By-laws PDF

As Amended 16 Feb. 2012

BY-LAWS

OF

QUAIL VALLEY ASSOCIATION,
INC.

Quail Valley Association, QVA, as an organization is
subordinate to the United States of America, the State of California, and
Riverside County. Therefore Quail Valley
Association is subservient to the Constitution, Statutes, Rules and Regulations
and Codes of all these agencies. When
portions of these QVA By-Laws conflict with portions of these Constitutions,
Statutes, Rules and Regulations and Codes only those portions of these QVA
By-Laws which are in conflict will be considered null and void. All other portions of these QVA By-Laws will
continue in force. When items under
consideration by the QVA Board of Directors or the Membership are not covered
by the QVA By-Laws and or Constitutions, Statutes, Rules and Regulations, and
Codes of agencies named above, Robert's Rules of Order, latest edition, will be
used for procedure to be followed.

Added 16 Feb 2012.

Architectural Rules recommended by the Architectural
Committee and approved by the Board of Directors, Separate Rules and
Regulations enacted and distributed by the Board of Directors will be
considered as Appendices of these By-Laws

ARTICLE I

Plan of Cooperative
Ownership

Section 1.01: Name. The name of the corporation is QUAIL VALLEY
ASSOCIATION, INC., hereinafter referred to as the "Association or QVA". The principal office of the Association shall
be located in Riverside County, California.

Section 1.02: Application. The provisions of these By-Laws are
applicable to the project known as QUAIL VALLEY ASSOCIATION, located in the
County of Riverside, State of California.
All present and future Members of the Association, its employees and any
other person that might use the facilities of the Project in any manner, are
subject to the regulations set forth in these By-Laws, the Rules and
Regulations of the Association and the Leases executed between the Members and
the Association. The mere acquisition of
a membership in the Association, or the mere act of occupancy of a space in the
Project will signify that these By-Laws are accepted, ratified, and will be
complied with.

ARTICLE II

Definitions

Unless otherwise expressly provided, the following
words and phrases when used in the By-Laws shall have the meaning hereinafter
specified.

Section 2.01: Architectural Committee. "Architectural Committee" shall mean the
Architectural Review Committee created pursuant to Article IX hereof.

Section 2.02:
Architectural Committee Rules. "Architectural Committee Rules" shall mean
the rules adopted by the Architectural Committee pursuant to Article IX,
Section 9.02 hereof.

Section 2.03:
Articles. "Articles"
shall mean the Articles of Incorporation of QUAIL VALLEY ASSOCIATION, INC., as
filed in the office of the Secretary of the State of California, a true copy of
which is available at the Association
Office and contents of same are incorporated
herein by this reference, as such Articles may be amended from time to time.

Section 2.04: Assessment,
Annual. "Annual Assessment" shall
mean a charge against a particular and his Membership and Lease, representing a
portion of the costs of maintaining, improving, repairing and managing the
Project and all other Common Expenses, which are to be paid by each Member
to the Association for common Expenses in accordance with the percentages set
forth in the Maintenance Expense Schedule and Tax Allocation Schedule.

Section 2.05: Assessment, Capital Improvement. "Capital Improvement Assessment" shall mean
a charge against each Member and his/her Membership
and Lease, representing a portion of the cost to the Association for
installation or construction of any capital improvement or other addition on
any of the Project, which the Association may from time to time authorize. Such charge shall be levied among all of the Membersin the Project in the
same proportions set forth in the Maintenance Expense Schedule, as provided
herein.

Section 2.06: Assessment, Reconstruction. "Reconstruction Assessment" shall mean a
charge against the Membersand
their respective Memberships and Leases, representing a portion of the cost to
the Association for reconstruction of any capital improvements on any of the
Project which the Association may from time to time authorize, and which shall
be levied among all of the Members
in equal proportions.

Section 2.07: Assessment, Special. "Special Assessment" shall mean a charge
against a particular Member and his Membership and Lease,
directly attributable to, or reimbursable by, the Member
equal to the cost incurred by the Association for corrective action performed
pursuant to the provisions of these By-Laws plus interest and other charges
thereon as provided for in these By-Laws.

Section 2.08: Association. "Association" shall mean QUAIL VALLEY
ASSOCIATION, INC., a California corporation (formed pursuant to the General
Nonprofit Corporation Law of the State of California), its successors and
assigns.

Section 2.09: Beneficiary. "Beneficiary" shall mean a mortgagee under a mortgage or a beneficiary under a
deed of trust, or the pledgee or assignee by way of security of a Lease of
Certificate and the Membership represented thereby, as the case may be and the
assignees of such mortgagee, beneficiary, pledgee or assignee.

Section 2.10: Board or Board of Directors. "Board of Directors" or "Board" shall mean
the Board of Directors of the Association.

Section 2.11: By-Laws. "By-Laws" shall mean the within By-Laws
of the Association as initially adopted by the Board and as amended by the
Members of the Association from time to time.

Section 2.12: Certificate. "Certificate" shall mean a Membership
Certificate, issued by the Association to one or more persons and recorded in
the books and records of the Association which represents a Membership or
Memberships in the Association and the particular space allocated to such
Membership or Memberships. Each
Certificate, and the Memberships represented thereby, shall be appurtenant to a
particular space in the Project and a Certificate and the appurtenant
Membership and Lease shall not be separately transferred, assigned or
conveyed.. The sequential numbers of the
originally issued Certificated representing Memberships in the Association, together
with the locations of the numbered spaces to which such certificates and
Memberships shall be appurtenant, are set forth on The Site Plan which
is located in the Association Office
(referenced in section 2.27).

Section 2.13: Close of Escrow. "Close of Escrow" shall mean the date on
which a Certificate representing a Membership in the Association is issued or
transferred to a purchaser.

Section 2.14: Common Expenses. "Common Expenses" shall mean the actual
and estimated costs of: ownership,
maintenance, management, operation, repair and replacement of the Project
(including unpaid Annual Assessments, Special Assessments, Reconstruction
Assessments and Capital Improvement Assessments); the costs of any and all
utilities metered to more than one space and other commonly metered charges for
the Project; any costs of trash collection and removal; costs of management and
administration of the Association including, but not limited to, compensation
paid by the Association to managers, accountants, attorneys and other
employees; the costs of all gardening, security and other services benefiting
the Project; the costs of fire, casualty and liability insurance, worker's
compensation insurance covering the Project; the costs of bonding of the members
of the management body; taxes paid by the Association, including real property
taxes on the Project; amounts paid by the Association for discharge of any lien
or encumbrance levied against the entire Project or any portion thereof; and
the costs of any other item or items designated by, or in accordance with other
expenses incurred by the Association, including reimbursement to Officers and
Directors of their out-of-pocket expenses incurred on Association business, for
any reason whatsoever in connection with the Project, for the common benefit of
the Members.

Section 2.15: Family. "Family" shall mean one or more persons
each related to the other by blood, marriage or adoption, or a group of not
more than two (2)Persons
not all so related, inclusive of their domestic servants, who maintain a common
household in a Residence.

Section 2.16: Improvements. "Improvements" shall mean all structures owned by the Associationand
appurtenances thereto of every type and kind, including but not limited to,
swimming pools, recreation facilities, walkways, sprinkler pipes, roadways,
driveways, open parking areas, fences, retaining walls, deck covers, awnings,
stairs, the exterior and interior surfaces of any visible structure, planted
trees and shrubs, water softener fixtures, septic tanks or equipment.

Section 2.17: Lease. "Lease" shall mean the proprietary
occupancy agreement entered into between the Association and its Members and
entitling each Member to the exclusive use and occupancy for residential
purposes of the space allocated to his/her
respective Certificate. Until
amended by the Members and their Mortgagees [1]as
provided herein, the form of the Lease, together with the form of assignment of
Lease and the recordable Memorandum thereof to be used by the Association for
the leasing of all spaces in the Upon expiration of Leases and any renewals
thereof, allocated to all spaces in the Project, the Project shall be sold and
the proceeds distributed in accordance with Article XIII, Section 13.02 hereof,
unless following such termination, a new Lease between the Association and each
of the Membershad been
authorized by Members representing
a majority of the voting power of the Association. Such new Lease shall be substantially in the sameform, unless amendments
thereto have been approved by both (1) the vote or written consent of Members
representing at least fifty plus percent (50 plus %)of the voting power of the Association, and (2) the
written consent of the holders of the beneficial interests in fifty plus
percent (50 plus % ) of the first Mortgagees encumbering Association
Memberships and Certificates.

Section 2.18: Maintenance Expense Schedule. "Maintenance Expense Schedule" shall
mean the relative allocation of Common Expenses of the Association among all of
the spaces, exclusive of principal and interest payable by the Association of
account of any loan secured by a Mortgage encumbering the fee title of the
Project and real property taxes assessed against the Project as a whole.

Section 2.19: Maintenance Funds. "Maintenance Funds" shall mean the
accounts created for receipts and disbursements of the Association pursuant to
Article X, Section 10.02 hereof.

Section 2.20: Manager. "Manager" shall mean the Person employed
by the Association, pursuant to and limited by Article III, Section 3.05
hereof, and delegated the duties, powers or functions of the Association as
limited by said section.

Section 2.21: Member, Membership. "Member" shall mean every Person holding a
Membership in the Association, pursuant to Article IV, Section 4.01
hereof. "Membership" shall mean the use
of the Association property, voting, and other rights and privileges of
Members, together with the correlative duties and obligation contained in the
Articles and By-Laws of the Association.
Each Membership and the corresponding Membership Certificate shall

be
appurtenant to a Particular space in the Project, as provided in Section 2.12
of the Article II.

Section 2.22: Mortgage. "Mortgage" shall mean any pledge
assignment or other hypothecation or transfer of a Lease or Certificate and the
Membership represented thereby as a security or any mortgage or deed of trust
or other conveyance of all or any portion of the Project to secure the
performance of an obligation, which pledge, assignment, hypothecation or
conveyance will be released or reconvened upon the completion of such
performance.

The term "Deed of Trust" or "Trust Deed" when used
herein shall by synonymous with the term "Mortgage".

Section 2.23: Mortgagee, Mortgagor. "Mortgagee" shall mean a Person to whom a
Mortgage is made and shall include the beneficiary of a Deed of Trust and the
pledgee or assignee of a Lease or Certificate and the corresponding Membership. "Mortgagor" shall mean a person who mortgages
his or its property to another (i.e., the maker of the Mortgage), and shall
include the Trustor of a Deed of Trust and the pledgor or assignor of a Lease
or Certificate and corresponding Membership as security. The term "Trustor" shall be synonymous with
the term "Mortgagor" and the term "Beneficiary" shall be synonymous with the
term "Mortgagee". As used in these
By-Laws, a Mortgage or Mortgagee "or record" shall mean any Mortgage or
Mortgagee reflected in the books and records of the Association or recorded in
the Office of the Riverside County Recorder.

Section 2.24: Notice and Hearing. "Notice and Hearing" shall mean written
notice of and a public hearing before the Board in the Conference Room,
at which the Membersconcerned shall have an opportunity to be heard in
person, or by counsel at the Member's expense, in the manner
further provided in the By-Laws. (See
footnote one)

Section 2.25: Member. "Members" shall mean the Member,
whether one or more persons, of a Membership in the Association, as reflected
on the books and records of the Association, but excluding those Persons
holding such Membership or the Certificate representing such Membership as
security for the performance of an obligation.
For purposes of Article XI only, unless
the context otherwise requires, Membershall also include the
family, quests and invitees, of any Member.

Section 2.26: Person. "Person" shall mean a natural individual,
a corporation or any other entity with the legal right to hold title to
property.

Section 2.27: Plan. "Plan" shall mean the engineering drawings
and related materials showing the diagrammatic plans of the project, the
boundaries of the project and Common Areas and, where applicable, dimensions,
specific alternative uses as authorized in the By-Laws, and such other
information reasonably necessary to identify a space. A copy of the Plan as incorporated in the
Leases, together with a schedule of the originally issued Certificates and the
spaces and incorporated herein by the reference are located in the Association Office.

Section 2.28: Project. "Project" shall mean all of the lands and
improvements located on real property more particularly described as located at 70-201 Aurora Rd. Desert Hot
Springs, CA 92241.and incorporated herein by the reference.

Section 2.29: (reserved)

Section 2.30: (reserved)

Section 2.31: (reserved)

Section 2.32: Restrictions. "Restrictions" shall mean these By-Laws,
the Rules and Regulations and the Architectural
Rules of the Association.

Section 2.33: Rules and Regulations. "Rules and Regulations" shall mean the
rules and regulations adopted by the Board pursuant to these By-Laws, and such
rules and regulations may be amended from time to time.

Section 2.34: Architectural
Rules "Architectural Rules" shall mean the rules
adopted by the Board and the Membership pursuant to the By-Laws, and such rules
may be amended from time to time.

Section 2.35: Tax Allocation Schedule. "Tax Allocation Schedule" shall mean the
relative interests of the Membersin allocations or
principal and interest payable by the Association on account of any loan
secured by a Mortgagee encumbering the fee title of the Project, and taxes on
the Project, expressed as equal percentages provided herein in the Association Office.In the event the spaces are separately valued by the office of the
Riverside County Assessor, references herein to the Tax Allocation Schedule
shall then mean the Members' interests in such
taxes, computed in accordance with the relative assessed valuation of the
spaces in the Project, expressed as percentages, and based upon the ratio of
such assessed valuation of each space divided by the total of such assessed
valuations of all spaces in the Project, as reflected on the most recent rolls
of the Riverside County Assessor.

Section 2.36: Space. "Space" shall mean a recreation vehicle
space within the Project intended for occupancy by a single-family, together
with their recreational vehicles. The
diagrammatic plans of the spaces, together with a schedule of the originally
issued Certificates and the spaces which are appurtenant thereto, are set forth
on the Plan. Each space and the right to its excusive use pursuant to a Lease
shall be appurtenant to a specified Certificate and the membership represented
thereby, as set forth in Section 2.12 of this Article II and as designated in
the Plan.

ARTICLE III

Duties and Powers of the
Association

Section 3.01: Duties and Powers. The
duties and powers of the Association are those set forth in the Articles,
together with its general and implied powers of a nonprofit corporation,
generally to do any and all things that a corporation organized under the laws
of the Sate of California may lawfully do which are necessary or proper, in
operating the Project for the peace, health, comfort, safety and general
welfare of its Members, subject only to the limitations upon the exercise of such powers as are
expressly set forth in the Articles and these By-Laws. The Association shall furnish each Member, upon request,
with copies of any and all tax statements and interest statements reflecting
real property taxes levied against the Project and interest paid by the
Association on indebtedness incurred by the Association in the performance of
its obligations pursuant to these By-Laws.
The proportionate share of such taxes and interest allocable to each Membershall be determined in
accordance with the percentages reflected in the Tax Allocation Schedule. In the event a Certificate and the
appurtenant Membership and Lease is acquired by the Mortgagee of such
Certificate, Membership and Lease by foreclosure or other proceeding in lieu of foreclosure (collectively the
"foreclosed lease"), and that portion of any delinquent Annual Assessment
attributable to the foreclosed lease and allocable to interest and real and
personal property taxes on the Project is not paid by the Mortgagee of the foreclosed
lease, then such taxes and interest shall be allocated among the remaining Members
in accordance with the percentages reflected in the Tax Allocation
Schedule. The Association shall further
have the right to install or construct capital Improvements on the Project as
provided herein. The Association may at
any time, and from time to time, reconstruct, replace or refinish any
Improvement or portion thereof upon the Project, replace destroyed trees or
other vegetation and plant trees, shrubs and ground cover upon any portion of
the Project, as further provided herein.
The Association may employ personnel necessary for the effective
operation and maintenance of the Project, including the employment of legal and
accounting services, as provided in these By-Laws.

