Section 2. Place of Meetings. Meetings of the Association shall be held at the Project or such other suitable place within the State of Hawaii convenient to the apartment owners as may be designated by the Board of Directors.

Section 3. Annual Meetings. The first annual meeting of the Association shall be held not later than one hundred eighty (180) days after the date of recordation of the first apartment conveyance provided that prior to such first annual meeting, forty percent (40%) or more of the apartments have been sold and the instruments conveying the same have been recorded. If within one (1) year after recordation of the initial apartment conveyance forty percent (40%) or more of the apartments have not been sold and the instruments conveying the same recorded, then the first annual meeting shall be held as soon as practicable thereafter upon the call of at least ten percent (10%) of the apartment owners. Thereafter the annual meetings of the Association shall be held each calendar year.

Section 4. Special Meetings. Special meetings of the Association may be held at any time upon the call of the President or a petition signed by at least twenty-five percent (25%) of the apartment owners and presented to the Secretary.

Section 5. Notice of Meetings. The Secretary shall give written or printed notice of each annual and special meeting to every apartment owner according to the Association's record of ownership, and to every institutional holder of a first mortgage on an apartment or of an apartment lease demising the same, as shown in the Association's record of ownership or who have given the Board notice of their interest through the Secretary or the Managing Agent, at least fourteen (14) days, but not more than sixty (60) days, before the date set for such meeting, stating whether it is an annual or special meeting, the authority for the call thereof, the place, day, and hour of such meeting, the items on the agenda for such meeting, and a standard - proxy form authorized by the Association, if any, in any of the following ways: (a) by delivering it to him personally, or (b) by leaving it at his apartment in the Project or at his usual residence or place of business, or (c) by mailing it, postage prepaid, addressed to him at his address as it appears on the Association's record of ownership. The notice to all owners also shall include a standard proxy form authorized by the Association, if any.' If notice is given pursuant to the provisions of this section, the failure of any apartment owner or mortgagee to receive actual notice of any meeting shall in no way invalidate such meeting or any proceedings thereat. The presence of any apartment owner or mortgagee in person or by proxy at any meeting shall be deemed a waiver of any required notice to such owner unless he shall at the opening thereof object to the holding of such meeting because of the failure to give notice in accordance with the provisions hereof.

Section 6 Quorum. The presence at any meeting in person or by proxy of a majority of apartment owners shall constitute a quorum, and the acts of a majority of the apartment owners at any meeting at which a quorum is present shall be the acts of the Association except as otherwise provided herein. The term "majority of apartment owners" herein means the owners of apartments to which are appurtenant more than fifty percent (50%) of the common interests as established by the Declaration, any other specified percentage of the apartments owners means the owners of apartments to which are appurtenant such percentage of the common interests.

Section 7. Voting. Voting shall be on a percentage basis, and the percentage of the total vote to which each apartment is entitled shall be the percentage of the common interests assigned to such apartment in the Declaration. Votes may be cast in person or by proxy by the respective apartment owners as shown in the record of ownership of the Association. An executor, administrator, guardian, or trustee may vote in person or by proxy at any meeting of the Association the percentage of vote for any apartment owned or controlled by him in such capacity, whether or not the same shall have been transferred to his name in the Association's record of ownership, provided that he shall first present evidence satisfactory to the Secretary that he owns or controls such apartment in such capacity. The vote for any apartment owned of record by two (2) or more persons may be exercised by any one (1) of them present at any meeting in the absence of protest by the other or others, and in case of protest each co-tenant shall be entitled to only a share of such vote in proportion to his share of ownership in such apartment. The purchaser of an apartment pursuant to an agreement of sale recorded in the Bureau of Conveyances of the State of Hawaii or filed in the office of the Assistant Registrar of the Land Court of the State of Hawaii shall have all of the rights of an apartment owner, including the right to vote, except as to those matters expressly retained by the seller under such agreement of sale and as permitted by law.

Section 8. Proxies and Pledges. The authority given by any owner to another person to represent him at meetings of the Association must be in writing and contain at least the following: the name of the Association, the date of the meeting of the Association, the printed name and signature of the person or persons giving the authority, the apartment or apartments for which the proxy is given, the printed name of the person to whom the proxy is given, and the date the proxy is given. The proxy may designate any person or the Board of Directors as an entity as proxy and may be limited as the apartment owner indicates; provided, however, that a proxy given to the Board of Directors shall contain a box wherein the owner may indicate that the owner wishes the vote to be shared with each Board member present at the meeting receiving an equal percentage, and provided further, however, that a proxy given to the Board of Directors which is not marked shall be considered a choice by the owner that the vote be made on the basis of the preference of the majority of the Board. To be valid, a proxy must be delivered to the Secretary of the Association or the Managing Agent, if any, no later than 4:30 p.m. on the second business day prior to the date of the meeting to which it pertains. Voting rights transferred or pledged by mortgage, deed of trust, or agreement of sale of any apartment or interest-therein, a true copy of which is filed with the Board through the Secretary or Managing Agent, shall be exercised only by the person designated in such instrument until the written release or other termination thereof is filed with the Board in like manner.

