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HomeMy WebLinkAboutAppendix F - DRAFT Governing Docs 05-05-2020Articles of Incorporation of AP-PP Condominiums Owners Association, Inc. Page 1 of 6 ARTICLES OF INCORPORATION OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. The undersigned, acting as the incorporator of a corporation, pursuant to the Montana Nonprofit Corporation Act, hereby adopts the following Articles of Incorporation: ARTICLE I The name of this corporation is AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. ARTICLE II The corporation is a mutual benefit corporation, as defined by Montana Code Annotated § 35-2-126. ARTICLE III The purposes for which the corporation is organized are: 1. To exercise all of the powers and privileges and to perform all of the duties and obligations of the condominium association which are set forth in the Declaration of Covenants, Conditions, and Restrictions Relating to AP-PP Condominiums, a residential development located in Gallatin County, Montana, as that declaration may be amended and supplemented from time to time in accordance with the terms thereof, which declaration (referred to in these Articles as the "Declaration") has been or will be recorded in the office of the Clerk and Recorder of Gallatin County, Montana. These powers, privileges, duties and obligations include, but are not limited to, the following: (a) To promote the convenience, enjoyment, health, safety, and welfare of the owners of the units which are subject to the Declaration (referred to in these Articles as the "Units"); (b) To own, maintain, preserve, and improve the common areas and facilities in the Condominium to the extent described in the Declaration, and to provide the members of this corporation with such services, improvements, and facilities as they may approve; ______________________________________________________________________ Articles of Incorporation of AP-PP Condominiums Owners Association, Inc. Page 2 of 6 (c) To enforce the restrictions, regulations, and requirements set forth in the Declaration, and to exercise architectural control over improvements on the Units to the extent described in the Declaration; (d) To fix and levy assessments on the Units, and to collect such assessments, in order to obtain funds with which to carry out the duties and obligations of the corporation; and (e) To exercise all other rights and powers which the corporation now has or may hereafter acquire under the corporation laws of the State of Montana. ARTICLE IV The corporation shall have members. Every person or entity which is the record owner of a fee interest in a Unit as depicted in the site plan attached to the Declarations shall be member. The term “Member” shall include the buyer under a contract for deed, but excluding the seller under a contract for deed and other persons having an interest in a Unit merely as security for the performance of an obligation. Membership shall be appurtenant to and may not be separated from the ownership of a Unit, and the ownership of a Unit shall be the sole qualification for Membership. ARTICLE V To the fullest extent permitted by law, the directors of the corporation shall not be liable to the corporation or its Members for monetary damages for breach of their duties to the corporation or its Members, except for (a) a breach of a director's duty of loyalty to the corporation or its members; (b) acts or omissions that were not in good faith or that involved intentional misconduct or a knowing violation of law; (c) transactions from which a director derived an improper personal or economic benefit; (d) transactions involving a conflict of interest, as defined in Montana Code Annotated § 35-2-418; (e) transactions involving a loan or loan guarantee made to or for the benefit of a director by the corporation in violation of Montana Code Annotated § 35-2-435; or (f) a director's personal liability for an unlawful distribution under Montana Code Annotated § 35-2-436. ARTICLE VI ______________________________________________________________________ Articles of Incorporation of AP-PP Condominiums Owners Association, Inc. Page 3 of 6 The corporation shall indemnify each director to the full extent permitted by the Montana corporation statutes against all costs and expenses reasonably incurred or imposed upon the director in connection with or rising out of any action, suit, or proceeding in which the director is made a party by reason of having been a director or officer of the corporation. ARTICLE VII The period of duration of the corporation is perpetual. ARTICLE VIII The corporation may be dissolved or merged with another condominium owner’s association if the owner or owners, as the case may be, of two-thirds or more of the Units depicted in the site plan attached to the Declarations execute a consent to the dissolution or merger. If the corporation is dissolved or merged, all of its assets shall be distributed as set forth in the Declaration. ARTICLE IX The street address of the corporation’s initial registered office is: 32 South Tracy Ave. Bozeman, Montana 59715 The name of the initial registered agent at that address is: Human Resource Development Council of District IX, Inc. ARTICLE X The number of directors constituting the initial board of directors of this corporation is three (3). The duties, qualifications, number and term of the directors and the manner of their election, appointment or removal shall be as set forth in the Bylaws and the Declaration, and the names and addresses of the persons who are to serve as directors until the first annual meeting of the Members and until their successors are elected and have qualified are: Gregory M. Dunfield: 520 Pike Street, Suite 1010, Seattle, WA 98101 Steve Dymoke: 520 Pike Street, Suite 1010, Seattle, WA 98101 Heather Grenier: 32 South Tracy Ave. Bozeman, MT 59715 ______________________________________________________________________ Articles of Incorporation of AP-PP Condominiums Owners Association, Inc. Page 4 of 6 ARTICLE XI: The initial directors whose names and addresses are set forth above are also the incorporators of this corporation. ARTICLE XII: The corporation may amend these Articles in accordance with the Montana Nonprofit Corporation Act so long as the amendment is not contrary to or inconsistent with the Act or any provision of the Declaration. IN WITNESS WHEREOF, these Articles of Incorporation have been executed by the directors and incorporators on the day of __________, 2020. [Signatures on following pages] ______________________________________________________________________ Articles of Incorporation of AP-PP Condominiums Owners Association, Inc. Page 5 of 6 Gregory M. Dunfield STATE OF WASHINGTON ) : ss. County of ____________ ) This instrument was acknowledged before me on the ____ day of _______, 2020, by Gregory M. Dunfield. Notary Public for the State of Washington (SEAL) Residing at __________, Washington My Commission expires: Steve Dymoke STATE OF WASHINGTON ) : ss. County of ____________ ) This instrument was acknowledged before me on the ____ day of _______, 2020, by Steve Dymoke. Notary Public for the State of Washington (SEAL) Residing at __________, Washington My Commission expires:______________ ______________________________________________________________________ Articles of Incorporation of AP-PP Condominiums Owners Association, Inc. Page 6 of 6 Heather Grenier STATE OF MONTANA ) : ss. County of Gallatin ) This instrument was acknowledged before me on the ____ day of ____________, 2020, by Heather Grenier. Notary Public for the State of Montana (SEAL) Residing at Bozeman, Montana My Commission expires: BYLAWS of AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. ARTICLE I. Identification Section 1.1 Name. The name of the corporation is AP-PP Gardens Condominiums Owners Association, Inc. Section 1.2 Location. The principal office of AP-PP Condominiums Owners Association, Inc., is located at ________________. The corporation may have such other offices as the Board of Directors and officers may establish from time to time. Section 1.3 Seal. The seal of the corporation shall consist of the name of the corporation, the state of its incorporation, and the year of its incorporation. Section 1.4 Fiscal Year. The fiscal year of the corporation shall be the calendar year. Section 1.5 Definitions. All capitalized terms used herein shall have the meaning set forth in the Declaration. "Declaration" shall mean the Declaration of Condominiums, as it may be amended, relating to certain real property situated in the _______________________, County of Gallatin, State of Montana, being more particularly described as follows (the “Property”): Lot 3A of Minor Subdivision No. 407A and Saccoccia Common Open Space of the Saccoccia Minor Subdivision No. 407, City of Bozeman, Gallatin County, Montana, according to the official plat thereof on file and of record in the office of the County Clerk and Recorder, Gallatin County, Montana. ARTICLE II. Purposes The purposes for which the Association has been organized, as set forth in the Articles of Incorporation, are to exercise all of the powers and privileges and to perform all of the duties and obligations of the Homeowners Association which are set forth in the Declaration and in the Articles of Incorporation. ARTICLE III. Members Section 3.1 Eligibility. Every person, including the Declarant’s, who is the Owner of a Unit shall be a Member of the Association. Membership shall be BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 2 appurtenant to and may not be separated from ownership of a Unit, and ownership of a Unit shall be the sole qualification for membership. The Association shall not be considered a Member either for voting or assessment purposes if it acquires an interest in a Unit. Section 3.2 Classification of Members. The Board of Directors may establish as many classes of membership as it considers desirable, and may establish annual dues or assessments for each class of membership. Initially, there shall be two (2) classes of members, as follows: Arrowleaf Unit Owner: Arrowleaf Unit Owners shall consist of the Owner of Unit 1 and Unit 2, and the Buildings located on Unit 1 and Unit 2. Perennial Unit Owner: Perennial Unit Owners shall consist of the Owner of Unit 3 and Unit 4, and the Buildings located on Unit 3 and Unit 4. The Arrowleaf Unit Owner shall have sole responsibility with respect to the maintenance and use of Unit 1 and Unit 2, the Buildings located on Unit 1 and Unit 2 and the Limited Common Area appurtenant to Unit 1 and Unit 2. The Perennial Unit Owner shall have sole responsibility with respect to the maintenance and use of Unit 3 and Unit 4, the Buildings located on Unit 3 and Unit 4 and the Limited Common Area appurtenant to Unit 3 and Unit 4. Section 3.3 Rights and Responsibilities. Members, as defined in the Declaration, are not entitled to vote on any issue or in any election unless the Board of Directors adopts a resolution submitting a particular issue to the Members for a vote, or authorizing the Members to vote in a particular election or as otherwise specified in the Declaration. Members will not be liable for any of the debts or other obligations of the corporation. Section 3.4 Meetings. Meetings of the Members may be called at any time by the Board of Directors. The first meeting of the Members shall be held within eighteen months after the formation of the corporation, and at least one meeting of the Members shall be called in each calendar year thereafter. Further, the Unit Committee of each Unit shall, at least annually, meet to determine any issues, or set any fees or assessments with respect to each Unit and the Buildings therein. Section 3.5 Voting Rights of Members. The Members of the Association shall be entitled to cast one (1) for each Unit of which they are the Owner. When two (2) or more Persons own joint or common interests in any Unit, then such persons shall determine between themselves how the vote for that Unit shall be BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 3 exercised, but in no event may more than one (1) vote be cast per Unit. If two (2) or more Persons each claim the right to cast the vote for a Unit, and votes are different, then the Association may elect to refuse to recognize either vote. Section 3.6 Voting. An action will be approved by the Association if a majority of the votes cast by each class of Members of the Unit Owners present at a meeting, either in person or by proxy, are in favor of the action. The election of directors must be by ballot. Voting upon any other issue may be oral unless the officer presiding over the meeting shall order, or any Member shall demand, that the voting be conducted by ballot. Section 3.7 Proxies. A Member may vote either in person or by a proxy appointed by a written instrument signed by the Member. A document appointing a proxy will not be effective until it is delivered to an officer of the Association. A document appointing a proxy may not have a term greater than three (3) years, and will terminate after eleven (11) months unless the document specifies a greater or lesser term. A Member may revoke the appointment of a proxy at any time either by attending and voting at any meeting, by executing a written instrument revoking the appointment and delivering it to an officer of the Association, or by executing a written instrument appointing a new proxy and delivering it to an officer of the Association. A proxy will automatically terminate upon the transfer of the Unit to which it relates. Section 3.8 Membership Lists. The Association shall maintain a membership list containing the names and addresses of the Owner or Owners of each Unit, arranged in alphabetical order. The Association shall also maintain a second membership list arranged by Unit number. The membership lists shall state the name and address of any proxy appointed to vote for any Owner, and the term of the appointment. Any Member will have the right to inspect and copy these membership lists at any time during usual business hours. The lists will be brought to each meeting of the Members and will be available for inspection by any Member in case any questions arise concerning the presence of a quorum, the Persons who are entitled to vote, and other such issues. Each Member shall be responsible for advising the Association of any change of mailing address and any transfer or purchase of a Unit. Section 3.9 Annual Meeting. The annual meeting of the Members shall be held on the 25th day of June of each year, unless the Board of Directors sets a different date for a particular annual meeting. The purpose of the annual meeting shall be to hear reports on the activities and financial condition of the Association, to elect directors, and to transact any other business which may come before the meeting. BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 4 Section 3.10 Special Meetings. Special meetings of the Members may be called by the Board of Directors or the President. It shall be the duty of the Board of Directors and the President to call a special meeting with respect to a Unit when requested to do so in writing by the owners of not less than twenty percent (20%) of the Units comprising the Association. Section 3.11 Purposes of Meetings. The notice of an annual meeting need not include a description of the purposes of the meeting. The notice of a special meeting must include a description of the purpose or purposes of the meeting, and only such business shall be conducted at a special meeting as is specified in the notice of the meeting, unless all of the Members, either in person or by proxy, unanimously consent to conduct other business at the meeting. However, a Member must object to the discussion of a subject at a special meeting as soon as the subject is presented or raised, or the right to object will be waived. Section 3.12 Place of Meetings. Meetings of the Members will be held at the Property or such other locations as determined by the Board of Directors. Section 3.13 Notice of Meetings. A notice stating the place, day, hour and purpose of each meeting of the Members shall be mailed to each member not less than ten (10) days nor more than fifty (50) days before the date of the meeting. The notice may be placed in any newsletter or other publication sent to all Members of the corporation. Section 3.14 Quorum. If the Board of Directors submits an issue to the Members for a vote, or authorizes the Members to vote in an election, no specific number of Members will be required to constitute a quorum, unless the resolution authorizing the vote, or the Declaration, requires a minimum number of Members to be present at the meeting at which the vote is held. ARTICLE IV. Board of Directors Section 4.1 Powers and Duties. The business, affairs and property of the corporation shall be generally managed and supervised by a Board of Directors. The duties of the directors shall include, but not be limited to, the following: (a) To arrange for the maintenance and repair of the General Common Areas and facilities owned by the Association; (b) To enforce the restrictions contained in the Declaration; BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 5 (c) To provide for all improvements, facilities, and services in the General Common Areas as may be in the best interest of the Members; (d) To adopt and publish rules and regulations governing the use of the General Common Areas and facilities, and to establish penalties for violation of these rules and regulations; (e) To employ all employees, contractors, architects, attorneys, and other persons required to achieve the objective and carry out the duties of the Association; (f) To obtain funds for achieving the objectives and carrying out the duties of the Association by levying assessments on the Members and their Units in the manner provided for in Article VIII; (g) To obtain adequate liability and casualty insurance on the General Common Areas and other property and facilities owned by the Association; (h) To deposit and invest the funds of the Association in a safe and prudent manner; and (i) To maintain a complete record of the corporate and financial affairs of the Association. Section 4.2 Number of Directors. The Board of Directors shall be composed of three (3) Directors. The Board of Directors may increase or decrease the number of directors within this range from time to time by resolutions adopted by three-quarters of the directors. Section 4.3 Qualifications of Directors. Directors need not be Members of the corporation. Directors do not need to be residents of the State of Montana or citizens of the United States of America. A director may be employed by or provide services to the corporation or may be employed by or provide services to an Owner. Section 4.4 Election of Directors. At each annual meeting of the Board of Directors, the Members shall accept nominations for new directors to replace the directors whose terms are expiring. After nominations have been received, each Member shall vote for as many of the nominees as there are positions to be filled, and the nominees who receive the most votes shall be elected as members of the Board of Directors. BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 6 Section 4.5 Term of Office. The initial Board of Directors named in the Articles of Incorporation of the corporation shall hold their offices until the end of the second annual meeting of the Board of Directors, during which meeting their successors shall be