.:“: ‘

BY-LWB

0P

THE VILLA AVMJ?I AB800IATIOK

A NON-PROFIT )(UTUL BENEFIT CORPORATION

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rtio1• I Plan of Association Manb.rshiy

Section 1 - Name 1

Section 2 - Definitions 1

Section 3 - By-Laws Applicability 1

Section 4 - Eligibility of MembersSection 5 - Assessment Obligation 1

Section 6 - Termination arid Transfer of )Iembership 1

Artiol. XI - Voting. Maoritv of )(emb•rs. quorum. Proxi•s

Section 1 - Voting 2

Section 2 - Majority of Members 2

Section 3 - Quorum 2

Section 4 - Proxies 3

Section 5 - Election of Board 3

Article II! — Administration

Section 1 - Association Responsibilities 3

Section 2 - Place of Meeting 3

Section 3 - Annual Meeting. 3

Section 4 - Special Meeting. 4

Section 5 - Notice of Meetings 4

Section 6 - Ad3ourned Meetings 4

Section 7 - Action Without a Meeting 4

Section 8 - Order of Business 5

Section 9 - Fiscal Year 5

Articl• IV - Board of Directors

Section 1 - Number and Qualifications 5

Section 2 - Powers and Duties 6

Section 3 Other Duties 10

Section 4 Management Agent 10

Section 5 - Election and Term of Office 10

Section 6 — Vacancies 10

Section 7 - Removal of Board Members 10

Section 8 - Organization Meeting 11

Section 9 - Regular and Special Meetings 11

Section 10— Open Meetings and Notice of Members 11

Section 11— Quorum 12

Section 12— Action without meetings 12

Section 13— Fidelity Bonds 12

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Article V Officers

Section 1 Designation 12Section 2 - Election and removal of Officers 13Section 3 President 13Section 4 — Vice President 13Section 5 - Secretary 13Section 6 — Treasurer 14Section 7 - Execution of Documents 14

Article VI — Indemnification 14

Article VII Mortgages 14

Artici. VIII - Enforcement

Section 1 - Suspension 15Section 2 - Fines 15Section 3 — Remedies Cumulative 15Section 4 — Attorney’s Fees 15

artici. IX - Amendments

Section 1 - Amendments to By-Laws 16Section 2 - VA Approval 16Section 3 — Special Restrictions 16

Article X — Conflicts 16

artici. xx - Inspection of Books and Records 16

VILGRO. BYWARTICLES/880829

BY-LAWSOF

TEE VILLA AVAIITI ASSOCIATION

ARTICLE I

8•ct.ion 1.

The name of the nonprofit mutual benefit corporation createdhereby is TEE VILLA AVANTI ASSOCIATION (“the Association”) - Theprincipal office of the Association shall be located in RiversideCounty, California.

Section 2. DefinitionS.

All defined terms used in these By—laws shall have the samemeaning and definition ascribed to those terms in the Declarationof Covenants, Conditions, and Restrictions recorded on

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1988 as Instrument No.

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Official Records of Riversidecounty. Any amendment to those definitions shall be applicable tothese By—laws.

Section 3. By-lava Amolicability.

The provisions of these By-laws are applicable to the Project.

Section 4. Eligibility of Members.

Every Owner of a Lot within the Project shall automaticallybecome a Member of this Association, which membership shall beappurtenant to said Lot.

Sction 5. Assessment Obligations.

As provided in the Declaration, each Owner, including Declar—ant, shall be subject to assessments for regular monthly maintenance of the landscape Maintenance Areas, Common Areas, and reservesfor long-term repair and replacement of capital improvements. Inaddition, subject to the limitations provided in the Declaration,each Owner, including Declarant, may be subject to special assessments.

Section 6. Termination and Transfer of Membership.

A membership in the Association shall automatically terminateupon transfer of titi. of the Lot to which it i. appurtenant. Amembership may be transferred only in conjunction with the trans

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f.r of title of the Lot to which it is appurtenant1 and th.n onlyto the transferee of title. Upon said transfer and termination,

the transferee shall automatically become a Member of the Associa

tion.

