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STATE OF NORTH CAROLINA �I �,� L
COUNTY OF CARTERET
THIS DECLARATION AND OPERATING AGREEMENT (hereinafter
referred to as "Declaration") made and entered into this the
day of October, 1991, by and between CAPE EMERALD MASTER
ASSOCIATION, INC. (hereinafter referred to as "Master
Association"); LAWRENCE S. SPELL, Trustee for Ocean Oaks of Emerald
Isle, a partnership (hereinafter referred to as "Spell"); THE
NASSAU CORPORATION (hereinafter referred to as "Nassau"); and CAPE
ROYALL DOLPHIN ASSOCIATION, INCORPORATED (hereinafter referred to
as "Corporation").
W I T N E S S E T H:
" WHEREAS, Master Association is the property owner
3
association for Cape Emerald as set forth in the Declaration of
W Covenants, Restrictions and Easements for Cape Emerald recorded in
Book 557, Page 173 and amended in Book 660, Page 155, said
amendment being re -recorded in Book 661, at Page 1, in the office
of the Register of Deeds of Carteret County, which association is
N
the association for all of the Lots shown on the plats recorded in
0
3 Map Book 24, at Pages 90 and 91 in the office of the Register of
Deeds of Carteret County; and,
WHEREAS, Nassau is the owner of the Lots as shown on the
plat of Royall Oaks recorded in Map Book 28, at Page 229 and Lots
as shown on the plat of Dolphin Ridge recorded in Map Book 28, at
Page 228, in the office of the Register of Deeds of Carteret
County; and,
WHEREAS, Spell is the owner of Lot 9 in Block B of Ocean
Oaks as shown on the plat of Ocean Oaks recorded in Map Book 21, at
Page 36, in the office of the Register of Deeds of Carteret County;
and,
WHEREAS, Master Association has agreed to convey to the
Corporation (i) by general warranty deed certain real property
constituting a portion of the Common Areas of Cape Emerald upon
which is located the sewer treatment plant, drain fields, and
required replacement areas and such nonexclusive easements not
within the Cordmon Areas in which are located collection lines,
J �f
v

drain lines and other equipment appurtenant to the sewer treatment
plant and (ii) by general warranty Bill of Sale all personal
property, equipment, collection lines, valves and all such related
property utilized in the operation of the sewer treatment plant;
and,
WHEREAS, Master Association has agreed to assign or
deliver to Corporation all permits necessary or required to operate
the collection lines and sewer treatment plant, books and records
relating to the operation and maintenance of the sewer treatment
plant and all funds and all bank accounts, deposits and all
receivables from customers as have been collected or are due and as
are associated with the sewer treatment facility; and,
WHEREAS, Corporation will own the Community Use Areas and
will operate and provide for the Upkeep of the Sewer System, all as
more particularly described in the Corporation Documents.
I.
DEFINITIONS
(A) "Articles" means the Articles of Incorporation of
Cape Royall Dolphin Association, Incorporated.
(B) "Base Unit" means the 360 gallon daily sewage flow
which is allocated to a standard residential lot which is
sufficient to serve a three bedroom -three bath dwelling on a Lot.
Notwithstanding the adoption by the State of North Carolina of a
standard or measure other than a 360-gallon daily sewage flow for
a three bedroom -three bath dwelling, a Base Unit shall nevertheless
be defined as herein stated.
(C) "Board of Directors" means the Board of Directors of
Cape Royall Dolphin Association, Incorporated.
(D) "Bylaws" means the Bylaws of Cape Royall Dolphin
Association, Incorporated.
(E) "Cape Emerald" means Cape Emerald subdivision as
shown on the plats recorded in Map Book 24, Pages 90 and 91 in the
office of the Register of Deeds of Carteret County.
a'
2

3
a
(F) "Community Use Areas" means all real property
(including the Sewer System), all improvements upon the real
property, interests in real property and all personal Propertynow
y the
owned or hereafter acquired b
Corporation for providing
sewerage service to Connected Lots.
(G) "Connected Lot(s)" means:
1. Lots which are connected to and are utilizing
the Sewer System which, as of the date of the recording of this
Declaration, consist of the following Lots within Cape Emerald:
Lot 2 Block A, Lot 14 Block A, Lot 8 Block A, Lot 4 Block B, Lot 12
Block B, Lot 4 Block C, Lot 6 Block D, Lot 7 Block D, Lot 6 Block E
and Lot 11 Block E;
2. Lots which have the main or lateral collection
lines of the Sewer System installed in front of or adjacent to them
which had been stubbed off to provide easy connection of the Lots
to the Sewer System, such Lots, as of the date of the recording of
this Declaration, consisting of the following Lots located within
Cape Emerald: Lot 1 and Lots 3 through 10, Block A; Lot 1, 2, 3,
5 and Lots 8 through 11, Block B; Lots 1 through 3 and Lots 9
through 13, Block C; Lots 1, 2, 3, 5 and Lots 8 through 12,
Block D; and Lots 1 through 5, Lots 7 through 10 and Lots 12
through 14, Block E;
3. Lots owned by Nassau located in Dolphin Ridge
and Royall Oaks which had been allocated at least one (1) Base
Unit, those Lots being Lots 87 and 113 in Dolphin Ridge and Lots 1,
18, 21, 22 and 3.9 in Royall Oaks as of the date of the recording of
this Declaration, and additional Lots in Dolphin Ridge and Royall
Oaks to which Nassau may subsequently allocate the Base Units
acquired by it as set forth in this Declaration;
4. A Lot the owner of which has acquired from the
Corporation one (1) or more Base Units for sewer treatment capacity
in the Sewer System; and,
5. Lot 5 Block D in Cape Emerald and Lot 9 Block B
as shown on the plat of Ocean,, Oaks recorded in Map Book 21, at
Page 36 in the office of the Register of Deeds of Carteret County.
p 3

(H) "Corporation" means Cape Royall Dolphin Associ
Incorporated
its successors and assigns. ation,
(I) "Corporation Documents"
Bylaws, the Declaration means the Articles
any amendments thereto the
resolutions of the � any dul
Corporation and Y adopted
adopted by the Board of Directors, any rules and regulations
(J) "Dolphin Ridge" means Dolphin Ridge subdivision
shown on the plat recorded
in Ma ion as
Office of the Re P Book 28, at page 228 in
Register of Deeds of Carteret the
(K) "Fiscal County,
Year" shall mean the Fiscal
Corporation as defined in Year of
Article 8, the
(L)
Section 8.4 of the Bylaws.
Of land. "Lot" tract means a separately described tor
3
J parcel
(M) "Owner"
means the record owner
Persons, of a fee or , whether one or undivided. fee more
including interest in a Connected Lot
10 a g contract purchasers
but excluding those having such
interest merely as security for the performance
(N) "Person" °f an obligation.
means any individual
corporation, partnership or an ' group of individuals,
3 combination thereof, y other entity, including any
(0) "Royall Oaks" means Royall Oaks subdivision as
on the plat recorded in Ma Book shown
P 28
the Re , at Pa e
Register
Of Deeds ofg 229 in the office of
Carteret County,
(P) "Sewer System"
facilit means the wastewater treatment
y as has been constructed and is located within Cape Eme
together with all related real rald
Proert property, interests
p Y. all Y and
personal Property in real
includin interests in personal property,
g but not limited to the
appurtenances, easements equipment, improvements,
lateral collection lines'locateduponlines, drain fields . sewer main and
Communit and constituting part of the
Y Use Areas employed or utilized to
to the Connected provide sewer service
Lots. Collection improvements on a Connected Lot tlines extending from
main or o the point of Lot
collection lines connection into
of the Sewer System and related
equipment owned and provided by the Owner and necessary for

violation of any rule, regulation or other requirement of the
Corporation Documents, and is not in arrears in payment of any
assessment. Such rights of an Owner as arise because of ownership
of any particular Connected Lot shall automatically terminate upon
transfer of the Connected Lot.
No member shall have a property right in the Corporation
nor any property right as a member in an
if such certificates are issued. y membership certificate,
IV.
ADMISSION OF ADDITIONAL MEMBERS
(A) Cape Emerald Lot Owners. A Person owning any Lot
within Cape Emerald shall be permitted to become a member of the
Corporation upon written application to the Corporation, the
execution of a Membership Agreement provided by the Corporation,
advancement of costs to the Corporation as set forth in
Section IV(C)5 hereinafter and the execution of an Amendment to
this Declaration as set forth in Section IV(D) hereinafter. A
Person owning a Lot within Cape Emerald as constituted on the date
of this Declaration shall not be required to pay, as a condition to
membership, the membership fee as set forth in Section IV(C)2.
(B) Dolphin Ridge and Rovall Oaks Lot Owners. As more
specifically described in Section VI E
the Corporation twenty-two and 78/100 (22 Nassau8) Base Un is whith may
from
be assigned to various Lots within Dolphin Ridge and Royall Oaks
owned by Nassau. Upon allocation of Base Units to Lots other than
Connected Lots 87 and 113 in Dolphin Ridge and Connected Lots other
than 1, 18, 21, 22 and 39 in Royall Oaks, Nassau shall execute an
Amendment to this Declaration identifying the new Connected Lots
and the Base Units allocated to each new Connected Lot and
confirming the Base Units which continue to be allocated to other
Connected Lots within Dolphin Ridge and Royall Oaks. Neither
Nassau nor any subsequent Owner of a Connected Lot within Dolphin
Ridge or Royall Oaks to which has been allocated a portion of the
twenty-two 78/100 (22.78) Base Units acquired by Nassau as set

3
a
utilization of the Sewer System by a Connected Lot shall not be
Part of the Sewer System.
(Q) "Upkeep" means care
inspection, maintenance,
repair, repainting, remodeling, restoration, replacement,
improvement, renovation, alteration, replacement reconstruction.anc
II.
NEW CORPORATION
A new corporation named Cape Royall Dolphin Association,
Incorporated, has been formed pursuant to the requirements of the
Non -Profit Corporation Act (Chapter 55A) of the General Statutes of
North Carolina as an association of the Owners of Connected Lots.
Its purposes are to own, manage, maintain, operate and provide for
the Upkeep of the Community Use Areas and facilities located upon
the Community Use Areas specifically
limited to, the Sewer System. including, but not being
III.
-0N MEMBERSHIP
(A) Membership.All Owners of
3 including contract a Connected Lot,
purchasers, are automatically members of the
Corporation and all Persons shall automatically become members of
the Corporation upon their acquisition of a Connected Lot or upon
their Lot becoming a Connected Lot and may become members in no
other manner.
(B) Notice of Membership. It shall
e the
responsibility of each Person, upon acquisition of a Connecbted Lot
or upon a Person's Lot becoming a Connected Lot, to notify the
Corporation and furnish the. Corporation such information as
requested on forms provided by the Corporation.
(C) Transfer of Membershi
p. are
transferable and occur only upon the occurrence of those Memberships event not
out in this Article III. s set
(D) Suspension or Termination of Membership Rights. The
membership rights of a member shall not be suspended so long as the
Person continues to be the Owner of a Connected Lot, is not in
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91

