Woodcrest Hills HOA Bylaws (2003)

AMENDED AND RESTATED BYLAWS OF WOODCREST HILLS HOMEOWNERS ASSOCIATION A California Nonprofit Mutual Benefit Corporation Adopted Effective January 17, 2003 ARTICLE I Name The name of the association is WOODCREST HILLS HOMEOWNERS ASSOCIATION (the "Association"). ARTICLE II Offices The principal office for the transaction of the business of the Association shall be located in the City of San Diego, County of San Diego, State of California. The Board of Directors is hereby granted full power and authority to change the said principal office from one location to another within the said county by adopting a resolution to that effect and incorporating it in the minutes of the meeting at which it is adopted. ARTICLE III Purposes The overriding mission of the association is to provide an attractive, safe, equitable and comfortable living environment for all of its residents, while maintaining prudent fiscal policies to protect the assets of the Association. This mission is intended to result in higher property values and greater satisfaction for the members. To that end, the Association is a

nonprofit mutual benefit corporation and its purposes shall include acting as a management body for the preservation, maintenance, improvement, and architectural control of the Residential Lots and Common Area of the planned development known as Woodcrest Hills within the City of San Diego, County of San Diego, State of California. Revision 1.22 17 January 2003 SD 191335v1 1

ARTICLE IV Definitions 4.1 Definition of Declaration. "Declaration" as used herein shall mean and refer to that certain Declaration of Covenants, Conditions, and Restrictions for Woodcrest Hills (A Planned Development) made by Mercy Mira Mesa 207 Associates, as Declarant, recorded November 20, 1989 as Instrument No. 89- 630380 in the Official Records of San Diego County, California. 4.2 Incorporation of Definitions. The definitions contained in the Declaration are incorporated herein and made a part hereof by this reference. ARTICLE V Meetings of Members 5.1 Membership. The authorized number and qualifications of Members of the Association, the different classes of Members, if any, the property, voting, and other rights and privileges of Members, and their liability for assessments and the method of collecting them, shall be controlled by these Bylaws and the Declaration, and the provisions of the Declaration pertaining thereto are by this reference incorporated herein and made a part hereof. 5.2 Place of Meetings. All meetings of Members shall be held within the Project

(defined in the Declaration) or as close thereto as practicable. Unless unusual circumstances exist, Members' meetings shall not be held outside of the County in which the Project is situated. 5.3 Annual Meetings of Members. Regular annual meetings of the Members shall be set by the Board so as to be held in January of every calendar year. At such annual meetings there shall be elected, by ballot of the Members, a Board of Directors in accordance with the provisions of Article VIII hereof. The Members may also transact such other business of the Association as may properly come before them. 5.4 Special Meetings. Special meetings of the Members shall be scheduled promptly by the Board in response to: (1) the vote of the Board itself, or (2) a written request for a special meeting signed by Members representing at least five percent (5%) of the total voting power of the Association. Upon request in writing to the President, any Vice President, or the Secretary, by any person (other than the Board) entitled to all a special meeting of Members, the

officer forthwith shall cause notice to be given to the Members pursuant to Section 5.5 herein that a meeting will be held at a time fixed by the Board, which time shall be not less than thirty-five (35) nor more than ninety (90) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the persons entitled to call the meeting may give the notice. Revision 1.22 SD 191335v1 2 17 January 2003

5.5 Notice of Meetings. Subject to the provisions of Section 5.4 above, written notice of each meeting of the Members (annual or special) shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by personal delivery, by mailing of a copy of such notice, first-class, postage prepaid, or by telegram not less than ten (10) nor more than ninety (90) days before such meeting, to each Member who, on the Record Date (as defined in Section 5.12 herein) for notice of the meeting, would be entitled to vote thereat, and to each First Mortgagee requesting notice in writing addressed to the Member's or Mortgagee's address last appearing on the books of the Association, or supplied by such Member or Mortgagee to the Association for the purpose of notice. Such notice shall specify the place, day and hour of the meeting, and (a) in the case of a special meeting, the general nature of the business to be transacted, and that no other business may be transacted, or (b) in the case of the annual meeting,

those matters which the Board, at the time of the mailing of the notice, intends to present for action by the Members, but, subject to the provisions of applicable law, that any proper matter may be presented at the meeting for such action. The notice of any meeting at which Directors are to be elected shall include the names of all those who are nominees at the time the notice is sent to Members. If mailed, the notice of meeting shall be deemed to be delivered forty-eight (48) hours after it is deposited in the United States mail addressed to the Member at the Member's address as it appears on the records of the Association, with postage thereon prepaid. Notice by telegram shall be deemed received twenty-four (24) hours after it is properly sent. Whenever any Member entitled to vote has been absent from any meeting of the Members, whether annual or special, an affidavit executed by the Secretary or Assistant Secretary to the effect that notice has been duly given shall be prima facie evidence that due notice of such meeting was given to such

