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ARTICLES OF INCORPORATION =: -.-OF .c'

MORNINGSTAR TOWNHOME ASSOCIATION, INC.

The undersigned, acting as incorporator of a corporationunder the Colorado Nonprofit corporation Act hereby certifiesthe following Articles:

ARTICLE INAME

The name of the corporation is Morningstar TownhomeAssociation, Inc.

ARTICLE IIPERIOD OF EXISTENCE

Morningstar Townhome Association, Inc. (the "Association")shall have perpetual existence.

ARTICLE IIIPURPOSES AND POWERS

3.1 Purposes. The purposes and objectives for which theAssociation is formed are as follows:

A. To promote, undertake and advance any and all lawfulactivities and objectives for the general benefit, well-being,advancement, improvement and enjoyment of the Association andits members;

B. To provide for the care, upkeep and supervision ofMorningstar Townhomes (the "Property"), as more fully describedin the Declaration and all supplements and amendments theretofiled of record from time to time in the Office of the Clerk andRecorder, Eagle County, Colorado (the "Declaration"), and thePlat to be filed for record in the real property records ofEagle County, Colorado and all supplements thereto (the "Plat"),including the General Common Elements as defined in theDeclaration and shown on the Plat;

C. To provide an entity for the furtherance of theinterests of the Owners of the Property.

3.2 Powers. Subject to any specific limitation imposed bythese Articles of Incorporation, the Association shall have thefollowing powers:

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A. All of the powers conferred upon nonprofit corporationsby the laws of the state of Colorado in effect from time totime.

B. All of the powers necessary or desirable to perform theobligations and duties and exercise the rights and powers of theAssociation under the Declaration (terms which are defined inthe Declaration shall have the same meanings herein unlessotherwise defined herein), including, without limitation, thefollowing powers:

1. To make and collect· assessments against Members forthe purpose of paying the costs, expenses and any losses of theAssociation, or of exercising its powers or of performing itsfunctions;

2. To manage, control, operate, maintain, repair andimprove the General Common Elements, Party Walls and ExteriorMaintenance Areas;

3. To enforce covenants, restrictions and conditionsaffecting the Property to the extent the Association may beauthorized under any such covenants, restrictions or conditionsand to make and enforce rules and regulations for use of theProperty;

4. To engage in activities which will actively foster,promote and advance the common ownership interests of theOwners;

5. To buy or otherwise acquire, sell or otherwisedispose of, mortgage or otherwise encumber, exchange, lease,hold, use, operate and otherwise deal with and in, real,personal and mixed property of all kinds, and any right orinterest therein, for any purpose of the Association, subject tothe Declaration and Bylaws of the Association;

6. To borrow money and secure the repayment of moniesborrowed for any purpose of the Association, limited in amountor in other respects as may be provided in the Bylaws or in theDeclaration;

7. To enter into, make, perform or enforce contractsof every kind and description, including, without limitation, acontract for management services, and to do all other actsnecessary, appropriate or advisable in carrying out any purposeof the Association, with or in association with any person,firm, association, corporation or other entity or agency, publicor private;

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8. To adopt, alter, and amend or repeal such Bylaws asmay be necessary or desirable for the proper management of theaffairs of the Association, provided, however, that such Bylawsmay not be inconsistent with or contrary to any provisions ofthese Articles of Incorporation or the Declaration.

The foregoing enumeration of powers shall not limit orrestrict in any manner the exercise of other and further rightsand powers which may now or hereafter be allowed or permitted bylaw; and the powers specified in each of the paragraphs of thisArticle III are independent powers, not to be restricted byreference to or inference from the terms of.any other paragraphor provisions of this Article III, except for those limitationsset forth in paragraph 3.3 below.

3.3 Restrictions Upon Purposes and Powers. The foregoingpurposes and powers of the Association are subject to thefollowing limitations:

A. The Association shall be organized and operatedexclusively for nonprofit purposes as set forth in the InternalRevenue Code of 1986, as it is now or may hereafter be amended,or in any corresponding provision of any future law of theUnited states of America providing for exemption of similarorganizations from income taxation.

B. No part of the net earnings of the Association shallinure to the benefit of any Member (except that reasonablecompensation may be paid for services rendered to or for theAssociation and affecting one (1) or more of its purposes andobjectives, and reimbursement may be made for any expensesincurred for the Association by any officer, Director, Member,agent, or employee, or any person or corporation, pursuant toand upon authorization of the Board of Directors).

C. The Association shall not pay any dividends. Nodistribution of the corporate assets to Members (as such) shallbe made until all corporate debts are paid, and then only uponfinal dissolution of the Association by the required action setforth in the Declaration.

ARTICLE IVINITIAL REGISTERED OFFICE AND AGENT

The initial registered office of the Association shall be0048 East Beaver Creek Boulevard, suite 205, P.O. Box 1626,Avon, Eagle County, Colorado 81620. The initial registeredagent at such office shall be James R. Wear.

