BY-LAWS of the ORCHARDS HOMEOWNER S ASSOCIATION, INC

Transcription

1 BY-LAWS of the ORCHARDS HOMEOWNER S ASSOCIATION, INC INTRODUCTORY The name of the corporation is The Orchards Homeowner's Association, Inc., referred to as the "ASSOCIATION"). The ASSOCIATION shall maintain an office at such place as the Board of Directors of the ASSOCIATION may determine. The corporate seal of the ASSOCIATION shall be in circular form and shall bear the name of the ASSOCIATION and such other language as is required by the laws of the Commonwealth of Pennsylvania. ARTICLE I DEFINITIONS The following words, phrases and terms, when used in these BY LAWS shall have the meanings and references as provided for below in this Article I. Section 1.1. "APARTMENT UNIT" shall mean a MULTI FAMILY LIVING UNIT, other than a Townhouse lot, semi-detached, or single family lot, whether or not the apartment unit is created pursuant to the Pennsylvania Uniform Condominium Act. Section 1.2. "APPROVED LIVING UNITS" shall mean the total number of LIVING UNITS, permitted at any point in time under preliminary or (where applicable) final subdivision approvals to be constructed upon all portions of the premises then included within the GENERAL PLAN OF DEVELOPMENT. Section 1.3. "ARTICLES" shall mean the Articles of Incorporation of the ASSOCIATION as said Articles are amended from time to time. Section 1.4. "ASSOCIATION" shall mean and refer to The Orchards Homeowner's Association, Inc., a Pennsylvania non-profit corporation, its successors and assigns. Section 1.5. "BOARD" shall mean the Board of Directors of the ASSOCIATION. Section 1.6. "BY LAWS" shall mean the By-Laws of the ASSOCIATION as such By-Laws may be amended from time to time. Section 1.7. "DEFINITIONS" shall mean any term not defined herein shall have the definition and meaning assigned to it under the "DECLARATION." Section 1.8. "DECLARANT" shall mean and refer to Melhorn Associates, a general partnership heretofore referred to, and such of its successors and assigns as shall hereafter acquire any portion of the PROPERTIES for the purpose of development and be designated by Melhorn Associates or a successor DECLARANT as a DECLARANT for the purpose hereof by a duly recorded written instrument. Any such designation by Melhorn Associates or a successor DECLARANT may by its terms be either for specific designated purposes, may be limited to specific portions of the PROPERTIES, or may be for all purposes and may be subject to such limitations or reservations as Melhorn Associates or such successor DECLARANT may provide in such designation and may also include the right of redesignation by such successor or further successors. Any such designation in a mortgage shall become effective upon the occurrence of such event or events as shall be specified in such document. On occasion reference may be made to "successor DECLARANTS", "successors to DECLARANTS" or "a successor to DECLARANT". Such reference is not intended to limit, modify or affect in any other context the construction of the term "DECLARANT" as defined in this Section 1.8 and is merely so used in a particular context for possible further clarity. Melhorn Associates has, in a document to be recorded concurrently with the DECLARATION, been, for certain specified purposes, designated as the successor DECLARANT for that 1

2 portion of the PROPERTIES described on the legal description of the PROPERTIES. Section 1.9. "DECLARANT'S DEVELOPMENT PERIOD" shall mean the time period extending from the date of recording of the DECLARATION until the earliest occurring of any of the following events: (i) Completion of development of the properties described in Exhibits "A" and "B" to the DECLARATION in accordance with the GENERAL PLAN OF DEVELOPMENT, (ii) Voluntary termination by DECLARANT of DECLARANT'S DEVELOPMENT PERIOD by written notice from DECLARANT to the ASSOCIATION of such termination and the filing by DECLARANT termination of DECLARANT'S DEVELOPMENT PERIOD; Section "DECLARATION" shall mean and refer to the Declaration of Covenants, Conditions, Restrictions, Rights, Easements and Affirmative Obligations applicable to The Orchards, Mount Joy Borough, Pennsylvania filed by DECLARANT and Melhorn Associates, a Pennsylvania corporation, as the same may be amended from time to time, together with any and all SUPPLEMENTARY DECLARATIONS which may be recorded from time to time pursuant to the provisions of the DECLARATION. Section "DESIGN REVIEW COMMITTEE" shall mean a COMMITTEE as defined in the attached Exhibit #C. Section "FULLY DEVELOPED LIVING UNIT" shall mean a LIVING UNIT the construction of which has been substantially completed and which is suitable for occupancy by a SINGLE FAMILY. Section "GENERAL PLAN OF DEVELOPMENT" shall mean and refer to the total general scheme of intended uses of land in The Orchards, as may be amended from time to time. Section "THE ORCHARDS" shall mean and refer to all phases of the real property described in the DECLARATION as the same may from time to time be modified by amendment to the DECLARATION approved in writing by DECLARANT. DECLARANT may from time to time by a recorded SUPPLEMENTARY DECLARATION remove portions of the lands described from the definition of "THE ORCHARDS" for purposes of the DECLARATION so long as such lands to be so removed have not been annexed. Section "THE ORCHARDS PROPERTY DOCUMENTS" include the DECLARATION, any SUPPLEMENTARY DECLARATIONS, all BY-LAWS adopted pursuant to the DECLARATION, the ASSOCIATION RULES, any Rules and Regulations adopted by the DESIGN REVIEW COMMITTEE, and all amendments and supplements to the foregoing. Section "LANDS" shall refer to any parcel of ground and improvements thereon erected that does not constitute a LOT which is located within the boundaries of the PROPERTIES. Section "LIMITED COMMON AREA" shall mean those portions of the PROPERTIES designated as such on any recorded final subdivision plan of any portion of the PROPERTIES or designated as such in any SUPPLEMENTARY DECLARATION. Section "LIVING UNIT" shall mean any portion of a structure or an entire structure as the case may be situated upon the PROPERTIES intended for occupancy as a residence for a SINGLE FAMILY. The term "LIVING UNIT" shall include (but not be limited to) a Single Family house, a Townhouse, and an APARTMENT UNIT. Reference to a LIVING UNIT where appropriate shall include associated land. Section "LOT" shall mean and refer to any numbered or otherwise designated plot of ground shown upon any final recorded subdivision map of the PROPERTIES, or of any portion of the PROPERTIES, and any improvements thereon erected except that, the term "LOT" shall not refer to any portion or the whole of the PRD COMMON AREA, any LIMITED COMMON AREA, areas dedicated to and accepted by any state or local public authority but shall include a MULTI FAMILY PLOT. 2

