ByLaws Updated and Accepted April 23, 2017

BYLAWS

OF

THE CLEARINGS HOMEOWNERS ASSOCIATION, INC.

ARTICLE I.

BUSINESS ADDRESS

The business address of The Clearings Homeowners Association, Inc. (the “Association”) shall be 7909 Dairy Ridge Road, Mebane, NC 27302. The business address may be changed by the Board of Directors.

ARTICLE II.

MEMBERSHIP IN THE ASSOCIATION

Every person or entity who is a record owner of a fee or undivided fee interest in any of the residential lots in any phase of The Clearings at Tom’s Creek Subdivision, (“the lots”) located in Orange County, North Carolina, shall be a member of the Association. Ownership of such interest shall be the sole qualification for membership, and membership shall be appurtenant to and may not be separated from such ownership. All references herein to “the subdivision” shall mean and refer to all areas encompassed by the boundaries of The Clearings at Tom’s Creek Subdivision, as shown at Plat Book 78, Pages 33 and 34, Orange County Registry.

ARTICLE III.

PURPOSES OF THE ASSOCIATION

The purposes and duties of the Association shall be:

A. To maintain and preserve all tracts of land, rights-of-way and easements owned by the Association at any time, and all roads, streets, ponds, trails, utilities, common areas and other improvements located thereon and therein;

B. To enforce the provisions of these Bylaws, of that Declaration of the Clearings Homeowners Association of record at Book 1573 Page 426, Orange County Registry (“the Declaration”), of that Declaration of Restrictive and Protective Covenants for The Clearings at Tom’s Creek of record at Book 1573 Page 403, Orange County Registry, and of any rules and regulations promulgated by the Association;

C. To have all rights and powers and to perform all duties and obligations under the Restrictive Covenants; and

D. To promote and protect the enjoyment and beneficial use and ownership of the lots.

No part of the funds and securities of the Association shall inure to the benefit of its members, Directors, or officers, or to any other person, except that the Association shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the above stated purposes.

ARTICLE IV.

ASSESSMENTS

The Association shall have the power to make and collect assessments against the individual Lot owners as stated in Sections 4 and 5 of the Declaration, the terms of which are incorporated herein.

ARTICLE V.

MEETINGS OF THE MEMBERS

Section 1. Place of Meetings. All meetings shall be held at such place as shall be designated on the notice of the meeting or agreed upon by a majority of the members entitled to vote thereat.

Section 2. Annual Meetings. The Annual Meeting of the members for the election of officers and the transaction of the other business shall be held in October of each year on any day (except a legal holiday) in that month as determined by the Board of Directors for the following purposes:

1. To establish and approve by majority vote of the Association the budget for the next fiscal year;

2. To fix the amount of the annual assessment against each lot pursuant to Article IV above;

3. To elect officers of the Association; and

4. To transact any other business that may come before the membership, including but not limited to the adoption, modification and/or repeal of any rules and regulations governing the subdivision.

Section 3. Substitute Annual Meeting. If the Annual Meeting shall not be held on the day designated by these Bylaws, a Substitute Annual Meeting may be called in accordance with the provisions of Section 4 of this Article V. A meeting so called shall be designated and treated for all purposes as the Annual Meeting.

Section 4. Special Meetings. Special Meetings of the members may be called at any time by the President or the Board of Directors of the Association, or by petition of a majority of the Lot owners.

Section 5. Notice of Meetings. Written notice stating the time and place of the meeting shall be delivered not less than ten nor more than fifty days before the date of any members’ meeting, either personally or by mail, by or at the direction of the President, the Secretary, or other person calling the meeting, to each member of record. If mailed, such shall be deemed to be delivered when deposited in the United States Mail, addressed to the member at his/her address as it appears on the record of members of the Association, with postage thereon prepaid. It shall be the responsibility of the individual members to keep the Secretary informed of their current address. In the absence of instructions from an individual member as to his/her address, the Secretary shall be entitled to rely on the most recent records of the Orange County Tax Collector to determine the addresses of the owners(s) of a lot.

In the case of a Special Meeting, the notice of the meeting shall specifically state the purpose or purposes for which the meeting is called; but, in the case of an Annual or Substitute Annual Meeting, the notice of meeting need not specifically state the business to be transacted thereat unless such a statement is required by the provisions of the North Carolina Nonprofit Corporation Act.

When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. When a meeting is adjourned for less than thirty days in any one adjournment, it is not necessary to give any notice of the adjourned meeting other than by announcement at the meeting at which the adjournment is taken.

Section 6. Voting Rights. On matters of the Association’s business submitted to vote of the membership, there shall be one (1) vote per lot, regardless of the number of owners of a lot. Unless otherwise provided in the Restrictive Covenants or the Declaration, thirteen (13) Lot owners (represented either in person or by proxy) shall constitute a quorum for the purposes of submitting any matter to a vote, and all matters submitted to a vote at any meeting held in accordance with these Bylaws shall be decided by a simple majority of the total votes cast except as noted in Article IX of these Bylaws.

