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WATAUGA COUNTY STATE OF NORTH CAROLINA AMENDMENT TO DECLARATION OF INTENTION TO SUBMIT PROPERTY TO THE PROVISIONS OF CHAPTER 47-A OF THE NORTH CAROLINA GENERAL STATUTES SMOKETREE LODGE WHEREAS, Condo Venture Corporation, previously executed the said Declaration of Smoketree Lodge Condominiums, dated October 8, 1982, and recorded said Declaration in Book 225 at page 405, and in Condominium Unit Ownership Book 5 at page 5, Watauga County, North Carolina, and WHEREAS, SMOKETREE ASSOCIATES, LTD., a North Carolina Corporation, has purchased all of the remaining rights, title and interest of the Developer in and to said condominium and the same has been transferred, conveyed and assigned to Smoketree Associates, Ltd., by deed of conveyance recorded in the Watauga County Public Registry, including the irrevocable power of attorney of each unit owner and mortgagee, and any other person with an interest, to make an amendment or amendments to the Declaration of Condominium from time to time, as set out in Article III of said Declaration, and WHEREAS, said Declaration may be amended as provided, and the said successor Declarant, Smoketree Associates, Ltd. desires to amend same and to provide the appropriate and required plans, specifications and architects certificate in connection therewith; NOW, THEREFORE, the aforesaid Declaration is hereby amended as follows: AMENDMENT NO. 3: Item A: Exhibit I, Description of Property, beginning on page 420, Book 225, Watauga Public Registry, is deleted in its entirety, and a new Exhibit I, the same being attached hereto, is substituted in its place. Item B: Exhibit IV as appears in said Declaration (as amended) is deleted in its entirety and the attached Exhibit IV (Third Amendment) is substituted in its place. Architect David Patrick Moses Certificate dated December 18, 1985, __________________ together with the plans and specifications attached thereto for units 107A, 200A, 200B and 200C is added as an Exhibit to said Condominium Declaration and filed in Condominium Unit Ownership Book 5 at page 5. Said Exhibit IV (Third Amendment) also corrects errors in the previous Exhibit IV amending unit 105 to a one bedroom unit, and units 107 and 202 to two bedroom units, to depict the actual construction of said units. Item C: Exhibit V, entitled Future Additions as it appears in said Declaration is deleted in its entirety and the attached Exhibit IV (First Amendment) is substituted in its place. Item D: Exhibit VI, Management Agreement for Smoketree Lodge Condominium is voided and deleted in its entirety. IN WITNESS WHEREOF, Smoketree Associates, Ltd., for itself as successor Declarant, and on behalf of all unit owners, mortgagees and all other persons or parties with an interest in said Condominium, through the power of attorney granted in said Declaration of Condominium, has caused this Amendment to be executed by its duly authorized officers and its corporate seal to be hereunto _ affixed, this the ____ day of December, 1985. 11 th

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ATTEST: Asst. Secretary (Corporate Seal) ATTEST: Asst. Secretary (Corporate Seal)

- 2 -

SMOKETREE ASSOCIATES, LTD. By: Asst. V. President DECLARANT SMOKETREE ASSOCIATES, LTD. By: Asst. V. President

AS ATTORNEY for Unit Owners, Mortgagees and all other persons or parties with an interest in said Condominiums (See Article III, Section 5, Declaration of Condominium, Book 225, Page 410, Watauga County Public Registry. WATAUGA COUNTY STATE OF NORTH CAROLINA This _____ day of December, 1985, personally came before me, ______________ ______________________ a Notary Public in and for said State and County, Wayne ________________________, i Greenholtz, who, being by me duly sworn, says that he is the Asst. V. President of Smoketree Associates, Ltd., and that the seal affixed to the foregoing Amendment to Declaration of Condominium for Smoketree Lodge is the Corporate Seal of the Corporation, and that the said writing was signed and sealed by him in behalf of the said Corporation by its authority duly given. And the said Wayne Greenholtz acknowledged the said writing to be the act and deed of the Corporation. Witness my hand and Notarial Seal this the _____ day of December, 1985. _______________________________________ i Notary Public My Comm. Exp.: ____________________________ STATE OF NORTH CAROLINA COUNTY OF WATAUGA I, ______________________________________, a Notary Public in and for said i State and County, do hereby certify that Wayne Greenholtz, who, being by me duly sworn, says that he is Asst. V. President of Smoketree Associates, Ltd., Attorney in fact for Unit Owners, Mortgagees and all other persons or parties with an interest in Smoketree Lodge, a Condominium, and that he executed the foregoing Amendment to Declaration of Condominium for Smoketree Lodge, and that Smoketree Associates, Ltd.s authority to execute said instrument is as successor and assign to the authority of the Declarant as set out in the original Declaration of Condominium, as referred to in the foregoing Amendment, and that this Amendment was executed under and by virtue of the authority given by said Declaration of Condominium granting said power of Attorney; that the said Wayne Greenholtz acknowledged the due execution of the foregoing Amendment for the purposes therein expressed for and in behalf of said Unit Owners, Mortgagees and all other persons with an interest in said Condominium further that the seal affixed is the corporate seal of Smoketree Associates, Ltd., and that the said writing was signed and sealed by him in behalf of Smoketree Associates, Ltd. by its authority duly given, and is acknowledged by him to be the act and deed of Smoketree Associates, Ltd. in its capacity as Attorney. Witness my hand and Notarial Seal this the _____ day of December, 1985. My Comm. Exp.: ___________________ _______________________________________ i Notary Public

NORTH CAROLINA - WATAUGA COUNTY The foregoing certificates of Susan W. Congelosi, Notary Public, Watauga County, N. C. are certified to be correct. This instrument was presented for registration and recorded in this Office in Book 028, Page 808. This 19th day of December, 1985, at 12:15 oclock P.M. Phyllis E. Foster Register of Deeds By: Deputy

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SMOKETREE LODGE EXHIBIT I (First Amendment) Description of Property The property herein committed to Condominium consists of all of that certain parcel or tract of land, together with all improvements thereon, located in Watauga Township, Watauga County, North Carolina, described as follows: BEGINNING on N.C. Grid Station Marjons and running S55-17W, 4,521.66 feet to an Iron Set; Thence the following courses and distances in the Northwestern margin of the 100 foot right-of-way of N.C. Hwy. 105; 541-06W, 78.21 feet, S37-l7W, 84.60 feet, S35-34W, 71.73 feet and S34-41W, 40.37 feet to a calculated point being the BEGINNING of Tract 3. Thence from the BEGINNING and with the common line of Tracts 3 and 4 N51-17W, 14.44 feet to a point in the edge of the parking area; Thence with the edge of said parking area and said common line the following courses and distances; N51-17W, 26.31 feet, N71-09W, 36.14 feet and N23-02W, 11.23 feet to the South corner of the steps; Thence N69-37E, 31.78 feet to a calculated point; Thence N57-31E, 112.77 feet to a Spike Set; Thence N67-49E, 18.10 feet to a Spike Set; Thence N36-l3W, 81.28 feet to a Spike Set; Thence S60-32W, 16.85 feet to an Iron Set; .Thence S59-55W, 61.74 feet to a Spike Set; Thence S74-42W, 49.81 to a Spike Set at the edge of the steps; Thence with the edge of the steps S75-5lW, 5.00 feet to the Northwest corner of the steps; Thence S54-57W, 10.04 feet to a Tack Set in the edge of the parking area; Thence S76-09W, 84.89 feet to a Tack Set in the edge of the parking area; Thence with the edge of said parking area N12-57W, 8.93 feet and S84-00W, 52.87 feet to point A of a map of the Condo Ventures Corporation property, by Michael M. Lacey, RLS L-1497, Job #82-3-24-48; Thence from point A and the common line of Tracts 1 and 3 S50-57W, 20.60 feet to point B, Thence from point B S14-18E, 29.83 feet to point C; Thence from point C N75-42E, 22.58 feet to point D; Thence from point D N14-18W, 15.17 feet to point E; Thence from point E N75-42E, 12.33 feet to point F; Thence from point F Nl4-18W, 14.50 feet to point G; Thence from point G N75-42E, 12.17 feet to point H; Thence from point H S14-18E, 14.50 feet to point I; Thence from point I N75-42E, 12.17 feet to point J; Thence from point J S14-18E, 19.25 feet to point K; Thence from point K S75-42W, 43.17 feet to point L; Thence from point L S13-52E, 34.92 feet to a calculated point; Thence S16-20E, 41.54 feet to the centerline of the branch and a common corner of Tracts 1, 2, and 3; Thence down and with the centerline of the branch and the common line of Tracts 2 and 3 the following courses and distances; N63-34E, 13.39 feet, S87-38E, 25.89 feet, S64-24E, 57.76 feet, S47-00E, 30.24 feet and S86-36E, 48.83 feet to the centerline of the branch at a culvert; Thence S75-24E, 20.65 feet to a calculated point in the Northwestern edge of the 100 foot right-of-way of N.C. Hwy. 105; Thence with the Northwestern edge to the right-of-way N34-4lE, 60.04 feet to the point of BEGINNING. Containing 0.85 acre and being designated as Tract 3 on a map by Michael N. Lacey, RLS L-1497, dated March 24, 1982, Map # 82-3-24-48 and revised Map # 85-12-2-260. Also conveyed herewith is a non-exclusive easement for parking purposes for unit owners of said condominium, as follows: BEGINNING on an Iron Set; Iron Set being located S55-17W, 4,521.66 feet from N.C. Grid Station Marjons. Thence from the BEGINNING N62-20W, 87.37 feet to a Spike Set in parking area; Thence leaving parking area N20-43W, 20.00 feet to a calculated point, said point being a common corner of Tract 5 and Tract 4, and being located S20-43E, 211.19 feet from an Iron Set in the centerline of the old Tweetsie Railroad bed; Thence with the common line Tracts 4 and 5, S63-09W, 14.42 feet to a point, said point being the edge of the parking area, Thence with the edge of the parking area and common line of Tract 4 and 5 S52-11W, 68.66 feet, S67-55W, 137.07 feet, S71-41W, 56.06 feet and S80-48W, 45.53 feet; Thence leaving the edge of the parking area and still with the line of Tract 5 S72-21W, 35.25 feet to a Tack Set in a rock, the common corner to Tracts 1, 4, and 5; Thence with the common line of Tracts 1 and 4 Due South, 26.28 feet to point A of a map of the Condo Venture Corporation property, by Michael M. Lacey, RLS L-1497, Job #82-3-24-48; Thence from point A N84-00E, 52.87 feet to a point in the edge of the parking area; Thence S12-57E, 8.93 feet to a Tack Set in the edge of said parking area;

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- 2 -

Thence N76-09E, 84.89 feet to a Tack Set in the same parking area; Thence N54-57E, 10.04 feet to a point, said point being the Northwest edge of the steps; Thence N75-51E, 5.00 feet with the northern most edge of the steps to a Spike Set; Thence N74-42E, 49.81 feet to a Spike Set; Thence N59-55E, 61.74 feet to an Iron Set; Thence N60-32E, 16.85 feet to a Spike Set; Thence S36-13E, 81.28 feet to a Spike Set; Thence S67-49W, 18.10 feet to a Spike Set; Thence S57-31W 112.77 feet to a calculated point; Thence S69-37W, 31.78 feet to the edge of said parking area and the South corner of the steps; Thence with edge of said parking area S23-02E, 11.23 feet, S71-09E, 36.14 feet and S51-17E, 26.31 feet; Thence leaving said parking area S51-17E, 14.44 feet to a calculated point in the Northwest edge of a 100 foot right-of-way along N.C. Hwy. 105, Thence with the western edge of right-of-way N34-41E, 40.37 feet; Thence with edge of said right-of-way N35-34E, 71.73 feet crossing the parking area; Thence with same edge of the right-of-way N37-17E, 84.60 feet, N41-06E, 78.21 feet to the point of BEGINNING. Containing 0.71 acre and being designated as Tract 4 on a map by Michael M. Lacey, RLS L-1497, dated March 24, 1982, Map # 82-3-24-48 and revised Map # 85-12-2-260. The Declarant reserves the right to alter, amend, add to or take from said parking easement, in his sole discretion, so long as there exists sufficient parking area to provide one parking space for each condominium unit. The aforesaid property and the particular improvements thereon which are hereby committed to Condominium, and the location of said improvements, are as shown and described on the Site Plan and Plans constituting a part hereof, being incorporated herein by this reference, recorded simultaneously herewith in Condominium Plat Book 5, at Page 5, Watauga County Registry. Improvements consisting of the building in which the units are located and the location of individual units therein are as shown and described on said Site Plan and Plans. All areas not contained within the units, as said units are defined and depicted in this Declaration and said Site Plan and Plans, constitute common elements. There are no limited common elements at present; however, should such be later designated, they will be indicated, along with the unit or units having the use thereof, by an appropriate amendment hereto. The building in the Condominium contains Condominium Units as designated on said Plans and on the following Exhibit IV.

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SMOKETREE LODGE EXHIBIT IV (THIRD AMENDMENT) COMMON ELEMENTS AND VOTING RIGHTS PERCENTAGE OF INTEREST IN THE COMMON ELEMENTS AND EXPENSES NO. OF VOTES

UNIT DESIGNATION Ground Floor 101 102 103 104 105 106 107 107A 108 109 110 111 First Floor 200 200A 200B 200C 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 Second Floor 301 302 303 304 305 306 307 * 308 * 309 310 311 * 312 313 314 TOTALS

TYPE OF UNIT

1 Bedroom 1 Bedroom Efficiency 1 Bedroom 1 Bedroom Efficiency 2 Bedroom 1 Bedroom (Ground Level) Efficiency Efficiency Efficiency Efficiency

2.2 2.2 2.0 2.2 2.2 2.0 2.5 2.3 2.0 2.0 2.0 2.0

22 22 20 22 22 20 25 23 20 20 20 20

2 Bedroom 1 Bedroom 1 Bedroom Efficiency Efficiency 2 Bedroom Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency 1 Bedroom 1 Bedroom 1 Bedroom 1 Bedroom Efficiency Efficiency 2 Bedroom 2 Bedroom

2.5 2.3 2.3 2.0 2.0 2.5 2.0 2.0 2.0 2.0 2.0 2.0 2.3 2.3 2.3 2.3 2.0 2.0 2.5 2.5

25 23 23 20 20 25 20 20 20 20 20 20 23 23 23 23 20 20 25 25

Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom Efficiency 1 Bedroom Efficiency 2 Bedroom Efficiency Efficiency

2.0 2.3 2.3 2.0 2.3 2.3 2.0 2.3 2.0 2.3 2.0 2.5 2.0 2.0 _____ 100.0

20 23 23 20 23 23 20 23 20 23 20 25 20 20 _____ 1000

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EXHIBIT V FUTURE ADDITIONS

In accordance with Article 3, Section 5, entitled Future Additions, future additions not exceeding eighty units may be added to this Condominium, on the following described property: Being all that property designated as Tract 3, consisting of .85 acres, on that certain plat entitled Property of Condo Venture Corporation on a map by Michael M. Lacey, RLS No. L-1497, dated March 24, 1982 and being revised Map No. 85-12-2-260 recorded simultaneously herewith in Condominium Book 5 at Page 5, Watauga County Public Registry, and being incorporated herein by reference.