3 Section "MANAGER" shall mean and refer to the managing agent, whether corporate or individual, retained by the ASSOCIATION on contract and charged with the maintenance and upkeep of the PRD COMMON AREA and any LIMITED COMMON AREA. Such Manager or other firm may be retained by the ASSOCIATION also to manage and administer the affairs of the ASSOCIATION and consult with the ASSOCIATION, its officers and directors. Section "MULTI-FAMILY LIVING UNIT" shall mean an APARTMENT UNIT. Section "MULTI FAMILY PLOT" shall mean a plot of ground within the PROPERTIES upon which an approved final subdivision plan permits the construction of MULTI FAMILY LIVING UNITS or upon which such MULTI FAMILY LIVING UNITS have been constructed. Section "OWNER" shall mean and refer to the record owner (including DECLARANT), whether one or more persons or entities, of a fee simple title to any LOT, LIVING UNIT, or LANDS including contract sellers, but excluding those having such interest merely as security for the performance of an obligation. The term "OWNERS" shall refer to the plural of the term "OWNER" as so defined and shall refer to all such owners unless otherwise limited in a particular context. Section "COMMON AREA" shall mean all those portions of the PROPERTIES (including the improvements thereto) shown as such on any recorded final subdivision map of any portion of the PROPERTIES or designated as such in the DECLARATION or any SUPPLEMENTARY DECLARATION and which are or shall be owned by the ASSOCIATION for the common use and enjoyment of the members of the ASSOCIATION. The COMMON AREA shall be owned by the ASSOCIATION at the time of the first conveyance of a LOT by Melhorn Associates to a purchaser who thereby becomes a MEMBER. Section "PROPERTIES" shall mean and refer to the real property described on Exhibit "A" and "B" together with such additional real property as hereafter becomes subject to the provisions of the DECLARATION. Section "SINGLE FAMILY" shall mean a group of one or more persons (not to exceed three (3) persons unrelated to each other by blood or marriage), together with their domestic servants, who maintain a common household in a LIVING UNIT. The ASSOCIATION may, from time to time by resolution approved by a majority of its members modify this definition of the term "Single Family", provided that any such modified definition does not discriminate among OWNERS or tenants of LIVING UNITS. Section "SUPPLEMENTARY DECLARATION" shall mean the document filed pursuant to the DECLARATION to effectuate an annexation. Section "UNDEVELOPED APPROVED LIVING UNITS" shall mean and be equal to the total number of APPROVED LIVING UNITS less the number of FULLY DEVELOPED LIVING UNITS. Section "UNIT LOT" shall mean and refer to any numbered lot, and any improvements erected thereon, shown on the Preliminary Development Plan for all phases of "THE ORCHARDS", and, if any lot is ever created pursuant to the Pennsylvania Uniform Condominium Act shall include such approved condominium unit. ARTICLE II MEMBERS: VOTING: QUORUM: PROXIES Section 2.1. Membership. (a) Qualifications. Each OWNER (including DECLARANT) shall be a member of the ASSOCIATION and shall be entitled to one membership for each LOT or APARTMENT UNIT owned. Ownership of a LOT or APARTMENT UNIT, shall be the sole qualification for membership in the ASSOCIATION. 3

4 (b) Member s Rights and Duties. Each member shall have the rights, duties and obligations set for in the applicable PROPERTY DOCUMENTS. (c) Transfer of Membership. The ASSOCIATION membership of each OWNER (including DECLARANT) shall be appurtenant to the LOT, or APARTMENT UNIT giving rise to such membership, and shall not be assigned, transferred, pledged, hypotecated, conveyed or alienated in any way except upon the transfer of title to said LOT or APARTMENT UNIT and then only to the transferee of title to such LOT or APARTMENT UNIT. Any attempt to make a prohibited transfer shall be void. Any transfer of title to a LOT or APARTMENT UNIT shall operate automatically to transfer the membership in the ASSOCIATION appurtenant thereto to the new Owner thereof. In the event of a transfer of only a portion of lands giving rise to a membership, both the transferee and transferor shall be members independent of the other provided each owns at least one LOT or one APARTMENT UNIT. Section 2.2. Voting Rights of Members - Class of Members (a) Classes of Members. The ASSOCIATION shall have two (2) classes of voting membership: Class A. Class A members shall be all owners, with the exception of the DECLARANT, and shall be entitled to one vote for each Unit Lot owned. When more than one person holds an interest in any Unit Lot, all such persons shall be members. The vote for such Unit Lot shall be exercised as they determine, but in no event shall more than one vote be cast with respect to any Unit Lot. Class B. The Class B members shall be the DECLARANT and shall be entitled to three (3) votes for each Unit Lot owned whether said lot is designated as a lot with preliminary or final plan approval for all phases of THE ORCHARDS. The Class B membership shall cease and be converted to Class A membership upon the sale by the DECLARANT to other parties of ninety percent (90%) of the Unit Lots in all phases of the Properties or December 31, 2012, whichever shall first occur. (b) Joint and Multiple Owner Disputes. The vote or votes for each LOT, or APARTMENT UNIT must be cast as a single vote, and fractional votes shall not be allowed. In the event that joint or multiple OWNERS are unable to agree among themselves as to how their vote or votes shall be cast, they shall lose their right to vote on the matter in question. If any OWNER or OWNERS cast a vote representing a certain LOT, or APARTMENT UNIT, it will thereafter be conclusively presumed for all purposes that he was or they were acting with the authority