By- Laws

BY-LAWS

OF

VIRGINIA CITY HIGHLANDS

PROPERTY OWNERS' ASSOCIATION

(amended August 2003)

ARTICLE I NAME

The name of this corporation is and shall be, VIRGINIA CITY HIGHLANDS PROPERTY OWNERS' ASSOCIATION, and for convenience, shall be referred to hereinafter as the "Association".

ARTICLE II OBJECTS & PURPOSES

The Association has been created as a rural agricultural residential common-interest community pursuant to NRS 116.1201 and the regulation known as L CB File No. R 114-99, Section 3.The objects and purposes of the Association shall be to further and promote the community welfare of the owners of the lots within the recorded subdivision Unit No. 1, situated in Storey County, Nevada, which has been developed and subdivided by Lake Tahoe Recreational Land Company, Inc. The Association shall be authorized to do whatever may be deemed necessary, conducive, incidental or advisable, to accomplish and promote said objects or purposes, except carry on a business, trade or profession for profit, including but not limited to:

(a) Owning, improving and maintaining recreational facilities, streets, pond, streams, parks and/or public areas in Virginia City Highlands;

(b) Providing protective service to members and their families;

(c) Caring for vacant, unimproved or unkempt vacant lots, removing rubbish and unsightly growth therefrom and doing any and all other things necessary or desirable to keep them in a neat and orderly condition;

(d) Enforcing any and all restrictions, covenants and conditions imposed at any time, on the residential lots in Virginia City Highlands, for the general benefit of the owners thereof;

(e) Paying all taxes, utilities, charges, and assessments and other levies upon property owned or managed by the Association;

(f) Making and collecting charges and assessments by which to further the foregoing objects and purposes;

(g) Providing informational services for members.

And to do any other act or thing in any way connected with the foregoing or related to the objects and purposes of the Association.

 

ARTICLE III MEMBERSHIP

 

1. Membership in the Association shall be limited to the owners of one (1) or more lots in Unit No. 1 in Virginia City Highlands. For the purpose of these By-Laws, lots shall consist of those lots described and set forth in the subdivision map filed in the office of the County Recorder of Storey County, Nevada, relating to Virginia City Highlands Unit No. 1. A purchaser of any such lots under contract, shall be the owner for purposes of these By-Laws.

2. All persons who become owners of lots in Virginia City Highlands, as defined and described above in Section 1 of this Article III, shall by reason of such ownership, become and hereby are, made members of the Association.

3. There shall be but one (1) vote for each lot in Unit No. 1 of Virginia City Highlands. The vote for a lot owned by Joint owners may be voted by any one (1) of the Joint owners. A majority of the Joint owners of the lot shall have the right to select the Joint owner who is to vote in any election. Any Joint owner of a lot who votes in any election without an objection of the other Joint owners of said lot, shall irrevocably be presumed as having voted with the consent of all other owners of the same lot.

In the election of the members of the Board of Directors of this Association, every voting owner shall have the right to cast one (1) vote per lot for each vacancy to be filled.

ARTICLE IV CERTIFICATES OF MEMBERSHIP & TRANSFER

1. The Association may issue certificates of membership in such form as the Board of Directors shall designate, and such certificates shall contain the signature of the duly authorized officers. A certificate book shall be maintained in such an event which shall contain a margin on which shall be shown the number, date and name of the member as set forth in the corresponding certificate. In the event that no such certificates are issued, a membership book shall be maintained showing the date and name of the owner, and the lot or lots owned by said member(s).

2. Certificate of Membership (or the membership itself if no such certificates are issued), shall be appurtenant to the lots in Virginia City Highlands as described in Section 1 of Article III of these By-Laws and shall not be transferable except with the conveyance of the lot for which said certificate is issued. Such conveyance shall affect the transfer of the certificate or membership appurtenant to that particular, to its purchaser.