Prepared by C. Banks Finger, Attorney at Law, P.O. Box 2480 Boone, NC 28607

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WATAUGA COUNTY STATE OF NORTH CAROLINA AMENDMENT TO DECLARATION OF INTENTION TO SUBMIT PROPERTY TO THE PROVISIONS OF CHAPTER 47-A OF THE NORTH CAROLINA GENERAL STATUTES SMOKETREE LODGE WHEREAS, CONDO VENTURE CORPORATION, A Florida Corporation authorized to do business in North Carolina, hereinafter called the Declarant, previously executed the said Declaration of Smoketree Lodge Condominium, dated _____________________ , and recorded said October 8, 1982 Declaration in Book 225 at Page 405, and in Condominium Unit Ownership Book 5 at page 5, Watauga County, North Carolina, and WHEREAS, said Declaration may be amended as provided, and the Declarant desires to amend to provide the appropriate and required architects certificate, plans and specifications with regard to added units 307, 308, 309 and 310 located on the Second Floor of said Condominium; NOW, THEREFORE, the aforesaid Declaration is hereby amended as follows: AMENDMENT # 1 Exhibit IV as appears in the said Declaration is deleted in its entirety and the attached Exhibit IV (First Amendment) is substituted in its place. Architect David Patrick Moses Certificate dated October 24, 1983, together with the plans and specifications attached thereto for said Units 307, 308, 309 and 310 is added as an Exhibit to said Condominium Declaration and filed in Condominium Unit Ownership Book 5 at page 5. IN WITNESS WHEREOF, Declarant has caused this Amendment to be executed by its duly authorized officers and its corporate seal to be hereunto affixed, this the 24th day of October, 1983. ATTEST: Asst. Secretary STATE OF NORTH CAROLINA WATAUGA COUNTY This the 24th day of October, 1983, personally came before me ______________________ a Notary Public in the above County and State, C. Banks Finger, who being by me duly sworn, says that he is the Asst. Vice President of Condo Venture Corporation, and that the seal affixed to the foregoing Amendment is the corporate seal of the Corporation, and that the said writing was signed and sealed by him and attested by the Asst. Secretary on behalf of the said corporation by its authority duly given. And the said C. Banks Finger acknowledged the said writing to be the act and deed of the corporation. Witness my hand and notarial seal this 24th day of October, 1983. My Commission expires: Notary Public CONDO VENTURE CORPORATION By: Asst. Vice President

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SMOKETREE LODGE EXHIBIT IV (FIRST AMENDMENT) COMMON ELEMENTS AND VOTING RIGHTS 28 UNITS PERCENTAGE OF INTEREST IN THE COMMON ELEMENTS AND EXPENSES NO. OF VOTES

UNIT DESIGNATION Ground Floor 101 102 103 104 First Floor 200 201 202 203 204 205 206 207 208 209 210 211 212 Second Floor 301 302 303 304 305 306 307 308 309 310 TOTALS:

TYPE OF UNIT

1 Bedroom 1 Bedroom Efficiency 1 Bedroom

4% 4% 3% 4%

40 40 30 40

2 Bedroom Efficiency 1 Bedroom Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency 1 Bedroom 1 Bedroom 1 Bedroom 1 Bedroom

4% 3% 4% 3% 3% 3% 3% 3% 3% 4% 4% 4% 4%

40 30 40 30 30 30 30 30 30 40 40 40 40

Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom Efficiency 1 Bedroom

3% 4% 4% 3% 4% 4% 3% 4% 3% 4% _____ 100%

30 40 40 30 40 40 30 40 30 40 ______ 1000

Return to: Smoketree Lodge, P.O. Box 3407, Boone, NC 28607

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WATAUGA COUNTY STATE OF NORTH CAROLINA AMENDMENT TO THE BY-LAWS OF SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION WHEREAS, the Declaration of Smoketree Lodge Condominiums was previously executed and recorded in Book 225 at page 40.5, and in Condominium Unit Ownership Book 5 at page 5, Watauga County, North Carolina, and WHEREAS, the Amended By-laws were previously executed and recorded in Book 207 page 649, Watauya County, North Carolina, and WHEREAS, said By-laws may be amended as provided (Article 8Page 11): NOW, THEREFORE, the aforesaid By-laws are hereby amended as follows: AMENDMENT NO. 1: To amend Article II-Section 7 Page 3 A quorum of membership meetings shall consist of persons entitled to cast a majority of the voting interests of the entire membership of the Association, except that elections shall be decided by a plurality of those ballots cast. There shall be no quorum requirement; however, at least twelve percent (12%) of the eligible voters must cast a ballot in order to have a valid election of members of the board of administration. IN WITNESS WHEREOF, Smoketree Lodge Property Owners Association, Inc. for itself on behalf of all unit owners, mortgagees and all other persons or parties with an interest in said Condominium, through the power granted in said Declaration of Condominium, has caused this Amendment to be executed by its duly authorized officers and its corporate seal to be hereunto affixed, this the 6th day of November, 1993.

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THE UNDERSIGNED, being the President of SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION, INC., a corporation not for profit under the laws of the State of North Carolina, does hereby certify that the foregoing amendment to the By-laws was adopted by said Association on the 6th day of November, 1993. SMOKETREE LODGE POA

SANDRA C. THOMPSON Secretary COUNTY OF WATAUGA STATE OF NORTH CAROLINA

CHARLES E. RUNDGREN President

This 6th day of November, 1993, personally came before me, Linda S. Ives, a Notary Public in and for said State and County, Charles E. Rundgren, who, being by me duly sworn, says that he is the President of Smoketree Lodge Property Owners Association, Inc. and that the seal affixed to the foregoing Amendment to Declaration of Condominium for Smoketree Lodge, is the corporate seal of the corporation, and that the said writing was signed and sealed by him in behalf of the said corporation by its authority duly given. And the said Charles E. Rundgren acknowledged the said writing to he the act and deed of the corporation. Witness my hand and notarial seal this 6th day of November, 1993.

My commission expires:

Notary Public

NORTH CAROLINA WATAUGA COUNTY The foregoing certificate of Linda S.Ives, Notary Public, Watauga County, N.C. is certified to be correct. This the 5th day of January 1994. Wanda C. ScottRegister of Deeds By Deputy

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AMENDED BY-LAWS OF SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION WHEREAS, the Declaration of Smoketree Lodge Condominiums was previously executed and recorded in Book 225 at page 405, and in Condominium Unit Ownership Book 5 at page 5, Watauga County, North Carolina, and WHEREAS, said Declaration may be amended as provided: NOW, THEREFORE, the aforesaid Declaration is hereby amended as follows: ARTICLE I - PLAN OF UNIT OWNERSHIP SECTION 1. Unit Ownership. The property located in Watauga County, State of North Carolina, and more particularly described in the Declaration of Condominium of Smoketree Lodge (hereinafter called the Declaration), has submitted to the provisions of Chapter 47A of the North Carolina General Statutes entitled Unit Ownership Act by the Declaration recorded in the Office of the Register of Deeds of Watauga County, State of North Carolina, and shall be hereinafter be known as Smoketree Lodge Condominium (hereinafter called the Condominium). SECTION 2. Formation of Association. SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION (hereinafter called this Association) is a North Carolina non-profit corporation which has been formed for the purpose of administering the operation and management of the Condominium (a copy of the Articles of Incorporation of which has been recorded in the Office of the Register of Deeds of the county in which the Condominium is located-Book 0073 Page 600). SECTION 3. Applicability of By-Laws. The provisions of these ByLaws are applicable to all affairs of this Association and to the Property of the Condominium and the use and occupancy thereof. The term Property as used herein shall include the land, the building and all other improvements thereon (including the units and the common areas and facilities) owned in fee simple absolute, and all easements, rights and appurtenances, belonging thereto, and all other property, personal or mixed, intended for use in connection therewith, all of which are intended to be submitted to the provisions of said Chapter 47A of the North Carolina General Statutes. All present and future owners, mortgagees, lessees and occupants of all Units in the Condominium and their agents and employees, and any other persons who may use the facilities of the Property in any manner are subject to the Declaration, the Articles of Incorporation of this Association, these By-Laws and Rules and Regulations made pursuant hereto and any amendment or amendments to any of said

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-2documents made from time to time hereafter. The acceptance of a deed or conveyance or the entering into of a lease or the act of occupancy of a Unit shall constitute an agreement that these By-Laws (and any Rules and Regulations made pursuant hereto) and the provisions of the Declaration and said Articles, as they may be amended from time to time, are accepted, ratified, and will be complied with. ARTICLE II - MEETINGS AND VOTING SECTION 1. Place of Meeting. All meetings of this Association shall be held at the property or at such other place either within or without the State of North Carolina, as shall be determined by the Board of Directors of this Association (hereinafter described and hereinafter called the Board). SECTION 2. Organizational Meeting. The initial meeting of this Association to organize the Condominium and elect the initial Board shall be held no later than 120 days after 50% of the Units initially included in the Condominium pursuant to the Declaration have been sold and deeded by the Declarant or its successors or assigns as developer of the Condominium, but in any event no later than five years following the said sale and deeding of the first of said Units. Pending the said election of the initial Board, all of the powers and authority of the Board shall be vested in the Declarant or its said successors or assigns as developer of the Condominium. SECTION 3. Annual Meeting. Annual meetings of this Association shall be held at such times and places as may be designated by the Board and specified in the notice of each such meeting, for the purpose of electing members of the Board and for the transaction of such other business as may be properly brought before the meeting. SECTION 4. Substitute Annual Meeting. If the annual meeting shall not be held on the day designated, a substitute annual meeting may be called in accordance with the provisions of Section 5 of this Article. A meeting so called shall be designated and treated for all purposes as the annual meeting. SECTION 5. Special Meetings. After the organizational meeting, special meetings of this Association may be called at any time by the Board or upon the written request of Unit Owners owning in aggregate no less than fifty percent (50%) of the total interest in the common areas and facilities. SECTION 6. Notice of Meetings. Written or printed notice stating the place, day and hour of the meeting shall be delivered or mailed not less than ten (10) days nor more than sixty (60)

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-3days before the date thereof, to each person entitled to vote at such meeting. In the case of an annual or substitute annual meeting, the notice of meeting need not specifically state the purpose or purposes for which the meeting is called. When a meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. When a meeting is adjourned for less than thirty (30) days in any one adjournment, it is not necessary to give any notice of the adjourned meeting other than by announcement at the meeting at which the adjournment is effective. SECTION 7. Quorum. The presence in person or by proxy at any meeting of the voting members (as defined in Section 8 of this Article) having a majority of the total votes shall constitute a quorum. Unless otherwise expressly provided herein, any action may be taken at any meeting of this Association at which a quorum is present upon the affirmative vote of the voting members having a majority of the total votes present at such meeting. If there is no quorum at the opening of the meeting, such meeting may be adjourned from time to time by the vote of a majority of the voting members present, either in person or by proxy; and at any adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the original meeting. The voting members at a meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough voting members to leave less than a quorum. SECTION 8. Voting rights. The owner of each condominium shall be entitled to one vote. If a condominium unit owner owns more that one unit he/she shall be entitled to one vote for each unit week owned. The vote of a condominium unit shall not be divisionary. Not withstanding, the foregoing shall be entitled to 1/51 of the total votes assigned to the unit in which he/she owns his/her unit weeks for each unit week owned. The Association shall not have a vote for any unit week conveyed to it. He/she shall be known and hereafter referred to as a voting member. Such voting member may be the owner or may be some other person designated by such owner or owners to act as proxy on his/her behalf and who need not be an owner. Such designation shall be made in writing to the Board and shall be revocable at any time by actual notice to the Board. SECTION 9. Waiver of Notice. Any Unit Owner may at any time waive notice of any meeting of this Association in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a Unit Owner at any meeting of this Association shall constitute a waiver of notice by him of the time and place thereof, except where a Unit Owner attends a

BK 0207 PG 652
-4meeting and indicates immediately upon the meetings being called to order that his sole purpose of attending is to object to the transaction of business because the meeting has not been lawfully called. SECTION 10. Informal Action by Unit Owners. Any action which may be taken at a meeting of this Association, except removal of a member of the Board, may be taken without a meeting by written approval, signed by voting members having the voting power required to pass such action at a meeting. Such approval shall be filed with the Secretary of this Association and kept in the Minute Book of this Association. ARTICLE III - BOARD OF ADMINISTRATORS SECTION 1. General Powers. The business and property of the Condominium shall be managed and directed by the Board or by such Executive Committee as the Board may establish pursuant to these By-Laws. SECTION 2. Number, Term and Qualifications. The number of Directors of this Association shall be the number, not fewer than three (3) nor more than seven (7), fixed from time to time upon the affirmative vote of voting members representing a majority of the total vote of the Condominium. Directors shall serve in staggered terms of two (2) for three (3) years, two (2) for two years and three (3) for one year. The Board may declare the office of a member absent from three (3) consecutive meetings of the Board to be vacant. Each member of the Board shall be one of the owners or co-owners or a spouse of an owner or co-owner; provided, however, that in the event an owner is a corporation, partnership, trust or other legal entity other than a natural person or persons, then any officer or director of such corporation, partner of such partnership, beneficiary of such trust or manager of such other legal entity, shall be eligible to serve as a member of the Board. SECTION 3. Election of Directors. Except as otherwise provided in Sections 2 and 5 of this Article, the Directors shall be elected initially at the Organizational Meeting and thereafter at the Annual Meeting of this Association; and those persons who receive the highest number of votes shall be deemed to have been elected. SECTION 4. Removal. Directors may be removed from office with or without cause by the affirmative vote of the Unit Owners having a majority of the total votes entitled to vote at an relection of directors. However, unless the entire Board is removed, an individual director may not be removed if the number of Unit Owners voting against the removal would be sufficient

BK 0207 PG 653
-5to elect a director if such Unit Owners voted cumulatively at an annual election. If any directors are so removed, new directors may be elected at the same meeting. SECTION 5. Vacancies. A vacancy occurring in the Board of Directors, including directorships not filled by the Unit Owners, may be filled by a majority of the remaining directors, through less than a quorum, or by the sole remaining director; but a vacancy created by an increase in the authorized number of Directors shall be filled only by election at an annual meeting or a special meeting of this Association called for that purpose. Voting members may elect a Director at any time to fill any vacancy not filled by the Directors. SECTION 6. Compensation. Directors shall receive no monetary compensation for their services. The only exception is reimbursement for mileage. Mileage amounts will be determined by the Board based on standard Federal mileage reimbursement. SECTION 7. Executive Committees. The Board may, by resolution, designate two or more directors to constitute an Executive Committee, which committee, to the extent provided in such resolution, shall have and may exercise all of the authority of the Board in the management of the Condominium. SECTION 8. Powers and Duties. The Board shall have the powers and duties necessary for the administration of the affairs of the Condominium and may do all such acts and things, except such acts as by law or by the declaration or by these By-Laws may not be delegated to the Board. Such powers and duties of the Board shall include, but shall not be limited to, the following: (a) Operation, care, upkeep and maintenance of the common areas and facilities. (b) Determination of the common expenses required for the affairs of the Condominium, including without limitation, the operation and maintenance of the property. (c) Collection of the common charges from the Unit Owners.

(d) Employment and dismissal of the personnel necessary for the maintenance and operation of the common areas and facilities. (e) With the approval of the Unit Owners having the majority of the total votes, the adoption and amendment of such reasonable rules and regulations as it may deem advisable for

BK 0207 PG 658
-10of the Board, shall supervise and control the management of the Condominium. The President shall, when present, preside at all meetings of the Board and of this Association and, in general, shall perform all duties incident to the office of President and such other duties as may be prescribed from time to time by the Board. SECTION 6. Vice President. The Vice President, and if there be more than one, the Vice President designated by the Board, shall, in the absence or disability of the President, have the powers and perform the duties of said office. In addition, each Vice President shall perform such other duties and have such other powers as shall be prescribed by the President. SECTION 7. Secretary. The Secretary shall keep accurate records of the acts and proceedings of all meetings of this Association and Directors. He/she shall give, or cause to be given, all notices required by law and by these By-Laws. He/she shall have general charge of the minute books and records of both this Association and the Board. He/she shall sign such instruments as may require his/her signature and, in general, shall perform all duties incident to the office of Secretary and such other duties as may be assigned him from time to time by the President or by the Board. SECTION 8. Treasurer. The Treasurer shall have custody of all Condominium funds and securities and shall receive, deposit, or disburse the same under the direction of the Board. He/she shall keep full and accurate accounts of the finances of the Condominium in books especially provided for its assets and liabilities as of the close of each fiscal year. The Treasurer shall also file all reports and returns required by Federal, State, or local law and shall generally perform all other duties as may be assigned to him/her from time to time by the President or the Board. Assistant Secretaries and Treasurers. The SECTION 9. Assistant Secretaries and Assistant Treasurers, if any, shall, in the absence or disability of the Secretary or the Treasurer, respectively, have all the powers and perform all of the duties of those officers, and they shall in general perform such other duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President. ARTICLE VI - COMMON CHARGES As more fully described in the Declaration, each member is obligated to pay to the Board annual and special common charges which are secured by a lien upon the property which the common charge is made. Any common charges not paid within thirty (30)

BK 0207 PG 659
-11days after the due date, the common charges shall bear interest from the date of delinquency at the rate of twelve percent (12%) per annum, and the Board may bring an action at law against the Unit Owner personally obligated to pay the same or foreclose the lien against the property, and interest, and costs, and reasonable attorneys fees of any such action shall be added to the amount of such common charges. No Unit Owner may waive or otherwise escape liability for the common charges provided for herein by non-use of the Common Areas or abandonment of his Unit. ARTICLE VII - RECORDS, AUDITS, REPORTS AND NOTICES The Board or the managing agent shall keep detailed records of the actions of the Board and the managing agent, minutes of the meetings of the Board, minutes of the meetings of the Unit Owners, and financial records and books of account of the Condominium, including a chronological listing of receipts and expenditures, as well as a separate account for each Unit which among other things, shall contain the amount of each assessment of the common charges against such Unit, the date when due, the amounts paid thereon, and the balance remaining unpaid. The financial records and books of account, as well as copies of the Declaration, By-Laws and any Rules and Regulations then in effect, as amended to the time, shall be available for examination by all the Unit Owners, and to holders, insurers or guarantors of any first deed of trust, or their respective authorized agents or attorneys, upon request during normal business hours or under other reasonable circumstances. ARTICLE VIII - AMENDMENT These By-laws may be amended by the affirmative vote of the owners representing a majority of the total undivided interest of the Condominium; provided, however, that any such amendment shall not become operative until set forth in amended Declaration and duly recorded. All Unit Owners shall be bound to abide by any amendment upon the same being passed and duly set forth in an amended Declaration, duly recorded. In the case of conflict between the Articles of Incorporation and the By-laws, the Articles shall control; and in the case of any conflict between the Declaration and these By-laws, the Declaration shall control.

