BY-LAWS OF APPLEFIELDS OWNERS ASSOCIATION, INC.

ARTICLE SECTION PAGE

I. Name and Location 3

II. Definitions 3

III. Membership: Suspension of Membership 4

IV. Property Rights: Rights of Enjoyment 4

V. Board of Directors: Number: Election: Nomination: Removal: 4

Compensation: Action Taken Without a Meeting: Term of Office

VI. Meetings of Directors: Regular Meetings: Special Meetings: Quorum 6

VII. Power and Duties of the Board of Directors: Powers 6

VIII. Committees 8

IX. Meetings of Members: Annual Meeting: Special Meetings: 9

Notice of Meetings: Quorum: Proxies

X. Officers and Their Duties: Enumeration of Officers: Election of Officers: 10

Term: Special Appointments: Resignation and Removal: Vacancies: Duties

XI. Assessments: Creation of the Lien and Personal Obligation of Assessments: 11

Purpose of Assessments: Basis and Maximum of Annual Assessments:

Method of Computation When Using the Consumer Price Index: Special

Assessments for Capital Improvements: Uniform Rate: Quorum for an Action

Authorized Under Section 3 and 5: Date of Commencement of Annual

Assessments: Effect of Non-Payment of Assessments: Remedies of the

Association: Subordination of the Lien to Mortgages: Exempt Property

XII. Books and Records 15

XIII. Corporate Seal 15

XIV. Amendments 15

XV. Miscellaneous 16

XVI. Animal Control Laws 16

XVII. Common Ground Parking 16

BY-LAWS OF APPLEFIELDS OWNERS ASSOCIATION, INC.

ARTICLE I - NAME AND LOCATION

The name of the corporation is Applefields Owners Association, Inc., hereinafter referred to as the "Association". The principal office of the Association shall be located at Box 408, Romney, West Virginia 26757.

ARTICLE II - DEFINITIONS

Section 1. "Association" shall mean and refer to Applefields Owners Association, Inc. its successors and assigns.

Section 2. "Properties shall mean and refer to that certain real property described in the Declaration of Covenants, Conditions and Restrictions, and such additions thereto as may be hereafter brought within the jurisdiction of the Association.

Section 3. "Common Area" shall mean all real property owned by the Association for the common use and enjoyment of the members of the Association.

Section 4. "Lot" shall mean and refer to plot of land shown upon any recorded subdivision map of the Properties with the exception of the Common Area.

Section 5. "Member" shall mean and refer to every person or entity who holds a membership in the Association.

Section 6. "Owner" shall mean and refer to the record owner, whether one of more persons or entities, of the fee simple title to any lot which is a part of the Properties, including contract sellers, but excluding those having such interest merely as security for the performance of an obligation.

Section 7. "Declarant" shall mean and refer to FRANK WHITACRE, INC., its successors and assigns, if such successors or assigns should acquire more than one undeveloped Lot from the Declarant for the purpose of development.

Section 8. "Declaration" shall mean and refer to the Declaration of Covenants, Conditions and Restrictions applicable to the Properties recorded in the Office of the Clerk of Court, Hampshire County, West Virginia.

ARTICLE III - MEMBERSHIP

Section 1. Every person or entity who is a record owner of a fee or undivided fee interest in any Lot which is subject to the covenants of record to assessments by the Association. The foregoing is not intended to include persons or entities who hold an interest merely as security for the performance of an obligation. No owner shall have more than one membership. Membership shall be appurtenant to and may not be separated from ownership of any Lot which is subject to assessment by the Association. Ownership of such Lot shall be the sole qualification for membership.

Section 2. Suspension of Membership: During any period in which a member shall be in default in payment of an annual or special assessment levied by the Association, the voting rights of such member in the Association may be suspended by the Board of Directors until such assessment has been paid. Such rights of a member may also be suspended, after notice and hearing, for a period not to exceed thirty (30) days, for violation of any rules and regulations established by the Board of Directors governing the use of the Common Area and facilities.

ARTICLE IV - PROPERTY RIGHTS: RIGHT OF ENJOYMENT

Each member shall be entitled to the use and enjoyment of the Common Area and facilities as provided in the Declaration. Any member may delegate his right of enjoyment of the Common Area and facilities to members of his family, his tenants or contract purchasers, who reside on the property. Such member shall notify the Secretary, in writing, of the name of any such delegee. The rights and privileges of such delegee are subject to suspension to the same extent as those of the member.

