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EXHIBIT "a•

»YLAWS OF THE ASSOCIATION

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BYLAWS

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INDIAN HILL TOWNHOMES ASSOCIATION

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TABL! OF CONTENTS FOR BYLAWS OF

INDI>.N RILL TOWNHOMES ASSOCIATION

DESCRIPTION

ARTICLE I GENERAL Pt.AN OF OWNERSHIP

Section l.01 Section l. 02 Section 1.03

Nue Application Meaning of Terms

ARTtCLE II

Section Section Section Section

VOTING BY ASSOCIATION MEMBERSHIP

2.0l Votin9 Rights 2.02 Majority of Quonun 2 . 03 Quor\11'11 2.04 Proxies

ARTlCLE I II ADMINISTRATION

Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3. 07 S•ction 3.08 Section 3.09 Section 3.10

Association Responsibilities Place of Meetings of Members Annual Meetin9s of Members Special Meetings of Members Notice of Meetings of Members Adjourned Meetings Order of Business Action Without M~etinq Consent of Absentees Minutes, Presumption o! Notice

ARTICLE IV BOARD OF DIRECTORS

S•ction 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 Section ·4 , 07 Section 4.08 Section 4.09 Section 4 . 10 Section 4. ll Section 4.12 Section 4.13 Section 4.14 Section 4 . 15 Section 4 . 16

Number and Qualification Powers and Duties Special Powers and Duties Management Agent Election and Term of Office Books, Audit Vacancies Removal of Directors Organization Meeting of Board Reqular Meetings of Board Special Meeting s of Board Waiver of Notice Action Without Meeting Quorum and Adjournment Fidelity Bonds Committees

ARTICLE V OFFICERS

Section S. 01 Section S . 02 Section 5.03

Designation Election of Officers Removal of ' Officers

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TABLE or co~nrrs (Continued) PESCRIPIION

S•ct1on 5.04 S•Ction 5. OS S•ct1on 5 . 06 S•ction 5 . 07 Section s.oe

Compensation President Vice Preaident Secretary Treasurer

ARTICLE VJ OBLIGATIONS OF MEMBERS

S•ction 6. 01 Section 6.02

Aase11ment1 Maintenance and Repair

ARTICLE VII AMENDMENTS TO BYLAWS

ARTICLE VIII MORTCAOEES

PAC! NO.z.

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Section 8 . 01 Section 8.02

Notice to Association Notice o! Unpaid Assessm6nta

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ARTICLE IX

ARTICLE X

ARTICLE XI

CONFLICTINC PROVISIONS 16

INDEMNIFICATION OF DIRECTORS AND OFFICERS 16

MISCELLANEOUS 17

Section 11. 01 Section 11. 02 Section 11. 03 Section 11 . 04

Execution of Documents Inspection of Bylaws Fiscal Year Membership Book

ARTSCLE XII NOTICE AND HEARINC PROCEDURE

Section 12 . 01 Se~tion 12 . 02 Section 12.03 Section 12.04 Section 12.0S Section 12 . 06

Suspension o! Privileqea Written Complaint Appointment of Tribunal Notice of Hearinq Conduct of Hearinq Dec i sion of Board

CERtIFJCATE OF SECRETARY

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BYLAWS

or tND.I>.N RILL TOWNHOMES ASSOCIATION

ARTICt.E I

GENERAL PLAN OF OWNERSHIP

Section 1.01. ~ame. The name o! the corporation is INDIAN HILL TOWNHOMES ASSOCIATION, hereinafter referred to as the "Association.• The principal office of the Association shall be located in Oranqe County, California.

Section 1.02. Application . The provisions of these Bylaws are applicabl• to the phased planned residential development known as INDIAN HILL TOWNHOMES, located in unincorporated Oranqe County, State of California (the "Properties"} ~ All pretent and future owners and their tenants, future tenants, employees, and any other person who might use the facilities o! the Properties in any manner, are subject to the regulations set forth in these Bylaws and in the Declaration of Covenant•, Conditions, Restrictions and Reservation of Ease~ents for Indian Hill Townhomes and Notice of Annexation to Aliso Viejo Community Association (the "Declaration" herein) Recorded or to be ~ecorded in the Office of the Orange County Recorder and applicable to the Properties. Th• mere acquiaition or rental o! any Lot in th• Properties or the mere act o! occupancy of any Lot will 1i9nify that these Bylaws are accepted, ratified, and will be complied with.

Section 1 .03. Meaning o! Tenn• . Unless otherwise speci!i• eally provided herein, the capitalized terms in these Bylaw1 ahall have th• 1ame meanin91 as are qiven to euch t•rm1 in the Declaration.

ARTICLE ·I I

YOTINO BY ASSOCIATION MEMBERSHIP

Section 2.01. Voting Right1. The Aaaociation ahall have two (2) elas1e1 ot votinq Membership, as !ollow11

Cla11 A. Class A Members ahall be thoae Owner• with th• exc•ption ol Oeclarant !or 1·0 lonq a• there exi1t1 a Clan B Membership. Cl•~• A Members shall be entitled to one (l) vote fd~ ~ach Lot owned and subject to assessment a1 further provided in the Declaration.

Class B. The Cl••• B Member shall be Oeclarant. The Cl au B Member shall be entitled to three (.3) votes for each Lot owned by Oeclarant and subject to assessment, provided that the Class B Membership shall cease and be converted to Clas1 A Membership on the happenin9 of either of the followinq event•, whichever occurs first: ·

· (1) When the total votes outstandin9 in the Class A Membership equal the to~al votes outstandinq in the Clas• B Membership;

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(2) Th• second anniversary o! the oriqinal issu-ance o! the ~oat recently issued Final Subdivision Public Report tor a Phase o! Development; or

(3) Th• !ourth anniversary o! the oriqinal i1au-ance o! the Final Subdivision Public Report !or Phase l ; or

(4) The seventh anniversary o! the Recordation o! the Declaration.

Except•• provided in Section 17.11 o! the Declaration, aa lon9 aa there exiata a Claaa a Membership, any action to be taken pursuant to a provision of the Declaration, the Articles or th••• 8ylaw1 which expres1ly require• a vote or written c~n-1ent o! a apec1!1ed percenta9e o! the votin9 power o! the A1ao-ciation before such action is undertaken (1.e., other than action• requirinq merely th• vote or written con1ent o! a ~ajority of a quorum) shall require the approval o! such apeci• !i•d percentaqe ~! the votin9 power o! each c1asa o! Membership. Except a1 provided in Section 17.ll o! the Declaration, upon termination o! th• Claaa B Membership, any action to be taken pur1uant to 1 p·rov11ion o! the Declaration, th• .a.rticlu or th~•• 8ylaw1 which expressly require• a vote or written consent o! Own•r• r•pre1entin9 a specified percenta9e o! the votinq power o! the Aaaociation before 1ueh action 1• undertaken shall then require the approval o! Owners representinq such speci!ied percentaqe o! both the total votinq power o! the Association and the votinq power of the Association residinq in Owner1 other than Oeclarant.