Member or Members as required by law and by the charter documents of the Association. 5.6 Order of Business. The order of business at all meetings of the Members shall be as follows: (a) roll call to determine the voting power represented at the meeting, (b) proof of notice of meeting or waiver of notice, (c) reading of minutes of preceding meeting (unless waived by a majority of Members present), (d) reports of officers, (e) reports of committees, (f) election of inspector of elections (at annual meetings or special meetings held for such purpose), (g) election of Directors (at annual meetings or special meetings held for such purpose), (h) unfinished business, and (i) new business. Meetings of Members shall be conducted by the officers of the Association, in order of their priority. 5.7 Action by Written Ballot. Subject to Section 7513 of the California Nonprofit Mutual Benefit Corporation Law, any action, except the election of Directors, which under any provision of the California Nonprofit Mutual Benefit Corporation Law may be taken at any

regular or special meeting of Members, may be taken without a meeting if: (a) the written ballot of every Member is solicited; (b) the number of ballots cast within the time period specified equals or exceeds the quorum required to be present at a meeting authorizing the action; and (c) the number of affirmative responses received by the deadline equals or exceeds the percentage required for approval of such action, if they had been cast at a meeting. Each ballot so distributed shall: (i) set forth the proposed action, (ii) provide the Members an opportunity to specify Revision 1.22 17 January 2003 SD 191335v1 3

approval or disapproval of such proposal, (iii) state that where an approval or disapproval is specified the ballot will be cast accordingly, and (iv) provide a reasonable time and specify the date and time by which the Association must receive the ballots for them to be counted. All solicitations of ballots must specify the number of responses necessary for a quorum and the percentage of approvals necessary to pass the measure submitted. Unless a Record Date for voting purposes be fixed by the Board as provided in Section 5.12 herein, the Record Date for determining Members entitled to cast written ballots pursuant to this Section 5.7, when no prior action by the Board has been taken, shall be the day on which the first written ballot is mailed or solicited, whichever is first. All such written ballots shall be filed with the Secretary of the Association and kept in the records of the Association for three (3) years. 5.8 Quorum and Voting. The presence, in person or by proxy, of Members entitled

to vote holding at least fifty-one percent (51%) of the voting power of the Association shall constitute a quorum for the transaction of business at all meetings of the Members, except as otherwise may be provided in these Bylaws and/or the Declaration. The Members present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the Members required to constitute a quorum. If any meeting cannot be held because a quorum is not present, no business may be transacted except that a majority of the Members present, either in person or by proxy, may, as otherwise provided by law, adjourn the meeting to a time not less than five (5) days nor more than thirty (30) days from the original meeting date, at which meeting the quorum requirement shall be twenty-five percent (25%) of the voting power of the Members.

Any provision of the Governing Documents which that the approval of a specified percentage of the Voting Power of the Association shall require the approval of that specified percentage of the Voting Power of the membership. If no percentage of the Voting Power is specified in the Governing Documents or by California law, approval by a majority of the Voting Power of those voting, in person or by proxy, so long as a quorum is present or represented at the meeting, shall constitute approval. 5.9 Adjourned Meetings. When any meeting of Members, either annual or special, is adjourned for thirty (30) days or more, or if a time and place for the adjourned meeting is not fixed by those in attendance at the original meeting, or if for any reason a new date is fixed for the adjourned meeting after adjournment, notice of the time and place of the adjourned meeting shall be given as in the case of an original meeting. Except as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned

meeting, other than by announcement thereof at the meeting at which such adjournment is taken. 5.10 Proxies. Each person entitled to vote shall have the right to do so either in person or by one or more agents authorized by written proxy, signed by the person and filed with the Secretary of the Association. A proxy shall be deemed signed if the Member's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise Revision 1.22 17 January 2003 SD 191335v1 4

by a Member or the Member's attorney-in-fact. Any form of proxy or written ballot distributed by any person to the membership of the Association shall afford the opportunity to specify a choice between approval and disapproval of each matter or group of matters to be acted on. The proxy or written ballot shall provide that when the Member specifies a choice, the vote shall be cast in accordance with that choice. The proxy also shall identify the person who is authorized to exercise the proxy and the length of time the proxy shall be valid. Any proxy or written ballot that is distributed to ten (10) or more members shall satisfy the requirements of California corporations Code Section 7514(a) if the Association has one hundred (100) or more members. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. The maximum term of any proxy shall be three (3) years from the date of its execution. Every proxy shall be revocable, and shall be revoked upon any of the following: (a)

by a written notice prior to the vote by the Member executing the proxy delivered to the Secretary of the Association, stating that the proxy is revoked, (b) by a subsequent proxy executed by the Member executing the prior proxy and presented to the meeting, (c) at any meeting, by attendance at the meeting and voting in person by the Member, (d) by conveyance by the Member of his Lot, or (e) upon receipt of written notice by the Association of the death or judicially declared incompetence of such Member. The suspension of any Member's voting rights by the Association shall automatically suspend any proxy executed by that Member. 5.11 Consent of Absentees. The transaction of any business at any meeting of Members, either annual or special, however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the Members entitled to vote, not present