elected. Thereafter each director shall hold office until the next annual meeting of the Members, or until his or her successor is elected. Section 4.6 Maximum Terms of Office. There is no limit to the number of terms than an individual may serve as an elected director. Section 4.7 Resignation. A director may resign at any time by giving written notice of his or her resignation to the Board of Directors. Section 4.8 Leave of Absence. Any director may be granted a leave of absence from the Board of Directors so long as the leave is approved by a majority of the other directors. A leave of absence will not extend the term of office of a director. Section 4.9 Removal. A director may be removed from office by the affirmative vote of two-thirds of the directors for malfeasance, misfeasance, nonfeasance, lack of sympathy with the purposes of the corporation, or refusal to render reasonable assistance in carrying out the purposes of the corporation. No such vote may be held at a meeting unless the directors who request the vote mailed a written notice to every member of the Board of Directors at least ten (10) days before the meeting, advising all directors that they intend to request such a vote, and stating the name of the director that they propose to remove and the grounds for the proposed removal. A director may be removed without cause by the affirmative vote of two-thirds of the Members at a special meeting called for that purpose. Section 4.10 Vacancies. A vacancy in the Board of Directors created by the resignation, removal, or death of a director shall be filed by the majority vote of the remaining directors. Each person elected to fill a vacancy shall hold office for the unexpired term of the director that they are replacing, at the end of which term they may be nominated for reelection. Section 4.11 Fees and Compensation. Officers, directors, and employees of the corporation may receive such compensation, if any, for their attendance at meetings, their work for the corporation, and their expenses as may be deemed reasonable by the Board of Directors and established by resolution. ARTICLE V. Meetings of Directors BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 7 Section 5.1 Place of Meetings. Meetings of the Board of Directors, whether annual, regular, or special, may be held at any place designated by the Board of Directors, or in the case of a special meeting, at any place designated in the notice of the meeting, either inside or outside the State of Montana. Section 5.2 Annual Meetings. An annual meeting of the Board of Directors shall be held on the 1st business day of each year, or on such other date as the Board of Directors may designate, for the purpose of electing officers of the corporation and acting upon such other business as may come before the meeting. Section 5.3 Regular Meetings. The Board of Directors may, by resolution, establish a time and place for holding regularly scheduled meetings of the Board of Directors. No notice of any kind need be given to the directors of any such regularly scheduled meetings. Section 5.4 Special Meetings. Special meetings of the Board of Directors may be called by the President of the corporation or by a majority of the Members of the Board of Directors then in office, by sending notices to all of the directors in the manner required by this article of the By-laws. Section 5.5 Notices of Meetings. Each of the directors must be notified of the place, date, and time of each annual meeting of the Board of Directors by sending written notice of the meeting to him or her by mail at least twenty (20) days before the meeting. Each of the directors must be notified of the place, date, and time of each special meeting of the Board of Directors by ending written notice of the meeting to him or her by mail or express delivery service at least seven days before the meeting, or by actually delivering written or oral notice of the meeting to him or her in person, by telephone, by fax, or by other means of instantaneous electronic transmission at least five (5) days before the meeting. Notice of any meeting of the Board of Directors may be waived in writing signed by the person or persons entitled to the notice, whether before or after the time of the meeting. Attendance at a meeting by a director shall be a waiver by that director of notice of the time and place of the meeting, unless at the beginning of the meeting the director states any objection to the notice of the meeting or the transaction of business during the meeting. Neither the business to be transacted nor the purpose of any special meeting of the Board of Directors need be specified in the notice or waiver of notice of the meeting, unless specifically required by another provision of these By-laws. Section 5.6 Addresses for Notices. Each director shall advise the corporation from time to time of the address, fax number, or telephone number to which BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 8 notices of meetings shall be sent, and notices shall be effective if sent to that director at that address, fax number, or telephone number. Section 5.7 Quorum. A majority of the directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. No business may be conducted at a meeting until a quorum is present. The directors present at a duly called meeting may continue to conduct business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 5.8 Voting. At every meeting of the Board of Directors, each director shall be entitled to one vote. A director may vote either in person or by a proxy appointed by a written instrument executed by that director, dated not more than sixty (60) days prior to the meeting. Upon the demand of any director, the vote upon any question before the Board of Directors shall be by ballot. An action or resolution approved by a majority of the directors’ present at a meeting at which a quorum is present shall be an action of the Board of Directors, unless these By- laws require approval by a greater percentage of the directors. Section 5.9 Acting without Assembling. Any action which may be taken at a meeting of the Board of Directors may be taken by the directors by communicating simultaneously with each other by means of conference or similar communications equipment. Section 5.10 Action without a Meeting. Any action required to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing setting forth the action so taken is signed by all of the directors then in office. Any such written consent may be executed in any number of counterparts, will have the same effect as a unanimous vote of the directors, and shall be inserted in the minute book as if it were the minutes of a directors' meeting. ARTICLE VI. Officers Section 6.1 Officers of the Corporation. The officers of the corporation shall be a President, a Vice-President, a Secretary, and a Treasurer, each of whom shall be elected by the Board of Directors. In addition to the above officers, the Board of Directors may elect or appoint such other officers, assistant officers and agents as it deems necessary at such times, in such manner and upon such terms as it shall prescribe. BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 9 Section 6.2 Qualifications for Office. The President, Vice-President, Secretary, and Treasurer shall be Members of the Board of Directors, but other officers or employees elected or appointed by the Board of Directors need not be Members of the Board of Directors. With the exception of the Members of the initial Board of Directors, no director may be elected to an office until he or she has served for at least one (1) year as a director. The individual holding the office of Secretary shall not also hold the office of either President or Vice- President. Section 6.3 Election of Officers. The President, Vice-President, Secretary, and Treasurer shall be elected by the incumbent directors at the annual meeting of the directors, immediately after the incumbent directors elect the Board of Directors for the following year. Section 6.4 Term of Office. Each officer's term of office shall begin upon the adjournment of the annual meeting at which he or she is elected, and shall end upon the adjournment of the next annual meeting of the Board of Directors, during which meeting his or her successor will be elected. Section 6.5 Maximum Terms of Office. There is no limit to the number of terms that an Officer may serve in a particular office. Section 6.6 Resignation. Any officer may resign at any time by giving written notice of his or her resignation to the Board of Directors. Section 6.7 Removal. Any officer may be removed from office by the affirmative vote of two-thirds of the directors for malfeasance, misfeasance, nonfeasance, lack of sympathy with the purposes of the corporation, or refusal to render reasonable assistance in carrying out the purposes of the corporation. No such vote may be held at a meeting unless the directors who request the vote mailed a written notice to every member of the Board of Directors at least ten (10) days before the meeting, advising all directors that they intend to request such a vote, and stating the name of the officer that they propose to remove and the grounds for the proposed removal. The removal of an officer from office will also remove that officer from the Board of Directors, unless the resolution removing the officer from office expressly states that the officer will remain a member of the Board of Directors. Section 6.8 Vacancies. If any office of the corporation becomes vacant as a result of the resignation, removal, death, or disqualification of any officer, the majority of the directors then in office may elect a member of the Board of Directors to fill the vacancy, and the officer so elected shall hold office and serve until the election and qualification of his successor. BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 10 Section 6.9 Duties and Powers. (a) Powers and Duties of the President. The President shall preside at meetings of the Members and the Board of Directors; shall manage and supervise the business, affairs and property of the corporation, subject, however, to the control of the Board of Directors and to the Members; and shall perform such other duties as are incident to this office or are properly required of or by the Board of Directors. (b) Powers and Duties of the Vice-President. The principal duties of the Vice-President shall be to discharge the duties of the President in the event of the absence or disability for any cause whatsoever of the President, and to perform such other duties as the Board of Directors or the President may from time to time require. (c) Powers and Duties of the Secretary. The principal duties of the Secretary shall be to countersign all contracts and other instruments of the corporation, to affix the seal of the corporation thereto and to such other papers as shall be required or directed to be sealed; to keep a record of the proceedings of meetings of the Members and meetings of the Board of Directors; to be custodian of the corporate records and seal of the corporation; to keep a register of the address of each member; to see that all notices are duly given as required by law and the provisions of these By-Laws; to safely and systematically keep all books, papers, records and documents belonging to the corporation or pertaining to the business thereof; and to perform such other duties as the Board of Directors may from time to time direct. (d) Powers and Duties of the Treasurer. The principal duties of the Treasurer shall be to have charge and custody of and be responsible for all funds and investments of the corporation; to keep an account of all monies received and disbursed, and of monies and property at hand; and to perform such other duties as shall be required by the Board of Directors. Section 6.10 Delegation of Duties. Whenever an officer is absent or whenever for any reason the Board of Directors may deem it desirable, the Board of Directors may delegate the powers and duties of an officer to any other officer or officers or to any director or directors. BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 11 ARTICLE VII. Authorization of Corporate Acts Section 7.1 Gifts. The Board of Directors may accept on behalf of the corporation any contribution, gift, bequest, or devise granted to further the purposes of the corporation. Section 7.2 Contracts. The Board of Directors may authorize any officer or officers or agent or agents to enter into any contract relating to the Association or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 7.3 Loans. No loans shall be contracted on behalf of the Association and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors and unless it relates specifically to the Association. Such authority may be general or confined to specific instances. Section 7.4 Checks and Drafts. All checks, drafts, notes, or other orders for the payment of money or evidences of indebtedness issued in the name of the corporation shall be signed by such officer, officers, agent or agents of the corporation and in such manner as shall from time to time be established by resolution of the Board of Directors. Section 7.5 Deposits. All funds of the Association not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select. Section 7.6 Contracts in which Directors have an Interest. No contract or other transaction of the corporation shall be invalidated or affected by: (i) the fact that any director, individually or jointly with others, may be a party to or have a personal interest in the contract or transaction, or (ii) the fact any director of the corporation has an interest in or is a director or officer of one of the other parties to the transaction; and each person who may become a director of this corporation is hereby relieved from any liability that might otherwise arise by reason of his contracting with the Association for the benefit of himself or any entity in which he may have an interest; provided, that the director fully reveals his interest in the contract or transaction to the Board of Directors, and that the contract or transaction is authorized, approved or ratified by a majority of the directors present at the meeting who do not have any interest in the transaction. Section 7.7 Nonliability of Directors and Officers. The directors and officers of the corporation shall not be liable for the debts and obligations of the BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 12 corporation unless they expressly agree to assume any of such debts or obligations. Section 7.8 Prohibition of Loans to Directors and Officers. No loans shall be made by the corporation to its directors or officers. Any director or officer who assents to or participates in the making of any such loan shall be liable to the corporation for the amount of such loan until the loan is repaid. Section 7.9 Prohibited Activities. Notwithstanding any other provision of these By-Laws, no director, officer, employee, or agent of the corporation shall take any action or carry on any activity by or on behalf of the corporation which is not permitted to be carried on by an organization exempt under Internal Revenue Code § 501(c)(3) and its Regulations, as they now exist or may hereafter be amended, or by organization contributions to which are deductible under Internal Revenue Code § 170(c)(2), as they now exist or may hereafter be amended. ARTICLE VIII. Assessments Section 8.1 Creation of Lien and Obligation. The assessments are to be fixed, established and collected from time to time as provided for in the Declaration and these By-Laws. The assessments, together with interest and costs of collection as provided for in the Declaration and these By-Laws, shall be a charge on the land and shall constitute a lien upon the Unit against which they are made as provided for in the Declaration. Section 8.2 Purpose of Assessments. The assessments levied by the Association shall be used for such purposes as are authorized by the Declaration. Section 8.3 Annual Assessments. The duties of the Board of Directors with respect to annual assessments are as follows: (a) To prepare a budget each year containing estimates of the anticipated general expenses of the Association, together with any reserves which the Board may consider prudent for emergency expenses and the repair or replacement of improvements; (b) To determine the total amount of assessments which will need to be levied on the Members in order to pay those general expenses and provide for those reserves; BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 13 (c) To establish the amount that will be assessed against each Unit in order to pay those general expenses and provide for those reserves, which amount will be the same for all Units with the exception of undeveloped Units owned by the Declarant, which shall not be subject to Annual assessment. (d) To establish the date or dates by which the annual assessments must be paid, and to determine whether they will be payable in a single annual payment or semi-annual or monthly installments; (e) To establish the interest that will be charged on all delinquent assessments; (f) To send written notice of the annual assessments to each Member at least thirty (30) days before the first due date; (g) To perfect the Association's lien upon the Units from time to time by filing in the office of the Clerk and Recorder of Yellowstone County an account of the assessments and interest, if any, which are delinquent with respect to each of the Units, together with a legal description of each of the Units; (h) To take all action required to collect delinquent assessments owed by Members, together with attorney's fees and the other expenses of such collection efforts, including, if necessary, bringing an action to foreclose the Association's lien on the Units which are subject to such assessments; and (i) Upon the demand of any Member and for a reasonable charge set by the Board, to issue a certificate in recordable form setting forth the amount, if any, of assessments and interest owed with respect to any Unit as of the date of the certificate, which certificate will be binding on the Association and conclusive evidence of the amount of assessments and interest owed with respect to the Unit as of the date of the certificate. Section 8.4 Special Assessments. The duties of the Board of Directors with respect to special assessments are as follows: (a) To determine, on its own initiative or upon the petition of any group of Members, whether any group of the Units or Members desires or requires an improvement or service which does not benefit all Units equally; BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 14 (b) To prepare estimates of the total cost of the improvement or service; (c) To propose a method of allocating the cost of the improvement or service among the Units or Members which will benefit from the improvement or service in a manner which is equitable in light of the nature of the improvement or service; (d) To estimate the amount of the special assessment that would be levied each year against the Units which will benefit from the improvement or service if the improvement or service is approved by the Members; (e) To call a special meeting of the Members who are the Owners of the Units which would be subject to the special assessment, to explain the proposed improvement or service, the proposed method of allocating the cost of the improvement or service, and the amount of the special assessment that would be levied against each of such Members each year to pay the cost of the improvement of service; (f) To hold a vote of such Members with respect to the improvement or service and the special assessments required to pay for it, which improvement or service and special assessment must be approved by the votes of two-thirds of each class of Members present at the meeting; and (g) If the improvement or service and special assessments are approved, to collect the special assessments in the same manner as Annual assessment. Section 8.5 Additional Assessments. The Board of Directors shall have the authority to levy additional assessments as provided in the AP-PP Condominiums Owners Association, Inc. Declaration. Section 8.6 Nonpayment of Assessments. Any assessments or installment payments on assessments which are not paid when due shall be delinquent. The Association may take such action as is authorized by the Declaration to collect such delinquent assessments and to enforce the lien of such assessments as provided in the Declaration. No Owner may avoid liability for assessments by non-use of the General Common Areas or abandonment of his or her Unit. BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 15 Section 8.7 Property Subject to Assessment. All Units shall be subject to assessments by the Association as herein provided except those Units acquired by the Association, and the General Common Areas, and except as provided in Section 3.2 hereof or as provided in the Declaration. ARTICLE IX. Amendments Section 9.1 Amendments. The Articles of the Association and these By-laws may be amended, repealed or restated by the affirmative vote of two-thirds of each class of Members. No such action may be approved by the Members unless it was proposed in the form of a resolution at a prior meeting of the Members. CERTIFICATE Gregory M. Dunfield, Steve Dymoke and Heather Grenier hereby certify as follows: 1. We are all of the directors of AP-PP Condominiums Owners Association, Inc., a Montana non-profit Association. 