A director who uses Association funds to solicit proxies shall not cast any of these proxy votes for the election or reelection of directors at any Association meeting unless the proxy form specifically authorizes such a vote, and the Board first posts notice of its intent to solicit proxies in prominent locations within the Project at least thirty (30) days prior to its solicitation of proxies. Any owner has seven (7) days from the time the Board posts notice to request Association funds to solicit proxies accompanied by a statement. The statement shall not exceed one hundred (100) words and shall disclose the owner's qualifications to serve on the Board and the reasons for wanting proxies. The Board shall promptly mail to all owners a proxy form containing either (i) the names of all owners who requested the use of Association funds to solicit proxies, together with their statements, or (ii) without any names but accompanied by a list of names of all owners who have requested the use of Association funds for soliciting proxies and their statements.

A managing agent or resident manager employed by the Association shall not solicit aiiy proxies for his use, nor shall he cast any proxy vote at any Association meeting except for the purpose of establishing a quorum.

Section 9. Adjournment. Any meeting of the Association may be adjourned from time to time not less than forty-eight (48) hours from the time the original meeting was called as may be determined by majority vote of the apartment owners present, whether or not a quorum is present, without notice other than the announcement at such meeting. At any such adjourned meeting at which a quoru ' m is present, any business may be transacted which might have been transacted by a quorum at the meeting as originally called.

Section 10. Order of Business. The order of business at annual meetings of the Association shall be as follows:

(a) Roll call.
(b) Proof of notice of meeting.
(c) Reading of minutes of preceding meeting.
(d) Report of officers.
(e) Report of committees.
(f) Election of inspectors of election.
(g) Election of directors.
(h) Unfinished business.
(i) New business.

Section 11. Conduct of Association Meeting. Unless some other generally accepted rules for the conduct of meetings of the Association are designated or adopted by majority vote of the apartment owners, all meetings of the Association shall be conducted in accordance with Roberts Rules of order.

Section 1. Number and Qualifications. The affairs of the Association shall be governed by a Board of Directors composed of seven (7) persons. All members of the Board of Directors shall be owners, co-owners, vendees under an agreement of sale, or an officer of any corporate owner of an apartment. The partners in a general partnership and the general partner(s) of a limited partnership shall be deemed to be the owners of an apartment for this purpose. The directors shall serve without compensation, unless such compensation is specifically authorized by the Association at a regular or special meeting. The Resident Manager of the Project, if any, may not serve on the Board.

Section 2. Powers. The Board of Directors shall have all powers necessary for the administration of the affairs of the Association and may do all such acts and things therefor as are not by law, the Declaration or these By-Laws directed to be exercised or done only by the apartment owners.

Section 3. Regular Meetings. Regular meetings of the Board of Directors may be held at such time and place as shall be determined from time to time by a majority of the Directors, but at least one (1) such meeting shall be held during each calendar quarter of every year. Notice of regular meetings of the Board shall be given to each director, personally or by mail, telephone, or messenger service, at least three (3) days prior to the date of such meeting. Whenever practicable, notice of all Board meetings shall be posted by the resident manager or a member of the Board in prominent locations within the project seventy-two (72) hours prior to the meeting or simultaneously with notice to the Board of Directors. Voting, whether by telephone or video conference is an acceptable alternative should a quorum of Board members in one place not otherwise be possible. Facilities, as required, will be made available to any other apartment owners who desire to participate in such a meeting.

[Article II, Section 3 - amended ____1998 to allow telephone voting]

Section 4. Vacancies. Vacancies in the Board of Directors caused by any reason other than removal of a director by the Association shall be filled by vote of a majority of the remaining directors, even though they may constitute less than a quorum, and each person so elected shall be a director until his successor is elected at the next annual meeting of the Association. Death, incapacity, or resignation of any director, or his ceasing to be the sole owner or co-owner of an apartment, shall cause his office to become vacant.

[Article II, Section 4 - amended ____1999 to remove 6 month absense rule]

Section 5. Removal. At any regular or special meeting of apartment owners, any one (1) or more directors may be removed with or without cause by vote of a majority of apartment owners and a successor may t en be elected for the remainder of the term to fill the vacancy thus created; provided, however, that if such removal and replacement is to occur at a special meeting, the call for such meeting shall be by the President or by a petition to the Secretary or Managing Agent signed by not less than twenty-five percent (25%) of the apartment owners; and provided further that if the Secretary or Managing Agent does not send out the notices for the special meeting within fourteen (14) days of receipt of the petition, the petitioners shall send out the notices for the special meeting. Any member of the Board whose removal has been proposed by an apartment owner shall be given the opportunity to be heard at such the meeting.

