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BYLAWS OF COBBLY NOB PROPERTY OWNERS ASSOCIATION, INC.

Adopted January 2, 1976 Revised September 5, 1992 Revised September 3, 1977 Revised September 3, 1994 Revised September 4, 1982 Revised August 31, 1996 Revised September 1 , 1984 Revised August 31, 2002 Revised August 30, 1986 Revised August 30, 2003 Revised September 5, 1987 Revised September 1, 2007

ARTICLE I DEFINITIONS

The following words and terms, as used in the Bylaws of the Cobbly Nob Property Owners Association, Inc., a Tennessee non-profit corporation, shall, unless the context shall otherwise require, mean and be defined as follows:

1. "Association" means the aforesaid corporation, said term to be used interchangeably with the term "corporation."

2. "Board" means the Board of Directors of the Association.

3. "Bylaws" mean the Bylaws of the Association.

4. "Lot" means a lot plus any and all lots subsequently incorporated into the Village of Cobbly Nob, including but not limited to Parcel No. 30 and Parcel No. 31 in Pine Cove Section, all in the Village of Cobbly Nob, Sevier County, Tennessee.

5. "Condominium Unit" means any condominium unit now in and all subsequent condominium units incorporated in the Village of Cobbly Nob, Sevier County, Tennessee, including but not limited to all units in the Fairways and Gatlinburg Golf & Racquet Club, Inc.

6. "Rental Unit" means any dwelling located on a Lot and any Condominium Unit located in the Village of Cobbly Nob which is wholly or partly rented on a short term basis (periods of less than one month).

7. "Owner" means any person who holds a fee simple title to a Lot or Condominium Unit.

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8. "Village of Cobbly Nob" means the entire aggregation of Lots and Condominium Units which are subject to assessment by the Cobbly Nob Property Owners Association, Inc. The "Plat of the Village of Cobbly Nob" and "Outline of the Village of Cobbly Nob" for definition purposes only, means the Cobbly Nob, Inc. map located in the Association's office. The original surveyed plat of the A Lil Bit of Heaven Subdivision and the original surveyed plats of the thirteen (13) communities of the Village of Cobbly Nob are recorded in the Map Files in the Register's Office for Sevier County, Tennessee. The boundaries of the Village of Cobbly Nob have been revised from time to time to reflect certain duly authorized annexations or deletions.

9. "Dues" means: The term "dues", "assessments", and

"maintenance fees" shall be considered as "Dues".

ARTICLE II DECLARATION OF RESTRICTIONS

The following Covenants and Restrictions (hereinafter collectively referred to as the Restrictions) shall be binding upon the Association, its Board and its membership.

Section 1. A LIL BIT OF HEAVEN. Subdivision Restrictions (hereinafter called Subdivision restrictions) dated January 26, 1970, and recorded that date in Miscellaneous Book 22, Page 248, in the Register's Office for Sevier County, Tennessee. Gatlinburg Real Estate Company was succeeded by Cobbly Nob, Inc. which was later succeeded by the Association as far as certain authority granted in the aforesaid Subdivision Restrictions.

Section 2. VILLAGE OF COBBLY NOB. Declaration of Restrictions

(hereinafter called Declaration of Restrictions) dated April 28, 1971, and recorded that date in Miscellaneous Book 26, Page 429, in the Register's Office for Sevier County, Tennessee. Cobbly Nob, Inc. was later succeeded by the Association as far as certain interests, options and authority granted in the aforesaid Declaration of Restrictions. The Declaration of Restrictions applies in full to properties within the sections of the Village of Cobbly Nob acquired prior to April 28, 1996.

Section 3. VILLAGE OF COBBLY NOB. Restrictions and Protective

Covenants (hereinafter called Restrictions and Protective Covenants) effective April 28, 1996 and recorded on April 25, 1996, in Miscellaneous Book 273, Page 1, in the Register's Office

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for Sevier County, Tennessee. The Restriction and Protective Covenants compliment Subdivision Restrictions described in Section 1, and the Declaration of Restrictions described in Section 2, of Article II for affective properties acquired prior to April 28, 1996. These Restrictions and Protective Covenants apply in full to all properties within the sections of the Village of Cobbly Nob acquired after April 28, 1996.