Section 3.02: Repair and Maintenance Duties of
Association. Subject to Article
XIV pertaining to eminent domain, subject to Article XIII pertaining to
destruction of improvements, and subject to Section 3.03 pertaining to repairs
by the Association shall paint, maintain, repair and make necessary
improvements to the Project, or shall contract for such maintenance, repair and
improvements, to assure the maintenance of the Project, in good condition and
repair. Such maintenance, repairs and Improvements shall include, without
limitation, all corrective architectural, janitorial, landscaping and repair
work within any space if the Memberfails
to repair such space which is subject to his/her duty to maintain, repair and payment for all centrally
metered utilities, water charges, and mechanical and electrical equipment in
the Project; payment of all charges for any and all utilities which serve
individual spaces but which are subject to a common meter; payment of all
Common Expenses; and repair and maintenance of all walks and other means of
ingress and egress within the Project, and if determined by the Board to be
economically feasible, a monthly inspection and preventative program for the
prevention and eradication of infestation by wood destroying and other pests
and organisms in the Project. All such
maintenance, repairs and Improvements to the Project which are the
responsibility of the Association shall be paid for as Common Expenses out of
the Maintenance Funds as provided in these By-Laws. All work performed for and on behalf of a Membershall be charged to
such Memberas a Special Assessment, as herein provided. To the extent not assessed to the Members, the Association shall
pay all real and personal property taxes and assessments levied upon any
portion of the Project. It shall further
by the affirmative duty of the Board of Directors to require strict compliance
with all provisions of these By-Laws and to cause the Project to be inspected
by the Architectural Committee for any violations thereof.

Section 3.03: Repair and Maintenance by Member. It shall be the duty of each Memberto keep his space free
from debris. The Membershall
be responsible for the resurfacing, replacing or structural repairing of his/her space so long as the damage is
not caused by the willful or negligent acts of someone other thanthe Memberor his/her
Family, guest, invitees or sub-tenants.
It shall further be the duty of each Memberto pay when due any and all charges for all utility
services when services are not centrally metered but are separately metered to
his/her space.

Section 3.04: Rights of Entry. The Board of Directors shall have limited
right of entry in and upon all areas of the Project, including all spaces, for the
purpose of inspecting the Project, and taking whatever corrective action may be
deemed necessary or proper by the Board of Directors, consistent with the
provisions of these By-Laws. However,
nothing herein shall be construed to impose any obligation upon the Association
to maintain or repair any portion of a space.
Nothing in the Section shall in any manner limit the right of the Memberto exclusive occupancy
and control over his space. However,
each Membershall permit a right of entry to the Board of
Directors, as reasonably necessary, such as for Maintenance or in case of any
emergency originating in or threatening his/her space, whether the Memberis present or not. Furthermore, each Member
shall permit other Members,or their representatives,
to enter his/her space for the
purpose of performing required installation, alterations or repair to the
mechanical or electrical services to a Residence, provided that such requests
for entry are made in advance and that entry is at a time reasonably convenient
to the Memberwhose space is to be entered and provided further
that the entered space is left in substantially the same condition as it
existed immediately preceding such entry.
In case of an emergency, such right of entry shall be immediate. Upon receipt of reasonable notice from the
Association (which shall in no event be less than seven (7) days), each Member
shall vacate his or her space in order to accommodate efforts by the
Association to perform any maintenance or repairs pursuant to these By-Laws.
The Board shall have the right of entry to the space and the right to
remove Members from their
space, as necessary, to accomplish its duties as provided herein. The cost of performing any such maintenance
or repairs will be a Common Expense
of the Association.

Section 3.05: Use of Agent. The Board of Directors, on behalf of the
Association, may contract with a professional property Manager for the
performance of maintenance and repair and for conducting other activities on
behalf of the Association. The term of
such contract, or any contract with the Sponsor for the furnishing of services
to the Association, shall not exceed one (1) year, renewable by agreement of
the parties for successive one-year periods, and by agreement of the parties
for successive one-year periods, and such contract shall be terminable by the
Association at any time (1) for cause upon thirty (30) days' written notice
thereof, and (2) without cause nor the payment of a termination fee upon ninety
(90) days' written notice.

ARTICLE IV

Membership and Voting

Section 4.01: Membership. Any Person or Persons to whom the
Association issues or transfers a one or more Certificates
or a co-interest in a one or more Certificates,
upon recordation of such issuances or transfer in the books and records of the
Association, and the Sponsor, for so long as any Certificate is owned by or
issuable to a nominee of the Sponsor, shall automatically be a Member of the
Association; provided, however, that at
no time shall there be more than one (1)Certificates issued and outstanding on the books and
records of the Association. With the
exception of a Mortgagee who acquires a Membership by foreclosure, deed in lieu
of foreclosure or any other remedy provided in the Mortgage, only qualified individuals may be Members
of the Association for so long as any state or federal statute requires that a
specified percentage of the Association Members be individuals in order for the
Members to deduct a proportionate share of the real property taxes assessed
against the Project, it being intended to exclude corporations, partnerships
and other entities (other than Mortgages) from the Association Membership if
required by federal or state taxing statutes.
Memberships in the Association shall continue until such time as a
termination or transfer (other than to a Mortgagee or Beneficiary as security
for the performance of an obligation) of the Membership, and the corresponding
Certificate, is recorded in the books and records of the Association, at which
time the Membership shall automatically cease.
Issuance or transfer of the Certificate on the books and records of the
Association and payment to the Association of a reasonable transfer fee and written
approval of the proposed transferees by majority of the Board of Directors
after a personal interview, shall be the sole requirements for Membership;
provided, however, that as a condition of such issuance or transfer, the
Association may require that the issuee or transferee (collectively the "New
Member") execute and deliver to the Association for recordation a Deed of Trust
encumbering the interest of the new Member under the Lease between such new
Member and the Association, which Deed of trust shall secure the payment of
assessments as rental under such Lease.
No person shall have more than one Membership in the Association.

Section 4.02: Transfer. Except as otherwise provided in these
By-Laws, the Membership held by any Membershall not be
transferred, pledged or alienated in any way, except upon endorsement and
presentation to the Association of such Member'sCertificate for
recordation of the transfer in the Association books and records. Memberships shall not be transferred
separately from the Certificate and Lease to which they are appurtenant. Endorsement and transfer of a Certificate to
a Mortgagee as security for an obligation shall be reflected as such on the
books and records of the Association and any subsequent transfer of the
Certificate shall require an endorsement thereon by the Mortgagee as well as by
the Mortgagor- -Member. Notwithstanding the foregoing, in the event
of a Member'sdefault under a loan secured by a first Mortgage
of record in such Member'sMembership or Lease
(meaning a Mortgage with first priority or seniority over other Mortgages), the
first Mortgagee of such defaulting Member,without the prior
consent or approval of the Association and following at least thirty (30) days
prior written notice to the Member and the Association at their respective
addresses at the Project, shall have the right to sell the Member's Certificate
and corresponding Membership at a public or private sale and assign all rights
under the Subject Lease to the purchaser who shall agree as a condition of such
assignment to cure any defaults thereunder.
Upon written notification to the Association by the first Mortgagee of
the completion of such sale, the transfer to the purchaser of the defaulting Member'sCertificate and
corresponding Membership and Lease shall be recorded in the books and records
of the Association.

The Association shall have a 15 day right of first
refusal to match the terms and conditions of any bona fide offer received by a
Member for the purchase of his lease hold interest and certificate.

Section 4.03: Shares and Voting. The Association shall have one (1) and
only one (1) class of voting Membership.
At any meeting of the Association, each Member shall be entitled to cast
no more that one (1) vote for each Certificate owned by or issuable at the
direction of such Member. Where there is
more than one (1) record Memberof a Certificate co-members), any or all of such co-membersshall be Members and
may attend any meeting of the Association, but only one (1) of such co-membersshall be entitled to
exercise the single vote to which the Certificate is entitled. See
QVA 2006. Such co-owners
shall from time to time all designate in writing to the Associationone of their number to vote. All
co-membersshall be
jointly and severally responsible for all of the obligations imposed upon the
jointly owned Certificate and shall be entitled to all other benefits of Membership. Members may enter into agreements respecting
the manner in which their votes are cast, provided that a copy of any such
agreement and any modification or extension thereof must be filed with the
Secretary of the Association. All
agreements and determinations lawfully made by the Association in accordance
with the voting percentages established in these By-Laws of the Association,
shall be deemed to be binding on all Members,
their successors and assigns.
All voting rights shall be subject to the restrictions and limitations
provided in these By-Laws and in the Articles of Incorporation of the
Association.

Section 4.04: Reserved.

Section 4.05: Quorum. Except as otherwise provided in these
By-Laws, the presence in person or by proxy of at least fifty plus
percent (50 plus %) of the voting power of the Membership of the Association
shall constitute a quorum of the Membership.
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.

Section 4.06: Ballots. Votes
may be cast in person or by mail.

Section 4.07: (reserved)

ARTICLE V

Administration

Section 5.01: Association Responsibilities. In accordance with the provisions of the
Articles and these By-Laws, the Association shall have the responsibility of
owning and administering the Project. This includes approving the annual
budget, establishing and collecting all assessments applicable to the Project,
arranging for overall architectural control of the Project, and overall supervision of clubs and
committees of the Associationunless specifically exempted by the Board
of Directors.

Section 5.02: Place of Meetings of Members. Meetings of the Members shall be held on
the Project, or such other suitable place as proximate thereto as practicable,
in Riverside County, convenient to the Members,
as may be designated by the Board of Directors.

Section 5.03: Annual Meetings of Members. Anannual meeting of the
Members shall be held on or about the anniversary date of February 1. The
President of Quail Valley Association will preside at this meeting of the
membership. The President will appoint a
Member to record the minutes of this meeting. At each annual meeting there shall
be elected by ballot of the Members a Board of Directors, of the Association,
in accordance with the requirement of Section 6.04 of Article VI of these
By-Laws. The Members may also transact
such other business of the Associations as may properly come before
them. EachMembershall be entitled to make motionsand
vote on issues. However,only
one vote per Membership may be cast. Each
first Mortgagee of a Certificate may designate a representative to attend all
Annual Meetings of the Members.

Section 5.04: Special Meetings of Members. It shall be the duty of the President to
call a special meeting of the Members, as directed by resolution of a majority
of a quorum of the Board of Directors, or upon receipt by the Secretary of a
petition signed by Members representing at least ten fifteen
percent (10% 15%) of the total voting power of the
Association. The notice of any special
meeting shall state the time and place of such meeting and the purpose
thereof. The President of Quail Valley Association will preside at this meeting of
the Membership. The President will
appoint a Member to record the minutes of this Meeting. No business shall be transacted at
a special meeting except as stated in the notice, Each first Mortgagee of a
Certificate may designate a representative to attend all special meetings of the
Members.

Section 5.05: Notice of Meetings of Members. It shall be the duty of the Secretary to
mail a notice of each annual or special meeting, at least ten (10) days but not
more than (30) days prior to such meeting, stating the purpose thereof as well
as the day, hour and place where it is to be held, to each Member of record,
and to each first Mortgagee of a Certificate, which Mortgagee has filed a
written request for notice with the Secretary.
The notice may set forth time limits for speakers and nominating procedures
for the meeting. The mailing of a
notice, postage prepaid, in the manner provided in this Section, shall be
considered notice served, forty-eight (48) hours after said notice has been
deposited in a regular depository of the United States mail. Such notice shall be posted in a conspicuous
place on the Project, and such notice shall be deemed served upon a Member upon
posted if no address has been then furnished to the Secretary. The Board of Directors may fix a date as a
record date for the determination of the Members entitled to notice of any
meeting of Members. The record date so
fixed shall not be more than thirty (30) days prior to the date of the
meeting. When a record date is so fixed,
only Members of record on that date shall be entitled to notice of the meeting,
notwithstanding any transfer of or issuance of Membership Certificates on the
books of the Association after the record date.

Section 5.06: Adjourned Meetings. If any meeting of Members cannot be
organized because a quorum is not present, the Members who are present, in
person may adjourn the meeting to a time not less than five (5) days nor more
than thirty (30) days from the time the original meeting was called, at which
meeting the quorum requirement shall be the present in person holding at least
twenty-five percent (25%) of the voting power of the Association. Such Adjourned Meetings may be held without
notice thereof as provided in this Article V, provided that notice is given by
announcement at the meeting at which such adjournment is taken. If a meeting is adjourned for more than
thirty (30) days, notice of the adjourned meeting shall be given in the manner
provided in Section 5.05 of the Article V.

Section 5.07: 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 meeting; (b) proof of notice of meeting ( c) reading of Minutes of preceding
meeting; (d) reports of officers; (e) reports of committees; (f) election of inspector of elections; (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.

Section 5.08: Reserved

Section 5.09: Reserved

Section 5.10: Minutes, Presumption of Notice. Minutes or a similar record of the
proceedings of meetings of Members, when signed by the President or Secretary,
shall be presumed truthfully to evidence the matters set forth therein. A recitation in the Minutes of any such
meeting that notice of the meeting was properly given shall be prima facile
evidence that such notice was given. (See
section on the duties of secretary in Roberts Rules of Order.)

ARTICLE VI

Board of Directors

Section 6.01: Number and Qualification. The affairs of the Association shall be
governed and managed by a Board of Directors composed of seven (7) Persons,
each of whom, except for those appointed and serving as first Directors, must
be a Member. The Board of
Directors may increase, by resolution, the authorized number of Directors;
provided that the Members shall have the sole right to elect the new
Directors. Directors shall not receive
any salary or compensation for their services as Directors unless such
compensation is approved by the vote or written consent of Members representing
at least a majority of the Association voting power; provided, however,
that (1) nothing herein contained shall
be construed to preclude any Director from serving the Association in some
other capacity and receiving compensation therefore, and (2) any Director may be reimbursed for his
actual expenses incurred in the performance of his/her duties.

Section 6.02: Powers and Duties. The Board of Directors has the powers and
duties necessary for the administration of the affairs of the Association and
may do all such acts and things as are not by law or by these By-Laws directed
to be exercised and done by the Members.
The Board of Directors shall not enter into any contract for a term in
excess of one (1) year, without the vote or written consent of the Members
representing at least a majority of the Association voting power, except
for (1) any contract of a minimum term
with a public utility company regulated by the Public Utilities Commission
(such as Southern California Edison Company) which requires a term in excess of
one (1) year, (2) a management contract
terms of which have been approved by the Veterans Administration or the Federal
Housing Administration, and (3) prepaid
casualty or liability insurance policies of not to exceed three years'
duration, provided that the policies permit short rate cancellation by the
Association.

Section 6.03: Special Powers and Duties. Without prejudice to such foregoing
general powers and duties, the Board of Directors is vested with:

(a) The
power and duty to select, appoint, and remove all officers, agents and
employees of the Association, to prescribe such powers and duties for them as
may be consistent with law, with the Articles of Incorporation, and these
By-Laws; to fix their compensation, if any, and to require from them security
for faithful services when deemed advisable by the Board.

(b) The
power and duty to conduct, manage and control the affairs and business of the
Association, and to make and enforce such rules and regulations therefore
consistent with law, with the Articles of Incorporation and these By-Laws, as
the Board may deem necessary or advisable.