ARTICLS IIVOTING. MAJORITY OP 1EMB!RS OUORVK. PROZIU

Section 1. y:2.ju.

The Association shall have two classes of voting membership

as defined in Artici. 3(b) of the Declaration. Class A Member.

shall have one vote per Lot owned and the Class B Members shall

have three votes for each Lot owned by Declarant as more specifi

cally set forth in the Declaration.

Section 2. Naority of Members.

Any provision in these By-laws or in the Declaration calling

for approval by a “majority of Members” or “majority of the voting

power’ for action to be taken by the Association, except provisions

with respect to action to enforc. th. obligations of the Subdividerunder any completion bond, shall require the vote or written assent

of .a majority of each class of membership during the time that

there are two outstanding classes of membership. Prom and afterthe cessation of two-class voting, ‘majority of Neers’ or “majority, of the voting power’ shall mean those Members holding a majority of the total voting power of the Association as well as - amajority of the total voting power of members other than Declarant.

Where these By—laws or the Declaration require the vote orwritten assent of each class of membership for the initiation ofaction by or in the name of the Association, except with respect

to action to enforce th. obligations of the Subdivider under anycompletion bond and except with respect to amendments to these Bylaws or the Dclaration, any requirement that the vot, of theDeclarant shall be excludd in any such d.ter.inat.on shall beapplicable only if ther. has been a conv•rsion of Class B to ClassA membership and only for so long as the Declarant holds or direct

ly controls 25% or mor. of the voting powr of the Association.

Section 3 • Ouorum.

Except as otherwise provided in these By—law, the presencein person or by proxy of Members holding more than 50% of th votesin accordanc. with Section 3. of this Article II shall constitute

a quorum.

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Section 4. Zr2ZiU

Votes may be cast in person or by proxy. Proxies must b

fil.d with the Secretary before the appointed tim. of each met

ing. A holder of a proxy need not be a Member of the Association.

Tb. proxy may be revoked at any time by written notice of the

Member to the Secretary, and all, proxies shall automatically tar

sinate upon transfer of titl. of a Lot by the owner.

Section 5. Zleotion of Board.

Voting for the Board shall be by secret written ballot. Every

Owner entitled to vote at any election for Board members of theAssociation may cumulate his Votes and give on. candidat. the

number of votes equal to the number of Board members to be elected

multiplied by the number of votes to which he is entitled und•rSection 1 of this Article II, or he say distribut, his votes among

as many candidates as he thinks fit. No Member shall be entitled

to cumulate votes for a candidate or candidates unless the candid..

ate’ a name or candidates’ names have been placed in nosinatio

prier to the voting and the Member has given notice at the meeting

prier to the voting of the Member’s intention to cumulate votes.

If any one Member has given this notice, all Members say cumulate

their votes for candidates in nomination. If the Members, exciud

ing Declarant, do not have enough votes to elect at least one

member of the. Board, then on. of the Board members shall be elected

separately by vote of the Members, excluding Declarant.

RRTICL* III)DXINIBTRA?ION

S.ction 1. Association Responsibilities.

The Board will have the responsibility of administering the

Project, approving the annual budget, establishing and collecting

monthly assessments and arranging for the management of the Pro

j.ct.

Section 2. Place of Meeting.

Meetings of the Association shall be held within the Project

or as close thereto as practical, as determined by the Board.

B.ctiea 3. Annual I(eetinas.

The first annual meeting of the Association shall be heldwithin six months following the close of escrow for the sale of thefirst Lot in the Project, or within 45 days following the cbs. ofescrow for the sal. of 51. percent of the lots within the project

(as authorized undr the first Final Subdivision Public Report forthe Project), whichever shall first occur. Thereaftr, th. annual,

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meetings of the Association shall b. held in the month in which thefirst annual meeting was held. At such meetings a Board shall beelected by ballot of the Members in accordance with the requirements of Section 5 of Article II of these By-laws. The Members mayalso transact such other business of the Association as may properly come before them.

seCtion 4. Special Meetings.

