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EXHIBIT C
<br />(2)The words “claim,” “action,” “suit,” or
<br />“proceeding” shall apply to all claims, actions, suits, or
<br />proceedings (civil,criminal, or other, including appeals), actual or
<br />threatened, made or commenced subsequent to the adoption of this
<br />Certificate of Formation; and the words “liability” and “expenses”
<br />shall include, without limitation, attorneys’ fees, costs, judgments,
<br />amounts paid in settlement, fines, penalties, and other liabilities.
<br />(b)No indemnification shall be provided hereunder to a director or
<br />officer or any other individual:
<br />(1)Against any liability to the Association by reason of
<br />willful misfeasance, bad faith,gross negligence, breach of
<br />fiduciary duty, criminal misconduct or reckless disregard of the
<br />duties involved in the conduct of his office;
<br />(2)With respect to any matter as to which he shall have
<br />been finally adjudicated not to have acted in good faith inthe
<br />reasonable belief that his action was in the best interest of the
<br />Association;
<br />(c)The rights of indemnification herein provided may be insured
<br />against by policies maintained by the Association, shall be severable, shall not
<br />affect any other rights towhich any director or officer now or hereafter may be
<br />entitled, shall continue as to a person who has ceased to be a director or officer
<br />and shall inure to the benefit of the heirs, executors, and administrators of such a
<br />person.
<br />(d)Expenses in connection with the preparation and presentation of a
<br />defense to any claim, action, suit, or proceeding of the character described in
<br />Article IX hereof may be advanced by the Association before final disposition
<br />thereof upon receipt of an undertaking by or on behalf of the director or officers,
<br />secured by a surety bond or other suitable insurance issued by a company
<br />authorized to conduct such business in the State of Texas, to repay such amount if
<br />it is ultimately determined that he is not entitled to indemnification under Article
<br />IX.
<br />ARTICLE X
<br />THE ASSOCIATION, ITS BOARD OF DIRECTORS AND OFFICERS, ITS MANAGER,
<br />EMPLOYEES, AGENTS AND/OR ITS ATTORNEYS, (“ASSOCIATION AND RELATED
<br />PARTIES”) SHALL NOT IN ANY WAY BE CONSIDERED AN INSURER OR GUARANTOR OF
<br />SECURITY WITHIN THE SUBDIVISION. NEITHER SHALL THE ASSOCIATION AND RELATED
<br />PARTIES BE HELD LIABLE FOR ANY LOSS OR DAMAGE BY REASON OF FAILURE TO
<br />PROVIDE ADEQUATE SECURITY OR INEFFECTIVENESS OF SECURITY MEASURES
<br />UNDERTAKEN. LOT OWNERS AND OCCUPANTS, AS APPLICABLE, ACKNOWLEDGETHAT
<br />THE ASSOCIATION AND RELATED PARTIES DO NOT REPRESENT OR WARRANT THAT ANY
<br />FIRE PROTECTION, BURGLAR ALARM SYSTEMS, ACCESS CONTROL SYSTEMS, PATROL
<br />SERVICES, SURVEILLANCE EQUIPMENT, MONITORING DEVISES, OR SECURITY SYSTEMS
<br />(IF ANY ARE PRESENT) WILL PREVENT LOSS BY FIRE, SMOKE, BURGLARY, THEFT, HOLD-
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