and consent of all other OWNERS of the same LOT, or APARTMENT UNIT. In the event more than one vote is cast for a particular LOT or APARTMENT UNIT, none of said votes shall be counted and said with the authority and consent of all other OWNERS of the same LOT, or APARTMENT UNIT. In the event more than one vote is cast for a particular LOT or APARTMENT UNIT, none of said votes shall be counted and said votes shall be deemed void. (c) Common or Joint Ownership. In the event that more than one person shall at any time be the Owner of any LOT, or APARTMENT UNIT, all such persons shall be Members and the vote for such LOT, or APARTMENT UNIT, shall be subject to the provisions of subsection (b) of this Section 2.21 be exercised as such persons among themselves shall determine. In no event shall more than one ACTIVE MEMBERSHIP vote be cast with respect to any LOT or APARTMENT UNIT. Section 2.3. Majority of Members. As used herein the term "Majority of the Members" shall mean persons entitled to cast more than fifty percent (50%) of the total votes to which all Members are entitled. The concurrence of a majority of the votes cast at a meeting at which a quorum is present shall be the act of, and binding upon, all Members for all purposes, except unless otherwise provided under other applicable ORCHARDS PROPERTY DOCUMENTS. Section 2.4. Quorum. Except as otherwise provided in Section 3.5 or elsewhere in these BY LAWS, the presence in person or by proxy of a Majority of the Members shall constitute a quorum at a meeting of the ASSOCIATION. The Members present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough persons so that less than a quorum is present, and the Members then remaining and entitled to cast votes at such meeting shall constitute a quorum in connection with the conduct of such business prior to adjournment. Section 2.5. Proxies. Votes may be cast in person or by written proxy. Proxies must be filed with the ASSOCIATION Secretary before the appointed time of each meeting. A proxy shall be revocable at any time only upon written notice to the Secretary and shall automatically cease after one (1) year. A proxy 4

5 shall also become void when the ASSOCIATION has received written notice of the death or judicially declared incompetence of the grantor of the proxy or of recording of a transfer of title to the UNIT LOT from the grantor of such proxy. ARTICLE III MEETINGS OF MEMBERS Section 3.1. Annual Meetings. The first annual meeting of the Members shall be held within one (1) year from the date of incorporation of the ASSOCIATION, and each subsequent annual meeting of the Members shall be held on the same day of the same month of each succeeding each subsequent annual meeting of the Members shall be held on the same day of the same month of each succeeding year thereafter, at the hour of 8:00 P.M., or at such other date and time as the BOARD may determine, but not more than sixty (60) days before or after the date regularly scheduled for the annual meeting. Section 3.2. Special Meetings. (a) Special meetings of the Members may be called at any time by the ASSOCIATION President or by the BOARD, or upon written request of ten percent (10%) of the Members. (b) The notice of any special meeting shall state the time and place of such meeting and the purpose thereof. No business shall be transacted at a special meeting except that stated in the notice unless consented to in person or by proxy by sixty percent (60%) of the votes entitled to be cast at any such meeting or poll. Notice of meetings or ballot polls shall specify the place, day and hour. In the case of a ballot poll, the notice shall include the matter(s) to be voted upon. Notices shall be addressed to Members at each Member's respective UNIT LOT or to such other address as any such Member may from time to time specify in writing to the ASSOCIATION Secretary. Delivery shall be deemed to have been made when the notice is placed by hand in the Member's mailbox or when the notice has been duly deposited in the United States mail, postage prepaid and sent to the address indicated for such notice. Notices may be waived by any Member in writing given at any time. Notices to co-owners shall be addressed to all but need only be sent to one address. Section 3.3 Missing or deleted. Section 3.4 Missing or deleted. Section 3.5. Adjourned Meetings. If a quorum is not present at any meeting, the Members present, either in person or by proxy, may, by majority vote, reschedule the meeting for a later date, and notice thereof in accordance with the provisions of Section 3.4 shall be given to all Members entitled to attend and vote at such meeting. If no quorum is present at such second meeting, the notice procedure shall be repeated if the Members present, either in person or by proxy, by majority vote, decide to call a third meeting. A quorum at such third meeting shall consist of whatever number of Members is present, and such fact shall be communicated in the notice for the third meeting. Section 3.6. Action by Consent. Any action required or permitted to be taken by vote of Members of any class or of all classes may be taken without a meeting by the written consent, stating the actions so taken, of at least that number of such persons whose votes would otherwise have been sufficient to take the action if a meeting had been held at which all Members of such class or classes were present. ARTICLE IV BOARD OF DIRECTORS Section 4.1. Number. The affairs of the ASSOCIATION shall be managed by a BOARD 0f up to nine (9) Directors who must either be: (i) Members of the ASSOCIATION or (ii) nominated as a Director by a DECLARANT during the DECLARANT'S DEVELOPMENT PERIOD. Section 4.2. Composition & Term. Directors shall be elected at annual meetings and shall serve for two (2) 5

