BYLAWS OFNORTh SHORE CO~IMUNITY ASSOCIATION

ARTICLE I

DEFIN1TIONSqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 1. Assessment Unit,"Assessment Unit" shall mean any residential dwelling unitlocated within the Residential Areas and individual building sites within a condominium created for thepurpose of constructing a residential dwelling therein.

Section 2. Association." Association shall mean North Shore Community Association,aMichigan non-profit corporation.

Section 3. Community Areas. "Community Areas" shall mean the property andcommunity facilities thereon which are so described in ExhibitzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA"B" to the declaration.

Section 4. Declaration. "Declaration" shall mean the Declaration of Easements,Covenants, Conditions and Restrictions for the North ShoreCommunity, as recorded in the office of theLivingston County Register of Deeds, as it may be amended from time to time.

Section 5. Declarant. "Declarant shall mean North Shore Land Development, L.L.C., aMichigan limited liability company, or its duly designatedsuccessor under the Declaration.

Section 6. The North Shore Community.mean the Residential Areas and the Community Areas.

The "North Shore Community" shall

Section 7. Owners' Associations. "Owners' Associations" shall mean the non-profitcondominium unit owners' corporations respectively and collectively responsible for the maintenance,administration, management and operation of the portions of the Residential Areas established ascondominium projects.

Section 8. Residential Areas. "Residential Areas" shall mean the real property which isintended by Declarant to be developed as one or more residential condominium projects.

ARTICLE IT

PURPOSES

The purposes of the Association are set forth in the Articlesof Incorporation of the Association.

'ARTICLE III

MEMBERSHIP AND VOTING RIGHTS OF MEMBERSqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 1. Membership. The members of the Association shall consist of the Declarantits successors and assigns, if any, and each of the corporatecondominium associations responsible underMichigan law for management, maintenance, operation and administration of condominium projectsestablished from time to time within the North Shore Community. No other persons or entities shall beentitled to membership.

Section 2. Classes. There shall be two classes of membership. Declarant shall bethe onlyClass A member, and the Owners' Associations shall be the Class B members. Tne Class A membershipshall terminate when all Assessment Units planned for the North Shore Community have been conveyedunless the Class A member shall be invited to continue as suchby a majority of the Class B members.

Section 3. Transfer. The share of a member in the funds and assets of the Associationcannot be separately assigned, pledged or transferred in any manner.

Section 4. Voting. Except as limited in Section 5 below, each member of the Associationshall be entitled to one vote on all matters to be acted upon bythe membership.

Section 5. Voting Prior to First Annual Meeting, No member, other than a Class Amember, shall be entitled to vote prior to the first annual meeting of members held in accordance withSection 2 of Article IV.

Section 6. Quorum. The presence of members of the Association representing at least amajority of the votes in the Association shall be necessary to constitute a quorum for holding a meetingof the members of the Association. The absentee ballot of anymember furnished at or prior to any dulycalled meeting at which said member is not otherwise presentin person or by proxy shall be counted indetermining the presence of a quorum with respect to the specific question upon which the ballot is cast.

Section 7. Votes. Votes may be cast in person or by a writing duly signed by a dulyauthorized designated voting representative not present at a given meeting. Absent any specific writtendesignation to the contrary, the President of each member shall be its designated voting representative.Written votes must be cast with respect to specific questions of which due notice is given prior to aparticular meeting and any such votes must be filed with the Secretary of the Association at or before theappointed time of such meeting.

Section 8. Majority. A majority, except where otherwise provided herein or in theDeclaration, shall consist of more than fifty percent (50%) of the votes constituting the quorum for anygiven meeting. Whenever provided specifically herein or inthe Articles of Incorporation, action by themembers of the Association may be required to be unanimous orof a greater majority than more thanfifty percent (50%); otherwise, the members may act by the majority specified above.

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ARTICLE IV

MEETINGS OF MEMBERSqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 1. Meetings. Meetings of members of the Association shall be held at the principaloffice of the Association or at such other suitable place convenient to the members as may be designatedby the Board of Directors. Voting shall be as provided in Article III. Meetings of the Association shallbe conducted in accordance with the Sturgis' Code of Parliamentary Procedure, Roberts Rules of Orderor some other generally recognized manual of parliamentaryprocedure, when not otherwise in conflictwith the Articles ofIncorporation, the Bylaws of the Association, the Declaration or the laws of the Stateof Michigan.

