WQ0040002_Operational Agreement_20170328

MEMORANDUM OF OWNERSHIP
AND
MAINTENANCE RESPONSIBILITY
FOR SEPTIC SYSTEM SERVING
LOTS 1-13 OF MAJESTIC OAKS WEST SUB DIVISION
RECITALS
WHEREAS;
A. Eastern NC Homebuilders LLC, (hereinafter "Eastern") are the owners of certain lots in
Majestic Oaks West subdivision more specifically lots numbered 9, 10, 11, 13, and 16 as
shown on Pender County Map Book 59 Page 112 and Map Book 59 page 113, per Pender
County Deeds Book 4611 Page 826, Book 4616 Page 1763 and Book 4616 Page 1761;
B. Coastal Home Company, (hereinafter "Coastal") is the owner of 10 lots more fully
described as lots 2, 3, 4, 5, 6, 7, 8, 12,14 and 15 in Majestic Oaks West subdivision as
shown on Pender Register of Deeds Map Book 59 Page 113 and Map Book 59 Page 112
per Pender County Deed Book 4640 Page 731;
C. John Michael Turco and Shelly Lynne Turco, (hereinafter "Turco) are the owners of a
parcel real property known as lot 1 in Pender County Map Book 59 Page 112 pursuant to
Pender County Register of Deeds Book 4643 Page 213;
D. Old North State Water Company, LLC, (hereinafter "utility) is the owner and operator of
water and septic systems and the owner of a sewer collection chamber located at the
intersection of Dan Owen Drive and Mae Drive in Majestic Oaks West Subdivision;
E. Lots 14, 15,16 are on a separate Septic System and are not subject to this Agreement.
F. The parties desire to enter into an agreement to have Old North State Water Company,
LLC collect sewage from the aforesaid sewer collection chamber. To effectuate this a •
written agreement concerning ownership, maintenance and repair responsibilities for the
septic system serving Lots 1 through 13 shall be created;

WHEREFORE;
In consideration of the above recitals the parties enter into the following;
AGREEMENT
1. We, the owners of lots 1-13 as shown above, of Majestic Oaks West, acknowledge and
accept the ownership, maintenance, and repair responsibilities for the septic system serving
lots 1-13. Each respective owner shall be responsible for their respective lots that they
presently own.
2. Ownership, maintenance and repair responsibilities shall include the septic collection tank,
the pump chamber located on or serves each respective lot and the service line that runs
from the septic tank to and within the 10-foot-wide utility easement lying adjacent to and
running parallel with the northern right of way of Dan Owen Drive up to the point where it
meets a sewer collection chamber which is owned by Old North State Water Company,
LLC. Said sewer collection chamber is located at the intersection of Dan Owen Drive and
Mae Drive in the Majestic Oaks West Subdivision.
3. Said ownership, maintenance and repair responsibilities shall run with and be appurtenant to
each lot individually. Should a lot be transferred to a new owner the new owner by virtue of
his ownership of the lot, shall be subject to this memorandum of ownership and
maintenance responsibility.
4. By acceptance of the Deed to their property, future owners of any of the 13 lots described
herein become parties that are bound by this agreement whether or not expressly stated in
their Deed.
5. The duration of Agreement. The agreement shall be perpetual and shall inure to the benefit
of their successors in interest, heirs and assigns and all future owners of said 13 lots
described herein.
6. Maintenance of the sewer line. Lot owners and their successors in interest agree to maintain
and repair the sewer lines at their own expense running from their particular lot running to

STATE OF NORTH CAROLINA
COUNTY OF
On this day of _ _ 2017, personally appeared
before me, the said named Coastal Home Company, Inc by to me
known and known to me to be the person described in and who executed the foregoing
instrument and he/she acknowledged that he/she executed the same and being duly sworn
by me, made oath that the statements in the foregoing instrument are true.
My Commission Expires:
Notary Public

STATE OF NORTH CAROLINA
COUNTY OF
On this day of _ _ 2017, personally appeared before me,
the said named Mike Turco to me known and known to me to be the person described in
and who executed the foregoing instrument and he/she acknowledged that he/she
executed the same and being duly sworn by me, made oath that the statements in the
foregoing instrument are true.
My Commission Expires: _ _
Notary Public
STATE OF NORTH CAROLINA
COUNTY OF
On this day of 2017, personally appeared
before me, the said named Shelly Lynne Turco to me known and known to me to be the
person described in and who executed the foregoing instrument and he/she acknowledged
that he/she executed the same and being duly sworn by me, made oath that the statements
in the foregoing instrument are true.
My Commission Expires: _
Notary Public

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This Document eRecorded: 03/28/2017 04:27:21 PM
Fee: $74.00 DocType: D/R Tax: $0.00
Pender County, North Carolina
Sharon Lear Willoughby, Register of Deeds
STATE OF NORTH CAROLINA DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS
COUNTY OF PENDER OF MAJESTIC OAKS WEST
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
FOR MAJESTIC OAKS WEST (as may be atnended or supplemented as set forth herein,
"Declaration") is made this eday of March, 2017 by EASTERN NC HOME BUILDERS,
LLC, a North Carolina Limited Liability Company, whose address is 449 Grill Road, Clayton,
N.C. 27520 (the "Declarant").
WITNESSETH:
A. Declarant is the owner and developer of certain real estate in Pender County, North
Carolina, and more particularly described on those maps recorded in Map Book 59 at Pages 112
and 113 and made a part hereof (the "Property" or "Subdivision"); and
B. Declarant is developing the Property known as "Majestic Oaks West" by
subdividing it into "Lots" that are to be used for residential purposes as well as common real estate
and improvements that are to be owned by a homeowners association to which the Owner of a Lot
must belong and pay lien -supported maintenance assessments; and
THEREFORE, the Declarant hereby declares that all of the Lots and Roads and
Wastewater Treatment Systems (defined below) located within the Subdivision are held and shall
be held, conveyed, hypothecated or encumbered, leased, rented, used, occupied and improved,
subject to the following covenants, conditions and restrictions, all of which are established and
agreed upon for the purpose of enhancing and protecting the value, desirability and attractiveness
of the Subdivision as a whole and of each of said Lots. All of these restrictions shall run with the
land and shall be binding upon the Declarant and upon the parties having or acquiring any right,
title or interest, legal or equitable in and to the Property or any part or parts thereof subject to such
restrictions, and shall inure to the benefit of the Declarant and every one of the Declarant's
successors in title to any of the Property.
ARTICLE I
DEFINITIONS
submitted electronically by "Ray C. Blackburn, Jr. attorney at Law"
in compliance with North Carolina statutes governing recordable documents
and the terms of the submitter agreement with the Fender County Register of needs.

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Section 1.1 "Annual Organizational Board Meeting" means the annual
organizational board meeting of the Board, which shall take place immediately after each
Annual Meeting of the Members.
Section 1.2 "Annual Meeting" means the annual meeting of the Members held
in Pender County, North Carolina, within the last quarter of each calendar year, upon
proper notice, at a date, time and at a place from time to time designated by the Board. The
first Annual Meeting of the Members shall be held within one (1) year from the date of
incorporation on such date as the initial Board shall determine.
Section 1.3 "Articles" or "Articles of Incorporation" shall mean those articles,
filed with the Secretary of State of North Carolina, incorporating The Majestic Oaks West
Home Owner's Association, Inc., as a nonprofit corporation under the provisions of North
Carolina State law, as the same may be amended from time to time.
Section 1.4 "Assessments" means Regular Assessments, Special Assessments,
Working Capital Assessments, Individual Assessments and Fine Assessments.
Section 1.5 "Association" shall mean and refer to the MAJESTIC OAKS
WEST HOMEOWNERS ASSOCIATION, INC., to be formed as a non-profit corporation,
its successors and assigns.
Section 1.6 "Board" or "Board of Directors" shall mean and refer to the Board
of Directors of the Association.
Section 1.7 "Bylaws" shall mean the Bylaws of the Association, as the same may
be amended from time to time.
Section 1.8 "Class A Members" shall mean as defined in Section 4.5.1 below.
Section 1.9 "Constituent Documents" shall mean the Declaration, the Bylaws,
the Articles of Incorporation, and the Rules and Regulations, if any, and any other basic
documents usedto create and govern the Subdivision.
Section 1.10 "Roads and Wastewater Treatment Systems. Roads shall include,
but not limited to, those portions of Dan Owen Drive shown as 30 foot Private Right of Way
on the Plat, and Wastewater Treatment Systems shall include the improvements and other
Systems, located or to be located, within those portions .of the Wastewater Utility System
shown as 10 foot Drainage and Utility Easement on the Plat, and described in that certain
Wastewater Agreement between the Declarant and Old North State Water Company, LLC
dated September 29, 2016, the terms, conditions, obligations and restrictions of which are
hereby incorporated by reference.
Section 1.11 "Common Expenses" shall mean, refer to, and include all charges,
costs and expenses incurred by the Association for and hi connection with the administration
of the Subdivision, including, without limitation thereof, operation. of the Subdivision,
maintenance, repair, replacement and restoration (to the extent not covered by insurance)
of the Roads and Wastewater Treatment Systems; the costs of any additions and alterations

BK 4640 PG 3 DOC# 20021855
thereto; all labor, services, common utilities, materials, supplies, and equipment therefor; all
liability for loss or damage arising out of or in connection with the Roads and Wastewater
Treatment Systems and their use; all premiums for hazard, liability and other insurance
with respect to the Subdivision; all costs incurred in acquiring a Lot pursuant to judicial
sale; and all administrative, accounting, legal, and managerial expenses. "Common
Expenses" shall also include the cost of operation, maintenance, improvement, and
replacement of any Recreational Facilities, including establishing reserves therefore.
"Common Expenses" shall also include amounts incurred in replacing, or substantially
repairing, capital improvements within the Roads and Wastewater Treatment Systems of
the Subdivision, including, but not limited to private road resurfacing. "Common
Expenses" shall also include all reserve funds or other funds established by the Association.
"Common Expenses" shall be construed broadly
Section 1.12 "Declarant" shall mean and refer to Eastern NC Home Builders,
LLC, a North Carolina Limited Liability Company, its successors and assigns as a Declarant.
Section 1.13 "Default" shall mean any violation or breach of, or any failure to
comply with, the Restrictions, this Declaration or any other Constituent Documents.
Section 1.14 "Development Period" means the period commencing on the date
on which this Declaration is recorded in the Pender County Register, of Deeds and
terminating on the earlier to occur of (i) when Declarant no longer owns a Lot in the
Subdivision; (ii) the date that Declarant relinquishes in writing Declarant's right to appoint
Directors; or (iii) the occurrence of the date ten (10) years from the date of recording the
Declaration, renewable for an additional ten (10) year period with the consent of a majority
of Lot Owners other than the Declarant.
Section 1.15 "Dwelling Unit" shall mean and refer to the individual family living
units, which have been issued certificates of occupancy as required by any governmental
authority, on an individual Lot.
Section 1.16
this Declaration.
Section 1.17
5.4 of this Declaration.
"Fine Assessment" means the charge established by Section 5.5.2 of
"Individual Assessment" means the charge established by Section
Section 1.18 "Lot" shall mean and refer to any parcel of land designated on the
Plat upon which a Dwelling Unit has been or is to be constructed. The Declarant has initially
created sixteen (16) Lots in the Subdivision and has the right to establish additional Lots in
accordance with the terms of this Declaration.
Section 1.19 "Member" shall mean and refer to all those Owners who are
Members of the Association as provided in Article IV below.

