Bylaws

LAKE LURE VILLAGE RESORT
PROPERTY OWNERS ASSOCIATION

BYLAWS

Revised: July, 2004

ARTICLE I    Name

The name of this Association shall be: Lake Lure Village Resort Property Owners Association. Hereinafter known as POA.

A Corporation not for profit, under the Laws of North Carolina.

These Bylaws shall, subject to the provisions of the Articles of Incorporation and the Warranty Deed (Indenture), govern the conduct, management and affairs of this Association and those dealing with the Association shall be bound by the provisions thereof, as well as the provisions of the Articles of Incorporation and the Warranty Deed (Indenture).

ARTICLE II         Membership, Quorum, Voting, Proxies

Section 1.    Membership

a)..The owner(s), whether a person, firm, any corporation, trust,-trustee, or any form of Guardian of each lot acquired from Lake Lure Village Resort, LTD., from that certain ninety (90) acre tract of land described in Plat recorded in Plat book 10, at Pages 14 and 15, in the Rutherford
County, North Carolina Public Registry, shall accept Membership in the POA as a condition of purchase of such lot and shall remain a member of the POA until conveyance or other legal
transfer of ownership of a lot. The transferee shall be deemed to succeed to all rights and
obligations of the original member.

b) The number of POA memberships of any member equals the number of lots owned: one lot equals one Membership. With regard to the (10) duplex units situated on lots 12A through
21A, each living unit shall be entitled to one Membership. Each duplex shall be considered as two (2) living units. In the event that any duplex shall have the center dividing wall removed, and is principally used, and is intended to be used in the future, by one family unit, it shall qualify as one (1) living unit. In the event that a conflict arises between the POA and an individual member regarding the status of a particular duplex, the Board of Review Committee will make a determination that will be binding on both parties.

c) Lake Lure Village Resort LTD., as Developers, shall not be considered a member of the
POA, and all lots retained by Lake Lure Village Resort, LTD. shall not be liable for assessments. Upon conveyance by Lake Lure Village Resort, LTD. of a lot, the transferee, as a condition of transfer of such lot, shall become a member of the POA, as set forth in subparagraphs a) and b).

d) Inasmuch as Lake Lure Village Resort, LTD., as Developers, is not a member of the POA, Lake Lure Village Resort, LTD., shall have no control over the acts of the POA.

e) Where more than one person is the owner of a lot, all of such owners shall be permitted to use the membership, but there shall be only one membership for each lot, and each of said joint owners shall be deemed to hold a fractional membership interest as corresponds to the number of owners of said lot.

f) In the event that a lot is owned by a couple, and the deed is in the name of one spouse, that spouse has the option to appoint the un-named spouse as a co-owner, thereby making the un-named spouse a joint member.

g)..In the event that a lot is owned by a firm, any corporation, trust-trustee or any form of guardianship, said entity can designate, in writing to the POA Secretary or Treasurer, the name of an individual who will represent that entity. That individual shall represent that entity and be considered a member until such time as he/she is relieved of such responsibility, in writing, to the POA Secretary or Treasurer.

Section 2.    Voting

At the time of membership voting, there shall be one (1) vote for each membership owned by a member, providing he is in good standing. Good standing meaning assessments paid in full on the lot(s) at the time of voting.

Section 3.    Quorum

A quorum for membership meetings shall be members in good standing representing 25% of the
total memberships. This quorum will be presided over by at least one (1) officer and two (2)
directors. All proxies in good standing may be counted toward a quorum.

Section 4.    Proxies

Proxies shall be valid only for the particular meeting designated thereon. All proxies must be signed and filed with the Secretary, so as to be checked whether said owner is in good standing
and entitled to how many votes.

ARTICLE III        Annual and Special Meetings of Membership

Section 1.

a) The annual POA membership meetings shall be held during the first week of July for the purpose of electing officers and directors, receiving reports, approving the budget, amending bylaws and any other business authorized by the membership of the Board of Directors.

b) Notice of the Annual Meeting will be mailed to all members, postmarked at least 30 days prior to the date of the meeting. Included in this mailing will be (1) the date, time and place of the meeting, (2) the order of business for the meeting, (3) the proposed budget, (4) the report from the Nominating Committee, and (5) any proposed By-law changes. In addition, the Secretary will provide the membership, within this mailing, such other information as the Board deems useful and appropriate for the conduct of the meeting.