It shall be the duty of the President to cafl a special meet-ing of the Members (a) upon the vote for such a meeting by a majority of a quorum of the Board or (b) upon receipt of a writtenrequest signed by Members representing not less than five percent(5%) of the total voting power of the Association. The Notice ofany special meeting shall state the time and place of such meetingand the purpos. thereof.

Section 5. Noticö of Meetings.

It shall be the duty of the Secretary to mail or deliver anotice of each annual or special meeting, stating the purposethereof, as well as the time and place where it is to be held, tothe address of each Member as it appears en the Membership registerof the Association, not less than ten (10) nor more than ninety(90) days prior to such meeting. The mailing or personal deliveryof a notice in the manner provided in this Section shall be considered notice served.

section 6. Adjourned K..tinq5.

If any meeting cannot be organized because a quorum has notattended, the Members who ar. present, either in pers or byproxy, may not transact any business except to adjourn the meetingto a time not less than five days nor nor. than thirty days fromthe tim. the original meeting was called. The quorum requirementfor the subsequent meeting shall be 25% of the voting .por of aUMembers of the Association. If a tin, and plac. for the adjournedmeeting is not fixed by those in attendance at the. original meetingor if for any reason a new date is fixed for the adjourned meetingafter adjournment, notice of the time and plac. of the adjournedmeeting shall be given to Members in the manner prescribed forregular meetings.

Section 7 Action Without a Neetinc.

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Any action which may be taken by the vot, of Members at aregular or special meeting, except the election of Board members,may be taken without a meeting if the Board distributes a writtenballot to every Member entitled to vote on the matter. S ballot

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shall set forth the proposed action1 provide an opportunity tospecify approval or disapproval of any proposal, and provide t

reasonable tiiie within which to return the ballot to the Board.

Approval by written ballot pursuant to this section shall bevalid only when the number of votes cast by ballot within the tineperiod specified equals or exceeds the quori required to be present at a meeting authorizing the action, and th. number ofapprovals equals or exceeds th. number of Votes that vould berequired to approv, at a meeting at which the total number of votescast was the sane as the number of votes cast by ballot.

Ballots shall be delivered to Members in th. same manner asprovided for delivery of notic. of meeting. in Section 5 of thisArticle III. All such ballots shall indicat, th. number of responses needed to meet the quorum requirement and, with respect toballots other than for th. election of directors, shall state thepercentage of approvals necessary to pass the measure submitted.Th. ballot must specify the time by which it must be received inorder to be counted.

Section 8. Ord.r of Business.

The order of business of all meetings shall b. as follows:(a) roll call; (b) proof of notice of meeting; (C) reading ofMinutes of preceding meeting; (d) repots of officers; (e) reportof committees; (f) appointment of inspectors of election; (g’election of Board members; (Ii) unfinished business; and (i) nebusiness.

Section s. ca3T.

Unless modified by resolution of the Board, the fiscal yearof the Association shall be the calendar year.

AR?ZCLS IVBOARD OP DIRZCTOU

Section 1. Numb.r and Onalification..

The affairs of the Association shall be governed by a Boardof Directors (Board9. The Board shall, prier to the first annualmeeting, be composed of three persons (aBoard members or Boardmember9 appointed by Dec2.arant. From and after the first annualmeeting, the Board shall be composed of fiv, duly elected personsszving a term as set forth in Section 5 of this Article.

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Section 2. Powers and Duti...

A. The Board shall have the power and duties necessary forthe administration of the affairs of the Association and may do allsuch acts and things as are not by law or these By-laws directedto be exercised and done by the Members. The powers and duties ofthe Board shall include but not be united to the following:

1. Enforcement and carrying out of the provisions ofth& Articles of Incorporation, Declaration, By—law., Rules andReq lations, and other agreements.

2. Payment of taxes and special assessments which areor would become a lien on the Common Areas or Landscape MaintenanceAreas, or a portion thereof, unless such 1ien encumbers a part ofa Lot and is sol•iy the obligation of the owner of such Lot.

