KENMARA HOMEOWNERS ASSOCIATION

BYLAWS

TABLE OF CONTENTS

NAME 3
1. 1 Name 3

PURPOSES AND POWERS; DEFINITIONS 3
2.1 Purpose 3
2.2 Powers 3
2.3 Definitions 6

OFFICES 6
3.1 Initial Office 6
3.2 Maintain Office 6

MEMBERSHIP, VOTING RIGHTS AND ASSESSMENTS 6
4.1 Membership 6
4.2 Duration of Membership 7
4.3 Voting 7
4.4 Matters Requiring Vote of Membership 8
4.5 Annual Meeting of Association 8
4.6 Special Meeting of Members 8
4.7 Notices of Meetings 9
4.8 Quorum at Meeting 9
4.9 Annual Assessments 9
4.10 Special Assessments 10

EXECUTIVE BOARD 10
5.1 Executive Board 10
5.2 Regular Meetings 12
5.3 Special Meetings 12
5.4 Quorum 12
5.5 Majority 12
5.6 Vacancy 12
5.7 Removal of Directors 13
5.8 Compensation 13
5.9 Chairman and Secretary 13
5.10 Action Without Meeting 13
5.11 Limitation on authority 14

OFFICERS 14
6.1 Officers 12
6.2 Qualifications 14
6.3 Officer's Vacancy 14
6.4 Removal of Officers 14
6.5 President 15
6.6 Secretary 15
6.7 Treasurer 15
6.8 Assistant Treasurer 15
6.9 Assistant Secretary 15

CONTRACTS, CHECKS, DEPOSITS AND FUNDS 16
7.1 Contracts 16
7.2 Checks 16
7.3 Deposits 16
7.4 Insurance 16
7.5 Gifts 19

BOOKS AND RECORDS 20
8.1 Books and Records in General 20
8.2 Financial Records 20
8.3 Annual Financial Statements 20
8.4 Filing of Complaints 21

FISCAL YEAR 21
9.1 Fiscal year 21

SEAL 21
10.1 Corporate Seal 21

WAIVER OF NOTICE 21
11.1 Waiver 21

LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS 21
12.1 Standard of Care and Justifiable Reliance 21
12.2 Exercise of Powers 22
12.3 Liability of Directors and Officers 23
12.4 Indemnification of Directors and Officers 23
12.5 Amendments Affecting Provisions of this Article 25

DELEGATION OF POWERS OF BOARD AND OFFICERS 25
13.1 Delegation of Powers of Board 25
13.2 Delegation of Powers of Officers 25

AMENDMENTS TO BYLAWS 25
14.1 Declarant Control Period 25
14.2 Subsequent Periods 25
14.3 Restrictions on Amendments 26

AMENDMENTS TO DECLARATION 26
15.1 Amendment Procedure 26

BYLAWS OF KENMARA
HOMEOWNERS ASSOCIATION

ARTICLE I
NAME

1.1 Name.

The name of the non-profit corporation is KENMARA HOMEOWNERS ASSOCIATION (the "Association").

ARTICLE 2
PURPOSES AND POWERS; DEFINITIONS

2.1 Purpose.

The purposes of the Association are: the ownership, management, operation and maintenance of certain real estate and the improvements located thereon, situated in East Bradford Township, Chester County, Pennsylvania, including the 'Common Facilities" and "Controlled Facilities" and "Common Elements" of the Association as defined in the Declaration (as hereinafter defined), and the implementation, administration and enforcement of a certain "Declaration of Covenants, Restrictions and Easements for Kenmara" (the "Declaration"), dated 1/28/1998 and recorded in the Office of the Recorder of Deeds in and for Chester County, Pennsylvania, on 2/2/1998 in Record Book 4295, Page 1986 et seq., with Rouse/Chamberlain Ltd., a Pennsylvania Limited Partnership as the Declarant, as the same may be further hereafter amended, and any other lawful purpose for which the Association may be conducted on a not-for-profit basis pursuant to the laws of the Commonwealth of Pennsylvania. Any capitalized terms used in these Bylaws which are not otherwise defined herein shall have the meanings given to such terms as set forth in the Declaration.

2.2 Powers.

Except as otherwise provided in the Declaration or the Pennsylvania Uniform Planned Community Act (the "Act"), the Association shall have the powers to do and perform the following:

(1) Adopt and amend bylaws and rules and regulations.

(2) Adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from Unit owners.

(3) Hire and terminate managing agents and other employees, agents and independent contractors.

(4) Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more Unit owners on matters affecting the Planned Community.

(5) Make contracts and incur liabilities.

(6) Regulate the use, maintenance, repair, replacement and modification of Common Elements.

(7) Cause additional improvements to be made as a part of the Common Facilities and, only to the extent permitted by the Declaration, the Controlled Facilities.

(8) Acquire, hold, encumber and convey in its own name any right, title or interest to real or personal property, but Common Facilities may be conveyed or subjected to a security interest only under the provisions of section 5318 of the Act (relating to conveyance or encumbrance of Common Facilities).

(9) Grant easements, leases, licenses and concessions through or over the Common Facilities and, only to the extent permitted by the Declaration, the Controlled Facilities.