Section 2. First Annual Meeting and Regular AnnualaZYXWVUTSRQPONMLKJIHGFEDCBAM eetings. The first annualmeeting of the members of the Association shall be held at such time as the first Board of Directors ofthe Association shall determine but, in no event, later than90 days after the conveyance by Declarant of95% of all Assessment Units proposed to be included within the Residential Areas. At least thirty (30)days' written notice of the date, time and place thereof shall be given to each member. Thereafter, anannual meeting shall be held on the third Tuesday of September, at such time and place as shall bedetermined by the Board of Directors. .

Section 3. Regular M eetings, In addition to the annual meetings described in Section 2of this Article IV, regular meetings of the members may be held at such times and places as shall bedetermined from time to time by the Board of Directors. Notice of regular meetings of the members shallbe given to each member personally, by mail, telephone or telegraph, at least twenty (20) days prior tothe date named for such meeting.

Section 4. Special Meetings. Special meetings of the members of the Association may becalled by the President or any other two officers on seven (7)days notice to each member, givenpersonally, by mail, telephone or telegraph, which notice shall state the time, place and purpose of themeeting.

Section 5. Waiver of Notice. Before or at any meeting of the members, any member may,in writing, waive notice of such meeting and such waiver shall be deemed equivalent to the giving of suchnotice. Attendance by a member at any meeting of the members of the Association shall be deemed awaiver of notice by it of time and place thereof. If all the members are present at any meeting of themembers of the Association, no notice shall be required and any business may be transacted at suchmeeting.

Section 6. Adjournment. If, at any meeting of the members of the Association, there isless than a quorum present, the majority of those present mayadjourn the meeting from time to time.At any such adjourned meeting, any business which might havebeen transacted at the meeting asoriginally called may be transacted without further notice. The joinder of a member in the action of ameeting by signing and concurring in the minutes thereof shall constitute the presence of such memberfor purposes of determining a quorum and ratification by such member of any action taken or authorized

at such meeting.

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ARTICLE V

BOARD OF DIRECTORSqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 1. Number and Qualifications of Directors.The affairs of the Association shallbe governed by a Board of Directors. Except for the Board of Directors which serves until the firstannual meeting of members, one authorized representative from the Class A member and the presidentof each Class B member of the Association shall automatically be a Director of the Association and noother person or entity shall be entitled to be a Director. Directors shall serve without compensation.

Section 2. First Board of Directors. The first Board of Directors (and any successorsthereto appointed by the Class A member prior to the First Annual Meeting) shall be composed of threepersons and such first Board of Directors shall manage the affairs of the Association until the first annualmeeting of members of the Association is convened at the timerequired by these Bylaws. Prior to thefirst annual meeting of members, the Ciass A Member shall be entitled to appoint the first Board ofDirectors and any successors thereto. Tnereafter, the Board of Directors of the Association shall consistof the president of each Class B member until all of the Assessment Units planned for the ResidentialAreas have been conveyed by Declarant after which time the Class A member shall no longer be entitledto a directorship unless such membership is continued underthe provisions of Article III, Section 2hereof. The actions of the First Board of Directors and any successors thereto who are appointed solelyby the Class A Member shall be binding upon the Association and all members and owners of AssessmentUnits so long as such actions are within the scope of the powers and duties which may be exercisedgenerally by a Board of Directors elected after the first annual meeting.

Section 3. Powers and Duties. Subject to the limitations of the Articles of Incorporationor Act No. 162 of the Public Acts of 1982, as may be amended fromtime to time, as to action to beauthorized or approved by the members, and subject to the duties of the Directors as prescribed by theBylaws, all corporate powers shall be exercised by or under authority of, and the business and affairs ofthe Association shall be controlled by, the Board of Directors; subject, however, to the general authoritiesconcerning capital improvements as are reserved to the Owners of Assessment Units in the ResidentialAreas as set forth in Article IV, Section 4 of the Declaration, it is hereby expressl y declared that theDirectors shall have the following powers:

a. To select and remove all other officers, agents and employees of the Association,prescribe such powers and duties for them as may not be inconsistent with law, with the Articlesof Incorporation or the Bylaws and fix their compensation, if any;

b. To conduct, manage and control the affairs and business ofthe Association, tomaintain and contract for maintenance with respect to any property of the Association inCommunity Areas and to make such rules and regulations therefor, not inconsistent with law,with the Articles of Incorporation, Declaration or the Bylaws, as they may deem best;

c. To adopt, make and use a corporate seal, and to prescribe the forms ofcertificates of membership, and to alter the form of such seal and of such certificates from timeto time, as in their judgment they may deem best, provided such seal and such certificates shallat all times comply with the provisions of law;zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

