Declaration of joint use and reservation system



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DECLARATION OF JOINT USE AND RESERVATION SYSTEM

THIS DECLARATION is made June 26, 1981, by REAL-TRONIC CORPORATION, a Virginia corporation having its principal office in Norfolk, Virginia (the Developer). Real-Tronic Corporation (formerly Herdon Corporation) owns real property situated in the City of Virginia Beach, Virginia. A portion of the property was previously submitted to the Condominium Act, Title 55, Chapter 4.2 of the Code of Virginia of 1950, as amended (the Condominium Act), and established as a condominium known as "Indian Cove Campground" by declarations recorded in the Clerk's Office of the Circuit Court for the City of Virginia Beach, Virginia (the Clerk's Office) in Deed Book 1848, page 485, Deed Book 1886, page 243, and Deed Book 1988, page 623. The Indian Cove Campground condominium was terminated in accordance with the provisions of the Condominium Act upon recordation of a termination agreement in the Clerk's Office preceding recordation of this Declaration of Joint Use and Reservation System (the Declaration). Purchasers of units in the Indian Cove Campground condominium agreed to exchange their condominium units and rights in the condominium, for Undivided Interests pursuant to this Declaration in the property described herein as Indian Cove Resort. The Developer intends to sell undivided interests in Indian Cove Resort and in other properties that may be acquired by the Developer, which properties are hereby or may hereafter be designated for the purpose, all in accordance with the Joint Use and Reservation System described herein.

NOW, THEREFORE, the Developer establishes this JOINT USE AND RESERVATION SYSTEM (sometimes herein referred to as the Joint Use System) respecting Indian Cove Resort. The Developer will convey undivided interests therein pursuant to the Joint Use System, which will permit the former condominium unit owners as Exclusive Owners hereunder to occupy a specific Camping Lot and have non-exclusive use of the Common Area, and which will permit Owners to occupy an assigned Camping Lot for a Reservation Period and have non-exclusive use of the Common Area during such Reservation Period, all in accordance with the following covenants, conditions and restrictions.

SECTION 1 - DEFINITIONS




1.1. Defined Terms. The capitalized terms defined in this section shall have the respective meanings set forth below for purposes of this Declaration, unless otherwise specifically defined or unless the content expressly requires another meaning.

1.2. Camping Lot. A campsite or tent site in Indian Cove Resort, whether now existing as such or hereafter designated as such by supplemental declaration. The campsites and tent sites initially designated as Camping Lots by the Developer include those shown on the site plans included with Exhibit 1 attached to this Declaration.

1.3. Clerk's Office. The Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia.

1.4. Common Area. Those portions of Indian Cove Resort (as defined in Section 1.8) which are not Camping Lots and which are intended to be devoted to the common use and enjoyment of the Owners and others, including improvements and facilities thereon.

1.5. Day. A period of 24 consecutive hours commencing at 12:00 noon on one day and ending at 12:00 noon on the following day; provided, however, that the first day of each Reservation Period shall commence at 2:00 p.m., and the last day of each Reservation Period shall end at 10:00 a.m.

1.6. Declaration. This Declaration of Joint Use and Reservation System, setting forth the description of the Joint Use System and other matters relating thereto, executed by the Developer and recorded in the Clerk's Office; together with supplemental declarations, if any, which may be executed by the Developer and recorded in the Clerk's Office.

1.7. Developer. Real-Tronic Corporation, a Virginia stock corporation having its principal and registered offices in the City of Virginia Beach, Virginia, including its successors in interest and assigns.

1.8. Indian Cove Resort. The real property situated in the City of Virginia Beach, Virginia, which includes the Camping lots and Common Area to which this Declaration applies, and which is more specifically described in Schedule 1 attached hereto.

1.9. Majority in Interest. An Owner or Owners (including the Developer) who own in the aggregate at least fifty-one (51%) of the Undivided Interests as of the time when the Majority in Interest is being determined.

1.10. Owner. A person to whom the Developer has conveyed an Undivided Interest. Except to the extent otherwise provided in the Declaration, the Developer shall be considered to be an Owner as to each Undivided Interest which the Developer owns, whether such interests are unsold Undivided Interests or are Undivided Interests which the Developer may have subsequently acquired from another owner.

(a) Exclusive Owner. An Owner who acquires from the Developer an Undivided Interest which is stated in the deed to such Owner to be the interest of an Exclusive Owner, and which Undivided Interest is acquired in exchange for such person's unit owner's interest in the condominium regime previously applicable to the Indian Cove campground condominium; such person thereby becomes entitled to the use, occupancy and enjoyment rights accorded an Exclusive Owner by this Declaration; and the term includes such person's successors in title until such time, if ever, as the Exclusive Owner shall have exchanged the Undivided Interest pursuant to Section 9.

(b) Owner. An Owner who purchases from the Developer or from another Owner an Undivided Interest, and who thereby becomes entitled to the use, occupancy and enjoyment rights accorded an Owner by this Declaration; and the term includes such person's successors in title.

