Avery Close Bylaws2 · Avery Close Condominium Association

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BCG 3408 PACE 801 DECLARATION OF CONDOMINIUM Establishing AVERY CLOSE CONDOMINIUM Benchmark Atlantic Co., Inc. a South Carolina corporation, hereinafter referred to as "Developer", having a place of business in Hilton Head, South Carolina, does hereby make, declare and establish this Declaration of Condominium as and for the plan of dwelling ownership of Avery Close Condominium, being the property and improvements hereinafter described.

WHEREAS, Developer is constructing in successive segments (hereinafter referred to as "Phases"), on the parcel of land described in Exhibit A. a condominium development consisting of dwelling units (hereinafter referred to as the "PROJECT") established in accordance with the provisions of the Unit Ownership Act, Chapter 47A of the General Statutes of the State of North Caroline, and the Project when completed will comprise approximately 122 units (hereinafter referred to as "DWELLING UNITS" or "UNITS") on the parcel of land described in Exhibit A; and WHEREAS, it is the desire of Developer to submit a phase of the Project property hereinafter described in Exhibit B together with the improvements thereon constructed to the provisions of the Unit Ownership Act for condominium ownership; and WHEREAS, Developer also desires herein to provide for the submission of successive phases of the Project to condominium ownership by amending this Declaration as said sections are developed and completed; and WHEREAS, Developer hereby establishes by this Declaration a plan for the individual ownership of the real property estates consisting of the area or space contained in each of the Units and the co-ownership by 1 BOUN 3108 FACE 802 the individual and separate owners thereof, as tenants in common of all

eal property estates consisting of the area or space contained in each of the Units and the co-ownership by 1 BOUN 3108 FACE 802 the individual and separate owners thereof, as tenants in common of all of the remaining real property which is hereinafter defined and referred to as the "COMMON AREAS AND FACILITIES".

NOW, THEREFORE, Developer hereby declares: I.

LEGAL DESCRIPTION OF PROJECT PROPERTY The overall Avery Close Condominium Project site referred to herein is situated in Paleigh Township, Wake County, North Carolina, and is described in Exhibit A as the "Project Property".

II.

LEGAL DESCRIPTION OF FHASE OF PROJECT PROFERTY DEDICATED TO CONDOMINIUM OWNERSHIP The Project Property which is herewith dedicated to condominium or unit ownership is situated in Raleigh Township, Wake County, North Carolina and described in Exhibit B as the "Condominium Property".

III.

ESTABLISHMENT OF CONDOMINIUM Developer is the owner of the fee simple title to that certain real property described in Exhibit "B" attached hereto and incorporated herein by reference, and on which property there have been, or will be, constructed eleven or more detached buildings containing a total of 120 condominium living units and two support facilities units and their supporting facilities, and other appurtenant improvements. There are no basements. The buildings are of wood frame construction with stucco exteriors. Ground floors are concrete slab; units are wood frame; decks and outside stairs are wood construction; and the roof is covered with asphalt roofing shingles. Developer does hereby submit the above described property and improvements to condominium ownership under the provisions of Chapter 47A of the General Statutes of North Carolina

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halt roofing shingles. Developer does hereby submit the above described property and improvements to condominium ownership under the provisions of Chapter 47A of the General Statutes of North Carolina (Unit Ownership Act), and hereby declares the same to be a condominium to be known and identified as "Avery Close Condominium”. Hereinafter in this Declaration of Condominium, Avery Close Condominium is also referred to as "Condominium”.

IV.

SURVEY AND DESCRIPTION OF IMPROVEMENTS Annexed hereto and expressly made a part hereof as Exhibit "C", of Paragraphs XXX and XXXI, is a Survey of the land and graphic description and plot plans of the improvements constituting the Condominium, identifying the Condominium Units and Common Areas and Facilities, as said terms are hereinafter defined, and their respective locations and approximate dimensions. Each Condominium Unit is identified by specific numerical and alphabetical designation on said Exhibit "D", and no Condominium Unit bears the same designation as any other Condominium Unit.

BOUN 3408 FACE 8º V.

DEFINITIONS The Condominium consists of Condominium Units and Common Areas and Facilities, as said terms are hereinafter defined.

Condominium Units as the term is used herein shall mean Dwelling Units and the Support Facilities Units which are designated in Exhibit "B", to this Declaration of Condominium including the air conditioning compressor located on the concrete slab and the water heater designated for the unit located in the limited common area below mentioned, excluding, however, all spaces and improvements lying: 1. Beneath the subflooring material of the floors.

2. Beneath the interior surfacing material of all perimeter walls,

ommon area below mentioned, excluding, however, all spaces and improvements lying: 1. Beneath the subflooring material of the floors.

2. Beneath the interior surfacing material of all perimeter walls, interior bearing walls and/or bearing partitions: 3. Above the interior surfacing material of the ceilings; and further excluding all pipes, ducts, wires, conduits and other facilities for the furnishing of utilities and other services to Condominium Units and Common Areas and Facilities up to and including the point of entry of such pipes, ducts, wires, and conduits through the interior surfacing material for walls and ceilings and subflooring surfacing material for floors. All pipes, ducts, wires, conduits and other such facilities shall become a part of the respective Condominium Units at such point of entry. All exterior doors, window frames, panes and screens shall be part of the respective Condominium Units, provided, however, that the exterior decoration and painting of the exterior surface of such doors and window frames shall be the responsibility of the Association, as hereinafter defined.

All portions of the property not encompassed and included within the various Condominium Units are part of the Common Areas and Facilities.

Certain portions of the Common Areas and Facilities are reserved for the use of a particular Condominium Unit or Units to the exclusion of other Units and are designated as "Limited Common Areas and Facilities." The Limited Common Areas and Facilities and the Condominium Unit or Units to which they are reserved are as follows: 1. The porches, balconies, decks and attics which are adjacent to respective Condominium Units and interior access to which can be had only through a Unit are Limited Common Areas and Facilities, and the use

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porches, balconies, decks and attics which are adjacent to respective Condominium Units and interior access to which can be had only through a Unit are Limited Common Areas and Facilities, and the use of such areas shall be limited to the Unit owner or occupant whose Unit affords interior access to such porch, balconies, decks or attics.

2. The exterior steps and stoops which are a part of each building are Limited Common Areas and Facilities and are reserved for the use of the owners of Units in the respective buildings, their families, guests, invitees and lessees.

3. There are air conditioning compressor pads located at ground level. These compressor pads are Limited Common Areas and Facilities and their use is limited to the respective Owner or Owners of the Condominium Unit with which each compressor pad is associated. Each concrete compressor pad is designated as the Unit with which it is associated.

The terms "Association of Unit Owners", "Building", '"Common Areas and Facilities" (sometimes herein referred to as "Common Property"), "Common Expenses", "Common Profit", "Condominium”, "Declaration", BOON 3408 FACE 804 "Majority" or "Majority of Unit Owners", "Person" "Property", "Recordation", "Unit" or "Condominium Unit", "Unit Designation", and "Unit Owner", unless it is plainly evident from the context of this Declaration that a different meaning is intended shall, as used herein, have the meaning set out in Section 3 of Chapter 47A of the General Statutes of North Carolina, known as the Unit Ownership Act.

VI.

OWNERSHIP OF CONDOMINIUM UNITS AND APPURTENANT INTEREST IN COMMON PROPERTY Each Condominium Unit shall be conveyed and treated as an individual property capable of independent use and fee simple ownership, and the

NDOMINIUM UNITS AND APPURTENANT INTEREST IN COMMON PROPERTY Each Condominium Unit shall be conveyed and treated as an individual property capable of independent use and fee simple ownership, and the Owner of each Unit shall also own, as an appurtenance to the ownership of each said Condominium Unit, an undivided interest in the Common Areas and Facilities. At the date of this Declaration and until amended is provided in Paragraph XXXX, the undivided interest appurtenant to each Condominium Unit is as set forth in Exhibit "D", attached hereto and made a part hereof. The proportional interest in the Common Property that is appurtenant to each Condominium Unit as shown in said Exhibit has been determined by a ratio formulated upon the approximate relation that the fair market value of each Unit at the date of the Declaration or Amendment bears to the aggregate fair market value of all of the Units having an interest in the Common Areas and Facilities.

The approximate fair market value of each Unit and the aggregate fair market value of all of the Units have been determined by the Developer for purposes of this Declaration, and this determination shall be binding upon all Unit Owners, their heirs, successors and assigns.

A copy of the plans for all Units in Phase I is attached as Exhibit "C".

As the other Units are completed, a Registered Architect or Licensed Professional Engineer, will file, as amendments to this Declaration, the verified statements required by North Carolina General Statutes Section 47A-15, certifying that the Units, as built, are fully and accurately depicted in Exhibit "C". At the time the architect or engineer files such verified statements, Developer shall also file an amendment to this Declaration stating that the percentage undivided

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curately depicted in Exhibit "C". At the time the architect or engineer files such verified statements, Developer shall also file an amendment to this Declaration stating that the percentage undivided interest in the Common Area appurtenant to each Unit at the time of such filing is as shown in Exhibit "D", or on Exhibit "D" as amended. Each Unit Owner shall be deemed by his acceptance of the deed to a Condominium Unit to have consented to the powers of amendment herein reserved by Developer and to any amendments previously or thereafter executed by Developer pursuant to this Article VI. Further, each Unit Owner and each Institutional Lender, as hereinafter defined, shall be deemed by the Owner's acceptance of a deed to a Condominium Unit to have appointed Developer their attorney-in-fact to give, execute and record the consent of said Owner and institutional Lender to any and all amendments executed pursuant to this Article. Except as provided herein, the percentage of undivided interest in the Common Property assigned to each Condominium Unit shall not be changed except with the unanimous consent of all of the Owners of all of the Condominium Units acting individually or through their attorney-in-fact as provided in Article XXX hereof.

VII.

RESTRICTION AGAINST FURTHER SUBDIVIDING OR TIMESHARING OF CONDOMINIUM UNITS AND SEPARATE CONVEYANCE OF APPURTENANT COMMON PROPERTY No Condominium Unit may be divided or subdivided into a smaller Unit or Units than as shown on Exhibit "C" hereto, nor shall any Condominium Unit or portion thereof be added to or incorporated into any 3408 FAL other Condominium Unit. No Condominium Unit may be divided or subdivided into time share estates. The undivided interest in the Common Property

on thereof be added to or incorporated into any 3408 FAL other Condominium Unit. No Condominium Unit may be divided or subdivided into time share estates. The undivided interest in the Common Property declared to be an appurtenance to each Condominium Unit shall not be conveyed, devised, encumbered or otherwise dealt with separately from said Condominium Unit, and the undivided interest in Common Property appurtenant to each Condominium Unit shall be deemed conveyed, devised, encumbered or otherwise included with the Condominium Unit even though such undivided interest is not expressly mentioned or described in the instrument conveying, devising, encumbering or otherwise dealing with such Condominium Unit. Any conveyance, mortgage or other instrument which purports to grant any right, interest or lien in, to or upon a Condominium Unit, shall be null, void and of no effect insofar as the same purports to affect any interest in a Condominium Unit and its appurtenant undivided interest in Common Property, unless the same purports to convey, devise, encumber or otherwise trade or deal with the entire Condominium Unit. Any instrument conveying, devising, encumbering, or otherwise dealing with any Condominium Unit, which described said Condominium Unit by the numerical and alphabetical designation assigned thereto in Exhibit "D" without limitation or exception, shall be deemed and construed to affect the entire Condominium Unit. and its appurtenant undivided interest in the Common Property. Nothing herein contained shall be construed as limiting or preventing ownership of any Condominium Unit and its appurtenant undivided interest in the Common Property by more than one person or entity as tenants in common, joint tenants, or as tenants by the entirety.

VIII.

ership of any Condominium Unit and its appurtenant undivided interest in the Common Property by more than one person or entity as tenants in common, joint tenants, or as tenants by the entirety.

VIII.

THE CONDOMINIUM SUBJECT TO RESTRICTIONS The Condominium Units, Common Property and Limited Common Areas shall be, and the same are hereby declared to be subject to the restrictions, easements, conditions and covenants prescribed and established herein governing the use of said Condominium Units, Common Property and Limited Common Areas and setting forth the obligations and responsibilities incident to ownership of each Condominium Unit and its appurtenant undivided interest in the Common Property, and said Condominium Units, Common Property and Limited Common Areas are further declared to be subject to the restrictions, easements, conditions, and limitations now of record affecting the land and improvements of the Condominium.

IX.

PERPETUAL NONEXCLUSIVE EASEMENT IN COMMON PROPERTY The Common Property shall be, and the same is hereby declared to be subject to a perpetual non-exclusive easement in favor of all of the Owners of Condominium Units in the Condominium for their use and the use of their immediate families, guests and invitees, tenants and lessees for all proper and normal purposes, and for the furnishing of services and facilities for which the same are reasonably intended, for the enjoyment of said Owners of Condominium Units. Notwithstanding anything above provided in this Article, Avery Close Condominium Association, hereinafter identified, shall have the exclusive right to establish the rules and regulations pursuant to which the Owners of any Condominium Unit, lessees, his family, guests and invitees, may be

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, hereinafter identified, shall have the exclusive right to establish the rules and regulations pursuant to which the Owners of any Condominium Unit, lessees, his family, guests and invitees, may be entitled to use the Common Property, including the right to make permanent and temporary assignments of parking spaces, and to establish regulations concerning the use thereof.

The Association has the right to grant permits, licenses and over the common property for utilities, roads and other easements 5 340880 purposes reasonably necessary or useful for the proper maintenance or operation of the condominium.

EASEMENTS In the event that any Condominium Unit shall encroach upon any Common Property, or any other Condominium Unit or Units, for any reason not caused by the purposeful or negligent act of the Condominium Unit Owner, or agents of such Owner, then an easement appurtenant to such Condominium Unit shall exist for the continuance of such encroachment upon the Common Property or upon a Condominium Unit for so long as such encroachment shall naturally exist; and, in the event that any portion of the Common Property shall encroach upon any Condominium Unit for so long as such encroachment shall naturally exist. If any Condominium Unit or Common Property shall be partially or totally destroyed as a result of fire or other casualty, or as a result of condemnation or eminent domain proceedings, and if upon reconstruction of such Unit and/or Common Property in accordance with Article XXIV hereof, there exist encroachments of portions of the Common. Property upon any Condominium Unit, or of any Condominium Unit upon any other Condominium Unit or upon any portion of the Common Property, then such encroachments

achments of portions of the Common. Property upon any Condominium Unit, or of any Condominium Unit upon any other Condominium Unit or upon any portion of the Common Property, then such encroachments shall be permitted and a valid easement for the maintenance thereof shall exist so long as such encroachments shall naturally remain.

Each Unit Owner shall have a perpetual, non-exclusive easement in common with all other Unit Owners to use all pipes, wires, ducts, cables, conduits, public utility lines and other common facilities located in any of the other Units and serving his Unit. Each Unit shall be subject to a perpetual non-exclusive easement in favor of all other Unit Owners to use the pipes, ducts, cables, wires, conduits, public utility lines and other common facilities serving such other Units and located in such Unit.

XI.

RESTRAINT UPON SEPARATION AND PARTITION OF COMMON PROPERTY Recognizing that the proper use of a Condominium Unit by an Owner or Owners is dependent upon the use and enjoyment of the Common Property in common with the Owners of all other Condominium Units and that it is in the interest of all Owners that the ownership of the Common Property be retained in common by the Owners, it is hereby declared that the proportional undivided interest in the Common Property appurtenant to each Condominium Unit shall remain undivided and no Unit Owner shall bring or have any right to bring any action for partition or division.

XII.

ADMINISTRATION OF THE CONDOMINIUM BY AVERY CLOSE CONDOMINIUM ASSOCIATION To efficiently and effectively provide for the administration of the Condominium by the Owners of the Condominium Units, a non-profit North Carolina corporation known and designated as Avery Close

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ION To efficiently and effectively provide for the administration of the Condominium by the Owners of the Condominium Units, a non-profit North Carolina corporation known and designated as Avery Close Condominium Association, has been organized, and said corporation shall administer the operation and management of the Condominium and undertake and perform all acts and duties incident thereto in accordance with the terms of its Articles of Incorporation and By-Laws. A true copy of said Articles of Incorporation and By-Laws are annexed hereto and expressly made a part hereof as Exhibits "E" and "F" respectively. The Owner or Owners of each Condominium Unit shall automatically become members of said corporation upon his, their or its acquisition of any ownership D/IEMIRD-03 6 BEND 3408 FACE interest in title to any Condominium Unit and its appurtenant undivided interest in Common Property, and the membership of such Owners or Owner shall terminate automatically upon such Owner or Owners being divested of such ownership interest in the title to such Condominium Unit, No regardless of the means by which such ownership may be divested.

person, firm or corporation holding any lien, mortgage or other encumbrance upon any Condominium Unit shall be entitled, by virtue of such lien, mortgage or other encumbrance, to membership in said corporation In the or to any of the rights or privileges of such membership.

administration of the operation and management of the Condominium, Avery Close Condominium Association shall have and is hereby granted the authority and power to enforce the provisions of this Declaration of Condominium, to levy and to collect assessments in the manner hereinafter provided, and to adopt, promulgate and enforce such rules and

ity and power to enforce the provisions of this Declaration of Condominium, to levy and to collect assessments in the manner hereinafter provided, and to adopt, promulgate and enforce such rules and regulations governing the use of the Condominium Units and Common Property as the Ecard of Directors of said Association may deem to be in the best interests of the Association. Avery Close Condominium Association, is hereinafter referred to as "Association."

XIII.