3. Contracting and paying for a fidelity bond and forfire, casualty, liability and oth.r insurance insuring the Association, Board, Common Areas and Owners.

4. Contracting and paying for maintenance, gardening,utilities, materials and supplies, and other goods and servicesrelating to the Common Areas and Landscape Maintenance Areas and

• employment of personnel necessary for the operation of the Project,including legal and accounting services, subject to the linitationsof paragraph B. below.

5. Delegation of its powers to óosmittees, officers oremployees of the Association as expressly authorized in the Declaration, Articles of Incorporation and these By-laws.

6. Preparation of budgets and financial statements asprescribed in paragraph 15 of Section 1 of this Article IV.

7. Formulation, adoption and publishing of Rules andRegulations governing the use of the Project, and the personalconduct of the Members and their guests thereon.

S. Imposition of fines and suspension of voting rightsfor non—payment of assessment or other breaches of the Declaration,the By-laws, or the Association’s published Rules and Regulationsafter notice and hearing which are required by other provisionshereof.

9. Entering onto any Lot where necessary in connectionwith maintenance or construction for which the Association isresponsible or becomes responsible.

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10. Payment for reconstruction of any portion or portions of the Proct damaged or destroyed which are to be rebuiltby the Association.

11. Lvying of assessments as provided in the Declaration.

12. Election of officers of the Board.

3.3. rifling of vacanci.s en the Board except for avacancy created by the removal of a Board member as provided inSection 7 of this Article XV.

3.4 • The Board shall adopt architectural guidelines andset forth procedures, rules and regulations for submission of plansfor improvements (as set forth in Article 9(b) of the Declaration)to the Architectural Control Committee. The Board shall also setforth appeal procedures from Committee decisions and such otherrules for enforcement as the Board deems necessary.

15. The Board shall regularly prepare and distribute thefollowing financial information to all Members regardless of thenumber of Members or the amount of assets of the Association:

(a) A pro forma operating budget for each fiscalyear consisting of at least the following information shall bedistributed not more than 60 nor, less than 45 dayS prier to Ui,beginning of th. fiscal year.

(1) Estimated revenue and expenses on anaccrual basis.

(2) Th. identification of th. total cashreserves currently set aside.

(3) An itemized estimate of the remaining lifeof. and th. methods of funding to defray the futur. repair,replacement or additions’ to the sa)or components that the Association is obligated to maintain.

(4) A general statement setting forth theprocedures ‘used by the Board in the calculation and establishmentof reserves to defray the costs of repair replacement Or additionsto aajor components of the Common Areas, Landscape Maintenance Areaor other items for which the Association is responsible.

(b) A balance sheet - as of an accounting datewhich is the last day of the month closest in tim. to six monthsfrom the dat. of closing of the first sal. of an interest in thesubdivision — and an operating statement for the period from thedat. of the first closing to the said accounting date, shall be

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distributed within 60 day. after the accounting date. This operat

Jag statement shall includ, a schedule of assessments received and

receivable identified by the number of the Lot and the name of the

entity assessed.

(C) A report consisting of the following shall b.

distributed within 120 days after the close of the fiscal year.

(1) A balance sheet as of the end of the

fiscal year.

(2) An operating (income) statement fez the

fiscal year..

(3) A statement of changes in financial posi

tion for the fiscal year.

(4) For any fiscal year in which the gross

income to the Association exceeds $75,000, a copy of the review of

th. annual report prepared in accordance with generally accepted

accounting principles by a licensee of the California State Board

of Accountancy.

(4) If the report referred to iii subparagraph (15)

(c) • above, is not prepared by an independent accountant, it shall

ho accompanied by the certificate of an authorized officer of the

J Association that the statement was prepared from books and records

of the Association without independent audit or review.

(e) In addition to financial atements1 the Board

shall annually distribUte during the 60 day period immediately

prior to the beginning of the fiscal year a statement of the Assoc

iation’ s policies and practices in enforcing its lien right or

other legal remedies against Members for defaults in the payment

of regular and special assessments.

