By-Laws of the Sky Valley Association in Deep Creek Lake Maryland

BY-LAWS OF SKY VALLEY ASSOCIATION, INC.

REVISED June 27, 2006

Article I
Definitions

As used in these By-Laws:

Section 1.01. The term "Association" shall mean Sky Valley Association, Inc.

Section 1.02. The term "Act" shall mean the Corporations and Associations Article of the Annotated Code of Maryland, as amended from time to time.

Section 1.03. The term "Articles of Incorporation" shall mean the Articles of Incorporation of the Association, as amended from time to time.

Section 1.04. The term "By-Laws" shall mean the By-Laws of the Association, as amended from time to time.

Section 1.05. The term "Sky Valley" shall mean the subdivision known as Sky Valley, which is situated in Garrett County, at Deep Creek Lake, Maryland.

Article II
Identification

Section 2.01. Name. The name of the Association is Sky Valley Association, Inc.

Section 2.02. Principal Office and Resident Agent. The location of the principal office of the Association and the designation of the resident agent of the Association shall be as specified in the Articles of Incorporation, unless after the adoption of the Articles of Incorporation, such location or such designation or both shall be changed in accordance with the requirements of the Act, in which case the notice of the change that is required by the Act (and the more or most recent of such notices, if two or more shall have been filed) shall be conclusive as to the matters covered by such notice.

Section 2.03. Seal. The seal of the Association shall be in the form of a circle, about the upper periphery of which shall appear the words "Sky Valley Association, Inc." (or an appropriate abbreviation thereof), and about the lower periphery of which shall appear "1967 Maryland". When the affixing of the seal of the Association to any instrument shall be appropriate, the affixing shall be done by means of a metal die capable of impressing the seal on paper.

Section 2.04. Fiscal Year. The fiscal year of the Association shall begin on the first day of March in each year and end on the last day of February in the next subsequent calendar year.

Article III
Membership

Section 3.01. Qualifications for Membership. The qualifications for membership in the Association shall be as follows:

A. The members of the Association shall be persons or corporations who at any time are owners (legal or equitable) of numbered residential lots in Sky Valley. A person who has no interest in real estate in Sky Valley other than an interest that is held merely as security for the performance of an obligation to pay money (e. g., the interest of a mortgagee or a land contract vendor) shall not be entitled to membership in the Association.

B. Membership in the Association shall lapse and terminate when any member shall cease to be the owner of a numbered residential lot in Sky Valley.

C. No member may be expelled from membership in the Association for any reason whatsoever; provided, however, that the Board of Directors of the Association shall have the right to suspend the voting rights (if any), and the right to use the parks and other recreational facilities of the Association of any member (I) for any period during which any Association charge (including fines levied by the Association for violation of rules applicable to Sky Valley) owed by the member remains unpaid; (II) and for the period of any continuing violation of the restrictive covenants of Sky Valley, after the existence of the violation shall have been declared in writing by the Board of Directors of the Association. Further the Board of Directors of the Association shall have the right to suspend the voting rights (if any) and privileges of membership for the period any bill for service owed by the member shall remain unpaid.

D. Any member whose annual dues and additional charges are unpaid shall be considered not in good standing until such payment is made. Annual dues and additional charges shall be considered to be unpaid if they are not paid on or before the due date posted on the annual dues invoice or bill.

E. There shall be no other preferences, limitations, or restrictions with respect to the relative rights of the members, unless otherwise defined in the rules and regulations of the Association.

Section 3.02. Evidence of Membership. The Board of Directors of the Association shall have the power (but not the duty) to cause the issuance of evidence of membership in the Association to the members thereof in such form as the Board of Directors shall prescribe. As of the date of the adoption of these By-Laws, the Board of Directors has taken no action (except the adoption of this By-Law) in respect of evidence of membership in the Association.

Section 3.03. Privileges of Membership. The members of the Association (and any person who both belongs to the family of a member and has the same residence as the member to whose family he belongs) and any person who is a guest of a member of the Association shall have the privilege of using the streets within Sky Valley, the areas designated as parks or pedestrian easements on the plats thereof, and any other recreational facilities within Sky Valley that are owned by the Association, in accordance with the restrictive covenants for Sky Valley and the Articles of Incorporation and any such other rules for the use of such streets or roads and parks adopted from time to time.

1. Only one house shall be erected and maintained by any one lot and same shall in no case be used for commercial purposes, unless approved by Sky Valley Association, Inc. owing to the topography of the grounds of said subdivision, and the desire to preserve the natural beauty of the whole, Sky Valley Association, Inc. reserves the right to approve the location and exterior appearance of the house or structure before construction proceeds. Minimum residence living space on ground or first floor, exclusive of porch area, shall be not less than 760 square feet.

