CREEKSIDE AT BETHPAGE ASSOCIATION, INC. SECRETARY'S ... at... · secretary's certificate (this...

CREEKSIDE AT BETHPAGE ASSOCIATION, INC. SECRETARY'S CERTIFICATE

February 3, 2015

CREEKSIDE AT BETHPAGE ASSOCIATION, INC., a North Carolina corporation (the "Association") is or will be entering into one or more stormwater agreements in substantially the form of that Stormwater Facility Agreement and Covenants (Residential Version) attached hereto as Exhibit A (any such agreement, with such changes as are approved or deemed necessary, appropriate or desirable by the officer executing the same, the execution thereof by such officer to be conclusive evidence of such approval and determination, is referred to as an "Agreement") with the City of Durham in connection with the construction and maintenance of stormwater facilities serving Creekside at Bethpage community (such agreement and future agreements being referred to herein as the "Transactions"). The first such facility is located at the property commonly known as Creekside at Bethpage Ph. 1. The Association has requested that Womble Carlyle Sandridge & Rice, LLP (the "Firm"), in its capacity as counsel to the Association, deliver an attorney certification in connection with the Transaction to the City of Durham (the "City"). In order that the Firm may render the requested certification, the undersigned hereby confirms and certifies to the Firm that the information set forth below in this secretary's certificate (this "Certificate ") is true and complete, with the understanding that the Firm will rely on the accuracy of such certification in issuing its attorney certification to the City.

The undersigned, being the duly elected and acting Secretary of the Association, does hereby certify as follows:

A. In her aforesaid capacity as the Secretary of the Association, she is familiar with, and keeps control of, its governing documents and schedules meetings of its members and directors.

B. Attached hereto as Exhibit B is a true, correct, and complete copy of the Articles of Incorporation of the Association, which articles are in full force and effect as of the date hereof and has not been further amended or rescinded.

C. Attached hereto as Exhibit C is a true, correct, and complete copy of the By-Laws of the Association, which bylaws are in full force and effect as of the date hereof and has not been further amended or rescinded,

D. The following named individuals are all of the duly elected, qualified and acting directors currently serving on the Board of Directors of the Association:

Bill Kiselick Paul Dahlkamp Dave Mulac

The Turnover Date, as defined in the bylaws of the Association, has not occurred.

E. Attached hereto as Exhibit D is a true, correct and complete copy of the resolutions dated as of February 3, 2015, duly and lawfully adopted by written consent of the Board of Directors of the Association authorizing the Transactions, and such resolutions are in full force and effect as of the date hereof and have not been amended or rescinded. Such

WCSR 33593969v3

resolutions constitute all of the resolutions of the Board of Directors with regard to the Transaction.

F. The following named individuals are all of the duly elected, qualified and acting officers of the Association holding the offices set forth opposite their names and the signatures appearing opposite their names are their authentic signatures:

Name

Dave Mulac

Bill Kiselick

Marie Lorimer

Paul Dahlkamp

Title

President

Vice President

Secretary

Treasurer

G. Each such officer who signs or has signed that certain Amended and Restated Declaration of Covenants, Conditions, and Restrictions for Creekside at Bethpage (the "Covenants ") and one or more Stormwater Facility Agreement and Covenants (Residential Version) agreements by and among AVH Bethpage, LLC, the Association and the City of Durham ("Agreements") or any of the ancillary documents referenced in the Covenants or the Agreements is or has been duly authorized and empowered to do so in the name and on behalf of the Association.

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WCSR 33593969v2

IN WITNESS WHEREOF, the undersigned has executed this Secretary's Certificate as of the date hereof.

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By

Marie Lorimer, Secretary

I, Dave Mulac, President of the Association, hereby certify that Marie Lorimer has been duly elected and has duly qualified as, and on this day is, the Secretary of the Association, and the signature above is his/her genuine signature, and that all of the information in this Certificate is true and correct as of the date hereof.

IN WITNESS WHEREOF, I have hereunto signed my name as of the date hereof.

Dave Mulac

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WCSR 33593969v2

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US2000 10570123.1

WCSR 33593969v2

NORTh CAROLINA Jt Departmont OT the Secretary OT Ste

To all whom these presents shall come, Greetings:

I, Elaine F. Marshall, Secretary of State of the State of North Carolina, do hereby certify the following and hereto attached to be a true copy of

the original of which was filed in this office on the 11th day of February, 2014.

d

Scan to verify online.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal at the City of Raleigh, this 11th day of February, 2014.

4 Certification# C201403800862-1 Reference# 0201403800862-1 Page: 1 of 6

Secretary of State Verify this certificate online at wtvw.secretary.state.no ,us/verification

SOSID: 1361456 Date Filed: 2/11/2014 5:25:00 PM

Elaine F. Marshall North Carolina Secretary of State

C2014 038 00862 ARTICLES OF INCORPORATION

OF CREEKSIDE AT BETHPAGE ASSOCIATION, INC.

In compliance with the requirements of Chapter 55A of the North Carolina General Statutes, the undersigned, a natural person of full age, has this day executed these Articles of Incorporation for the purpose of forming a nonprofit corporation and does hereby certify:

ARTICLE I

The name of the Corporation is CREEKSIDE AT BETHPAGE ASSOCIATION, INC., hereafter called the "Association".

ARTICLE II

The principal office of the Association is located at: c/o Womble Carlyle Sandridge & Rice, LLP, 150 Fayetteville Street, Suite 2100, Raleigh, NC 27601.

ARTICLE III

Cheryl D, Steele, whose address is c/o Horack, Talley, Pharr & Lowndes, P,A., 2600 One Wells Fargo Center, 301 South College Street, Charlotte, NC 28202-6006, is hereby appointed the initial registered agent of the Association.

ARTICLE IV

The Association is the "Association" contemplated by that certain Declaration of Covenants, Conditions and Restrictions for Creekside at Bethpage, executed by AVH Bethpage, LLC as Declarant therein, and recorded, or to be recorded, in the Office of the Register of Deeds of Durham County, North Carolina, (as the same may be modified, amended or supplemented from time to time, the "Declaration"). All capitalized terms herein not defined herein shall have the meanings ascribed to such terms in the Declaration,

ARTICLE V

The Association shall not operate for pecuniary gain or profit, shall not issue capital stock, and no part of the net earnings of the Association shall inure to the benefit of any Member or individual (except that reasonable compensation may be paid for services rendered), and the specific purposes for which it is formed are to provide for: (i) the ownership, use, improvement, maintenance, operation, repair and reconstruction of the Area of Common Responsibility, including any improvements and amenities located thereon; (ii) the establishment of rules and regulations for the use of the Area of Common Responsibility, including any improvements and amenities located thereon; (iii) the distribution among the Owners of the Lots and Dwelling Units of the costs of the use, improvement, maintenance, and repair of the Area of Common Responsibility, including any improvements and amenities located thereon; (iv) the

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promotion of the health, safety, pleasure, recreation, and welfare of the residents of the Dwelling Units within the Property, (v) the maintenance, operation, repair, reconstruction and administration of expenses with respect to property subject to a Covenant to Share Costs or other agreement binding the Association with respect to property benefiting the Community; (vi) the maintenance, operation, repair, reconstruction and administration of expenses with respect to any infrastructure in connection with any services provided within the Community, including without limitation water, stormwater, sanitary sewer, wastewater treatment and disposal, telecommunications, data, cable and security and fire monitoring, as authorized by the Declaration and any other agreements binding the Association; (vii) any other purposes authorized in the Declaration or any agreements governing an Area of Common Responsibility or required by the City of Durham; and (viii) all other lawful purposes. In furtherance of these purposes, the Association, (by action of its Board unless otherwise noted in these Articles of Incorporation or in the Declaration) shall have full power to:

(a) exercise all of the powers and privileges and to perform all of the duties and obligations of the Association as set forth in the Declaration, the By-laws and any other agreements binding the Association and entered into in accordance with the terms of the Declaration, the By-laws or as required by the City of Durham, as the same may be amended from time to time as therein provided, the Declaration being incorporated herein by reference as if set forth at length;

(b) fix, levy, collect, and enforce payment by any lawful means of all charges or assessments pursuant to the terms of the Declaration and the By-laws; to pay all expenses in connection therewith and all office and other expenses incident to the conduct of the affairs of the Association, including all licenses, taxes, or governmental charges levied or imposed against the property of the Association;

(c) acquire (by gift, purchase or otherwise), own, hold, improve, build upon, operate, - maintain, convey, sell, lease, transfer, dedicate for public use, or otherwise dispose of real or personal property in connection with the affairs of the Association, subject, however, to the requirements of the Declaration and the applicable county and municipal ordinances;

(d) borrow money and, with the assent of Declarant and eighty percent (80%) of all Members, unless otherwise provided in the Declaration, mortgage, pledge, convey by deed of trust, or hypothecate any or all of its real or personal property as security for money borrowed or debts incurred (but the rights of the mortgagee shall be subordinate to the rights of the Owners and the Association);

(e) dedicate, sell, or transfer all or any part of the Common Areas to any public agency, authority, or utility with the assent of the Declarant and eighty percent (80%) of the votes of the Members, subject, however, to such conditions as may be agreed to by the Members and provided that, notwithstanding the foregoing, the Association and the Declarant shall have the right to grant easements and rights-of-way as provided in the Declaration;

(f) participate in mergers and consolidations with other nonprofit corporations organized for the same purposes or annex additional property and open space, provided that,

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except as otherwise provided in the Declaration, any such merger, consolidation or annexation shall have the assent of eighty percent (80%) of the votes of the Members; and

(g) have and to exercise any and all powers, rights and privileges which a non-profit corporation organized under the corporation law of the State of North Carolina by law may now or hereafter have or exercise,

ARTICLE VI

Every Owner shall be a member of the Association, Membership shall be appurtenant to and may not be separated from ownership of any Lot or Dwelling Unit, except that Declarant and any Additional Declarants shall remain a member so long as they have any right to annex any Additional Property into the Community.

ARTICLE VII

The voting rights of each Member shall be as set forth in the Declaration,

ARTICLE VIII

The affairs of this Association shall be managed by a Board of Directors, a majority of whom shall be Members of the Association after the termination of the Development and Sale Period specified in the By-laws of the Association, The number of directors shall be as provided in the By-laws of the Association and may be changed by amendment of the By-laws of the Association.

ARTICLE IX

Amendment of these Articles shall require the assent of the holders of eighty percent (80%) of the votes of Members present in person or by proxy at the meeting at which the vote is taken, The Association shall be dissolved upon the termination of the Declaration, or upon the written assent given in writing and signed by not less than eighty percent (80%) of the Members of each class of Members, or upon such more restrictive or additional conditions and in such manner as otherwise provided by the laws of the State of North Carolina. Upon dissolution or insolvency of the Association or upon loss of ownership of the Common Area (once such ownership has been acquired) by the Association for any reason whatsoever (except for exchange or dedication or conveyance of any part or all of the Common Area as allowed by the Declaration or by reason of merger and/or consolidation with any other association as allowed by the Declaration), any portion of the Common Area not under the jurisdiction and being maintained by the Association, shall be offered to Durham County, North Carolina, or to some other appropriate governmental entity or public agency (as determined by the Board) to be dedicated for public use for purposes similar to those to which the Common Area and such assets were required to be devoted by the Association, If Durham County or such other appropriate governmental entity or public agency accepts the ° offer of dedication, such portion of the Common Area and assets shall be conveyed by the Association to Durham County or such other appropriate governmental entity or public agency, subject to the superior right of the Owner of


each Lot or Unit to an easement (if necessary) for reasonable ingress and egress to and from such Owner's Lot or Unit and the public or private street(s) on which such Lot or Unit is located, and subject to all other applicable rights of way and easements and subject to ad valorem property taxes subsequent to the date of such conveyance.

In the event that Durham County or such other appropriate govermnental entity or public agency refuses the offer of dedication and conveyance, the Association may transfer and convey such Common Area and assets to any nonprofit corporation, association, trust or other entity which is or shall be devoted to purposes and uses that would most nearly conform to the purposes and uses to which the Common Area was required to be devoted by the Declaration, such conveyance to be made subject to the•rights of Owners and other matters set forth in the immediately preceding paragraph.

ARTICLE X

The Association shall exist perpetually.

ARTICLE XI

Every director and every officer of the Association shall be indemnified by the Association against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him in connection with any proceeding to which he may be a party, or in which he may become involved, by reason of his being or having been a director or officer of the Association, whether or not he is a director or officer at the time such expenses are incurred, except in such cases wherein the director or officer is found to be or adjudged guilty of willful misfeasance or malfeasance in the performance of his duties; provided that, in the event of any claim for reimbursement or indemnification hereunder based upon a settlement by the director or officer seeking such reimbursement or indemnification, the indemnification herein shall only apply if the Board approves such settlement and reimbursement as being in the best interest of the Association. The foregoing right of indemnification shall be in addition to and not exclusive of all other rights to which such director or officer may be entitled, but shall not relieve any director or officer who is an Owner of any obligation it has to pay assessments as a Member of the Association.

ARTICLE XII

In the event that any Member finances its Lot or Dwelling Unit through a loan guaranteed by the United States Department of Veterans Affairs or insured by the Federal Housing Authority of the United States Department of Housing and Urban Development, then, if either the United States Department of Veterans Affairs or the United States Department of Housing and Urban Development requires that its approval be obtained, the following actions will require the prior approval of the applicable Department: annexation of additional properties, mergers and consolidations, mortgaging of Common Areas, dedication of additional Common Areas, dissolution of the Association and amendment of these Articles.