PESIDENTIAL USE RESTRICTIONS APPLICABLE TO CONDOMINIUM UNITS Such Each Condominium Unit is hereby restricted to residential use by the Owner thereof, his immediate family, guests, invitees and lessees; provided, notwithstanding anything in this Declaration to the contrary, a rental office and laundry that two units may be maintained as facility, hereinafter the "support facilities units" and the Developer shall have the right to maintain model units and a sales office within the project or use Dwelling Units for model units and/or a sales office during the period that units remain unsold. No Owner of any Condominium Unit shall permit the use of his Unit for commercial purposes except as provided in the preceding sentence. Corporate members other than the Developer shall permit the use of a Condominium Unit owned by it only by its principal officers or directors, or other guests, or lessees.

corporate member shall annually sign and deliver to the Association a written statement designating the name of the party (or parties) entitled to use such Condominium Unit, together with a written covenant of such party in favor of the Association whereby the party agrees to comply with the terms and provisions of this Declaration of Condominium and with the rules and regulations which may be promulgated by the

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party in favor of the Association whereby the party agrees to comply with the terms and provisions of this Declaration of Condominium and with the rules and regulations which may be promulgated by the Association from time to time and acknowledging that the party's right to use such Condominium Unit shall exist only so long as the corporation shall continue to be a member of the Association. Upon demand by the Association to any corporate member to remove a party for failure to comply with the terms and provisions of the Declaration of Condominium and/or the rules and regulations of the Association or for any other reason, the corporate member shall forthwith cause such party to be removed, failing which the Association, as agent of the Owner, may take such action as it may deed appropriate to accomplish such removal, and all such action by the Association shall be at the cost and expense of the Owner who shall reimburse the Association therefore upon demand together with such attorney's fees as the Association may have incurred in the process of removal.

Unit Owners may lease less than the entire Unit. All leases shall be in writing. Unrelated owners and unrelated tenants may live in a Unit. Any lease agreement shall be required to provide that the terms of the lease shall be subject in all respects to the provisions of the Declaration and the By-Laws and any failure of lessee to comply with the terms of such documents shall be a default under the lease.

7 NOU: 3408 FAL 3 XIV.

USE OF COMMON PROPERTY SUBJECT TO RULES OF THE ASSOCIATION The use of Common Property, including the Limited Common Areas and Facilities, by the Owner or Owners of all Condominium Units, and all other parties authorized to use the same, shall be at all times subject

of Common Property, including the Limited Common Areas and Facilities, by the Owner or Owners of all Condominium Units, and all other parties authorized to use the same, shall be at all times subject to such reasonable rules and regulations as may be prescribed and established governing such use, or which may be hereafter prescribed and established by the Association.

XV.

THE CONDOMINIUM TO BE USED FOR LAWFUL PURPOSES: RESTRICTION AGAINST NUISANCES No immoral, improper, offensive or unlawful use shall be made of any Condominium Unit or of the Common Property, nor any part thereof and all laws, zoning ordinances and regulations of all governmental authori ties having jurisdiction of the Condominium shall be observed. No Owner of any Condominium Unit shall permit or suffer anything to be done or kept in his Condominium Unit, or on the Common Property, which will increase the rate of insurance on the Condominium, or which will obstruct or interfere with the rights of other occupants of the Condominiun or annoy them by unreasonable noises, nor shall any Owner undertake any use or practice which shall create and constitute a nuisance to any other Owner of a Condominium Unit, or which interferes with the peaceful possession and proper use of any other Condominium Unit or the Common Property.

XVI.

RIGHT OF ENTRY INTO CONDOMINIUM UNITS IN EMERGENCIES In case of any emergency originating in or threatening any Condominium Unit, regardless of whether the Owner is present at the time of such emergency, the Board of Directors of the Association, or any other person authorized by it, or the Managing Agent, shall have the right to enter such Condominium Unit for the purpose of remedying or abating the cause of such emergency, and such right of entry shall be immediate.

XVII.

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by it, or the Managing Agent, shall have the right to enter such Condominium Unit for the purpose of remedying or abating the cause of such emergency, and such right of entry shall be immediate.

XVII.

RIGHT OF ENTRY FOR MAINTENANCE OF COMMON PROPERTY Whenever it may be necessary to enter any Condominium Unit for the purpose of performing any maintenance, alteration or repair to any portion of the Common Property, the Owner of each Condominium Unit shall permit other Owners or their representatives, or the duly constituted and authorized Agent of the Association, to enter such Condominium Unit for such purpose, provided that the entry shall be made only at reasonable times and with reasonable advance notice.

XVIII.

LIMITATION UPON RIGHT OF OWNERS TO ALTER AND MODIFY CONDOMINIUM UNITS: NO RIGHT TO ALTER COMMON PROPERTY No Owner of a Condominium Unit shall permit any structural modification or alteration to be made to such Condominium Unit without first obtaining the written consent of the Association, which consent may be withheld in the event that a majority of the Board of Directors of the Association shall determine, in their sole discretion, that such structural modifications or alterations would adversely affect or in any K/TRAITOR 07 8 BJD 3408 FACE 809 number manner endanger the Condominium in part or in its entirety. No Owner _ shall cause any improvements or changes to be made on the exterior of or other decoration, the the Condominium (including painting or installation of electrical wiring, television or radio antennae or any other objects, machines or air conditioning units which may protrude through the walls or roof of the Condominium) or in any manner alter the appearance of the exterior portion of any building without the written

s, machines or air conditioning units which may protrude through the walls or roof of the Condominium) or in any manner alter the appearance of the exterior portion of any building without the written consent of the Association being first had and obtained. No Unit Owner shall display, or cause or allow to be displayed, to public view any CI or identifying name sign, placard, poster, billboard, (including a "For Sale" or "For Rent" sign upon any unit, building or any portion of the common area or limited common area and facilities, allowed by the except as may be required by a municipality or Association, provided that the owners of the suppert facilities units Notwithstanding any may place or erect signs on the common area.

provision in this Declaration to the contrary, the Developer shall have the right to place signs on the Common Property. No Unit Coner shall cause any object to be fixed to the Common Property, any Limited Common Area, (including the location or construction of fences, athletic equipment, the planting or growing of flowers, trees, shrubs or any other vegetation) or in any manner change the appearance of the Common Property or Limited Common Area without the written consent of the Association being first had and obtained.

XIX.

RIGHT OF ASSOCIATION TO ALTER AND IMPROVE COMMON PROPERTY AND ASSESSMENT THEREFOR The Association shall have the right to make or cause to be made such alterations or improvements to the Common Property which do not prejudice the rights of the Owner of any Condominium Unit in the use and enjoyment of his Condominium Unit, provided the making of such alterations and improvements are approved by the Board of Directors of the Association, and the cost of such alterations or improvements shall be

of his Condominium Unit, provided the making of such alterations and improvements are approved by the Board of Directors of the Association, and the cost of such alterations or improvements shall be common expenses to be assessed and collected from all of the Owners of Condominium Units. However, where any alterations and improvements are exclusively or substantially for the benefit of the Owner or Owners of certain Condominium Unit or Units requesting the same, then the cost of such alterations or improvements shall be assessed against and collected solely from the Owner or Owners of the Condominium Unit or Units exclusively or substantially benefitted, the assessment to be levied in such proportion as may be determined by the Board of Directors of the Association.

XX.

MAINTENANCE AND REPAIR BY OWNERS OF CONDOMINIUM UNITS Every Owner shall perform promptly all maintenance and repair work within his Condominium Unit which, if omitted, would affect the Condominium, either in its entirety or in a part belonging to other Owners, every Owner being expressly responsible for the damages and liability which his failure to do so may engender. The Owner of each Condominium Unit shall be liable and responsible for the maintenance, repair and replacement, as the case may be, of all air conditioning and heating equipment, stoves, refrigerators, fans, or other appliances or equipment, including any fixtures and/or their connections required to provide water, light, power, telephone, sewage and sanitary service to his Condominium Unit. Such Owner shall further be responsible and liable for the maintenance, repair and replacement of the interior surfaces of any and all walls, ceilings and floors within his Unit

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his Condominium Unit. Such Owner shall further be responsible and liable for the maintenance, repair and replacement of the interior surfaces of any and all walls, ceilings and floors within his Unit including painting, decorating and furnishings, and all other accessories which such Owner may desire to place or maintain in his Condominium Unit. Whenever the maintenance, repair and replacement of any item for which the Owner of a Condominium Unit is obligated to maintain, BOUN 3408 PAGE 810 replace or repair at his own expense is occasioned by any loss or damage which may be covered by any insurance maintained in force by the Association, the proceeds of the insurance received by the Association shall be used for the purpose of making such maintenance, repair or replacement except that the Owner of such Condominium Unit shall be, in said instance, required to pay such portion of the costs of such maintenance, repair and replacement as shall, by reason of the applicability of any deductibility provisions of such insurance exceed the amount of the insurance proceeds applicable to such maintenance, repair or replacement. Except as otherwise provided herein, the Owner of a Condominium Unit who has exclusive use of any Limited Common Area shall maintain such at his own expense. All glass doors, window frames, panes and screens are a part of the respective Condominium Units and shall be maintained by the respective Unit Owners.

The Owner of a Condominium Unit who has exclusive use of a porch, balcony, deck, compressor pad, attic, storage closet or compartment constituting Limited Common Area shell maintain such balcony, deck, compressor pad, storage closet, attic, or compartment at his own expense. The Limited Common Areas composed of steps and stoops shall be

tituting Limited Common Area shell maintain such balcony, deck, compressor pad, storage closet, attic, or compartment at his own expense. The Limited Common Areas composed of steps and stoops shall be maintained as part of the Common Expense, as hereinafter defined.

Each unit is served by individual underground utility connections for water, sewer, electricity and telephone services crossing the common areas from the main or feeder lines of each utility which main lines are located either in the street right of way or in utility easements shown on the Plan of Condominium. Should the need arise to inspect, repair, replace or maintain said individual lines between the unit and the common service main lines or feeder lines, then said inspection, repair, replacement or maintenance and the cost thereof and restoring and placing the common area in the same condition as it was in prior to said work and the cost thereof shall be totally the responsibility of the unit owner or owners served by said individual lines.

XXI.

MAINTENANCE AND REPAIR OF COMMON PROPERTY BY THE ASSOCIATION The Association, at its expense, shall be responsible for the maintenance, repair and replacement of all of the Common Property, including those portions thereof which contribute to the support of the buildings, and all conduits, ducts, plumbing, wiring and other facilities located in the Common Property for the furnishing of utility and other services to the Condominium Units and said Common Property, except as provided in Article XX. Should any incidental damage be caused to any Condominium Unit by virtue of any work which may be done or caused to be done by the Association in the maintenance, repair or replacement of any Common Property, the Association shall, at its expense, repair

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ium Unit by virtue of any work which may be done or caused to be done by the Association in the maintenance, repair or replacement of any Common Property, the Association shall, at its expense, repair such incidental damage. Whenever the maintenance, repair and replacement of any item for which the Association is obligated to maintain, replace or repair at its expense is occasioned by any act of a Condominium Unit Owner, his immediate family, guests, tenants, lessees, or invitees, and such loss or damage may be covered by any insurance maintained in force by the Association, the proceeds of the insurance received by Association shall be used for the purpose of making such maintenance, repair or replacement, except that the Unit Owner who is responsible for the act causing the damage (whether done by himself or by his family, guests or invitees) shall be required to pay such portion of the cost of such maintenance, repair and replacement as shall, by reason of the applicability of such deductibility provision of such 10 330K 3408 PAGL insurance, exceed the amount of the insurance proceeds applicable to such maintenance, repair or replacement.

XXII.

INSURANCE, AUTHORITY TO PURCHASE Insurance policies upon the Property (other than title insurance) shall be purchased by the Association in the name of the Managing Agent or Board of Directors of the Association, as Trustees for the Condominium Unit Owners and their respective mortgagees as their interests may appear, and shall provide for the issuance of certificates of mortgage endorsements to the holders of first mortgages on the Condominium Units or any of them, and if the companies writing such policies will agree, the policies shall provide that the insurer waives its

endorsements to the holders of first mortgages on the Condominium Units or any of them, and if the companies writing such policies will agree, the policies shall provide that the insurer waives its rights of subrogation as to any claims against Condominium Unit Owners, the Association and their respective servants, agents, terants, lessees, and guests. Each Condominium Unit Owner may obtain insurance at his own expense, affording coverage upon his Condominium Unit, his personal property and for his personal liability and as may be permitted or required by law, but all such insurance shall contain the same waiver of subrogation as that referred to above if the same is available.

XXIII.

INSURANCE COVERAGE TO BE MAINTAINED: USE AND DISTRIBUTION, OF INSURANCE PROCEEDS A. The following insurance coverage shall be maintained in full force and effect by the Association covering the operation and management of the Condominium, meaning the Condominium Units and Common Property, to wit: (1) Casualty insurance covering the buildings and all improvements upon the land and all personal property included within the Property described in Exhibit "B" hereto, except such personal property as may be owned by the Condominium Unit Owners, shall be procured in an amount equal to the maximum insurable replacement value thereof (exclusive of excavation and foundations) as determined annually by the insurance company affording such coverage. Such coverage shall afford protection against: (a) loss or damage by fire and other hazards covered by the standard extended coverage endorsement; (b) such other risks as from time to time customarily shall be covered with respect to buildings similar in construction, location and use, including, but not

Page 12

e standard extended coverage endorsement; (b) such other risks as from time to time customarily shall be covered with respect to buildings similar in construction, location and use, including, but not limited to, vandalism, malicious mischief, and windstorm damage.

(2) Public liability and property damage insurance in such amounts and in such forms as shall be required by the Association, including but not limiting the same to legal liability, hired automobile, non-owned automobile and off-premises employee coverages.

(3) All liability insurance shall contain cross-liability endorsements to cover liabilities of the Condominium Unit Owners as a group to a Condominium Unit Owner.

B. Premiums upon insurance policies purchased by the Association shall be paid by the Association as common expenses to be assessed and collected from all of the Owners of Condominium Units.

All insurance policies purchased by the Association shall be for the benefit of the Association and the Condominium Unit Owners and their mortgagees, as their respective interests may appear, and shall provide that all proceeds payable as a result of casualty losses shall 11 BOOK 3408812 be paid to the Association. The Association shall hold such proceeds in trust for the benefit of the Association, the Condominium Unit Owners and their respective mortgagees in the following shares: (1) Proceeds on account of damage to Common Property: in undivided shares for each Condominium Unit Owner and his mortgagee, if any, which shares as to each Condominium Unit are shown in Exhibit "D" attached hereto.

(2) Proceeds on account of damages to Condominium Units shall be held in the following undivided shares: (a) Partial destruction when the Condominium is to be

are shown in Exhibit "D" attached hereto.

(2) Proceeds on account of damages to Condominium Units shall be held in the following undivided shares: (a) Partial destruction when the Condominium is to be restored: for the Owners of damaged Condominium Units in proportion to the costs of repairing the damage suffered by each damaged Condominium Unit.

(b) Total destruction of the Condominium or where the Condominium is not to be restored: for all Condominium Unit Owners, the share of each being set forth in Exhibit "D".

D. In the event a mortgagee endorsement has been issued as to a Condominium Unit, the share of the Condominium Unit Owner shall be held for the mortgagee and the Condominium Unit Owners as their interests may appear, but nothing herein contained shall be construed so as to give any mortgagee the right to determine or participate in the determination of reconstruction or repair.

E. Proceeds of insurance policies received by the Association shall be distributed to or for the benefit of the beneficiary Condominium Unit Owners in the following manner: (1) If the damage for which the proceeds were paid is to be repaired or reconstructed, the proceeds shall be paid to defray the costs thereof as elsewhere provided. Any proceeds remaining after defraying such costs shall be distributed to the beneficial Condominium Unit Owners, all remittances to Condominium Unit Owners and their mortgagees being payable jointly to them. This is a covenant for the benefit of any mortgagee of a Condominium Unit and may be enforced by him.

Page 13

it is determined in the manner elsewhere provided that the damage for which the proceeds are paid shall not be reconstructed or repaired, the proceeds shall be distributed to the beneficial Condominium Unit Owners, remittances to Condominium Unit Owners and their mortgagees being payable jointly to them. This is a covenant for the benefit of any mortgagee of a Condominium Unit and may be enforced by him.

XXIV.

RECONSTRUCTION OR REPAIR OF CASUALTY DAMAGE; DAMAGE TO COMMON PROPERTY; DAMAGE TO CONDOMINIUM UNITS A. If any part of the Common Property shall be damaged by casualty, the determination of whether or not to reconstruct or repair the same shall be made as follows: (1) Partial destruction shall be deemed to mean destruction which renders less than two-thirds (2/3) of the Condominium Units untenantable. In the event of partial destruction, the Common Property shall be reconstructed or repaired unless this Declaration is terminated by the unanimous vote of all of the Condominium Unit Owners at a meeting of the members of the Association called and held prior to commencement of such reconstruction or repair.

12 BOUR 3408 PAGE 813 (2) Total destruction shall be deemed mean destruction more of the Condominium Units .. which renders two-thirds (2/3) or untenantable. In the event of total destruction, the Common Property shall not be reconstructed or repaired if, at a meeting which shall be called within thirty (30) days after the occurrence of the casualty, or if by such date the insurance loss has not been finally adjusted, then within thirty (30) days after such adjustment, Condominium Unit Omers who own seventy-five (75%) percent or more of the aggregate interests vote against reconstruction or repair.

(3) Any such reconstruction or repair shall be substantially

stment, Condominium Unit Omers who own seventy-five (75%) percent or more of the aggregate interests vote against reconstruction or repair.

(3) Any such reconstruction or repair shall be substantially in accordance with the plans and specifications contained herein and on file with and approved by the applicable governmental authorities.

B. If the damage is only to those parts of one or more Condominium Units for which the responsibility for maintenance and repair is that of the Condominium Unit Owner, then the Condominium Unit Owner shall be responsible for reconstruction and repair after casualty. In all other instances, the responsibility of reconstruction and repair after casualty shall be that of the Association as follows: (1) Immediately after the casualty causing damage to property for which the Association has the responsibility for maintenance and repair, the Association shall obtain reliable and detailed estimates of the cost to place the damaged property in condition as good as that before the casualty. Such costs may include professional fees and premiums for such bonds as the Board of Directors deems necessary or appropriate.