2. No trailers, mobile homes or other similar pre-fabricated or pre-built structure shall be permitted upon the land, but this shall not be construed to prohibit pre-cut or pre-fabricated structures of other than the "mobile" type.

3. No ditches or drains shall be dug or constructed on said lot without approval of Sky Valley Association, Inc., or its duly appointed agents, and only United States or Maryland approved septic tanks shall be installed for sewerage disposal; garbage shall be kept in containers approved by the Board of Directors and disposed of by removal from said subdivision, and in no case shall sewerage or garbage or other noxious substances be permitted to flow or run into or be thrown into Deep Creek Lake or the pond of water maintained by the Association.

4. No fences, walls or hedges shall be installed on the front portion of any lot within this subdivision between the front lot line and the front building set-back line; provided, individual trees, shrubs and other landscaping shall be permissible therein.

5. The exterior of any structure, the construction of which is commenced, must be completed within 12 calendar months from the date construction began. Minimum set-back requirements shall be as specified in Article 4, section 401 for a single family detached dwelling in a Lake Residential District as set forth in the DEEP CREEK WATERSHED ZONING ORDINANCE. (40 ft. front and rear 15 ft. sides.)

6. The owner (owners) agree that they will not do, nor permit to be done on said property, anything which shall amount to a nuisance, either private or public.

7. No boat docks, floats or other structures extending into the lake shall be constructed or placed into or on said lake without prior written approval of Sky Valley Association, Inc., its successors or assigns.

8. All covenants and agreements herein set forth as well as restrictions will bind on and run with the land and the said Sky Valley Association, Inc. for itself, its successors and assigns, agrees that the same or similar restrictions, covenants and agreements shall be included in each deed or conveyance for all property sold from the said subdivision.

9. Sky Valley Association, Inc., for itself, its successors, assigns and licensees reserves a fifteen (15) foot wide easement along both sides of all road rights-of-way and a ten (10) foot wide easement along the side and rear lines of each and every lot, with the right of ingress and egress thereon for the purpose of installing and maintaining utility lines, gas and water mains, sewer lines and drainage ditches and appurtenances thereto; together with the right to trim, cut or remove any trees or brush necessary, and the right to locate guy wires, braces and anchors where necessary. Except where an owner of two or more adjoining lots constructs a building which will cross over or through a common lot line, said common lot line shall not be subject to the aforementioned ten (10) foot easement. Sky Valley Association, Inc., for itself, its successors, assigns and licensees also reserves the right to cause or permit drainage of surface waters over and/or through said lots. The owners of said lots shall have no cause of action against Sky Valley Association, Inc., its successor, assigns or licensees either at law or in equity excepting in cases of willful negligence, by reason of any damage caused said lots in installing, operating or maintaining above mentioned installations.

Section 3.04. Conveyance of Property. The owner(s) agree that they will not sell, assign or convey lot(s) they own without first having given notice to Sky Valley Association, Inc. of their intent to sell any such lot and also shall give notice to any prospective purchaser, in accordance with the Maryland Homeowner Association Act, which appears in Title 11B of the Real Property Article of the Maryland Annotated Code, that any such prospective purchaser, upon acquiring a lot in Sky Valley, shall become a member of Sky Valley Association, Inc. and be subject to all of its rules, regulations and responsibilities. Any deed conveying title to any lot in Sky Valley shall reflect that the property is conveyed subject to the rights and obligations of membership in Sky Valley Association, Inc., including the provisions of these By-Laws and all other rules and regulations of the Association.

Section 3.05. Lien in Favor of the Association. Non-payment of Assessments - Statement of Condominium Lien. Any dues, charges and assessment levied pursuant to these By-Laws, and any installment thereof, which is not paid on the date when due shall be delinquent and shall entitle the Association to claim the amount of the dues, charges and assessment, together with interest thereon, late charges and the actual costs of collection and reasonable attorney's fees, as a lien in accordance with the Maryland Contract Lien Act, Section 14-201, Real Property Article, Annotated Code of Maryland (1981 Repl. Vol.) et seq. The personal obligation of the member to pay the assessment shall, however, remain his personal obligation for the statutory period and a suit to recover a money judgment for non-payment of any dues, charges or assessments or any installment thereof, may be maintained without foreclosing or waiving the lien established pursuant to the Maryland Contract Lien Act. No sale or transfer shall relieve a member from liability for any such dues, charges and assessments which became due prior to such sale or transfer or from the lien of any subsequent dues, charges and assessments; provided, however, that a sale or transfer of a member's property pursuant to the foreclosure or any proceeding in lieu thereof of a recorded first mortgage or deed of trust shall extinguish the lien as to payments which became due prior to such sale or transfer.

