Section 1. Powers, Duties and Term of Board

The Board shall consist of five (5) members all of whom shall be owners. Representatives of Declarant, such as employees and agents, may be members of the Board. The powers, duties and term of the Board shall be as follows:

(a) Powers.

1. Adoption of Rules. To adopt and publish rules and regulations governing the use of the Common Area and facilities and the personal conduct of members and their guests.

2. Exercise of Powers. To exercise for the Association all powers, duties and authority vested in or delegated to this Association, not reserved to the membership by other provisions of these By-Laws or the Declaration.

3. Declare Office of Director Vacant. To declare the office of a member of the Board to be vacant in the event such member shall be absent from three (3) consecutive regular meetings of the Board.

4. Collect Assessments. To establish, levy, assess and collect assessments or charges.

5. Enforce Restrictions. To enforce the applicable provisions of the Declaration, these By-Laws and other instruments for the management and control of the project, including reasonable rules and regulations that may be promulgated by the Board.

6. Pay Taxes on Common Area. To pay taxes and assessments which are or could become a lien on the Common Area or any portion thereof.

7. Delegate Powers. To delegate its powers to committees, officers, employees or a professional property manager.

8. Contract for Materials and Services. To contract for materials and/or services for the Common Area or the Association, with the term of any service contract limited to a duration of one (1) year, except with approval of a majority of members of the Association, other than Declarant.

 9. Contract for Insurance. To contract for fire, casualty, liability and other insurance on behalf of the Association.

10. Contracts - Execution - Limitations. The Board, except as may be otherwise provided in these By-Laws, may authorize any officer or agent to enter into any contract or execute any instrument in the name and on behalf of the Association and such authority may be general or confined to specific instances and, unless so authorized by the Board, no officer, agent or employee shall have any power to authority to bind the Association by a contract or engagement or pledge its credit or render it liable for any purpose or to any amount. Neither Declarant nor its agent, nor the Board, shall enter into any contract which binds the Association for a period in excess of one (1) year, unless the contract is approved by a majority of the Association members, with the following exceptions:

(1) a management contract, the terms of which have been approved by FHA or VA;

(2) a contract with a public utility company if the rates charged for materials or services are regulated by the Public Utilities Commission, provided that the term of the contract shall not exceed the shortest term for which the supplier will contract at the regulated rate;

(3) prepaid casualty and/or liability insurance policies of not to exceed three (3) years' duration provided that the policy permits for short rate cancellation by the insured.

11. Right of Entry. To enter in or upon any privately owned unit where necessary in connection with construction, maintenance or repair for the benefit of the Common Area or for the owners in common after reasonable notice to the owner prior to entry.

(b) Duties. It shall be the duty of the Board:

1. Records. To cause to be kept a complete record of all its acts and affairs and to present a statement thereof to members at the annual meeting of members or at any special meeting when such statement is requested by 1/5th of the membership entitled to vote.

2. Supervise. To supervise all officers, agents and employees of the Association and to see that their duties are properly performed.

3. As more fully provided for herein and in the Declaration:

 1. Fixing Assessments. To fix the amount of regular assessments against each unit at least sixty (60) days in advance of each regular assessment period hereinafter provided.

 2. Notice of Assessment. To send written notice of assessment to every owner subject hereto at least thirty (30) days in advance of each such annual assessment period.

3. MISSING

4. Certificate of Assessment. To issue or cause to be issued, upon demand by any person, a certificate setting forth whether any assessment has been paid. A reasonable charge may be made for the issuance of such certificate by the Board. Such certificate shall be conclusive evidence of any assessment herein stated to have been paid.

5. Common Area Insurance. To procure and maintain adequate liability insurance and to procure adequate hazard insurance on property under the control of the Association.

6. Bonds. To cause all officers or employees having fiscal responsibility to be bonded as it may deem appropriate.

7. Maintenance of Common Area. To cause the Common Area to be maintained in a first class condition to the extent provided for in the Declaration.

8. Maintenance of Exteriors. To cause the exterior to all units to be maintained in first class condition and to the extent provided for in the Declaration.

9. Employment of Managing Agent. To employ an independent contractor or such other employees as it deems necessary and to prescribe their duties. Any professional management body selected by Declarant or by the initial Board prior to the organizational meeting, shall be employed to manage on until the first annual owners meeting, at which time the continuance of same shall or the selection of another body or agent shall be determined by majority vote of the owners, other than Declarant. Further, no service contract shall be for a term in excess of one (1) year after the organizational meeting except with approval of a majority of the Association.

10. Insurance. The Board, on behalf of the Association, at its common expense, shall at all times keep the buildings of the project insured against loss or damage by fire with extended coverage in an amount as near as practicable to the full replacement value thereof without deduction for depreciation, in the name of the Board as trustee for all the owners and mortgagees, according to the loss or damage of their respective units and appurtenant common interest and payable in case of loss to such bank or trust company authorized to do business in California, as the Board shall designate for the custody and disposition as herein provided of all proceeds of such insurance and, from time to time, upon receipt thereof, cause to be deposited promptly with the owners and mortgagees of units or interests herein, true copies of such insurance policy or policies, or current certificates of thereof, without prejudice to the right of each owner to insure his own unit for his own benefit. In every case of such loss or damage, all insurance proceeds shall be used as soon as reasonably possible by the Association for rebuilding, repairing or otherwise reinstating the same building(s) in good and substantial manner according to the original plans and elevation thereof, or such modified plans conforming to the laws and ordinances in effect as shall be first approved by the Association as its common expense. Every such policy of insurance shall:

(a) Provide that the liability of the insurer shall not claim any right of set-off, counterclaim, apportionment, proration or contribution by reason of any other insurance obtained by or the any unit owner.

