BY-LAWSOF

CHIWAWA COMMUNITIES ASSOCIATION

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L\'I:lO'; L. Mui"[5LDCHEL/-\~~ CCUNfY AUDITOR

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As Amended19 March 1969, 4 December 1969, 21 April 1971,

26 April 1979, 23 April 1988, and 23 September 1989and 26 September 1992

SECTION 1. The members of this corporation shall be owners oflots in Chiwawa River Pines, a real estate development located inSection 31, Township 27 North, Range 18, EWM, Chelan County,Washington, lying east and west of the Chiwawa River. Transfer ofownership of the lots by any means automatically transfersmembership in the Association to the new owner. An owner may be anaturai person, partnership, corporation, association or other formof entity. An owner may have only one membership regardless of thenumber of lots owned.

SECTION 2. No member of the corporation shall have any right,title or interest in or to the whole or any part of the property orassets of the corporation, and no member shall be entitled to eitherthe whole or any part thereof in the event of the termination of hismembership in the corporation.

SECTION 3. Each owner shall have one membership and one voteregardless of the number of lots owned. A husband and wife holdinga lot as community property or two or more other persons holdingjointly or as tenants in common shall be entitled collectively toone membership. Unless the Board of Trustees decides otherwise nocertificates of membership need be issued. An owner shall becomeentitled to vote after establishing his ownership to thesatisfaction of the Secretary of the corporation. The personalrepresentative or surviving spouse of a deceased member shall haveall that member's rights, privileges and duties.

SECTION 4. No member may withdraw from the corporation exceptupon transfer of the lot or lots to which his membership isappurtenant. No compensation shall be paid by the corporation uponthe transfer of membership and no member whose membership istransferred shall thereafter be entitled to share or participate inany of the property, facilities or benefits provided by thecorporation except to the extent of continued membership by reason9T::qwne.rs.hipof another lot or lots.,.",.,'.p,",. ! :~b7::) ':::2.

CHIWAWA COMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

SECTION 5. The Board of Trustees, or any officer designated byit, may, in accordance with procedures prescribed by the Board,exclude any member from voting, the use or enjoyment of thefacilities and benefits of the corporation for delinquency ofpayments of assessments and/or charges required of members or forfailure to comply with the Articles of Incorporation or By-Laws ofthis corporation, or with the rules and regulations established bythe Board.

SECTION 1. Semi-Annual Meetings. The semi-annual meetings ofthe members of the corporation shall be held on the fourth Saturdayin April (designated as Annual Meeting) and a second meeting will beheld on the fourth Saturday in September of each year. Suchmeetings shall be held at the office of the corporation unlesschanged by the Board of Trustees. Written notice of said meetingtime and place shall be given twenty-one (21) days in advance to allmembers of the corporation. The above-written notice will include,as a minimum, Agenda, Proposed Budget, Proxy, and a list of subjects,plans, expenditures, and other items that require membershipapproval. In addii:ion, the Annual Meeting written notice shallinclude a member absentee ballot for election of trustees. Thisballot shall list the proposed candidate names for all Trusteespositions open. The ballot must be signed and dated in order to bevalid and returned to the Secretary prior to the Annual Meeting.

SECTION 2. Special Meetings. Special meetings of the membersmay be called by the President, the Board of Trustees or by any twomembers of the Board of Trustees, or by members representingtwenty-five percent (25%) of the membership.

SECTION 3. Notice of Meetings. Notice of the regularsemi-annual meetings of members need be given as provided in Section1 of this article. Notice of special meetings of the members of thecorporation stating the place, date and time of the meeting, and thegeneral purpose or purposes thereof, shall be mailed by theSecretary to each member entitled to vote, at least twenty-one (21)days prior to the date of the special meeting. If mailed, thenotice of the meeting shall be deemed to be delivered when depositedin the United States mail addressed to the member at his address asit appears on the records of the corporation, with postage thereonprepaid.

