RESTATED BY-LAWS Draft OF CASTLE MOUNTAIN CREEKS OWNERS ASSOCIATION, INC. ARTICLE I OFFICES

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1 RESTATED BY-LAWS Draft OF CASTLE MOUNTAIN CREEKS OWNERS ASSOCIATION, INC. ARTICLE I OFFICES The principle location and office of the corporation shall be Boise County, State of Idaho. The Board of Directors may at its discretion establish and maintain such other office whenever and where ever the business of the corporation may require. ARTICLE II INSTRUMENT These Restated CASTLE MOUNTAIN CREEKS OWNERS ASSOCIATION (CMCOA) By-Laws (hereinafter referred to as the By-Laws ) which By-Laws are filed of record as Instrument No.. Records of Boise County, State of Idaho and are attached to the Restated Master Declaration of Covenants, Conditions and Restrictions of Castle Mountain Creeks (hereinafter referred to as the CCRs) as Exhibit B. All of the words or terms which are capitalized herein shall have same meaning and definition as contained in the definitions in Article I of the CCRs, which definitions are incorporated herein by reference. ARTICLE III POWERS, AUTHORITY, MEMBERSHIP, AND VOTING A. Powers and Authority of the Association. The Association shall have the authority of an Idaho nonprofit association, subject only to such limitations upon the exercise of such powers as are expressly set forth in the Restated Articles of Incorporation (hereinafter referred to as the Articles of Incorporation ) attached to the CCRs as Exhibit C and By-Laws. It shall have the 1

2 power to any and all lawful things which may be authorized, required or permitted to be done by the Master Association under and by virtue of the CMCOA Articles of Incorporation, and By-Laws, and to do and perform any and all acts which may be necessary or proper for or incidental to the exercise of any of the express powers of the Master Association. B. Membership. Each Owner of a Lot by virtue of being such an Owner and for so long as he is such an Owner shall be deemed a Member of the Master Association. The Master Association membership of each Owner shall be appurtenance to said Lot and shall not be transferred, pledged or alienated in any way except upon the transfer of title to said Lot, and only to the transferee of title to said Lot. Any attempt to make a prohibited transfer shall be void. Any transfer of title to said Lot shall operate automatically to transfer said membership to the new Owner thereof. In the event of dispute as to membership the ownership of such Lot as shown in the public records of the County of Boise, State of Idaho shall be determinative. The name, names, or entity under which membership appears on the books and records of the corporation shall be maintained until such time as satisfactory evidence of a change in membership is presented to the secretary. C. Voting. Members of the Master Association may vote either in person, by proxy, or by Ballot, provided that all proxies and Ballots shall be in writing, signed by the Members and filed with the secretary twenty-four hours before the time appointed and scheduled for the meeting at which such time votes shall be taken. The Owner of each Lot in CMCOA may, by notice to the Association, designate a person (who need not be an Owner) to exercise the vote by proxy for such Lot. Said designation shall be revocable at any time by notice to the Association by the Owner. Such powers of designation and revocation may be exercised by the guardian of an Owner s estate or by his conservator, or in the case of a minor having no guardian, by the parent entitled to his custody, or during the 2

3 administration of an Owner s estate, by his executor or administrator where the latter s interest in said property is subject to administration in his estate. D. Joint Owner Disputes The vote for each such Lot shall, if at all, be cast as a unit, and fractional votes shall not be allowed. In the event that joint Owners are unable to agree among themselves as to how their vote or votes shall be cast, they shall lose their right to vote on the matter in question. If any Owner casts a vote representing a certain Lot, it will thereafter be conclusively presumed for all purposes that he or they were acting with the authority and consent of all other Owners of the same Lot. E. Transfer of Voting Right. The right to vote may not be severed or separated from the ownership of the Lot to which it is appurtenant, except that any Owner may give a revocable proxy, or may assign his right to vote to a lessee or beneficiary of the Lot concerned, for the term of the lease or deed of trust, and any sale, transfer or conveyance of such Lot to the new Owner or Owners shall operate automatically to transfer the appurtenant vote to the new Owner, subject to any assignment of the right to vote to a lessee or beneficiary as provided herein. F. Meeting of Owners. There shall be a meeting of the Owners, on an annually determined Saturday in June of each year, at CMCOA office, or at such other reasonable place or time (not more than thirty (30) days before or after such date) as may be designated by notice of the Board given to the Owners not less than seven (7) nor more than sixty (60) days prior to the date fixed for said meeting. A Special Meeting of the Owners may be called at any reasonable time and place by notice of the Board or by the Owners having one-fifth (1/5) of the total votes and delivered to all other Owners not less than fifteen (15) days prior to the date fixed for said meeting. The presence at any meeting, in person, by proxy, or by Ballot of the Owners entitled to vote at least a majority of the total votes shall constitute a quorum. If any 3