Section 6. Annual Meetings. An organizational meeting of the Board of Directors shall be held at the place of and immediately following each annual meeting of the Association. Notice of the annual Board meeting shall be given in a reasonable manner at least fourteen (14) days, if practicable, prior to such meeting and may accompany the notice of the annual meeting of the Association. At such meeting, the Board shall elect the officers of the Association for the ensuing year.

Section 7. Regular Meetings. Regular meetings of the Board of Directors may be held at such time and place as shall be determined from time to time by a majority of the Directors, but at least one (1) such meeting shall be held during each calendar quarter of every year. Notice of regular meetings of the Board shall be given to each director, personally or by mail, telephone, or messenger service, at least three (3) days prior to the date of such meeting. Whenever practicable, notice of all Board meetings shall be posted by the resident manager or a member of the Board in prominent locations within the project seventy-two (72) hours prior to the meeting or simultaneously with notice to the Board of Directors. Voting, whether by telephone or video conference is an acceptable alternative should a quorum of Board members in one place not otherwise be possible. Facilities, as required, will be made available to any other apartment owners who desire to participate in such a meeting.

Section 8. Special Meetings. Special meetings of the Board of Directors may be called by the President on at least eight (8) hours' notice to each director, given personally or by telephone or messenger service, which notice shall state the time, place, and purpose of such meeting. Special meetings of the Board shall be called by the President or Secretary in like manner and with like notice on the written request of at least two (2) directors.

Section 9. Waiver of Notice. Before or at any meeting of the Board of Directors, any director may in writing waive notice of such meeting, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a director at any meeting of the Board shall be a waiver of notice to him of such meeting. If all the directors are present at any meeting of the Board, no notice thereof shall required, and any business may be transacted at such meeting.

Section 10. Quorum of Board. At all meetings of the Board of Directors, a majority of the total number of directors established by these By-Laws shall constitute a quorum for the transaction of business, and the acts of a majority of the directors present at any meeting at which a quorum is present shall be the acts of the Board. If less than a quorum shall be present at any meeting of the Board, a majority of those present may adjourn the meeting from time to time. At any such adjourned meeting at which a quorum is present, any business which might have been transacted at the meeting as originally called may be transacted without further notice.

Section 11. Fidelity _Bonds. The Board of Directors shall require that all directors, officers, employees, and agents of the Association handling, or responsible for funds belonging to or administered by the Association furnish adequate fidelity bonds in favor of the Association in accordance with the provisions of Sections 514A-95 and 514A-95.1, Hawaii Revised Statutes:

(a) Provide that the bond(s) may not be canceled or substantially modified (including cancellation for nonpayment of premiums) without at least thirty (30) days' prior written notice to the Board, the first mortgagees, and every other person in interest who shall have requested such notice; and

(b) Contain a waiver of any defense based upon the exclusion of persons who serve without compensation from any definition of "employee" or similar expression.

Section 12. Conflict of Interest. A director who has a conflict of interest on any issue before the Board shall disclose the nature of the conflict of interest prior to a vote on that issue at the Board meeting, and the minutes of the meeting shall record the fact that d disclosure was made. A director shall not cast any proxy vote at any Board meeting, nor shall a director vote at any Board meeting on any issue in which the director has a conflict of interest.

Section 13. Rules of Order. Unless some other generally accepted rules for the conduct of meetings of the Board are designated or adopted by the Board, all meetings of the Board shall be conducted in accordance with Roberts Rules of Order.

Section 14. Compensation. Directors shall not expend Association funds for their travel, directors, fees, and per diem, unless apartment owners are informed and a majority approve of these expenses.

Section 1. Designation. The principal officers of the Association shall be a President, Vice President, a Secretary, and a Treasurer, all of whom shall be elected by, and in the case of the President from, the Board of Directors. The Board may appoint an assistant treasurer, an assistant secretary, and such other officers as in its judgment may be necessary. An owner shall not act as an officer of the Association and simultaneously an employee of the Managing Agent employed by the Association.

Section 2. Election and Term. The officers of the Association shall be elected annually by the Board of Directors at its annual meeting and shall hold office at the pleasure of the Board.

Section 3. Removal. Any officer may be removed either with or without cause by vote of a majority of the members of the Board of Directors, and his successor elected, at any regular meeting of the Board or any special meeting called for such purpose.

Section 4. President. The President shall be the chief executive officer of the Association and shall preside at all meetings of the Association and of the Board of Directors. Subject to the control of the Board, he shall exercise general supervision and direction over the management and conduct of the business and affairs of the Association. He shall also have such other powers and duties as may be provided by these By-Laws or assigned to him from time to time by the Board.