BK 0207 PG 660

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THE UNDERSIGNED, being the President of SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION, INC., a corporation not for profit under the laws of the State of North Carolina, does hereby certify that the foregoing By-laws were adopted as the By-Laws of said Association on the 2nd day of May , 1992. ATTEST: SMOKETREE LODGE POA

SANDRA C. THOMPSON Secretary COUNTY OF WATAUGA STATE OF NORTH CAROLINA

CHARLES E. RUNDGREN President

This the 2nd day of May , 1992, personally came before me, Linda S. Gouge, A Notary Public in and for said State and County, Charles E. Rundgren, who, being by me duly sworn, says that he is the President of Smoketree Lodge Property Owners Association, Inc. and that the seal affixed to the foregoing Amendment to Declaration of Condominium for Smoketree Lodge, is the corporate seal of the corporation, and that the said writing was signed and sealed by him in behalf of the said corporation by its authority duly given. And the said Charles E. Rundgren acknowledged the said writing to be the act and deed of the corporation. Witness my hand and notarial seal this 1992. 2nd day of May ,

My commission expires:

Notary Public

NORTH CAROLINA WATAUGA COUNTY The foregoing certificate_____of

Linda S. Gouge, Avery County, NC __________________

Notary(ies) Public is (are) certified to be correct. This instrument was presented for registration and recorded in this office in Book 207 , Page 649 May , 19 92 , at 10:15 This 8th day of oclock A.M.

Phyllis E. Foster
Register of Deeds

by

Deputy

BK 0207 PG 649
AMENDED BY-LAWS OF SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION WHEREAS, the Declaration of Smoketree Lodge Condominiums was previously executed and recorded in Book 225 at page 405, and in Condominium Unit Ownership Book 5 at page 5, Watauga County, North Carolina, and WHEREAS, said Declaration may be amended as provided: NOW, THEREFORE, the aforesaid Declaration is hereby amended as follows: ARTICLE I - PLAN OF UNIT OWNERSHIP SECTION 1. Unit Ownership. The property located in Watauga County, State of North Carolina, and more particularly described in the Declaration of Condominium of Smoketree Lodge (hereinafter called the Declaration), has submitted to the provisions of Chapter 47A of the North Carolina General Statutes entitled Unit Ownership Act by the Declaration recorded in the Office of the Register of Deeds of Watauga County, State of North Carolina, and shall be hereinafter be known as Smoketree Lodge Condominium (hereinafter called the Condominium). SECTION 2. Formation of Association. SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION (hereinafter called this Association) is a North Carolina non-profit corporation which has been formed for the purpose of administering the operation and management of the Condominium (a copy of the Articles of Incorporation of which has been recorded in the Office of the Register of Deeds of the county in which the Condominium is located-Book 0073 Page 600). SECTION 3. Applicability of By-Laws. The provisions of these ByLaws are applicable to all affairs of this Association and to the Property of the Condominium and the use and occupancy thereof. The term Property as used herein shall include the land, the building and all other improvements thereon (including the units and the common areas and facilities) owned in fee simple absolute, and all easements, rights and appurtenances, belonging thereto, and all other property, personal or mixed, intended for use in connection therewith, all of which are intended to be submitted to the provisions of said Chapter 47A of the North Carolina General Statutes. All present and future owners, mortgagees, lessees and occupants of all Units in the Condominium and their agents and employees, and any other persons who may use the facilities of the Property in any manner are subject to the Declaration, the Articles of Incorporation of this Association, these By-Laws and Rules and Regulations made pursuant hereto and any amendment or amendments to any of said

BK 0207 PG 650
-2documents made from time to time hereafter. The acceptance of a deed or conveyance or the entering into of a lease or the act of occupancy of a Unit shall constitute an agreement that these By-Laws (and any Rules and Regulations made pursuant hereto) and the provisions of the Declaration and said Articles, as they may be amended from time to time, are accepted, ratified, and will be complied with. ARTICLE II - MEETINGS AND VOTING SECTION 1. Place of Meeting. All meetings of this Association shall be held at the property or at such other place either within or without the State of North Carolina, as shall be determined by the Board of Directors of this Association (hereinafter described and hereinafter called the Board). SECTION 2. Organizational Meeting. The initial meeting of this Association to organize the Condominium and elect the initial Board shall be held no later than 120 days after 50% of the Units initially included in the Condominium pursuant to the Declaration have been sold and deeded by the Declarant or its successors or assigns as developer of the Condominium, but in any event no later than five years following the said sale and deeding of the first of said Units. Pending the said election of the initial Board, all of the powers and authority of the Board shall be vested in the Declarant or its said successors or assigns as developer of the Condominium. SECTION 3. Annual Meeting. Annual meetings of this Association shall be held at such times and places as may be designated by the Board and specified in the notice of each such meeting, for the purpose of electing members of the Board and for the transaction of such other business as may be properly brought before the meeting. SECTION 4. Substitute Annual Meeting. If the annual meeting shall not be held on the day designated, a substitute annual meeting may be called in accordance with the provisions of Section 5 of this Article. A meeting so called shall be designated and treated for all purposes as the annual meeting. SECTION 5. Special Meetings. After the organizational meeting, special meetings of this Association may be called at any time by the Board or upon the written request of Unit Owners owning in aggregate no less than fifty percent (50%) of the total interest in the common areas and facilities. SECTION 6. Notice of Meetings. Written or printed notice stating the place, day and hour of the meeting shall be delivered or mailed not less than ten (10) days nor more than sixty (60)

BK 0207 PG 651
-3days before the date thereof, to each person entitled to vote at such meeting. In the case of an annual or substitute annual meeting, the notice of meeting need not specifically state the purpose or purposes for which the meeting is called. When a meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. When a meeting is adjourned for less than thirty (30) days in any one adjournment, it is not necessary to give any notice of the adjourned meeting other than by announcement at the meeting at which the adjournment is effective. SECTION 7. Quorum. The presence in person or by proxy at any meeting of the voting members (as defined in Section 8 of this Article) having a majority of the total votes shall constitute a quorum. Unless otherwise expressly provided herein, any action may be taken at any meeting of this Association at which a quorum is present upon the affirmative vote of the voting members having a majority of the total votes present at such meeting. If there is no quorum at the opening of the meeting, such meeting may be adjourned from time to time by the vote of a majority of the voting members present, either in person or by proxy; and at any adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the original meeting. The voting members at a meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough voting members to leave less than a quorum. SECTION 8. Voting rights. The owner of each condominium shall be entitled to one vote. If a condominium unit owner owns more that one unit he/she shall be entitled to one vote for each unit week owned. The vote of a condominium unit shall not be divisionary. Not withstanding, the foregoing shall be entitled to 1/51 of the total votes assigned to the unit in which he/she owns his/her unit weeks for each unit week owned. The Association shall not have a vote for any unit week conveyed to it. He/she shall be known and hereafter referred to as a voting member. Such voting member may be the owner or may be some other person designated by such owner or owners to act as proxy on his/her behalf and who need not be an owner. Such designation shall be made in writing to the Board and shall be revocable at any time by actual notice to the Board. SECTION 9. Waiver of Notice. Any Unit Owner may at any time waive notice of any meeting of this Association in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a Unit Owner at any meeting of this Association shall constitute a waiver of notice by him of the time and place thereof, except where a Unit Owner attends a

BK 0207 PG 652
-4meeting and indicates immediately upon the meetings being called to order that his sole purpose of attending is to object to the transaction of business because the meeting has not been lawfully called. SECTION 10. Informal Action by Unit Owners. Any action which may be taken at a meeting of this Association, except removal of a member of the Board, may be taken without a meeting by written approval, signed by voting members having the voting power required to pass such action at a meeting. Such approval shall be filed with the Secretary of this Association and kept in the Minute Book of this Association. ARTICLE III - BOARD OF ADMINISTRATORS SECTION 1. General Powers. The business and property of the Condominium shall be managed and directed by the Board or by such Executive Committee as the Board may establish pursuant to these By-Laws. SECTION 2. Number, Term and Qualifications. The number of Directors of this Association shall be the number, not fewer than three (3) nor more than seven (7), fixed from time to time upon the affirmative vote of voting members representing a majority of the total vote of the Condominium. Directors shall serve in staggered terms of two (2) for three (3) years, two (2) for two years and three (3) for one year. The Board may declare the office of a member absent from three (3) consecutive meetings of the Board to be vacant. Each member of the Board shall be one of the owners or co-owners or a spouse of an owner or co-owner; provided, however, that in the event an owner is a corporation, partnership, trust or other legal entity other than a natural person or persons, then any officer or director of such corporation, partner of such partnership, beneficiary of such trust or manager of such other legal entity, shall be eligible to serve as a member of the Board. SECTION 3. Election of Directors. Except as otherwise provided in Sections 2 and 5 of this Article, the Directors shall be elected initially at the Organizational Meeting and thereafter at the Annual Meeting of this Association; and those persons who receive the highest number of votes shall be deemed to have been elected. SECTION 4. Removal. Directors may be removed from office with or without cause by the affirmative vote of the Unit Owners having a majority of the total votes entitled to vote at an relection of directors. However, unless the entire Board is removed, an individual director may not be removed if the number of Unit Owners voting against the removal would be sufficient

BK 0207 PG 653
-5to elect a director if such Unit Owners voted cumulatively at an annual election. If any directors are so removed, new directors may be elected at the same meeting. SECTION 5. Vacancies. A vacancy occurring in the Board of Directors, including directorships not filled by the Unit Owners, may be filled by a majority of the remaining directors, through less than a quorum, or by the sole remaining director; but a vacancy created by an increase in the authorized number of Directors shall be filled only by election at an annual meeting or a special meeting of this Association called for that purpose. Voting members may elect a Director at any time to fill any vacancy not filled by the Directors. SECTION 6. Compensation. Directors shall receive no monetary compensation for their services. The only exception is reimbursement for mileage. Mileage amounts will be determined by the Board based on standard Federal mileage reimbursement. SECTION 7. Executive Committees. The Board may, by resolution, designate two or more directors to constitute an Executive Committee, which committee, to the extent provided in such resolution, shall have and may exercise all of the authority of the Board in the management of the Condominium. SECTION 8. Powers and Duties. The Board shall have the powers and duties necessary for the administration of the affairs of the Condominium and may do all such acts and things, except such acts as by law or by the declaration or by these By-Laws may not be delegated to the Board. Such powers and duties of the Board shall include, but shall not be limited to, the following: (a) Operation, care, upkeep and maintenance of the common areas and facilities. (b) Determination of the common expenses required for the affairs of the Condominium, including without limitation, the operation and maintenance of the property. (c) Collection of the common charges from the Unit Owners.

(d) Employment and dismissal of the personnel necessary for the maintenance and operation of the common areas and facilities. (e) With the approval of the Unit Owners having the majority of the total votes, the adoption and amendment of such reasonable rules and regulations as it may deem advisable for

BK 0207 PG 654
-6the maintenance, conservation and beautification of the property, and for the health, comfort, safety and general welfare of the owners and occupants of the property. Written notice of such rules and regulations shall be given to all owners and occupants and the entire property shall at all times be maintained subject to such rules and regulations. (f) Opening of bank accounts on behalf of the Condominium and designating the signatories required thereon. (g) Purchasing or leasing or otherwise acquiring in the name of the Board or its designee, corporate or otherwise, on behalf of all Unit Owners, units offered for, sale or lease. (h) Purchasing of units at foreclosure or other judicial sales in the name of the Board or its designee, corporate or otherwise, on behalf of all Unit Owners. (i) Selling, mortgaging, voting the votes appurtenant to or otherwise dealing with units acquired by the Board or its designee, corporate or otherwise, on behalf of all Unit Owners, subject to the Declaration and other applicable restrictions, and organizing corporations to act as designees of the Board in acquiring title to units on behalf of all Unit Owners. (j) Maintaining and repairing any unit if such maintenance or repair is necessary in the discretion of the Board or by operation of applicable restrictions to protect the common areas and facilities or any other portion of the building and the owner of said unit has failed or refused to perform such maintenance or repair within a reasonable time after written notice of the necessity of said maintenance or repair has been delivered or mailed by the Board to said owner, provided that the Board shall levy a special assessment against such owner for the costs of said maintenance or repair. (k) Entering any unit when necessary in connection with any maintenance or construction for which the Board is responsible; provided, such entry shall be made during reasonable hours with as little inconvenience to the owner as practicable, and any damage caused thereby shall be repaired by the Board and such expenses shall be treated as a common expense. (l) Signing all agreements, contracts, deeds and vouchers for payment for expenditures and other instruments in such manner as from time to time shall be determined by written resolution of the Board. In the absence of such determination by the Board, such documents shall be signed by the Treasurer and countersigned by the President of this Association.

BK 0207 PG 655
-7(m) Obtaining of insurance for the property, including the units, pursuant to applicable provisions of the Declaration. (n) Making of repairs, additions, and improvements to or alterations of the property and repairs to and restoration of the property in accordance with the other provisions of these By-Laws and the Declaration, after damage or destruction by fire or other casualty, or as a result of condemnation or eminent domain proceeding. (o) Employ attorney to represent the Board when deemed necessary. SECTION 9. Managing Agent. The Board may engage the services of any person, firm, or corporation to act as managing agent at a compensation established by the Board, to perform such duties and services for the Condominium as the Board shall authorize including, but not limited to, the duties listed in subdivisions (a), (c), (d), (j), (k), (1), and (n) of Section 8 of this Article III. The Board may delegate to the managing agent all of the powers granted to the Board by these By-Laws other than the powers set forth in subdivisions (b), (e), (f), (g), (h), (k?, (m) and (o) of Section 8 of this Article III. ARTICLE IV - MEETINGS OF DIRECTORS SECTION 1. Organizational Meeting. The first meeting of the members of the Board shall immediately follow the Organizational Meeting of this Association (as provided in Section 2 of Article II). No notice shall be necessary to the newly elected members of the Board in order to legally constitute such meeting, providing a quorum shall be present. Regular Meetings. A regular meeting of the Board SECTION 2. shall be held immediately after, and at the same place as the annual meeting or substitute annual meeting of this Association. In addition, the Board may provide by resolution the time and place either within or without the State of North Carolina, for the holding of a regular meeting of the Board. SECTION 3. Special Meetings. Special meetings of the Board may be called by or with the request of the President or by a majority of the Directors. Such meeting may be held either within or without the State of North Carolina. SECTION 4. Notice of Meetings. Regular meetings of the Board may be held without notice. The person or persons calling a special meeting of the Board shall, at lease two days before the meeting, give notice thereof by any usual means of communication. Such notice need not specify the purpose for which

BK 0207 PG 656
-8the meeting is called. SECTION 5. Waiver of Notice. Any member of the Board may at any time waive notice of any meeting of the Board in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a member of the Board at any meeting of the Board shall constitute a waiver of notice by him of the time and place thereof, except where a director attends the meeting and announces immediately upon the meetings being called to order that he is attending for the sole purpose of objecting to the transaction of any business because the meeting was not lawfully called. If all the members of the Board are present at any meeting of the Board, and no objection is made, no notice shall be required and any business may be transacted at such meeting. SECTION 6. Quorum. A majority of the number of Directors fixed by thes By-Laws shall be required for and shall constitute a quorum for the transaction of business at any meeting of the Board. SECTION 7. Manner of Acting. Except as otherwise provided in this section, the act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board. A vote of a majority of the number of Directors fixed by the By-Laws shall be required to adopt a resolution constituting an Executive Committee. The vote of a majority of the Directors then holding office shall be required to adopt, amend, or repeal a By-law. SECTION 9. Informal Action of Directors. Action taken by a majority of the Directors without a meeting is nevertheless Board action if written consent to the action in question is signed by all of the Directors and filed with the minutes of the proceedings of the Board, whether done before or after the action so taken. SECTION 10. proceedings. Minutes. The Board shall keep minutes of its