in person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or approval of the minutes thereof. All such waivers, consents and approvals shall be filed with the records of the Association, or made a part of the minutes of the meeting. Attendance of a person at a meeting shall not constitute a waiver of notice of that meeting, except when the person objects at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Also, attendance at a meeting is not a waiver of any right to object to the consideration of matters required by the California Nonprofit Mutual Benefit Corporation Law to be included in the notice but not so included, if such objection is expressly made at the meeting. Neither the business to be transacted nor the purpose of any regular or special meeting of Members need be specified in written waiver of notice, consent to the holding of the meeting, or approval of the minutes thereof, except as provided in

Section 7511(f) of the California Nonprofit Mutual Benefit Corporation Law. 5.12 Record Date. The Board may fix, in advance, a record date ("Record Date") for the determination of the Members entitled to notice of any meeting of Members or entitled to vote, act by written ballot, or take any other lawful action. The Record Date so fixed for notice purposes shall be not more than sixty (60) days nor less than ten (10) days prior to the meeting; for all other purposes, the Record Date shall be not more than sixty (60) days prior to such other action. When a Record Date is so fixed, only Members of record on that date are entitled to notice, to vote, act by written ballot, or take other action for which the Record Date was fixed. A Revision 1.22 17 January 2003 SD 191335v1 5

determination of Members of record entitled to notice of a meeting of Members shall apply to any adjournment of the meeting unless the Board fixes a new Record Date for the adjourned meeting. The Board shall fix a new Record Date if the meeting is adjourned for more than forty-five (45) days. If no Record Date is fixed by the Board, the Record Date for determining Members entitled to notice of a meeting of Members shall be at the close of business on the business day preceding the day on which notice is given or, if notice is waived, at the close of business on the business day preceding the day on which the meeting is held. If no Record Date is fixed by the Board, Members on the day of the meeting who are otherwise eligible to vote are entitled to vote at the meeting of Members or, in the case of an adjourned meeting, Members on the day of the adjourned meeting who are otherwise eligible to vote are entitled to vote at the adjourned meeting of Members.

The Record Date for determining Members for any purpose other than set forth in this Section 5.12 or Section 5.7 herein shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever is later. ARTICLE VI Liabilities of Members No Members of this Association, either regular or otherwise, shall be personally liable for any of the debts, liabilities and/or obligations of the Association. ARTICLE VII Books and Records 7.1 Books and Records of the Association. The Board shall keep or cause to be kept such membership registers, books of account and minutes of meetings of Members, the Board, and committees of the Board as it from time to time shall deem to be reasonably necessary.

Such books and records as are kept by the Association and the Board shall be made available for inspection and copying by any Member, or by a Member's duly appointed representative, at any reasonable time and for a purpose reasonably related to his or her interest as a Member, at the office of the Association or at such other place within or outside the Project as the Board shall prescribe. Minutes of the Board and the Architectural Committee shall be kept at least as long as the statute of limitations on any legal action which could be raised against actions of those entities. Every meeting of the Architectural Committee shall record minutes, which must minimally cover issues and resolutions. Minutes of Executive Sessions as defined in section 8.14 of these Bylaws shall be kept separately. Other committees may keep minutes as appropriate. Such minutes, if produced, shall be kept in the same manner as minutes of the Board and other Committees. Revision 1.22 17 January 2003 SD 191335v1 6

Minutes of the Executive Sessions and the subject matter addressed there are only available to the current Board and the management company. All other books and records shall be available for review by any member of the Association. The Board or the Management company may adopt certain restrictions to protect the integrity of such records. Copies of such records may be obtained by any member of the Association at the same rate of charge that the management company provides to the Board. 7.2 Establishment of Rules Pertaining to Records. The Board shall establish reasonable rules with respect to: (a) Notice (not to exceed five (5) business days' written notice) to be given to the custodian of records of the Association by the Member desiring to make the inspection, stating the purpose of the inspection; (b) Hours and days of the week when such inspection may be made; and (c) Payment of the cost of reproducing copies of documents requested by a Member. 7.3 Inspection by Directors. Every Director shall have the absolute right at any

reasonable time to inspect all books, records and documents of the Association and the physical properties owned or controlled by the Association. The right of inspection by a Director includes the right to make extracts and copies. ARTICLE VIII Board of Directors 8.1 Number, Election, and Term of Office. The affairs of the Association shall be managed and administered by its Board of Directors. The Board shall consist of five (5) directors ("Directors"), each of whom must be a Member of the Association. The terms of the office of directors shall be two years (2 yrs.) and shall be staggered so that three (3) terms expire in odd numbered years and two (2) terms expire in even-numbered years. Directors shall be elected at each annual meeting to fill the vacancies of those directors whose terms then expire. If any annual meeting is not held, or the Directors are not elected thereat, the Directors may be elected at any special meeting of Members held for that purpose. All Directors shall hold office until their successors are elected or appointed.