ARTICLE V MEETING OF MEMBERS

1. ANNUAL MEETINGS: The annual meeting of the members of the Association shall be at the discretion of the Board of Directors, and shall be held in the County of Storey, State of Nevada at the address designated in the written notice. The secretary shall mall or deliver to each member, written notice of such meeting at least thirty (30) days prior to the date appointed therefor. Notice mailed to the last address given to the Secretary or the Association by any member, shall be sufficient. Notice or this meeting may be contained in the newsletter or newspaper published by the Association, provided it is mailed in the manner set forth herein above.

2. SPECIAL MEETINGS: Special meeting of members may be called at any time by the President, a majority of the Board of Directors, or not less than twenty five per cent (25%) of the members of the Association, to be held at a convenient place in Storey County, Nevada. Upon receipt of a request in writing, setting forth the purpose of such proposed special meeting, signed by the President or a majority of the Board of Directors or not less than twenty five per cent (25%) of the members of the Association, the Secretary shall fix a time and place for such meeting which shall not be less than ten (10) nor more than thirty (30) days after the receipt of such request, and shall cause written notice thereof, setting forth the time and place and purpose of the meeting, to be given each member by personal delivery or by mailing as provided for the annual meeting; and it the Secretary shall neglect or refuse to issue such call, the President, Directors or members making the request may do so. A special meeting or the voting members may be held at any time without notice, when all of the voting members are present in person or by proxy, or when all of the voting members waive notice and consent in writing, to the holding thereof.

3. The presence in person or by proxy, of ten per cent (10%) of all voting members of the Association shall constitute a quorum for the transaction of business at any meeting of the members. A majority vote of the voting members voting, shall be required for the passage of any motion, or other action by the members. Proxies shall be signed and filed with the Secretary of the Association prior to their being voted. Proxies may apply only to a specific meeting, or the may provide for the proxy to remain in effect until revoked by the voting members. In the latter event, said proxy shall be honored until receipt by the Secretary of revocation thereof.

ARTICLE VI DIRECTORS

1. The business, property and affairs of the Association shall be managed by a Board of Directors composed of five (5) members of the Association elected by the membership at its annual meeting to serve a two (2) year term. To provide continuity of the Board, Directors will be elected annually with two (2) Directors being elected on even years and three (3) being elected on uneven years. Any member of the Board of Directors who has served a full two (2) two (2) year terms shall not be eligible to succeed himself in office nor to be nominated for election to the Board of Directors for the ensuing term.

2. The number of Directors constituting the Board of Directors, shall remain at five (5) unless changed by action of the membership so long as the total number of lots to which this Association is applicable, shall be less than one thousand two hundred (1,200).

3. The Board of Directors shall have the general management and control of the business and affairs of the Association and shall exercise any and all of the powers that may be exercised or performed by the Association under the law, the Articles of Incorporation and these By-Laws. The Board of Directors may make and enforce, such rules and regulations as they deem necessary, conducive, incidental or advisable to accomplish or promote the objects and purposes of the Association and the use of its property, assets and facilities.

4. Regular meetings of the Board of Directors shall be held immediately after the annual meeting of members and at such other regular times and places as may be established by a majority of the Board. Special meetings may be called at any time by the President, a Vice President in the absence of the President, or any three (3) Directors, at such times and places as shall be set forth in the notice thereof. At least forty-eight (48) hours notice of such meeting shall be given to each Director, which notice may be given by telephone. The transaction of any meeting of the Board of Directors, however, called and noticed and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if either before and/or after the meeting, each Director not present signs a written waiver of notice and/or consent to holding such meeting or an approval of the minutes thereof, which waiver, consent or approval shall be filed with the minutes of such meeting.

5. A majority of the Directors shall constitute a quorum for the transaction of business and a majority of such quorum shall determine any question except as otherwise provided by law, the Articles of Incorporation, or these By-Laws, provided, however, that if a quorum not be present, the majority of those Directors present may adjourn to such future time and place as they shall determine, notice of such adjournment to be given to each Director as herein provided for meetings of the Board of Directors.