ARTICLE III COBBLY NOB PROPERTY OWNERS ASSOCIATION, INC.

Section 1. The Cobbly Nob Property Owner's Association, Inc. (Association) was formed on January 2, 1976, under the terms and provisions of Paragraph (25) of the Declaration of Restrictions described in Section 2 of Article II hereof. The original Bylaws of the Association were adopted that date. The Association had become the successor of interest to Gatlinburg Real Estate Co. and Cobbly Nob, Inc., the developers of the A Lil Bit of Heaven Subdivision and the Village of Cobbly Nob, respectively, and the parties responsible for establishing the restrictions described in Sections 1 and 2 of Article II.

Section 2. The Association through its elected Board under the provisions of

these Bylaws and the provisions of the Restrictions cited in Article II above have certain rights, responsibilities, options and approvals stated therein. Actions by various Boards of the Association have established certain procedures to be used in governing the Village of Cobbly Nob. These actions, by the Board, among other things and as amended from time to time, involve RULES AND REGULATIONS, SECURITY AND SAFETY, COMPLAINT POLICY AND PROCEDURES. APPLICATION FOR BUILDING PERMITS, PROCEDURES FOR COMBINING LOTS and EMPLOYEE BENEFIT PACKAGE.

ARTICLE IV

MEMBERSHIP

Section 1. Classes of Members. There shall be two classes of members in the Association: Voting members and Associate members.

Section 2. Voting Members. Voting membership shall be appurtenant to Lots or Condominium Units. Each owner shall have one vote regardless of the number of Lots or Condominium Units owned by such owner, the number of persons who have an ownership interest in such Lots or Condominium Units, or the manner in

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which title is held by them. In the case of joint ownership of a Lot or Condominium Unit the name of the first owner shown on the deed will be the voting member unless the joint owners designate in writing to the Association another deeded owner as the voting member. Such designation may be changed by the owners of the joint property by notifying the Association in writing of such change. If an owner owns more than one Lot or Condominium Unit in any form of joint ownership, each co-owner may be a voting member designating one as the voting member for Lot A, another as the voting member for Lot B, and so on, as long as one person has no more than one voting membership. A voting membership in the Association terminates upon the transfer of the ownership of the Lot or Condominium Unit giving rise to such membership.

Section 3. Associate Members. The following shall be entitled to associate

membership in the Association:

A. Co-owners of any Lot or Condominium Unit.

B. The spouse and/or children of a member who also have the same residence of the member.

C. Persons who may be tenants or regular occupants of residences but who have no ownership therein.

Associate members shall have no vote or right to notice of any meeting of members whether regular or special.

Section 4. Privileges of Members. Voting members and associate members and the guest of each shall have a license to use the roads and facilities.

Section 5. Limitations on privileges and the right to vote. A member, whether voting or associate, will become a member not in good standing in the event that such member has failed to pay within twelve (12) months any annual assessment or charge by the Association against said member or against the Lot or Condominium Unit, the ownership of which gives rise to Association membership, or for violation cited by the Board of the applicable Restrictions or the Bylaws of the Association. The member so declared to be not in good standing, will not be allowed to vote or hold office during such status and will also be limited as to his privileges as a member and will be denied all services provided to members until satisfactory arrangements

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are made with the Board for settlement of all outstanding obligations. The declaration of a voting member to be not in good standing will automatically result in the declaration of all associate members whose membership is appurtenant to such voting member to likewise not be in good standing.

ARTICLE V

EVIDENCE OF MEMBERSHIP AND TRANSFER

Section 1. Membership certificates. Certificates of membership in the Association may be issued to the members thereof. Such certificates shall be in such form as the Board of Directors shall from time to time designate and shall be issued over the signature of the president or other officer of the Association. Such certificates shall also clearly state on their face that the Association is a non-profit corporation. Adequate records shall be maintained at the registered office of the corporation showing the names of the members of the Association, the type of membership, the date that such person became a member of the Association, and a sufficient description of the Lot or Lots and/or Condominium Unit or Units giving rise to such membership.