Section 2.02. Majority of QuOrul'll. Unless otherwise expressly provided in these Sylawa or in th• Declaration, any action which m·ay be taken by the Members shall require th• vote or written consent o! a majority o! a quorum o! the Members.

Section 2.03. Quorum. Except as othervise pr~vided in these Bylaws, the presence in person or by proxy o! at least fifty-one percent (Slr.) o! th• votin9 po1o1er of the Membership of the Association shall constitute a quorum o! th• Membe:ship. Members present at a duly called or held mee'tinc; at which a quorura is present may continue to do business until adjourn-ment, notwithstandinq the withdra1o1al o! enouqh Members to leave leas than a quorum.

Section 2.04 . Proxies . Votes may be cast in person or by proxy. Proxies must be in writinq and filed with the Secretary in advance o! each meetinq . Every proxy shall be revocable and shall automatica·lly cease after completion o! the meeting !or which the proxy was filed.

ARTICLE III

ADMINISTRATION

Section 3 ~ 01. Association Resoonsibilities. In accordance with the provisions of the Declaration, the Association shall have the responsibility of administering the Properties. main-tainin9 the Common Area and the Association Maint~nance Areas,

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approvin9 the annual budqet, establiahinq and collectin9 all assessments authorized under the Declaration, and arranqinq for overall architectural control o! the Propertiea.

Section 3 . 02 . Place o! Meetings o! Members . Meetinqs of th• Members shall be held on the Properties or such other suit• able place aa proximate thereto aa practicable and convenient to the Members as may be designated !rom time to time by the Board o! Directors.

Section 3.03. Annual Meetings o! Members. The !irat annual meetinq of Members shall be held within forty-five (45} days a!ter the Close o! Escrow !or the aale of !i!ty-o~e percent (51~) o! the Lota in Phase l or within six (6) months after the !irst Close o! Escrow !or the sale of a Lot in the Properties, whichever occurs first. Thereafter, the annual meetinqs of the Association shall be held on or about the anniversary date of the first annual meetinq. At each annual meetinq there shall be elected by ballot o! the Members a Board o! Directors, in accord.anct vith the requirements o! Section 4 . 05 o! these Bylaws. Th• Members may also transact such other business of the Association as may properly come before them. Each holder, insurer, and quarantor of a first Mortqage on a Lot ln the Properties ~•Y designate a representative to attend all annual meetinq1 of the Members.

Section 3.04. Soecial Meetings o! Members. It shall be th• duty o! the Board to call a special meetinq of the Members, aa directed by resolution of a majority of a quot'Ulll of the Soard of Oirectora, or upon a petition siqned by Members representinq at least five percent csr.) of the total voting power o! the Association . The notice of any special meetinq shall be qiven within tventy (20) days after adoption of such resolution or receipt of such petition and shall state the time and place of such meetinq and the purpoae thereof. The special meeting 1hall be held not less than thirty-five (35) days nor more than ninety (90) days after adoption of such resolution or receipt of such petition. No business shall be transacted at a special meetinq except as stated in the notice . Each holder, insurer, and quarantor of a first Mortgage on a Lot in the Properties may designate a representative to attend all special meetings of the Member a. ·

Section 3.0S. Notice of Meetings of Members. It shall be th• duty of the Secretary to send a notice o! each annual or special meetinq by !irst-clasa mail, stating the purpose there-of as vell aa the day, hour and place where it 1• to be held, to each Member of record and to each !i.rst Mortgagee of a Lot which has filed a written request for notice with t'.he Secre-tary, at least ten (10} but not more than thirty (30) days prior to such meeting. The notice may set forth .time limits for . speakers and nominating procedures for the meeting. The notice o! any meeting at which Directors are to be elected shall 'include the names of all those who are nominees at the time the notice ia given to Members . The mailing o! a notice, postage prepaid,· in the manner provided in this Section, shall be tonsidered notice served, forty-eight (48) hours after said·-._..._

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notice has been deposited in a regular depository of the United -·---. .. __ _ Sta~•• mail. Such no'tice shall be posted in a conspicuous ··~ :~ place on .the Com.~on Area, and euch notice shall be deemed it aer\•ed upo,n a Member upen posting if no addreu has beer. then 11

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furnithed th• Secretary. Th• Board of Director• •ay fix a date as a record date for th• determination o! th• Members entitled to notice ot any meetin9 o! Mell'lber1. Th• record date ao fixed 1h1ll be not l••• than ten (10) days nor more than sixty (60) days prior to the date o! th• .meetinq. Only Member• who on th• record date for notice o! th• meetin9 are entitled to vote thereat, shall b• entitled to notice o! the mtetinq, notwith• 1tandin9 any tran1!•r of or i1suanc1 o! Membership certi!icat11 on tht book• of th• A11ociation a!ttr th• record date,

Section 3.06. Adjourned Meetings, If any meetin~ o! Mem• btra cannot bt orqanized becau11 a quonim 11 not present, a majority ot the Mell\bera who are present , either in person or by proxy, may adjourn th• meetinq to a ti~• not l••• than !iv• (S) days nor more than thirty (30) daya !rom the time the oriqinal meetin9 wa1 called, at which meetinq the quorum requirement shall be the presence in per1on or by proxy o! the Members holdin9 at least twenty•fiv• percent (2Sr.) of the votinq power o! tht Association. Such an adjourned meetinq may be held without notice therto! a1 otherwise required by this Article III, provided that notice ii qiven by announcement at the me•t• inc; at which such adj ourM1ent ii taken. It, hoW'ev•r, such an adjourned meetinq is actually attended, in person or by proxy, by Members havin9 leas than one•third (l/3rd) of the votinq power o! the Association, notwithstandinq the ~reaence of a quorum, no matter may be voted upon except such matters notice o! the qeneral nature o! which was _qiven pursuant to Section 3 . 05 herao!.

Section 3.07. Order of Business . The order of business at all meetings of the Members shall be as !olloW's : (a) roll call to det ermine the votinq po .... er represented at the meetinq; (b) proof of notice of meetinq or waiver of notice ; (c) readinq of minutes o! precedinq meeting; (d) reports of officers; (e) reports of committees ; (!) election of inspector of election (at annual meetings or special meetings held for such purpose): (q) election of Directors (at annual meetinqs or spec:al meet• inga held for such purpose); (h) unfi ni shed bus i ness ; and (i) new business.