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Whenever Directors are to be elected to terms of different lengths at the same election, due to vacancies or any similar reason, each candidate elected shall be entitled to select his or her term of office from the term lengths available, starting with the candidate who receives the greatest number of votes and then to the remaining candidates in descending order of votes received. 8.2 Voting and Election of Directors. Cumulative voting in the election of Directors shall be prescribed for all elections in which two (2) or more positions are to be filled, subject only to the procedural prerequisites to cumulative voting prescribed in Section 7615(b) of the Corporations Code. Voting in the election of Directors shall be by secret written ballot. 8.3 Vacancies. A vacancy or vacancies shall be deemed to exist in case of the death, resignation or removal of any Director. Any Director who misses three consecutive regular meetings of the Board may be removed by a majority vote of the entire board at conclusion of the third meeting missed.

At that meeting or thereafter, the Board may appoint a replacement as is provided in this section. If the Members shall increase the number of authorized Directors but shall fail to elect the additional Directors as provided for at the meeting at which such increase is authorized, or at an adjournment thereof, or in case the Members fail to at any time elect the full number of the authorized Directors, a vacancy or vacancies shall be deemed to exist. Any Director may resign effective upon giving written notice to the President, the Secretary, or the Board, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected before such time to take office when the resignation becomes effective. Vacancies in the Board, except those existing as a result of a removal of a Director, may be filled by a majority of the remaining Directors, although less than a quorum, or by a sole remaining Director, and each Director so elected shall hold office until his successor is

elected at an annual meeting of Members, or at a special meeting called for that purpose. A vacancy which exists as a result of a removal of a Director may be filled by the Board with the vote or written consent of a majority of the voting power residing in Members other than Declarant. The Board may declare vacant the office of a Director who has been declared of unsound mind by a final order of court, or convicted of a felony. The Members may at any time elect Directors to fill any vacancy not filled by the Directors, and may elect the additional Directors at the meeting at which an amendment of the Bylaws is voted authorizing an increase in the number of Directors. No reduction of the number of Directors shall have the effect of removing any Director prior to the expiration of his or her term of office. Revision 1.22 17 January 2003 SD 191335v1 8

8.4 Removal of Directors. One (1) or more Directors may be removed prior to the expiration of their terms, with or without cause, at an annual or special meeting of the Members called for such purpose. The entire Board may be removed, with or without cause, by a majority vote of those Members present in person or by proxy at a meeting at which a quorum is represented. However, so long as cumulative voting for Directors is authorized by the Articles of Incorporation or these Bylaws, unless the entire Board is removed from office by the vote of the Members, an individual Director shall not be removed prior to the expiration of his or her term of office if the number of votes cast against the removal, or not consenting in writing to the removal, would be sufficient to elect the Director if voted cumulatively at an election at which the same total number of votes were cast (or, if the action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of Directors authorized at the time of the Director's most recent election were then being elected.

If a Director is removed, his or her successor shall be elected by a vote of the Members at the same meeting or within a reasonable time thereafter. 8.5 Organizational Meeting. The first meeting of a newly elected Board shall be held within ten (10) days following the election, at such place as shall be fixed by the Directors at the meeting at which such Directors were elected, and no notice shall be necessary to the newly elected Directors in order to legally constitute such meeting, provided a majority of the whole Board shall be present. 8.6 Regular Meetings. Regular meetings of the Board shall be held at least five (5) times annually, at such hours and place as may be fixed from time to time by resolution of the Board. The meeting place may be within or outside of the Project. If held outside the Project's boundaries, the meeting room selected shall be as close as reasonably possible to the Project. Should said meeting fall upon a legal holiday, then that meeting shall be held at the same time on the next day which is not a legal holiday. Notice of Regular meetings must meet the

announcement requirements established in section 8.21 of these Bylaws. 8.7 Special Meetings and Notices. Special meetings of the Board for any purpose may be called at any time by the President, or if the President is unable or refuses to act, by the Vice President or by any two (2) Directors. No special meeting of the Board shall be held without notification to the members as specified in section 8.21 of these Bylaws. 8.8 Waiver of Notice. Before or at any meeting of the Board, any Director may, in writing, waive notice of such meeting or consent to the holding of the meeting, and such waiver or consent shall be deemed equivalent to the giving of notice of the meeting. All such waivers or consents shall be filed with the records of the Association or made a part of the minutes of the meeting. Attendance by a Director at any meeting of the Board shall be a waiver of notice by such Director of the time and place thereof. If all the Directors are present at any meeting of the Board, no notice shall be required and any business may be transacted at such meeting.