(10) Impose and receive payments; fees or charges for the use, except as limited by other provisions of the Act, rental or operation of the Common Elements other than the Limited Common Elements described in section 5202(2) and (3) of the Act (relating to Unit boundaries).

(11) Impose charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the Declaration, Bylaws and rules and regulations of the Association.

(12) Impose reasonable charges for the preparation and recording of amendments to the Declaration, resale certificates required by section 5407 of the Act (relating to resales of Units) which shall be ONE charge that may be made by the Association solely because of the resale or retransfer of any Unit or statement of unpaid assessments. In addition, the Association may impose a capital improvement fee, but no other fees, on the resale or transfer of Units in accordance with the following:

(i) the capital improvement fee for any Unit shall not exceed the annual assessments for general common expense charged to such Unit during the most recently completed fiscal year of the Association; provided that:

(a) in the case of resale or transfer of a Unit which was either created or added to the Planned Community in accordance with section 5311 of the Act (relating to conversion and expansion of flexible planned communities) at some time during the, most recently completed fiscal year of the Association but was not in existence for the entire fiscal year, the capital improvement fee shall not exceed one-half of the annual assessments for general common expenses charged to a Unit comparable to such Unit during the most recently completed fiscal year of the Association.

(ii) capital improvement fees allocated by an Association must be maintained in a separate capital account and may be expended only for new capital improvements or replacement of existing common elements, and may not be expended for operation, maintenance or other purposes.

(iii) no capital improvement fee shall be imposed in the case of resale or transfer of a Unit consisting of unimproved real estate, a transfer from the Declarant to a third party buyer, or on any gratuitous transfer of a Unit between any of the following family members; spouses, parent and child, siblings, grandparent and grandchild.

(iv) no fees may be imposed upon any person who;

(a) acquires a Unit consisting of unimproved real estate and signs and delivers to the Association at the time of such person's acquisition a sworn affidavit declaring the person's intention to reconvey such Unit within 18 months of its acquisition; and

(b) completes such reconveyance within such 18 months.

(13) Provide for the indemnification of its officers and executive board and maintain directors' and officers' liability insurance.

(14) Exercise any other powers conferred by this subpart, the Declaration or bylaws.

(15) Exercise all other powers that may be exercised in this Commonwealth by legal entities of the same type as the Association.

(16) Exercise any other powers necessary and proper for the governance and operation of the Association.

(17) Assign its right to future income, including the right to receive common expense assessments, only to the extent the Declaration expressly provides.

(18) Assign or delegate any powers of the Association listed in this section to a Master Association subject to the provisions of section 5222 of the Act (relating to master Associations) and accept an assignment or delegation of powers from one or more planned communities or other incorporated or unincorporated associations.

2.3 Definitions.

Any capitalized term used in these Bylaws but not otherwise defined shall have the meaning as set forth in the Declaration.

ARTICLE 3
OFFICES

3.1 Initial Office.

The Association shall have its initial principal office at 500 Exton Commons, Exton, PA 19341.

3.2 Maintain Office.

The Association shall have and continuously maintain a registered office in the Commonwealth of Pennsylvania.

ARTICLE 4
MEMBERSHIP, VOTING RIGHTS AND ASSESSMENTS

4.1 Membership.

Each Owner of a Lot, including Declarant, shall be a Member of the Association at such time as set forth in the Declaration. Each membership shall be appurtenant to, and not severable from, ownership of a Lot, and shall be held in the name of the record owner of the Lot, whether or not the Lot is owned jointly, in common or in any other form of tenancy. Each Lot shall have one, and only one, membership regardless of the number of co-tenants, joint-tenants or tenants by the entireties holding interests in said Lot. The Declarant shall be a Member until the Declarant's interest is terminated by selling all of the Lots it owns.

4.2 Duration of Membership.

Each membership shall initially commence upon the recording of the Declaration. Thereafter, membership shall be transferred to each successive record Owner of a Lot as of the date and hour of the completion of settlement on the conveyance of a Lot to a new Owner.

4.3 Voting.

4.3.1 In General: Members may vote on those items submitted to their vote by the Executive Board. Each Member shall be entitled to one vote on all matters on which Members are entitled to vote. Members shall not be entitled to cumulative voting for the election of members of the Executive Board. Except where a higher percentage of votes is required in these Bylaws or in the Declaration, the vote of the majority of Members shall be controlling.

4.3.2 Unit Owner Other Than Natural Person: If the owner of a Unit is a corporation, joint venture, partnership or unincorporated association, the natural person who shall be entitled to cast the vote for that Unit shall be the person named in a certificate executed by that entity pursuant to its governing documents. If the owner of a unit is a trust, the trustee or trustees shall be deemed to be the owner for voting purposes.

4.3.3 Ownership by More Than One Person: If the ownership of a Unit is in more than one person, the natural person who shall be entitled to cast the vote of the Unit shall be the person named in a certificate executed by all of the owners of the Unit and filed with the secretary of the Association or, in the absence of that named person from the meeting or in the event of failure to execute and file such a certificate, the person owning such unit who is present. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with their unanimous agreement unless the Declaration expressly provides otherwise. There shall be deemed to be unanimous agreement if any one of the multiple owners casts the votes allocated to that Unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the Unit. Such a certificate shall be valid until revoked by a subsequent certificate similarly executed.