ARTICLE XIII


The name and address of the incorporator is as follows:

Nellie K. Shipley Wbmble Carlyle Sandridge & Rice, LLP 150 Fayetteville Street, Suite 2100 , Raleigh, North Carolina 27601

IN TESTIMONY WHEREOF, I, being the incorporator, have hereunto set my hand and seal, this the "/ day of ^e ~ uu 2014,

Nellie K, Shipley Incorporator

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is


US2000 10570123.1

WCSR 33593969v2

ARTICLE I

NAME AND LOCATION. The name of the corporation is Creekside at Bethpage Association, Inc., hereinafter referred to as the "Association". The principal office of the Association shall be located, and meetings of Members and Directors (hereinafter defined) may be held, at such places within the State of North Carolina as may be designated by the Board of Directors of the Association from time to time.

ARTICLE II

DEFINITIONS

Section 1. All capitalized terms herein not defined herein shall have the meanings ascribed to such terms in that certain Amended and Restated Declaration of Covenants, Conditions and Restrictions for Creekside at Bethpage, executed by AVH Bethpage, LLC as Declarant therein, and recorded or to be recorded in the Office of the Register of Deeds of Durham County, North Carolina (as the same may be modified, amended or supplemented, from time to time, the "Declaration").

Section 2. "Membership" means all Members, as a group.

ARTICLE III

MEETING OF MEMBERS

Section 1. Annual Meetings . The first annual meeting of the Members shall be held within one year from the date of the first conveyance of a Dwelling Unit to a third party from the Declarant, and a subsequent regular annual meeting of the Members shall be held each year thereafter, at a date, time and place within Durham County, North Carolina selected by the Board of Directors.

Section 2. Special Meetings . Special meetings of the Members may be called at any time by the president or by a majority of the Board of Directors, or upon written request of the Members who are entitled to vote one-tenth (1/10) of all of the votes of the Membership.

Section 3. Notice of Meetings . Except as otherwise provided in the Declaration or these By-laws, not less than ten (10) nor more than sixty (60) days before the meeting, written notice of each meeting of the Members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by mailing a copy of the notice, postage prepaid, to each Member, addressed to the Member's address last appearing on the books of the Association, or supplied by the Member to the Association for the purpose of notice, or by sending the notice by electronic

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mail over the Internet, to an electronic mailing address supplied by the Member to the Association for the purpose of notice. The notice shall specify the place, day, and hour of the meeting, and the items on the agenda, including the general nature of any proposed amendment to the Declaration or these By-laws, any budget changes and any proposal to remove a Director or Officer.

Section 4. Quorum. The presence at the meeting of Members or proxies entitled to cast one-sixteenth (1/16) of the votes of the Membership shall constitute a quorum for any action except as otherwise provided in the Declaration or these By-laws. In the event business cannot be conducted at any meeting because a quorum is not present, that meeting may be adjourned to a later date by the affirmative vote of a majority of those present in person or by proxy. Notwithstanding any provision to the contrary in the Declaration or these By-laws, the quorum requirement at the next meeting shall be one-half of the quorum requirement applicable to the meeting adjourned for lack of a quorum. This provision shall continue to reduce the quorum by fifty percent (50%) from that required at the previous meeting, as previously reduced, until such time as a quorum is present and business can be conducted. Thereafter, the quorum requirement shall increase to its original amount.

Section 5. Proxies. At all meetings of Members, each Member may vote in person or by proxy. Directed proxies, in which authority only to cast specific votes on behalf of a Member, may be utilized. All proxies shall be in writing and filed with the secretary. Every proxy shall be revocable and shall automatically cease upon the earlier of: (a) one year from the date of the proxy and (b) conveyance by the Member of its Lot or Dwelling Unit.

ARTICLE IV

BOARD OF DIRECTORS SELECTION: TERM OF OFFICE

Section 1. Number. The Board of Directors (the "Directors") shall initially consist of three (3) Directors and, upon the termination of the Class B Control Period (the "Turnover Date"), the number of Directors shall be increased to five (5) Directors. The business and affairs of the Association shall be managed by or under the direction of the Board of Directors, which may adopt such rules and procedures, not inconsistent with the Articles of Incorporation, the Declaration, these by-laws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Association. The initial Directors (the "Initial Directors") are Bill Kiselick, Paul Dahlkamp and Dave Mulac.

Section 2. Term of Office. The term of office for each of the Initial Directors shall continue until the first annual meeting of Members following the Turnover Date, or until such Director's earlier death, resignation, disqualification or removal. . Following the Turnover Date, the term of each Director shall be for one (1) year, or until such Director's earlier death, resignation, disqualification or removal. Notwithstanding the expiration of the term of a Director, such Director shall continue to hold office until a successor is elected and qualifies.

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Section 3. Removal . Following the Turnover Date, any Director may be removed from the Board of Directors, with or without cause, by a majority vote of the Members of the Association present and entitled to vote at any meeting of the Members at which a quorum is present. Prior to the Turnover Date, Directors may be removed by the Declarant, with or without cause. In the event of death, resignation or removal, pursuant to these By-laws, of a Director (a) if such Director was elected by the Members of the Association, his successor shall be selected by the remaining Members of the Board of Directors and shall serve for the unexpired term of his predecessor and (b) if such Director was appointed by the Declarant, then his successor shall be selected by the Declarant.

Section 4. Compensation . No Director shall receive compensation for any service he may render to the Association. However, any Director may be reimbursed for his actual expenses incurred in the performance of his duties.

Section 5. Action Taken without a Meeting . The Directors shall have the right to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all the Directors. Any action so approved shall have the same effect as though taken at a meeting of the Directors.

Section 6. Resignation . Any Director may resign at any time by giving written notice to the Board of Directors. Such resignation shall take effect on the date of receipt of the notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of the resignation shall not be necessary to make it effective.

ARTICLE V

NOMINATION AND ELECTION OF DIRECTORS

Section 1. Appointment of Directors by Declarant Prior to the Turnover Date . Notwithstanding anything to the contrary set forth in Section 2 of this Article V, prior to the Turnover Date, First Directors and Directors shall not be elected by the Members; instead the Declarant shall be entitled to appoint and remove the members of the Board of Directors, who shall not be required to be Members of the Association. From and after the Turnover Date, the Board of Directors shall be elected by the Members in the manner set forth in Section 2 of this Article V.

Section 2. Election of Directors .

(a) Nomination. From and after the occurrence of the Turnover Date, nomination of persons for election to the Board of Directors may be made by the existing Board of Directors or by any Member wishing to nominate someone, which nomination must be submitted to the Board of Directors. Nominations may also be made from the floor at the annual meeting. The Board of Directors shall make as many nominations for election to the Board of Directors as it shall, in its discretion determine, but not less than the number of vacancies that are to be filled. Nominations may be made only from among Members. Non-Members are not eligible for election to the Board of Directors from and after the Turnover Date.

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(b) Election . Until the Turnover Date, the Directors shall be appointed by the Declarant. At the first annual meeting following the Turnover Date, and thereafter, the Directors shall be elected by the Members. Election to the Board of Directors shall be by written ballot. At the election, the Member or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Declaration. The persons receiving the largest number of votes shall be elected. Neither cumulative nor fractional voting is permitted. In the event that any Director resigns, including a First Director but not including a Director elected by the Declarant prior to the Turnover Date, the remaining Directors shall elect a substitute Director to fill his or her unexpired term.

ARTICLE VI

MEETINGS OF DIRECTORS

Section 1. Regular Meetings . The regular meetings of the Board of Directors shall be held at least annually and may be held without notice of the date, time, place or purpose of the meeting.

Section 2. Special Meetings . Special meetings of the Board of Directors shall be held when called by the President of the Association, or by any two Directors, after notice to each Director as provided herein. The secretary or other person or persons calling a special meeting shall give notice by any usual means of communication to be sent at least three (3) days before the meeting if notice is sent by means of telephone, telecopy or personal delivery and at least five (5) days before the meeting if notice is sent by mail. A director's attendance at, or participation in, a meeting for which notice is required shall constitute a waiver of notice, unless the director at the beginning of the meeting (or promptly upon arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

Section 3. Quorum. A majority of the Directors shall constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the Directors at a duly held meeting at which a quorum is present shall be regarded as the act of the Board of Directors. In the event business cannot be conducted at any meeting because a quorum is not present, that meeting may be adjourned to a later date by the affirmative vote of a majority of those present in person or by proxy. Notwithstanding any provision to the contrary in the Declaration or these By-laws, the quorum requirement at the next meeting shall be one-half of the quorum requirement applicable to the meeting adjourned for lack of a quorum. This provision shall continue to reduce the quorum by fifty percent (50%) from that required at the previous meeting, as previously reduced, until such time as a quorum is present and business can be conducted. Thereafter, the quorum requirement shall be restored to its original threshold.

Section 4. Meeting by Conference Telephone . Any one or more Directors may participate in a meeting of the Board by means of a conference telephone or similar communications device which allows all persons participating in the meeting to hear each other, and such participation in a meeting shall be deemed presence in person at such meeting.

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Section 5. Members' Forum . At regular intervals, the Board shall provide Members not on the Board the opportunity to attend a portion of a meeting of the Board and to address issues or concerns to the Board. The Board may impose reasonable restrictions on the number of persons who may speak on each side of an issue in such meetings and may place reasonable time restrictions on speakers in such meetings.

ARTICLE VII

POWERS AND DUTIES OF THE BOARD OF DIRECTORS

Section 1. Powers . The Board of Directors shall have the power to:

(a) adopt and publish rules and regulations governing the use of the Common Areas and Association Property including any improvements and amenities located thereon, and the personal conduct of the Members and their guests thereon, and to establish penalties for the infraction thereof, including fines;

(b) pursuant to reasonable notice and a right to a hearing in accordance with applicable North Carolina law, suspend the voting rights, and the right of use of any recreational facilities located on any Common Area during any period in which the Member is in default (for a period in excess of 30 days) in the payment of any assessment levied by the Association; these rights may also be suspended for an infraction of published rules and regulations;

(c) exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the Members by other provisions of these By-laws, the Articles of Incorporation, or the Declaration;

(d) employ one or more managers, independent contractors, or other employees or contractors as they deem necessary, and to prescribe their duties, which may include the carrying out of powers or duties of the Board of Directors herein specified;

(e) payment of all taxes and assessments validly levied, assessed or imposed with respect to the Area of Common Responsibility; and

(f) enter into agreements obligating the Association in accordance with the terms of the Declaration.

Section 2. Duties . It shall be the duty of the Board of Directors to:

(a) keep a complete record of all its acts and corporate affairs and to present a statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such a statement is requested in writing by the holders of one tenth (1/10) of the votes of the Members, and to make its financial and other records reasonably available for examination by Members and their authorized agents;

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(b) supervise all Officers, agents and employees of this Association, and to see that their duties are properly performed;

(c) as more fully provided in the Declaration:

(1) fix the amount of the Base Assessment, Neighborhood Assessment Special Assessment, Benefitted Assessment and all fees that may be charged by the Association, including without limitation the Transfer Fee, the Community Enhancement Fee and the Reserve Account Fund Fee, against each Lot and Dwelling Unit as provided in the Declaration;

(2) send written notice of each Base Assessment, Neighborhood Assessment Special Assessment, Benefitted Assessment and all fees that may be charged by the Association, including without limitation the Transfer Fee, the Community Enhancement Fee and the Reserve Account Fund Fee, to every Owner subject thereto, as provided in the Declaration; and

(3) foreclose the lien against a Lot or Dwelling Unit if the Owner thereof has not paid the assessment or fees thereon within such time as the Board of Directors may determine, or bring an action at law against the Owner personally obligated to pay the same;

(d) issue, or cause an appropriate Officer to issue, upon demand by any person and within 10 business days of receipt of such demand, a certificate setting forth whether or not any assessment has been paid; a reasonable charge may be made by the Board of Directors for the issuance of these certificates (if the certificate states that an assessment has been paid, the certificate shall be conclusive evidence of payment with respect to any person relying on the certificate);

(e) procure and maintain adequate liability and hazard insurance on property owned by the Association;

(f) cause all Officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate;

(g) cause the Area of Common Responsibility to be maintained in accordance with the terms of the Declaration and any other agreements governing an Area of Common Responsibility; and

(h) perform, or cause to be performed on its behalf, and other obligations of the Board under the Declaration or agreements entered into by the Association in accordance with the terms of the Declaration.

ARTICLE VIII

OFFICERS AND THEIR DUTIES

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Section 1. Enumeration of Offices . The Officers of this Association shall be a President and Vice-President, a Secretary, and a Treasurer, one or more Assistant Secretaries, and such other Officers as the Board of Directors may from time to time by resolution create (the "Officers"). An Officer may hold more than one (1) office at any given time, but there shall be no less than two (2) Officers holding the offices of President, Vice President, Treasurer and Secretary at any given time.

Section 2. Election of Officers . The election of Officers shall take place at the first meeting of the Board of Directors and thereafter at the first meeting of the Board of Directors following each annual meeting of the Members.

Section 3. Term . The Officers of the Association shall be elected annually by the Board of Directors and each shall hold office for one (1) year unless he shall sooner resign, or shall be removed, or otherwise disqualified to serve.

Section 4. Special Appointments . The Board of Directors may elect such other Officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board of Directors may, from time to time, determine.

Section 5. Resignation and Removal . Any Officer may be removed from office with or without cause by the Board of Directors. Any Officer may resign at any time by giving written notice to the Board of Directors, the President or the Secretary. Such resignation shall take effect on the date of receipt of the notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of the resignation shall not be necessary to make it effective.

Section 6. Vacancies . A vacancy in any office may be filled by appointment by the Board of Directors. The Officer appointed to the vacancy shall serve for the remainder of the term of the Officer he or she replaces.

Section 7. Duties . The duties of the Officers are as follows:

(a) President . The President of the Association (the "President") shall preside at all meetings of the Members and of the Board of Directors and see that orders and resolutions of the Board of Directors are carried out. The President shall have authority to sign all leases, mortgages, deeds of trust, deeds, and other written instruments, including but not limited to amendments to the Declaration and certifications thereof by the Association.