Section 5. Vice President. The Vice President shall assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. If neither the President nor the Vice President is able to act, the Board of Directors shall appoint some other member of the Board to do so on an interim basis. He shall also have such other powers and duties as may be as signed to him from time to time by the Board.

Section 6. Secretary. The Secretary shall attend and keep the minutes of all meetings of the Association and of the Board of Directors, give all notices thereof as provided by these By-Laws, maintain and keep a continuous and accurate record of ownership of all apartments, have charge of such books, documents, and records of the Association as the Board may direct, and in general perform all the duties incident to the office of Secretary.

Section 7. Treasurer. The Treasurer shall maintain and keep the financial records and books of account of the Association, prepare regular reports thereof, and be responsible for the proper deposit and custody in the name of the Association of all its funds and securities.

Section 8. Auditor. The Association shall appoint annually a public accountant or accounting firm as auditor, who shall not be an officer of the Association nor own any interest in any apartment, to audit the books and financial records of the Association as required by law or directed additionally by the Board of Directors. The members of the Association may by majority vote at any annual meeting require that the yearly audit be conducted by a certified public accountant or a firm of certified public accountants. The Association shall have no less than one yearly unannounced verification of the Association's cash balance by a public accountant; provided that both this and the yearly audit may be waived by a majority vote of all apartment owners taken at an Association meeting. Any institutional holder of a first mortgage on an apartment or of an apartment lease demising the same may request, and , the Association shall provide said mortgagee with, a copy of said annual audited financial statement within ninety (90) days following the end of any fiscal year of the Association.

Section 1. Management. The Board of Directors shall at all times manage and operate the Project and have such powers and -duties as may be necessary or proper therefor including without limitation the following:

(a) Supervision of its immediate management and operation;

(b) Maintenance, repair, replacement, and restoration of the common elements and any additions and alterations thereto;

(c) Purchase, maintenance, and replacement of any equipment and provision of all water and utility services required for the common elements;

(d) Provision at each apartment of all water, sewer, electricity, and such other utility services and utilities as the Board shall deem necessary either at the expense of such apartment or as a common expense as determined by the Board;

(e) Employment, supervision, and dismissal of such personnel as may be necessary for the maintenance and operation of the Project;

(f) Preparation at least sixty (60) days before each fiscal year of a proposed budget and schedule of assessments for such year;

(g) Collection of all installments of assessments levied and payment of all common expenses authorized by the Board;

(h) Purchase and maintenance in effect of all policies of hazard and liability insurance for the Project required by the Declaration and such other insurance and bonds as may be required or authorized by the Declaration or the Board;

(i) Custody and control of all funds of the Association, maintenance of full and accurate books of account and records of such funds, and preparation of regular financial reports thereof;

(j) Notification of all persons having any interest in any apartment according to the Association's record of ownership of delinquency exceeding thirty (30) days in the payment of any assessment against such apartment;

(k) Notification in writing of all institutional holders of first mortgages on apartments, or of apartment leases demising the same, as shown in the Association's record of ownership or of which the Secretary of the Association has been given written notice, of any loss to, or taking of, the common elements of the Project if such loss or taking exceeds TEN THOUSAND DOLLARS ($10,000.00);

(1) Notification in writing to the institutional holder of the first mortgage on any apartment, or of the apartment lease demising the same, as shown in the Association's record of ownership or of which the Secretary of the Association has been given written notice, of any loss to such apartment which exceeds ONE THOUSAND DOLLARS ($1,000.00); and

(m) Establishment of such penalties and fines as it deems appropriate with respect to enforcement of the provisions of the Declaration, these By-Laws, and the house rules adopted pursuant to Article V, Section 5, of these By-Laws chargeable against persons for the violation of those covenants, conditions, or restrictions, and the method for determination of violations and the manner of enforcing the penalties, if any"; provided such penalties and fines are not inconsistent with the law or the provisions herein, and the unpaid amount of such penalties and fines against any apartment owner shall constitute a lien against his interest in his apartment which may be foreclosed by the Board of Directors or Managing Agent in the same manner as provided in the Condominium Property Act for common expenses; provided, however, that the said lien for such penalties and fines shall be subordinate to liens for taxes and assessments lawfully imposed by governmental authority against the apartment and to all sums unpaid on mortgages of record filed prior to said lien.

(n) May authorize the borrowing of money to be used by the Association for the repair, replacement, maintenance, operation or administration of the common elements of the project, or the making of any additions, alterations, and improvements thereto. The cost of such borrowing, including without limitation, all principal, interest, commitment fees, and other expenses payable with respect to such borrowing, shall be a common expense of the project; provided that owners representing fifty per cent (50%) of the common interest and apartments give written consent to such borrowing, having been first notified of the purpose and use of the funds.'