2. The By-Laws set forth above constitute the By-Laws of the Association, duly adopted by the Board of Directors on _________ _____, 2020. DATED this day of _______________, 2020. [Signatures on following pages] BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 16 Gregory M. Dunfield, Director Steve Dymoke, Director ___________________________ Heather Grenier, Direct BYLAWS OF AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Page 17 Return to: Jason C. Harby, LL.M. St. Peter Law Offices, P.C. P.O. Box 17255 Missoula, MT 59808 Declaration AP-PP Condominiums Owners Association, Inc., Declaration Contents PREAMBLE ................................................................................................................................................ 1 ARTICLE I DEFINITIONS ..................................................................................................................... 2 Section 1.01 - Allocated Interest ...................................................................................................... 2 Section 1.02 - Articles. ........................................................................................................................ 2 Section 1.03 - Assessment, Annual ................................................................................................ 2 Section 1.04 - Assessment, Capital Improvement ...................................................................... 2 Section 1.05- Assessment, Reconstruction .................................................................................. 3 Section 1.06- Assessment, Special ................................................................................................. 3 Section 1.07- Association .................................................................................................................. 3 Section 1.08- Beneficiary ................................................................................................................... 3 Section 1.09 Board or Board of Directors ..................................................................................... 3 Section 1.10- Budget ........................................................................................................................... 3 Section 1.11- Bylaws ........................................................................................................................... 3 Section 1.12 - Common Areas-General ......................................................................................... 4 Section 1.12A - Common Areas-Limited ....................................................................................... 4 Section 1.13 - Common Expenses ................................................................................................... 4 Section 1.14 - Declarant ..................................................................................................................... 5 Section 1.15 Declaration .................................................................................................................... 5 Section 1.16- Department ................................................................................................................... 5 Section 1.17 - Maintenance Fund ..................................................................................................... 5 Section 1.18 - Member, Membership ............................................................................................... 5 Section 1.19 - Operating Fund .......................................................................................................... 5 Section 1.20 - Owner ........................................................................................................................... 5 Section 1.21 – Person ......................................................................................................................... 5 Section 1.22- Property or Project ..................................................................................................... 6 Section 1.23- Residential Unit ........................................................................................................... 6 Section 1.24 - Restrictions ................................................................................................................. 6 Section 1.25 - Reserve Fund ............................................................................................................. 6 Section 1.26 - Rules and Regulations ............................................................................................. 6 Section 1.27- Section 42 Compliance Period ................................................................................ 6 Section 1.28- Site Plan ........................................................................................................................ 6 Section 1.29- Tenant Spaces ............................................................................................................. 6 Section 1.30 - Unit ................................................................................................................................ 6 Section 1.31- Unit Designation, Description of Building ........................................................... 7 Section 1.32- Arrowleaf Unit Owner ................................................................................................ 7 Section 1.32A- Perennial Unit Owner .............................................................................................. 7 ARTICLE II AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. ................................... 7 Section 2.01 - Organization of Association, Agent for Service of Process .......................... 7 Section 2.02- Duties and Powers ..................................................................................................... 7 Section 2.02(A) - Unit Committees .................................................................................................. 8 Section 2.03- Membership ................................................................................................................. 8 Section 2.04 – Transfer ....................................................................................................................... 8 Section 2.05 - Classes of Membership ........................................................................................... 9 Section 2.06 - Voting Rights .............................................................................................................. 9 Section 2.07 - Repair and Maintenance by the Association of General Common Areas 10 AP-PP Condominiums Owners Association, Inc., Declaration Section 2.08- Unsegregated Real Property Taxes ..................................................................... 11 Section 2.09 - Repair and Maintenance by Owners .................................................................. 11 Section 2.10- Use of Agent .............................................................................................................. 12 ARTICLE III RIGHTS IN COMMON AREA ......................................................................................... 12 Section 3.01- Association Easement ............................................................................................ 12 Section 3.02- Limited Common Areas Easement ...................................................................... 12 Section 3.03 - Partition ..................................................................................................................... 12 Section 3.04 - Members’ Easements of Use and Enjoyment of General Common Areas and Limited Common Areas ........................................................................................................... 13 Section 3.05- Extent of Members’ Easements ............................................................................ 13 Section 3.06- Delegation of Use ..................................................................................................... 14 Section 3.07- Waiver of Use ............................................................................................................ 14 Section 3.08 - Damage by Member ................................................................................................ 14 ARTICLE IV (RESERVED) ..................................................................................................................... 15 ARTICLE V ASSOCIATION FUNDS AND ASSESSMENTS ........................................................... 15 Section 5.01- Personal Obligation of Assessments ................................................................. 15 Section 5.02 - Purposes of Assessments .................................................................................... 15 Section 5.03 - Basis of Maximum Annual Assessment ........................................................... 16 Section 5.04- Commencement and Collection of Annual Assessments ............................. 16 Section 5.05- Delinquency and Acceleration .............................................................................. 17 Section 5.06 - Creation and Release of Lien ............................................................................... 18 Section 5.07 - Enforcement of Liens ............................................................................................. 18 Section 5.08 - Priority of Assessment Lien ................................................................................. 19 ARTICLE VI PROJECT EASEMENTS AND RIGHTS OF ENTRY ................................................. 20 Section 6.01 - Easements ................................................................................................................. 20 Section 6.02 - Rights of Entry ......................................................................................................... 20 ARTICLE VII UNIT AND USE RESTRICTIONS ................................................................................. 21 Section 7.01- Residential Use Only and Commercial Use Only ............................................. 21 Section 7.02 - Parking and Vehicular Restrictions .................................................................... 21 Section 7.03 - Nuisances .................................................................................................................. 22 Section 7.04 - Signs ........................................................................................................................... 22 Section 7.05- Antennae ..................................................................................................................... 23 Section 7.06- Inside and Outside Installations ........................................................................... 23 Section 7.07 - Animal Regulations ................................................................................................ 23 Section 7.08 - Business or Commercial Activity ....................................................................... 24 Section 7.09 - Rubbish Removal .................................................................................................... 24 Section 7.10 - Section 42 .................................................................................................................. 24 ARTICLE VIII INSURANCE ................................................................................................................... 24 AP-PP Condominiums Owners Association, Inc., Declaration Section 8.01- Duty to Obtain Insurance; Types ......................................................................... 24 Section 8.02 - Waiver of Claim Against Association ................................................................ 25 Section 8.03 - Right and Duty of Owners to Insure ................................................................... 25 Section 8.04 - Notice of Expiration Requirements .................................................................... 25 Section 8.05 - Insurance Premiums .............................................................................................. 25 Section 8.06 - Trustee for Policies ................................................................................................. 26 Section 8.07 - Actions as Trustee .................................................................................................. 26 ARTICLE IX DESTRUCTION OF IMPROVEMENTS ........................................................................ 26 Section 9.01 - Reconstruction of the Property-General Common Areas ............................ 26 Section 9.01A - Reconstruction of the Property-Unit 1, Unit 2, Unit 3, Unit 4 and Appurtenant Limited Common Areas. .......................................................................................... 27 Section 9.02 - Interior Damage ....................................................................................................... 28 Section 9.03 - Notice to Owners and Listed Mortgages ........................................................... 28 ARTICLE X DURATION AND AMENDMENT .................................................................................... 28 Section 10.01 - Duration ................................................................................................................... 28 Section 10.02 - Amendment ............................................................................................................ 29 Section 10.03 - Protection of Declarant’s .................................................................................... 29 ARTICLE XI GENERAL PROVISIONS ................................................................................................ 29 Section 11.01 - Legal Proceedings ................................................................................................ 29 Section 11.02 - Violation of Restrictions ...................................................................................... 30 Section 11.03 - Severability ............................................................................................................. 30 Section 11.04 - Interpretation .......................................................................................................... 31 Section 11.05 - No Public Right or Dedication ........................................................................... 31 Section 11.06 - No Representations or Warranties ................................................................... 31 Section 11.07 - Nonliability and Indemnification ....................................................................... 31 Section 11.08 - Notices ..................................................................................................................... 32 Section 11.09 - Priorities and Inconsistencies ........................................................................... 