4 meeting cannot be held because a quorum is not present, the Owners present, either in person or by proxy, may, as otherwise provided by law, may vote to adjourn the meeting to a time not less than four (4) days nor more than thirty (30) days from the time the original meeting was called, at which meeting the quorum requirement shall be the Owners entitled to vote at least twenty-five per cent (25%) of the total votes. The president of the Board (or the vice president in his absence) shall act as chairman of all meetings of the Owners and the secretary of the Association (or an assistant secretary thereof in his absence) shall act as secretary of all such meetings. Except as otherwise provided herein, any action may be taken at any meeting of the Owners, upon the affirmative vote of the Owners having a majority of the total votes present at such meeting in person, by proxy, or by Ballot. F. Removal of Directors. Any director may be removed from office by a vote of a majority of the Members entitled to vote at an election of directors or Special Meeting called for said purpose. If any or all directors are so removed, new directors may be elected at the same meeting to fill remaining terms. G. Conduct of the Meeting. At all meetings of the Members the following order of business shall be observed insofar as it is consistent with the purposes and objectives of the meeting: 1. Calling of the roll to determine and/or for registration of Members who are represented at the meeting; 2. Reading of notice and proof of call of meeting; 3. Approval of minutes; 4. Relevant correspondence; 5. Reports of officers; 6. Reports of committees; 7. Unfinished business; 8. New business; 4

5 9. Election of directors; 10. Miscellaneous business; 11. Set date of next meeting. ARTICLE IV BOARD OF DIRECTORS A. General Powers, Authority, and Duties. The property, business and affairs of the corporation shall be controlled and managed by the Board of Directors. B. Number. The Board shall consist of three (3) to nine (9) members. C. Qualification: Election and Term. Directors should be Members of the Master Association, in good standing, and shall be elected by the Members at their annual meeting. If no Members are nominated then a non-member may be nominated for election to the Board. Their term of office shall begin immediately after election and shall continue for two (2) years and until their successors shall be elected. Their terms shall be staggered and no more than 2/3 of the directors and officers terms shall expire per year. D. Resignation. Any director may resign by submitting a written notice to the Board stating the effective date of his resignation, and acceptance of the resignation shall not be necessary to make it effective. E. Vacancies. Any vacancy occurring on the Board whether by removal, resignation, death, or an increase in the number of directors, or otherwise, shall be filled by the majority vote of the remaining qualified directors though less than a quorum unless a director was 5

6 selected by vote of the membership. A director selected to fill a vacancy on the Board shall hold office for the unexpired term and shall continue in such office only until his successor is duly elected at an annual meeting or Special Meeting. F. Meeting. There shall be a regular annual meeting of the Board immediately following the annual meeting of the Members of the Master Association to elect Officers, and the Board may establish regular meetings to be held at such other places and times as may be determined from time to time. After the establishment of the time and place for such regular meetings, no further notice thereof need be given. Special Meetings of the Board may be called by the president, or upon written request delivered to the secretary, or by any two directors. G. Quorum; Vote Required; Adjournment. At any meeting of the Board a majority of directors shall constitute a quorum. If a quorum is not present, the majority of the directors present may adjourn the meeting from time to time without further notice other than announcement of the next meeting. H. Action of Directors Without a Meeting. Any action which is required to be taken or any other action which may be taken at a meeting of the Board may be taken without such a meeting if consent in writing setting forth the action so taken shall be signed by all of the directors entitled to vote with respect to the subject matter thereof. I. Advisory Committee. The Board by resolution may create advisory committees. The number of members of the advisory committee and the persons who shall be members thereof shall be determined by the Board. The Board shall have the discretion to appoint non-members to the advisory committee provided that a majority of the members of the advisory committee shall be Members of the Master Association. 6

7 J. Rules. The Board may adopt such CMCOA Rules and policies as it deems proper for the use and occupancy of the Master Association Property. A copy of the CMCOA rules and policies shall be posted. K. Liability of Board Members and Manager. No member of the Board, or the Manager shall be personally liable to any Owner, or to any other party, for any damage, loss or prejudice suffered or claimed on account of any act or omission of the Master Association, the Board, the Manager or any other representatives or employees of the Master Association, or the Architectural Committee, provided that such Board member, or the Manager, has, upon the basis of such information as may be possessed by him, acted in good faith. L. Delegation of Authority. The Board may delegate any of its duties, powers or functions to any person, corporation or firm to act as Manager, provided that any such delegation shall be revocable upon notice by it. ARTICLE V OFFICERS A. General. The executive officers of the corporation shall be a president, one or more vice presidents, a secretary and a treasurer, all of whom shall be elected by and serve at the pleasure of the Board. The Board may appoint such other officers, agent, factors, and employees as it may deem necessary or desirable, all of whom shall serve at the pleasure of the Board. Any Director, except the president, may hold two or more offices simultaneously. 7