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._.zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA~

d. To appoint committees' and to delegate to such committees, subject. to the controlof the Board of Directors, any of the powers and authority of said Board except the power toadopt, amend or repeal the Bylaws;

e. To levy and collect regular annual assessments as provided in the Articles ofIncorporation and in accordance with Article IV of the Declaration (without specific approval byOwners of Assessment Units as provided inthe Declaration) and to enforce the collection thereof;provided, however that all special assessments for capitalimprovements shall be levied andcollected only in accordance with the provisions of ArticleIV, Section 4 of the Declaration;

f. To contract for maintenance, landscaping, security and other management serviceson behalf of the residential developments within the Residential Areas for which the Class B areadministratively responsible, to the extent such authority is conferred by the Declaration ordelegated to the Board by members of this Association and/orthe owners of the ResidentialAreas;

g. To pay real and personal property taxes and special assessments which are or maybecome a lien on the property of the Association, if any;

h. To contract and pay premiums for fire, casualty, liability and other insurance,including indemnity and other bonds, on the property of the Association;

i. To delegate such of its powers and duties as may be properlydelegable to aprofessional management company;

j. To borrow money in furtherance of the purposes of the Association and to securerepayment of the sameby mortgage, pledge or lien of Association properties; subject, however,to the rights of the Owners of Assessment Units in the Residential Areas to approve the same bythe same procedures required under Article IV, Section 4 of the Declaration.

k. To lease, license, sell, conveyor otherwise dispose of property of the Associationin furtherance of the purposes of the Association; subject however, to the rights of the Ownersof Assessment Units in the Residential Areas to approve the same by the same proceduresrequired under Article IV, Section 4 of the Declaration;

1. To contract when expedient and fair, with any person or entity to or with whomor which the Class A Member may be related or affiliated for the provision of services orproducts which are necessary to carry out the purposes and responsibilities of the Association;and

m. To do all other such acts as may be required by or are consistent with thepurposes of the Association, provided such are permitted bylaw, the Declaration, the Articlesof Incorporation, and/or the Bylaws.qponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

SectionZYXWVUTSRQPONMLKJIHGFEDCBA4. Vacancies. The term of office of each of the Directors of the Associationdesignated by a Class B member shall coincide with his or her respective term as president of one (1) ofthe Owners' Associations referenced in Article III, Section 1 above. The duly appointed or electedsuccessor to the president of the Owners's Association shall automatically be a Director of this

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Association in the place and stead of the person whom he/she succeeds. Any such Director of thisAssociation may not resign his/her directorship without similarly resigning as president of the Owners'Association which he or she represents. The term of office ofthe director designated by the Class Amember shall continue so long as is authorized by the Class A member.qponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 5. Removal. No Director of the Association may be removed at any time by themembers or other Directors of the Association.

Section 6.aZYXWVUTSRQPONMLKJIHGFEDCBAM eetings. Regular meetings, special meetings, notice of meetings, quorumrequirements, voting, and majority voting requirements for meetings of the Board of Directors are asdescribed in Articles III and IV hereof for meetings of members of the Association.

Section 7. Fidelity Bonds. The Board of Directors shall require that all officers andemployees of the Association handling or responsible for Association funds furnish adequate fidelitybonds. The premiums on such bonds shall be expenses of administration paid by the Association.

ARTICLEzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBAvr

OFFICERS

Section 1. Officers. The principal officers of the Association shall be a President, whoshall be a member of the Board of Directors, a Vice President,Secretary and a Treasurer. The directorsmay appoint First and Second Vice-Presidents, an AssistantTreasurer, an Assistant Secretary, or any ofthem and such other officers as in their judgment may be necessary. Any two offices except that ofPresident and Vice-President may be held by one person.