forth in this Declaration shall be required to pay, as a condition
to membership, the membership fee set forth in Section IV(C)2.
(C) Other Lot Owners. A Person owning a Lot reasonably
proximate to Cape Emerald and the Sewer System may make written
application to and be granted membership into the Corporation upon
the following conditions:
1. There exists collection and treatment capacity
in the Sewer System sufficient to provide service to the Lot and
improvements of the Person so requesting membership without causing
a detriment to the then members of the Corporation;
2. The Person pays to the Corporation the required
membership fee which shall b , _minimum amount of Four Thousand One
Hundred and No/100 Dollars �c��c,
for each Base Unit to be
allocated to the Lot and improvements owned by such Person
requesting membership, said membership fee to be paid in the
discretion of Board of Directors at any time commencing with the
acceptance of such Person for membership to and including the time
at which a certificate of occupancy is issued for the improvements
to be constructed on the Lot; provided, however, that the
membership fee must be paid in full prior to the issuance of any
certificate of occupancy. In the event more than one Base Unit is
requested by the Person, and the allocation of more than one Base
Unit is approved by the Corporation, the membership fee for a
fractional part of a Base Unit purchased in addition to a full Base
Unit shall be the pro rata portion of the full membership fee based
on the capacity allocated and acquired as compared to three hundred
sixty (360) gallons per day of the full Base Unit;
3. The Person executes a Membership Agreement
provided by the Corporation;°'and,
4. The application of the Person is approved by a
vote of two-thirds (2/3) of the directors of the Corporation;
Notwithstanding the granting of membership status to an
Owner, an Owner must, prior to being eligible to utilize the Sewer
System, pay in advance to the corporation the reasonable estimated
costs as may be associated with connecting the improvements on Lot

to the Sewer
System and the
Corporation construction to
n necessary to enable the be Performed including, Lot to utilize the by the
but not limited to Sewer System
and the costs of legal, engineers
similar all pumps collectionengineering and permit fees
equipment, lines, valves, meters determines If, during construction and
that the construct the
complete t ion costs advanced Corporation
he necessary work are insufficient to
who shall advance ' the Corporation shall
to the corporationnotify the Owner
to complete the the additional funds
construction or connection necessary
the Lot to
the Sewer of the improvements
CorporationSystem. Any amounts °n
for construction in excess ° advanced the
set forth to
in this Section f the amounts re
3 upon completion IV(C)5 shall be refundedrequired as
the °f the construction b to the Owner
into Sewer y the
System by the Corporation the tap
Z construction Owner and the
and taps by those approval Of all
jurisdiction governmental
< over the same, agencies having
Unless
i construction otherwise
agreed by the N costs advanced Corporation, the
construction shall exclude
and installation of collection Costs
for the
3 improvements on lines I a Connected Lot extending from
main or lateral to the Point of
collection lines Connection
equipment of the Sewer into
not constituting a System
Part of the and related
Utilization Sewer SystemOf necessary for
iDi Amendment to y the lmprOVements on the Lot.
recording of Declaration.
this Declaration Subsequent to the
additional Person upon the
into the Corporation as a acceptance
shall the
member, °f any
and cause to be . the Corporation
Declaration recorded an Amendment
which shall
Connected describe the to this
Lot. The Amendment s Lot which h
newly hall be to become a
Y designated Connected executed by the
Lot for Owner of the
Owner, his heirs the Purpose Of
successors and assigns,binding the
and the improvements the Lot described t
obligati being serviced herein
gations and liabilities by the Sewer
described imposed,, System to the
in P d; on Connected Lots and
the Corporation Documents. Owners as
II
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(E) Number of New Members. Other than the Owners .,_
Connected Lots within Cape Emerald specifically enumerated herein
and Persons owning Lots within Cape Emerald, the total number of
additional members (as distinguished from Persons acquiring
Connected Lots from Owners who are members) who may be admitted to
the Corporation shall not exceed fifty (50).
(F) Granting of Easements. Upon acceptance of any
Persons of the Corporation as members, they shall execute in
recordable form such easements on said Persons' Lots as the
Corporation determines are necessary to provide service to the
Lots.
(G) Membership Fees Paid to Master Association. All
membership fees collected by the Corporation shall be paid by the
Corporation to Master Association.
V.
TERMINATION OF MEMBERSHIP
(A) Sale of Connected Lot. The membership rights of any
Person in the Corporation shall terminate at such time as said
Person is no longer the owner of any Connected Lot.
'� (B) Withdrawal of Connected Lot. The Owner of any
C ected Lot may not terminate Connected Lot status of his Lot or
withdraw as a member of the Corporation except under extraordinary
circumstances resulting in gross inequities or extreme undue
hardships upon said Owner or his Connected Lot as determined by the
Board of Directors of the Corporation which determination shall be
appealabl--�
final, conc usive� and —not e,._._ Upon any permitted
withdrawal of a Connected Lot, the Person owning the Lot shall
continue to be a member of the Corporation so long as such Person
is the Owner of any other Connected Lot which has not been
withdrawn from Connected Lot status.
(C) Amendment to Declaration Upon Withdrawal of
Connected Lot. Upon the withdrawal of any Connected Lot from
Connected Lot status, the Corpdoration shall execute and cause to be
recorded an Amendment to this Declaration which shall describe the
Lot being withdrawn from Connected Lot status. The Amendment shall
9

3
be executed by the Person owning the former Connected Lot for the
purpose of acknowledging the Lot is no longer entitled to Connected
Lot status, and the rights and privileges appurtenant thereto, and,
if applicable, that said Person no longer is a member of the
Corporation.
VI.
ALLOCATION OF BASE UNITS
(A) One Base Unit Allocated to Each Connected Lot.
Except as hereinafter specifically provided, each Connected Lot
shall be allocated one (1) Base Unit. A Connected Lot shall not be
allocated less than one (1) Base Unit except as an addition to an
existing Base Unit as provided hereafter. Connected Lots in Cape
Emerald with residences and related improvements located thereon as
of the date of the recording of this Declaration shall be deemed to
be allocated one Base Unit without regard to the number of bedrooms
or bathrooms.
(B) Allocation of Additional Base Units to Connected
Lots in Cape Emerald. . Upon request by the Owner of a Connected Lot
in Cape Emerald, the Corporation shall allocate to said Owner
additional Base Units, or portions thereof, as may be necessary to
service the improvements placed or added upon said requesting
Owner's Connected Lot.
(C) The Allocation of Additional Base Units to Connected
Lots Outside of rape Emerald. Subject to the provisions and
limitations hereinafter stated and the payment to the Corporation
of the fees (or additional fee if applicable) set forth in Section
IV(C)2, the Owners of Connected Lots located outside of Cape
Emerald and Persons applying for membership in the Corporation may
be allocated more than one Base Unit, or portion thereof, as may be
necessary to service the improvements utilizing the Sewer System.
(D) Allocation of Acquired Base Units by Owner. A
member may acquire or be allocated one or more Base Units for each
Connected Lot so owned. A member may allocate the Base Units so
allocated or acquired, in his sole discretion, in any proportion to
any Connected Lot so owned. d'
10
L -
r -u xrSy .,,0'�".s�7 ?fir.;
�.

(E) Allocation of Base Units by Nassau. Nassau, as of
the date of this Declaration, has acquired from the Corporation and
is the owner of twenty-two and 78/100 (22.78) Base Units. Nassau
may assign all or any portion of said Base Units to subsequent
purchasers of Lots within Dolphin Ridge or Royall Oaks owned by
Nassau. Any Lots so assigned Base Units shall become Connected
Lots and each purchaser of any such Connected Lots shall become a
member of the Corporation without the payment of any membership
fee. Nassau may also allocate and reallocate at any time in its
discretion any portion of the Base Units so acquired by it to the
club house/recreational facility located on Lot 87 in Dolphin
Ridge.
As of the date of the recordation of this Declaration,
Nassau has allocated one (1) Base Unit to Lot 113 in Dolphin Ridge
and Lots 1, 18, 21, 22 and 39 in Royall Oaks and 16.78 Base Units
to Lot 87 in Dolphin Ridge.
(F) Allocation of Base Units to Commercial Facilities.
Should a Person owning a commercial facility or other
non-residential structure be admitted as a member of the
Corporation, the allocation of Base Units to serve the improvements
on said Person's Lot shall be based upon waste treatment plant
utilization as established by the Department of Environmental
Management of the State of North Carolina computed in terms of Base
Units as defined herein.
(G) Total Number of Base Units to be Allocated. The
total number of Base Units which may be allocated to or acquired by
Persons other than Persons owning Lots within Cape Emerald shall
not exceed fifty (50).
VII.
CONNECTION TO SEWER SYSTEM
(A) Construction by Owner. Owner, at the sole cost and
expense of Owner, shall caus°e to be constructed and installed all
improvements and equipment to extend an individual collection line
from the improvement on Owner's Connected Lot to the point where
0
11

1
■ -
such line can be tapped into the main or lateral collection lines
of the Sewer System.
(B) Tap Fee Paid by Owner. Owner shall pay to the
Corporation, in advance, the cost of any equipment installed or
work performed by the Corporation to effect the tap or connection
of the Owner's individual collection line into the collection lines
of the System as such costs are determined from time to time by the
Board of Directors.
VIII.
MANAGEMENT AND ADMINISTRATION
The Corporation shall own, operate, manage and administer
the Community Use Areas and provide for the Upkeep of the Community
Use Areas and the Sewer System pursuant to the terms and conditions
of the Corporation Documents.
IX.
t COMMON EXPENSES
(A) Amounts Included as Common Expenses. The Common
Expenses of the Corporation shall include:
1. All amounts expended by the Corporation in
operating, administering and managing the Community Use Areas,
specifically including but not limited to, the Sewer System;
2. All amounts expended by the Corporation in
insuring the Community Use Areas;
3. All amounts expended by the Corporation for the
Upkeep of the Community Use Areas and the Sewer System;
4. All amounts expended by the Corporation in
legal, engineering, architectural, contract -operator and permitting
fees;
5. All amounts expended by the Corporation in
carrying out any duty or discretion as may be required or allowed
by the Corporation Documents,,
6. All amounts declared to be Common Expenses by
resolution of the Board of Directors;
12

3
a
7. All taxes and special assessments which may be
levied from time to time by any governmental authority upon the
Community Use Areas and/or against or due from the Corporation;
and,
8. All amounts allocated or budgeted by the Board
of Directors as reserves.
(B) Upkeep By Owner. Notwithstanding any provisions
contained herein, Common Expenses do not include any sums expended
by the Owner of a Connected Lot for the Upkeep of any equipment or
collection lines extending from improvements on a Connected Lot to
the point of tap into the main or lateral collection lines
constituting a part of the Sewer System.
X.
BUDGET AND ASSESSMENTS
(A) Preparation and Approval of Budget.
1. Beginning with the 1992 fiscal year, at least
sixty (60) days before the beginning of each fiscal year, the Board
of Directors shall adopt a budget for the Corporation containing an
estimate of the total amount considered necessary for the ensuing
fiscal year to pay the cost of management of the Corporation and
Upkeep of Community Use Area and Sewer System and the cost of other
expenses that may be declared to be Common Expenses. The budget
shall include such reasonable amounts as the Board of Directors
considers necessary to provide working capital (available cash for
day-to-day expenses which is otherwise uncommitted), a general
operating reserve for working capital (including an amount to cover
operating losses due to insurance deductibles), reserves for
contingencies (potential costs or liabilities which have not been
incurred but which should be planned for) and reserves for
replacements.
Beginning with the 1992 fiscal year, at least
thirty (30) days before the beginning of each fiscal year, the
Board of Directors shall provide to each member a copy of the
budget in a reasonably itemized form which sets forth the amount
of the projected Common Expenses and the assessment payable per
13