(b) Vice President . The Vice President of the Association (the "Vice President") shall act in the place and stead of the President in the event of his absence or inability or refusal to act, and exercise and discharge such other duties as may be required of him by the Board of Directors. The Vice President shall likewise have authority to sign all leases, mortgages, deeds of trust, deeds, and other written instruments, including but not limited to amendments to the Declaration and certifications thereof by the Association.

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(c) Secretary; Assistant Secretaries . The Secretary of the Association (the "Secretary") shall record the votes and keep the minutes of all meetings and proceedings of the Board of Directors and of the Members; serve notice of meetings of the Board of Directors and of the Members; keep appropriate current records showing the Members of the Association together with their addresses; prepare amendments to the Declaration or certifications thereof by the Association upon approval thereof by the Association; record amendments to the Declaration and/or certifications thereof by the Association; attest to the execution of documents by the President or the Vice President; and perform such other duties as required by the Board of Directors. Any Assistant Secretary (the "Assistant Secretary") may act in the place and stead of the Secretary in the event of his or her absence or inability or refusal to act.

(d) Treasurer . The Treasurer of the Association (the "Treasurer") shall receive and deposit in appropriate bank accounts all monies of the Association and disburse these funds as directed by resolution of the Board of Directors; keep proper books of account; cause an independent annual audit, review or compilation of the Association books to be made by a public accountant at the completion of each fiscal year; and prepare an annual budget and a statement of income and expenditures to be presented to the Membership at its regular annual meeting, and deliver a copy of each to the Members requesting the same.

ARTICLE IX

COMMITTEES

The Board may establish and appoint committees from time to time as the Board decides is appropriate to assist in the conduct of the affairs of the Association. Committee members may, but need not, be Members. Committee members serve at the Board's discretion for such periods as the Board may designate by resolution or committee charter; provided, however, that any committee member, including the committee chair, may be removed by the vote of the majority of the Board.

ARTICLE X

BOOKS AND RECORDS

The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Member. The Declaration, the Articles of Incorporation and the By-laws of the Association shall be available for inspection by any Member at the principal office of the Association, where copies may be purchased at a reasonable cost.

ARTICLE XI

ASSESSMENTS AND FINES

As more fully provided in the Declaration, each Member is obligated to pay to the Association assessments which are secured by a continuing lien upon the Lot or Dwelling Unit

against which the assessment is made. If the assessment is not paid on the due date, the assessment shall bear interest as provided in the Declaration, and the Association may bring an action at law against the Owner personally obligated to pay the same or foreclose the lien against the Lot or Dwelling Unit, and interest, costs, and reasonable attorneys' fees of any such action shall be added to the amount of such assessment. No Owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the Common Areas or abandonment of its Lot or Dwelling Unit.

The Association may also establish a schedule of fines for violations of the terms of the Declaration. Fines may be imposed after notice to the Owner and an opportunity to be heard. Fines may be enforced in the same manner as assessments.

ARTICLE XII

AMENDMENTS

Section 1. These By-laws may be amended, at a regular or special meeting of the Members, by the holder of two-thirds (2/3) of the votes of the Members of the Association present in person or by proxy at the meeting at which the vote is taken; provided, however, the consent of the Declarant shall be required for any amendment until the Turnover Date.

Section 2. In the case of any conflict between the Articles of Incorporation and these By-laws, the Articles shall control; and in the case of any conflict between the Declaration and the Articles or these By-laws, the Declaration shall control.

ARTICLE XIII

MISCELLANEOUS

The fiscal year of the Association shall begin on the first day of January and end on the 31 St day of December of every year, except that the first fiscal year shall begin on the date of incorporation and end on the next occurrence of December 31 St

The seal of the Association shall be in the form impressed on the margin of this page or in such form as the Board of Directors shall adopt from time to time.

The signatures of two Officers shall be required for withdrawal of funds from the Major Reconstruction Fund described in the Declaration.

SEAL:

CERTIFICATION

I, the undersigned, do hereby certify:

THAT I am the duly elected and acting Secretary of Creekside at Bethpage Association, Inc. a North Carolina nonprofit corporation; and

THAT the foregoing By-laws constitute the original By-laws of said Association, duly adopted by the Board of Directors thereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name as of the day of

Secretary

10

WCSR 31862818v3

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Pursuant to the laws of the state of North Carolina, the undersigned, being all of the directors of Creekside at Bethpage Association, Inc., a North Carolina nonprofit corporation (the "Corporation"), do hereby unanimously consent to the adoption of the following resolutions without the formality of convening a first meeting of the Board of Directors (the "Board"), for and as the actions of the Corporation, as of the date set forth above:

Ratification of Actions of Incorporator

RESOLVED, that all of the actions of the incorporator of the Association taken on behalf of the Association be, and hereby are, ratified, confirmed, approved and adopted as the actions of the Association.

Acceptance of Articles of Incorporation

RESOLVED, that the Articles of Incorporation of the Corporation, a copy of which is attached hereto as Exhibit A, which was received and filed with the North Carolina Secretary of State on February 11, 2014, be and hereby is, accepted, adopted and approved for the Corporation.

Adoption of By-Laws

RESOLVED, that the form of By-Laws attached hereto as Exhibit B and incorporated herein by this reference be, and hereby is, adopted as the By-Laws of the Corporation (the " Laws").

Appointment of Officers

WHEREAS, pursuant to Article VIII, Section 2 of the By-Laws, the Board shall elect the officers of the Corporation.

NOW, THEREFORE, BE IT RESOLVED, that the following individuals be, and hereby are, elected and appointed as the Corporation's officers (the "Authorized Officers"), effective as of the date first set forth above, each to hold office until his or her successor shall have been duly elected and qualified, or until any such officer resigns or is removed from office:

Name Office

Dave Mulac President Bill Kiselick Vice President Marie Lorimer Secretary

WCSR 33609750v2_,

Paul Dahlkamp Treasurer

RESOLVED, that any actions taken by the Authorized Officers prior to the date of the foregoing resolution adopted hereby that are within the authority conferred thereby are hereby ratified, confirmed, approved and adopted as actions of the Corporation.

RESOLVED, that the Authorized Officers be, and each of them acting singly hereby is, authorized, empowered, and directed, in the name and on behalf of the Corporation, to establish bank accounts (whether checking, securities, custody or safekeeping accounts) (each, a "Bank Account") in the United States and designate any authorized signatories as may be necessary or proper for the business activities of the Corporation; and further

RESOLVED, that any resolution or resolutions required by any bank, trust company, or other banking institution for the opening of any Bank Account and the designation of authorized signatories for any such account be considered as adopted as if at a duly held meeting of the Board, and any such Authorized Officer is authorized to so certify.

Fiscal Year

RESOLVED, that the Corporation adopts as its annual accounting period a fiscal year ending on December 31 of each year.

Stormwater Agreements

RESOLVED, that the Corporation is authorized to enter into one or more stormwater agreements in substantially the form of that Stormwater Facility Agreement and Covenants (Residential Version) attached hereto as Exhibit C, with the City of Durham, North Carolina in connection with stormwater infrastructure to be constructed and maintained in connection with the community to be governed by the Corporation, in accordance with the Amended and Restated Declaration of Covenants, Conditions and Restrictions for Creekside'at Bethpage, with such changes as are approved or deemed necessary, appropriate or desirable by the Authorized Officer executing the same, the execution thereof by such Authorized Officer to be conclusive evidence of such approval and determination.

General Authorizations

RESOLVED, that the Authorized Officers be, and each of them acting singly hereby is, authorized to execute the requisite documents described in the foregoing resolutions in the name of and on behalf of the Corporation and to take such additional action and to execute such additional documents as any such Authorized Officer determines to be necessary or advisable to effectuate the transactions contemplated thereby; and further

2

WCSR 33609750v2

RESOLVED, that all actions taken by any incorporator, director, officer or shareholder of the Corporation in connection with any and all of the transactions referred to in, or contemplated by, any of the foregoing resolutions be, and they hereby are, ratified, confirmed and approved; and further

RESOLVED, that this consent be filed with the records of meetings of the Board; and further

RESOLVED, that this consent may be executed in any number of counterparts, all of which when taken together shall constitute a single original consent; and this consent may be executed by facsimile.

3

WCSR 33609750v2

IN WITNESS WHEREOF, this Action by Unanimous Written Consent of Directors of Creekside at Bethpage Association, Inc. in lieu of an organizational meeting shall be effective as of the first date set forth above.

(3Le( t c4-eit Bill Kiselick

Paul Dahlkamp

Dave Mulac

WCSR 33609750v2

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(See attached.)

WCSR 33609750v2

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I, Elaine F. Marshall, Secretary of State of the State of North ,Carolina, do hereby certify the following and hereto attached to be a true copy of

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the original of which was filed in this office on the 11th day of February, 2014.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal at the City of Raleigh, this 11th day of February, 2014.

Scan to verify online.

Certification# C201403800862-1 Reference# C201403800862-1 Page: 1 of 6 Verify this certificate online at www.secretary.state.nc.us/verification

Secretary of State

SOSID: 1361456 Date Filed: 2/11/2014 5:25:00 PM

Elaine F. Marshall North Carolina Secretary of State

C2014 038 00862 ARTICLES OF INCORPORATION

OF CREEKSIDE AT BETHPAGE ASSOCIATION, INC.

In compliance with the requirements of Chapter 55A of the North Carolina General Statutes, the undersigned, a natural person of full age, has this day executed these Articles of Incorporation for the purpose of forming a nonprofit corporation and does hereby certify;

ARTICLE I

The name of the Corporation is CREEKSIDE AT BETHPAGE ASSOCIATION, INC., hereafter called the "Association"

ARTICLE II

The principal office of the Association is located at: c/o Womble Carlyle Sandridge & Rice, LLP, 150 Fayetteville Street, Suite 2100, Raleigh, NC 27601.

ARTICLE III

Cheryl D. Steele, whose address is c/o Horack, Talley, Pharr & Lowndes, P.A., 2600 One Wells Fargo Center, 301 South College Street, Charlotte, NC 28202-6006, is hereby appointed the initial registered agent of the Association,

ARTICLE IV

The Association is the "Association" contemplated by that certain Declaration of Covenants, Conditions and Restrictions for Creekside at Bethpage, executed by AVH Bethpage, LLC as Declarant therein, and recorded, or to be recorded, in the Office of the Register of Deeds of Durham County, North Carolina, (as the same may be modified, amended or supplemented from time to time, the "Declaration"). All capitalized terms herein not defined herein shall have the meanings ascribed to such terms in the Declaration.

ARTICLE V

The Association shall not operate for pecuniary gain or profit, shall not issue capital stock, and no part of the net earnings of the Association shall inure to the benefit of any Member or individual (except that reasonable compensation may be paid for services rendered), and the specific purposes for which it is formed are to provide for: (i) the ownership, use, improvement, maintenance, operation, repair and reconstruction of the Area of Common Responsibility, including any improvements and amenities located thereon; (ii) the establishment of rules and regulations for the use of the Area of Common Responsibility, including any improvements and amenities located thereon; (iii) the distribution among the Owners of the Lots and Dwelling Units of the costs of the use, improvement, maintenance, and repair of the Area of Common Responsibility, including any improvements and amenities located thereon; (iv) the

Certification# C201403800S62-1 Reference# C201403800862- Page: 2 of 6

promotion of the health, safety, pleasure, recreation, and welfare of the residents of the Dwelling Units within the Property, (v) the maintenance, operation, repair, reconstruction and administration of expenses with respect to property subject to a Covenant to Share Costs or other agreement binding the Association with respect to property benefiting the Community; (vi) the maintenance, operation, repair, reconstruction and administration of expenses with respect to any infrastructure in connection with any services provided within the Community, including without limitation water, stormwater, sanitary sewer, wastewater treatment and disposal, telecommunications, data, cable and security and fire monitoring, as authorized by the Declaration and any other agreements binding the Association; (vii) any other purposes authorized in the Declaration or any agreements governing an Area of Common Responsibility or required by the City of Durham; and (viii) all other lawful purposes. In furtherance of these purposes, the Association, (by action of its Board unless otherwise noted in these Articles of Incorporation or in the Declaration) shall have full power to:

(a) exercise all of the powers and privileges and to perform all of the duties and obligations of the Association as set forth in the Declaration, the By-laws and any other agreements binding the Association and entered into in accordance with the terms of the Declaration, the By-laws or as required by the City of Durham, as the same may be amended from time to time as therein provided, the Declaration being incorporated herein by reference as if set forth at length;

(b) fix, levy, collect, and enforce payment by any lawful means of all charges or assessments pursuant to the terms of the Declaration and the By-laws; to pay all expenses in connection therewith and all office and other expenses incident to the conduct of the affairs of the Association, including all licenses, taxes, or governmental charges levied or imposed against the property of the Association;

(c) acquire (by gift, purchase or otherwise), own, hold, improve, build upon, operate, - maintain, convey, sell, lease, transfer, dedicate for public use, or otherwise dispose of real or personal property in connection with the affairs of the Association, subject, however, to the requirements of the Declaration and the applicable county and municipal ordinances;

(d) borrow money and, with the assent of Declarant and eighty percent (80%) of all Members, unless otherwise provided in the Declaration, mortgage, pledge, convey by deed of trust, or hypothecate any or all of its real or personal property as security for money borrowed or debts incurred (but the rights of the mortgagee shall be subordinate to the rights of the Owners and the Association);

(e) dedicate, sell, or transfer all or any part of the Common Areas to any public agency, authority, or utility with the assent of the Declarant and eighty percent (80%) of the votes of the Members, subject, however, to such conditions as may be agreed to by the Members and provided that, notwithstanding the foregoing, the Association and the Declarant shall have the right to grant easements and rights-of-way as provided in the Declaration;

(f) participate in mergers and consolidations with other nonprofit corporations organized for the same purposes or annex additional property and open space, provided that,

Certification# C201403800S62-1 Reference# 0201403800862- Page: 3 of 6

except as otherwise provided in the Declaration, any such merger, consolidation or annexation shall have the assent of eighty percent (80%) of the votes of the Members; and

(g) have and to exercise any and all powers, rights and privileges which a non-profit corporation organized under the corporation law of the State of North Carolina by law may now or hereafter have or exercise.