Section 2. Election. The officers of the Association shall be elected annually bythe Boardof Directors at the annual meetings referenced in Article IV, Section 2 above and shall hold office at thepleasure of the Board.

Section 3. Removal. Upon a majority vote of the Board of Directors, any officer may beremoved either with or without cause, and his successor elected at any regular meeting of the Board ofdirectors, or at any special meeting of the Board called for such purpose.

Section 4. President. The President shall be the chief executive officer of the Association.He shall preside at all meetings of the Association and of theBoard of Directors. He shall have all ofthe general powers and duties which are usually vested in theoffice of the President of an associationincluding, but not limited to, the power to appoint committees from among the members of theassociation from time to time as he may in his discretion deemappropriate to assist in the conduct of the

affairs of the Association.

Section 5. Vice President. The Vice President shall take the place of the President andperform his duties whenever the President shall be absent orunable to act. If neither the President northe Vice President is able to act, the Board of Directors shall appoint some other member of the Board

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to so do on an interim basis. The Vice President shall also perform such other duties as shall from timeto time be imposed upon him by the Board of Directors.qponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 6. Secretary. The Secretary shall keep the minutes of all meetings of the Boardof Directors and the minutes of all meetings of the members ofthe Association; he shall have charze ofzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

'"the corporate seal and of such books and papers as the Board ofDirectors may direct; and he shall, ingeneral, perform all duties incident to the office of the Secretary.

Section 7. Treasurer. The Treasurer shall have responsibility for the Association fundsand securities and shall be responsible for keeping full andaccurate accounts of all receipts anddisbursements in books belonging to the Association. He shall be responsible for the deposit of allmonies and other valuable effects in the name and to the credit of the Association, and in suchdepositaries as may, from time to time, be designated by the Board of Directors .

.Section 8. Duties. Tne officers shall have such other duties, powers and responsibilitiesas shall, from time to time, be authorized by the Board of Directors.

ARTICLE VII

FINANCES

Section 1. Method of Assessment.aZYXWVUTSRQPONMLKJIHGFEDCBA

Q . Genera! Annual Assessment. Every Class B member shall pay an annualassessment which shall be levied by the Board of Directors and which shall be used exclusivelyfor the purposes of the Association as set forth in the Articles of Incorporation. The annualassessment against each Class B member shall be the sum of theseparate equal assessments leviedby the Board of Directors against each Assessment Unit in thecondominium project administeredby such member, or as otherwise determined by the Declarant as that right is reserved in theDeclaration. The due dates of such annual assessments shallbe fixed by the Board of Directorsand they shall send written notice of such assessments to each member and to each AssessmentUnit Owner in the Residential Areas. Said assessments may, in the discretion of the Board ofDirectors, be made payable on a monthly or other periodic basis and may be paid by the Owners'Associations described in Article III, Section 6 hereof on behalf of their respective members.The Declarant may relieve Owners who have not constructed residences upon their building sitesfrom payment, for a limited period of time, of all or some portion of their respectively allocableshare of the Association budget. The purpose of this provision is to provide fair and reasonablerelief from Association assessments until such Owners actually commence utilizing the CommonElements on a regular basis. The Class A member shall not be responsible for payment of anygeneral annual assessments except to the extent that it ownsoccupied Assessment Units within

the Residential Areas.

b. Limited Annual Assessment.The Declarant may determine, from time to time,in its sole discretion, that the expense of maintenance, repair and replacement of certain of theCommunity Areas should not be equally assessed against eachAssessment Unit. Rather, basedon various considerations, including without limitation anticipated use and geographic location,

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it is equitable to assign percentagesof expenses to the Properties lying within the North ShoreCommunity. Article IV, Section 3b of the Declaration, as it may be amended from time to time,shall set forth the percentages of expenses.qponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 2. Amount. The amounts of all assessments shall be determined in accordance withthe provisions of the Declaration.

Section 3. Records. The Association shall keep detailed books of account showing allexpenditures and receipts incurred by or on behalf of the Association. Such accounts and all otherAssociation records shall be open for inspection by all members and all owners of the Residential Areasduring reasonable working hours. The Association shall prepare and distribute to each member at leastonce each year a financial statement, the contents of which shall be defined by the Association. Thebooks of account shall be audited at least annually by qualified independent auditors; provided, however,that such auditors need not be certified public accountantsnor does such audit need to be a certified audit.