6. Any vacancy in the Board or Directors caused by the death, resignation or disability of a Director, shall be filled by a vote of a majority of the remaining Directors, or by only for the unexpired term of his predecessor.

7. Subject to limitations of the Articles of Incorporation, these By-Laws and the laws of Nevada governing non-profit corporations, and in addition to any powers granted thereby, the Directors shall have the following specific powers, to-wit:

First: To change the principal office for the transaction of the business of the Association from one location to another; to prescribe the forms of certificates or membership and to alter the form of the Association's seal and of such certificates, from time to time, as in their Judgement they may deem best, provided such seal and such certificates at all times comply with the provisions of the law.

Second: To authorize the issuance of certificates or membership of the Association, from time to time, upon such terms as may be lawful.

Third: To make and enter into contracts for any legal purpose.

Fourth: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee, any of the powers and authority of the Board, in the management of the business and affairs of the Association except the power to adopt, amend or repeal By-Laws. The Executive Committee shall be composed of two (2) or more Directors.

8. The Board of Directors shall suspend the voting rights of an owner or owners, of one or more lots, for such period of time, during which any assessment against said owner's lot remains unpaid and delinquent.

9. Each member of the Board of Directors shall be entitled to receive a fee of twenty dollars ($20.00) for each meeting of the Board attended by said Directors; but in no event, shall a Director be entitled to be so compensated for more than twenty four (24) meetings in any one year of the Association.

ARTICLE VII OFFICERS

1. The officers of the Association shall be a President, one or more Vice Presidents, a Secretary, and a Treasurer. Such officers shall be elected for a term of one (1) year by the Board of Directors at the first meeting of the Board after the annual meeting of members or any adjournment thereof, and shall serve until the successor of each is elected and qualified.

2. The President shall be the executive head of the Association, and shall preside at all meetings of the Board of Directors and all meetings of the members. The President, together with the Secretary, shall sign all certificates of membership, contracts, deeds bonds and other obligations of the Association and other instruments authorized by the Board of Directors.

3. A Vice President shall perform, in the absence of the President or in the event of the President's inability to act, the same duties and functions as are provided to be performed by the President. A Vice President shall also perform the duties of the Secretary in the Secretary's absence or inability to act insofar as the same shall pertain to the calling of meetings of members or Directors.

4. The Secretary shall be the custodian of all records and documents pertaining to the Association and its property and shall keep fair and correct minutes and records of all meetings of members and of the Board of Directors. The Secretary shall sign with the President, where appropriate, all certificates of membership, contracts, deeds, bonds and other obligations of the Association, and other instruments authorized by the Board of Directors. The Secretary shall give notice of all meetings of members of the Association and of the Board of Directors as set forth in these By-Laws. If, at any meeting of the Board of Directors, The Secretary shall be absent or unable to perform his duties, the President shall appoint a Secretary pro tem.

5. The Treasurer shall receive and safely keep all monies and securities belonging to the Association and shall disburse the same under the direction of the Board of Directors·at each annual meeting of the members and at any other time when directed by the Board of Directors, he shall submit a report on the financial affairs of the Association and the status of all monies, funds and assets then on hand or received and disbursed since the Treasurer's last report.

6. The Board of Directors may appoint, employ, terminate, discharge, fix the compensation and provide For the duties and powers of such officers, agents and employees as in the Judgement or the Directors, shall be advisable, subject to the requirements and provisions of this Article VII and two (2} or more oŁ any officers, agents or employees may be combined in one person, except the office of the President and Secretary. Any officer of this Association shall perform and discharge such duties, other than those enumerated in this Article VII, as the Board of Directors may, From time to time, require.

7. Any officer may be removed as such by the Board or Directors at any properly called meet-ins, for any reason deemed sufficient to the Directors. Vacancies in any office, whether caused by resignation, removal, death or otherwise, shall likewise be Filled by the Board of Directors.