1.11. Reservation Period. A period of one or more days for which an Owner has made a reservation for the use of a Camping Lot, in accordance with the Joint Use System described herein.

1.12. Resort Association. The Indian Cove Resort Association, Inc., a Virginia non-stock corporation organized by the Developer to administer the reservation system and other aspects of the Joint Use System.

1.13. Service Period. A period of four hours, from 10.00 a.m. until 2:00 p.m., commencing at the end of a Reservation Period and ending at the beginning of the next Reservation Period. The Service Period may be used by the Resort Association to clean and otherwise service the Camping Lots.

1.14. Undivided Interest. An undivided fee simple share or fractional interest, as a tenant in common with other Owners, in Indian Cove Resort. At any given time, each Undivided Interest shall be a fractional interest determined in accordance with the provisions of Section 2.

SECTION 2 - JOINT USE SYSTEM



2.1. Establishment of System. The Joint Use and Reservation System (the Joint Use System) applies to all Owners of Undivided Interests, and is hereby established for the purpose of enhancing and perfecting the value , desirability, and enjoyment of the Indian Cove Resort and the interests therein to be conveyed. The Joint Use System, and all limitations, restrictions, covenants and conditions set forth herein, are intended to run with the land including specifically the Undivided Interests, and to inure to the benefit of and be binding upon each such Undivided Interest created pursuant to this Declaration and on all parties having or acquiring any right, title, interest, or estate therein.

2.2. Undivided Interests. The Undivided Interests created by this Declaration are joint interests in real property, with each Owner owning in fee simple absolute an undivided interest in Indian Cove Resort as a tenant in common with other Owners. Each Undivided Interest represents a present interest in the property comprising Indian Cove Resort, and a future interest in such property in the event the Developer reduces the number of Undivided Interests pursuant to the provisions of Section 2.3 of the Declaration.

2.3. Number of Undivided Interests. There are hereby established 4,000 Undivided Interests in Indian Cove Resort, each of which, immediately following the recordation in the Clerk's Office of this Declaration, is owned by the Developer until such time as the Developer conveys or transfers such Undivided Interest to another person or entity as Owner and by recordation in the Clerk's Office of a deed of conveyance. By supplemental declaration recorded in the Clerk's Office, the Developer may reduce the total number of Undivided Interests by terminating one or more of the Undivided Interests then owned by the Developer (except for Undivided Interests to be retained by the Developer as required by Section 9.4) which case the total number of Undivided Interests shall automatically be reduced by the number of such interests which the
Developer shall have so terminated. In the event of any such reduction in the total number of Undivided Interests, each remaining Undivided Interest shall be increased prorate, and each Owner of a remaining Undivided Interest shall automatically be vested with such greater fractional interest in Indian Cove Resort as shall result from the reduction in the total number of Undivided Interests, without the necessity for the execution of any deeds or other instruments of conveyance other than the recordation in the Clerk's Office of a supplemental declaration executed by the Developer, as contemplated in this Section 2.3. Notwithstanding the foregoing, no such supplemental declaration reducing the number of Undivided Interests shall be made by the Developer after July 1, 2000, and if made after such date, shall be totally void, and of no affect.

2.4. Rights and Obligations. Each Owner of an Undivided Interest shall have the rights and privileges of an Owner of real property, except that the Owner's right to use and enjoy Indian Cove Resort shall be subject to and limited by the provisions of this Declaration. By accepting conveyance of an Undivided Interest, each Owner agrees to the limitations and restrictions on the use and enjoyment of Indian Cove Resort imposed by or in accordance with this Declaration for the mutual benefit of all Owners, which limitations and restrictions are covenants running with the land; and each Owner accepts the responsibilities and obligations imposed by this Declaration, which are covenants running with the land.

SECTION 3 - EXCLUSIVE OWNERS

3.1. General Provisions. The provisions of this Section 3 shall apply only to each Owner who is an Exclusive Owner, and shall not be applicable to other Owners.

3.2. Exclusive and Non-Exclusive Use. Each Owner shall have the rights of use and occupancy described below. No Owner shall occupy a Camping Lot or use the Common Area, or exercise any other rights of ownership with respect to Indian Cove Campground, other than the rights provided herein. Each Owner shall keep the selected Camping Lot and Common Area used by the Owner in good condition and repair.

(a) Selected Camping Lot. Each owner shall have the exclusive right to use and occupy the Camping Lot selected by the Owner at the time such person acquires an Undivided Interest in Exchange for the unit owner's interest in the terminated condominium, as described in Section 1.10(a), subject to the provisions of this Declaration. Each Owner may use the selected Camping Lot for those purposes and uses permitted by law and applicable governmental rules and regulations.