(2) When the damage is to both Common Property and Condominium Units, the insurance proceeds shall be applied first to the costs of repairing the Common Property and the balance to the Condominium Units.

Each Condominium Unit Owner shall be deemed to have delegated to the Board of Directors of the Association his right to adjust with insurance companies all losses under policies purchased by the Association, except in any case where the damage is restricted to one Condominium Unit.

XXV.

ASSOCIATION TO MAINTAIN REGISTER OF OWNERS AND MORTGAGEES The Association shall at all times maintain a Register setting In the

Page 14

any case where the damage is restricted to one Condominium Unit.

XXV.

ASSOCIATION TO MAINTAIN REGISTER OF OWNERS AND MORTGAGEES The Association shall at all times maintain a Register setting In the forth the names of the Owners of all of the Condominium Units .

event of the sale or transfer of any Condominium Unit to a third party, the purchaser or transferee shall notify the Association in writing of his interest in such Condominium Unit, together with such recording information as shall be pertinent to identify the instrument by which such purchaser or transferee has acquired his interest in any Condominium Unit. Further, the Owner of each Condominium Unit shall notify the Association of the names of the parties holding any mortgage or mortgages on any Condominium Unit, the amount of such mortgage or mortgages and the recording information which shall be pertinent to identify the mortgage or mortgages. The holder of any mortgage or mortgages upon any Condominium Unit may, if he so desires, notify the Association of the existence of any mortgage or mortgages held by such party on any Condominium Unit and, upon receipt of such notice, the Association shall register in its records all pertinent information relating thereto.

13 BOUN 3408 FACE XXVI.

ASSESSMENTS: LIABILITY, LIEN AND ENFORCEMENT The Association is given the authority to administer the operation and management of the Condominium, it being recognized that the delegation of such duties to one enticy is in the best interest of the Owners of all Condominium Units. To properly administer the operation and management of the Condominium, the Association will incur for the mutual benefit of all of the Owners of Condominium Units, costs and

of all Condominium Units. To properly administer the operation and management of the Condominium, the Association will incur for the mutual benefit of all of the Owners of Condominium Units, costs and expenses which are sometimes herein referred to as "common expense". To provide the funds necessary for such proper operation, management and capital improvement, the Association has heretofore been granted the right to make, levy and collect assessments against the Unit Owners and their Condominium Units. In furtherance of this grant of authority to the Association to make, levy and collect assessments to pay the costs and expenses for the operation, management of and capital improvements to the Condominium, the following provisions shall be operative and binding upon the owners of all Condominium Units: A. All assessments hereby levied against the Unit Owner and their Condominium Units shall be uniform and, unless specifically otherwise provided for in this Declaration of Condominium, all assessments made by the Association shall be in such an amount that any assessment levied against a Unit Owner and his Condominium Unit shall bear the same ratio to the total assessment made against all Unit Owners and their Condominium Units as the undivided interest in Common Property appurtenant to each Condominium Unit at the time such assessment is levied bears to the total undivided interest in Common Property appurtenant to all Condominium Units as shown on Exhibit "D" attached hereto. Should the Association be the Owner of a Condominium Unit or Units, the assessment which would otherwise be due and payable to the Association by the Owner of such Unit or Units, reduced by the amount of income which may be

be the Owner of a Condominium Unit or Units, the assessment which would otherwise be due and payable to the Association by the Owner of such Unit or Units, reduced by the amount of income which may be derived from the leasing of such Unit or Units by the Association, shall be apportioned and assessment therefor levied ratably among the Owners of all Units which are not owned by the Association, based upon their proportionate interests in Common Property exclusive of the interests therein appurtenant to any Unit or Units owned by the Association.

B. Assessments provided for herein shall be payable in monthly installments, or in such other installments and at such times as may be determined by the Board of Directors of the Association. Such assessments shall commence for each Unit on the first day of the second month following the recordation of this Declaration.

of the first Condominium Unit). Such budget shall project all expenses for the forthcoming year which may be required for the proper operation, management and maintenance of the Condominium, including a reasonable allowance for contingencies and reserves, such budget to take into account projected anticipated income which is to be applied in reduction of the amounts required to be collected as an assessment each year. The Board of Directors shall keep separate, in accordance with Paragraph "D" hereof, items relating to operation and maintenance from items relating to capital improvements. Upon adoption of such Annual Budget by the

Page 15

ectors shall keep separate, in accordance with Paragraph "D" hereof, items relating to operation and maintenance from items relating to capital improvements. Upon adoption of such Annual Budget by the Board of Directors of the Association, copies of said Budget shall be delivered to each Owner of a Condominium Unit and the assessment for said year shall be established based upon such Budget, although the delivery of a copy of said Budget to each Owner shall not be a condition precedent to the liability of any Owner for such assessment. Should the Board of Directors at any time determine, in its sole discretion, that 14 Ste 3408 i the assessments levied are or may prove to be insufficient to pay the costs of operation and management of the Condominium, or in the event of emergencies, the Board of Directors shall have the authority to levy such additional assessment or assessments it may deem to be necessary.

D. The Board of Directors of the Association, in establishing the Annual Budget for operation, management and maintenance of the Condominium, may designate therein a sum to be collected and maintained as a reserve fund for replacement of and capital improvements to the Common Property, which Capital Improvement and Replacement Fund shall be for the purpose of enabling the Association to replace structural elements and mechanical equipment constituting a part of the Common Property, as well as the replacement of personal property which may constitute a portion of the Common Property held for the joint use and benefit of the Owners of Condominium Units. The amount to be allocated to such Capital Improvement Fund may be established by said Ecard of Directors so as to collect and maintain a sum reasonably necessary to anticipate the need

ominium Units. The amount to be allocated to such Capital Improvement Fund may be established by said Ecard of Directors so as to collect and maintain a sum reasonably necessary to anticipate the need for replacement of Common Property. The amount collected for the Capital Improvement Fund shall be maintained in a separate account by the Association and such monies shall be used only to make capital improvements to Common Property. Any interest earned on monies in the Capital Improvement Fund may, in the discretion of the Board of Directors of the Association, be expended for current operation and maintenance. Each Unit Owner shall be deemed to own a portion of the Capital Improvement Fund equal to his proportionate interest in the Common Property as shown on Exhibit "D". However, such balance shall not be subject to withdrawal by a Unit Owner.

5. All monies collected by the Association shall be treated as the separate property of the Association, and, subject to the limitations set forth in Paragraph "D" above, such monies may be applied by the Association to the payment of any expense of operating and managing the Condominium, or to the proper undertaking of all acts and duties imposed upon it by virtue of this Declaration of Condominium, the Articles of Incorporation and ByLaws of the Association. As monies for any assessment are paid unto the Association by any Owner of a Condominium Unit, the same may be co-mingled with monies paid to the Association by the other Owners of Condominium Units. Although all funds and common surplus, including other assets of the Association, and any increments thereto or profits derived therefrom or from the leasing or use of Common Property, shall be held for the benefit of the members of the

Page 16

s, including other assets of the Association, and any increments thereto or profits derived therefrom or from the leasing or use of Common Property, shall be held for the benefit of the members of the Association, no member of the Association shall have the right to assign, hypothecate, pledge or in any manner transfer his membership interest therein, except as an appurtenance" to his Condominium Unit.

When the Owner of a Condominium Unit shall cease to be a member of the Association by reason of his divestment of ownership of such Condominium Unit, by whatever means, the Association shall not be required to account to such Owner for any share of the fund or assets of the Association, or which may have been paid to the Association by such Owner, as all monies which any Owner has paid to the Association shall be and constitute an asset of the Association which may be used in the operation and management of the Condominium.

F. The Association shall establish a working capital fund equal to at least the aggregate assessments for each Unit for a period of two months. Each Unit's share of said working capital fund shall be collected and transferred to the Association at the time of the closing of the initial sale of each Unit by Developer. The working capital fund shall be maintained in a separate account for the use and benefit of the Association and shall be used to meet unforeseen expenditures or to acquire additional equipment or services deemed necessary or desirable by the Board of Directors. All sums paid into the working capital fund 15 33408 are in addition to and not in lieu of regular assessments fo expenses.

ommon The payment of any assessment or installment thereof shall be in default if any such assessment or installment is not paid to the

dition to and not in lieu of regular assessments fo expenses.

ommon The payment of any assessment or installment thereof shall be in default if any such assessment or installment is not paid to the Association within thirty (30) days of the due date for such payment .

When in default, the delinquent assessment or delinquent installment thereof due to Association shall bear interest at the highest rate allowed by law until such delinquent assessment or installment thereof, and all interest due thereon, has been paid in full to Association . All monies owing to Association shall be due and payable at the main office of Association in the State of North Carolina.

H. The Owner or Owners of each Condominium unit shall be personally liable, jointly and severally, to the Association for the payment of all assessments, regular or special, which may be levied by the Association against such Condominium Unit while such party or parties In the event that any Unit are Owner or Owners of a Condominium Unit.

Owner or Owners are in default in payment of any assessment or installment thereof owed to the Association, such Unit Cwner or Owners shall be personally liable, jointly and severally, for interest on such delinquent assessment or installment thereof as above provided, and for all costs of collecting such assessment or installment thereof and interest thereon, including a reasonable attorneys' fee, whether suit be brought or not.

I. No Owner of a Condominium Unit may exempt himself from liability for any assessment levied against him or his Condominium Unit by waiver of the use or enjoyment of any of the Common Property, or by abandonment of the Condominium Unit or in any other way.

J. Recognizing that proper operation and management of the Condo-

m Unit by waiver of the use or enjoyment of any of the Common Property, or by abandonment of the Condominium Unit or in any other way.

J. Recognizing that proper operation and management of the Condominium requires the continuing payment of costs and expenses therefor, and that such proper operation and maintenance results in benefit to all of the Owners of Condominium Units, and that the payment of such common expenses represented by the assessments levied and collected by Association is necessary in order to preserve and protect the investment of each Unit Owner, the Association is hereby granted a lien upon each Condominium Unit and its appurtenant undivided interest in Common Property, which lien shall secure and does secure the monies due for all assessments now or hereafter levied against the Owner of each such Condominium Units, which lien shall also secure interest , if any, which may be due on the amount of any delinquent assessments owing to the Association, and which lien shall also secure all costs and expenses, including a reasonable attorneys' fee, which may be incurred by the Association in enforcing this lien upon said Condominium Unit and its The lien granted to appurtenant; undivided interest in Common Property.

the Association may be foreclosed in the same manner that real estate deeds of trust and mortgages may be foreclosed in the State of North Carolina, and in any suit for the foreclosure of said lien, the Association shall be entitled to a reasonable rental from the owner of any Condominium Unit from the date on which the payment of any assessment or installment thereof became delinquent, and shall be entitled to the appointment of a Receiver for said Condominium Unit, without notice to the Owner of such Condominium Unit. The lien granted

Page 17

sment or installment thereof became delinquent, and shall be entitled to the appointment of a Receiver for said Condominium Unit, without notice to the Owner of such Condominium Unit. The lien granted to the Association shall further secure such advances for taxes, and payments on account of superior mortgages, liens or encumbrances which may be required to be advanced by the Association in order to preserve and protect its lien, and the Association shall further be entitled to interest at the highest All rate allowed by law on any such advances made for such purpose.

persons, firms or corporations who shall acquire, by whatever means, any interest in the ownership of any Condominium Unit, or who may be given 16 SCU: 3408 FACE 817 or acquire a mortgage, lien or other encumbrance thereon, are hereby placed on notice of the lien rights granted to the Association, and shall acquire such interest in any Condominium Unit expressly subject to such lien rights.

K. The lien herein granted unto the Association shall be enforceable from and after the time of recording a claim of lien in the Public Records of Wake County, North Carolina, which claim shall state the description of the Condominium Unit encumbered thereby, the name of the record owner, the amount due and the date when due. The claim of lien shall be recordable any time after default and the lien shall continue in effect until all sums secured by said lien as herein provided shall have been fully paid. Such claims of lien shall include only assessments which are due and payable when the claim of lien is recorded, plus interest, costs, attorneys' fees, advances to pay taxes and prior encumbrances and interest thereon, all as above provided. Such claims of lien shall be signed and verified by an officer or agent

plus interest, costs, attorneys' fees, advances to pay taxes and prior encumbrances and interest thereon, all as above provided. Such claims of lien shall be signed and verified by an officer or agent of the Association. Upon full payment of all sums secured by such clain of lien, the same shall be satisfied of record .

The lien provided for herein shall be subordinate to the lien of any first mortgage or deed of trust and any person, firm or corporation acquiring title to any Condominium Unit and its appurtenant undivided interest in Common Property by virtue of any foreclosure, a judicial sale, or a deed in lieu of foreclosure, shall be liable and obligated only for assessments as shall accrue and become due and payable for said Condominium Unit and its appurtenant undivided interest in Common Property subsequent to the date of acquisition of such title, and it shall not be liable for the payment of any assessments which were in In the event default and delinquent at the time it acquired such title.

of the acquisition of title to a Condominium Unit by foreclosure or judicial sale, any assessment or assessments as to which the party so acquiring title shall not be liable shall be absorbed and paid by all Owners of all Condominium Units as a part of the common expense , aithough nothing herein contained shall be construed as releasing the party liable for such delinquent assessment from the payment thereof or the enforcement of collection of such payment by means other than foreclosure.

L. Whenever any Condominium Unit may be leased, sold or mortgaged by the Owner thereof, the Association, upon written request of the Unit Owner, shall furnish to the proposed lessee, purchaser or mortgagee, a statement verifying the status of payment of any assessment which shall

Page 18

hereof, the Association, upon written request of the Unit Owner, shall furnish to the proposed lessee, purchaser or mortgagee, a statement verifying the status of payment of any assessment which shall Such statement be due and payable to the Association by such Unit.

shall be executed by any officer of the Association, and any lessee, purchaser or mortgagee may rely upon such statement in concluding the proposed lease, purchase or mortgage transaction, and the Association shall be bound by such statement.

In the event that a Condominium Unit is to be leased, sold or mortgaged at the time when payment of any assessment against the Owner of said Condominium Unit and such Condominium Unit due to the Association shall be in default (whether or not a claim of lien has been recorded by the Association), then the rent, proceeds of such purchase or mortgage proceeds, shall be applied by the lessee, purchaser or mortgagee first to payment of any then delinquent assessment or installments thereof due to the Association before the payment of any rent, proceeds of purchase or mortgage proceeds to the Owner of any Condominium Unit who is responsible for payment of such delinquent assessment.

In any voluntary conveyance of a Condominium Unit (other than by deed in lieu of foreclosure), the Purchaser thereof shall be jointly and 17 BOOK 3408... 812 be paid to the Association. The Association shall hold such proceeds in trust for the benefit of the Association, the Condominium Unit Owners and their respective mortgagees in the following shares: (1) Proceeds on account of damage to Common Property: in undivided shares for each Condominium Unit Owner and his mortgagee, if any, which shares as to each Condominium Unit are shown in Exhibit "D" attached hereto.

account of damage to Common Property: in undivided shares for each Condominium Unit Owner and his mortgagee, if any, which shares as to each Condominium Unit are shown in Exhibit "D" attached hereto.

(b) Total destruction of the Condominium or where the Condominium is not to be restored: for all Condominium Unit Owners, the share of each being set forth in Exhibit "D".

E. Proceeds of insurance policies received by the Association shall be distributed to or for the benefit of the beneficiary Condominium Unit Owners in the following manner: (2) If the damage for which the proceeds were paid is to be repaired or reconstructed, the proceeds shall be paid to defray the costs thereof as elsewhere provided. Any proceeds remaining after defraying such costs shall be distributed to the beneficial Condominium Unit Owners, all remittances to Condominium Unit Owners and their mortgagees being payable jointly to them. This is a covenant for the benefit of any mortgagee of a Condominium Unit and may be enforced by him.

(2) If it is determined in the manner elsewhere provided that

Page 19

agees being payable jointly to them. This is a covenant for the benefit of any mortgagee of a Condominium Unit and may be enforced by him.

(2) If it is determined in the manner elsewhere provided that the damage for which the proceeds are paid shall not be reconstructed or repaired, the proceeds shall be distributed to the beneficial Condominium Unit Owners, remittances to Condominium Unit Owners and their mortgagees being payable jointly to them. This is a covenant for the benefit of any mortgagee of a Condominium Unit and may be enforced by him.

XXIV.

12 BOUR 3408 PAGE 813 mean destruction (2) Total destruction shall be deemed which renders two-thirds (2/3) or more of the Condominium Units untenantable. In the event of total destruction, the Common Property shall not be reconstructed or repaired if, at a meeting which shall be called within thirty (30) days after the occurrence of the casualty, or if by such date the insurance loss has not been finally adjusted, then within thirty (30) days after such adjustment, Condominium Unit Owners

thirty (30) days after the occurrence of the casualty, or if by such date the insurance loss has not been finally adjusted, then within thirty (30) days after such adjustment, Condominium Unit Owners who own seventy-five (75%) percent or more of the aggregate interests vote against reconstruction or repair.

(3) Any such reconstruction or repair shall be substantially in accordance with the plans and specifications contained herein and on file with and approved by the applicable governmental authorities.

Page 20

ed to the Board of Directors of the Association his right to adjust with insurance companies all losses under policies purchased by the Association, except in any case where the damage is restricted to one Condominium Unit.

XXV.

ASSOCIATION TO MAINTAIN REGISTER OF OWNERS AND MORTGAGEES The Association shall at all times maintain a Register setting In the forth the names of the Owners of all of the Condominium Units.