Base Unit. Such budget shall constitute the basis for determining
the assessment against each Owner for the Base Units or portions
thereof so owned.
2. Effect of Failure to Prepare or Adopt Budget.
The failure or delay of the Board of Directors to prepare or adopt
a budget for any fiscal year shall not constitute a waiver or
release in any manner of an Owner's obligation to pay the
assessment determined for said year as herein provided whenever the
same shall be determined. In the absence of any annual budget,
each Owner shall continue to pay assessments at the rate
established for the previous fiscal year until notified of the new
assessment which is due on the first day of the next payment period
which begins more than ten (10) days after such new annual budget
is adopted and the Owner receives such notice.
(B) Assessments and Common Expenses.
1. Rate of Assessment and Payment. The total
budget as established in Section X(A)l shall be assessed against
the Owners of each Connected Lot as follows:
(a) The total dollar amount of the budget
shall be divided by the total number of Base Units as have been
allocated by the Corporation to the members and the resulting
quotient so obtained shall be the amount of the annual assessment
for each Base Unit. The Owner of each Connected Lot shall pay an
annual assessment equal to the product obtained by multiplying the
annual assessment per Base Unit times the number of Base Units as
allocated to such Connected Lot.
(b) For purposes of levying the assessments,
each Connected Lot containing a residence and related improvements
in Cape Emerald as of the date of the recording of this Declaration
shall be deemed to have one (1) Base Unit without regard to the
number of bedrooms or bathrooms constituting a part of the
improvements.
(c) The Board of Directors shall establish one
or more payment periods of the annual assessment and the due dates
for each such payment in each fiscal year; provided, however, that
14

I -
payments shall be due not less than quarterly or more frequently
than monthly. All sums collected by the Board of Directors with
respect to assessments or from any other source may be commingled
into a single fund.
2. Initial Budget and Initial Assessment. Upon
taking office, the first Board of Directors shall determine the
budget, as defined in this Section X, for the period commencing
with the date of the recordation of this Declaration in the office
of the Register of Deeds of Carteret County and ending on the last
day of the first fiscal year of the Corporation. Until otherwise
determined by the Board of Directors, the assessment for each Base
Unit payable by each Owner shall be Fifteen and No/100 Dollars
($15.00) per month, payable on the first day of each month to the
Corporation.
3. Members and Lots Added During the Fiscal Year.
Notwithstanding any other provision of this Article, whenever any
additional member is admitted during the current fiscal year, the
assessment against such new member and the new Connected Lot shall
be prorated based upon the number of days remaining in the payment
period and shall be calculated in the same manner and due in the
same number of installments as the assessment for the remainder of
the fiscal year against Connected Lots whose Owners are already
members of the Corporation.
,^ 4. Additional Assessments. The Board of Directors
may evy additional assessments in the following manner: the Board
of Directors shall give written notice of any proposed additional
assessment to the Owners specifying the amount, the reasons
therefor, and the general manner of calculation of the additional
assessment to be levied against each Connected Lot. The notice
shall specify that the additional assessment shall become effective
upon a date which is not less than fifty (50) calendar days from
the date specified in said notice. Unless a petition is presented
to the Secretary of the Corporation requesting a special meeting of
mew onsider the proposed additional assessment as set forth
in this Section X(B)5, the additional assessment shall become

3
a
effective on the date as stated in the notice. Upon a petition
being presented to the Secretary of the Corporation and signed by
members entitled to cast at least fifty percent (50%) of the votes,
of the Corporation, a special meeting of members of the Association
shall be held, the sole purpose of said meeting to vote upon the
proposed additional assessment. At the special meeting held for
that sole purpose, the proposed additional assessment may be
rejected by two -third (2/3) of the votes actually cast by the
members attending such meeting in person or by proxy. If the
proposed additional assessment is not rejected by the members as
set forth herein, the proposed additional assessment shall become
effective upon the earlier to occur of the date stated in the
notice or the day following the special meeting.
The additional assessments shall be payable in
full with the next periodic installment of regular assessments
which is due not more than ten (10) days after the date of such
notice or in not more than twelve ( 12 ) equal periodic installments,
as the Board may determine.
5. Reserves. The Board of Directors shall
establish and maintain reasonable reserves for working capital,
contingencies and replacements. Such funds shall be a Common
Expense of the Corporation and may be deposited with any financial
institution, the accounts of which are insured by an agency of the
United States of America or may, in the discretion of the Board of
Directors, be invested in obligations of, or fully guaranteed as to
principal by, the United States of America. As to each separate
reserve account:
(a) Extraordinary expenditures not originally
included in the annual budget, which may become necessary during
the year, shall be charged first against the appropriate reserves.
Except for expenses for normal Upkeep shown in the annual operating
budget, all expenses for repair and replacement of physical assets
maintained by the Corporation shall be charged first against the
appropriate reserves. Unless otherwise determined by the Board of
Directors, the amount held as reserves shall not substantially

exceed the amount reasonably required to assure the Corporation's
ability to replace components as they reach the end of their useful
lives.
(b) If regular annual maintenance extends the
useful life of components so that reserves are excessive, the
reserves may be adjusted by reallocation to other budget items.
(c) If the reserves are inadequate to meet
actual expenditures for any reason (including non-payment of any
Owner's assessment) then the Board of Directors shall, in
accordance with Section X(B)4 hereof, levy an additional assessment
against the Owners.
6. Surplus and Deficit.
(a) Any amount accumulated in excess of the
amount required for actual expenses and reserves shall, at the
discretion of the Board of Directors, be placed in reserve
accounts, be placed in a special account to be expended solely for
the general welfare of the Owners or be credited to the next
periodic installments due from Owners under the current fiscal
year's budget, until exhausted.
(b) Unless the budget for the succeeding
fiscal year is adjusted to amortize the deficit during such fiscal
year, any net shortage in expenses (including reserves) shall be
assessed promptly against the Owners as an additional assessment in
accordance with Section X(B)4 hereof.
(C) Liability for Common Expenses.
1. Owner Liability. Each Owner of a Connected Lot
shall be deemed to covenant and agree to pay to the Corporation all
Common Expenses and other charges assessed by the Board of
Directors pursuant to the provisions of the Corporation Documents.
Each Owner shall be personally liable for all assessments against
such Owner. No Owner may Abe exempted from liability for the
assessment for Common Expenses. The purchaser of a Connected Lot
shall be jointly and severally liable with the selling Owner for
all unpaid assessments against the latter for the proportionate
share of the Common Expenses up to the time of such recordation,
17

a
without prejudice to the purchaser's right to recover from the
selling Owner amounts paid by the purchaser therefore; provided,
however, that any such purchaser may rely on a Statement of Common
Expenses obtained pursuant to Section X(E) herein.
2. Mortgagee Liability. Each mortgagee who comes
into ownership of a Connected Lot by virtue of foreclosure or by
deed or assignment in lieu of foreclosure, or any purchaser at a
foreclosure sale, shall take the Connected Lot free of any claims
for unpaid assessments or charges against such Connected Lot which
accrue prior to the time such mortgagee or purchaser comes into
ownership thereof.
3. Master Association Liability. Master
Association, on behalf of all members of said Master Association,
shall be liable for all assessments levied by the Corporation
against the Owners of Connected Lots in Cape Emerald.
(D) Collection of Assessments. Any assessment, or
installment thereof, not paid within fifteen (15) days after the
due date shall be delinquent and shall accrue a late charge in the
amount of one percent (i%) of such assessment, or such greater
percentage as may be established from time to time by the Board of
Directors, each month or portion thereof, until said assessment is
paid. The Board of Directors shall take prompt action to collect
any assessments for Common Expenses due from Owner which remain
unpaid for more than thirty (30) days after the due date for
t
Payments thereof.
(E) Statement of Common Expenses. The Board of
Directors shall provide any Owner, contract purchaser or mortgagee,
within ten (10) days after a written request therefor, with a
written statement of all unpaid assessments for Common Expenses due
with respect to a specific Connected Lot (or a statement that the
amount of unpaid assessments is zero). No contract purchaser,
mortgagee or purchaser from a mortgagee requesting such a statement
shall be liable for any unpaid assessments due prior to the date of
such statement in excess of thie amount set forth on such statement;
provided, however, that this section shall not be interpreted to
9

release any Person from personal liability for such assessments
levied while such Person owned the Connected Lot. The Board of
Directors may impose a reasonable charge for the preparation of
such statement to cover the cost of preparation.
(F) Assessment from Owners Within Other Associations.
With respect to any annual or additional assessments provided for
herein, the Board of Directors may elect by resolution to collect
such assessments directly from the owners association or
condominium unit owners association governing Connected Lots within
any planned development if the association documents (articles of
incorporation, bylaws, declarations and resolutions) of such
associations so permit or authorize. In such event, payment of
such assessments shall be an obligation of such owners association
or condominium unit owners association, but each Owner shall remain
personally liable for the assessment against such Owner's Connected
Lot. If the Board elects to collect assessments from such owners
association or condominium unit owners association, then all
notices regarding assessments against such Lots shall be sent to
such association. This section shall not limit or waive any of the
Corporation's remedies for non-payment of assessments.
XI.
COMPLIANCE WITH THE CORPORATION DOCUMENTS
In the case of failure of an Owner to comply with the
terms and provisions contained in the Corporation Documents, the
following relief shall be available:
(A) The Corporation shall have the right to bring an
action and recover sums due, damages, injunctive relief, and/or
such other and further relief as may be just and appropriate.
(B) If the violation is the nonpayment of any
assessment, the Corporation shall have the right:
1. to suspend the offending Owner's voting rights;
2. to terminate the use by the Owner's Connecting
Lot of the Community Use Areas and the Sewer System and collect
from the Owner such expenses as are incurred by the Corporation in