Section 4. Management Agent.Tne Board of Directors may, in its discretion, employfor the Association a professional management agent at reasonable compensation established by the Boardto perform such duties and services as the Board shall authorize.

Section 5. Veto. Notwithstanding the foregoing, the Owners of Assessment Units in theResidential Areas shall have the right, at any meeting duly convened for such purpose, to exercise controlover any decisions of the members and directors of the Association to levy assessments for capitalimprovements pursuant to the terms and provisions of the Declaration.

Section 6. Fiscal Year. The fiscal year of the Association shall be an annual periodcommencing on such date as may be initially determined by theDirectors. The commencement date ofthe fiscal year shall be subject to change by the Directors for accounting reasons or other good cause.

Section 7. Bank. The funds of the Association shall be deposited in such bank as may bedesignated by the Directors and shall be withdrawn only uponthe check or order of such officers,employees or agents as are designated by resolution of the Board of Directors from time to time.Reserves and other surplus funds of the Association may be invested from time to time in savingsaccounts or certificates insured by the Federal Deposit Insurance Corporation or the Federal Savings andLoan Insurance Corporation or in obligations of the United States Government.

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ARTICLE VIII

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Every director and officer of the Association shall be indemnified by the association against allexpenses and liabilities, including actual and reasonablecounsel fees and amounts paid in settlement,incurred by or imposed upon him in connection with any threatened, pending or completed action, suitor proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal,to which he may be a party or in which he may become involved by reason of his being or having beena director or officer of the Association, whether or not he isa director or officer at the time suchexpenses are incurred except as otherwise prohibited by law; provided that, in the event of any claim forreimbursement or indemnification hereunder based upon a settlement by the director or officer seekingsuch reimbursement or indemnification, the indemnification herein shall apply only if the Board ofDirectors (with the director seeking reimbursement abstaining) approves such settlement andreimbursement as being in the best interest of the Association. The foregoing right of indemnificationshall be in addition to and not exclusive of all other rights to which such director or officer may beentitled. At least ten days prior to payment of any indemnification which it has approved, the Associationshall notify all members thereof. Further, the Board of Directors is authorized to carry officers' anddirectors' liability insurance covering acts of the officers and directors of the Association in such amountsas it shall deem appropriate.

ARTICLE IX

AMENDMENTSqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

Section 1. General. Amendments to these Bylaws shall be made only by and at the instanceof the Class A Member until all Assessment Units planned the North Shore Community have beenconveyed. Thereafter, amendments to the Bylaws shall be adopted only upon the affirmative vote of theClass B Members representing at least seventy-five percent(75 %) of the votes in the Association;provided, however that there shall be no such amendment to these Bylaws without the written consentof the Class A Member until conveyance by Declarant of the last Assessment Unit to be included in theNorth Shore Community.

Section 2. Proposal. Amendments to these Bylaws may be proposed by one or more ofthe members of the association whether at a meeting of members or by instrument in writing signed by

it or them.

Section 3. Meeting, Upon any such amendment being proposed, a meeting forconsideration of the same shall be duly called in accordancewith the provisions of Article IV of theseBylaws.

Section 4. "When Effective. Any amendment to these Bylaws shall become effective uponadoption of the same in accordance with Section1 of this Article IX.

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SectionzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA5. Distribution. A copy of each amendment to these Bylaws shall be furnished toevery member of the Association after adoption and to each owner of an Assessment Unit within theResidential Areas.

ARTICLE X

COlvfPLIANCE

These Bylaws are set forth to comply with the requirements ofAct No. 162 of the Public Actsof Michigan of 1982, as may be amended from time to time, and with the duly recorded Declaration.In the event that these Bylaws conflict with the provisions of such statute or with the provisions of theDeclaration, the provisions of the statute and the Declaration shall be controlling.hgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

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E S C R O W A G R E E M E N TzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA

THIS,AGREEMENT is entered into thisaZYXWVUTSRQPONMLKJIHGFEDCBA2L dayzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBAOfr<.)gi!!!{~-/;vH999, between North Shore Land Development, L.L.C.("Developer"), and Transnation Title Insurance Company ("Escrow gent") through its duly designated representative for this purpose,American Title Company of Livingston. '