4.3.4 Approval or Disapproval: Except where execution by owners of a Unit in the same manner as a deed is required in the Act, and subject to the provisions of the Declaration and these Bylaws, wherever the approval or disapproval of a Unit owner is required by the Act, the Declaration or the Bylaws, the approval or disapproval shall be made only by the person who would be entitled to cast the vote of the Unit at any meeting of the association.

4.3.5 Proxies: Votes allocated to a Unit may be cast pursuant to a proxy duly executed by a Unit owner. If a Unit is owned by more than one person, each owner of the Unit may vote or register protest to the casting of votes by the other owners of the Unit through a duly executed proxy. A Unit owner may not revoke a proxy given under this section except by actual notice of revocation to the person presiding over a meeting of the Association. A proxy is void if it is not dated or purports to be revocable without notice. A proxy terminates one year after its date unless it specifies a shorter term.

4.3.6 Units owned by association: No votes allocated to a unit owned by the association may be cast.

4.4 Matters Requiring Vote of Membership.

Among other matters that may from time to time be submitted to the Members for a vote by the Executive Board, the Members shall in any event be entitled to vote at the annual meeting of the Members of the Association for the election of members of the Executive Board (see Section 4.5), or the amendment of these Bylaws (see Article 14 hereof), or on an amendment of the Declaration.

4.5 Annual Meeting of Association.

The annual meeting of the Members of the Association, beginning in the year in which Declarant Control ends, shall be held no later than the first Monday of July of each year, at the registered office of the Association or at such other location as may be determined by the Executive Board (but not outside the County of Chester, Commonwealth of Pennsylvania) and as shall be designated in the notice of the meeting, for the purpose of electing members of the Executive Board and transacting such other business as may properly be brought before the meeting.

4.6 Special Meeting of Members.

Special meetings of the Members may be called to be held at the registered office of the Association, or at such other place designated in the call of the g (but not outside of the County of Chester, Commonwealth of Pennsylvania), at any time, by the President of the Association or by resolution of the Executive Board, or upon written request of Members holding not less dm one-fifth (1/5) of the outstanding voting rights. Upon written request of the Members, as aforesaid, the Secretary of the Association shall give notice of such special meeting, to be held at such time as the Secretary may fix, not less than fourteen (14) nor more than sixty (60) days in advance of the meeting. Upon neglect or refusal of the Secretary to issue such notice, the Members making the request may do so.

4.7 Notices of Meetings.

The Secretary or any assistant secretary of the Association, not less than fourteen nor more than 60 days in advance of any meeting, shall cause notice to be hand delivered or sent prepaid by United States mail to the mailing address of each Unit or to any other mailing address designated in writing by the Unit owner. The notice of any meeting must state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the Declaration or bylaws; any budget or assessment changes; and, where the Declaration or these Bylaws require approval of Unit owners, any proposal to remove a director or officer.

4.8 Quorum at Meeting.

A quorum is present throughout any meeting of the Association if persons entitled to cast 20% of the votes which may be cast for election of the Executive Board are present in person or by proxy at the beginning of the meeting.

4.9 Annual Assessments.

4.9.1 General Rule: Until the Association makes a common expense
assessment, the Declarant shall pay all the expenses of the Planned Community. After any assessment has been made by the Association, assessments shall be made at least annually, based on a budget adopted at least annually by the association. The initial annual assessment shall be fixed by the Executive Board no later than December 31, 2003. Subsequent annual assessments shall be fixed by the Board no later than December thirty-first of each year for each succeeding year.

4.9.2 Budgets: The budgets of the association shall segregate limited common expenses from general common expenses if and to the extent appropriate. The Executive Board shall deliver to all Unit owners copies of each budget approved by the Executive Board and notice of any capital expenditure approved by the Executive Board promptly after such approval. In addition to other rights conferred by the Declaration, Bylaws or the Act, the Unit owners, by majority or any larger vote specified in the Declaration, may reject any budget or capital expenditure approved by the Executive Board within 30 days after approval.

4.9.3 Allocation and interest: Except for assessments under subsection 4.9.4 below, all common expenses shall be assessed against all the Units in accordance with the common expense liability allocated to each Unit in the case of general common expenses and in accordance with subsection 4.9,4 in the case of special allocation of expenses. Any past due assessment or installment thereof shall bear interest at the rate established by the Association at not more than 20% per year.

4.9.4 Special allocations of expenses: Except as provided by the Declaration:

(1) Any common expense associated with the maintenance, repair or replacement of a Limited Common Element shall be assessed in equal shares against the Units to which that Limited Common Element was assigned at the time the expense was incurred.

(2) Any Common Expense benefiting fewer than all of the Units shall be assessed exclusively against the Units benefited.

(3) The costs of insurance shall be assessed in proportion to risk, and the costs of utilities that are separately metered to each Unit shall be assessed in proportion to usage.

(4) If a common expense is caused by the negligence or misconduct of any Unit owner, the Association may assess that expense exclusively against his or her Unit.

4.9.5 Reallocation: If Common Expense liabilities are reallocated, Common Expense assessments and any installment thereof not yet due shall be recalculated in accordance with the reallocated Common Expense liabilities.