0
s
Ln
0
3
• i
terminating service or, subsequently, restoring service to the
Connected Lot; and
3. to require a cash deposit from the Owner prior
to reestablishing service to the improvements on the Connected Lot,
which deposit may be held and dispersed by the Corporation pursuant
to written regulations adopted by the Corporation pertaining to
such deposits.
(C) In any case where an assessment against the Owner is
payable in installments, upon a default by such Owner in the timely
payment of any two (2) consecutive installments, the maturity of
the remaining total of the unpaid installments of such assessment
may be accelerated at the option of the Board of Directors and the
entire balance of the assessment may be declared due and payable in
full by the service of notice to such effect upon the defaulting
Owner.
(D) The remedies provided by this Section XI are
cumulative and are in addition to any other remedies provided by
law.
(E) The failure of the Corporation to enforce any
provision contained in Corporation Documents shall not be deemed a
waiver of the right to enforce such provisions thereafter as to the
same violation or subsequent violation of similar character.
XII.
TTTCIT TD T TTOV
(A) The Corporation may purchase and maintain, if
available at a reasonable cost, hazard insurance against loss or
damage by fire and similar perils for the Sewer System and all
improvements and fixtures owned by the Corporation located on
Community Use Areas, including personal property of the
Corporation. The insurance may cover the current replacement costs
of the improvements and fixtures as determined by the Corporation
with the assistance of the insurance company providing coverage or
a consultant selected by the Board of Directors and may include
endorsements for such other coverages as the Board of Directors
deems necessary or desirable. Coverage may exclude land,

foundations, excavations, or other items that are usually excluded
from insurance coverage. If obtained, the insurance policy shall
require that the insurer notify the Corporation in writing at least
ten (10) days prior to any substantial change in coverage or
cancellation. The insurance policy shall also contain clauses
providing for waiver of subrogation.
(B) If the property of the Corporation is located within
a special flood hazard area, the Corporation may purchase and
maintain flood insurance in amounts it deems necessary. Any such
policy shall require the insurer to notify the Corporation in
writing at least ten (10) days prior to cancellation or any
substantial change in the coverage.
(C) The Corporation may purchase and maintain a
comprehensive general liability insurance policy covering Community
Use Areas and any other areas that are under its supervision. The
liability insurance may insure against liability to the public or
to Owners, their tenants, guests or invitees, relating in any way
to the ownership, operation, maintenance, Upkeep and/or use of the
Community Use Areas, and any part thereof, and any other areas
under the Corporation's supervision. If reasonably available, any
such insurance policy shall contain a "severability of interest
endorsement" or equivalent coverage which precludes the insurer
from denying the claim of an Owner because of the negligent acts of
the Corporation or other Owners. Limits of liability may be in
amounts acceptable to the Board of Directors and may cover claims
for bodily injury and/or property damage. Coverage under this
policy may include, if available and economically feasible, legal
liability arising out of losses related to employment contracts of
the Corporation. If obtained, the policy shall require the insurer
to notify the Corporation in writing at least ten (10) days before
the insurer cancels or substantially changes the coverage.
(D) Fidelity boiRds or insurance coverage against
dishonest acts on the part of such persons (including by way of
illustration and not limitation, Corporation members, officers,
directors, managers, agents, employees and volunteers) handling or
21 `w .0

responsible for funds belonging to or administered by the
Corporation may be maintained by the Corporation if deemed
necessary. Any such policy shall contain a provision providing
that it may not be cancelled or substantially modified (including
cancellation for nonpayment of premium) without at least ten (10)
days prior written notice to the Corporation.
XIII.
DURATION, AMENDMENT AND TERMINATION
This Declaration shall run with and bind the Connected
Lots and Community Use Areas until January 1, 2005, after which
time this Declaration shall automatically be extended for
successive periods of ten (10) years.
This Declaration may be amended in full or part by an
instrument signed by not less than three -fourths (3/4) of the
members. No amendment which terminates or has the effect of
terminating this Declaration shall be effective unless (i) approved
by a written instrument signed by one hundred.percent (100%) of the
members of the Corporation and (ii) alternative sewage collection
and treatment facilities from a governmental agency or publicly
regulated company and facility has been provided to each Connected
Lot. No amendment to increase the number of new members of the
Corporation or the number of Base Units which may be allocated to
or acquired by Persons other than the owners of Lots within Cape
Emerald shall be effective unless approved by all owners of Lots in
Cape Emerald. To be effective, any amendment must be recorded in
the office of the Register of Deeds of Carteret County.
This Declaration shall terminate and be without further
force and effect upon dissolution or termination of the Corporation
as provided in the Articles.
Invalidation of any provisions of this Declaration by
judgment or court order shall in no way effect any other provisions
of this Declaration, which phall remain in full force and effect.

XIV.
APPLICABILITY
This Declaration shall only apply to the Owners of
Connected Lots, Community Use Areas of the Corporation and Persons
and their properties subsequently admitted to the Corporation.
XV.
n T nM T nMC
The captions preceding the various articles of this
Declaration are for the convenience of reference only, and shall
not be used as an aid in interpretation or construction of this
Declaration. As used herein, the singular includes the plural and
where there is more than one Owner of a Connected Lot, said Owners
are jointly and severally liable for the obligations herein
imposed. Throughout this Declaration, references to the masculine
shall be deemed to include the feminine, the feminine to include
the masculine and the neuter to include the masculine and feminine.
XVI.
NOTICES
All notices provided for or permitted pursuant to this
Declaration shall be in writing and, except as is herein expressly
otherwise provided, notice shall be deemed sufficient and service
thereof completed upon transmittal by facsimile, hand delivery, or
refusal or non -delivery of same after three (3) calendar days, when
mailed postage prepaid to the party to or upon whom notice is being
given or served at the address of such party last reflected on the
records of the Corporation,
IN TESTIMONY WHEREOF, Master Association has caused this
Declaration to be executed under seal and in such form to be legal
and binding pursuant to the Amendment to Declaration of Cape
Emerald recorded in Book 660, Page 155, said Amendment being re-
recorded in Book 661, at Page 1, in the office of the Register of
Deeds of Carteret and, the other corporate parties have caused this
instrument to be executed under seal and in such form as to be
legal and binding and the individual party has hereunto set his
hand and adopted as his seal the typewritten word "SEAL" appearing
23
u LOC",

beside his name, all effective the day and year first above
written.
CAPE EMERALD MASTER ASSOCIATION, INC.
By:
PresidAnt
'•ATTEST:
Secretary
THE NASSAU CORPORATION
By:
�. President
(2w Yn
_G
Secretary
(SEAL)
AWRENCE S. SPELL, ruste
CAPE ROYALL DOLPHIN ASSOCIATION,
INCORPORATED
Secretary

3
a
. �_
STATE OF NORTH CAROLINA
COUNTY OF`::'s.r L.��-
I, 6k,ye,i1'.-u a Notary Public in
and for said County and State, do hereby certify that on the 60
day of C"'h aer , 1991, before me personally appeared
Lak.)cerc,e, S Spell with whom I am personally
acquainted, who, being by me duly sworn, says that he is
President and that L,'�,t is
Secretary of CAPE EMERALD MASTER'ASSOCIATION, INC., the corporation
described in and which executed the foregoing instrument; that he
knows the common seal of said corporation; that the seal affixed to
the foregoing instrument is said common seal; that the name of the
corporation was subscribed thereto by the said President;
that the said President and Secretary subscribed
their names thereto and the said common seal was affixed, all by
authority of the Board of Directors of said corporation; and that
the said instrument is the act and deed of said corporation.
WITNESS my hand and notarial seal, this the YW) day of
_ &e,r , 1991.
Notary Public
My Commission Expires:
STATE OF NORTH CAROLINA
COUNTY OF ((Z OA/ C M
I,�,.x..k`��-'tCl-a'; t%_,si.:'i,c(t;`c.F , a Notary Public in
and for said County and State, do hereby certify that on
day of I, 4,g , 1991, before me personally appeared
L(_ . ;,;� : ,(„j,-( :L/ ° with whom I am personally
acquainted, who, be ' by me duly_ sworn,. says that he isa .
President and that >, �.,trf..r t��` ! f, `%'j(2/vi1((l�.x'.�.�, is :' _'� -4
Secretary of THE NASSAU CORAORATION, the corporation described in
and which executed the foregoing instrument; that he knows the
common seal of said corporation; that the seal affixed to the
foregoing instrument is said common seal; that, the name of the
corporation was subscribed thereto by the said j(,-e President;
that the said V President and Secretary subscribed
their names thereto and the said common seal was affixed, all by
authority of the Board of Directors of said corporation; and that
the said instrument is the act and deed of said corporation.
25 /

3
a
z
O
a
z
3
WITNESS my hand and notarial seal, this the day of
1991.
'y.
j
`'...._
R C) c A ,+�
' jJ` (/ f} [/!') \, ` .,r/r y •1. .'i.' .G�
K.
ft. E F
o• m
0
Notary Public
to
My Commission Eip-j�es :__" 5
m PUBLIC w
r e w
�%`✓� �� �� '°eg�'"mmmp'fomaamooc"` �L••w
i v'1 •„�
C wA
5m•���x
tB38E 8846g0 ..
STATE OF NORTH CAROLINA
COUNTY OF C-atj-+? r -+
I, Liv- v&in'a,,. 0
!°�C_��� a Notary Public in
and for said County and State, do
hereb^y certify that on the j6
day of c?C}o be 1991,
before me personally appeared
with whom I am personally
LwrP rv,e,
acquainted, who, being by me duly
";�
sworn, says that he is
President and that
is
Secretary of CAPE_ ROYALL DOLPH
ASSOCIATION, INCORPORATED, the
corporation described in and
which executed the foregoing
instrument; that he knows the common
seal of said corporation; that
the seal affixed to the foregoing
instrument is said common seal;
that the name of the corporation was subscribed thereto by the said
President; that the said
President and
Secretary subscribed their names
thereto and the said common seal
was affixed, all by authority of
the Board of Directors of said
corporation; and that the said instrument is the act and deed of
said corporation.
WITNESS my hand and notarial seal, this the /e�M day of
C40, 6 .e,/- , 1991.
Notary Public)
My Commission Expires:
STATE OF NORTH CAROLINA
COUNTY OF �j_,g4e-r"
_, ` e I a Notary Public in
and for said County and State, do --hereby certify that LAWRENCE S.
SPELL, Trustee personally appeared before me this day and
acknowledged the due execution of the foregoing instrument.
26

WITNESS my hand and notarial seal,
19 91.
: J _
this the r' day of
Notary Public/U
My Commission Expires:
STATE OF NORTH CAROLINA
COUNTY OF CARTERET
The. f rego ng certificates of,;i� +x.0
Notaries Public of'said County, and State, are certified to be
correct. This instrument was presented for registration this day
and hour and duly recorded in the office of the. —Register f,� eeds
of Carteret County, North Carolina, in Book Page u .
� f
j. This A34day of , 1991, at
:i o'clock jr M.
86-0233(P)
12AML
10/09/91
/ JI)
Regist r of Deeds
7 PLl

R,w
BYLAWS OF
CAPE ROYALL DOLPHIN ASSOCIATION, INCORPORATED
ARTICLE 1
NAMES AND DEFINITIONS
Section 1.1. Name. The name of the
Corporation is Cape Royall Dolphin Association, Incorporated
(hereinafter sometimes referred to as the "Corporation").
Section 1.2. Definitions. The words and
phrases used in these Bylaws shall have the same meaning as
set forth in the Declaration and Operating Agreement
("Declaration") recorded in Book 669, Page 444, in the
Carteret County Register of Deeds Office unless the context
shall otherwise indicate.
Section 1.3. Principal Office. The principal
office of the Corporation shall be located in Carteret County,
North Carolina.
Section 1.4. Registered Office. The
registered office of the Corporation required by law to be
maintained in the State of North Carolina may be, but need not
be, identical with the principal office.
ARTICLE 2
MEMBERSHIP AND VOTING
Section 2.1. Membership: All Owners of a
Connected Lot, including contract purchases, are automatically
members of the Corporation and all Persons shall automatically
,)become
a member of the Corporation upon their acquisition of
a Connected Lot or upon their Lot becoming a Connected Lot and
may become a member in no other manner.
Section 2.2. Notice of Membership. It shall
be the responsibility of each Person, upon acquisition of a
Connected Lot or upon a Person's Lot becoming a Connected Lot,
to notify the Corporation and provide the Corporation such
information as requested on 'forms provided by the Corporation.
Section 2.3. Transfer of Membership.
Memberships are not transferable and occur only upon the
occurrence of those events set out in this Article. No member
shall have a property right in the Corporation nor any
property right as a member in any membership certificate, if
such certificates are issued...
Section 2.4. Suspension or Termination of
Membership Riqhts: The membership rights of a member shall
not be suspended so long as the Person continues to be the
Owner of a Connected Lot, is not in violation of any rule,
regulation or other requirement of the Corporation Documents,