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Section 1.20 "Owner" shall mean and refer to the record owner, including
Declarant, whether one or more persons or entities, of a fee simple title to any Lot located
within the Subdivision.
Section 1.21. "Plat" shall mean and refer to the record plat of the Subdivision
recorded by Declarant in Map Book 59 at pages 112 and 113 of the Fender County Registry,
as the same may be amended or supplemented by Declarant from time to time.
Section 1.22 "Planned Community Act" shall mean and refer to the North
Carolina Planned Community Act, currently codified as Chapter 47F of the North Carolina
General Statutes, as the same may be amended from time to time.
Section 1.23 "Property" or "Subdivision" shall mean and refer to that certain
real estate described in Exhibit A and all.other real estate that may be annexed into this
Declaration and the Association by the Declarant.
Section 1.24 "Regular Assessment" means the charge established by Article V
of this Declaration.
Section 1.25 "Resident" shall mean and refer to any person, not an Owner, living
in the Owner's Dwelling Unit, including, but not limited to, temporary guests and Tenants.
Section 1.26 "Restrictions" shall mean all covenants, conditions, restrictions,
easements, charges, liens and other obligations provided for in this Declaration, including,
without limitation, all notices, rules and regulations issued in accordance with this
Declaration.
Section 1.27 "Rules and Regulations" shall mean and include the rules and
regulations made from time to time by the Board of Directors as provided in Section 4.3
below.
Section 1.28 "Special Assessment" means the charge established by Section 5.2
of this Declaration.
Section 1.29 "Tenant" means any person occupying any Lot pursuant to a
written or oral lease agreement with the Owner thereof or with any other person or entity
claiming under the Owner.
Section 1.30 "Working Capital Assessment" means the charge established by
Section 5.3 of this Declaration.
When applicable for the sense of this instrument, the singular should be read as including
the plural and the male, female, and neuter pronouns and adjectives should be read as
interchangeable.
ARTICLE II
PROPERTYSUBJECT TO THIS DECLARATION

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The Property, each portion thereof, and all Dwelling Units thereon shall be held,
transferred, sold, conveyed, leased, mortgaged and occupied subject to the terms, provisions,
covenants and conditions of this Declaration.
ARTICLE III
PROPERTY RIGHTS 1N ROADS AND THE WASTEWATER DISPOSAL SYSTEM
Section 3.1 Owner's Easements of Enjoyment. Except as herein otherwise
provided, each Owner shall have a right and easement of enjoyment for (i) ingress, egress
and regress in and to the Roads shown on the plat and (ii) use of Wastewater Treatment
Systems as shown on the Plat and described in the Wastewater Agreement, which shall be
appurtenant to and shall pass with the title to his Lot. Each Tenant shall have a non-
transferable right to use and enjoy the Roads and Wastewater Treatment Systems as defined
above, if any, which right shall terminate when such person ceases to have the status of a
Tenant. Such rights and privileges shall be subject, however, to the following:
3.1.1 The right of the Association to grant permits, licenses and public or
private easements over the Roads and Wastewater Treatment Systems and other purposes
reasonably necessary or useful for the proper maintenance or operation of the Property,
Section 3.2 Use of Roads and Wastewater Treatment Systems by Declarant. In
addition to the specific rights and easements reserved herein, Declarant and its affiliates and
associates shall have the same rights of use and enjoyment of the Roads and Wastewater
Treatment Systems during the Development Period until all of the Lots have been sold.
ARTICLE IV
HOMEOWNERS ASSOCIATION
Section 4.1 Homeowners Association. There is has been created a North
Carolina non-profit corporation, known as Majestic Oaks West Homeowners Association,
Inc., which shall be responsible for the maintenance, management and control of the Roads
and Wastewater Treatment Systems.
Section 4.2 Board of Directors and Officers. The Board of Directors, and such
officers as the may elected or appointed in accordance with the Articles or the Bylaws, shall
conduct the affairs of the Association. The Board of Directors may also appoint committees
and managers or other employees and agents who shall, subject to the general direction of
the Board of Directors, be responsible for the day-to-day operation of the .Association.
Section 4.3 Rules and Regulations. By a majority vote of the Board of
Directors, the Association may, from time to time adopt, amend and repeal Rules and
Regulations with respect to all aspects of the Association's rights, activities and duties under
this Declaration. The Rules and Regulations may, without limitation, govern use of the
Subdivision, including prohibiting, restricting or imposing charges for the use of any portion
of the Subdivision by Owners, Residents or others, interpret this Declaration or establish

, BK 4640 PG 6 DOC# 20021855
procedures for operation of the Association or the administration of this Declaration;
provided, however, that the Rules and Regulations shall not be inconsistent with this
Declaration, the Articles, Bylaws or the terms of the Roadway Declaration or the
Recreational Facilities Easement Agreement. A copy of the Rules and Regulations, as they
may from time to time be adopted, amended or repealed, shall be maintained in the office of •
the Association and shall be available to each Owner upon request.
Section 4.4 Membership of Association. Every Owner of a Lot shall be a
Member of the Association. Such Owner and Member shall abide by the Association's Rules
and Regulations, shall pay the Assessments provided for in this Declaration, when due, and
shall comply with decisions of the Association's governing body. Conveyance of fee simple
title to a Lot automatically transfers membership in the .Association without necessity of
further documents. Membership shall be appurtenant to and may not be separated from
ownership of any Lot that is subject to Assessment.
Section 4.5 Membership. The Association shall have one (1) class of
Membership:
4.5.1
such Member.
Each- Member shall have one vote with respect to each Lot owned by
Section 4.6 Maintenance Obligations of the Association. The Association, at its
expense, shall maintain, • operate and keep in good repair, unless such obligations are
assumed by any municipal or governmental agency having jurisdiction thereof, the Roads
and Wastewater Treatment Systems and. all improvements located thereon for the common
benefit of the Subdivision. The Association shall make the determination as to when
maintenance, repair, replacement and care shall be done, and its determination shall be
binding. Declarant shall have the right to employ a manager to oversee and implement the
Association's maintenance obligations, and any such management fees incurred thereby
shall be paid by the Association. The Association shall also perform the other duties
prescribed by this instrument or the Association's Rules and Regulations.
Section 4.7 Maintenance Obligation of the Lot Owners. The responsibilities of
each Lot Owner shall include:
4.7.1 To clean, maintain, keep in good order, repair and replace at his or her
expense all portions of his or her Lot and Dwelling Unit. Any repair, replacement and
maintenance work to be done by an Owner must comply with any Rules and Regulations
of the Association including architectural control and visual harmony.
4.7.2 To perform his responsibilities in such manner so as not unreasonably
to disturb other persons residing within the Subdivision.
4.7.3 Not to paint or otherwise alter, decorate or change the appearance of any
exterior portion of his Dwelling Unit, without the written consent of the Association.

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4.7.4 Not to impair the use of any easement without first obtainingthe written
consents of the Association and of the Owner or Owners for whose benefit such easements
exists.
4.7.5 Each Lot Owner shall be deemed to agree by acceptance of delivery of
a deed to a Lot, to repair and/or replace at his or her expense all portions of the Roads and
Wastewater Treatment Systems which may be damaged or destroyed by reason of his or
her own intentional or negligent act or omission, or by the intentional or negligent act or
omission of any invitee, tenant, licensee family member, including, but not limited to any
repairs necessary which result from damage incurred ;by pets or vehicles owned by the Lot
Owner, or owned by any guest, invitee, Tenant or licensee of such Lot Owner. To the
extent that any Roads and Wastewater Treatment Systems are damaged as an insurable loss
and the proceeds from the Association's insurance policy are utilized to pay for the loss,
the Owner shall be responsible for payment of the deductibleas an Individual Assessment
in accordance with Section 5.4 and Section 7.7 below.
Section 4.8 Construction Defects. The obligations of the Association and of
Owners to repair, maintain and replace the portions of the Subdivision for which they are
respectively responsible shall not be limited, discharged or unreasonably postponed by
reason of the fact that any maintenance, repair or replacement may be necessary to cure any
latent or patent defects in materials or workmanship in the construction of the project. The
undertaking of repair, maintenance or replacement by the Association or Owners shall not
constitute a waiver of any rights against any warrantor but such rights shall be specifically
reserved. Likewise, this Section 4.8 is not intended to work for the benefit of the person or
entity responsible for the construction defect. Also, performance by Association may be
delayed if Association does not have the means or the funds to repair the defect or if by
repairing the defect, Association would be compromising the right to sue to have the defect
corrected and/or to collect damages caused by the defect.
• Section 4.9 Effect of Insurance or Construction Guarantees. Notwithstanding
the fact that the Association and/or any Lot Owner may be entitled to the benefit of any
guarantee of material and workmanship furnished by any construction trade responsible for
any construction defects, or to benefits under any policies of insurance providing coverage
for loss or damage for which they are respectively responsible, the existence of construction
guarantee or insurance coverage shall not excuse any unreasonable delay by the Association
or any Lot Owner in performing his obligation hereunder. Likewise, this Section 4.9 is not
intended to work for the benefit of the person or entity responsible for the construction
defect. Also, performance by Association may be delayed if Association does not have the
means or the funds to repair the defect or if, by repairing the defect, the Association would
be compromising the right to sue to have the defect corrected and/or to collect damages
caused by the defect.
ARTICLE V
COVENANT FOR ASSESSMENTS