c) Special membership meetings shall be called whenever the Board of Directors deem necessary. A meeting must be called by the president upon receipt of a request from a majority
of the members of the POA. A written notice must be given to each member stating time, place, and subject for which the meeting is called. Such notice shall be given no less than fifteen (15)
days, nor more than sixty (60) days prior to the date set for such meeting, which notice shall be mailed.

d)..Order of Business at Annual Meeting

1)..Declaring a quorum- declaration that notice was sent, stating time and place of
     meeting.
2)..Calling the roll of officers.
3)..Certifying of proxies- stating number of votes.
4)..Reading and disposal of any unapproved minutes.
5)..Reports of officers.
6)..Reports of committees.
7)..Appointment by President of three (3) tellers to count ballots.
8)..Election of officers and directors.
9)..Unfinished business.
10).New business.
11).Announcements.
12).Adjournment.

ARTICLE IV        Board of Directors

Section 1.

a) The Board of Directors shall be composed of four (4) executive officers and five (5) directors who are members of the POA. No one can be elected to office unless all their fees and assessments are paid in full. They shall be elected by a plurality of the votes cast by paper ballot at the annual membership meeting of the POA. They shall serve for the term(s) hereafter stated. Their terms(s) of office shall start at the close of the annual meeting.

b) Two (2) Directors shall be elected for a two (2) year term during the July, 1991 POA meeting and every odd numbered year thereafter. Three (3) Directors shall be elected for a two (2) year term during the July, 1992 POA meeting and every even numbered year thereafter. There is no limit on the number of elected terms a Director may serve.

c) The organization meeting of the 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 are elected.   No further notice of the organization meeting shall be necessary provided a quorum shall be present.

d) Vacancies occurring in the Board of Directors may be filled by the Board of Directors until the date of the next annual meeting of the membership of the POA.

e) 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, or telephone, which notice shall state the time, place, and purpose of meeting. No officer or director can vote at a Board of Directors meeting unless their fees and assessments are paid in full.

f) Special meetings of the Board of Directors may be called by the president and must be called at the written request of at least one-third of the Board members. Not less than three (3) days notice of a meeting shall be given to each Director, personally or by mail, or telephone, which shall state the time, place, and purpose of the meeting.

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

h) At all meetings of the Board of Directors, two-third (2/3) of all Directors (6 Directors) shall constitute a quorum for the transaction of business. Acts of the majority of the Directors present at a meeting at which a quorum is present shall be acts of the Board of Directors.

i) The Board of Directors shall have general supervision of the affairs of the POA between the annual meetings, fix the hour and place of meetings, make recommendations to the membership and have the power to perform such other duties existing under the common law statues, the Article of Incorporation, the Warranty Deed (Indenture) and the Bylaws, and shall include:

1) To make, levy and collect assessments against members’ lots and units to use the
proceeds of said assessments in the exercise of the powers and duties granted to the Association.

2) The maintenance, repairs, replacement, operation and management of the development wherever the same is required to be done and accomplished by the Association for the benefit of the members.

3) The reconstruction of improvements after casualty, and further improvement of the property, real and personal.

4) Making of recommendations to the membership whenever necessary to amend the Bylaws and/or Regulations governing the use of the property, real or personal, in the development, as long as such amendments thereto do not conflict with the restrictions and limitations which may be placed upon the use of said property under the terms of the Article of Incorporation and the Warranty Deed (Indenture).

5) Paying all taxes and assessments which are liens against any part of the development other than lots and units, and to assess the same against the members and their respective lot(s) or unit(s) subject to such liens.

6) Carrying casualty, liability and such other insurance as may be deemed necessary for the protection of the members of the POA.

7) Paying all costs of gas, water, power, sewer and other utility services rendered to the development and not billed to the owners of the separate lots or units.

8) Employment of personnel for reasonable compensation to perform the services required for proper administration of the purposes of the Association.

9) Enforcement, by legal means, if necessary, of provisions of the Article of Incorporation, Bylaws of the POA, and the Warranty Deed (Indenture) governing the use of the development property.

10) Preparation of the annual budget and presentation at the July membership meeting.