WHEREAS, Developer has established North Shore Woods as a residential site Condominium Project under applicableMichigan law; and,

WHEREAS, Developer is selling Condominium Units in North Shore Woods and is entering into Purchase Agreements withPurchasers for such Units. and each Purchase Agreement requires that all deposits made under such Agreement be held in an escrowaccount with an Escrow Agenl; and,

WHEREAS, the parties hereto desire to enter into an Escrow Agreement to establish such an escrow account for the benefit ofDevetoper and for the benefit of each Purchaser (hereinafter "Purchaser") who makes deposits under a Purchase Agreement; and,

WHEREAS, Escrow Agent is acting as an independent party hereunder pursuant to the provisions of this Agreement and theMichigan Condominium Act (Act No. 59, Public Acts of 197B, as amended, hereinafter the "Act") for the benefit of Developer and allPurchasers and not as the agent of anyone or less than all of such parties.

NOW, THEREFORE, it is agreed as follows:

1. Initial Deposit of Funds. Developer shall. promptly after receipt. transmit to Escrow Agent all sums deposited with itunder a Purchase Agreement, together with a fully executed copy of such Agreement and a receipt signed by the Purchaser for therecorded Master Deed, The Condominium Buyer's Handbook and the Disclosure Statement.

2. Release of Funds. The sums paid to Escrow Agent under the terms of any Purchase Agreement shall be held andreleased to Developer or Purchaser only upon the conditions hereinafter set forth:

A. Upon Withdrawal by Purchaser. The escrowed funds shall be released to. Purchaser under the followingcircumstances:

(i) If the Purchase Agreement is contingent upon Purchaser obtaining a mortgage and he fails to doso as provided therein and duty withdraws from the Purchase Agreement as a result thereof. Escrow Agent shallrelease to Purchaser all sums held by it pursuant to said Agreement.

(ii) In the event that a Purchaser duly withdraws from a Purchase Agreement prior to the time that saidAgreement becomes binding under the General Provisions thereof, Escrow Agent shall, within 3 business days fromthe date of receipt of notice of such withdrawal, release to Purchaser all of Purchaser's deposits held thereunder.

(iii) In theqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBAevent that a Purchaser duly terminates a Purchase Agreement executed under theprovisions of §BB of the Act pursuant to the General Provisions of a Purchase Agreement. Escrow Agent shallrelease all of Purchaser's deposits held thereunder to Purchaser.

B. Upon Default by Purchaser. In the event that a Purchaser under a Purchase Agreement defaults inmaking any payments required by said Agreement or in fulfilling any other obligations thereunder for a period of ten days afterwritten notice by Developer to Purchaser. Escrow Agent shall release all sums held pursuant to the Purchase Agreement toDeveloper in accordance with the terms of said Agreement.

C. Upon Conveyance of Title to Purchaser. Upon conveyance of title to a Unit from Developer to Purchaser(or upon execution of a land contract between Developer and Purchaser in fulfillment of a Purchase Agreement), EscrowAgent shall release to Developer all sums held in escrow under such Agreement provided Escrow Agent has received acertificate signed by a licensed professional engineer or architect confirming:

(i) That those portions of the phase of the Condominium Project in which such Purchaser's Unit islocated and which on the Condominium Subdivision Plan are labeled "must be built" are substantially complete; and

(ii) That the common elements or facilities intended for common use, wherever located, which on theCondominium Subdivision Plan are labeled "must be built" are substantirlly complete.

If the elements or facilities referred to in paragraphs 2C(i) and 2C(ii) above are not substantially complete, onlysufficient funds to finance substantial completion of such elements or facilities shall be retained in escrow and the balance maybe released. All funds required to be retained in escrow may be released, however, if other adequate security shall have beenarranged as provided in paragraph 2F below. Determination of amounts necessary to finance substantial completion shalllikewise be determined by the certificate of a licensed professional architect or engineer. For purposes of paragraph 2C(i)above, the portion of the Condominium Project in which Purchaser's Unit is located shall be "substantially complete" when allutility mains and the access roads (to the extent such items are designated on the Condominium Subdivision Plan as "must bebuilt") are substantially complete as evidenced by certificates of substantial completion issued by. a licensed professionalarchitect or engineer as described in Section 3 below. Improvements of the type described in paragraph 2C(ii) above shall besubstantially complete when certificates of substantial completion have been issued therefor by a licensed professionalarchitect or engineer, as described in Section 3.