( c) The
power but not the duty to change the principal office for the transaction of
the business of the Association from one location to another within the County
of Riverside, as provided in Article I hereof; to designate any place within
said County for the holding of any annual or special meeting or meetings of
Members consistent with the provisions of Article V, Section 5.02 hereof, and
to adopt and use a corporate seal and to alter the form of such seal from time
to time, as the Board, in its sole judgment, may deem best, provided that such
seal shall at all times comply with the provisions of law.

(d) Subject
to Article XV hereof and with the approval of Members representing at least
fifty plus percent (50 plus %) of the voting power of the entire membershipbut not the duty to borrow money
and to incur indebtedness for the purposes of the Association, and to cause to
be executed and delivered thereof, in the Association's name, promissory notes,
bonds, debentures, deed of trust, mortgages, pledges, hypothecations or other
evidences of debt and securities therefore.

(e) The
power and duty to fix and levy from time to time Annual Assessments, Special
Assessments, and Reconstruction Assessments upon Members, as provided herein;
to fix and levy from time to time in any
fiscal year Capital Improvement Assessments applicable to that year only for
capital improvements; to determine and fix the due date for the payment of such
assessments, and the date upon which the same shall become delinquent;
provided, however, that such assessments shall be fixed and levied only to provide
for the payment of the Common Expenses of the Association, including taxes and
assessments upon real or personal property owned, leased, controlled or
occupied by the Association, or for the payment of expenses for labor rendered
or materials or supplies used and consumed, or equipment and appliances
furnished for the maintenance, improvement or development of such property or
for the payment of any and all obligations in relation thereto, or in
performing or causing to be preformed any of the purposes of the Association,
for the general benefit and welfare of its Members in accordance with the
provisions of the Articles and these By-Laws.
The Board of Directors shall have the power and duty to incur any and
all such expenditures for any of the foregoing purposes and to provide, or
cause to be provided, adequate reserves for real and personal property taxes on
the Project and replacements as it shall deem to be necessary or advisable in
the interest of the Association or welfare of its Members. The funds collected by the Board of Directors
from the Members, attributable for replacement reserves, for maintenance costs
which cannot normally be expected to occur on an annual basis, for capital
improvements, and for real and personal property taxes on the Project, shall at
all times be held in trust for the Members and shall not be commingled with
other assessments collected from the Members.
Disbursements from such trust reserve fund shall be made only in
accordance with the provisions of these By-Laws. Such Annual Assessments, Reconstruction
Assessments, Special Assessments and Capital Improvement Assessments shall be
fixed in accordance with the provisions of these By-Laws. Should any Member fail to pay such assessments
before delinquency, the Board of Directors in its discretion is authorized to
enforce the payment of such delinquent assessments as provided herein.

(f) The
power and duty to enforce the provisions of the Articles, these By-Laws, or
other agreements of the Association.

(g) The power
and duty to contract for and pay fire, casualty, blanket liability, malicious
mischief, vandalism, errors and omission, liquor liability and other insurance,
insuring the Members, the Association, the Board of Directors and other
interested parties, in accordance with the provisions of these By-Laws,
covering and protecting against such damages or injuries as the Board deems
advisable (which may include without limitation, medical expenses of persons
injured on the Project).

(h) The
power and duty to contract for and pay maintenance, legal, accounting,
gardening, common utilities, materials and supplies, services and other Common
Expenses relating to the Project, and relating to the spaces only to the extent
not separately metered or charged, and to employ personnel necessary for the
operation of the Project, including legal and accounting services and to
contract for and pay for Improvements on the Project.

(i) The
power but not the duty to delegate its powers according to law; to contract
with a professional Manager subject to Section 3.05.

(j) The
power but not the duty to grant easements where reasonably necessary for
utilities and other purposes over the Project for the benefit of the members of
the Association.

(k) The power
and duty to fix, determine and name from time to time, if necessary or
advisable, the non profit fund, trust or corporation which is then or there
organized or operated for similar purposes, to which the assets of this
Association shall be distributed upon liquidation or dissolution, according to
the Articles of Incorporation of the Association. The assets so distributed shall be those
remaining after satisfaction of all just debts and obligations of the
association, and after distribution of all property held or acquired by the
Association under the terms of a specific trust or trusts.

(l) The
power and duty to developsuch
Rules and Regulations as the Board may deem necessary for the management of the
project, which Rules and Regulations shall become effective and binding
after (1) they are adopted by a majority
of the Membership, and (2) a copy of the Rules and Regulations so
adopted is posted in a conspicuous place in the Project. Such Rules and Regulations may concern,
without limitation, use of the Project facilities, signs, parking restrictions;
subleasing, collection and disposal of refuse, minimum standards of property
maintenance consistent with these By-Laws and the procedures of the
Architectural Committee; and any other matter within the jurisdiction of the
Association as provided in these By-Laws; provided however, that such Rules and
Regulations shall be enforceable only to the extent that they are consistent
with the Articles of Incorporation and these By-Laws. and The Rules and
Regulations may not be used to amend any of said documents.

(m) The
power and duty to keep, or cause to be kept, a complete record of all acts and
corporate affairs of the Association and to present a summarystatement of major actions thereof to the Members at the Annual Meeting
of the Members and at any other time that such statement is requested by at
least five percent (5%) of the members who are entitled to vote.

(n) The
power but not the duty to appoint a Membership Committee composed of at least
one (1) Director and at least one (1) Association Member at Large. The Membership committee shall be responsible
for establishing initial contact with all Members who are delinquent in the
payment of any assessments or other charges due the Association.

(o) Subject
to Article XV hereof, the power but not the duty to sell property of the
Association, provided, however, that the prior vote or written approval of a
majority of the voting power of the Association must be obtained to sell during
any fiscal year any property of the Association having an aggregate fair market
value greater than five percent (5%) of the budgeted gross expenses of the
Association for that fiscal year.

Section 6.04: Election and Term of Office. At the first Annual Meeting of the
Members, new Directors shall be elected by secret written ballot by a majority
of Members as provided in these By-Laws, and all positions on the Board of
Directors shall be filled at that election.
In the event that an Annual Meeting is not held, or the Board is not
elected thereat, the Board may be elected at any Special Meeting of the Members
held for that purpose. Each Director
shall hold office until his successor has been elected or until his death,
resignation, removal or judicial adjudication of mental incompetence. The terms of office of the Directors elected
at the first Annual Meeting and the term of office of each Director
elected to fill a vacancy created by the expiration of the term of office of
the respective past Director shall be staggered. The terms of the 4 Directors elected with the
largest number of votes shall be 2 years.
The terms of the remaining 3 Directors elected shall be 1
year. After the expiration of the terms
of the Directors elected for 1 year, the terms of the Directors elected in
their stead shall be 2 years. Any person
serving as a Director may be reelected one
time. After a directors elected
term/terms of office expires he/she will be eligible to rerun for office after
sitting out for one year. The
term of office of each Director elected to fill a vacancy created by the
resignation, death or removal of his/her predecessor shall be in the
balance of the unserved term of his predecessor effective with the adoption of these revised By-Laws.
At any election of the Board, each Member may give one or more candidates for
Director a number of votes equal to such Member's share of the voting power all
set forth in Article IV, multiplied by the number of Directors to be elected.

Section
6.05: Books, Audit. The Board of Directors shall cause to be
maintained a full set of books and records showing the financial condition of
the affairs of the Association in a manner consistent with generally accepted
accounting principles. A pro forma
operating statement (budget) for each fiscal year shall be distributed to the
Members not less than sixty (60) days before the beginning of the fiscal year
as provided in Section 10.05 hereof. At
no greater than annual intervals the Board of Directors shall obtain an independent
audit of such books and records performed by a public accountant. A balance sheet and an audited operating
(income) statement for the Association shall be posted.

All books, records and papers of the Association
shall be made available for inspection and copying by any Member or his/her
duly appointed representative at the principal office of the Association or at
such other place within the Project as the Board may prescribe. The Board shall establish reasonable rules
with respect to (1) notice to be given to the custodian of the records by the
Member desiring to make the inspection,
(2) hours and days of the week when such an inspection may be made
and (3) payment of the cost of
reproducing copies of documents requested by a Member. 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 shall include the right to make extract and copies of
documents.

Section 6.06: Vacancies. Vacancies in the Board of Directors caused
by any reason shall be filled by vote of the majority of the remaining
Directors, even though they may constitute less than a quorum, and each
person so elected shall be a Director until a successor is elected at the next
Annual Meeting of the Members of the Association, or at a Special Meeting of
the Members for the purpose of filling the vacancy or removing a Director. A vacancy or vacancies shall be deemed to
exist in case of death, resignation, removal or judicial adjudication of mental
incompetence of any Director, in case the Members fail to elect the full number
of authorized Directors at any meeting at which such election is to take place.

Approved by
vote of the membership on 16 Feb. 2012

Section 6.07: Removal of Directors.

At any annual
or Special Meeting of the Members duly called, any one or more of the Directors
may be removed with cause as stated in
the call for the meetingby a majority vote (50% plus one) of
the Members of the Association. This vote will be done using the same voting
process which is used to elect Directors.
The name of each director proposed for removal will appear onthe
ballot with an opportunity for the Members to vote yes orno on each
Director. A successor
may then and there be appointed
in accordance with Section 6.06 to fill the vacancy thus created. Any Director whose removal has
been proposed by the Members shall be given an opportunity to be heard at the
meeting. In the event that all of the Directors are removed, a committee of three
Members present will be appointed by those Members present and voting to seek
nominations and conduct the election.
This committee would also be responsible for the operation of the
Association until a new Board of Directors has been elected

Section 6.08: Organization Meeting of Board. The organization meeting of the newly elected Board of Directors will be held
after the election at the Annual Board Meeting.
A majority of the whole Board shall be present. There will be an organization meeting to
choose a President, Vice President, Secretary, Treasurer, Maintenance, and
Members at Large. No other business
should be conducted at this meeting. At
a regular weekly Board meeting (within 7 days) the Board should appoint an
Architectural (3 members), Sales and Grievance Chairperson. These appointments should be reported in the
next monthly Board minutes.

Section 6.09: Regular Meetings of Board. Regular meetings of the Board of Directors
shall be open to all Members, provided that Members who are not Directors may
not participate in any deliberation or discussion at such regular meeting
unless expressly so authorized by a vote of a majority of a quorum of the Board
of Directors. Special Meetings may be
called by the President or by any two (2) Directors. At least seventy-two (72) hours' notice shall
be given to each Director, personally or by mail, telephone, or
telegraph, or electronic mail,which
notice shall state the time, place (as hereinabove provided) and the purpose of
the meeting, and shall be posted at a prominent place or places within the Project. If served by mail, each such notice shall be
sent, postage prepaid, to the address of each Director reflected on the records
of the Association, and shall be deemed given, if not actually received
earlier, at 5:00 o'clock P.M. on the second day after it is deposited in a
regular depository of the United States mail as provided herein. Whenever any Director has been absent from
any special meeting of the Board, an entry in the Minutes to the effect that
notice has been duly given shall be conclusive and incontrovertible evidence
that due notice of such meeting was given to such Director, as required by law
and as provided herein.

Section 6.10: (reserved)

Section 6.11: (reserved)

Section 6.12: (reserved)

Section 6.13: Quorum and Adjournment. Except as otherwise expressly provided
herein, at all meetings of the Board of Directors, a majority of the Directors
shall constitute a quorum for the transaction of business, and the acts of the
majority of the Directors present at a meeting at which a quorum is present
shall be the acts of the Board of Directors.
If at any meeting of the Board of Directors there is less than a quorum
present, the majority of those present may adjourn the meeting to a later time. At any such adjourned meeting, any business
which might have been transacted at the meeting as originally called may be
transacted without further notice if a quorum is present.

The Board of Directors may, with the approval of a
majority of a quorum of the Directors, recess
the meeting and reconvene in Executive Session to discuss and vote
upon personnel matters, litigation in which the Association is or may become
involved and orders of business of a similar nature. The nature of any and all business to be
considered in executive session shall first be announced in open session, and recorded minutes need to reflect in
general terms the business conducted.

Section 6.14: Fidelity Bonds. The Board of Directors may require that
all officers and employees of the Association handling or responsible for
Association funds shall furnish adequate fidelity bonds. The premiums on such bonds shall be paid by
the Association.

Section 6.15: Committees. The Board of Directors, by resolution, may
from time to time designate such committees as it shall desire, and may
establish the purposes and powers of each such committee created. The resolution designating and establishing
the committee shall provide for the appointment of it Members, as well as a chairperson, and shall state
the purposes of the committee, and shall provide for reports, termination, and
other administrative matters as deemed appropriate by the Board. All
committees will be appointed or reappointed annually.

ARTICLE VII

Officers

Section 7.01: Designation. The principal officers of the Association
shall be a President, a Vice President, a Secretary, and a Treasurer, all of
whom shall be elected by the Board of Directorsfrom the Board of Directors.
The Board of Directors may appoint an Assistant Treasurer, and an
Assistant Secretary, and such other officers as in their judgment may be
necessary. The office of Secretary and
Treasurer may be held by the same person. The office of President
may not be combined with any other
office.

Section 7.02: Election of Officers. The officers of the Association shall be
elected annually by the Board of Directors at the Organization Meeting of each
new Board of Directors, and each officer shall hold his office at the pleasure
of the Board of Directors, until he/she shall resign or be removed or otherwise disqualified to serve
or his/her successor
shall be elected and qualified to serve.

Section 7.03: Removal of Officers. Upon
an affirmative vote of a majority of the entire Board of Directors, any officer
may be removed, with cause, and his/her
successor elected at any Regular Meeting of the Board of Directors,
or at any Special Meeting of the Board of Directors called for such
purpose. Any officer may resign at any
time by giving written notice to the Board or to the President or Secretary of
the Association. Any such resignation
shall take effect at the receipt of such notice or at any later time specified
therein; and unless otherwise specified in said notice, acceptance of such
resignation by the Board shall not be necessary to make it effective.

Section 7.04: Compensation. Agents, and employees of the Association
shall receive such reasonable compensation for their services as may be
authorized or ratified by the Board. Nothing
herein contained shall be construed to preclude any officer from serving the
Association in some other capacity and receiving compensation therefore,
and (2) any officer may be reimbursed
for his/her actual expenses
incurred in the performance of his/her
duties. Appointment of any officer,
agent or employee shall not of itself create contractual rights of compensation
for services performed by such officer, agent or employee.

Section 7.05: President. The President shall be the Chief Executive
Officer of the Association. He/she shall
preside at all meetings of the Association and of the Board of Directors. He/she shall have all of the general powers
and duties which are usually vested in the office of the President of an
Association, including but not limited to the power, subject to the provisions
of Article VI, Section 6.15, to appoint committees from among the Members from
time to time as he/she may in his/her
discretion decide is appropriate to assist in the conduct of the affairs of the
Association. The President shall,
subject to the control of the Board of Directors, have general supervision,
direction and control of the business of the Association. The President shall be ex-officio non-votingmember of all
standing committees, and he/she shall have such other powers and duties as may
be prescribed by the Board of Directors or these By-Laws of the Association.

Section 7.06: Vice President. The Vice President shall take the place of
the President and perform his/her 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/her by the Board of Directors or
these By-Laws of the Association.