SECTION 11. Liability of the Board. The members of the Board shall not be liable to the Unit Owners for any mistake of judgment, negligence, or otherwise except for their own individual willful misconduct or bad faith. The Unit owners shall indemnify and hold harmless each of the members of the Board against all contractual liability to others arising out of contracts made by the Board on behalf of the Condominium unless any such contract shall have been made in bad faith or

BK 0207 PG 657
-9knowingly contrary to the provisions of the Declaration or these By-Laws. Said indemnity obligation, and all costs reasonably incurred in enforcing it, including reasonable attorneys fees, shall be secured by a lien in favor of the Board and each of its members individually identical to that provided in connection with common expenses. It is intended that the members of the Board shall have no personal liability with respect to any contract made by them on behalf of the Condominium, except to the extent that they are Unit Owner(s). It is also intended that the liability of any Unit Owner arising out of any contract made by the Board or out of the aforesaid indemnity in favor of the members of the Board, shall be limited to such proportion of the total liability thereunder as his/her interest in the common areas and facilities bears to the interests of all the Unit Owners in the common areas and facilities. Every agreement made by the Board or by the managing agent on behalf of the Condominium shall provide that the members of the Board, or the managing agent, as the case may be, are acting only as agents for the Unit Owners and shall be limited to such proportion of the total liability thereunder as his/her interest in the common areas and facilities bears to the interest of all Unit Ownersin the common areas and facilities. ARTICLE V - OFFICERS SECTION 1. Number. The principal officers of the Condominium shall consist of a President, a Secretary, a Treasurer, and such Vice Presidents, Assistant Secretaries, Assistant Treasurers, and other officers as the Board may from time to time elect. Any two or more offices may be held by the same person except the offices of President and Secretary. SECTION 2. Election and Term. The officers of the Condominium shall be elected by and from among the Board. Such elections may be held at the regular annual meeting of the Board. Each officer shall hold office for a period of one year or until his/her death, resignation, retirement, removal, disqualification, or his/her successor is elected and qualifies. Removal. Any officer or agent elected or appointed SECTION 3. by the Board may be removed by the Board with or without cause; but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. Compensation. No officer shall receive any compensation from the Condominium for acting as such. SECTION 5. President. The President shall be the principal executive officer of the Condominium and, subject to the control

BK 0207 PG 658
-10of the Board, shall supervise and control the management of the Condominium. The President shall, when present, preside at all meetings of the Board and of this Association and, in general, shall perform all duties incident to the office of President and such other duties as may be prescribed from time to time by the Board. SECTION 6. Vice President. The Vice President, and if there be more than one, the Vice President designated by the Board, shall, in the absence or disability of the President, have the powers and perform the duties of said office. In addition, each Vice President shall perform such other duties and have such other powers as shall be prescribed by the President. SECTION 7. Secretary. The Secretary shall keep accurate records of the acts and proceedings of all meetings of this Association and Directors. He/she shall give, or cause to be given, all notices required by law and by these By-Laws. He/she shall have general charge of the minute books and records of both this Association and the Board. He/she shall sign such instruments as may require his/her signature and, in general, shall perform all duties incident to the office of Secretary and such other duties as may be assigned him from time to time by the President or by the Board. SECTION 8. Treasurer. The Treasurer shall have custody of all Condominium funds and securities and shall receive, deposit, or disburse the same under the direction of the Board. He/she shall keep full and accurate accounts of the finances of the Condominium in books especially provided for its assets and liabilities as of the close of each fiscal year. The Treasurer shall also file all reports and returns required by Federal, State, or local law and shall generally perform all other duties as may be assigned to him/her from time to time by the President or the Board. Assistant Secretaries and Treasurers. The SECTION 9. Assistant Secretaries and Assistant Treasurers, if any, shall, in the absence or disability of the Secretary or the Treasurer, respectively, have all the powers and perform all of the duties of those officers, and they shall in general perform such other duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President. ARTICLE VI - COMMON CHARGES As more fully described in the Declaration, each member is obligated to pay to the Board annual and special common charges which are secured by a lien upon the property which the common charge is made. Any common charges not paid within thirty (30)

BK 0207 PG 659
-11days after the due date, the common charges shall bear interest from the date of delinquency at the rate of twelve percent (12%) per annum, and the Board may bring an action at law against the Unit Owner personally obligated to pay the same or foreclose the lien against the property, and interest, and costs, and reasonable attorneys fees of any such action shall be added to the amount of such common charges. No Unit Owner may waive or otherwise escape liability for the common charges provided for herein by non-use of the Common Areas or abandonment of his Unit. ARTICLE VII - RECORDS, AUDITS, REPORTS AND NOTICES The Board or the managing agent shall keep detailed records of the actions of the Board and the managing agent, minutes of the meetings of the Board, minutes of the meetings of the Unit Owners, and financial records and books of account of the Condominium, including a chronological listing of receipts and expenditures, as well as a separate account for each Unit which among other things, shall contain the amount of each assessment of the common charges against such Unit, the date when due, the amounts paid thereon, and the balance remaining unpaid. The financial records and books of account, as well as copies of the Declaration, By-Laws and any Rules and Regulations then in effect, as amended to the time, shall be available for examination by all the Unit Owners, and to holders, insurers or guarantors of any first deed of trust, or their respective authorized agents or attorneys, upon request during normal business hours or under other reasonable circumstances. ARTICLE VIII - AMENDMENT These By-laws may be amended by the affirmative vote of the owners representing a majority of the total undivided interest of the Condominium; provided, however, that any such amendment shall not become operative until set forth in amended Declaration and duly recorded. All Unit Owners shall be bound to abide by any amendment upon the same being passed and duly set forth in an amended Declaration, duly recorded. In the case of conflict between the Articles of Incorporation and the By-laws, the Articles shall control; and in the case of any conflict between the Declaration and these By-laws, the Declaration shall control.

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THE UNDERSIGNED, being the President of SMOKETREE LODGE PROPERTY OWNERS ASSOCIATION, INC., a corporation not for profit under the laws of the State of North Carolina, does hereby certify that the foregoing By-laws were adopted as the By-Laws of said Association on the 2nd day of May , 1992. ATTEST: SMOKETREE LODGE POA

SANDRA C. THOMPSON Secretary COUNTY OF WATAUGA STATE OF NORTH CAROLINA

CHARLES E. RUNDGREN President

This the 2nd day of May , 1992, personally came before me, Linda S. Gouge, A Notary Public in and for said State and County, Charles E. Rundgren, who, being by me duly sworn, says that he is the President of Smoketree Lodge Property Owners Association, Inc. and that the seal affixed to the foregoing Amendment to Declaration of Condominium for Smoketree Lodge, is the corporate seal of the corporation, and that the said writing was signed and sealed by him in behalf of the said corporation by its authority duly given. And the said Charles E. Rundgren acknowledged the said writing to be the act and deed of the corporation. Witness my hand and notarial seal this 1992. 2nd day of May ,

My commission expires:

Notary Public

NORTH CAROLINA WATAUGA COUNTY The foregoing certificate_____of

Linda S. Gouge, Avery County, NC __________________

Notary(ies) Public is (are) certified to be correct. This instrument was presented for registration and recorded in this office in Book 207 , Page 649 May , 19 92 , at 10:15 This 8th day of oclock A.M.

Phyllis E. Foster
Register of Deeds

by

Deputy

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EXHIBIT I Description of Property The property herein committed to Condominium consists of all of that certain parcel or tract of land, together with all improvements thereon, located in Watauga Township, Watauga County, North Carolina, described as follows: Beginning on N.C. Grid Station marjons and running South 55 17 West, 4,521.66 feet to an iron set: thence the following courses and distances in the Northwestern margin of the 100 foot rightofway of N.C. Highway 105; South 41 06 West, 78.21 feet; South 37 17 West, 84.60 feet; South 35 34 West, 71.73 feet and South 34 41 West, 40.37 feet to a calculated point being the BEGINNING of Tract 3. Thence from the BEGINNING and with the common line of Tracts 3 and 4, North 51 17 West, 14.44 feet to a point in the edge of the parking area; thence with the edqe of said parking area and said common line the following courses and distances: North 51 17 West, 26.31 feet; North 71 09 West, 36.14 feet and North 23 02 West, 11.23 feet to the South corner of the steps; thence with the edge of the steps North 06 36 East, 4.99 feet to the North corner, of the steps; thence still with the edge of said parking area and said common line the following courses and distances: North 38 59 East, 53.63 feet; South 15 56 East, 22.70 feet to a calculated point; North 59 39 East, 81.12 feet to a calculated point; North 34 36 West, 35.23 feet to a calculated point; South 56 54 West, 66.54 feet to the edge of the parking lot; North 42 32 West, 44.57 feet and North 89 16 West, 27.18 feet to the Northeast corner of the steps; thence with the edge of the steps South 75 5l West, 5.00 feet to the Northwest corner of the steps; thence South 54 57 West, 10.04 feet to a tack set in the edge of the parking area; thence South 76 09 West, 84.89 feet to a tack set in the edge of the parking area; thence with the edge of said parking area North 12 57 West, 8.93 feet and South 84 00 West, 52.87 feet to a Point A of a map of the Condo Venture Corporation property, by Michael M. Lacey, RLS No. L1497, Job #8232448; thence from Point A and the common line of Tracts 1 and 3, South 50 57 West, 20.60 feet to Point B; thence from Point B South 14 18 East, 29.83 feet to Point C; thence from Point C North 75 42 East, 22.58 feet to Point D; thence from Point D North 14 18 West, 15.17 feet to point E; thence from Point E North 75 42 East, 12.33 feet to Point F; thence from Point F North 14 18 West, 14.50 feet to Point G; thence from Point G North 75 42 East, 12.17 feet to Point H; thence from Point H South 14 18 East, 14.50 feet to Point I; thence from Point I North 75 42 East, 12.17 feet to Point J; thence from Point J Sputh 14 18 East, 19.25 feet to Point K; thence from Point K South 75 42 West, 43.17 feet to Point L; thence from Point L South 13 52 East, 34.92 feet to a calculated point; thence South 16 20 East, 41.54 feet to the centerline of the branch and a common corner of Tracts 1, 2 and 3; thence down and with the centerline of the branch and the common line of Tracts 2 and 3 the following courses and distances: North 63 34 East, 13.39 feet; South 87 38 East, 25.89 feet: South 64 24 East, 57.76 feet; South 47 00 East, 30.24 feet and South 86 36 East, 48.83 feet to the centerline of the branch at a culvert; thence South 75 24 East, 20.65 feet to a calculated point in the Northwestern edge of the 100 foot right-of-way of N.C. Highway 105; thence with the Northwestern edge of the right-of-way North 34 41 East, 60.04 feet to the BEGINNING, containing 0.64 acre and being designated as Tract 3 on a Map by Michael M. Lacey, RLS No. Ll497, dated March 24, 1982, Map No. 823-24-48.

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Also conveyed herewith is a non-exclusive easement for parking purposes for unit owners of said condominium, as follows: BEGINNING on an iron set; iron set being located South 55 17 West, 4,521.66 feet from N.C. Grid Station Marjons. Thence from the BEGINNING North 62 20 West, 87.37 feet to a spike set in parking area; thence leaving parking area North 20 43 West, 20.00 feet to a calculated point, said point being a common corner of Tract 5 and Tract 4, and being located South 20 43 East, 211.19 feet from an iron set in the centerline of the old Tweetsie Railroad bed; thence with the common line of Tracts 4 and 5, South 63 09 West, 14.42 feet to a point, said point being the edge of the the parking area; thence with the edge of the parking area and common line of Tract 4 and 5, South 52 11 West, 68.66 feet; South 67 55 West, 137.07 feet; South 71 41 West, 56.06 feet; South 80 48 West, 45.53 feet; thence leaving the edge of the parking area and still with the line of Tract 5, South 72 21 West, 35.25 feet to a tack set in a rock, the common corner to Tracts 1, 4 and 5; thence with the common line of Tracts 1 and 4 due South, 26.28 feet to Point A of a map of the Condo Venture Corporation property, by Michael M. Lacey, RLS No. L-1497, Job #8232448; thence from Point A North 84 00 East, 52.87 feet to a point in the edge of the parking area; thence South 12 57 East, 8.93 feet to a tack set in the edge of said parking area thence North 76 09 East, 84.89 feet to a tack set in the same parking area; thence North 54 57 East, 10.04 feet to a point, said point being the Northwest edge of the steps; thence North 75 51 East, 5.00 feet with the Northernmost edge of the steps to the Northeast corner of the steps; thence South 89 16 East, 27.18 feet to a point, said point being the edge of the parking area; thence with the edge of same parking area South 42 32 East, 44.57 feet; South 02 22 West, 11.84 feet; thence South 38 59 West, 53.63 feet to the edge of the parking area and the North corner of the steps; thence with the edge of the parking area and the edge of the steps South 06 36 West, 4.99 feet to the edge of said parking area and the South corner of the steps; thence with the edge of said parking area South 23 02 East, 11.23 feet; South 71 09 East, 36.14 feet and South 51 17 East, 26.31 feet; thence 1eaving said parking area South 51 17 East, 14.44 feet to a calculated point in the Northwest edge of a 100 foot right-of-way along N.C. Highway 105; thence with the western edge of the right-ofway North 34 41 East, 40.37 feet; thence with the edge of said rightofway North 35 34 East, 71.73 feet crossing the parking area; thence with same edge of the right-of-way North 37 17 East, 84.60 feet; thence North 41 06 East, 78.21 feet to the BEGINNING, containing 0.92 acre and being designated as Tract 4 on a Map by Michael M. Lacey, RLS No. L1497, dated March 24, 1982, being Map #8232448. The Declarant reserves the right to alter, amend, add to or take from said parking easement, in his sole discretion, so long as there exists sufficient parking area to provide one parking space for each condominium unit. The aforesaid property and the particular improvements thereon which are hereby committed to Condominium, and the location of said improvements, are as shown and described on the Site Plan and Plans constituting a part hereof, being incorporated herein by this reference, recorded simultaneously herewith in Condo minium Plat Book ______, at Page ______, Watauga County Registry. 5 5 Improvements consisting of the building in which the units are located and the location of individual units therein are as shown and described on said Site Plan and Plans. All areas not contained within the units, as said units are defined and depicted in this Declaration and said Site Plan and Plans,

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constitute common elements. There are no limited common elements at present; however, should such be later designated, they will be indicated, along with the unit or units having the use thereof, by an appropriate amendment hereto. The building in the Condomin ium contains Condominium Units as designated on said Plans and on the following Exhibit IV.