D. Release of Funds Escrowed For Completion of Incomplete Improvements. Upon furnishing EscrowAgent a certificate from a licensed professional architect or engineer evidencing substantial completion in accordance with thepertinent plans and specifications of an improvement, facility or identifiable portion thereof for which funds or other securityhave been deposited in escrow, Escrow Agent shall release to Developer the amount of such funds or other security specifiedby the issuer of the certificate as being attributable to such substantially completed item(s); provided, however, that if theamounts remaining in escrow after any such partial release would be insufficient in the opinion of the issuer of such certificateto finance substantial completion of any remaining incomplete items for which funds or other security have been deposited inescrow, only the amount in escrow in excess of such estimated cost to substantially complete shall be released by EscrowAgent to Developer.

E. Release of Interest Earned Upon Escrowed Funds. Escrow Agent shall be under no obligation to earninteresl upon the escrowed sums held pursuant hereto. In the event that interest upon such sums is earned, however, all suchinterest shall be separately accounted for by Escrow Agent and shall be held in escrow and released as and when principaldeposits are released hereunder; provided, however, that all interest earned on deposits refunded to a Purchaser upon tileoccasion of his withdrawal from a Purchase Agreement shall be paid to Developer.

F. Other Adequate Security. If Developer requests that all of the escrowed funds held hereunder or any partthereof be delivered to it prior to the time it otherwise becomes entitled to receive the same, Escrow Agent may release allsuch sums to Developer if Developer has placed with Escrow Agent an irrevocable letter of credit drawn in favor of EscrowAgent in form and substance satisfactory to Escrow Agent and securing full repayment of said sums, or has placed withEscrow Agent such other substitute security as may be pennitted by law and approved by Escrow Agent.

G. In the Event Elements or Facilities Remain Incomplete. if Escrow Agent is holding In escrow funds or. other security for completion of incomplete elements or facilities under § 103b(7) of the Act, such funds or other security shallbe administered by Escrow Agent in the following manner:

(i) Escrow Agent shall upon request give all statutorily required notices under §103b(7) of the Act.

• ." _. r _.•.__ - •.•_••••~•••~ ~fedcbaZYXWVUTSRQPONMLKJIHGFEDCBAv.unltzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA<uU, ""c,c.' '" "It, ,,:;t;'UW oeposn enter Into a written agreement (satisfactory in its terms and conditions to EscrowAgent for Escrow Agent's protection, as determined by Escrow Agent in its absolute and sole discretion), as to thedisposition of the funds or security in escrow under § 103b(7) of the Act, Escrow Agent shall release such funds orsecurity in accordance with the terms of such written agreement among such parties.

(iii) Failing written agreement as provided in paragraph 2G(ii) above, Escrow Agent shall be under noobligation whatever to release any such escrowed funds or security, but Escrow Agent may, in its absolute and solediscretion at any time take either of the following actions:

(a) Initiate an interpleader action in any circuit court in the State of Michigan naming theDeveloper, the North Shore Woods Association and all other claimants and interested parties as parties anddeposit all funds or other security in escrow under §103b(7) of the Act with the clerk of such court in fullacquittance of its responsibilities under this Agreement; or

(b) Initiate an arbitration proceeding under the Commercial Arbitration Rules of the AmericanArbitration Association pursuant to which proceeding both the Developer and the North Shore WoodsAssociation shall be named as parties. Escrow Agent shall continue to hold all sums in escrow under§ 103b(7) of the Act pending the outcome of such arbitration but Escrow Agent shall not be a party to sucharbitration. All issues relative to disposition of such escrow deposits or other security shall be decided bythe arbitrator or arbitration panel and such decision shall be final and binding upon all parties concerned andjudgment thereon may be rendered upon such award by any circuit court of the State of MiChigan. EscrowAgent may in any event release all such escrow deposits in accordance with the arbitration decision or maycommence an interpleader action with respect thereto as provided above.