and is not in arrears in payment of any assessment. Such
rights of an Owner as arise because of ownership of any
particular Connected Lot shall automatically terminate upon
transfer of the Connected Lot.
Section 2.5. Voting. The Corporation shall
have one class of members. Except for certain restrictions
set forth herein, all members shall be entitled to the number
of notes equal to the number of Base Units, or portions
thereof, allocated to the Connected Lot they own; provided,
however, when more than one Person holds an interest in any
Connected Lot, all such Persons shall hold the membership with
regard to such Connected Lot in undivided interests. The vote
of such multiple Owners of a Connected Lot shall be exercised
as they, among themselves, shall determine, but in no event
shall the total number of votes cast exceed the number of Base
Units allocated to the Connected Lot owned by such multiple
Owners.
Section 2.6. Additional Provisions Governing
Voting.
(a) Corporation Votes. If the
Corporation is an Owner, the Corporation shall cast its votes
with the majority of other members with respect to any
Connected Lot it owns, and in any event such votes shall be
counted for the purpose of establishing a quorum. In the
event of a tie vote, any votes with respect to any Connected
Lot owned by the Corporation shall not be cast. -
(b) Multiple -Person Owners. In the event
that any Connected Lot is owned by more than one Person, and
if only one of such Persons is present at a meeting of the
Corporation, that Person so present shall be entitled to cast
the vote for that Connected Lot. If more than one of such
Persons is present, the vote appurtenant. to that Connected Lot
shall be cast only in accordance with unanimous agreement of
such Persons who are Owners and such agreement shall be
conclusively presumed if any one of them purports to cast the
vote appurtenant to that Connected Lot without protests being
made forthwith to the Person presiding over the meeting by any
of the other Persons having an ownership interest in the
Connected Lot.
(c) voting Certificate. If a member is
not a natural Person, the.vote of such member may be cast by
any natural Person authorized by such.member. Such natural
Person must be named and a certificate signed by an authorized
officer, partner or trustee of such Owner and filed with the
Secretary; provided, however, that any vote cast by a natural
Person on behalf of such member shall be deemed valid unless
successfully challenged prior to the adjournment of the
meeting at which the vote is cast. Such certificate shall be
valid until revoked by a• subsequent certificate similarly
executed and filed with the Secretary.
(d) Delinquency. No member may vote at
j any meeting of the Corporation, be elected to serve on the
/ 2

Board of Directors or be appointed to serve on any committee
if payment by such member of any financial obligation to the
Corporation is delinquent more than sixty (60) days and the
amount necessary to bring the account current has not been
paid at the time of such meeting, election or appointment.
Section 2.7. Voting. Except for the election
of directors as hereinafter provided and other specific
exceptions provided in the Corporation Documents, a majority
Of the votes of members entitled to be cast by the members
present or represented by proxy, separately computed, on any
matter at a meeting of members at which a quorum is present
shall be the act of the members on that matter.
Voting. on all matters except the election of
directors, matters affecting dissolution of the Corporation,
matters affecting the disbursement of insurance or eminent
domain proceeds, or matters which according to the Corporation
Documents require a vote greater than a majority shall be by
voice vote or show of hands unless, prior to the voting, a
demand for a ballot vote on such matter is made by any member
present.
Section 2.8. Proxies. A member may vote
either in person or by proxy. Proxies shall be in writing,
shall be dated, shall be signed by the member or a Person
authorized by the member or, in cases where the member is more
than one Person, by or on behalf of all such Persons. A proxy
shall be valid for eleven (11) months unless a longer or
shorter period is provided in the proxy and all proxies shall
be filed with the Secretary. Proxies shall be deemed revoked
only upon actual receipt of a written revocation by the
Secretary or of
actual receipt of a person presiding over
the meeting of notice of revocation from the member. Every
_proxy shall be revocable.
ARTICLE 3
MEETINGS OF MEMBERS
Section 3.1. Place of Meeting. All meetings
of members shall be held at the principal office of the
Corporation or at such other place in Carteret County, North
Carolina, as may be determined by the Board of Directors to
be convenient to the members.
Section 3.2. Annual Meetings. The first
annual meeting of the Corporation shall be held not later than
the first anniversary of the incorporation of the Corporation
at such time and place as may be fixed by a resolution of the
Board of Directors. Subsequent annual meetings of the
Corporation shall be held on a Saturday or Sunday at least
thirty (30) days prior to the beginning of each fiscal year
at such time as may be fixed from time to time by resolution
of the Board of Directors.
Section 3.3. Special Meetings. The
Corporation shall hold a special meeting: (1) upon the call
3

of the President; (2) if so directed by a resolution of the
Board of Directors; or (3) upon a petition presented to the
mem
Secretary and signed by ers entitled -to _cast at -Yeast
�i�ty percent ( 50 0 ) of the votes . The signatures "" on a
petition requesting a special meeting shall be valid for a
period of ninety (90) days after the date of the first
signature. Such resolution, petition or request must: (1)
specify the time and place at which the meeting is to be held,
which place must be in Carteret County, North Carolina; (2)
either specify a date on which the meeting is to be held which
will permit the Secretary to comply with all notice provisions
of this Article or else specify that the Secretary shall
designate the date of the meeting; (3) specify the purposes
for which the meeting is to be held; and (4) be delivered to
the Secretary in writing.
Section 3.4. Notice of Meetings.
(a) Written notice stating the place, day and
time of each annual meeting and, in the case of a special
meeting, the purposes for which the meeting is called, shall
be given by the Secretary to each member entitled to vote at
such meeting not less than ten (10) nor more than fifty (50)
days before the date of the meeting. N_ business shall be
transacted at a special meeting except as stated_=in the
no ice .. .
(b) In addition to the provisions of
subsection (a) of this Section 3.4, notice of a meeting to act
on an amendment to the Declaration or the Articles of
Incorporation, a plan of merger or consolidation or a plan of
dissolution of the Corporation shall be accompanied by a copy
of the proposed amendment, plan of merger or consolidation or
plan of dissolution.
Section 3.5. Waiver of Notice of Meetings.
(a) Whenever any notice is required to be
given of any meeting of the Corporation, a waiver thereof in
writing signed by a member entitled to such notice, whether
given before or after the meeting, shall be the equivalent to
the giving of such notice to that member and such waiver shall
be delivered to the Secretary.
(b) A member who attends a meeting shall be
conclusively presumed to -,.have received timely and proper
notice of the meeting or to have duly waived notice thereof
unless such member attends for the express purpose of
objecting to the transaction of any business on the grounds
that the meeting was not lawfully called or convened and so
notifies the person conducting the meeting at or prior to the
commencement of the meeting or at or prior to the
consideration of the matter subject to objection in the case
of a special meeting.
_ Section 3.6. Quorum. A quorum shall be
'deemed to be present throughout any meeting of the Corporation
if members entitled to cast at least fifty percent (50%) of
n

all of the votes of the members are resent, in person or by
proxy, at the beginning of such meet` g Onceabet--is
�-Vse'nt at a meeting such member is deemed present for quorum
purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new Record Date is or
shall be set for that adjourned meeting.
If at any meeting of the Corporation a quorum
is not present, a majority of the members who are present at
such meeting in person or by proxy may: (1) recess the meeting
to such date, time and place as members may agree not more
than forty-eight (48) hours after the time the original
meeting was called; or, (2) adjourn the meeting to a time not
less than forty-eight (48) hours after the time the original
meeting was called and to such date and place as such members
may agree, whereupon the Secretary shall announce the date,
time and place at the meeting and shall make other reasonable
efforts to notify all members of such date, time and place.
Section 3.7. Order of Business. Unless
otherwise specified in the notice of the meeting, the order
of business at all meetings of the Corporation shall be as
follows: (1) roll call or proof of quorum; (2) proof of
notice of meeting; (3) reading of the minutes of the preceding
meeting; (4) reports of officers; (5) report of Board of
Directors; (6) reports of committees; (7) unfinished business;
(8) new business; and (9) election of directors; provided,
however, that the voting for election of directors may
commence at any time at the direction of the presiding
officer.
Section 3.8. Conduct of Meetings. The
President shall preside over all meetings of the Corporation
and the Secretary shall keep the minutes of the meetings and
-record all resolutions adopted at the meetings and proceedings
occurring at such meetings. The President may appoint a
parliamentarian at any meeting of the Corporation. The most
current edition of Robert's Rules of Order shall govern the
conduct of all meetings of the Corporation when not in
conflict with the Corporation documents.
Section 3.9. Record Date to Determine Members
and List of Members. The date for determining which Persons
are members ("Record Date") shall be the close of business on
the sixtieth (60th) day prior to the date of the meeting,
unless the Board of Directors shall determine otherwise. The
Board of Directors shall not set a Record Date retroactively.
At least ten (10) days before each meeting, the Secretary
shall make a complete list of members, with the address of
each, available for review by the members before and during
the meeting. The list shall be current as of the Record Date.
ARTICLE 4
dl
BOARD OF DIRECTORS
Section 4.1. Initial Directors. There shall
be three (3) initial directors of the Corporation, being those
5

persons named in the Articles of Incorporation, who shall -
serve until their successors are elected in accordance with
Section 4.3 hereof.
Section 4.2. Election Procedures and
Qualifications.
(a) Nominating Committee. Nominations for
election to the Board of Directors shall be made by a
Nominating Committee. The Nominating Committee shall be
appointed by the existing Board of Directors and shall consist
of a chairman, who shall be a member of the Board of Directors
whose term is not then expired, and at least two ( 2 ) other
persons who are members of the Corporation but not currently
serving on the Board of Directors. The Nominating Committee
shall develop election procedures and administer such
procedures as are approved by the Board of Directors providing
for election of directors by members at the annual meetings,
and, where appropriate, at special meetings. Members of the
Nominating Committee shall serve from the date of their
appointment through the close of the annual meeting or, where
appropriate, the special meeting, at which the election of
members of the Board of Directors is to be held.
(b) Nominations. Persons qualified to be
directors may be nominated for election. by the Nominating
Committee and their names shall be submitted to the President
of the Corporation and the Board of Directors fifty (50) days
before the meeting at which the election is to be held. The
Nominating Committee shall make as many nominations for
election to the Board of Directors as it shall in its
discretion determine. The written nominations presented by
the Nominating Committee shall be accompanied by a statement
signed by the nominees indicating the willingness of such
nominees to serve as a director. Additional nominations may
be made from the floor at the meeting at which the election
is held for each vacancy on the Board of Directors. The
nominee must either be present at said meeting and consent to
the nomination or have indicated in writing the willingness
to serve as a director.
(c) Qualifications. Subject to the
limitations provided herein, any natural person shall be
eligible for election as a member of the Board of Directors.
Section 4.3: Number of Directors, Election
of Directors and Term of Office.
(a) The Corporation shall have three (3)
directors.
(b) The terms of the first Board of Directors
shall be staggered as follows: one (1) director shall serve
for a term of three (3) years; one (1) director shall serve
for two (2) years and one (1) director shall serve for one (1)
year. The nominee receiving the most votes shall be elected
for a term of three (3) years, the nominee receiving the next
highest number of votes shall be elected for a term of two (2)