ARTICLE VI

Every Owner shall be a member of the Association. Membership shall be appurtenant to and may not be separated from ownership of any Lot or Dwelling Unit, except that Declarant and any Additional Declarants shall remain a member so long as they have any right to annex any Additional Property into the Community,

ARTICLE VII

The voting rights of each Member shall be as set forth in the Declaration,

ARTICLE VIII

The affairs of this Association shall be managed by a Board of Directors, a majority of whom shall be Members of the Association after the termination of the Development and Sale Period specified in the By-laws of the Association. The number of directors shall be as provided in the By-laws of the Association and may be changed by amendment of the By-laws of the Association.

ARTICLE IX

Amendment of these Articles shall require the assent of the holders of eighty percent (80%) of the votes of Members present in person or by proxy at the meeting at which the vote is taken. The Association shall be dissolved upon the termination of the Declaration, or upon the written assent given in writing and signed by not less than eighty percent (80%) of the Members of each class of Members, or upon such more restrictive or additional conditions and in such manner as otherwise provided by the laws of the State of North Carolina. Upon dissolution or insolvency of the Association or upon loss of ownership of the Common Area (once such ownership has been acquired) by the Association for any reason whatsoever (except for exchange or dedication or conveyance of any part or all of the Common Area as allowed by the Declaration or by reason of merger and/or consolidation with any other association as allowed by the Declaration), any portion of the Common Area not under the jurisdiction and being maintained by the Association, shall be offered to Durham County, North Carolina, or to some other appropriate governmental entity or public agency (as determined by the Board) to be dedicated for public use for purposes similar to those to which the Common Area and such assets were required to be devoted by the Association, If Durham County or such other appropriate governmental entity or public agency accepts thee' offer of dedication, such portion of the Common Area and assets shall be conveyed by the Association to Durham County or such other appropriate governmental entity or public agency, subject to the superior right of the Owner of


each Lot or Unit to an easement (if necessary) for reasonable ingress and egress to and from such Owner's Lot or Unit and the public or private street(s) on which such Lot or Unit is located, and subject to all other applicable rights of way and easements and subject to ad valorem property taxes subsequent to the date of such conveyance.

In the event that Durham County or such other appropriate governmental entity or public agency refuses the offer of dedication and conveyance, the Association may transfer and convey such Common Area and assets to any nonprofit corporation, association, trust or other entity which is or shall be devoted to purposes and uses that would most nearly conform to the purposes and uses to which the Common Area was required to be devoted by the Declaration, such conveyance to be made subject to the rights of Owners and other matters set forth in the immediately preceding paragraph.

ARTICLE X

The Association shall exist perpetually.

ARTICLE XI

Every director and every officer of the Association shall be indemnified by the Association against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him in connection with any proceeding to which he may be a party, or in which he may become involved, by reason of his being or having been a director or officer of the Association, whether or not he is a director or officer at the time such expenses are incurred, except in such cases wherein the director or officer is found to be or adjudged guilty of willful misfeasance or malfeasance in the performance of his duties; provided that, in the event of any claim for reimbursement or indemnification hereunder based upon a settlement by the director or officer seeking such reimbursement or indemnification, the indemnification herein shall only apply if the Board approves such settlement and reimbursement as being in the best interest of the Association. The foregoing right of indemnification shall be in addition to and not exclusive of all other rights to which such director or officer may be entitled, but shall not relieve any director or officer who is an Owner of any obligation it has to pay assessments as a Member of the Association.

ARTICLE XII

In the event that any Member finances its Lot or Dwelling Unit through a loan guaranteed by the United States Department of Veterans Affairs or insured by the Federal Housing Authority of the United States Department of Housing and Urban Development, then, if either the United States Department of Veterans Affairs or the United States Department of Housing and Urban Development requires that its approval be obtained, the following actions will require the prior approval of the applicable Department: annexation of additional properties, mergers and consolidations, mortgaging of Common Areas, dedication of additional Common Areas, dissolution of the Association and amendment of these Articles.

ARTICLE XIII

Cerdficalion# C201403800862-1 Reference# C201403800862- Page: 5 of 6

The name and address of the incorporator is as follows:

Nellie K. Shipley Womble Carlyle Sandridge & Rice, LL? 150 Fayetteville Street, Suite 2100 Raleigh, North Carolina 27601

IN TESTIMONY WHEREOF, I, being the incorporator, have hereunto set my hand and seal, this the 1 day of , 2014,

Nellie K, Shipley

Incorporator

5

Certification# C201403800362-1 Reference# C201403800S62- Page: 6 of 6

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(See attached.)

WCSR 33609750v2

BY-LAWS OF

CREEKSIDE AT BETHPAGE ASSOCIATION, INC.

ARTICLE I

NAME AND LOCATION. The name of the corporation is .Creekside at Bethpage Association, Inc., hereinafter referred to as the "Association". The principal office of the Association shall be located, and meetings of Members and Directors (hereinafter defined) may be held, at such places within the State of North Carolina as may be designated by the Board of Directors of the Association from time to time.

ARTICLE II

DEFINITIONS

Section 1. All capitalized terms herein not defined herein shall have the meanings ascribed to such terms in that certain Amended and Restated Declaration of Covenants, Conditions and Restrictions for Creekside at Bethpage, executed by AVH Bethpage, LLC as Declarant therein, and recorded or to be recorded in the Office of the Register of Deeds of Durham County, North Carolina (as the same may be modified, amended or supplemented, from time to time, the "Declaration").

Section 2. "Membership" means all Members, as a group.

ARTICLE III

MEETING OF MEMBERS

Section 1. Annual Meetings . The first annual meeting of the Members shall be held within one year from the date of the first conveyance of a Dwelling Unit to a third party from the Declarant, and a subsequent regular annual meeting of the Members shall be held each year 'thereafter, at a date, time and place within Durham County, North Carolina selected by the Board of Directors.

Section 2. Special Meetings . Special meetings of the Members may be called at any time by the president or by a majority of the Board of Directors, or upon written request of the Members who are entitled to vote one-tenth (1/10) of all of the votes of the Membership.

Section 3. Notice of Meetings . Except as otherwise provided in the Declaration or these By-laws, not less than ten (10) nor more than sixty (60) days before the meeting, written notice. of each meeting of the Members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by mailing a copy of the notice, postage prepaid, to each Member, addressed to the Member's address fast appearing on the books of the Association, or supplied by the Member to the Association for the purpose of notice, or by sending the notice by electronic

1

mail over the Internet, to an electronic mailing address supplied by the Member to the Association for the purpose of notice. The notice shall specify the place, day, and hour of the meeting, and the items on the agenda, including the general nature of any proposed amendment to the Declaration or these By-laws, any budget changes and any proposal to remove a Director or Officer.

Section 4. quorum. The presence at the meeting of Members or proxies entitled to cast one-sixteenth (1/16) of the votes of the Membership shall constitute a quorum for any action except as otherwise provided in the Declaration or these By-laws. In the event business cannot be conducted at any meeting because a quorum is not present, that meeting may be adjourned to a later date by the affirmative vote of a majority of those present in person or by proxy. Notwithstanding any provision to the contrary in the Declaration or these By-laws, the quorum requirement at the next meeting shall be one-half of the quorum requirement applicable to the meeting adjourned for lack of a quorum. This provision shall continue to reduce the quorum by fifty percent (50%) from that required at the previous meeting, as previously reduced, until such time as a quorum is present and business can be conducted. Thereafter, the quorum requirement shall increase to its original amount.

Section 5. Proxies. At all meetings of Members, each Member may vote in person or by proxy. Directed proxies, in which authority only to cast specific votes on behalf of a Member, may be utilized. All proxies shall be in writing and filed with the secretary. Every proxy shall be revocable and shall automatically cease upon the earlier of: (a) one year from the date of the proxy and (b) conveyance by the Member of its Lot or Dwelling Unit.

ARTICLE IV

BOARD OF DIRECTORS SELECTION: TERM OF OFFICE

Section 1. Number. The Board of Directors (the "Directors") shall initially consist of three (3) Directors and, upon the termination of the Class B Control Period (the "Turnover Date"), the number of Directors shall be increased to five (5) Directors. The business and affairs of the Association shall be managed by or under the direction of the Board'of Directors, which may adopt such rules and procedures, not inconsistent with the Articles of Incorporation, the Declaration, these by-laws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Association. The initial Directors (the "Initial Directors") are Bill Kiselick, Paul Dalilkamp and Dave Mulac.

Section 2. Tenn of Office. The term of office for each of the Initial Directors shall continue until the first annual meeting of Members following the Turnover Date, or until such Director's earlier death, resignation, disqualification or removal. . Following the Turnover Date, the tern of each Director shall be for one (1) year, or until such Director's earlier death, resignation, disqualification or removal. Notwithstanding the expiration of the tenn of a Director, such Director shall continue to hold office until a successor is elected and qualifies.

2

Section 3. Removal . Following the Turnover Date, any Director may be removed from the Board of Directors, with or without cause, by a majority vote of the Members of the Association present and entitled to vote at any meeting of the Members at which a quorum is present. Prior to the Turnover Date, Directors may be removed by the Declarant, with or without cause. In the event of death, resignation or removal, pursuant to these By-laws, of a Director (a) if such Director was elected by the Members of the Association, his successor shall be selected by the remaining Members of the Board of Directors and shall serve for the unexpired term of his predecessor and (b) if such Director was appointed by the Declarant, then his successor shall be selected by the Declarant.

Section 4. Compensation . No Director shall receive compensation for any service he may render to the Association. However, any Director may be reimbursed for his actual expenses incurred in the performance of his duties.

Section 5. Action Taken without a Meeting . The Directors shall have the right to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all the Directors. Any action so approved shall have the same effect as though taken at a meeting of the Directors.

Section 6. Resignation . Any Director may resign at any time by giving written notice to the Board of Directors. Such resignation shall take effect on the date of receipt of the notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of the resignation shall not be necessary to make it effective.

ARTICLE V

NOMINATION AND ELECTION OF DIRECTORS

Section 1. Appointment of Directors by Declarant Prior to the Turnover Date . Notwithstanding anything to the contrary set forth in Section 2 of this Article V, prior to the Turnover Date, First Directors and Directors shall not be elected by the Members; instead the Declarant shall be entitled to appoint and remove the members of the Board of Directors, who shall not be required to be Members of the Association. From and after the Turnover Date, the Board of Directors shall be elected by the Members in the manner set forth in Section 2 of this Article V.

Section 2. Election of Directors .

(a) Nomination. From and after the occurrence of the Turnover Date, nomination of persons for election to the Board of Directors may be made by the existing Board of Directors or by any Member wishing to nominate someone, which nomination must be submitted to the Board of Directors. Nominations may also be made from the floor at the annual meeting. The Board of Directors shall make as many nominations for election to the Board of Directors as it shall, in its discretion determine, but not less than the number of vacancies that are to be filled. Nominations may be made only from among Members. Non-Members are not eligible for election to the Board of Directors from and after the Turnover Date.

3

(b) Election. Until the Turnover Date, the Directors shall be appointed by the Declarant. At the first annual meeting following the Turnover Date, and thereafter, the Directors shall be elected by the Members. Election to the Board of Directors shall be by written ballot. At the election, the Member or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Declaration. The persons receiving the largest number of votes shall be elected. Neither cumulative nor fractional voting is permitted. In the event that any Director resigns, including a First Director but not including a Director, elected by the Declarant prior to the Turnover Date, the remaining Directors shall elect a substitute Director to fill his or her unexpired term.

ARTICLE VI

MEETINGS OF DIRECTORS

Section 1. Regular Meetings. The regular meetings of the Board of Directors shall be held at least annually and may be held without notice of the date, time, place or purpose of the meeting.

Section 2. Special Meetings. Special meetings of the Board of Directors shall be held when called by the President of the Association, or by any two Directors, after notice to each Director as provided herein. The secretary or other person or persons calling a special meeting shall give notice by any usual means of conununication to be sent at least three (3) days before the meeting if notice is sent by means of telephone, telecopy or personal delivery and at least five (5) days before the meeting if notice is sent by mail. A director's attendance at, or participation in, a meeting for which notice is required shall constitute a waiver of notice, unless the director at the beginning of the meeting (or promptly upon arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

Section 3. Quorum. A majority of the Directors shall constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the Directors at a duly held meeting at which a quorum is present shall be regarded as the act of the Board of Directors. In the event business cannot be conducted at any meeting because a quorum is not present, that meeting may be adjourned to a later date by the affirmative vote of a majority of those present in person or by proxy. Notwithstanding any provision to the contrary in the Declaration or these By-laws, the quorum requirement at the next meeting shall be one-half of the quorum requirement applicable, to the meeting adjourned for lack of a quorum. This provision shall continue to reduce the quorum by fifty percent (50%) from that required at the previous meeting, as previously reduced, until such time as a quorum is present and business can be conducted. Thereafter, the quorum requirement shall be restored to its original threshold.

Section 4. Meeting by Conference Telephone. Any one or more Directors may participate in a meeting of the Board by means of a conference telephone or similar communications device which allows all persons participating in the meeting to hear each other, and such participation in a meeting shall be deemed presence in person at such meeting.