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8.9 Adjournment. A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting, either regular or special, may adjourn, from time to time until the time fixed for the next regular meeting of the Board. 8.10 Notice of Adjournment. Notice of adjournment of any Directors' meeting, either regular or special, need not be given to absent Directors, if the time and place are fixed at the meeting adjourned. 8.11 Quorum. A majority of the authorized number of Directors shall be necessary to constitute a quorum, except to adjourn as provided above. Every act or decision done or made by a majority of the Directors present at a meeting at which a quorum is present shall be the act and/or decision of the Board, unless a greater number be required by law.

A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of Directors, if any action taken is approved by at least a majority of the required quorum for such meeting. 8.12 Action Without Meeting. Any action by the Board may be taken without a meeting if all of the Directors individually or collectively shall consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. If the Board resolves by unanimous written consent to take action, an explanation of the action taken shall be posted at a prominent place or places within the Common Area of the Property within three (3) days after the written consents of all Directors have been obtained. 8.13 Board Meetings Open to Members.

All regular and special meetings of the Board, and Executive Committee meetings shall be open to all Members, and any holders of mortgages encumbering any portion of the Property; provided, however, that Members and/or mortgagees who are not on the Board may not participate in any deliberation or decision unless expressly so authorized by the vote of the majority of a quorum of the Board. 8.14 Executive Sessions. The Board may, with the approval of a majority of a quorum of Directors, 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 sessions shall first be announced in open session. 8.15 Fidelity Bonds. The Board may require that all officers and employees of the Association handling or responsible for Association or trust funds shall furnish adequate fidelity bonds. The premiums on such bonds shall be paid by the Association.

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8.16 Liability and Indemnity of the Board and Officers. The Directors and the officers of the Association shall not be liable to the Members for any non-willful tort or mistake of judgment, negligent or otherwise, except for their own individual willful misconduct or bad faith. Each Director and officer, to the fullest extent permitted by law, shall be indemnified by the Association and the Members as provided in Article XII of these Bylaws. 8.17 Executive Committee. The Board shall have the power to appoint an Executive Committee composed of five or more Members, two (2) or more of which must be Directors, and to delegate to such committee any of the powers and authority of the Board in the management of the business and affairs of the Association, except the following: (a) The approval of any action for which the California Nonprofit Mutual Benefit Corporation Law also requires approval of the Members or approval of a majority of all Members; (b) The filling of vacancies on the Board;

(c) The fixing of compensation of the Directors for serving on the Board or on any committee; (d) The amendment or repeal of Bylaws or the adoption of new Bylaws; (e) The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable; and (f) The expenditure of corporate funds to support a nominee for Director after there are more people nominated for Director than can be elected. The Executive Committee shall be entitled to appoint members of any other committee if the Board fails to do so. The Board shall have the power to prescribe the manner in which proceedings of the Executive Committee shall be conducted. Minutes shall be kept of each meeting. No Executive Committee meeting may be held without proper prior notification to the members as specified in section 8.21 of these Bylaws. 8.18 Nominations of Candidates for the Board. Nominations for election to the Board shall be made by a nominating committee ("Nominating Committee"). Nominations may also be made by the Members at the annual meeting.

The Nominating Committee shall consist of a chairperson, who shall be a Director, and at least one (1) other Member of the Association. The Revision 1.22 17 January 2003 SD 191335v1 11

Nominating Committee shall be appointed by the Board at least sixty (60) days prior to each annual meeting of the Members, to serve until the close of such annual meeting. The Nominating Committee shall make as many nominations for election to the Board as it shall in its discretion determine, but not less than the number of vacancies that are to be filled. Any Member may announce candidacy for the Board by written notice to the Nominating Committee, the Board, or the management company. 8.19 Powers of the Board. Subject to limitations of these Bylaws, of the Declaration, and of the California Nonprofit Mutual Benefit Corporation Law relating to action required to be approved by the Members or by a majority of Members, the activities and affairs of the Association shall be conducted and all of its powers shall be exercised by or under the direction of the Board.

The Board may delegate the management of the activities of the Association to any person or persons, a management company, or committees however composed, provided that the activities and affairs of the Association shall be managed and all of its powers shall be exercised under the ultimate direction of the Board. Without prejudice to such general powers but subject to the same limitations, it is hereby expressly declared that the Board shall have, in addition to the other powers enumerated in these Bylaws, the following powers: (i) To exercise for the Association all powers, duties and authorities vested in or delegated to the Association and not reserved to the Members by provisions of the Declaration; (ii) To generally manage the affairs of the Association; (iii) After notice and hearing in the manner provided in Article XI herein, to suspend the voting right of a Member during any period in which such Member shall be in default in the payment of any assessment levied by the Association; and