Section 2. Transfer. A voting membership in the Association terminates

upon the transfer of ownership of the Lot or Condominium Unit giving rise to such membership. The Board of Directors may by resolution require the payment of a transfer fee. All transfers shall be subject to the payment of all indebtedness to the Association of the member whose membership is transferred. It is the responsibility and obligation of the seller to make payment of all unpaid fees and assessments on a pro-rata basis to date of sale of the property including the transfer fee and to notify the secretary of the Association in writing of the transfer of membership, with the necessary information so the secretary can provide the new owner, when in good standing, with copies of the Bylaws, Restrictions, rules and regulations, membership cards, etc.

ARTICLE VI MEETINGS OF MEMBERS

Section 1. Place of Meetings. Any meeting of the members of the Association shall be held in the State of Tennessee at such particular place therein as may be stated in the notice of such meeting.

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Section 2. The Annual Meeting. The Annual Meeting of the Association shall be held on the Saturday before Labor Day of each year.

Section 3. Special Meetings of the Association. Special meetings of the Association may be called by the Board of the Association at any time in manner hereinafter provided. A special meeting may also be called upon the written petition of the members representing twenty per cent (20%) of the eligible vote which would be entitled to be voted at such special meeting. Said petition shall be addressed to the President of the Association who shall thereupon fix the most commonly convenient place for such meeting and a time not more than fifty (50) days after receipt of the petition. Petitions for such special meetings shall set forth the purpose for which the special meeting has been called; and the notice of any special meeting whether at the call of the Board or upon petition of the members representing twenty per cent (20%) as aforesaid, shall set forth the purpose of said meeting, and no business other than that specified in the notice of said meeting shall be considered at such special meeting.

Section 4. Notice of Meetings of the Association. Written or printed

notice stating the place, date, and hour of the meeting and, in cases of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten (10) days nor more than forty (40) days before the date of the meeting either personally or by mail to each member entitled to vote in such meetings. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the member at his address as it appears on the records of the Association, with postage thereon prepaid.

Section 5. Quorum. Except as may be otherwise provided for herein, a

quorum at either a special meeting or at the Annual Meeting shall be the members representing ten per cent (10%) of the eligible vote entitled to be voted at such meeting. The vote of a majority of the votes entitled to be cast at the meeting at which a quorum is present shall be necessary for the adoption of any matter voted upon by the members, unless a greater proportion is required by these bylaws. In determining whether or not a quorum is present at a meeting, there shall be taken into consideration those members personally present or represented by absentee ballot.

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Section 6. Absentee Voting. Proxy voting shall not be permitted. Instead of proxy voting, the Association shall initiate an absentee voting procedure by which all matters to be voted at an annual or special meeting will be voted on by written ballot either by absentee ballot or by written ballot at the annual property owners meeting. Additionally, an agenda for the annual meeting will be mailed to members stating matters on which votes will be cast at the annual meeting. Anyone desiring to place a resolution on the agenda shall submit same, in writing, to the Board on or before July 15 of each year. All matters submitted to the Board by the above date shall be placed on the agenda and the absentee ballot.

There shall be no amendments (except amendments to the proposed budget) to the resolutions on the absentee ballot. Only matters on the agenda and the absentee ballot will be voted on at the annual meeting.

Section 7. Robert's Rules of Order, latest edition, shall govern the conduct of the Association meetings when not in conflict with these bylaws.

ARTICLE VII DIRECTORS

Section 1. The number of Directors shall be nine (9). Directors shall be voting members and shall serve without salary.

Section 2. Powers. The Board of Directors:

A. Shall have the right to enforce the Restrictions stated in Article II hereof and abide by and enforce the Bylaws of the Association.

B. Shall elect the officers of the Association in accordance with Article VII of these bylaws, such election of officers to be held at the first meeting of the Board held immediately following the Annual Meeting.

C. Shall manage and control the affairs of the Association,

unless otherwise provided herein.

D. May adopt a corporate seal as the Seal of the Association.

E. Shall designate a banking institution or institutions as

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depository for the Association's funds and the officer or officers authorized to make withdrawals therefrom and to execute obligations on behalf of the Association.

F. Shall adopt such rules and regulations relating to the use of Association property as they may deem reasonable necessary for the best interests of the Association and its members. They may also, in order to better enforce said rules and regulations, adopt reasonable sanctions for non-compliance therewith.