6 year terms, except as provided herein. At the first annual meeting, five (5) Directors shall be elected; the two (2) Directors receiving the highest number of votes shall be elected for a two (2) year term; the other Directors shall serve a one (1) year term. The BOARD may from time to time increase the number of Members of the BOARD until the BOARD shall consist of nine (9) persons. Any such action must be taken at least six (6) weeks prior to the election at which the new BOARD positions are to be filled. In no event may there be less than five (5) nor more than nine (9) Directors. In no event may the BOARD in any year increase the number of BOARD Members by more than two (2) persons. Terms shall be staggered so that as near as possible half of the Directors shall be elected each year. Section 4.3. Election. The election of Directors shall take place at, or not more than one week prior to, the annual meeting of the ASSOCIATION, as the BOARD shall by resolution determine. Election procedures, such as method of nomination, appointment of judges of election and tellers, etc., shall be determined by resolution of the BOARD, subject to Sections 2.1 and 2.3 hereof. Cumulative voting is not permitted. Those nominees receiving the highest number of votes shall be elected. If the annual meeting is postponed, as provided herein, for any reason, any election which would have satisfied the requirements of this Section had the annual meeting been held on the originally scheduled date shall be unaffected by such postponement. Section 4.4. Resignation and Removal. The unexcused absence of a Director from three (3) consecutive regular meetings of the BOARD shall be deemed a resignation. Any Director may be removed from the BOARD, with or without cause, by a vote of a Majority of the Members of the ASSOCIATION, a Director nominated by a DECLARANT may be removed only upon a majority vote of the Class "B" MEMBERS as a class. Any vacancy so created by the removal of a Director nominated by a DECLARANT must be filled by a Director nominated by DECLARANT. Section 4.5. Vacancies. In the event of death, resignation or removal of a Director, his successor shall be selected by the remaining Directors and shall serve for the unexpired term of his predecessor, except that any vacancy occurring as a result of the death, resignation or removal of a Director nominated by a Class "B" MEMBER, shall, until all Class "B" MEMBERSHIPS have been converted pursuant to Subsection 3.3(b) of the DECLARATION, be filled by the vote of the Class "B" MEMBERS as a class. Section 4.6. Organization Meeting. The first meeting of the BOARD shall be held within twenty (20) days after the Annual Meeting at which the Directors serving thereon took office at such place as shall be fixed by such Directors, and no notice shall be necessary to constitute such meeting, providing a quorum shall be present. Section 4.7. Regular Meetings. Regular meetings of the BOARD may be held at such time and place as shall be determined, from time to time, by the BOARD at a duly convened meeting or by a majority thereof without a meeting, but in no event shall more than one-hundred (100) days elapse between such regular meetings. Section 4.8. Special Meetings. (a) Special meetings of the BOARD may be called by the President. Special meetings of the BOARD must be called by the President upon the written request of at least two (2) Directors. Any such special meeting called by written request shall be scheduled by the President and held within ten (10) days after the Secretary's receipt of such written request, at the discretion of the President (or chairman). Except in the event of a significant emergency, no special meeting may be scheduled on less than three (3) day s advance notice. (b) A special reorganizational meeting of the BOARD shall be held at the call of the President within one-hundred (100) days of the conversion of all Class "B MEMBERSBIPS pursuant to Subsection 3.3(b) of the DECLARATION. The term of all Directors nominated by a DECLARANT shall terminate upon new Directors being elected at such special reorganizational meeting to serve for the unexpired term of such DECLARANT nominated Directors. Section 4.9. Notice; Waiver of Notice. (a) Notice of any regular or special meeting of the BOARD shall be given to each Director serving 6

7 thereon, personally or by telephone, mail, telegraph or fax stating the date, time and place of such meeting. in addition, in the case of special meetings, such notice shall state the purpose of the meeting. Notice of regular meetings shall contain a proposed agenda and be given at least ten (10) days prior to the scheduled date for the meeting. (b) Before or at any meeting of the BOARD, any Director may, in writing, waive notice of such meeting, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a Director at any such meeting shall be a waiver of notice by him of the time and place thereof unless such attendance is solely for the purpose of objecting to the notice given. If all the Directors then serving on the BOARD are present at any meeting thereof, no notice shall be required, and any business may be transacted at such meeting unless one or more of the Director's are attending solely for the purpose of objection to the notice given. Section Action by Written Consent. Any action which may be taken at a meeting of the BOARD may be taken without a meeting, if a consent in writing, setting forth the action so taken, shall be signed by all of the Directors who would be entitled to vote at a meeting for such purpose and shall be filed with the Secretary. Section Quorum. At all meetings of the BOARD, a quorum shall be deemed to be present for the transaction of business if both of the following requirements have been met: (a) a majority of the Directors then serving on the BOARD are present; and (b) a majority of the Directors nominated by the Class "A" MEMBERS are present. The acts of the majority of the Directors present at a meeting at which a quorum is present shall be the acts of the BOARD. If, at any meeting of the BOARD, there be less than a quorum present, the majority of those present may adjourn or cancel the meeting. At any adjourned meeting at which a quorum is present, any business which might have been transacted at the meeting as originally called may be transacted without further notice. Section Effect of Presence. Any Director present at any meeting shall be deemed to have assented to any action taken at such meeting unless his dissent is entered in the minutes or unless his written dissent is filed with the Secretary at or immediately following the adjournment thereof, provided that no Director may dissent from any action for which he voted in favor at the meeting. Section Communications Equipment. One or more Directors may participate in and be counted for quorum purposes at any meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can speak to and hear