(iv) To employ and/or remove a manager, independent contractor, or such other employees as the Board shall deem necessary, and to prescribe their duties. 8.20 Duties of the Board. It shall be the duty of the Board to: (i) See that all duties and responsibilities of the Board as set forth in the Declaration are properly and timely performed; (ii) Supervise all officers, agents and employees of the Association, and to see that their duties are properly and timely performed; and Revision 1.22 17 January 2003 SD 191335v1 12

(iii) Keep or cause to be kept a complete record of all of its acts and doings and to present a statement of them to the Members at such times as it deems reasonably appropriate 8.21 Meeting Announcements. Notice of the time and place of any regular or Special Board meeting or Executive Committee meeting shall be communicated to the Directors not less than five (5) days prior to such meetings by first-class mail, telephone, telephone message system, telegram, facsimile or electronic mail or other previously-agreed electronic means; provided, however, that notice need not be given to any Director who has signed a waiver of notice or a written consent to holding of the meeting. The notice of any Special Board meeting or Executive Committee meeting shall specify the nature of any special business to be considered. The Association shall give notice to all Members of the time and place of Board meetings or Executive Committee meetings, except for emergency meetings and executive sessions. The Association may use first-class mail, telephone, telephone message system,

telegraph, facsimile or electronic mail or other previously-agreed electronic means, physical delivery to homes, newsletters or similar means of communication at least five (5) days prior to the meeting. However, the Association shall send nonresident members the same notice by first-class mail postage prepaid and postmarked by the first business day after the first physical delivery to resident members if physical delivery to resident members is used. ARTICLE IX Officers 9.1 Enumeration of Officers. The officers of the Association shall be a President, a Vice President, a Secretary and a Treasurer. The Association also may have, at the discretion of the Board, one (1) or more Assistant Secretaries, one (1) or more Assistant Treasurers and such other officers as may be appointed in accordance with the provisions of this Article IX. officers other than the President need not be Directors. One (1) person may hold two (2) or more offices, except those of President and Secretary. 9.2 Election and Term of Office. The officers of the Association shall be elected

annually by the Board at the regular annual organizational meeting of the Board, in accordance with the rules specified in section 8.1. If election of the officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently possible. New offices may be created and filled at any meeting of the Board. Each officer shall hold office until the officer's resignation, removal, or other disqualification from service, or until a successor shall have been elected. Revision 1.22 17 January 2003 SD 191335v1 13

9.3 Removal and Resignation. Any officer elected or appointed by the Board may be removed by the Board whenever, in its judgment, the best interests of the Association would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the officer so removed. Any officer may resign at any time by giving written notice to the Board, the President or the Secretary of the Association. Any such resignation shall not prejudice the rights, if any, of the Association under any contract to which the officer is a party. Any such resignation shall take effect as of the date of the receipt of such notice, or any later date specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 9.4 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause, may be filled for the unexpired portion of the term in the manner prescribed in these Bylaws for regular election or appointment to such office. 9.5 President.

The President shall be the principal executive officer of the Association and generally shall supervise and control all of the business and affairs of the Association. The President shall preside at all meetings of the Members and of the Board. The President may sign, with the Secretary or any other proper officer of the Association authorized by the Board, any deeds, mortgages, bonds, contracts, or other instruments which the Board has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws or by statute to some other officer or agent of the Association; and in general, the President shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board from time to time. 9.6 Vice President. In the absence of the President or in the event of the President's inability or refusal to act, the Vice President shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the

President. The Vice President shall perform such other duties as from time to time may be assigned to the Vice President by the President or by the Board. 9.7 Treasurer. The Treasurer is the chief financial officer of the Association and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Association, and shall send or cause to be sent to the Members such financial statements and reports as are required by law, by these Bylaws or by the Declaration. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the Association; receive and give receipts for monies due and payable to the Association from any source whatsoever, and deposit all such monies in the name of the Association in such banks, trust companies, or other depositories as shall be selected in accordance with the provisions of these Bylaws; and in general, the Treasurer shall perform all the duties incident to the office of Treasurer and such other duties as from time to time may be

assigned to the Treasurer by the President or by the Board. If required by the Board, the Revision 1.22 SD 191335v1 17 January 2003 14

Treasurer shall give a bond for the faithful discharge of the Treasurer's duties in such sum and with such surety or sureties as the Board shall determine. The premium on any such bond shall be paid by the Association. 9.8 Secretary.

The Secretary shall keep or cause to be kept, in one (1) or more books provided for that purpose, the minutes of the meetings of the Members, the Board and committees of the Board, with the time and place of holding, whether regular or special (and if special, how authorized), the notice thereof given, the names of those present at Board and committee meetings, the number of Members present or represented at Members' meetings, and the proceedings thereof; see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; be custodian of the Association's records; keep a register of the post office address of each Member which shall be furnished to the Secretary by such Member; and in general, the Secretary shall perform all duties as from time to time may be assigned to the Secretary by the President or by the Board. 9.9 Assistant Treasurers and Assistant Secretaries.