ARTICLE V - BOARD OF DIRECTORS: SELECTION: TERM OF OFFICE

Section 1. Number. The affairs of the Homeowners Association shall be managed by a Board of seven (7) directors, who shall be members of the Association.

Section 2. Election. Each elected member to the Board of Directors shall serve a two-year term. This is retroactive to those members elected to a three-year term in 1987 /or 1988. Thus, their term will be completed in 1990 /or 1991. Election to the Board of Directors shall be by secret written ballot. At such election, the members or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Declaration. The persons receiving the largest number of votes shall be elected. Cumulative voting is not permitted.

Section 2.1 Nomination. Nomination for election of the Board of Directors shall be made by a Nominating Committee. Nominations may also be made from the floor at the Annual Meeting. The nominating Committee shall consist of a Chairman who shall be a member of the Board of Directors, and two or more members of the Association. The Nominating Committee shall be appointed by the Board of Directors 90 days prior to each Annual Meeting of the members and shall serve to the close of such Annual Meeting. The Nominating Committee shall make as many nominations for election to the Board of Directors as it shall in its discretion determine, but not less than the number of vacancies that are to be filled.

Section 3. Removal. Any Director may be removed from the Board, with or without cause, by a majority vote of the members of the Association. In the event of death, resignation or removal of a Director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.

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

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

Section 6. Term of Office. Directors shall assume office at the first regular or special meeting of Directors following the Annual election. Said meeting must be held within 90 days following the Annual election. Directors shall hold office until succeeded in office, unless the Director shall sooner resign, be removed, or otherwise be disqualified to serve.

ARTICLE VI - MEETINGS OF DIRECTORS

Section 1. Regular Meetings. Regular meetings of the Board of Directors shall be held monthly without notice, at such place and hour as may be fixed from time to time by resolution of the Board. Should said meeting fall upon a legal holiday then that meeting shall be held at the same time on the next day which is not a legal holiday.

Section 2. Special Meetings. Special meetings of the Board of Directors shall be held when called by the President of the Association, or by any two (2) Directors, after not less than three (3) days notice to each Director. In the event of an emergency, the three day notice may be waived, if all seven Directors waive the notice in writing.

Section 3. Quorum. A majority of the number of Directors shall constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as an act of the Board.

ARTICLE VII - POWER AND DUTIES OF THE BOARD OF DIRECTORS

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

[a] Adopt and publish rules and regulations governing the use of the Common area and facilities, and the personal conduct of the members and their guests thereon, and to establish penalties for the infraction thereof;

[b] exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the membership by other provisions of these By-Laws, the Articles of Incorporation, or the Declaration;

[c] declare the office of a member of the Board of Directors to be vacant in the event such member shall be absent from three (3) consecutive regular meetings of the Board of Directors; and

[d] employ a manager, and independent contractor, or such other employees as they deem necessary, and to prescribe their duties.

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

[a] cause to be kept a complete record of all its acts and corporate affairs and to present a statement thereof to the members at the Annual Meeting of the members or at any special meeting, when such statement is requested in writing by one fourth (1/4) of the Applefields owners who are entitled to vote;

[b] supervise all officers, agents and employees of this Association, and to see that their duties are properly performed;

[c] as more fully provided herein, and in the Declaration to:

[1] fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period, and as hereinafter provided in Article XII;

[2] send written notice of each assessment to every Owner subject thereto at least thirty (30) days in advance of each annual assessment period; and

[3] foreclose the lien against any property for which assessments are not paid within thirty (30) days after due date or bring an action against the owner personally obligated to pay the same.

[d] issue, or to cause an appropriate officer to issue, upon demand by a person, a certificate setting forth whether or not any assessment has been paid. A reasonable charge may be made by the Board for the issuance of these certificates. If a certificate states an assessment has been paid, such certificate shall be conclusive evidence of such payment;

[e] procure and maintain adequate liability and hazard insurance on the property owned by the Association;

[f] cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate;

[g] cause the Common Area to be maintained; and

[h] establish and maintain a reserve account. Said reserve account to be funded annually in an amount determined by the Board and to be held to provide for the maintenance, repair and replacement of the Association's real and personal capital assets.