Section 2. Managing Agent. The Board of Directors shall annually employ a responsible Hawaii managing agent, to manage and control the Project subject at all times to direction by the Board, with all of the administrative functions specifically set forth in the preceding Section 1 and with such other powers and duties and at such compensation as the Board may establish from time to time. Any decision by the Association to terminate professional management of the Project and to assume self-management of the Project may not be effected without the prior written consent of at least seventy-five percent (75%) of the institutional holders of a first mortgage on an apartment or an apartment lease demising the same (based upon one (1) vote for each first mortgage owned). Every such employment contract shall provide: (a) that in no event may such employment contract be for a fixed term exceeding one (1) year; (b) that it may be terminated by the Board of Directors for cause on no more than thirty (30) days, written notice and without cause on no more than ninety (90) days' written notice; and (c) that in no event shall a termination fee be due and owing the Managing Agent in the event of such termination.

Section 3. Representation. The President or Managing Agent, subject to the direction of the Board of Directors, shall represent the Association or any two (2) or more apartment owners similarly situated as a class in any action, suit, hearing, or other proceeding concerning the Association, the 'common elements, or more than one (1) apartment, and on its or their behalf may institute, defend, intervene in, prosecute, and. settle any such actions, suits, and proceedings, without prejudice to the rights of any apartment owner individually to appear, sue, or be sued. Service of process on two (2) or more apartment owners in any such action, suit, or proceeding may be made on the President or Managing Agent. Every first mortgagee to whom the lessee is required by the terms of the mortgage to pay the same or, whenever there is no such mortgagee, every Managing Agent shall also be the agent of the respective lessees under any apartment leases filed with the Board for the collection, custody, and payment of all rent, taxes, assessments, and other charges thereunder payable to their lessors.

Section 4. Execution of Instruments. All checks, drafts, notes, acceptances, conveyances, contracts, and other instruments shall be signed on behalf of the Association by such person or persons as shall be provided by general or special resolution of the Board of Directors or, in the absence of any such resolution applicable to such instrument, by the President or Vice President and by the Treasurer or Secretary.

Section 5. Provision of Project Documents. The Association, at its expense, shall provide all Board members with a current copy of the Association's Declaration, By-laws, House Rules, and annually, a copy of the Condominium Property Act of the State of Hawaii.10

Section 6. Prohibited Acts of Association Employees. No employee of the Association shall engage in selling or renting apartments in the Project except Associatibn-owned apartments, unless such activity is approved by an affirmative vote of sixtyfive percent (65%) of the apartment owners."

Section 7. Access for Emergency Repairs. The apartment owners shall have the irrevocable right, to be exercised by the Board of Directors, to have access to each apartment from time to time during reasonable hours as may be necessary for the operation of the Project or for making emergency repairs therein necessary to prevent damage to the common elements or to another apartment or apartments.

Section 1. Assessments. All apartment owners shall pay to the Managing Agent, in advance on the f irst day of each and every month, the monthly installments of assessments against their respective apartments for common expenses , of the Project in accordance with the Declaration and also, with respect to any lease of any apartment filed with the Board of Directors, a monthly sum determined by the Managing Agent to be sufficient to accumulate and pay when due all rent, taxes, assessments, and other charges thereunder payable by the lessee of such apartment unless such sums are required to be paid to and accumulated by the mortgagee under any subsisting mortgage of such apartment lease filed with the Board.

Section 2. Responsibilities, of Apartment Owners. An apartment owner shall be responsible for the conduct of his lessee(s), renter(s), or guest(s) and shall, upon request of the Board or- Managing Agent, immediately abate and remove, at his expense, any structure, thing, or condition that may exist with regard to the occupancy of his apartment by his lessee(s), renter(s), or guest(s) which is a violation hereof, or of the Declaration, or of any rules and regulations adopted by the Board, or, if the apartment owner is unable to control the conduct of his lessee(s), renter(s), or guest(s),, the apartment owner shall, upon request of the Board or Managing Agent,, immediately remove such lessee(s), renter(s), or guest(s) from the premises, without compensation for lost rentals or any other loss or damage resulting therefrom.

Section 3. Repair and Maintenance of Apartments..