4.10 Special Assessments.

In addition to the annual assessments provided for above, the Association, by an affirmative vote of at least two-thirds of the Members, may levy in any assessment year:

(i) special assessments applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction or improvement, unexpected repair, replacement or cost in connection with the operation, maintenance, repair, restoration, and management of the Common Elements; or

(ii) assessments for any insufficiency of the annual assessment for a preceding assessment year to cover the actual costs incurred by the Association in such year. Any special assessment made pursuant to this Section shall be apportioned equally among the Lots and the Owners thereof.

ARTICLE 5
EXECUTIVE BOARD

5.1 Executive Board.

The affairs of the Association shall be governed and conducted by its Executive Board, which shall initially be comprised of four (4) persons, to be elected or appointed in accordance with these Bylaws, and the provisions of Section 4 of the Declaration.

5.1.1 Status during period of Declarant control.

(a) The Declaration provides for a period of Declarant control of the Association, during which the Declarant or persons designated by the Declarant may appoint and remove the officers and members of the Executive Board.

(b) The period of Declarant control extends from the date of the first conveyance of a unit to a person other than a Declarant for a period of not more five years.

(c) The period of Declarant control terminates no later than the earlier of: (i) sixty days after conveyance of 75% of the Units which may be created to Unit owners other than the Declarant; (ii) two years after Declarant (or its successors and assigns) has ceased to offer Units for sale in the ordinary course of business; or (iii) two years after any development right to add new Units was last exercised.

(d) Declarant may voluntarily surrender the right to appoint and remove officers and members of the Executive Board before termination of that period. In that event, the Declarant may require, for the duration of the period of Declarant control, that specified actions of the Association or Executive Board, as described in a recorded instrument executed by the Declarant, be approved by the Declarant before they become effective.

5.1.2 Election of members during transfer of Declarant control. Not later than 60 days after conveyance of 25 % of the Units which may be created to Unit owners other than a Declarant, at least one member and not less than 25 % of the members of the Executive Board shall be elected by Unit owners other than the Declarant. Not later than 60 days after conveyance of 50% of the Units, which may be created to Unit owners other than a Declarant, not less than 33 % of the members of the Executive Board shall be elected by Unit owners other than the Declarant.

5.1.3 Election of members and officers following Declarant control. Not later than the termination of any period of Declarant control, the Unit owners shall elect an Executive Board of at least three members, at least a majority of whom shall be Unit owners. The Executive Board shall elect the officers. The Executive Board members and officers shall take office upon election.

5.1.4 Term of Executive Board: Except during the period of Declarant Control, Board members shall serve for a term of two years, or until their successor has been appointed or elected.

5.2 Regular Meetings.

Regular meetings of the Executive Board shall take place immediately following the annual meeting of the Association, and at such other times as the Board may agree. Special meetings of the Executive Board may be called by or at the request of the President of the Association or any two (2) members of the Executive Board. Such special meetings shall be held at the registered office of the Association or at such other location within the County of Chester, Commonwealth of Pennsylvania as may be determined by the person calling such special meeting and as shall be designated in the notice of special meeting.

5.3 Special Meetings.

Notice of any special meeting of the Executive Board shall be given at least two (2) business days previously thereto by written notice delivered personally or sent by first class mail or fax to each member of the Executive Board at his or her address as shown by the records of the Association. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail in a sealed envelope so addressed, with postage thereon prepaid. Any member of the Executive Board may waive notice of any meeting. The attendance of a member of the Executive Board at any meeting shall constitute a waiver of notice of such meeting, except where a member of the Executive Board attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Executive Board need be specified in the notice or waiver of notice of such meeting, unless specifically required bylaw or these Bylaws.

5.4 Quorum.

A quorum is deemed present throughout any meeting of the Executive Board if persons entitled to cast 50% of the votes on the Board are present at the beginning of the meeting.

5.5 Majority.

The act of a majority of the members of the Executive Board shall be the act of the Executive Board, except where otherwise provided bylaw or by these Bylaws.

5.6 Vacancy.

Any vacancy occurring in the Executive Board, or any vacancy to be filled by reason of any increase in the number of members of the Executive Board resulting from any amendment of the Declaration or these Bylaws, shall be filled by the Executive Board appointing a replacement; except that a vacancy due to the resignation, withdrawal or incapacity of members of the Executive Board appointed by the Declarant shall be filled by the Declarant appointing a replacement. A Director appointed to fill a vacancy shall be appointed for the unexpired term of his predecessor in office.

5.7 Removal of Directors.

5.7.1 General Removal Powers: Notwithstanding any provision of the Declaration or these Bylaws to the contrary, the Members, by a two-thirds vote of all persons present and entitled to vote at any meeting of the Unit owners at which a quorum is present, may remove any member of the Executive Board with or without cause, other than a member appointed by the Declarant.

5.7.2 Removal for Dishonesty: Members of the Executive Board may be removed for dishonesty, incompetence or other good cause shown, by a vote of at least two thirds of the Members attending a special meeting called for that purpose. Any such Director shall have the right to speak and present evidence in his defense at the special meeting prior to any vote being taken on his removal. These removal rights shall not apply to a Director who was appointed by the Declarant.

5.7.3 Declarant Appointees: Members of the Executive Board appointed by the Declarant serve at the pleasure of the Declarant and may be removed at any time by the Declarant.