36. On a quarterly basis the Board shall do all of the

following:

(a) Review a current reconciliation of the Associa

tion’ s operating accounts.

(b) Review a current reconciliation of the Associa

tion’ s reserve accounts.

(c) Review the current year’s actual reserve

revenues and expenses compared to the current year’s budget.

(4) Review the latest account statements prepared

by the financial institution where the Association has its operat

iz and reserve accounts.

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Ce) Review an income and expense statement for theAssociation’s operating and reserve accounts.

17 • The Board shall require the signature of two of itsmembers to withdraw any funds from the Association ‘ s reserveaccounts.

B. The Board shall be prohibited from taking any of thefollowing actions, except with the Vot, or written assent of ama:jority of the voting power of the Association residing in Membersother than the D.clarant.

1. Entering into a contract with a third person whereinthe third person will furnish goods or services for the CommonAreas, the Landscape Maintenance Areas or the Association for aterm longer than one year with the following exceptions: (i) amanagement contract, the terms of which have been approved by theFederal Housing Administration or Veterans Administration; or (ii)a contract with a public utility company if the rates charged forth. materials or services are regulated by the Public UtilitiesCommission; provided, however, that the term of the contract shallnot exceed the shortest term for which the supplier viii contractat the regulated rate; or (iii) prepaid casualty and/or liabilityinsurance policies of not to exceed three years duration, providedthat th• policy permits short rate cancellation by the insured.

2. Incurring aggregate expenditures for cap’improvements to the Common Areas or Landscape Maintenance Area.any fiscal year in excess of 5% of the budgeted gross expenses ofthe Association for that fiscal year or a regular annual assessmentwhich is more 20 percent greater than teregular assessmentof the immediately preceding fiscal year, except as set forth insection 1366(b) of the California Civil Cod..

3. Selling, during any fiscal year, property of theAssociation having an aggregate fair market greater than 5% of thebudgeted gross expenses of the Association for that fiscal year;provided, however, the Board may sell, lease or assign withoutcompensation to County Service Area 143 all or part of the CommonAreas and/or the Landscape Maintenance Areas without any approvalof members.

4. Paying compensation to members of the Board or toofficers of the Association for services performed in the conductof the Association’s business; provided, however, that the Boardmay cause a Board member or officer to be reimbursed for expensesincurred in carrying on the business of the Association.

5. Filling of a vacancy on the Board created by theremoval of a Board member as provided for in Section 7 of thisArticle IV.

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Section 3. 9tr piit.9a.

In addition to duties imposed by these By—laws or by resolutions of the Association, the Board shall be responsible for thefollowing: care, upkeep.and surveillance of the Project as providedin the Declaration; collection of monthly and special assessmentsfrom the Owners; and hiring and dismissal of the personnel necessary for the Association’s maintenance and operation of the Pro—ect.

Bection 4. Kanaemeut Agent.

Subject to the limitations set forth in Section 2(B) of thisArticle IV, the Board may employ for the Association a managementagent and/or security officers at a compensation established by theBoard to perform such duties and services as the Board shall autho—.rize. ny management agreement for the Project shall provide fortermination by either party without cause and without payment ofa termination fee, upon 30 days’ written notice, and shall have aterm, not exceeding one year, renewable by agreement of the partiesfor successive one—year periods.

section 5 • Bl•ctiea and Term of Office.

The first election of the Board shall be at the first meetingof Members and thereafter at each annual meeting of Members, butif such annual meeting is not held or Board members are not electedthere at, the Board members may be elected at a special meetingheld for that purpose. Voting for the Board shall be by secretwritten ballot. The term of office for each Board member shall runconcurrently, shall be for one (1) year and each shall hold officeuntil a successor is elected.

Section 5.

Vacancies in the Board caused by any reason other than theremoval of a Board member by a vote of the Association shall befilled by vote of the majority of the remaining Board members, andeach person so elected shall be a Board member until a successoris elected at the next annual or special meeting of the Association.