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Section 5.1 Regular Assessments. Regular Assessments for the payment of the
Common Expenses shall be made in the manner provided herein, and in the manner
provided in the Bylaws. The Regular Assessment is established for the benefit and use of the
Association and shall be used in covering all of the Common Expenses, but not limited to the
Roads and Wastewater Treatment Systems.
Section 5.2 Special Assessment In addition to levying Regular Assessments,
and to the extent that the reserve fund is insufficient, the Board of Directors may levy Special
Assessments to construct, structurally alter, or replace improvements which are a part of the
Roads and Wastewater Treatment Systems, provided that funds shall not be assessed for any
capital improvement in excess of Twenty Five Thousand and 00/100 Dollars ($25,000.00) for
any one item or in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) in the aggregate
in any one calendar year ("Capital Expenditure Limit") without the prior written consent of
two-thirds (2/3) of the votes of the Members who are voting either in person or by proxy at
a meeting duly called for such purpose or unless expressly stated in the annual budget. The
Board of Directors shall have the authority to adjust the Capital Expenditure Limit annually
to account for inflation, which adjustment shall be effective each January (hereinafter
referred to as the "Adjustment Date") commencing January 1 of the next year following the
year during which the sale of the first Lot by Declarant. As of each Adjustment Date, the
Capital Expenditure Limit shall be increased from the Capital Expenditure Limit on the
date of this Declaration ("Effective Date") by a percentage equal to the percentage increase,
if any, in the Consumer Price Index, All Urban Consumers ("CPI-U"), (1982-1984=100), All
Items, as compiled and published by the Bureau of Labor Statistics, U.S. Department of
Labor ("CPI") from the Effective Date to the Adjustment Date. If after the date of this
Declaration the CPI is converted to a different standard reference base or otherwise revised
or ceases to be available, the determination of any new amount shall be made with the use of
such conversion factor, formula or table for converting the CPI as may be published by any
other nationally recognized publisher or similar statistical information reflected by the
Board. Until the expiration of the Development Period or the date on which Declarant no
longer owns a Lot, whichever is earlier, Declarant shall be one of the consenting Members,
or the capital improvement shall not be made. The Board of Directors shall calculate each
Lot's proportionate share of the Special Assessment for the capital improvements, and shall
give the Lot Owner(s) written notice of the proportionate share and of the date(s) that the
Special Assessment is due and payable. Notwithstanding the foregoing, Declarant shall have
no obligations to pay any Special Assessment with respect to any Lot owned by it unless there
is a Dwelling Unit located upon the Lot that is occupied as a residence.
Section 5.3 Working Capital Assessment. Upon the initial transfer of record of
the Lot from the Declarant (or successor declarant or designated declarant) to the Lot Owner
(other than a successor declarant or designated declarant), the purchaser is required to pay
a sum equal to two (2) full months of the Regular Assessment due on his or her Lotus his or
her initial contribution to the working capital of the Association. This sum is not an advance
payment of the monthly Regular Assessment; rather the sum is allocated to a working capital
fund to meet unforeseen expenditures and operating expenses or to purchase any additional
equipment or services. While the Declarant is in control of the Association, it cannot use any
of the working capital funds to defray its expenses, reserve contributions, or construction
costs. When control of the Association is transferred to the Lot Owners, the working capital

, BK 4640 PG 9 DOC# 20021855
fund shall be transferred to the Association for deposit to a segregated fund. After control
of the Association is transferred to the Lot Owners the Declarant shall be responsible to
collect the initial contribution to the working capital account and forward such funds to the
Association. Additionally, at the closing, each purchaser of a Lot is required to pay a pro-
rata share of the Regular Assessment due in the month of closing.
Section 5.4 Individual Assessment. In the event that the need for maintenance,
repair or replacement of any improvement on the Property, for which the Association has
the maintenance, repair and/or replacement obligation, is caused through the willful or
negligent act of an Owner, his family, his pet(s), or a Resident, the cost of such maintenance,
repairs or replacements shall be paid by such Owner. The Board shall have the maintenance,
repair or replacement done and the cost thereof shall be provided by the Board to said Owner
and shall be paid by said Owner within thirty (30) days thereafter, unless an earlier date is
otherwise set forth herein.
Section 5.5 Date of Commencement of Assessments; Due Dates; Determination
of Regular Assessments; Fine Assessments.
5.5.1 The monthly Regular Assessment provided for herein shall commence
as to each Owner of a Lot, except Declarant, on the first day following the initial
conveyance of the Dwelling Unit to the Owner and shall be adjusted according to the
number of days remaining in the month. The Declarant, its successors and assigns, shall
not be required to pay the Regular Assessment for any Lot which it owns until such time
as Declarant transfers the Lot to a third party. The Board of Directors shall fix the amount
of the monthly Regular Assessment to be paid by each Class A Member against each Lot
at the beginning of each calendar year. Written notice of the monthly Regular Assessment
shall be sent to every Class A Member subject thereto. The Board of Directors shall
establish the due dates.
5.5.2 The Board of Directors, or an adjudicatory panel established by the
Board of Directors, may levy a reasonable Fine Assessment, as a fine or penalty for
violation of this Declaration, all in accordance with the Planned Community Act. A lien
may be filed for this Fine Assessment and this Fine Assessment may be enforced by
foreclosure and otherwise treated as a Regular Assessment.
5.5.3 Both Regular and Special Assessments for a Lot Owner shall be
determined by the Association based upon the proportion that each Lot bears to the
aggregate number of Lots located on the Property, except those owned by Declarant which
are not assessed in accordance with Section 5.5.1 above. The Association's governing
body may, at its discretion, waive the Regular Assessment for any year or part of a year for
any Lot not occupied as a residence,
Section 5.6 Billing. The Association shall inform each Lot Owner of the amount
of the total Regular Assessment due from the Owner of that particular Lot. This Regular
Assessment may be paid in monthly installments or as otherwise required by the Association.
Except as provided in Section 5.5.1 herein, the Owner of each Lot must pay his Lot's required
Regular Assessment in advance on the first calendar day of each month, unless the

, BK 4640 PG 10 DOC# 20021855
Association otherwise directs. Payment is to be made to such person at such an address as
Association determines. Special Assessments are due thirty (30) days after the bill for the
Special Assessment has been mailed or otherwise sent out by Association, unless the
Association otherwise directs. The Owners of the initial Lots in the Subdivision, except
Declarant, shall be obligated to begin paying the Regular Assessment as of the first day of
the initial conveyance of the Lot from Declarant to the Owner. If the Subdivision is expanded
and additional Lots are brought into the Subdivision during a given Assessment year, those
additional Lots shall begin paying the Regular Assessment on the first day of the initial
conveyance of the Lot from Declarant to the Owner.
Section 5.7 Common Surplus. If the Regular Assessment collected in any given
year is in excess of the actual Common Expenses for that year, the Board may, at its sole
discretion (a) return each Owner's share of the Common Surplus; (b) credit each Owner's
share of the Common Surplus to each Owner's payment as for the Regular Assessment for
the following year; or (c) apply the Common Surplus to the reserve.
Section 5.8 Assessment Certificate. The Association shall, upon demand, at any
reasonable time, furnish to any Owner liable for Assessments a certificate in writing signed
by an Officer or other authorized agent of the Association, setting forth the status of said
Assessments; i.e., "current", and if not current, "delinquent" and the amount due. Such
certificate shall be conclusive evidence of the payment of any Assessment therein stated to
have been paid. A reasonable charge to cover labor and materials may be made in advance
by the Association for each certificate.
Section 5.9 Books and Records of the Association. The Association shall keep
full and correct books of account. The Association shall make available to all Lot Owners
and the holders of all first mortgages on Lots, current copies of the books, records and
financial statements of the Association upon reasonable request during normal business
hours. All funds collected by the Association shall be held and expended solely forthe
purposes designated by this Declaration and shall be deemed to be held for the use, benefit
and account of the Association and all of the Lot Owners. All books and records must be
kept in accordance with good accounting procedures and must be reviewed at least once a
year by an independent accounting firm..
Section 5.10 Non -Payment of Assessment. Any Assessments levied pursuant to
these covenants which is not paid on the date when due shall be delinquent and shall, together
with such interest and other costs as set out elsewhere in this Declaration, thereupon become
a continuing lien upon the Lot which shall bind the Lot in the hands of the then Owner and
the Owner's successors and assigns.
If the Assessment is not paid within thirty (30) days after the due date, the Assessment shall
bear interest at a reasonable rate of ten percent (l 0%) per year or at such other reasonable rate set
by Association in its minutes, not to exceed the maximum amount allowed by law, and the
Association may bring an action at law against the Owner personally obligated to pay the same
and/or foreclose the lien against the Lot, in either of which events interest, costs and reasonable
attorneys' fees shall be added to the amount of each Assessment. No Owner may waive or

BK 4640 PG 11 DOC# 20021855
otherwise escape liability for the Assessments by non-use or waiver of use of the Roads and
Wastewater Treatment Systems or by abandonment of his Lot.
Section 5.11 Priority of Association Lien. The lien provided for in this Article V
shall take priority over any lien or encumbrance subsequently arising or created, except liens
for real estate taxes and assessments and liens of bona fide first mortgages which have been
filed of record before a claim of this lien hereunder has been docketed in the office of the
clerk of superior court in Pender County, and may be foreclosed in the same manner as a
mortgage on real property under power of sale in an action brought by the Association in
accordance with the Planned Community Act. The Association is entitled to recover its
reasonable attorneys' fees and court costs and collection costs, as part of the lien. In any
such foreclosure action, the Association shall be entitled to become a purchaser at the
foreclosure sale.
Section 5.12 Disputes as to Common Expenses; Adjustments. Any Owner who
believes that the portion of Common Expenses chargeable to his Lot, for which an assessment
lien has been filed by the Association, has been improperly charged against his or her Lot,
may bring action in an appropriate court of law.
Section 5.13 Purchaser at Foreclosure Sale Subject to Declaration, Bylaws,
Rules and Regulations of the Association. Any purchaser of a Lot at a foreclosure sale shall
automatically become a Member of the Association and shall be subject to all the provisions
of this Declaration, the Bylaws and the Rules and Regulations.
Section 5.14 Non -Liability of Foreclosure Sale Purchaser for Past Due Common
Expenses. When the holder of a first mortgage or first deed of trust of record or other
purchaser of a Lot acquires title to the Lot as a result of foreclosure of the first mortgage
first deed of trust or by deed in lieu of foreclosure, such acquirer of title, his, her or its
successors and assigns, shall not be solely liable for the share of the Common Expenses or
other Assessments by the Association chargeable to such Lot which became due prior to the
acquisition of title to the Lot by such acquirer, other than Assessments for which a claim of
lien has been docketed with the Pender County clerk of superior court prior to the
recordation of the lien being foreclosed. Such unpaid share of Common Expenses or
Assessments shall be deemed to be Common Expenses collectible from all of the Lots,
including that of such acquirer, his, her or its successors or assigns. This provision shall not
relieve the party acquiring title or any subsequent Owner of the subject Lot from paying
future Assessments.
Section 5.15 Liability for Assessments Upon Voluntary Conveyance. In a
voluntary conveyance of a Lot, any grantee or his or her first mortgagee shall inform the
Board of Directors in writing of such contemplated conveyance and such grantee or first
mortgagee shall be entitled to a statement from the Board of Directors of the Association
setting forth the amount of all unpaid Assessments (including current Assessments) against
the grantor due the Association. Neither the grantee nor the mortgagee shall be personally
obligated for any delinquent Assessments, but such delinquent Assessments, along with
interest, late charges, costs and reasonable attorneys fees shall be a lien against the Lot in
accordance with Section 5.10 and Section 5.11 herein.