13 800 3408 A XXVI.

nagement of the Condominium, it being recognized that the delegation of such duties to one enticy is in the best interest of the Owners of all Condominium Units. To properly administer the operation and management of the Condominium, the Association will incur for the mutual benefit of all of the Owners of Condominium Units, costs and expenses which are sometimes herein referred to as "common expense". To provide the funds necessary for such proper operation, management and capital improvement, the Association has heretofore been granted the right to make, levy and collect assessments against the Unit Owners and their Condominium Units. In furtherance of this grant of authority to the Association to make, levy and collect assessments to pay the costs and expenses for the operation, management of and capital improvements to the Condominium, the following provisions shall be operative and binding upon the owners of all Condominium Units: A. All assessments hereby levied against the Unit Owner and their Condominium Units shall be uniform and, unless specifically otherwise provided for in this Declaration of Condominium, all assessments made by the Association shall be in such an amount that any assessment levied against a Unit Owner and his Condominium Unit shall bear the same ratio to the total assessment made against all Unit Owners and their Condominium Units as the undivided interest in Common Property appurtenant to each Condominium Unit at the time such assessment is levied bears to the total undivided interest in Common Property appurtenant to all Condominium Units as shown on Exhibit "D" attached hereto. Should the Association be the Owner of a Condominium Unit or Units, the assessment which would otherwise be due and payable to the Association by the Owner

its as shown on Exhibit "D" attached hereto. Should the Association be the Owner of a Condominium Unit or Units, the assessment which would otherwise be due and payable to the Association by the Owner of such Unit or Units, reduced by the amount of income which may be derived from the leasing of such Unit or Units by the Association, shall be apportioned and assessment therefor levied ratably among the Owners of all Units which are not owned by the Association, based upon their proportionate interests in Common Property exclusive of the interests therein appurtenant to any Unit or Units owned by the Association.

C. The Board of Directors of the Association shall establish an Annual Budget in advance for each fiscal year (which shall correspond to the calendar year, except that in the initial year of operation of the Condominium, the fiscal year shall commence with the closing of the sale of the first Condominium Unit). Such budget shall project all expenses for the forthcoming year which may be required for the proper operation, management and maintenance of the Condominium, including a reasonable allowance for contingencies and reserves, such budget to take into account projected anticipated income which is to be applied in reduction of the amounts required to be collected as an assessment each year. The Board of Directors shall keep separate, in accordance with Paragraph "D" hereof, items relating to operation and maintenance from items relating

Page 21

equired to be collected as an assessment each year. The Board of Directors shall keep separate, in accordance with Paragraph "D" hereof, items relating to operation and maintenance from items relating to capital improvements. Upon adoption of such Annual Budget by the Board of Directors of the Association, copies of said Budget shall be delivered to each Owner of a Condominium Unit and the assessment for said year shall be established based upon such Budget, although the delivery of a copy of said Budget to each Owner shall not be a condition precedent to the liability of any Owner for such assessment. Should the Board of Directors at any time determine, in its sole discretion, that 14 BEG 3408 i i, the assessments levied are or may prove to be insufficient to pay the emergencies, the Board of Directors shall have the authority to levy such additional assessment or assessments it may deem to be necessary.

ommon Property held for the joint use and benefit of the Owners of Condominium Units. The amount to be allocated to such Capital Improvement Fund may be established by said Ecard of Directors so as to collect and maintain a sun reasonably necessary to anticipate the need for replacement of Common Property. The amount collected for the Capital Improvement Fund shall be maintained in a separate account by the Association and such monies shall be used only to make capital improvements to Common Property. Any interest earned on monies in the Capital Improvement Fund may, in the discretion of the Board of Directors of the Association, be expended for current operation and maintenance. Each Unit Owner shall be deemed to own a portion of the Capital Improvement Fund equal to his proportionate interest in the Common Property as shown on Exhibit "D". However, such balance shall not be subject to withdrawal by a Unit Owner.

Page 22

her Owners of Condominium Units. Although all funds and common surplus, including other assets of the Association, and any increments thereto or profits derived therefrom or from the leasing or use of Common Property, shall be held for the benefit of the members of the Association, no member of the Association shall have the right to assign, hypothecate, pledge or in any manner transfer his membership interest therein, except as an appurtenance to his Condominium Unit.

When the Owner of a Condominium Unit shall cease to be a member of the Association by reason of his divestment of ownership of such Condominium Unit, by whatever' means, the Association shall not be required to account to such Owner for any share of the fund or assets of the Association, or which may have been paid to the Association by such Owner, as all monies which any Owner has paid to the Association shall be and constitute an asset of the Association which may be used in the operation and management of the Condominium.

F. The Association shall establish a working capital fund equal to at least the aggregate assessments for each Unit for a period of two months. Each Unit's share of said working capital fund shall be collected and transferred to the Association at the time of the closing of the initial sale of each Unit by Developer. The working capital fund shall be maintained in a separate account for the use and benefit of the Association and shall be used to meet unforeseen expenditures or to acquire additional equipment or services deemed necessary or desirable by the Board of Directors. All sums paid into the working capital fund 15 3003408 are in addition to and not in lieu of regular assessments f expenses.

ommon G. The payment of any assessment or installment thereof shall be

ors. All sums paid into the working capital fund 15 3003408 are in addition to and not in lieu of regular assessments f expenses.

ommon G. The payment of any assessment or installment thereof shall be in default if any such assessment or installment is not paid to the Association within thirty (30) days of the due date for such payment.

monies owing to Association shall be due and payable at the mair. office of Association in the State of North Carolina.

iability for any assessment levied against him or his Condominium Unit by waiver of the use or enjoyment of any of the Common Property, or by abandonment of the Condominium Unit or in any other way.

assessments now or hereafter levied against the Owner of each such Condominium Units, which lien shall also secure interest, if any, which may be due on the amount of any delinquent assessments owing to the Association, and which lien shall also secure all costs and expenses, including a reasonable attorneys' fee, which may be incurred by the Association in enforcing this lien upon said Condominium Unit and its appurtenant undivided interest in Common Property. The lien granted to the Association may be foreclosed in the same manner that real estate deeds of trust and mortgages may be foreclosed in the State of North Carolina, and in any suit for the foreclosure of said lien , the Association shall be entitled to a reasonable rental from the Owner of any Condominium Unit from the date on which the payment of any assessment or installment thereof became delinquent, and shall be entitled to the

Page 23

ll be entitled to a reasonable rental from the Owner of any Condominium Unit from the date on which the payment of any assessment or installment thereof became delinquent, and shall be entitled to the appointment of a Receiver for said Condominium Unit, without notice to the Owner of such Condominium Unit. The lien granted to the Association shall further secure such advances for taxes, and payments on account of superior mortgages, liens or encumbrances which may be required to be advanced by the Association in order to preserve and protect its lien, and the Association shall further be entitled to interest at the highest All rate allowed by law on any such advances made for such purpose.

persons, firms or corporations who shall acquire, by whatever means, any interest in the ownership of any Condominium Unit, or who may be given 16 SCU: 3408 FACE 817 or acquire a mortgage, lien or other encumbrance thereon, are hereby _ placed on notice of the lien rights granted to the Association, and shall acquire such interest in any Condominium Unit expressly subject to such lien rights.

en fully paid. Such claims of lien shall include only assessments which are due and payable when the claim of lien is recorded, plus interest, costs, attorneys' fees, advances to pay taxes and prior encumbrances and interest thereon, all as above provided. Such claims of lien shall be signed and verified by an officer or agent of the Association. Upon full payment of all sums secured by such claim of lien, the same shall be satisfied of record.

of the acquisition of title to a Condominium Unit by foreclosure or judicial sale, any assessment or assessments as to which the party so acquiring title shall not be liable shall be absorbed and paid by all Owners of all Condominium Units as a part of the common expense, although nothing herein contained shall be construed as releasing the party liable for such delinquent assessment from the payment thereof or the enforcement of collection of such payment by means other than foreclosure.

L. Whenever any Condominium Unit may be leased, sold or mortgaged by the Owner thereof, the Association, upon written request of the Unit

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of collection of such payment by means other than foreclosure.

In any voluntary conveyance of a Condominium Unit (other than by deed in lieu of foreclosure), the Purchaser thereof shall be jointly and 17 BOON 3408 FAC severally liable with Seller for all unpaid assessments against Seller made prior to the time of such voluntary conveyance, without prejudice to the rights of the Purchaser to recover from Seller the amounts paid by Purchaser therefor.

l unpaid assessments against Seller made prior to the time of such voluntary conveyance, without prejudice to the rights of the Purchaser to recover from Seller the amounts paid by Purchaser therefor.

Institution of suit at law to attempt to effect collection of the payment of any delinquent assessment shall not be deemed to be an election by the Association which shall prevent it from thereafter seeking, by foreclosure action, enforcement of the collection of any sums remaining owing to it, nor shall proceeding by foreclosure to attempt such collection be deemed to be an election precluding the institution of a suit at law to collect any sum then remaining owing to Association.

XXVII.

COMMON SURPLUS "Common Surplus", meaning all funds and other assets of the Association (including excess of receipts of the Association, including but not limited to assessments, rents, profits, and revenues from whatever source over amount of the common expense), shall be owned by the Owners of all Condominium Units in the same proportion that the undivided interest in Common Property appurtenant to each Owner's Condominium Unit bears to the total of all undivided interest in Common Property appurtenant to all Condominium Units as shown on Exhibit "D", as the case may be; provided, however, that said common surplus shall be held by the Association in the manner, and subject to the terms, provisions and conditions of this Declaration, imposing certain limitations and restrictions upon the use and distribution thereof. Except for distribution of any insurance indemnity herein provided, or upon termination of the Condominium, any attribution or distribution of common surplus which may be made from time to time shall be made to the then

Page 25

on of any insurance indemnity herein provided, or upon termination of the Condominium, any attribution or distribution of common surplus which may be made from time to time shall be made to the then Owners of Condominium Units in accordance with their percentage interest in common surplus as declared herein.

XXVIII.

TERMINATION The Condominium shall be terminated, if at all, in the following manner: A. The termination of the Condominium may be effected only by the unanimous agreement of all Condominium Unit Owners expressed in an instrument to that effect duly recorded; and, provided, that the holders of all liens affecting any of the Condominium Units consent thereunto, or agree, in either case by instrument duly recorded, that their liens be transferred to the percentage of the undivided interest of the Condominium Unit Owner in the Property as provided in Subparagraph "D" below. The termination shall become effective when such agreement has been recorded in the public records of Wake County, North Carolina.

B. If it is determined in the manner elsewhere provided that the Condominium shall not be reconstructed after casualty, the Condominium plan of ownership shall be terminated and the Declaration of Condominium revoked. The determination not to reconstruct after casualty shall be evidenced by a Certificate of the Association certifying as to the facts effecting the termination, which Certificate shall become effective upon being recorded in the public records of Wake County, North Carolina.

C. After termination of the Condominium, the Condominium Unit Owners shall own the Property as tenants in common in undivided shares and the holders or mortgages and liens against the Condominium Unit or Units formerly owned by such Condominium Unit Owners shall have 18

hall own the Property as tenants in common in undivided shares and the holders or mortgages and liens against the Condominium Unit or Units formerly owned by such Condominium Unit Owners shall have 18 300 3408 FACE 819 gages and liens upon the respective undivided shares of the Condominium Unit Owners. The undivided share or interest owned as tenants in common shall be that percentage of the undivided interest in the Common Area and Facilities previously owned by each Unit Owner. All funds held by the Association and insurance proceeds, if any, shall be and continue to be held for the Unit Owners in the same proportion. The costs incurred by the Association in connection with the termination shall be a Common Expense.

D. Following termination, the property may be partitioned and sold upon the application of any Condominium Unit Owner. Following a termination, if the Board of Directors determines by not less than a three-fourths (3/4) vote to accept an offer for the sale of the property, each Condominium Unit Owner shall be bound to execute such deeds and other documents reasonably required to effect such sale at such times and in such form as the Board of Directors directs. In such event, any action for partition or other division of the property shall be held in abeyance pending such sale, and upon the consummation thereof shall be discontinued by all parties thereto.

E. The members of the Board of Directors acting collectively as agent for all Condominium Unit Owners, shall continue to have such powers as in this Article are granted, notwithstanding the fact that the Association itself may be dissolved upon a termination.

XXIX.

ADDITIONS TO CONDOMINIUM PROPERTY As Developer completes additional phases of the Project, said

granted, notwithstanding the fact that the Association itself may be dissolved upon a termination.

XXIX.

ADDITIONS TO CONDOMINIUM PROPERTY As Developer completes additional phases of the Project, said stages will become part of the Condominium Property by amendment to this Declaration and the Unit Owners of the Dwelling Units constructed on the future phases will become members of the Association, to the same extent as if their Units were originally a part of the Units covered by this Declaration. Developer, therefore, hereby reserves the right at any time within a period of five (5) years, commencing on the date this Declaration is filed for record, that Developer determines to take the action so contemplated (i) to submit from time to time phases of the Project Property, together with the Buildings thereon, and all articles of personal property existing for the common use of the Unit Owners to the provisions of this Declaration and the Unit Ownership Act, and (ii) to amend this Declaration, in the manner provided in Paragraph XXX hereof, in such respects as Developer may deem advisable in order to effectuate such submission or submissions, including, without limiting the generality of the foregoing, the right to amend this Declaration so as (a) from time to time within said five (5) year period to include phases of the Project Property and the improvements constructed thereon as part of the Condominium Property, (b) from time to time to include descriptions of Buildings constructed on said phases of the Project Property in this Declaration and to add Drawings thereon to Exhibit C hereto, and (c) to provide that the owners of Units in the Buildings will have an interest in the Common Areas and Facilities of the Condo-

Page 26

in this Declaration and to add Drawings thereon to Exhibit C hereto, and (c) to provide that the owners of Units in the Buildings will have an interest in the Common Areas and Facilities of the Condominium Property and to amend paragraph VI and Exhibit D hereof so as to establish the percentage of interest in the Common Areas and Facilities which the owners of all Units within the Buildings on the Condominium Property will have at the time of such amendment or amendments, which percentage shall be, with respect to each Unit, in the proportion that the fair market value of each Unit at the date said amendment is filed for record bears to the then aggregate value of all the Units within the Buildings on the Condominium Property, which determination shall be made by Developer and shall be conclusive and binding upon all Unit Owners.

Developer and shall be conclusive and binding upon all Unit Owners.

Developer expressly agrees, however, that there will not be constructed D/IEMIRD-03 19 BOOK 3408 FACE SL on the Condominium Property more than a total of 120 Dwelling Units, and that the buildings and Dwelling Units constructed in any subsequent phase shall be architectually compatible with the existing buildings and Dwelling Units. Developer, on its own behalf as the owner of all Units in the Condominium Property and on behalf of all subsequent Unit Owners, hereby consents and approves, and each Unit Owner and his mortgagees by acceptance of a deed conveying such Ownership Interest or a mortgage encumbering such Ownership Interest, as the case may be, thereby consents to and approves, the provisions of this Paragraph XXIX, including without limiting the generality of the foregoing, the amendment of this

uch Ownership Interest, as the case may be, thereby consents to and approves, the provisions of this Paragraph XXIX, including without limiting the generality of the foregoing, the amendment of this Declaration by Developer in the manner provided in Paragraph XXX hereof and all such Unit Owners and their mortgagees, upon request of Developer shall execute and deliver from time to time all such instruments and perform all such acts as may be deemed by Developer to be necessary or proper to effectuate said provisions.

XXX.

AMENDMENT OF DECLARATION OF CONDOMINIUM The Declaration of Condominium may be amended in the following manner: If A. An Amendment or Amendments to this Declaration. of Condominium may be proposed by the Board of Directors of the Association acting upon a vote of a majority of the Directors, or by the members of the Association owning a majority of the Condominium Units, whether meeting as members or by instrument in writing signed by them. Upon any Amendment or Amendments to this Declaration of Condominium being proposed by said Board of Directors or members, such proposed Amendment or Amendments shall be transmitted to the President of the Association, or other officer of the Association in the absence of the President, who shall thereupon call a Special Meeting of the Members of the Association for a date not sooner than twenty (20) days nor later than sixty (60) days from receipt by him of the proposed Amendment or Amendments. It shall be the duty of the Secretary to give each member written or printed notice of such Special Meeting, stating the time and place thereof, and reciting the proposed Amendment or Amendments in reasonably detailed form, which notice shall be mailed not less than ten (10) days nor more

ch Special Meeting, stating the time and place thereof, and reciting the proposed Amendment or Amendments in reasonably detailed form, which notice shall be mailed not less than ten (10) days nor more than thirty (30) days before the date. set for such Special Meeting.

mailed, such notice shall be deemed to be properly given when deposited in the United States Mail addressed to the member at his Post Office address as it appears on the records of the Association, the postage thereon prepaid. Any member may, by written waiver of notice signed by such member, waive such notice, and such waiver, when filed in the records of the Association, whether before or after the holding of the meeting, shall be deemed equivalent to the giving of notice to such member. At the meeting, the Amendment or Amendments proposed must be approved by an affirmative vote of seventy-five (75%) percent of the aggregate interest of members owning Units in the Condominium in order for such Amendment or Amendments to become effective. Thereupon such Amendment or Amendments of this Declaration of Condominium shall be transcribed and certified by the duly authorized officers of the Association as having been duly adopted. The original or an executed copy of such Amendment or Amendments, so certified and executed with the same formalities as a Deed, shall be recorded in the Public Records of Wake County, North Carolina, within ten (10) days from the date on which the same became effective, such Amendment or Amendments to specifically refer to the recording date identifying the Declaration of Condominium.

Thereafter, a copy of said Amendment or Amendments in the form in which the same were placed of record by the Officers of Association

Page 27

to the recording date identifying the Declaration of Condominium.