ARTICLE V        Officers

Section 1.

a) The principal executive officers of the LLVR POA shall be a President, a Vice President, a Secretary, and a Treasurer.

b) The executive officers shall be elected by the membership at the annual meeting. The term of office for the executive officers shall be for one (1) year, but they may be re-elected for five (5) consecutive terms. No executive office shall serve more than six (6) consecutive years in an executive position.

c) Officers and Directors may resign at any time upon a written notice the Secretary or the President. Upon an affirmative vote of at least six (6) members of the Board of Directors, any officer or director may be removed, with or without cause.

Section 2.

a) The President shall be the chief executive officer of the Association. He shall be invested
with all the powers and duties of said office including, but not limited to appointing of committees from among the lot owners from time to time as he may in his discretion decide is appropriate to assist in the conduct of the affairs of the Association.

b) The Vice President shall assume the duties of the President in the absence or disability of the President; to serve and shall succeed to the office of President for the unexpired term, in the
event of a vacancy in that office. He shall also generally assist the President and perform such other duties as may be required by the Board of Directors.

c) The Secretary shall keep minutes of all Association and Board of Directors meetings. He/she
shall attend to the giving of all notices to the membership, and any notices required by law. He/she shall be responsible for the seal of the Association and affix the same to instruments requiring a seal when duly signed. He/she shall keep all records of the Association, except those of Treasurer, and shall perform any other duties incident to the office of Secretary, as required by the Association or Board of Directors.

d) The Treasurer shall be custodian of all funds, securities and evidences of indebtedness of the
Association. He shall keep assessment rolls and accounts of members. He shall send
assessment notices to each member. He shall be responsible for keeping full and accurate
accounts of all receipts and disbursements in books belonging to the Association, placing
funds in depositories that may be designated by the Board of Directors, from time to time,
and shall perform all other incidents associated with the office of Treasurer.

Section 3.

All agreements, contracts, deeds, leases, checks, legal notices and other instruments to be
executed on behalf of the Association shall be executed by any two (2) officers of the
Association or by such other person(s), firm(s), or corporation(s) as may be designated by the
Board of Directors.

Section 4.

No officer or Director, except for the Treasurer and Secretary, shall receive any compensation for serving in
said capacity. The Treasurer will receive a reimbursement of Two Hundred dollars ($200) per month and the
Secretary will receive One Hundred dollars ($100) per month.

ARTICLE VI        Finances

Section 1.

The fiscal year shall be: October 1 to September 30, to become effective October 1, 1999.

Section 2.

a) The annual budget of the POA shall be for the period from October 1 (following the annual
     meeting) through September 30, and shall be proposed by the Board of Directors and
     presented to the membership at the annual meeting for its adoption. The budget shall
     include, but not be limited to, the following: Public liability and extended insurance
     coverage (estimated amounts necessary for maintenance and operation of common property),
     utility service, phone, roads, recreational areas and proposed assessments to be paid by each
     member.

b) The proposed budget shall be attached to the call of the annual meeting sent to each member
      of the POA.

c) Nothing in the budget shall be construed as restricting the right of the Board of Directors to,
     at any time at their discretion, levy any additional assessment in the event that the original
     budget adopted proves insufficient to pay the cost and expenses of operation, or in the event,
     of emergencies.

d) The reimbursement for all persons or positions providing services to the POA, including
      both hourly and monthly payments, will be determined by the Board of Directors prior to the
      annual Spring meeting and reported to the general membership as a part of the Treasurer’s
      annual budget message.

Section 3.

a) Assessments for the approved budget will be determined using the following formula:

1) 80% of the assessment portion of the approved budget will be assessed equally
among each Membership as provided in Article II of these bylaws. Any joint or fractional owner
shall be pro-rata and equally responsible for assessments levied upon a single Membership.

2) 20% of the assessment portion of the approved budget will be assessed equally
among each residential living unit.

b) Assessments shall be sent to every member of record by the Treasurer no later than August 1
    with a schedule of payments and amount due on each payment date as determined by the
    Board of Directors. The first payment shall be due as of October 1, following the annual
    meeting. The assessment due on October 1. 1999, and thereafter, will be for a period of one
    (1) year.

Section 4.

An assessment roll shall be maintained by the Treasurer in a set of accounting books which shall
account for each lot or unit stating name and address of the owner(s), the amount against the
owner, the date and amount in which each assessment comes due, the amount paid upon the
account and balance due upon the account.