SECTION 4. Quorum. Members holding one-tenth (1/10th) of thevotes entitled to be cast by the members present or represented byproxy at a meeting at which a quorum is present shall be necessaryfor the adoption of any matter voted upon by the members. If ameeting be recessed to a later date upon further written notice ofat least seven days to the members, a quorum shall be deemed to bepresent at such reconvened meeting provided that at least one-halfthe number are there present who would regularly constitute a

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CHIWAWA COMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

quorum. ALLendance at andperson or by proxy.

In any membership action to be taken upon proceedings fordissolution or merger of the corporation, for an undertaking of acapital assessment (as distinguished from operations ~r mainte-nance assessment), for transfer of the substantial operating assetsof the corporation to another person or party, or for extension ofmembership to additional areas, or for the provision of servicesother than or in addition to the provision of water service, anaffirmative vote in favor of such action shall require not only amajority vote of the members, but also that such affirmative voteshaJ.Iinclude members owning at least twenty-five percent (25%) ofthe land area as served or contemplated to be served hereunder.

SECTION 5. Proxy Voting. Members may vote in person or mayvote by proxy executed in writing by the member or his dulyauthorized attorney-in-fact. No proxy shall be valid after eleven(11) months from the date of its execution unless otherwise providedin the proxy. Where trustees are to be elected by members, suchelections may be conducted by mail.

SECTION 1. General Powers. The affairs of the corporation Inthe organization and commencement of business shall be managed by aBoard of Trustees which shall be composed of at least nine membersof the corporation.

SECTION 2. Tenure, Qualification and Methods of Election. TheBoard of Trustees shall be elected from those members of thecorporation who are not indebted to the corporation with past dueindebtedness.

The three Trustees elected at the Annual Meeting each yearshall serve until the Annual Meeting three (3) years later. Asterms of three (3) Trustees expire, their successors shall beelected for three year terms.

The election of Trustees shall be held at each Annual Meetingof the members of the corporation, and the Trustees shall holdoffice until the third annual members' meeting thereafter and untiltheir respective successors are elected and qualified. In the eventof failure to hold an election of Trustees at any annual members'meeting, or in the event of failure to hold any annual members'meeting as provided for by these By-Laws, election of the Trusteesmay be held at a special meeting of the members called for thatpurpose.

SECTION 3.Trustees and anyin the number of

Vacancies .. Any vacancy occurring in the Board oftrusteeship to be filled by reason of an increasetrustees shall be filled by the affirmative vote

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CHIWAwA COMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

a majority of the remaining Board of Trustees even though less thana quorum is present. A trustee elected or appointed, as the casemay be, to fill a vacancy shall be elected or appointed for theunexpired term of his predecessor in office.

SECTION 4. Regular Meetings. Regular semi-annual meetings ofthe Board of Trustees shall be held without other notice than thisBy-Law, immediately after and at the same place as the semi-annualmeetings of members.

SECTION 5. Special Meetings. Special meetings of the Board ofTrustees may be called by or at the request of the President or byany three (3) Trustees. Notice of any special meeting of the Boardof Trustees shall be given at least ten (10) days prior to themeeting by written notice delivered personally or sent by mail toeach Trustee at his address as shown by the records of thecorporation, which notice shall include the general purpose orpurposes of the meeting. If mailed, such notice shall be deemeddelivered when deposited in the United States mail in a sealedenvelope or postal card so addressed, with postage thereon prepaid.

SECTION 6. Quorum. A majority of the Board of Trustees shallconstitute a quorum for the transaction of business at any meetingof the Board.

SECTION 7. Removal of Trustees. The entire Board of Trusteesor any individual Trustee, at a special meeting of the memberscalled for that purpose, may be removed from office by a vote of themajority of the members entitled to vote at any election ofTrustees. If the Board or anyone or more Trustees is so removed,new Trustees may be elected at the same meeting. Unless the entireBoard is removed, no individual Trustee shall be removed in case thevotes of a sufficient number of members are cast against theresolution of his removal, which, if cumulatively voted at anelection of the full Board, would be sufficient to elect one or moreTrustees.