The Assistant Treasurers and Assistant Secretaries, in general, shall perform such duties as shall be assigned to them by the Treasurer, the Secretary, the President or the Board. If required by the Board, the Assistant Treasurers shall give bonds for the faithful discharge of their duties in such sums and with such sureties as the board shall determine. The premiums of such bonds shall be paid by the Association. ARTICLE X Committees The Board shall appoint (i) an Architectural Committee at the time and in the manner provided for in the Declaration, and (ii) a Nominating Committee, as provided for in these Bylaws. In addition, the Board shall appoint other committees as it deems appropriate in carrying out the purposes of the Association. Except as otherwise specifically provided in the Declaration, committee members shall serve at the pleasure of the Board. ARTICLE XI Disciplining Members for Breaches of Declaration There shall be no violation of the provisions of the Declaration.

If any Member, Member's family, servants, guests, lessees, or invitees violate the provisions of the Declaration, or any of them, the Board may impose an extraordinary charge upon such Member for not more than FIFTY DOLLARS ($50.00) for each violation and may suspend the right of such Member to vote his membership in the Association, under such circumstances as the Board may specify, for a period not to exceed thirty (30) days for each such violation; provided, however, that before Revision 1.22 SD 191335v1 17 January 2003 15

invoking any such additional charge and/or suspension the Board shall give the Member fifteen (15) days' prior written notice of the charge and/or suspension of voting rights and the reasons therefore, and shall provide an opportunity for the Member to be heard before the Board, in person, in writing, or by counsel, at the Member's expense, not less than five (5) days before the effective date of the charge and/or suspension. Any notice hereunder which is given by mail must be sent first class or registered mail to the Member at his or her most recent address as shown on the records of the Association. ARTICLE XII Indemnification 12.1 Definitions.

For the purposes of this Article XII, "agent" means any person who is or was a Director, officer, employee, or other agent of the Association, or is or was serving at the request of the Association as a Director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a Director, officer, employee, or agent of a foreign or domestic corporation which was a predecessor of the Association or of another enterprise at the request of such predecessor; "proceeding" means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes, without limitation, attorneys' fees and any expenses of establishing a right to indemnification under Section 12.4 or 12.5(c) of this Article XII. 12.2 Indemnification in Actions by Third Parties.

The Association shall have power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the Association to procure a judgment in its favor) by reason of the fact that such person is or was an agent of the Association, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the Association and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contenders or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of the Association or that the person had reasonable cause to believe that the person's conduct was unlawful.

12.3 Indemnification in Actions by or in the Right of the Association. The Association shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the Association to procure a judgment in its favor by reason of the fact that such person or was an agent of the Association, against expenses actually and reasonably incurred by such person in Revision 1.22 17 January 2003 SD 191335v1 16

connection with the defense or settlement of such action if such person acted in good faith, in a manner such person believed to be in the best interests of the Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. No indemnification shall be made under this Section 12.3: (a) In respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to the Association in the performance of such person's duty to the Association, unless and only to the extent that the court in which such proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for the expenses which such court shall determine; (b) Of amounts paid in settling or otherwise disposing of a threatened or pending action, with or without court approval; or (c) Of expenses incurred in defending a threatened or pending action which is

settled or otherwise disposed of without court approval. 12.4 Indemnification Against Expenses. To the extent that an agent of the Association has been successful on the merits in defense of any proceeding referred to in Section 12.2 or 12.3 herein or in defense of any claim, issue, or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith. 12.5 Required Determinations. Except as provided in Section 12.4 herein, any indemnification under this Article XII shall be made by the Association only if authorized in the specific case, upon a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Section 12.2 or 12.3 herein, by: (a) A majority vote of a quorum consisting of Directors who are not parties to such proceeding; (b) Approval by vote or written ballot of a majority of a quorum present at a duly held meeting of the Members with the persons to be indemnified not being entitled to vote thereon; or

Revision 1.22 17 January 2003 SD 191335v1 17

(c) The court in which such proceeding is or was pending upon application made by the Association or the agent or the attorney or other person rendering services in connection with the defense, whether or not such application by the agent, attorney, or other person is opposed by the Association. 12.6 Advance of Expenses. Expenses incurred in defending any proceeding may be advanced by the Association prior to the final disposition of such proceeding upon receipt of an undertaking by or on behalf of the agent to repay such amount unless it shall be determined ultimately that the agent is entitled to be indemnified as authorized in this Article XII. 12.7 Other Indemnification. No provision made by the Association to indemnify its Directors or officers for the defense of any proceeding, whether contained in the Articles, Bylaws, a resolution of Members or Directors, an agreement, or otherwise, shall be valid unless consistent with California Corporations Code Section 7237 as amended from time to time, it

being understood that at the present time the provisions of this Article XII comply with the requirements of California Corporations Code Section 7237. Nothing contained in this Article XII shall affect any right to indemnification to which persons other than such Directors and officers may be entitled by contract or otherwise. 12.8 Forms of Indemnification Not Permitted. No indemnification or advance shall be made under this Article XII, except as provided in Section 12.4 or 12.5(c), in any circumstance where it appears: (a) That it would be inconsistent with a provision of the Articles, these Bylaws, a resolution of the Members, or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement. 12.9 Insurance.