Section 7 • Removal of Board Memb.çs.

At any regular or special meeting of Members duly called, anyone or more of the Board members may be removed with or withoutcause by a majority of the Members, and a successor may then andthere be elected to fill the vacancy thus created (by cumulativevoting as provided in Section 5 of Article II). Any Board memberwhose removal has been proposed by the Members shall be given anopportunity to be heard at the meeting. Unless the entire Board

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is removed from office by the vote of Members of the Association’,no individual Board member shall be removed prior to the expirationof his or her term of office if the votes cast against removalwould be sufficient to elect the Board member if voted cumulatjvat an election at which the same total number of votes were cand the entire number of Board members authorized at the time ofthe most recent election of the Board member were then elected;provided, however, that a Board member who has been elected tooffice solely by the votes of Members of the Association other thanthe Declarant, may be removed prior to the expiration of hi. termonly by the vote of at least a simple majority of the voting powerresiding in Members other than the Declarant.

Section 8. Qganisatiea Meeting.

The first meeting of a newly elected Board shall be heldwithin thirty (30) days of election at such place within the Project or as close thereto as possible as shall be fixed by the Boardat the meeting at which such Board was elected, and no notice shallbe necessary to the newly elected Board members in order to legallyconstitute such meeting; provided a majority of the whole Boardshall be present.

Section 9 • Recular and Soecial Meetings.

Regular meetings of the Board may be held at such time andplace as shall be determined, from time to time, by a majority ofthe Board members, but at least one such meeting shall be held eachmonth, unless business to be transacted does not justify r Ifrequent meetings, in which case the Board shall meet at letevery three (3) months.

Special meetings of:the Board may be called by written:noticesigtied by the President or by any two members of the Board otherthan the President. The notice of a special meeting shall statethe time, place and purpose of the meeting.

Notice of the time and place of regular Board meetings shallbe communicated to all Board members not less than four (4) daysprior to the meeting, and notice of the time, place and purpose ofspecial meetings shall be communicated to all Board members notless than seventy-two (72) hours prior to the meeting, provided,however, that notice of a regular or special meeting need not begiven to any Bqard member who has signed a waiver of notice or awritten consent to the holding of the meeting.

Section 10. ODen Mactima. and Kotic. to Members.

Regular and special meetings of the Board shall be open to allMembers; provided, however, that Members may not participate in anydeliberation or discussion unless expressly so authorized by the

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vote of a majority of a quorum of the Board; provided, further,however, that upon the vote of a majority of a quorum of the Board,the Board may adjourn and reconvene in executive session toand vote upon personnel matters, litigation in which the Association is or may become iflVQ]Ved, and orders of business of a similarnature. The nature of any and all business to be considered inexecutive sessions shall first be announced in open session.

Section U. quorum.

r At all meetings of the Board, a majority of the authorizedBoard members shall constitute a quorum for the transaction ofbusiness, and the acts of the majority of the Board members presentat a meeting at which a quorum is present shall be the acts of theBoard. If at ny meeting of the Board there be less than a quorumpresent, the majority of those present may adjourn the meeting toa time certain. At any such adjourned meeting, any business whichmight have been transacted at the meeting as originally called maybe transacted provided a quorum is present.

Section 12. Action without Meeting.

The Board may take actions without a meeting upon unanimouswritten consent of all Board members. If such action is approved,an explanation of the action shall be posted at a prominent placeor places within the common area within three days after the lastwritten consent was obtained.

Section 1.3. Fidelity Bonds.

The Board may require that all officers and employees of theAssociation handling or responsible for Association funds shallfurniSh adequate fidelity bonds. The.-preums on such bonds shallbe paid by the Association.

ARTICLE V

Section 1. Designation.

The principal officers of the Association shall be a Presi-.dent, a Vice President, a Secretary, and a Treasurer, all of whomshall be appointed by the Board. One Board member may hold thedual offices of Vice President and Treasurer. The Board mayappoint an assistant secretary, and such other officers as in itsjudgment may be necessary, and such other officers need not beBoard members. Any Board member may simultaneously serve as anofficer.

