Declaration of Covenants and Restrictions

THIS DECLARATION, made this 4^th day of October 1988, by Forest Lakes Associates, a Virginia Partnership hereinafter called "Company".

WHEREAS, the Company is the owner of the real property described in Article II of this Declaration and desires to create thereon a planned development community with representation of residential, commercial, and recreational uses to be known as "Forest Lakes";

WHEREAS, the Company desires to provide for the preservation of values and for the maintenance of common facilities and services and for a vehicle for the administration and enforcement of covenants and restrictions;

WHEREAS, the Company will cause to be incorporated under the laws of the State of Virginia, a non-stock corporation, Forest Lakes Community Association, Inc., for the purpose of exercising the functions aforesaid, and which are hereinafter more fully set forth;

NOW THEREFORE, the Company declares that the real property described in Article II, and such additions thereto as may hereinafter be made pursuant to Article II hereof, is and shall be held, transferred, sold, conveyed, given, donated, leased, occupied and used subject to the covenants, restrictions, conditions, easements, charges, assessments ("Assessments"), affirmative obligations, and liens (all hereinafter sometimes referred to as "the Covenants") hereinafter set forth.

The following words and terms when used in this Declaration or any supplemental declaration (unless the context shall clearly indicate otherwise) shall have the following meanings:

(a) "Affiliate" shall mean any corporation of which more than fifty percent (50%) of the voting stock is owned or controlled by the Company or the Developer, and any partnership or joint venture in which the Company or the Developer has more than a fifty percent (50%) equity interest or an interest in fifty percent (50%) or more of the cash flow from such partnership or joint venture.

(b) "Apartment Tract" shall mean and refer to any improved property or property formerly classified "Multiple Family Tract" for use as a multi-family apartment building or buildings, but not a condominium. An "Apartment Tract" or portion of it shall be deemed to be improved when the improvements being constructed thereon are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties as set forth in Section 3(d) of Article V.

(c) "Apartment Unit" shall mean any residential unit in an apartment building but not a condominium unit or co-operative unit.

(d) "Association" shall mean and refer to Forest Lakes Community Association, Inc., a Virginia non-stock corporation, its successors and assigns.

(e) "Common Areas" shall mean and refer to those tracts of land with any improvements thereon which are deeded to the Association and designated in said deed or lease as "Common Areas." The term "Common Areas" shall also include any personal property acquired or leased by the Association if said property is designated a "Common Area." All Common Areas are to be devoted to and intended for the common use and enjoyment of the Members of the Association, their guests, and visiting members of the general public (to the extent permitted by the Board of Directors of the Association) subject to the fee schedules and operating rules adopted by the Association. Common Areas shall not include those tracts of land falling .within the definition of "Restricted Common Areas" set forth below.

(f) "Company" shall mean Forest Lakes Associates, a Virginia Partnership, its successors and assigns.

(g) "Developer" shall mean Forest Lakes Associates, a Virginia Partnership, its successors and. assigns.

(h) "Development Unit Parcel" shall mean and refer to any parcel or tract of land within the Properties, conveyed by the Company to any third party under Covenants and Restrictions permitting the division of such parcel or tract into smaller land units such as Residential Lots, Multiple-Family Tracts, or Public or Commercial Sites. For the purposes of this Declaration, a parcel of land shall not be deemed a "Development Unit Parcel" until such time as its exact metes and bounds have been surveyed and a plat thereof identifying or designating such property as a Development Unit Parcel is recorded in the Clerks Office of the Circuit Court of Albemarle County. Virginia; provided, however, that any property within said parcel of land which also qualifies as "Exempt Property" as defined in paragraph (i) of this Article I shall not be deemed part of said Development Unit Parcel for the purposes of calculating Assessments or votes. A Development Unit Parcel, or portions thereof, shall remain classified as such until further subdivided and classifiable as a Residential Lot or Lots, Multiple-Family Tract, or Public or Commercial Site pursuant to Section 3 (h) of Article V.

(i) "Exempt Property" shall mean and refer to the following classifications of property within the Properties which, for the purposes of this Declaration, shall not be deemed "Multiple-Family Tracts" "Public or Commercial Sites", "Apartment Tracts", "Development Unit Parcels", "Unsubdivided Land", or "Public or Commercial Units", and shall be expressly excepted from the definitions thereof:

(1) All land designated on the Master Plan for intended use, or by actual use if applicable, for indoor and outdoor recreational and community facilities owned and operated by the Company, the Company's Affiliates, the Developer, the Developer's Affiliates, the Association, and any other home owners association (hereinafter referred to as "Home Owners Association") organized by the Company or by others with the consent of the Company if such Home Owners Association operates such facilities within the Properties for the private use of its members or the Members of the Association; places of worship; libraries; fire stations and rescue squads; post offices; day care centers, nursery schools, and other schools and instructional centers; non-profit or charitable community, civil, or cultural clubs and institutions; and other similar community facilities which the Board of Directors, in its sole and uncontrolled discretion, may designate as Exempt Properties;

(2) All lands and any improvements thereon designated in any way as Common Areas or Restricted Common Areas;

(3) All lands and any improvements thereon committed to the Association through express, written notification by the Company to the Association of intent to convey to the Association, including, without limitation, Intended Common Areas and Intended Restricted Common Areas;

(4) All lands designed on the Master Plan or on recorded plats as "Open Space" or "Private Open Space" (hereinafter referred to, respectively, as "Open Space Areas" and "Private Open Space Areas") as defined in any subsequent declaration, covenant or restriction applicable to Property in Forest Lakes, and any improvements thereon which are defined in subparagraph (1) of this paragraph (i);

(5) Property which is used for the maintenance, operation and service of facilities within Common Areas, Restricted Common Areas, Intended Common Areas, and Intended Restricted Common Areas, and facilities within Open Space Areas which are defined in subparagraph (1) of this paragraph (i); and

(6) Property which is used for the maintenance, operation, and service of utilities within the Properties.

(j) "Family Dwelling Unit" shall mean and refer to any improved property or any property formerly classified a Residential Lot for which a building permit has been issued by the appropriate governmental authorities, which property is located within the Properties and intended for use as a Single Family Dwelling, including, without limitation, any Single-Family Detached Dwelling, Villa Home, Condominium Unit, or Townhouse Unit.

(k) "Forest Lakes" shall mean and refer to the lands in Albemarle County, Virginia, which are shown as a part of Forest Lakes on the Company s Master Plan as revised from time to time.

(1) "Intended Common Area" shall mean and refer to those tracts of land and any improvements thereon committed to the Association through express, written notification by the Company to the Association of intent to convey said property to the Association as a Common Area.

(m) "Intended for Use" shall mean the use intended for various parcels within the Properties as shown on the Master Plan of Forest Lakes prepared by the Company or Developer as the same may be revised from time to time by the Company or Developer, or the use to which any particular parcel of land is restricted by Covenants expressly set forth or incorporated by reference in deeds by which the Company has conveyed the property.

(n) "Intended Restricted Common Area" shall mean and refer to those tracts of land and any improvements thereon committed to the Association through express, written notification by the Company to the Association of intent to convey said property to the Association as a Restricted Common Area.

(o) "Master Plan" shall mean and refer to the drawing which represents the conceptual plan for the, future development of Forest Lakes. Since the concept of the future development of Forest Lakes is subject to continuing revision and change by the Company or Developer, present and future references to the Master Plan shall be references to the latest revision thereof.

(p) "Member" shall mean and refer to all those Owners and Tenants who are Members of the Association as defined in Section 1 of Article III.

(q) "Multiple-Family Tract" shall mean any unimproved parcel of land located within the Properties, intended for development of Condominiums as defined by the Code of Virginia and Apartments as defined and controlled by the applicable zoning for Forest Lakes. For the purposes of this Declaration, a parcel of land shall not be deemed a "Multiple-Family Tract" until such time as its exact metes and bounds have been surveyed and a plat thereof identifying or designating such property for Multiple-Family use is recorded in the Clerks Office of the Circuit Court of Albemarle County, Virginia; provided, however, that any property within said parcel of land which also qualifies as an "Exempt Property" as defined in paragraph (i) of this Article I shall not be deemed part of said Multiple-Family Tract for the purposes of calculating Assessments or votes. A Multiple-Family Tract, or portions of said Multiple-Family Tract, shall be deemed to be unimproved until the improvements being constructed thereon are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties as set forth in Section 3 (d) of Article V.

(r) "Neighborhood Area" shall mean and refer to areas in Forest Lakes designated as neighborhoods on the Master Plan deed or subdivision plats recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia.

(s) "Owner" shall mean and refer to the Owner as shown by the Real Estate Records in the Clerks Office of the Circuit Court of Albemarle County, Virginia, whether it be one (1) or more persons, firms, associations, corporations, or other legal entities, of fee simple title to any Residential Lot, Family Dwelling Unit, Multiple-Family Tract, Apartment Tract, Public or Commercial Site, Public or Commercial Unit, Development Unit Parcel, or Unsubdivided Land situated within or upon the Properties but, notwithstanding any applicable theory of a deed of trust, shall not mean or refer to the mortgages or holder of a deed of trust, its successors or assigns, unless and pursuant to foreclosure or a proceeding or deed in lieu of foreclosure; nor shall the term "Owner" mean or refer to any lessee or Tenant of an Owner. In the event that there is recorded in the Office of the Clerk of the Circuit Court of Albemarle County, Virginia, a long-term contract of sale covering any land within the Properties, the Owner of such land shall be the purchaser under said contract and not the fee simple title holder. A long-term contract of sale shall be one where the purchaser is required to make payments for the land for a period extending beyond nine (9) months from the date of the contract and where the purchaser does not receive title to the land until all such payments are made, although the purchaser is given the use of said land.

(t) "Properties" shall mean and refer to the Existing Property described in Article II hereof, and additions thereto, as are subjected to this Declaration or any Supplementary Declaration under the provisions of Article II hereof.