Section 7.07: Secretary. The
Secretary shall take and keep
the Minutes of all meetings of the Board of Directors and the Minutes of all
meetings of the Association at the principal office of the Association or at
such other place as the Board of Directors may order. The Secretary shall keep the seal of the
Association in safe custody and shall have charge of such books and papers as
the Board of Directors may direct; and the Secretary shall, in general, perform
all of the duties incident to the office of Secretary. The Secretary shall give, or cause to be
given, notices of meetings of the Members of the Association and of the Board
of Directors required by these By-Laws or by law to be given. The Secretary shall maintain a record book of
Members, listing the names and
addresses of Members, as
furnished to the Association, and such books shall be changed only at such time
as satisfactory evidence of a change in ownership of a Certificate is presented
to the Secretary as provided in Article IV, Section 4.02. The Secretary shall perform such other duties
as may be prescribed by the Board of Directors or these By-Laws. See the duties of Secretary section of
Roberts rules of Order.

Section 7.08: Treasurer. The Treasurer shall have responsibility
for Association funds and securities and shall be responsible for keeping, or
causing to be kept, full and accurate accounts, tax records and business
transactions of the Association, including account of all assets, liabilities,
receipts and disbursements in books belonging to the Association. The Treasurer shall be responsible for the
deposit of all monies and other valuable effects 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 disburse the funds of the Association as may be
ordered by the Board of Directors, in accordance with these By-Laws, shall
render to the President and Directors, upon request, an account of all of his/her transactions as Treasurer and of
the financial conditions of the Association, and shall have such other powers
and perform such other duties as may be prescribed by the Board of Directors or
these By-Laws.

ARTICLE VIII

Members' Rights to Use and Enjoyment
of Project Facilities

Section 8.01: Association
Responsibilities. The
Association shall immediately become responsible for all maintenance,
operation, control and expenses associated with the Project. The Association shall obtain a CLTA standard
coverage Members title insurance
policy showing title to the Project vested in the Association subject only
to 1) the lien of property taxes and
assessments not delinquent, (2) all
restrictive covenants of record at the time of conveyance, (3) all other matters of record at the time
of conveyance except monetary encumbrances.

Section 8.02: Members' Rights of Use and Enjoyment of
Project Facilities. Subject to
the provisions of Section 8.03 of this Article, every Member of the Association,
upon execution of a Lease, and the Sponsor with respect to Certificates owned
by or issuable to the nominees of Sponsor, shall have for himself and his/her
family, guests, invitees and subtenants, a non-exclusive right of use and
enjoyment of the facilities and Improvements of the Project (except for the
spaces a Restricted Common Areas allocated to other Members), and such right of
use shall be appurtenant to and shall pass with every Membership in the
Association

Section 8.03: Extent of Members' Rights of Use. The rights of use and enjoyment of the
Project facilities set forth in Section 8.02 of this Article shall be subject
to the Restrictions, including, without limitation, the following:

(a) The
right of the Association to construct additional Improvements on the Project
and to alter or remove any existing Improvements on the Project for the benefit
of the Members of the Association.

(b) The
right of the Association, acting through the Board, to grant or convey
easements, licenses or rights-of-way in, on or over the Project for purposes
and in the manner authorized under these By-Laws.

Section 8.04: Delegation of Use. Any Member entitled to the right of use
and enjoyment of the Project facilities may delegate, in accordance with these
By-Laws, his/her right of use and enjoyment of the Project facilities to
his Family, contract renterswho
reside in his/her space, subject
to reasonable regulation by the Board.

Section 8.05: Waiver of Use. AMember may notexempt himself /herselffrom personal
liability for Assessments duly levied by the Association nor effect the release
of his/her Membership and Lease
from the liens and charges thereof, by waiver of the use and enjoyment of the
Project facilities or by abandonment of his/her space.

Section 8.06: Damage by Members. Each Member shall be liable to the
Association for any damage to the Project not fully reimbursed to the
Association by insurance which may be sustained by reason of the negligence or
willful misconduct of said Member, or the persons deriving their right of use
and enjoyment of the Project from said Member, or their respective Family and
guests, both minor and adult. However,
the Association reserves the right, acting through the Board, to determine whether
any claim shall be made upon the insurance maintained by the Association; and
the Association further reserves the right, after Notice and Hearing as
provided herein, to levy a Special Assessment against said Member equal to the
cost of repairing such damage or the increase, if any, in insurance premiums
attributable to the damage caused by such Member or the person for whom such
Member may be liable as described above.
In the case of joint Membership
of a Certificate, the liability of such co- Membersshall be joint and several, except to the extent
that the Association shall have previously contracted in writing with such
joint co- Membersto the
contrary. After Notice and Hearing, as
provided in the By-Laws, the cost of correcting such damage to the extent not
reimbursed to the Association by insurance shall be a Special Assessment
against the Certificate, and may be enforced as provided herein for the
enforcement of other Assessments.

ARTICLE IX

Architectural Review
Committee

Section 9.01: Members of Committee. The Architectural Review Committee,
sometimes referred to in these By-Laws as the "Architectural Committee" or the
"Committee", shall consist of at least three (3) persons. Members appointed to the Committee by the
Board shall be from the Membership of the Association. The Committee may designate and appoint a
representative who is a licensed architect and a majority of the Members of
said Committee may, from time to time, remove or replace such
representative. The designated representative
of the Committee may be, but need not be, a member of the Committee or a Member
of the Association.

Section 9.02: Review of Plans and Specifications. The Committee shall consider and act upon
any and all plans and specifications submitted for its approval pursuant to
these By-Laws and perform such other duties as from time to time shall be
assigned to it by the Board, including the inspection of construction in
progress to assure its conformance with plans approved by the Committee. No construction, alteration, addition,
modification, or reconstruction of an Improvement in the Project shall be
commenced or maintained until the plans and specifications therefore showing
the nature, kind, shape, height, width, elevation, color, materials and
location of the same shall have been submitted to the Committee and approved in
writing by the Committee. The Membershall obtain a written,
dated, receipt for the plans and specifications from an authorized agent of the
Committee. The Committee shall approve
proposals or plans and specifications submitted for its approval only if it
deems that the construction, alterations, or additions contemplated thereby in
the locations indicated will not be detrimental to the appearance of the
surrounding area of the Project as a whole, that the appearance of any
structure affected thereby will be in harmony with the surrounding structures,
that the construction thereof will not detract from the beauty, wholesomeness
and attractiveness of the Project or the enjoyment thereof by the Members, and
that the upkeep and maintenance thereof will not become a burden on the
Association. The Committee may condition
its approval of proposals or plans and specification for any Improvement (1) upon the applicant's furnishing the
Association with security acceptable to the Association against any mechanic's
lien or other encumbrance which may be recorded against the Project as a result
of such work, (2) on such changes
therein as it deems appropriate, (3)
upon the agreement by the Person (referred to in the Section 9.02 as
"applicant") submitting the same to grant appropriate rights of entry to the
Association for the maintenance of the Improvements, or (4) upon the agreement of the applicant to
reimburse the Association for the cost of maintenance, or all four, and may
require submission of additional plans and specification or other information
prior to approving or disapproving material submitted. The Committee shall also issue Architectural
Committee Rules or guidelines setting forth specific standards of approval,
procedures for the submission of plans for approval (including the requirement
of a fee to accompany each application for approval), and any reasonable
additional factors which it will take into consideration in reviewing
submissions. The Committee may provide
that the amount of such fee shall be uniform, or that it be determined in any
other reasonable manner, such as based upon the reasonable cost of the
construction, alterations or additions contemplated. The Committee may require such detail in
plans and specifications submitted for its review as it deems proper, including
without limitation, floor plans, site plans, drainage plans, elevation drawings
and description or samples of exterior material and colors. Until receipt by the Committee of any
required plans and specifications, the Committee may postpone review of any
plan submitted for approval. Decisions
of the Committee and the reasons thereof shall be transmitted by the Committee
to the applicant at the address set forth in the application for approval,. The
Architectural Committee will establish a time schedule for applications.

Section
9.03: Meetings of the
Committee. The Committee shall meet from time to time
as necessary to perform its duties hereunder.
The Committee may from time to time by resolution unanimously adopted in
writing designate a Committee Representative (who may, but need not, be one of
its members) to take any action or perform any duties for and on behalf of the
Committee, except the granting of variances pursuant to Section 9.08 of this
Article IX. In the absence of such
designation, the vote of any two (2) members of the Committee, or the written
consent of any two (2) members of the Committee taken without a meeting, shall
constitute an act of the Committee.

Section 9.04: No Waiver of Future Approvals. The approval of the Committee to any
proposals of plans and specifications or drawings for any work done or proposed
or in connection with any other matter requiring the approval and consent of
the Committee, shall not be deemed to constitute a waiver on the part of the
Committee of any right to withhold approval or consent to any similar
proposals. Plans and specifications, drawings or matter whatsoever subsequently
or additionally submitted for approval or consent.

Section 9.05: Compensation of Members. The members of the Committee shall receive
no compensation for services rendered, other than reimbursement for expenses
incurred by them in the performance of their duties hereunder.

Section 9.06: Correction of Defects. Inspection of work and correction of
defects therein shall proceed as follows:

(a) The
Committee or its duly authorized representative may at any time inspect any
Improvement for which approval of plans is required under this Article IX;
provided, however, that the Committee's right of Inspection of the Improvement
for which plans have been submitted and approved shall terminate sixty (60)
days after such work of Improvement shall have been completed and the
respective Membershall
have given written notice to the Committee of such completion. The Committee's rights of inspection shall
not terminate pursuant to this paragraph in the event plans for the work of
Improvement have not previously been submitted to and approved by the
Committee. If, as a result of such inspection,
the Committee finds that such improvement was done without obtaining approval
of the plans therefore or was not done in substantial compliance with the plans
approved by the Committee, it shall notify the Memberin writing of failure to comply with this Article IX
within sixty (60) days from the inspection, specifying the particulars of
non-compliance. The Committee shall have
the authority to require the Memberto
take such action as may be necessary to remedy the non-compliance.

(b) If upon
the expiration of sixty (60) days from the date of such notification, the Membershall have failed to
remedy such compliance, the Committee shall notify the Board in writing of such
failure. Upon Notice and Hearing, as
provided in the By-Laws, the Board shall determine whether there is a
non-compliance and, if so, the nature thereof and the estimated cost of
correcting or removing the same. If a
non-compliance exists, the Membershall
remedy or remove the same within a period of not more that forty-five (45) days
from the date that notice of the Board ruling is given to the Member. If the Memberdoes not comply with the Board ruling within such
period, the Board may record a Notice of Non-Compliance against the Member'sleasehold interest in
the Unit, peacefully remove the non-complying Improvement or otherwise
peacefully remedy the non-compliance, and the Membershall reimburse the Association upon demand, for all
expenses incurred in connection therewith.
If such expenses are not promptly repaid by the Memberto the Association, the Board shall levy a Special
Assessment against such Memberfor
reimbursement collectible in the same manner as Annual Assessments provided in
these By-Laws. The right of the
Association to remove a non-complying Improvement or otherwise remedy the
non-compliance shall be in addition to all other rights and remedies which the
Association may have at law, in equity or in the Lease between the Association
and the respective Member.

(c ) If for
any reason the committee fails to notify the
Memberof any
non-compliance with previously submitted and approved plans within sixty (60)
days after receipt of said written notice of completion from the Member,
the Improvement shall be deemed to be in accordance with said approved plans.

(d)
Notwithstanding anything contained in these By-Laws to the contrary, any
member of the Board or of the Committee, or any officer of the Association,
shall immediately notify the Board upon learning of any work of improvement on
the Project undertaken by on behalf of a
Member, including any
work of improvement located entirely within such Member's
Unit. Within ten (10) days
after the Board learns of such work or improvement, the Board shall cause a
notice of no responsibility to be recorded and posted in the manner specified
in Section 3094 of the California Civil Code, or such other provision of
California law dealing with non-responsibility for mechanics' liens resulting
from such Member'swork
on any portion of the Project.

Section 9.07: Non-Liability of Committee Members. Neither the Sponsor, the Architectural
Committee, nor any member of the Architectural Committee, the Board nor their
duly authorized representative shall be liable to the Association, or to any Memberfor any loss, damage or
injury arising out of or in any way connected with the performance of the
duties hereunder, unless due to the willful misconduct or bad faith of any such
Person. The Architectural Committee
shall review and approve or disapprove all plans submitted to it for any
proposed Improvement, alteration or addition, solely on the basis of aesthetics
considerations and the overall benefit or detriment which would result to the
immediate vicinity of the Project generally.
The Committee shall take into consideration the aesthetic aspects of the
architectural designs, placement of buildings, landscaping, color schemes,
exterior finishes and materials and similar features. The Committee's approval or disapproval shall
be based solely on the considerations set forth in this Article IX, and the
Committee shall not be responsible for reviewing, nor shall its approval of any
plan or design be deemed approval of, any plan or design from the standpoint of
structural safety or conformance with building or other codes.

Section 9.08: Variances. The Committee may authorize variances from
compliance with any of the architectural provisions of these By-Laws, including
restrictions upon height, size, floor area or placement of Improvements, or
similar restrictions when circumstances such as topography, natural
obstructions, hardship, aesthetic or environmental consideration may
require. Such variances must be evidence
in writing, must be signed by at least two (2) members of the Committee, and
shall become effective upon certification by the Secretary of the Association
and recordation in the books and records of the Association. If any such variance is granted, no violation
of the provisions of these By-Laws shall be deemed to have occurred with
respect to the matter for which the variance was granted. The granting of such a variance shall not
operate to waive any of the terms and provisions of these By-Laws for any
purpose except as to the particular property and particular provision hereof
covered by the variance and shall not necessarily serve as a basis for
subsequent variances with the respect to spaces. The granting of any variance shall not affect
in any way the Member'sobligation
to comply with all governmental laws and regulations affecting his/her use of the Residence.

ARTICLE X

Association Maintenance
Funds and Assessments

Section
10.01: Creation of the Lien and Personal
Obligation of Assessments. The
Sponsor, for each Certificate which is owned by or issuable to a nominee of the
Sponsor and allocated to a space, hereby covenants and agrees to pay, and each Member, by acceptance of a Certificate
allocated to a space, is deemed to covenant and agree to pay to the
Association, all Annual Assessments for Common Expenses and all applicable
Special Assessments, Reconstruction Assessments and Capital Improvement
Assessments. Except as provided in
Section 10.06 of this Article X, the payment of all such assessments, together
with interest, costs, and reasonable attorneys' fees, shall be a separate,
distinct and personal obligation of the person who was the Memberof such Certificate at
the time when the assessments fell due, and shall bind his/her heirs, personal representatives
and assigns. This personal obligation
cannot be avoided by abandonment of the spaces assigned to such Member'sCertificate, or by an
offer to waive use of the Project facilities.

Section
10.02: Maintenance Funds of Association. The Board of Directors shall establish no
fewer than three (3) separate accounts (the "Maintenance Funds"), into which
shall be deposited all monies paid to the Association, and from which
disbursements shall be made, as provided herein, in the performance of
functions by the Association under the Articles and these By-Laws. Each of the Maintenance Funds shall be
established as separate trust savings or trust checking accounts at a banking
or savings institution. The Maintenance
Funds shall include: (1) a Tax Fund into
which the Board shall deposit taxes currently assessed against the Project, (2)
an Operating Fund for current Common Expenses of the Association, (3) a Reserve Fund for capital improvements,
replacement, painting and repairs of the Project (which cannot normally be
expected to occur on an annual basis), and
(4) any other funds which the Board of Directors may establish to the
extent necessary under the provisions of these By-Laws. The Board of Directors shall not co-mingle
any amounts deposited into any of the Maintenance Funds with one another. Nothing contained herein shall limit,
preclude or impair the establishment of additional Maintenance Funds by the
Association, so long as the amounts assessed to, deposited into, and disbursed
from any such Fund are earmarked for specified purposes authorized by these
By-Laws.