(a) Every apartment owner shall at his own expense at all times well and substantially repair, maintain, amend, and keep his apartment and the limited common elements appurtenant thereto, including without limitation all internal installations therein such as water, electricity, gas, telephone, sewer, sanitation, air conditioning, lights, and all other fixtures and accessories belonging to such apartment and the interior decorated or finished surfaces of all walls, floors, and ceilings of such apartment, with all necessary reparations and amendments whatsoever, in good order and condition except as otherwise provided by law or the Declaration, and shall be liable for all loss or damage whatsoever caused by his failure to perform any such work diligently, and in case of such failure, after reasonable notice to perform, shall reimburse to the Association promptly on demand all expenses incurred by it in performing any such work authorized by the Board of Directors or the Managing Agent. Every apartment owner and occupant shall reimburse the Association promptly on demand all expenses incurred by it in repairing or replacing any uninsured loss or damage to the common elements or any furniture, furnishings and equipment thereof caused by such owner or occupant or any person under either of them and shall give prompt notice to the Managing Agent of any such loss or damage or other defect in the Project when discovered.

(b) It is intended that the exterior of the building shall present a uniform appearance; and to attain that result, each apartment owner hereby agrees that the Board may require the apartment owner at his sole expense to paint or repair his lanai and the Board may regulate the design and appearance of the repairs and replaced items, the type of surface and the type and color of paint to be used. In the alternative, the Board is authorized to contract for the repairs, painting, or surfacing of all such lanais. If the Board contracts for such items,, the Board may either seek reimbursement from the owner thereof (who shall then bear such cost individually) or the Board may make payment therefor out of the maintenance fund.

- Section 4. Use of Property.

(a) The apartments of the project shall be used only for their respective purposes as set forth in the Declaration and for no other purpose.

No trade or business of any kind may be conducted in or from any apartment or any of the properties except that an owner or occupant residing in an apartment may conduct such business activity within the apartment so long as: (i) the existence or operation of the business activity is not apparent or detectable by sight, sound, or smell from the exterior of the apartment; (ii) the business activity conforms to all zoning requirements for the property; (iii) the business activity does not involve persons coming onto the condominium property who do not reside in the condominium; . (iv) the business activity does not increase the liability or casualty insurance obligation or premium of the Association; and (v) the business activity is consistent with the residential character of the Association and does not constitute a nuisance or hazardous or offensive use, as may be determined in the sole discretion of the Board of Directors.

The terms "business" and "trade," as used in this provision, shall be construed to have their ordinary generally accepted meaning and shall include, without limitation, any occupation, work or activity undertaken on an ongoing basis which involve the provision of goods or services to persons other than the provider's family regardless of whether (i) such activity is engaged in full or part-time; (ii) the provider receives a fee, compensation, or other form of consideration; (iii) such activity is intended to or does generate a profit; or (iv) a license is required therefor.

(b) All common elements of the Project shall be used only for their respective purposes as designed.

(c) No apartment owner or occupant shall place, store, or maintain on walkways, roadways, grounds, or other common elements any furniture, packages, or objects of any kind or otherwise obstruct transit through such common elements.

(d) Every apartment owner and occupant shall at all times keep his apartment in a strictly clean and sanitary condition and observe and perform all laws, ordinances, rules, and regulations now or hereafter made by any governmental authority or the Association for the time being applicable to the use of the Project

(e) No apartment owner or occupant shall make or suffer any strip or waste or unlawful, improper, or offensive use of his apartment or the Project nor alter or remove any furniture, furnishings, or equipment of the common elements.

(f) No apartment owner or occupant shall erect or place in the Project any building or structure including fences and walls, nor make any additions or alterations to any common elements of the Project, nor place or maintain thereon any signs, posters, or bills whatsoever, except in accordance with plans and specifications including detailed plot plan, prepared by a licensed architect if so required by the Board and approved by the Board and a majority of apartment owners (or such larger percentage require7d by law or the Declaration) including all owners of apartments thereby directly affected.

(g) No apartment owner shall decorate or landscape any entrance of his apartment or any other portion of the Project except in accordance with standards therefor established by the Board of Directors or specific plans approved in writing by the Board.

(h) All occupants shall exercise extreme care about making noises and in the use of musical instruments, radios, televisions, and amplifiers that may disturb other occupants.

(i) No garments, rugs, or other objects shall be hung from the windows or facades of the Project.

(j) No rugs or other objects shall be dusted or shaken from the windows of the Project or cleaned by beating or sweeping on any hallway or exterior part of the Project.

(k) No refuse, garbage, or trash of any kind shall be thrown, placed, or kept on any common elements of the Project outside of the disposal facilities provided for such-purpose.

(1) All livestock, poultry, rabbits, or other animals, including dogs, cats, and other household pets, shall not be allowed or kept in any part of the Project by the apartment owners and occupants in their respective apartments or on any of the common elements.

(m) No apartment owner or occupant shall without the written approval of the Board of Directors install any wiring for electrical or telephone installations, television antenna, machines, or air-conditioning units, or other equipment or appurtenances whatsoever on the exterior of the Project or protruding through the walls, windows, or roof thereof.

(n) No apartment owner or occupant shall erect, place, or maintain any, television or other antennas on said Project visible from any point outside of the Project.