33 EXHIBITS A – Site Plan B – Allocated Interests C– Articles of Incorporation of the Association D – By-Laws of the Association E – Certification of compliance with Mont. Code Ann § 76-3-203 F – Certification from Montana Department of Revenue Pursuant to Mont. Code Ann. § 70-23-303. Page 1 AP-PP Condominiums Owners Association, Inc., Declaration AP-PP Condominiums Owners Association, Inc. ~ DECLARATION ~ THIS DECLARATION IS MADE BY MT ARROWLEAF LLLP and MT PERENNIAL LLLP PREAMBLE A. Declarant’s are the owners of certain real property (“AP-PP Condominiums”) located in at 1750 Sacco Drive, Bozeman, Montana, being more particularly described as follows: Lot 3A of Minor Subdivision No. 407A and Saccoccia Common Open Space of the Saccoccia Minor Subdivision No. 407, City of Bozeman, Gallatin County, Montana, according to the official plat thereof on file and of record in the office of the County Clerk and Recorder, Gallatin County, Montana. B. It is the desire and intention of Declarant’s to develop the Property (as hereinafter defined) into Condominium estates, pursuant to the Montana Unit Ownership Act (the “Act”) and to impose mutually beneficial restrictions under a general plan of improvement for the benefit of all the condominium estates created. C. Declarant’s hereby declare that all of the Property is to be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the following limitations, restrictions, reservations, rights, easements, conditions and covenants, all of which are declared and agreed to be in furtherance of a plan for the protection, subdivision, maintenance, improvement and sale of the Property for the purpose of enhancing the value, desirability and attractiveness of the Property. All provisions of this Declaration, including without limitation the easements, uses, obligations, covenants, conditions and restrictions hereof, are hereby imposed as equitable servitudes upon the Property. All of the limitations, restrictions and reservations, rights, easements, conditions and covenants herein shall run with and burden the Property and shall be binding on and for the benefit of all of the Property and all Persons having or acquiring any right, title or interest in the Property or any part thereof and their respective heirs, executors, administrators, personal representatives, successors, assigns, tenants, employees, guests and invitees. D. Declarant’s, it successors, assigns and grantees, covenant and agree that the undivided interest in the General Common Areas, the membership in the Association, any easements conveyed therewith and the fee title to each respective Unit conveyed therewith shall not be separated or separately conveyed, and each such undivided interest, membership and easement shall be deemed to be conveyed or encumbered Page 2 AP-PP Condominiums Owners Association, Inc., Declaration with its respective Unit even though the description in the instrument of conveyance or encumbrance may refer only to the Unit; provided, however, that this restriction upon the severability of the component interests of the Units shall not extend beyond the period for which the right to partition the Property is suspended in accordance with Montana law. E. The Condominium shall be composed of no more than four (4) Units, which shall be referred to herein as “Unit 1”, Unit 2", “Unit 3” and “Unit 4” and the Buildings constructed therein as indicated on the Site Plan attached hereto as Exhibit A. It is the intention of Declarant’s that the Unit Owner or Owners, as the case may be, of each respective Unit and the Buildings constructed therein shall be responsible for the care, maintenance and repair of their respective Units and the Buildings constructed therein. Further, as provided herein, each Unit shall form a committee of Unit Owners, or shall designate a property manager or agent, to attend to any maintenance, repair, or care, and any related annual or special assessments respecting each Unit and the Buildings constructed thereon. It is the intention of the Declarant’s that both Unit 1, Unit 2, Unit 3 and Unit 4 shall be initially constructed and maintained as low-income residential housing units. ARTICLE I DEFINITIONS Unless otherwise expressly provided, the following words and phrases when used in this Declaration shall have the following specified meanings. Section 1.01 - Allocated Interest “Allocated Interest” means the percentage undivided interest in the General Common Areas allocated to each of the Units as set forth on Exhibit B. Section 1.02 - Articles. “Articles” shall mean the Articles of Incorporation of the Association, filed or to be filed in the Office of the Secretary of State of the State of Montana, a true copy of which is attached hereto, marked Exhibit C, as such Articles may be amended from time to time. Section 1.03 - Assessment, Annual “Annual Assessment” shall mean a charge against a particular Owner and his Unit, representing a portion of the Common Expenses which are to be paid by each Owner to the Association in the manner and proportions provided herein. Such Assessment may be billed and collected by the Association in monthly installments. The charges will be determined by the Board of Directors. Section 1.04 - Assessment, Capital Improvement “Capital Improvement Assessment” shall mean a charge against a particular Owner and his Unit, representing a portion of the expenses which are to be paid by such Owner that pertain or relate to capital improvements approved by, in the case of General Common Areas, the Association, or, in the case of a Unit or a Limited Common Area Page 3 AP-PP Condominiums Owners Association, Inc., Declaration with respect thereto, the Unit Committee applicable to such Unit as provided in Section 2.02A hereof. Section 1.05- Assessment, Reconstruction “Reconstruction Assessment” shall mean a charge against a particular Owner and his Unit, representing a portion of the expenses which are to be paid by such Owner that pertain or relate to reconstruction costs, as approved by the Association, or, in the case of a Unit or a Limited Common Area with respect thereto, the Unit Committee applicable to such Unit as provided in Section 2.02A hereof. Section 1.06- Assessment, Special “Special Assessment” shall mean a charge against a particular Owner directly attributable to, or reimbursable by, the Owner, equal to the cost incurred by the Association for corrective action performed pursuant to the provisions of this Declaration, or a reasonable fine or penalty assessed by the Board, plus interest and other charges on such Special Assessments as provided for in this Declaration. Special Assessments shall not include any late payment penalties, interest charges or costs (including attorneys’ fees) incurred by the Association in the collection of Annual, Capital Improvement and Reconstruction Assessments. Section 1.07- Association “Association” shall mean AP PP Condominiums Owners Association, Inc., a Montana non-profit corporation, its successors and assigns. Section 1.08- Beneficiary “Beneficiary” shall mean a Mortgagee under a Mortgage or a Beneficiary under a Deed of Trust, as the case may be, and the assignees of such Mortgagee or Beneficiary. Section 1.9 Board or Board of Directors “Board of Directors” or “Board” shall mean the Board of Directors of the Association, as provided in this Declaration and in the Articles and Bylaws of the Association, and the Act. Section 1.10- Budget “Budget” shall mean a written, itemized estimate of the income and Common Expenses of the Association in performing its functions under this Declaration, which Budget shall be prepared pursuant to the Bylaws. Section 1.11- Bylaws “Bylaws” shall mean the Bylaws of the Association as adopted by the Board initially in the form of Exhibit “D”, attached hereto, as such Bylaws may be amended from time to time in accordance with the terms thereof. Page 4 AP-PP Condominiums Owners Association, Inc., Declaration Section 1.12 - Common Areas-General “General Common Areas” shall mean all areas on the Project identified in the Site Plan, except the Units, or areas that are designated “Limited Common Areas”. General Common Areas shall include, without limitation, for maintenance purposes of the Association, but not necessarily by way of fee title, all gas, water and waste pipes, all sewers, all ducts, chutes, conduits, wires and other utility installations which are not specifically designated as “Limited Common Areas”, as depicted in Exhibit A or which are not otherwise clearly within or appurtenant to either Unit 1, Unit 2, Unit 3 and Unit 4. Each Unit Owner shall have an undivided interest in the General Common Areas to the extent of its Allocated Interest. The General Common Areas shall be the joint responsibility of all Unit Owners in the Project in accordance with their Allocated Interest. Section 1.12A- Common Areas-Limited “Limited Common Areas” shall mean ___________________ The Limited Common Areas appurtenant to Unit 1 and Unit 2 shall be the exclusive responsibility of the Arrowleaf Unit Owner. The Limited Common Areas appurtenant to Unit 3 and Unit 4 shall be the exclusive responsibility of the Perennial Unit Owner. Section 1.13 - Common Expenses “Common Expenses” shall mean those expenses for which the Association is responsible under this Declaration, and for which each Unit Owner will be responsible to the extent of its Allocated Interest (except as may otherwise be specified herein) including the actual and estimated costs of: maintenance, management, operation, repair and replacement of the General Common Area; the cost of maintenance of any recreational facilities on the General Common Areas; the cost of maintenance of those public parkway areas which the Association is obligated to maintain, if any; the costs of any and all utilities metered to more than one Unit and other commonly metered charges for the Property, if any; the cost of management and administration of the Association including, but not limited to, compensation paid by the Association to managers, accountants, attorneys and other employees; the costs of all gardening, security, clustered mailboxes and other services benefitting the General Common Areas; the costs of fire, casualty and liability insurance, workers’ compensation insurance, errors and omissions and director, officer and agent liability insurance, and other insurance covering the Property and the directors, officer and agents of the Association; the costs of bonding of the members of the Board; taxes paid by the Association, including any blanket tax assessed against the General Common Area; amounts paid by the Association for discharge of any lien or encumbrance levied against the General Common Area, or portions thereof; and the costs of any other item or items incurred by the Association, for any reason whatsoever in connection with the General Common Area, for the common benefit of the Owners. The Board shall, at least annually, meet to determine the Common Expenses that shall be apportioned to each Unit. Page 5 AP-PP Condominiums Owners Association, Inc., Declaration Section 1.14 – Declarant’s “Declarants” shall mean MT Arrowleaf LLLP, a Montana limited liability limited partnership and MT Perennial LLLP, a Montana limited liability limited partnership, their successors, and any Person to which it shall have assigned any of its rights hereunder by an express written assignment, and as permitted by the Act. Section 1.15- Declaration “Declaration” shall mean the within Declaration, as it may be amended from time to time as provided herein, and as permitted by the Act. Section 1.16- Department “Department” shall mean the Montana Department of Revenue. Section 1.17 - “Maintenance Fund” “Maintenance Fund” shall refer to such fund or money held by the Association on behalf of each Unit to pay expenses associated with maintenance, repair, or improvements approved by each individual Unit Owner. Section 1.18 - Member, Membership “Member” shall mean every Person holding a membership in the Association, pursuant to Section 2.03 hereof. “Membership” shall mean the property, voting and other rights and privileges of Members as provided herein, together with the correlative duties and obligations contained in this Declaration and the Articles and Bylaws. Section 1.19 - Operating Fund “Operating Fund” shall refer to such fund of money held by the Association on behalf of each Unit Owner to pay the normal operating expenses or other charges or liabilities, or obligations of the Association with regard to each Unit. Section 1.20 - Owner “Owner” shall mean the record owner of a fee interest in any Unit, including the buyer under a contract for deed, and excluding other persons having and interest in the Unit merely as security for the performance of obligations, unless such Person has acquired record title to the Unit pursuant to foreclosure or any proceedings in lieu of foreclosure. Section 1.21 – Person “Person” shall mean a natural person, a trustee, a personal representative, a corporation, a partnership, a limited liability company, a limited liability limited partnership, a joint venture, a government entity, or any other individual or entity capable of holding title to real property. Section 1.22- Property or Project “Property” or “Project” shall mean the property identified above in the Preamble to this Declaration. The Property shall be known as AP-PP Condominiums. Page 6 AP-PP Condominiums Owners Association, Inc., Declaration Section 1.23- Residential Unit “Residential Unit” or “Residence” shall mean a Unit specifically intended for residential use, as depicted on the Site Plan, attached hereto as Exhibit A. Section 1.24 - Restrictions “Restrictions” shall mean this Declaration, the Articles, Bylaws and the Rules and the Regulations of the Association from time to time in effect Section 1.25 - Reserve Fund “Reserve Fund” shall refer to such fund of money held by the Association on behalf of each Unit to pay expenses associated with the replacement and improvement of each Unit and the Building constructed thereon approved by Individual Unit Owners. Section 1.26 - Rules and Regulations “Rules and Regulations shall mean those rules and regulations established by the Board of Directors for the Association in accordance with the Articles of Incorporation and By-laws of the Association. Section 1.27- Section 42 Compliance Period For purposes of this Declaration, “Compliance Period” shall have the meaning set forth in Section 8.04, hereof. Section 1.28- Site Plan “Site Plan” shall refer to the site plan attached to this Declaration as Exhibit A. Section 1.29- Tenant Spaces “Tenant Spaces” shall refer to the individual rental units within each Unit of the Project. Section 1.30 - Unit “Unit” shall mean the elements of the Property not owned in common with the Owners of other Units in the Project. Each of the Units shall be a separate fee simple estate as separately shown, numbered and designated in the Site Plan attached as Exhibit A, including the Limited Common Areas appurtenant to such Unit, as well as the undivided interest in the General Common Areas to the extent of its Allocated Interest. Each such Unit consists of a fee interest in the real estate upon which it is built (to the extent of its Allocated Interest), space bounded by and contained within the interior unfinished (meaning exclusive of wall coverings, floor coverings, fixtures, or decorations) surfaces of the perimeter walls, floors, ceilings, windows, and doors of each individual Unit, as shown and defined in the Site Plan. On those sides where the Site Plan shows that exterior walls or structural interior walls of the building in which the Unit is located bound the Unit, the interior unfinished surfaces of such walls shall be the lateral boundaries of the Unit. On those sides of a Unit where no structural interior wall bounds the Unit, the lateral boundaries of such Unit Page 7 AP-PP Condominiums Owners Association, Inc., Declaration shall be shown on the Site Plan; provided however, that such lateral boundaries shall extend to the center lines of any partitions which may be constructed from time to time along such boundaries. Section 1.31- Unit Designation, Description of Building The Project shall consist of no more than four (4) Units and the buildings constructed thereon. Unit 1 will consist of ____ buildings. Each building within Unit 1 will be three (3) stories and shall be of wood frame construction. Unit No. 2 will consist of ___ buildings. Each Building in Unit 2 will be three (3) stories and shall be of wood frame construction. Unit 3 will consist of one (1) buildings. The building within Unit 3 will be one (1) story and shall be of wood frame construction. Unit No. 4 will consist of one (1) building. Each Building in Unit 4 will be one (1) story and shall be of wood frame construction. The Units are designated “Unit 1", “Unit 2", “Unit 3” and “Unit 4” as shown on Exhibit A. Section 1.32- Arrowleaf Unit Owner Arrowleaf Unit Owner is MT Arrowleaf LLLP, a Montana limited liability limited partnership. Section 1.32A- Perennial Unit Owner Perennial Unit Owner is MT Perennial LLLP, a Montana limited liability limited partnership. ARTICLE II AP-PP CONDOMINIUMS OWNERS ASSOCIATION, INC. Section 2.01 - Organization of Association, Agent for Service of Process The Association is or shall be incorporated under the name of AP-PP Condominiums Owners Association, Inc., as a nonprofit corporation under the Nonprofit Corporation Law of the State of Montana. For purposes of Montana Code Annotated §70-23-901 the agent for service of process is Human Resource Development Council of District IX, Inc., whose place of business within the county in which the Property is located is 32 South Tracy Ave. Bozeman, Montana 59715. Section 2.02- Duties and Powers The duties and powers of the Association are those set forth in the Declaration, the Articles and Bylaws, together with its general and implied powers of a nonprofit mutual benefit corporation, generally, to do any and all things that a corporation organized under the laws of the State of Montana may lawfully do which are necessary or proper, in operating for the peace, health, comfort, safety and general welfare of its Members, subject only to the limitations upon the exercise of such powers as are expressly set forth in the Articles, the Bylaws and in this Declaration. The Association shall further have the right to install or construct capital improvements on the General Common Areas. The Association may at any time, and from time to time reconstruct, replace or refinish any Improvement portion thereof upon the General Common Areas in accordance with the original design, finish or standard of construction of such Improvement; replace destroyed trees or other vegetation and plant trees, shrubs and ground cover upon any portion of the General Common Areas. The Association may Page 8 AP-PP Condominiums Owners Association, Inc., Declaration employ personnel necessary for the effective operation and maintenance of the General Common Areas, including the employment of legal, management and accounting services. The Association shall make available for inspection by any prospective purchaser of a Unit, any Owner of a Unit, and the Beneficiaries, prospective Beneficiaries, insurers and guarantors of the first Mortgage on any Unit, current copies of the Declaration, the Articles, the Bylaws, the Rules and Regulations and all other books, records, and financial statements of the Association. Section 2.02(A) - Unit Committees The Unit Committee for Unit 1 shall consist solely of the Owner of Unit 1 or the Property Manager appointed by the Owner of Unit 1. The Unit Committee for Unit 2 shall consist solely of the Owner of Unit 2 or the Property Manager appointed by the Owner of Unit 2. The Unit Committee for Unit 3 shall consist solely of the Owner of Unit 3 or the Property Manager appointed by the Owner of Unit 3. The Unit Committee for Unit 4 shall consist solely of the Owner of Unit 4 or the Property Manager appointed by the Owner of Unit 4 (the Unit Committee for Unit 1, Unit Committee for Unit 2, Unit Committee for Unit 3 and Unit Committee for Unit 4 are sometimes collectively referred to as the “Unit Committees”). Each such Unit Committee or Property Manager shall have the powers and duties prescribed in the Association Bylaws. Such powers and duties shall include, without limitation, the power to determine maintenance, care, repair or improvements within or appurtenant to each Building, and to fix any Special or Annual Building Assessments relating solely to such Building (which may be billed centrally through the Association at the request of the of the Unit Owners). Section 2.03- Membership Every Owner, upon becoming the fee simple Owner including the buyer under a contract for deed, but excluding the seller under a contract for deed and other persons having an interest in a Unit merely as security for the performance of an obligation (unless such Person has acquired record title to the Unit by foreclosure or any proceedings in lieu of foreclosure), shall automatically become a Member of the Association, and shall remain a Member thereof until such time as his ownership ceases for any reason, at which time his Membership in the Association shall automatically cease. Ownership of a Unit shall be the sole qualification for Membership in the Association. All Memberships shall be appurtenant to the Unit. Section 2.04 – Transfer The Membership held by any Owner shall not be transferred, pledged or alienated in any way, except upon the sale or encumbrance of such Owner’s Unit, or as otherwise approved by the Association, and then only to the purchaser or Beneficiary of such Unit. A prohibited transfer is void and will not be reflected upon the books and records of the Association. A Member who has sold his Unit to a contract purchaser under an agreement to purchase shall delegate to the contract purchaser his Membership rights in the Association. The delegation shall be in writing and shall be delivered to the Board before the contract purchaser may vote. However, the contract seller shall remain liable for all charges and assessments