ARTICLE VIII - COMMITTEES

Section 1. The Association shall appoint a Nominating Committee as provided in these By-Laws. In addition, the Board of Directors shall appoint other committees as deemed appropriate in carrying out its purposes, such as:

[a] A Recreation Committee which shall advise the Board of Directors on all matters pertaining to the recreational program and activities of the Association and shall perform such other functions as the Board, in its discretion, determines.

[b] A Maintenance Committee which shall advise the Board of Directors of all matters pertaining to the maintenance, repair or improvement of the Properties, and shall perform such other functions of the Board, in its discretion, determines;

[c] An Audit Committee which shall supervise the annual audit of the Association's books and approve the annual budget and statement of income and expenditures to be presented to the membership at its regular Annual Meeting, as provided in Article XI, Section 8(d). The Treasurer shall be an ex-officio member of the Committee; and

Section 2. It shall be the duty of each committee to receive complaints from members on any matter involving Association functions, duties, and activities within its field or responsibility. It shall dispose of such complaints as it deems appropriate or refer them to such other committee, Director, or officer of the Association as it is further concerned with the matter presented.

ARTICLE IX - MEETINGS OF MEMBERS

Section 1. Annual Meetings. The Board of Directors is to designate a day in the month of April to hold its Annual Meeting and elect its new officers.

Section 2. Special Meeting. Special Meetings of the members may be called at any time by the President or by the Board of Directors, or upon written request of the members who are entitled to vote one-fourth (1/4) of all the votes of the entire membership or who are entitled to vote one-fourth (1/4) of the votes of the membership.

Section 3. Notice of Meetings. Written notice of each meeting of the members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by mailing a copy of such notice, postage prepaid, at least fifteen (15) days before such meeting, to each member entitled to vote thereat, addressed to the member's address last appearing on the books of the Association, or supplied by such member to the Association for the purpose of notice. Such notice shall specify the place, day and hour of the meeting, and, in the case of a special meeting the purpose of the meeting.

Section 4. Quorum. The presence at the meeting of members entitled to cast, or of proxies entitled to cast, one-tenth (1/10) of the votes of each class of membership shall constitute a quorum for any action except as otherwise provided in the Articles of Incorporation, the Declaration, or these By-Laws. If, however, such quorum shall not be present or represented at any meeting, the members entitled to vote thereat shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum as aforesaid shall be present or be represented.

Section 5. Proxies. At all meetings of members, each member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary. Every proxy shall be revocable and shall automatically cease upon conveyance by the member of his Lot.

ARTICLE X - OFFICERS AND THEIR DUTIES

Section 1. Enumeration of Officers. The officers of this Association shall be a President, a Vice-president, a Secretary, and a Treasurer, all of whom shall be members of the Board of Directors. The Board may also create, by resolution, other officers, who shall also be members of the Board, as the Board deems necessary.

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

Section 3. Term. The officers of this Association shall be elected annually by the Board of Directors, such election shall take place within thirty (30) days following the Annual election of Directors. Officers shall hold office for one (1) year or until a successor is elected unless the officer shall sooner resign, be removed or otherwise disqualified to serve.

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

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

Section 6. Vacancies. A vacancy in any office may be filled in the manner prescribed for regular election. The officer elected to such vacancy shall serve for the remainder of the term of the officer he or she replaces.

Section 7. Multiple Offices. The offices of Secretary and Treasurer may be held by the same person. No person shall simultaneously hold more than one of the other offices except in the case of special offices created pursuant to Section 4 of this Article.

Section 8. Duties. The duties of the officers are as follows:

[a] President. The President shall preside at all meetings of the Board of Directors; shall see that orders and resolutions of the Board are carried out; shall sign all leases, mortgages, deeds and other written instruments and shall co-sign all checks and promissory notes.

[b] Vice-President. The Vice President shall act in the place of and stead of the President in the event of his absence, inability or refusal to act, and shall exercise and discharge such other duties as may be required of him by the Board.