, BK 4640 PG 12 DOC# 20021855
Section 5.16 Late Charge. The Association may impose a charge against any Lot
Owner who fails to pay any amount assessed by the Association against his Lot within ten
(10) days after such Assessments are due and payable and who fails to exercise his rights
under this Declaration or under the laws of the State of North Carolina to successfully contest
such Assessment. The amount of the late charge shall be the greater of (a) twenty and 00/100
Dollars (S20.00), or (b) twenty percent (20%) of the delinquent amount, or such other
amount as may be determined by the Association from time to time. Additionally, if a Lot
Owner shall be in Default in payment of an installment upon an assessment or of a single
monthly assessment, the Association has the right to accelerate all monthly Assessments
remaining due in the current fiscal year. The total of such Assessments, together with the
delinquent Assessments shall then be due and payable by the Lot Owner no later than ten
(10) days after the delivery of written notice of such acceleration to the Lot Owner or twenty
(20 days) days after mailing of such notice to him by certified mail, whichever occurs first.
If such acceleration amount is not paid by the due date, the above -described late charge may
be imposed on the part of such accelerated amount not paid by the due date.
Section 5.17 Miscellaneous.
5.17.1 The Association may change the interest rate due on delinquent
Assessments (including anylate charges), except that the rate cannot be changed more
often than once every six (6) months. As of its effective date, the new interest rate will
apply to all Assessments then delinquent.
5.17.2 The Owner has the sole responsibility of keeping the Association
informed of the Owner's current address if different from the Lot owned. Otherwise notice
sent by Associationto the Lot is sufficient for any notice requirement under this
Declaration.
5.17.3 The lien under this Article V arises automatically, and no notice of lien
need be recorded to make the lien effective.
5.17.4 The Assessment lien includes all collection costs, including demand
letters, preparation of documents, reasonable attorneys' fees, court costs, filing fees,
collection fees, and any other expenses incurred by the Association in enforcing or
collecting the Assessment.
5.17.5 Any Assessment otherwise payable in installments shall become
immediately due and payable in full without notice upon Default in the payment of any
installment. The acceleration shall be at the discretion of the Board.
5.17.6 No Owner of a Lot may exempt himself or herself from liability for his
or her contribution toward the Common Expenses by waiver of the use or enjoyment of
any of the Roads and Wastewater Treatment Systems or by the abandonment of his or her
Lot.
5.17.7 This Section 5.17 applies to every type of Assessment.
ARTICLE VI

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EASEMENTS
Declarant's Easements: General. The easements and grants reserved for and granted to he
Declarant also benefit and bind any heirs, successors and assigns of Declarant and their respective
guests, invitees or lessees, including, without limitation, assignees of Declarant who do not own
property within the property.
Section 5.18 Easements to Run with Land. All easements and rights described in this
Article VI are easements appurtenant, running with the land, perpetually in full force and effect,
and at all times shall inure to the benefit of and be binding on the Declarant, its successors and
assigns, and any Owner, purchaser, mortgagee, and other person or entity now or hereafter having
an interest in the Subdivision, or any part or portion of it.
Section 5.19 Easement for Encroachments. The Dwelling Units, all utility lines, and
all other improvements as originally constructed by or on behalf of Declarant or its assigns shall
have an easement to encroach upon any setback or Lot as a result of the location of the building,
utility lines and other improvements across boundary lines between and along Lots and/or the
Roads and Wastewater Treatment Systems, or as a result of building or improvement movement
or alterations or additions from time to time, provided that such alterations or additions have
complied with the requirements of this Declaration.
Section 5.20 General Easements. An easement is hereby reserved and/or granted in
favor of the Declarant and/or the Association in, on, over and through the Roads and Wastewater
Treatment Systems, the Lots and/or Dwelling Units for the purposes of maintaining, cleaning,
repairing, improving, regulating, operating, policing, replacing and otherwise dealing with the
Roads and Wastewater Treatment Systems, Lots and/or Dwelling Units, including all
improvements thereon as required or permitted by the Constituent Documents or applicable law.
Section 5.21 Use of Easement. Any use of the rights and easements granted and
reserved in this Article VI shall be reasonable. If any damage, destruction, or disturbance occurs
to a Lot, Road or Wastewater Treatment Systems as a result of the use of any easement or right,
the Lot, Road or Wastewater Treatment Systems shall be restored by, or at the direction of, the
Association promptly in a reasonable manner at the expense of the person or persons making the
use of the easement or right that resulted in the damage, destruction or disturbance. Before
beginning work, Association may require all or any part of the expected expense to be prepaid by
that person or those persons liable for the expense. Additionally, should any Lot Owner other than
Declarant elect to exercise its easement rights hereunder, it shall be required to obtain the Board's
prior written approval (not to be unreasonably withheld), after providing the Board with detailed
plans of its proposed work, as well as evidence of appropriate insurance and other such reasonable
information or assurances as the Board may require. No easement may be granted across, through,
over, or under any Lot, Road or Wastewater Treatment Systems, which materially restricts ingress
and egress to the Lot, Road or Wastewater Treatment Systems, unless reasonable alternate ingress
and egress is provided or unless the restrictions is only temporary. All easements reserved
hereunder shall be perpetual and non-exclusive.

BK 4640 PG 14 DOC# 20021855
Section 5.22 Declarant's Easements: General. The easements and grants reserved for
and granted to the Declarant also benefit and bind any heirs, successors and assigns of Declarant
and their respective guests, invitees or lessees, including, without limitation, assignees of
Declarant who do not own property within the property.
Section 5.23 Easements to Run with Land. All easements and rights described in this
Article VI are easements appurtenant, running with the land, perpetually in full force and effect,
and at all times shall inure to the benefit of and be binding on the Declarant, its successors and
assigns, and any Owner, purchaser, mortgagee, and other person or entity now or hereafter having
an interest in the Subdivision, or any part or portion of it.
Section 5.24 Reference to Easements and Deeds. Reference in the respective deeds
of conveyance or any mortgage or trust deed or other evidence of obligation, to the easements and
rights described in this Declaration, shall be sufficient to create and reserve such easements and
rights to the respective grantees, mortgagees and trustees in said instruments as fully and
completely as those such easements and rights were recited fully and set forth in their entirety in
such instruments.
ARTICLE VI
INSURANCE
Section 6.1 General Insurance. The Association may carry a master policy of fire
and extended coverage, vandalism, malicious mischief and liability insurance, and if required by
law, workmen's compensation insurance with respect to the Subdivision and the Association's
administration thereof in accordance with the following provisions:
6.1.1 The Association shall purchase a master policy for the benefit of the
Association, the Lot Owners and their mortgagees as their interest may appear, subject to
the provisions of this Declaration and the Bylaws. The "master policy" may be made up.
of several different policies purchased from different agencies and issued by different
companies.
6.1.2 All Roads and Wastewater Treatment Systems now or at any time
hereafter constituting a part of the Subdivision shall be insured against fire and other perils
covered by a standard extended coverage endorsement, in an. amount not less than one
hundred (100%) percent of the replacement value thereof, with a deductible agreed to by
the Board of Directors, exclusive of the cost of the land, foundations, footings, excavation,
and architect's fees, without deduction for depreciation. The policy shall have cost of
demolition, water damage (excluding floods, backing up of sewers and drains, the running
off of surface water, and the overflow of a body of water), and agreed amount endorsements
and a deductible on any single loss or group of losses within one year in such amounts as
shall be found reasonable by the Board of Directors, after carefully considering and
comparing the increased premium costs resulting from a low deductible with the lower
premium costs but higher per loss risk resulting from a high deductible, together with all

BK 4640 PG 15 DOC# 20021855
other pertinent factors. The policy providing such coverage shall provide that no mortgagee
shall have any right to apply the proceeds thereof to the reduction of any mortgage debt.
Such policy shall provide coverage for built-in fixtures and equipment in an amount not
less than one hundred percent (100%) of the replacement cost thereof (subject to the
deductible provisions described above) and shall also provide that the insurer shall have no
right to contribution from any insurance which may be purchased by any Lot Owner as
hereinafter permitted. Such policy shall also contain either a waiver by the insurer of any
increased hazard clause, a severability of interest endorsement, or a provision stating that
the coverage will not be affected by the act, omission or neglect of any person unless such
act, omission or neglect is within the knowledge and control of the Association prior to the
occurrence of the loss. Such policy shall not provide coverage for any items of personal
property owned by any Lot Owner.
6.1.3 Such master policy of insurance shall contain provisions requiring the
issuance of certificates of coverage and the issuance of written notice to the Association
and to any mortgagee or mortgagees of any Lot Owner not less than thirty (30) days prior
to any expiration, substantial modification or cancellation of such coverage. •
6.1.4 Such insurance by the Association shall not prevent an Owner of a Lot
to obtain insurance on its own property, but no Lot Owner may at any time purchase
individual policies of insurance covering any item which the Association is required to
insure. If any Lot Owner does purchase such a policy, he or she shall be liable to the
Association for any damages, expenses or Iosses which it suffers or incurs as a result
thereof, and the Association shall have the same lien rights provided by Article V hereof
for Common Expense payments with respect to any such damages, expenses or losses not
paid to it by such Owner.
6.1.5 The Board of Directors shall review the insurance coverage required
under this Section 7.1 at least annually, and if any of such insurance coverage becomes
impossible or impractical to obtain, the Association shall obtain coverage that most closely
approximates the required coverage with the deductible provisions as determined by the
Board of Directors. In any event, all such insurance must comply, at a minimum, with the
applicable requirements set forth in the North Carolina Planned Community Act.
6.1.6 If the required insurance coverage under this Section 7.1 ceases to exist
for any reason whatsoever, any mortgagee of any portion of the Subdivision may remedy
that lack of insurance by purchasing policies to supply that insurance coverage. The funds
so advanced shall be deemed to have been loaned to the Association; shall bear interest at
a per annum rate two percent (2%) higher than the basic interest rate in any note secured
by the mortgagee's mortgage against a portion of the Subdivision; and shall be due and
payable to the mortgagee by the Association immediately. The repayment of this
obligation shall be secured by a Special Assessment against all Lot Owners under Article
V of this Declaration and shall not require a vote of the Members of the Association,
anything to the contrary in this Declaration notwithstanding.
6.1.7 The Association shall also maintain liability insurance in reasonable
amounts, covering all occurrences commonly insured against for death, bodily injury, and

BK 4640 PG 16 DOC# 20021855
property damage arising out of or in connection with the use, ownership, or maintenance
of the Roads and Wastewater Treatment Systems. The Association shall try to have its
liability insurance contain cross -liability endorsements or appropriate provisions to cover
liability of the Lot Owners, individually and as a group (arising out of their ownership
interest in the Roads and Wastewater Treatment Systems), to another Lot Owner.
Section 6.2 Fidelity Insurance. The Association must have fidelity coverage against
dishonest acts on the part of Officers and employees, Members of the Association, members of the
Board, trustees, employees or volunteers responsible for the handling of funds collected and held
for the benefit of the Lot Owners. The fidelity bond or insurance must name the Association as
the named insured and shall be written in an amount sufficient to provide protection which is in
no event less than the insured's total Regular Assessment, plus all accumulated reserves and all
other funds held by the Association either in its own name or for the benefit of the Lot Owners.
Section 6.3 Directors' and Officers' Errors and Omissions Insurance. The
Association shall purchase insurance to protect itself and to indemnify any Director or Officer,
past or present against expenses actually and reasonably incurred by him/her in connection with
the defense of any action, suit or proceeding, civil or criminal, in which he is made a party by
reason of being or having been such Director or Officer, except in relation to matters as to which
he shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct
in the performance of duty to the Association; or to obtain such fuller protection and •
indemnification for Directors and Officers as the law of North Carolina permits. The policy or
policies shall be in an amount to be reasonably determined by the Association.
Section 6.4 Premiums. All premiums upon insurance purchased by the Association
shall be Common Expenses. Notwithstanding the foregoing, the Lot Owners may be responsible
for certain deductibles to the insurance policies purchased by the Association as outlined in Section
7.1 and Section 7.7 herein.
Section 6.5 Proceeds. Proceeds of all insurance policies owned by the Association
shall be received by the Association for the use of the Lot Owners and their mortgagees as their
interest may appear; provided, however, the proceeds of any insurance received by the Association
because of property damage shall be applied to repair and reconstruction of the damaged property,
except as may otherwise be permitted by this Declaration.
Section 6.6 Power of Attorney. Each Lot Owner shall be deemed to appoint the
Association as his true and lawful attorney -in -fact to act in connection with all matters concerning .
the maintenance of the master policy or any other insurance policy obtained by the Association.
Without limitation on the generality of the foregoing, the Association as said attorney shall have
full power and authority to purchase and maintain such insurance, to collect and remit the
premiums therefor, to collect proceeds and to distribute the same to the Association, the Lot
Owners and their respective mortgagees as their interest may appear, to execute releases of liability
and to execute all documents and to do all things on behalf of such Lot Owners and the Subdivision
as shall be necessary or convenient to the accomplishment of the foregoing; and any insurer may
deal exclusively with the Association in regard to such matters.