Section 10.03: Purpose of Assessments. The assessments levied by the Board of
Directors on behalf of the Association shall be used exclusively to promote the
recreation, health, safety and welfare of the residents of the spaces and for
the operation, replacement, improvement and maintenance of the Project. All amounts deposited into the Operating Fund
must be used solely for the common benefit of all of the Membersfor purposes authorized
by these By-Laws, as amended from time to time.
Disbursements from the Operating Fund shall be made by the Board of
Directors for such purposes as may be necessary for the discharge of its
responsibilities herein for the common benefit of all of the Members, other than those purposes for
which disbursements from the Tax or Reserve Fund are to be used. Disbursements from the Reserve Fund shall be
made by the Board of Directors for the respective purposes specified in the
Article X. Amounts deposited into the
Tax Fund shall not be disbursed for any purpose other than the payment of real
and personal property taxes assessed against the Project when due. Nothing in these By-Laws shall be construed
in such a way as to preclude the Association from using any assessments to
abate any annoyance or nuisance emanating from outside the physical boundaries
of the Project.

Section
10.04: Basis of Maximum Annual Assessment. The maximum Annual Assessment under this
Article X shall be determined in accordance with the budget of the Association
as approved by the Board of directors. Should the board of Directors determine
that the maximum Annual Assessment is insufficient to meet the common Expenses
of the Association during the remainder of the Association's fiscal year, the
Board of Directors may, by majority vote, increase that Annual assessment by
not more than Twentypercent
(20%) above the maximum Annual Assessment of theprior year.
Any annual assessments which would exceed 20% would, in emergency
situations, be governed by Section 1366 of the California Civil Code.

(a) Annual
Assessment under Article X shall be determined yearly and approved by the Board
of Directors. Form QVA 2006 and
appropriate California Codes and Laws will be utilized by preparing committee.

(b) Unless
approved by the members as provided above, the Board of Directors may not fix
an Annual Assessment amount in excess of the maximum.

Section
10.05: Commencement of Annual Assessment. The Board of Directors shall authorize and
levy the amount of the Annual Assessment upon each Certificate and the
Memberships represented thereby, as provided herein, by majority vote of the
BoardAll Annual Assessments shall be assessed proportionately against the Membersand their Memberships,
based upon the percentages reflected in the Maintenance Expense Schedule and
the Tax Allocation Schedule.

At
least sixty (60) days prior to the beginning of each fiscal year, the Board of
Directors shall prepare and distribute to the Membership of the Association, a
written, itemized budget of the Annual Assessments to be levied and the total
income and Common Expenses to be received or incurred by the Association during
such year in performing its functions under these By-Laws. This
includesa reasonable
provision for contingencies and deposits into the Reserve Fund, less any
expected income and accounting for any surplus from the prior year's respective
Maintenance Fund). Written notice
of the Annual Assessments shall be sent to every Member subject thereto. The Board of Directors shall fix the amount
of the Annual Assessments against each
and his respective Certificate at least thirty (30) days in advance of
each Annual Assessment period. Each
Annual Assessment shall constitute an aggregate of separate assessments for
each of the Maintenance Funds, reflecting an itemization of the amounts
assessed and attributable to prospective deposits into the Reserve Fund, the
Tax Fund and the Operating Funds.

In the event that the Board of Directors shall
determine that the estimate of total charges for the current year is, or will
become, inadequate to meet all expenses for the Project for any reason, it
shall immediately determine the approximate amount of such inadequacy. Subject to the provisions of Section 10.04 of
this Article, the Board of Directors shall have the authority to levy, at any
time by a majority vote, a supplemental Annual Assessment, reflecting a
revision of the total charges to be assessed against each Certificate and the
Memberships and Lease evidenced thereby.
Written notice of any change in the amount of Annual Assessments levied
by the Association through the Board of Directors shall be given to all Members
not less than thirty (30) days prior to the effective date of such change.

Each Member
shall pay to the Association his/her Annual Assessment in total
or inquarterly installments in such amounts as established by
the Board of Directors. Each Annual
Assessment may be paid by the Member to the Association in one check or in
separate checks as payments attributable to the deposits under the Operating
Funds, the Tax Fund and the Reserve Fund. In the event that any installment of an
Annual Assessment payment is less than the amount assessed and the payment does
not specify the Maintenance Fund or Funds into which it should be deposited,
the receipt by the Association from that Membershall be credited in order of priority first to the
Tax Fund until that portion of the Annual Assessment has been satisfied, then
to the Operating Fund, until that portion of the Annual Assessment has been
satisfied, and lastly to the Reserve Fund.

Section
10.06: Collection of Annual Assessments. Annually the Board of Directors shall
present to the Members, and to any and every institutional holder of a first
Mortgage on a Certificate who has filed a written request with the Board, a
written financial statement, reflecting income and expenditures of the
Association including deposits in and withdrawals from the Tax and Reserve
Funds from the date of establishment thereof, as further provided in Article
VI, Section 6.05 hereof. The Board of
Directors may cause such statement to be distributed to all Members in such
greater frequency as deemed appropriate by the Board of Directors of the
Association.

At the end of any fiscal year of the Association,
the Board of Directors may
determine that all excess funds in the Tax and Operating Funds may be returned
to the Members proportionately, or may be retained by the Association and used
to reduce the following year's Annual Assessments. Upon dissolution of the Association incident
to the abandonment or termination of the Project, any amounts remaining in any
of the Maintenance Funds shall be distributed proportionately to the Members as
provided in the Articles.

In any voluntary or involuntary conveyance of a
Certificate, the new Member("Purchaser")
shall be jointly and severally liable with the previous Member("Seller") for all unpaid assessments levied by the
Board of Directors against the Seller for his/her proportionate share of the Common Expenses up to the time of
the transfer, without prejudice to the right of the Purchaser to collect from
the Seller thereof. However, any such
Purchaser shall be entitled to a statement from the Board of Directors or the
Manager of the Association, as the case may be, setting forth the amount of the
unpaid assessments against the Seller due the Association; and such Purchaser
shall not be liable for, nor shall the Certificate and the Membership
represented thereby be liable for any unpaid assessments levied by the Board of
Directors against the Seller in excess of the amount set forth in the
statement; provided, however, that the Purchaser shall be liable for any such
assessment becoming due after the date of any such statement. Notwithstanding the foregoing, and subject to
the provisions of Section 10.10, any first Mortgagee or other Purchaser for
value who obtains title to a Certificate and corresponding Lease pursuant to
the remedies provided in the first Mortgage, by foreclosure of the first
Mortgage, or by assignment in lieu of foreclosure, shall not be liable for
unpaid assessments or charges against the mortgaged Certificate and Lease which
accrue prior to the time such Mortgagee acquires title to that Certificate and
Lease.

Section
10.07: Capital Improvement Assessments. Should the Board of Directors determine the
need for a capital Improvement or other such expenditure, the cost of which in
the aggregate exceed five percent (5%)
of the budgeted gross expenses of the Association for the then current fiscal
year (exclusive of real and personal property taxes assessed against the
Project), then the vote or written consent of Members representing at
least a majority of the voting power of the Association shall be required to
approve and render effective a Capital Improvement Assessment levied by the
Board of Directors to cover the cost of such expenditure. Capital Improvement Assessments may be levied
by the Board without the consent of the Members, if the aggregate cost of the
expenditure does not exceed five percent (5%) of the budgeted gross expenses of
the Association for the then current fiscal year, (exclusive of
real and personal property taxes assessed against the Project).

Section
10.08: Delinquency and Acceleration. Any installment of an assessment provided
for in these By-Laws shall become delinquent if not paid on the due date as
established by the Board of Directors of the Association. With respect to each installment of an
assessment not paid within ten (10) days after its due date, the Board of Directors
may, at its election, require the delinquent
Memberto pay a
late charge of not to exceed Twenty-Five
Dollars ($25.00) or
twelve percent (12%) of the amount of the delinquent installment, which ever is
greater, together with interest at the maximum rate permitted by law on such
delinquent sums, calculated from the date of delinquency to and including the
date full payment is received by the Association. If any installment of an annual Assessment is
not paid within thirty (30) days after its due date, the Board shallmail a notice to the Memberand to each first
Mortgagee who has requested a copy of the notice. Such notice shall specify (1) the fact that the installment is
delinquent; (2) the action required to
cure the default; (3) a date, not less
than thirty (30) days from the date the notice is mailed to the Member,
by which such default must be cured; and
(4) that failure to cure the default on or before the date specified in
the notice may result in acceleration of the balance of the installment of the
Annual Assessment for the then current fiscal year and sale of the Member's
Certificate and appurtenant Membership and Lease. The notice shall further inform the Memberof his right to cure
after acceleration and to bring a court action to assert the nonexistence of a
default or any defense of the Member
to acceleration and sale. If
the delinquent installments of the Annual Assessment and any charges thereon
are not paid in full on or before the date specified in the notice, the Board,
at its option may declare all of the unpaid balance of the Annual Assessment
for the then current fiscal year, attributable to that Member
and his/her
Membership, to be immediately due and payable without further demand and may
enforce the collection of the full Annual Assessment and all charges thereon in
any manner authorized by law and these By-Laws.

Section
10.09: Notice of Lien. The Board of Directors may cause to be
prepared and recorded in the Office of the Riverside County Recorder a Notice
of Delinquent Assessment ("Notice of Lien") reflecting any delinquent
assessment or installment thereof, levied by the Association against any Member and his/her appurtenant Membership and Lease as provided in these
By-Laws. Such Notice of Lien shall
state (1) the amount of such delinquent
assessment or installment as the case may be, and other authorized charges and
interest, including without limitation the cost of preparing such Notice of Lien, (2) the expenses of collection in connection
with any delinquent installments, including without limitation reasonable
attorneys' fees, (3) a description of
the Certificate and Lease against which the same has been assessed, (4) the name of the Member
thereof, (5) the name and
address of the Association, and (6) the
fact that such lien is subordinate to any first Mortgage of Record. Such Notice of Lien shall be signed by an
authorized representative of the Association and a copy shall be delivered to
the delinquent Memberand
any Mortgagee of such Memberwho
has requested such notice. Upon payment
to the Association of the full amount claimed in the Notice of Lien, or other
satisfaction thereof, the Board of Directors shall cause to be prepared and
recorded a Notice of Satisfaction and Release of Lien ("Notice of Release")
stating the satisfaction and release of such amount claimed. The Board of Directors may demand and receive
from the applicable Membera
reasonable charge for the preparation of such Notice of Release before
recording the same. Any purchaser or
encumbrancer, who has acted in good faith and extended value may rely upon such
Notice of Release, as conclusive evidence of the full satisfaction of the sums
stated in the Notice of Lien.

Section
10.10: Liens, Enforcement. All sums assessed in accordance with the
provisions of these By-Laws shall constitute a lien on the respective
Certificate and appurtenant Membership and Lease prior and superior to all
other liens and any declaration of homestead, except (1) all taxes and other levies, which, by
law, would be superior thereto, and (2)
the lien or charge of any first Mortgage (meaning any Mortgage with first
priority or seniority over other Mortgages) made in good faith and for value
and recorded in the books and records of the Association or the Office of the
Riverside County Recorder prior to the date on which a Notice of Lien is
recorded pursuant to Section 10.09 or a notice of default is recorded pursuant
to any Deed of Trust given by the defaulting
Memberto secure
the payment of assessments as rent under such
Member'sLease. Such lien shall relate only to the
Certificate and appurtenant Membership and Lease against which the assessment
was levied and not to the Project as a whole.
It shall be the duty of the Board of Directors to enforce the collection
of any amounts due under these By-Laws by one or more of the alternative means
of relief afforded by law and these By-Laws.
Such lien, and the lien of any Deed of Trust given by the defaulting Memberto secure the payment of
assessments as rent under such Member's
Lease, may be enforced by sale of the Certificate and the
appurtenant Membership and Lease by the Association, its attorney or other
person authorized by the Association to make the sale, after failure of the Memberto pay an assessment, or
an installment thereof, as provided herein.
Such sale shall be conducted in accordance with the provisions of the
California Civil Code pertaining to the exercise of powers of sale in mortgages
and deeds of trust, or in any manner permitted by law. An action may be brought to foreclose the
lien of the Association by law. An
action may be brought to foreclose the lien of the Association by the Board or
by any Member if the Board fails or refuses to act, after expiration of at
least thirty (30) days from the date on which the Notice of Lien was recorded;
provided that at least ten (10) days have expired since a copy of the Notice of
lien was mailed to the defaulting Memberaffected thereby, and
subject to the provisions of Section 10.08 of this Article in the event that
the Board accelerated the due date of any annual Assessment installments. In any such foreclosure, the defaulting Member
shall be required to pay the Association a reasonable rental for the
space allocated to such Member'sCertificate, and the
plaintiff in such foreclosure action shall be entitled for the appointment of a
receiver to collect the same. The
Association, through its agents, shall have the power to bid on the Certificate
and appurtenant Membership and Lease at the foreclosure sale, and acquire,
hold, sublease, mortgage and convey the same, subject to any outstanding first
Mortgage of Record. Upon completion of
the sale, the Trustee conducting the sale shall assign the defaulting Member'sMembership and
appurtenant Lease to the purchaser at the sale, subject to any outstanding
first Mortgage of Record and subject also to a Trust Deed encumbering the
interest of the purchaser at the sale for the purpose of securing future
assessments payable by such purchaser as rental under the Lease. Such assignment shall be reflected in the
books and records of the Association, subject to any outstanding first Mortgage
of Record. In the event any first
Mortgage of Record remains outstanding against the defaulting Member'sCertificate and
appurtenant Membership and Lease following assignment by the Trustee in
foreclosure, the Association shall promptly notify such first Mortgagee of the
assignment and the appurtenant Certificate may be cancelled and a new
Certificate issued to the purchaser at the foreclosure sale only upon
endorsement by such first Mortgagee following payment of the first
Mortgage. Upon completion of the
foreclosure sale, an action may be brought by the Association or the purchaser
at the sale in order to secure occupancy of the Unit allocated to the
defaulting Member'sCertificate,
and the defaulting Membershall
be required to Pay the reasonable rental value for such space during any period
of continued occupancy by the defaulting
Memberor any
persons claiming under the defaulting Member. Use
of forms QVA 2006 "C" will be required in processing a lien, which are located
in the Quail Valley Association office.

ARTICLE XI

Residence and Use
Restrictions

All of the Project shall be held , used and enjoyed
subject to the following limitations and restrictions and subject to the
exemptions of the Sponsor set forth in these By-Laws.

Section
11.01: Residential Use. No living area of any space shall be used
for any purpose other than the use and support of a recreational vehicle. No gainful occupation, profession, trade or
other non-residential use shall be conducted within the Project. The provisions of this Section 11.01 shall
not preclude professional and administrative occupations without external
evidence thereof, for so long as such occupations are in conformance with all
applicable governmental ordinances and are merely incidental to the use of the
space as for the use and enjoyment of a recreational vehicle.