5.8 Compensation.

Members of the Executive Board as such shall not receive any stated salaries for their services, but by resolution of the Executive Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board. Nothing herein contained shall be construed to preclude any member of the Executive Board from serving the Association in any other capacity and receiving compensation therefore.

5.9 Chairman and Secretary.

Meetings of the Executive Board shall be presided-over by a Chairman to be chosen at the meeting. The Secretary of the Association shall act as Secretary of every meeting, but if the Secretary is not present, the persons present at such meeting shall choose any person present to act as Secretary of the meeting.

5.10 Action Without Meeting.

Subject to the further specific provisions of these Bylaws, any action required or permitted to be taken at any meeting of the Executive Board may be taken without a meeting, if prior to such action, a written consent thereto is signed by all members of the Executive Board and such written consent is filed with the minutes of proceedings of the Executive Board.

5.11 Limitation On Authority.

The Executive Board may not act on behalf of the Association to amend the Declaration under section 5219 of the Act (relating to amendment of Declaration), to terminate the Planned Community under section 5220 of the Act (relating to termination of Planned Community) or to elect members of the Executive Board or determine the qualifications, powers and duties or terms of office of Executive Board members under Article 5 above, but the Executive Board may fill vacancies in its membership for the unexpired portion of any term.

ARTICLE 6
OFFICERS

6.1 Officers.

The officers of the Association shall be a President, a Secretary, a Treasurer, and such Assistant Secretaries and Assistant Treasurers as the Board may from time to time authorize. Officers may hold more than one office. The initial officers of the Association shall be appointed by Declarant and they shall serve until successor officers are elected by the Executive Board at the first regular annual meeting of the Board after the period of Declarant Control has ended. The officers shall thereafter be elected annually by the Executive Board at the regular meeting of the Board. The officers shall have the authority and shall perform the duties as set forth in these Bylaws, and as may be prescribed from time to time by the Executive Board.

6.2 Qualifications.

All officers shall be owners or tenants of a Unit at the time of their election or appointment to office.

6.3 Officer's Vacancy.

Any vacancy occurring in any office, including any new office to be created in the future, shall be filled by the Executive Board appointing a replacement. An officer appointed to fill a vacancy shall be appointed for the unexpired term of his predecessor in office.

6.4 Removal of Officers.

Each officer shall serve at the pleasure of the Executive Board. Officers may be removed for dishonesty, incompetence or other good cause shown, and may also be removed at any time by the unanimous vote of the full Executive Board.

6.5 President.

The President shall be the principal executive officer of the Association and shall, in general, supervise and control all of the business and affairs of the Association. He shall preside at all meetings of the Members and of the Executive Board. He may sign, along with the Secretary or any other proper officer of the Association authorized by the Executive Board, any deed, mortgage, bond, contract. or other instrument which the Executive Board has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Executive Board or by these Bylaws or by statute to some other officer or agent of the Association. In general, the President shall perform all duties incident to the office of President and such other duties as may be prescribed by the Executive Board from time to time.

6.6 Secretary.

The Secretary shall: (i) keep the minutes of the meetings of the Executive Board in one or more books provided for that purpose; (ii) see that all notices are duly given in accordance with the provisions of these Bylaws or as required bylaw; and (iii) be custodian of the Association's records and of the seal of the Association and see that the seal of the Association is affixed to all documents, the execution of which on behalf of the Association under its seal is duly authorized in accordance with the provisions of these Bylaws.

6.7 Treasurer.

The Treasurer shall have charge and custody of and be responsible for all funds of the Association, receive and give receipts for moneys due and payable to the Association from any source whatsoever, and deposit all such moneys in the name of the Association in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of these Bylaws, If required by the Executive Board, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Executive Board shall determine, which cost shall be an expense of the Association.

6.8 Assistant Treasurer.

The Assistant Treasurer shall have the same power and authority as the Treasurer, such authority to be exercised only at the direction of the President, and only upon the incapacity or unavailability of the Treasurer to perform such tasks.

6.9 Assistant Secretary.

The Assistant Secretary shall have the same power and authority as the Secretary, such authority to be exercised only at the direction of the President, and only upon the incapacity or unavailability of the Secretary to perform such tasks.

ARTICLE 7
CONTRACTS, CHECKS, DEPOSITS AND FUNDS

7.1 Contracts.
The Executive Board may authorize any officer or officers, agent or agents of the Association, in addition to the officers so authorized by these Bylaws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Association and such authority may be general or confined to specific instances.

7.2 Checks.

All checks, drafts or other orders for the payment of money, and notes or other evidences of indebtedness issued in the name of the Association, shall be signed by such officer or officers, agent or agents of the Association and in such manner as shall from time to time be determined by resolution of the Executive Board. In the absence of such determination by the Executive Board, such instrument shall be signed by the Treasurer and countersigned by the President of the Association.

7.3 Deposits.

All funds of the Association shall be deposited from time to time to the credit of the Association in such banks, trust companies or other depositories as the Executive Board may select.