years and the next nominee receiving the most votes from the
members shall be elected for a term of one (1) year. All
directors elected by the membership after the first annual
meeting of _ the.�Corporation shall hold off ice_ - for a term of
three O,-,yearn. Each elected director shall hold office.
until `'phis death, resignation, retirement, removal,;
disqualification, or his successor is elected.
Section 4.4. Action by the Board of
Directors. At all meetings of the Board of Directors, a
majority of the total number of directors shall constitute a
quorum for the transaction of business, and a majority vote
of the directors while a quorum is present shall constitute
a decision of the Board of Directors unless otherwise provided
by the Corporation Documents.
The unanimous vote of the directors shall be
required to adopt a resolution dissolving the Corporation.
Section 4.5. Removal or Resignation of
Directors.
(a) At any regular or special meeting of the
Corporation any one or more of the directors may be removed
with or without cause by the members provided a majority of
such members present at such meeting vote to remove such
director. Any director whose removal has been proposed by the
members shall be given at least ten (10) days' notice of the
time, place and purpose of the meeting and shall be given an
opportunity to be heard at the meeting. The notice given to
members of such meeting shall state that one of the purposes
of the meeting is to remove such director. If a special
meeting of a Corporation has been duly called for the express
and sole purpose of removing a director as herein permitted,
a quorum shall be deemed to be present throughout such meeting
if at least fifty percent (50°%) of those members eligible to
vote to remove or elect such director are present, in person
or by proxy, at the beginning of such meeting.
(b) A vacancy among the directors of the Board
of Directors caused by any reason other than the removal of
a director by the members shall be filled by a majority vote
of the remaining directors at a meeting of the Board of
Directors held for such purpose promptly at the occurrence of
such vacancy or, if the directors remaining in office
constitute fewer than a quorum, an affirmative vote of the
majority of the directors remaining in office. Each Person
so elected shall hold office until the expiration of the term
of the elected director who is being replaced.
(c) A director may resign at any time by
giving notice to the Board of Directors, the President or the
Secretary. Unless otherwise specified, such resignation shall
take effect upon the receipt thereof and the acceptance of
such resignation shall not be necessary to make it effective.
Section 4.6 Powers and Duties of the Board.
The business and affairs of the Corporation shall be managed
W

by the Board of Directors. The Board of Directors shall have
all powers necessary for the administration of the affairs of
the Corporation, including, but not by way of limitation, all
powers as set forth in Article 4 of Chapter 55A of the North
Carolina General Statutes (Non -Profit Corporation Act), as the
same may be amended from time to time, and may do all such
acts and things except those prohibited by the Corporation
Documents or required to be exercised and done by the members.
In addition to the duties imposed by any other provision of
the Corporation Documents, the Board of Directors shall
perform the following duties and take the following actions
on behalf of the Corporation:
(a) Provide services to the members in
accordance with the Corporation Documents, and provide for
Upkeep of the Community Use Areas.
(b) Designate, hire, dismiss and, where
appropriate, compensate the personnel necessary to provide for
the Upkeep of the Community Use Areas as well as purchase
equipment, supplies and materials to be used by such personnel
in the performance of their duties.
(c) Collect the assessments, deposit the
proceeds thereof in depositories designated by the Board of
Directors and use the proceeds as so authorized by the
Corporation Documents.
(d) Open bank accounts on behalf of the
Corporation and designate the signatories thereon.
(e) Enforce by legal means the provisions.of
the Corporation Docum s.
(f) Act with respect to all matters arising
out of any eminent domain proceeding affecting the Community
Use Areas.
(g) Notify the members of any litigation
against the Corporation involving a claim in excess of ten
percent (10%) of the amount of the annual budget.
(h) Obtain and carry insurance against
casualties and liabilities, as provided in the Declaration,
pay the premiums therefor and adjust and settle any claims
thereunder.
(i) Pay the cost of all authorized goods and
services rendered to the Corporation.
(j) Charge reasonable fees for the use of the
Community Use Areas and for services.
(k) Prepare"an annual budget in accordance
with the provisions of the Declaration.
(1) Adopt an annual budget and make
assessments against the Owners to defray the Common Expenses

of the Corporation, establish the means and methods of
collecting such assessments from the Owners and establish the
due date for the assessments for Common Expenses.
Iry (m) Borrow money on behalf of the Corporation,
Wand with the assent of two-thirds (2/3) of the members,
mortgage, pledge, deed in trust or hypothecate any or all of
its property as security for money borrowed or debts incurred.
(n) Dedicate, sell, or transfer all or any
portion of the Community Use Areas to any party, public
agency, authority or u i ity for such purposes as may be
agreed upon; provided, however, no such dedication or transfer
shall be effective unless an instrument signed by three -
fourths (3/4) of all of the members agreeing to such
dedication, sale or transfer has been recorded in the office
of the Register of Deeds of Carteret County.
(o) Keep, or cause to be kept, a record of all
its acts and affairs and provide a summarized statement
thereof to the members prior to or at the annual meeting of
members.
(p) Keep, or cause to be kept, a record of all
the receipts and disbursements and keep the records open for
examination by any member at any reasonable time.
(q) Cause to be prepared an itemized
accounting of the Common Expenses for each fiscal year
actually incurred and paid together with a tabulation of the
amounts collected pursuant to the budget adopted by the Board
of Directors for such fiscal year showing the net amount over
or short of actual expenditures plus reserves within one
hundred ninety (90) days after the end of each fiscal year.
(r) Adopt rules and regulations relating to
the use of the Community Use Areas and the Sewer System which
may provide, among other things, for the termination of
service to a Connected Lot upon failure of the Cwner to pay
any assessment levied by the Corporation and reasonable
charges for the resumption of service to a Connected Lot from
which service has previously been discontinued.
( s ) Do anything else not inconsistent with the
Cam` Corporation Documents.
Section 4.7. Meetinq of Directors.
(a) Types of Meetings. The first
organizational meeting of the Board of Directors shall be held
within thirty (30) days following the recordation of the
Declaration in the office of the Register of Deeds of Carteret
County, North Carolina. The.purpose of such meeting shall be
to elect Officers and establish the manner of the operation
of the Board of Directors and the Corporation, pursuant to the
Corporation Documents, until the first organizational meeting
of the Board of Directors elected at the first annual meeting
of the Corporation.

The first (organizational) meeting of the Board
of Directors following an annual meeting of the Corporation
shall be held within fifteen ( 15 ) days thereafter at such time
and place as shall be determined by a majority of the
directors to elect Officers and establish the manner of
operation of the Board of Directors for the ensuing year.
Regular meetings of the Board of Directors may be held at such
time and place as shall be determined from time to time by a
majority of the directors. Special meetings of the Board of
Directors may be called by the President and shall be called
by the President or Secretary upon the written request of at
least two (2) directors. All meetings of the Board of
Directors shall be open to Owners as observers, except that
the President or presiding officer may call the Board into
_executive session on sensitive matters such as personnel,
litigation strategy or hearings with respect to violations of
the Corporation Documents. Any final action taken by the
Board of Directors in executive session shall be recorded in
the minutes.
(b) Notice. Notice of meetings of the Board
of Directors shall be given to each director, personally or
by mail, facsimile, telegraph or telephone, orally or in
writing, at least three ( 3 ) calendar days prior to the day
named for such meeting. Such notice shall state the place,
day and time and, in the case of special meetings, the purpose
thereof. No notice of the organizational meeting shall be
necessary if such meeting is held immediately following the
annual meeting.
( c ) Waiver of Notice. Any director may at any
time, in writing, waive notice of any meeting of the Board of
Directors, and such waiver shall be deemed equivalent to the
-giving of such notice. Attendance by a director at any
meeting of the Board of Directors shall constitute a waiver
of notice by such director of the time, place and purpose of
such meeting, unless such director attends for the express
purpose of objecting to the transaction of any business on the
grounds that the meeting was not lawfully called or convened
and so notifies the person conducting the meeting at or prior
to the commencement of the meeting or at or prior to
consideration of the matter subject to objection in the case
of a special meeting. If all directors are present at any
meeting of the Board of Directors, no notice shall be required
and any business may be transacted at such meeting.
(d) Quorum of Board of Directors. At all
meetings of the Board of Directors, a majority of the total
number of directors shall constitute a quorum for the
transaction of business, and a majority vote of the directors
while a quorum is present shall constitute the decision of the
Board of Directors unless provided otherwise in the
Corporation Documents. If at any meeting of the Board of
Directors there shall be less than a quorum present, a
majority of those present may adjourn or recess the meeting
from time to time. At any such adjourned meeting at which a
quorum is present, any business which might have been
10

transacted at the meeting originally called may be transacted
without further notice. A director. who participates in a
meeting by any means of communication by which all directors
may simultaneously hear each other during the meeting shall
be deemed present at the meeting for all purposes.
(e) Conduct of Meetings. The President shall
preside over meetings of the Board of Directors and the
Secretary shall keep the minutes of the meeting and record all
resolutions adopted at the meetings and proceedings. occurring
at the meetings. The then current edition of Robert's Rules
of Order shall govern the conduct of the meetings of the Board
of Directors when not in conflict with the Corporation
Documents.
Section 4.8. Action bV Directors Without
Meeting. Any action by the Board of Directors required or
permitted to be taken at any meeting may be taken with a
meeting if a consent in writing setting forth the action taken
shall be signed either before or after such action is taken
by all the directors. Any such written consent shall have the
same force and effect as a unanimous vote and shall be filed
with the minutes of the Board of Directors.
ARTICLE 5
OFFICERS
Section 5.1. Designation and Duties of
Officers. The principal officers of the Corporation shall be
the President (who shall also serve as Chairman of the Board
of Directors), the Vice President, the Secretary and the
Treasurer, all of whom shall be elected by the Board of
Directors. The Board of Directors may also elect an assistant
treasurer, an assistant secretary and such other officers as
in its judgment may be necessary. The President and Vice
President shall be members of the Board of Directors. Any
other officers need not be directors. Each officer shall
perform such duties as are normally associated with such
office in parliamentary organizations, except to the extent,
if any, inconsistent with the Corporation Documents, and shall
perform such other duties as may be assigned to such office
by resolution of the Board of Directors. If any officer is
unable for any reason to perform the duties of the office, the
President (or the Board of Directors if the President fails
to do so) may appoint another qualified Person to act in such
officer's stead on an interim basis.
Section 5.2. Election of Officers. The
officers of the Corporation shall be elected annually by the
Board of Directors at the organizational meeting of each new
Board of Directors and shall hold office at the pleasure of
the Board of Directors. Any officer may hold more than one
position; provided, however, that the offices of President,
Vice President and Secretary shall be held by three different
individuals. Except for death, resignation or removal, the
11