(u) "Public or Commercial Site" shall mean any unimproved parcel of land within the Properties, intended for use as a site for improvements designed to accommodate commercial, office, professional, governmental, or business enterprises to serve residents of Forest Lakes and/or the public; provided, however, that a "Public or Commercial Site" shall not include property which qualifies as "Exempt Property" as defined in paragraph (i) of this Article I. For the purposes of this Declaration, a parcel of land shall not be deemed a "Public or Commercial Site" until such time as its exact metes and bounds have been surveyed and a plat thereof identifying or designating such property as a Public or Commercial Site is recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia. A Public or Commercial Site or portions of said Site, shall be deemed to be unimproved until the improvements being constructed thereon are sufficiently completed to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties as set forth in Section 3 (e) of Article V.

(v) "Public or Commercial Unit" shall mean and include any improved parcel of land within the Properties which is intended and designed to accommodate commercial, office, professional, governmental, or business enterprises to serve residents of Forest Lakes and/or the public; provided, however, that a "Public or Commercial Unit" shall not include any property which also qualifies as "Exempt Property" as defined in paragraph (i) of this Article I. A parcel of land shall not be deemed to be improved until the improvements being constructed on said parcel are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties as set forth in Section 3(e) of Article V.

(w) "Residential Lot" shall mean any subdivided parcel of land located within the Properties for which' no building permit has been issued by the appropriate governmental authorities and which parcel is intended for use as a site for a Single Family Detached Dwelling, Townhouse Unit, or Villa Home as shown upon any recorded final subdivision plat on any part of the Properties. No parcel shall, however, be classified as a Residential Lot until the first day of the quarter of the year following after all of the following have occurred:

(1) Recording of a plat in the Clerks Office of the Circuit Court of Albemarle County. Virginia showing such Residential Lot;

(2) In those cases where the Lot is owned by the Company, the Company's Affiliates, the Developer, or the Developer's Affiliates, the Residential Lot has been placed on an "Inventory List" (as defined in Section 3(c) of Article V) of lots for sale submitted to the Association by the Company, the Company's Affiliates, the Developer, or the Developer's Affiliates.

(3) In those cases where the Residential Lot is owned by any third party other than the Company, the Company's Affiliates, the Developer, or the Developer's Affiliates, the Residential Lot is sufficiently developed to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as a Residential Lot.

(x) "Restricted Common Areas" shall mean and refer to those tracts of land with any improvements thereon which are deeded to the Association and designated in such deed or lease as "Restricted Common Areas". The term "Restricted Common Areas" shall also include any personal property acquired or leased by the Association if said property is designated a "Restricted Common Area". All Restricted Common Areas are to be devoted to and intended for the common use and enjoyment of designated Owners, their Tenants and guests, with all use of Restricted Common Areas to be subject to the fee schedules and operating rules adopted by the Association. Any lands or personal property which are leased by the Association for use as Restricted Common Areas shall lose their character as Restricted Common Areas upon the expiration of such leases.

(y) "Tenant" shall mean and refer to the lessee under a written agreement for the rent and hire of a Family Dwelling Unit, Apartment Unit or Public or Commercial Unit in Forest Lakes.

(z) "Unsubdivided Land" shall mean and refer to all land in the Existing Property described in Article II hereof, and additions thereto, as are subjected to this Declaration or any Supplementary Declaration under the provisions of Article II hereof, which has not been subdivided into and classified as Residential Lots, Multiple-Family Tracts, Apartment Tracts, Public or Commercial Sites, or Development Unit Parcels, through metes and bounds subdivision plats recorded in the Clerks Office of the Circuit Court of Albemarle County, Virginia; provided, however, that "Unsubdivided Land" shall not include any property which also qualifies as "Exempt Property" in paragraph (i) of this Article I. Unsubdivided Land, or portions thereof, shall remain classified as such until subdivided and classifiable as a Residential Lot or Lots, Multiple-Family Tract, Apartment Tract, Public or Commercial Site, or Development Unit Parcel pursuant to Section 3 of Article V.

Section 1. Existing Property. The real property which is subject to these Covenants is described as follows:

All that tract or parcel of land, situated, lying and being in Albemarle County, Virginia, which is more particularly described in Exhibit "A" attached hereto and by specific reference made a part hereof.

All of the real property hereinabove described shall sometimes be referred to herein as the "Existing Property". The Company plans to develop the Existing Property in accordance with a Master Plan placed on display in its Reception and Sales Office and other areas. The Company and Developer reserve the right to review and modify the Master Plan and this statement shall not bind the Company, its successors and assigns, or Developer, its successors and assigns to adhere to the Master Plan in the development of the land shown hereon. Subject to its right to modify the Master Plan as stated herein, the Company shall convey to the Association certain properties, as in the reasonable exercise of its discretion it so chooses, without regard to the relative location of such portions or sections within the overall plan. Once conveyed to the Association, these properties shall become Common Areas or Restricted Common Areas, as the case may be. The Company shall not be required to follow any predetermined sequence or order of improvements and development and it may bring within the plan of this Declaration additional lands, and develop the same before completing the development of the Existing Property, subject to any necessary local governmental approvals. The Company shall have full power to add to, subtract from, or make changes in the Master Plan regardless of the fact that such actions may affect the relative maximum potential voting strength of the various types of membership of the Association, subject to any necessary local governmental approvals.

Section 2. Additions to Existing Property. Additional lands may become subject to, but not limited to, this Declaration in the following manner:

(a) Additions. The Company, its successors and assigns, or Frank A. Kessler shall have the right, without further consent of the Association, to bring within the plan and operation of this Declaration additional property. Such property may be subject to this Declaration as one parcel or as several smaller parcels at different times. The additions of such property authorized under this paragraph may increase the cumulative maximum number of Residential Lots, Multi-Family Tracts, Development Unit Parcels, Apartment Tracts, Public or Commercial Sites, Public or Commercial Units or Family Dwelling Units authorized in the Properties and, therefore, may alter the relative maximum potential voting strength of the various types of membership of the Association.

The addition authorized under this subsection shall be made by recording a Supplementary Declaration of Covenants and Restrictions with respect to the additional property which shall extend the operation and effect of the Covenants and Restrictions of this Declaration to such additional property. The Supplementary Declaration may contain such complementary additions and/or modifications of the Covenants and Restrictions contained in this Declaration as may be necessary or convenient, in the sole judgment of the Company, to reflect the different character, if any, of the added properties and as are not inconsistent with the plan of this Declaration, but such modifications shall have no effect upon the Property described in Section 1, Article II above, or upon any other additions to the Properties.

(b) Mergers. Upon merger or consolidation of the Association with another association, as provided for in the By-Laws of the Association, its property rights and obligations may, by operation of law, be transferred to another surviving or consolidated association, or in the alternative, the properties, rights and obligations of another association may, by operation of law, be added to the properties of the Association as a surviving corporation pursuant to a merger. The surviving or consolidated association may administer the Existing Property, together with the Covenants and Restrictions established upon any other properties, as one plan. No merger or consolidation shall effect any revocation, within the Existing Property, including, without limitation, the maximum limits on Assessments and dues of the Association, or any other matter substantially affecting the interests of Members of the Association.

(c) Additional lands which become subject to this Declaration under the provisions of this Section II may in the future be referred to as a part of Forest Lakes. Also, the name Forest Lakes may be used by the Company to refer to other nearby properties not subject to this Declaration.

Section 1. Membership. The Company shall be a Member of the Association, and a creditor who acquired title to the Properties or any portion thereof pursuant to foreclosure or any other proceeding or deed in lieu of foreclosure shall be a Member of the Association. Every Owner and Tenant, unless otherwise specified, shall be a Member of the Association. Every Owner shall be required to submit the names(s) of his Tenant(s) and the duration of their tenancy to the Secretary of the Association. The Association may issue to each Member a membership card which shall expire upon termination of a Tenants Lease or upon sale by an Owner of his property in Forest Lakes. Tenants of Public or Commercial Units and Owners who are exempt from the payment of Assessments shall not be Members of the Association unless otherwise specified herein.

Section 2. Voting Rights. The Association shall have four (4) types of regular voting membership and one (1) type of special voting membership which provides the Company, its successors and assigns, with the power to elect a portion of the Board of Directors:

TYPE "A": Type "A" Members shall be all Owners, including the Company, its successors and assigns, of Residential Lots and Family Dwelling Units. A Type "A" Member shall be entitled to two (2) votes for each Residential Lot or each Family Dwelling Unit which he owns.

TYPE "B": Type "B" Members shall be all those Owners, including the Company, its successors and assigns, of platted Public or Commercial Sites and Multiple-Family Tracts. A Type "B" Member shall be entitled to one (1) vote for each One Hundred ($100.00) Dollars in Annual Assessments paid to the Association. In computing the number of votes to which a Type "B" Member shall be entitled, the amount of the Assessment paid shall be rounded to the nearest One Hundred ($100.00) Dollars.

TYPE "C": Type "C" Members shall be all those Owners, including the Company, its successors and assigns, of Apartment Tracts and Public or Commercial Units. A Type "C" Member shall be entitled to one (1) Vote for each One Hundred ($100.00) Dollars in Annual Assessments paid to the Association. In computing the number of votes to which a Type "C" Member shall be entitled, the amount of the Assessment paid shall be rounded to the nearest One Hundred ($100.00) Dollars.

TYPE "D": Type "D" Members shall include all those Owners, including the Company, its successors and assigns, of Unsubdivided Lands and platted Development Unit Parcels held and intended for future development by the Company or a third party. A Type "D" Member shall be entitled to one (1) vote for each One Hundred ($100.00) Dollars of Annual Assessments paid to the Association. In computing the number of votes to which a Type "D" member shall be entitled, the amount of the Assessment paid shall be rounded to the nearest One Hundred ($100.00) Dollars.

TYPE "E": The Type "E" Member shall be the Company, its successors and assigns. The Type "E" Member shall be entitled to elect a portion of the Board of Directors as set out in Section 4 of this Article III, but will have no votes on other matters.