(b) Use of Common Area. Each Owner shall have the non-exclusive right to use and enjoy the Common Area, subject to the provisions of this Declaration. In addition, each Owner may obtain six (6) guest cards permitting guests of the Owner to have non-exclusive use of the Common Area, subject to the provisions of this Declaration.

(c) Lease of Rights. Each owner may make his or her rights of use and occupancy under this Declaration available to others, by lease or otherwise, so long as such rights are not hereby enlarged beyond the rights available to the Owner.

3.3. Rules and Regulations.

(a) Each Owner shall use and occupy the selected Camping Lot and the Common Area in accordance with the rules and regulations promulgated from time to time by the Resort Association for the purpose of implementing the Joint Use System. Subject to matters set forth herein, the rules and regulations may provide for the following matters:

(1) Appropriate use charges for the use of specific facilities and amenities;

(2) Charges for extra or incidental services or benefits, including food services, purchased goods, and the like;

(3) Such other matters, guidelines and restrictions as may be reasonably necessary to insure the maximum availability of all such facilities and amenities comprising the Common Area for use by the Owners.

(b) The rules and regulations in effect from time to time will be made available to each Owner.

SECTION 4 OWNERS

4.1. General Provisions. The provisions of this Section 4 shall apply to each Owner but shall not be applicable to Exclusive owners.




4.2. Exclusive and Non-Exclusive Use. Each Owner who obtains a reservation for use of a Camping Lot during the Reservation Period shall have the rights of use and occupancy described below. No Owner shall occupy a Camping Lot or use the Common Area, or exercise any other rights of ownership in respect to the Indian Cove Resort, other than the rights provided herein. Each owner shall keep the assigned Camping Lot and Common Area used by the Owner in good condition and repair.

(a) Owner. An Owner shall have (i) the exclusive right to use and occupy the Camping Lot assigned to the Owner in accordance with the provisions of the Joint Use System, together with (ii) the non-exclusive right to use and enjoy the Common Area, all subject to the provisions of this Declaration.

4.3. Available Camping Lots. The Camping Lots available to be reserved by Owners shall not include Camping Lots selected by Exclusive Owners.

4.4. Reservations Required. The use of any Camping Lot is dependent upon a reservation for use of a Camping Lot. An Owner may obtain a reservation for a Camping Lot in advance, by writing or calling the Resort Association, and upon payment of the applicable reservation deposit. Any Owner may reserve a Camping Lot at the time the Owner arrives at Indian Cove Resort, if there are any unreserved Camping Lots available at such time. All reservations, whether made in advance of arrival or obtained at the time of arrival are made on a first-come, first-served basis only, so long as the Owner applying for a reservation has not exceeded the applicable limitations on reservations set forth in Section 4.5 and any applicable rules or regulations promulgated by the Resort Association.

(a) Assigned Camping Lot. Except to the extent provided below, the designation of the specific Camping Lot to be occupied by an Owner during the Reservation Period shall be assigned to the Owner upon arrival at Indian Cove Resort at the beginning of the Reservation Period. Where practicable, the Resort Association will permit such Owner to select the Camping Lot to be assigned from those Camping Lots which will be available during the Reservation Period, unless such Owner has no preference among the available Camping Lots.

(b) Advance Assignment. In the sole discretion of the Resort Association, it may offer to Owners at any time or from time to time the opportunity to obtain an advance assignment of a specific Camping Lot at the time such Owner makes an advance reservation and pays the applicable reservation deposit. In such event, the Resort Association will notify the Owner of the availability of the advance assignment opportunity when the Owner makes the advance reservation, and the amount of any reservation fee (in addition to the reservation deposit) that may be charged for such opportunity.

(c) Advance Reservation Deposit. No advance reservation made by an Owner shall become effective until the Resort Association has received a reservation deposit in such amount as may be established from time to time by its rules and regulations. Upon arrival at Indian Cove Resort at the beginning of such Owner's Reservation Period, the reservation deposit will be refunded in full to the owner. In the event the Owner does not arrive at Indian Cove Resort at the beginning of such Owner's Reservation Period, the reservation deposit will be retained by the Resort association as a no-show fee for failing to use the advance reservation.

4.5. Limitations on Reservations. No Owner shall reserve more Camping Lots at any one time than the number of Undivided Interests owned by such Owner. The Resort Association may adopt By-laws or rules and regulations which impose such reasonable restrictions and limitations on the use of reservations as may be appropriate for the maximum enjoyment of the Camping Lots and the Common Area by the greatest majority of the Owners, such as limitations on the number of days in advance of use that a reservation may be made, the number of consecutive days' use that may be reserved, and the like.

4.6. Vacating Camping Lot. Each Owner shall vacate the assigned Camping Lot and the Common Area at the termination of the Owner's Reservation Period, remove all persons and property there-from, leave the Camping Lot in good and sanitary condition and repair, and otherwise comply with such reasonable checkout and other procedures as may be established from time to time in rules and regulations promulgated by the Resort Association.