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S.ctien 3 Ilaction sad Removal of Officers.

The principal officers of the Association shall be el.ct.d bythe Board at the organization meeting of each n.y Board and shallhold office for one year, unless such officer shall sooner resignor shall be removed or otherwise disqualified to serve. Upon anaffirmative vote of a majority of the members of the Board, anyoffjeer may be removed, either with or without cause, and hissuccessor elected at any regular meeting of the Board, or anyspecial meeting of the Board called for such purpose. Vacanciescaused by resignation shall be filled by appointment by the President until an election is held by the Board.

Section 3. President.

The President shall be the chief executiv, officer of theAssociation. 8. shall preside at all meetings of the Associationand of the Board. He shall hay, all of the general powers andduties which are usually vested in the office of president of anassociation including, but not limited to, the power to appointcommittees from among the Members from time to time as he may inhis discretion decide is appropriate to assist in the conduct ofthe affairs of the Association. All disbursements, of funds,monies, and other assets of the Association shall requir. the lointwritten signatures of th• President and Treasurer, provided, however, that if the President or Treasurer is not available tbSecretary may sign in his or her place.

Section 4. Vice President.

The Vice President shall take the place of the President andpertore his or her duties whenever the President shall be absentor unable to act • If neither the President nor the Vice Presidentis able to act, the Board shall appoint some other member of theBoard to do so on an int.rim basis. The Vice President shall alsoperform such other duties as shall froe time to time, b imposedupon hi. or her by the Board.

Section 5. cr..The Secretary shall record the votes and keep the minutes of

all meetings and proceedings of the Board and the Association; heor she shall have charg. of such books and papers as the Board maydirect; and he or she shall, in general, perform aU the dutiesincident to the office of Secretary. The Secretary shall also beresponsible for maintaining the membership register of the Association and serving notice of meetings of the Association and theBoard.

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Diction

The Treasurer shall have responsibility for Association fundsand securities and shall be responsible for keeping full and accurat. accounts of all receipts and disbursements in books belongingto the Association and for the preparation of all. budgets, finarz.cial statements and audits required of the Association. e or sheshall be responsible for the deposit of ail *onies and other valuable .ffeats in the name of and to the credit of the Associationin such depositories as say from time to time be designated by theBoard, and shall disburse the funds of the Association as may beordered by the Board.

5.ctiea 7 • Ixecution of Documents.

The Board nay authorize any officer or officers to enter intoany contract or execut. any document in the name of and on behalfof the Association; and unless so authorized by the Board, noofficer or other person shall have any power or authority to bindthe Association or to pledge its credit or to render it liable forany debt or obligation, except the President and Secretary togethermay execute contracts and agreements in the ordinary conrs. ofbusiness of The Association.

AR?ICJS VIThDEKMtPICIOM

Each Owner shall be liable to the Association for any damageto the Common Areas or Landscape Maintenance Areas caused by thenegligence or willful misconduct, of the Owner or his family,guests, invitees or lessees. Each Owner shafl indemnify, holdharmless, and pay any costs of defense of each other Owner fromclaims for personal in)ury or property damage occurring within anyLot owned by the indemnitor, provided that this protection shallnot extend to any indemnitee whose negligenc. or willful misconductcaused or contributed to the injury or damage; provided furthrthat this Article VI is not intended to be for the benefit of anyinsurer and shall not affect nor limit the duty of any insurer topay any claim which would be payable by said insurer but for thisArticle Vt.

)RTILZ VIZ.) •T

The Association shall, at the request of a Mortgagee of a Lot,report any unpaid assessments due from the Owner of such Lot.

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ARTICLE VUX

Section 1. guspnsio.