Section 3 .08. Action Without Meeting . Any action, which may be taken at a meeting of the Members (except for the elec• tion of Di ::-ectors) may be taken vi t hout a meeting by written ballot of the Members . Ballots shall be solicited in the same oanner a-s provided in Sectioll 3. 05 for the giving of noti ce of meetings of Members . Such solicitations shall specify (a) the number o! responses needed to meet the quorum requirements, (b) the percentage of approvals nec·essary to approve the action, and (c) the time by W'hich ballots must be received in order to be counted. The form of written ballot shall afford an oppor· tunity to specify a choice between approval and d i sapproval of each matter and shall provide that, .... here the Member specifi es a choice, the vote shall be cast in accordance therewith. Receipt within the time period specified in the solicitation of a number of ballots which equals or exceeds the quorum which would be required if the action were taken at a meet1.nq and a number of approva l s which equals or exceeds the number of vote1 which would be rfquired for approval if the action were taken at a meetinq at which the total number of votes cast was the same as th• total number o! ballots cast shall constitute approval by written ballo~. ·

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S•ction 3.09. Consent o! Absentees. Th• transactions o! any meetin9 of Members, either annual or special, however called and noticed, •hall be as valid as thou9h had at a meet• inq duly held after reqular call and notice, if a quorum be present either in person or by proxy, and i!, either before or after the meetinq, each of the Members not present in person or by proxy, si91ls a written waivet of notice, or a consent to the holdin9 o! such meeting, or ~n approval of the minu~es there-of. All such waivers, consents or approvals shall be filed . with the corporate records or made a part of the minutes of the meetinq .

§ection 3.10. Minutes, Presumption o! Notice. Minutes or a similar record of the proceedinqs of meetinqs of Members, when siqned by the President or Secretary, shall be presumed truth-fully to evidence the matters set !orth therein. A recitation in the minutes of any such meetin9 that notice of the meetin9 was properly given shall be prima facie evidence that such notice was qiven.

ARTICLE IV

BOARD OF DIRECTORS

Section 4.01. Number and Qualification. The property, business and affair• of the Association shall be 9overned and managed by a Board of Director• composed o! !iv• (S) Persona, each o! whom, except for those appointed and servinq as first Directors, must either be a resident Owner o! a Lot in the Properties, or an aqent o! Oeclarant !or so lon9 as Declarant o'Jna a Lot in the Properties. The authorized number o! Oirec• tors may be chan9ed by ·a duly adopted amendment to the Bylaw1. 01r•ctor1 shall not receive any salary or eompensation !or their s•rvice• as 01r•ctors unless •uch compensation 1• first approved by th• vot• or ~ritten consent o! Member• representinq at least a majority o! both the Class A and Clas• B votin9 power; provided, however, that (l) nothing herein contained shall be construed to preclude any Director from. ,..ervin9 the Association in some other capacity and receiving compensation therefor, and (2) any Director may be reimbursed !or his actual expenses incurred in the performance of such Directors' duties.

Section 4.02. Powers and Duties. The Board of Directors has the powers and duties necessary for the administration of the affairs of th• Associa~ion and may do all such acts and thinqs as are not by law or by these Bylaws directed to be exercised and done exclusively by the Members. The Board o! Director• shall not enter into any contract for a term in excea1 of one year, without the vote or written consent of the Members representing at least a majority of the votinq power of the Association, . except for (l) any contract with a public utility company if the rates charged !or the materia l s or services are regulated by the California Public Utilities Commission; pro-vided, however, that the terms of the contract shall not exceed the shortest term for whi~h the supplier will contract at the re

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provided that Oeclarant doe• not have a direct or indirect ownership interest in the lessor o! such fixtures and equipment qreater than or equal to ten per~ent.

Section 4.03. ~ecial Powers and Duties. Without prejudice to such foreqoinq qeneral powers and duties a.nd such powers and duties as are set forth in the Declaration, the Board o! Direc-tor• is vested with, and responsible !or, the followinq powers and duties:

(a) The power and duty to select, appoint, and remove all officers, aqents, and employees of the Association, to pre-scribe such powers and duties for them as may be consistent wit.~ law, with the Articles, the Declaration and these Bylaws; to fix their compensation and to require from them security for faithful service when deemed advisable by the Board .

(b) The power and duty to conduct, manaqe and control th• affairs and business of the Association, and to make and enforce such rules and requlations therefor consistent with law, with the Articles, the Declaration and these Bylaws, as the Board may deem necessary or advisable.

(c) The power but not the duty to chanqe the princi-pal office for the transaction of the business of the Associa-tion from one location to another within the County in which th• Properties are located,- aa provided in Article I hereof; to desiqnate any place within said County for the holdin9 of any annual or special meetin9 or meetin9s o! Members consistent with th• provisions of Section 3.02 hereof ; and to adopt and use a corporate seal and to alter the form o! such seal from time to time, as the Board, in its sole judqment, may deem best, provided that such seal shall at all times comply with the provisions of law.

(d) With th• approval of Members representinq at leaat two-third• (2/3rds) o! the votinq power of th• Asaocia-tion, and 11.lbject to Articles XIV and XVII o! th• Declaration, th• power but not the duty to borrow money and to incur indebt• edn••• !or the purpose• o! the Association, and to cause to be executed and delivered therefor, in the Association'• name, promiasory note•, bonds, debentures, deed• o! truat, mortqaqe1, pledqea , hypothecations or other evidences o! debt and secu• rit1•• therefor. ·

(•) Th• power and duty to !ix and levy !ro~ time to time Common Aaseesmenta, Special Asaessmenta, and Reconatrue• tion Ass•samenta upon the Member•, as provided in the Declara• tion; to !ix and levy !ro.m time to time in any !iecal year Capital Improvement· A1ses1ment1 applicable to that year only !or capital improvement•; to determine and fix the due date !or the payment o! such as~easmenta, and the date upon which the same ahall become delinquent; provided, however, that euch assessment• shall be !!xed and levted only to provide for the payment o! .. th• Common Expen••• of the Association and o! taxe1 •nd assessments upon real or personal property owned, leased, controlled or occupied by the Association, or for the . payment of expenae1 for labor rendered or material• or auppli•• used and conaumed, or equipment and appliance• furnished !or the maintenance, imp~ovement or development of .such property or !or the payment o! any and all obli9ationa in relation t..~e~eto, or in par!orminq or cauainq to be performed any o! the purpose• of th• Association !or the qeneral bene!i t and wel!are of i"ta Mem• ber1, in accordance with the provisions of the Declaration.

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Subject to any limitation• imposed by th• Oeclarat1on and th••• Bylaw•, the Board o! 01rectora shall have the power and duty to incur any and all such expenditures !or any of the fore9oinq purposes and to provide, or cause to be provided, adequate reserve• for replacements as it shall deem to be necessary or advisable in the interest o! the Association or welfare of it• Members. Common Assessments, Reconstruction Assessments, Special Assessments and Capital Improvement Assessments shall be fixed in accordance with the provisions of the Declaration. Should any Member fail to pay an assessment before delinquency, the Board of Directors in its di1cretion is authorized to enforce the payment of ~uch delinquent assessment as provided in th• Declaration.

(!) The power and duty to enforce the provisions of the Declaration coverinq the Properties, these Bylaws or other aqreements o! the Association.