4.7. Special Use of Camping Lot. To the extent that there is no material infringement on the rights of all Owners to use and enjoy the Camping Lots designated by the Developer for use by Owners in accordance with the provisions of this Declaration, the Resort Association may provide for the use of Camping Lots by guests of Owners and by others, on such terms and conditions as may be determined by the Resort Association.

4.8. Use of Common Area. Each Owner shall have non-exclusive use of the Common Area during such Owner's Reservation Period. In addition, Owners (who do not hold a Reservation Period), guests of Owners, and other persons shall enjoy such use of the Common Area as may be determined from time to time by the Resort Association.

4.9. Rules and Regulations.

(a) Each Owner shall use and occupy the assigned Camping Lot and the Common Area in accordance with the rules and regulations promulgated from time to time by the Resort Association for the purpose of implementing the Joint Use System. Subject to matters set forth herein, the rules and regulations may provide for the following matters:

(1) Frequency of use of specific facilities and amenities, and appropriate use charges therefore;

(2) Charges for extra or incidental services or benefits, including food services, purchased goods, and the like;

(3) Number and frequency of guests allowed, and guest fees;

(4) Provision for the use of facilities by non-Owners, including (in addition to guests of Owners) persons who participate in campground exchange programs approved by the Developer and the Resort Association; and

(5) Such other matters, guidelines and restrictions as may be reasonably necessary to ensure the maximum availability of all such facilities and amenities comprising the Common Area for use by the Owners.

(b) The rules and regulations then in effect will be made available to each Owner at the beginning of such Owner's Reservation Period; and a copy may be obtained by any Owner at any time by written request to the Resort Association and upon payment in advance of any fee necessary to defray costs of printing and distribution.

SECTION 5 - USE RIGHTS OF DEVELOPER

5.1. General Provisions. The provisions of this section 5 shall apply only to the Developer as to the Undivided Interests owned by the Developer, including the initial Undivided Interests created by this Declaration and not sold to other persons or entities, and Undivided Interests which the Developer may subsequently acquire from another owner.

5.2. Rental of Camping Lots. The Developer shall be entitled to rent Camping Lots to the general public on such terms and conditions, and for such rents, as the Developer may determine. Notwithstanding the foregoing, however, the Developer shall not rent any Camping Lot which has been selected by an Exclusive Owner nor any Camping Lot which has been designated to the Resort Association for use by all other Owners. Each person to whom the Developer has rented a Camping Lot shall have exclusive use of the Camping Lot so rented for the term of the rental, together with non-exclusive use during such rental term of the Common Area.

5.3. Rules and Regulations. Persons who rent Camping Lots from the Developer shall use and occupy the Assigned Camping Lot and the Common Area in accordance with the rules and regulations promulgated from time to time by the Resort Association for the purpose of implementing the Joint Use System. Subject to the matters set forth herein, the rules and regulations may provide for the following matters:

(1) Frequency of use of specific facilities and amenities, and appropriate use charges therefor;

(2) Charges for extra or incidental services or benefits. including food services, purchased goods, and the like;

(3) Number and frequency of guests allowed, and guest fees; and

(4) Such other matters, guidelines and restrictions as may be reasonably necessary to insure the maximum availability of all such facilities and amenities comprising the Common Area for use by the Owners.

5.4. Operation of Concessions. The Developer shall have the right to operate all concessions at Indian Cove Resort, and derive the profit therefrom. If the Developer elects not to operate a concession which the Resort Association desires to have available at Indian Cove Resort, the Resort Association may, during such time as the Developer does not operate such concession, operate or provide for such concession. Notwithstanding the foregoing, the Developer shall have no right pursuant to this Section 5.4 to require the Resort Association to make capital expenditures in connection with the operation of concessions, unless such expenditures are at the Developer's expense or the Resort Association is reasonably compensated therefore.






SECTION 6 - INDIAN COVE RESORT ASSOCIATION, INC.

6.1. Organization and Management. Indian Cove Resort Association, Inc. was organized by the Developer under Virginia law for the purposes of co-coordinating certain matters among the Owners, and exercising the rights given to the Resort Association by the Declaration. The management of the affairs of the Resort Association shall be vested in its Board of Directors, which shall be elected in the manner provided from time to time by the articles of incorporation of the Resort Association, including amendments thereto.

6.2. Membership. Each Owner shall be a member of the Resort Association, holding the class of membership determined in accordance with Section 6.3 below; provided, however, that such membership is not intended to apply to those persons who hold an Undivided Interest merely as security for the performance of an obligation to pay money or for the performance of any related obligations associated with the maintenance of the security property, until such time, if ever, as such person may become a legal owner of an Undivided Interest through having realized on the security or lien interest. Membership in the Resort Association is appurtenant to and may not be separated from ownership of an Undivided Interest. Where an Undivided Interest is owned by more than person or by an entity, the membership in the Resort Association shall be determined as follows:

(a) Where two or more persons jointly own an Undivided Interest, the membership in the Resort Association shall be issued to only one of such persons.