SECTION 8. Power and Authority of the Board of Trustees. TheBoard of Trustees shall have full power and authority to:

(a) Appoint and remove, at its discretion, all officers,agents and employees of the corporation, and to prescribe theirduties and recommend their compensation;

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CHI~AWA COMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

(b) Make such expenditures as the Board deems expedient;provided, however, that the members of the corporation, byresolution adopted by a majority vote at any meeting of members, mayrestrict the amount of expenditures which can be made by the Boardwithout prior approval of the members;

(c) Collect dues and assessments to be paid by the members ofthe corporation; determine and enforce assessments and charges foroperations and maintenance. Power to assess for capitalcontributions is reserved to the membership;

(d) Manage and conduct the affairs and business of thecorporation and generally do and perform or cause to be done andperformed any and every act which the corporation may lawfully do andperform; provided, however, that the Board of Trustees shall nothave power to borrow money on behalf of the corporation unlessauthorized by a majority vote of the members of the corporation at ameeting of the members called for that purpose;

(e) Acquire water rights, franchises, easements or otherinterests as necessary or appropriate to the provision of waterservices, to install wells, pumps, drains, valves, mains, tanks,reservoirs, and all other equipment and installation as necessary orappropriate [or the provision of water service; to determineoperating and maintenance assessments and charges, including servicecharges and hookup; to provide for the creation of reserve funds asnecessary and appropriate to the assurance df continued services bythe corporation;

(f) Procure and maintain such forms of insurance as the Boardmay deem appropriate as to risks pertaining to the corporation or tothe obligations or interests of its members;

(g) The Board of Trustees shall not make political orcharitable donations of the corporation funds or property;

(h) The Board of Trustees may exercise the power and authorityof the Board of Trustees between formal meetings of the members,provided that all such authority so exercised shall be reported tothe next meeting of the membership and submitted for approval by themembers;

(i) Acquire'by donation, exchange, purchase or otherwise realor personal property so located and of such nature as may be of useor benefit to the platted communities served by this corporation,including but not limited to park space, recreation space or openspace, and to improve and manage the same for the common use ofmembers;

CHIWAW'ACOMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

(j) The Board of Trustees shall appoint a nominating committeeand chairperson at the Annual MeeLing. The committee duLies shallbe to provide a minimum of five (5) candidates for re-election tothe three (3) positions on the Board. This list shall be sent tothe Secretary thirty (30) days prior to mailing of notice of theAnnual Meeting to enable the Secretary to make out the absenteeballots to send to the members with their written notice of theAnnual Meeting.

(k) The Board of Trustees shall by January 15 of each yearappoint a Chairperson, and support persons as required, from membersof the corporation to review/audit the Treasurer's report ofincome/expenditures for the previous year's activities. TheChairperson shall have said report available for the Annual Meetingand shall at that meeting give a verbal summary of said report.

SECTION 1. The officers of the corporation shall consist of apresident, a vice president, a secretary/treasurer, each of whomshall be elected by the Board of Trustees at the third meeting ofsaid Board of Trustees after the annual meeting of members, but in noevent later than the first week of September following the annualmeeting. Officers of the corporation so elected shall hold officefor a term of two years or until their successor is elected. Anyofficer may be suspended or removed by a majority vote of thetrustees.

SECTION 2. The officers of the corporation shall consist of apresident, a vice president and a secretary receive any salary orcompensation from the corporation, but may receive r~imbursement ofout-of-pocket expenses incurred in performance of duties for thecorporation. Vote of membership may include other positions asdeemed necessary.

SECTION 3. President. The president shall preside at allmeetings of the Trustees and members and shall have and exerciseunder the direction of the Board of Trustees, the generalsupervision of the affairs of the corporatlon.

SECTION 4. Vice President. The vice president shall presideat meetings in the absence of the president and in case of theabsence or disability of the president shall perform all otherduties of the presjdent.

SECTION 5. Secretary/Treasurer. The secretary shall issuenotices of meetings and keep the minutes of meetings. The secretaryshall keep a record of the names and addresses of the members andshall have charge of the other necessary records and papers of thecorporation. The secretary shall be custodian of

CIIIWAWACOMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

the corporation seal and impress papers wit~h the seal whererequired.