officers shall hold office until their respective successors
shall have been elected by the Board of Directors.
Section 5.3. Resignation or Removal of
Officers. Any officer may resign by delivering written notice
to the Board of.Directors: Unless otherwise specified, such
resignation shall take effect upon the receipt thereof, and
acceptance of such resignation shall not be necessary to make
it effective. Upon the affirmative vote of a majority of all
members of the Board of Directors any officer may be removed,
either with or without cause, and a successor may be elected
at any regular meeting of the Board of Directors or at any
special meeting of the Board of Directors called for such
purpose.
Section 5.4. Vacancies. A vacancy in any
office may be filled by appointment by the Board of Directors.
The Person appointed to fill a vacancy shall serve for the
remainder of the term of the officer such Person replaces.
Section 5.5. President. The President shall
be the chief executive officer of the Corporation; preside at
all meetings of the Corporation and of the Board of Directors;
have general and active direction of the business of the
Corporation subject to the control of the Board of Directors;
see to the execution of the resolutions of the Corporation and
the Board of Directors; see that all orders and resolutions
of the Board of Directors are carried into effect; and, in
general, perform all the duties incident to the office of
President.
Section 5.6. Vice President. The Vice
President shall take the place of the President and perform
the duties of the President whenever the President shall be
absent or unable to act. If neither the President nor the
Vice President is able to act, the Board of Directors shall
appoint some other director to act in the place of the
President, on an interim basis. The Vice President shall also
perform such other duties as shall from time to time be
imposed by the Board of Directors or by the President.
Section 5.7. Secretary. The Secretary shall.
keep the minutes of all meetings of the Corporation and of the
Board of Directors; have charge of such books and papers as
the Board of Directors may direct and as may be required by
Article 4 of Chapter 55A of the General Statutes of North
Carolina; give or cause to be given all notices required to
be given by the Corporation; give each Owner notice of each
assessment against such Owner's Connected Lot as soon as is
practicable after assessment is made; provide for each member
and Owner, upon request, notice and a copy of the rules and
regulations and all amendments thereof; maintain a register
setting forth the place to which all notices to members, shall
be delivered; and, in general;, perform all the duties incident
to the office of Secretary.
Section 5.8. Treasurer. The Treasurer shall
be responsible for Corporation funds and securities; keep full
12

and accurate financial records and books of account showing
all receipts and disbursements; prepare all required financial
data; deposit all monies and other valuable effects in the
name of the Corporation in such depositories as may from time
to time be designated by the Board of Directors; and, in
general, perform all the duties incident to the office of
Treasurer.
ARTICLE 6
COMMITTEES
Section 6.1. Nominating Committee. The Board
of Directors shall establish a Nominating Committee as set
forth in these Bylaws.
Section 6.2. Other Committees. The Board of
Directors may create and abolish from time to time such other
committees consisting of two (2) or more persons as the Board
of Directors may deem appropriate to aid in the administration
of the affairs of the Corporation. Such committees shall have
the powers and duties fixed by resolution of the Board of
Directors from time to time. The Board of Directors shall
appoint the chair of each committee, and may either appoint
the other members thereof or leave such appointment to the
committee chair.
Section 6.3. Action by Committee Without
Meeting. Any action required or permitted to be taken at a
meeting of a committee may be taken without a meeting if
consent in writing, setting forth the action taken, shall be
signed either before or after such action by all of the
members of the committee. Any such written consent shall have
the same force and effect as a unanimous vote and shall be
-filed with the minutes of the committee.
ARTICLE 7
FIDUCIARY DUTIES
Section 7.1. Execution of Documents. Unless
otherwise provided in a resolution of the Board of Directors,
all agreements, contracts, deeds, leases, checks and other
instruments of the Corporation for expenditures or obligations
for Common Expenses and all checks drawn upon reserve accounts
shall be executed by any two (2) persons designated by the
Board of Directors. Any Officer of the Corporation may be
designated by the Board of Directors to sign on behalf of the
Corporation.
Section 7.2. Conflicts of Interest.
(a) Each director or officer shall exercise
such director's or officer's' powers and duties in good faith
and in the best interests of the Corporation. No contract or
other transaction between the Corporation and any of its
directors or officers, or between the Corporation and any
corporation, firm or association in which any of the directors
13

or officers of the Corporation are directors or officers or
are pecuniarily or otherwise interested, is either void or
voidable because of such relationship or because any such
director or officer is present at the meeting of the Board of
Directors or any committee thereof which authorizes or
approves the contract or transaction or because such
director's or officer's vote is counted for such purpose if
any of the following conditions exist: (1) the material facts
of the transaction and the common directorate or interest is
disclosed or known to the Board of Directors or a majority
thereof, and the Board authorizes, approves or ratifies such
contract or transaction in good faith; or (2) the common
directorate or interest is disclosed or known and the contract
or transaction is commercially reasonable to the Corporation
in view of all the facts known to any director or officer at
'the time such contract or transaction is authorized, ratified,
approved or executed.
(b) Any common or interested directors or
officers may be counted in determining the presence of a
quorum of any meeting of the Board of Directors, a committee
thereof, or the members which authorize, approve or ratify any
contract or transaction, and such director's vote shall be
counted with respect to any matter provided at least one of
the conditions set forth in Section 7.2 (a) are met.
Section 7.3. Liability and Indemnification.
(a) No Personal Liability. The directors,
officers and members of the Committees shall not be liable to
the Corporation or any member or Owner r any mis_ e of
ju men , igence or otherwise, except for their own
individual wi miscon uc or a faith. Directors an
o i r ave no ona lability with respect to any
contract made by them on behalf of the Corporation. No member
or Owner shall be liable for the contract or tort liability
of the Corporation by reason of membership therein. Every
agreement made by the Board of Directors and the officers on
behalf of the Corporation shall, if obtainable, provide that
the directors, the officers or the managing agent, as the case
may be, are acting only as agents for the Corporation and
shall have n persona ereun er.
(b) Indemnification. The Corporation shall
indemnify the directors and officers to the extent that a non-
profit corporation may indemnify its directors, officers and
employees pursuant to Article 4 of Chapter 55A of the General
Statutes of North Carolina.
(c) Directors and Officers Liability
Insurance. The Corporation shall have the power to purchase
and maintain insurance on behalf of any Person who is or was
a director, officer or member of any committee against any
liability asserted against°such Person and incurred by such
Person in any such capacity or arising out of such Person's
status as such, whether or not the Corporation would have the
power to indemnify such Person against such liability under
14

the provisions of this section. Further, the availability of
the Corporation's indemnity shall not relieve any insurer of
any liability under an insurance policy held by the
Corporation.
Section 7.4. Compensation of Directors and
Officers. No salary or other compensation shall be paid by
the Corporation to any director or officer of the Corporation
for serving or acting as such, but this shall not preclude the
payment of salary or other compensation for the performance by
such director or officer of other services to the Corporation
nor shall it preclude the reimbursement of reasonable,
ordinary and necessary expenses incurred in serving or acting
as a director or officer.
ARTICLE 8
BOOKS AND RECORDS
Section 8.1. Maintenance. The Corporation
shall keep books and records as required by Article 4 of
Chapter 55A of the General Statutes of North Carolina. All
books and records shall be kept in accordance with generally
accepted accounting principles.
Section 8.2. Availability. The books and
6J&—)records of the Corporation shall be available for examination
by the members, the Owners, their attorneys, accountants, and
authorized agents during general business hours_ on business
days at the times an in es a is e by the oard
of Dire t- rs . e lis embers requ re3--by -SedcUiori —3 : g
eof shall be available for inspection for a period of ten
(10) days prior to the meeting and at the meeting. The Board
of Directors may fix from time to time a reasonable charge to
cover the direct and indirect costs of providing any documents
to a member.
Section 8.3. Accounting Report. Within sixty
(60) days after the end of each fiscal year, the Board of
Directors shall make available to members requesting the same
an itemized accounting of the Common Expenses for such fiscal
year actually incurred and paid, together with a tabulation of
the amounts collected pursuant to the budget adopted by the
Board of. Directors for such fiscal year, and showing the net
amount over or short of the actual expenditures plus reserves.
Section 8.4. Fiscal Year. The first fiscal
year of the Corporation shall begin on the date of
incorporation and end on the last day of December, unless
otherwise determined by the Board of Directors. After the
first fiscal year, unless otherwise determined by the Board of
Directors, the fiscal year shall be the calendar year.
Section 8.5. ' Seal. The corporate seal of the
Corporation shall consist of two concentric circles between
which is the name of the Corporation and in the center of
which is inscribed "SEAL."
15

y
ARTICLE 9
NOTICES
Except as specifically provided otherwise in
the Corporation Documents, all notices, demands, bills,
statements or other communications under the Corporation
Documents shall be in writing and shall be deemed to have been
duly given if delivered personally, sent by facsimile, or sent
by United States mail, postage prepaid, or if notification is
of a default or lien, sent by registered or certified United
States mail, return receipt requested, postage prepaid:
(1) if to an Owner, at the address which the Owner shall
designate in writing and file with the Secretary or, if no
such address is designated, at the address of the Connected
_Lot of such Owner; and (2) if to the Corporation, or the Board
of Directors, at the principal office of the Corporation or at
such other address as shall be designated by notice in writing
to the Owners pursuant to this section. If a Connected Lot is
owned by more than one Person, each such Person who so
designates an. address in writing to the Secretary shall be
entitled to receive all notices hereunder; provided, however,
notice to one Person who is an Owner shall be sufficient
notice and meet all of the notice requirements specified
herein. It shall be the responsibility of any Person
receiving the notice to notify the other Persons comprising
the Owner.
ARTICLE 10
60
AMENDMENTS
These Bylaws may be amended upon the written
assent of two-thirds (2/3s) of the directors of the
Corporation.
86-0233(P)
2IPS/1
10/31/91
16

STATE OF
NORTH
CAROLINA
r
r
7 S ,.5 .
Department of the < 10
Secretary of State
To all whom these presents shall come, Greetings:
I, Rufus L. Edmisten, Secretary of State of the State of
North Carolina, do hereby certify the following and hereto
attached ( 7 sheets) to be a trzze copy of
ARTICLES OF INCORPORATION
OF
CAPE ROYALL DOLPHIN ASSOCIATION, INCORPORATED
the original of which was filed in this office on the 12th day
Of August 1991.
In Witness Whereof, I have herezzzzto set nzy hand and
affixed my official Seal.
]Done in Office, at Raleigh, this the
Of August
7
1
j
12 th day
in the Year of our Lord 1991.
Filed -for re istration ntlG:k`� ���'
��� � _SPA. n.th � day �i.
19 -t-�---� ad recorded in Gook , ? ;ge Gffic of
the Resister of Deeds, Cartcrct County, Forth C,r^lion.
rrn n;"Cr
egister of, "s£ds
AsPs4gnt, Deputy
i Secretary of State
BOOK- U)PAGrc I

o
ARTICLES OF INCORPORATION
OF
CAPE ROYALL DOLPHIN ASSOCIATION, INCORPORATEI�T
A Nonprofit Corporation .. �,s,f�rr�
fir E Ub/ 1 •_i 1 A
C 1 tR
I, the undersigned natural person being of T; )R LaiSM1;_1-V
eighteen (18) years or older, hereby do form;i';;gk��.i;T�
corporation under the laws of the State of North
contained in Chapter 55A of the General Statutes of North Carolina
entitled "Nonprofit Corporation Act," and the several amendments
thereto, and to that end do hereby set forth:
1. Name: The name of the Corporation is Cape Royall
Dolphin Association, Incorporated.
2. Definitions: The words and phrases used in these
Articles of Incorporation ("Articles"), shall have the same meaning
as set forth in the Declaration and Operating Agreement
("Declaration") to be executed between Cape Emerald Master
Association,- Inc., Lawrence S. Spell, Trustee, The Nassau
Corporation and Cape Rovall Dolphin Association, Incorporated and
to be recorded in the office of the Register of Deeds of Carteret
County, North Carolina, unless the context shall otherwise
indicate.
3. Duration: The period of duration of the Corporation
shall be perpetual.
4. Purposes: The principal purposes for which the
Corporation is organized are:
(A) To own, manage, administer, and provide for the
Upkeep of the Community Use Areas.
(B) To own, manage, administer and provide for the Upkeep
of any real estate which may hereafter be acquired by the
Corporation through purchase, gift, annexation, dedication or
d
otherwise.
(C) To own, manage, administer, operate and provide for
the Upkeep of the Sewer System and any other improvements now or
hereafter located on any portion of the Community Use Areas.
4ci c