each other. Section No Compensation. No Director shall be compensated by the ASSOCIATION for acting as such. Section Rules of Order. Where not otherwise provided herein, the BOARD and ASSOCIATION shall conduct their respective business in accordance with Robert's Rules of Order, or such other rules as it may adopt from time to time for such purpose. Section Members Right to Attend Meetings. Members shall have no right to attend meetings of the BOARD, but the BOARD may, in its sole discretion, elect to allow Members to attend a particular meeting or meetings, and shall post or cause to be posted a notice of such a meeting in such places as it thinks appropriate at least three (3) days prior to such meeting; provided, however, that the failure to give such notice shall neither invalidate any actions taken at said meeting nor impose any liability on the BOARD, the ASSOCIATION or any of its servants for failure to give such notice. Section Consent. Whenever any ORCHARDS PROPERTY DOCUMENT shall require written permission of the BOARD, such permission shall consist of a written statement setting forth the action or activity for which such permission is granted, signed by at least two (2) members of the BOARD who shall have been authorized to sign such permission on behalf of the BOARD by a vote thereof. The action or activity for which permission is granted shall be noted by the Secretary in the records of the BOARD. 7

8 Section Powers. The BOARD shall have all powers for the conduct of the affairs of the ASSOCIATION which are granted by law and the ORCHARDS PROPERTY DOCUMENTS. Section Duties. In addition to any other powers which the BOARD may have under law and pursuant to the ORCHARDS PROPERTY DOCUMENTS, it shall be the duty of the BOARD to: (a) exercise its powers in accordance with the ORCHARDS PROPERTY DOCUMENTS and pursuant to any agreements the ASSOCIATION may enter into with holders or insurers of mortgages secured upon portions of the PROPERTIES, including without limitation a Mortgage Protective Agreement which may relate to the ASSOCIATION'S performance of its routine administrative and operational activities such as maintenance of insurance, general management functions, and management standards; (b) cause to be kept a complete record of all its affairs, including a record of all resolutions of the BOARD (hereinafter called the "BOOK OF RESOLUTIONS"), make such records available for inspection by any Member, his agent or any mortgage which has an interest in THE ORCHARDS; (c) adopt and follow procedures for adoption and publication of BOARD resolutions to be included in the BOOK OF RESOLUTIONS, including the provision for hearing and notice to members for resolutions on ASSOCIATION RULES, the annual budget and other matters affecting the rights of Members; (d) adopt and publish rules and regulations including fees, if any, governing the use of the COMMON AREA and any LIMITED COMMON AREA, and the personal conduct of the members and their guests thereon, and to include these in the BOOK OF RESOLUTIONS; (e) supervise all officers, agents and employees of the ASSOCIATION and see that their duties are properly performed; (f) designate depositories for ASSOCIATION funds, designate those officers, agents and/or employees who shall have authority to withdraw funds from such accounts on behalf of the ASSOCIATION, and cause such persons to be bonded, as it may deem appropriate; (g) send written notice of each assessment to every OWNER subject thereto at least fifteen (15) days in advance of the due date of the annual assessment or first installment thereof. ARTICLE V OFFICERS Section 5.1. Designation. The officers of this ASSOCIATION shall be a President, a Vice President, and a Treasurer, all of whom shall at all times be members of the BOARD and a Secretary who need not be a Member of the BOARD. The BOARD may create such other offices as the BOARD may from time to time deem necessary or desirable. Section 5.2. Election of Officers. The officers shall be elected by the BOARD at the first meeting of the BOARD following each annual meeting of the Members. Section 5.3. Term. The officers of this ASSOCIATION shall be elected annually by the BOARD, and each shall hold office for one (I) year unless he shall sooner resign, or shall be removed, or otherwise disqualified to serve. Section 5.4. Resignation and Removal. Any officer may be removed from office with or without cause by an affirmative vote of a majority of the entire BOARD. Any officer may resign at any time by giving written notice to the BOARD, the President or the Secretary. Such resignation shall take effect on the date or receipt of such notice or at any later time specified therein, and unless otherwise specified by such resignation, the acceptance of such a resignation shall not be necessary to make it effective. Section 5.5. Vacancies. A vacancy in any office may be filled by appointment by the BOARD. Specific notice that a vacancy will be filled at a particular BOARD meeting must be given to all BOARD Members at least ten (IO) days prior to such meeting unless such notice is waived in writing at least eighty percent (80%) of the actual Members of the BOARD. The officer appointed to a vacancy shall serve for the remainder of the term of the officer so replaced. Section 5.6. Multiple Offices. The officers of President and Secretary may not be held by the same person. 8

9 Section 5.7. Duties. The duties of the officers are as follows: (a) President. The President shall be the chief executive officer of the ASSOCIATION and shall preside at all meetings of the Members and of the BOARD. The President shall have the powers and duties usually vested in the office of president of any association, including, but not limited to, the power consistent with the authorization of the BOARD to appoint committees from among the Members from time to time as he may in his discretion decide are appropriate to assist in the conduct of the affairs of the ASSOCIATION. (b) Vice President. The Vice President shall take the place of the President and perform the President's duties whenever the President shall be absent or unable to act. If neither the President nor the Vice President is able to act, the BOARD shall appoint some other member of such BOARD to so do on an interim basis. The Vice President shall also perform such other duties as shall