The treasurer shall keep and maintain or cause to be kept andmaintained adequate and correct accounts of the properties andbusiness transactions of the corporation. The books of accountshall at all times be open to inspection by any member. Thetreasurer shall keep safely all monies and securities of thecorporation and disburse the same under the direction of the Boardof Trustees. The treasurer shall make available his records toreview and audit and cooperate with the Chairperson performing theannual financial review and audit. The treasurer shall assist thesaid Chairperson in the preparation of the summary report forpresentation at the Annual Meeting. In addition, the treasurershall issue and present a full statement showing in detail thecondition of the affairs of the corporation.

The Board of Trustees shall provide a corporation seal, whichshall be in the following form:

SECTION 1. Assessments may from time to time be assessed bythe corporation against its members for the purpose of provision ofwater services as set forth in the Articles of Incorporation. Theassessments shall be levied at a uniform rate for each lot towhich water service is provided to the property line and at aseparate uniform rate for each lot not utilizing waterservice, and shall be expended exclusively for the purposes setforth in the Articles of Incorporation. Assessment for otherservices, as approved by the membership, shall be assessed by thecorporation against each lot at an equal rate.

SECTION 2. In addition to assessments, the purposes of whichare to provide funds for use to the benefit of this corporation and

CHIWAWA COMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

its members generally inthe corporation, throughcollect charges directlymore members, including,service charges.

the provision of water and other services,its Board of Trustees, may determine andrelated to use of such services by one orbut not limited to, hook-up charges and

SECTION 3. All assessments and charges including water a~-~i~,ass~ssmen~ shall be due within 30 days after mailing of the noticeof assessment to the members. Thereafter, said assessment and chargeshall be delinquent and bear interest at the rate of 8% per annumuntil paid. Any assessment or charge shall be a personal obligationof the member assessed and shall be a lien upon the real property ofsaid member. The Association may, at any time after the assessmentand charge is delinquent for a period of 60 days, bring suit inforeclosure by civil action in the Superior Court of Chelan County.In the event it is necessary for the Association to employ anattorney to make collection of any such assessment of charge, thenall reasonable expenses incurred by the Association for attorney'sfees and costs in collecting or enforcing the assessment of chargewhether in a court action or not shall be the personal obligation ofthe delinquent member and includable in the lien upon said member'sreal property. The lien shall be enforceable by foreclosureproceedings in accordance with Chapter 57.08 of Revised Code ofWashington as may be amended from time to time. Said lien shall beagainst the member's real property upon which service was received orcould have been received subject only to the lien for general taxes.

In addition to interest being charged on delinquent accounts,the delinquent member shall be charged in addition a penalty of 10%of each delinquent assessment or charge. Further, in addition to theright to foreclose provided in A hereof, the Association may also cutoff all or part of the service after assessments for charges forwater are delinquent for a period of 60 days. The Association mayfile a lien against the delinquent member's property and all expensestherefor including release thereof shall be paid by such member.

In the eveht water service to a member's real property isterminated for nonpayment of the assessment and charges, it will inno way affect the status of the member's assessment and there shallbe a reconnection charge of $25 assessed against said member.

These By-Laws may be amended, altered or repealed by amajority vote of the members present at any regular or specialmeeting of the members if notice of the proposed alteration oramendment is contained in the notice of the meeting; provided,however, that no such amendment shall reduce the requirements for anapproving vote of specific matt,ers as seL out in Ar1:icle II, SecLion4 of these By-Laws unless the vote approving such amendment shallitself comply with such requirement.

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CHJWAWA COMMUNITIES ASSOCIATIONBy-Laws as amended 9-26-92

In the event of the dissolution of the corporation each personwho is then a member shall receive his pro rata share of the assetsafter all its debts have been paid.

The By-Laws next above are a true and accurate compilation ofthe original By-Laws adopted 18 December 1963 and amendments adopted19 March 1969, 4 December 1969, 21 April 1971, 26 April 1979 and 23April 1988.

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