(b) Where a corporation, partnership, joint venture or other entity owns an Undivided Interest, the membership in the Resort Association shall be issued to only one individual person who is selected by such entity.

(c) Where an interest passes under the will of a deceased person or by the laws of intestacy to more than one person, the membership in the Resort Association shall belong to only one of such persons.

(d ) The Bylaws of the Resort Association shall make provision for determining how such membership is to be recognized in the case where there is more than one person holding a single Undivided Interest in a Camping Lot; where the Undivided Interest is owned by a corporation, partnership, or other entity; and in all other such cases.

6.3. Classes of Membership. The Resort Association shall have two classes of voting membership:

(a) Class A: The Class A member shall consist of each Owner, with the exception of the Developer (for so long as the Class B membership exists). When the Class B membership terminates, the Class A membership shall include the Developer, and each Class A member shall be entitled to one vote for each Undivided Interest owned. The exercise of the voting right, where the Undivided Interest is owned by more than one individual person or by an entity, shall be determined in accordance with the provisions of Section 6.2 and the bylaws of the Resort Association.

(b) Class B: The Class B member shall be the Developer, and the Class B member shall be entitled to 7,500 votes. The Class B membership shall cease and automatically be converted to a Class A membership on the happening of either of the following, whichever first occurs:

(1) June 30, 1991; or

(2) When the Board of Directors of the Resort Association find it to be in the best interests of the Resort


Association to amend its articles of incorporation to convert the Class B membership into a Class A membership, which amendment proposed by the board of directors shall be approved by a vote of more than two-thirds of all voting together and without regard to class.

(c) Voting Right of Members. Until change by an amendment to the articles of incorporation of the Resort Association, Class A members shall be entitled to one vote for each Undivided Interest owned, and for so long as the Class B membership exists, the Class B members shall be entitled to 7,500 votes. As to all matters as to which the members are entitled to vote, whether under this Declaration or by law, the vote of a majority of the votes entitled to be cast by the members present or represented by proxy at a meeting at which a quorum is present, voting together and without regard to class, shall be the act of the members, unless the vote of a greater proportion is required by law, or unless otherwise provided in the articles of incorporation, including amendments thereto, of the Resort Association.

6.4. Suspension of Voting Rights. The voting rights of any member of the Resort Association may be suspended by action of the Board of Directors of the Resort Association during the period when any dues or assessments validly levied against such member shall remain delinquent and unpaid; but upon payment of all such dues and assessments, the voting rights and privileges of such member shall automatically be restored.

6.5. Family Guest Privileges. The members of an Owner's immediate family (defined below) shall have the same membership privileges in the Resort Association as the Owner, except that the rules and regulations of the Resort Association relating to the number and frequency of guests allowed shall be applied to the family as a whole. For purposes of this provision, the term "immediate family" shall include a member's spouse and dependent children.

6.6. Dues and Assessments.

(a) The board of directors shall, among other powers, have the power to levy annual dues as of May 1 of each year for the ensuing 12 months, and special assessments from time to time, in order to provide funds for the expenditures to be made by the Resort Association, including the following:

(1) Property taxes assessed against the Camping Lots and Common Area;

(2) Premiums for taking out and maintaining casualty and liability insurance policies on behalf of the Resort Association applicable to the Camping Lots and Common Area (to the extent owned or leased by the Resort Association);

(3) Maintenance, cleaning and repairing the Common Area, including all amenities and facilities, and for the maintenance and repair of certain designated aspects of the Camping Lots which aspects directly affect the overall condition and appearance of Indian Cove Resort;

(4) Acquisition, construction, management, maintenance and care of Common Area amenities, facilities and improvements;

(5) Administrative or other costs incurred in its operations or in the discharge of its duties and responsibilities;

(6) Fees incurred under the management contract referred to in Section 6.8; and

(7) Appropriate reserves to provide for payment of the foregoing items.

(b) The Developer will not be considered to be a member for purposes of payment of annual dues but will be considered a member for purposes of payment of special assessments with respect to any Undivided Interest owned by the Developer.

6.7. Duties of Association. The Resort Association shall further and promote the welfare of Indian Cove Resort, and be responsible for operation of the Joint Use and Reservation System. In discharge of its overall responsibilities, the Resort Association shall, among other things and subject to the provisions of this Declaration:

(1) Provide for the orderly use of the Camping Lots and the Common Area by Owners, guests of Owners, and non-Owners, including persons who participate in campground exchange programs approved by the Developer and the Campground Association;

(2) Provide for the management and maintenance of the Indian Cove Resort, and for the operation and management of the Joint Use System described in and established by this Declaration;

(3) Act on behalf of all owners in matters of contract or otherwise, which affect or relate to Indian Cove Resort;

(4) Enter into service contracts in connection with certain agreement between the Developer and the City of Virginia Beach, Virginia, dated September 25, 1978, recorded in the Clerk's office in Deed Book 1844, page 137.