attributable to his Unit until fee title to the Unit sold is transferred, as further provided in Section 5.01 of this Declaration. If the Owner of any Page 9 AP-PP Condominiums Owners Association, Inc., Declaration Unit fails or refuses to transfer the Membership registered in his name to the purchaser of the Unit upon transfer of fee title thereto, the Board of Directors shall have the right to record the transfer upon the books of the Association. The Association may levy a reasonable transfer fee against a new Owner and his Unit (which fee shall be added to the Annual Assessment chargeable to such new Owner) to reimburse the Association for the administrative cost of transferring the membership to the new owner on the records of the Association. Notwithstanding anything contained in this Section 2.04, the Membership held by the Owner of Unit 1, the Membership held by the Owner of Unit 2, the Membership held by the Owner of Unit 3 and the Membership held by the Owner of Unit 4 may be pledged as a part of the construction or permanent financing for the Owner’s respective Unit. Section 2.05 - Classes of Membership The Association shall have one (1) class of voting Membership. Section 2.06 - Voting Rights (a) All voting rights shall be subject to the Restrictions. (b) At any meeting of the Association, each Owner, except as otherwise provided in Section 10.03 of this Declaration with respect to the protection of the Declarant’s, shall be entitled to cast no more than one (1) vote for each Unit owned as shown on the Site Plan. Where there is more than one (1) record Owner of a Unit (“co-owners”), all of those co-owners shall be Members and may attend any meeting of the Association, but only one (1) of those co-owners shall be entitled to exercise the single vote to which the Unit is entitled. Co-owners owning the majority interests in a Unit shall from time to time designate in writing one (1) of their number to vote. Fractional votes shall not be allowed, and the vote for each Unit shall be exercised, if at all, as a Unit. Where no voting co-owner is designated or if the designation has been revoked, the vote for the Unit shall be exercised as the co-owners owning the majority interests in the Unit mutually agree. Unless the Board receives a written objection in advance from a co-owner, it shall be conclusively presumed that the corresponding voting co-owner is acting with the consent of his co-owners. No vote shall be cast for any Unit if the co-owners present in person or by proxy owning the majority interests in such Unit cannot agree to said vote or other action. The nonvoting co-owner or co-owners shall be jointly and severally responsible for all of the obligations imposed upon the jointly-owned Unit and shall be entitled to all other benefits of ownership. All agreements and determinations lawfully made by the Association in accordance with the voting procedures established herein, or in the Articles of Incorporation or Bylaws of the Association, shall be deemed to be binding on all Owners, their successors and assigns. Voting shall be by class. Any action presented to the Members by the Association must be approved by a majority of Unit 1 Owners, by a majority of the Unit 2 Owners, by a majority of the Unit 3 Owners, and by a majority of the Unit 4 Owners. Page 10 AP-PP Condominiums Owners Association, Inc., Declaration (c) During the Initial Meeting of the Association, and at each annual meeting thereafter, the directors of the Association shall be appointed in accordance with the Articles of the Association. Section 2.07 - Repair and Maintenance by the Association of General Common Areas The Association shall paint, maintain, repair and replace the General Common Areas and improvements thereon, if any, or shall contract for such maintenance, repair and replacement to assure maintenance of the General Common Areas and improvements thereon in a clean, sanitary and attractive condition reasonably consistent with the level of maintenance reflected in the most current Budget on file with and approved by the Department. However, the Association shall not be responsible for or obligated to perform those items of maintenance, repair or improvement of the Units which is the responsibility of the Owners as provided in Article II, Section 2.09 hereof. Association maintenance, repair or improvements shall include, without limitation, the right, without obligation, to perform all corrective janitorial, landscaping and repair work within any Unit, if the Owner fails to repair it; the repair and payment for all centrally metered utilities, water charges, and mechanical and electrical equipment in the General Common Areas, if any; payment of all charges for all utilities which serve individual Units but which are subject to a meter common to the entire Property, if any; payment of all Common Expenses and charges for water and utilities servicing recreational amenities in the General Common Areas; the repair and maintenance of all walks, private driveways and other means of ingress and egress with in the property within the General Common Areas (except as may be otherwise specified in any easement approved pursuant to the terms hereof with respect to any General Common Areas), and if determined by the Board to be economically feasible, an inspection and preventative program for the prevention and eradication of infestation by wood- destroying and other pests and organisms in the General Common Areas. All such costs of maintenance, repairs and replacements for the General Common Area shall be paid for as Common Expenses out of the Association Funds as provided in this Declaration. All work performed by the Association for and on behalf of an Owner as permitted hereunder which work is not the responsibility of the Association shall be charged to the Owner as a Special Assessment. It shall further be the affirmative duty of the Board of Directors to require strict compliance with all provisions of this Declaration and to cause the Units to be inspected by the related Unit Committee for any violation thereof. The cost of any maintenance, repairs or replacements by the Association arising out of, or caused by, the act of an Owner or such Owner’s family, tenants, guests, invitees, or agents shall, after Notice and Hearing, be levied by the Board as a Special Assessment against such Owner. All such painting, repair, maintenance and replacement, as the case may be, of the General Common Areas shall be equally apportioned among Units within the Project according to its Allocable Interest except as provided in Section 1.14 of this Declaration. All such painting, repair or maintenance which is solely within either Building, shall be apportioned among the Unit Owner(s) of such Building. Page 11 AP-PP Condominiums Owners Association, Inc., Declaration Section 2.08- Unsegregated Real Property Taxes To the extent not assessed to or paid by the Unit Owners, the Association shall pay all real and personal property taxes and assessments levied upon any portion of the Property. In addition, if Unit 1, Unit 2, Unit 3 and Unit 4 are taxed under a blanket tax bill covering all of such Units on the Property, each Owner shall pay his proportionate share of any installment due under the blanket tax bill to the Association at least ten (10) days prior to the delinquency date; and the Association shall transmit the taxes to the appropriate tax collection agency on or before the delinquency date. Blanket taxes shall be allocated on a pro rata basis among the Units, based upon the ratio of the square footage in each Unit to the total square footage of the Property. The Association shall, at least forty-five (45) days prior to the delinquency date of any blanket tax installment, deliver to each Owner of such Unit a copy of the tax bill, along with a written notice setting forth the Owner’s obligation to pay is proportionate share of the tax installment and the potential additional charges to the Owner for failure to comply. The Association may elect to pay the taxes on behalf of any Owner who does not pay his proportionate share. In such event, the Association shall levy a Special Assessment against any delinquent Owner in the amount of any sum advanced, plus interest at the rate of ten percent (10%) per annum and may, in addition, include as part of the Special Assessment an amount necessary to reimburse the Association for any penalty or late charge actually assessed in connection with the blanket tax bill, for which a late charge results from the failure of the delinquent Owner(s) to make timely payment of his proportionate share of the taxes. Any payments in lieu of taxes that may be assessed with respect to Unit 1, Unit 2, Unit 3 and Unit 4 shall be the sole responsibility of the Unit Owners based on the same square footage ratio laid out above. Section 2.09 - Repair and Maintenance by Owners Each Owner shall maintain, repair, replace, paint, paper, plaster, tile, finish and restore or cause to be so maintained, repaired, replaced and restored, at his sole expense, all portions of its Unit, as well as the windows, light fixtures actuated from switches controlled from, or separately metered to, such Owner’s Unit, and the interior surfaces of the walls, ceilings, floors, doors, including exterior doors, and permanent fixtures, as well as the decking, railing, and other non-structural components of their decks in a clean, sanitary and attractive condition, in accordance with the Site Plan and the original construction design of the improvements in the Project. It shall further be the duty of each Owner to pay when due all charges for any utility service which is separately metered to his Unit. Subject to any required approval of the Unit Committee. Each Owner shall be responsible for maintaining those portions of any heating and cooling equipment and other utilities which are located within or which exclusively serve his Unit. In addition, each Owner shall be responsible for maintaining and repairing the air conditioning pad which supports or will support the air conditioning compressor serving such Owner’s Unit. Page 12 AP-PP Condominiums Owners Association, Inc., Declaration Section 2.10- Use of Agent The Board of Directors, on behalf of the Association, may contract with a Manager for the performance of maintenance and repair and for conducting other activities on behalf of the Association. The term of such contract, or any contract with Declarant’s for the furnishing of services to the Association, shall not exceed one (1) year, renewable by agreement of the parties for successive one-year periods, and such contract shall be terminated by the Association, acting through the Board, at any time (a) for cause upon thirty (30) days’ written notice thereof, and (b) without cause or upon ninety (90) days’ written notice. ARTICLE III RIGHTS IN GENERAL COMMON AREAS and LIMITED COMMON AREAS Section 3.01- Association Easement The Association shall have an easement over the General Common Area for purposes described in this Declaration. The Association’s obligations with respect to maintenance of the General Common Areas shall commence on the date the Property receives its Certificate of Occupancy from the City of Bozeman, Montana; and upon such date, the Association shall be deemed to have accepted its responsibilities to maintain and manage the General Common Areas. Section 3.02- Limited Common Areas Easement Each Owner or Owners, as the case may be, of Unit 1 shall have a nonexclusive easement of access, ingress, egress, use and enjoyment of the Limited Common Areas appurtenant to Unit 1. Each Owner or Owners, as the case may be, of Unit 2 shall have a nonexclusive easement of access, ingress, egress, use and enjoyment of the Limited Common Areas appurtenant to Unit 2. Each Owner or Owners, as the case may be, of Unit 3 shall have a nonexclusive easement of access, ingress, egress, use and enjoyment of the Limited Common Areas appurtenant to Unit 3. Each Owner or Owners, as the case may be, of Unit 4 shall have a nonexclusive easement of access, ingress, egress, use and enjoyment of the Limited Common Areas appurtenant to Unit 4. The obligations with respect to maintenance of the Limited Common Areas appurtenant to each Unit for each respective Owner shall commence on the date the Property received its Certificate of Occupancy from the City of Bozeman, Montana; and upon such date, the respective Unit Owner shall be deemed to have accepted its responsibilities to maintain and manage the Limited Common Areas. Section 3.03 - Partition Except as provided in this Declaration, there shall be no judicial partition of the General Common Areas, or any part thereof, for the term of the Project, nor shall Declarant’s, any Owner or any other Person acquiring any interest in any Unit in the Project seek any such judicial partition. Page 13 AP-PP Condominiums Owners Association, Inc., Declaration Section 3.04 - Members’ Easements of Use and Enjoyment of General Common Areas and Limited Common Areas Subject to the provisions of this Declaration, every member of the Association shall have, for it, its assigns, its tenants and guests, a nonexclusive easement of access, ingress, egress, use and enjoyment of, in and to the General Common Areas, and such easements shall be appurtenant to and shall pass with title to every Unit in the Project. The Unit Owners of each respective Unit shall have, for himself, his family, his tenants and guest or invitees, a nonexclusive easement of access, ingress, egress, use and enjoyment of, in and to the Limited Common Areas designated in the Site Plan with respect to each such Unit. Section 3.05 - Extent of Members’ Easements The rights and easements of use and enjoyment of the General Common Areas created by this Declaration shall be subject to the Restrictions, which include, without limitation, the following: (a) The right of the Board to suspend the rights and easements of any Member, and the Persons deriving such rights and easements from any Member, for any period during which the payment of any, Annual Building, or Special Assessment against the Member and his Unit remains delinquent, and, after Notice and Hearing as provided in the Bylaws, to suspend such rights and easements for the period set forth in the Bylaws for any violation of the Restrictions, it being understood that any suspension for either nonpayment of any Assessment or breach of the Restrictions shall not constitute a waiver or discharge of the Member’s obligation to pay assessments as provided in this Declaration; (b) The right of the Association to consent to or otherwise cause the construction of additional improvements on the General Common Areas and to consent to or otherwise cause the alteration or removal of any existing improvements on the General Common Areas for the benefit of the Members of the Association; (c) The right of the Association, acting through the Board of Directors, to grant, consent to or join in the grant or conveyance of easements, licenses or rights-of-way in, on or over the General Common Areas for purposes not inconsistent with the intended use of the Property as a residential Unit project; (d) Subject to the provisions of this Declaration, the right of each Owner to the exclusive use and occupancy for the purposes designated in this Declaration to his respective Unit. (e) The rights and reservations of Declarant’s as set forth in this Declaration; Page 14 AP-PP Condominiums Owners Association, Inc., Declaration (f) The right of the Association, acting through the Board of Directors, to reasonably restrict access to roofs, maintenance and landscaped areas and similar areas of the Property within the General Common Areas; (g) The right of the Association to reasonably limit the number of guests and tenants of the Owners using the General Common Areas; and (h) The right of the Association, acting through the Board, to establish uniform Rules and Regulations for the use of the General Common Areas, as provided in this Declaration. Section 3.06- Delegation of Use Any Member entitled to the right and easement of use and enjoyment of the General Common Areas and Limited Common Areas may delegate, in accordance with the Bylaws, its right to use and enjoyment of the General Common Areas and Limited Common Areas to his tenants, contract purchasers or subtenants who reside in his Unit, subject to reasonable regulation by the Board. Section 3.07- Waiver of Use No Member may exempt himself from personal liability for Assessments duly levied by the Association or effect the release of his Unit from the liens and charges thereof, by waiving use and enjoyment of the General Common Areas or by abandoning his Unit. Section 3.08 - Damage by Member To the extent permitted by Montana law, each Member shall be liable to the Association for any damage to the General Common Areas not fully reimbursed to the Association by insurance if the damage is sustained because of the negligence, willful misconduct or unauthorized or improper installation or maintenance of any Improvement by the Member, his guests, tenants or invitees, or any other Persons deriving their right and easement of use and enjoyment of the General Common Areas from the Member, or his or their respective family and guests, both minor and adult. However, the Association, acting through the Board, reserves the right to determine whether any claim shall be made upon the insurance maintained by the Association, and the Association further reserves the right, after Notice and Hearing as provided in the Bylaws, to levy a Special Assessment equal to the increase, if any, in insurance premiums directly attributable to the damage caused by the Member or the Person for whom the Member may be liable as described above. In the case of joint ownership of a Unit, the liability of the Owners shall be joint and several, except to the extent that the Association shall have previously contracted in writing with the joint owners to the contrary. After Notice and Hearing as provided in the Bylaws, the cost of correcting the damage to the extent not reimbursed to the Association by insurance shall be a Special Assessment against such Member’s Unit and may be enforced as provided herein. Page 15 AP-PP Condominiums Owners Association, Inc., Declaration ARTICLE IV (RESERVED) ARTICLE V ASSOCIATION FUNDS AND ASSESSMENTS Section 5.01- Personal Obligation of Assessments Declarant’s, for each Unit owned by Declarant’s, hereby covenants and agrees to pay, and each Owner, by acceptance of a deed of a Unit whether or not it shall be so expressed in any such deed, is deemed to covenant and agree to pay to the Association all Annual Assessments for Common Expenses and all applicable Annual Unit Assessments and Special Assessments. Except as provided in this Section 5.01, all such assessments, together with interest, costs, and reasonable attorneys’ fees shall be a separate, distinct and personal obligation of the Person who was the Owner of the Unit at the time when the assessment fell due. This personal obligation cannot be avoided by abandonment of the Unit or by an offer to waive use of the General Common Areas. The Association may impose a reasonable late fee for any payment of any Annual Unit Assessment, Capital Improvement Assessments, Reconstruction Assessments or Special Assessment. In the case of the monthly installments for the Annual Assessment, the Association may charge a late fee of Ten Dollars ($10.00) for any such monthly installment which is paid more than seven (7) days after such monthly installment is due. Unless