Article III Board of Directors

Section 3.01 Number and Eligibility. The affairs of the Association shall be governed managed by the Board of Directors ) herein collectively called the "Board or Director" and individually called Director" ). The Board of Directors shall be composed of three ( 3) persons. No person shall be eligible to serve as a Directors unless he is an Owner or unless he is appointed by the developer. Also any Owner who is thirty (30) days or more in arrears in his Annual or Special Assessments, will not be eligible to serve or to continue to serve as a Director.

Section 3.02 Initial Board of Directors. The initial Board of Directors shall be appointed by Developer. Notwithstanding and other provisions in the By-Laws, the initial Board of Directors shall hold office until the first Annual Meeting of the Owners.

Section 3.03 Additional Qualifications. Where an Owner consists of more than one person or partnership, corporation, trust or other legal entity, then one of the persons constituting the multiple owner, or an officer or trustee, shall be eligible to serve on the Board of Directors by more than one persons at a time.

Section 3.04. Term of Office and Vacancy. The Board of Directors shall be elected at each annual meeting of the Association. At the first annual meeting of the Board, one director shall be elected for one (1) year, and one director for two (2) years. At each subsequent annual meeting one director shall be elected for a term of two (2) years ( since the term of one year of the directors will be expiring), and any other vacancies in the Board of Directors shall be filled by electing director to serve for the remainder of the term of the director who did not serve for his whole term of office. Any vacancy or vacancies occurring in the Board of Directors shall be filled until the next annual meeting of the Members by a vote of a majority of the remaining directors or by vote of the owners if a director is removed in accordance with Section 3.05 of this Article III.

Section 3.05 Removal of Director. A director or directors, except the initial director, may be removed with or without caused by vote of the owners at a meeting duly called and constituted. In such case, a successor director shall be elected at the same meeting from eligible owners. A director so elected shall serve until the next Annual Meeting of the owners or until his successor is duly elected and qualified. An initial director may be removed and replaced at the discretion of the developer.

Section 3.06 Duties of the Board of Directors. The board of directors shall provide for the management, administration, operation, maintenance, repair, upkeep and replacement of the common areas in the subdivision, and the collection and disbursement of the common expense.

These duties may include, but are not limited to:

(A) Contracting for services such as property management, maintenance, repair and replacements of common areas;

(B) procuring of utilities used in connection with the common facilities, removal of garbage and waste, and snow removal from common areas and, if the Board of Directors deems prudent, from public streets in the Subdivision;

(D) maintaining sidewalks;

(E) assessment and collection from the owners of their pro rate share of the common expenses;

(F) preparation of Annual Budget;

(G) preparing and delivering annually to the owners a full accounting of all receipts and expenses incurring in the prior year; such accounting shall be delivered to each owner as soon as possible after the end of each fiscal year;

(H) keeping a current, accurate and detailed record of receipts and expenditures affecting the property, specifying and itemizing the common expenses. All records and vouchers shall be a available for examination by an owner upon reasonable notice during normal business hours;

(I) to procure fire and extended coverage insurance covering any improvements on or to the common areas to full replacement value thereof and to procure public liability and property damage insurance and workmen's compensation insurance, if necessary, for the benefit of the owners and the association; and,

(J) assessment and collection of Special Assessments from any or all of the owners.

Section 3.07 Powers of the Board of Directors. The Board of Directors shall have all powers as are reasonable and necessary to accomplish the performance of their duties. These powers include, but are not limited, to the power:

(A) to employ a managing agent or a real estate management company ( either being hereinafter referring to as Managing Agent ) to assist the Board in performing its duties;

(B) to purchase for the benefit of the Association such equipment, materials, labor, and services as may be necessary in the judgment of the Board of Directors;

(c) to employ legal counsel, architects, contractors, accountants, and others as in the judgment of the Board of Directors may be necessary or desirable in connection with the business and affairs of the Association;

(D) to include the cost of all of the above and foregoing as a Common Expense;

(E) to open and maintain one or more bank accounts in the name of the Association;

(F) to determine rules and procedures for hiring and firing of personnel necessary for the maintenance, repairs and replacement of common areas and for approving the payment of vouchers, invoices and the like;

(G) to adopt, revise, amend and alter from time to time reasonable Rules and Regulations with respect to use, occupancy, operation, and enjoyment of the Common Areas;

(H) to grant easements and other rights over Common Areas;

(I) to impose non-discriminatory fines upon any owner or owners if they , or any members of their family, quest or invitees, shall violate any rules or regulations adopted by the Association, such fines shall be collectible, and shall be secured by a lien on the owner's lot and subject to late charges and interest to the same extent as a late payment of the Annual Assessment; and,

(J) to do such others acts and things as are in the best interest of a majority of owners and which are not contrary to law.

Section 3.08 Limitation on Board Action. The authority of the Board of Directors to enter into contracts shall be limited to contracts involving a total expenditure of less than $2,500.00 without obtaining the prior approval of the owners at a meeting thereof, except in the following cases:

(A) contract for replacing or restoring portions of the Common Areas damaged or destroyed by fire or other casualty unless all the buildings are totally destroyed.