The Association shall have power to purchase and maintain insurance on behalf of any agent of the Association against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such whether or not the Association would have the power to indemnify the agent against such liability under the provisions of this Article XII. The Association shall purchase and maintain such insurance on behalf of at least all officers and directors of the Association. Such insurance shall not be less than one million dollars or whatever minimum coverage is sufficient to provide the limitation of liability afforded by Civil Code Section 1365.7, whichever amount is larger. Revision 1.22 17 January 2003 SD 191335v1 18

ARTICLE XIII Miscellaneous 13.1 Checks; Drafts. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Association, shall require the joint signature or endorsement of any two of the following officers: the President, the Treasurer, and the Secretary, provided that under all circumstances the withdrawal of any money from the Association's Reserve Accounts shall require the signatures of at least two (2) people who either shall be Directors or one (1) Director and one (1) officer who is not a Director. 13.2 Contracts. The Board, except as otherwise provided in the Declaration may authorize any officer(s) or agent(s) to enter into contracts 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 authorized by the Board, no officer, agent or employee shall have power or authority to bind the Association by any contract or engagement or to pledge its credit or to render it liable for any purpose or any amount.

13.3 Inspection of Articles and Bylaws. The Association shall keep in its principal office for the transaction of business the original or a copy of its Articles of Incorporation and these Bylaws as amended to date, which shall be open to inspection by the Members at all reasonable times during office hours. 13.4 Fiscal Year. The fiscal year of the Association shall be determined by the Board and having been so determined is subject to change from time to time as the Board shall determine. 13.5 Conflicts. In the case of any conflict between the Declaration and these Bylaws, the Declaration shall control. In case any of these Bylaws conflict with any applicable law or statute of the State of California, the provisions of said law or statute shall control. 13.6 Rules and Regulations.

The Board shall have the right to adopt reasonable rules and regulations ("Rules") not inconsistent with the provisions contained in the Declaration, and to amend the same from time to time, relating to the use of the Common Area and any facilities situated thereon by Owners and by their tenants or guests, and the conduct of such persons with respect to automobile parking, outside storage of boats, trailers, bicycles and other objects, disposal of waste materials, drying of laundry, control of pets and other activities which, if not so regulated, might detract from the appearance of the Project or offend or cause inconvenience or danger to persons residing or visiting therein. Such Rules may provide that the Owner of a Lot whose occupant leaves property on the Common Area in violation of the Rules Revision 1.22 17 January 2003 SD 191335v1 19

may be assessed (after appropriate notice and an opportunity for a hearing before the Board as set forth in the Declaration) an amount to cover the expense incurred by the Association in removing such property and storing or disposing thereof. 13.7 Conduct at Meetings. All meetings of the Association shall be conducted in accordance with the recognized system of parliamentary procedure or such special parliamentary procedures as the Board may adopt. Where the Board intends adopt a particular text as its system of parliamentary authority, the Board shall note in the minutes the name, publisher and date of publication, which parliamentary authority shall control over any conflicts with any other parliamentary authority. If there is any conflict between any special parliamentary procedures the Board chooses to adopt and the adopted text used as the system of parliamentary authority, the special parliamentary procedures the Board has adopted shall control. ARTICLE XIV Amendments These Bylaws may be amended by the vote or written consent of Members

representing not less than fifty-one percent (51%) of the Association. Notwithstanding the foregoing, the percentage of voting power necessary to amend a specific clause or provision of the Bylaws shall not be less than the prescribed percentage of affirmative votes required for action to be taken under that clause or provision. Revision 1.22 17 January 2003 SD 191335v1 20

CERTIFICATE OF SECRETARY OF WOODCREST HILLS HOMEOWNERS ASSOCIATION A California Nonprofit Mutual Benefit Corporation I, the undersigned, do hereby certify that: (1) I am the duly elected Secretary of Woodcrest Hills Homeowners Association, a California nonprofit mutual benefit corporation; (2) the foregoing Bylaws of said Association have been restated and rewritten to incorporate all the Bylaw amendments submitted to the membership and approved by them on January 17, 2003; (3) that said Bylaw amendments received the required approval of the membership of the Association, and (4) the foregoing Bylaws were duly adopted as the Bylaws of the Association on January 17, 2003 and are effective as of said date. Dated: _________________________, 1/17/03. Secretary Revision 1.22 17 January 2003 SD 191335v1 21