7.4 Insurance.

(a) Insurance to be carried by association. Commencing not later than the time of the first conveyance of a unit to a person other than the Declarant, the Association shall maintain, to the extent reasonably available, all of the following:

(1) Property insurance on the Common Facilities and Controlled Facilities to the extent the Controlled Facilities can be insured separately from the Unit and, if insurance for the Unit is not provided by the Association under subsection (b) or the Declaration, insuring against all common risks of direct physical loss. The total amount of insurance after application of any deductibles shall be not less than 80% of the actual cash value of the insured property, exclusive of land, excavations, foundations and other items normally excluded from property policies.

(2) Comprehensive general liability insurance, including medical payments insurance, in an amount determined by the Executive Board but not less than any amount specified in the Declaration covering all occurrences commonly insured against for death, bodily injury and property damage, arising out of or in connection with the use. ownership or maintenance of the Common Elements.

(b) Other insurance carried by association. If the insurance described in subsection (a) is not maintained, the Association promptly shall cause notice of that fact to be hand delivered or sent prepaid by United States mail to all Unit owners. The Declaration may require the Association to carry any other insurance. The Association may carry any other insurance it deems appropriate to protect the Association or the Unit owners,

(c) Policy terms. Insurance policies carried under subsections (a) shall provide all of the following:

(1) Each Unit owner is an insured person under the policy with respect to liability arising out of his membership in the Association,

(2) The insurer waives its right to subrogation under the policy against any Unit owner or member of the owner's household.

(3) No act or omission by any Unit owner, unless acting within the scope of his authority on behalf of the Association, will void the policy or be a condition to recovery under the policy,

(4) If at the time of a loss under the policy there is other insurance in the name of a Unit owner covering the same risk covered by the policy, the Association's policy is primary insurance not contributing with the other insurance.

(d) Proceeds from property insurance. Any loss covered by the property policy under subsection (a)(1) shall be adjusted with the Association, but the insurance proceeds for that loss shall be payable to any insurance trustee designated for that purpose, or otherwise to the Association, and not to any mortgagee or beneficiary under a deed of trust. The insurance trustee or the Association shall hold any insurance proceeds in trust for Unit owners and lien holders as their interests may appear. Subject to the provisions of subsection (g), the proceeds shall be disbursed first for the repair or restoration of the damaged Common Elements and Units, and Unit owners and lien holders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the Common Elements and units have been completely repaired or restored or the Planned Community is terminated.

(e) Unit owner insurance. A residential Unit owner shall insure the owner's Unit except as insurance is provided by the Association in accordance with this section or the Declaration. An insurance policy issued to the Association does not prevent a Unit owner from obtaining insurance for the owner's own benefit.

(f) Evidence and cancellation of insurance. An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to the Association and, upon request, to any Unit owner, mortgagee or beneficiary under a deed of trust. The insurance may not be canceled until 30 days after notice of the proposed cancellation has been mailed to the Association, each Unit owner and each mortgagee or beneficiary under a deed of trust, to whom a certificate or memorandum of insurance has been issued.

(g) Disposition of insurance proceeds.-

(1) Amy portion of the Planned Community for which insurance is required to be maintained by the Association by this section or the Declaration and which is damaged or destroyed shall be repaired or replaced promptly by the Association unless:

(i) the Planned Community is terminated;

(ii) repair or replacement would be illegal under any state or local health or safety statute or ordinance; or

(2) Any portion of the Planned Community for which insurance is required to be maintained by the Unit owner by this section or the Declaration and which is damaged or destroyed shall be repaired or replaced promptly by the Unit owner unless: (i) the Planned Community is terminated; or (ii) repair or replacement would be illegal under any state or local health or safety statute or ordinance. The cost of repair or replacement of these portions in excess of insurance proceeds is the Unit owner's expense.

(3) If the entire Planned Community is not repaired or replaced, the following apply:

(i) The insurance proceeds attributable to the damaged Common Elements shall be used to restore the damaged area to a condition compatible with the remainder of the Planned Community.

(ii) The insurance proceeds attributable to Units shall be paid to Unit owners except those proceeds attributable to Controlled Facilities for which insurance is separately maintained by the Association under this section or the Declaration shall be distributed to all Unit owners in proportion to their Common Expense liability. Proceeds attributable to Limited Common Facilities which are not rebuilt shall be distributed equally to owners of Units to which those Limited Common Facilities were assigned.

(iii) The remainder of the proceeds shall be distributed to all the Unit owners in proportion to their Common Expense liability.

(4) Notwithstanding the provisions of this subsection, section 5220 of the Act (relating to termination of Planned Community) governs the distribution of insurance proceeds if the Planned Community is terminated.

7.5 Gifts.

The Executive Board may accept on behalf of the Association any contribution, gift, bequest or devise for the general purpose or for any special purpose of the Association.

7.6 Surplus Funds.

7.6.1 Limited Common Expenses. Any amounts accumulated from assessments for limited Common Expenses and income from the operation of Limited Common Elements to which those Limited Common Expenses pertain in excess of the amount required for actual Limited Common Expenses and reserves for future Limited Common Expenses shall be credited to each Unit assessed for a share of those Limited Common Expenses in proportion to the share of those Limited Common Expenses so assessed. These credits shall be applied, unless the Declaration provides other-wise, to the next monthly or annual assessments of Limited Common Expenses against that unit under the current fiscal year's budget and thereafter until exhausted.