(b) Contain no provision relieving the insurer from liability for loss occurring while the hazard to such building is increased, whether or not within the knowledge or control of the Board of because of any breach of warranty or condition or any other act or neglect by the Board of any owner or any other person under either of them.

(c) Provide that such policy may not be canceled (whether or not requested by the Board), except by the insurer giving at least thirty (30) days prior written notice thereof to the Board, owners, and every person with an interest who shall have requested such notice of the insurer.

(d) Contain a waiver by the insurer of any right of subrogation to any right of the Board, or owners against any of them or any person under them.

(e) Contain a standard mortgagee clause which shall:

(1) provide that any preference to a mortgagee in such policy shall mean and include all holders of mortgagees of any unit in the project in their respective order and preference, whether or not named therein;

(2) provide that such insurance as to the interest of any mortgagee, shall not be invalidated by any act or neglect of the Board or owners, or any person under any of them;

(3) waive any provision invalidating such mortgagee clause by reason of failure of any mortgagee to notify the insurer of any hazardous use or vacancy and requirement that the mortgagee pay any premium thereon and any contribution clause;

(4) provide that without affecting any protection afforded by such mortgagee clause, any proceeds payable under such policy shall be payable to said bank or trust company designated by the Board. The Board, on behalf of the Association, at its common expense, shall also effect and maintain at all times, comprehensive general liability insurance covering all owners with respect to the project in a responsible insurance company with minimum limits of not less than $500,000.00 for injury to one person and $1,000,000, for injury to more than one person in any one accident or occurrence and $500,000.00 property damage and, from time to time, upon receipt thereof, deposit promptly with the owners, current certificates of such insurance without prejudice to the right of any owner to maintain additional liability insurance for his respective unit.

Section 2. Election of Board of Directors

A new Board shall be elected by the owners at the organizational meeting and at each annual meeting thereafter. Every owner entitled to vote at any election of the Board may cumulate his vote and give one candidate a number of votes equal to the number of directors to be elected, multiplied by the number of votes to which his unit is entitled, or may distribute his vote on the same principle among as many candidates as he desires. To assure resident owners representation on the Board, at least one (1) member of the Board shall be elected solely by votes of the owners, other then Declarant, at all elections where the owners (other than Declarant) do not have a sufficient percentage or voting power to elect at least one (1) member of the Board through cumulative voting of all their votes.

Section 3. Removal of Board of Directors

The entire Board may be removed from office by affirmative vote of fifty-one (51%) percent of the owners entitled to vote at any election of the Board. However, unless the entire Board is removed, an individual director shall not be removed if the number of votes against the resolution for his removal exceeds the quotient arrived at when the total number of outstanding votes is divided by one plus the authorized number of directors. If any or all of the directors are so removed, new directors may be elected at the same meeting, provided that a Board member who has been elected to office solely by votes of members of the Association, other then Declarant, may be removed from office prior to the expiration of his term only by the vote of at least a simple majority of the voting power residing in members other than Declarant.

Section 4. Meetings

The Board shall meet not less than every three (3) months but shall also meet at the call of the President or if he is absent or unable or refuses to act, by any two (2) directors.The Secretary shall keep summarized written minutes of such meetings of the Board. Regular meetings of the Board shall be held at a time and place within the project fixed by the Board. Notice of the time and place of such meetings shall be posted in a prominent place within the Common Area. A special meeting of the Board may be called by written notice signed by the President of the Association or by any two (2) members of the Board other than the President. The notice shall specify the time, date and place of meeting and nature of the special business to be considered. The notice shall be sent to all Board members and posted in a manner similar to that for regular meetings not less then seventy-two (72) hours prior to the scheduled time of the special meeting. Regular and special meetings of the Board shall be open to all members of the Association, provided that Association members who are not on the Board may not participate in any deliberation or discussion unless expressly so authorized by the vote of the majority of a quorum of its members, adjourn a meeting and reconvene in executive session to discuss and vote upon personnel matters, litigation in which the Association is or may become involved, and orders of business of a similar nature. The nature of any and all business to be considered in executive session shall be first announced in open session.

Section 5. Voting

A majority of the members of the Board shall constitute a quorum for the transaction of business, but no question shall be decided upon the vote of fewer then two (2) of the members.

Section 6. Vacancies

Section 7. Compensation

No Director shall receive compensation for any service he may render to the Association. However, any director may be reimbursed for his actual expenses incurred in performance of his duties. Nothing herein shall preclude any director from serving the Association in any capacity other than as an officer or director and receiving compensation therefore(sic), as authorized and approved by the Board. Any director receiving any special compensation for services in such other capacity, shall be excluded from deliberations and voting by the Board relative to the authorization thereof and fixing compensation with regard thereto.