8 B. President. The president shall be the chief executive officer of the corporation. Subject to the direction of the Board he shall have the general powers and duties of supervision, management, and coordination of the affairs of the corporation usually vested in and attributed to the office of president. He shall preside at all meetings of Members of the Association. C. Vice President. A vice president shall perform the duties and exercise the powers of the president in case of sickness, disability, absence, death, inability or failure to act, and he shall perform such other duties, carry out such other responsibilities, and have such other authority as may be delegated to him from time to time by the president of the Board. D. Secretary. The secretary or his representative shall attend all sessions of the Board and all meetings of the Members and act as the clerk thereof and record all votes and the minutes of all proceeding. He shall see that all books, records, reports, notices, and other documents of the corporation are properly kept and filed in accordance with the provision of these By-Laws as is required by State Statute and in general shall perform all duties incident to the office of secretary and as required by State Statute and shall perform such other duties, carry out such other responsibilities, and have such other authority as may be delegated to him from time to time by the president or the Board. The Board may appoint one or more assistant secretaries who may act in place of the secretary in case of his sickness, disability, absence, death, inability or failure to act. E. Treasurer. The treasurer shall have charge and custody of and be responsible for all sorts of securities of the corporation. He shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such banks and depositaries as shall be designated by the Board. He shall keep books of account and records of all his transactions as treasurer and of the financial condition of the corporation and shall 8

9 submit such reports thereof as the Board may from time to time require; and in general shall perform all of the duties incident to the office of the treasurer as required by State Statute, and he shall perform such other duties, carry out such other responsibilities, and have such other authority as may be delegated to him from time to time by the president or the Board. The Board may appoint one or more assistant treasurers who may act in place of the treasurer in case of his death, sickness, disability, absence, inability or failure to act. ARTICLE VI CONTRACTS, CONVEYANCES, COMPENSATION, SPECIAL ASSESSMENTS, INSURANCE, CHECKS AND MISCELLANEOUS A. Contracts. The Board may authorize any officer or agent of the corporation to enter into any contract or execute any instrument in the name of the corporation except as otherwise specifically required by the Articles of Incorporation, CCRs Art. 9.01, 9.02, and 9.03, and by these By-Laws. B. Compensation. Officers, agents, factors, and employees shall receive such reasonable compensation for their services as may be authorized or ratified by the Board. Appointment of any officer, agent, factor or employee shall not of itself create contractual rights of compensation for services performed by such officer, agent, factor, or employee, provided that no officer or director may receive any compensation. C. Drinking Water System Operator. The Board shall provide the appropriate level operator(s) as determined by State Statute and as licensed and regulated by EPA, DEQ, and the local Health Department. This shall be accomplished through CMCOA Owner Association 9

10 employee(s) or by annually renewable contract which content shall be determined by the Board. D. Conveyances and Encumbrance. Corporate property may be conveyed or encumbered by authority of the Board or such other person or persons to whom such authority may be delegated by resolution of the Board. Conveyances or encumbrances shall be by instrument executed by the president or a vice president and by the secretary or the treasurer or executed by such other person or persons to whom such authority may be delegated by the Board. E. Special Assessment. In addition to the regular assessments levied by the Board, it may with the consent of fifty-one per cent (51%) of the voting power of the Members levy a special assessment or assessments for the purpose of making capital Improvements to the Master Association Property. Until expended, such funds shall constitute a capital reserve to be used solely for the purposes set forth in the notice of the annual or Special Meeting of the Members called for the purpose of voting on the proposed assessments or assessments. F. Checks. The Board shall designate which person or persons may sign checks, drafts, and notes and order for the payment of money. G. Records. The corporation shall maintain accurate, correct and complete books, records, and accounts of its business and properties which shall all be kept at such place as is from time to time fixed and designated by the Board. H. Insurance. The Board shall obtain such of the following policies of insurance as it deems 10

11 advisable: 1. Fire and extended coverage insurance on all Improvements under the controls of the Master Association, the amount of such insurance to be not less than ninety percent (90%) of the aggregate full insurable value, meaning actual replacement value exclusive of the cost of excavations, foundations and footings. Such insurance shall insure the association and its mortgages, as their interests may appear. As to each such policy, which will not be voided or impaired thereby, the association hereby waives and releases all claims against the Board, the Manager, and agents and employees of each of the foregoing, with respect to any loss covered by such insurance, whether or not caused by negligence of or breach of any agreement by said persons, but only to the extent that that insurance proceeds are received in compensation for such loss. 2. Bodily injury insurance, with limits of not less than $100,000 per person and $300,000 per occurrence, and property damage liability insurance with a deductible of not more than $1,500 and a limit of not less than $50,000 per occurrence, insuring against liability for bodily injury, death and property damage arising from the activities of the Master Association or with respect to property under its jurisdiction, including, if obtainable, a cross-liability endorsement insuring each insured against liability to each other insured. 3. Workmen s compensation insurance to the extent necessary to comply with any applicable laws. 4. A fidelity bond in the penal amount of Twenty-Five thousand Dollars ($25,000) or more, naming the members of the Board and the Manager, and such other persons as may be designated by the Board, as principals and the association as obligee. 5. Such other insurance, including indemnity and other bonds as the Board shall deem necessary or expedient to carry out the Master Association functions as set forth in the CMCOA Articles of Incorporation, By-Laws, and CCRs. 6. The liability insurance referred to the above shall name as separately protected insureds the Master Association, the Board, the Manager, the Architectural Committee, and their representatives, Members and employees, with respect to 11