G. May establish and levy reasonable fees for the issuance of

building permits or for the use of Association property.

H. May employ a sufficient number of persons to adequately maintain Association property. A full-time or part-time Village Manager may be hired at the discretion of the Board following the approval of the membership of an annual budget providing funds for compensation for such a manager. The Village Manager shall report to the Board and shall be responsible for all activities of the employees of the Association and perform such other duties as may be required by the Board.

I. Shall adopt prior to the annual meeting each year, an

operating budget including funds for depreciation and a reserve account to be presented to the membership for their approval at the annual meeting. In addition, the Board shall, based upon said operating budget and taking into consideration other sources of income that the Association may have, propose a levy of assessment for each category of the annual maintenance fee, i.e., "developed Lots", "undeveloped Lots", and "Condominium Units", and such other categories as may from time to time be established pursuant to amendment to these Bylaws. At least thirty (30) days prior to the annual meeting, the Board shall send its adopted budget and proposed annual maintenance fees to each member for their review and comments. Upon approval and adoption of the budget by the membership, the Board shall be bound by same and shall levy the assessment for the annual maintenance fees proposed for such budget. Any changes in the budget by the membership prior to its approval shall result in corresponding change in the levy of assessment of the

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annual maintenance fees. The Board shall not vary from the approved budget except as follows:

(1) When deemed to be in the best interests of the Association the Board may re-allocate excess funds from budgeted line items. The Board shall use discretion in re-allocating excess funds and such shall require an affirmative vote of at least seven Directors.

(2) In the case of an emergency and there being no

excess funds available from budgeted items, the Board may, by an affirmative vote of at least seven Directors, spend such funds as are required by the emergency. However, in no case shall such expenditure exceed 15% of the annual gross budget.

(3) The specifics of any re-allocation of, or emergency use of funds as described in (1) and (2) above, shall be reported to the membership at the next annual meeting or before.

(4) Any other variation from the adopted and approved budget shall require the prior approval of the majority of the votes cast by the membership at a special meeting or by mail ballot (provided that in the instance of mail ballot all members entitled to vote must consent in writing to taking action without a meeting).

J. There shall be included in the annual budget a specified

account for fire protection in the amount of $10,000.00 per year for a period of fifteen (15) years commencing in 2006 which will be paid to the Pittman Center Volunteer Fire Department (PCVFD) and is to be used for equipment betterment and operating costs. The payment should be made by a formal written agreement between PCVFD and the Association and such agreement shall provide, among other things, the right of an annual audit by the Association and the right by the PCVFD to use such funds as security for a loan to purchase equipment which would serve the fire protection needs of the Village of Cobbly Nob.

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K. The categories for assessment of the annual maintenance fees are 1) undeveloped Lots, 2) developed Lots, and 3) Condominium Units. The annual assessment for maintenance fees for each of the foregoing categories shall be made in the following manner:

(1) The annual maintenance fee for each developed Lot shall be one hundred percent (100%) of the base maintenance fee.

(2) The annual maintenance fee for each undeveloped Lot shall be thirty-one percent (31%) of the base maintenance fee.

(3) The annual maintenance fee for each Condominium Unit shall be eighty percent (80%) of the base maintenance fee.

The base maintenance fee is determined by dividing the annual operating budget (less other sources of income) by the sum of the following: 1) the number of developed Lots x 1, plus: 2) the number of undeveloped Lots x .31 plus; 3) the number of Condominium Units x .8.

L. The Board may not borrow money except by the following procedure: Upon the written affirmation of a majority of the Board that the interest of the Association requires the borrowing of money in order to implement the operating budget of the Association, the membership shall be so informed in writing. Such report to the membership shall state the purpose or purposes for which the money will be used, the need to borrow money for such purpose or purposes, and the proposed method of repayment including, if applicable, the necessity to pledge or assign future revenues of the Association as security therefor.

The membership shall have reasonable opportunity (not less than fifteen days) to review said request to borrow money and to comment thereon, either at hearings held thereon or through such other means as the Directors may deem appropriate. A special meeting of the membership shall then be held as hereinbefore prescribed in these Bylaws for the purpose of voting on the proposal to borrow money and, if applicable, to pledge future funds as security therefore. A two-thirds affirmative vote of the vote cast at such special meeting shall be required for approval.