When any property entitling the Owner to membership as a Type "A", "B", "C" and "D" Member of the Association is owned of record in the name of two (2) or more persons or entities, whether fiduciaries, joint tenants, tenants in common, tenants in partnership or in any other manner of joint or common ownership, or if two (2) or more persons or entities have the same fiduciary relationship respecting the same property, then unless the instrument or order appointing them or creating the tenancy otherwise directs and it or a copy thereof is filed with the Secretary of the Association, their acts with respect to voting shall have the following effect:

(2) If more than one (1) votes, in person or by proxy, the act of the majority so voting shall bind all;

(3) If more than one (1) votes, in person or by proxy, but the vote is evenly split on any particular matter, each fraction shall be entitled to its proportionate share of the vote or votes;

(4) If the instrument or order filed with the Secretary of the Association shows that any such tenancy is held in unequal interest, a majority or even split under subparagraphs (2) and (3) immediately above shall be a majority or even split in interest in the property to which the vote(s) is attributable;

(5) The principles of this paragraph shall apply, insofar as possible, to execution of proxies, waivers, consents or objections, and for the purpose of ascertaining the presence of a quorum.

Section 3. Governance. The Association shall be governed by a Board of Directors consisting of seven (7) Members. The number and term of such Directors is to be determined in accordance with the provisions of the Articles of Incorporation of the Association. Except as may be otherwise provided in the Articles of Incorporation, there shall be two (2) classes of Directors: Class I Directors shall be elected by the Type "A", "B", "C" and "D" Members, and Class II Directors shall be elected by the Type "E" Members.

(a) Each member of Type "A", "B", "C" and "D" Membership classes shall be entitled to as many votes as equals the total number of votes he is entitled to based on his Ownership of or Tenancy in one (1) or more of the various classifications of property as computed by the formula set out hereinabove in Section 2 hereof. Each Member may cast the total number of votes to which he is entitled for each vacancy to be filled by a Class I Director. Cumulative voting shall not be allowed. Members, except the Type "E" Membership, are divided into classes for the purpose of computing voting rights and shall not vote as a class.

(b) The Type "A", "B", "C", and "D" Members shall elect the Class I Director(s), and the Type "E" Member shall elect the Class II Director(s) according to the following formula:

(1) The number of Class I Directors shall be determined by (A). dividing (i) the number of Residential Lots and Family Dwelling Units owned by Type "A" Members by (ii) the maximum number of Residential Lots and Family Dwelling Units authorized by the Zoning Ordinance of the County of Albemarle as of June 1, 1988 for the Properties as defined in Article I paragraph (t) and (B) then multiplying the resulting quotient by the total number of Directors, and (C) rounding the result to the nearest whole number, e.g., 1.49 = 1, and 1.50 = 2.

(2) The number of Class II Directors shall be determined by subtracting the number of Class I Directors from the total number of Directors. The Class II Directors shall be elected by the Type "E" Member.

(3) For the purposes of this formula, the number of Residential Lots and Family Dwelling Units owned by Type "A" Members and the maximum number of Residential Lots and Family Dwelling Units authorized in the Properties shall be determined by the Board of Directors as of the date on which notice of the meeting of the Members at which the Board of Directors is to be elected is mailed.

Section 5. Quorum Required for Any Action Authorized at Regular or Special Meetings of the Association. The quorum required for any action which is subject to a vote of the Members at an open meeting of the Association shall be as follows:

(a) The first time a meeting of the Members of the Association is called to vote on (i) an increase in the Maximum Regular Annual Assessment greater than that provided for by subparagraph (o) of Section 3 of Article V hereof, (ii) a Special Assessment as provided for by Section 4 of Article V hereof, (iii) the gift or sale of any parcel of land and improvements thereon designated as a Common Area or Restricted Common Area as provided for by subparagraph (f) of Section 4 of Article IV hereof, (iv) an Amendment to this Declaration as provided for by Section 2 of Article VIII hereof, or (v) the termination of this Declaration as provided in Section 1 of Article VIII hereof, the presence at the meeting of Members or proxies entitled to cast thirty percent (30%) of the total vote of the Membership required for such action shall constitute a quorum.

(b) The first time a meeting of the Members of the Association is called to vote on any action proposed to be taken by the Association, other than that described in subparagraph (a) above, the presence at the meeting of Members or proxies entitled to cast fifteen percent (15%) of the total vote of the Membership required for such action shall constitute a quorum.

If the required quorum is not present at any meeting described in subparagraphs (a) or (b) above, with the exception of any meeting called to vote on the termination of this Declaration described in subparagraph (a(v)) above, another meeting or meetings may be called subject to the giving of proper notice and the required quorum at such subsequent meeting or meetings shall be one-half (1/2) of the required quorum at the preceding meeting.

Unless otherwise provided, any reference hereafter to "votes cast at a duly called meeting" shall be construed to be subject to the quorum requirements established by this Article III, Section 5, and any other requirements for such "duly called meeting" which may be established by the Bylaws of the Association. For the purpose of this section, "proper notice" shall be deemed to be given when given each Member not less than thirty (30) days prior to the date of the meeting at which any proposed action is to be considered.

Section 6. Proxies. All Members of the Association may vote and transact business at any meeting of the Association by proxy authorized in writing.

Section 7. Ballots by Mail. When desired by the Board of Directors, there shall be sent with notices of regular or special meetings of the Association, a statement of certain motions to be introduced for vote of the Members and a ballot on which each Member may vote for or against each such motion. Each ballot which is presented at such meeting shall be counted in calculating the quorum requirements set out in Section 5 of this Article III; provided, however, such ballots shall not be counted in determining whether a quorum is present to vote upon motions not appearing on the ballot.

Section 1. Members' Easements of Enjoyment in Common Areas. Subject to the provisions of these Covenants, the rules and regulations of the Association, and any fees or charges established by the Association, every Member, and every guest of such Member, shall have a right of easement of enjoyment in and to the Common Areas, except that Tenants in Apartment Units, Owners and Tenants in Condominiums, Owners of Public or Commercial Sites or Units may have restricted or limited rights as set forth herein or in later declarations,, and such easement shall he appurtenant to and shall pass with the title of every Residential Lot, Family Dwelling Unit, Multiple-Family Tract, Public or Commercial Site, Public or Commercial Unit, Apartment Tract, Development Unit Parcel, or any Unsubdivided Land.

Employees of the Type "E" Member and its agent, the Developer, shall have access to and enjoyment of the Common Areas subject to rules and regulations and user fees established by the Board of Directors.

A Member's spouse, parents, and children who reside with such Member in Forest Lakes shall have the same easement of enjoyment hereunder as a Member.

In those instances where a Residential Lot or Family Dwelling Unit or other property in Forest Lakes is owned and/or occupied as a Tenant by two (2) or more persons (who do not have the relationship of spouse, parent, or child, one to the other) or by a corporation, such joint Owners and corporations shall annually appoint one (1) person as the "Primary Member." Such Primary Member shall have the same easement of enjoyment in the Common Areas as Members who own or occupy such property singularly. The remaining Joint Members and Tenants and the principal officers of such corporation shall be entitled to an easement of enjoyment in the Common Areas by:

(2) By paying to the Association annually an amount equal to the Annual Assessment charged against the property in which he or she owns a fractional interest or occupies as a Tenant. The payment of such amount shall not entitle such remaining Joint Members, Tenants or principal officers any additional votes in the Association.

As determined in the sole and uncontrolled discretion of the Board of Directors of the Association, certain Owners and Tenants of Exempt Properties, and guests of the Association, may have access to and enjoyment of the Common Areas subject to rules and regulations and user fees established by the Board of Directors.

Section 2. Member& Easements of Enjoyment in Restricted Common Areas. Subject to the provisions of these covenants, and supplemental covenants, the rules and regulations of the Association, and any fees or charges established by the Association, a designated Member shall have a right and easement of enjoyment in and to the Restricted Common Areas and such easement shall be appurtenant to and shall pass with the title of the real estate. By an affirmative vote of seventy-five percent (75%) of the votes cast by owners having the use of the Restricted Common Area at a meeting of the Association called for the purpose of voting on such proposal, a "Restricted Common Areas may be changed into an unrestricted "Common Area." Employees of the Company and its agent, the Developer, shall have access to and enjoyment of the Restricted Common Areas, subject to rules regulations, and user fees established by the Board of Directors.

(a) The Company covenants for itself, its successors and assigns, that it shall convey Common Areas and Restricted Common Areas by deed to the Association, at no cost to the Association, and subject to (i) all restrictions and limitations imposed by the Declaration of Rights. Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes, including, without limitation, all rights of easement and rights of entry reserved unto the Company, its successors and assigns, in said Declaration, (ii) all other restrictions and limitations of record at the time of conveyance, (iii) any restrictions, limitations, conditions, or determinations as to the purposes and uses of the conveyed properties as stipulated in said deed, (iv) deeds of trust of record (but the Company shall covenant to hold the Association and the property harmless from the lien secured by the deed of trust), and (v) any commitments by the Company to construct certain improvements thereon as stipulated in said deed; and, upon such conveyance, such parcels of land and any improvements thereon shall become Common Areas or Restricted Common Areas as designated in said deed.

(b) The Association shall not refuse the conveyance to it of any Common Area or Restricted Common Area and shall not refuse the designation of any parcel of land or any improvements thereon as an Intended Common Area or Intended Restricted Common Area through the express, written notification by the Company to the Association of intent to convey said property to the Association, and, further, the Association shall not refuse to accept any Intended Common Area or Intended Restricted Common Area as a Common Area or Restricted Common Area at such time as the Company, in its sole and uncontrolled discretion, deems it advisable to convey such property to the Association.

(c) Upon conveyance of any parcel or land and any improvements thereon as a Common Area or Restricted Common Area by the Company or any other third party, the Association shall immediately become responsible for all maintenance and operation of said property, and for such additional construction of improvements thereon as may be authorized by the Associations Board of Directors subject to the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes. It is the purpose of this provision to provide that the Association shall be responsible for all maintenance and operation of all Common Areas and Restricted Common Areas.

(d) Notwithstanding anything in the foregoing to the contrary, the Company reserves unto itself, its successors and assigns, and its agents, the right to enter upon any Intended Common Area, Intended Restricted Common Area, Common Area, or Restricted Common Area for the purpose of constructing or maintaining indoor and outdoor recreational and community facilities thereon. The provisions of this paragraph shall in no way create any obligation on the part of the Company to construct or maintain any such facilities on said properties. The Company further reserves for itself, its assignees and successors the right to reserve, and to grant to third parties such easements as it may deem necessary over Common Areas and Restricted Common Areas.