Section
11.02: Parking and Vehicular Restrictions. No commercial-type vehicle (including, but
not limited to, any dump truck, cement mixer truck, oil or gas truck or
delivery truck), or any other similar vehicle or any vehicular equipment,
mobile, or otherwise, deemed to be a nuisance by the Board, shall be parked,
kept or maintained anywhere on the Project.
No inoperable vehicle shall be stored or allowed to remain on the
Project. The parking areas shall be used
for parking of authorized vehicles only and shall not be converted for
storage, living, recreational or business purposes. The Association, through the Board and its
agents is hereby empowered to establish "parking", "guest parking" and "no
parking" areas within the Project (other than "Restricted Common Areas"
allocated to the spaces) in accordance with Section 22658 of the California
Vehicle Code, or any similar statute hereafter enacted as well as to enforce
these parking limitations by all means lawful for such enforcement on city
streets, including the removal of any violating vehicles by those so empowered.

Section
11.03: Antennae No exterior radio antenna,
"C.B." antenna, television antenna, or other antenna of any type shall be
erected or maintained anywhere in the Project unless first approved by the
Architectural Committee. Motor homes and/or travel trailers arriving
with existing antennae shall be exempt.

Section
11.04: Insurance Rates. Nothing shall be done or kept in the
Project which will increase the rate of insurance on any property insured by
the Association without the approval of the Board, nor shall anything be done
or kept in the Project which would result in the cancellation of insurance on
any property maintained by the Association or which would be in violation of
any law.

Section
11.05: Subleases. No Member
shall sublet his/herspace
without the prior written consent of a majority of the Board of Directors of
the Association and without first having complied with all applicable laws and
regulations. No Membershall be permitted to sublease or rent his/her space
for transient purpose. The terms of any
such sublease or rental agreement shall be subject in all respects to the
provisions of the Restrictions and the By-Laws of the Association and any
failure by the subleasee of such space to comply with the terms of the
Restrictions or the By-Laws of the Association shall constitute a default under
the sublease or rental agreement.
Notwithstanding the foregoing, no space in the Project may be
partitioned or subdivided (physically or legally) without the prior written
approval of the holder of any first Mortgage lien on the Certificate to which
such space is allocated, and this Section may not be amended without the prior
written approval of at least fifty plus percent (50 plus %) of the first
Mortgagees of Certificates.

Section 11.06: Signs. No sign, poster, billboard, advertising
device or other display of any kind shall be displayed to the public view
without the approval of the Architectural Committee. Any sign stating that a Membership is for
sale may be placed within the appurtenant space. The Board of Directors shall have the power
to reasonably control the location of any "for sale" signs in the Project and
may construct a directory of spaces for which appurtenant Memberships are for
sale. Address identification signs shall
be maintained by the Association.
Notwithstanding the foregoing, nothing herein contained shall be
construed in such a manner as to permit the maintenance of any sign which is
not in conformance with any ordinance of the County of Riverside.

Section
11.07: View Obstructions. No vegetation or other obstruction shall
be planted or maintained upon any patio, deck or balcony in such a location or
of such height as to unreasonably obstruct the view from any other space in the
vicinity thereof. In the event of a
dispute between Membersas
to the obstruction of a view from a space, such dispute shall be submitted to
the Architectural Committee, whose decision in such matters shall be
binding. Any such obstruction shall,
upon request of the Architectural Committee, be removed or otherwise altered to
the satisfaction of the Architectural Committee, by the Memberupon whose space said obstruction is located. Any item or vegetation maintained upon any
deck or patio which item or vegetation is exposed to the view of any Member, shall be removed or otherwise
altered to the satisfaction of the Architectural Committee, if such Committee
determines that the maintenance of such item or vegetation in its then existing
state is contrary to the purposes or provisions of these By-Laws. The Architectural Committee shall ensure that
the vegetation on the Project maintained by the Association is cut frequently,
so that the view of any Member
is not unreasonably obstructed.

Section
11.08: Animal and Insect Restriction. No livestock, reptiles, insects, poultry
or other animals of any kind shall be raised, bred or kept anywhere in the
Project except domestic dogs, cats, fish, birds and other household pets may be
kept within any Residence, provide that they are not kept, bred or maintained
for commercial purposes or in unreasonable quantities or sizes. As used in these By-Laws, "unreasonable
quantities" shall ordinarily mean more than one (1) pet per space, provided, however,
that the Board of Directorsmay
determine that a reasonable number in any instance may be more or less. The Board
of Directorsshall have the right to prohibit maintenance of any
animal which in its opinion constitutes a nuisance or annoyance to any other Member. Animals belonging to Member occupants or their licensees, tenants or invitees within
the Project must be either restrained within an enclosure, an enclosed patio or
balcony or on a leash being held by a person capable of controlling the
animal. Furthermore, any Member
shall be absolutely liable to each and all remaining Members,
their families, guests, tenants and invitees, for any unreasonable noise or
damage to person or property caused by any animal brought or kept upon the
Project by any Member or by members of his/her
family, his/her tenants or
guests. It shall be the duty and responsibility of each such Memberto clean up after such
animals which have used any portion of the Project. Notwithstanding the foregoing, the
Restrictions shall not be interpreted in such a manner as to permit (1) the
maintenance of any animals which are not permitted to be maintained in the
Project under the ordinances of the County of Riverside, or (2) the maintenance of any animals which may
otherwise by permitted on the Project by the ordinances of the County of
Riverside but which are not otherwise permitted pursuant to these By-Laws.

Section
11.09: Nuisances. No rubbish or debris of any kind shall be
placed or permitted to accumulate anywhere upon the Project and no odor shall
be permitted to arise therefrom so as to render the Project, or any portion
thereof, unsanitary, unsightly, offensive or detrimental to any other property
in the vicinity thereof or to its occupants.
No activity shall be permitted to exist or operate upon any portion of
the Project, so as to be offensive, hazardous or detrimental to any other
property in the vicinity thereof or to its occupants. The Board of Directorsshall have the
right to determine if any noise, odor or activity producing same constitutes a
nuisance. Without limiting the
generality of any of the foregoing provisions, no exterior speakers, horns,
whistles, bells or other sound devices (other than security devices used
exclusively for security purposes), noisy or smoky vehicles, large power tools,
unlicensed off-road motor vehicles or items which may unreasonably interfere
with television or radio reception of any
Member, in the Project,
shall be located, used or placed on any portion of the Project, without the
prior written approval of the Board of
Directors. All storage shall be
enclosed within the enclosed Units or designated storage areas, if any, so as
not to be visible to other Members. Each Member
shall be accountable to the Association and other Owners for the
conduct and behavior of the children visiting his/her space and other Family members or persons residing in or
visiting his/her space and any
damage to the Project facilities or property of another Membercaused by such children or other Family Members
shall be repaired at the sole expense of the Member with who said children or other Family Members or Persons
are residing or visiting.

Section
11.10: Inside and Outside Installations. No outside installation of any type,
including but not limited to a television or radio pole, antenna or clothesline
shall be constructed, erected or maintained on any space except as may be
installed by the Memberor
with the prior consent of the Architectural Committee. Outdoor patio or lounge furniture, plants and
barbeque equipment may be maintained pursuant to the Rules and
Regulations. Notwithstanding the
specificity of the foregoing, no exterior addition, change or alteration to any
space or Restricted Common Area shall be commenced without the prior written
approval of the Architectural Committee.
There shall be no destruction of any part of the Project, except by the
Association in accordance with the Restrictions. No utility bearing or structural interior
wall in any of the Improvements of the Project shall be pierced or otherwise
altered in any way, without a structural engineering analysis and the prior
written approval of the Architectural Committee. No Member
shall cause or permit any mechanic's lien to be filed against any portion of
the Project for labor or materials alleged to have been furnished or delivered
to the Project or any Unit for such Member. Any such Membershall immediately cause such lien to be discharged within
five (5) days after notice to the Member
from the Board, the Board may discharge the lien and charge the a
Special Assessment for such cost of discharge after Notice and Hearing.

Section
11.11: Rubbish Removal. Trash, garbage, or other waste shall be
disposed of only by depositing same into a designated trash container. No portion of the Project shall be used for
the storage of building materials, refuse or any other materials, other than in
connection with approved construction.
There shall be no exterior fires whatsoever except barbeque fires
contained within receptacles therefore.
No clothing, household fabrics or other unsightly articles shall be
hung, dried or aired on any portion of the Project, including any space, so as
to be visible from other spaces or the street.
No lumber, grass, shrub or tree clippings or plant waste, metals, bulk
materials, scrap, refuse or trash shall be kept, stored or allowed to
accumulate in any space, including any patio or parking space.

Section 11.12: Drainage. There shall be no interference with the
established drainage pattern over the project, unless an adequate alternative
provision is made for proper drainage and is first approved in writing by the
Architectural Committee.

Section 11.13: Water Supply Systems. No individual water supply or water softener
system shall be permitted on any space unless such system is designed, located,
constructed and equipped in accordance with the requirements, standards, and
recommendations of any applicable water district, the County of Riverside and
all other applicable governmental authorities.
Any sewage disposal system shall be installed only after approval by the
Architectural Committee and any governmental health authority having
jurisdiction.

ARTICLE XII

Insurance

Section
12.01: Duty to Obtain Insurance; Types. The Board shall obtain and continue in
effect adequate blanket public liability insurance (including medical
payments), with such limits as may be considered advisable by this Board of
Directors (but not less than $1 million dollars covering all claims for
personal injury and property damage arising out of a single occurrence),
insuring against liability for bodily injury, death and property damage arising
from the activities of the Association and its Members, with respect to the
Project and any other property under its jurisdiction. The Board shall also obtain and continue in
effect fire and casualty insurance with extended coverage in an amount as near
as possible to the full replacement value of the Project (including, without
limitation, all Improvements, built-in appliances and cabinets, if any, without
deduction for depreciation). Such
insurance shall be maintained by the Board of Director for the benefit of the
Association, the Members,
and the Mortgagees, as their interests may appear as named insureds, subject,
however, to loss payment requirements as set forth herein. The Board of Directors shall purchase such
other insurance, as necessary, to cover such other risks as shall customarily
be covered with respect to cooperative apartment projects similar in
construction, location and use. Fidelity
bond coverage may be obtained by the Association for any Person or entity
handling funds of the Association, including, but not limited to, officers, directors,
trustees and employees of the Association and employees of any professional
managing agent of the Association.

Section
12.02: Waiver of Claims Against Association. As to all policies of insurance maintained
by the Association and the Members
which will not be voided or impaired thereby, the Association and the Membershereby waive and
release all claims against one another, the Board of Directors and the Sponsor,
to the extent of the insurance proceeds available whether or not the insurable
damage or injury is caused by the negligence of or breach of any agreement by
any of said persons.

Section
12.03: Rights and Duty of Member
to Insure. It shall be
the responsibility of each memberto
provide insurance on his/her personal property and upon all other property
within his/her space or
Restricted Common Area which is not insured by the Association's blanket
policy. Nothing herein shall preclude
any Memberfrom carrying
any public liability insurance as he/she may deem desirable to cover his/her
individual liability for damage to Persons or property occurring inside his/her
individual space or elsewhere upon the Project.
Such other policies shall not adversely affect or diminish any liability
under any insurance obtained by the Association, and duplicate copies of such
other policies shall be deposited with the Board. If any loss intended to be covered by
insurance carried by the Association shall occur and the proceeds payable
thereunder shall be reduced by reason of insurance carried by any Member, such Membershall assign the proceeds of such insurance carried
by him/her to the Association, to the extent of such
reduction, for application by the Board to the same purposes as the reduced
proceeds are to be applied.

Section
12.04: Notice of Expiration Requirements. All of the policies of insurance
maintained by the Association shall contain a provision that said policy or
policies shall not be cancelled or terminated, or expired by their terms,
without sixty (60) days' prior written notice to the Board, the Members and their respective first
Mortgagees provided that such Member
or Mortgagee have filed written requests with the carrier for such
notice and every other Person in with interest who shall have requested
such notice of the insurer.

Section
12.05: Insurance Premiums. Insurance premiums for any such blanket
insurance coverage obtained by the Association and any other insurance deemed
necessary by the Board of Directors shall be a Common Expense to be included in
the Annual Assessments levied by the Association, collected from the Members; and the portion of such
payment necessary for the required insurance premiums shall be separately
accounted for by the Association in a
designated line item in the General Fundto be used solely for
the payment of premiums of required insurance as such premiums become due.

Section
12.06: Trustee for Policies. The Association, acting through its Board
of Directors, is hereby appointed and shall be deemed trust of the interests of
all named insureds under policies of insurance purchased and maintained by the
Association. All insurance proceeds
under any such policies as provided for in Section 12.01 of this Article shall
be paid to the Board of Directors as Trustees.
The Board shall have full power to receive and to receipt for the
proceeds and to deal therewith as provided herein. Insurance proceeds shall be used by the
Association for the repair or replacement of the property for which the
insurance was carried or otherwise disposed of as provided in Article XIII of
these By-Laws. The Board is hereby
granted the authority to negotiate losses and settlements with the appropriate
insurance carriers, with participation, to the extent they desire, by first
Mortgagees who have filed written requests as provided in Article XV of these
By-Laws. Any two Directors of the
Association may sign a loss claim form and release form in connection with the
settlement of a lost claim, and such signatures shall be binding on all the
names insureds.

Section
12.07: Actions as Trustee. Except as otherwise specifically provided
in these By-Laws, The Board, acting on behalf of the Association and all Members, shall have the exclusive
right to bind such parties in respect to all matters affecting insurance
carried by the Association, the settlement of a loss claim, and the surrender,
cancellation, and modification of all such insurance, in a manner satisfactory
to seventy-five percent (75%) of the first Mortgagees who have filed requests
under Article XV of these By-Laws, to the extent such first Mortgagees desire
to participate. Duplicate originals or
certificates of all policies of fire and casualty carried by the Association
and of all renewals thereof together with proof of payment of premiums, shall
be delivered by the Association to all Mortgagees who have requested the same
in writing.

Section
12.08: Annual Insurance Review. The Board shall review the insurance
carried by the Association at least annually, for the purpose of determining
the amount of the casualty and fire insurance referred to in Section 12.01
above. The Board shall obtain a current
appraisal of the full replacement value of the Improvements in the Project
except for foundations and footings, without deduction for depreciation, by a
qualified independent insurance appraiser, prior to each such annual review.

Section
12.09: Required Waiver. All policies of physical damage insurance
shall provide, if reasonably possible, for waiver of the following rights, to
the extend that the respective insurers would have the rights without such
waivers:

(a)
subrogation of claims against the Membersand the subtenants of the Members;

(b) any
defense based on co-insurance;

(c ) any
right of set-off, counterclaim, apportionment, pro-ration or contribution by reason of other insurance
not carried by the Association;

(d) any
invalidity, or adverse effect or defense on account of any breach of warranty
or condition caused by the Association, any
Memberor any
subtenant of any Member, or arising from any act, neglect, or omission, of any
named insured or the respective agents, contractors and employees of any
insured;

(e) any
right of the insurer to repair, rebuild, or replace and, in the event the
building is not repaired, rebuilt or replaced following loss, any right to pay
under the insurance an amount less than the replacement value of the Improvements
insured or the fair market value thereof;

(f) notice
of the assignment of any Memberof his interest in the
insurance by virtue of a transfer of his Membership; and

(g) any
right to require any assignment of any Mortgage to the Insurer.