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EXHIBIT II ARTICLES OF ASSOCIATION FOR THE ASSOCIATION OF CO-OWNERS OF SMOKETREE LODGE CONDOMINIUM The present and future owners of interest in SMOKETREE LODGE CONDOMINIUM (the Condominium), a Condominium project under the Unit Ownership Act of the State of North Carolina (the Act), do hereby associate together for the purpose of forming a nonprofit association (the Association) under the laws of the State of North Carolina, and hereby certify and agree as follows: ARTICLE I - The name of the association shall be the Association of Co-owners of Smoketree Lodge Condominium. ARTICLE II - The purpose of the Association is to be the Association as defined in the Act, and as such Association to operate and administer the Condominium and carry out the functions and duties of the Association as set forth in the Declaration of Condominium for Smoketree Lodge (to which these Articles constitute an Exhibit) and the other Exhibits thereto, recorded in the Office of the Register of Deeds of Watauga County, North Carolina, in Deed Book ______ at Page ______, and Condominium Plat Book _____, 405 5 225 at Page _____. 5 ARTICLE III All persons who are owners of Condominium units, or who own interval ownership in Condominium units committed to interval ownership, or who are corporate officers or partners of such entities who are such owners, shall be members of the Association. Such membership shall automatically terminate when such person is no longer the owner of such interest, or an officer or partner of such owner. Subject to the foregoing, admission and termination of membership shall be governed by the said Declaration of Condominium. ARTICLE IV The Association shall exist for so long as the Condominium exists. ARTICLE V The names and residences of subscribers to these Articles of Association are as follows: NAME Howard Bloom Herbert Hirsch Stephanie Norman ADDRESS 5300 Powerline Road Ft. Lauderdale, Florida 33309 5300 Powerline Road Ft. Lauderdale, Florida 33309 Smoketree Lodge Route 1, Banner Elk, North Carolina 28604

PREPARED BY

ARTICLE VI The affairs of this Association shall be managed by a Board of Administrators of not fewer than three, nor more than the number specified in the ByLaws of the Association, as amended

FINGER, WATSON DI SANTI & McGEE

ATTORNEYS P. O. BOX 193 BOONE, N. C. 28607 PHONE: 264-8128

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from time to time. Provisions for election and removal, disqualification and resignation of Administrators and for filling vacancies on the Board shall be established by the By-Laws. ARTICLE VII The principal officers of the Association shall be a President, VicePresident, Secretary and Treasurer who shall be elected from time to time in a manner set forth in the By-Laws. The names of the officers who shall serve until the first election of officers pursuant to the terms of the Declaration of the Condominium and the By-Laws of the Association are as follows: OFFICE President VicePresident SecretaryTreasurer NAME Howard Bloom Herbert Hirsch Stephanie Norman

ARTICLE VIII The aforesaid three persons shall also constitute the first Board of Administrators, and shall serve until the first election of the Board of Administrators at the first regular meeting of the Association. ARTICLE IX - This Association shall have all the powers granted to such associations by the Act, as well as all powers, rights and duties granted to or imposed upon it by the Declaration of the Condominium and its Exhibits, as amended from time to time. ARTICLE X There shall be no dividends or profits to any members of the Association, nor shall any part of the income of the Association be distributed to its Board of Administrators, officers or members. In the event the Association shall have any excess of receipts over disbursements, such excess shall be applied toward future necessary expenditures of the Association. The Association may pay compensation in a reasonable amount to its members in conformity with its purpose and may make such payments to any management firm as are mutually agreed upon between the Association and the management firm for the performance of duties and services by the management firm. Upon final dissolution and liquidation, the Association may make distribution only in a manner consistent with its nonprofit status, as requireed by all applicable tax and other laws, rules and regulations. This Association shall issue no shares of stock of any kind or nature whatsoever. Membership in the Association, transfer thereof, the number of members thereof, and the voting rights thereof, shall be in accordance with the terms and conditions of the Declaration of SMOKETREE LODGE CONDOMINIUM and all Exhibits thereto, including the ByLaws of this Association, as amended from time to time. IN WITNESS WHEREOF, the subscribers hereto have hereunto set their respective hands and seals on this day of 1982. (SEAL) Howard Bloom (SEAL) Herbert Hirsch (SEAL) Stephanie Norman

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STATE OF NORTH CAROLINA COUNTY OF WATAUGA This is to certify that on the day of

1982, before me, a Notary Public, persona1ly appeared HOWARD BLOOM, HERBERT HIRSCH and STEPHANIE NORMAN, who I am satisfied are the persons named in and who executed the foregoing Articles of Association and I, having first made known to them the contents thereof, they did acknowledge that they signed and delivered the same as their voluntary act and deed for the uses and purposes herein expressed. IN TESTIMONY WHEREOF, I have hereunto set my hand and seal this the day of 1982.

Notary Public My Commission Expires:

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EXHIBIT III BY-LAWS OF THE ASSOCIATION OF CO-OWNERS OF SMOKETREE LODGE CONDOMINIUM ARTICLE I Application and Definition. These By-Laws shall apply to all present and future owners, mortgagees, lessees or other occupants, and all other persons who may use the facilities of SMOKETREE LODGE Condominium (hereinafter the Condominium), with the mere act of occupancy of any of the Condominium units or property to signify that these By-Laws and all other of the Condominium documentation, rules and regulations are accepted, ratified and will be complied with, these By-Laws as they exist from time to time being hereby declared to be covenants running with all property within the Condominium. All terms herein shall be considered to have the same definition as in the Declaration of the Condominium (hereinafter the Declaration) and the other Exhibits attached thereto, and the North Carolina Unit Ownership Act (hereinafter the Act), and in the event of any conflict among them, the Act shall control. ARTICLE II Membership and Management. All owners of Condominium units or unit weeks will be members of the Association of Co owners (hereinafter the Association) which, through its Board of Administrators (hereinafter the Board), shall have the responsibility of managing the Condominium or arranging for its management pursuant to the Management Agreement constituting an Exhibit to the Declaration, or other management agreement. All management duties may, unless prohibited by the Declaration or the Act, be assigned to the management firm or its successors under said Management Agreement, or any other management agreement. Except as otherwise specifically provided, decisions required to be made by the members of the Association shall require approval of a majority thereof, as hereinafter defined. ARTICLE III Meetings and Voting. Section 1 Place of Meeting. Meetings of the members of the Association shall be held at the Condominium or at such other suitable place convenient to the members as may be designated by the Board. Section 2 Annual Meeting. The annual meeting of the members of the Association shall be held on the first Saturday in July of each year, commencing in July, 1983. At such meeting the members shall be ballot elect the Board for the ensuing year, and transact such other business of the Association as may properly come before the meeting. Section 3 Special Meeting. It shall be the duty of the President of the Association to call a special meeting of the members if directed to do so by resolution of the Board, or by a petition signed by a majority of the members. Notice thereof shall state the time, place and purpose of said meeting, and no business shall be transacted at any special meeting other than that stated in said notice, except by consent of no less than SeventyFive Per

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cent (75%) of the eligible votes present, either in person or by proxy. Section 4 - Notice of Meeting. It shall be the duty of the Secretary to mail a notice of the annual meeting and each special meeting (stating the purpose of said special meeting) to each unit owner at the address then on record with the Board at least Thirty (30) days but not more than Ninety (90) days in advance of each annual meeting, and at least Ten (10) days but not more than Thirty (30) days in advance of any such special meeting, such notice to be considered complete upon mailing. Section 5 - Voting and Majority. Voting shall be on a percentage basis with the percentage of the total vote of each member to be the same as his percentage interest in the common elements of the Condominium, as provided by the Declaration and the Exhibits thereto. Throughout these ByLaws, the term majority shall mean more than Fifty Percent (50%) of the total vote on the percentage basis hereinabove described. Section 6 - Quorum. Except as otherwise specifically provided herein, the presence in person or by proxy of the members holding a majority of the total vote shall constitute a quorum. In the event a quorum is not present the members who are present, either in person or by proxy, may adjourn the meeting to a time not less than Twenty-Four (24) hours from the beginning day and time of the then meeting. Section 7 - Proxies. Votes may be cast either in person or by proxy. Proxies shall be in the form determined from time to time by the Board, and must be filed with the Secretary at least Fifteen (15) days before the scheduled date and time of a regular meeting, or at least Twenty-Four (24) hours before the scheduled time of a special meeting. ARTICLE IV - Board of Administrators. Section 1 - Number and Qualifications. The Board of the Association shall consist of at least Three (3) persons, all of whom must be unit owners, or officers of a corporate unit owner, or partners of a partnership unit owner, or spouses of an individual unit owner. Section 2 - Powers and Duties. The Board shall manage and control the affairs of the Association, select the officers thereof, establish committees thereof and appoint the members of said committees, adopt reasonable rules of order for the conduct of the meetings of the Association (and have sole determination of procedural questions upon which no rules have been adopted), assign such duties and responsibility to the committees as it considers desirable which are not inconsistent with these By-Laws or any other of the Condominium documentation, adopt reasonable rules and regulations for the use of the Condominium, see to the maintenance of the Condominium property, the operation of the Condominium and the collection of assessments for that purpose, except to the degree that said duties and responsibilities have been delegated to the management firm under the Management Agreement constituting an Exhibit to the Declaration, or other management agreement then in effect. Section 3 - Election and Term of Office. At the first annual meeting of the Association, the term of office of the candidate for the Board receiving the greatest number of votes shall be

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three (3) years, the term of office of the candidate receiving the next highest number of votes shall be two (2) years, and the term. of office of the candidate receiving the third highest number of votes shall be one (1) year. At the expiration of the initial term of each Administrator, his successor shall be elected to serve a term of three (3) years. Each Administrator shall hold office until his successor has been duly elected and qualified. Pending the first election pursuant hereto, those persons subscribing the Articles of Association of the Association shall serve as the initial Board. Cumulative voting will not be permitted in the election of the Board. Section 4 - Meetings of the Board. The first meeting of the Board shall be held within ten (10) days following their election, at such place and time as they may determine by resolution, at the meeting in which they are elected, of which no notice shall be required. Regular meetings of the Board may be held at such time and place as shall be determined by a majority resolution, at least two of which meetings shall be held during each fiscal year. Notices thereof shall be given to each member personally or by mail telephone or telegraph at least ten (10) days prior thereto. Special meetings may be called by any two (2) Administrators, notice of which shall be given to each member of the Board, in the manner above described, at least three (3) days prior thereto. Notice of any meeting may be waived prior to, at or after any meeting of the Board. Attendance at a meeting by a member of the Board shall constitute a waiver of notice by him, unless he announces that his only purpose in attending said meeting is to its being held without proper notice. Any action which may be taken at a meeting may be taken without a meeting, in writing signed by all members of the Board and filed with the Secretary of the Association. Section 5 - Quorum. A majority of the members of the Board shall constitute a quorum to transact its business, and the act of a majority of the Administrators present shall be deemed to be the act of the Board. Section 6 - Vacancies and Removal. Any vacancy on the Board shall be filled by the remaining Administrator(s), even though he (they) might constitute less than a quorum. Any person so elected shall serve out the expired term of the vacant office. Any member of the Board may be removed with or without cause at any time by a majority vote of the members of the Association cast at any regular meeting or any special meeting called for that purpose. Section 7 - Fidelity Bond. The Board may require that any or all officers or employees of the Association handling funds of the Association furnish a fidelity bond in an amount determined by the Board, the premium for which shall be paid by the Association. ARTICLE V OFFICERS. Section 1 - Designation, Election and Removal. The officers of the Association shall be a President, a VicePresident, a Secretary and a Treasurer, and such additional Vice-Presidents and Assistant Secretaries and Assistant Treasurers as may be determined from time to time by the Board, all of whom shall be elected by the Board. Any two or more offices may be held by the same person, except the offices of President and Secretary. The officers shall be elected annually by the Board and shall hold office at the pleasure of the Board. Any officer may be removed, with or without cause, and his successor elected by the Board.

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Section 2 - President. The President shall be the chief executive officer of the Association, and shall be a member of the Board. He shall preside at all meetings of the Board and the members of the Association, shall have all of the general powers and duties usually vested in the office of President, including but not limited to the power to appoint committees from among the Associations members from time to time as he may consider appropriate, subject in all actions, however, to the supervision of the Board. Section 3 - VicePresident. The VicePresident shall perform the duties of the President in the absence of the President, and such other duties as may from time to time be assigned to him by the Board. Section 4 - Secretary. The Secretary shall keep minutes of all meetings of the Board and the members of the Association, have custody of the records of the Board and the Association, and perform all duties incident to the office of Secretary and such other duties as may be assigned to him from time to time by the Board. Section 5 - Treasurer. The Treasurer shall be responsible for the funds of the Association and for keeping full and accurate accounts of all receipts and disbursements and all other financial records of the Association. He shall be responsible for the deposit of all monies and other valuables in the name and to the credit of the Association in such depositories as may from time to time be designated by the Board, and for delivering to the management firm any and all funds owed by the Association to the management firm. ARTICLE VI - Mortgages and Mortgagees. Section 1 - Notification. Any unit owner who mortgages his unit or his interest therein shall notify the Association through the management firm, or the President of the Board in the event there is no Management Agreement then in effect, of the name and address of each mortgagee, and the Association or management firm shall maintain a record thereof. Section 2 - Notice of Unpaid Assessments. The Association or the management firm shall, at the request of any mortgagee or prospective mortgagee of a unit, report any unpaid assessments due from its mortgagor. Section 3 - Rights of Mortgagees. All mortgagees shall have the rights granted to them by the Declaration, and nothing contained in these By-Laws shall contravene said rights. ARTICLE VII Amendments. These By-Laws may be amended by the affirmative vote of unit owners entitled to vote a majority of the total vote of the Condominium, determined as hereinabove provided. No such amendment shall become effective until a certification thereof by the President and/or the Secretary of the Board or an authorized agent of the management firm is recorded in the Office of the said Watauga County Register of Deeds. All parties dealing with the Condominium in any manner shall be entitled to rely on such certification(s). ARTICLE VIII - Action by Written Consent

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Notwithstanding anything herein to the contrary, any action which may be taken pursuant to a vote in favor thereof at any meeting may be instead taken pursuant to written consent of the person who would be entitled to vote thereon at a meeting, which said written consent shall have the same effect as a vote at a duly instituted meeting, pursuant to due notice, in favor of the action consented to, which said consent may be evidenced by a Certificate thereof by the President and/or the Secretary of either the management firm or the Board, recorded in the Office of the said Watauga County Register of Deeds, and all parties dealing in any way with any of the Condominium property, the Board, the Association or any other person(s) affiliated with the Condominium are hereby authorized to rely on each said Certificate and the authority of the person executing the same. These ByLaws are hereby adopted, accepted and fully ratified as the ByLaws of the Association of Co-owners of SMOKETREE LODGE CONDOMINIUM, this the day of 1982. (SEAL) Howard Bloom (SEAL) Herbert Hirsch (SEAL) Stephanie Norman

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STATE OF NORTH CAROLINA COUNTY OF WATAUGA This is to certify that on the day of

1982, before me, a Notary Public, personally appeared HOWARD BLOOM, HERBERT HIRSCH and STEPHANIE NORMAN, who I am satisfied are the persons named in and who executed the foregoing By-Laws of the Association of Co-owners of Smoketree Lodge Condominium and I, having first made known to them the contents thereof, they did acknowledge that they signed and delivered the same as their voluntary act and deed for the uses and purposes herein expressed. Witness my hand and seal this the 1982. Notary Public day of

My Commission Expires:

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EXHIBIT IV COMMON ELEMENTS AND VOTING RIGHTS 24 UNITS PERCENTAGE OF INTEREST IN THE COMMON ELEMENTS AND EXPENSES NO. OF VOTES

UNIT DESIGNATION Ground Floor 101 102 103 104 105 First Floor 200 201 202 203 204 205 206 207 208 209 210 211 212 Second Floor 301 302 303 304 305 306 Totals:

TYPE OF UNIT

1 Bedroom 1 Bedroom Efficiency 1 Bedroom 1 Bedroom

5% 5% 3% 5% 5%

50 50 30 50 50

2 Bedroom Efficiency 1 Bedroom Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency 1 Bedroom 1 Bedroom 1 Bedroom 1 Bedroom

5% 3% 5% 3% 3% 3% 3% 3% 3% 5% 5% 5% 5%

50 30 50 30 30 30 30 30 30 50 50 50 50

Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom 1 Bedroom

3% 5% 5% 3% 5% 5% ______ 100%

30 50 50 30 50 50 ________ 1000

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EXHIBIT V FUTURE ADDITIONS

In accordance with Article 3, Section 5, entitled Future Additions, future additions not exceeding Eighty units may be added to this Condominium, on the following described property: Being all that property designated as Tract 5", _________ consisting of 3.38 acres, on that certain plat entitled Property of Condo Venture Corporation on a map by Michael M. Lacy, RLS L-1497, dated March 24, 1982, and being Map No. 82-3-24-48, recorded simultaneously herewith in Condominium Book _____, at Page _____, Watauga County Public 5 5 Registry, and being incorporated herein by reference.

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STATE OF NORTH CAROLINA COUNTY OF WATAUGA AMENDMENT TO DECLARATION OF INTENTION TO SUBMIT PROPERTY TO THE PROVISIONS OF CHAPTER 47-A OF THE NORTH CAROLINA GENERAL STATUTES SMOKETREE LODGE WHEREAS Condo Venture Corporation previously executed the said Declaration of Smoketree Lodge Condominiums, dated October 8, 1982 and recorded said Declaration in Book 225 at Page 405 and in Condominium Unit Ownership Book 5 at Page 5, Watauga County, North Carolina, Public Registry; and WHEREAS Smoketree Associates, Ltd., a North Carolina Corporation, has purchased all of the remaining rights, title and interest of the Developer in and to said condominium and the same has been transferred, conveyed and assigned to Smoketree Associates, Ltd. by deed of conveyance recorded in the Watauga County Public Registry, including the irrevocable power of attorney of each unit owner and mortgagee, and any other person with an interest, to make an amendment or amendments to the Declaration of Condominium from time to time, as set out in Article III of said Declaration; and WHEREAS said Declaration may be amended as provided, and the said successor Declarant, Smoketree Associates, Ltd., desires to amend same and to provide the appropriate and required plans or specifications in connection therewith; NOW THEREFORE, the aforesaid Declaration is hereby amended as follows: AMENDMENT NO. 4: Item A: Exhibit I, Description of Property (First Amendment) beginning on Page 810, Book 0028, Watauga County Public Registry, is deleted in its entirety and a new Exhibit I, the same being attached hereto, is substituted in its place. IN WITNESS WHEREOF, Smoketree Associates, Ltd., for itself as successor Declarant, and on behalf of all unit owners, mortgagees, and all other persons or parties with an interest in said Condominium, through the power of attorney granted in said Declaration of Condominium, has caused this Amendment to be executed by its duly authorized officers and its corporate seal to be hereunto affixed this the ______ day of _________________, 1986. SMOKETREE ASSOCIATES, LTD. By: Asst. V. President DECLARANT SMOKETREE ASSOCIATES, LTD. (Corporate Seal) Attest: Assistant Secretary By: Asst. V. President AS ATTORNEY for Unit Owners, Mortgagees and all other persons or parties with an interest in said Condominiums (See Article III, Section 5, Declaration of Condominium, Book 225, Page 410, Watauga County Public Registry.)