Thereafter, a copy of said Amendment or Amendments in the form in which the same were placed of record by the Officers of Association shall be delivered to the Owners of all Condominium Units, but delivery BOUR 3408 FACE 821 of a copy thereof shall not be a condition prec _ to the effectiveness of such Amendment or Amendments. At any meeting held to consider such Amendment or Amendments, the written vote of any member of the Association shall be recognized if such member is not in attendance at such meeting or represented thereat by proxy, provided such written vote is delivered to the Secretary of the Association prior to such meeting or at such meeting.

B. Developer shall have the right to amend this Declaration at any time prior to five years from the date of recordation of the Declaration, without the further consent of the Unit Owners, to incorporate into the Property (i) the additional land described in Exhibit "A" attached hereto and incorporated herein by reference and (ii) the additional dwelling Units to be constructed upon such additional land by Developer. In the event that this Declaration is so amended, the term "Property" as used herein shall be deemed to mean and include the property described in Exhibit "A" and in Exhibit "E" and all improvements and structures now or hereafter placed by Developer thereon, all easements, rights and appurtenances thereto, and all articles of in personal property provided by Developer and intended for use connection therewith. Upon such Amendment the undivided interest appurtenant to each Condominium Unit shall be as set out in Exhibit "D", The materials attached hereto and made a part hereof or as amended.

ction therewith. Upon such Amendment the undivided interest appurtenant to each Condominium Unit shall be as set out in Exhibit "D", The materials attached hereto and made a part hereof or as amended.

used in the construction of the additional units shall be of comparable quality as those used in the original units, and the architectural style of the additional units shall be substantially the same as, or compatible with, the original units. No amendment made by Developer in accordance with this Paragraph shall divest an Owner of any portion of his Unit without the consent of such Owner and no such amendment shall materially alter the plan of development set forth herein without the consent of all Owners affected thereby. Each Unit Owner shall be deemed by his acceptance of a deed to a Condominium Unit to have consented to the powers of amendment herein reserved by Developer and to any amendments previously or thereafter executed by Developer pursuant thereto. Each Unit Owner and each Institutional Lender shall further be deemed by the Owner's acceptance of a deed to a Condominium Unit to have appointed Developer their attorney-in-fact to give, execute and record the consent of said Owner and said Institutional Lender to any and all amendments to this Declaration which Developer may wish to execute pursuant to the powers herein reserved.

Except as expressly set out in this Declaration, no alteration in the percentage of ownership in Common Property appurtenant to each Condominium Unit, or alteration of the basis for sharing common expenses and other apportionment of assessments which may be levied by the Association in accordance with the provisions hereof, or alteration of basis of ownership of Common Surplus, shall be made without written

Page 28

other apportionment of assessments which may be levied by the Association in accordance with the provisions hereof, or alteration of basis of ownership of Common Surplus, shall be made without written consent of all of the owners of all Condominium Units and their respective mortgagees, being first had and obtained.

D. No alteration, amendment or modification of the rights and privileges granted and reserved hereunder in favor of an Institutional Lender or Institutional Lenders shall be made without written consent of all Institutional Lenders holding mortgages on Condominium Units in the Condominium being first had and obtained.

E. No alteration, amendment or modification of the rights and privileges granted and reserved hereunder in favor of Developer shall be made without the written consent of said party being first had and obtained.

21 300K 3408 FACE 822 XXXI.

REMEDIES IN EVENT OF DEFAULT The Owner or Owners of each Condominium Unit shall be governed by and shall comply with the provisions of this Declaration of Condominium, and the Articles of Incorporation and By-Laws of the Association, as any of the same are now constituted or as they may be amended from time to time. A default by the Owner of any Condominium Unit shall entitle the Association or the owner of other Condominium Units to the following relief: A. Failure to comply with any of the terms of this Declaration of Condominium or other restrictions and regulations contained in the Articles of Incorporation or By-Laws of the Association, or which may be adopted pursuant thereto, shall be grounds for relief including without limitation an action to recover sums due for damages, injunctive relief, foreclosure of lien, or any combination thereof. Such relief may be

uant thereto, shall be grounds for relief including without limitation an action to recover sums due for damages, injunctive relief, foreclosure of lien, or any combination thereof. Such relief may be sought by the Association or, if appropriate, by an aggrieved Unit Owner.

B. Each Unit Owner shall be liable for the expense of any maintenance, repair or replacement rendered necessary by his act, neglect or carelessness, or by that of any member of his family, or his or their guests, employees, agents or lessees, but only to the extent that such expense is not met by the proceeds of insurance carried by the Association. Such liability shall include any increase in fire insurance rates occasioned by use, misuse, occupancy or abandonment of a Condominium Unit or its appurtenances. Nothing herein contained, however, shall be construed so as to modify any waiver by insurance companies of rights of subrogation.

C. In any proceeding arising because of an alleged default by a Unit Owner, the Association, if successful, shall be entitled to recover the costs of the proceeding and such reasonable attorneys' fees as may be determined by the Court, but in no event shall any Unit Owner be entitled to such attorneys' fees.

D. The failure of the Association of any Unit Owner to enforce any right, provision, covenant or condition which may be granted by this Declaration of Condominium or the other above-mentioned documents shall not constitute a waiver of the right of the Association or of the Unit Owner to enforce such right, provision, covenant or condition in the future.

E. All rights, remedies and privileges granted to the Association or the Owner or Owners of a Condominium Unit pursuant to any terms, provisions, covenants or conditions of the Declaration of Condominium or

Page 29

rights, remedies and privileges granted to the Association or the Owner or Owners of a Condominium Unit pursuant to any terms, provisions, covenants or conditions of the Declaration of Condominium or other above-mentioned documents, shall be deemed to be cumulative, and the exercise of any one or more shall not be deemed to constitute an election of remedies, nor shall it preclude the party thus exercising the same from exercising such other and additional rights, remedies or privileges as may be available to such party at law or in equity.

F. The failure of Developer to enforce any right, privilege, covenant or condition which may be granted to it by this Declaration of Condominium or other above-mentioned document shall not constitute a waiver of the right of Developer to thereafter enforce such right, provision, covenant or condition in the future.

G. The failure of an Institutional Lender or Institutional Lenders, as said term is herein defined, to enforce any right, provision, privilege, covenant or condition which may be granted to it or them by this Declaration of Condominium or other above-mentioned documents, 22 3408 FACE 3 shall not constitute a waiver of the right of said party or parties to thereafter enforce such right, privilege, covenant or condition in the future.

XXXII.

RIGHTS RESERVED UNTO INSTITUTIONAL LENDERS "Institutional Lender" or "Institutional Lenders", as the terms are used herein, shall mean and refer to banks, savings and loan associations, insurance companies, or other reputable mortgage lenders. So long as any Institutional Lender of Institutional Lenders shall hold any mortgage upon any Condominium Unit or Units, or shall be the owner of any Condominium Unit or Units, such Institutional Lender or Institu-

Institutional Lender of Institutional Lenders shall hold any mortgage upon any Condominium Unit or Units, or shall be the owner of any Condominium Unit or Units, such Institutional Lender or Institutional Lenders shall have the following rights, to-wit: A.

To approve the company or companies with whom casualty insurance is placed.

B. To be furnished with at least one copy of the Annual Financial Statement and Report of the Association, prepared by an Accountant designated by the Association, such Financial Statement and Report to be furnished by April 15 of each calendar year.

Upon written request to the Association, identifying the name and address of the holder, insurer or guarantor and the unit number or address, any such eligible mortgage holder or eligible insurer or guarantor will be entitled to timely written notice of: A. Any condemnation loss or any casualty loss which affects a material portion of the project or any unit on which there is a first mortgage held, insured or guaranteed by such eligible mortgage holder or eligible insurer or guarantor, as applicable; B. Any delinquency in the payment of assessments or charges owed by an owner of a unit subject to a first mortgage held, insured or guaranteed by such eligible holder or eligible insurer or guarantor, which remains uncured for a period of 60 days; C. Any lapse, cancellation or material modification of any insurance policy or fidelity bond maintained by the Association; D. Any proposed action which would require the consent of a specified percentage of mortgage holders.

E. The call of any meeting of the membership to be held for the purpose of considering any proposed Amendment to this Declaration of Condominium, or the Articles of Incorporation and By-Laws of the Asso-

Page 30

The call of any meeting of the membership to be held for the purpose of considering any proposed Amendment to this Declaration of Condominium, or the Articles of Incorporation and By-Laws of the Association, which notice shall state the nature of the Amendment being proposed.

XXXIII.

RIGHTS OF DEVELOPER (a) Until such time as the first of the following events occurs: The expiration of three (3) full years after the registration of the Declaration; (b) 120 days after the date as of which Units of which seventy-five percent (75%) of the total undivided interest appertain shall have been conveyed by Benchmark Atlantic Co., Inc. to Unit Owners; or (c) The surrender by Benchmark Atlantic Co., Inc. of the authority to appoint and remove members of the Board of Directors by an express amendment to Declaration executed and recorded by Benchmark Atlantic Co., Inc., said Benchmark Atlantic Co., Inc. shall have the right to designate and select a majority of the persons who shall serve as members of each Board of Directors of the Corporation. Benchmark 23 BOU-3408 FACE 825 alter, modify or impair in any manner whatsoever any of the other terms, * provisions or covenants hereof or the remaining portions of any terms, provisions or covenants held to be partially invalid or unenforceable.

XXXVII.

LIBERAL CONSTRUCTION The provisions of this Declaration of Condominium shall be liberally construed to effectuate its purpose of creating a uniform plan of Condominium ownership. Throughout this Declaration wherever appropriate the singular shall include the plural and the masculine çender the feminine or neuter. The Article headings are for convenience of reference only and shall not be considered terms of this Declaration.

XXXXVIII.

DECLARATION OF CONDOMINIUM BINDING

asculine çender the feminine or neuter. The Article headings are for convenience of reference only and shall not be considered terms of this Declaration.

XXXXVIII.

DECLARATION OF CONDOMINIUM BINDING CN ASSIGNS, AND SUBSEQUENT CWNERS The restrictions and burdens imposed by the covenants of this Declaration of Condominium are intended to and shall constitute covenants running with the land, and shall constitute an equitable servitude upon each Condominium Unit and its appurtenant undivided interest in Common Property. This Declaration of Condominium shall be binding upon Developer, its successors and assigns, and upen all parties who may subsequently become Owners of Condominium Units in the Condominium, and their respective heirs, legal representatives, successors, and assigns.

XXXIX.

AGENT FOR SERVICE OF PROCESS The following named individual is designated as the person to receive service of process for the Association: Dee Ogilvy, 2508 Avent Ferry Road, Raleigh, Wake County, North Carolina 27606.

XXXX.

AMENDMENT OF DECLARATION WITHOUT APPROVAL OF OWNERS The Developer, without the consent or approval of any other owner, shall have the right to amend this Declaration to conform to the requirements of law or governmental agency having legal jurisdiction over the Property or to qualify the Property or any Units and improvements thereon for mortgage or improvement loans made by, guaranteed by, sponsored by or insured by a governmental agency or to comply with the requirements of law or regulations of any corporation or agency belonging to, sponsored by, or under the substantial control of, the United States Government or the State of North Carolina, regarding purchase or sale of such Units and improvements, or mortgage interests

Page 31

ing to, sponsored by, or under the substantial control of, the United States Government or the State of North Carolina, regarding purchase or sale of such Units and improvements, or mortgage interests therein, as well as any other law or regulation relating to the control of the Property, including, without limitation, ecological controls, construction standards, aesthetics, and matters affecting the public health, safety and general welfare. A letter from an official of any such corporation or agency, including, without limitation, the Veterans Administration (VA), U. S. Department of Housing and Urban Development (HUD), the Federal Home Loan Mortgage Corporation, Government National Mortgage Association, the Federal National Mortgage Association, or any agency of the State of North Carolina requiring an amendment as a condition of approval, or suggesting an amendment, shall be sufficient evidence of the approval of such amendment of VA, HUD and/or such corporation or agency. No amendment made pursuant to this Section shall 25 BOUR 3408 FACE 826 be effective until duly recorded in the Wake County Registry.

i Assistand its corpoIN WITNESS WHEREOF, Benchmark Atlantic Co., Inc., has caused this Declaration to be executed in its name by its President rate seal to be hereunto affixed, attested by its Secretary, by authority of its Board of Directors, this 28th day of December 1984.

C.!!

CO.

Richardson Assistant Secretary South BENCHMARK ATLANTIC CO., INC.

Bimanda By: Vice President CAROLINA Beaufort COUNTY This is to certify that on the 28th day of December 1984, before me personally appeared Emily M. Richardson, with whom I am personally acquainted, who, being by me duly sworn, says that Frank is the Vice President, and she is the

Pages 31–32

e 28th day of December 1984, before me personally appeared Emily M. Richardson, with whom I am personally acquainted, who, being by me duly sworn, says that Frank is the Vice President, and she is the Secretary of Benchmark Atlantic Co., Inc., the corporation described in Tara Morda and which executed the foregoing instrument; that he knows the common seal of said corporation; that the seal affixed to the foreçcing instrument is said common seal, and the name of the corporation was subscribed thereto by the said stVice President, and that the said Vice President and Secretary subscribed their names thereto, and said common seal was affixed, all by order of the Board of Directors of said corporation, and that the said instrument is the act and deed of said corporation.

1984.

ASSI Witness my hand and official seal this 28 day of December Jolie's 'Hara - Hyjalin Notary Public My commission expires: 8/17/94 26 25 BDC. 3408 PAGE 827 EXHIBIT A BEGINNING at a point, said point being South 49 deg. 13 min. 00 sec. West 256.49 feet from a nail in the intersection of the center line of Avent Ferry Road and Lake Raleigh Road; thence from the POINT AND PLACE OF BEGINNING South 40 deg. 14 min. 55 sec. West 406.02 feet along and with the western rightof-way line of Avent Ferry Road to a new iron pipe; thence continuing along and with the western right-of-way line of Avent Ferry Road South 42 deg. 01 min. 07 sec. West 73.55 feet to a new iron pipe; thence leaving the western right-of-way line of Avent Ferry Road North 50 deg. 20 min. 49 sec. West 182.07 feet to an existing iron pipe; thence South 47 deg. 16 min. 40 sec . West 84.93 feet to an existing iron pipe; thence South 63 deg. 38 min . 34 sec .

West 80.00 feet to an existing iron pipe; thence South 63 deg. 24

Pages 32–33

ting iron pipe; thence South 47 deg. 16 min. 40 sec . West 84.93 feet to an existing iron pipe; thence South 63 deg. 38 min . 34 sec .

West 80.00 feet to an existing iron pipe; thence South 63 deg. 24 min. 28 sec. West 140.59 feet to an existing iron pipe; thence North 00 deg. 51 min. 04 sec. East 381.69 feet to a new iron pipe; thence North 10 deg. 45 min. 09 sec. East 254.65 feet to an existing iron pipe; thence North 20 deg. 31 min. 04 sec. East 116.98 feet to an existing iron pipe; thence South 61 deg. 22 min. 24 sec. East 703.33 feet to an existing iron pipe in the western right-of-way line of Avent Ferry Road and being the POINT AND PLACE OF BEGINNING, and containing 7.0438 acres, according to Associates, Registered Land survey prepared by Murphy & Surveyors, entitled "Plat of Actual Survey, Benchmark Atlantic, Inc." dated December 10, 1983, and recorded in Book of Maps 1983 , page 1513, Wake County Registry.

a ECU 3408 FA :8 EXHIBIT B BEGINNING at a point, said point being South 49 deg. 13 min. 00 sec. West 256.49 feet from a nail in the intersection of the center line of Avent Ferry Road and Lake Raleigh Road; thence from the FOINT AND PLACE OF BEGINNING South 40 deg. 14 min. 55 sec. West 406.02 feet along and with the western right-of-way line of Avent Ferry Road to a new iron pipe; thence continuing along and with the western right-of-way line of Avent Ferry Road South 42 deg. 01 min. 07 sec. West 73.55 feet to a new iron pipe; thence leaving the western right-of-way line of Avent Ferry Road North 50 deg. 20 min. 49 sec. West 182.07 feet to an existing iron pipe; thence South 47 deg. 16 min. 40 sec. West 34.93 feet to an existing iron pipe; thence South 63 deg. 28 min. 34 sec.

West 80.00 feet to an existing iron pipe; thence South 63 deg. 24

Pages 33–36

xisting iron pipe; thence South 47 deg. 16 min. 40 sec. West 34.93 feet to an existing iron pipe; thence South 63 deg. 28 min. 34 sec.

West 80.00 feet to an existing iron pipe; thence South 63 deg. 24 min. 28 sec. West 140.59 feet to an existing iron pipe; thence North 00 deg. 51 min. 04 sec. East 381.69 feet to a new iron pipe; thence North 10 deg. 45 min. 09 sec. East 254.65 feet to an existing iron pipe; thence North 20 deg. 31 min. 04 sec. East 116.98 feet to an existing iron pipe; thence South 61 deg. 22 min. 24 sec. East 703.33 feet to an existing iron pipe in the western right-of-way line of Avent Ferry Road and being the POINT AND PLACE OF BEGINNING, and containing 7.0438 acres, according to a survey prepared by Murphy & Associates, Registered Land Surveyors, entitled "Plat of Actual Survey, Benchmark Atlantic, Inc.* dated December 10, 1983, and recorded in Book of Maps 1983, page 1513, Wake County Registry.

ROD. 3408 PAUL 829 EXHIBIT C See Plans for Avery Close Condominium filed herewith in the Condominium Plan Files, # 74 Wake County Registry, which is incorporated herein by reference.

29 FACE 830 EXHIBIT D (Page 1 of 3) · Percentage of undivided interest in common areas and facilities.

Unit No.