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M. As it may be deemed necessary, the Board may levy a special assessment to cover costs for special improvements or for any unforeseen disaster replacement costs, and other acts which authority to perform has been granted herein or by law.

Section 3. Election and Term.

A. The nine Directors shall be divided into groups of three each and each group shall serve staggered terms of three years each so that only three Directors are elected each year.

B. Three new Directors shall be elected from the voting members in the manner prescribed hereinafter for Three (3)-year terms each to replace the three Directors whose terms are expiring. In order to maintain a broad base representation of all members, the spouse or member of the same immediate family (immediate family shall be defined as husband, wife, son, daughter, brother and sister), or a person having a direct business association with a nominee or Director whose term has not expired, is not eligible to be a candidate for the Board or serve as an Officer. A Director may not serve more than two terms consecutively.

C. Nominations. In May of each year any voting member in

good standing may file with the Secretary of the Association a statement of his or her nominees for the office of Director of the Association, said statement to be accompanied by a brief resume of the candidates' qualifications for the office and the signature of the candidates and of three other members of the Association.

D. Ballots. No later than July 1, the Secretary of the

Association shall cause to be mailed to each voting member a ballot listing on separate lines the names of the candidates, listed in the order in which their statements of candidacy were filed with the Secretary of the Association, and separately from the ballot the statement of each as to his or her qualifications for the office of Director. A ballot envelope shall accompany each ballot.

E. Voting. The voting members shall cast their ballots as

hereinafter described, returning them to the Secretary of

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the Association no later than August 1. Only a member in good standing shall be entitled to vote in said election.

(1) The member shall vote for each of three Directors by placing an "X" by the names of the candidates for whom he wishes to vote. Cumulative voting shall not be permitted.

(2) The ballot shall then be placed in the ballot envelope and sealed.

(3) The ballot envelope must be signed by the member in the space provided and shall be mailed or hand delivered to the Secretary of the Association.

F. Election Procedure.

(1) Upon receipt of each return, the Secretary shall immediately place the sealed ballot envelope in a safe or other locked place until the day set for the counting of the ballots.

(2) Election Committee.

The Election Committee shall be composed of the Secretary and the President of the Association and a Director who is not an officer. Said committee shall meet on a date between August 1 and 31 as set by the Board to open sealed ballots and count the votes.

(3) Ballots.

If any ballot is found to contain any discrepancies, all such ballots shall be disqualified by the vote of the majority of the members of the election committee. The ballots and the signed ballot envelopes shall be placed in a safe or other locked place and retained by the Secretary of the Association for a period of one year.

(4) Election Certification.

The secretary shall certify to the members at the next annual meeting the names of the persons who

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have been elected as such Directors of the Association. The terms of office of such Directors shall commence immediately following the annual meeting.

Section 4. Meetings of the Board.

A. The Board shall meet at least quarterly. The first meeting of the fiscal year will be held immediately following the annual meeting for the purpose of election of officers. The Board may by resolution determine that they should meet with a greater degree of frequency. Upon the adoption of such a resolution setting forth the times of such regular meetings, the requirement of this section calling for notice of such meetings shall be waived, except insofar as it may apply to special meetings of the Board.

Special meetings of the Board may be called by a majority of the Directors and shall be held at such place as the call or notice of the meeting shall designate. Notice of a special meeting may be given in writing or orally at least twenty-four hours prior to date of said meeting.

B. Membership workshop meeting with the Board.

Any member of the Association may address the Board prior to a regularly scheduled Board meeting on any matter either, preferably, by requesting to do so in writing stating the subject of the matter to be addressed or verbally at the workshop meeting.

This policy is necessary to allow Board meetings to be conducted in a formal manner without unrecognized interruption by the audience. Such workshop meetings shall be conducted by the President and shall be informal expressions of opinions to be taken under advisement by the Board. Presentations should reference Articles of the Restrictions and/or Bylaws when applicable. The agenda of the Board meeting will be available at the Association's office one week prior to such Board meeting for reference and the review of the membership.