(Corporate Seal) Attest: Assistant Secretary

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STATE OF NORTH CAROLINA COUNTY OF WATAUGA

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This the _____ day of __________, 1986, personally came before me, _____________________________, a Notary Public in and for said State and County, Wayne Greenholtz, who, being by me duly sworn, says that he is the Assistant Vice President of Smoketree Associates, Ltd., and that the seal affixed to the foregoing Amendment to Declaration of Condominium for Smoketree Lodge, is the corporate seal of the corporation, and that the said writing was signed and sealed by him in behalf of the said corporation by its authority duly given. And the said Wayne Greenholtz acknowledged the said writing to be the act and deed of the corporation. Witness my hand and notarial seal this _____ day of _____________, 1986. ________________________________________ Notary Public

My commission expires: _______________________ STATE OF NORTH CAROLINA COUNTY OF WATAUGA

I _________________________________, a Notary Public in and for said State and County, do hereby certify that Wayne Greenholtz, who, being by me duly sworn, says that he is the Assistant Vice President of Smoketree Associates, Ltd., Attorney in Fact for Unit Owners, Mortgagees and all other persons or parties with an interest in Smoketree Lodge, a Condominium, and that he executed the foregoing Amendment to Declaration of Condominium for Smoketree Lodge, and that Smoketree Associates, Ltd.s authority to execute said instrument is as successor and assignee to the authority of the Declarant as set out in the original Declaration of Condominium, as referred to in the foregoing Amendment, and that this Amendment was executed under and by virtue of the authority given by said Declaration of Condominium granting said Power of Attorney; and the said Wayne Greenholtz acknowledged the due execution of the foregoing Amendment for the purposes therein expressed for and in behalf of said Unit Owners, Mortgagees and all other persons with an interest in said Condominium; further that the seal affixed is the corporate seal of Smoketree Associates, Ltd. and that the said writing was signed and sealed by him in behalf of Smoketree Associates, Ltd. by its authority duly given, and is acknowledged by him to be the act and deed of Smoketree Associates, Ltd. in its capacity as Attorney. Witness my hand and notarial seal this _____ day of _____________, 1986. _______________________________________ (SEAL) Notary Public

My commission expires: _______________________

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SMOKETREE LODGE EXHIBIT I (Second Amendment) Description of Property The property herein committed to Condominium consists of all of that certain parcel or tract of land, together with all improvements thereon, located in Watauga Township, Watauga County, North Carolina, described as follows: BEGINNING on N. C. Grid Station Marjons and running South 55 degrees 17 minutes West 4,521.66 feet to an iron set; thence the following courses and distances in the Northwestern margin of the 100 foot right-of-way of N. C. Highway 105: South 141 degrees 06 minutes West 78.21 feet; South 37 degrees 17 minutes West 84.60 feet; South 35 degrees 34 minutes West 71.73 feet and South 34 degrees 41 minutes West 40.37 feet to a calculated point being the Beginning of Tract 3; thence from the beginning and with the common line of Tracts 3 and 4, North 51 degrees 17 minutes West 14.44 feet to a point in the edge of the parking area; thence with the edge of said parking area and said common line the following courses and distances: North 51 degrees 17 minutes West 26.31 feet; North 71 degrees 09 minutes West 36.14 feet and North 23 degrees 02 minutes West 11.23 feet to the South corner of the steps; thence North 69 degrees 37 minutes East 31.78 feet to a calculated point; thence North 57 degrees 31 minutes East 112.77 feet to a spike set; thence North 67 degrees 49 minutes East 18.10 feet to a spike set; thence North 36 degrees 13 minutes West 81.28 feet to a spike set; thence South 60 degrees 32 minutes West 16.85 feet to an iron set; thence South 59 degrees 55 minutes West 61.74 feet to a spike set; thence South 74 degrees 42 minutes West 49.81 feet to a spike set at the edge of the steps; thence with the edge of the steps South 75 degrees 51 minutes West 5.00 feet to the Northwest corner of the steps; thence South 54 degrees 57 minutes West 10.04 feet to a tack set in the edge of the parking area; thence South 76 degrees 09 minutes West 84.89 feet to a tack set in the edge of the parking area; thence with the edge of said parking area North 12 degrees 57 minutes West 8.93 feet and South 84 degrees 00 minutes West 52.87 feet to point A of a map of the Condo Venture Corporation property by Michael M. Lacey, RLS No. L-1497, Job No. 82-3-24-48; thence from point A and the common line of Tracts 1 and 3 South 50 degrees 57 minutes West 20.60 feet to point B; thence from point B South 14 degrees 18 minutes East 29.83 feet to point C; thence from point C North 75 degrees 42 minutes East 22.58 feet to point D; thence from point D North 14 degrees 18 minutes West 10.83 feet to point M; thence from point M North 75 degrees 42 minutes East 12.00 feet to point N; thence from point N South 14 degrees 18 minutes East 14.91 feet to point O; thence from point O South 75 degrees 42 minutes West 18.50 feet to point L; thence from point L South 13 degrees 52 minutes East 34.92 feet to a calculated point; thence South 16 degrees 20 minutes East 41.54 feet to the centerline of the branch and a common corner of Tracts 1, 2 and 3; thence down and with the centerline of the branch and the common line of Tracts 2 and 3, the following courses and distances: North 63 degrees 34 minutes East 13.39 feet; South 87 degrees 38 minutes East 25.89 feet; South 64 degrees 214 minutes East 57.76 feet; South 47 degrees 00 minutes East 30.24 feet and South 86 degrees 36 minutes East 48.83 feet to the centerline of the branch at a culvert; thence South 75 degrees 24 minutes East 20.65 feet to a calculated point in the Northwestern edge of the 100 foot right-of-way of N. C. Highway 105; thence with the Northwestern edge to the right-of-way North 34 degrees 41 minutes East 60.04 feet to the point of BEGINNING, containing 0.85 acre and being designated as Tract 3 on a map by Michael M. Lacey, RLS No. L-1497, dated March 24, 1982 and being Map No. 82-3-24-48. Also conveyed herewith is a non-exclusive easement for parking purposes for unit owners of said condominium, as follows: BEGINNING on an iron set; iron set being located South 55 degrees 17 minutes West 4,521.66 feet from N. C. Grid Station Marjons; thence from the BEGINNING North 62 degrees 20 minutes West 87.37 feet to a spike set in parking area; thence leaving parking area North 20 degress 43 minutes West 20.00 feet to a calculated point, said

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point being a common corner of Tract 5 and Tract 4, and being located South 20 degrees 43 minutes East 211.19 feet from an iron set in the centerline of the old Tweetsie Railroad bed; thence with the common line Tracts 4 and 5, South 63 degrees 09 minutes West 14.42 feet to a point, said point being the edge of the parking area; thence with the edge of the parking area and common line of Tract 4 and 5 South 52 degrees 11 minutes West 68.66 feet; South 67 degrees 55 minutes West 137.07 feet; South 71 degrees 41 minutes West 56.06 feet and South 80 degrees 48 minutes West 45.53 feet; thence leaving the edge of the parking area and still with the line of Tract 5, South 72 degrees 21 minutes West 35.25 feet to a tack set in a rock, the common corner to Tracts 1, 4 and 5; thence with the common line of Tracts 1 and 4, due South 26.28 feet to point A of a map of the Condo Venture Corporation property by Michael M. Lacey, RLS No. L-1497, Job No. 82-3-24-48; thence from point A North 84 degrees 00 minutes East 52.87 feet to a point in the edge of the parking area; thence South 12 degrees 57 minutes East 8.93 feet to a tack set in the edge of said parking area; thence North 76 degrees 09 minutes East 84.89 feet to a tack set in the same parking area; thence North 54 degrees 57 minutes East 10.04 feet to a point, said point being the Northwest edge of the steps; thence North 75 degrees 51 minutes East 5.00 feet with the northernmost edge of the steps to a spike set; thence North 74 degrees 42 minutes East 49.8l feet to a spike set; thence North 59 degrees 55 minutes East 61.74 feet to an iron set; thence North 60 degrees 32 minutes East 16.85 feet to a spike set; thence South 36 degrees 13 minutes East 81.28 feet to a spike set; thence South 67 degrees 49 minutes West 18.10 feet to a spike set; thence South 57 degrees 31 minutes West 112.77 feet to a calculated point; thence South 69 degrees 37 minutes West 31.78 feet to the edge of said parking area and the South corner of the steps; thence with edge of said parking area South 23 degrees 02 minutes East 11.23 feet; South 71 degrees 09 minutes East 36.14 feet and South 51 degrees 17 minutes East 26.31 feet; thence leaving said parking area South 51 degrees 17 minutes East 14.44 feet to a calculated point in the Northwest edge of a 100 foot right-of-way along N. C. Highway 105; thence with the western edge of said right-of-way North 34 degrees 41 minutes East 40.37 feet; thence with edge of said rightof-way North 35 degrees 34 minutes East 71.73 feet crossing the parking area; thence with same edge of the right-of-way North 37 degrees 17 minutes East 84.60 feet; North 41 degrees 06 minutes East 78.21 feet to the point of BEGINNING, containing 0.71 acre and being designated as Tract 4 on a map by Michael M. Lacey, RLS No. L-1497, dated March 24, 1982, Map No. 82-3-24-48 and revised Map No. 85-12-2-260. The Declarant reserves the right to alter, amend, add or to take from said parking easement, in his sole discretion, so long as there exists sufficient parking area to provide one parking space for each condominium unit. The aforesaid property and the particular improvements thereon which are hereby committed to Condominium, and the location of said improvements, are as shown and described on the Site Plan and Plans constituting a part hereof, being incorporated herein by this reference, recorded in Condominium Flat Book 5 at Page 5, Watauga County Registry. Improvements consisting of the building in which the units are located and the location of individual units therein are as shown and described on said Site Plan and Plans. All areas not contained within the units, as said units are defined and depicted in this Declaration and said Site Plan and Plans, constitute common elements. There are no limited common elements at present; however, should such be later designated, they will be indicated, along with the unit or units having the use thereof, by an appropriate amendment hereto. The building in the Condominium contains Condominium Units as designated on said Plans and on Exhibit IV.

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WATAUGA COUNTY STATE OF NORTH CAROLINA AMENDMENT TO DECLARATION OF INTENTION TO SUBMIT PROPERTY TO THE PROVISIONS OF CHAPTER 47-A OF THE NORTH CAROLINA GENERAL STATUTES SMOKETREE LODGE WHEREAS, CONDO VENTURE CORPORATION, A Florida Corporation authorized to do business in North Carolina, hereinafter called the Declarant, previously executed the said Declaration of Smoketree Lodge Condominium, dated October 8, 1982, and recorded said Declaration in Book 225 at Page 405, and in Condominium Unit Ownership Book 5 at page 5, Watauga County, North Carolina, and WHEREAS, said Declaration may be amended as provided, and the Declarant desires to amend to provide the appropriate and required architects certificate, plans and specifications with regard to additional added units 105 through 111, 213 through 216, and 311 through 314, located on the three floors of said Condominium; NOW, THEREFORE, the aforesaid Declaration is hereby amended as follows: AMENDMENT # 2: Exhibit IV as appears in the said Declaration (as Amended) is deleted in its entirety and the attached Exhibit IV (second amendment) is substituted in its place. Architect David Patrick Moses Certificate dated June 18, 1984, together with the plans and specifications attached thereto for the said units 105 through 111, 213 through 216, and 311 through 314, is added as an Exhibit to said Condominium Declaration and filed in Condominium Unit Ownership Book 5 at page 5. IN WITNESS WHEREOF, Declarant has caused this Amendment to be executed by its duly authorized officers and its corporate seal to be hereunto affixed, this the 18th day of June, 1984. CONDO VENTURE CORPORATION By: Asst. Vice President Asst. Secretary STATE OF NORTH CAROLINA WATAUGA COUNTY This the 18th day of June, 1984, personally came before me, ______________________ a Notary Public in the above County and State, C. Banks Finger, who being by me duly sworn, says that he is the Asst. Vice President of Condo Venture Corporation, and that the Seal affixed to the foregoing Amendment is the corporate seal of the Corporation, and that the said writing was signed and sealed by him and attested by the Asst. Secretary on behalf of the said Corporation by its authority duly given. And the said C. Banks Finger acknowledge the said writing to be the act and deed of the corporation. Witness my hand and notarial seal this 18th day of June, 1984. My Commission expires: Notary Public

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SMOKETREE LODGE EXHIBIT IV (SECOND AMENDMENT) COMMON ELEMENTS AND VOTING RIGHTS PERCENTAGE OF INTEREST IN THE COMMON ELEMENTS AND EXPENSES NO. OF VOTES

UNIT DESIGNATION Ground Floor 101 102 103 104 105 106 107 108 109 110 111 First Floor 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 Second Floor 301 302 303 304 305 306 307 308 309 310 311 312 313 314 TOTALS:

TYPE OF UNIT

1 Bedroom 1 Bedroom Efficiency 1 Bedroom Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency

2.4 2.4 2.3 2.4 2.3 2.3 2.3 2.3 2.3 2.3 2.3

24 24 23 24 23 23 23 23 23 23 23

2 Bedroom Efficiency 1 Bedroom Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency 1 Bedroom 1 Bedroom 1 Bedroom 1 Bedroom Efficiency Efficiency 2 Bedroom 2 Bedroom

2.7 2.3 2.4 2.3 2.3 2.3 2.3 2.3 2.3 2.4 2.4 2.4 2.4 2.3 2.3 2.7 2.7

27 23 24 23 23 23 23 23 23 24 24 24 24 23 23 27 27

Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom 1 Bedroom Efficiency 1 Bedroom Efficiency 1 Bedroom Efficiency 2 Bedroom Efficiency Efficiency

2.3 2.4 2.4 2.3 2.4 2.4 2.3 2.4 2.3 2.4 2.3 2.7 2.3 2.3 _____ 100%

23 24 24 23 24 24 23 24 23 24 23 27 23 23 _____ 1000

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STATE OF NORTH CAROLINA COUNTY OF WATAUGA DECLARATION OF CONDOMINIUM FOR SMOKETREE LODGE Pursuant to Chapter 47A of the North Carolina General Statutes This Declaration of Condominium, made on the date hereinafter set forth by CONDO VENTURE CORPORATION, a Florida Corporation (hereinafter called Declarant or "Developer" or Grantor), pursuant to the provisions of Chapter 47A of the North Carolina General Statutes, as amended, W I T N E S S E T H: Whereas, Declarant is the owner in fee simple of the real property located in Watauga County, North Carolina, described in Exhibit I attached hereto and by this reference incorporated herein, and all buildings and other improvements thereon, and WHEREAS, Declarant desires to submit said property to the provisions of Chapter 47A, North Carolina General Statutes, as amended, thereby creating a Condominium thereon to be known as Smoketree Lodge (hereinafter referred to as the Condominium) and to provide for the individual ownership of the Condominium Units and interest in that portion of the property constituting Common Areas and Facilities, pursuant to the provisions hereinafter set forth: NOW, THEREFORE, Declarant hereby submits said property to the provisions of said Chapter 47A, North Carolina General Statutes, as amended, thereby creating a Condominium thereon to be known as Smoketree Lodge, and hereby imposes on said property the covenants, conditions, restrictions, reservations, liens and other charges as set forth in this Declaration and the By-Laws and other Exhibits attached hereto, all of which shall bind and inure to the benefit of Declarant and its successors and assigns and all subsequent owners of any interest in said property. ARTICLE I DEFINITIONS In this Declaration and the By-Laws and Exhibits attached hereto, and all Amendments thereof, unless the context otherwise requires, the following definitions shall govern: (a) Assessment means a share of the funds required for the payment of common expenses or other expenses which from time to time are assessed against some or all of the unit owners. (b) Association of Coowners, or the Association, means the Association of all Co-owners.
PREPARED BY

FINGER, WATSON DI SANTI & McGEE

ATTORNEYS P. O. BOX 193 BOONE, N. C. 28607 PHONE: 264-8128

(c)

Board of Administrators, or the Board, means the

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Board of Administrators of the Association of Co-owners. (d) Building means a structure containing one or more Condominium units, comprising a part of the property. (e) ByLaws means the By-Laws of the Association of Coowners, as amended from time to time. (f) Common Elements means and includes all of the Condominium property excluding the Units, including general common elements and limited common elements, if any, and shall be considered synonymous with the term common areas and facilities. (g) Common Expenses means and includes (1) all expenses incident to the administration, maintenance, repair and replacement of the common elements, after excluding therefrom any and all expenses which are the responsibility of a unit owner as set forth in this Declaration and the Exhibits hereto; (2) expenses determined by the Board to be common expenses; and (3) expenses declared by the Act to be common expenses. (h) Condominium Property or the property" means and includes all land and all buildings and other improvements and structures thereon, and all easements, rights and appurtenances belonging thereto, whether or not contiguous, then comprising a part of, or intended for use in connection with, the Condominium. (i) Condominium Unit or Unit means an individual Condominium unit as defined and described by the Act, and as further defined and described herein and in the Exhibits hereto, including the Site Plan and other plans and drawings constituting part of Exhibit I hereto, which delineate the physical boundaries of each unit. (j) Coowner or Unit Owner means any person or other legal entity, including Declarant, owning one or more units, or any unit weeks in a unit committed to Interval Ownership, but shall not include any mortgagee or other lienor, unless said mortgagee or lienor has acquired title pursuant to foreclosure or some process in lieu of foreclosure. (k) Declaration means this Declaration of Condominium.