1-A 1-B Percentage .8197 .8197 1-C .8197 2-A .8197 2-B .8197 2-C .8197 3-4 .8197 3-2 .8197 3-C .8197 4-A .8197 4-B .8197 4-C .8197 5-A .8197 5-B .8197 5-C .8197 6-A .8197 6-B .8197 6-C .8197 7-A .8197 7-8 .8197 7-C .8197 8-A .8197 8-B .2197 8-C .8197 9-A .8197 9-3 .8197 9-C .8197 10-A .8197 10-B .8197 10-C .8197 11-A .8197 11-B .8197 11-C .8197 12-A .8197 12-B .8197 12-C .8197 13-A .8197 13-B .8197 13-C .8197 14-A .8197 14-B .8197 14-C .8197 15-A .8197 15-B .8197 15-C .8197 16-A .8197 16-B .8197 16-C .8197 17-A .8197 17-B .8197 17-C .8197 10 30 BOUR 3408 FACE

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197 12-C .8197 13-A .8197 13-B .8197 13-C .8197 14-A .8197 14-B .8197 14-C .8197 15-A .8197 15-B .8197 15-C .8197 16-A .8197 16-B .8197 16-C .8197 17-A .8197 17-B .8197 17-C .8197 10 30 BOUR 3408 FACE EXHIBIT D (Page 2 of 3) Percentage of undivided interest in common areas and facilities.

Unit No.

Percentage 18-A .8197 15-B .8197 18-C .8197 19-A .8197 19-B .8197 19-C .8197 20-A .8197 20-B .9197 20-C .8197 21-A .8197 21-B .8197 21-C .8197 22-A .8197 22-B .8197 22-C .8197 23-A .9197 23-B .8197 23-C .8197 24-A .8197 24-B .8197 24-C .8197 25-A .8197 25-B .8197 25-C .8197 26-A .8197 26-B .8197 26-C .8197 27-A .8197 27-B .8197 27-C .8197 28-A .8197 28-B .8197 28-C .8197 29-A .8197 29-B .8197 29-C .8197 30-A .8197 30-B .8197 30-C .8197 31-A .8197 31-B .8197 31-C .8197 32-A .8197 32-B .8197 32-C .8197 33-A .8197 33-B .8197 33-C .8197 34-A .8197 34-B .8197 34-C .8197 35-A .8197 35-B .8197 35-C .8197 1 31 !

BOOK 3408 FACE 832 EXHIBIT D (Page 3 of 3) Percentage of undivided interest in common areas and facilities.

Unit No.

Percentage 36-A .8197 36-B .8197 36-C .8197 37-A .8197 37-B .8197 37-C .8137 38-A .8197 38-B .8197 38-C .8197 39-A .8197 39-B .8197 39-C .8197 40-A .8197 40-B .8197 40-C .8197 Support Facilities Unit A .9180 Support Facilities Unit B .8180 TOTAL 100.0000% 32 I BDC. 3408 FACE 833 EXHIBIT E The following is a copy of the Articles of Incorporation of Avery Close Condominium Association: 33 S6BVEN INGHAIN DATE 12/18/84 TIME!

FILED THAD EURE SECRETARY OF STAT NORTH CAROLINA BODY 3408 FACE 834 ARTICLES OF INCORPORATION OF AVERY CLOSE CONDOMINIUM ASSOCIATION In compliance with the requirements of Chapter 55A of the North Carolina General Statutes, the undersigned, a natural person of full age, has this day executed these Articles of Incorporation for the pur-

ompliance with the requirements of Chapter 55A of the North Carolina General Statutes, the undersigned, a natural person of full age, has this day executed these Articles of Incorporation for the purpose of forming a non-profit corporation and hereby certifies: ARTICLE I The name of the corporation is AVERY CLOSE CONDOMINIUM ASSOCIATION, hereinafter called the "Association".

ARTICLE II The principal and initial registered office of the Association is located at 2508 Avent Ferry Road, Raleigh, Wake County, North Carolina 27606.

ARTICLE III Dee Ogilvy, whose address is 2508 Avent Ferry Road, Raleigh, Wake County, North Carolina 27606, is hereby appointed the initial Registered Agent of this Association.

ARTICLE IV This Association does not contemplate pecuniary gain or profit to the members thereof and no part of the Association's net income shall inure to the benefit of any of its officers, directors or members or any other private individual. The purposes and objects of the corporation shall be to administer the operation and management of Avery Close Condominium, a condominium to be established in accordance with the laws of the State of North Carolina upon the property situate, lying and being in Raleigh Township, Wake County, North Carolina, and more particularly described in Exhibit "A" attached to the Declaration of Condominium and incorporated herein by reference; to undertake the performance of the acts and duties incident to the administration of the operation and management of said Avery Close Condominium in accordance with the terms, provisions, conditions and authorizations contained in these Articles of Incorporation and which may be contained in the formal Declaration of Condominium which will be recorded in the Public Records

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provisions, conditions and authorizations contained in these Articles of Incorporation and which may be contained in the formal Declaration of Condominium which will be recorded in the Public Records of Wake County, North Carolina, at the time said property, and the improvements now or hereafter situate thereon, are submitted to a plan of Condominium Ownership; and to own, operate, lease, sell, trade and otherwise deal with such property, whether real or personal, as may be necessary or convenient in the administration of said Avery Close Condominium.

• ARTICLE V The Corporation shall have the following powers: 1. The Corporation shall have all of the powers and privileges granted to Non-Profit Corporations under the law pursuant to which this Corporation is chartered, and all of the powers and privileges which may be granted unto said Corporation under any other applicable laws of the State of North Carolina, including the Unit Ownership Act.

2 2203408 FALL 835 2. The Corporation shall have all of the powers sonably necessary to implement and effectuate the purposes of the Corporation, including but not limited to the following: (a) To make and establish reasonable rules and regulations governing the use of Condominium Units and Common Property in Avery Close Condominium as said terms may be defined in said Declaration of Condominium to be recorded.

(b) To levy and collect assessments against members of the Corporation to defray the common expenses of the Condominium as may be provided in said Declaration of Condominium and in the By-Laws of this Corporation which may be hereafter adopted, including the right to levy and collect assessments for the purposes of acquiring, operating, leasing, managing and otherwise trading and dealing with such property,

on which may be hereafter adopted, including the right to levy and collect assessments for the purposes of acquiring, operating, leasing, managing and otherwise trading and dealing with such property, whether real or personal, including Condominium Units in Avery Close Condominium, which may be necessary or convenient in the operation and management of Avery Close Condominium and in accomplishing the purposes set forth in said Declaration of Condominium.

(c) To maintain, repair, replace, operate and manage Avery Close Condominium and the property comprising same, including the right to construct improvements after casualty and to make further improvement of the Condominium property, and to make and enter into any and all contracts necessary or desirable to accomplish said purposes.

(d) To contract for the management of Avery Close Condominium and to delegate to such contractor all of the powers and duties of the Association except those which may be required by the Declaration of Condominium to have approval of the Board of Directors or membership of the Corporation.

(e) To acquire and enter into, now or at any time hereafter, leases and agreements whereby the Association acquires leaseholds, memberships, and other possessory or use interests in lands or facilities including, but not limited to, swimming pools, tennis courts, and other recreation facilities whether or not contiguous to the lands of Avery Close Condominium to provide enjoyment, recreation or other use or benefit to the owners of Condominium Units.

(f) To enforce the provisions of the Declaration of Condominium, these Articles of Incorporation, the By-Laws, rules and regulations governing the use of said Avery Close Condominium as the same may be hereafter established.

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ons of the Declaration of Condominium, these Articles of Incorporation, the By-Laws, rules and regulations governing the use of said Avery Close Condominium as the same may be hereafter established.

(g) To exercise, undertake and accomplish all of the rights, duties and obligations which may be granted to or imposed upon the Corporation pursuant to the Declaration of Condominium aforementioned.

ARTICLE VI The qualification of the members, the manner of their admission to membership and termination of such membership, and voting by members shall be as follows: 1. The Owners of all Condominium Units in Avery Close Condominium shall be members of the Corporation, and no other person or entities shall be entitled to membership, except as provided in item (5) of this Article VI.

2. Membership shall be established by the acquisition of fee title to a Condominium Unit in Avery Close Condominium, or by acquisition of a fee ownership interest therein, whether by conveyance, devise, judicial decree or otherwise, and the membership of any party shall be Box 3408 automatically terminated upon his being divested of all title to or his entire fee ownership interest in any Condominium Unit, except that nothing herein contained shall be construed as terminating the membership of any party who may own two or more Condominium Units, or who may own a fee ownership interest in two or more Condominium Units, so long as such party shall retain title to or a fee ownership interest in any Condaninium Unit.

3. The interest of a member in the funds and assets of the Corporation cannot be assigned, hypothecated or transferred in any manner, except as an appurtenance to his Condominium Unit. The funds and assets of the Corporation shall belong solely to the Corporation subject to the

be assigned, hypothecated or transferred in any manner, except as an appurtenance to his Condominium Unit. The funds and assets of the Corporation shall belong solely to the Corporation subject to the limitation that the same be expended, held or used for the benefit of the membership and for the purposes authorized herein, in the Declaration of Condominium and in the By-Laws which may be hereafter adopted.

4. On all matters on which the membership shall be entitled to vote, there shall be only one person entitled to vote for each Condominium Unit in Avery Close Condominium, which vote may be exercised cr cast by the Owner or Owners of each Condominium Unit in such manner as may be provided in the By-Laws hereafter adopted by the Corporation. The total number of votes shall be 100, and each Comer or group of Owners (including the Board of Directors, if the Ecard of Directors, or its designee, shall then hold title to one or more Units) shall be entitled to the number of votes equal to the total of the percentage of ownership in the Common areas and facilities applicable to his or their Unit as set forth in the Declaration.

5. Until such time as the property described in Exhibit "A" to the Declaration of Condominium and the improvements which may hereafter be constructed thereon, are submitted to a Plan of Condominium Ownership by the recordation of the Declaration of Condominium, the membership of the Corporation shall be comprised of the five (5) individuals named in Article XI hereof as the initial Board of Directors of the Corporation, and each such individual shall be entitled to cast one vote on all matters on which the membership shall be entitled to vote.

ARTICLE VII The Corporation shall have perpetual existence.

ARTICLE VIII

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, and each such individual shall be entitled to cast one vote on all matters on which the membership shall be entitled to vote.

ARTICLE VII The Corporation shall have perpetual existence.

ARTICLE VIII The affairs of the Corporation shall be managed by the President of the Corporation, assisted by the Vice President, Secretary and Treasurer and, if any, the Assistant Secretaries and Assistant Treasurers, subject to the directions of the Board of Directors. The Board of Directors, or the President with the approval of the Board of Directors, may employ a Managing Agent and/or such other managerial and supervisory personnel or entities to administer or assist in the administration of the operation and management of Avery Close Condominium, and the affairs of the Corporation, and any such person or entity may be so employed without regard to whether such person or entity is a member of the Corporation or a Director or Officer of the Corporation, as the case may be.

ARTICLE IX The number of members of the first Board of Directors of the Corporation shall be five (5). The number of members of succeeding Boards of Directors shall be as provided from time to time by the ByLaws of the Corporation. The members of the Board of Directors shall be elected by the members of the Corporation at the Annual Meeting of the membership as provided by the ByLaws of the Corporation, and at least a majority of the Board of Directors shall be members of the Corporation or shall be 00502 i authorized representatives, officers or employees of a corporate member of the Corporation. Notwithstanding the foregoing, until such time as the first of the following events occurs: (a) The expiration of three (3) full years after the registration of the Declaration; (b) 120 days

poration. Notwithstanding the foregoing, until such time as the first of the following events occurs: (a) The expiration of three (3) full years after the registration of the Declaration; (b) 120 days after the date as of which Units to which seventy-five percent (75%) of the total undivided interest appertair shall have been conveyed by Benchmark Atlantic Co., Inc. to Unit Owners; or (c) The surrender by Benchmark Atlantic Co., Inc. of the authority to appoint and remove members of the Board of Directors by an express amendment to Declaration executed and recorded by Benchmark Atlantic Co., Inc., said Benchmark Atlantic Co., Inc. shall have the right to designate and select a majority of the persons who shall serve as members of each Board of Directors of the Corporation. Benchmark Atlantic Co., Inc. may designate and select the person or persons to serve as a member or members of each said Board of Directors in the manner provided in the EyLaws of the Corporation, and such person or persons so designated and selected need not be a resident of the Condominium.

ARTICLE X The Board of Directors shall elect a President, Vice President, Secretary and Treasurer, and as many Assistant Secretaries and Assistant Treasurers as the Board of Directors shall determine. The President and Vice President shall be elected from among the membership of the Board of Directors, but no other officer need be a Director. The same person may hold two offices, the duties of which are not incompatible; provided, however, that the office of President and Vice President shall not be held by the same person, nor shall the office of President and Secretary or Assistant Secretary be held by the same person.

ARTICLE XI The names and addresses of the initial Board of Directors who,

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be held by the same person, nor shall the office of President and Secretary or Assistant Secretary be held by the same person.

ARTICLE XI The names and addresses of the initial Board of Directors who, subject to the provisions of these Articles of Incorporation, the By-Laws, and the laws of the State of North Carolina, shall hold office until the first Annual Meeting of the Membership (or until their successors are elected and qualified) are as follows: Name Arthur C. Schultz Frank A. Morda Elwood Doan Gary Young Pamela Shrout Address 7 Office Park Road Hilton Head Island, South Carolina 29928 7 Office Park Road Hilton Head Island, South Carolina 29928 7 Office Park Road Hilton Head Island, South Carolina 29928 7 Office Park Road Hilton Head Island, South Carolina 29928 7 Office Park Road Hilton Head Island, South Carolina 29928 BOOK 3408 FACE 838 ARTICLE XII The original By-Laws of the Corporation shall be adopted by a majority vote of the members of the Corporation present at a meeting of members at which a majority of the membership is present, and thereafter, such By-Laws may be altered or rescinded only in such manner as said By-Laws may provide.

ARTICLE XIII Every Director and every officer of the Corporation shall be indemnified by the Corporation against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him in connection with any proceeding to which he may be a party, or in which he may become involved, by reason of his being or having been a Director or Officer of the Corporation, whether or not he is a Director or Officer at the time such expenses are incurred, except in such cases wherein the Director or Officer is adjudged guilty of willful mis-

Pages 43–44

r Officer of the Corporation, whether or not he is a Director or Officer at the time such expenses are incurred, except in such cases wherein the Director or Officer is adjudged guilty of willful misfeasance or malfeasance in the performance of his duties; provided that, in the event of any claim for reimbursement or indemnification hereunder based upon a settlement by the Director or Officer seeking such reimbursement or indemnification, the indemnification herein shall only apply if the Board of Directors approves such settlement and reimbursement as being in the best interests of the Corporation. The foregoing right of indemnification shall be in addition to and not exclusive of all other rights to which such Director or Officer may be entitled.

ARTICLE XIV An amendment or amendments to these Articles of Incorporation shall require the assent of seventy-five per cent (75%) of the membership.

No amendment to these Articles of Incorporation which shall abridge, amend or alter the right of Benchmark Atlantic Co., Inc. to designate and select members of each Board of Directors of the Corporation, as provided in Article IX hereof, may be adopted or become effective without the prior written consent of Benchmark Atlantic Co., Inc.

ARTICLE XV The name and address of the incorporator is as follows: James H.

Pardue, Suite 104, 3201 Glenwood Avenue, Post Office Box 31268, Raleigh, North Carolina 27622.

IN WITNESS WHEREOF, I, the undersigned incorporator, have hereunto set my hand and seal, this 17th day of December Jo Padr JAMES H. PARDUE 1984.

(SEAL) NORTH CAROLINA - WAKE COUNTY BOON 3408 FACE 39 ' 1984, This is to certify that on this 17th day of December before me, Linda P. Whitley a Notary Public of said County and

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JAMES H. PARDUE 1984.

(SEAL) NORTH CAROLINA - WAKE COUNTY BOON 3408 FACE 39 ' 1984, This is to certify that on this 17th day of December before me, Linda P. Whitley a Notary Public of said County and State, personally appeared James H. Pardue, who I am satisfied is the person named in and who executed the foregoing Articles of Incorporation of Avery Close Condominium Association, and I having first made known to him the contents thereof, he did acknowledge that he signed, sealed and delivered the same as his voluntary act and deed for the uses and purposes therein expressed.

, IN WITNESS WHEREOF, I have hereunto set my hand and seal, this 17th day of December, 1984.

` My Commission Expires: Linda Ly LINDA P. WHITLEY NOTARY PUBLIC JOHNSTON COUNTY, N.C.

My Commission Expires 12 2-23 Notary Public 200 3405 .840 EXHIBIT F The following is a copy of the Bylaws of Avery Close Condominium Association: i 34 1 30% 3408 146 BYLAWS OF AVERY CLOSE CONDOMINIUM ASSOCIATION A corporation not for profit under the laws of the State of North Carolina 1. IDENTITY a These are the Sy-Laws of Avery Close Condominium Association non-profit corporation under the laws of the State of North Carolina, the Articles of Incorporation of which were filed in the Office of the Secretary of State on December 18, 1984. Avery Close Condominium Association, hereinafter called "Association", has been organized for the purpose of administering the operation and management of Avery Close Condominium, a condorinium established C to be established in accordance with the laws of the State of North Carolina upon the property situate, lying and being in Paleigh Township, Wake County, North Carolina, and described in Exhibit "A" to the Declaration of Condominium and incorporated herein by reference.

rolina upon the property situate, lying and being in Paleigh Township, Wake County, North Carolina, and described in Exhibit "A" to the Declaration of Condominium and incorporated herein by reference.

a) The provisions of these By-Laws are applicable to Avery Close Condominium, and the terms and provisions hereof are expressly subject to the terms, provisions, conditions and authorization contained in the Articles of Incorporation and which may be contained in the formal Declaration of Condominium which will be recorded in the Public Records of Wake County, North Carolina, at the time said property and the improvements now or hereafter situated thereon are submitted to the plan of condominium ownership, the terms and provisions of said Articles of Incorporation and Declaration of Condominium are to be controlling wherever the same may be in conflict herewith.

b) All present or future owners, tenants, future tenants, or their employees, or any other person that might use Avery Close Condominium or any of the facilities thereof in any manner, are subject to the regulations set forth in these By-Laws and in said Articles of Incorporation and Declaration of Condominium.

c) The office of the Association shall be at 2508 Avent Ferry Road, Raleigh, Wake County, North Carolina, 27606 or such other place as the Board of Directors shall designate from time to time.

d) The fiscal year of the Association shall be the calendar year.