BK 4640 PG 17 DOC# 20021855
Section 6.7 Responsibility of Lot Owner. The Association shall not be responsible
for procurement or maintenance of any insurance covering any Lot or Dwelling Unit, or the
contents of and Lot or Dwelling Unit nor the liability of any Lot Owner for injuries not caused by
or connected with the Association's operation, maintenance or use of the Roads and Wastewater
Treatment Systems or other property located in the Subdivision. Each Lot Owner shall, at his or
her own expense, obtain public liability insurance for personal injuries or damage arising out of
the use and occupancy of or occurring within his Lot or Dwelling Unit. In addition, each Lot
Owner shall maintain fire and extended coverage insurance on his Dwelling Unit, and the contents
of his Dwelling Unit. The Association may request the Lot Owner to provide a copy of the policy(s)
to the Association evidencing this insurance coverage at any time.
Each Lot Owner agrees that if any Owner(s) damages a building or other improvements
now or at any time hereafter constituting a part of the Roads and Wastewater Treatment Systems
of the Subdivisionwhich is covered under the Association's insurance policy, the Owner or
Owners causing such damage shall be responsible for paying the lesser of: (a) the insurance
deductible due under the Association's insurance policy; or (b) the cost to repair and/or replace
any damage to a building or other improvements, which amount shall be due within ten (10) days
after the delivery of written notice of such deductible due or replacement/repair costs by the
responsible Lot Owner(s) or twenty (20) days after mailing of such notice by certified mail,
whichever occurs first. In the event a Lot Owner refuses or fails to pay the insurance deductible
or replacement/repair costs in the time period provided in the preceding sentence, the amount
thereof may be advanced by the Association and the amount so advanced by the Association shall
be assessed to such Owner as an Individual Assessment, which shall be due and payable following
seven (7) days written notice.
Section 6.8 Release. All policies purchased under this Article VII by either the
Association or the individual Lot Owners shall provide for the release by the issuer, thereof,
of any and all rights of subrogation or assignment and all causes and rights of recovery
against any Lot Owners, member of their family, their employees, their tenants, servants,
agents and guests, the Association, any employee of the Association, the Board, or any
occupant of a Dwelling Unit in the Subdivision, for recovery against any one of them for any
loss occurring to the insured property resulting from any of the perils insured against under
the insurance policy.
Section 6.9 Approximate Coverage. If any of the required insurance coverage
under this Article VII becomes or is impossible to obtain or can be obtained only at an
unreasonable cost, the Association shall obtain coverage which most closely approximates
the required coverage, if such substitute insurance is available.
Section 6.10 Additional Policy Requirements. All such insurance coverage
obtained by the Association shall be written in the name of the Association, for the use and
benefit of the Association, the Lot Owners and their mortgagees, as further identified below.
Such insurance shall be governed by the provisions hereinafter set forth:
6.10.1 Exclusive authority to adjust losses under policies in force on the
Subdivision obtained by the Association shall be vested in the Association provided,

BK 4640 PG 18 DOC# 20021855
however, that no mortgagee having an interest in such losses may be prohibited from
participating in the settlement negotiations, if.any, related thereto.
6.10.2 In no event shall the insurance coverage obtained by the Association
hereunder be brought into contribution with insurance purchased by individual Owners,
occupants, or their mortgagees, and the insurance carried by the Association shall be
primary.
6.10.3 All casualty insurance policies shall have *an agreed amount
endorsement with an annual review by one or more qualified persons.
6.10.4 The Association shall be required to make every reasonable effort to
secure insurance policies that will provide for the following:
6.10.4.1 a waiver of subrogation as discussed in Section 7.8;
6.10.4.2 that no policy may be canceled, invalidated, or suspended on
account of the acts of arty one or more individual Owners;
6.10.4.3 that no policy may be canceled, invalidated or suspended on
account of the conduct of any Director, officer or employee of the Association or
its duly authorized manager without prior demand in writing delivered to the
Association to cure the defect and the allowance of a reasonable time thereafter
within which the defect may be cured by the Association, its manager, any Owner
or mortgagee; and
6.10.4.4 that any "other insurance" clause in any policy exclude
individual Owner's policies from consideration.
ARTICLE VII
ASSOCIATION
Section 7.1 Association. The administration of the Subdivision, after Declarant
conveys out 75 per cent of the lots in the subdivision, shall be vested in the Association. The
Owner of any Lot, upon acquiring title, shall automatically become a Member of the
Association and shall remain a Member until such time as his ownership of such Lot ceases
for any reason, at which time his membership in the Association shall automatically cease.
The Association shall have full power and responsibility to administer, operate, sustain,
maintain, and govern the Subdivision including but not limited to, the powers and
responsibilities to make prudent investments of funds held by it; to make reasonable Rules
and Regulations; to borrow money; to make Assessments; to bring lawsuits and defend
lawsuits; to enter into contracts; to enforce all of the provisions of this Declaration, the
Bylaws and any other documents or instruments relating to the establishment, existence,
operation, alternation of the Subdivision. The powers of the Association shall be construed
liberally and shall include, without limitation, all of the powers set forth in Section 47F-3-
102 of the Planned Community Act.

BK 4640 PG 19 DOC# 20021855
Section 7.2 Board of Directors. Unless otherwise specifically stated in this
Declaration, the Association shall act exclusively through its Board of Directors (the
"Board"). The Association in accordance with the Bylaws shall choose the Board. The Board
shall be authorized to delegate the administration of its duties and powers by written
contract to a managing agent or administrator employed for that purpose by the Board.
Section 7.3
7.3.1
Dwelling Units.
improvements in
Association.
Limitations on Association's Duties.
The Association did not construct the improvements, including the
The Association does not warrant in any way or for any purpose, the
the Subdivision. Construction defects are not the responsibility of the
7.3.2 The Association shall have a reasonable time in which to make any
repair or do any other work, which it is required to do under the Constituent Documents.
The Association must first have actual knowledge of a problem. Any determination of the
reasonableness of the Association's response, must allow for the facts that the Association
is volunteer and that the funds available to the Association are limited.
7.3.3 In case of ambiguity or omission, the Board may interpret - the
Declaration and the other Constituent Documents, and the Board's interpretation shall be
final if made without malice or fraud.
ARTICLE VIII
HARMONY, ENVIRONMENTAL CONTROLS
Section 8.1 Architectural Control Committee. Except for original construction
performed by or on behalf of Declarant or as otherwise in these covenants provided, no
building, fence, electric pet fence, sidewalk, drive, mailbox, or other structure, or
improvement or anything attached thereto visible from the outside of the structure or
improvement (including, without limitation, storm doors, windows, drapes or window
coverings) shall be erected, placed, altered, or maintained within the Subdivision nor shall
any exterior addition to or change (including any change in color) or alteration therein be
made until the proposed building plans, specifications, exterior color and finish, plot plans
(showing the proposed location of such building or structure, drives, fences and parking
areas), general contractor and all subcontractors, and construction schedule shall have been
submitted to and approved in writing by the Board of Directors of the Association, or by any
architectural control committee appointed by said Board of Directors. Refusal of approval
of plans, location or specification by said Board .of Directors or architectural control
committee may be based upon any reasonable ground, including, without limitation, lack of
harmony of external design, color, location or relation to surrounding structures and
topography and purely aesthetic considerations which, in the discretion of said Board of
Directors or architectural control committee shall deem sufficient. After approval by the
Board of Directors or architectural control committee is given, no alterations may be made
in such plans except by and with their prior written consent. One copy of all plans,

BK 4640 PG 20 DOC# 20021855
specifications and related data shall be furnished the Board of Directors or architectural
control committee for its records.
ARTICLE IX
USE RESTRICTIONS
Section 9.1 Use and Occupancy. The Association shall make Rules and
Regulations to govern the use and occupancy of the Subdivision. In addition, the following
covenants, conditions, and restrictions, as to use and occupancy shall run with the land and
shall be binding upon each Lot Owner, his heirs, tenants, licensees and assigns..
Section 9.2 Purpose of Subdivision. Except as otherwise provided in this
Declaration, no part of the Subdivision shall be used for other than housing and the common
recreational purposes for which the property was designed, and each Lot shall be used only
for residential purposes, unless the Board of Directors authorizes some other use. Except for
the construction, sales and management activities (including, without limitation, the right of
Declarant to maintain one or more model Dwelling Units, or sales offices) of the Declarant,
no business, trade, industry, occupation or profession of any kind, whether for profit or not
for profit, may be conducted, maintained, or permitted on any part of the Subdivision
property. To the extent permitted by law, an Owner may use a portion of his or her Dwelling
Unit for an office or studio (other than a music and/or dance studio) provided that the
activities conducted therein shall not interfere with the quiet enjoyment or comfort of any
other owner or occupant; and provided further that such activities do not increase the
normal flow of traffic or individuals in and out of the Subdivision or in and out of said
Owner's Lot.
Section 9.3 Obstruction of Roads and Wastewater Treatment Systems. There
shall be nti storage or parking of any items, including baby carriages, playpens, bicycles,
wagons, toys, vehicles, benches or chairs in any part of the Roads and Wastewater Treatment
Systems, except as permitted by the Rules and Regulations. Patios porches (except screened
in and/or enclosed porches) and decks, may be used only for their intended purposes.
Section 9.4 Parking. Except for vehicles being used by persons providing
services to the Declarant, the Association, the Lot Owners or otherwise used or authorized
to be used at the Subdivision by the Declarant, no part of the Subdivision may be used for
the parking of any house trailer, mobile home, automobile trailer, , camp car, or any other
similar vehicle (collectively, "Special Vehicles"), unless such Special Vehicles are parked in
the garage of the Lot Owner who owns such Special Vehicle and the garage door of such Lot
Owner is completely closed at all times when a Special Vehicle is parked therein. Operative
vehicles, other than Special Vehicles, used by a resident of a Lot as a primary source of
transportation may be parked in the driveway of such Lot Owner or in any garage space
owned by the Owner of such Lot. Inoperative vehicles may not be parked within the
Subdivision unless these inoperative vehicles are parked in the garage and the garage door
is completely closed. No auto maintenance and/or repairs may be performed on the
Subdivision except if performed inside the garage of a Lot Owner. Vehicles, whether owned
by a Lot Owner or not, parked in violation of any part of this Declaration or in violation of