Section 5.

a) Late Fees: Interest. Any Assessment not paid when due shall be delinquent.
If the Assessment is not paid within thirty (30) days after the due date, the Assessment
shall bear interest from the date of delinquency at the maximum rate allowed by law (or
such lower rate approved by the Board), plus reasonable late fees determined by the
Board.
b) Nature of Obligation. Pursuant to the North Carolina Planned Community
Act and in particular, North Carolina General Statute 47F-3.1.115 and 47F-3.1.116, all
Assessments, along with any late fee, interest, and costs of collection when delinquent
(including a reasonable attorney’s fee, whether or not suit is brought) shall be charged on
the land and shall be a continuing lien upon the lot(s) of the delinquent member to which
the charges relate. In addition, all such Assessments and charges shall be the personal
obligation of the delinquent member or member who was the owner of such lot(s) at the
time when the assessment was levied, and of each subsequent owner. Each owner
expressly vests in the Association the right and power to bring all action against such
owner personally for the collection of the charges as a debt and to enforce the charges by
all methods available for the enforcement of liens pursuant to 47F-3.1.116, including, but
not limited to, filing a claim of lien and foreclosure on said lien by an action brought in
the name of the Association in a like manner as a foreclosure of a mortgage lien on real
property. No owner may waive or otherwise escape liability by abandonment of the
lot(s) to which the Assessments or charges relate.
c) Action on Lien. The lien provided for in this section shall be in the favor of the
Association and shall be for the benefit of all other owners.
d) The Board of Directors shall have the authority to suspend a delinquent
member or occupant’s right to use the common elements and to suspend a delinquent
member’s right to vote for unpaid assessments. The Board of Directors shall also have
the authority to take any further action allowed by the North Carolina Planned Community Act.
    e) Any fees, charges, late charges, fines, interests and other charges imposed
pursuant to General Statute 47F-3-102, 47F-3-107, 47F-3-107.1 and 47F-3-115 shall be
enforceable as assessments pursuant to General Statue 47F-3-116.

Section 6.

Prior to building any dwelling, lot owners will be assessed a road impact fee to cover costs
associated with maintenance following the movement of heavy equipment on POA roads. In
addition, prior to connecting to the POA water and/or sewer lines, property owners will pay a
water and/or sewer hookup fee (lot owners constructing a septic tank system will not be held
liable for a sewer hookup assessment). The amount of each of these assessments will be
determined by the Board of Directors and reported to the membership each year at the Annual
Meeting as part of the Treasurer’s annual budget message.

Pursuant to applicable provisions North Carolina Planned Community Act and in particular,
North Carolina General Statute 47F-3-102(a)(11) and 47F-3-107.1, and after notice and an
opportunity to be heard, the Board of Directors shall have the power to (i) impose fines
in an amount not to exceed One Hundred Fifty Dollars ($150.00) per violation of the
Planned Community Act, Declaration, Bylaws or the Rules and Regulations of Lake Lure
Village Resort, such amount to be assessed per day for a continuing violation, for any violation
of any duty imposed under the Planned Community Act or the Documents duly adopted pursuant
thereto against Owners or occupants, which fine(s) shall constitute an assessment against the Lot
in accordance with Article IV, Section 5 hereof, and become a personal obligation of the Owner,
and a lien upon the property; (ii) to suspend an Owner’s or occupant’s right to use the common
elements; and (iii) to suspend an Owner’s right to vote.

In the event that any occupant of a Resident Lot violates the Planned Community Act, Declaration,
Bylaws or the Rules and Regulations and a fine is imposed, the fine shall first be assessed against such occupant; provided, however, if the fine is not paid by the occupant within the time period set by the
Board, the record Lot Owner shall pay the fine upon notice from the POA. The failure of the POA
or Board of Directors to enforce any provision of the Planned Community Act, Declaration, Bylaws
or the Rules and Regulations, shall not be deemed a waiver of the right of the Board to do so thereafter.
Additionally, Owners waive and release any defense that enforcement is or may be selective. Finally,
charges for late payments of assessments under Article IV, Section 5 of the Declaration are not to be
regarded as fines that warrant a hearing under this section.

Section 7.

An audit of the accounts of the association shall be made at any time upon an order from the
Board of Directors or a majority vote of a membership quorum.

Section 8.

A proposed expenditure requiring a loan (and not required to meet a law or not required by the
emergency assessment powers in these Bylaws) can only be approved by either:

1) At an annual meeting or special meeting, where 73 or more votes are cast in the favor of the
     expenditure, or:

2) It is approved by a majority of the votes cast at a special or annual meeting, and it is also
     approved by a majority of the votes received within 30 days (from the date of a notice sent
     to all members of a special write-in vote).