2. MEMBERSHIP, VOTING, QUORUM, PROXIES a) The qualification of members, the manner of their admission to membership and termination of such membership, and voting by members, shall be as set forth in Article VI of the Articles of Incorporation of the Association, the provisions of which said Article VI of the Articles

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termination of such membership, and voting by members, shall be as set forth in Article VI of the Articles of Incorporation of the Association, the provisions of which said Article VI of the Articles of Incorporation are incorporated herein by reference.

b) A quorum at members' meetings shall consist of persons entitled to cast a majority of the votes of the entire membership. The joinder of a member in the action of a meeting by signing and concurring in the minutes thereof shall constitute the presence of such person for the purpose of determining a quorum.

c) The vote of the Owners of a Condominium Unit owned by more than one person or by a corporation or other entity shall be cast by the one person named in a Certificate signed by all of the Owners of the 800.3.

84 Condominium Unit and filed with the Secretury of the Association, and such Certificate shall be valid until revoked by subsequent Certificate.

If such a Certificate is not on file, the vote of such Owners shall not be considered in determining the requirement for a quorum, nor for any other purpose.

d) Votes may be cast in person or by proxy. Proxies shall be valid only for the particular meeting designated thercon and must be filed with the Secretary before the appointed time of the meeting.

e) Approval or disapproval of a Unit Owner upon any matter, whether or not the subject of an Association meeting, shall be by the same person who would cast the vote of such Owner if in an Association meeting.

E) Except where otherwise required under the provisions of the Articles of Incorporation of the Association, these By-Laws, the Declaration of Condominium, or whether the same way otherwise be required by law, the affirmative vote of the Owners of a majority of the Condominium

rporation of the Association, these By-Laws, the Declaration of Condominium, or whether the same way otherwise be required by law, the affirmative vote of the Owners of a majority of the Condominium Units represented at any duly called members' meeting at which a querum is present shall be binding upon the members.

3. ANNUAL AND SPECIAL MEETING OF MEMBERSHIP a) The Annual Members' Meeting shall be held at the office of the Association or at such other place designated by the Board of Directors, at 10:00 o'clock a.m. on the second Saturday in May of each year for the purpose of electing Directors and of transacting any other business authorized to be transacted by the members, provided, however, that if the day is a legal holiday, the meeting shall be held at the same hour on the next succeeding Saturday. The First Annual Meeting shall be held on the appropriate date in May, 1985.

b) Special Members' Meetings shall be held whenever called by the President or Vice-President or by a majority of the Board of Directors, and must be called by such Officers upon receipt of a written request from members of the Association owning a majority of the Condominium Units.

c) Notice of all members' meetings, regular or special, shall be given by the President, Vice-President or Secretary of the Association, or other Officer of the Association in absence of said Officers, to each member, unless waived in writing, such notice to be written or printed and to state the time and place and object for which the meeting is called. Such notice shall be given to each member not less than ten (10) days nor more than sixty (60) days prior to the date set for such meeting, which notice shall be mailed or presented personally to each

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Such notice shall be given to each member not less than ten (10) days nor more than sixty (60) days prior to the date set for such meeting, which notice shall be mailed or presented personally to each member within said time. If presented personally, receipt of such notice shall be signed by the member, indicating the date on which such notice was received by him. If mailed, such notice shall be deemed to be properly given when deposited in the United States Mail addressed to the member at his post office address as it appears on the records of the Association (Register of Owners) as of the date of mailing such notice, the postage thereon prepaid. Proof of such mailing shall be given by the Affidavit of the person giving the notice. Any member may, by signed written waiver of notice, waive such notice and, when filed in the records of the Association whether before or after the holding of the meeting, such waiver shall be deemed equivalent to the giving of notice to the member. If any members' meeting cannot be organized because a quorum has not attended, or because the greater percentage of the membership required to constitute a quorum for particular purposes has not attended (wherever the latter percentage of attendance may be required as set forth in the Articles of Incorporation, these By-Laws or the Declaration of Condominium) the members who are present, either in are: 340843 person or by proxy, may adjourn the meeting from time to time until a quorum, or the required percentage of attendance, if greater than a quorum, is present.

d) The order of business at Annual Members' Meetings and, as far as practical, at any other members' meetings, shall be: i) Calling of the roll and certifying of proxies; ii) Proof of notice of meeting or waiver of notice;

ss at Annual Members' Meetings and, as far as practical, at any other members' meetings, shall be: i) Calling of the roll and certifying of proxies; ii) Proof of notice of meeting or waiver of notice; iii) Reading and disposal of any unapproved minutes; iv) Reports of Officers; v) Reports of Committees; vi) Appointment of Inspectors of Election by Chairman; vii) Unfinished business; viii) New business; and ix) Adjournment.

4. BOARD OF DIRECTORS a) The first Board of Directors of the Association shall consist of five (5) persons. Each succeeding Board of Directors shall consist of not less than five (5) ncr more than nine (9) persons.

Notwithstanding the foregoing, until such time as the first of the following events occurs: (a) The expiration of three (3) full years after the registration of the Declaration; (b) 120 days after the date as of which Units to which seventy-five percent (75%) of the total undivided interest appertain shall have been conveyed by Benchmark Atlantic Co., Inc. to Unit Owners; or (c) The surrender by Benchmark Atlantic Co., Inc. of the authority to appoint and remove members of the Board of Directors by an express amendment to Declaration executed and recorded by Benchmark Atlantic Co., Inc., said Benchmark Atlantic Co., Inc. shall have the right to designate and select a majority of the persons who shall serve as members of each Board of Directors of the Corporation. Benchmark Atlantic Co., Inc. may designate and select the person or persons to serve as a member or members of each said Board of Directors in the manner provided in the ByLaws of the Corporation, and such person or persons so designated and selected need not be a resident of the Condominium.

b) Election of Directors shall be conducted in the following manner:

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in the ByLaws of the Corporation, and such person or persons so designated and selected need not be a resident of the Condominium.

b) Election of Directors shall be conducted in the following manner: i) Developer shall, at the beginning of the election of the Board of Directors, designate and select that number of the members of the Board of Directors which it shall be entitled to designate and select in accordance with the provisions of these By-Laws, and upon such designation and selection of Developer by written instrument presented to the meeting at which such election is held, said individuals so designated and selected by Developer shall be deemed and considered for all purposes Directors of the Association, and shall thenceforth perform the offices and duties of such Directors until their successors shall have been selected or elected in accordance with the provisions of these By-Laws.

ii) All members of the Board of Directors whom Developer shall not be entitled to designate and select under the terms and provisions BO 3408 FACE844 of these By-Laws shall be elected by a plurality of the es cast at the Annual Meeting of the members of the Association immediately following the designation and selection of the members of the Board of Directors whom Developer shall be entitled to designate and select.

iii) Vacancies in the Board of Directors may be filled until the date of the next Annual Meeting by the remaining Directors, except that should any vacancy in the Board of Directors be created in any Directorship previously filled by any person designated and selected by Developer, such vacancy shall be filled by Developer designating and selecting, by written instrument delivered to any Officer of the Asso-

p previously filled by any person designated and selected by Developer, such vacancy shall be filled by Developer designating and selecting, by written instrument delivered to any Officer of the Association, the successor Director to fill the vacated Directorship for the unexpired term thereof.

iv) At the first Annual Meeting of the members held after the property identified herein has been submitted to the plan of condominium ownership and the Declaration of Condominium has been recorded in the public records of Wake County, North Carolina, the term of office of the three (3) Directors receiving the highest plurality of votes shall be established at two (2) years, and the terms of office of the other two (2) Directors shall be established at one (1) year. Thereafter, as many Directors of the Association shall be elected at the Annual Meeting as there are regular terms of office of Directors expiring at such time, and the term of office of the Directors so elected at the Annual Meeting of the members each year shall be for two (2) years expiring at the second Annual Meeting following their election, and thereafter until their successors are duly elected and qualified, or until removed in the manner elsewhere provided or as may be provided by law.

v) In the election of Directors, there shall be appurtenant to each Condominium Unit as many votes for Directors as there are Directors to be elected, provided, however, that no member or Owner of one (1) Condominium Unit may cast more than one (1) vote for any person nominated as a Director, it being the intent hereof that voting for Directors shall be noncumulative. Notwithstanding the fact that Developer may be entitled to designate and select a majority of the members

as a Director, it being the intent hereof that voting for Directors shall be noncumulative. Notwithstanding the fact that Developer may be entitled to designate and select a majority of the members of the Board of Directors, it shall still be entitled to cast one (1) vote for each Condominium Unit owned by it in the elections of other Directors; provided, however, that the other Directors elected are persons other than officers, Directors, Stockholders and Employees of Developer, or wives and relatives of any said persons.

vi) In the event that Developer in accordance with the rights herein established, selects any person or persons to serve on any Board of Directors of the Association, Developer shall have the absolute right at any time, in its sole discretion, to replace such person or persons with another person or persons to serve on said Board of Directors.

Replacement of any person or persons designated by Developer to serve on any Board of Directors of the Association shall be made by written instrument delivered to any Officer of the Association, which instrument shall specify the name or names of the person or persons to be replaced and the name or names of the person or persons designated as successor or successors to the persons so removed from said Board of Directors.

The removal of any Director and designation of his successor shall be effective immediately upon delivery of such written instrument by Developer to any Officer of the Association.

c) The organizational meeting of each newly elected Board of Directors shall be held within ten (10) days of their election, at such time and at such place as shall be fixed by the Directors at the meeting at which they were elected, and no further notice of the organizational

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be held within ten (10) days of their election, at such time and at such place as shall be fixed by the Directors at the meeting at which they were elected, and no further notice of the organizational meeting shall be necessary provided a quorum shall be present.

d) Regular meetings of the Board of Directors may be held at such time and place as shall be determined from time to time by a majority of..

the Directors. Notice of regular meetings shall be given to each Director, personally or by mail, telephone or telegram, at least thirty (30) days prior to the day named for such meeting, unless notice is waived.

e) Special meetings of the Directors may be called by the President, and must be called by the Secretary at the written request of one-third of the votes of the Board. Not less than fifteen (15) days' notice of a meeting shall be given to each Director, persorally or by mail, telephone or telegram, which notice shall state the time, place and purpose of the meeting.

f) Any Director may waive notice of a meeting before or after the meeting, and such waiver shall be deemed equivalent to the giving of notice.

If any g) A quorum at a Directors' meeting shall consist of the Directors entitled to cast a majority of the votes of the entire Board. The acts of the Board approved by a majority of the votes cast at a meeting at which a quorum is present shall constitute the acts of the Board of Directors, except as specifically otherwise provided in the Articles of Incorporation, these By-Laws or the Declaration of Condominium.

Directors' meeting cannot be organized because a quorum has not attended, or because the greater percentage of the Directors required to constitute a quorum for particular purposes has not attended, wherever

' meeting cannot be organized because a quorum has not attended, or because the greater percentage of the Directors required to constitute a quorum for particular purposes has not attended, wherever the latter percentage of attendance may be required as set forth in the Articles of Incorporation, these By-Laws or Declaration of Condominium, the Directors who are present may adjourn the meeting from time to time until a quorum, or the required percentage of attendance if greater than a quorum, is present. At any adjcured meeting, any business that might have been transacted at the meeting as originally called may be transacted without further notice. The joinder of a Director in the action of a meeting by signing and concurring in the minutes thereof shall constitute the presence of such Director for the purpose of determining a quorum.

h) The Presiding Officer of Directors' meetings shall be the Chairman of the Board, if such an officer has been elected; and if none, then the President of the Association shall preside. In the absence of the Presiding Officer, the Directors present shall designate one of their number to preside.

i) Directors' fees, if any, shall be determined by the members.

j) All of the powers and duties of the Association shall be exercised by the Board of Directors, including those existing under the common law and statutes, the Articles of Incorporation of the Association, these By-Laws and the Declaration of Condominium. Such powers and duties shall be exercised in accordance with said Articles of Incorporation, these By-Laws and the Declaration of Condominium, and shall include, without limiting the generality of the foregoing, the following: i) To make, levy and collect assessments against members and

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on, these By-Laws and the Declaration of Condominium, and shall include, without limiting the generality of the foregoing, the following: i) To make, levy and collect assessments against members and members' Condominium Units to defray the costs of the Condominium, as provided for in Article XXVI of the Declaration of Condominium which Article is herein incorporated by reference, and to use the proceeds of said assessments in the exercise of the powers and duties granted unto the Association; ii) To maintain, repair, replace, operate and manage the Common Areas and Facilities wherever the same is required to be done and 000341 FACE 846 accomplished by the Association for the benefit of its members; and further to approve any expenditure made or to be made for said purposes...

iii) To reconstruct any part of the Common Property after casualty in accordance with Article XXIV of the Declaration of Condominium, and to make further improvement to the Common Property, real and personal, and to make and to enter into any and all contracts, necessary or desirable to accomplish said purposes; iv) To make, amend and enforce regulations governing the use of the Common Property and Condominium Units of Avery Close Condominium so long as such regulations or amendments thereto do not conflict with the restrictions and limitations which may be placed upon the use of such property under the terms of the Articles of Incorporation and Declaration of Condominium; v) To acquire, operate, lease, manage and otherwise trade and deal with property, real and personal, including Condominium Units in Avery Close Condominium as may be necessary or convenient in the operation and management of the Condominium, and in accomplishing the

with property, real and personal, including Condominium Units in Avery Close Condominium as may be necessary or convenient in the operation and management of the Condominium, and in accomplishing the purposes set forth in the Declaration of Condominium, provided that the acquisition of real property other than Condominium Units shall require the approval of the membership of the Association; vi) To acquire now or at any time hereafter, and to enter into leases and agreements whereby the Association acquires leaseholds, memberships, and other possessory or use interests in lands or facilities including, but not limited to, swimming pools, tennis and other recreational facilities whether or not contiguous to the lands of Avery Close Condominium to provide enjoyment, recreation or other use or benefit to the owners of Condominium Units; vii) то contract for the management of Avery Close Condominium and to designate to such contractor all of the powers and duties of the Association, except those which may be required by the Declaration of Condominium to have approval of the Board of Directors or membership of the Association; provided, however, that the initial Board of Directors shall not enter into any management agreement which shall exceed the period of one year from the date the Declaration of Condominium is recorded in the Wake County Registry; viii) To enforce by legal means or proceedings the provisions of the Articles of Incorporation and By-Laws of the Association, the Declaration of Condominium and the regulations hereinafter promulgated governing use of the Common Property in Avery Close Condominium.

ix) To pay all taxes and assessments which are or may become other than liens against any part of Avery Close Condominium,

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promulgated governing use of the Common Property in Avery Close Condominium.

ix) To pay all taxes and assessments which are or may become other than liens against any part of Avery Close Condominium, Condominium Units and the appurtenances thereto, and to assess the same against the members and their respective Condominium Units subject to such liens; x) To purchase insurance for the protection of the members and the Association against casualty and liability in accordance with Article XXII of the Declaration of Condominium and applicable FNMA guidelines; and in addition such insurance as shall be deemed necessary by the Board, including directors liability insurance.

The coverage shall be for at least $1,000,000.00 for bodily injury, including death of persons and property damage arising out of a single occurrence.

xi) To pay all costs of power, water, sewer and other utility services rendered to the condominium and not billed to the Owners of the separate Condominium Units; and NGO. 3408 TAL :7 xii) To designate and remove personnel necessary for the maintenance, repair, replacement and operation of the condominium including the Common Property.

k) If the Board of Directors of the Association shall deem it to be expedient and in the best interest of the Association, in the sole discretion of said Board of Directors acting upon a unanimous vote of all of said Directors, the powers and duties of the Board of Directors may be delegated to an Executive Committee which shall be comprised of three (3) members of the Board of Directors and which Executive Committee may act in the place and stead of said Board of Directors in any emergencies or between regular meetings of the full Board of Directors, and said Executive Committee shall be empowered to act upon a majority

in the place and stead of said Board of Directors in any emergencies or between regular meetings of the full Board of Directors, and said Executive Committee shall be empowered to act upon a majority vote of the members of said Executive Committee. Any action authorized and undertaken by said Executive Committee shall be binding upon the Association in the same manner as though such action had been authorized and undertaken upon a majority vote of the full Board of Directors of the Association acting at a duly called and constituted meeting thereof.

1) The initial Board of Directors of the Association shall be comprised of the five (5) persons designated to act and serve as Directors in the Articles of Incorporation, which said persons shall serve until their successors are elected at the first Annual Meeting of the members of the Association called after the property identified hersin has been submitted to the plan of condominium ownership and the Declaration of Condominium has been recorded in the public records of Wake County, North Carolina. Should any member of the initial Board of Directors be unable to serve for any reason, a majority of the remaining members of the Board of Directors shall have the right to select and designate a party to act and serve as a Director for the unexpired term of the Director who is unable to serve.

m) The undertakings and contracts authorized by the initial Board of Directors shall be binding upon the Association in the same manner as though such undertakings and contracts had been authorized by any Board of Directors duly elected by the membership after the property identified herein has been submitted to the plan of condominium ownership, so long as such undertakings and contracts are within the scope of the

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rs duly elected by the membership after the property identified herein has been submitted to the plan of condominium ownership, so long as such undertakings and contracts are within the scope of the powers and duties which may be exercised by the Board of Directors of the Association in accordance with all applicable condominium documents.

n) Any one or more of the members of the Board of Directors may be removed, either with or without cause, at any time by a vote of the members owning a majority of the Condominium Units in Avery Close Condominium, at any Special Meeting called for such purpose, or at the Annual Meeting; provided, however, that only the Developer shall have the right to remove a Director appointed by it.

