1. HOA/POA Joint Meeting and Merger Discussion October 9, 2003

2. HOA/POA 02-03 Activities JAN-JUNE 02- ATTEMPT TO RENEGOTIATE USE AGREEMENT UNSUCCESSFUL JAN-JUNE 03: ATTEMPT TO RENEGOTIATE USE AGREEMENT UNSUCCESSFUL JULY: PROPOSED NEW USE AGREEMENT NULLIFIED. AUGUST: MERGER COMMITTEE FORMED BY BOTH BOARDS SEPTEMBER: COMMITTEE REOMMENDATIONS MADE TO POA/HOA BOARDS SEPTEMBER: POA/HOA BOARDS VOTE TO CALL A SPECIAL MEETING FOR MEMBERS TO VOTE ON MERGER. NOVEMBER: HOA/POA SPECIAL MEETINGS SET

3. Merger Committee GRANT FARRIS. (HOA) PHONE: 281.556.5601 JOYCE CONTRERAS. (HOA) PHONE: 281.493.3361 DIANA MOSVOLD. (HOA) PHONE: 281.493.6128 JON JOINER. PHONE: (POA) 281.679.7161 LARRY OAKES. PHONE: (POA) 281.556.9155 PATTY VASEY. PHONE: (POA) 281.556.1814 Reviewed HOA/POA Deed Restrictions, Bylaws, Articles of Incorporation, Budgets, Financial Statements.

4. POA Facts 452 RESIDENCES/LOTS. CURRENT ANNUAL ASSESSMENT: $330./YR. COMMON AREAS: SWIMMING POOL, BATH HOUSE, CLUB HOUSE, TENNIS COURTS, BASKETBALL COURT, PLAYGROUNDS, PICNIC AREA, OPEN ACREAGE, ONE SUBDIVISION SIGN. MANAGEMENT: SELF MANAGED CURRENT BOARD MEMBERS: SEVEN

5. HOA Facts 411 RESIDENCES ON 437 LOTS 1 UNIMPROVED LOT CURRENT ANNUAL ASSESSMENT: $ 420./YEAR COMMON AREAS: TWO RETENSION PONDS, FOUR SUBDIVISION SIGNS. MANAGEMENT: PROFESSIONAL MANAGEMENT COMPANY. USE AGREEMENT WITH POA EXECUTED JANUARY 28, 1983. CURRENT BOARD MEMBERS: FOUR

6. Professional Vs. Self Management PROFESSIONAL MANAGEMENT WILL COST LESS THAN SELF MANAGEMENT. (Merged Cost <40% ) PROFESSIONAL MANAGEMENT ELIMINATES THE BURDEN OF HOMEOWNERS (BOARD MEMBERS) POLICING OTHER HOMEOWNERS. PROFESSIONAL MANAGEMENT HAS BROAD UNDERSTANDING OF THE DEED RESTRICTION ENFORCMENT LEGAL REQUIRMENTS, ISSUES AND NEEDS OF HOMEOWNERS’ ASSOCIATIONS. PROFESSIONAL MANAGEMENT HAS THE EXPERIENCE AND EXPERTISE TO NEGOTIATE CONTRACTS, MANAGE FUNDS, ADMINISTER RECORD KEEPING, ACCOUNTING AND REPORTING MATTERS.

7. POA Amenity And Common Area Fair Market Value PROPERTY CANNOT BE USED FOR COMMERCIAL PURPOSES. THE DEED RESTRICTIONS PROHIBIT SUBDIVIDING, LEASING, SUB-LETTING, OR CHANGING THE PURPOSE FOR WHICH THE AMENTIES WERE BUILT. EVEN THOUGH FINANCIAL VALUE IS SET FOR INSURANCE PURPOSES, IT IS DIFFICULT TO ESTABLISH A FAIR MARKET VALUE FOR SALE OR OTHER PURPOSES. FAILURE TO MAINTAIN THE AMENITIES WILL HAVE A NEGATIVE EFFECT ON PROPERTY VALUES IN THE HOA/POA. THE AMENITIES ADD VALUE TO ALL RESIDENCES BY: INCREASING THE OVERALL APPEAL OF THE NEIGHBORHOOD TO PROSPECTIVE BUYERS. OFFERING RECREATIONAL ACTIVITIES TO OWNERS THAT ARE UNAVAILABLE IN OTHER NEIGHBORHOODS. PROVIDING AN AREA FOR COMMUNITY USE BY ALL OWNERS.

8. The Use Agreement EXECUTED AND EFFECTIVE: JANUARY 28, 1983 HOA PAYMENT FOR USE IS MADE IN ADVANCE, BASED ON PRIOR YEARS’ OPERATING EXPENSES COVERS REPAIR AND MAINTENANCE OF AMENITIES DOES NOT COVER IMPROVEMENTS OF AMENITIES (UNLESS IMPROVEMENTS ARE CONSIDERED LESS COSTLY THAN REPAIRS) HOA PAYMENT HAS CHANGED YEARLY, BASED ON PRIOR YEARS’ POA ACTUAL EXPENSES WILL BECOME NULL AND VOID UPON MERGER DOES NOT REQUIRE REIMBURSEMENT TO THE POA

9. Merged Board/by Laws Effective Date of the Merged Assoc: January 2004 Interim Board: January-March 2004 New Board: Seven Members Three Members from the POA (2 year term) Three Members from the former HOA (2 year term) One Member @ Large (1 year term) Board Elections and Annual Meeting March 2004 Minimum Cash Reserve $75K Maximum annual dues increase 10% with 2/3 vote over 5%

10. Deed Restrictions THERE IS ESSENTIALLY NO CHANGE IN THE MERGED ASSOCAITION DEED RESTRICTIONS THE MERGER COMMITTEE ANALYZED THE POA AND HOA RESTRCITIONS AND INSURED ALL COVENANTS FROM BOTH ASSOCIATIONS WERE INCLUDED. ANY DIFFERENCES WERE STRENGTHED

11. Questions & Answers POA/HOA Capital Improvements to POA Amenities- Joint Decision will be made by Merged Board rather than conflict arising from separate groups Annual Fee 2004- NO CHANGE HOA: $420 POA: $330 Base Annual Fee 2005 $330 Cash balance from POA 12/31/03 $176k Cash from HOA- HOA 12/31/03 $133k (HOA shortfall of $35K) Equivalent Cash Make-up from HOA- HOA adds $35K through 2004 annual fee Intangible $ Value of Amenities- Adds value to all residences Tangible $ Value of POA Amenities- No financial value Vote Required to pass Merger: 2/3 of all residents

12. Benefits of Merged Association Decisions based on one community. Balanced Board Greater Negotiating Power (863 Residences). Ten Year Cash Savings: $250K-$400K Updated Deed Restrictions & Bylaws Professional Management vs. Private Management. Joint Decisions on Security, Grounds, Trash, Amenities. Combined Working Capital (2004): $640K Net Working Capital after Expenses (2004): $325K

13. Important Dates Next Information Meeting November 6, 2004 HOA Mailing of Proxy/Ballot Revised Deed Restrictions, Bylaws On or Before October 18, 2003 HOA Mailing of Proxy/Ballot Revised Deed Restrictions, Bylaws On or Before November 2, 2003 POA Vote for Proposed Merger November 18,2003 HOA Vote for Proposed Merger November 17,2003 WWW.Briarhills.ORG