12 any liability arising out of the maintenance or use of any Association Property. Every policy of insurance obtained by the Master Association shall contain an express waiver, if available, of any and all rights of subrogation against the Board, the Manager, the Architectural Committee, and their representatives, Members and employees. 7. Said fire and liability insurance policies may be blanket policies covering the Association Properties, with respect to insurance proceeds from the Association Property only, the Association shall be deemed trustee of the interests of all Owners in any insurance proceeds paid to it under any such policies, and shall have full power to receive and to receipt for their interests in such proceeds and to deal therewith. I. Committees. The Board may appoint and remove members of the committees including the mandatory Architectural Committee. J. Enforcement of Restrictions, Rules, and Policies. To perform such other acts, whether or not expressly authorized by the CMCOA CCRs, By-Laws, Rules, and Policies as may be reasonably necessary to enforce any of the provisions of the CMCOA CCRs, Rules, and policies including the Architectural Committee Rules. K. Audit. Any Owner may at any time and at his/her own expense, cause an audit or inspection to be made of the books and records of the Manager or the Association by a certified public accountant; provided that such audit or inspection is made during normal working hours and without unnecessary interference with the operations of the Manager or the Association. L. Assessments. The Board shall levy assessments on the Owners of Lots within CMCOA, and 12

13 enforce payment of such assessments in accordance with the provisions herein. M. Right of Entry and Enforcement. After twenty-four (24) hours written notice to enter, without being liable to any Owner upon any Lot for the purpose of enforcing by peaceful means the CMCOA CCRS, Rules, or policies for the purpose of inspecting, maintaining, or repairing any such area if for any reason whatsoever the Owner thereof fails to maintain or repair any such area as required by said CCRs. The Master Association shall also have the power and authority from time to time in its own name on its own behalf or on behalf of any Owner or Owners who consent thereto, to commence and maintain actions and suits to restrain and enjoin any breach or threatened breach of the CMCOA CCRs, Rules, or policies and to enforce, by mandatory injunctions or otherwise all the provisions of said CCRs, Rules, or policies. N. Manager. To retain and pay for the services of a person or firm to manage the Association Properties (the Manager ) to the extent deemed advisable by the Board, as well as such other operation of the Association Properties or the conduct of the business of the Master Association, whether such personnel are employed directly by the Association or are furnished by the Manager. The Association and the Board may delegate any of their duties, powers or functions to the Manager, provided that any such delegation shall be revocable upon notice by the Association and the Board. The Owners release the members of the Board from liability for any omission or improper exercise by the Manager of any such duty, power or function as delegated. O. Legal and Accounting Services. To retain and pay for legal and accounting services necessary or proper in the operation of the Association Properties, enforcement of the CMCOA CCRs, Rules, and policies or in performing any of the other duties or tights of the Master Association. 13

14 P. Association Property Services. Assessments will pay for water, sewer, garbage, telephone, electrical, gas, maintenance, snow removal and gardening service, and other necessary utility or other services for the Association Properties. Q. Maintenance of Property and Facilities. The Board shall have oversight of maintenance, and repair all Association Property, facilities, roads, and Common Areas, including landscaping and snow removal. R. Other Areas. The Board shall maintain and repair slope easements, roads, roadway rights-ofway, entry details, or other area of CMCOA not maintained by governmental entities or owned by the Association. S. Other Services and Properties. To obtain and pay for, as the case may be, any other property, services, taxes or assessments which the Association or the Board is required to secure or pay for pursuant to the terms of the CMCOA CCRs, Articles of Incorporation, and By- Laws, including security services for the Association Properties or for CMCOA generally, or which in its opinion shall be necessary or proper for the operation of the Association Property. ARTICLE VII AMENDMENTS These By-Laws may be altered, amended or new By-Laws adopted at any annual meeting or any Special Meeting of the Members thereof called for that purpose by the affirmative vote of two-thirds (2/3) of the voting power of the combined number of Lots. 14

15 IN WITNESS WHEREOF, Members have executed these Restated By-Laws on this day of, Wendy Scribner, President William Sipple, Secretary Treasurer 15