(l) Limited Common Elements means and includes those common elements which are reserved for the use of one or more units to the exclusion of the other units, and includes all areas if any, designated limited common elements in this Declaration and all Exhibits hereto, and any and all later amendments thereto. (m) Management Agreement means that certain Agreement attached to this Declaration between the Association of Co-owners, acting through its Board of Administrators, and Declarant, or any other Management Agreement then in effect, providing for the management of the Condominium. (n) Management Firm means Declarant In its function under the Management Agreement pursuant to which it will manage the Condominium, or its successors or assigns under said Agreement. In the event no Management Agreement is then in effect, all references herein to the management firm shall be deemed to refer instead to the Board, it being specifically intended that all authority and responsibility placed with the management firm Hereby shall in such event rest with the Board, unless it shall

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have been otherwise delegated or assigned by the Board consistent with the provisions hereof. (o) Occupant means any person or persons in possession of a unit or any part thereof. (p) Person means and includes individuals, partnerships, corporations and all other legal entities. (q) The Act means Chapter 47A of the General Statutes of North Carolina, as amended from time to time. It is the intention hereof that the provisions of the Act shall control the creation of the Condominium. Should there be any conflict between the Act and this Declaration, the Act shall control. (r) With reference only to those units committed to Interval Ownership: 1. Interval Ownership means the ownership of one or more units. 2. Interval Owner means the person owning one or more of said unit weeks, whether entirely or jointly or in common with others. 3. Unit Week means an undivided 1/52 interest in fee simple in a particular Condominium Unit as a tenant in common with the owners of all other unit weeks in said unit, including an undivided 1/52 interest in fee simple in the fractional undivided interest in the common elements attributable to that particular unit, as set forth in Exhibit IV attached hereto, which said interest shall be subject, however, to the following provisions concerning use and occupancy of said unit, which said provisions shall constitute a Use and Occupancy Agreement among all said owners of unit weeks in said unit, which said Agreement shall be a covenant appurtenant to said unit, which shall run with the title thereto and be enforceable against all parties acquiring any interest in said unit, all of said parties to be construed to be agreeing to the provisions thereof by their acquisition of said interest, it being hereby agreed among all parties acquiring any interest in said unit that the owner of each unit week in said unit shall have the right to the exclusive use and occupancy of said unit, as well as the right to use the common elements to the exclusion of the owners of other unit weeks in said unit, during the particular numbered unit week owned by him, for a term commencing upon the recording of the first Deed committing the unit involved to interval ownership, as hereinafter described, and terminating on December 31, 2080, unless said term has been renewed as hereinafter provided. The respective numbered unit weeks are as follows: Unit Week No. 1 (and the period during which the owner thereof shall have exclusive use and occupancy of the unit involved) shall be the sevenday period commencing at 12:00 Noon on the first Saturday of each year. Unit Week No. 2 shall be the seven-day period next succeeding, with each following unit week, to and including Unit Week No. 52, determined in like manner. Each interval owner will, however, relinquish occupancy for the first four hours and the last two hours of each unit week to allow six hours (from 10:00 A.M. to 4:00 P.M. on each Saturday) for cleaning, repairs, maintenance and other services to the unit involved. 4. Unit Committed to Interval Ownership means any unit

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in which any one or more unit weeks is owned by some person other than the owner of other unit weeks in said unit with each unit becoming committed to interval ownership upon the recording of the first Deed so separating ownership of the unit. A unit shall be considered to no longer be committed to interval ownership whenever all unit weeks (constituting total title) therein are owned by the same person. No unit may be committed to interval ownership by any person other than Declarant or the person to whom Declarant shall have conveyed substantially all units owned by it and assigned its right to commit units to interval ownership. ARTICLE II THE ASSOCIATION OF CO-OWNERS Section 1. Responsibility for Administration. The admin istration and operation of the Condominium and the maintenance, repairs and replacement of common elements shall be the responsibility of the Association, said administration and operation to be in accordance with, and the Association to have all powers and duties provided by, the Act and this Declaration and all Exhibits hereto, as amended from time to time, as well as all other supplementary and related powers and duties appropriate to operate the Condominium. Section 2. Articles of Association and ByLaws. The Association is being formed simultaneously with this Declaration, by the execution of the Articles of Association thereof attached hereto as Exhibit II. The Association shall be governed by said Articles and by the ByLaws of the Association attached hereto as Exhibit III, as amended from time to time, provided, however, that no amendment shall be adopted which would impair the validity or priority of any mortgage without the written consent of the record holder thereof, or which would affect the rights or obligations of the Declarant, its successors or any management firm then managing the Condominium without the prior written consent thereof, and no amendment shall be effective until an appropriate document indicating said amendment shall have been duly recorded in the Office of the Register of Deeds of Watauga County, North Carolina. Section 3. Voting Rights. Any two or more persons owning a unit or unit week shall designate one of them as the Voting Member. Such designation shall be in accordance with any provisions of the ByLaws applicable thereto, but the Board is hereby authorized to rely on the representation of individuals representing themselves to be Voting Members that they have been duly designated as such, subject, however, to such proof as the Board in its discretion may require. Each Voting Member shall be entitled to vote all of the votes appertaining to the unit week or weeks being voted, by him, as provided by Exhibit IV attached hereto and by this reference incorporated herein, at any meeting of the Association, in person or by proxy, as provided by the ByLaws, regardless of whether such meeting occurs during a unit week being voted by him. ARTICLE III PROPERTY RIGHTS Section 1. Unit Designation and Identification. The desig-

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nation of each unit, its location, layout dimensions, approximate area, ceiling and floor elevations, number of rooms, common elements to which it has access and which afford access to it, as well as the identifying number by which it shall be designated, are as shown on attached Exhibit I. Each unit is bounded both as to horizontal and vertical boundaries by the interior unfinished surfaces of its perimeter walls, ceilings and floor as shown on the plans constituting part of said Exhibit I (it being intended that the final surface of said walls, ceilings and floors, such as carpet, paint, paneling, wallpaper, and drywall shall constitute part of the unit), subject to such encroachments as may now or hereafter exist by virtue of construction, settlement or movement of the building in which it is located, or by permissible repairs, construction or alteration. Section 2. Description of Buildinqs. The Condominium contains the buildings as shown on Exhibit I, Said buildings are constructed principally of wood frame, with block foundations on footers and cedar shake roofs, containing three stories, without basement, as shown on said plans. Section 3. Common Elements. The common elements shall consist of all of the Condominium, except the portion thereof which is included within individual units, as hereinabove described, and shall include all improvements of whatever nature, whether within or without individual units, necessary or convenient to the common use of the property and to the existence maintenance or safety of the property. Each unit owner shall own an undivided interest in the common elements, stated as a percentage, as set forth in Exhibit IV, which shall be appurtenant to the Condominium unit or unit week involved and not susceptible to separation from said unit or unit week except in the event of termination of the Condominium according to law and any applicable provisions hereof. Section 4. Use. The buildings and each of the units shall be used for residential purposes only, subject to the Use and Occupancy Agreement provided under the Declaration of Unit Week hereinabove. Each unit owner hereby covenants and agrees to be bound by and comply with all Rules and Regulations promulgated by the Board or the management firm, and to be responsible for their being obeyed by his family, guests, invitees, servants and all other occupants occupying the unit of said unit owner with his permission. Any unit owner may be denied the use of his unit and the common elements, by the Board or management firm, while he is in default of payment of any assessments for common expenses or other property assessment against him, or while he or any other person occupying his unit by his permission is in violation of any of the aforesaid Rules and Regulations. The use of the common elements shall be limited to those persons who are then rightfully occupying units. The management firm shall have the authority to designate parking spaces for use by the occupants of the respective units, whereupon such designations shall become a part of the aforesaid Rules and Regulations, enforceable as to all owners or other users. No animals or pets of any kind shall be kept in any unit or elsewhere on the property in violation of any then applicable Rules and Regulations; provided, however, that no pets of any kind shall be kept or maintained for any commercial purposes, and that any pets causing or creating a nuisance or unreasonable disturbance shall be permanently removed from the property upon three days notice from either the Board or the management firm. No person shall do

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or permit to be done anything in or about his unit which will increase the rate of insurance on the property or annoy or interfere in any way with the rights of others, or commit or permit any nuisance or illegal act on or about the property. The right of occupancy and use of a unit committed to interval ownership and the common elements by an interval owner shall be limited to the unit week(s) owned by said interval owner. Should any interval owner, or any person occupying his unit, occupy said unit otherwise and thereby infringe upon the use thereof by another interval owner, the interval owner involved shall pay to the aggrieved interval owner the sum of $250.00 per day or part thereof that such use and occupancy is infringed upon, and said aggrieved interval owner, as well as the management firm and the Association, shall have a lien upon the offending interval owners interest in the unit for payment thereof, plus reasonable attorneys fees, as provided herein for common expenses. Upon collection of said sum by the Board or the management firm, said funds shall thereupon be paid to the aggrieved owner. Section 5. Future Additions. Notwithstanding anything herein to the contrary, Declarant or its assigns shall have the right to add such additional property and units to the Condominium as it might desire; provided, however, that such future units shall consist of a maximum of Eighty (80) units, located on all or part of the property described in Exhibit V attached hereto, shall be compatible architecturally and otherwise with the existing units, and shall be completed within five years from the date hereof. Declarant or its assigns shall have the absolute right in its discretion to amend the Declaration and all Exhibits hereto from time to time in order to include such additional units and property, or portions thereof, and to that end to redetermine from time to time the percentage interest in the common elements attributable to each unit, and to make all such other amendments as may be necessary, convenient or proper to effectuate the inclusion of such additional units and property; provided further, however, that the undivided interest in the common elements attributable to each unit shall bear the same ratio to the total undivided interest in the common elements as the approximate fair market value of said unit then bears to the then aggregate fair market value of all units then included in the Condominium, without regard to differences in market value which might result from some units being then used rather than new, or to decreases in market value of a particular unit or units as a result of damage from fire or other casualty which has not then been repaired. Each unit owner and mortgagee, and each other person having any interest in the Condominium shall be deemed to have consented to such amendment or amendments to the Declaration and all Exhibits thereto, and shall be deemed to have granted to Declarant or its assigns an irrevocable power of attorney, coupled with an interest, to make such amendment or amendments from time to time. ARTICLE IV COMMON EXPENSES AND ASSESSMENTS The common expenses of the Condominium, including the obligations of each unit owner under the Management Agreement attached hereto as Exhibit VI, shall be shared by the unit owners in the respective, percentages specified in Exhibit IV, excluding, however, Declarant with respect to units and units weeks then remaining unsold (such units and unit weeks being responsible for

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their respective shares of said common expenses only from the date of the recording of the first conveyance thereof by Declarant or Declarants successors or assigns to the first owner/user thereof). With the exception of Declarant and its successors and assigns with respect to units and unit weeks remaining unsold, as hereinabove provided, each unit owner in each unit committed to interval ownership shall pay, in addition to his prorata share of the common expenses as hereinabove provided, a prorata share (said prorata share to be the amount determined by the management firm in its discretion to be the prorata share attributable to said owners unit week or weeks) of all other costs incurred by the management firm and the Board in the maintenance, upkeep and operation of all units committed to interval ownership, including but not limited to the funds necessary for repair and replacement of furniture, fixtures, appliances, carpeting, utensils, linens and all other personal property appurtenant to said unit, and reserves necessary therefor; casualty, liability, hazard and contents insurance; real estate, personal property and other taxes against said unit or its contents; maid service; and any other expenses incurred in the normal operation and maintenance of all such units. Declar ant shall be responsible for actual operating expenses in excess of the collections of said assessments to the extent that said excess would be otherwise payable by the owners of units and unit weeks then remaining unsold. The management firm shall have the power to fix and collect the assessments for the common expenses of the Condominium, including the aforesaid expenses with respect to units committed to interval ownership, and all other sums provided for in this Declaration and its Exhibits, in the manner provided. All such assessments not paid within ten (10) days of the due date thereof shall bear interest at the rate of Twelve Percent (12%) per annum (or such lesser rate as shall then constitute the maximum rate allowed by law) from the due date thereof until paid, and, at the discretion of the management firm or the Board, a late charge of Ten Dollars ($10.00), or such lesser sum as the management firm or Board shall determine, shall also be due and payable. Regular assessments shall be due and payable in advance, at such intervals as may be determined by the management firm. After initial notification to the unit owners of the amount and interval of said assessments, periodic billing shall not be required. A lien shall exist in favor of the Association of Co-owners and the management firm, against the interest of each unit owner in each Condominium unit and all tangible personal property therein, for all unpaid assessments and interest thereon, which said lien shall attach as of the respective due dates of the respective unpaid assessments. All fees and costs incident to the collection of such said assess ments, including reasonable attorneys fees, as well as all sums advanced by the Association or the management firm for taxes, payments on mortgages, and/or any other advances which may be required in order to preserve and protect said lien, shall be payable by the unit owner involved and secured by said lien. In addition, a personal action may be taken against the defaulting unit owner, which shall not be considered to waive said lien. In addition, the unit owner shall be required to pay reasonable rent for the Condominium unit for the period of time said default exists and said unit is occupied by said unit owner or anyone else by, through, or under him, and the Association and management firm shall be entitled to the appointment of a receiver to collect said rent from said unit owner and/or occupant of the unit. A new unit owner as a result of foreclosure of a first

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mortgage against a unit or unit weeks, or deed in lieu of foreclosure thereof, or its successors and assigns, shall not be liable for assessments made against the former owner which became due prior to acquisition of title as a result of said foreclosure or deed in lieu of foreclosure. Such unpaid assessments shall be deemed to be common expenses collectible from all unit owners, including said new title holder. Any person otherwise acquiring an interest in a unit shall not be entitled to occupancy of the unit or use of the common elements until such time as all unpaid assessments against said unit or unit week shall have been paid, and shall be jointly and severally liable with the former owner or owners for payment thereof. The management firm and the Board shall have the right to assign its claim and lien rights for the recovery of unpaid assessments to any third party or parties. ARTICLE V MAINTENANCE, OPERATION, MANAGEMENT, REPAIRS AND ALTERATIONS Section 1. Contracts for Maintenance, Operation, Management and Repairs. The Board shall have the authority to contract with any and all parties, and to join with other condominiums in doing so, for the maintenance, operation, management and repair of the Condominium, and may delegate to any said party all powers and duties of the Board and the Association, except those which are specifically required hereby or by the By-Laws to have the approval of the Board or the members of the Association. Said contractor or management firm may be authorized to determine the budget for the Condominium, set the assessments for common expenses and for the operation of units committed to interval ownership, and to collect the same, with all authority in connection therewith which is conferred on the Board hereby. The Association, acting through its Board, is hereby authorized to enter into such agreements, including without limitation a management agreement, with Declarant and/or others, as it may deem necessary or desirable for the administration, management, operation and maintenance of the Condominium. Each unit owner, by acquiring or holding an interest in any unit, and each occupant of a unit by said occupancy, thereby agrees to be bound by the terms and conditions of all such agreements entered into by the Board on behalf of the Association. A copy of all such written agreements shall be made available at the office of the Associa tion for review by each unit owner. The Association, through its initial Board, has entered into a Management Agreement with Declarant, which is attached hereto as Exhibit VI, and every interest in the Condominium property, as owner, mortgagee or otherwise, shall hereafter be subject to all provisions of said Agreement, or any such Management Agreement then in effect, so long as it remains in effect. Section 2. Authorization and Assessment for Alterations and Additions. There shall be no improvements, alterations or additions to the common elements costing in excess of $5,000.00, unless authorized by the management firm and approved by the affirmative vote or written consent of co-owners owning at least SixtyFive Percent (65%) interest in the common elements. The cost thereof shall be assessed as a common expense, except that any such alterations or additions which are exclusively or substantially exclusively for the benefit of one or more particular