Notwithstanding any other remedy or action available to theAssociation, th. membership and all rights and privileges thereofof any Member may be suspended by action of the Board for a periodnot to exceed thirty 30 days for; (i) failure to pay any membershipassessment in full promptly when due (whether or not he or sh. bepersonally obligated to pay such assessment), and (ii) violationof any provision of these By—laws, or any provisions set forth in.the Declaration or any Rules or Regulations of the Association.Such suspension shall not take effect inl.s. the Member is notifiedin writing of the suspension and the reasons therefor at leastfifteen (15) days prior to the effective dat. of the suspension,and if requested by said Member in writing within five (5) daysafter receipt of notice thereof, a hearing on said suspension isheld before the Board. Said hearing shall be held by the Board atleast five (5) days befor. the effectiv. date of th. suspension,and at said hearing the Member may appear and defend himselfagainst the matters resulting in the notice of suspension.

SectiOn 2. Zini.

The Board shall also have the right, pursuant to notice awhearing requirements of Section 7341 of the California CorporatiorCode ar tO such other procedures as it may establish, to assessfines against any Member who t.s, or whose guest or guests,invitees or lessees violate, th• Declaration, these By—laws, or theRules and R6’ulations then in effect. Pini*ay be levied for eachsuch offense • For the first offense such fin, shall not exceed$50.00 For repeated offenses fines shall not exceed $100.00 foreach offense. Any fine imposed by the Board shall not exceed theamount necessary for th. purpose or purposes for which it iileried.

Section 3. Remedies cu.ulativ..

The remedies provided herein shall he in addition to, and notin lieu of, any other remedies which may be provided by theDeclaration, these By—laws, or under law.

Section 4. Attorney’. lees.

In any action brought for enforcement, damages, or declaratoryrelief with respect to the provisions of these By-law or theDeclaration, the prevailing party shall be entitled to attorney’sfees in such amount as say be ordered by a Court of competentjisdiction.

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RETICLE IX

Section 1. men41ments to Bv-Lawi.

These By-laws and the Articles of Incorporation may be amendedby the vote or written assent of a majOrity of each class ofMembers in existence at the time the amendment is considered. Uponcessation of two-class voting as provided in Article 3(b) of theDeclaration, these By-laws may be amended by a majority vote of allof the following: (a) the total voting power of the Association,and (b) the Members other than the Declarant. The Articles ofIncorporation may be amended after cessation of two class votingby a maority vote of all of th. following: (a) the total votingpower of the Association, and (b) the Members other than the Dec]arant and (C) The Board of Directors.

Section 2. !Rpwova1.

In addition, so long as there is a Class B membership in theAssociation, the Veterans Administration shall hav, the right toveto any amendment to these By—law..

Section 3. Special Restrictions.

The percentage of the voting power necessary to amend a specific clause or provision of these Bylaws shall not be less than thepercentage of affirmative votes prescribed for action to be takenunder that clause.

ARTICLEX

In the case of any conflict between the Declaration, theArticles and these By-laws, the Declaration shall control over allothers, then the Articles shall control over the By-laws.

ARTICLE XIINSPECTION OP BOOKS AND RECORDS

The membership register, books of account, and minutes ofmeetings of the Members, of the Board, and of the Board’. coemittees shall be made available for inspection and copying by anyMember of the Association, or by his duly-appointed representative,at any reasonable time and for a purpose reasonably related to hisinterest as a Member, at the office of the Association or at suchother place as the Board shall prescribe, subject to such reasonable rules as the Board may establish with respect to: (1) noticeto be given to the custodian of the records by the Member desiring

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to sake the inspection; (ii) hours and days of the week when SUChan inspection may be made; and (iii) payment of the cost ofreproducing copies of documents requested by a Member.

Every Board member shall have the absolute right at any reasonable time to inspect all books, records and documents of theAssociation and the physical properties owned or controlled by theAssociation. The right of inspection by a Board member includesthe right to make extracts and copies of documents.

CERTIPICATION

I, the undersigned, hereby certify:

That I am the Incorporator of TEE VILLA A’V)1TI ASSOCIATION,and

That the foregoing By-laws constitute the original By-laws ofsaid Association, as duly adopted on the day of

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1988.

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