Section 5. Action without meeting. Any action which, under the

applicable provisions of these bylaws, may be taken at a meeting of the Directors, may be taken by telephone poll provided all

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Directors are notified and a minimum of six (6) Directors have approved the action. This action must be ratified at the next board meeting by signed written consent.

Section 6. Quorum. Except as may be otherwise indicated herein, a majority of the Directors shall constitute a quorum to transact business for the Association. An act of five (5) Directors shall be deemed to be the act of the Board.

If, on any issue, five consistent votes are not present, then paper ballots shall be transmitted to the absent Directors to be returned to the Secretary no later than two (2) weeks following the meeting during which the issue was considered. A Director, so polled, may respond aye, nay or abstain. Any combination of five (5) consistent paper and oral votes shall be deemed the act of the Board. Prior to a vote being taken on an issue, any Director for any reason may postpone by request, consideration of that issue until the next regular monthly meeting, but no issue may be so passed more than one time.

Section 7. Vacancies.

A. In the event that the office of any Director or Directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, a majority of the remaining Directors, though less than a quorum, shall appoint a successor or successors, who shall hold office until the next annual Association meeting. The appointment for the purpose of filling said vacancy may be made at any regular meeting of the Board.

B. The Association Bylaws provide that three Directors will be

elected each year for a term of three years. When a vacancy occurs, and a Director is appointed by the Board, the appointed position shall be filled at the next scheduled election of Directors by using the following procedure: The three candidates receiving the highest number of votes are elected to the three year term, the candidates receiving the next highest votes will be elected to fill the vacated positions for the remaining term of the replaced Directors. If there are only three candidates nominated for the position of Director, the appointed Director shall serve the remaining term of the replaced Director.

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C. Any temporarily appointed Director may also be a candidate for a position on the Board.

Section 8. Removal of Directors. A Director may be removed for cause by a majority of the voting membership where there is a quorum provided he has been declared of unsound mind by a court order, adjudicated a bankrupt, failed to accept or perform the duties of the office of a Director, or has been guilty of conduct which in the opinion of the Board or the membership has been prejudicial to the interests of the Association, or for any other reason sufficient in the opinion of the membership.

ARTICLE VIII THE OFFICERS

Section 1. Officers. The officers of the Association shall be the President, one or more Vice Presidents, Secretary, Treasurer, and such other officers as the Board may from time to time elect. Officers shall serve at the will of the Board. Officers must be members of the Association and shall serve without salary. No person can hold two offices at the same time.

Section 2. President. The President of the Association shall be a Director

and shall serve as Chairman of the Board. The President shall be the general managerial officer of the Association, except as may be otherwise designated or defined by the action of the Board, and shall be vested with the powers and duties generally incident to the office of President of a non-profit corporation except where specifically designated to the contrary by action of the Board or as may be otherwise set forth in these bylaws.

Section 3. Vice President. In the absence of the President, or in the

event of his inability or refusal to act, the Vice President is empowered to act and shall thereupon be vested with the powers and duties of the President of the Association. Vice Presidents shall be Directors.

Section 4. Secretary. The Secretary of the Association shall keep the

minutes of the business and other matters transacted at the meetings of the members and of the Directors. The Secretary shall mail, or cause to be mailed, all notices required under the bylaws. The Secretary shall have custody of the corporate seal and records and maintain a list of the members and their addresses, and perform all other duties incident to the office of Secretary.

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Section 5. Treasurer. The Treasurer shall have custody of the funds of the Association, collect monies due, pay the obligations of the Association out of its funds, and perform such other duties as are incident to the office of Treasurer. At the election of the Directors, the Treasurer may be required to be bonded for such amount and under such conditions as the Directors may see fit to impose. An annual audit of the records should be made prior to the annual meeting and the results announced to the membership at that meeting. An audit of the Association's statement of cash receipts and disbursements will be done in accordance with generally accepted auditing standards by a CPA and will include the preparation of the federal income tax return for the year then ended.

Section 6. Removal of Officers. Any officer may be removed when, in the

judgment of the Directors, the best interest of the Association will be served by such removal.