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Section 5. Members' Forum . At regular intervals, the Board shall provide Members not on the Board the opportunity to attend a portion of a meeting of the Board and to address issues or concerns to the Board. The Board may impose reasonable restrictions on the number of persons who may speak on each side of an issue in such meetings and may place reasonable time restrictions on speakers in such meetings.

ARTICLE VII

POWERS AND DUTIES OF THE BOARD OF DIRECTORS

Section 1. Powers . The Board of Directors shall have the power to:

(a) adopt and publish rules and regulations governing the use of the Common Areas and Association Property including any improvements and amenities located thereon, and the personal conduct of the Members and their guests thereon, and to establish penalties for the infraction thereof, including fines;

(b) pursuant to reasonable notice and a right to a hearing in accordance with applicable North Carolina law, suspend the voting rights, and the right of use of any recreational facilities located on any Common Area during any period in which the Member is in default (for a period in excess of 30 days) in the payment of any assessment levied by the Association; these rights may also be suspended for an infraction of published rules and regulations;

(c) exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the Members by other provisions of these By-laws, the Articles of Incorporation, or the Declaration;

(d) employ one or more managers, independent contractors, or other employees or contractors as they deem necessary, and to prescribe their duties, which may include the carrying out of powers or duties of the Board of Directors herein specified;

(e) payment of all taxes and assessments validly levied, assessed or imposed with respect to the Area of Common Responsibility; and

(f) enter into agreements obligating the Association in accordance with the terms of the Declaration.

Section 2. Duties . It shall be the duty of the Board of Directors to:

(a) keep a complete record of all its acts and corporate affairs and to present a statement thereof to the Members at the amlual meeting of the Members, or at any special meeting when such a statement is requested in writing by the holders of one tenth (1/10) of the votes of the Members, and to make its financial and other records reasonably available for examination by Members and their authorized agents;

(b) supervise all Officers, agents . and employees of this Association, and to see that their duties are properly performed;

(c) as more fully provided in the Declaration:

(1) fix the amount of the Base Assessment, Neighborhood Assessment Special Assessment, Benefitted Assessment and all fees that may be charged by the Association, including without limitation the Transfer Fee, the Community Enhancement Fee and the Reserve Account Fund Fee, against each Lot and Dwelling Unit as provided in the Declaration;

(2) send written notice of each Base Assessment, Neighborhood Assessment Special Assessment, Benefitted Assessment and all fees that may be charged by the Association, including without limitation the Transfer Fee, the Community Enhancement Fee and the Reserve Account Fund Fee, to every Owner subject thereto, as provided in the Declaration; and

(3) foreclose the lien against a Lot or Dwelling Unit if the Owner thereof has not paid the assessment or fees thereon within such time as the Board of Directors may determine, or bring an action at law against the Owner personally obligated to pay the same;

(d) issue, or cause an appropriate Officer to issue, upon demand by any person and within 10 business days of receipt of such demand, a certificate setting forth whether or not any assessment has been paid; a reasonable charge may be made by the Board of Directors for the issuance of these certificates (if the certificate states that an assessment has been paid, the certificate shall be conclusive evidence of payment with respect to any person relying on the certificate);

(e) procure and maintain adequate liability and hazard insurance on property owned by the Association;

(f) cause all Officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate;

(g) cause the Area of Common Responsibility to be maintained in accordance with the terms of the Declaration and any other ag reements governing an Area of Common Responsibility; and

(h) perform, or cause to be performed on its behalf, and other obligations of the Board under the Declaration or agreements entered into by the Association in accordance with the teens of the Declaration.

ARTICLE VIII

OFFICERS AND THEIR DUTIES

on

Section 1. Enumeration of Offices . The Officers of this Association shall be a President and Vice-President, a Secretary, and a Treasurer, one or more Assistant Secretaries, and such other Officers as the Board of Directors may from time to time by resolution create (the "Officers"). An Officer may hold more than one (1) office at any given time, but there shall be no less than two (2) Officers holding the offices of President, Vice President, Treasurer and Secretary at any given time.

Section 2. Election of Officers . The election of Officers shall take place at the first meeting of the Board of Directors and thereafter at the first meeting of the Board of Directors following each annual meeting of the Members.

Section 3. Term . The Officers of the Association shall be elected annually by the Board of Directors and each shall hold office for one (1) year unless he shall sooner resign, or shall be removed, or otherwise disqualified to serve.

Section 4. Special Appointments . The Board of Directors may elect such other Officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board of Directors may, from time to time, determine.

Section 5. Resignation and Removal , Any Officer may be removed from office with or without cause by the Board of Directors. Any Officer may resign at any time by giving written notice to the Board of Directors, the President or the Secretary. Such resignation shall take effect on the date of receipt of the notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of the resignation shall not be necessary to make it effective.

Section 6. Vacancies . A vacancy in any office may be filled by appointment by the Board of Directors. The Officer appointed to the vacancy shall serve for the remainder of the term of the Officer he or she replaces.

Section 7. Duties. The duties of the Officers are as follows:

(a) President . The President of the Association (the "President") shall preside at all meetings of the Members and of the Board of Directors and see that orders and resolutions of the Board of Directors are carried out. The President shall have authority to sign all leases, mortgages, deeds of trust, deeds, and other written instruments, including but not limited to amendments to the Declaration and certifications thereof by the Association.

(b) Vice President . The Vice President of the Association (the "Vice President") shall act in the place and stead of the President in the event of his absence or inability or refusal to act, and exercise and discharge such other duties as may be required of him by the Board of Directors. The Vice President shall likewise have authority to sign all leases, mortgages, deeds of trust, deeds, and other written instruments, including but not limited to amendments to the Declaration and certifications thereof by the Association.

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(c) Secretary, Assistant Secretaries . The Secretary of the Association (the "Secretary") shall record the votes and keep the minutes of all meetings and proceedings of the Board of Directors and of the Members; serve notice of meetings of the Board of Directors and of the Members; keep appropriate current records showing the Members of the Association together with their addresses; prepare amendments to the Declaration or certifications thereof by the Association upon approval thereof by the Association; record amendments to the Declaration and/or certifications thereof by the Association; attest to the execution , of documents by the President or the Vice President; and perform such other duties as required by the Board of Directors. Any Assistant Secretary (the "Assistant Secretary") may act in the place and stead of the Secretary in the event of his or her absence or inability or refusal to act.

(d) Treasurer . The Treasurer of the Association (the "Treasurer") shall receive and deposit in appropriate bank accounts all monies of the Association and disburse these funds as directed by resolution of the Board of Directors; keep proper books of account; cause an independent annual audit, review or compilation of the Association books to be made by a public accountant at the completion of each fiscal year; and prepare an annual budget and a statement of income and expenditures to be presented to the Membership at its regular annual meeting, and deliver a copy of each to the Members requesting the same.

ARTICLE IX

COMMITTEES

The Board may establish and appoint committees from time to time as the Board decides is appropriate to assist in the conduct of the affairs of the Association. Committee members may, but need not, be Members. Committee members serve at the Board's discretion for such periods as the Board may designate by resolution or committee charter; provided, however, that any committee member, including the committee chair, may be removed by the vote of the majority of the Board.

ARTICLE X

BOOKS AND RECORDS

The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Member. The Declaration, the Articles of Incorporation and the By-laws of the Association shall be available for inspection by any Member at the principal office of the Association, where copies may be purchased at a reasonable cost.

ARTICLE XI

ASSESSMENTS AND FINES

• As more fully provided in the Declaration, each Member is obligated to pay to the Association assessments which are secured by a continuing lien upon the Lot or Dwelling Unit

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against which the assessment is made. If the assessment is not paid on the due date, the assessment shall bear interest as provided in the Declaration, and the Association may bring an action at law against the Owner personally obligated to pay the same or foreclose the lien against the Lot or Dwelling Unit, and interest, costs, and reasonable attorneys' fees of any such action shall be added to the amount of such assessment. No Owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the Common Areas or abandonment of its Lot or Dwelling Unit.

The Association may also establish a schedule of fines for violations of the terms of the Declaration. Fines may be imposed after notice to the Owner and an opportunity to be heard. Fines may be enforced in the same manner as assessments.

ARTICLE XII

AMENDMENTS

Section 1. These By-laws may be amended, at a regular or special meeting of the Members, by the holder of two-thirds (2/3) of the votes of the Members of the Association present in person or by proxy at the meeting at which the vote is taken; provided, however, the consent of the Declarant shall be required for any amendment until the Turnover Date.

Section 2. In the case of any conflict between the Articles of Incorporation and these By-laws, the Articles shall control; and in the case of any conflict between the Declaration and the Articles or these By-laws, the Declaration shall control.

ARTICLE XIII

MISCELLANEOUS

The fiscal year of the Association shall begin on the first day of January and end on the 31 St day of December of every year, except that the first fiscal year shall begin on the date of incorporation and end on the next occurrence of December 31 St

The seal of the Association shall be in the form impressed on the margin of this page or in such form as the Board of Directors shall adopt from time to time.

The signatures of two Officers shall be required for withdrawal of funds from the Major Reconstruction Fund described in the Declaration.

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CERTIFICATION

I, the undersigned, do hereby certify:

THAT I am the duly elected and acting Secretary of Creekside at Bethpage Association, Inc. a North Carolina nonprofit corporation; and

THAT the foregoing By-laws constitute the original By-laws of said Association, duly adopted by the Board of Directors thereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name as of the day of ✓ ~ ~ ,20 6_ JJf

/( /WL Secretary

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\\'CSR 31862818v3

Exhibit C

flEl]l" HJ < (tI) ; r 1' t flhiJI , Li I

(See attached.)

WCSR 33609750v2

Prepared by: City of Durham, Department of Public Works, 101 City Hall Plaza, Durham, NC; Please return to: Womble Carlyle Sandridge & Rice, LLP, 150 Fayetteville Street, Suite 2100, Raleigh, NC, 27601; ATTN• Nellie I. Shipley

STATE OF NORTH CAROLINA STORMWATER FACILITY AGREEMENT COUNTY OF DURHAM AND COVENANTS (Residential Version)

THIS AGREEMENT ("Agreement ") is made among AVH Bethpage, LLC, an Arizona limited liability company ( "Permittee "), Creekside at Bethpage Association, Inc., a North Carolina corporation ("Association"), and the City of Durham, a North Carolina municipal corporation ("City") and is effective on the date of its recordation in the Durham County Register of Deeds.

1. Background and Definitions

a. Scope; Purpose. Permittee owns and is developing real property (the "Property") that, upon completion of development, will contain one or more constructed stormwater improvements (the "Facility/ies") to control stormwater runoff and pollution from the Property. After construction, Permittee will transfer portions of the Property, including the Facility/ies, to the Association, which will be responsible for perpetual maintenance, annual inspection, repair, reporting to the City, and reconstruction of the Facility/ies. This Agreement sets forth Permittee's obligations to construct the Facility/ies in accordance with the obligations of this Agreement and other City Requirements, inspect and certify the Facility/ies, pay certain monies toward the replacement of the Facility/ies, and establish the Association and its obligations, through legally binding covenants. This Agreement also sets forth the responsibilities of the Association with regard to the Facility/ies. This Agreement is appurtenant to and runs with the Property, described in Section 1(b) below. The purpose of this Agreement is to ensure construction of the Facility/ies per City Requirements, to ensure the perpetual inspection, maintenance, repair, and reconstruction of the Facility/ies by Lot Owners within the Property, and to allow the City in its discretion to enforce these requirements, if necessary, for the benefit of the Lot Owners collectively, and the public at large.

b. Property to which this Agreement Attaches. The Property is that property shown on the plat recorded at Plat Book 193, Pages 8-11, Lot 1, Durham County Register of Deeds. It is generally located north of the intersection of Chin Page Road and Page Road and is commonly known as Creekside at Bethpage Ph. 1. It is part or all of the property acquired by Permittee in deeds recorded in Deed Book 7443, Page 113, Durham County Register of Deeds. The Facility/ies that must be constructed, certified, maintained, inspected annually, repaired, and reconstructed pursuant to this Agreement are located on the following lots on the above described plat and are of the following approximate size and type:

one (1) wet detention pond (WP#1) to detain the 1-, 2-, 10-, and 100-year storm events and provide

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TSS and nutrient removal designed with a storm surface area of 22,069 square feet, a drainage area of 9.98 acres and a permanent pool volume of 39,638 cubic feet. It is located behind Lots 4-8.

ii. one (1) wet detention pond (WP#2) to detain the 1-, 2-, 10-, and 100-year storm events and provide TSS and nutrient removal designed with a storm surface area of 71,175 square feet, a drainage area of 27.52 acres and a permanent pool volume of 235,438 cubic feet. It is located behind Lots 63 and 64.

iii. one (1) wet detention pond (WP#3) to detain the 1-, 2-, 10-, and 100-year storm events and provide TSS and nutrient removal designed with a storm surface area of 42,426 square feet, a drainage area of 21.99 acres and a permanent pool volume of 108,623 cubic feet. It is located behind Lots 104-108.

iv. one (1) level spreader (LS#3) located downstream of WP#3 with a level lip length of 11.5 feet; and v. one (1) level spreader (LS#2) located downstream of WP#2 with a level lip length of 11.5 feet.

c. Background. This Agreement is intended to comply with City ordinances and policies that implement State and Federal laws that require that development contain stormwater facilities to control runoff and pollution and that such facilities be perpetually maintained and reconstructed.

d. Relationship to Ordinances, Policies, and Guidelines. This Agreement supplements other City Requirements. If this Agreement and such City Requirements conflict, the stricter requirements shall control.

e. Definitions. The terms in this Agreement have the following definitions: "Association" and "HOA" (the terms being used interchangeably) means the association that has executed this

Agreement that was formed by Permittee in compliance with statutory requirements (which may include the North Carolina Nonprofit Corporation Act, NCGS Chapter 55A, and the North Carolina Planned Community Act, NCGS Chapter 47F and successor statutes) for the purpose of owning and maintaining real property and improvements thereon intended for the common benefit of - Lot Owners within the Property-. In the absence of the Association, for whatever reason, the Lot Owners, collectively, shall be considered the Association and shall be responsible for the Association's obligations under this Agreement. The "Association" may also include additional associations or lot owners not shown on the Property where such associations or owners have joined, or have purchased subject to, the obligations of the Association in this Agreement.