provided otherwise by the Association, each monthly installment shall be due on the 1st day of each calendar month. Section 5.02 - Purposes of Assessments The assessments levied by the Board of Directors on behalf of the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents of the Units, for the operation, replacement, improvement and maintenance of the Property, and to discharge any other obligations of the Association under this Declaration. All amounts deposited into the Funds for Annual Assessment must be used solely for the common benefit of all of the Unit Owners for purposes authorized by this Declaration. Disbursements from the Operating Fund shall be made by the Board of Directors for such purposes as may be necessary for the discharge of its responsibilities herein for the common benefit of all of the Owners, other than those purposes for which disbursements from the Reserve Fund are to be used. Disbursements from the Reserve Fund shall be made by the Board of Directors only for the respective purposes specified in this Article V. Nothing in this Declaration shall be construed in such a way as to prohibit the Association from using any assessments to abate any annoyance or nuisance emanating from outside the boundaries of the Property. Annual Assessments shall be used to satisfy Common Expenses of the Association, as provided herein and in the Bylaws. The Association shall separately account for and separately maintain the Unit Fund, Operating Fund, Reserve Fund, Reconstruction Fund and Capital Improvement Fund with respect to each Unit. Additionally, such funds with respect to Unit 1, Unit 2, Unit 3 and Unit 4 shall be held by the Owner of Unit 1, Unit 2, Unit 3 and Unit 4, respectively, in accordance with Section 42 of the Internal Revenue Code and the regulations promulgated thereunder. Page 16 AP-PP Condominiums Owners Association, Inc., Declaration Section 5.03 - Basis of Maximum Annual Assessment Except as provided below, until the first day of the Association’s next fiscal year following receipt by the Property of the Certificate of Occupancy from the City of Bozeman, Montana, the maximum Annual Assessment under this Article V shall be determined in accordance with the initial Budget of the Association. The first Annual Assessment shall be adjusted according to the number of months remaining in the initial fiscal year. If the Board of Directors determines that the initial Annual Assessment is insufficient to meet the Common Expenses of the Association during the remainder of the Association’s initial fiscal year, the Board of Directors may, by majority vote, increase that Annual Assessment, subject to approval by a majority vote of the voting power of the Association. (a) Commencing on the first day of the next fiscal year following receipt by the Property of the Certificate of Occupancy from the City of Bozeman, Montana, the maximum Annual Assessment for any fiscal year may be increased by the Board above the maximum Annual Assessment for the previous fiscal year, without a vote of the Membership and effective no sooner than the first day of each fiscal year, in an amount no more than ten percent (10%). Any increase in the maximum Annual Assessment which exceeds the maximum increase authorized in this subsection (a) shall require the vote or written consent of Members representing a majority of the Arrowleaf Unit Owner and Perennial Unit Owner. (b) Except as provided in this Section 5.04 the Board of Directors may not fix an Annual Assessment at an amount which exceeds the maximum set forth in (a) above. (c) All expenses relating to the General Common Areas and all expenses relating to real and personal property taxes and assessments levied against the Property, shall be allocated on a pro rata basis among the Units, based upon the ratio of the square footage in each Unit to the total square footage of the Property, except as specifically provided in Section 2.08 hereof. Section 5.04- Commencement and Collection of Annual Assessments The Board of Directors shall authorize and levy the amount of the Annual Assessment upon each Unit, as provided herein, by majority vote of the Board. The initial Annual Assessment shall begin on each Unit of the Project on the first day of the first calendar month following the receipt by the Property of the Certificate of Occupancy from the City of Bozeman, Montana. All Annual Assessments shall be assessed equally against the Members and their Unit based upon the proportion of the square footage of Unit owned by each Member as compared to the total square footage of the Property. Annual Assessments for fractions of any month involved shall be prorated. The Board shall fix the amount of the Annual Assessment against each Unit at least thirty (30) days in Page 17 AP-PP Condominiums Owners Association, Inc., Declaration advance of each Annual Assessment period. From time to time the Board may determine that all excess funds in the Operating Fund be retained by the Association and used to reduce the following year’s Annual Assessments. Upon dissolution of the Association incident to the abandonment or termination of the Property, any amounts remaining in any of the Maintenance Funds shall be distributed to or for the benefit of the Members in the same proportions as such monies were collected from the Members. Each Member shall pay to the Association his Annual Assessment in installments at such frequency and in such amounts as established by the Board. Initially, the Annual Assessment shall be apportioned and collected in monthly installments, due on the first day of each month. Each Annual Assessment may be paid by the Member to the Association in one check or in separate checks as monthly payments, or in such other manner as may be determined by the Association. Declarant’s may enter into a written maintenance agreement with the Association under which Declarant’s shall pay all or any portion of the Common Expenses and perform all or any portion of the Association’s maintenance responsibilities. Such maintenance agreement may require Owners to reimburse Declarant’s, through the Association, for a portion of the costs expended in satisfaction of Common Expenses. Section 5.05- Delinquency and Acceleration Any installment of an assessment provided for in this Declaration shall become delinquent if not paid within seven (7) days of the due date as established by the Board of Directors of the Association. The Board shall be authorized to adopt a system pursuant to which any installment of Annual Assessments or Special Assessments not paid within seven (7) days after the due date shall bear interest from the due date until paid at the rate of up to 10% per annum, but in no event more than the maximum rate permitted by law. In addition, the Board of Directors may require the delinquent Owner to pay a late charge in accordance with Montana Law to compensate the Association for increased bookkeeping, billing and other administrative costs. No such late charge shall exceed the maximum amount allowable by law. If any installment of any assessment is not paid within thirty (30) days after its due date, the Board may mail a notice to the Owner and to each Beneficiary of a Unit which has requested a copy of the notice. Such notice shall specify (1) the fact that the installment is delinquent; (2) the action required to cure the default; (3) a date, not less than thirty (30) days from the date the notice is mailed to the Owner, by which such default must be cured; and (4) that failure to cure the default on or before the date specified in the notice may result in acceleration of the balance of the installments of such assessment for the then current fiscal year and sale of the Unit. The notice shall further inform the Owner of his right to cure after acceleration. Notwithstanding anything herein to the contrary, the limited partner of a Unit Owner shall have the right, but not the obligation, to cure such defaults. If the delinquent installment of an assessment of any charges thereon are not paid in full on or before the date specified in the notice, the Board at its option may declare all of the unpaid balance of such assessment for the then current fiscal year, attributable to Page 18 AP-PP Condominiums Owners Association, Inc., Declaration that Owner and his Unit, to be immediately due and payable without further demand and may enforce the collection of the full assessment for such fiscal year and all charge thereon in any manner authorized by law and this Declaration. Section 5.06 - Creation and Release of Lien All sums other than Special Assessments assessed in accordance with the provisions of this Declaration shall constitute a lien on the respective Unit prior and superior to all other liens, except (1) all taxes, bonds, assessments and other levies which, by law, would be superior thereto, (2) the lien or charge of any first Mortgage of record (meaning any recorded Mortgage or Deed of Trust with first priority of seniority over other Mortgages or Deeds of Trust) made in good faith and for value and recorded prior to the date on which the lien became effective, (3) the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 1, (4) the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 2. (5) the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 3, and (6) the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 4. Notwithstanding the foregoing, any assessment lien provided for hereunder shall be prior and superior to any declaration of homestead recorded after the recordation of this Declaration. The lien shall become effective upon recordation by the Board or its authorized agent of a Notice of Assessment (“Notice of Lien”) securing the payment of any Annual Assessment, Annual Unit Assessment, Capital Improvement Assessments, Reconstruction Assessments or Special Assessment or installment thereof, levied by the Association against any Unit Owner as provided in Montana Law. The Notice of Lien shall state (i) the amount of the assessment or installment, as the case may be, and other authorized charges and interest, including the cost of preparing and recording the Notice of Lien, (ii) the expenses of collection in connection with any delinquent installments, including, without limitation, reasonable attorneys’ fees, (iii) a sufficient description of the Unit against which the same has been assessed, (iv) the name and address of the Association, and (v) the name of the Owner. The lien shall relate only to the individual Unit against which the assessment was levied and not to the Property as a whole. Upon payment to the Association of the full amount claimed in the Notice of Lien, or other satisfaction thereof, the Board of Directors shall cause to be recorded a Notice of Satisfaction and Release of Lien (“Notice of Release”) stating the satisfaction and release of the amount claimed. The Board of Directors may demand and receive from the applicable Owner a reasonable charge for the preparation and recordation of the Notice of Release before recording it. Any purchaser or encumbrancer who has acted in good faith and extended value may rely upon the Notice of Release as conclusive evidence of the full satisfaction of the sums stated in the Notice of Lien. Section 5.07 - Enforcement of Liens It shall be the duty of the Board of Directors to enforce the collection of any amounts due under this Declaration by one (1) or more of the alternative means of relief afforded by this Declaration. The lien on a Unit may be enforced by sale of the Unit by the Page 19 AP-PP Condominiums Owners Association, Inc., Declaration Association, the Association’s attorneys, any title insurance company authorized to do business in Montana, or other persons authorized to conduct the sale as a trustee, after failure of the Owner to pay any Annual Assessment, Annual Unit Assessment, Capital Improvement Assessments, Reconstruction Assessments or Special Assessment, or installment thereof, as provided herein. The sale shall be conducted in accordance with the provisions of Montana law, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any manner permitted by law; provided, however, that if not otherwise required by law, the Beneficiary, shall be given notice of such sale in accordance with the Montana Small Tract Financing Act. Notwithstanding anything herein to the contrary, the limited partner of a Unit Owner shall have the right, but not the obligation, to cure defaults hereunder during the compliance period under Section 42 Compliance Period. An action may be brought to foreclose the lien of the Association by the Board, after thirty (30) days from the date on which the Notice of Lien was recorded; provided that at least ten (10) days have expired since a copy of the Notice of Lien was mailed to the Owner affected thereby, and subject to the provisions of Section 5.05 if the Board accelerates the due date of any assessment installments. The Association, through its agents, shall have the power to bid on the Unit at foreclosure sale, and to acquire and hold, lease, mortgage and convey the same. Upon completion of the foreclosure sale, an action may be brought by the Association or the purchaser at the sale in order to secure occupancy of the defaulting Owner’s Unit and the defaulting Owner shall be required to pay the reasonable rental value for such Unit during any period of continued occupancy by the defaulting Owner or any persons claiming under the defaulting Owner. Suit to recover a money judgment of unpaid assessments shall be maintainable without foreclosing or waiving any lien securing the same, but this provision or any institution of suit to recover a money judgment shall not constitute an affirmation of the adequacy of money damages. Any recovery resulting from a suit at law or in equity initiated pursuant to this Section 5.07 may include reasonable attorneys’ fees as fixed by the court. Section 5.08 - Priority of Assessment Lien The lien of the assessments, including interest and costs of collection (including attorneys’ fees), provided for herein shall be subordinate to the lien of any first Mortgage upon any Unit, the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 2, the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 3, and the construction and permanent loan financing required, including the Owners low income housing tax credit regulatory agreements, for Unit 4. Sale or transfer of any Unit shall not affect the assessment lien. Page 20 AP-PP Condominiums Owners Association, Inc., Declaration ARTICLE VI PROJECT EASEMENTS AND RIGHTS OF ENTRY Section 6.01 – Easements (a) Access Declarant’s expressly reserves for the benefit of the Owner reciprocal, nonexclusive easements for access, ingress and egress over all of the General Common Areas, including any private streets or driveways currently existing in the Property or subsequently added to it, which easements may be conveyed by Declarant’s to the Owner and to the Association for so long as Declarant’s owns any interest in the Property. Subject to the provisions of this Declaration governing use and enjoyment thereof, the easements may be used by all Owners and their guests, tenants and invitees residing on or temporarily visiting the Property, for walkways, vehicular access and such other purposes reasonably necessary for use and enjoyment of a Unit in the Project. (b) Maintenance and Repair. Declarant’s expressly reserves for the benefit of the Board of Directors and all agents, officers and employees of the Association, nonexclusive easements over the General Common Areas as necessary to maintain and repair the General Common Areas, and to perform all other tasks in accordance with the provisions of this Declaration. Such easements over the General Common Areas shall be appurtenant to, binding upon, and shall pass with the title to, every Unit conveyed. (c) Utility Easements. Declarant’s expressly reserves for the benefit of the Association the right of Declarant’s to grant additional easements and rights-of-way over the Property to utility companies and public agencies, as necessary, for the proper development and disposal of the Property. Such right of Declarant’s shall expire (i) upon receipt by the Property of the Certificate of Occupancy from the City of Bozeman, Montana; or (2) upon a later date if approved by a majority of the Members. Section 6.02 - Rights of Entry The Board of Directors shall have a limited right of entry in and upon the General Common Areas and the Limited Common Areas and the interior of all Units for the purpose of inspecting the Project, and taking whatever reasonable corrective action may be deemed necessary or proper by the Board of Directors, consistent with the provisions of this Declaration. However, such entry upon the interior of a Unit shall be made, except to effect emergency repairs or other emergency measures, only after three (3) days prior written notice to the Owner of such Unit and after authorization of two-thirds (2/3) of the Board of Directors. Nothing herein shall be construed to impose any obligation upon the Association to maintain or repair any property or improvements required to be maintained or repaired by the Owners. Nothing in this Article VI shall in Page 21 AP-PP Condominiums Owners Association, Inc., Declaration any manner limit the right of the Owner to exclusive occupancy and control over the interior of his Unit. However, an Owner shall permit a right of entry to the Board of Directors or any other personal authorized by the Board of Directors, as reasonably necessary, such as in case of any emergency originating in or threatening his Unit, whether the Owner is present or not. Any damage caused to a Unit by such entry by the Board of Directors or by any person authorized by the Board of Directors shall be repaired by the Board as a Common Expense of the Association. In case of an emergency such right of entry shall be immediate. Any damage caused to a Unit by such entry by an Owner or its representative shall be repaired by such Owner. ARTICLE VII UNIT AND USE RESTRICTIONS All of the Property shall be held, used and enjoyed subject to the following limitations and restrictions, subject to the exemptions of Declarant’s set forth in this Declaration. Section 7.01- Residential and Commercial Use Only The Units designated on the Site Plan as residential shall be used exclusively for residential purposes. The Units designated on the Site Plan as commercial shall be used exclusively for commercial purposes. Section 7.02 - Parking and Vehicular Restrictions Following completion of construction of the Buildings and improvements located upon the Units, no Owner of a Unit shall park, store, or keep anywhere on the Property any large commercial-type vehicle (including, but not limited to, any dump truck, cement mixer truck, oil or gas truck or delivery truck). No Person shall park, store, or keep any recreational vehicle (including, but not limited to, any camper unit, house car or motor home), bus, trailer, trailer coach, camp trailer, boat, aircraft, mobile home, inoperable vehicle or any other similar vehicle anywhere on the Property. In addition, no Person shall park, store, or keep anywhere on the Property any vehicle or vehicular equipment, mobile or otherwise, reasonably deemed to be a nuisance by the Board. Each Unit Committee is hereby empowered to establish “parking”, “guest parking’ and “no parking” areas within the Limited Common Areas associated with such Unit. Restoring or repairing of vehicles shall not be permitted anywhere on the Property. Parking spaces which