(o) No thing shall be allowed, done, or kept in any apartments or common elements of the Project which would overload or impair the floors, walls, or roofs thereof, or cause any increase in the ordinary premium rates or the cancellation or invalidation of any insurance thereon maintained by or for the Association.

(p) Use or occupancy of any apartment for, in connection with, or pursuant to any time sharing plan is expressly prohibited. As used herein, the phrase "time sharing plan" shall be deemed to include, but shall not be limited to, any legal or equitable estate or interest in any apartment, pursuant to a plan or program whereby the right to use, occupy, or possess such apartment shifts or circulates among two (2) or more persons, corporations, partnerships, other entities, or any combination thereof, on a periodically occurring basis, whether according to a fixed or floating time schedule or otherwise. This prohibition expressly includes time sharing plans of any type whatsoever, including but not limited to, plans or programs whereby the members, or participants' interest is of any of the following types: fee, leasehold, right to use, license, partnership, association, or club membership. The phrase "time sharing plan" as used herein shall also include and incorporate by reference, but shall not be limited to, any definition of time sharing or time sharing plans contained in any statute or ordinance which might at 13 any time be enacted by the State of Hawaii or-the County of Maui

Section 5. House Rules. The Board of Directors, upon giving notice to all apartment owners in the same manner as herein provided for notice of meetings of the Association and opportunity to be heard thereon, may adopt, amend, or repeal any supplemental rules and regulations governing details of the operation and use of the common elements not inconsistent with any provision of law, the Declaration, or these By-Laws.

Section 6. Expenses of Enforcement. Ev6ry apartment owner shall pay to the Association promptly on demand all costs and expenses including reasonable attorneys' fees incurred by or on behalf of the Association in collecting any delinquent assessments against such apartment, foreclosing its lien therefor, or enforcing any provisions of the Horizontal Property Act, the Declaration, or these By-Laws against such owner or any occupant of such apartment.

Section 7. Record of Ownership. The Board of Directors, Resident Manager, or Managing Agent shall keep an accurate and current list of the names and addresses of all members of the Association, including all vendees under any agreement of sale on an apartment in the Project, if any. The list shall be maintained in a place designated by the Board of Directors. In connection therewith, every apartment owner shall promptly cause to be duly recorded or fired -of record the deed,, lease, agreement of sale, assignment, or other conveyance to him of such apartment or other evidence of his title thereto and shall file a copy of such documents with the Board of Directors through the Secretary or the Managing Agent.

Section 8. Mortgages.

(a) Notice to Board of Directors. An apartment owner who mortgages his interest shall notify the Association of the name and address of his mortgagee and within ten (10) days after the execution of the same shall file a conformed copy of such mortgage with the Association; the Association shall maintain such information in a book entitled "Mortgages of Apartments".

(b) Notice of Unpaid Common Expenses. The Association, whenever so requested in writing by an owner or mortgagee of an interest in an apartment, shall promptly report any then unpaid assessments or common expenses due from the apartment owner involved.

(c) Notice of Default. The Board, when giving notice to an apartment owner of a default in paying common expenses or other default, shall send a copy of such notice to each holder of a mortgage covering such apartment or interest therein whose name and address has theretofore been furnished to the Association. In each and every case where the mortgagee has made a request, the Association shall notify the mortgagee of any unpaid assessment that is thirty (30) or more days delinquent.

(d) Examination of Books. Each apartment owner and each mortgagee shall be permitted to examine the books and records of the Association or the Project at reasonable times on business days, and each mortgagee shall have the right to require the submission of annual reports and other financial data.

(e) Mortgage Protection. Notwithstanding any provision to the contrary in these By-Laws:

(1) Any first mortgagee who obtains title to an apartment pursuant to the remedies provided in the mortgage or foreclosure of the mortgage or conveyance in lieu of foreclosure will not be liable for such apartment's unpaid dues or charges which accrue prior to the acquisition of title to such apartment by the mortgagee.

(2) All taxes, assessments, and charges which may become liens prior to the first mortgage under the laws of the State of Hawaii shall relate only to the individual apartments and not to the condominium Project as a whole.

3) The Declaration and By-Laws shall not give an apartment owner or any other party priority over any rights of first mortgagees of apartments pursuant to their mortgages in the case of a distribution to apartment owners of insurance proceeds or condemnation awards for losses to or a taking of apartment units, common elements, or both.

(4) Notwithstanding any other provision of these By-Laws, no amendment of this Section 8(e) shall affect the rights of the holder of any such mortgage recorded in the Bureau of Conveyances, State of Hawaii, prior to the filing of such amendment who does not join in the execution thereof.