(e) Natural areas, trail areas, etc. may be designated from time to time as Intended Common Areas or Intended Restricted Common Areas, and shall be conveyed in large or small parcels from time to time after the Company has completed the surveying and platting. Written notification designating such properties as Intended Common Areas or Intended Restricted Common Areas will not normally show metes and bounds and, in any event, the metes and bounds as shown on the recorded plat and deed to the Association shall govern.

(f) Notwithstanding anything in the foregoing to the contrary, the Company shall not be required to convey the above referred to parcels where such conveyance would be prohibited under agreements existing on the date hereof, but, in such case, shall be allowed to postpone such conveyance, without penalty, until such time as said prohibition may be nullified.

Section 4. Extent of Members' Easements. The rights and easements of enjoyment created hereby shall be subject to the following:

(a) The right of the Association in accordance with its By-laws, to borrow money from the Company or any lender for the purpose of improving and/or maintaining the Common Areas and Restricted Common Areas, and providing services authorized herein, and in aid thereof to mortgage said properties provided, however, that any such mortgage is with the prior consent of two-thirds of the Members of the Association, which consent may be evidenced by petition or by an affirmative vote of two-thirds of the Members voting in person or by proxy at a duly called meeting of the Association;

(b) The right of the Association to take such steps as are reasonably necessary to protect the above-described properties against foreclosures;

(c) The right of the Association to suspend the rights and easements of enjoyment of any Member or Tenant or guest of any Member for any period during which the payment of any Assessment against property owned by such Member remains delinquent, and for any period not to exceed sixty (60) days for each infraction of its published rules and regulations, it being understood that any suspension for either nonpayment of any Assessment or a breach of the rules and regulations of the Association shall not constitute a waiver or discharge of the Members obligation to pay the Assessment, and, provided that the Association shall not suspend the right to use any roads belonging to the Association subject to the rules, regulations and fees, if any, established by the Association for such use.

(d) The right of the Association to charge reasonable admission and other fees and dues for the use of recreational facilities and services on the Common Areas and Restricted Common Areas.

(e) The right of the Company or the Association by its Board of Directors to dedicate or transfer to any public or private utility, utility or drainage easements on any part of the Common Areas and Restricted Common Areas.

(f) The right of the Association to give or sell all or any part of the Common Areas and Restricted Common Areas, including lease-hold interests, subject to (i) the limitations and restrictions, imposed by the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes and (ii) all other restrictions and limitations of record at the time of conveyance, to any public agency, authority, public service district, utility, or private concern for such purposes and subject to such conditions as may be agreed to by the Members; provided, however, that no such gift or, sale of any parcel of land and improvements thereon, or determination as to the purposes or as to the conditions thereof, shall be effective unless such dedication, transfers, and determinations as to purposes and conditions shall be authorized by the affirmative vote of three-fourths (3/4) of the votes cast at a duly called meeting of the Association, subject to the quorum requirements established by Article III, Section 5, and unless written notice of the meeting and of the proposed agreement and action thereunder is sent to every Member of the Association at least thirty (30) days prior to such meeting and as to Restricted Common Areas the affirmative vote of three-fourths (3/4) of the owners having the use of the Restricted Common Areas. A true copy of such resolution together with a certificate of the results of the vote taken thereon shall be made and acknowledged by the President or Vice President and Secretary or Assistant Secretary of the Association and such certificate shall be annexed to any instrument of dedication or transfer of any parcel of land and improvements thereon affecting the Common Areas or Restricted Common Areas prior to the recording thereto. Such certificates shall be conclusive evidence of authorization by the membership. The gift or sale of any personal property owned by the Association shall be determined by the Board of Directors in its sole and uncontrolled discretion.

Section 1. Creation of the Lien and Personal Obligation of Assessments. The Company covenants, and each Owner of any Residential Lot, Family Dwelling Unit, Multiple-Family Tract, Public or Commercial Site, Public or Commercial Unit, Development Unit Parcel, Unsubdivided Land or Apartment Tract located within the Properties, whether or not it shall be so expressed in any such deed or other conveyance, shall be deemed to covenant and agree to all the terms and provisions of this Declaration and to pay to the Association: (a) Annual Assessments or charges; and (b) Special Assessments or charges for the purposes set forth in this Article, such assessments to be fixed, established and collected from time to time as hereinafter provided. The Annual and Special Assessments, together with such interest thereon and costs of collection thereof including a reasonable attorney's fee as hereinafter provided, shall be a charge and continuing lien on the real property and improvements thereon against which each such Assessment is-made. Each such Assessment, together with such interest thereon and cost of collection thereof including a reasonable attorney's fee as hereinafter provided, shall also be the personal obligation of the person who was the Owner of such real property at the time when the Assessment first became due and payable. In the case of co-ownership of a Residential Lot, Family Dwelling Unit, Multiple-Family Tract, Apartment Tract, Public or Commercial Site, Public or Commercial Unit, Development Unit Parcel or any Unsubdivided Land, all of such co-owners shall be jointly and severally liable for the entire amount of the Assessment.

Section 2. Purpose of Assessments. The Annual Assessments levied by the Association shall be used exclusively for the improvement, maintenance, enhancement, enlargement, and operation of the Common Areas, Restricted Common Areas, Intended Common Areas, and Intended Restricted Common Areas, and to provide services which the Association is authorized to provide.

Section 3. Application of "Maximum" Assessment. The Maximum Regular Annual Assessment, as set forth in the schedule hereinbelow, and as is automatically increased annually pursuant to the provisions of subparagraph (o) below, shall be levied by the Association. If, however, the Board of Directors of the Association, by majority vote, determines that the important and essential functions of the Association may be properly funded by an Assessment less than the Maximum Regular Annual Assessment, it may levy such lesser Assessment; provided, however, so long as the Company is engaged in the development of properties which are subject to the terms of this Declaration, the Association may not reduce Assessments below those set out in Section 3(a) immediately below without the written consent of the Company. The levy of an Assessment less than the Maximum Regular Annual Assessment in one (1) year shall not affect the Boards right to levy an Annual Assessment equal to the Maximum Regular Annual Assessment in subsequent years.

If the Board of Directors shall levy less than the Maximum Regular Annual Assessment for any Assessment year and thereafter, during such Assessment year, determine that the important and essential functions of the Association cannot be funded by such lesser Assessment, the Board may, by majority vote, levy a Supplemental Assessment. In no event shall the sum of the initial and Supplemental Assessments for that year exceed the applicable Maximum Regular Annual Assessment.

If the Board of Directors, by majority vote, determines that the important and essential functions of the Association will not be properly funded in any one (1) year, or in any one (1) year and all subsequent years, it may request approval of a specified increase in the Maximum Regular Annual Assessment for either one (1) year only, or for that one (1) year and all subsequent years, by a favorable vote of seventy-five percent (75%) of the votes cast at a duly called meeting of the Association, subject to the quorum requirements established by Article III, Section 5. Should the Members vote in favor of such proposed increase, it shall be deemed approved and may be levied by the Board. An increase in the Maximum Regular Annual Assessment for one (1) year only pursuant to the provisions hereof shall in no way affect the Maximum Regular Annual Assessment for subsequent years or increases thereof in subsequent years.

(a) The Maximum Regular Annual Assessment as of the date of these covenants and restrictions shall be the sums calculated in accordance with the following Assessment Schedule, as shall be automatically increased in each instance by an inflation adjuster as set forth in Section (3)(o) of this Article, and as may be increased pursuant to the provisions set forth immediately above:

Property Type	Maximum Regular Annual Assessment
Residential Lot	$75.00 per lot
Family Dwelling Unit	$150.00 per Unit
Public or Commercial Unit	$0.10 per square foot of floor space, but in no event less than $200.00 for each unit
Public or Commercial Site	$200.00 per acre; prorated for part of an acre, but in no event less than $200.00 for each Site
Multiple-Family Tract	$200.00 per acre; prorated for part of an acre, but in no event less than $200.00 for each Tract
Apartment Tract	$200.00 per acre; prorated for part of an acre, but in no event less than $200.00 for each Tract
Development Unit Parcel	$10.00 per acre or any portion of an acre
Unsubdivided Land	$10.00 per acre or any portion of an acre

(b) Property shall not be classified for purposes of the Annual Assessments as a Residential Lot until the first day of the quarter of the year following after all of the following have occurred:

(1) Recording of a plat in the Clerk's Office of the Circuit Court of Albemarle County, Virginia, showing such Residential Lot;

(2) The Residential Lot has been placed on an "Inventory List" as stated in Article I paragraph (w)(2) of these covenants.

(3) In those cases where the Lot is owned by any third party other than the Company, the Company's Affiliates, the Developer, or the Developer's Affiliates, the Residential Lot is sufficiently developed to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as a Residential Lot.

(c) "Inventory List" as used in these Covenants shall mean and refer to a listing of those Residential Lots owned by the Company, the Company's Affiliates, the Developer, or Developer's Affiliates which are available for sale to purchasers, and which listing is submitted to the Association. The Company reserves for itself, its Affiliates, the Developer, and the Developer's Affiliates the right to make additions and deletions from this listing one (1) day prior to the commencement of each quarter.

(d) Property shall not be classified for the purposes of these Covenants and these Annual Assessments as a Multiple-Family Tract until such time as its exact metes and bounds have been surveyed and a plat thereof identifying or designating such property for Multiple-Family use is recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia; provided, however, that any property within said parcel of land which also qualifies as an Exempt Property as defined in Section 13 of this Article V shall not be deemed part of said Multiple-Family Tract for the purposes of calculating Assessments or votes. A Multiple-Family Tract, or portions of said Multiple-Family Tract, shall be deemed to be unimproved until the improvements being constructed thereon are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors, as improved properties.

In those cases where the improvements intended on a Multiple-Family Tract include more than one building or structure containing Attached Residential Units or Apartment Units, each building or structure shall be deemed to be unimproved until the building or structure is sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties, at which time each and every Attached Residential Unit or Apartment Unit within said building or structure shall be deemed a Family Dwelling Unit or Apartment Unit, respectively, for the purpose of Assessment; and, in addition, the remaining number of acres to be assessed as a Multiple-Family Tract shall be calculated by subtracting (i) the number of acres within the Tract upon which the attached Residential Units or Apartment Units have actually been developed from (ii) the total number of acres in the original Multiple-Family Tract.