(B) proposed contract and proposed expenditures expressly set fourth as provided for in the Annual Budget, which shall include but not be limited to the compensation of the Managing Agent, ongoing contracts of all kinds, maintenance contracts, landscape contracts, contracts for improvements which have been approved by the Owners and contributions to reserve accounts; and

(C) items within the Budget need not be approved separately. The Board may also reallocate items in the Budget, if the total Budget will not be increased.

Section 3.09 Compensation. No Director shall receive any compensation for his services. unless a majority of the Owners shall approve paying such compensation. Each Directors shall be reimbursed for his reasonable costs and expenses incurred for the benefit of the Association.

Section 3.10 Meetings Regular meetings of the Board of Directors may be held at such time and place as shall be determined from time to time by the President. The Secretary shall give notice of the regular meetings of the Board to each Directors personally or mailed by United States Mail at least three (3) days prior to the date of such meeting.

Special meetings of the Board of Directors may be called by President or any two members of the Board. The person or persons calling such meeting shall give written notice thereof to the Secretary who shall either personally or by mail and at least three (3) days prior to the date of such special meeting, give notice to the Board members. The notice of the meeting shall contain a statement of the purpose for which the meeting is called. Any regular or special meeting shall be held at such place and at such time as shall be designated in the notice.

Section 3.11 Wavier of Notice. Any Director may, in writing, waive notice of a meeting and such waiver shall; be deemed equivalent to the receipt of such notice. The presence of any Director at a meeting shall, as to such Director, constitute a waiver of notice of the time, place and purpose thereof. If all Directors are present at the meeting of the Board, or if those not present shall waiver notice of the meeting or shall consent to the actions taken at the meeting, notice shall not be required and any business may be transacted at such meeting.

Section 3.12 Quorum. At all meetings of the Board a majority of the Directors shall constitute a quorum for transaction of business and the votes of the majority of the Directors present at a meeting at which a quorum is present shall be the decision of the board.

Section 3.13. Non-Liability of Directors. The Directors shall not be liable to the Owners or any other persons for any error or mistake in judgment exercised in carrying out their duties and responsibilities as Director, except for their own individual willful misconduct, bad faith or gross negligence. The Association may indemnify and hold harmless each of the Directors against any and all liability to any person, firm or corporation arising out of contracts made by the Board on behalf of the Association, unless any such contract shall have been made in bad faith or contrary to the provisions of law. The Association shall if reasonably available carry a liability insurance for the Board of Directors. The cost of such insurance shall be included as part of the Common Expenses. It is intended that the Directors shall have no personal liability with respect to any contract made by them in good faith on behalf of the Association. The Owners shall be subject to special assessment for sums necessary for the Association to pay the aforesaid indemnity in favor of directors. Every contract made by the Board or the Managing Agent on behalf of the Association shall be in the name of the Association.

Section 3.14. Additional Indemnity or Directors and Officers. The Association may indemnity any person, his heirs, assigns and personal reprehensive, made a party to any action, suit or proceeding by reason of the fact that he is or was a Director or an Officer of the Association, against the reasonable expenses, including attorneys fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceeding, or in connection with any appeal thereon, except as otherwise specifically provided herein in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence or willful misconduct in the performance of his duties. The Association may also reimburse to any such Director or Officers of the Association the reasonably cost of settlement of or judgment rendered in any action, suit or proceeding, if it shall be found by a majority of the Owners that such Director or Officer was not guilt of gross negligence or willful misconduct. In making such findings and notwithstanding the adjudication in any action, suit or proceeding against a Director or Officer, no Director or Officer shall be considered or deemed to be guilty of or liable for negligence or willful misconduct in the performance of his duties where, acting in good faith, such Director or Officer relied on the books and records of the Association or statements or advice made by or prepared by the Managing Agent or any other officer or employee thereof, or any accountant, attorney or other person, firm or corporation employed by the Association to render advise or service unless such Director had actual knowledge of the falsity or incorrectness thereof; nor shall a Director or Officer be deemed guilty of or liable for negligence or willful misconduct solely by virtue of the fact that he failed or neglected to attend a meeting or meetings of the Board of Directors.

Section 3.15 Bond. The class A members of the Board of Directors shall give bond and shall require any class A Treasurer and such other class A member officers as the Board deems necessary to give Bond, indemnifying the Association against larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction, willful misapplication and their acts of fraud or dishonesty, in such sums and with such sureties as may be determined to be proper by the Board of Directors, or by the Owners at a duly constituted meeting thereof, and any such bond shall specifically include protection for any insurance proceeds received for any reason by the Board. The expense of any such bond shall be Common Expense.

Section 3.16 Books and Records. The Board of Directors shall itself, or through the Managing Agent, make available to Owners and lenders, and to holders, insurers or guarantors of any first mortgage, current copies of the Declaration of Restrictions, these By-Laws, any rules and regulations concerning the Subdivision, and the books, records and financial statements of the Association. " Available" shall mean available for inspection, upon request, during normal business hours or under other reasonable circumstances.

Article IV Officers