"City Manager" means the Durham City Manager or a Deputy City Manager to whom authority to execute contracts has been delegated.

"City Fund" means "Stormwater Facility Replacement Fund" as defined below. "City Requirements" means the legal obligations and standards set forth in City ordinances, and written City and

Public Works policies, guidelines, manuals, protocols, standards, and/or handbooks, as such may be amended from time to time,

"Director" means the City's Director of Public Works or the Director of a successor department to the Department of Public Works and any Person to whom the Director's duties have been delegated pursuant to City Requirements.

"Facility/ies" means one or more stormwater control device(s) and/or areas that are created for the purpose of detaining and/or treating stormwater. Such facilities may include but are not limited to dry detention areas, wet detention ponds, wetlands, level spreaders and all associated constructed and natural features that allow such devices or areas to function as intended.

"Lot" means a lot within the Property, whether developed or undeveloped. "Lot Owner" means the legal owner of any fee simple interest in a Lot. "Permittee" means the party that owns the Property at the time of recordation and that executes this Agreement

and successors in interest who take all or a portion of the Property. The term does not include any Person that has only a beneficial interest in the Property. The term also does not include a Person who owns one Lot zoned for single family use where such owner does not own other lots.

"Person" includes but is not limited to natural persons, business trusts, joint ventures, governments, governmental subdivisions, governmental agencies, firms, corporations, limited liability companies, associations, partnerships, and other legal entities.

"Property" is the land described in Section 1(b) above which is owned by the Permittee and which will be served by the Facility/ies described herein.

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WCSR 33342070v6

"Site" means a Lot or parcel within the Property which contains at least one Facility. Where there are multiple Facilities, there shall be multiple Sites.

"Stormwater Facility Replacement Fund" (also "City Fund") is the fund established by the City under ordinance to receive payments from various permittees for future use in the construction, repair, and reconstruction of facilities for which payment into the fund has been made, or for replacement facilities that mitigate the burden on or need for such original facilities.

"Transfer" includes sell, convey, assign or alienate all or a portion of an interest in property.

2. Permittee's Obligations to Create HOA; Record Documents and Covenants; Provide Certification; and Make Fund Payment Prior to Transferring Interest in, or Selling any Lots.

a. Incorporation of Association; Recording Documents and Covenants. Permittee shall incorporate an Association consisting of all Lot Owners in the Property which Association shall be charged with maintaining and repairing common areas within the Property, of which the Facility/ies shall be a part. Permittee shall create covenants for the Association which comply with this Agreement and which include Exhibit A to this Agreement, the Mandatory Covenant Requirements Regarding Stormwater Facilities. At the same time as the final plat for the Property is filed in the Office of the Register of Deeds for Durham County, and before Transfers of any interest in or Lots within the Property, Permittee shall take the following actions and complete the following additional filings in the Register of Deeds for Durham County, in the order indicated below:

i. Finalize this Agreement by inserting the appropriate plat book and page references for the just-recorded plat for the Property in Section 1(b) above and adding any other missing entries or information;

ii. Record this Agreement, properly executed by all Parties so as to bind the Permittee, the Association, and the Property;

iii. Finalize the covenants for the Property by inserting the plat book and page numbers for the Property, the deed book and page numbers for this Agreement, and necessary language to incorporate Exhibit A of this Agreement into the Covenants;

iv. Record the properly executed Covenants for the Property.

b. Delivery of Recorded Documents and Attorney Certification. Within 5 working days of completing the steps described in 2(a) above, and prior to Transferring any interest in the Property, including but not limited to the sale of any Lot, and prior to applying for and receiving any building permits for any Lot, Permittee shall deliver to the City's Stormwater Services Division an attorney's certification, as described below, and copies of the properly executed and recorded documents described in (a) above — i.e., the recorded plat, the recorded Agreement, and the recorded covenants for the Property, The attorney certification shall be from an attorney licensed to practice law in the State of North Carolina, in form and substance acceptable to the City that certifies to the following:

i. That the Association was properly formed and incorporated in North Carolina in accordance with law; ii. That this Agreement has been executed by the Association, and the Agreement and the Covenants for

the Property run with the land and are therefore binding on the Permittee, the Association and the Property, including the current and future owners thereof;

iii. That the Agreement contains necessary references to the recorded plat for the Property, and that the Covenants for the Property contain necessary references to the recorded plat and the recorded Agreement, and incorporate Exhibit A of this Agreement;

iv. That recordation of instruments described above occurred in the following order — plat, then Agreement, then Covenants;

v. that the Covenants for the Property require membership for each Lot within the Property (except commonly owned Lots which may be excepted) and a rational allocation of the cost of maintenance, repair, and reconstruction of the Facility/ies amongst all such member Lots exists;

vi. that the mandatory dues amounts for the two stormwater funds have been included in the Covenants; vii. that the Covenants provide a process for assessing the Lot Owners for delinquent payments and for

additional payments for stormwater costs and enforcing such assessments and that the City is named as

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WCSR 3334207Ov6

a third party with the right to enforce such assessments in lieu of the Association if necessary.

c. Payment to Stormwater Facility Replacement Fund. At the time of delivery of the recorded documents and certification, Permittee shall pay the estimated Stormwater Facility Replacement Fund payment, prescribed by City Requirements, which shall equal 25% of the estimated cost of constructing the Facility/ies, calculated in accordance with City Requirements. This payment is not intended as a substitute for security that ensures the construction of the Facility/ies, which security may be required at such point in the development process as is specified in City Requirements. Per City Requirements, Permittee may be required to supplement the payment into the Fund Payment upon completion of the Facility/ies, or may be refunded a portion of such payment.

d. Payment of Permit Fee(s). At the time of delivery of the recorded documents and certification, Permittee shall pay the Stormwater Permit Fee for each of the Facility/ies, as prescribed by City Requirements.

3. Permittee's Obligations with Regard to Construction of Facility/ies; Denial of Permits in the Event of Noncompliance.

a. Construction, Inspection Certification, and Submission of As-Built Construction Drawings. Permittee shall complete the actions described below for the Facility/ies on such timetable as is specified in City Requirements.

i. Construct the Facility/ies in accordance with the construction plans approved by the Department of Public Works and take various steps toward final completion, and finally complete the Facility/ies, in accordance with such timetables and/or deadlines specified in City Requirements;

ii. Provide any additional security required by the Director to ensure construction of the Facility/ies if the deadlines described in (i) above have not been met, or in the event that Permittee becomes insolvent or otherwise unable to proceed with construction on the Property;

iii. Cause the Facility/ies to be finally inspected and certified by the engineer who designed the Facility or by such other registered NC Professional Engineer acceptable to the City, in accordance with the City's BMP Certifying Engineer Program and other City Requirements;

iv. Submit to the Department of Public Works reproducible as-built drawings and as-built calculations acceptable to the Department;

v. Complete an operation and maintenance manual for each Facility in accordance with City Requirements;

vi. Submit records to the City Stormwater Services Division in accordance with City Requirements documenting construction costs for the Facility, including but not limited to all costs of construction administration;

vii. Complete any repairs to the Facility/ies that may be directed in the discretion of the Director;

hl the event Permittee does not satisfactorily complete the foregoing obligations on such timetable as may be specified by the City, the City may withhold any permits and approvals related to development of the Property or any Lot and may pursue any other remedy available under this Agreement or applicable law.

b. Transfer of Site and Facility to Association. After satisfactory completion of the steps described in subsection (a) above, Permittee shall Transfer the Site(s) to the Association(s) which shall, thereafter, become responsible for inspection, maintenance, and reconstruction of the Facility/ies as set forth in Section 4 below. Permittee's transfer of the Site prior to completion of the steps described in (a) above shall not relieve Permittee of its obligations under this Agreement.

c. Discharge of Permittee's Obligations; Recordation of Release. Following satisfactory performance of its obligations under this Agreement, Permittee may request a release from the Director in writing. Within 30 calendar days of receipt of such request and receipt of all accompanying documentation and certifications required by the City, upon determination that Permittee has satisfied its obligations, the Director shall issue a release confirming that

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WCSR 3334207Ov6

Permittee has fulfilled its obligations under this Agreement and is discharged from such obligations. Permittee shall record such release at the Durham County Register of Deeds. In its discretion, the City may record any documents indicating that construction of the Facility/ies has been completed and/or that Permittee is released from the obligations of this Agreement.

d. Notice to Lot Owners and Successors in Interest to Permittee. Recordation of this Agreement gives notice to all Lot Owners that building permits may be withheld for Lot(s) in which they have an interest in the event of Permittee noncompliance with Section (2) above or this Section (3). In addition, it gives notice to all Persons who may be considered "Permittee" under the definitions herein that approvals and permits related to development of the Property may be withheld in the event of Permittee noncompliance with this Agreement.

4. Association/Lot Owner Responsibility for Completed Facility/ies

a. Association's/Lot Owners' Continuing Permanent Responsibility for Facili /ies. Upon release of Permittee as described in Section 3(c) above, or if no release occurs, then upon official notification to the Association from the City, the Association, or in the event there is no legally effective Association, the Lot Owners collectively shall be responsible for inspection, maintenance, repair, reconstruction, and funding for the completed Facility/ies, and shall comply with all City Requirements. The Association shall be responsible for performing these obligations whether or not the Site and/or the Facility/ies have been legally transferred to the Association. The obligations of the Association, or the Lot Owners in the absence of an Association, are further described below.

b. Filing of Responsible Officer for Association with City. The Association file with the City's Department of Public Works, and update such filing yearly, the name and contact information of a responsible officer or agent for the Association who is familiar with the maintenance and upkeep of the Facility. The filing shall also be updated when there is a change in the responsible officer or agent.

c. Maintenance. The Facility/ies shall be maintained in compliance with City Requirements as they may change from time to time. At the time of recordation of this Agreement these are generally found in the City of Durham's "Owner's Maintenance Guide for Stormwater BMPs Constructed in the City of Durham" and in the operation and maintenance manual prepared specifically for the Facility/ies at the time of completion of construction. (As of October 1, 2007, the current version of the "Owner's Maintenance Guide for Stormwater BMPs Constructed in the City of Durham" can be viewed at or downloaded from the City's website at: Irttp://durhamnc gov/ich/o /p pwd/stor-m/DocumentsBMCProgramChanges2013/Owner's%2OMaintenance%2OGuide%20 for%20Stormwater%20BMPS.pdf)

d. Inspections/Reports to City. In accordance with City Requirements, the Association shall cause the Facility/ies to be inspected (i) annually; (ii) after events that cause visual damage to the Facility; and (iii) upon notification by the Director. The inspection shall be performed by a registered North Carolina Professional Engineer or a North Carolina Registered Landscape Architect certified by the City and shall be in compliance with City Requirements. The inspection shall occur annually during the month in which acceptance of the as-built certification for the Facility/ies occurred, or at such other time as may be reasonably directed by the City. The inspection shall be reported to the City as further described below.

e. Repair and Reconstruction. The Association shall repair and/or reconstruct the Facility/ies as it determines is necessary, and, additionally, as may be directed by the City, to allow the Facility/ies to function for its/their intended purpose, and to its design capacity. The Association shall provide written reports regarding major repair or reconstruction to the City in accordance with City Requirements.

f. Budget Line Items for Stormwater Expenses. The dues of the Association shall include amounts for upkeep and reconstruction of the Facilities and charges for these purposes shall be included in the dues charged to Lots

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from the point that Lots are charged dues for other common purposes. The Association shall maintain two (2) separate funds in its budget for the Facility/ies. The first ("Inspection and Maintenance Fund") shall be for routine, yearly Facility expenditures -- annual inspections, maintenance, and routine repairs — and the funds for this purpose may be maintained as part of the Association's general account. The second ("Major Reconstruction Fund") shall be dedicated to a separate, increasing reserve fund that will build over time and provide money for major repairs to and eventual reconstruction of the Facility/ies. The Major Reconstruction Fund shall be maintained in an account that is separate from the HOA's general account as described below. At a minimum, the Association shall earmark $11,864.00 [WP1: $2,920.00; WP2: $3,279.00; WP3: $3,069.00; LS2: $1,298.00; LS3: $1,298.00] annually from its collected dues for the Inspection and Maintenance Fund and $2,531.00 [WP1: $691.00; WP2: $780.00; WP3: $728.00; LS2: $166.00; LS3: $166.00] annually for the Major Reconstruction Fund. These minimum amounts shall generally be increased annually by 3%, more or less, per year over the prior year's amount. The Association shall set a higher amount if the Director determines, in his/her reasonable discretion that additional amounts are necessary to provide for adequate inspections and maintenance or for an adequate reserve fund, The Association shall set dues at a sufficient amount to fund each of the two line items in addition to the Association's other obligations. The Association may compel payment of dues through all remedies provided in the Covenants for the Property or otherwise available under law.

