Durham County. Also being the property purchased
by Duke University by Deed recorded in Deed Book 334 at Page 500 and known as
1305 Green Street.