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ARTICLE VMEMBERSHIP

5.1 Qualifications. The Association shall be a membershipcorporation without certificates or shares of stock and shallconsist of two classes of membership. Class A Members shall beall Owners, with the exception of Declarant (as defined in theDeclaration). The Class B Member(s) shall be Declarant and anySuccessor Declarant. The rights and obligations of each classof membership are set forth in the Declaration and Bylaws of theAssociation. A Class A membership shall terminate automaticallywithou.t any Association action whenever such entity orindividual ceases to own a Townhouse unit. Termination ofmembership shall not relieve or release any former Member fromany liability or obligation incurred by virtue of, or in any wayconnected with, ownership of a Townhouse unit, or impair anyrights or remedies which the Association or others may haveagainst such former Member arising out of, or in any wayconnected with, such membership.

5.2 Suspension of Voting Rights. The Association maysuspend the voting rights of a Member for failure to pay anyAssessments or for failure to otherwise comply with the rulesand regulations, or the Bylaws, of the Association, or with anyother obligations of the Members under the Declaration, oragreement(s) created pursuant thereto.

5.3 Bylaws. The Bylaws may contain provisions, notinconsistent with the foregoing, setting forth the rights,privileges, duties and responsibilities of the Members.

ARTICLE VIBOARD OF DIRECTORS

The business and affairs of the Association shall beconducted, managed, and controlled by a Board of Directors.

6.1 Number; Manner of Election. The Board of Directorsshall consist of not less than three (3) nor more than seven (7)members, the specified number to be set forth from time to timein the Bylaws. In the absence of any provision in the Bylaws,the Board shall consist of three (3) members. The terms ofoffice of Directors and the manner of their selection orelection shall be determined according to the Bylaws from timeto time in effect. Directors may be removed and vacancies onthe Board of Directors shall be filled in the manner provided inthe Bylaws.

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6.2 Initial Board of Directors. The initial Board ofDirectors shall consist of three (3) persons and the names andaddresses of the members of the initial Board of Directors whoshall serve until their successors are duly elected andqualified, are as follows:

Name Address

William L. Williams P.O. Box NEdwards, CO 81632

Wayne Conrad P.O. Box NEdwards, CO 81632

Carol A. Williams P.O. Box NEdwards, CO 81632

Any vacancies in the Board of Directors occurring before thefirst election of Directors by Class A Members shall be filledby the remaining Directors. Notwithstanding anything to thecontrary provided for herein, however, the Class B Member(s)shall be entitled to appoint all of the members of theAssociation's Board of Directors during the period of Class Bmembership. The Class B membership shall terminate on theearlier of the following events:

(a) when Declarant has conveyed thirty (30) Townhouse units(representing 75% of the forty (40) Townhouse units whichDeclarant may, but shall not be obligated to, bring within thejurisdiction of the Declaration); or

(b) December 31, 1997; or

(c) The date on which Declarant voluntarily relinquishes itsClass B membership, evidenced by a notice recorded in the officeof the Clerk and Recorder for Eagle County, Colorado.

After termination of the Class B membership, Declarant andany designated Successor Declarant shall be entitled to one votefor each Townhouse unit owned.

ARTICLE VIIOFFICERS

The Board of Directors may appoint a President, one or moreVice-Presidents, a Secretary, a Treasurer, and such otherofficers as the Board, in accordance with the provisions of theBylaws, believes will be in the best interests of theAssociation. The officers shall have such duties as may beprescribed in the Bylaws.

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ARTICLE VIIINON-LIABILITY AND INDEMNIFICATION

To the fullest extent permitted by the ColoradoCorporation Code, as the same exists or may hereafter beamended, a director of this corporation shall not be liable tothe corporation or its shareholders for monetary damages forbreach of fiduciary duty as a director.

The Association shall have the right to indemnify anyperson to the fullest extent allowed by the laws of Colo~ado,except as limited by the Bylaws of the Association from time totime in effect.

ARTICLE IXAMENDMENTS

The Association reserves the right to amend, alter, orchange any provision contained in these Articles ofIncorporation by a vote of at least two-thirds (2/3) of thevotes in the Association present at any regular or specialmeeting of the Members of the Association at which a quorum ispresent, provided, however, that no amendment to these Articlesof Incorporation shall be contrary to or inconsistent with anyprovision of the Declaration.

ARTICLE XINCORPORATOR

The name and address of the incorporator of the Associationis as follows:

Richard D. Travers0048 East Beaver Creek BoulevardSuite 205P.O. Box 1626Avon, Colorado 81620

Executed this 4th day of October, 1991.

(Z~hCRichard D. Travers, Incorporator

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STATE OF COLORADO ))

COUNTYOF EAGLE )

The foregoing instrument was acknowledged before me in ~he\J.::.:.~~~~';'County of Eagle, State of Colorado, this 4th day of october, ~••••, :J 17 •...~c.;1991 by Richard D. Travers, Incorporator. !;,:t . ~A ~ ~

: ~ s , ~~ '", •.•- '··v, ()oo',..WITNESS MYHANDANDOFFICIAL SEAL. ~"'\;'~/ : •..

''f-. " •••:?f;t,,~.OfI ...-'...~,.;. .-.......... ~J~.cMYCOMMISSIONEXPIRES: 10/2/93 \

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