from time to time be assigned to him by the BOARD. If there be more than one Vice President, BOARD shall allocate functions among such Vice Presidents. (c) Secretary. The Secretary shall keep the minutes of all meetings of the ASSOCIATION and the BOARD, shall have charge of such books and papers as the BOARD may direct and, in addition to those duties specifically assigned to him by these BY-LAWS, he shall in general, perform all the duties incident to the office of secretary of a corporation. (d) Treasurer. The Treasurer shall have the responsibility for the funds and securities of the ASSOCIATION and for the deposit of all monies and other valuable effects in the name, and to the credit, of the ASSOCIATION in such depositories as may from time to time be designated by the BOARD. Detailed records of all receipts and expenditures shall be maintained by employees of the ASSOCIATION or by the MANAGER under the general supervision of the Treasurer. The records shall include expenditures affecting the COMMON AREA, specifying and itemizing the maintenance, repair and replacement expenses of such COMMON AREA and any other expenses incurred by the ASSOCIATION. Except for current books of account which may be maintained elsewhere, such records shall be available for examination by the Members during regular business hours. In accordance with the actions of the BOARD in making assessments against the OWNERS and Members, accurate records shall be maintained of such assessments and of the payment thereof by each person so assessed. The Treasurer and any other employee or agent handling funds shall, if required by the BOARD, furnish a bond in such form and amount and covering such risks as the BOARD shall require, the premium for which shall be paid by the ASSOCIATION. Section 5.8. Delegation of Duties to MANAGER. Certain specific duties of the Secretary and Treasurer of the ASSOCIATION may be delegated by the BOARD to the MANAGER designated by the BOARD. Section 5.9. Compensation. The compensation, if any, of officers shall be fixed by the ASSOCIATION at its annual meeting by agreement of at least a Majority of the Members. If no such compensation is set for any officer, such officer shall not receive any compensation. Section Execution of Instruments. No agreement, check, deed, lease or other instrument shall be binding upon the ASSOCIATION unless entered into on its behalf and signed by two (2) officers of the ASSOCIATION or by one (1) officer and one (1) assistant officer or other person designated by the BOARD. ARTICLE VI COMMITTEES Section 6.1. BOARD Appointed Committees. The BOARD may appoint such committees as it deems appropriate to carry out its purposes and may delegate to the President full, partial, restricted, or unrestricted power to create Committees and appoint the Members to such Committees. Section 7.1. Annexation of Additional Real Estate. ARTICLE VII ANNEXATION 9

10 (a) Except as otherwise provided for by subsection (b) of this Section 7.1 the owner of any real property who desires to annex such real property to the scheme of THIS DECLARATION may accomplish such annexation by the recordation of a SUPPLEMENTARY DECLARATION as provided for by Sections 7.2 and 7.3, provided such annexation is approved in writing by all of the following: (i) Class "A" MEMBERS of the ASSOCIATION entitled to cast at least fifty one percent (51%) of the votes allocated to all Active Members. (ii) Class "B" MEMBERS of the ASSOCIATION, if any, entitled to cast at least fifty-one percent (51%) of the votes allocated to all Members. (iii) NOTICED MORTGAGES holding first mortgage liens on LOTS, LIVING UNITS and LANDS representing not less than sixty percent (60%) of the total ASSOCIATION voting power for each then existing class of membership of all LOTS, LIVING UNITS, and LANDS subject to such first mortgages. (b) OWNERS upon recordation of any SUPPLEMENTARY DECLARATION, also have a right and non-exclusive easement of enjoyment in and to the COMMON AREA within the real property so annexed in accordance with the provisions of such SUPPLEMENTARY DECLARATION and an obligation to contribute to the cost of improvement, operation and maintenance of such COMMON AREA within the annexed lands in like manner as if such COMMON AREA had been originally located within the PROPERTIES. (c) Any SUPPLEMENTARY DECLARATION recorded in accordance with the terms hereof shall be conclusive in favor of all persons who rely thereon in good faith. From and after recordation of any SUPPLEMENTARY DECLARATION in accordance with the provisions hereof and subject to the provisions of such SUPPLEMENTARY DECLARATION, the real property described therein shall be subject to the provisions of THIS DECLARATION and all other applicable ORCHARDS PROPERTY DOCUMENTS, the jurisdiction of the ASSOCIATION pursuant to the terms of THIS DECLARATION, the BY-LAWS, and THE ARTICLES. Section 7.2 Missing or deleted. Section 7.3 Missing or deleted. Section 7.4. GENERAL PLAN OF DEVELOPMENT. (a) Purpose. The GENERAL PLAN OF DEVELOPMENT is the dynamic design for the development of THE ORCHARDS as a Cluster Residential Development which will be regularly modified and amended, as provided herein, during the several years required to build the com unity. Because the GENERAL PLAN OF DEVELOPMENT is a temporary design, it shall not bind the DECLARANT to make the additions to the PROPERTIES which are shown on the General Plan or to improve any portion of such real estate in accordance with GENERAL PLAN OE DEVELOPMENT unless and until a SUPPLEMENTARY DECLARATION is filed for such real estate which subjects them to THIS DECLARATION. Thereupon, the then DECLARANT shall develop such real estate so annexed in accordance with the GENERAL PLAN OF DEVELOPMENT then in effect as the same may then or thereafter be amended from time to time as provided for by subsection (b) of Section 7.4. (b) Amendments. DECLARANT hereby reserves the right to amend the GENERAL PLAN OF DEVELOPMENT in response to changes in technological, economic, environmental or social conditions related to the development or marketing of the PROPERTIES or to changes in requirements of government agencies or financial institutions. Such amendments shall be effected by; (1) giving notice of the proposed changes to THE ASSOCIATION (2) publishing notice of proposed changes in a newspaper of general circulation in Mount Joy Borough once a week for two consecutive weeks, and (3) securing approval of any appropriate public agencies having jurisdiction in the matter if such approval is required. Providing that the requisite notice has been given to THE ASSOCIATION, THE ASSOCIATION may not use its resources nor take a public position in opposition the proposed changes; however, nothing herein shall be construed to limit the rights of a Member of the ASSOCIATION to act as an individual or in affiliation with other Members of the ASSOCIATION or groups with respect to the proposed changes. ARTICLE VIII 10