ARTICLE VII        Parliamentary Authority

Roberts Rules of Order, Newly Revised (latest addition), govern the conduct of POA
proceedings when not in conflict with the Articles of Incorporation, these Bylaws or with the
Statutes of North Carolina.

ARTICLE VIII        Amendments to the Bylaws

a) Amendments to these Bylaws may be made at any Annual Meeting or Special Meeting of the
membership called for this purpose. A two-thirds (2/3) vote of the members attending and voting
(including proxies) is required, providing the membership has been notified at least thirty (30) days
prior to the meeting.

b) Amendments without notice shall require a unanimous vote of the members (and proxies) voting.

c) Members presenting amendments shall present them to the Secretary, in writing, at least sixty (60)
days prior to the Annual Meeting so they will be included in the call of the meeting.

d) When a proposed Bylaw amendment has been presented and rejected, the same type of Bylaw
amendment cannot be presented again for three (3) years.

ARTICLE IX        Liability of Officers and Directors of the Association

The Officers and members of the Board of Directors of the Association, designated or elected as
provided in these Bylaws, shall not be liable to the members of the Association for any mistakes of
judgment, negligence, or otherwise; except for their own individual willful misconduct or bad faith.
The members of the Association shall indemnify and hold harmless each of the officers and members
of the Board of Directors against all contractual liability to others arising out of contracts made by the
Officers and Board of Directors on behalf of the Association, unless any such contract shall have been
made in bad faith or contrary to the provisions of these Bylaws.

It is intended that the Officers or members of the Board of Directors shall have no personal liability
with respect to any contract made by them on the behalf of the Association, except as members. Every
agreement made by the Officers or members of the Board of Directors, on behalf of the Association,
shall provide that the Officers or members of the Board of Directors, as the case may be, are acting only
as agents for the Association and shall have no personal liability thereunder (except as members).

Lake Lure Village Resort shall be subject to the North Carolina Planned Community Act, Chapter 47F of the North Carolina General Statutes to the extent that the provisions of the Planned Community Act contradict
the provisions of the Bylaws and Rules and Regulations of Lake Lure Village Resort, the Bylaws and
Rules and Regulations shall control.

ARTICLE X        Miscellaneous Provisions

1) Upon the transfer of property to a new owner, the seller will provide the buyer with a copy of the
     POA Bylaws, the Rules and Regulations, and a copy of the Warranty Deed (indenture). The
     Seller’s responsibility will also be to notify the POA Treasurer, in writing, of the transfer, stating
     the number of the lot or living unit, and the name, address, and telephone number (if one) of the
     new owner.

2) The use of common property by the members of the POA, or any other authorized person(s) shall be
     at all times subject to the Rules and Regulations as set down by the membership and the Board of
     Directors from time to time. Said regulations shall be clearly posted.

3) Damage to or loss of any personal property, furniture, personal effects or other items which may be
     stored in common property shall be borne by the owner and not by the POA.

4) The Warranty Deed attachment hereto is hereby incorporated by reference as if fully set forth and all
      terms, conditions and restrictions as evidenced in said Warranty Deed shall be made part of these
      Bylaws and enforceable pursuant to the authority conferred upon the Board of Directors.

5) The Board Review Committee, or its designee, has the authority to direct the placing of
     construction materials, boats, trailers, RV’s, unused vehicles, or other unattached items, whether
     on the member’s property or on common property of the POA. This authority can only be
     implemented under any one or more of the following conditions:

     a. receipt of a written complaint from five (5) or more POA members and after being duly
         investigated by the Board of Review Committee;

     b. allowing a condition to exist that is in violation of Federal State or local environmental safety
         and health regulations; or

     c. creating a condition that may become a violation of such regulations or of law.

The member is required to comply in a timely manner with all written directives from the Board
of Review Committee. After compliance, the member may appeal the directive to the Board of
Directors. In case of non-compliance by the member, the Board of Directors can limit the use of
POA facilities, and/or assess a fee of no less than ten dollars ($10) per day or more than fifty dollars
($50) per day. This authority does not, in any way imply any POA liability.

6) No POA property that abuts the lake can be sold. Other POA properties may be sold only after approval of two-thirds (2/3) of the POA membership and after all legal requirements have been met.