(q) The power and duty to contract for and pay fire, casualty, errors and omissions, blanket liability, malicious mischief, vandalism, liquor liability and other insurance, in1urin9 the Members, the Association, the Board o! Directors and other interested parties, in accordance with the provisions o! the Declaration, coverinq and protectinq aqainat such damaqe• or injuries as the Board deems advisable (which may . include without limitation, medical expenses o! persona injured on th• Common Area or Association Maintenance Areas,). The Board shall review, not less frequently than annually , all insurance policies and bonds obtained by the Board on behalf o! the Association.

(h) The power and duty to contract !or and pay main• tenance, qardeninq, utilities, materials and supplies, and aer:vices relatinq to the Common Area and Association Mainten• ance Areas and to employ personnel necessary for the operation o! the Properties, includinq leqal and accountin9 services, and to contract for and pay for Improvements on the Common Area .

(i) The power but not the duty to deleqate its power• accordinq to law and to adopt these Bylaws.

(j) The power but not the duty to qrant easements where necessary for utilities, sewer facilities and other public purposes over the Common Area to serve the Properties, subject to Article XIV of the Declaration •

(k) The power and duty to adopt such Rules and Re

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(1) Th• power and duty to kttp, or cau1• to bt ~•pt, a complete record o! all aet1 and eorporatt a!f air1 of tht A11oe1ation and to present a 1tattment thereof to tht Member• at tht annual mett1nq o! the Members and at any other time that 1uch statement 11 rtqueated by at leaat ten percent (10~) o! the Member• who are entitled to vote.

(N) Th• power but not the duty to appoint a Member• ship ColMlitt .. composed o! at ltaat one ( l) Director and at lea1t one (1) Association Member at larqe . The Membership Com• mitt•• shall be responsible !or contactinq all purchasers of Lot• in tht Properties as aoon as any transfer of title to a Lot ia discovered. The Membership Committee shall further attempt to establish initial contact with all Members who are delinquent in the payment of any assessments or other charqe1 du• the Association.

(n) The power but not the duty to sell property of th• Association subject to Article XIV of the Dec~aration; provided, however, that the prior vote or written approval o! Member• entitled to cast at least two-third• (2/3rds) of the votinq power of the Association must be obtained to sell durinq any fiscal year property of the Association havinq an agqre

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hi• vote1 !or any candidate !or th• Board it th• candidate'• name haa been placed in nomination prior to th• votin9 and i! 1uch Member, or any other Member, has 9iven notice at the meet• in9 prior to th• votin9 o! auch Member's intention to cumulate votes. I! a Member cumulates hi• votes , such Member may 9ive on• OT more candidate for Director a number of votes equal to the Member'• share of the v6tin9 power aa set forth in t.~e Dec-laration, multiplied by the number of Directors to be elected.

(b) Notwithstandin9 the !ore9oin9, whenever (l) notice is qiven for an election o! Directors of th• Board, (2) upon such date Declarant ia either (i) entitled to exercise a Claaa B vote, or (ii) entitled to exercise a majority of the votin9 power of the Association and (3) upon such date the Members other than Oeclarant do not nave a 1uf!icient percent• aqe o! th• votinq power of the Association to elect a number ot Direc·tora representinq at least twenty percent (20r.) (thouqh not lesa than one (l)) of th• entire Board throuqh the !ore• 9oin9 cumulative votinq procedure, then such notice shall also provide !or the !ollowin9 special election procedure. Election of Director• shall be first apportioned to the Members other than Oeclarant until the aqqreqate number of Directors on the Board elected by such Members other than Declarant represents at least twenty percent (20r.> (thouqh not les1 than one (l)) of th• entire Board. Any resident Owner shall be an eliqible candidate tor the 1pecial election upon receipt by the Secre• tary of a Declaration of Candidacy, 1i9ned by the candidate, at any time ·prior to the election. Such etection 1hall be by secret ballot unless a majority o! th• Members other than the · Oeclarant determine othen1i•• · Th• person or persona r•ceivin9 the qreat11t number o! votes c11t by the Member• other than Oeclarant •hall be elected to th• Board in a co-equal capacity with all other Oirector1. Th• remaininq Members on the Soard 1hall be •l•cted throuqh. th• euatomary cumulative votin9 proce• dure outlined above.

Section 4,06, 800K1L Audit, The Board of Director• shall cauee to b• maintained a full set of booKa and record• showinq the f1nanei1l condition o! the a!fair1 of the Association in a manner con1i1tent with qenerally accepted accountinq pr1nci• pl••· A pro !orma operat1nq statement (budqet) !or each !1acal year 1hall be d1&tri~uted to the Member• not leas than •ixty (60) days before the beqinninq ot the fiscal year. A balance sheet and an operatinq (income) •tatement for the Association shall be prepared aa of an accountinq date which ahall be the last day of the month cl~seat in time to six (6) months follow• inq the first Close of Escrow !or the sale o! a Lot to a Mem• . ber, and shall be distributed to each Member (and to any holder, insurer, and quarantor o! a first Mortqaqe on a Lot in the Properties upon request) within sixty (60) days of such accounting date. Such operating statement shall include a schedule o! assessments received or receivable itemized by Lot address and by the name of the person or entity assessed. Thereafter, the Board shall prepare and distribute to each Member (and to ~ny holder, insurer, and quarantor of a first Mortqage on a Lot in the Properties upon request), within ninety (90) days of the last day of the Association's fiscal year, an annual report as provided in the Declaration.

All books, records and papers of the nssocia~ion shall be made available for inspecy an~· Member, pro-spective purcha.ser . of a Lot in the Properties, and any holder, insurer and quarantor of a fi~st Mortgage, or their duly

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appointed repr•••ntat1v•• at th• principal of !ice of the Aa10-ci at1on or at aueh other place within the Project a1 the Board may preaeribe. Th• Board ahall establish reasonable rules vith respect to (l) notice to be 9iven to the custodian o! t.~• rec-ord• by the Member deairin9 to 111ake the inspection, (2) hours - - ---and day1 o! the .,,.eek .,,.hen such an inspection may be made and { 3) -- · ·-payment o! the cost of reproducin9 copies of documents requested by a Member. Every Director shall have the absolute ri9ht at any reasonable time to inspect all books, records and document• o! th• A11oeiat1on, and th• phy11eal properties owned or con-trolled by the Association . The right o! inspection by a Diree• tor 1hall include the ri9ht to ma~e extracts •nd copie1 o! documents .