8. Personal Liability. No member of the Board or any committee of the Association, or any officer of the Association, if any, shall be personally liable to any owner, or to any other party, including the Association, for any damage, loss or prejudice suffered or claimed on account of any act, omission, error or negligence of the Association, the Board, the Architectural Committee, or any other committee, or any officer of the Association, or employee of the Association, provided that such person has, upon the basis of such information as may be possessed by him, acted in good faith, and without willful or intentional misconduct.

ARTICLE VIII CHARGES & ASSESSMENTS

1. For the purpose or securing funds to meet the capital outlays, operating expenses and other expenditures required to accomplish the objects and purposes authorized in Article II or these By-Laws, the Board or Directors shall be authorized to determine and levy charges and assessments against each and every property owner and/or lot in the Virginia City Highlands, as it may, from time to time, fix and establish by resolution. Such charges and assessments shall constitute liens on the affected lots from and after the time each such charge and assessment becomes due and payable and until the same is paid in Full. A purchaser under a contract for purchase of a lot or lots in Virginia City Highlands, shall be deemed an owner for the purpose of these By-Laws. Such lien or liens shall also cover interest on such charges and assessments and costs of collecting the same, if any, including attorney's fees. The authority to levy such charges and assessments upon lots in Virginia City Highlands, is granted to the Association by Lake Tahoe Recreational Land Company, Inc., as owner and developer, as part of the declaration of conditions and restrictions imposed, from time to time, upon respective subdivisions comprising Virginia City Highlands and recorded in the office of the County Recorder of Storey County, Nevada. Such liens shall be superior to any and all other liens (except as provided in Section 7 hereof) at any time levied or imposed upon such lots. The validity of such charges and assessments against individual lots, shall in no event, be dependent upon the authority of the Association to determine and levy such charges and assessments against all of such lots that may at any time exist in Virginia City Highlands, but such charges and assessments shall be valid to the extent, that such authority has been granted to the Association.

2. Each owner or owners of a lot or lots in Virginia City Highlands, shall, by the accept-ante of a deed for such lot or lots or by the signing of a contract or agreement to purchase the same, whether from Lake Tahoe Recreational Land Company, Inc., or by a subsequent owner of such lot or lots, bind himself, his heirs, personal representative and assigns to pay all such charges and assessments as shall be determined and levies upon much lot or lots, including interest on such charges and assessments and collection costs thereof, if any, including attorney's Fees, and the obligation to pay such charges, interest and costs thereby constitutes and obligation running with the land

3. Charges and assessments shall be determined and levied equally against each lot and each said lot shall be subject to said charges and assessments at the time such determination is made. The maximum annual dues authorized to be imposed by the Board of Directors shall not exceed fifty dollars ($50.00) per membership lot For any twelve (12) month period of assessment, based on the calendar year January 1st through December 31st.

4. The maximum annual dues authorized to be imposed by the Board of Directors shall not exceed fifty dollars ($50.00) per membership lot for any twelve (12) month period of assessment, based on the calendar year January 1st through December 31st.

5. The annual dues shall be determined by the Board or Directors on or before October 15th of each year to cover the calendar year of the Association next Following said determination. Statements of outstanding dues shall be mailed within the first ten (10) days of December. Assessments shall be due and payable on January 1st of the subsequent year and considered delinquent on March 1st or that year. Late fees shall be the maximum allowed under Nevada State Law.

6. All liens herein provided for, shall be enforceable by foreclosure proceedings in the manner provided by law for the Foreclosure or mortgages and/or trust deed; provided, however, that the acceptance or a deed For any lot or lots or by the signing of a contract or agreement to purchase the same, whether From Lake Tahoe Recreational Land Company, Inc., or from a subsequent owner or purchaser thereof, such purchaser or owner shall thereby waive all rights of redemption and of homestead in such lot or lots with respect to foreclosure of such liens. No proceeding for foreclosure of any such lien or liens shall be commenced except upon the expiration of four (4) months from and after the date, the charge and assessment giving rise to such lien or liens becomes due and payable.