ARTICLE IX DUTIES OF MEMBERS

Section 1. Payment of Assessments. The charges levied by the Association as herein above provided shall be paid to it on or before the date fixed by resolution of the Board. Payments made after that date will be subject to penalty charges as provided by resolution of the Board. Any assessments or scheduled payments which are not paid when due shall be declared delinquent and subject to a late charge amount. Written notice of the charge and date of payment shall be sent to each member at the address last given by the member to the Association. If any charges levied against any Lot or Condominium Unit shall not be paid when due, it shall become a lien upon said Lot or Condominium Unit, subject only to matters of record on such due date, and shall remain a lien until paid in full.

The Board may direct that such actions be instituted either at law or in equity for the collection of such assessments or charges including interest, costs of collection, and attorney’s fees as they shall deem appropriate. The sale or transfer of any Lot or Condominium Unit shall not affect any lien for charges provided for herein. Upon request, the Association shall furnish a statement certifying that the charges against the specified Lot or Condominium Unit have been paid or that certain charges remain unpaid, as the case may be. In any event, the

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Association shall not be required to transfer memberships on its books or to allow the exercise of any rights or privileges of memberships by any member unless and until all of the assessments and charges due it are paid. The termination of membership in the Association shall not relieve or release any such former member from any liability or obligations incurred under or in any way connected with the Association during the period of such membership, or impair any rights or remedies which the Association may have against such former member arising out of or in any way connected with such membership and the covenants and obligations incident thereto.

Section 2. Maintenance of Property. Each member of the Association

shall keep the property owned by him in Cobbly Nob in good repair and shall keep the same so as to prevent the same from becoming unsightly, all as provided for and defined in the Restrictions. If it is determined by the Board that the condition is unsightly and/or unsafe, notice in writing will be given to the property owner that such must be corrected. If satisfactory corrections are not made within forty (40) days of the date of the Association's notice, then the Association shall have the right but not the obligation to correct the condition and back charge the property owner for all corrective work, administrative costs and any legal proceedings.

Section 3. Rules and Regulations. Each member of the Association shall

be bound by the adopted and posted rules and regulations governing the use of common areas and community facilities including ALL PRIVATE ROADS.

A property owner may be held responsible for infraction of these published rules and regulations including damage to roads where reasonable precautions have not been taken by himself or his building contractor.

Section 4. Compliance with Standards. All construction and usage of property must conform with the then current Southern Standard Building Code. Compliance with this code is the responsibility of the Owner. Determination of non-compliance with this code shall be the right, but not the obligation of the Association and/or its agent.

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ARTICLE X AMENDMENTS

These bylaws may be altered, amended, or added to at any duly called meeting of the Association provided that:

1. Notice of the meeting shall contain a statement of the proposed amendment.

2. An amendment to the bylaws shall be deemed approved when approved by two-thirds (2/3) of the votes cast or a majority of the total of the eligible voting membership, whichever is less. Any amendment to the Bylaws which relates solely to the Dues required for membership which establishes or changes a specific amount for the Dues, shall be approved by a majority of the members present and voting at a meeting at which a quorum is present.

3. If the amendment has not been approved by a majority of the

Board, the amendment must receive the affirmative vote of three-fourths (3/4) of the votes cast at any meeting at which a quorum is present.

ARTICLE XI INDEMNIFICATION

The Association, its Members and Associate Members shall indemnify, and do hereby indemnify, every Director and every Officer, his heirs, executors, and administrators against all loss, cost and expenses reasonably incurred by him in connection with any action, suit, or proceeding to which he may be made a party by reason of his being or having been a Director or Officer of the Association, including reasonable counsel fees to be approved by the Association, except as to matters wherein he shall be finally adjudged in such action, suit, or proceeding to be liable for or guilty of gross negligence or willful misconduct. The foregoing rights shall be in addition to and not exclusive of all other rights to which such Director or Officer may be entitled. It is intended by the foregoing that Directors and Officers shall be indemnified by the Association to the fullest extent permitted by law.

ARTICLE XII

UNDEVELOPED PROPERTIES ADJOINING THE VILLAGE OF COBBLY NOB

The Board may recommend (i) the inclusion of adjoining undeveloped properties into the Village of Cobbly Nob or (ii) recommend the use of the

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Association's roads to access and service an adjoining undeveloped property providing the following procedures and conditions are satisfied. Undeveloped properties refers to properties either adjacent or within the Village of Cobbly Nob.