Section 4 . 07. Vacancies. Vacancies in the Board of Director• caused by any reason other than the removal of a Director by a vote o! the Members o! the Association shall be !illed by vote of the majority of the remaining Directors, even though they may constitute less than a quorum . Any vacancy caused by the removal of a Director may be filled by the vote of the majority of the remaining Directors but only with the approval, by vote or written consent, of a majority of the votin9 power o! the Association residing in Members other than Declarant. Each person so elected shall be a Director until a successor is elected at the next annual meetinq of t.~e Members o! the Asso-ciation, or at a special meetin9 o! the Members called !or that purpose. A vacancy shall be deemed to exist in case o! death, resignation, removal or judicial adjudication o! mental incom-petence of any Director, or in case the Members fail to elect the full number of authorized Directors at any meetin~ at which such election i• to take place. Any vacancy not filled by the Director• may be filled by vote of the Members at a special meeting of the Mambers called for such purpose.

Section 4 . 08 . Removal of Directors. At any regular or special meetinq of the Members duly called, any individual Direc~~r or the entire Board may be removed with or vi t.~out cau~e as follovs : (i) for so long as fewer than fifty (SO) Lots comprise the Properties, by the vote of Members represent-ing a majority of the total voting power of the Assoc i ation (including votes attributable to Declarant), and (ii) once fifty (SO) or more Lots comprise the Properties, by the vote of Members representing a majority of a quorum of Mer:lbers . Not-withstanding the foregoing, if the entire Board of Directors is not removed as a group pursuant to a single vote, no individual Director shall be removed if the number o! votes cast against hi• removal or not consenting in writing to such removal, would be sufficient to el·ect such Director i! voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written ballot, all votes entitled t~ be voted were cast) an~ t.~e entire number of Direc-tor• a~thorized at t.~e t i me of the Director's most recent elec-tion were then being elec~ed . Any .Director whose removal has been proposed by the Members shall be given an opportunity to be heard at the meeting . I! ·any or all o! the Directors are so removed at a ~eeting, nev Directors may be elected at the same meeting. Notwithstanding the foregoing~ any Director who has been elected to office solely by the votes of Members other than Declarant pursuant to Section 4.0S(b) hereof may be removeQ from office prior to ~h• expiration o! his ~•rm of o!!iee only by th• ~ote of at lea•~ a aimple majority o! ihe v~tin9 power reaidinq in Member• other than Oeclar·ant.

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Section 4.09. Organization Meetinq of Board. The first reqular

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Director at any meetinq of th• Board shall be a ·vaiver o! per-sonal notic• by him of the time and place thereof. If all the Directors are present at any meetinq o! t.~e Board, no notice to Directors shall b• required and any business may be transacted at such meetinq. Th• transactions of any meetinq o! the Board, however called and noticed or wherever held, shall be as valid a• thou9h had at a meetin9 duly held a!ter reqular call and notice, if (l) • quorum be present, (2) notice to the Members o! such meetin9 waa posted as provided in Section 4 . 10 hereof and (3) either before or a!ter the meetinq, each of the Direc-tors not present aiqns such a written waiver of notice, a con• sent to holdinq such meetinq, or an approval o! the minutes thereof. All such waivers, consents and approvals shall be filed with the records o! the Association or made a part of the minutes o! the meetinq.

Section 4,13. Action ·wtthout Meeting. Any action required or pi)rmi tted to b• taken by 1;he Board may be taken without a m••tinq, i! all Director• individually or collectively consent in writinq to such action. Such written consent or consent• •hall be filed with the minutes of the proceedinqa o! th• Soard. Such action by written consent shall have th• same tore• and effect a1 a unanimoua vote of euch Oirector1. .\n explanation o! any action taken by unanimous written consent ~ithout a meetinq shall be posted by the Soard in a prominent place or places in the Common Area within three (3) days after th• written consent• of all Directors have been obtained.

Section 4 . 14. Quorum and Adjournment. Except aa othen1i•• expressly provided herein, at all meetinqa o! the Board of Directora, a majority o! the Directors shall constitute a quorum !or the t~ansaction of business, and the acts o! the majority o! the Directors present at a meetinq at which a quorum 1• present shall be the acts o! the Board o! Directors . I! at any meetinq o! the Board o! Directors , there is less than a quorum present, the majority o! those present may adjourn the meetinq !rom time to time. At any such reconvened meetinq, any business which mi9ht have been transacted at the meetinq as oriqinally called may be transacted without further notice 1! a quorum is present. The Board may , with the approval o! a majority o! a quorum of the Directors, adjourn ~ meeti~q and reconvene in executive session to discuss and vote upon person-nel matters , litigation in which the Association is or may become involved and orders of business of a similar nature. The natur• of any and all business to be considered in execu-tive session shall first be announced in open session.

Section 4 . 15. Fidelity Bonds . . The Board of Directors shall require that all officers , aqents and employees o! the Associa-tion handling or responsible for Association funds shall fur-nish adequate fidelity bonds. The premiums on such bonds may be paid by the Association .

Section 4 . 16. Committees. The Board of Directors, by resolu-tion, may from time to time designate such advisory and oth•r committees as it shall desire, and may establish the purposes and powers of each such committee created. 'nle resolu~ion designatinq and establishinq the committee shall provide for the appoint:Jnen~ of its members, as well as a chairman, shall

· state the purposes of ~~e cor.uni~tee, and shall p~ovide !or

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report•, tenaination, and other adlllini1trat1v• matter• •• dttm•d appropriate by th• 8oard,

ARTlCLE Y

O[FICP,:RS

!ect!on 5.01, P••iqnat!on. Th• principal o!!ictra of th• A11oci1tion shall be a President, a Vic• President, a Secrt• t&ry, and a Tre11ur1r, all o! whom •hall b• tltcttd by the Board o! Oirtctora. Tht Soard o! Director• may appoint an A1ai1tant Treasurer and an A••i•tant Secretary, and auch other o!!icer1 aa in their judqment may be necessary. O!!icera other than th• Preaident need not bt Oirectors. One Person may hold more than one office ,

Section S.02. Election o! O!!ic•r•. Th• o!!icer1 o! tht Aatociation shall be elected annually by the Board of Directors at the or9anization mettinq o! each new Board o! Directors , and each o!!icer ah&'ll hold hie office at the pleasure o! the Board of Directors, until he shall resiqn or be removed or otherwise disqualified to serve or his successor shall be elected and . qualified to serve.

Section S . 03. Removal o! Officers. Upon an af!irmativt vote of a majority of the entire Board of Directors, any officer may be removed, either with or without cause, and his successor elected at any reqular meeting of the Soard of Di rec-tors, or at any special meeting of the Board of Directors called !or such purpose . Any officer may resiqn at any time by qiving written notice to the Board or to the President or Secretary of the Association. Any such re!iqnation shall take effect at the date of receipt of such notice or at any later time speci!ied therein; and unless otherwise specified in said notice , acceptance of such resignation by the Board shall not be necessary to make it effective.