g. Assessments/Liens . In addition to payment of dues, each Lot shall be subject to assessments by the Association for the purpose of fulfilling the Association's obligations under this Agreement. Such assessments shall be collected in the manner set forth in the covenants. As allowed under NCGS §47F, or successor statutes, or, for condominiums, as allowed under NCGS 47C, or successor statutes, all assessment remaining unpaid for 30 days or longer shall constitute a lien on the Lot. Such lien and costs of collection may be filed and foreclosed on by the Association. In addition, the Association's rights may, in the discretion of the City, be exercised by the City, as a third party beneficiary of this Agreement and/or as Attorney in Fact for the Association, as provided in Section 7 of this Agreement, without limitation as to other rights the City may have under this Agreement and under law,

h. Stormwater Expenditures Receive Highest Priority . Notwithstanding any contrary provisions of the Association's recorded covenants, to the extent not prohibited by law, the inspection, maintenance, repair, and replacement/reconstruction of the Facility/ies shall receive the highest priority (excluding taxes and assessments and other statutorily required expenditures) of all Association expenditures.

i. Separate Account for Major Reconstruction Fund; Requirements for Withdrawal . The Association shall maintain the major reconstruction fund for the Facility/ies in an account maintained at a bank or other similar institution and such account shall be separate from the Association's general account. The Association shall use the Major Reconstruction Fund only for major repairs and reconstruction of the Facility/ies. The Association's bylaws shall require that signatures of two Association officers are required for withdrawal of funds from the Major Reconstruction Fund.

j. Engineer Report prior to Major Repairs and Reconstruction . Prior to withdrawing funds from this account, the Association shall (i) obtain a written report from an engineer approved in accordance with City Requirements regarding repairs or reconstruction needed and approximate cost of such repair or reconstruction; and (ii) submit such report to the Director and notify the Director of the major repairs or reconstruction to be undertaken on the Facility, the proposed date, and the amount to be withdrawn from the Major Reconstruction Fund. In the event of an emergency withdrawal and expenditure of funds from the Major Reconstruction Fund may be made after telephone notification to the Stormwater Services Division of the Department.

k. Annual Reports to City, The Association shall provide to the Director annual reports in substance and form as set forth in City Requirements. This annual report shall be signed by an officer of the Association, who shall attest as to the accuracy of the financial information in such report. If prepared by a professional management company hired to manage the Association's affairs, the report shall so indicate. The Officer's signature and attestation shall be notarized. At a minimum each report shall include:

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WCSR 33342070v6

i. the annual Facility/ies inspection report described in Section 4(d) above;

ii, a bank or account statement showing the existence of and balance in the separate Major Reconstruction Fund at the time of submission of the report;

iii. other information regarding the Facility/ies as may be required under City Requirements; iv. the amount of Association dues being set aside for the current year for each of the two purposes — the

Inspection and Maintenance Fund, and the Major Reconstruction Fund.

1. Facility/ies to Remain with Association; Lot Owners' Liability. To the extent not prohibited by law, the Facility/ies shall remain the property of the Association and may not be conveyed by the Association. In the event the Association ceases to exist or is unable to perform its obligations under this Agreement, all Lot Owners with the exception of those Lots owned by the Association shall be jointly and severally liable to the City to fulfill the Association's obligations under this Agreement. Such Lot Owners shall have the right of contribution from other owners with each Lot's proportional obligation calculated as set forth in the Covenants for the Association. In addition, the City may exercise the remedies described in Section 7 of the recorded Agreement. This Agreement and all other remedies provided by law.

m. No Public Adoption. The City's exercise of rights under this Agreement or under City Requirements does not constitute adoption of the Facility/ies by the City. City regulation is not intended to impede or prohibit the Association or Lot Owners from taking all necessary actions to maintain, repair, and reconstruct the Facility/ies so that they function safely and perform the function for which they were created.

5. Stormwater Facility Replacement Payment and Fund.

The Permittee's payment to the Stormwater Facility Replacement Fund ("City Fund") shall be calculated, retained, used, and disbursed as provided by ordinance and other City Requirements. The Fund shall be used for the purchase, design, construction, reconstruction, and repair of stormwater facilities that have paid into the Fund or for stormwater facilities that replace or mitigate the need for those facilities for which monies have been paid into the Fund.

6. City Easement/Right of Entry/No City Responsibility

Permittee, the Association, and the Lot Owners hereby grant the City a permanent nonexclusive easement over the Site and Facility/ies for inspection, construction, repair, and other work on the Facility. The terms and conditions regarding the use of such easement may be expanded but not limited by recorded declarations regarding the use of such easements. Permittee, the Association, and the Lot Owners also grant the City a permanent nonrevocable nonexclusive right of ingress, egress, and regress over and across all public or private easements on the Property, including but not limited to private roads, for inspection, construction, repair, and other work on the Facility/ies. Permittee and Lot Owners grant the City a permanent nonrevocable nonexclusive right of ingress, egress, and regress over individual Lots solely for response to emergencies, public nuisances, or the imminent threat thereof. In this Section, "the City" includes employees, agents, and contractors of the City. The grant of these rights does not obligate the City to exercise them or to take any other action.

7. Remedies for Violations; Lien on Property; Future Obligations Secured:

a. City Performance of Work. If the Permittee and/or Association fail to perform their obligations under this Agreement, the City may send notice to the party (ies) in default demanding performance. If the defaulting party does not cure such default within sixty (60) days from the date notice is mailed, the City may, in the reasonable discretion of the Director, enter the Property and the Site and perform some or all of the defaulting party's obligations under this Agreement. In an emergency the City may perform such work prior to the expiration of the 60 day period. Nothing in this Agreement shall be interpreted to require the City to undertake a party's obligations under this Agreement.

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b. Repayment of City. The defaulting party shall reimburse the City for its costs in inspecting, constructing, repairing, and reconstructing the Facility/ies. Such costs may include the cost of administration and overhead. The City shall send written notice to the party in default requesting reimbursement for the costs of the work. The defaulting party shall pay all such costs within sixty days of the date he notice is mailed. Any costs not paid to the City within the sixty day period shall be delinquent, and the defaulting party shall be subject to all legal remedies available to the City under law or equity.

C. Debt Owed in the Event of Nonpayment; Lien. In the event that the defaulting party does not reimburse the City as required in subsection (b) above, the party shall owe the following additional amounts: interest on such costs at the rate of eight percent (8%) per annum, collection costs, late payment charges of three hundred dollars ($300) for the first ninety (90) days of default and five hundred dollars ($500) additional charge for each ninety (90) day period thereafter, and reasonable attorneys' fees. The debt may be collected by the City using any remedy authorized by law or in this Agreement. In addition, the debt or a proportional amount thereof calculated using a methodology reflecting number of lots, value of Property, types of uses, or a combination of these factors, as determined in the City's sole discretion, shall be a lien against the Property and the Lots and may be collected as unpaid taxes in accordance with N.C.G.S. 160A-193 or other statutory provisions, with notice as may be required by law. The City may add the debt to any utility bills owed and utilize any remedy provided by law or ordinance for unpaid utility bills. The City may also foreclose on the liens.

d. Right to Act for the Association. In addition to all of the remedies set forth herein, if the defaulting party is the Association and payment has become delinquent as described in paragraph (b) the City may, with additional 30 days' written notice to the Association, pursue the right of the Association to repay the amount due, as calculated in accordance with the Articles of Incorporation, Covenants, and Bylaws of the Association. The Association hereby designates, constitutes and appoints the City as the Association's Attorney in Fact for the express and limited purpose of assessing and pursuing collection of such amounts under the conditions and limitations as set forth herein. This appointment is coupled with an interest and is irrevocable as long as this Agreement is in effect.

e. Withholding of Permits. In the event the defaulting party is the Permittee, the City may withhold any or all permits or other approvals necessary to complete development of the Property or any Lot until such time as Permittee fulfills such obligations.

Release of Lien by Certificate.

a. Duty to Furnish a Certificate. On the request of any of the Persons described in subsection (a) (i) below, and upon the condition prescribed by subsection (a) (ii) below, the Director shall furnish a written certificate stating the amount of any monetary liabilities owed pursuant to this Agreement by a party to this Agreement or a Lot Owner.

i. Who May Make Request -- Any of the following Persons shall be entitled to request the certificate: A. An owner of the Property; B. An occupant of the Property; C. A Person having a lien on the Property; D. A Person having a legal interest in the Property, including but not limited to a Lot Owner; E. A Person having a contract to purchase or lease the Property or Lot or a Person that has

contracted to make a loan secured by the Property or Lot; F. The authorized agent or attorney of any Person described in subdivisions (a) (i) (A) through (E)

above.

ii. Duty of Person Making Request -- The City's duty to furnish a certificate is contingent upon the requester providing the following, as may be specified by the Director: the name of the party regarding whom the

WCSR 3334207Ov6

certificate is requested; the property regarding which the certificate is requested (the Property as a whole, some portion of the Property, or a Lot); recordation information for the pertinent Agreement; recordation information for pertinent covenants, if the request concerns an Association or Lot; a copy of the first page of this Agreement; a copy of the first page of the Association's Covenants; and payment of the required fee for a certificate.

b. Reliance on the Certificate. When a certificate has been issued as provided in subsection(a) above, all monetary liabilities owed pursuant to this Agreement that have accrued against the Site or the Property or the Lot identified in the request for the period covered by the certificate shall cease to be a lien against the identified property for which the certificate has been issued, except to the extent of monetary liabilities stated to be due in the certificate, as to all Persons obtaining such a certificate and their successors in interest who rely on the certificate by doing one or more of the following:

i. Paying the amount of monetary liabilities stated therein to be owed; ii. Purchasing or leasing a portion of the Property; or iii. Lending money secured by all or part of the Property.

C. Oral Representations not Effective. Without limiting the effect of this Section, no oral statement made by any City employee as to the amount of monetary liabilities that are owed by the Permittee or a Lot Owner, or are a lien on all or a portion of the Property pursuant to this Agreement, shall be legally effective, or shall bind the City.

9. Warranty. Permittee covenants with the City that Permittee is seized of the Property in fee simple, has the right to convey the same in fee simple, that title is free and clear of all encumbrances, except for those identified in the Opinion of Title furnished to the City as a requirement prior to the City's execution of the Agreement, and that Permittee will warrant and defend the title against the lawful claims of all persons except for the exceptions stated in such opinion of title.

10. Notice. When a notice is required or permitted by this Agreement, it shall be given in writing to the City delivered to the Director of Public Works, 101 City Hall Plaza, Durham, NC 27701, FAX: (919) 560-4316 or upon the Permittee/Association at Creekside at Bethpage Association, Inc., 7901 Strickland Road, Suite 108, Raleigh, NC

27615; ATTN.: President (Dave M ulac) . Written notice shall be sent by first class mail, and in addition by facsimile, if a fax address can be determined. Parties' addresses may be changed by sending a notice of the new address attached to a copy of the first page and execution pages of this Agreement.

11. No Waiver of Breach. If the City fails to enforce or waives any breach of any obligation or covenant in this Agreement, that failure to enforce or waiver shall not constitute a waiver of any other or future breach of the same or any other obligation or covenant. The City's failure to exercise any right under this Agreement shall not constitute a waiver of that right.

12. Agreement Binding. This Agreement and Covenants shall bind the Association in perpetuity and shall bind Permittee and its successors in interest until the City releases such Permittee as described in Section 3 above. A Lot Owner's obligations and liabilities under this Agreement shall cease upon conveyance of his/her Lot.

13. Amendment of Agreement. Amendments to this Agreement shall be valid only if made in writing and signed by the parties, provided that the Permittee's signature shall not be required if the Permittee has ceased to exist or has been released by the City as provided in Section 3 above. The City Manager may, on behalf of the City, amend this agreement without approval by the City Council.

14. Covenants Herein to Run with the Property. The obligations of this Agreement are a perpetual servitude and appurtenant to and running with the Property, -- the Site, and the Lots.

n WCSR 3334207Ov6

15. Successors and Assigns. The designation of Permittee, Association and the City shall also include their heirs, assigns, and successors in interest.

16. Liability; Indemnification.

a. The approval by the City or any employee of the City of any plans or of any work referred to in this Agreement shall not create any liability in the City or its officers, officials, or employees for the plans or the work. Nothing herein is intended to release any other Person for any liability for those plans or work.

b. The performance by the City or any employee of the City of any work allowed under this Agreement shall not create any liability in the City or its officers, officials, or employees for the work. Nothing herein is intended to release any other Person for any liability for that work.

c. The Permittee, prior to release from the City, and the Association, after the Facility/ies are constructed shall indemnify the City and its officers and employees for any costs to the City or such Persons resulting from any claims regarding the construction, operation, maintenance, repair, and/or reconstruction of the Facility/ies, or the failure to perform the same. Costs shall include but are not limited to the expense of counsel chosen by and acceptable to the City.

17. Remedies not Exclusive . The provision of specific remedies in this Agreement is not limiting and the City shall have all remedies available in law and in equity to enforce the provisions of this Agreement against the Permittee, the Association, and/or the Lot Owners, and their respective heirs, personal representatives, successors, and assigns.

18. No Third Party Rights. Except as may be explicitly provided in this Agreement, this Agreement is not intended to be for the benefit of any Person other than the parties hereto, the Lot Owners, and their heirs, personal representatives, successors, and assigns.

19. Governmental Functions; Superseding Regulations . Nothing contained in this Agreement shall be deemed or construed to in any way estop, limit, or impair the City from exercising or performing any regulatory, policing, legislative, governmental, or other powers or functions. In addition, this Agreement does not restrict or prevent the application of ordinances or other enactments which may supplement or supersede the provisions of this Agreement.

20. Choice of Law and Forum. This Agreement shall be deemed made in Durham County, North Carolina and shall be governed by and construed in accordance with the law of North Carolina. The exclusive forum and venue for all actions arising out of this Agreement shall be the North Carolina General Court of Justice, in Durham County. Such actions shall neither be commenced in nor removed to federal court. This section shall not apply to subsequent actions to enforce a judgment entered in actions heard pursuant to this section.