3. Proof of Occurrences; Confirmation of Substantial Completion; Determination of Cost to Complete. EscrowAgent may require reasonable proof of occurrence of any of the events, actions or conditions stated herein before releasinq any sumsheld by it pursuant to any Purchase Agreement either to a Purchaser thereunder or to Developer. Whenever Escrow Agent is requiredhereby to receive the certification of a licensed professional architect or engineer that a facility, element, improvement or identifiableportion of any of the same is substantially complete in accordance with the pertinent plans therefor, it may base such confirmationentirely upon the certificate of the Developer to such effect coupled with the certificate to the same effect of a licensed professionalarchitect or engineer. Likewise, all estimates and determinations of the cost to substantiauy complete any incomplete elements,facilities, structures and improvements for which escrowed funds are being specifically maintained under paragraph 20 above shall bemade entirely by a licensed professional engineer or architect and the determination of all amounts to be retained or maintained in theescrow account for the completion of any such elements, facilities or improvements shall be based entirely upon such determinationsand estimates as are furnished by such engineer or architect. No inspections of the Project or any portion thereof by an representativeof Escrow Agent shall be deemed necessary hereunder, nor must any cost estimates or determinations be made by Escrow Agent andEscrow Agent may rely entirely upon certificates, determinations and estimates as described above in retaining and releasing allescrowed funds hereunder.

4. limited Liability of Escrow Agent; Right to Deduct Expenses From Escrow Deposits. Upon mal<ing delivery ofthe funds deposited with Escrow Agent pursuant to any Purchase Agreement and pertormance of the obligations and services statedtherein and herein, Escrow Agent shall be released from any further liability thereunder and hereunder, it being expressly understoodthat liability is limited by the terms and provisions set forth in such Agreements and in this Agreement, and Ihat by acceptance of thisAgreement, Escrow Agent is acting in the capacity of a depository and is not, as such, responsible or liable for the sufficiency,correctness, genuineness or validity of the instruments submitted to it, or the marketability of title to any Unit sold under any otherAgreement. Escrow Agent is not responsible for the failure of any bank used by it as an escrow depository for funds received by itunder this Agreement.

Further, Escrow Agent is not a guarantor of pertormance by Developer under the Condominium Documents or any PurchaseAgreement and Escrow Agent undertakes no responsibilities whatever with respect to the nature, extent or quality of such performancethereunder or with regard to the conformity of such performance to the terms of such documents, to the plans and specifications for theProject, to local or state laws or in any other particular. So long as Escrow Agent relies in good faith upon any certificate, cost estimateor determination of the type described Section 3, Escrow Agent shall have no liability whatever to Developer, any Purchaser, any Co-owner or any other party for any error in such certificate, cost estimate or determination or for any act or omission by the Escrow Agentin reliance thereon. .

Except in instances of gross negligence or wilful misconduct, Escrow Agent's liability hereunder shall in all events be limited toreturn, to the party or parties entitled thereto, of the funds retained in escrow (or which were replaced by security) less any reasonableexpenses which Escrow Agent may incur in the administration of such funds or otherwise hereunder, including, without limitation,reasonable attorney's fees and litigation expenses paid in connection with the defense, negotiation or analysis of claims against it, byreason of litigation or otherwise, arising out of the administration of such escrowed funds, all of which costs Escrow Agent shall beentitled without notice to deduct from amounts on deposit hereunder.

Notwithstanding any other provision herein to the contrary, escrow Agent shall be under no obligation to release fundsdeposited hereunder to any party until it can satisfactorily ascertain that the funds deposited have been paid, settled and fully collectedas such tenms are defined under the provisions of MCL 440.4101, et seq.

5. Notices. All notices required or permitted hereunder and all notices of change of address shall be deemed sufficientif personally delivered or sent by registered mail, postage prepaid and retum receipt requested, addressed to the recipient party at theaddress shown below such party's signature to this Agreement or upon the pertinent Purchase Agreement. For purposes of calculatingtime periods under the provisions of this Agreement, notice shall be deemed effective upon mailing or personal delivery, whichever isapplicable.

TRANSNATION TITLE INSURANCE COMPANY, Escrow Agent

By: American Title Company 0JLll...ngston, Agent

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By:qponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA~/.JLLL> )l?et.J"~/,JSally ReaderaZYXWVUTSRQPONMLKJIHGFEDCBAI IIts: PresidentTelephone No.: (517) 546-8020

00102329

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