[c] Secretary. The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the members; keep the corporate seal of the Association and affix it on all papers requiring said seal; serve notice of meetings to the Board and to the members; keep appropriate current records showing the members of the Association together with their addresses, and shall perform such other duties as required by the Board.

[d] Treasurer. The Treasurer shall receive and deposit in appropriate bank accounts all monies of the Association and shall disburse such funds as directed by resolution of the Board of Directors; shall sign all checks and promissory notes of the Association; keep proper books of account; cause an annual audit of the Association books to be made by a public accountant at the completion of each fiscal year; and shall prepare an annual budget and a statement of income and expenditures to be presented to the membership at its regular Annual Meeting, and deliver a copy of each to the members.

ARTICLE XII - ASSESSMENTS

Section 1. Creation of the Lien and Personal Obligation of Assessments. By the Declaration each member is deemed to covenant and agree to pay the Association: (1) annual assessment or charges, and (2) special assessments for capital improvements. During the period of construction of improvements, the Declarant for each Lot located within the Properties, hereby covenants and agrees to pay to the Association fifty (50%) of the annual assessments or charges and special assessments for capital improvements as provided immediately hereinabove, on those Lots owned by the Declarant which are vacant or super-imposed by an unsold or unoccupied home
as long as there is a Class B membership. The annual and special assessments, together with such interest thereon and the cost of collection thereof, as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made. Each such assessment, together with such interests, costs, and reasonable attorneys fees shall also be the personal obligation of the person who was the Owner of such property at the time when the assessment fell due and shall not pass to his successors in title unless expressly assumed by them.

Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively for the purpose of promoting the recreation, health, safety, and welfare of the Lot owners in the Properties and in particular for the improvement and maintenance of the Properties, services and facilities devoted to this purpose and related to the use and enjoyment of the Common Area of the homes situated upon the Lots in the Properties, including trash service, snow removal and maintenance of all properties not dedicated to Hampshire County, it being understood that Hampshire County does not provide such services.

Section 3. Basis and Maximum of Annual Assessments. The maximum annual assessment shall be Two Hundred and Twenty-Five Dollars ($225) per Lot.

[a] The maximum annual assessment may be increased effective January 1st of each year without a vote of the membership in conformance with the rise, if any, of the Consumer Price Index (published by the Department of Labor, Washington, DC) for the preceding month of September.

[b] From and after January 1 of the year immediately following conveyance of the first Lot to an Owner, the maximum annual assessment may be increased above that established by the Consumer Price Index formula by a vote of the members for the next succeeding year and at the end of each year's period, for each succeeding period of one year, provided that any such change shall have the assent of two-thirds (2/3) of the votes of owners who are voting in person or by proxy, at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than thirty (30) days nor more than sixty (60) days in advance of the meeting setting forth the purpose of the meeting. The limitations hereof shall not apply to any change in the maximum and basis of the assessments undertaken as an incident to a merger of consolidation in which the Association is authorized to participate under its Articles of Incorporation; and
[c] After consideration of current maintenance costs and future needs of the Association, the Board of Directors may fix the annual assessment at an amount not in excess of the maximum.

Section 4. Method of Computation When Using the Consumer Price Index. The Consumer Price Index establishes the United States City average numerical rating for the July, 1986, as ?????. This will be the base rating. To determine the percentage to be applied to the maximum annual assessment for each subsequent year, divide the base rating into the numerical rating established by the Consumer Price Index for the month of September preceding the proposed assessment year. This adjustment percentage, if in excess of 100 percentum, is multiplied by the original maximum assessment to obtain the maximum assessment for the subsequent year.

Section 5. Special Assessments for Capital Improvements. In addition to the annual assessments authorized above, the Association may levy in any assessment year, a special assessment applicable to that year only, for the purpose of defraying in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of a described capital improvement upon the Common Area, including the necessary fixtures and personal property related thereto, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of members who are voting in person or by proxy at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than thirty (30) days nor more than sixty (60) days in advance of the meeting setting forth the purpose of the meeting.

Section 6. Uniform Rate. Both annual and special assessments must be fixed at a uniform rate for all Lots and may be collected on a monthly basis.