7. Any lien created or granted under the provisions of this declaration is expressly made subject and subordinate to the rights of the beneficiary of any first deed of trust upon any lot in the Development, made in good faith and for value and no such lien shall in way, defeat, invalidate or impair the obligation or the priority of such deed unless the beneficiary thereof, shall expressly subordinate his interest, in writing, to such lien.

8. Title to any residential lot acquired under or by virtue of a proceeding For the enforcement of any lien or liability under these By-Laws, shall always be subject to all of the reservations, limitations, restrictions, covenants and conditions imposed upon said lot by contract of sale or deed from Lake Tahoe Recreational Land Company, Inc., or by declaration of Lake Tahoe Recreational Land Company Inc., or the Association or these By-Laws.

ARTICLE IX PRINCIPAL OFFICE

The principal office For the transaction of the business of the corporation is as may be hereafter fixed and located by the Board of Directors in the County of Storey, State of Nevada. The Board of Directors may, at any time, or, from time to time, change the location of the principal office from one location to another in said County.

ARTICLE X DISSOLUTION

In the event of the dissolution of this Association, any and all assets of the Association, and any and all funds, shall be distributed to any charitable subdivision of the State of Nevada, or to any non-profit organization for purposes similar to that of this Association, or for charitable purposes as may be determined by the Board of Directors.

ARTICLE XI NOTICE

Any notice required to be given pursuant to these By-Laws, shall be a written notice, unless otherwise specifically provided herein. Such written notice may be given by depositing the same in the United States mail in an envelope, postage prepaid, addressed to the recipient at his last known address, and the time when the same shall be mailed shall be deemed the time of giving such notice. A written waiver of notice, signed before or after the time stated in such waiver for holding a meeting, or attendance at a meeting, shall be deemed equivalent to notice thereof required to be given by these By-Laws.

ARTICLE XII AMENDING OR REPEALING BY-LAWS

New By-Laws may be adopted or these By-Laws may be amended only by a majority vote of the members present and voting at a duly called meeting of members.

ARTICLE XIII MISCELLANEOUS

1. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of 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 other person shall have any power or authority to bind the Association by and contract or engagement or to breach its credit or to render it liable for any purpose or to any amount.

2. Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the laws of Nevada relating to non-profit corporations, shall govern the construction of these By-Laws.

3. The rules contained in Roberts' Rules of Order, Revised, shall govern all members' meetings and Directors' meetings of the Association, except in instances of conflict between said Rules of Order and the Articles of Incorporation or By-Laws of the Association or provisions of law.

4. Exterior Colors and Finishes: The exterior color of all structures and fences, excluding metal corral fences, shall be in subdued flat earthtone and woodtone colors. Earthtone colors are considered to be medium to dark shades of reddish-brown, brown, tan, umber, and green. Pastel colors, white, or other colors that are not earthtone or woodtone shall not be allowed. The exterior colors of structures and fences shall be compatible with their surroundings, and blend rather than contrast, with the existing vegetation and site. This amendment does not require structures and fences in existence as of July 26, 2003 to change their existing colors.

5. Architectural Style: The exterior design should be in harmony with the western Nevada mountains and early Comstock Lode atmosphere. All structures shall be of an architectural style that is log cabin, western, mountain, or rustic in appearance.

KNOW ALL MEN BY THESE PRESENTS:

We, the undersigned duly elected officers and Directors of Virginia City Highlands Property Owners' Association, do hereby certify that the foregoing amended By-Laws were adopted by the voting members Virginia City Highlands Property Owners' Association, at a duly held meeting, on the 15th day of July, 1979, at Virginia City, Nevada.

THE ORIGINAL OF THE ABOVE DOCUMENT WAS DULY SIGNED BY THE THEN DIRECTORS OF THE ASSOCIATION.

THE ABOVE ALSO INCLUDES AMENDMENTS WHICH WERE DULY APPROVED IN JULY OF 1980, JULY 1981, JULY 2000, and JULY 2003.