11 LIABILITY AND INDEMNIFICATION Section 8.1. Liability of Directors, Officers, DESIGN REVIEW COMMITTEE Members and Other Committee Members. Directors, officers, assistant officers, DESIGN REVIEW COMMITTEE members and other committee members: (a) shall not be liable to any Member, OWNER or other resident of PROPERTIES as a result of any actions taken or omitted to be taken in such capacities, or for any mistake or judgment, negligence or otherwise, except for their own willful misconduct or gross negligence; (b) shall have no personal liability in contract to a Member or OWNER, or any other person or entity, under any agreement, instrument or transaction entered into or executed by them on behalf of the ASSOCIATION; (c) shall have no personal liability in tort, direct or imputed, to a Member or OWNER, or any other person or entity, by virtue of acts performed by themselves or by agents, employees or contractors employed or retained by them, on their behalf in their official capacity, except for their own willful misconduct or gross negligence; and (d) shall have no personal liability arising out of the use, misuse or condition of the PROPERTIES or any part thereof, or which might in any other way be assessed against or imputed to them as a result, or by virtue of, their capacities as such. Section 8.2. Indemnification. (a) The ASSOCIATION may by a majority vote of its Members provide that the ASSOCIATION shall indemnify and hold harmless any person, his heirs and personal representatives, from and against any and all personal liability, and all expenses, including counsel fees, incurred or imposed, or arising out of, or in settlement of, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, instituted by any one or more OWNERS or any other persons or entities, to which he shall be or shall be threatened to be made a party by reason of the fact that he is or was a Member of the Board or an officer or assistant officer, or a Member of the DESIGN REVIEW COMMITTEE or any other committee, other than to the extent, if any, that such liability or expense shall be attributable to his willful misconduct or gross negligence, provided, in the case of any settlement, that the ASSOCIATION or BOARD shall have approved the settlement, which approval shall not be unreasonably withheld. Such right of indemnification shall not be deemed exclusive of any other rights to which such person may be entitled as a matter of law or agreement, or vote of OWNERS or the BOARD, or otherwise. The indemnification by the ASSOCIATION set forth in this subsection (a) shall be paid by the ASSOCIATION and shall be assessed and collectible in accordance with the terms of the DECLARATION. Any such resolution shall bind all OWNERS so long as the same shall remain in effect. Any such resolution may be from time to time repealed and from time to time readopted by a vote of a Majority of the Members. (b) The ASSOCIATION may by a majority vote of its Members provide that the ASSOCIATION shall indemnify any such person, his heirs and personal representatives in the same manner and to the same extent as provided in subsection (a) above where such action, liability or expense arises out of his serving as a Director, officer or assistant officer or DESIGN REVIEW COMMITTEE Member or other committee member and relates to the condition of, or any event concerning, the PRD COMMON AREA. The indemnification by the ASSOCIATION set forth in this subsection (b) shall be paid by the ASSOCIATION and shall be assessed and collectible in accordance with the terms of the DECLARATION. (c) The ASSOCIATION may by a majority vote of its Members agree that the ASSOCIATION shall indemnify any such person, his heirs and personal representatives, in the same manner and to the same extent as provided in subsection (a) above where such action, liability or expense arises out of such person serving as a Director, officer or assistant officer, member of the DESIGN REVIEW COMMITTEE or any other committee, and relates to any other matter concerning or affecting the PROPERTIES except as set forth in subsections (a) and (b) above. The indemnification set forth in this subsection (c) shall be paid by the ASSOCIATION and shall be assessed and collectible pursuant to the terms of the DECLARATION. (d) Either of the resolutions referred to in subsection 8.2(b) and (c) above shall remain in effect and bind all Members upon being adopted and, until repealed by a Majority of the Members, and may, by such majority vote, from time to time be readopted and from time to time repealed. Section 8.3. Language Concerning Liability In Agreements. The agreements, deeds, leases, or other instrument entered into by the ASSOCIATION may provide that the BOARD and the officers or assistant 11

12 officers executing the same are acting on behalf of the ASSOCIATION and shall have no personal liability thereunder that any claim by the other party or parties with respect thereto or to the subject matter thereof shall be asserted against the ASSOCIATION. Section 8.4. Notice of Suit and Opportunity to Defend. Complaints brought against the ASSOCIATION, Members as a class, OWNERS as a class, or the Officers, Assistant Officers, DESIGN REVIEW COMMITTEE members, employees or agents thereof, in their respective capacities as such, or the PROPERTIES as a whole, or any part thereof, shall be directed to the ASSOCIATION, which shall promptly give written notice thereof to all persons named or directly affected and the holders of any first mortgages entered into by such persons and shall be defended by the ASSOCIATION. ARTICLE IX AMENDMENT OF BY-LAWS Section 9.1. Method. These BY-LAWS may be amended: (a) By a vote of two-thirds of all Directors of the BOARD at any meeting duly called for that purpose, providing