Section 1. THE INCLUSION OF AN ADJOINING UNDEVELOPED PROPERTY INTO THE VILLAGE OF COBBLY NOB

A. The Developer/Owner of such a property must make written application for the property's inclusion into the Village of Cobbly Nob. The application must include plats, drawings and other descriptive data that clearly depicts for the proposed development and describes the property's intended use.

B. The Developer/Owner shall commit in writing that the

Developer and/or Owner will provide for and maintain the roads within the adjoining property. The construction of roads shall be in accordance with the Tennessee specifications for Roads and Bridges. The construction of roads by the Developer/Owner does not preclude the possibility of the dedication of such roads to the Association if requested by the owners, recommended by the Board and approved by the membership.

C. The Developer/Owner must commit that owners will

adhere to the Restrictions and Protective Covenants and Bylaws of the Association. Developer/Owner will assure, by including a binding requirement in any ownership transfer documents, that any and all subsequent Owners of the property, or any part thereof (parcel, lot, dwelling unit, etc.) are to become members of the Association, and as such, are entitled to enjoy all its privileges and are responsible for all obligations under the Restrictions and Protective Covenants and the Association Bylaws.

D. The Developer/Owner may be required by the Association

to provide a swimming pool and other recreational amenities for any Development of more than twenty (20) lots and/or condominium units. The nature, number, and location of these lots shall be a consideration in the Board's evaluation of the benefit of including this Development into the Association. In lieu of Recreation amenities or a swimming pool , the Developer may elect to pay a one- time cash payment per lot of an amount to be determined

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by the Board. Any pool or amenity provided hereunder shall be dedicated to the Association and shall be maintained by the Association.

E. The Developer/Owner shall pay the initial Road Assessment Fee per lot when site preparation work commences on each lot of the Development. All other fees, such as the Building Permit Fee and Annual Maintenance Fees, shall be paid in accordance with the Association's then current fee schedule and practice.

F. The Board may recommend the inclusion of an adjoining

undeveloped property providing that (i) all the conditions and procedures described herein have been satisfied, (ii) it has been clearly shown that the inclusion of such property is in the best interest of the Association and (iii) that the inclusion of such property is approved by two-thirds (2/3) of the votes cast by the eligible voting membership at either a special called meeting for that purpose, or at the annual membership meeting in September.

Section 2. THE USE OF THE ASSOCIATION'S ROADS TO ACCESS AND

SERVICE AN ADJOINING PROPERTY.

A. The Developer/Owner of an adjoining property must make written application to the Association for the use of the Association's roads. The application should include plats, maps of any roads to the property, drawings and other descriptive data that clearly shows the nature of the proposed Development and the property's intended use.

B. The Developer/Owner must agree in writing to adhere to

the Restrictions and Protective Covenants and the Association's Bylaws as such pertain to road usage and vehicle operator conduct while on the Association's roads. Also, that the Developer will assure that this obligation is passed on to any subsequent owner of the property or any part thereof, (parcel, lot, dwelling unit, etc.) by including a binding statement of same in any ownership transfer deed or documents.

C. The Developer/Owner shall pay the Initial Road

Assessment Fee for each dwelling unit if a multi-family complex before site preparation work commences.

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D. The Owner shall pay the road damage portion of the Association's Building Permit Fee at the time construction commences on each dwelling or pay such fee per unit at the time construction starts on a condominium complex. This portion of the Association's Building Permit Fee is to compensate for or provide for the repair of unspecified damage caused to the Association's roads by construction trucks and equipment, but does not cover specific damage directly contributed to the Owner's construction.

E. Each dwelling or condominium unit Owner shall pay an

annual Road Maintenance Fee which is the portion of the Association's Annual Maintenance Fee that is attributable to road maintenance and auxiliary services.

F. The Board may recommend an application by the Developer/Owner of an adjoining undeveloped property to use the Association's roads to access and service his property providing that (i) the procedures and conditions described herein have been satisfied, (ii) it has been clearly shown that granting such approval is in the best interest of the Association, or that such is required by law, and (iii) such approval shall require an affirmative vote of two-thirds (2/3) of the votes cast by the eligible voting membership at either a special called meeting for that pur- pose, or at the annual membership meeting in September.