Section 5.04 . Compensation. Officers, agents, and employ••• shall receive such reasonable compensation for their services as may be authori%•d or ratified by the Board; provided, how• ever, that no officer shall receive any compensation !or ser-vice• performed in the conduct of the Association's business unles1 such compen~ation i.s approved by the vote or written consent of Members representing at least a major i ty o! the votinq power o! the Association, and provided further, that (l) nothing herein contained shall be construed to preclude any officer from aervinq the Association in some other capacity and receiving compensation therefor, and (2) any officer may be reimbursed for his actual expenses incurred in the perfor~ance of hi• duties. Appointment of any officer, agent, or employee shall no.t of i tael! create contractual right a o! compensation tor services performed by such officer, agent, or employee. Notwithstandinq the foregoing, no officer, employee or director of Declarant or any a!!1l.1ate -of Declarant may receive any com• penaation.

Section s .os, President. Th• Preaiden~ •hall bt the chi•! tx•c~tive officer of the Association. He shall preside at ~ll meetin91 of tht A1sociation and of the Board of Directors. Ht shall have Ill of tht 91neral power• and dutiea vhich art

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u1ually ve1ted in th• office of the Pre1ident of a corporation, includin9 but not limited to the pover, subject to the provi-sions o! Section 4.16, to appoint committ••• from amon9 th• Members !rol'll time to time u he may in his dfscretion decide 1• appropriate to assist in the conduct o! the affair• of the Association. The President 1hall, subject to the control of the Board of Directors, have 9eneral supervision, direction and control of the business of the Association. The President shall be ex officio a member of all standinq committees, and he shall have such other powers and duties as may be prescribed by the Board of Directors or these Bylaws of the Association. The Pre1ident shall execute all leases, mortgages, deeds and other written instruments and shall co-sign all checks and promissory notes of the Association.

Section 5.06 . Vice Presiden·t. The Vice President shall take the place of the President and perform his duties whenever the President shall be absent, disabled, refuses or is unable to act. If neither the President nor the Vice President is able to act, the Board of Directors shall appoint some other member of the Board to do so on an interim basis . The Vice President shall also perform such other duties as shall from time to time be imposed upon him by the Board of Directors or these Bylaws of the Association.

Section 5.07. Secre~ary. The Secretary shall keep the ~inutes of all meetings of the Board of Directors and the minute• of all meeting• of the Association at the principal ·· - -office o! the Association or at such other place as the Board ---------· of Directors may order. The Secretary shall keep the seal of th• Association in safe custody and shall have char9e o! such books and papers as the Board o! Dir-ectors may direct; and the Secretary shall, in qeneral, perform all of th• duties incident to the of!ice of Secretary . The Secretary shall qive, or cause to be qiven, notices of meetin9s o! the Members of the Associa-tion and of the Board o! Directors required by these Bylaws or by law to be qiven . The Secretary shall maintain a ~ecord book o! Members, listinq the names and addresses of the Members as furnished to the Association, and such books shall be chanqed only at such time as satis!actory evidence of a change in " ownership of a Lot is presented to the Secretary. The Secre- · l tary shall perform such other duties as may be prescribed by the Board of Directors.

Section S.08. Treasurer. The Treasurer shall be the chief !inan~ial officer of the Association and shall have responsi-bility for Association funds and securities and shall be responsibl• for keeping, or causing to be kept • . full and accur-ate accQunts, tax records and business transactions of the Association, includinq accounts of all assets, liabilities, receipts and disbursements in books belonging to the Associa-tion . The Treasurer shall be responsible for the deposit of all monies and other valuable ef:fects in the name, and to the credit, of the Association in such depositories as may from time to time be designated by the Board of Directors. The Treasurer shall sign all checks and promissory notes of the Association and shall disburse the funds of the Association aa may be ordered by the Soard of Directors, in accordance with the Declaration, shall render to the President and Directors, upon request, an account of all of his transactions as - Treasurer and of the !inancial conditions o! the Associa~ion, and shU.l

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hav• 1uch other power1 and p•r!on11 1uch other duties as may b• prescribed by th• Board o! Director• or th••• Bylawa.

\ ARTICLE VI OBLICAT?ONS OF MEMBERS

$ection 6.0\ . hs1es1ment1,

(a) All M•mb•r• are obli9ated to pay, in accordance with the provi1ion1 o! th• Declaration and th• Community Dec• laration, all assessment• imposed by the Association and th• ColM\unity A11ociation, to meet their respective expense1.

(b) All delinquent assessment• shall be enforced, collected or foreclosed in the manner provided in the Declara-tion and th• Community Declaration, as applicable.

Section 6 . 02. Maintenance and Repair.

(a) Every Mel!lber must perform promptly, at hi• aole coat and expense, such maintenance and repair work on his Lot aa i• required under the provisions o! the Declaration . Aa further provided in the Declaration, all plans !or alteration• and repair o! Improvements on the Lots within the Properties muat receive the prior written consent o! the ARC and the Master Architectural Committee of the Community Association. The ARC shal l establish r easonable procedures !or the grantinq o! such approval, in accordance with the Dec!ar ation.

(b) As !urther provided in the Declaration, each Member ahal l reimburse the Association for any expenditur es ihcurred in repairinq or repl acinq any portion o! t.he Common Area or the Association Maintenance Areas whi ch are damaged throu9h the fault o! such Member or his family, guests, ten-ants, or invitees . Such expenditures shall include all court costs and reasonable a t torneys' fees i ncurred in enforcing any provision o! these Bylaws or the Declaration.

ARTICLE VII

AMENDMENTS TO BYLAWS

Amandn.ent of these Bylawa shall require the vote or written consent of a ~ajority o! the total voting power of the Associa• tion; provided that the specified percentaqe of each class of th• Members necessary to amend a speci·fic Section or provision of these Bylaws shall not be less than the perc entaqe of affir• mativa votes prescribed for action to be taken under that Sec-tion or provision; and provided further, that t hese Bylaws may be amended by a majority o! the entire Board, at any time prior to the Close of Esc row for the sale of the first Lot. The written approval of holders of seventy-five percent (75Y.) of all first Mortgages on Lots in the Properties and the vote or written consent of Owners representing sixty-seven percent (67~) of the voting power of the Association must be secured before any material amendment to these Bylaws affecting matters delin• eated in Article XIV and Section 17.05 of the Declaration may take effect, and th.is sem:ence may not be a:n~nded wi t."lout such prior written approval . Notwithstandin~ t.~e f oregoing, if a ! ! rat Mortga9ee who receives a written re~Jest !rom t.."le Board to approve a propo.sed amendment or amendments to the Bylaws

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doe1 not deliv&r a ntqative re1pon1t to th• Soard within thirty (30) day1 o! the ~•ilin9 o! 1uch reque1t by tht Board, 1uch !ir•t Mortqaq•• 1hall bt deemed to have ap?roved tht propoatd amendment or U1tndrnent1. So lon9 aa there exi1t1 a Cla11 B member1hip and provided that FF.A ia insurinq or hat agreed to insure or VA 11 quarantetinq or ha• agreed to quarante• loan• to !inane• tht initial sales o! Lota in th• Propertie• by Oeclarant, material a.mendrnent o! the Bylaws shall require the prior approval of FHA or VA. Prior to enactment o! any proposed amendment, Declarant shall transmit notice o! t he proposed amendment to FHA or VA, as applicable . I! written notice of disapproval is r.ot received by Declarant within s i xty (60) day1 !ollowin9 receipt by the agency (FHA or VA) of such notice, approval of th• proposed amendment shall be deemed to have been qiven.