At such time as all Buildings intended for development on a Multiple-Family Tract have been classified as Family Dwelling Units or Apartment Units, and the Owner of said Multiple-Family Tract is able to warrant to the satisfaction of the Board of Directors that (1) no further development of buildings shall take place upon said Tract, and (ii) any remaining unimproved acres within said Tract shall not be sold to any other third party for further development, such Owner may apply to the Board of Directors for the release of any remaining unimproved acres within said Tract from the classification of a Multiple-Family Tract, and the Board of Directors of the Association may, in its sole and uncontrolled discretion, grant such release.

(e) Property shall not be classified for the purposes of these Covenants and Annual Assessments as a Public or Commercial Site until such time as its exact metes and bounds have been surveyed and a plat thereof identifying or designating such property as a Public or Commercial Site is recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia; provided, however, that any property within said parcel of land which also qualifies as an Exempt Property as defined in Section 13 of this Article V shall not be deemed part of said Public or Commercial Site for the purposes of calculating Assessments or votes. A Public or Commercial Site, or portions of said Site, shall be deemed to be unimproved until the improvements being constructed thereon are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties.

In those cases where the improvements intended on a Public or Commercial Site include more than one building, structure or phase or group of improved units, each building, structure, or phase or group of units shall be deemed to be unimproved until the building, structure, or phase or group of units is sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties, at which time each improved unit within said building, structure, or phase or group of units shall be deemed a Public or Commercial Unit for the purpose of Assessments; and, in addition, the remaining number of acres to be assessed as a Public or Commercial Site shall be calculated by subtracting (i) the number of acres within the Site upon which Public or Commercial Units have actually been developed from (ii) the total number of acres in the original Public or Commercial Site.

At such time as all public or commercial buildings and facilities intended for development on a Public or Commercial Site have been classified as Public or Commercial Units, and the Owner of said Public or Commercial Site is able to warrant to the satisfaction of the Board of Directors of the Association that (i) no further development of Public or Commercial Units shall take place on said Site, and (ii) any remaining unimproved acres within said Site shall not be sold to any other third party for further development of Public or Commercial Units, then said Owner may apply to the Board of Directors for the release of any remaining acres in said Site from the classification of a Public or Commercial Site, and the Board of Directors may, in its sole and uncontrolled discretion, grant such release.

(f) Property shall not be classified for purposes of these Covenants and these Annual Assessments as a Family Dwelling Unit or Apartment Tract until (i) the improvements being constructed on a Multiple-Family Tract are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties as defined in subparagraph (d) hereinabove.

(g) Property shall not be classified for purposes of these Covenants and these Annual Assessments as a Public or Commercial Unit until the improvements being constructed on a Public or Commercial Site are sufficiently complete to be subject to Assessment, in the sole and uncontrolled discretion of the Board of Directors of the Association, as improved properties as defined in subparagraph (e) hereinabove.

(h) Property shall not be classified for purposes of these Covenants and these Annual Assessments as a Development Unit Parcel until such time as its exact metes and bounds have been surveyed and a plat thereof identifying or designating such property as a Development Unit Parcel is recorded in the clerk's Office of the Circuit Court of Albemarle County, Virginia; provided, however, that any property within said parcel of land which also qualifies as an Exempt Property as defined in Section 13 of this Article V shall not be deemed part of said Development Unit Parcel for the purpose of calculating Assessments or votes. As such time as a Development Unit Parcel, or a portion of said Development Unit Parcel, is further subdivided and classifiable as a Residential Lot or Lots, Multiple-Family Tract, Apartment Tract, or Public or Commercial Site, said property or such portion of said property shall then be classified as a Residential Lot or Lots, Multiple-Family Tract, Apartment Tract, or Public or Commercial Site; and, in addition, the remaining number of acres to be assessed as a Development Unit Parcel shall be calculated by subtracting (i) the number of acres within the property which have been classified as a Residential Lot or Lots, Multiple-Family Tract, Apartment Tract, or Public or Commercial Site from (ii) the total number of acres within the original Development Unit Parcel.

(i) For purposes of these Covenants and these Annual Assessments, all properties which have not been subdivided into and classified as Residential Lots, Multiple-Family Tracts, Apartment Tracts, Public or Commercial Sites, or Development Unit Parcels shall be classified as Unsubdivided Land; provided, however, that Unsubdivided Land shall not include any property which also qualifies as Exempt Property as defined in Section 13 of this Article V.

(j) Assessments shall be billed annually, quarterly, monthly, or on such other basis as may be determined by the Board of Directors. The billing schedule shall be the same for all properties of a specified category, however, the Board of Directors, in its sole discretion, may establish different schedules for the billing of Assessments due from different categories of property. All Assessment bills shall be due and payable ninety (90), thirty (30) or fifteen (15) days from the date of mailing of same as determined by the Board of Directors; provided however, that if the Board of Directors elects to utilize a Billing Agent, the Billing Agent shall set the date on which Assessment bills shall be due and payable.

(k) The Board of Directors may authorize a Billing Agent to collect the Assessments provided' for herein.

(l) The Owner of any assessable property which changes from one category to another during an Assessment year shall be billed an additional amount for the remaining full quarters of such year to reflect the category change.

(m) The Board of Directors shall determine the square footage of floor space to be assessed by the Association for each Public or Commercial Unit and Apartment Tract. In certain extraordinary circumstances, as in the case of an indoor tennis facility, skating rink, swimming pool, gymnasium, or certain storage areas where an unusually large number of square feet of floor space is required within such facility, the Board of Directors may, in its sole and uncontrolled discretion, exempt from Assessment a portion of the square footage of floor space of such facility.

(n) Changes during an Assessment year in square footage of floor space to be assessed by the Association for a Public or Commercial Unit or Apartment Tract shall be reflected in the billing for the remaining full quarters of the Assessment year.

(o) From and after January 1, 1990 the Maximum Regular Annual Assessment shall be automatically increased each year by an amount of ten percent (10%) per year over the previous year, or the percentage increase between the first and last months of the thirteen (13) month period terminating at the end of the third (3rd) quarter of the previous Assessment year in the Consumer Price Index, U.S City Average, All Items (1982-84/100) (hereinafter "C.P.I.") issued by the U.S. Bureau of Labor Statistics in its monthly report entitled "The Consumer Price Index, U.S. City Average and Selected Areas", whichever of these two percentage figures is larger. If the C.P.I. is discontinued, then there shall be used the most similar index published by the United States Government that may be procured indicating changes in the cost of living.

(p) Any increase in the Maximum Regular Annual Assessment shall be made in such a manner that the proportionate increase in such Assessment is the same for Owners of Residential Lots, Family Dwelling Units, Multiple-Family Tracts, Public or Commercial Sites, Public or Commercial Units, Apartment Tracts, Development Unit Parcels, or Unsubdivided Land. Any time the actual Assessment levied by the Board of Directors of the Association is less than the Maximum Regular Annual Assessment, such decrease shall be proportionate among the Owners of Residential Lots, Family Dwelling Units, Apartment Tracts, Multiple-Family Tracts, Public or Commercial Sites, Public or Commercial Units, Development Unit Parcels, and Unsubdivided Land.

Section 4. Special Assessments for Improvements and Additions. In addition to the Maximum Regular Annual Assessments authorized by Section 3 hereof, the Association may levy Special Assessments for the following purposes:

(a) Construction, reconstruction, repair, or replacement of capital improvements upon the Common Areas, Restricted Common Areas. Intended Common Areas, or Intended Restricted Common Areas, including the necessary fixtures and personal property related thereto;

(d) To repay any loan made to the Association to enable it to perform the duties and functions authorized herein.

Such Special Assessment, before being charged, must have received the approval of the Members of the Association by the favorable vote of fifty-one percent (51%) of the votes cast at a duly called meeting of the Association, subject to the quorum requirements established by Article III, Section 5. The notice of such meeting shall include one (1) statement from those Directors favoring the Special Assessment, and one (1) statement from those Directors opposing the Special Assessment, containing the reasons for those Directors support and opposition for the Assessment. Neither statement shall exceed five (5) pages in length.

This provision shall be interpreted to mean that the Association may make in any one (1) year an Annual Assessment up to the maximum set forth in Section 3 of this Article V, plus an additional Special Assessment. Such Special Assessment in any one (1) year may not exceed a sum equal to the amount of the Maximum Regular Assessment for such year except for emergency or repairs required as a result of storm, fire, natural disaster, or other casualty loss. The fact that the Association has made an Annual Assessment for an amount up to the Maximum Regular Annual Assessment shall not affect its right to make a Special Assessment during the year.

The proportions of each Special Assessment to be paid by the Owners of the various classifications of assessable property shall be equal to the proportion of the Annual Assessments levied for the Assessment year during which such Special Assessments are approved by the Members.

Section 5. Assessments for Restricted Common Areas. In addition to the Maximum Regular Annual Assessments and Special Assessments under Section 4 above, the Association may levy Assessments and Special Assessments to Owners having the enjoyment of Restricted Common Areas, which assessment will be used for the Restricted Common Area for the same purposes as the Regular Assessments and Special Assessments are used for the Common Areas.

Section 6. Reserve Funds. The Association shall establish reserve funds from its Annual Assessments to be held in reserve in an interest drawing account or investments as a reserve for:

(b) Emergency and other repairs required as a result of storm, fire, natural disaster, or other casualty loss; and

Section 7. Special Assessments for Neighborhood Areas. On petition of seventy-five percent (75%) of all Owners within a particular Neighborhood Area, or continuous Neighborhood Areas, as such may be designated on a recorded subdivision plat, the Board of Directors of the Association may levy a Special Assessment applicable only to each Owner within the immediate Neighborhood Area or Areas, to undertake special neighborhood improvements, neighborhood rehabilitation or construction, special neighborhood security and neighborhood maintenance. If such Special Assessment be proposed by the Board of Directors of the Association rather than by petition as provided for here in above then such proposal shall be submitted to a referendum of all Owners within the particular Neighborhood Area or Areas, and such Special Assessment shall be levied upon each such Owner only upon a favorable response to said Referendum, as shall be indicated by not less than seventy five percent (75%) of the votes entitled to be cast voting in favor of such Special Assessment.