(5) Furnish to Owners and others copies of this Declaration, certificates referred to in Section 8.6, and other information relating to the Joint Use System described herein, upon payment by the Owner or others of such fees as may be established by the Resort Association for such services;

(6) Maintain appropriate financial records accounting for the collection of dues and assessments and expenditures thereof, which records or appropriate summaries thereof will be made available to the members in accordance with the bylaws of the Resort Association or as otherwise required by law;

(7) Collect all dues and assessments imposed on members of the Resort Association; and

(8) Perform such other acts as may be appropriate for the orderly operation and management of Indian Cove Resort.

6.8. Management Matters. The Resort Association may enter into management agreements with one or more entities selected by it (which may include the Developer), pursuant to which it contracts for management services required to discharge its responsibilities and duties for the management, operation and maintenance of Indian Cove Resort.

SECTION 7 - ANNUAL DUES AND ASSESSMENTS

7.1. Annual Dues and Special Assessments. Subject to the provisions of its bylaws, the Resort Association may levy annual dues as of May 1 of each year for the ensuing 12 months against each member of the Resort Association (other than the Developer), and special assessments from time to time against each member of the Resort Association (including the Developer), all in accordance with the following provisions.

7.2. Annual Dues. The amount of the annual dues for the period from the time an Owner acquires an Undivided Interest to the immediately following April 30 shall be established at the time the Owner acquires the Undivided Interest from the Developer. For each 12 month period thereafter, from May 1 through the succeeding April 30 (the "Dues Year"), the amount of the annual dues shall be determined by the Resort Association in accordance with the provisions of its bylaws; and such amount shall be announced to the Owners and a notice of such announcement shall be recorded in the Clerk's Office by supplemental declaration. In the event no such announcement is made and notice recorded as of May 1 of any year, the amount of dues as of May 1 for the ensuing 12 months shall be deemed to be the same as the amount set forth in the immediately preceding announcement and recorded notice.

7.3. Limitation on Increases. So long as the Class B membership exists, the annual dues charged to any member shall not exceed the increase, if any, in the cost of living, using as the basis of such computation the "Revised Consumer Price Index - Cities (1967=100)," hereafter called the "Index," published by the Bureau of Labor Statistics of the United States Department of Labor. The Index number in the column for Washington, D.C. - Maryland - Virginia, entitled "All Items" for the month of February which immediately precedes the beginning of the Dues Year in which the Owner becomes a member of the Resort Association shall be the base Index number and the corresponding Index number for the month of February in each calendar year thereafter shall be the current Index number for the Dues Year which begins in such calendar year. The amount of dues permitted to be charged an owner for any Dues Year pursuant to this provision shall be determined by multiplying the amount of Annual Dues charged such Owner at the time such Owner became a member of the Resort Association by a percentage, which percentage shall be determined by dividing the current Index number by the base Index number applicable to such Owner. If publication of the Index as defined above shall be discontinued, the term "Index" shall thereafter refer to comparable statistics on the cost of living for Washington, D.C. - Maryland - Virginia, as they shall be computed and published by an agency of the United States or by a responsible financial periodical of recognized authority then to be selected by the Resort Association. In the event of (1) use of comparable statistics in place of the Index as defined above, or (2) publication of the Index figure at other than intervals which include the month of February, there shall be made in the method of computation set forth above such revisions as the circumstances may require to carry out the intent of this Section 7.3.






7.4. Special Assessments. In the event the Resort Association makes any special assessments, the amount thereof and date for payment shall be announced to the Owners and notice of such announcement shall be recorded in the Clerk's Office by supplemental declaration.

7.5. Initial Year. The amount of dues for the initial period beginning with the recordation of this Declaration and ending April 30, 1982, shall be $90.00.

SECTION 8 - LIEN FOR UNPAID DUES AND ASSESSMENTS

8.1. General Provisions. To the extent that the provisions of this Section 8 are not inconsistent with provisions of law relating to the subject matter hereof and applicable to Indian Cove Resort, the following provisions shall be applicable to each Owner with respect to annual dues and special assessments which remain unpaid or are delinquent

8.2. Lien for Unpaid Amounts. The Resort Association shall have a lien on each Undivided Interest for unpaid annual dues and special assessments levied against the Owner of such Undivided Interest as a member of Resort Association. Such lien, when perfected in the manner described in this Section 8, shall be prior to all other liens and encumbrances except (i) real estate tax liens on Indian Cove Resort, (ii) liens and encumbrances recorded prior to the perfection of this lien, and (iii) any sums unpaid on any first mortgages or first deeds of trust recorded prior to the perfection of this lien and securing institutional lenders.