Section 7. Quorum for Any Action Authorized Under Section 3 and 5. At the first meeting called, as provided in Sections 3 and 5 hereof, the presence at the meeting of members or of proxies entitled to cast sixty percent (60%) of all the votes of each class of membership shall constitute a quorum. If the required quorum is not forthcoming at any meeting, another meeting may be called, subject to the notice requirement set forth in Section 3 and 5 and required quorum at any such subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.

Section 8. Date of Commencement of Annual Assessments: Due Dates. The annual assessment provided for herein shall commence as to all the Lots on the first day of the month following the conveyance of the Common Area. The first annual assessment shall be adjusted according to the number of months remaining in the calendar year. The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period. Written notice of the annual assessment shall be sent to every Owner subject thereto. The due dates shall be established by the Board of Directors. The Association shall upon demand at any time furnish a certificate in writing, signed by an officer of the Association, setting forth whether the assessment on a specified Lot have been paid. A reasonable charge may be made by the Board for the issuance of these certificates. Such certificates shall be conclusive evidence of payment of any assessment therein stated to have been paid.

Section 9. Effect of Non-Payment of Assessments: Remedies of the Association. The Board of Directors may in its discretion elect to bill the individual owners and collect from them the annual assessment on a monthly, quarterly, or other periodic installment basis. Assessments are due thirty (30) days after the beginning of the billing period. If the assessment is not paid on or before the due date, each owner, by accepting a deed to his Lot, is deemed to covenant and agree to pay a ten percent (10%) penalty for each delinquent assessment to be calculated as ten percent (10%) of the total delinquent assessment balance. If any individual owner is delinquent in paying the assessments on any three billing periods, the Board of Directors will sent a notice of intent to accelerate the assessments for the next succeeding nine (9) months. The owner, after receiving notice of such intent to accelerate, will have ten (10) days in which to appear before the Board of Directors to present his reasons for delinquency. Within fifteen (15) days after such notice of intent to accelerate, the Board of Directors will then decide whether or not to effectuate such acceleration. Each owner is personally responsible for all costs and reasonable attorney's fees in the event of legal action. No owner may waive or otherwise escape liability for the assessments, provided for herein by non-use of the recreation area, common areas, or abandonment of his Lot.

Section 10. Subordination of the Lien to Mortgages. The lien of the Assessments provided for herein shall be subordinate to the lien of any first mortgage or mortgages. Sale or transfer of any Lot shall not effect the assessment lien. However, the sale or transfer of any lot which is subject to any first mortgage, pursuant to a decree of foreclosure under such mortgage or any proceeding in lieu of foreclosure thereof, shall

extinguish the lien of such assessments as to payments thereof which become due prior to such sale or transfer. No sale or transfer shall relieve such Lots from liability for any assessment thereafter becoming due from the lien thereof.

Section 11. Exempt Property. The following property subject to the Declaration shall be exempt from the assessments created therein: (a) all properties dedicated to and accepted by a local public authority, (b) the Common Area, and (c) all properties owned by a charitable or non-profit organization exempt from taxation by the laws of the State of West Virginia. However, no land or improvements devoted to dwelling use shall be exempt from said assessments.

ARTICLE XII - BOOKS AND RECORDS

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

ARTICLE XIII - Corporate Seal

The Association shall have a seal in circular form having within its circumference the words: Applefields Owners Association, Inc., West Virginia, and the word "Seal".

ARTICLE XIV - AMENDMENTS

Section 1. These By-Laws may be amended, at a regular or special meeting of the members, by vote of a majority of a quorum of members present in person or by proxy.

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

ARTICLE XV - MISCELLANEOUS

The fiscal year of the Association shall begin on the 1st day of January and end on the 31st day of December.

ARTICLE XVI - ANIMAL CONTROL LAWS

The Board of Directors shall be specifically empowered to request the enforcement of the various animal control laws in effect in Hampshire County or any controlling jurisdiction to the private property owned by of controlled by this Association. The Board shall, pursuant to Hampshire County Code, or other similar laws. post permanent notices of the applicability of said ordinances at conspicuous places throughout the Property. In addition, the Board shall have authority to enter into any arrangement deemed necessary to establish controls over unleashed and /or controlled animals on Association property.

ARTICLE XVI - COMMON GROUND PARKING

The Board of Directors shall have the power to promulgate and enforce rules governing the use of the Common Ground Parking Area.