Section 7. Voting by Proxy. Votes may be cast either in person or by one or more agents authorized by a dated, written proxy executed by the member or his/her attorney-in-fact. A proxy terminates one year after its date, unless it specifies a shorter term. Any form of proxy which is sufficient in law may be used, but the following form of proxy shall be deemed sufficient:

The undersigned hereby irrevocably constitute and appoint _____________________ their attorney-in-fact and proxy for the sole purpose of casting the vote allocated to Lot ___, on all matters submitted to vote at a meeting of The Clearings Homeowners Association, Inc., to be held on ______, 20__. The undersigned hereby ratify and confirm all such votes cast on behalf of said lot at that meeting, and certify that they are fully authorized to execute this instrument of proxy on behalf of all owners of any fee interest in said lot.

This the day of ____, 20__.

____________________

____________________

Section 8. Voting List. At least ten days before each meeting of the members, the Secretary of the Association shall prepare an alphabetical list of the members entitled to vote at such meeting or any adjournment thereof, with the address of each, which list shall be kept on file with the records of the Association. The list shall be produced and kept open at the time and place of the meeting and shall be subject to inspection by the members during the whole time of the meeting.

Section 9. Waiver of Notice. Any member may waive notice of any meeting. The attendance by a member at a meeting shall constitute a waiver of notice of such meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

ARTICLE VI.

BOARD OF DIRECTORS

Section 1. Purpose, Number and Term of Office. The business and affairs of the Association shall be managed by a Board of Directors. The Board of Directors of the Association shall consist of the President, Vice President, Treasurer, and Secretary of the Association. Each Director shall hold office until his/her death, disability, resignation, removal, or until the expiration of his/her term and the election of his/her successor.

Section 2. Powers and Duties. The Board of Directors shall have the power and duty to:

1. Oversee, operate, execute, and fulfill the purposes of the Association as set forth in Article III above.

2. Keep a complete record of all its acts and corporate affairs and present a statement thereof to the members at the Annual Meeting of the members.

3. Supervise all officers, agents and employees of the Association, and see that their duties are properly performed.

4. Present a proposed budget for the coming fiscal year at each Annual Meeting, including a proposed annual assessment, for consideration and approval by the membership; and, once an annual assessment has been approved by the membership, to:

a. Send written notice of the annual assessment to every member within thirty days of the date of approval;

b. File a lien with the Orange County Clerk of Superior Court against a Lot owner if the owner(s) thereof have not timely paid the assessment thereon, and/or bring an action at law against the member(s) personally obligated to pay the same; and

c. Issue, or cause an appropriate officer to issue, upon demand by any person, a certificate setting forth whether any assessment has been paid (a reasonable charge may be made by the Board of Directors for the issuance of these certificates, and, if a certificate states that an assessment has been paid, the certificate shall be conclusive evidence of payment with respect to any person relying on the certificate).

5. Procure and maintain adequate liability insurance for the potential indemnification of officers and Directors of the Association and hazard insurance on property owned by the Association.

Notwithstanding any other provision herein, the Board of Directors is authorized, on behalf of the Association, to submit any dispute with or claim against the owner(s) of any lot(s) to voluntary arbitration pursuant to any arbitration program then in effect in the General Court of Justice of Orange County, North Carolina.

ARTICLE VII.

MEETINGS OF THE DIRECTORS

Section 1. Called Meetings. Meetings of the Board of Directors may be called by or at the request of the President or any two Directors.

Section 2. Notice of Meeting. The person or persons calling a meeting of the Board of Directors shall, at least ten (10) days before the meeting, give notice thereof by any usual means of communication. Such notice need not specify the purpose for which the meeting is called.

Section 3. Waiver of Notice. Any Director may waive notice of any meeting. The attendance by a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 4. Quorum. A majority of the number of Directors fixed by these Bylaws shall constitute a quorum for the transaction of business at any meeting of the Board of Directors.

Section 5. Manner of Acting. Except as otherwise provided in these Bylaws, the act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 6. Informal Action by Directors. Action taken by a majority of the Directors without a meeting is nevertheless Board action if written consent to the action in question is signed by all the Directors and filed in the records of the Association, whether done before or after the action so taken.

Section 7. Committees of the Board. The Board may establish either standing or ad hoc committees of the members to assist it in its work.

ARTICLE VIII.

OFFICERS

Section 1. Designation. The officers of the Association shall consist of a President, a Vice-President, a Treasurer, a Secretary, and such other officers as the membership may from time to time elect.