ARTICLE XIII

Destruction of Improvements

Section
13.01: Restoration of Project. Except as otherwise provided in these
By-Laws, in the event of any destruction of any portion of the Project,excluding damage on a Members lot which would
be the lot Members responsibility,it shall be the duty of the
Association to restore and repair the same to its former condition, as promptly
as practical. The proceeds of any
insurance maintained pursuant to Article XII hereof shall be used for such
purpose, unless otherwise provided herein.
The Board shall be authorized to have prepared the necessary documents
to effect such reconstruction as promptly as practical. The Project shall be reconstructed or rebuilt
substantially in accordance with the original construction plans if they are
available, unless changes recommended by the Architectural Committee shall have
been approved in writing by fifty plus percent (50 plus %) of the Membersand by all of the first
Mortgages of the approving Members.
In the event that the amount available from the proceeds of such insurance
policies for such restoration and repair shall be at least eight-five percent
(85%) of the estimated cost of restoration and repair, a Reconstruction
Assessment of the Membersshall
be levied by the Board of Directors to provide the necessary funds for such
reconstruction, over and above the amount of any insurance proceeds available
for such purpose. In the event that the
amount available from the proceeds of such insurance policies for such
restoration and repair shall be less that eight-five percent (85%) of the
estimated cost of restoration and repair, the Membersby the vote of not less that fifty plus (50 plus %)
of the Memberspresent
and entitled to vote, in person or by mail, at a duly constituted SpecialMeeting of the Members
of the Association, together with the approval of at least fifty plus percent
(50 plus %) of the first Mortgages of record in the Project, shall determine
whether the Association shall be authorized to levy a Reconstruction Assessment
and proceed with such restoration and repair.
In the event of a determination by the Membersand the Mortgagees as provided above that the cost
of such restoration and repair would be substantial and that it would not be in
their best interest to proceed with the same, the Membersmay, at their discretion, proceed as provided in
Section 13.02 below.

Section
13.02: Sale of Project[2]. In the event that the amount available
from the proceeds of the Insurance policies maintained by the Association shall
be less than eighty-five percent (85%) of the cost of reconstruction, a
certificate of the resolution authorizing such reconstruction shall be filed in
the books and records of the Association and may be filed with the Riverside
County Recorder within six (6) months from the date of such destruction and in
the event of a failure to file such certificate in the Association's books and
records with said period, it shall be conclusively presumed that the Membersand first Mortgagee
have determined not to rebuild said Improvements. In the event of a determination not to
rebuild, the Association, acting through the Board, shall be authorized to have
the Project offered for sale at the highest and best price obtainable, either
in its damaged condition, or after damaged structures have been razed. The net proceeds of such sale and the
proceeds of any insurance carried by the Association shall, upon liquidation or
partial liquidation of the Association, be divided proportionately among the Members, such proportions to be
determined in accordance with the relative appraised valuation of Memberships
the effective date of thetaking[3] of
the MembersCertificates
appurtenant to (1) not taken, or (2) only
partially taken and capable of being restored to at least ninety-five
percent (95%) of their floor area and to substantially their condition prior to
the taking (collectively the "Remaining") do not by affirmative vote of a
majority of their entire voting interest (without adjustment among such Membersfor relative voting
right because of such partial taking) approve the continuation of the Project
and the repair, restoration and replacement to the extent feasible of the
Project and the remaining Units. A
"Partial Taking" shall occur if there is any other permanent taking of the
Project. A Partial Taking shall include,
without limitation, a "Special Partial Taking" which is described herein as a taking
of all or part of the interest of any Memberor Membersin their respective
Certificates and appurtenant Memberships and Leases, subject to all of the
provisions of these By-Laws, without involving any taking of the Project except
to the extent of the interests of such Members
in their Certificates and appurtenant Memberships and Leases, so
that the taking authority becomes a successor in interest to the Member
or Membersso
taken with the same effect as if the Certificates, Membership and Lease of such
Memberswere purchased by
the taking authority. Following any
taking which in the opinion of the Board of Directors would constitute a Total
Taking in the absence of the affirmative vote of the Membersto whom the remaining spaces are allotted ("remaining
Members") as required by the
foregoing provision, the Board of Directors shall call a Special Meeting of the
remaining Membersto be
held promptly, and, in any event within sixty (60) days after the effective
date of such taking, to determine if such
remaining Memberswill,
or will not, decide to continue the Project.

ARTICLE XIV

Miscellaneous

Section 14.01 (reserved)

Section
14.02: Awards; Repair; Restoration and
Replacement.

(a) In the
event of a Total Taking, the Board of Directors shall: (1) represent all of the Membersin an action to recover
any and all awards, subject to the right of all first Mortgagees of record upon
request, to join in the proceedings, and
(2) proceed with the sale of that portion of the Project which was not
included in the condemnation proceedings and distribution of the net proceeds
of such sale and any condemnation award, after deducting any incidental fees
and expenses, in the same proportions and in the same manner as provided in
Article XIII, Section 13.02.

(b) In the
event of a Partial Taking, or other than a Special Partial Taking, the
provisions of Section 14.02 (a) (1) of this Article shall be applicable. The net proceeds of the Partial Taking awards
shall be held by the Board of Directors, after deducting related fees and
expenses and the portions of the awards allotted in the taking proceedings or,
failing such allotment, allotted by the Board of Directors to (1) totally taken or partially taken, and not
capable of being restored to at least ninety-five percent (95%) of their floor
area and substantially their condition prior to the taking, and (2) taken in the same manner as in a Special
Partial Taking except that the taking is made subject to only some or to none
of the By-Laws and Rules and Regulations (collectively the "Taken Units").

The proceeds of the Partial Taking award allotted to
the Taken shall, upon partial liquidation of the Association, be paid to the Membersto which the taken
spaces are allocated provided; however, that such proceedings shall be first
applied to the balance then due on any Mortgages of Record in order of priority
before the distribution of any such proceeds to any Member
whose Membership or leasehold interest in a space is subject to any
such Mortgages First Mortgagees of Record with respect to the Remaining spaces
affected by such Partial Taking shall be entitled to severance damages payable
out of the award proceeds held by the Board of Directors to the extent that
such Mortgagees can prove that their security has been impaired by such
taking. The balance of the net proceeds
shall then be applied to the repair, restoration and replacement of the Project
and the Remaining spaces but no Member's
personal property nor those portions of the interiors of spaces
which the Membersare
obligated to restore to as nearly their condition prior to the taking as may be
feasible, in the proceeds of insurance as set forth in Article XIII, Section
13.01 hereof. Any funds held for
restoration by the Board of Directors following completion thereof shall be
disposed of, in each case in the same manner as provided in Articles XIII,
Section 13.02 except that the total amount of the award payable to any Memberand his Mortgagee or
Mortgagees for a destroyed space or spaces, shall not exceed the value of
said Member'sMembership interest.

In the event that the remaining Membershave voted to continue
the Project and the funds held for restoration by the Board of Directors are
less than the cost of restoration and repair, a Reconstruction Assessment of
the remaining Members, with each
remaining Membercontributing
a sum in the same proportion as Annual Assessments paid by such Member, may be levied by the Board of
Directors to provide the necessary additional funds for such
reconstruction. In no event shall the
Board of directors be required to undertake any repair or restoration work or
make any payment with respect to any space in excess of that proportion of the
awards reasonably attributable to the loss to that space. Following any Partial Taking, the Association
and the Project shall continue, subject to and with the benefit of all the
provisions of these By-Laws, so far as applicable to the remaining spaces, and
the voting interests of the Membersshall
be the same. Following any Partial
Taking, the Association shall be authorized to cancel the Certificates and
Memberships of the Membersto
whom the Taken spaces were allocated.

(c ) In the
event of a Special Partial Taking or a temporary taking of any Certificate and
the appurtenant Membership and Lease, the affected Members,
together with his/her
Mortgagees, shall have exclusive rights to prosecute the proceedings for the
respective taking awards and shall apply the proceeds thereof to reduce Common
Expenses.

Section
14.03: (reserved)

Section
14.04: Notice to Membersand Listed Mortgagees. The Board of Directors immediately upon
having knowledge of any taking by eminent domain of the Project, or any portion
thereof, or any threat thereof, shall promptly notify all Members and all Mortgagees who have
filed a written request for such notice pursuant to Article XV hereof.

ARTICLE XV

Rights of Mortgagees

Notwithstanding any other provision of these
By-Laws, no amendment or violation of these By-Laws shall operate to defeat or
render invalid the rights of any first Mortgagee of record under a Mortgage or
Deed of Trust encumbering a Certificate and the appurtenant Membership and
Lease, made in good faith and for value, provided that after the foreclosure of
any such Mortgage or Deed of Trust such Certificate, Membership, and Lease
shall remain subject to these By-Laws, as amended. Notwithstanding any and all provisions of
these By-Laws to the contrary, in order to enhance the financeability of the
Association Memberships and their appurtenant interest in the spaces, the
following provisions, are added hereto (and to the extent these added
provisions, pertaining to the rights of Mortgagees, conflicts with any other
provisions of these By-Laws or any other of the Restrictions, these added
restrictions shall control):

(a) Each
first Mortgagee of a Mortgage in the Project, upon filing a written request for notification with the Board, is
entitled to written notification from the Association of any default by the
Mortgagee's respective Mortgagor in the performance of such Mortgagor's
obligations under the Restrictions, the Articles or these By-Laws (collectively
referred to as the "Project Documents"), which default is not cured within
thirty (30) days after the Association learns of such default. For purpose of these By-Laws, a "first
Mortgagee' shall mean a Mortgage with first priority over the other Mortgages
or Deeds of Trust in the Project.

(b)
Every Member, including every first Mortgagee of a Mortgage in the
Project, which obtains title to a Membership or possession of the appurtenant
thereto pursuant to the remedies provided in such Mortgage, or pursuant to
foreclosure of the Mortgage, or by deed (or assignment) in lieu of foreclosure,
shall be exempt from any "right of first refusal".

(c ) Subject
to the provisions of Section 10.10 respecting first Mortgages recorded
subsequent to the recordation of a Notice of Lien or a Notice of Default by the
Association, each first Mortgagee of a Mortgage in the Project, which obtains
title to a Membership or possession of the appurtenant thereto , free and clear
of any claims for unpaid assessments or charges against such Membership which
accrued prior to the time such Mortgagee acquired title to such Membership or
possession of the space.

(d) Unless
at least one hundred percent (100%) of the institutional first Mortgagees
(based upon one vote for each Mortgage owned) have given their prior written
approval, neither the Association not the Membersshall:

(1) Subject to California nonprofit corporation
law to the contrary, by act or omission seek to abandon, partition, alienate,
subdivide release hypothecate, encumber, sell or transfer the Project and the
Improvements thereon which are owned by the Association;

The
granting of easements for public utilities or for other public purposes
consistent with the intended use of such property by the Association or sale of
the Project following condemnation or destruction pursuant to Article XIII,
Section 13.02 or Article XIV, Section 14.02 shall not be deemed a transfer
within the meaning of this clause.

(2) Change the method of determining the
obligations, assessment dues or other charges (other than Special Assessments
or late charges imposed by the Board in accordance with the provisions of these
By-Laws) which may be levied against any
Member, or the method of
allocating distributions of hazard insurance proceeds or condemnation awards;

(3) By act or omission change, waive or abandon
any scheme of regulations, or enforcement thereof, pertaining to the
architectural design or the exterior appearance of the Project.

(e) The Tax
Fund and Reserve Fund described in Article X of these By-Laws must be funded by
regular scheduled monthly, quarterly, or semi-annual payments rather than by
large supplemental Assessments.

(f) The
Board shall secure and cause to be maintained in force at all times a fidelity
bond for any Person handling funds of the Association including, but not
limited to, employees of the professional manager.

(g) Each Memberhereby authorizes the
first Mortgagee of a first Mortgage on his Membership or lease to furnish
information to the Board concerning the status of such first Mortgage and the
loan which it secures.

(h) First
Mortgagees may, jointly or singly, pay taxes or other charges which are in
default and which may or have become a charge against the Project and may pay
any overdue premiums on hazard insurance policies, or secure new hazard
insurance coverage on the lapse of a policy, for such property, and first Mortgagees
making such payments shall be owed immediate reimbursement therefore from the
Association.

(i) For
purposes of these By-Laws, any approval give or required to be given by
Mortgagees hereunder shall be determined on the basis of one (1) vote for each
Mortgage owned. For the purposes of any
notice to which Mortgagees may otherwise be entitled hereunder, including
without limitation, notices provided for in Sections 10.06, 12.04, 12.06,
12.07, 14.04 and Paragraphs (a), (e) and (f) of this Article XV, such notice
shall be deemed to have been requested following receipt by the Association of
a single notice in writing signed by such Mortgagee, which notice shall state
the name and address of such Mortgager, the number of Mortgages owned and the
particular Certificates and Memberships encumbered thereby.

(1) In addition to the foregoing, the Board may
enter into such contracts or agreements on behalf of the Association as are
required in order to satisfy the requirements of an institutional first
Mortgagee, so as to allow for the funding, purchase, guaranty or insurance, as
the case may be, by such entities of first Mortgages encumbering Memberships
and the appurtenant Certificates and Leases.
Each Memberhereby agrees that it will benefit the Association
and the membership of the Association, as a class of potential Mortgage
borrowers and potential sellers of their Memberships and appurtenant
Certificates and Leases, if such institutional first Mortgagees approve the
Project as a cooperative project qualifying for individual institutional
financing under their respective policies, hereby authorized to furnish
information to the Board concerning the status of any Mortgage encumbering a
Membership and appurtenant Certificate and Lease.

ARTICLE XVI

(reserved)

ARTICLE XVII

Indemnification of Directors
and Officers

Except to the extent that such liability or damage
or injury is covered by insurance proceeds, the Board of Directors may
authorize the Association to pay expenses incurred by, or to satisfy a judgment
or fine rendered or levied against, a present or former Director, officer,
committee member, or employee of the Association in an action brought by a
third party against such person, whether or not the Association is joined as a
part defendant, to impose a liability or penalty on such person for an act
alleged to have been committed by such person while a Director, officer,
committee member or employee; provided, the Board of Directors determines in
good faith that such Director, officer or employee was acting in good faith
within what he reasonably believed to be the scope of his employment or
authority and for a purpose which he reasonably believed to be in the best
interest of the Association or its Members; and provided, further, that the
payment of such expenses is otherwise permissible or required under applicable
state statutes. Notwithstanding, the
foregoing, in no event shall any employee, officer, or director of the Sponsor,
serving in such capacity as an appointee of the Sponsor, be entitled to such
indemnification. Payments authorized
hereunder include amounts paid and expenses incurred in settling any such
action or threatened action. The provisions
of this Article XVII shall include the estate, executor, administrator, heirs,
legatees, or devisees of such person.