In the event of election by the Members of a Neighborhood Area to be assessed by the Association for special improvements, construction, security, or maintenance, the Association shall be authorized to borrow money to fund such special improvements, construction, security, or maintenance, and to repay any such loan with the receipts from the Special Assessment authorized therefore.

Section 8. Changes in Maximum Amounts of Annual Assessments Upon Merger or Consolidation. The limitations of Section 3 hereof shall apply to any merger or consolidation in which the Association is authorized to participate under Article II, Section 2 hereof, and under the By-Laws of the Association.

Section 9. Date of Commencement of Annual Assessments Due Date. Notwithstanding anything in the foregoing to the contrary, the Annual Assessments provided for herein shall commence no earlier than January 1, 1989.

Section 10. Duties of the Board of Directors. The Board of Directors of the Association shall fix the amount of the Annual Assessment against each Residential Lot, Family Dwelling Unit, Multiple-Family Tract, Apartment Tract, Public or Commercial Site, Public or Commercial Unit, Development Unit Parcel, or Unsubdivided Land, within the Assessment Schedule as provided hereinabove, and shall at that time, direct the preparation of an index of the Properties and Annual Assessments applicable thereto, and any Assessments for Restricted Common Areas, Neighborhood Area Assessment and any Special Assessments applicable thereto, which shall be kept in the office of the Association and which shall be open to inspection by any Member. Written notice of Assessments shall thereupon be sent to every Member subject thereto.

The Association shall upon demand at any time furnish to any Owner liable for said Assessments a certificate in writing signed by an Officer of the Association, setting forth whether said Assessments have been paid. Such certificate shall be conclusive evidence against all but the Owner of payment of any Assessment therein stated to have been paid. If the Board of Directors authorizes a Billing Agent to collect Assessments, the Certificate of the said Billing Agent shall be conclusive evidence against all but the Owner of payment of any Assessment therein stated to have been paid.

Section 11. Effect of Non-Payment of Assessment: The Personal Obligation of the Owner; the Lien; Remedies of Association. If the Annual Assessment or any Special Assessment or an Assessment or Special Assessment for Restricted Common Areas or Neighborhood Assessment is not paid on or before the past-due date specified in Section 3 (j) hereof, then such Assessment shall become delinquent and shall (together with interest thereon at the maximum annual rate permitted by law accrued from the due date and cost of collection thereof including a reasonable attorney's fee as hereinafter provided) become a charge and continuing lien on the land and all improvements thereof, against which each such Assessment is made, in the hands of the then Owner, his heirs, devises, personal representatives, and assigns.

If the Assessment is not paid within thirty (30) days after the past due date, the Association may bring an action at law against the Owner personally and there shall be added to the amount to such Assessment the costs of preparing the filing of the complaint in such action and a reasonable attorney's fee, and in the event a judgment is obtained, such judgment shall include interest on the Assessment as above provided and a reasonable attorney's fee together with the costs of the action.

If the Board of Directors of the Association elects to utilize a Billing Agent to collect Assessments, interest which shall accrue on past-due sums will be the maximum interest rate which such agent may lawfully charge.

Section 12. Subordination of the Lien. The continuing lien of the Assessments provided for herein shall be subordinate to the lien of any first or second deed of trust now or hereafter placed upon any properties subject to Assessment, and, in addition, shall be subordinate to the lien of the Cost of Corrective Action provided for in the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes now or hereafter placed upon any properties subject to Assessment. In the event a creditor acquires title to any property subject to Assessment pursuant to foreclosure or any other proceeding or deed in lieu of foreclosure, said creditor shall be subject to Assessments accruing after such acquisition.

Section 13. Exemptions. The following property, individuals, partnerships, or corporations subject to this Declaration shall be exempted from the Assessment, charge, and lien created herein:

(a) All lands designated on the Master Plan for intended use, or by actual use if applicable, for indoor and outdoor recreational and community facilities owned and operated by the Company, the Company's Affiliates, the Developer, the Developer's Affiliates, the Association, and any other Home Owners Association organized by the Company or by others with the consent of the Company if such Home Owners Association operates such facilities within the Properties for the private use of its members or the Members of the Association; places of worship; libraries; fire stations and rescue squads; post offices, day care centers, nursery schools, and other schools and instructional centers; non-profit or charitable community, civil, or cultural clubs and institutions; and other similar community facilities which the Board of Directors of the Association, in its sole and uncontrolled discretion, may designate as Exempt Properties;

(b) All lands and any improvements thereon designated in any way as Common Areas or Restricted Common Areas;

(c) All lands and any improvements thereon committed to the Association through express, written notification by the Company to the Association of intent to convey to the Association, including without limitation. Intended Common Areas and Intended Restricted Common Areas;

(d) All lands designated on the Master Plan or on recorded plats as Open Space ("Open Space Areas") or Private Open Space ("Private Open Space Areas") as defined in the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes and any improvements thereon which are defined in Paragraph (a) of this Section 13;

(e) Property which is used for the maintenance, operation and service of facilities within Common Areas and Intended Restricted Common Areas, and facilities within Open Space Areas and Private Open Space Areas which are defined in paragraph (a) of this Section 13;

(f) Property which is used for the maintenance, operation, and service of utilities within the Properties; and

(g) The grantee in conveyances made for the purpose of granting utility easements.

Section 14. Annual Statements. The President, Treasurer, or such other Officer as may have custody of the funds of the Association shall annually, within ninety (90) days after the close of the fiscal year of the Association, prepare and execute under oath a general itemized statement showing the actual assets and liabilities of the Association at the close of such fiscal year, and a statement of revenues, costs and expenses. It shall be necessary to set out in the statement the name of any creditor of the Association; provided however, that this requirement shall be construed to apply only to creditors of mote than One Thousand and no/100 ($1,000.00) Dollars. Such Officer shall furnish to each Member of the Association who may make a request therefore in writing, a copy of such statement, within thirty. (30) days after receipt of such request. Such copy may be furnished to the Member either in person or by mail. Any holder of a first mortgage on a lot(s) or unit(s) shall be entitled upon written request, to a financial statement for the immediately preceding fiscal year.

Section 15. Annual Budget. The Board of Directors shall prepare and make available to all Members, at least sixty (60) days prior to the first day of the following fiscal year, a budget outlining anticipated receipts and expenses for the following fiscal year. The financial books of the Association shall be available for inspection by all Members at all reasonable times.

Section 1. Ownership and Maintenance of Properties. The Association shall be authorized to own and/or maintain Common Areas, Restricted Common Areas, Intended Common Areas, and Intended Restricted Common Areas, equipment, furnishings, and improvements devoted to, but not limited to, the following uses:

(a) For roads, roadways, roadway medians and parkways along said roads or roadway, cul-de-sac islands, and neighborhood or other area entrances or entrance easements throughout the Properties;

(b) For sidewalks, walking or jogging paths or trails, bicycle paths, pedestrian underpasses and bridle paths through the Properties;

(c) For transportation facilities throughout the Properties other than privately owned automobiles, e.g., buses, electric vehicles, etc.;

(d) For security and fire protection services including security stations, guardhouses, police equipment, fire stations and fire fighting equipment, and buildings used in maintenance functions;

(e) For emergency health care including ambulances, rescue squad facilities, emergency care medical facilities, and the equipment necessary to operate such facilities;

(f) For providing any of the services which the Association is authorized to offer under Section 2 and Section 3 of this Article VI;

(g) For purposes set out in deeds by which Common Areas and Restricted Common Areas are conveyed to the Association, provided that such purposes shall be approved by the Members of the Association as set out in Section 4 of this Article VI;

(i) For water and sewage facilities and any other utilities, if not adequately provided by a private utility or Albemarle County. Virginia;

Section 2. Services. The Association shall be authorized but not required, except as specified in Section 3 of this Article VI, to provide the following services:

(a) Cleaning and maintenance of all roads, roadways. roadway medians, parkways, cul-de-sac islands, neighborhood and other area entrances, lakes, parks, sidewalks, walking trails, bike trails, Common Areas, Restricted Common Areas, Intended Common Areas, Intended Restricted Common Areas, Open Space Areas, and Private Open Space areas within the Properties, and also all public properties which are located within or in a reasonable proximity to the Properties such that their deterioration would affect the appearance of the Properties as a whole;

(b) Landscaping and beautification of roads, roadways. roadway medians, parkways, cul-de-sac islands, neighborhood and other area entrances, lakes, parks, sidewalks, walking paths, bike trails, Common Areas, Restricted Common Areas, Intended Common Areas, Intended Restricted Common Areas, Open Space Areas and Private Open Space Areas;

(d) Lighting of roads, sidewalks, walking paths, bike trails, parking lots, and any recreational and community facilities located within the Properties;

(e) Police protection and security, including, but not limited to, the employment of police and security guards, maintenance of electronic and other security devices and control centers for the protection of persons and property within the Existing Property, and assistance in the apprehension and prosecution of persons who violate the laws of the State of Virginia or the County of Albemarle, within the Properties;

(h) Insect and pest control to the extent that it is necessary or desirable in the judgment of the Board of Directors of the Association to supplement the service provided by the state and local governments;

(i) The-services necessary or desirable in the judgment of the Board of Directors of the Association to carry out the Associations obligations and business under the terms of this document;

(j) To take any and all actions necessary to enforce all Covenants and Restrictions affecting the Properties and to perform any of the functions or services delegated to the Association in any Covenants or Restrictions applicable to the Properties;

(k) To set up and operate an Architectural Review Board for all Common Areas or Restricted Common Areas, and, in the event that the Association is designated by the Company as the agent or the assign of the Company for such purposes, to extend the operation of the Architectural Review Board to all properties within Forest Lakes;

(m) To conduct instructional, recreational, sports, crafts, social and cultural programs of interest to Members, their families and guests;

(n) To provide legal and scientific resources for the improvement of air and water quality within the Properties;

(p) To support the operation of transportation services between key points of the Properties and the airports, other public transportation terminals and public centers serving the area surrounding the Properties;

(q) To construct improvements on Common Areas, Restricted Common Areas, Intended Common Areas, or Intended Restricted Common Areas for use for any of the purposes authorized in this Article, or as may be required to provide any of the services authorized in this Article;

(r) To provide administrative services, including, but not limited to, legal, accounting, and financial; and communication services, including, but not limited to community newsletters and newspapers to inform members of activities, notices of meetings, referendums, and other issues and events of community interest;

(s) To provide liability and hazard insurance covering improvements and activities on and within the Common Areas and Restricted Common Areas;

(t) To provide water, sewage, and any necessary utility services not provided by a public body, private utility or the Company;

(u) To provide, conduct, or maintain water pollution and shoreline erosion abatement measures including, without limitation, maintenance and repair of shore revetments and groins;

(v) To construct mailboxes, signs, and other standard features for use throughout the Properties; and

(w) To provide any or all of the above listed services to another association of owners of real property under a contract, the terms of which must be approved by the Board of Directors.