Section 9. Collection of Rent from Undertenants. If an owner shall at any time rent or sublease his apartment and shall thereafter be in default in the payment of any common expense or special assessment for which his apartment is liable, the Board of Directors may, at its option, and so long as such default shall continue, demand and receive from such undertenant of the owner the rent due or becoming due from such undertenant to the owner up to an amount sufficient to pay all of such unpaid common expense or special assessment, including interest, and any such payment of rent to the Board of Directors by the subtenant shall be sufficient discharge of such subtenant, as between such subtenant and the owner to the extent of the amount so paid; such demand for, or acceptance of, such rent from any subtenant shall not be deemed to be a release or discharge of any of the obligations or duties owned by the owner. If the Board of Directors shall make such demand upon any subtenant as aforesaid, such subtenant shall not have the right to question the right of the Board of Directors to make such demand but such subtenant shall be obligated to make such payments to the Board of Directors with the effect as aforesaid.

Section 1. Amendment of By-Laws.

(a) Vote or Consent Requirement. These By-laws may be amended in any respect not inconsistent with law or the Declaration by the affirmative vote or written consent of not less than sixty-five percent (65%) of the owners.

(b) Proposed Amendments. Proposed by-laws with the rationale for the proposal may be submitted to the owners either by the Board of Directors or by a volunteer owners' committee. If a volunteer owners' committee desires to submit a proposal to the owners, it shall first submit the proposal to the Board of Directors with the rationale for the proposal and a petition supporting the proposed by-laws signed by not less than twenty-five percent (25%) of the owners. Within thirty (30) days from the receipt of the proposal, the rationale, and the petition by the Board, the Board, at the expense of the Association, shall mail to the owners for approval without change the proposed by-laws, the rationale for the proposal, ballots for voting, and the Board's comments, if any, concerning the proposal. The approval of the owners must be obtained within one hundred twenty (120) days after mailing. The volunteer owners' committee shall be precluded from submitting a petition for a proposed by-law which is substantially similar to that which has been previously mailed to the owners within one (1) year after the original petition was submitted to the Board. This subsection shall not preclude any apartment owner or voluntary owners' committee from proposing any by-law amendment at any annual Association meeting.

(C) When Amendment Are Effective. An amendment to the by-laws shall be effective upon adoption by an affirmative vote or written consent of not less than sixty-five percent (65%) of the owners. Thereafter, the Board shall cause the by-law amendment to be recorded in the Bureau of Conveyances or filed in the Land Court, as the case may be.

Section 2. Indemnification. The Association shall indemnify every director and officer and his executors and administrators against all expenses reasonably incurred by or imposed on him in connection with any action, suit, or proceedings to which he may be made a party by reason of being or having been a director or officer of the Association, except in relation to matters as to which he shall be finally adjudged in such action, suit, or proceeding to be liable for negligence or misconduct; and in the absence of such final adjudication, indemnification shall be provided only in connection with such matters as to which the Association is advised by its legal counsel that the person to be indemnified committed no such breach of duty. The foregoing right of indemnification shall not be exclusive of any other rights to which such person may be entitled.

Section 3. Subordination. These By-Laws are subordinate and subject to all provisions of the Declaration and any amendments thereto, the Condominium Property Act (Chapter 514A, Hawaii Revised Statutes, as amended), which shall control in case of any conflict. All terms herein (except where clearly repugnant to the context) shall have the same meaning as in the Declaration or said Condominium Property Act.

Section 4. Interpretation. In case any provision of these By-Laws shall be held invalid, such invalidity shall not render invalid any other provision hereof which can be given effect. Nothing in these By-Laws shall be deemed or construed to authorize the Association or Board of Directors to conduct or engage in active business for profit on behalf of any or all of the apartment owners,

Section 5. Books of Receipts and Expenditures. The Managing Agent or Board of Directors shall keep detailed, accurate records in chronological order of the receipts and expenditures affecting the common elements, specifying and itemizing the maintenance and repair expenses of the common elements and any other expenses incurred. All records and the vouchers authorizing the payments shall be kept and maintained at the address ot- the Project, or elsewhere within the State as determined by the Board of Directors, and shall be available for examination by the apartment owners at convenient hours of week days, in accordance with Chapter 514A 83.5, Hawaii Revised Statutes.

Section 6. Minutes of Meetings of the Board of Directors and Association. The minutes of meetings of the Board of Directors and of the Association of Apartment Owners shall be available for examination by apartment owners at convenient hours at a place designated by the Board, in accordance with Chapter 514A 83.5, Hawaii Revised Statutes

CERTIFICATE OF ADOPTION

The undersigned, being the Association of Apartment Owners of Paniolo Hale, hereby adopts the foregoing as the By-Laws of the Association of Apartment Owners of PANIOLO HALE, this 5th day of September, 1991.

ASSOCIATION OF APARTMENT OWNERS OF PANIOLO HALE

By James L. Fessenden
Its President

Samuel M. Ford
Its Secretary