BAYVIEW VILLAGE ASSOCIATION BOARD OF DIRECTORS MEETING

            OF MAY 10, 2006

            This meeting was convened pursuant to the decision of the Board taken at the regular meeting of the Board on May 8, 2006 at the Bay Club.  The meeting was conducted at the law offices of the firm of Broughton & Singleton in Silverdale, Washington.  The purpose of the meeting was for the Board to obtain from Attorney Broughton an explanation of the meaning and implications of a Stipulated Judgment Order which he indicated would bring the village's unification litigation to a successful resolution.

                The meeting began at 9:00 AM.  Present were Nancy Kragh, president; Bob Azen, vice -president; Bob Retke, secretary; and William Broughton, the attorney representing the Bayview Homeowners' Association.  The Board members questioned Mr. Broughton about certain aspects of the draft order.  Specifically, Mr. Broughton was questioned on three issues:

                1.  Will the entry of the Stipulated Judgment Order bring the parties defendant in the suit into the same status with respect to the documents governing Bayview Village as the declarations signed and filed with the Jefferson County Auditor by the other fifty-three members of the Bayview Village Association?

                Mr. Broughton's answer was in the affirmative.

                2.  Would the Stipulated Judgment Order conflict with or complicate any effort which might be undertaken by the South Bay Community Association or its constituent villages to deal with the Master Conditions, Covenants and Restrictions issues addressed by the declarations signed and filed with the Jefferson County Auditor by fifty-three  members of the Bayview Village Association?

                Mr. Broughton's answer was in the negative.

                3.  Is there any way in which the expenses of the litigation incurred by the Bayview Village Association could be recovered from the two defendant parties in the suit?

                Mr. Broughton's answer was that if the Association terminated the litigation by agreeing to the Stipulated Judgment Order, as he recommended, then it would not be possible to recover litigation expenses from the defendants.  He stated that if the Stipulated Judgment Order were rejected and the case went to trial the Association could not obtain a better legal result but might recover certain of its costs from the defendants.  He further stated that the unrecoverable expenses of a trial would substantially exceed the costs which might be recovered.  Accordingly, he concluded that it was impractical to attempt to recover the Association's expenses from the defendants.  However, he believed that the developer, Pope Resources, was responsible for the filing errors which led to this litigation and he would draft a letter demanding compensation from the company.

                  The meeting was adjourned at 9:45 AM.

Respectfully submitted:

__________________________________                        ______________________________

Bob Retke, Secretary                                                        Nancy Kragh, President