Section 3. Minimum List of Functions and Services. The "Minimum List of Functions and Services" shall establish and define the minimum level of functions and services which the Association must furnish to its Members. So long as the Company is engaged in the development of Properties which are subject to the terms of this Declaration, the Association shall not reduce the level of functions and services it furnishes to its Members below such minimum level without the prior written consent of the Company. The "Minimum List of Functions and Services" is as follows:

(a) The Association shall provide or procure the administrative services necessary to carry out the Association's obligations and business under the terms of this Declaration, the Articles of Incorporation of the Association, and the By-Laws of the Association, including, but not limited to, legal, accounting, financial, and communications services.

(b) The Association shall administer and enforce the covenants and restrictions established in this Declaration, and subsequent declarations including, but not limited to, the following:

(1) The Association shall set Assessments, levy cash Assessments, notify the Members of such Assessments, and collect such Assessments;

(2) The Association shall prepare accurate indexes of Members, Property Classifications, Votes, Assessments, the Cumulative Maximum Number of Residential Lots and Family Dwelling Units Authorized in the Properties, and the Maximum Regular Annual Assessment;

(4) The Association shall maintain and operate all Common Areas and Restricted Common Areas;

(5) The Association shall hold Annual Meetings, and Special Meetings, as required, hold elections for the Board of Directors as required, and give Members "proper notice" as required; and

(6) The Association shall prepare Annual Statements and Annual Budgets, and shall make the financial books of the Association available for inspection by Members at all reasonable times.

(c) Should the Company appoint the Association its agent for the administration and enforcement of any covenants and restrictions of record, the Association shall assume such responsibility and any obligations which are incident thereto.

(d) Should the Company assign to the Association any of the rights reserved unto it in any covenants and restrictions of record, the Association shall assume the responsibility of administering and shall assume any obligations which are incident thereto.

(e) The Association shall provide appropriate liability and hazard insurance coverage for improvements and activities on all Common Areas and Restricted Common Areas.

(f) The Association shall provide appropriate Directors' and Officers' Legal Liability Insurance, and indemnify persons pursuant to the provisions of the Articles of Incorporation of the Association.

(g) The Association shall keep a complete record of all its acts and corporate affairs.

(h) The Association shall provide regular and thorough cleanup of all roads, roadways, roadway medians, berms, parkways, cul-de-sac islands, neighborhood and other entrances, and bike trails throughout the Properties, including, but not limited to, mowing grass on all roadsides, cul-de-sac islands, entrances, and bike trails; sweeping all roads and bike trails; landscape maintenance on all roadsides, cul-de-sac islands, entrances, and bike trails; pickup and disposal of trash on all roads, roadsides, cul-de-sac islands, entrances, and bike trails. Such cleanup as is possible shall begin within an individual residential neighborhood as soon as construction of dwellings has commenced within said neighborhood. The Association shall further post such maintenance bonds as required by the Virginia Department of Transportation or other governmental authority to maintain median strips, dams and storage compounds, pedestrian underpasses and other areas.

(i) The Association shall provide regular and thorough maintenance of all berms along roadways, within Common Areas and within any berm easement on any lot. Easements for berms and access easements for the maintenance of them as shown on any recorded plat shall be for the benefit of the Company, the Association and their assigns.

(j) The Association shall provide general maintenance of all directional signs, bike trail signs, and neighborhood and other area signs, including, but not limited to, maintaining, repair work, replacement as needed, and landscaping within Common Areas and within any sign easement on any lot. Easements for signs and access easements for the maintenance and landscaping around the sign as shown on any recorded plat shall be for the benefit of the Company, the Association, and their assigns.

(1) The Association shall provide regular and thorough maintenance and cleanup of all Common Areas, Restricted Common Areas, Intended Common Areas, and Intended Restricted Common Areas, including, but not limited to, mowing of grass, fertilization as needed, landscape maintenance as needed, pickup and disposal of trash, washing down of picnic tables and benches as needed, and painting, repairs to and replacement of all improvements as needed.

(m) The Association shall maintain and keep in good repair and order all safety ledges (above and below the water) surrounding lakes in Forest Lakes. Easements for the safety ledges and access easements for maintenance of the safety ledges and adjoining lakes shown on any recorded plat shall be for the benefit of the Company, the Association and their assigns.

(n) Insurance coverage on the Property shall be governed by the following provisions:

(1) Ownership of Policies. All insurance policies upon the Common Areas and Restricted Common Areas shall be purchased by the Association for the benefit of the Association and the Owners and their mortgagees as their security interest may appear, and provisions shall be made for the issuance of certificates of mortgagee endorsements to the mortgagees of Owners.

(2) Coverage. All buildings and improvements upon the land and all personal property included in the Common Areas and Restricted Common Areas and facilities shall be insured in an amount equal to one hundred percent (100%) insurable replacement value as determined annually by the Board of Directors of the Association. Such coverage shall provide protection against:

(i) Loss or damage by fire and other hazard covered by standard extended coverage endorsement;

(ii) Such other risks as from time to time shall be customarily covered with respect to buildings on the land; and

(3) Liability. Public liability insurance shall be secured by the Association with limits of liability of no less than One Million Dollars ($1,000,000.00) per occurrence and shall include an endorsement to cover liability of the Owners as a group to a single Owner. There shall also be obtained such other insurance coverage as the Association shall determine from time to time to be desirable and necessary.

(4) Premiums. Premiums for insurance policies purchased by the Association shall be paid by Association and charged to the Owners as an assessment according to the provisions of Article V above.

(5) Proceeds. All insurance policies purchased by the Association shall be for the benefit of the Association and the Owners and their mortgagees as their security interest may appear, and shall provide that all proceeds thereof shall be payable to the Association as insurance trustee under this Declaration. The sole duty of the Association as insurance trustee shall be to receive such proceeds as are paid and to hold the same in trust for the purposes stated herein or stated in the By-Laws and for the benefit of the Owners and their mortgagees.

(6) Proceeds of insurance policies received by the Association as insurance trustee shall be placed in the Association's treasury for the following:

(i) Expense of the Trust. All expenses of the insurance trustee shall be first be paid or provisions made therefore.

(ii) Reconstruction or Repair. The remaining proceeds shall be paid to defray the cost of repairs. Any proceeds remaining after defraying such cost shall be retained by the Association.

(7) All persons responsible for or authorized to expend funds or otherwise deal in the assets of the Association or those held in trust, shall first be bonded by a quality insurer to indemnify the Association for any loss or default in the performance of their duties in an amount equal to six (6) months' assessments plus reserves accumulated.

Section 4. Obligation of the Association. The Association shall not be obligated to carry out or offer any of the functions and services specified by the provisions of this Article except as specified in Section 3 of this Article VI. The functions and services, other than those set in Section 3 of this Article VI, to be carried out or offered by the Association at any particular time shall be determined by the Board of Directors of the Association taking into consideration the funds available to the Association and the needs of the Members of the Association. The functions and services, other than those set in Section 3 of this Article VI, which the Association is authorized to carry out or to provide, may be added or reduced at any time upon the affirmative vote of fifty-one percent (51%) of the votes cast at a duly called meeting of the Association at which a quorum is present; provided, however, that so long as the Company is a member of the Association no change may occur without the consent of the Type "E" Member.

Section 5. Mortgage and Pledge. The Board of Directors of the Association shall nave the power and authority to mortgage the property of the Association and to pledge the revenues of the Association as security for loans made to the Association which loans shall be used by the Association in performing its authorized functions and services; provided that any such mortgage is with the prior consent of two-thirds of the Members of the Association, which consent may be evidenced by petition or by an affirmative vote of two-thirds of the Association. The Company may, but shall not be required, to make loans to the Association, subject to approval by the Company of the use to which such loan proceeds will be put and the terms pursuant to which such loan will be repaid. Notwithstanding anything in this Declaration to the contrary, the Association shall not be allowed to reduce the level of the Annual Assessment below the limit of the Maximum Regular Annual Assessment at any time there are outstanding any amounts due the Company as repayment of any loans made by the Company to the Association without the express written consent of the Company.

Section 6. Maintenance or Protection of Property Not Owned by the Association. The Association shall be authorized to render services of a governmental nature not furnished by the local government in the case of maintenance or protection of property not owned by it.

Section 1. Architectural Review of Common Areas and Restricted Common Areas. No building, wall, fence, swimming pool, or other structure shall be commenced, erected, or maintained upon the Common Areas or Restricted Common Areas, nor shall any landscaping be done in these Areas, nor shall any exterior addition to any existing structure located on these Areas or change or alteration therein be made until the plans and specifications therefore showing the nature, kind, shape, height, materials, colors and location of the same shall have been submitted to and approved in writing as to the harmony and compatibility of its external design and location with the surrounding structures and topography by the Architectural Review Board of the Association and by the Company pursuant to the provisions of the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes.

The Architectural Review Board shall be composed of at least three (3) but not more than eleven (11) Members, all of whom shall be appointed by the Board of Directors of the Association. At least one (1) Member of the Association other than representatives of the Company shall be a Member of the Architectural Review Board once there are one hundred (100) Members of the Association.

Section 2. The General Property Covenants. Pursuant to the provisions of the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Forest Lakes (the "General Property Covenants"), the Company reserves unto itself, its successors and assigns, the right to appoint the Association its agent for the purpose of administering and enforcing, in whole or in part, the rights reserved unto the Company in said General Property Covenants, including, but not limited to, the rights to approve (or disapprove) plans, specifications, color, finish, plot plan, land management plan, and construction schedules for any or all buildings or structures to be erected within any or all of the properties subject to said General Property Covenants. Such appointments may be temporary or permanent, and shall be subject to any conditions, limitations, or restrictions which the Company, in its sole and uncontrolled discretion, may elect to impose. Upon any such appointment of the Association as agent by the Company, the Association shall assume any obligations which are incident thereto.