notice of the meeting and the proposed amendments has been given to the members of the BOARD at least thirty (30) days prior to the meeting, or, (b) At any meeting of the Members, by a vote of the Majority of the Members who are voting in person or by proxy, providing the proposed amendments have been included in the notice of the meeting. Amendments shall become effective forty-five (45) days after adoption. Section 9.2. Conflict. In the event of a conflict between the provisions of these BY-LAWS and the DECLARATION, the DECLARATION shall prevail insofar as applicable. Section 9.3. Proviso. No amendment of these BY-LAWS shall make any change which would in any way affect any of the rights, privileges, powers and options of the DECLARANT or its successors in the development of THE ORCHARDS, and the development and sale of LOTS, LIVING UNITS and LANDS, unless the DECLARANT or its successors shall join in the execution of such amendment. ARTICLE X FISCAL YEAR The fiscal year of the ASSOCIATION shall begin on the day of and end on the day of every year, except that the first fiscal year shall begin on the date of incorporation of the ASSOCIATION. ARTICLE XI SEVERABILITY The provisions hereof shall be deemed independent and severable, and the invalidity, partial invalidity or unenforceability of any one provision or portion hereof shall not affect the validity or enforceability of any other provision or portion hereof unless such deletion shall destroy the uniform plan for development and operation of the Properties. EXHIBIT "C" DESIGN CONTROL Section 1.0 DESIGN REVIEW COMMITTEE Composition Appointment, Removal (a) Committee Composition (i) The DESIGN REVIEW COMMITTEE shall consist of a "MODIFICATIONS AND CHANGES SUBCOMMITTEE". The committee shall have exclusive authority within the area of this jurisdiction as provided for by this Section 1.0 and by Section 1.1 below. No member need be an architect, or a member, officer or director of the ASSOCIATION or meet any other particular qualifications in this Section 1.0. (ii) The "MODIFICATIONS AND CHANGES SUBCOMMITTEE" shall be composed of three (3) or more persons and shall perform the functions and exercise the authority set forth in Section 12

13 1.1 below with respect to changes in the external appearance of any FULLY DEVELOPED LIVING UNITS which have been conveyed to an Class "A" MEMBER. (b) Appointment, Removal, Etc. (i) The members of the "MODIFICATIONS AND CHANGES SUBCOMMITTEE" shall be appointed by the BOARD from among candidates nominated by any Member. Section 1.1 Functions. (a) The DESIGN REVIEW COMMITTEE shall: (i) consider and act upon any and all proposals or plans submitted to it pursuant to the terms of THIS DECLARATION; (ii) ascertain that any improvements constructed on the PROPERTIES by anyone other than DECLARANT or a successor DECLARANT, conform to plans and deed restrictions of the ASSOCIATION; (iii) adopt subcommittee rules; (iv) recommend to the BOARD enforcement of the provisions of the BY LAWS and deed restrictions of the ASSOCIATION; (v) carry out all other duties imposed upon it by THIS DECLARATION or delegated to it by the BOARD. (b) Notwithstanding anything contained in THIS DECLARATION expressly or impliedly to the contrary, and subject to any exceptions provided for by the MODIFICATIONS AND CHANGES SUBCOMMITTEE RULES, no building, fence, wall, aerial or other projection, addition, porch, patio, structure or other exterior IMPROVEMENTS shall be commenced, constructed, painted, erected or placed upon any LOT other then an UNDEVELOPED LOT other than by or on behalf of DECLARANT or a successor DECLARANT, nor shall any exterior addition to or change or alteration therein or change or alternation of the exterior finish of DECLARANT or a successor DECLARANT, until an application including final plans and specifications showing the nature, kind, shape, height, materials, colors, dimensions, and location thereof have been submitted to and approved in writing by the MODIFICATIONS AND CHANGES SUBCOMMITTEE as to harmony of external design and color with the then existing improvements erected on the PROPERTIES, conformity with the provisions of THIS DECLARATION, and location in relation to surrounding structures and topographs. MODIFICATIONS AND CHANGES SUBCOMMITTEE approval shall also be required prior to the removal (other than by or on behalf of DECLARANT or a successor DECLARANT) of any tree located on any lot other then an UNDEVELOPED LOT having a trunk diameter of more than three (3) inches. Section 1.2 Meetings and Procedure. (a) The DESIGN REVIEW COMMITTEE shall meet from time to time as necessary to perform its duties hereunder. The vote or written consent of a majority of the members of the committee, at a meeting or otherwise, shall constitute the act of the committee. The committee shall keep and maintain a written record of all actions taken by it at such meetings or otherwise. (b) Any person desiring to take any action requiring approval of the committee shall submit to the committee an application including copies of the plans and specifications therefore in the form specified by the committee plus such other information as the committee may reasonably request and pay such reasonable fee as may from time to time be fixed by the BOARD. Any such submission not disapproved in writing within forty five (45) days shall be deemed approved unless committee shall determine and so notify the applicant that the submission is not satisfactory, specifying with particularity the further information needed or the defects in the submission made. In the event of such a notice by the committee that the submission is not satisfactory, the forty five (45) day period provided for herein shall commence again when a resubmission is made. This procedure may be repeated where the committee deems such actions necessary to permit compliance with THIS DECLARATION and its duties hereunder and under the applicable BY-LAWS. Section 1.3 Estoppel Certificate. Within twenty (20) days after written demand therefore is delivered to the committee by the ASSOCIATION or any OWNER, and upon payment of such reasonable fee as may, from time to time, be fixed by the BOARD, the committee shall provide an estoppel certificate, executed by any two of its members, certifying with respect to any LIVING UNIT, LOT or LANDS that, as of the date 13