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Set forth below is the substance of communication from Sun Lakes Legal Counsel to the Representative of Petitioners. September 24, 2020 The Association's Board of Directors has authorized me to correspond with you in regard to the three petitions you submitted last week. As I will explain below, these petitions do not and cannot compel any action by the Association on the topics set forth in the petitions. Corporations Code Section 7210 provides that except for those matters that require member approval by statute or by the corporation's documents, all corporate powers are exercised by, or under the direction of, the Board of Directors. The Sun Lakes governing documents are similarly written. Article VII, Section 1, of the Bylaws says the "Board has all the general powers authorized under the Corporation Code… and shall have those specific powers more particularly set forth in Article VI of the Declaration." Article VI of the Declaration of CC&Rs provides: At Section 6.01 that the Association's duties will be performed "by action of the Board…" Section 6.02 states that, in addition to the general corporate powers: the Association shall have the power and authority, which may be exercised by the Board at any time, as follows: * * * (d) … the power to retain and pay for the services of a Person or firm as Manager to undertake any of the management or administrative functions for which the Board has responsibility hereunder to the extent deemed advisable by the Board, and to engage such other personnel as the Board shall determine be necessary or proper for the performance of such management or administrative functions… * * * (m) … the power to enter into any contracts necessary or convenient for the performance of the Association's obligations, rights and business." There is no provision in California law that authorizes corporate members to instruct the corporation's board of directors by petition on how the board shall make the business judgments which are within the board's allocated powers. There is a mechanism to call a special membership meeting by petition but only if the meeting is sought for a lawful purpose. Your petitions do not qualify. Corporations Code Section 7510 (e) provides: "Special meetings of members for any lawful purpose may be called by the board, the chairman of the board, the president, or such other persons, if any, as are specified in the bylaws. In addition, special meetings of members for any lawful purpose may be called by 5 percent or more of the members." (Emphasis added.) The language of the petitions do not call for a special membership meeting, but even if that was the intent, the subjects of the petitions (1) reinstatement of the former golf pro, a former First Service Residential ("FSR") employee, (2) replacement of the Executive General Manager, an FSR employee, and (3) replacement of FSR, the management company the Board has contracted with pursuant to the above authority, are not within the powers allocated to the members under the governing documents. Since the petitions are on matters as to which the Association's powers are allocated to the Board, not to the members, and matters which the Association has contracted for FSR's services, the petitions are not for lawful purposes and do not trigger a duty for the Association to call a special membership meeting, and such a meeting would be improper. Association members should refrain from interference in the Association's contractual relationships. The membership elects a Board of Directors to exercise the Association's corporate powers in accordance with the governing documents. Once elected, the Board must be permitted. If you have any questions regarding the foregoing, please consult with your own legal counsel. If you or your lawyer have any response to this letter, please direct the same to me, not to the Association's Board members. Very truly yours, FIORE, RACOBS & POWERS A Professional Law Corporation Peter E. Racobs, Esq. From the Board of Directors 8 | SUN LAKES LIFESTYLES | NOVEMBER 2020 |

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