In addition to the foregoing, the Company reserves unto itself, its successors and assigns, the right to assign in whole or in part to the Association its rights reserved in the General Property Covenants to grant approvals (or disapprovals), to establish rules and regulations, to administer and enforce the provisions of said General Property Covenants, and any or all other rights reserved therein by the Company. The assignment of such rights shall be subject to any conditions, limitations, or restrictions which the Company, in its sole and uncontrolled discretion, may elect to impose at the time of assignment. Following the assignment of such rights, the Association shall assume all of the Company's obligations which are incident thereto (if any), and the Company shall have no further obligation or liability with respect thereto. The assignment of such right or rights by the Company to the Association shall be made by written instrument which shall be recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia.

Notwithstanding anything in the foregoing to the contrary, so long as the Company, its successors and assigns, is the owner of property subject to the provisions of the General Property Covenants, the Company, in addition to and jointly with the Association, shall retain all rights of easement reserved unto it in said General Property Covenants, and shall, furthermore, retain all rights and entry granted unto it in said General Property Covenants for the purposes of correcting, repairing, enhancing, improving, cleaning, preserving, clearing out, removing, or taking any action to prevent a violation of said General Property Covenants, and the retention of said rights of easement and entry by the Company shall in no way create any obligation on the part of the Company to perform any affirmative action.

Section 1. Duration. The Covenants and Restrictions of this Declaration and any Amendments thereto shall run with and bind the land, and shall inure to the benefit of and be enforceable by the Association, the Company, or the Owner of any land subject to this Declaration, their respective legal representatives, heirs, successors, and assigns, for a period of thirty (30) years from the date this Declaration is recorded. Upon the expiration of said thirty (30) year period, this Declaration shall be automatically extended for successive periods of ten (10) years. The number of ten (10) years extension periods hereunder shall be unlimited, and this Declaration shall be automatically extended upon the expiration of the initial thirty (30) year period, or during the last year of any subsequent ten (10) year extension period, unless at a duly called meeting of the Association fifty-one percent (51%) or more of the total vote entitled to be cast by all the Members of the Association shall vote in favor of terminating this Declaration at the end of its then current term. The presence at the meeting of the Members or proxies entitled to cast thirty percent (30%) of the total vote of the Membership shall constitute a quorum. It shall be required that written notice of any meeting at which such a proposal to terminate this Declaration is to be considered, setting forth the fact that such a proposal will be considered, shall be given each Member at least thirty (30) days in advance of said meeting. In the event that the Members of the Association vote to terminate this Declaration, the President and Secretary of the Association shall execute a certificate which shall set forth the Resolution of Termination adopted by the Association, the date of the meeting of the Association at which such Resolution was adopted, the date the notice of such Meeting was given, the total number of votes of Members of the Association, the total number of votes required to constitute a quorum at a meeting of the Association, the total number of votes present at said meeting, the total number of votes necessary to adopt a Resolution terminating this Declaration, the total number of votes cast in favor of such Resolution, and the total number of votes cast against such Resolution. Said certificate shall be recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia, and may be relied upon for the correctness of the facts contained therein as they relate to the termination of this Declaration.

Section 2. Amendments. All proposed Amendments to this Declaration shall be submitted to a vote of the Members at a duly called meeting of the Association subject to the quorum requirements establish by Article III, Section 5, and any such proposed amendment shall be deemed approved if two-thirds (2/3) of the votes cast at such meeting vote in favor of such proposed amendment. Notice shall be given each Member at least fourteen (14) days prior to the date of the meeting at which such proposed amendment is to be considered. If any proposed amendment to this Declaration is approved by the Members as set forth above, the President and Secretary of the Association shall execute an Addendum to this Declaration which shall set forth the Amendment, the effective date of the Amendment (which in no event shall be less than fifteen (15) days after the date of the meeting of the Association at which such Amendment was adopted), the date the notice of such meeting was given, the total number of votes of Members of the Association, the total number of votes required to constitute a quorum at a meeting of the Association, the total number of votes present at said meeting, the number of votes necessary to adopt the Amendment, the total number of votes cast for and against the Amendment, and such Addendum shall be recorded in the Clerk's Office of the Circuit Court of Albemarle County, Virginia.

So long as the Company is a Type "E" Member, no Amendment of this Declaration shall be made without the written consent of the Company.

Section 3. Notices. Any notice required to be sent to any Member under the provisions of this Declaration shall be deemed to have been properly sent, and notice thereby given, when delivered personally or sent by mail, with the proper postage affixed, to the address appearing on the Association's Membership list. Notice to one (1) of two (2) or more co-owners or co-tenants shall constitute notice to all co-owners. It shall be the obligation of every Member to immediately notify the Secretary of the Association in writing of any change of address. Any person who becomes a Member following the first day in the calendar month in which said notice is delivered or mailed shall be deemed to have been given notice if notice was given to his predecessor in title.

Section 4. Enforcement. Enforcement of these Covenants and Restrictions shall be by any proceeding at law or in equity against any person or persons violating or attempting to violate or circumvent any Covenant or Restriction, either to restrain a violation or to recover damages, may be against the land or to enforce any lien created by these Covenants. Failure by the Association or the Company to enforce any Covenant or Restriction herein contained for any period of time shall in no event be deemed a waiver or estoppel of the right to enforce same thereafter.

Section 5. Severability. Should any Covenant or Restriction herein contained, or any Article, Section, Subsection, sentence, clause, phrase or term of this Declaration be declared to be void, invalid, illegal, or unenforceable, for any reason, by the adjudication of any Court or other tribunal having jurisdiction over the parties hereto and the subject matter hereof, such judgment shall in no way effect the other provisions hereof which are hereby declared to be severable and which shall remain in full force and effect.

Section 6. Interpretation. The Board of Directors of the Association shall have the right to determine all questions arising in connection with this Declaration of Covenants and Restrictions, and to construe and interpret its provisions, and its determination, construction, or interpretation shall be final and binding. In all cases, the provisions of this Declaration of Covenants and Restrictions shall be given that interpretation or construction that will best tend toward the consummation of the general plan of improvements.

Section 7. Authorized Action. All actions which the Association is allowed to take under this instrument shall be authorized actions of the Association if approved by the Board of Directors of the Association in the manner provided for in the By-Laws of the Association, unless the terms of this instrument provide otherwise.

Section 8. Limited Liability. In connection with all reviews, acceptances, inspections, permissions, consents or required approvals by or from the Company and/or the Association contemplated under this Declaration, the Company and/or the Association shall not be liable to an Owner or to any other person on account of any claim, liability, damage, or expense suffered or incurred by or threatened against an Owner or such other person and arising out of or in any way relating to the subject matter of any such reviews, acceptances, inspections, permissions, consents or required approvals, whether given, granted, or withheld.

Section 9. Termination of Association. In the event that this Declaration be declared to be void, invalid, illegal, or unenforceable in its entirety, or in such a significant manner that the Association is not able to function substantially as contemplated by the terms hereof, for any reason, by the adjudication of any Court or other tribunal having jurisdiction over the parties hereto and the subject matter hereof, and such adjudication occurs within ten (10) years of the date of recording this Declaration, all Common Areas and Restricted Common Areas belonging to the Association at the time of such adjudication shall revert to the Company, and the Company shall own and operate said Common Areas and Restricted Common Areas as trustee for the use and benefit of Owners within the Properties as set forth below. If said adjudication shall occur on a date more than ten (10) years after the date of recording of this Declaration, or if the Members of the Association should Vote not to renew and extend this Declaration as provided for in Article VIII, Section 1, all Common Areas and Restricted Common Areas owned by the Association at such time shall be transferred to a trustee (hereinafter referred to as "Trustee") appointed by the Circuit Court of Albemarle County, Virginia, which Trustee shall own and operate said Common Areas and Restricted Common Areas for the use and benefit of Owners within the Properties as set forth below:

(a) Each Lot, Tract, Site, Unit or Parcel of land located within the Properties shall be subject to an Annual Assessment which shall be paid by the Owner of each to the Company or Trustee, whichever becomes the successor in title to the Association. The amount of such Annual Assessment and its due date shall be determined solely by the Company or the Trustee, as the case may be, but the amount of such Annual Assessment on any particular Lot, Tract, Site, Unit or Parcel shall not exceed the amount actually assessed against that Lot, Tract, Site, Unit or Parcel in the last year that assessments were levied by the Association, subject to the adjustments set forth in subparagraph (b) immediately below;

(b) The Maximum Regular Annual Assessment which may be charged by the Company or Trustee hereunder may be automatically increased each year by an amount of ten percent (10%) or the percentage increase between the first and last months of the thirteen (13) month period terminating at the end of the third (3rd) quarter of the previous assessment year in the Consumer Price Index, U.S. City Average, All Items (1982-84/100) (hereafter "C.P.I.") issued by the U.S. Bureau of Labor Statistics in its monthly report entitled "The Consumer Price Index, U.S. City Average and Selected Areas", whichever of these two (2) percentage figures is larger. The actual amount of such increase in the Maximum Regular Annual Assessment shall equal the Maximum Regular Annual Assessment on such Lot, Tract, Site, Unit or Parcel for the previous year multiplied by the larger of the two (2) percentage factors set forth above. If the C.P.I. is discontinued, then there shall be used the most similar index published by the United States Government that may be procured indicating changes in the cost of living.

(c) Any past due Annual Assessment together with interest thereon at the maximum annual rate allowed by law accrued from the due date and all costs of collection including reasonable attorney's fees shall be a personal obligation of the Owner at the time the Annual Assessment became past due, and it shall also constitute and become a charge and continuing lien on the Lot or Parcel of land and all improvements thereon, against which the Assessment has been made, in the hands of the then Owner, his heirs, devisees, personal representatives and assigns.

(d) The Company, or the Trustee, as the case may be, shall be required to use the funds collected as Annual Assessments f