7.6.2 General Common Expenses. Any amounts accumulated from assessments for general Common Expenses and income from the operation of the Common Elements, other than Limited Common Elements with regard to which Limited Common Expenses are assessed, in excess of the amount required for actual general Common Expenses and reserves for future general Common Expenses ' shall be credited to each Unit in accordance with that Unit's interests in Common Elements. These credits shall be applied, unless the Declaration provides other-wise, to the next monthly or annual assessments of general Common Expenses against the Unit under the current fiscal year's budget and thereafter until exhausted.

ARTICLE 8
BOOKS AND RECORDS

8.1 Books and Records in General.

The Association shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its Executive Board and committees having any of the authority of the Executive Board.

8.2 Financial Records.

The Association shall keep records sufficiently detailed to enable the Association to comply with section 5407 of the Act (relating to resales of units). All financial and other records shall be made reasonably available for examination by any Unit owner and authorized agents.

8.3 Annual Financial Statements.

If the Planned Community in any Planned Community has more than 12 units, or is subject to any rights under section 5215 of the Act (relating to subdivision or conversion of units) or 5211 of the Act (relating to conversion and expansion of flexible planned communities), then within 90 days after the close of its fiscal year, the Association shall prepare annual financial statements consisting of at least a balance sheet and a statement of revenues and expenses for the Association. The cost of preparing the financial statements shall be a Common Expense. Each Unit owner shall be entitled to receive from the Association within 30 days after submitting a written request to the Association, a copy of the annual financial statements and, if such financial statements are audited, reviewed or compiled by public accountant, a copy of the independent accountant's report on the financial statements. The Association may charge a fee not to exceed the cost of producing copies of records other than the financial statement.

8.4 Filing of Complaints.

If the Association is subject to 8.3 above, and fails to provide a copy of the annual financial statements and, if applicable, the report of an independent accountant as required to the requesting Unit owner within 30 days of the Unit owner's written request, or if the financial records of the Association which substantiate the Association's financial statements are not made reasonably available by the association for examination by any Unit owner and authorized agents, the Unit owner may file a complaint with the bureau of consumer protection in the office of the Attorney General.

ARTICLE 9
FISCAL YEAR

9.1 Fiscal Year.

The fiscal year of the Association shall begin on January I and end on December 31 in each year.

ARTICLE 10
SEAL

10.1 Corporate Seal.

The Executive Board shall maintain a corporate seal that shall be in the form of a circle and shall have inscribed thereon the name of the Association.

ARTICLE 11
WAIVER OF NOTICE

11.1 Waiver.

Whenever any notice is required to be given under the provisions of the Pennsylvania Non-Profit Corporation Law of 1988, as amended from time to time, or under the provisions of the Articles of Incorporation or the Bylaws of the Association, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

ARTICLE 12
LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

12.1 Standard of Care and Justifiable Reliance

(a) A director of this Association shall stand in a fiduciary relation to this Association and shall perform his duties as a director, including his duties as a member of any committee of the Board of Directors upon which he may serve, in good faith, in a manner he reasonably believes to be in the best interests of this Association, and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his duties, a director shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, in each prepared or presented by any of the following:

(1) One or more officers or members of this Association, including, but not limited to, members of any standing committee, whom the Director reasonably believes to be reliable and competent in the matters presented,

(2) Counsel, public accountants or other persons as to matters that the Director reasonably believes to be within the professional or expert competence of such persons.

(3) A committee of the Board of Directors upon which he does not serve, duly designated in accordance with law, as to matters within its designated authority, which committee the Director reasonably believes to merit confidence.

(b) A Director shall not be considered to be acting in good faith if he has knowledge concerning the matter in question -that would cause his reliance to be unwarranted.

(c) An officer of this Association shall perform his duties as an officer in good faith, in a manner he reasonably believes to be in the best interests of this Association, and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. A person who so performs his duties shall not be liable by reason of having been an officer of the corporation.

12.2 Exercise of Powers.

(a) In discharging the duties of their respective positions, the Board of Directors, committees of the Board of Directors and the individual Directors may, in considering the best interest of this Association, consider to the extent they deem appropriate:

(1) The effects of any action upon any or all groups affected by such action, including members, suppliers and creditors of this Association and upon communities in which offices or other establishments of this Association are located,
(2) The short-term and long-term interests of the Association, including benefits that may accrue to the Association from its long-term plans and the possibility that these interests may be best served by the continued independence of the Association.
(3) The resources, intent and conduct (past, stated and potential) of any person seeking to acquire control of the Association;
(4) All other pertinent factors.

(b) The Board of Directors, committees of the Board of Directors and the individual Directors shall not be required, in considering the best interests of the Association or the effects of any action, to regard any corporate interest or the interests of any particular group affected by such action as a dominant or controlling interest or factor. The consideration of interests and factors in the manner described in this sub-section and in sub-section (a) shall not constitute a violation of the standard of care provisions of ß12. I.

(c) Absent breach of fiduciary duty, lack of good faith or self-dealing, any act as the Board of Directors, a committee of the Board or an individual director shall be presumed to be in the best interests of this Association.

12.3 Liability of Directors and Officers.

A Director or an officer of this Association shall not be personally liable, as such, for monetary damages for any action taken, or any failure to take any action, unless:

(a) The Director or officer has breached or failed to perform the duties of this office as provided by law; and,

(b) The breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.