BK 4640 PG 21 DOC# 20021855
any Rules or Regulations, shall be towed away and stored at the Owner's risk and expense.
By parking in the Subdivision, the Owner of the vehicle or other vehicle user hereby waives
any claim against the Association resulting directly or indirectly out of the towing, unless the
towing can be shown beyond a reasonable doubt to have been done maliciously by the
Association. Note that the Association is not obliged to try to determine the owner of a vehicle
and first give notice, before towing the vehicle. If a Lot Owner is not sure about the right to
park at any particular area or space, the Lot Owner should request, in writing, a written
opinion from the Board. If the Board gives the approval sought by the Lot Owner or if the
Board does not answer the written request by the Board, the Lot Owner may park in the
space until further writtennotice to the contrary from the Board. Note that the Association's
right to tow a vehicle includes the right to immobilize it.
Section 9.5 Compliance With Insurance Policies and Waste. Nothing shall be
clone or kept in any Dwelling Unit, in the Roads and Wastewater Treatment Systems or on a
Lot which will increase the rate of insurance of the buildings, or contents thereof, applicable
for residential use, without the prior written consent of the Association. No Lot Owner shall
permit anything to be done or kept in his or her Dwelling Unit, in the Roads and Wastewater
Treatment Systems -or on a Lot which will result in the cancellation of insurance on the
buildings, or contents thereof, or which would be in violation of any law. No waste will be
committed in the Roads and Wastewater Treatment Systems. All laws shall be obeyed.
Section 9.6 Exterior Surfaces of Buildings. Lot Owners shall not cause or
permit anything to be hung or displayed on the inside or outside of windows (except as
provided herein) or hung on the outside of the Dwelling Unit doors (including but not limited
to decorative door arrangements) or placed on the exterior walls of a building, and no sign
(other than those described in Section 10.11 hereof and directional signs or signs concerning
the use of the Roads and Wastewater Treatment Systems), awning, canopy, flag (except the
American flag), shutter, radio or television antenna shall be affixed to or placed upon the
exterior walls or roof or any part of the building, or the Roads and Wastewater Treatment
Systems without the prior written consent of the Association.
Section 9.7 Animals and Pets. No animals of any kind shall be raised, bred, or
kept on any Lot or in any Dwelling Unit or in the Roads and Wastewater Treatment Systems,
except service animals and animals that have been approved in writing by the Home
Owner's Association. All other approved animals may be kept in a Dwelling Unit, subject to
the Rules and Regulations, provided that it is not kept, bred or maintained for any
commercial purpose, and that it is kept subject to the Rules and Regulations of the
Association. Dogs, cats or other household pets must be kept within the confines of the
Owner's Dwelling Unit except when being held on hand leash by the pet owner of the animal.
No Lot Owner shall install a fence and/or electric fence on any portion of the Common Area
without the prior written consent of the Board. No pet may be "staked", housed, tied up or
otherwise left in any Common Area. A Lot Owner shall be responsible for cleaning up after
his household pet Additionally, the right of an occupant to maintain ari animal in a Dwelling
Unit shall be subject to termination if the Board in its full and complete discretion,
determines that maintenance of the animal constitutes a nuisance or creates a detrimental
effect on the Subdivision or occupants. No dog house or other structure used or intended for

BK 4640 PG 22 DOC# 20021855
the housing or keeping of animals may be constructed, placed or maintained on any part of
the Roads and Wastewater Treatment Systems.
Section 9.8 Nuisances. No noxious or offensive activity shall be carried on in
any Dwelling Unit or in the Roads and Wastewater Treatment Systems or on the Lot of an
Owner, nor shall anything be done therein, either willfully or negligently, which may be or
become an annoyance or nuisance to the other Lot Owners or occupants.
Section 9,9 Impairment of Structural Integrity of Building. Nothing shall be
done in any Dwelling Unit, or on any Lot, or in, on or to the Roads and Wastewater
Treatment Systems which will impair the structural integrity of any building or which,
absent the prior written approval of the Board, would structurally change any building.
Section 9.10 Laundry or Rubbish and Open Fires in Roads and Wastewater
Treatment Systems and Facilities. No clothes, sheets, blankets, laundry of any kind or other
articles shall be hung out or exposed on any part of the Roads and Wastewater Treatment
Systems, or. on any Lot in a manner visible from any neighboring Lot or street. The Roads
and Wastewater Treatment Systems shall be kept free and clear of rubbish, debris and other
unsightly materials. All trash, garbage or other rubbish shall be deposited only in covered
sanitary containers as provided in Section 10.14 below.
Section 9.11 Prohibited Activities. Except as otherwise provided in this
Declaration, no business, trade, industry, occupation or profession of any kind, whether for
profit or not for profit, shall be conducted,, maintained or permitted on any part of the
Subdivision unless approved by the Home Owner's Association. Declarant and/or the Board
shall have theright to immediately remove and dispose of those items in violation of this
Declaration. A Lot Owner must obtain the prior written consent of the Board of Directors
in the event a Lot Owner desires to maintain a "For Sale" or "For Rent" sign which is not of
a typical size within the industry, or desires to maintain other displays or advertising, unless
otherwise provided for under the Rules and Regulations. The right is reserved by the
Declarant to use any such unsold or unoccupied Dwelling Units or other structures in the
Subdivision as models and/or offices in connection with the construction, sale or rental of
Dwelling Units.
So long as the Declarant owns a Lot no action may be taken nor may any Rule or Regulation
be adopted or amended that would (a) directly or indirectly alter the exterior appearance of any
part of the Subdivision; (b) reduce or discontinue any maintenance standard or practice in effect
as of the date when the Declarant no longer controls the Board; (c) adversely affect the Declarant's
sale or leasing of any Lots; or (d) otherwise adversely affect the Declarant, any of its rights, or any
Lot owned by it without, in each case, first obtaining the Declarant's written consent.
Section 9.12 Alteration of Roads and Wastewater Treatment Systems. Nothing
shall be altered or constructed in or removed from the Roads and Wastewater Treatment
Systems except as otherwise provided in this Declaration and except upon the written consent
of the Association. In addition, a Lot Owner must obtain the prior written consent of the
Board prior to installing and landscaping or planting any flowers, herbs or vegetables, on
any portion of the Subdivision (including any Lot).

BK 4640 PG 23 DOC# 20021855
Section 9.13 Nondiscrimination. No. owner (including the Declarant), or any
employee, agent or representative thereof, shall discriminate upon the basis of sex, race, age,
color, creed or national origin in the sale, lease or rental of any Lot nor in the use of the .
Roads and Wastewater Treatment Systems.
ARTICLE X
ENFORCEMENT
Section 10.1 Enforcement.
10.1.1 The Association or any Lot Owner may enforce these covenants,
conditions and restrictions. Enforcement of these covenants, conditions and restrictions
shall be by any proceeding at law or in equity against any person or persons violating or
attempting to violate ("Violating Party") any covenant, condition or restriction, either to
restrain or enjoin violation or to recover damages, and against the land to enforce any lien
created by these covenants. In addition to all other amounts due on account of said
violation or attempted violation, the Violating Party shall be liable to the parties enforcing
the covenants and/or restrictions of this Declaration (the "Enforcing Parties") for all
reasonable attorney's fees and court costs incurred by the Enforcing Parties. Failure or
forbearance by the Association or any Owner to enforce any covenant, condition or
restriction herein contained shall in no event be deemed a waiver of the right to do so
thereafter. In any lawsuit filed to enforce this Declaration by injunction or restraint, there
shall be and there is hereby created and declared to be a conclusive presumption that any
violation or breach or any attempted violation or breach of any of the within covenants,
conditions or restrictions cannot be adequately remedied by action at law or by recovery of
damages.
10.1.2 In addition to all other remedies of the Association, the Association shall
have the right to assess a maximum fine of $150.00 per day (or such higher amount as may
be allowed by law) per violation against any Owner who violates any provision of this
Declaration or the Articles, Bylaws or Rules and Regulations of the Association after such
Owner has been given notice of the violation and an opportunity to be heard with respect
to the violation in accordance with such policies and procedures as may be adopted from
time to time by the Board of Directors or as may be set forth in the Bylaws.
10.1.3 In addition to the above rights, the Association may also enter upon a
Lot or any land upon which a violation exists to remove any violation, perform
maintenance or make repairs thereon which isthe responsibility of a Lot Owner who has
failed to remove said violation or to perform such maintenance or make such repairs (i)
after having given such owner at least ten (10) days prior notice, or (ii) without giving
notice in the event of an emergency.
Any action brought by the Association hereunder may be brought in its own name, in the
name of its Board or in the name of its managing agent. In any case of flagrant or repeated violation
by a Lot Owner, he or she may be required by the Association to give sufficient surety or sureties

BK 4640 PG 24 DOC# 20021855
for his or her future compliance with the covenants, conditions and restrictions contained in this
Declaration, the Bylaws and the Rules and Regulations.
Section 10.2 Severability. Invalidation of any one of these covenants, conditions
or restrictions by judgment or court order shall in no way affect any other provisions, which
shall remain in full force and effect.
Section 10.3 Restrictions Run With Land. The easements or other permanent
rights or interests are herein created, the covenants and restrictions of this Declaration shall
run with and bind the land, and shall inure to the benefit of and be enforceable by the
Association, or the Owner of any Dwelling Unit subject to this Declaration, their respective
legal representatives, heirs, successors, and assigns.
Section 10.4 Amendment. The Association (the Declarant controlling the
Association until the expiration of the Development Period) may amend this Declaration at
any time, as long as consistent with the design, scheme and purposes of this Declaration, by
the affirmative vote or written agreement of the Owners to whom not less than seventy-five
percent (75%) of all of the votes in the Association are allocated in accordance with Section
4.4 and Section 4.5 above. Any amendment must be recorded in the Pender County Register
of Deeds. Following the end of the Development Period, no such agreement to amend, in
whole or in part, shall be effective unless written notice of the proposed amendment is sent
to every Member at least thirty (30) days in advance of any action taken, and no such
amendment shall be effective with respect to any permanent easements or other permanent
rights or interests relating to the Roads and Wastewater Treatment Systems herein created
(unless such amendment is consented to in writing by Declarant and all other beneficiaries
of such permanent easements, rights of interests).
Section 10.5 Management and Service Contracts. Any agreement for the
professional management of the Subdivision of the Roads and Wastewater Treatment
Systems may not exceed three (3) years and shall provide for termination by either party
without cause and without payment of a termination fee upon reasonable notice.
Section 10.6 Binding Determination. In the event of any dispute or disagreement
with or between any Owner(s) relating to, or of any other disputes, disagreements or
questions regarding, the interpretation or application of the provisions of this Declaration or
the Articles or Bylaws of the Association, the determination thereof (i) by Declarant for so
long as Declarant retains control of the Association; and (ii) thereafter by the Board of
Directors of the Association shall be final and binding on each and all such Owners;
providing that any determination which directly or indirectly affects Declarant shall require
Declarant's prior consent to become binding upon Declarant.
Section 10.7 Captions and Titles. All captions, titles or headings in this
Declaration are for the purpose of reference and convenience only and are not deemed to
limit, modify' or otherwise affect any of the provisions hereof, or to be used in determining
the intent or context thereof.