may constitute a part of the General Common Areas shall be subject to reasonable control and use limitation by the Association. The Unit Committee with respect to each Unit, shall determine, in its discretion, whether there is noncompliance with the parking and vehicular restrictions herein. Without in any way limiting the obligations of the Owners as elsewhere herein described, the Association, or agency representing the Unit Committee with respect to a Unit, or its designee, as the case may be, shall have the right, and shall be obligated, to enforce all parking restrictions herein set forth and to remove any vehicles in violation thereof in accordance with Montana law with, or other applicable laws, codes, and statutes, in each case, with respect to such Unit. Vehicles owned operated or within the control of an Owner, or of a resident of such Owner’s Unit, shall be parked in the assigned parking space(s) of such Owner (if any) to the extent of the space available therein. Page 22 AP-PP Condominiums Owners Association, Inc., Declaration Section 7.03 - Nuisances No noxious or offensive activities (including, but not limited to, the repair of motor vehicles) shall be carried on upon the Property. No horns, whistles, bells or other sound devices, except security devices used exclusively to protect the security of a Unit and its contents, shall be placed or used in any such Unit. No loud noises, noxious odors, noisy or smoky vehicles, large power equipment or large power tools, unlicensed off- road motor vehicles or items which may unreasonably interfere with television or radio reception of any Owner in the Project, shall be located, used or placed on any portion of the Property. The Board of Directors of the Association shall have the right to determine if any noise, odor, or activity producing such noise or odor constitutes a nuisance. No Owner shall permit or cause anything to be done or kept upon the Property which may increase the rate of insurance on Units or on the Property, or result in the cancellation of such insurance, or which will obstruct or interfere with the rights of other Owners. No Person shall commit or permit any nuisance on the Property. Each Owner shall comply with all of the requirements of the local or state health authorities and with all other governmental authorities with respect to the occupancy and use of a Unit. Each Owner shall be accountable to the Association and other Owners for the conduct and behavior of children residing in or visiting his Unit and other family members or persons residing in or visiting his Unit. Any damage to the General Common Areas, personal property of the Association, or property of another Owner, caused by such children or other family members or visitors, shall be repaired at the sole expense of the Owner of the Unit where such children or other family members or persons are residing or visiting. Section 7.04 - Signs No sign, poster, display, or other advertising device of any character shall be erected or maintained anywhere on the Property, or shown or displayed from any Unit, without the prior written consent of the Board of Directors; provided, however, that the restrictions of this Section 7.04 shall not apply to any sign or notice of customary and reasonable dimension which states that the Unit is for rent or sale or identifying signs for a Residential Unit, or any sign that the Act requires the Association to permit, so long as it is consistent with the standards promulgated by the Unit Committees. Such sign or notice may be placed within a Unit but not upon any portion of the General Common Areas. The Board of Directors may erect within the General Common Areas a master list of Tenant Spaces which are for lease. Address identification signs and mail boxes shall be maintained by the Association. This Section 7.04 shall not apply to any signs used by Declarant’s or its agents in connection with the construction or alteration of the Units or General Common Areas, traffic and visitor parking signs installed by Declarant’s, and traffic and parking control signs installed with the consent of the Board. Notwithstanding the foregoing, nothing contained in this Section 7.04 shall be construed in such manner as to permit the maintenance of any sign which is not in conformance with any ordinances of the City or County in which the Property is located. Page 23 AP-PP Condominiums Owners Association, Inc., Declaration All signs intended for the use of business within Unit 3 and Unit 4 must conform with all federal, state, or local ordinances or rules regarding signage, and be first approved by the applicable Unit Committee. Section 7.05- Antennae No radio station or shortwave operators of any kind shall operate from any Unit or any other portion of the Property unless approved by the Board of Directors. Satellite dishes or antennae may not be attached or fixed to the exterior of the Units absent approval of the Association. Section 7.06- Inside and Outside Installations No outside installation of any type, including but not limited to, clotheslines, shall be constructed, erected or maintained on any Unit, excepting antennae installed by Declarant’s as a part of the initial construction of a Unit and except as may be installed by, or with the prior consent of the Unit Committee. No balcony, patio or deck covers, wiring, or installation of air conditioning, water softeners, or other machines shall be installed on the exterior of a Unit or be allowed to protrude through the walls or roofs of the buildings (with the exception of those items installed during the original construction of the Project), unless the prior written approval of the Board of Directors is secured. Outdoor patio or lounge furniture, plants and barbecue equipment may be maintained pursuant to rules and procedures of the Board of Directors. Nothing shall be done in any Unit or in, on, or to the General Common Areas which will or may tend to impair the structural integrity of any Unit in the Project or which would structurally alter any such except as otherwise expressly provided herein. There shall be no alteration, repair or replacement of wall coverings within Units which may diminish the effectiveness of the sound control engineering within the Units in the Project. No Owner shall cause or permit any construction lien to be filed against any portion of the Project for labor or materials alleged to have been furnished or delivered to the Project or any Unit for such Owner, and any Owner who does so shall immediately cause the lien to be discharged within five (5) days after notice to the Owner from the Board. If any Owner fails to remove such construction lien, the Board may discharge the lien and charge the Owner a Special Assessment for such cost of discharge. Section 7.07 - Animal Regulations No animals, livestock, reptiles, insects, poultry or other animals of any kind shall be kept in any Unit except that usual and ordinary domestic dogs, cats, fish, and birds inside bird cages may be kept as household pets within any Unit provided that they are not kept, bred or raised therein for commercial purposes or in unreasonable quantities or sizes. As used in the Declaration, “unreasonable quantities” shall ordinarily mean more than two (2) pets per Unit; provided, however, that the Board may determine that a reasonable number in any instance may be more or less. The Board shall have the right to limit the size of pets and may prohibit maintenance of any animal which constitutes, in the opinion of the Board of Directors, a nuisance to any other Owner. Animals belonging to Owners, occupants or their licensees, tenants or invitees within the Property must be either kept within an enclosure, an enclosed balcony or on a leash held by a person capable of controlling the animal. Furthermore, any Owner shall be Page 24 AP-PP Condominiums Owners Association, Inc., Declaration liable to each and all remaining Owners, their families, guests and invitees, for any unreasonable noise or damage to person or property caused by any animals brought or kept upon the Project by an Owner or by members of his family, his tenants or his guests. It shall be the duty and responsibility of each such Owner to clean up after such animals which have deposited droppings or otherwise used any portion of the General Common Areas or on any public street abutting or visible from the Property. Section 7.08 - Business or Commercial Activity No business or commercial activity shall be maintained or conducted on the Property which in in violation of any Federal, State or local law or regulation, or which is immoral, or contrary to the purposes of the Project. Furthermore, the business or commercial activity must serve primarily individuals with incomes 60% or less than the area median income for Gallatin County, Montana and must meet the following requirements: (a) the business or commercial provides services that will improve the quality of life for residents of the Property, (b) the business or commercial activity is demonstrated to be appropriate and helpful to individuals in the area of the Property whose incomes are 60% or less of the area median income for Gallatin County, Montana. This requirement may be satisfied through the use of a market study, and (c) any fees charged for the services provided, are affordable to individuals whose incomes are 60% or less of the area median income for Gallatin County. Section 7.09 - Rubbish Removal The Association shall arrange for the containment and removal of trash, garbage, or other waste, and may bill or assess the costs thereof to the Owners, based on the percentages of square footage of their Units. No portion of the Property shall be used for the storage of building materials, refuse or any other materials, except the building materials may be kept on any balcony, deck, patio or parking space temporarily during construction which has been previously approved by the Unit Committee. Section 7.10 - Section 42 The Association and the Owners are prohibited from engaging in any activity or from using the Project for any purpose or use that would cause the loss of tax credits issued pursuant to Section 42 of the Internal Revenue Code on Unit 1, Unit 2, Unit 3 and Unit 4. ARTICLE VIII INSURANCE Section 8.01- Duty to Obtain Insurance; Types The Board shall cause to be obtained and maintained, with respect to the General Common Areas, adequate Commercial General Liability, and Umbrella/Excess Liability insurance, with Commercial General Liability scheduled as underlying policies, with such limits as may be considered acceptable to the Board, insuring, among other things, against third party claims for liability for bodily injury, death and property damage arising from the activities of the Association and its Members, with respect to the General Common Area. The policies shall include an endorsement adding the Page 25 AP-PP Condominiums Owners Association, Inc., Declaration Beneficiaries, the Owners, the limited partners of the Arrowleaf Unit Owner and Perennial Unit Owner as additional insureds. Section 8.02 - Waiver of Claim Against Association As to all policies of insurance maintained by or for the benefit of the Association and the Owners, the Association and the Owners hereby waive and release all claims against one another, the Board of Directors and Declarant’s, to the extent of the insurance proceeds available, whether or not the insurable damage or injury is caused by the negligence of or breach of any agreement by any of said Persons. Section 8.03 - Right and Duty of Owners to Insure The Arrowleaf Unit Owner and the Perennial Unit Owner shall be responsible for obtaining and maintaining all insurance policies relating to its respective Unit, and the Limited Common Areas, including but not limited to, Commercial General Liability, Umbrella/Excess Liability, Builder’s Risk, General Contractor’s Liability, Architect’s Liability, fire and casualty and any other forms or types of insurance which the Beneficiaries of each Unit, the Arrowleaf Unit Owner’s limited partner, the Perennial Unit Owner’s limited partner, or other party in interest may now or hereafter require. It is the responsibility of each Owner to provide insurance on its personal property and upon all other property and improvements within its Unit for which the Association has not purchased insurance in accordance with Section 8.01 hereof. Nothing herein shall preclude any Owner from carrying any public liability insurance as it deems desirable to cover its individual liability for damage to person or property occurring inside his individual Unit or elsewhere upon the Property. Such policies shall not adversely affect or diminish any liability under any insurance obtained by or on behalf of the Association, and duplicate copies of such other policies shall be deposited with the Board upon request. Section 8.04 - Notice of Expiration Requirements If available, each of the policies of insurance maintained by the Association shall contain a provision that said policy shall not be canceled, terminated, materially modified or allowed to expire by its terms, without then (10) days’ prior written notice to the Board and Declarant’s, and to each Owner and, the limited partner of the Arrowleaf Unit Owner, and the limited partner of the Perennial Unit Owner during the longer of (a) the compliance period under Section 42 of the Code with respect to Arrowleaf Unit Owner, or (b) the compliance period under Section 42 of the Code with respect to Perennial Unit Owner (herein referred to as the “Section 42 Compliance Period”), and each Beneficiary, insurer and guarantor of a first Mortgage who has filed a written request with the carrier for such notice and every other Person in interest who requests such notice of the insurer Section 8.05 - Insurance Premiums Insurance premiums for any coverage obtained by the Association pursuant to Section 8.01 hereof shall be a Common Expense to be included in the Annual Assessments levied by the Association and collected from the Owners as provided herein. That portion of the Annual Assessments necessary for the required insurance premiums shall Page 26 AP-PP Condominiums Owners Association, Inc., Declaration be separately accounted for by the Association in the Reserve Fund, to be used solely for the payment of premiums of required insurance as such premiums become due. Section 8.06 - Trustee for Policies The Association, acting through its Board of Directors, is hereby appointed and shall be deemed trustee of the interests of all named insured under policies of insurance purchased and maintained by the Association. All insurance proceeds under any such policies as provided for in Section 8.01 of this Article shall be paid to the Board of Directors as trustees, subject to the rights of Beneficiaries. The Board shall have full power to receive and to receipt for the proceeds and to deal therewith as provided herein. Insurance proceeds shall be used by the Association for the repair or replacement of the property for which the insurance was carried or otherwise disposed of as provided in Article VIII of this Declaration. The Board is hereby granted the authority to negotiate loss settlements with the appropriate insurance carriers, with participation, to the extent they desire, of Beneficiaries. Any two (2) officers of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim, and such signatures shall be binding on all the named insureds. Notwithstanding the foregoing, there may be named as an insured, a representative chosen by the Board, including a trustee with whom the Association may have entered into an insurance trust agreement or any successor to such trustee who shall have exclusive authority to negotiate losses under any policy providing liability insurance and to perform such other functions necessary to accomplish this purpose. Section 8.07 - Actions as Trustee Except as otherwise specifically provided in this Declaration, the Board, acting on behalf of the Association and all Owners, shall have the exclusive right to bind such parties in respect to all matters affecting insurance carried by the Association, the settlement of a loss claim, and the surrender, cancellation, and modification of all such insurance, in a manner satisfactory to Beneficiaries of seventy-five percent (75%) of the Beneficiaries. Duplicate originals or certificates of all policies maintained by the Association and of all renewals thereof, together with proof of payment of premiums, shall be delivered by the Association to all Owners and Beneficiaries who have requested the same in writing. ARTICLE IX DESTRUCTION OF IMPROVEMENTS Section 9.01 - Reconstruction of the Property-General Common Areas Except as otherwise provided in this Declaration, in the event of any destruction of any portion of the General Common Areas, it shall be the duty of the Association to restore and repair the same to its former condition, as promptly as practical. The proceeds of any insurance maintained pursuant to Article VIII hereof for reconstruction or repair of the General Common Areas shall be used for such purpose, unless otherwise provided herein. The Board shall be authorized to have prepared the necessary documents to affect such reconstruction as promptly as practical. The Property shall be reconstructed or rebuilt substantially in accordance with the Site Plan and the original construction plans if they are available, unless changes recommended by the Unit Committees have Page 27 AP-PP Condominiums Owners Association, Inc., Declaration been approved in writing by the Arrowleaf Unit Owner and the Perennial Unit Owner; and by the Beneficiaries of Seventy-five Percent (75%) of the first Mortgages upon Unit 1, Seventy-five Percent (75%) of the first Mortgages upon Unit 2, Seventy-Five Percent (75%) of the first Mortgages upon Unit 3, and Seventy-Five Percent (75%) of the first Mortgages upon Unit 4. If the amount available from the proceeds of such insurance policies for such restoration and repair is at least Sixty-five Percent (65%) of the estimated cost of restoration and repair, a Reconstruction Assessment shall be levied by the Board of Directors to provide the necessary funds for such reconstruction, over and above the amount of any insurance proceeds available for such purpose. If the amount available from the proceeds of such insurance policies for such restoration and repair is less than Sixty-five Percent (65%) of the estimated cost of restoration and repair, the Members by the vote or written consent of the Arrowleaf Unit Owner and the Perennial Unit Owner; and by the Beneficiaries of Seventy-five Percent (75%) of the first Mortgages upon Unit 1, Seventy-five Percent (75%) of the first Mortgages upon Unit 2, Seventy-Five Percent (75%) of the first Mortgages upon Unit 3, and Seventy-Five Percent (75%) of the first Mortgages upon Unit 4, shall determine whether the Board shall levy a Reconstruction Assessment and proceed with such restoration and repair. Section 9.01A - Reconstruction of the Property-Unit 1, Unit 2, Unit 3, Unit 4, And Appurtenant Limited Common Areas. In the event of any destruction of all or any portion of Unit 1, Unit 2, Unit 3, Unit 4 or the Limited Common Areas appurtenant thereto, it shall be the duty of the applicable Unit Committee of such Unit to reconstruct a repair the same to its former condition as promptly as practical. The proceeds of any insurance maintained by the Association pursuant to Article VIII hereof for reconstruction or repair of the Unit shall be used for such purpose unless otherwise provided