8.3. Perfection of Lien. In order to perfect the lien given by this Section 8, the Resort Association shall file in the Clerk's Office, before the expiration of 90 days from the time any such annual dues or special assessments shall become due and payable, a memorandum verified by the oath of any officer of the Resort Association and containing the following information:

(1) A description of Indian Cove Resort;

(2) The name or names of the persons owning the Undivided Interests as to which the annual dues or special assessments have become delinquent;

(3) The amount of unpaid annual dues and special assessments currently due or past due and applicable to such Undivided Interest, together with the date when each fell due; and

(4) The date of issuance of the memorandum.

8.4. Release of Lien. When payment or satisfaction is made of the obligations secured by the lien perfected in accordance with the provision of this Section 8, such lien shall be released in accordance with the provisions of Section 55-66.3 of the Code of Virginia (1950), as amended, including any successor provision thereto. For purposes thereof, any officer of the Resort Association or its managing agent shall be deemed to be the duly authorized agent of the lien creditor.

8.5. Other Remedies. Nothing in this Section 8 shall be construed to prohibit the recovery of sums for which this Section 8 creates a lien; nor to prevent the Resort Association from following and using other remedies which it may have available, either at law or in equity.

8.6. Certificate of Payment. Any Owner shall be entitled, upon request, to a recordable statement setting forth the amount of unpaid annual dues or special assessments currently of levy against the Undivided Interest owned by such Owner. Such request shall be in writing, and shall be delivered to the principal office of the Resort Association. Such statement, when signed on behalf of the Resort Association shall be conclusive and binding on the Resort Association as to the payment or non-payment of such dues and assessments with respect to the Undivided Interest of such Owner.

SECTION 9 - EXCHANGE OF EXCLUSIVE OWNER'S RIGHTS.

9.1. Exchange Privilege. An Exclusive Owner shall have the right to exchange such Owner's Undivided Interest and related rights under this Declaration for eight (8) Undivided Interests. Such exchange privilege shall be exercised by delivering to the Developer (or its successor) a written request for such an exchange. There shall be no exchange privilege for an Owner to exchange an Undivided Interest for an Undivided Interest as an Exclusive Owner; and once an Exclusive Owner has exchanged his or her Undivided Interests as an Owner, such Owner may not thereafter exchange Undivided Interests to become an Exclusive Owner.

9.2. Exchange Documents. The Developer at its expense prepares such documents as may be necessary to give effect to the exchange authorized in this Section 9, and shall record in the Clerk's Office an appropriate deed of exchange or other document necessary to give effect to such exchange. Such deed of exchange or other document shall be sufficient for the purpose if it incorporates reference to this Section 9, and shall be effective when they shall have been recorded in the Clerk's Office.

9.3. Effect of Exchange. From and after the effective time of the Exchange of Undivided Interests pursuant to this Section 9, the Exclusive Owner who exchanges his or her Undivided Interest shall no longer have any rights as an Exclusive Owner, but shall have for each of the eight (8) undivided Interests received in exchange therefore the rights and obligations of an Owner as provided in this Declaration.

9.4. Reservation of Undivided Interests. The Developer shall retain a sufficient number of Undivided Interests in order to be able to convey to each Exclusive Owner the eight (8) Undivided Interests as an Owner in exchange for such person's Undivided Interest as an Exclusive Owner. In the event the Developer so elects, it may transfer to the Resort Association its rights and duties with respect to the exchange privilege described herein, and thereafter the Resort Association shall be deemed to be the Developer solely for the purpose of effecting such exchange.

SECTION 10 - TERMINATION OF JOINT USE SYSTEM

10.1. General Provisions. To the extent that the provisions of this Section 10 are not inconsistent with provisions of law relating to the subject matter hereof and applicable to Indian Cove Resort, the following provisions shall be applicable to the Joint Use System established by this Declaration.

10.2. Notice of Termination. Notice of a proposed termination of the Joint Use System established by this Declaration shall be given to all Owners at least thirty (30) days prior to the time a termination agreement is recorded in the Clerk's Office. Notice shall be deemed to have been given to the Owners when addressed to them at their respective addresses according to the records of the Resort Association, and deposited in the United States mails, first class postage prepaid.

10.3. Termination Agreement. The Joint Use System established by this Declaration may be terminated by written agreement of Owners who comprise a Majority in Interest. The termination agreement shall specify a date upon which it shall become void, unless it is recorded before that date in the Clerk's Office.

10.4. Effect of Termination Agreement. If the termination agreement sets forth the material terms of a contract or proposed contract under which Undivided Interests in Indian Cove Resort equal to the total number of Undivided Interests is to be sold and designates a trustee to effect the sale, the termination agreement becomes effective upon recordation, and title to the Undivided Interests vests upon termination in the trustee for the benefit of the Owners, to be transferred pursuant to the contract. If the termination agreement does not set forth the material terms of a contract or a proposed contract under which the Undivided Interests in Indian Cove project equal to the total number of Undivided Interests is to be sold and designates a trustee to effect the sale, the termination agreement becomes effective upon recordation, and title to the Undivided Interests in Indian Cove Resort equal to the total number of Undivided Interests vests upon termination in the Owners in proportion to their respective interests, and liens on the Undivided Interests shall accordingly encumber those interests; and in this case, any Owner may thereafter maintain an action for partition or for allotment or sale in lieu of partition pursuant to the laws of this state.