BK 4640 PG 25 DOC# 20021855
Section 10.8 Notices. Except as otherwise provided in this Declaration, any
notice to any Owner under this Declaration shall be in writing, shall be effective on the earlier
of (i) the date when received by such Owner, or (ii) the date which is three days after mailing
(postage prepaid) to the last address of such Owner set forth in the books of the Association.
The address of an Owner shall be at his Lot (or any of them if more than one) unless
otherwise specified in writing to the Association. The Articles and Bylaws shall specify the
permissible manner of giving notice for voting and all other Association matters for which
the manner of giving notice is not prescribed in this Declaration.
Section 10.9 Governing Law. This Declaration shall be deemed to be made
under, and shall be construed in accordance with and shall be governed by, the laws of the
State of North Carolina, and suit to enforce any provision hereof or to obtain any remedy
with respect hereto shall be brought in state court in Pender County, and forthis purpose
each Owner by becoming such hereby expressly and irrevocably consents to the jurisdiction
of said court.
ARTICLE XI
MORTGAGEE'S RIGHTS
Section 11.1 Notice of Rights of Mortgagee of a Lot. As used herein, the term
"Mortgagee" shall mean the holder of a first lien mortgage or deed of trust on. a Lot who
provides notice to the Association with its name and address with a request to receive any
notices and other rights provided to "Mortgagees" under this Article XII. A Mortgagee of a
Lot shall be entitled to receive written notification of any default, not cured within sixty (60)
days after its occurrence, by the Owner of the Lot with respect to any obligation of the Owner
under the Declaration, the Bylaws of the Association or the Articles of Incorporation of the
Association. Any Mortgagee of a Lot can make the request for notification. The notification
shall be sent not later than the 65th day after the occurrence of an uncured Default.
Section 11.2 Rights of First Refusal. Any right of first refusal now or hereafter
contained in this Declaration or any amendment or modification hereto or otherwise arising
in favor of the Association or certain Owners shall not apply to or preclude or impair in any
way the right of the first Mortgagee to (i) foreclose or take title to the Lot pursuant to the
remedies provided in its mortgage; (ii) accept a deed or assignment in lieu of foreclosure in
the event of a default under the Mortgage; or (iii) sell or lease a Lot and Dwelling Unit
acquired by the Mortgagee.
Section 11.3 Rights of Mortgagee. Unless at least seventy five percent (75%) of
the Mortgagees (based upon one vote for each first mortgage or deed of trust owned), and a
vote of seventy-five percent (756/o) of the votes allocated to the Members entitled to vote
hereunder, the Association shall not:
11.3.1 by an act or omission seek to abandon, partition, subdivide, encumber,
sell or transfer the Subdivision or Roads and Wastewater Treatment Systems or
improvements located thereon which are owned directly or indirectly by the Association
for the benefit of the Lots (the granting of easements for public utilities or for other

BK 4640 PG 26 DOC# 20021855
purposes consistent with the intended use of the Subdivision, or the conveyance of
Common Area (not including the Recreational Facilities) to a local governmental authority
for public park purposes or the conveyance or dedication of Roadways shall not be deemed
a transfer within the meaning of this clause); •
11.3.2 change the method of determining the obligations, assessments, dues or
other charges which may be levied against a Lot;
11.3.3 by act or omission change, waive or abandon any scheme of regulation
or enforcement thereof pertaining to the architectural design or exterior appearance of the
Dwelling Units, the exterior maintenance of the Dwelling Units, the maintenance of
common fences or driveways or the upkeep of lawns and plantings in the Subdivision;
11.3.4 fail to maintain fire and extended coverage insurance on insurable
Roads and Wastewater Treatment Systems on current replacement cost basis in an amount
not less than one hundred percent (100%) of the insurable value (based on current
replacement cost); or
11.3.5 use hazard insurance proceeds for losses to any Roads and Wastewater
Treatment Systems for other than the repair, replacement or reconstruction of such Roads
and Wastewater Treatment Systems.
Section 11.4 Right to Examine Books and Records. Mortgagees, their successors
or assigns, shall have the right to examine the books and records of the Association.
Section 11.5 Taxes and Insurance. Mortgagees may, jointly or singly, pay taxes
or other charges which are in default and which may or have become a charge against any
Lot and may pay overdue premiums on hazard insurance policies, or secure new hazard
insurance coverage on the lapse of a policy, for such Lot, and first mortgagees making such
payments shall be owed immediate reimbursement therefor from the Lot Owner. •
Section 11.6 Insurance Proceeds and Condemnation Awards. No provision of
this Declaration or any other document or instrument affecting the title to the Property,
Roads and Wastewater Treatment Systems, any Lot or the organization or operation of the
Association shall give an Owner or any other party priority over any rights of first
mortgagees of Lots within the Subdivision pursuant to their mortgages in the case of a
distribution to Owners of insurance proceeds or condemnation awards for losses to or taking
of Roads and Wastewater Treatment Systems.
Section 13 Majestic Oaks West is subject:to the general_ limitation that no more than
10,000 square feet of any individual lot may contain: impervious.. surfaces:. Majestic. Oaks
West was subdivided and platted in ite original form :during 1978 and prior to ilie-institution
of the North' Carolina: Stonnwater runoff requirements effective January 1 of 1988: and
therefore not subject to the requirements of the North Carolina Division of Water Quality
nor those of Pender County.
I'r REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

BK 4640 PG 27 DOC# 20021855
IN WITNESS WHEREOF, Declarant has caused this instrument to be executed as of the
day and year first above written.
Easte C Homebuilders, LLC
Its Manager
State of North Carolina
County of Pender
I , Jessica M. Blackburn, a Notary of the County and State aforesaid, do hereby certify
that (�� n %i, % �, r 1m personally came before me this day and acknowledged
that he is a member/manager of Eastern NC Home Builders, LLC, a North Carolina limited
Liability Company and that he, being authorized to do so, executed the foregoing on behalf of
said Company.
Witness my hand and official seal, this the
Notary Seal
CLT 657258v1
` �O1
day of/� rh�h ,r9
Notary Pub is
‘2(adiu r�
Printed name of Notary
My commission expires: OQ c/

WASTEWATER AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF PENDER
This Agreement, made this the Z i day of Seri. , 2016, by and between EASTERN NC
HOMEBUILDERS, LLC (hereafter referred to as "Developer" as defined below), and OLD
NORTH STATE WATER COMPANY, LLC (hereafter referred to as "Utility" as defined below).
The Developer and the Utility may individually be referred to as a "Party" and collectively
referred to as the "Parties".
WITNESSETH
THAT WHEREAS, Developer (defined below) is the owner of that certain lands located off
Dan Owens Road, in Pender County, North Carolina, to be known Majestic Oaks West
Subdivision (hereafter referred to as "Subdivision" as defined below) and shown on that certain
map by Weston Lyall, PE, PLS, PLLC entitled "Mike Turco, Majestic Oaks Section 1, lots 1-134,
dated 5/23/2016, and.
WHEREAS, Developer is desirous of installing in Subdivision a Wastewater Utility System
(defined below) to provide wastewater utility service to all those persons now or hereafter owning
or maintaining lots in Subdivision and requiring wastewater utility service; and
WHEREAS, Developer or the individual lot owners shall be responsible for the maintenance,
repair and/or replacement of the Wastewater Utility System; and
WHEREAS, the Wastewater Utility System serving the Subdivision will be interconnected to
Utility's existing Majestic Oaks Wastewater Facilities (defined below); and
WHEREAS, Developer has requested Utility to accept the wastewater from the 16 lots into
Utility's Majestic Oaks Wastewater Facilities via a manhole located on Mae Drive; and
WHEREAS, Utility is agreeable to accepting the wastewater from the 16 lots into Utility's
Majestic Oaks Wastewater Facilities;

NOW, THEREFORE, for and in consideration of the premises and of the rights, powers, duties
hereinafter set forth to be performed by each party, Developer and Utility mutually do agree as
follows:
1. Definitions.
1.1. `Aereernent" shall mean this Agreement for the installation of the Wastewater Utility
System by Developer and the acceptance by Utility of the wastewater from the 16 lots
into Utility's Majestic Oaks Wastewater Facilities (including all exhibits and schedules
hereto, if any, as amended from time to time).
1.2. "Certificate Extension" shall mean an extension to the Certificate for Majestic Oaks.
1.3. "Cosine' shall mean instance upon which the Developer's Engineer has certified that
the Wastewater Utility System has been installed in compliance with the plans
approved by the County (if required), and DEQ (if required) and general accepted
engineering practices.
1.4. "Commission" shall mean the North Carolina Utilities Commission.
1.5. "County" shall mean Pender County, North Carolina.
1.6. "Developer" shall mean Eastern NC Homebuilders, LLC, a North Carolina Limited
Liability Company, its successors and assign, whose mailing address is: 449 Grill Road,
Clayton, NC 27520-7029.
1.7. "DEO" shall mean the Division of Environmental Quality of the North Carolina
Department of Environment and Natural Resources.
1.8. "Non -Discharge Permit" (if required) shall mean the permit for the construction and
operation of the Wastewater Utility System serving the Subdivision issued by DEQ
including all modifications thereto.
1.9. "Permit" or `Per7nits" (if required) shall mean the Wastewater Utility System Permit
and/or the Non -Discharge Permit, as the context requires.
1.10. "Subdivision" shall mean the property to be developed by Developer known as
Majestic Oaks West Subdivision presently planned for 16 residential services.

1.11. "Utility" shall mean Old North State Water Company, LLC, a North Carolina Limited
Liability Company, its successors and assigns, whose mailing address is: 4700
Homewood Court, Suite 108, Raleigh, North Carolina 27609.
1.12. "Wastewater Utility System" shall mean the individual STEP System (septic tank
effluent pump system) for each of the 16 lots that the Developer plans to install. These
STEP systems are to be engineered by Weston Lyall, PE. Utility shall have the right,
but not the duty, to inspect each STEP System prior to the time the individual STEP
System is initially placed in service, and thereafter on a continuing basis,
1.13. "Wastewater Facilities" shall mean Utility's existing Majestic Oaks Wastewater
Collection system in which the Wastewater Utility System shall be connected to.
1.14. "Wastewater Plans" are all plans and specifications for the Wastewater Utility System
approved by the County (if required), and DEQ (if required), and engineered by
Developer's engineer.
1 15. "WWTP"shall mean the Wastewater Treatment Plant knows as Majestic Oaks
Wastewater Treatment Plant, owned and operated by Utility, which will receive, treat,
and dispose of the sewerage produced by the lots in the Subdivision.
2. Design, Permitting, and Installation of Wastewater Utility System.
2.1.
Desian and Permit Requirements. Developer, at Developer's cost, shall seek to obtain
a Wastewater Utility System Permit from DEQ (if required) and shall list Developer as
permittee. Developer shall pay all engineering costs associated with the Wastewater
Utility System Plans and Permit fees required during the permitting and construction
processes, including costs related to the engineer's certification of completion. The
Wastewater Utility System shall be designed and installed in accordance with the
Wastewater Utility System Plans to be approved by the County (if required) and the
DEQ (if required), and engineered by Developer's engineer. Developer's engineer
shall prepare and process through DEQ the Permit applications and Wastewater Utility
System Plans and interconnection to Utility's existing Wastewater Facilities. Utility
shall and cooperate fully with Developer's engineer to expedite the County (if
required) and DEQ construction approval process (if required).