5. OFFICERS a) The executive officers of the Association shall be a President, who shall be a Director, a Vice-President, who shall be a Director, a Treasurer, a Secretary and an Assistant Secretary, all of whom shall be elected annually by the Board of Directors and who may be pre-emptorily removed by a vote of the Directors at any meeting. Any person may hold two or more offices, except that the President shall not also be VicePresident, Secretary or an Assistant Secretary. The Board of Directors shall, from time to time, elect such other officers and designate their powers and duties as the Board shall find to be required to manage the affairs of the Association.

b) The President shall be the chief executive officer of the Association. He shall have all of the powers and duties which are usually vested in the office of the president of any association, JUAL · including, but not limited to, the power to appoint nittees from among the members from time to time, as he may, in his discretion,

lly vested in the office of the president of any association, JUAL · including, but not limited to, the power to appoint nittees from among the members from time to time, as he may, in his discretion, determine appropriate to assist in the conduct of the affairs of the Association.

c) The Vice-President shall, in the absence or disability of the President, exercise the powers and perform the duties of President. He shall also generally assist the President and exercise such other powers and perform such other duties as shall be prescribed by the Directors.

d) The Secretary shall keep the minutes of all proceedings of the Directors and the members. He shall attend to the giving and serving of all notices to the members and Directors, and such other notices required by law. He shall have custody of the seal of the Association and affix the same to instruments requiring a seal when duly signed. He shall keep the records of the Association, except those of the Treasurer, and shall perform all other duties incident to the office of secretary of an association and as may be required by the Directors or the President. The Assistant Secretary shall perform the duties of Secretary when the Secretary is absent.

e) The Treasurer shall have custody of all of the property of the Association, including funds, securities and evidences of indebtedness.

He shall keep, or supervise the keeping of the assessment rolls and accounts of the members; he shall keep the books of the Association in accordance with good accounting practices; and he shall perform all other duties incident to the office of Treasurer.

f) The compensation of all officers and employees of the Association shall be fixed by the Directors. This provision shall not pre-

hall perform all other duties incident to the office of Treasurer.

f) The compensation of all officers and employees of the Association shall be fixed by the Directors. This provision shall not preclude the Board of Directors from employing a Director as an employee of the Association, nor preclude the contracting with a Director for the management of the condominium.

g) All Officers shall serve at the pleasure of the Board of Directors and any Officer may be removed from office at any time, with or without cause, by a majority vote of the Board of Directors.

6. FISCAL MANAGEMENT The provisions for fiscal management of the Association set forth in the Declaration of Condominium and Articles of Incorporation shall be supplemented by the following provisions: a) The assessment roll shall be maintained in a set of accounting books in which there shall be an account for each Condominium Unit.

Such account shall designate the name and address of the Unit Owner or Owners, the amount of each assessment against the Owners, the dates and amounts in which assessments come due, the amounts paid upon the account and the balance due upon assessments.

bl The Board of Directors shall adopt a budget for each calendar year which shall contain estimates of the cost of performing the functions of the Association, including, but not limited to the following: i) Common Expense budget, which may include, without limiting the generality of the foregoing, the estimated amounts necessary for maintenance and operation of and capital improvements to the Common Property including landscaping, street and walkways, office expense, utility services, casualty insurance, liability insurance, administration and reserves (operating and Capital Improvement Replacement),

Page 54

ty including landscaping, street and walkways, office expense, utility services, casualty insurance, liability insurance, administration and reserves (operating and Capital Improvement Replacement), management fees and costs of maintaining leaseholds, memberships, and other possessory or use interests in lands or facilities whether or not contiguous to the lands of Avery Close Condominium, to provide enjoyment, recreation or other use or benefit to the Unit Owners; and 3408 849 ii) Proposed assessments against each member and his Unit.

Copies of the proposed budget and proposed assessments shall be transmitted to each member prior to January 1 of the year for which the budget is made. If the budget is subsequently amended before the assessments are made, a copy of the amended budget shall be furnished each member concerred. Delivery of a copy of any budget or amended budget to each member shall not affect the liability of any member for any such assessment, nor shall delivery of a copy of such budget or amended budget be considered as a condition precedent to the effectiveness of said budget and assessments levied pursuant thereto, and nothing herein contained shall be construed as restricting the right of the Board of Directors, at any time in their sole discretion, to levy any additional assessments in the event that the budget originally adopted shall appear to be insufficient to pay costs and expenses of operation and management, or in the event of emergencies.

c) The depository of the Association shall be such bank or banks as shall be designated from time to time by the Directors and in which the monies of the Association shall be deposited. Withdrawal of monies from such accounts shall be only by checks signed by such persons as are

signated from time to time by the Directors and in which the monies of the Association shall be deposited. Withdrawal of monies from such accounts shall be only by checks signed by such persons as are authorized by the Directors.

d) An audit of the accounts of the Association shall be made annually by a Certified Public Accountant, and a copy of the report shall be furnished to each member not later than April 15 of the year following the year for which the report is made.

e) Fidelity bonds shall be required by the Board of Directors from all officers and employees of the Association and from any contractor handling or responsible for Association funds. The amount of such bonds shall be determined by the Directors. The premiums on such bonds shall be paid by the Association.

f) Any agreement for professional management of the condominium project, or any other contract providing for services of the developer, sponsor, or builder may not exceed three years. Any such agreement must provide for termination by either party without cause and without payment of a termination fee on ninety (90) days or less written notice.

Before control of the Association passes from the Developer, the Association shall not be bound either directly or indirectly to contracts or leases (including a management contract) unless there is a right of termination of any such contract or lease, without cause, which is exercisable without penalty at any time after transfer of control, upon not more than 90 days notice to the other party thereto.

7. PARLIAMENTARY RULES Roberts Rules of Order (latest edition) shall govern the conduct of corporate proceedings when not in conflict with the Articles of Incorporation and these By-Laws or with the Statutes of the State of North Carolina.

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rder (latest edition) shall govern the conduct of corporate proceedings when not in conflict with the Articles of Incorporation and these By-Laws or with the Statutes of the State of North Carolina.

8. AMENDMENTS TO BY-LAWS Amendments to these By-Laws shall be proposed and adopted in the following manner: a) Amendments to these By-Laws may be proposed by the Board of Directors of the Association acting upon a vote of the majority of the Directors, or by members of the Association cwning a majority of the Condominium Units in Avery Close Condominium, whether meeting as members or by instrument in writing signed by them.

} 80341 44850 b) Upon any amendment or amendments to these By-Laws being proposed by said Board of Directors or members, such proposed amendment or amendments shall be transmitted to the President of the Association, or other Officer of the Association in the absence of the President, who shall thereupon call a Special Joint Meeting of the members of the Board of Directors of the Association and the membership for a date not sooner than twenty (20) days or later than sixty (60) days from receipt by such Officer of the proposed amendment or amendments, and it shall be the duty of the Secretary to give to each member written or printed notice of such meeting in the same form and in the same manner as notice of the call of a Special Meeting of the members is required as herein set forth.

c) In order for such amendment or amendments to become effective, the same must be approved by an affirmative vote of a majority of the entire membership of the Board of Directors and by an affimative vote of the members having not less than seventy five percent (75%) of the votes entitled to vote at an election of directors. Thereupon, such

membership of the Board of Directors and by an affimative vote of the members having not less than seventy five percent (75%) of the votes entitled to vote at an election of directors. Thereupon, such amendment or amendments to these By-Laws shall be transcribed, certified by the President and Secretary of the Association, and a copy thereof shall be recorded in the public records of Wake County, North Carolina, within ten (10) days from the date on which any amendment or amendments have been affirmatively approved by the Directors and members. No amendment shall become operative or effective until it shall have been duly recorded.

d) Upon the approval and proper recording of any amendment or amendments, the same shall become binding upon all Unit Owners.

e) At any meeting held to consider any amendment or amendments to the By-Laws, the written vote of any member of the Association shall be recognized if such member is not in attendance at such meeting or represented thereat by proxy, provided such written vote is delivered to the Secretary of the Association at or prior to such meeting.

f) Notwithstanding the foregoing provisions of this Article 8, no amendment to these By-Laws which shall abridge, amend or alter the right of the Developer to designate and select members of each Board of Directors of the Association, as provided in Article 4 hereof, may be adopted or become effective without the prior written consent of the Developer.

9. RULES OF CONDUCT a) No resident of the condominium shall post any advertisements or posters of any kind in or on the Common Property except as authorized by the Association.

b) Residents shall exercise extreme care about making noises or using musical instruments, radios, television sets and amplifiers that

Page 56

r on the Common Property except as authorized by the Association.

b) Residents shall exercise extreme care about making noises or using musical instruments, radios, television sets and amplifiers that may disturb other residents. Those keeping domestic animals will abide by the sanitary regulations of Wake County.

c) No garbage or trash shall be thrown or deposited outside the disposal installations provided for such purposes.

d) No Unit Owner shall cause any improvements or alterations to be made to the exterior of the Condominium (including painting or other decoration, or the installation of electrical wiring, television or radio antennae, or any other objects, machines or air conditioning units which may protrude through the walls or roof of the Condominium) or in any manner alter the appearance of any portion of the exterior surface of any building without the prior written permission of the Board of Directors or a duly appointed Architectural Control Committee. No Unit L Owner shall cause any object to be fixed to the Common Property or to any Limited Common Area (including the location or construction of fences, athletic equipment, the planting or growing of flowers, trees, shrubs or other vegetation) or in any manner change the appearance of the Common Property or Limited Common Area without the prior written permission of the Board of Directors or a duly appointed Architectural Control Committee.

10. DISSOLUTION OR INSOLVENCY a) The Association may be dissolved with the assent given in writing and signed by members having not less than seventy five percent (75%) of the votes entitled to vote at an election of directors.

b) Upon dissolution or insolvency of the Association, the members may elect to: 1) form a non-profit corporation and transfer and assign to

) of the votes entitled to vote at an election of directors.

b) Upon dissolution or insolvency of the Association, the members may elect to: 1) form a non-profit corporation and transfer and assign to such corporation the property of the Association for beautification, maintenance, and preservation of the property within Avery Close Condominium Association, with power to assess the owners for such purposes; or 2) transfer, assign, and convey the property of the Association to any non-profit corporation, association, trust, municipality, or other organization which is or shall be devoted to purposes and uses that would most nearly conform to the purposes and uses to which the property was required to be devoted by the Association.

c) The Association shall have no capital stock, and in the event of dissolution, no member, Director, or officer of the Association, and no private individual, shall be entitled to share in the distribution of the assets of the Association. If any assets shall remain after satisfaction of its just debts, the Association shall grant, convey, and assign such assets to any entity or entities that have accepted and undertaken the care and management of the common area or portions thereof. In the event that more than one entity has undertaken such care and management, the Association may distribute the assets among such entities in a manner which the Association, in its discretion, deems fair and equitable.

11. COMPLIANCE These By-Laws are set forth to comply with the requirements of the Unit Ownership Act, Chapter 47A of the General Statutes of the State of North Carolina. In the event that any of these By-Laws conflict with the provisions of said statute, it is hereby agreed and accepted that the provisions of the statute will apply.

Pages 57–58

tes of the State of North Carolina. In the event that any of these By-Laws conflict with the provisions of said statute, it is hereby agreed and accepted that the provisions of the statute will apply.

The foregoing were adopted as the By-Laws of Avery Close Condominium Association, a non-profit corporation under the laws of the State of North Carolina, at the first meeting of the Board of Directors on the 28 day of December 1984.

APPROVED: Prod Vice President Carrily 7 Assistant Secretary AS BUILT VERIFICATION 3408852 I, David M. Nichols, a North Carolina Registered Architect, hereby certify that the plans being filed simultaneoulsy with this Declaration of Condominium fully depict the layout, ceiling and floor elevations, unit numbers and dimensions of the units as built.

WITNESS my hand and seal, this 19 day of DEC South Carolina Richland County David M.

1934.

Registered Architect' 1 1. LAURA C. Nictes, Notary Public of said County and State, do hereby certify that David M. Nichols personally appeared before me this day and acknowledged the due execution of the foregoing instrument.

WITNESS my hand and official seal, this 19TH day of DECEMBER 1984.

Su Notary Public C. Nichols My commission expires: 10-12-92).

ATTACHMENT 2 BYLAW CHANGES AVERY CLOSE CONDOMINIUM ASSOCIATION BOOK 3562 PAGE 166 This is to certify that the following changes to the Bylaws have been voted on and approved by not less than seventy-five percent (75%) of the votes entitled to vote at an election of directors. These votes were counted and entered into the minutes of the Board of Directors meeting. on September 11, 1985.

1. Section 9b-Rules of Conduct Add the following: "No pets of any kind will be allowed to be kept in, or around any condominium unit of Avery Close Condominiums."

Pages 58–59

ctors meeting. on September 11, 1985.

1. Section 9b-Rules of Conduct Add the following: "No pets of any kind will be allowed to be kept in, or around any condominium unit of Avery Close Condominiums."

Delete the following: "Those keeping domestic animals will abide by the sanitary regulations of Wake County."

2. Section 3a-Annual and Special Meeting of Membership Add the following: "...on the first Saturday in May..."

Delete the following: "...on the second Saturday in May...": PRESENTED FOR SEP 20 3 39 PH '05 REGISTRATION REGI WAR KEN Susan S. Adams, President Avery Close Condominium Association Yes Corporat Seal Robert Hall, Acting Secretary Avery Close Condominium Association Witne liama NORTH CAROLINA, Wake County.

I, a Notary Public of the County and State aforesaid, certify that Rubert Hall.

personally came before me this day and acknow that he is Acting Secretary of Avery Close Condominium Association, A North Carolina Corporation, the foregoing instrument was sig in its name by its President, sealed with its corporate seal and attested by him as its Act Secretary. Witness my hand and official stan or seal, this 20 day of September 1 My commission expires: 11-9-88 NORTH CAROLINA — WAKE COUNTY The foregoing certificate Pamela W of Notar(y)(ies) Public is (are) certified to be correct. This instrument and this certificate are duly registered at the date and time and in the book and page shown on the first page hereof.

KENNETH C. WILKINS. Register of Deeds By Guy C.

Asst./Deputy Register of Deeds ALIVIN 1 BK703FG0828 AMENDMENT OF AVERY CLOSE CONDOMINIUM 90 MAY 14 AM 9:43 LAINS KENNETH REGISTER OF DEEDS COUNTY THIS AMENDMENT to the Declaration of Avery Close Condominium was made on May 5, 1990 at a Special Meeting of the Avery Close Condominium Association.

14 AM 9:43 LAINS KENNETH REGISTER OF DEEDS COUNTY THIS AMENDMENT to the Declaration of Avery Close Condominium was made on May 5, 1990 at a Special Meeting of the Avery Close Condominium Association.

The original Declaration of Condominium is recorded in Book 3408, Page 801, Wake County Registry.

Notice of the aforementioned meeting was sent out to each member on April 21, 1990 in compliance with Article XXX of the Original Declaration of Condominium that governs amendments. At the meeting the amendment was adopted by a vote of ninety-four (94) units voting in favor of the amendment and one unit voting opposed to the amendment. The ninety-four (94) votes represent more then Seventy-Five (75%) percent of the aggregate interest of unit owners necessary to adopt an amendment as set out in Article XXX of the Original The total number of unit owners is One-Hundred Twenty-Two Declaration.

(122).

The following amendment was adopted: On Page Seven (7) the first sentence of Article XIII entitled "Residential Use Restrictions Applicable To Condominium Units" shall be deleted and the following sentence substituted therefore: "Each Condominium Unit is hereby restricted to residential use by the owner thereof, his immediate family, guests, invitees, and lessees; provided, not withstanding anything in this Declaration to the contrary, that three units may be maintained as support facilities such as, but not limited to, offices and laundry facilities, as designated by the Board of Directors, hereinafter the support facilities units'."

WE, the undersigned President and Secretary of the Avery Close Condominium Association do hereby certify that the above amendment was adopted at the aforementioned meeting.

IN WITNESS WHEREOF, the corporation has caused this instrument to be signed th

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ery Close Condominium Association do hereby certify that the above amendment was adopted at the aforementioned meeting.

IN WITNESS WHEREOF, the corporation has caused this instrument to be signed th in its corporate name by its duly authorized officers this ✓ day of may.

1990.

AVERY CLOSE CONDOMINIUM ASSOCIATION By Sock E JACK E. CONNIFF PRESIDENT } SEAL CON ATTESTED: He o Kurt J.

H. CONNOR KENNETT, JR.

Secretary Avery Close Condominium Association SEAL C BK4/03 PG0829 STATE OF NORTH CAROLINA COUNTY OF WAKE I, a Notary Public of the County and State aforesaid certify that H. CONNOR KENNETT, JR. personally came before me this day and acknowledged that he is the Secretary of Avery Close Condominium Association, a North Carolina Corporation, and that by authority duly given and as the act of the Corporation, the foregoing instrument was signed in its name by its President sealed with its corporate seal and attested by its Secretary.

1990.

Witness my hand and official stamp or seal this 1 day of may.

MY COMMISSION EXPIRES: 4-2-94 NORTH CAROLINA The foregoing certificate _ of Ярунь B.

NOTARY PUBLIC WAKE COUNTY Dyce B. Me extre Notar(y)(ies) Public is (are) certified to be correct. This instrument and this certificate are duly registered at the date and time and in the book and page shown on the first page hereof.

KENNETH C. WILKINS, Register of Deeds By Asst./Deputy Register of Deeds 3