ARTICLE XVIII

Notice and Hearing Procedure

Section
18.01: Suspension of Privileges. In the event of an alleged violation of
these By-Laws or the Rules and Regulations of the Association, and after
written notice of such alleged failure is delivered personally or mailed to the
Member or any agent of the Member ("respondent") alleged to be in default in
the manner herein provided, by first class mail or certified mail return
receipt requested, the Board of Directors shall have the right, after affording
the respondent an opportunity for an appropriate hearing as hereinafter
provided, and upon an affirmative vote of a majority of All Directors on the
Board to take any one or more of the following actions: (1) levy a Special Assessment as provided in
these By-Laws, (2) suspend or condition
the right of said Member to the use of the recreational facilities on the
Project, (3) suspend said Member's
voting privileges as a Member; or (4)
record a Notice of Noncompliance against the respondent's leasehold interest in
the space. Any such suspension shall be
for a period of not more that thirty (30) days for any non-continuing
infraction, but in the case of a continuing infraction (including nonpayment of
any assessment after the same becomes delinquent) may be imposed for so long as the violation
continues. The failure of the Board or
the Architectural Committee to enforce the Rules and Regulations of the
Association, these By-Laws or the Leases shall not constitute a waiver of the
right to enforce the same thereafter.
The remedies set forth above and otherwise provided by these By-Laws shall
be cumulative and none shall be exclusive.
However, any individual Member must exhaust all available internal
remedies of the Association prescribed by these By-Laws, or by the Rules and
Regulations of the Association, before that Member may resort to a court of law
for relief with respect to any alleged violation of these By-Laws or the Rules
and Regulations of the Association by another Member, provided that the
foregoing limitation pertaining to exhausting administrative remedies shall not
apply to the Board or to any Member where the complaint, alleges nonpayment of
Annual Assessments, Special Assessments, Capital Improvement Assessments or
Reconstruction Assessments.

Section
18.02: Written Complaint. A hearing to determine whether a right or
privilege of the respondent under these By-Laws should be suspended or
conditioned, or whether a Special Assessment should be levied, shall be
initiated by the filing of a written Complaint by any Member or by any officer
or member of the Board of Directors or the Architectural Committee with the
President of the Association or other presiding member of the Board. The Complaint shall constitute a written
statement of charges which shall set forth in ordinary and concise language the
acts of omissions with which the respondent is charged, and a reference to the
specific provisions these By-Laws, the Leases or the Rules and Regulations of
the Association which the respondent is alleged to have violated. A copy of the Complaint shall be delivered to
the respondent in accordance with the notice procedures set forth herein
Section 18.02 Of this Article together with a statement which shall be
substantially in the following form:

SAMPLE

Unless a written request for a hearing signed by or
on behalf of the person named as respondent in the accompanying Complaint is
delivered or mailed to the Board of Directors within thirty (30)days after the Complaint was delivered or
mailed to you, the Board of Directors may proceed upon the complaint without a
hearing, and you will have thus waived your right to a hearing. The request for a hearing may be made by
delivering or mailing the enclosed form entitled Notice of Defense to the Board
of Directors at the following address: 70201 Aurora Rd, Desert Hot Springs, California 92241.

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

The Respondent shall be entitled to a hearing on the
merits of the matter if the Notice of Defense is timely filed with the Board of
Directors. The respondent may file a
separate statement by way of mitigation, even if he does not file a Notice of
Defense.

________________________________________

Board of
Director

Section
18.03: Notice of Hearing. The Board shall serve a notice of hearing,
as provided herein, on all parties at least ten (10) days prior to the hearing,
if such hearing is requested by the respondent.
The hearing shall be held no sooner than thirty (30) days after the Complaint
is mailed or delivered to the respondent as provided in Section 18.02 of this
Article. The notice to the respondent
shall be substantially in the following form but may include other information:

SAMPLE

You are hereby notified that a hearing will be held
before the Board of Directors of QUAIL VALLEY ASSOCIATION, INC., at
________________________________________________________, on the _______ day of
________________, 20___, at the hour of _______________________, upon charges
made in the Complaint served upon you.
You may be present at the hearing, or may but need not be
represented by counsel, may present any relevant evidence, and will be given
full opportunity to cross-examine all witnesses testifying against you. You are entitled to request the attendance of
witnesses and the production of books, documents or other items by applying to
the Board of Directors of the Association.

_____________________________________________

Board of
Director

Section
18.04: Hearing. The hearing shall be held before the Board
in Executive Session pursuant to this notice affording the Member a reasonable
opportunity to be heard. Prior to the
effectiveness of any sanction hereunder, Proof of Notice, and the invitation to
be heard shall be placed in the minutes of the meeting. Such proof shall be deemed adequate if a copy
of the notice together with a statement of the date and manner of delivery is
entered by the officer or director who mailed or delivered such notice. The notice requirement shall be deemed
satisfied if a violator appears at the meeting.
The minutes of the meeting shall contain a written statement of the
results of the hearing and the sanction, if any, imposed. A statement of the actions pertaining to the
Member and/or sanction will bepresented to the Member in signed written
form.

Section 18.05: Grievance Process. A
Member may elect to submit his/her signed grievance to a Grievance Officer
appointed by The Board of Directors for resolution. Nothing in this section would preclude a
member from submitting the grievance directly to the Board of Directors.

ARTICLE XIX

General Provisions

Section
19.01: Legal Proceedings. The failure of any Member, his/her family, guests, employees, invitees or
tenants to comply with any of the restrictions, after Notice and Hearing
(except for the nonpayment of any Assessments provided for herein) as set forth
in the By-Laws of the Association, shall be grounds for relief which may
include, without limiting same, an action to recover sums due for damages,
injunctive relief, foreclosure of lien, unlawful detainer, or any combination
thereof. Failure to enforce any
provisions hereof shall not constitute a waiver of the right to enforce said
provisions, or any other provision hereof.
The Board or any Member(not
at the time in default hereunder), shall be entitled to bring an action for
damages against any defaulting Member,
and in addition may enjoin any violation of these By-Laws or the
Restrictions. Any judgment rendered in
any action or proceeding pursuant thereto shall include a sum for attorneys'
fees in such amount as the court may deem reasonable, in favor of the prevailing
party, as well as the amount of any delinquent payment, interest thereon, costs
of collection and court costs. Each
remedy provided for in these By-Laws shall be cumulative and not exclusive or
exhaustive.

Section
19.02: Violation of Restrictions. Without in any way limiting the generality
of the foregoing, in the event that the Board of Directors determines that
there is a violation of any provision of the Restrictions, then the board shall
give written Notice to the Memberof
the condition or violation complained of.
The Board, after giving such Member
an opportunity for Notice and Hearing as provided in Article XVIII,
may undertake to remedy such condition or violation complained of, and the cost
thereof shall be charged to the Member
and his/her
respective Membership and Lease. Such
cost shall be deemed to be a Special Assessment to such Member, and his/her
Membership and Lease, and shall be subject to levy, enforcement and collection
by the Board in accordance with the assessment lien procedure provided for in
the By-Laws.

Section
19.03: Severability. The provisions hereof shall be deemed
independent and severable, and a determination of invalidity or partial
invalidity or unenforceability of any one provision of portion hereof by a court
of competent jurisdiction shall not affect the validity or enforceability of
any other provisions hereof.

Section
19.04: Interpretation. The provisions of these By-Laws shall be
liberally construed to effectuate its purpose of creating a uniform plan for
the creation and operation of a recreational vehicle project and for the
maintenance of the Project, and any violation of these By-Laws shall be deemed
to be a nuisance. The Article and
Section headings, titles and captions have been inserted for convenience only,
and shall not be considered or referred to in resolving questions of
interpretation or construction. As used herein, the singular shall include the
plural and masculine, feminine and neuter shall mean the same.

Section
19.05: Mergers or Consolidations. Upon a merger or consolidation of the
Association with another association, its properties, rights and obligations
may, by operation of law, be transferred to another surviving or consolidated
association or, alternatively, the properties, rights and obligations of
another association, may, by operation of law, be added to the properties,
rights and obligations of the Association as a surviving corporation pursuant
to a merger. The surviving or
consolidated association may administer the Project in accordance with these
By-Laws and the Leases, together with the covenants and restrictions
established upon any such other property, as one plan.

Section
19.06: Use of Recreation Facilities. The Board of Directors shall have the
right to limit the number of guests that a Membermay permit to use the recreational facilities of the
Project, and the Board shall have the right to set further reasonable
restrictions on the time and manner of use of the recreational facilities in
accordance with the Rules and Regulations.

Section
19.07: Non-liability and Indemnification. No right or power conferred on the Board
or the Architectural Committee by virtue of the Articles of these By-Laws shall
be construed as a duty, obligation or disability charged upon the Board of
Directors, the Architectural Committee, or upon any Director or Member thereof,
and except for injuries arising out of their malicious acts, no Member of the
Board or the Architectural Committee, shall be liable to any Person for his
decisions or failure to act in making decisions as a Member of the Board or Committee. The Association shall pay all expenses
incurred by, and satisfy any judgment or fine rendered or levied against, any
Person who is or has been a director, officer, employee or committee member of
the Association, as provided in Article XVII of these By-Laws.

Section
19.08: Notices. Except as otherwise provided in these
By-Laws, in each instance in which notice is to be given to an Member, the same shall be in writing
and may be delivered personally to the Member,
in which case personal delivery of such notice to one or more co members of a Certificate or to any
general partner of a partnership owning a Certificate be deemed delivery to all
co-owners or to the partnership as the case may be. Personal delivery of such notice to any
officer or agent for the service or process on a corporation shall be deemed
delivery to corporation. In lieu of the
foregoing, such notice may be delivered
by regular United States mail, postage paid, addressed to the Member
at the most recent address furnished by such Member
to the street address of the space allocated to such Member. Such notice shall be deemed delivered ten daysafter the time of such
mailing, except for notice of a meeting of Members or of the Board of Directors
in which case the notice provisions of Articles V and VI of these By-Laws shall
control. Any notice to be given to the
Association may be delivered personally to any Member of the Board, or sent by
United States mail, postage prepaid, addressed to the Association at such
address as shall be fixed from time to time and circulated to all Members.

Section
19.09: Notice of Mortgagees. Every Memberwho mortgages his Membership shall notify the
Association through the Manager, or through the Secretary in the event there is
no Manager, of the name and address of his Mortgagee; and the Association shall
maintain such information in a book entitled "Mortgagees of Members". Any such Member shall likewise notify the
Association as to the release or discharge of any such Mortgage.

Section
19.10: Membership Book. The Association shall keep and maintain in
its office for the transaction of business a Membership and Certificate
Register, containing the name, address, Certificate number and the number of
the space allocated to each Member and his respective Certificate. Termination or transfer of Membership shall
be recorded in the register, together with the date on which Membership ceased
or was transferred, in accordance with the provisions of these By-Laws.

Section
19.11: Checks, Drafts and Documents. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the QUAIL VALLEY ASSOCIATION, INC. shall be signed or endorsed
by such person or persons determined annually
by resolution of the Board of Directors.

Section
19.12: Execution of Documents. The Board of Directors may authorize by resolutionany officer or
officers, agent or agents, to enter into any contract or execute any instrument
in the name and on behalf of the Association, and such authority may be general
or confined to specific instances; and unless so authorized by the Board of
Directors, no officer, agent, or employee shall have the 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 in any amount.

Section 19.13: Inspection of By-Laws. The Association shall keep in its office
for the transaction of business the original or a copy of these By-Laws as
amended or otherwise altered to date, certified by the Secretary, which shall
be open to inspection by the members and all first Mortgagees in accordance
with Article VI, Section 6.05 hereof.

Section
19.14: Fiscal Year. The fiscal year of the Association shall
be determined by the Board of Directors, and having been determined, is subject
to change from time to time as the Board of Directors shall determine.

Section
19.15: Conflicting Provisions. In case any of these By-Laws conflict with
any provisions of the laws of the State of California, such conflicting By-Laws
shall be null and void upon final court determination to such effect, but all
other By-Laws shall remain in full force and effect. In case of any conflict between the Articles
of Incorporation and these By-Laws, the Articles of Incorporation shall
control; and in the case of any conflict between the Leases and these By-Laws,
these By-Laws shall control.

Section
19.16: Lost Certificates. Upon presentation of adequate evidence,
including an indemnity bond and a statement signed by the holder of any first
Mortgage of Record encumbering such Certificate, stating that a Certificate
previously issued by the Association has been lost or destroyed (the "Lost
Certificate"), the Board of Directors may direct the Lost Certificate be
cancelled and a new Certificate be issued in place of the Lost Certificate,
upon the payment to the Association of a reasonable fee which may be
established by the Board of Directors.
In the event any first Mortgage remains outstanding against the Lost
Certificate and the appurtenant Membership and Lease, the replacement
Certificate shall be issued to the Member subject to the first Mortgage, and
the original replacement Certificate shall be transmitted directly to such
first Mortgagee.

ARTICLE XX (reserved)

ARTICLE XXI

Amendment

These By-Laws may be amended by the Association by
the vote or written consent of Members representing fifty plus percent (50 plus
%) of the voting power of the Association. Notwithstanding the foregoing, any
of the following amendments to be effective, must be first approved in writing
by the holders of one hundred percent (100%) of the institutional first
Mortgages of record in the Project at the time of such amendment; based upon
one vote for each Mortgage owned;

(a) Any
amendment which affects or purports to affect the validity or priority of
Mortgages or the rights or protection granted to Mortgagees as provided in
these By-Laws.

(b) Any
amendment which would necessitate a first Mortgagee after it has acquired a
Membership or possession of the appurtenant space through foreclosure, to pay
more than its proportionate share of any unpaid assessments accruing after such
foreclosure.

(c ) Any
amendment which would or could result in Mortgage being cancelled by
forfeiture.

(d) Any
amendment which would or could result in termination or abandonment of the
Project, in any manner inconsistent with the provisions of these By-Laws or the
Leases.

(e) Any
amendment which would subject any Memberto a right of first
refusal or other such restriction in favor of the Association, in the event
such Memberexercises his right to sell, transfer or otherwise
convey his Certificate, Membership and right to exclusive occupancy of the
space allocated thereto.

The Association shall maintain in its files the
record of all written consents or votes cast to amend these By-Laws for a
period of at least four (4) years.

Certificate of Secretary

I,
the undersigned, do hereby certify that:

1. I am the
duly elected and acting Secretary of

QUAIL
VALLEY ASSOCIATION, INC., a California

nonprofit
corporation ("Association");

2. The
foregoing documents,

consisting of ??
Pages, including this page,

constitute the By-Laws of the Association as of

_________________________________________.

IN
WITNESS WHEREOF, I have hereunto subscribed my

hand and
affixed the seal of the Association this

_________
day of __________________, __________.

___________________________
Secretary

Certificate of Approval of
By-Laws Committee

We, the
undersigned, do hereby certify that:

We have reviewed and made recommendations for these
changes to the existing By-Laws of Quail Valley Association as of _________________________________________.

We
recommend the Board and membership approve these changes.

___________________________

___________________________

___________________________

___________________________

___________________________

Certificate of Approval of
Board of Directors

We, the
undersigned, do hereby certify that:

We have reviewed and approved the recommendations of
the By-Law Committee for these changes to the existing By-Laws of Quail Valley
Association as of12/10/2013______________________.

___________________________
President

___________________________

Vice
President

__________________________

Secretary

___________________________

Treasurer

___________________________

Maintenance

___________________________

Maintenance

___________________________

Member At
Large

[1] At the present time no mortgage's exist. Therefore, all references to same throughout
this document are without merit until one exists. Such mortgage's should be reported to the
association at time of issuance of a membership.

[2] At the present time the land is leased. In the event of a future purchase of this
property by the association this section would apply.

[3] Taking means eminent domain. The power of the federal or state government
to take private property for a public purpose, even if the property owner
objects. The Fifth Amendment to the
United States Constitution allows the government to take private property if
the taking is for a public use and the owner is "justly compensated" (usually,
paid fair market value) for his or her loss.
A public use is virtually anything that is sanctioned by a federal or
state legislative body, but such uses may include, roads, parks, reservoirs,
schools, hospitals, or other public buildings.
Sometimes called condemnation, taking, or expropriation.