2,2,
2.3.
4
Installation Requirements. Developer, at Developer's expense, shall cause to be
installed in Subdivision, the complete Wastewater Utility System, which shall include
the interconnection to Utility's Wastewater Facilities. Utility reserves the right to make
periodic inspections of the Wastewater Utility System's installation. Such inspection
should not be considered a substitute for the Developer's engineer's duties and
responsibilities to inspect the installation. Developer shall pay for the installation costs
of all the necessary- components of the Wastewater Utility System to provide
wastewater utility service to all 16 lots in Subdivision. The Wastewater Utility System
shall be constructed in such a manner as to restrict entry of groundwater and surface
waters into the Wastewater Utility System to at least the minimum standards
established by the DEQ regulations for infiltration/inflow. Failure to install a "tight"
collection system could result in infiltration/inflow causing the WWTP to exceed its
permitted flow limit. This could limit the number of connections that can be served by
the Utility.
Developer shall insert provisions in the recorded Restrictive Covenants for Subdivision
and disclose at the closing of each lot that each homeowner is subject to the authority
of the Utility and is solely responsible for the operation, maintenance, repair,
inspection and replacement of their individual STEP System and all its component
parts. Further, such Covenants shall stipulate that each homeowner shall (a) have their
unit inspected annually by an inspector approved by the Utility, (b) that any requires
repairs are made in a timely manner by a contractor certified by the Utility, and (c) that
the contractor provides Utility with a copy of the inspection report. Each homeowner
shall be responsible to maintain and operate their respective individual STEP System to
prevent spillage and also the infiltration of surface water, groundwater and rainwater
into their STEP System. The Utility shall have absolutely no responsibility whatsoever
for the individual STEP System at each residence including the operation,
maintenance, repair, inspection, spillage and replacement. The Utility's responsibility
for the wastewater from each residence shall begin only after the wastewater enters into
the Utility's manhole located near the intersection of Dan Owens Drive and Mae Drive.

5
2.4. Cut-off Valves. The Developer shall install an individual cut-off valve for each of the
16 lots being served. The cut-off valve shall be located in the easement for Dan Owen
Drive. The Utility shall have access to each cut-off valve for purposes of shutting off
wastewater service for (a) non-compliance of Utility or DEQ policies and (b) for non-
payment monthly usage charges.
2.5. Engineering Certification of Completion & Record Drawings. If required, Developer,
at Developer's cost, shall have the engineer furnish DEQ and Utility with a signed and
sealed copy of the DEQ required letter from Developer's engineer certifying that the
Wastewater Utility System is installed in compliance with the approved Wastewater
Plans. Said letter shall specify if the certification of completion issued by the engineer
is a final or partial certification and shall include the approved Wastewater Plans
Permit number issued by DEQ. Developer, at Developer's cost, shall have the engineer
supply Utility with an electronic copy of engineering. record drawings of the
Wastewater Utility System ("as-builts"). The electronic version of the as-builts shall be
submitted to Utility in '.dwg' format and shall also include, two special references. The
signed and sealed copy shall be submitted to Utility in '.pdf format and shall depict the
seal of the professional engineer responsible for issuing the as -built drawings.
3. Certificate of Public Convenience and Necessity. Upon signing of this Agreement, Utility
will apply to the Commission as soon as may be practicable for a Certificate Extension to
wastewater service for non-compliance of provide water service to the Subdivision. Utility, at
Utility's cost, shall file for the Certificate Extension. Upon the granting of such Certificate
Extension, and Closing occurring, Utility will supply wastewater utility service to the residents
of Subdivision under the terms of such Certificate as the same may be amended from time to
time.
4. Wastewater Rates, Fees, and Charges. Utility shall apply for its current Commission
approved wastewater rates and fees for Majestic Oaks Subdivision, as may be amended from
time to time.
4.1. Monthly Wastewater Rate: The monthly flat rate waster fee is 556.40

6
4.2. New Customer Fee: The New Customer fee shall be S20.00 and shall be charged each
time the name on account is changed.
4.3. Wastewater Connection Charge: The sewer connection fee for a wastewater service
shall be $4,200 per residential service and shall be paid by the person or builder
requesting wastewater service to that location for the first time only.
4.4. Danner Manhole Reimbursement Charge: This is a charge based on Utility's filing on
March 24, 2013 in Docket W-1300, Sub 0 of a Notification of Intent to Customer Serve
Outside Service Area. The charge is to reimburse Mr. Danner a prorated share of the
cost of installing Utility's manhole located near the intersection of Dan Owens Drive
and Mae Drive as required in that filing,. This charge shall be $732.35/lot and
calculated as follows: $12,450 (cost of installing manhole) / 17 (Danner lot + the 16
lots in this a-eement).
5. Purchase Price. There shall be no purchase price paid by Utility for the Wastewater Utility
System as Utility shall have no ownership or maintenance responsibilities of the Wastewater
Utility System.
6. Declarations. Utility acknowledges that the Subdivision shall be encumbered by a declaration
of covenants, conditions, and restrictions (the "Declaration") before or after Closing. In
addition, Developer shall include language advising the lot owners of their responsibilities for
the individual STEP facilities serving each individual home including that part of the STEP
facilities extending from each individual lot to the Utility's Wastewater Faculties.
7. Recorded Subdivision Plats. Developer, at Developer's cost, upon recordation shall provide
Utility with a recorded plat showing each lot being served by the Wastewater Utility System.
8. List of Lot Numbers and Addresses. The Developer shall furnish the Utility with a list of lot
numbers and physical address for each lot in the Submission. A lot number and address form is
attached hereto as Exhibit 8.
9. Binding Agreement. This Agreement shall be binding upon and shall inure to the benefit of the
Developer and the Utility and the successors and assigns of each.

7
10. General Provisions.
10.1. After the execution of this Agreement, all new development agreements entered into by
Developer with respect to development at the Subdivision shall be consistent with the
terms of this Agreement to the extent addressing the provision of wastewater utility
service to the Subdivision.
10.2. Representations. Warranties. Covenants and Agreements Survive Closing. All and
warranties of Developer and Utility hereunder shall survive Closing. Further, any
covenant or agreement herein which contemplates performance after the time of any
Closing shall not be deemed to be merged into or waived by the instruments delivered
in connection with such Closing, but shall expressly survive such Closing and be
binding upon the Parties obligated thereby.
10.3. Binding upon Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of Developer and Utility, and the successors and assigns
of each.
10.4. No Third Party Beneficiary Ruts. Nothing expressed or referred to in this Agreement
will be construed to give any person other than the Parties any legal or equitable right,
remedy or claim under or with respect to this Agreement or any provision of this
Agreement, except such rights as shall inure to a successor or permitted assignee
pursuant to Section 10.3 above.
10.5. Indenendent Contractors. The Parties are and shall be independent contractors to one
another, and nothing herein shall be deemed to cause this Agreement to create an
agency, partnership, or joint venture between the Parties.
10.6. Counterparts. This Agreement may be executed in one or more counterpart signature
pages (including facsimile counterpart signature pages), each of which will be deemed
to be an original of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.
10.7. Headings. The headings of particular provisions of this Agreement are inserted for
convenience only and shall not be construed as a part of this Agreement or serve as a
limitation or expansion on the scope of any term or provision of this Agreement.

8
10.8. Enforcement of Agreement. Each Parry acknowledges and agrees that the other Parry
would be irreparably damaged if any of the provisions of this Agreement are not
performed in accordance with their specific terms and that any breach of this
Agreement by a Party could not be adequately compensated in all cases by monetary
damages alone. Accordingly, in addition to any other right or remedy to which a Party
may be entitled, at law or in equity, it shall be entitled to enforce any provision of this
Agreement by a decree of specific performance and to temporary, preliminary and
permanent injunctive relief to prevent any breach or threatened breach of any of the
provisions of this Agreement, without posting any bond or other undertaking.
10.9. Waiver. No waivers of, or exceptions to, any term, condition or provision of this
Agreement, in any instance or instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such term, condition or provision.
10.10. Entire Agreement. This writing embodies the entire agreement and understanding
between the Parties hereto and there are no other agreements or understandings, oral or
written, with reference to the subject matter hereof that are not merged herein and
superseded hereby.
10.11. Modifications in Writing.. This Agreement shall not be modified, amended or changed
in any respect except in writing, duly signed by the parties hereto, and each party
hereby waives any right to amend this Agreement in any other way. By mutual written
agreement additional lots may be added to this Agreement.
10.12. Consent to Jurisdiction. The Parties agree that the state and federal courts of North
Carolina shall have exclusive jurisdiction over this Agreement and any controversies
arising out of, relating to, or referring to this Agreement, the formation of this
Agreement, and actions undertaken by the Parties hereto as a result of this Agreement,
whether such controversies sound in tort law, contract law or otherwise. Each of the
Parties hereto expressly and irrevocably consents to the personal jurisdiction of such
state and federal courts, agrees to accept service of process by mail, and expressly
waives any jurisdictional or venue defenses otherwise available.

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10.13. Governing Law. This Agreement shall be governed by the internal substantive laws of
the State of North Carolina, without regard to such state's conflict of law or choice of
law rules.
10.14. Notices. All notices and other communications required or permitted hereunder shall
be in writing and shall be sent either (i) personally by hand delivery, (ii) by registered
or certified United States first-class mail, postage prepaid, return receipt requested, (iii)
by nationally recognized overnight courier, or (iv) by facsimile addressed to the address
or facsimile number indicated below (or at such other address or facsimile number as
such Party or permitted assignee shall have furnished to the other Parties hereto in
writing). All such notices and other written communications shall be effective on the
date of delivery.
If to Developer, such notice shall be addressed to:
Eastern NC Home Builders, LLC
449 Grill Road, Clayton, NC 27520-7029
Attention: Linwood Jones
Telephone: [phone]
If to Utility, such notice shall be addressed to:
Old North State Water Company, LLC.
4700 Homewood Court, Suite 108
Raleigh, North Carolina 27609
Attn: Michael Myers
Telephone: [phone]

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E_kHIBIT 8
List of Lot Numbers and Physical Addresses
Subdivision Name: Majestic Oaks West
Lot No.
1
Physical Address
3
4
5
6
7
8
9
13
14
15
16

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LNT WI1 NESS WHEREOF, intending to be legally bound, the Parties hereto have duly
executed this Agreement on the date first above written.
Eastern NC Home Builders, LLC
Old North Carolina Water Company, LLC
Micha- yers, mber