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unit owners shall be assessed solely against and collected solely from said owners, in such proportion as may be determined to be fair and equitable by the management firm; provided, however, that no such alteration or addition shall be made which shall not have been approved by vote or written consent of at least Sixty Five Percent (65%) of the total percentage interest of the owners of the units benefiting therefrom. Section 3. Maintenance of and Alterations to Units Not Committed to Interval Ownership. Each owner of a unit not committed to interval ownership, shall maintain said unit and all interior surfaces therein (including wallpaper, drywall, paneling and carpet, if said unit is carpeted), as well as all fixtures and equipment therein, and all doors (except that the painting of the exterior of exterior doors shall be a common expense), windows, screens and glass, in good repair, and shall pay for his electricity and telephone, and shall neither make nor cause to be made any alteration within said unit without the prior written consent of the management firm. In the event of any such alteration, the unit owner involved shall be responsible for all damages to the common elements or any other unit caused by him or his contractor, subcontractor, agent or employee, whether such damage is caused by negligence, accident or otherwise. Section 4. Maintenance of and Alterations to Units Committed to Interval Ownership. Each interval owner in a unit committed to interval ownership shall pay his proportionate share of the cost of maintaining repairing and operating the unit as hereinabove provided, but shall make no alterations, repairs or replacements within said unit or the common elements without the prior written consent of the management firm, as well as the owners of all other unit weeks in said unite All expense of repairs or replacements occasioned by the specific use or abuse by any interval owner, or any other person occupying the unit with his consent, shall be borne in full by said interval owner. The management firm shall have the authority to determine the interior color scheme, decor and furnishings of all units committed to interval ownership, as well as the proper time for redecorating each said unit and replacing furnishings or other property therein, and to judge normal wear and tear, and to determine the amount to be assessed against any interval owner causing or allowing damage or abuse to the unit, its furnishings or other Condominium property. Section 5. Maintenance by the Management Firm or Board. The management firm, the Board, and their respective agents, employees and contractors, shall have the right to enter any unit for the purpose of inspection, maintenance, repairs and replacements. In the event any unit owner fails to meet his maintenance obligations the Board or the management firm shall be entitled to take legal action against said defaulting unit owner, and to levy a special assessment against the defaulting unit owner to make said repairs, maintenance and replacements, for which, as well as all costs reasonably incurred in connection therewith and reasonable attorneys fees, a lien shall exist as provided herein for common expenses. ARTICLE VI INSURANCE

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Section 1. Common Casualty and Liability Coverage. The management firm shall obtain, by a single master policy if available fire insurance with extended coverage, vandalism, malicious mischief and windstorm endorsements, from a company or companies authorized to do business in North Carolina, including all of the Condominium property (including all of the units and the bathroom and kitchen fixtures initially installed therein by the Declarant, or its assigns, including furniture, furnishings and other personal property which are common elements, hut not property supplied or installed by unit owners), together with all equipment and other service machinery on the Condominium, property, insuring the Association, the Board, and management firm, and all other unit owners and their mortgagees, as their interests may appear, in the maximum insurable replacement value of the property, as determined by the management firm, without deduction for depreciation, as well as public liability and property damage insurance in such amount as the management firm may from, time to time determine (but in no event less than $100,000.00 with respect to any one person, $300,000.00 with respect to any one accident or occurrence, and $50,000.00 with respect to any claim for property damage), insuring the management firm, the Board, the Association and each unit owner against any liability to the public or other owners (and their employees, agents and invitees) arising out of or incident to the ownership and/or use of the common elements on a comprehensive liability basis, containing a cross-liability endorsement under which the rights of a named insured under the policy shall not he prejudiced with respect to his action against another named insured The management firm shall attempt to obtain a policy providing that the insurer waives its right of subrogation to any claims against the Association, the Board, the managing agent and the owners and their respective agents, employees, quests and members of their households, and with any "no other insurance clause contained in the policy expressly excluding from its operation individual owners policies. In no event shall said insurance coverage be brought into contribution with insurance purchased by individual owners or their mortgagees, except to the extent required by North Carolina or other applicable law or insurance regulations. Section 2. Additional Insurance on Units Committed to Interval Ownership. The management firm shall obtain casualty and liability insurance with respect to the contents of all units committed to interval ownership, except to the extent that such insurance is provided by a furniture leasing company or similar source, in amounts considered by the management firm to be adequate the premiums for which shall constitute part of the additional assessments for said units. Section 3. Other Insurance. The management firm shall obtain Workmens Compensation Insurance if and to the extent required by law, and such other insurance as it determines from time to time to be desirable. Each unit owner shall have the right to obtain such additional insurance on his personal property and for his personal liability as he considers desirable, and shall have the responsibility to provide such insurance at his expense; provided, however, that no unit owner shall acquire or maintain such additional expense coverage so as to decrease the amount which may be realized under the coverage on behalf of all unit owners, or to cause such coverage to be brought into contribution with said additional insurance obtained by the unit owner, and such additional policies shall contain waivers of subrogation. Any owner obtaining individual insurance coverage on

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any portion of the property, other than personal property belong ing to said owner, shall file a copy of said policy or policies with the management firm within Thirty (30) days after acquiring it. Section 4. Authority to Compromise Claim and Repair or Rebuild. The management firm is hereby irrevocably appointed agent for each unit owner and mortgagee, and each other owner of any interest in the property, to adjust all claims arising under insurance policies purchased by the management firm or the Board, including the right to litigate any such claim when considered necessary by the management firm and to execute and deliver releases therefor. All such insurance proceeds shall be applied toward the repair, replacement and/or reconstruction of the lost or damaged property, it being hereby provided as a covenant running with the Condominium property that no mortgagee shall be entitled to require the application of insurance proceeds toward the payment of its loan, any provisions in any policies, deeds of trust or other documents involved being hereby waived by each said mortgagee provided, however, that the management firm shall be entitled to reimbursement for all of its out-of-pocket expenses out of said insurance proceeds and any special assessments against unit owners as a result of said loss or damage, as hereinafter provided. Should the amount of insurance proceeds be determined by the management firm to be insufficient to pay said expenses and the costs of said repair, replacement and/or reconstruction, it shall thereupon levy a special assessment against the unit owners, in proportion to their respective percentage interests in the common elements (except that any cost of replacement of furnishings or other personal property in the units committed to interval ownership in excess of the insurance proceeds available for said replacement shall be assessed among the unit owners of said units prorata in relation to the approximate cost of said replacement in the respective units), for the additional sums considered by it to be necessary, for which the lien provided for common expense assessments shall be applicable, and shall be entitled to delay or suspend correction of the loss until said special assessments have been paid to the extent which in its discretion justifies beginning or resuming said correction. No owner shall be entitled to compensation for loss of occupancy of his unit pending comple tion of said correction. The management firm is hereby also irrevocably appointed agent for the aforesaid parties to negotiate and contract for said repair, replacement and/or reconstruction of lost or damaged property, including the right to require any contractor involved to furnish a performance and/or payment bond to the degree considered by said agent to be desirable. Said repair, replacement and/or reconstruction shall be substantially in accordance with the buildings and other improvements as they existed prior to the loss involved, except as may be otherwise approved by both the management firm, if any, and the Board, provided, however, that said approval shall not be unreasonably withheld by either party. Section 5. Surplus Proceeds. Any surplus insurance proceeds remaining after the payment of expenses and costs of repair, replacement and/or reconstruction, as hereinabove provided, shall be distributed among or inure to the benefit of the unit owners, in accordance with their respective percentage interests in the common elements. ARTICLE VII AMENDMENTS TO DECLARATION, RENEWAL OF USE AND OCCUPANCY AGREEMENT AND TERMINATION OF CONDOMINIUM

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Section 1. Amendments to Declaration. This Declaration may be amended upon the affirmative vote therefor of unit owners entitled to vote a majority interest in the common elements at any regular or special meeting of the members of the Association, or by the written consent of said majority, evidenced by a certificate thereof by the Secretary of the Board or the secretary or person in charge of the management firm recorded in the office of the aforesaid Register of Deeds, and all parties dealing with any of the Condominium property are hereby authorized to rely on each said Certificate. No management shall change any unit or a unit owners proportionate share of the common elements, except as hereinabove provided concerning future additions to the Condominium, without the consent of the affected owner(s) and mortgagee(s) thereof of record. No other amendment shall be made which substantially adversely affects the rights of a record mortgagee without said mortgagees written consent. No amendment shall change the rights and obligations of Declarant or any successor management firm then involved, without its prior written approval. Notwithstanding anything, herein to the contrary, however, Declarant reserves unto itself and its assigns the right to change the interior design and arrangement of any unit, or to subdivide or otherwise change said unit, so long as Declarant or its said assigns owns said unit, except that no such change shall increase the share of common expenses of any unit owned by others without their written consent. Section 2. Renewal of Use and Occupancy Agreement. At any time prior to the expiration of the initial use and occupancy agreement term (as described hereinabove in the definition of unit week), or any then existing renewal of said term, as hereinafter provided, the unit owners shall have the option of renewing and extending said term for an additional period of Twenty (20) years after the expiration of said then existing initial or renewal term, by majority vote or consent as provided in Section 1 above concerning other amendments to this Declaration. Section 3. Termination of Condominium. The Condominium may be voluntarily terminated with the written consent of all owners and mortgagees of record, in which case all unit owners shall become tenants in common of the land and improvements constituting the Condominium, the undivided interest of each Unit owner therein to be the same percentage interest as his percentage interest in the common elements of the Condominium, and mortgage liens of record shall thereupon attached to the undivided interest of the unit owner against whose interest said mortgage existed. Any such termination shall be evidenced by a Certificate as provided hereinabove relating to amendments to this Declaration, and all parties dealing with any of the Condominium property are hereby authorized to rely on each said Certificate. ARTICLE VIII MISCELLANEOUS PROVISIONS A. No owner of a unit week may dispose of said unit week without disposing of his entire interest therein. B. Inasmuch as it is intended that each interval owner shall have the use of his unit during his unit week(s) during the term of the use and occupancy agreement and any renewal term thereof, no person having any interest in the unit shall seek or obtain through any legal procedure judicial partition of the unit or sale

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of the unit in lieu of partition at any time prior to the expiration thereof, except that this provision shall not prohibit a judicial sale of a unit week in lieu of partition as between co-owners of said unit week. C. The management firm shall have the authority to return the property for taxes, to prorate the ad valorem taxes among the various unit owners, in accordance with their respective portions of common expenses, to collect said taxes as a part of the common expenses, and pay the same to the taxing authorities. A lien shall exist for the payment thereof by the respective unit owners as provided hereinabove for other common expenses. D. All provisions of this Declaration and all Exhibits thereto, and all subsequent amendments to any of them, shall constitute covenants running with the Condominium property and every part thereof and interest therein, and all persons owning any interest in the Condominium property shall be bound by all provisions thereof. E. Notices to Declarant, its successors or assigns, or the management firm, shall be made at the address of the Condominium Notice to unit owners shall be made at the last address indicated by the records of the management firm or the Board. All such notices shall be considered complete when placed in the mail, first class postage prepaid. F. Declarant and its successors or assigns shall have the right to use a portion of the common elements of the property for the purpose of aiding in the sale of the Condominium units or interval ownership therein, including the right to use portions of the property for parking for prospective purchasers and such other parties as Declarant determines, and to display and erect signs, billboards and placards and store, keep and exhibit same and distribute audio and visual promotional materials upon the common elements of the property, and in its sole discretion to use any Condominium unit which it owns, or for the use of which it has contracted, as a sales office or for other business purposes, until its sales program with respect to the Condominium has been completed. G. Notwithstanding any provision or implication herein to the contrary, and action which may be taken by vote in favor thereof at any meeting of the members of the Association may be taken instead pursuant to written consent of the persons who would be entitled to vote thereon at a meeting, in which case said written consent shall have the same effect as a vote at a meeting, pursuant to due notice, in favor of the action consented to, which said consent may be evidenced by a Certificate thereof either by the Secretary of the Board or the Secretary or other person in charge of the management firm, recorded in the Office of the Register of Deeds, and all parties dealing in any way with any of the Condominium property are hereby authorized to rely on each said Certificate. H. C. Banks Finger is hereby designated to receive Service of Process in any action which may be brought against or in relation to this Condominium. Said persons place of business is 102 East King Street, Boone, North Carolina 28607, which is within the County in which the Condominium is located, the Condominium not being within any City. The management firm shall, however, have the authority to designate the names and addresses of other

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persons from time to time to receive Service of Process, by any appropriate Certificate recorded in the aforesaid Office of the Register of Deeds. I. Whenever the context so requires, the use of any gender shall be deemed to include all genders and the use of the singular shall include the plural and vice versa. All other provisions hereof shall be construed to effectuate the purposes set forth. Should any of the provisions hereof or of any Exhibit hereto or any subsequent amendments to any of them be determined to be invalid, such invalidity shall not affect the validity of the remainder thereof. Should any of the provisions of this Declaration or its Exhibits be deemed to violate the Rule against Perpetuities, or any other limitation imposed by law on the duration of the provisions hereof, any and all such provisions shall be deemed to remain in effect only for the maximum period permitted by law. J. The Condominium property is subject to all matters of record. Declarant and its successors and assigns hereby reserve the right to grant such other easements, for utility service, drainage, pedestrian and vehicular traffic, or otherwise, as may be considered by Declarant or its successors and assigns desirable for the use of the Condominium property or other nearby or adjacent property owned by Declarant or its successors or assigns, or in the use of which any of said parties shall have any interest. DECLARANT, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY EXPRESSLY RESERVES A PERPETUAL NONEXCLUSIVE EASEMENT OVER ALL DRIVEWAYS AND PARKING AREAS ON THE CONDOMINIUM PROPERTY, PLUS ANY ADDITIONAL AREA NEEDED TO CONNECT SAID DRIVEWAYS AND PARKING AREAS WITH THE BOUNDARIES OF THE CONDOMINIUM PROPERTY, THE LOCATION OF WHICH MAY BE CHOSEN BY DECLARANT OR ITS SUCCESSORS OR ASSIGNS, FOR USE IN COMMON WITH THE UNIT OWNERS AND OTHERS WHO MAY BY RIGHTFULLY USING SAID DRIVEWAYS AND PARKING AREAS, FOR ACCESS TO ALL ADJACENT AND NEARBY PROPERTY NOW OR HEREAFTER OWNED BY DECLARANT, OR ITS SUCCESSORS OR ASSIGNS, OR IN THE USE OF WHICH ANY OF SAID PARTIES SHALL HAVE ANY INTEREST, WHICH SAID EASEMENT SHALL BE CONSIDERED AN EASEMENT APPURTENANT TO SAID PROPERTY AND ALL PORTIONS THEREOF, TO RUN WITH THE TITLE TO SAID PROPERTY AND ALL PORTIONS THEREOF. IN WITNESS WHEREOF, Declarant, on bind itself and all of the unit owners caused this Declaration to be executed officers, and its corporate seal to be the day of May, 1982. behalf of itself and to of the Condominium, has by its duly authorized duly affixed hereto, this

CONDO VENTURE CORPORATION BY President ATTEST:

Secretary CORPORATE SEAL

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STATE OF NORTH CAROLINA COUNTY OF WATAUGA This the came before me, said State and County, day of , 1982, personally , a Notary Public in and for , who, being

by me duly sworn, says that he is the _________ President of CONDO VENTURE CORPORATION and that the seal affixed to the foregoing Declaration of Condominium for Smoketree Lodge is the corporate seal of the corporation, and that the said writing was signed and sealed by him in behalf of the said corporation by its authority duly given. And the said acknowledged

the said writing to be the act and deed of the corporation. Witness my hand and seal this the , 1982. day of

My Commission Expires:

NORTH CAROLINA WATAUGA COUNTY