12.4 Indemnification of Directors and Officers

(a) This Association shall indemnify any Director or officer, and may indemnify any other employee, agent or other person, who was or is a party to, or is threatened to be made a party to or who is called as a witness in connection with any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of this Association, by reason of the fact that he is or was a Director. officer, employee or agent of this Association, or is or was serving at the request of this Association as a Director, officer, employee or agent of another corporation. trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding unless the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness.

(b) The indemnification and advancement of expenses provided by, or granted pursuant to this Section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement or expenses may be entitled under any Bylaw, agreement, contract, vote of shareholders or disinterested directors or pursuant to the direction, howsoever embodied, of any court or competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. It is the policy of this Association that indemnification of. and advancement of expenses to, Directors and officers of this Association shah be made to the fullest extent permitted by law. To this end the provisions of this Section shall be deemed to have been amended for the benefit of Directors and officers of this Association effective immediately upon any modification of the Business Association Law of the Commonwealth of Pennsylvania (the " BCL") or the Directors' Liability Act of the Commonwealth of Pennsylvania (the "DLA") which expends or enlarges the power or obligation of corporations organized under the BCL or subject to the DLA to indemnify, or advance expenses to, Directors and officers of such corporations.

(c) This Association shall pay expenses incurred by an officer or Director, and may pay expenses incurred by any other employee, agent or other person, in defending a civil or criminal action, suit or proceeding, in advance of the final disposition of such action, suit or proceeding upon receipt of a written undertaking by or on behalf of such person to repay such amount if ft shall ultimately be determined that he is not entitled to be indemnified by this Association.

(d) The indemnification and advancement of expenses provided by, or granted pursuant to this Section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Director, officer, employee, or agent, and shall inure to the benefit of the heirs, executors and administrators or such person.

(e) This Association shall have the authority to create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise secure or insure in any manner, its indemnification obligations, whether arising under these Bylaws or otherwise. This authority shall include, without limitation, the authority to: (i) deposit funds in trust or in escrow, (ii) establish any form of self-insurance, (iii) secure its indemnity obligation by grant of a security interest, mortgage or other lien on the assets of this Association, (iv) establish a letter of credit, guaranty or surety arrangement, or (v) purchase and maintain liability insurance, for the benefit of such persons in connection with the anticipated indemnification or advancement of expenses contemplated by this Section. The provisions of this Section shall not be deemed to preclude the indemnification of, or advancement of expenses to, any person who is not specified in paragraph (a) of this Section but for whom this Association has the power or obligation to indemnify, or to advance expenses to, under the provisions of the BCL or the DLA or otherwise. The Board of Directors of this Association shall exercise the authority granted by this paragraph (c).

12.5 Amendments Affecting Provisions of this Article.

Notwithstanding any other provisions of these Bylaws, the approval of the members as provided by Article V of these Bylaws shall be required to amend, alter, change, repeal or adopt any provision as part of these Bylaws which is inconsistent with the purpose or intent of this Article 12. No amendment to or repeal of any of these sections shall apply to or have any effect on the liability or alleged liability of any Director or officer for, or with respect to, any acts or omissions of such Director or officer occurring prior to such amendment or repeal.

ARTICLE 13
DELEGATION OF POWERS OF BOARD AND OFFICERS
13.1 Delegation of Powers of Board.

The powers of the Executive Board may not be delegated to other persons or agents, but shall be reserved to those individuals who have been duly elected or appointed as members of the Executive Board.

13.2 Delegation of Powers of Officers.

The day to day operating authority of the officers, with respect to the handling of complaints, the enforcement of the provisions of the Declaration and these By Laws, the collection of assessments and any applicable fines and penalties, contracting for the ordinary and necessary maintenance and repairs for the Community, the payment of ordinary and necessary bills, any and all property management issues, and such other powers as the Executive Board may by resolution specifically identify, may be delegated to a managing agent to conduct the ordinary daily business of the Association.

ARTICLE 14
AMENDMENTS TO BYLAWS

14.1 Declarant Control Period.

During the period of Declarant Control, these Bylaws may only be altered, amended or repealed by vote of by an affirmative vote of at least two-thirds (2/3) of the Executive Board present at any regular meeting or special meeting of the Board.

14.2 Subsequent Periods.

After the period of Declarant Control has ended, these Bylaws may only be altered, amended or repeated, and new Bylaws may be adopted, by the affirmative vote of at least two-thirds of all Members (and not simply two-thirds of the quorum at any meeting).

14.3 Restrictions on Amendments.

All proposed amendments shall be subject to the following conditions and restrictions: (i) at least five (5) days written notice must be given to all Members of the intention to alter, amend or repeal or to adopt new Bylaws; (ii) no amendment, modification or repeal of any provision of these Bylaws shall be made which is inconsistent with the provisions of the Declaration; and (iii) the requirement of at least five (5) days written notice to Members of the intention to so amend or repeal, as set forth above in this Article, shall not be amended so as to require any shorter period of time, or be repealed entirely.

ARTICLE 15
AMENDMENTS TO DECLARATION

15.1 Amendment Procedure.

The Declaration may only be amended as provided in Section 12.1 thereof. After any such amendment has been duly adopted, any officers may prepare, execute, certify and record such amendments to the Declaration on behalf of the Association.