21. Interpretation of this Agreement. Unless the context requires otherwise, the singular includes the plural, the plural includes the singular, and the neuter includes the masculine and feminine. The captions and titles are for convenience only, and are not to be used to interpret the Agreement. The words "include" and "including" mean, respectively, "include but not limited to", and "including but not limited to".

22. Severabili.ty . Invalidation of any term or provision in this Agreement by a court of competent jurisdiction shall not invalidate the remaining terms and provisions of this Agreement which may be enforced, at the election of the City, as set forth herein.

23. E-Verify Compliance . The contractor represents and covenants that the contractor and its subcontractors comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes (NCGS). The City is relying on this E-Verify Compliance section in entering into this contract. The parties agree to this section only to the

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extent authorized by law. If this section is held to be unenforceable or invalid in whole or in part, it shall be deemed amended to the extent necessary to make this contract comply with NCGS 160A-20.1(b).

IN WITNESS WHEREOF, the parties hereto have respectively set their hands and seals, or if corporate, have executed this under seal by their proper officers, to be effective as of the date of its recordation in the Durham County Register of Deeds.

AVII BETHi ACRE+ , LLC, an Arizona limited liability company

By: AVH Carolinas, LLC, an Arizona limited liability company Its: Sole Member

By: Avatar Properties, Inc., a Florida corporation Its: Sole Member

Signed: Printed Name: Title:

I , a notary public in and for the aforesaid county and state, certify that personally appeared before me this day and acknowledged the execution of the

foregoing agreement with the City of Durham. This the day of , 20

Notary Public My commission expires:

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CREEKSIDE AT BETIIPAGE ASSOCIATION, INC., a North Carolina corporation

ATTEST: Signed:

Printed Name: Title: Secretary [Affix Corporate Seal]

Signed:

Printed Name: Title: President

STATE OF _ COUNTY OF

I, , a notary public for said county and state, certify that personally appeared before me this day, and acknowledged he or she is Secretary of Creekside at Bethpage Association, Inc., a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing agreement with the City of Durham was signed in its name by its President, whose name is

and attested by him/herself as its said Secretary or Assistant Secretary.

This the day of

1J

Notary Public My commission expires:

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ATTEST:

City Clerk

Type or print name person signing for the City:

City Manager

Nance of other party to the contract: AVH Bethpage, LLC• Creekside at Bethpage Association, Inc,

Title of the contract. Stormwater Facility Agreement and Covenants (Creekside at Bethpage Ph, 1)

I a notary public, certify: (Type or print name of Notary Public)

(1) personally appeared before me (Type or print name of City Clerk or Deputy City Clerk who attested)

in Durham County, N. C. on this day; (2) I have personal knowledge of her identity; and (3) she acknowledged that by authority duly given and as the act of the City of Durham, the foregoing document was signed in its corporate name by its City Manager, sealed with its corporate seal, and attested by its said City Clerk or Deputy City Clerk.

This the day of , 20

My commission expires: Notary Public

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EXHIBIT A TO

STORM WATER FACILITY AGREEMENT AND COVENANTS

MANDATORY PROVISIONS FOR DECLARATION OF RESTRICTIVE COVENANTS

ARTICLE (fill in)

Obligations Regarding Stormwater Facilities

The Property includes one or more stormwater management facilities (hereafter "Facility/ies") that is/are the perpetual responsibility of the Association. Such Facilities are the subject of a Stormwater Facility Agreement and Covenants ("Stormwater Agreement") between Declarant, the Association, and the City of Durham ("the City") that is binding on the Association. The Stormwater Agreement is recorded at DB Page , Durham County Register of Deeds. The Property subject to that Stormwater Agreement is the "Property" referred to in this Article, The Stormwater Facilities must be maintained in accordance with City Requirements, which include all ordinances, policies, standards, and maintenance protocols and in accordance with the recorded Stormwater Agreement. In particular the City's current "Owner's Maintenance Guide for Stormwater BMPs Constructed in the City of Durham" (available at the time of recording this document at Imo) ://d urhamnc. gov/ich/op/pwd/storm/Documents/BMCPrograinChanges2013/Owner's%2OMainten ance%20G a id e%20 for%20Stormwater%20BMPS.pdf and the operation and maintenance manual prepared specifically for the Facility/ies contain requirements that apply to the Association's Facilities.

Nothing in the remaining Article of these Restrictive Covenants filed by Declarant as part of this Declaration or any subsequent modifications of this Declaration may reduce the Association's or Lot Owners' obligations with regard to the Facility/ies. Such additional covenants may increase the obligations or provide for additional enforcement options.

The Stormwater Facility/ies and their location are as follows:

vi. one (1) wet detention pond (WP#1) to detain the 1-, 2-, 10-, and 100-year storm events and provide TSS and nutrient removal designed with a storm surface area of 22,069 square feet, a drainage area of 9.98 acres and a permanent pool volume of 39,638 cubic feet. It is located behind Lots 4-8,

vii. one (1) wet detention pond (WP#2) to detain the 1-, 2-, 10-, and 100-year storm events and provide TSS and nutrient removal designed with a storm surface area of 71,175 square feet, a drainage area of 27.52 acres and a permanent pool volume of 235,438 cubic feet. It is located behind Lots 63 and 64.

viii. one (1) wet detention pond (WP#3) to detain the 1-, 2-, 10-, and 100-year storm events and provide TSS and nutrient removal designed with a storm surface area of 42,426 square feet, a drainage area of 21.99 acres and a permanent pool volume of 108,623 cubic feet. It is located behind Lots 104-108.

ix. one (1) level spreader (LS#3) located downstream of WP#3 with a level lip length of 11.5 feet; and x. one (1) level spreader (LS#2) located downstream of WP#2 with a level lip length of 11.5 feet.

In addition to the above obligations, the Association's obligations with regard to the Facilities are:

1. Inspections/Routine Maintenance. In accordance with City Requirements, the Association shall cause the Facility/ies to be inspected i) annually; and, ii) after major storm events that cause visual damage to the Facility; and iii) upon notification from the City to inspect. The inspection shall be performed by a registered North Carolina Professional Engineer or a North Carolina Registered Landscape Architect certified by the City who shall document those things mandated under City Requirements. The inspection shall occur annually during the month in which the

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Facility/ies as-built certification was accepted by the City, which month may be determined through contact with the City of Durham Department of Public Works, Stormwater Division. The inspection shall be reported to the City as further described below.

2. Repair and Reconstruction . The Association shall repair and/or reconstruct the Facility/ies as it determines is necessary ; and, at a minimum, as set forth in City Requirements or as directed by the City to allow the Facility/ies to function for its intended purpose, and to its design capacity. The Association shall provide written reports regarding major repair or reconstruction to the City in accordance with City Requirements.

3. Stormwater Budget Line Items & Funding . The dues of the Association shall include amounts for upkeep and reconstruction of the Facilities which shall be included in dues charged to Lots or members from the point that Lots or members are charged dues for other common purposes. The Association shall maintain two (2) separate funds in its budget for the Facility/ies. The first, the "Inspection and Maintenance Fund," shall be for routine inspection and maintenance expenditures and shall be used for annual inspections, maintenance, and minor repairs. The funds for this purpose may be maintained as part of the Association's general account. The second fund, the "Major Reconstruction Fund," shall be a separate, increasing reserve fund that will build over time and provide money for major repairs to and eventual reconstruction of the Facility/ies. The Major Reconstruction Fund shall be maintained in an account that is separate account from the Association's general account as described below. At a minimum, the Association shall, annually, earmark $11,864.00 [WP1: $2,920.00; "WP2: $3,279.00; WP3: $3,069.00; LS2: $1,298.00; LS3: $1,298.00] annually from its collected dues for the Inspection and Maintenance Fund and $2,531.00 [WPI: $691.00; WP2: $780.00; WP3: $728.00; LS2: $166.00; LS3: $166.00] from its collected dues for the Major Reconstruction Fund. These minimum amounts shall generally be increased annually by 3%, more or less, per year over the prior year's amount. The Association will be required to seta higher amount if directed by Durham Director of Public Works after an examination of the Facility/ies. The Association shall set dues at a sufficient amount to fund each of the two line items in addition to the Association's other obligations. The Association may compel payment of dues through all remedies provided in these Covenants or otherwise available under law.

4. Assessments/Liens . In addition to payment of dues, each Lot shall be subject to assessments by the Association for the purpose of fulfilling the Association's obligations under this Article and under the Stormwater Agreement. Such assessments shall be collected in the manner set forth in these Covenants. As allowed under NCGS §47F, or successor statutes, or, for condominiums, as allowed under NCGS 47C, or successor statutes, all assessment remaining unpaid for 30 days or longer shall constitute a lien on the Lot. Such lien and costs of collection may be filed and foreclosed on by the Association. In addition, the Association's rights may, in the discretion of the City, be exercised by the City, as a third party beneficiary of the recorded Stormwater Agreement and/or as Attorney in Fact for the Association, as provided in Section 7 of the recorded Stormwater Agreement.

5. Stormwater Expenditures Receive Highest Priority . Notwithstanding any contrary provisions of the covenants of which this Article is a part, to the extent not prohibited by law, the inspection, maintenance, repair, and replacement/reconstruction of the Facility/ies shall receive the highest priority (excluding taxes and assessments and other statutorily required expenditures) of all Association expenditures.

6. Separate Account for Major Reconstruction Fund . Engineer's Report. The Association shall maintain the Major Reconstruction Fund for the Facility/ies in an account separate from the Association's general account. The Association shall use the Fund only for major repairs and reconstruction of the Facility/ies. No withdrawal shall be made from this fund unless the withdrawal is approved by two Association officials who shall execute any documents allowing such withdrawal. Prior to withdrawing funds from this account, the Association shall (i) obtain a written report from an engineer approved in accordance with City Requirements regarding repairs or reconstruction needed and approximate cost of such repair or reconstruction; and (ii) submit such report to the Director of the City's Department of Public Works, and notify the Director of the repairs or reconstruction to be undertaken on the Facility, the proposed date, and the amount to be withdrawn from the Major Reconstruction Fund. In the event of an emergency, withdrawal and expenditure of funds may be made after telephone notification to the Stormwater Services

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Division of the Department.

7, Annual Reports to City. The Association shall provide to the City annual reports in substance and form as set forth in City Requirements. This annual report shall be signed by an officer of the Association, who shall attest as to the accuracy of the information in such report. If prepared by a professional management company hired to manage the Association's affairs, the report shall so indicate. The Officer's signature and attestation shall be notarized. At a minimum each report shall include:

i. the annual Facilities inspections report described in section (1) above; ii. a bank or account statement showing the existence of the separate Major Reconstruction Fund described

in Section (6) above and the balance in such fund as of the time of submission of the report; iii. a description of repairs exceeding normal maintenance that have been performed on the Facility/ies in

the past year, and the cost of such repairs;

iv, the amount of Association dues being set aside for the current year for each of the two stormwater funds — the Inspection and Maintenance Fund and the Major Reconstruction Fund.

8. Facility/ies to Remain with Association; Lot Owners' Liability. To the extent not prohibited by law, the Facility/ies shall remain the property of the Association and may not be conveyed by the Association. In the event the Association ceases to exist or is unable to perform its obligations under this Agreement, all Lot Owners as defined in the Stormwater Agreement referenced above, excluding the Lots owned by the Association, shall be jointly and severally liable to fulfill the Association's obligations under this Agreement. Such Lot Owners shall have the right of contribution from other owners with each Lot's pro rata share being calculated as Lot Owner's proportional obligations are otherwise defined in these Covenants. The City may also exercise the rights described in Section 7 of the recorded Stormwater Agreement and other remedies provided by law.

9. City Rights; Liens Against Owners. In addition to rights granted to the City by ordinance or otherwise, the City shall have the following rights, generally summarized below, and more explicitly set forth in the Stormwater Agreement referenced above:

a. Direct the Association in matters regarding the inspection, maintenance, repair, and /or reconstruction of the Facility/ies;

b. If the Association does not perform the work required by ordinance, by these covenants, and by the Stormwater Agreement referenced above, do such work itself, upon 30 days' written notice to the Association.

c. Access the Facility/ies for inspection, maintenance, and repair, crossing as necessary the lot(s) on which the Facility/ies are located and all other private and public easements that exist within the Property subject to these covenants.

d. Require reimbursement by the Association of the City's costs in inspecting, maintaining, repairing, or reconstructing the Facility/ies, as provided in the Stormwater Agreement referenced above.

Enforce any debts owed by the Association as described in the Stormwater Agreement referenced above against Lot Owners if such debts are not fully paid by the Association. The debt may be allocated to Lot Owners as provided in the other sections of these Covenants, and may be made a lien on each owner's property, may be added to each owner's utility bills, and may result in foreclosure, as provided in Section 7 of the Stormwater Agreement referenced above.

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10. No Dissolution . To the extent not prohibited by law, the Association shall not enter into voluntary dissolution unless the Facility is transferred to a person who has been approved by the City and has executed a Stormwater Agreement with the City assuming the obligations of the Association. Under the Stormwater Agreement referenced above, individual Lots and Lot Owners continue to be liable for the Facility/ies in the event the Association is dissolved without a new Stormwater Agreement between the City and a responsible party that is assuming the Association's obligations.

11. No Amendment . Without the prior written consent of the City, which may be given by the Durham City Manager, and notwithstanding any other provisions of these Restrictive Covenants, the Association may not amend or delete this Article with the exception of supplementing its provisions in a more detailed manner to better describe members' or Lot Owners' obligations regarding each other.

12, Stormwater Agreement Supersedes. The Stormwater Agreement referenced above supersedes any limiting provisions contained elsewhere in other Articles of these Covenants. However, such Articles may supplement the obligations of the Association as set forth in that Agreement, and/or the obligations of and remedies against individual Lot Owners or members bound by these Covenants.

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