(D) To purchase, own, and provide for the Upkeep of any
and all equipment, facilities, and buildings used in connection
with the operation of the Sewer System and any facilities located
on Community Use Areas.
(E) To undertake the performance of the acts and duties
incident to the administration, management, and operation of the
above -described facilities in accordance with the terms,
provisions, and restrictions contained in the Corporation
Documents.
(F) To perform such acts as are deemed necessary to
achieve the aforesaid purposes.
(G) To sell, trade, buy, lease, and otherwise deal with
such property, whether real or personal, as may be necessary or
convenient to carry out the provisions of the Corporation
Documents.
(H) To establish an orderly and efficient system of
billing to pay for the Common Expenses of the Corporation.
(I)`- To exercise all of the powers and privileges and to
perform all of the duties and obligations of the Corporation as set
forth in the Corporation Documents.
(J) To engage in any lawful act or activity for which
nonprofit corporations may be organized under Chapter 55A of the
General Statutes of North Carolina and which is permitted to be
done or carried on by a corporation exempt from state income and
franchise taxes under Section 105-130.11 and 105-125 of the General
Statutes of North Carolina, and the several amendments thereto, and
a corporation electing to be treated as a tax exempt homeowner's
association under Section 528 of the Internal Revenue Code of 1986,
as amended, in the event and during the tax years of such election.
5. Powers: In connection with carrying out the purposes
set out in the preceding pp ragraph, the Corporation has all the
powers granted nonprofit corporations under the laws of the State
of North Carolina. By way of addition to, and not by way of
2
BOOK_

limitation of, the above powers, the Corporation shall have the
following specific powers: ;
(A) To fix, levy, and collect assessments against members
of the Corporation to defray the Common Expenses of the
Corporation.
(B) To enter into any and all contracts necessary or
desirable to accomplish the purposes of the Corporation.
(C) To exercise, undertake, and accomplish all of the
rights, duties, and obligations which may be granted to or imposed
upon the Corporation.
(D) To do any and all lawful acts not prohibited by the
Corporation Documents.
(E) To borrow money and, with assent of two-thirds (2/3)
of the members, mortgage, pledge, deed in trust, or hypothecate any
or all of its real or personal property as security for money
borrowed or debts incurred.
I
(F) To dedicate, sell, or transfer all or any part of
the Community Use, Areas to any party, public agency, authority, or
Utility for such purposes and subject to such conditions as may be
agreed upon; provided, however, no•such sale, dedication or
transfer shall be effective unless an instrument signed by two-
thirds (2/3). of the membe*rs, agreeing to such dedication, sale or
transfer has been recorded in the office of the Register of Deeds
of Carteret County.
(G) To participate in mergers and consolidations with
other non-profit corporations organized for he same purposes;
provided, however, any such merger or consoli...-ion shall require
the consent of two-thirds 2/3) of the directors on the Board o
,Directorsy�
(H) To establish rules and regulations, and amend or
repeal the same from time ,'to time, regarding the use of the
Community Use Areas by the members and the provision of sewage
service to the members including, but not limited to, the right to

3
terminate the use of the Community Use Areas by a member as more
particularly set forth in the Corporation Documents.
6. Membershin_:
(A) Members shall be of one class. All owners of
a Connected Lot, including contract purchases, are automatically
members of the Corporation and all Persons shall automatically
become a member of the Corporation upon ;eir acquisition of a
Connected Lot or upon their Lot becoming a Connected Lot and may
become a member in no other manner. The foregoing is not intended
to include Persons who hold an interest merely as security for the
performance of an obligation.
(B) Memberships are not transferable and occur only
upon the occurrence of those events set out in this Article. No
member shall have a property right in the Corporation nor any
property right as a member in any membership certificate, if such
certificates are issued.
(C) The membership rights of a member shall not be
suspended so long as the Person continues to be the Owner of a
Connected Lot, is not in violation of any rule, regulation or other
requirement of the Corporation Documents, and is not in arrears in
payment of any assessment. Such rights of an Owner as arise
because of ownership of any particular connected Lot shall
automatically terminate upon transfer of the Connected Lot.
(D) The membership of a member or a member's
interest in the funds and assets of the Corporation may not be
assigned, hypothecated, or transferred in any manner except as an
appurtenance to the Connected Lot upon which that particular
membership is based; provided, however, this provision shall not
prevent the allocation or reallocation of Base Units or interests
therein as provided in the Declaration.
7. Dissolution: The Corporation may be dissolved at
any time with the assent given in writing and signed by one hundred
percent (100%) of the members. Upon dissolution of the Corporation
other than incident to a merger or consolidation, the assets of the
4
Rona `" DAr- ��

r
Ak..
Corporation shall be dedicated to an appropriate public agency to
be used for purposes similar to those for which this Corporation
was created. In the event that such dedication is refused
acceptance, such assets shall be granted, conveyed and assigned to
any nonprofit corporation, association, trust, or other
organization to be devoted to such similar purposes.
8. Nonprofit: The Corporation shall be conducted as a
nonprofit corporation for the benefit of its members.
9. Registered Office and Agent: The Registered Office
of the Corporation is located in Carteret County at 8810 Emerald
Drive, Emerald Isle, North Carolina 28594 and the name of the
initial Registered Agent at such address is Lawrence S. Spell.
10. Directors:
(A) Any natural person may serve as a director.
(B) The number of directors of the Corporation may be
fixed by the Bylaws, but shall not be less than three, and the
method of their election shall be fired by the Bylaws.
(C) The number of directors constituting the initial
Board of Directors shall be three and the names and addresses of
the persons who are to serve as directors until the first meeting
of members or until their successors are elected and qualified are:
1) Lawrence S. Spell
8810 Emerald Drive
Emerald Isle, Carteret County
North Carolina 28594
2) L. B. Page
8810 Emerald 'Drive
Emerald Isle, Carteret County
North Carolina 28594
3) Herbert Page
8810 Emerald Drive
Emerald Isle, Carteret County
North Carolina- 28594
i'
5
�- 4C.0

11. Incorporator: The name and address of the
incorporator are: W. Daniel Martin, III, 1001 College Court, New
Bern, Craven, North Carolina 28563.
12. Amendments: Amendment of these Articles shall
require the written assent of seventy-five percent (750) of the
members.
IN TESTIMONY WHEREOF, I have hereunto iset my hand, this
the �day of August, 1991.
Wes' aniel Martin,; III
BOOK Le � 4 PAGE � 1

µ � 1
STATE OF NORTH CAROLINA
COUNTY OF J'-ak
This is to certify that on the day of Q-(.(Q; '.' ,
19g1 , before me, a Notary Public, personally appeared-JW. D?1NIEL
MARTIN, III, who I am satisfied is the person named in and who
executed the foregoing Articles of Incorporation, and I having
first made known to him the contents thereof, he did acknowledge
that he signed and delivered the same as his voluntary act and deed
for the uses and purposes therein expressed.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my seal, this T41 day of august, 1991.
My Commission expires:
J
86-0233(P)
228J$
8/7/91
uqulL L I
Notary Public ,J
7 -// c77ql

IICOUNTYOFCARTERET�—_ --
BILL OF SALE
THIS BILL OF SALE, made this /6.� day of October,
1991, by CAPE EMERALD MASTER ASSOCIATION, INC., hereinafter
referred to as party of the first part; to CAPE ROYALL DOLPHIN
ASSOCIATION, INCORPORATED, hereinafter referred to as party of the
second part;
W I T N E S S E T H:
That said party of the first part, for and in
consideration of the sum of Ten and No/100 Dollars ($10.00), to the
party of the first part paid, the receipt of which hereby is
acknowledged, has bargained and sold and by these presents does
bargain, sell and convey unto the said party of the second part,
said party's successors and assigns, certain articles of personal
property, more particularly described as follows:
All personal property, equipment, collection
lines, valves and all such related property
utilized in the operation of the wastewater
collection and treatment facility located upon
the tract or parcel of land designated as
"RESERVED FOR WASTEWATER TREATMENT PLANT SITE"
on the map recorded in Map Book 24, of Page 90
in the office of the Register of Deeds of
Carteret County, and all banking accounts,
deposits and receivables from customers
utilizing the wastewater treatment facility as
have been collected, or due or as otherwise
are associated with the operation of the
wastewater treatment facility.
TO HAVE AND TO HOLD said personal property to the said
party of the second part and said party's successors and assigns,
in fee simple. t,
And the said party of the first part covenants that party
of the first part is seized of said property in fee and has the
right to convey the same do fee simple, that the same is free and
clear of all encumbrances whatsoever, and that t-he party of the
first part will warrant and defend the title thereto against the
lawful claims of all persons whomsoever. '
IN TESTIMONY WHEREOF, the party of the first part has
caused this instrument to be executed in its corporate name by its
President, attested by its Secretary, and its corporate seal to be

hereto affixed, all by order of its Board of Directors first duly
given, this the day and year first above written.
CAPE EMERALD MASTER ASSOCIATION, INC.
By: -7 ---/Z
Presid
[SEAL]
ATTEST:
Secretary
STATE OF NORTH CAROLINA
COUNTY OF CARTERET ,J
a Notary Public in
I' do hey by certify that on the 10-6
and for said County and State,
day of r��*�C3r" 1991, before me personally app
eared
cu���/ with whom I am personally
e.
acquainted, who, bean by me duly sworn, says that he is President
is Secretary of CAPE
and that
EMERALD MASTER ASSOCIAT ON, INC., the corporation described in and
which executed the foregoing instrument; that he knows the common
seal of said corporation; that the seal affixed to the foregoing
instrument is said common seal; that the name of the corporation
was subscribed thereto by the said President; that the said
President and Secretary subscribed rrtheir the Board names thereto
of Directors aid
of
common seal was affix Y
said corporation; and that the said instrument is the act and deed
of said corporation.
WITNESS my hand and notarial seal, this the �'�� day of
1991.
My Commission Expires:
86L0233(P)
5LWH
7/3/91
�A
Notary Public +J

From: Alice Taylor
To: Parente, Leah
Subject: Re: [External] Re: WQ0005173 - Cape Royall Dolphin WWTP - Additional Information Request #1
Date: Tuesday, February 13, 2024 9:54:49 AM
Attachments: imaae001.pno
CAUTION: External email. Do not click links or open attachments unless verified. Report suspicious emails with the Report
Message button located on your Outlook menu bar on the Home tab.
Thank you. Just sent all you requested.
Also, need to correct the application where it asks for status of MW 6 & 7. They should be marked
active.
On Tue, Feb 13, 2024 at 9:52 AM Alice Taylor <alicept1951 Ca
n-mail.com> wrote:
CRDA Bylaws.pdf
CRDA Covenants Declaration.pdf
On Tue, Feb 13, 2024 at 8:19 AM Parente, Leah <leah.parente(kdeq.nc.gov> wrote:
Dear Ms. Taylor,
I just spoke with my supervisor and multiple portal submissions cannot be accepted due to the
way the system is set up. (You may have already received a rejection notice from the portal
system). Please attach those four documents to a response to this email and I will mark your
Additional Information Request as complete. I apologize for the inconvenience.
Sincerely,
Leah H. W. Parente
Geologist/Hydrogeologist
Division of Water Resources — Non -Discharge Branch
North Carolina Department of Environmental Quality
Office: [phone]
leah.parente e deq.nc.gov