ARTICLE VI II

MORTGAGEES

Section 8. 01 . Notice to Association. A Member who mortgaqee hit Lot shall notify the Association through the Manager, or through the Secretary if there ia no Manager , the name and add ress of his Mortgagee; and the As sociati on shall maintain sueh infor111at1on in a book entitled "Mortgagees of Lots . " Upon request, any sueh Member shall likewise notify the Association aa to tht release or discharge of any such Mor tgage.

Section 8.02 . Notice of Unoaid Assessments . The Board o! Directors ol the Assoc i ation shall at tile request of a M.ortqa-qet of a Lot report any unpaid asses sments cue f rom tile Owner or such Lot, in accordanee with th• provisions of the Dec l ara-tion.

ARTICLE IX

CONFLICT1NG PROVISIONS

In caae any of these Bylaw• conflict with any provisions o! the law• of the Stat• of California , such eon!lictinq Bylaw• shal l be null and void upon 'fina l court determination to such e!!ec:, but all other Bylaw• shall remain in full f orce and e!!eet. In east of any conflict between tile Articles and the•• Bylaws, the Article• ahall control1 and in the case o! any con-flict between the Declaration and these Bylaws , the Declaration ahall control.

ARTICLE X

INDEMNIFICATION OF DIRECTORS ANO OFFICERS

The . Board may authorize the Association to pay expense• incurred by, or to satisfy a judgment or fi ne levied against, any present or former Director, officer, employe_e, or agent o! the Association to the extent and under the circumstances pro-vided in the Declaration.

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ARTICLE XI

MISCELLANEOUS

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Section 11.01. Execution or Documents . The Board or Direc• tors, •xc•pt as in these Bylaws o~herwise provided, may autho• ri~• any officer or aqent to enter into any contract or execute any instrument in the name and on behalf o! the Association, and •uch authority may be general or confined to specific in1tane••: and unless so authori~ed by the Board of Directors, no officer, aqent, committee member, or employee shall have any power or authority to bind the Association by any contract or enqaqement or to pledqe it• credit or to render it liable !or any purpose or in any amount.

Section ll.02 . Inspection o! Bytaws. Th• Association shall keep in it• o!!ic• !or the transaction o( business the oriqinal or a copy o! these Bylaws as ~mended or otherwise altered to date, certi!ied by th• Secretary, which shall b• open to inspection by the Mell\be~s and all holders, insurers, and quarantora o! first Mortqaqes in accordance with Section 4.06(b) hereof.

Seet1on 11.03, Fiscal Year. The fiscal year o! th• Aasocia• tion ahall be determined by tht Soard of Director•, and havin9 been to determined, is subject to change from time to time a1 the 9oard o!· Direetort •hall determine.

Sectioft 11.0i. Membership Book. Th• Aaaociation •hall keep and ma1nta'1n in it• o!!ict tor th• transaction ot buainesa a book containi·n9 th• na.Jn• and addrua o! each Member. Tonnina• tion or tran•!•r of ownership o! any Lot by a Member 1hall be recorded in th• book, toqether with th• date on ~hich such ownership wa• transferred, 1n accordance with the provi11ona of the Oeclaration.

ARTICLE XII

NOT1C! ANO HEARING PROCEDUR!

Section 12.0l . Suspeneion of Privileqea. In the event of an alle9od violation o! the Ra1trictions and a!t•r written notice o! 1ueh alle9ed failure i• delivered personally or mailed to th• Member or any aqent o! the Member ("respondent") alleqed to b• in default, by first-class mail or by certified mail return receipt requested, or both, the Soard of Director• shall have th• riqht, after a!!ordin9 the respondent an oppor• tunity !or an appropriate hearing aa hereinafter provided, and upon an affirmative vote of a majority of all Directors on the Board, to take any one or more of the followinq actions1 (l) levy a Special Assessment as provided in the Declaration; (2) suspend or condition the right of said Member to use a.ny recreational facilities owned, operated or maintained by the Association, as provided in the Declaration; (3) suspend eaid Member's votin9 privileges as a Member, as further provided in the Dec lara·tion; or ( 4) record a notice. of noncompliance enCWll• berinq the Lot o! the respondent. Any such suspension shall be for a period of not more than thirty (30) days for any noncon· tinuinq inirac'tion, but in the case of a continuinq infraction (i°ncludinq nonpayment of any assessment after the same becomes

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delinq\ient) may be imposed !or ao lonq as th• violation con-tinuea. Th• failure of th• Board to en!orce any proviaion o! the Restrictions shall not constitute a waiver of the riqht to enforce the a&l'!le thereafter. The remedies set forth above and othervise provided by these Bylaw• shall be cumulative and none shall be exclusive. However, any individual Member must exhaust all avai l able internal remedies of the Association pre-scribed by these Bylaws, or by the Rules and Requlations of the Association, before that Member may resort t.o a court of law !or relief with respect to any al~eqed violation of the Restrictions by another Member, provided that the !oreqoinq limitation pertainin9 to exhausting administrative remedies shall not apply to the Board or to any Member where the Com-plaint alleqes nonpayment of an assessment.

Section 12.02 . Written Complaint. A hearinq to determine whether a right or privileqe of the respondent under the Dec• laration or these Bylaws should be suspended or conditioned, or whether a Special Assessment should be levied, shall be initi-ated by the !ilinq of a written Complaint by any Member or ~y any officer or member of the Board of Directors with the Presi• dent of the Association or other presidinq member of the Board. The Complaint shall constitute a written statement o! charqes which shall set forth in ordinary ~nd conci ~e language the acta or omissions with which th• respondent is charged, and a refer• ence to the specific provisions of the Restrictions which the respondent is alleqed to have violated. A copy of the Com-plaint .shall be delivered to the respondent in accordance with the notice procedures set forth in the Dec l aration, toqether with a statement which shall be substantially in the followinq !orm1

•unless a vritten request for a hearinq •iqned by or on behalf of the person named a• respondent in the accompanying Complaint is delivered or mailed to the Board of Directors within fifteen (15) days after the Complaint, the Board of Directors may proceed upon the Compl aint without a hearing, and you will have t hus waived your riqht to a hearinq. The request for a hear• in9 may be made by delivering or mailinq the enclosed form entitled 'Notice of Defense ' to th• Board of Directors at the followinq adc~ess:

You may, but need not, be reoresented by counsel at any or all stages of these oroceedings . If you desire the names and addresses of witnesses or an opportunity . to inspect any relevant writin9s or items on. file in connection with thia matter in the· possession, custody or control of the Board of Directors, you may contact

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Th• respondent shall be .. entitled to a hearinq on the merits of the matter if the Notice of· Defense is timely . filed with the Soard of b-irectora. The respondent may file a separate state• ment by way of mitigation; even if he does not file a Notice of ·oe!•n••.