Article IV
Meetings of Members

Section 4.01. Place of Meetings. Any meeting of the members of the Association may be held at any place within Garrett Co., Maryland. The place at which a particular meeting of the members is to be held shall be stated in the notice of that meeting.

Section 4.02. Semi-Annual Meetings. The fall semi-annual meeting of the members of the Association shall be held on the Saturday immediately preceding Labor Day in September of each year. The purpose of this meeting will be to elect the Directors in accordance with these By-Laws whose terms have expired and to handle such other business as may properly come before the meeting. The spring semi-annual meeting of the members of the Association shall be held on the Saturday immediately preceding Memorial Day of each year. The purpose of this meeting will be to review the rules and regulations and to discuss matters of interest to the Association with respect to the forth-coming summer season and to transact such other business as may properly come before the meeting. Failure to hold the semi-annual meetings on the designated dates shall not work any forfeiture or dissolution of the Association.

Section 4.03. Special Meetings. A special meeting of the members of the Association may be called by the President, by a majority of the Board of Directors, or by a written petition signed by a member who has, or members who have, the right (under the Articles of Incorporation and the By-Laws) to cast one-fourth (1/4) of the votes on any question upon which the vote of the membership of the Association shall be required or desirable.

Section 4.04. Notice of Meetings. A written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting (or when required by any provision of the Act or the Articles of Incorporation, or by any other provision of the By-Laws), the purpose for which such meeting shall have been called, shall be delivered or mailed by the Secretary to each member (or group of members constituting a tenancy by the entireties, a joint tenancy, or a tenancy in common) owning a numbered lot in Sky Valley at least twenty (20) days before the date of the meeting. Unless the Secretary shall have been otherwise notified in writing, adequate notice of a meeting shall be deemed to have been given to any member if said notice is mailed to the address of the member appearing in the official Sky Valley Directory maintained by the secretary or supplied by such member of the Association for the purpose of notice. It is the responsibility of the owner to notify the Association of any change of mailing address or ownership of property. Notice of any meeting of members may be waived in writing filed with the Secretary of the Association before the time of the meeting, at the time of the meeting, or after the time of the meeting, or by attendance in person.

Section 4.05. Voting at Meetings.

Clause 4.051. Voting Rights. The voting rights of the members of the Association shall be as follows:

Clause 4.052. Method of Voting. A vote attributable to a numbered lot in Sky Valley shall be cast as follows:

(a) If the lot is owned by one person, the vote shall be cast by that one person.

(b) If the lot is owned by more than one person, either as tenants in common, as joint tenants, or as tenants by the entireties, the vote attributable thereto shall be deemed properly cast if cast by one of the tenants in the absence of any objection, or contrary vote, by any other of them.

(c) If a lot is owned by more than one person, either as tenants in common, as joint tenants, or as tenants by the entireties, and if two or more of them desire that the vote attributable to that lot be cast in different way, or one of them desire that it not be cast, then the vote attributable thereto shall be deemed properly cast if cast by not less than a majority in number of the tenants.

Clause 4.053. Proxies. Any person who is entitled to vote (as the sole owner of a numbered lot in Sky Valley or as one of a group of tenants by the entireties, joint tenants, or tenants in common owning such a lot) at any meeting of the members of the Association may vote in person or by proxy executed in writing or by a duly authorized attorney in fact. No proxy shall be valid after eleven (11) months from the date of its execution unless a longer time is expressly provided for upon the face of the proxy instrument. As used in these By-Laws, the term "proxy" shall be deemed to include ballots published in the newsletter of the Association or otherwise distributed to all members of the Association, which are executed in writing by a member or duly authorized attorney in fact for a member.

Clause 4.054. Quorum. A quorum shall be deemed to be present at any semi-annual or special meeting of the membership of the Association if at such meeting, at least one fourth (1/4) of the total votes capable of being cast in accordance with Clause 4.052 are present in person or by proxy unless otherwise specified as in Articles IX and X.

Clause 4.055. Election tellers. If a vote is needed at any meeting of the members of the Association, the President shall appoint at least two election tellers to count votes for that meeting. Election tellers shall be members in good standing of the Association. No person who is a candidate for the Board of Directors may be an election teller. The tellers shall have the time needed and shall exercise diligence to assure a fair and accurate count of the votes cast.