herein. The Unit Committees shall be authorized to undertake such actions to affect such reconstruction (including, but not limited to obtaining required approvals, preparing necessary documentation, reviewing proposed contract(s) as promptly as practical. Each Unit shall be reconstructed or rebuilt substantially in accordance with the original Site Plan and original construction plans to the extent practicable and permitted by applicable law. If the amount available from the proceeds of such insurance policies for such reconstruction and repair is at least Sixty-five Percent (65%) of the estimated cost of reconstruction and repair, a Reconstruction Assessment shall be levied by the Unit Committee of such Unit and collected by the Association to provide the necessary funds for such reconstruction, over the and above the amount of any insurance proceeds available for such purpose, in accordance with the Allocable Interest of each Unit. If the amount available from the proceeds of such insurance policies for such reconstruction and repair of the Unit is less than Sixty-five Percent (65%) of the estimated cost of repair, then: Page 28 AP-PP Condominiums Owners Association, Inc., Declaration (a) For reconstruction of Unit 1 and/or the appurtenant Limited Common Areas, the decision of whether to rebuild and be assessed for the insurance shortfall will be made by the Unit Committee of Unit 1. (b) For reconstruction of Unit 2 and/or the appurtenant Limited Common Areas, then the decision of whether to rebuild and be assessed for the insurance shortfall will be made by the Unit Committee of Unit 2. (c) For reconstruction of Unit 3 and/or the appurtenant Limited Common Areas, the decision of whether to rebuild and be assessed for the insurance shortfall will be made by the Unit Committee of Unit 3. (d) For reconstruction of Unit 4 and/or the appurtenant Limited Common Areas, then the decision of whether to rebuild and be assessed for the insurance shortfall will be made by the Unit Committee of Unit 4. Section 9.02 - Interior Damage With the exception of any casualty or damage insured against by the Association pursuant to Section 8.01 of this Declaration, restoration and repair of any damage to the interior of any Unit including without limitation the Tenant Spaces, all fixtures, cabinets and improvements therein, together with restoration and repair of all interior paint, wall coverings and floor coverings, shall be made by and at the individual expense of the Owner of such Unit so damaged. In the event of a determination to rebuild the Property after partial or total destruction, as provided in this Article IX, such interior repair and restoration shall be completed as promptly as practical and in a lawful and workmanlike manner, in accordance with plans approved by the respective Unit Committee as provided herein. Section 9.03 - Notice to Owners and Listed Mortgages The Board, immediately upon having knowledge of any damage or destruction, affecting a material portion of the General Common Areas, shall promptly notify all Owners and Beneficiaries, insurers and guarantors of first Mortgages on Units in the Project. The Board, immediately upon having knowledge of any damage or destruction affecting a Unit, shall promptly notify any Beneficiary, insurer or guarantor of any Mortgage encumbering such Unit who has filed a written request for such notice with the Board. ARTICLE X DURATION AND AMENDMENT Section 10.01 - Duration This Declaration shall continue in full force for a term of fifty-five (55) years from the date of Recordation hereof, after which time the same shall be automatically extended for successive periods of ten (10) years, unless prior to the expiration of such term or any extension thereof a Declaration of Termination is Recorded, meeting the requirements of an amendment to this Declaration as set forth in Section 10.02 hereof. There shall be no severance by sale, conveyance, encumbrance or hypothecation of an Page 29 AP-PP Condominiums Owners Association, Inc., Declaration interest in any Unit from the concomitant Membership in the Association, as long as this Declaration shall continue in full force and effect. The provisions of this Article are subject to the provisions of Section 10.03 of this Declaration. Section 10.02 - Amendment Notice of the subject matter of a proposed amendment to this Declaration in reasonably detailed form shall be included in the notice of any meeting of the Association at which a proposed amendment is to be considered. A resolution adoption a proposed amendment may be proposed by an Owner at a meeting of Members of the Association. The resolution shall be adopted by the vote, in person or by proxy, or written consent of Members representing a majority of the Unit Owners, provided that the specified percentage of the voting power of the Association necessary to amend a specified Section or provision of this Declaration shall not be less than the percentage of affirmative votes prescribed for action to be taken under that Section or provision. A copy of each amendment shall be certified by at least two (2) officers of the Association and the amendment shall be effective when the Certificate of Amendment is recorded. Section 10.03 - Protection of Declarant’s Until the end of the Section 42 Compliance Period, the prior written approval of Declarant’s, as developer of the Property, will be required before any amendment which would impair or diminish the rights of Declarant’s to complete the Property or lease Tenant Spaces therein in accordance with this Declaration shall become effective. Notwithstanding any other provisions of the Restrictions, until such time as Declarant’s no longer owns any Units in the Property, the following actions, before being undertaken by the Association, shall first be approved in writing by Declarant’s: (a) Any amendment or action requiring the approval of Beneficiaries pursuant to this Declaration, including without limitation, all amendments and actions specified in Section 10.02; (b) The annexation to the Property of real property; (c) The levy of a Capital Improvement Assessment for the construction of new facilities not constructed on the Common Property by the Declarant’s; or (d) Subject to Section 5.03 regarding limitations on Annual Assessment increases, any significant reduction of Association maintenance or other services. ARTICLE XI GENERAL PROVISIONS Section 11.01 - Legal Proceedings Failure to comply with any of the terms of the Restrictions by an Owner, his family, guests, employees, invitees or tenants, shall be grounds for relief which may include, without limitation, an action to recover sums due for damages, injunctive relief, Page 30 AP-PP Condominiums Owners Association, Inc., Declaration foreclosure of any lien, or any combination thereof. Failure to enforce any provision hereof shall not constitute a waiver of the right to enforce that provision, or any other provision hereof. The Board, any Owner (not in default hereunder at the time), or Declarant’s (so long as Declarant’s are Owners) shall be entitled to bring an action for damages against any defaulting Owner, and in addition may enjoin any violation of this Declaration. Any judgment rendered in any action or proceeding pursuant to this Declaration shall include a sum for attorneys’ fees in such amount as the Court may deem reasonable, in favor of the prevailing party, as well as the amount of any delinquent payment, interest thereon, costs of collection and court costs. Each remedy provided for in this Declaration shall be cumulative and not exclusive or exhaustive. Each Owner shall have a right of action against the Association for the failure by the Association to comply with the Restrictions. Section 11.02 - Violation of Restrictions Without in any way limiting the generality of the foregoing, if the Board of Directors determines that there is a violation of any provision of this Declaration, or the Board determines that an Improvement which is the maintenance responsibility of an Owner is in need of installation, repair, restoration or painting, then the Board shall give written notice to the responsible Owner of the condition or violation complained of, and to the Beneficiaries of the Unit owned by such Owner. Unless the Board has approved in writing corrective plans proposed by the Owner to remedy the condition complained of, and an opportunity to cure such violation or to make such installation, repair, restoration or painting within such period of time as may be determined reasonable by the Board after it has given said written notice, and such corrective work so approved is completed thereafter within the time allotted by the Board, the Board, after Notice and Hearing, shall undertake to remedy such condition or violation complained of, and the cost thereof shall be charged to the Owner and his Unit whose Unit is the subject matter of the corrective work. Such cost shall be deemed to be a Special Assessment to such Owner and shall be subject to enforcement and collection by the Board in accordance with the procedures provided for in this Declaration. The Board may also adopt a schedule of reasonable fines or penalties which, in its reasonable declaration, it may assess against an Owner for the failure of such Owner, or of a resident of or visitor to such Owner’s Unit, to comply with any provision of the Restrictions. Such fines or penalties may only be assessed by the Board after Notice and Hearing. Notwithstanding anything herein to the contrary, the limited partner of the Arrowleaf Unit Owner and the limited partner of the Perennial Unit Owner shall have the right, but not the obligation, to cure such defaults. Section 11.03 - Severability The provisions hereof shall be deemed independent and severable, and a determination of invalidity or partial invalidity or unenforceability of any one provision or portion hereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provisions hereof. Page 31 AP-PP Condominiums Owners Association, Inc., Declaration Section 11.04 - Interpretation The provisions of this Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for the creation and operation of a residential Unit development and for the maintenance of Common Areas, and any violation of this Declaration shall be deemed to be a nuisance. The Article and Section headings, titles and captions have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction. As used herein, the singular shall include the plural and the masculine, feminine and neuter shall include the other, unless the context dictates otherwise. Section 11.05 - No Public Right or Dedication Nothing contained in this Declaration shall be deemed to be a gift or dedication of all or any part of the Property to the public, or for any public use. Section 11.06 - No Representations or Warranties No representations or warranties of any kind, express or implied, have been given or made by Declarant’s, or their agents or employees in connection with the Property, or any portion thereof, its physical condition, zoning, compliance with applicable laws, fitness for intended use, or in connection with the subdivision, sale, operation, maintenance, cost of maintenance, taxes or regulation thereof as a Unit Project, except as specifically and expressly set forth in this Declaration and except as may be filed by Declarant’s from time to time with the Department. Section 11.07 - Nonliability and Indemnification Except as specifically provided in the Restrictions or as required by law, no right, power, or responsibility conferred on the Board or the Unit Committee by this Declaration, the Articles or Bylaws shall be construed as a duty, obligation or disability charged upon the Board, the Unit Committee, any member of the Board or of the Unit Committee, or any other officer, employee or agent of the Association. No such Person shall be liable to any party (other than the Association or a party claiming in the name of the Association) for injuries or damage resulting from such Person’s acts or omissions within what such Person reasonably believed to be the scope of his Association duties (“Official Acts”), except to the extent that such injuries or damage result from such Person’s willful or malicious misconduct. No such Person shall be liable to the Association (or to any party claiming in the name of the Association) for injuries or damage resulting from such Person’s Official Acts, except to the extent that such injuries or damage result from such Person’s negligence or willful or malicious misconduct. The Association shall pay all expenses incurred by, and satisfy any judgment or fine levied against, any Person as a result of any action or threatened action against such Person to impose liability on such Person for his Official Acts, provided that: (a) The Board determines that such Person acted in good faith and in a manner such Person reasonably believed to be in the best interests of the Association; Page 32 AP-PP Condominiums Owners Association, Inc., Declaration (b) In the case of a criminal proceeding, the Board determines that such Person had no reasonable cause to believe his conduct was unlawful; and (c) In the case of an action or threatened action by or in the right of the Association, the Board determines that such Person acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. Any determination of the Board required under this Section 11.07 must be approved by a majority vote of a quorum consisting of Directors who are not parties to the action or threatened action giving rise to the indemnification. If the Board fails or refuses to make any such determination, such determination may be made by the vote or written consent of a majority of a quorum of each class of the Members of the Association, provided that the Person to be indemnified shall not be entitled to vote. Payments made hereunder shall include amounts paid and expenses incurred in settling any such action or threatened action. This Section 11.08 shall be construed to authorize payments and indemnification to the fullest extent now or hereafter permitted by applicable law. The entitlement to indemnification hereunder shall inure to the benefit of the estate, executor, administrator, heirs, legatees, or devisees of any Person entitled to such indemnification. Section 11.08 - Notices Except as otherwise provided in this Declaration, in each instance in which notice is to be given to an Owner, the same shall be in writing and may be delivered personally to the Owner, in which case personal delivery of such notice to one (1) or more co-owners of a Unit shall be deemed delivery to all co-owners or to the partnership, as the case may be with a copy to: GMD Development LLC ATTN: Steve Dymoke 520 Pike Street, Suite 1010 Seattle, WA 98101 PH: (206) 745-6464 Email: Steve@gmddevelopment.com Human Resource Development Council of District IX, Inc. ATTN: Heather Grenier 32 S Tracy Ave, Bozeman, Montana 59715 with a copy to: Downs Pham Keui, PC One Embarcadero Center, Suite 500 Page 33 AP-PP Condominiums Owners Association, Inc., Declaration ATTN: Gary P. Downs San Francisco, CA 99111 PH: (415)202-6374 Email: gdowns@downspham.com St. Peter Law Offices, P.C. ATTN: C. Harby 2620 Radio Way P.O. Box 17255 Missoula, Mt 59808 PH: (406)-728-8282 Email:don@stplawoffices.com; jason@stplawoffices.com Personal delivery of such notice to any officer or agent for the service of process on a corporation shall be deemed delivery to the corporation. In lieu of the foregoing, such notice may be delivered by regular United States mail, postage prepaid, addressed to the Owner at the most recent address furnished by such Owner to the Association or, if no such address shall have been furnished, to the street address of such Owner’s Unit. Such notice shall be deemed delivered Seventy-two (72) hours after the time of such mailing, except for notice of a meeting of Members or of the Board of Directors in which case the notice provisions of the Bylaws of the Association shall control. Any notice to be given to the Association may be delivered personally to any member of the Board, or sent by United States mail, postage prepaid, addressed to the Association at such address as shall be fixed from time to time and circulated to all Owners. Section 11.09 - Priorities and Inconsistencies If there are conflicts or inconsistencies between this Declaration and either the Articles of Incorporation or the Bylaws of the Association, the terms and provisions of this Declaration shall prevail. THIS DECLARATION is dated for identification purposes this _____ day of ___________, 2020. [Signatures on following page] Page 34 AP-PP Condominiums Owners Association, Inc., Declaration DECLARANT’S: MT ARROWLEAF LLLP, a Montana limited liability limited partnership By: MT AP GMD LLC, a Montana limited liability company, its Managing General Partner By: GMD Development LLC, a Washington limited liability company, its Sole Member By: ___________________________ Gregory M. Dunfield Manager By: HRDCIX AP, LLC, a Montana limited liability company, its Administrative General Partner By: Human Resource Development Council of District IX, Inc. a Montana nonprofit corporation, its Sole Member By: ___________________________ Heather Grenier Executive Director MT PERENNIAL LLLP, a Montana limited liability limited partnership By: MT AP GMD LLC, a Montana limited liability company, its Managing General Partner perennial By: GMD Development LLC, a Washington limited liability company, its Sole Member Page 35 AP-PP Condominiums Owners Association, Inc., Declaration By: ___________________________ Gregory M. Dunfield Manager By: HRDCIX AP, LLC, a Montana limited liability company, its Administrative General Partner By: Human Resource Development Council of District IX, Inc. a Montana nonprofit corporation, its Sole Member By: ___________________________ Heather Grenier Executive Director [Notary Block on Following Pages] Page 36 AP-PP Condominiums Owners Association, Inc., Declaration STATE OF WASHINGTON ) : ss. County of ________ ) This instrument was acknowledged before me this _____ day of _____________, 2020, Gregory M. Dunfield as manager of GMD Development LLC, which is the sole- member of MT AP GMD LLC, which serves as the managing general partner of MT Arrowleaf LLLP and MT Perennial LLLP. ___________________________________ (SEAL) Notary Public for the State of Washington STATE OF MONTANA ) : ss. County of Missoula ) This instrument was acknowledged before me this _____ day of _____________, 2020, Heather Grenier as executive director of Human Resource Development Council of District IX, Inc., which is the sole-member of HRDCIX AP, LLC, which serves as the administrative general partner of MT Arrowleaf LLLP and MT Perennial LLLP. ___________________________________ (SEAL) Notary Public for the State of Montana Page 37 AP-PP Condominiums Owners Association, Inc., Declaration Exhibit A Site Plan Page 38 AP-PP Condominiums Owners Association, Inc., Declaration Exhibit B Allocated Interest Unit Owner Allocated Interest Arrowleaf Unit Owner Perennial Unit Owner Page 39 AP-PP Condominiums Owners Association, Inc., Declaration Exhibit C Articles of Incorporation Page 40 AP-PP Condominiums Owners Association, Inc., Declaration Exhibit D Bylaws Page 41 AP-PP Condominiums Owners Association, Inc., Declaration Exhibit E Certification of Compliance with Mont. Code. Ann § 76-3-203 Page 42 AP-PP Condominiums Owners Association, Inc., Declaration Exhibit F Certificate form the Montana Department of Revenue Pursuant to Mont. Code Ann. § 70-23-303