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S•ction 12.03. Appointm•nt o! Tribunal. Th• Pr••id•nt 1hall appoint a Hearinq Committ•• ("Tribunal•) o! thr•• (3) persona who are Melllbera o! the Association or aqents of Declar• ant upon r•c•ipt o! a writt•n Complaint as provided in Section 12.02 . In appointinq th• members of the Tribunal, the Presi-dent shall -mak• a ~ood faith effort to avoid appointinq next• door neighbors of the respondent or any Member of the Associa• tion who he has reason to b•lieve may be a witness to the alledged violation giving rise to the Complaint. The appoint-ments by the President shall be final, except that the respon-dent may challen9e any appo:ntment, at any time prior to the taking of evidence at the hearing, on the 9round t.~at a !air and impartial hearing could not be afforded were such appointee a member of the Tribunal. In the event of such a challenge, the Board of Directors shall meet to determine the sufficiency of the challenge, without the President voting. All decisions of the Board of Director• in this regard shall be final . If auch challenge is sustained, the President shall make another appointment to replace the challenged appointee. The Tribunal shall elect a Chairman and appoint a hearing officer who shall present evidence and ensure that a proper record of all pro• ceedings is maintained. The Tribunal shall make a qood faith ef!ort to avoid appointing a next-door neighbor of the respon-dent or any Member .of the Association who it has reason to believe ~ay be a witness to the alleged violation giving rise to the Complaint.

Section 12.04. Notice o! Hearing . Th• Board shall serve a notice o! hearinq, as provided herein, on all part1ea at least ten (10) day• prior to the hearinq, i! such hearinq i• reques-ted by the respondent. Th• hearinq shall be held no sooner than thirty (30) days after the Complaint ia mailed or delivered to the respondent aa provided in Section 12.02 hereof. The notice to th• respondent shall be substantially in the !ollow-inq !ona but may include other information :

•you are hereby notified that a hearinq Yill be held before the Board o! Directors of the Indian Hill Townhomea Association at

on th• ~ day of , 19 , at the hour of , upon the~ charqea mad• in the Complaint served upon you. You ~y be pr~sent at the hearinq, may but need not be represented by counsel, may present any relevant evidenc~ . and will be given full opportunity to cross-examine all witnesses testifyinq against you. You are entitled to request the attendance of wit-nesses and the production of books , docwr.ent• or ot.her items by applyinq to the Board of Directors of the Association."

Section 12.0S. Conduct of Hearing.

(a) Whenever the Tribunal has com.~enced to -hear the matter and a member of the Tribunal is forced to withdraw prior to a final determination by the Tribunal, the remaining members shall continue to hear the case and the hearinq officer shall replace the

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w1thdrav1nq member. Oral evidence 1hall be taken only on oath or a!tinaation admini•t•r•d by an officer of th• Association. Th• uae of affidavit• and written interroqatori•• in lieu of oral testimony shall be encouraqed by th• Tribunal.

(b) £ach party •hall have th• followinq riqht11 to call and ex&J11in• witneasea; to introduce exhibit•; to cross-examine wit• nessea on any matter relevant to th• issues; to impeach any witnesa1 and to rebut the evidence against hi~. l! respondent does not t••-tify in his own behalf h• may be called and examined as if ur.der cro11-examination.

(c) The hearinq need not be conducted accordin9 to tech• nical rut•• relatinq to evidence and witnesaea. ~ny relevant ev1• denc• 1hall bt admitted 1! it 11 the type o! evidence upon which re1pon1ibl• Persona ar• accua~om•d to rely in th• conduct of aerioua a!faira, reqardl••• of the exiatenct of any common law or atatutory rule which miqht make improper the admission o! such •vi• dence over objection in a civil action. Hearsay evidence may be used tor th• purpose of aupplementinq or explaininq other evidence but •hall not be au!!icient in itself to support a !indinq except when auch evidence would b• admissible over objection in civil action•. Th• rules of privileqt ahall be e!fective to the extent that they are othervis• required by atatut• to be recoqnized at the hearing. ·Irrelevant and unduly repetitious evidence •hall be excluded.

(d) Neither th• accusinq Member nor the allegedly ~e!aultinq Member shall bt required to attend the hearinq. The hearinq ahall be open to attendance by all Member• o! th• Associa• tion to the extent of th• permissible capacity of the hearin9 room. In renderinq a decision, o!!icial notiee may be taken at any time o! any qenerally accepted matter within th• Restriction• or con-c:erninq th• operation o! the Association. Parties pr-esent at the hearinq shall be informed of the matters to be noticed by the Tribunal and such tnattera shall be made a part of the record of the proceedings. Th• Tribunal may qrant eontinuaneea upon a showinq ot qood cause. ·

Section 12.06. Oecision of Board . If the respondent fail• to file a Notice of Oe!enae , aa provided in Section 12.02, or fails to appear at · a hearing, the Tribunal may take action based upon the evidence presented to it without notice to the respondent . However, the respondent may make any showing by way of mitigation. The Tribunal shall prepare written findings of fact and recommendations for consideration by the Board of Directors. The Tribunal shall make its determinations only in accordance with these Bylaws. After all testimony and documen-tary evidence has been presented to the Tribunal , the Tribunal shall vote by secret wr i tten ballot upon the matter, vith a majority of the entire Tribunal controlling. A copy of _the findinqs and recommendations of the Tribunal shall be posted by the Soard of Oirect~rs at a conspicuous place on the Prop-erties, and a copy shall be served by the President on each party in the matter and hia attorney, if any. Disciplinary action and levy of a Spe.cial Assessment under the Restrictions shall be imposed only by ~he Board of O~rectors and in accord-ance vith the findinqa and recommendations· of the Tribunal . The Board of Directors may adopt the recommendations of the Tribunal in their entire~y or the Board may redue~ the proposed

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penalty and adopt th• balance of th• recoauuendations. Sowever, th• Board of Directors may not impose more strin9ent disciplin-ary action than recommended by the Tr ibunal. Th• decision o! the Board shall be in wr1t1n9 and shall be served and posted in t he same manner as the ! i ndinqs and recommendations o! the Tri• bunal . The decis i on of t he Soard shall become effective ten (10) days a!ter it is served upon the respondent unless other• wise ordered in writin9 by the Board of Directors . The Board may order a reconsideration at any time within fifteen (15) days !ollowin9 ae!"Vice of its decision on the parties , on its own moti on or in response to a petiti on by any party. No action against the Member arisinq from the al l eged viol ation shall take effect prior to the expiration o! !ifteen (15) day• after the Member's receipt of t he notice of hearing and five (S) days after the hearinq required herein .

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