Section 2. Election and Term. The officers of the Association shall be elected by the membership at the Annual Meeting of members. Only Lot owners may serve as officers of the Association. The officers shall be elected to one-year terms, and each officer shall hold office until his/her death, disability, resignation, removal, or until the expiration of his/her term and the election of his/her successor.

Section 3. Removal. Any officer may be removed at any time with or without cause by a majority vote of the members at a meeting held in accordance with these Bylaws.

Section 4. Vacancies. In the event of the death, disability, resignation or removal of an officer, his/her successor shall be selected and appointed by the Board of Directors to serve until the next Annual Meeting of the members.

Section 5. President. The President shall be the chief executive officer of the Association and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Association. He/she shall, when present, preside at all meetings of the members. He/she shall sign any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Association, or shall be required by law to be otherwise signed or executed; and in general he/she shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors.

Section 6. Vice-President. In the absence of the President or in the event of his/her death, inability or refusal to act, the Vice-President shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President and shall perform such other duties as from time to time may be assigned to him/her by the President or the Board of Directors.

Section 7. Secretary. The Secretary shall: (1) keep minutes of Annual, Special, and Board of Directors meetings; (2) ensure that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (3) be custodian of the corporate records ; (4) keep a register of the post office address of each member which shall be furnished to the Secretary by each member; and (5) in general perform all duties incident to the office of Secretary and such other duties as may be assigned to him/her by the President or by the Board of Directors.

Section 8. Treasurer. The Treasurer shall: (1) have charge and custody of and be responsible for all funds and securities of the Association; (2) receive and give receipts for moneys due and payable to the Association from any source whatsoever, and deposit all such moneys in the name of the Association in such depositories as shall be selected in accordance with the provisions of Section IV of Article IX of these Bylaws; and (3) in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors, or by these Bylaws.

ARTICLE IX.

CONTRACTS, LOANS, CHECKS, AND DEPOSITS

Section 1. Contracts. The Board of Directors may authorize any officer(s) or agent(s) to enter into any contract or execute and deliver any instrument in the name of and on the behalf of the Association. Such authority may be general or confined to specific instances.

Section 2. Loans. No loans of any kind in excess of the Association approved budget for the fiscal year shall be made on behalf of the Association and no evidence of indebtedness shall be issued in its name unless authorized by the approval of at least fifteen (15) Lot owners of the Association at an Annual or Special Meeting. Such authority may be general or confined to specific instances.

Section 3. Checks and Drafts. All checks, drafts or other orders for the payment of money, issued in the name of the Association, shall be signed by the President or the Treasurer of the Association.

Section 4. Deposits. All funds of the Association not otherwise obligated shall be deposited to the credit of the Association in such depositories as the Board of Directors may select.

ARTICLE X.

INDEMNIFICATION

Any person who serves or has served as an officer/director of the Association shall have the right to be indemnified by the Association to the fullest extent permitted by law against (a) reasonable expenses, including attorneys’ fees, incurred by him/her in connection with any threatened, pending, or completed civil, administrative, investigative, or arbitrative action, suit, or proceeding (and any appeal therein) seeking to hold him/her liable by reason of the fact that he/she is or was acting in such capacity, and (b) reasonable payments made by him/her in satisfaction of any judgment, money, decree, fine, penalty or settlement for which he/she may have become liable in any such action, suit or proceeding.

Upon request for payment, the President of the Association shall promptly call a Special Meeting of the Association to obtain approval by a majority vote of a quorum to pay the indemnification. Such approval may be general or confined to specific instances and shall not be unreasonably withheld. Upon approval by the members, the President shall promptly cause the indemnification to be paid to the requesting party if unobligated or uncommitted funds are available.

Any person who at any time after the adoption of these Bylaws serves or has served as an officer of the Association shall be deemed to be doing or to have done so in reliance upon, and as consideration for, the right of indemnification provided herein. Such right shall inure to the benefit of the legal representatives of any such person and shall not be exclusive of any other rights to which such person may be entitled apart from the provision of these Bylaws.

ARTICLE XI.

DISSOLUTION

In the event of dissolution of the Association, the residual assets of the Association will be distributed to a nonprofit organization with purposes similar to those of the Association.

ARTICLE XII.

GENERAL PROVISIONS

Section 1. Fiscal Year. The fiscal year of the Association shall be from November 1 through October 31.

Section 2. Amendments. The members of the Association may amend these Bylaws, repeal these Bylaws, and/or adopt new Bylaws at any Annual or Special Meeting of the Association pursuant to the then effective Bylaws of the Association.

The foregoing instrument is hereby approved, accepted, and adopted as the Bylaws of The Clearings Homeowners Association, Inc. In witness whereof, the President of the Association has set his hand effective ______________ .

___________________________

Terry Sterling,

President,

The Clearings Homeowners Association, Inc.