10.5. Rights of Owners. Except as otherwise specified in the termination agreement, so long as the former Owners or their trustee holds title to the Undivided Interests equal to the total Undivided Interest, each former Owner and successor in interest shall have the same rights with respect to the use, enjoyment and occupancy in Indian Cove Resort that such person would have had if termination had not occurred, together with the same liabilities and other obligations imposed by the Declaration or by law.




10.6. Distribution of Proceeds. After termination of the Joint Use System and adequate provision for payment of the claims of creditors for expenses applicable to Indian Cove Resort and the Undivided Interest, distribution shall be made, in proportion to their respective interests, to the former Owners and their respective successors in interest of: (i) the proceeds of any sale pursuant to this provision, (ii) the proceeds of any personally held for the use and benefit of the former Owners, and (iii) any other funds held for the use and benefit of the former Owners.

SECTION 11 - MISCELLANEOUS MATTERS

11.1. Assignment of Rights. For purposes of this Declaration, the Developer may assign and transfer in writing all or any of its rights hereunder to a successor in interest or other assignee, and any such assignment shall be effective to the extent expressly provided in such assignment.

11.2. Campground Exchange Programs. The Developer and the Resort Association may from time to time approve campground exchange programs for Indian Cove Resort. Persons authorized to participate in such exchange programs may be authorized by the Resort Association to enjoy the use and occupancy rights of Owners in the Camping Lots and the Common Area, provided the Owners receive substantially equivalent reciprocal privileges with such participating campgrounds.

11.3. Waiver of Partition. No Owner, creditor, or other person acquiring an Undivided Interest or any other interest in Indian Cove Resort shall seek or obtain through any legal process, judicial partition of Indian Cove Resort or any sale of Indian Cove Resort in lieu of partition, unless the Resort Association consents thereto after an affirmative vote of more than two-thirds of all votes cast by the members voting with respect thereto.

11.4. Transfer of Interest. Any Owner may sell or otherwise transfer the Undivided Interest subject, however, to the provisions of this Declaration (including any supplemental Declarations), and provided the purchaser or transferee of such Undivided Interest shall hold title subject to the provisions of this Declaration. Upon the recordation in the Clerk's Office of an instrument making or evidencing any transfer of an Undivided Interest, whether pursuant to this provision or any other provision of this Declaration, the Owner making such transfer shall cease to be a member of the Resort Association, and the transferee shall become a member of the Resort Association, subject to the provisions of this Declaration.

11.5. Prohibition Against Leases. Except as otherwise expressly provided in this Declaration, no Owner (other than the Developer) shall lease the Undivided Interest, or grant a license or easement with respect to such Undivided Interest, for the purpose or having the effect of transferring rights of use and enjoyment of the Camping Lots and the Common Area from the Owner to another without a conveyance of such Owner's Undivided Interest.

11.6. Maintenance of Camping Lots. The Developer (or an organization designated by the Developer) may have access to each Camping Lot during a Service Period applicable to such Camping Lot for the purpose of performing necessary maintenance associated with such Camping Lot. Where the need for such maintenance (other than ordinary wear and tear) is attributable to an Owner or other such person using such Camping Lot, such Owner or other person shall be liable for the cost of such maintenance.

11.7. Enforcement.

(a) In the event that any Owner shall violate the terms of this Declaration, then the Developer, Resort Association or any other Owner may bring action to recover damages or to enjoin such violation, or to specifically enforce this Declaration. The prevailing party in any such legal action shall be entitled to costs and attorneys' fees from the losing party.

(b) All remedies hereunder shall be cumulative and in addition to all other remedies available at law or equity; provided, however, that no breach of this Declaration by any Owner shall excuse any Owner from the performance of all the provisions of this Declaration, nor shall such breach entitle any other Owner to terminate this Declaration.

11.8. Supplements and Amendments. Except as provided below, the Declaration, and any subsequent supplemental declarations, may be amended at any time and from time to time by a supplemental declaration signed by the Resort Association, which instrument shall become effective upon recordation in the Clerk's Office. Notwithstanding the foregoing, no supplemental declaration shall amend the following sections of this Declaration without the consent of the Exclusive Owners who own in the aggregate at least two-thirds (2/3) of the Undivided Interests owned by all Exclusive Owners as of the time such supplemental declaration is recorded in the Clerk's Office: Section 3; and Sections 7.1, 10.2, and this 11.8.



11.9. Sever ability. Should any provision herein be void or become unenforceable in law or equity, the remaining portions hereof shall remain in full force and effect.


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