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\ SUPPLEMENTAL DECLARATION OF RESTRICTIONS FORISLAND AT ROCK CREEK SUBDIVISION

On this ^ r<JU day of r \,£tvv— 2006, the

undersigned, being all of the Owners and tire Developer of the

following described real property and all portions thereof,

located in Red Lodge, Carbon County, Montana, hereby

establish and declare the following covenants all of which

shall be applicable to said real property:

Lots 1 , 2 and 3 , of island At Rock CreekSubdivision, Phase 1, according to the officialplat thereof on file and of record in the office ofthe Clerk and Recorder of Carbon County, Montana,

; as Plat No. 1552, AM. •

At the time of the execution of this Supplemental

Declaration, the Developer, Kiely Construction, L.L.C., plans

to also plat all or part of the following • described real

property hereinafter referred, to as the ' "Expansion Property" :

Tracts A and B of Certificate of Survey 1552 lying-inthe City of Red Lodge and located in- the ME1/4 and theSE1/4 of Section 27, Township' 7 South, Range 20 East,P.M.M. , Carbon .County, Montana.

EXCEPTING therefrom Lots 1, 2 and 3 of Island at RockCreek Subdivision,, Phase 1, according to. the officialplat thereof on file and of record in the office ofthe Clerk and Recorder of Carbon County, Montana, asPlat No. 1552 AM.

Developer hereby reserves the right, in Developer's sole

discretion, to subject Lots which are later platted on the

expansion property to some or all of the provisions of this

Supplemental Declaration and the Island At Rock Creek

Subdivision . Declaration of Restrictions, Covenants and

Conditions (the "Original Declaration") filed in the office

of the Clerk and Recorder of Carbon County, Montana as

Instrument File No. 319575, by executing and recording an

amendment to this Supplemental Declaration and the Original

Declaration, thereby subjecting those Lots to some or all of

the' provisions of this Supplemental Declaration and the

Original Declaration, as they may be amended from time to

time. The amendment shall' be made in Developer's sole

discretion and without consent of any other person, entity,

or party. Neither the consent of the Island at Rock Creek

Homeowners Association, (the Association) , nor of any other

Lot owner, mortgagee, or trustee or beneficiary of any trust

indenture, shall be required for such amendment. From and

after the recording date of such amendment, if any, the

owners of any Lots thereby made subject to any one or all the

provisions of this Supplemental -Declaration and/or the

Original Declaration shall be members of the Association,

shall be bound by the provisions' of this Supplemental

Declaration, the Original Declaration and the Bylaws of the

Association as the same may be amended from time to time,

shall share in the costs of improvements and maintenance, and

shall be obligated to pay such assessments as the

Association, in its authority, assesses.•

The undersigned place these restrictions upon the Lots

for the benefit of the owners of all of the above-described

Lots in Island at Rock Creek Subdivision and any Lots later

subjected to the provisions of this Supplemental Declaration

for the purpose of protecting the value and desirability of

all of said Lots and to amend and supplement the original

Declaration as amended from time to time.

DEFINITIONS

In the interpretation of this Supplemental Declaration,

the following definitions shall ;apply:-

"Developer" means Kiely Construction, L.L.C., or any person

or entity to whom Kiely Construction, L.L.C. transfers or

assigns its development rights.

"Association" means The island at Rock Creek Owners

Association.

"Expansion Property' means:

Tracts A and B of Certificate of Survey 1552 lying inthe City of Red Lodge and located in the NE1/4 and theSE1/4 of Section 27, Township 7 South, Range 20 East,P.M.M., Carbon County, Montana.

EXCEPTING therefrom Lots 1, 2 and 3 of Island at RockCreek Subdivision, Phase 1, according to the officialplat thereof on file and of record in the office ofthe Clerk and Recorder of Carbon County, Montana, asPlat No. 1552 AM.

"Board" and "Board of Directors" means the Directors of

the Association.

"Lots" means all Lots now subject or later subjected to

this Supplemental Declaration.

"Lot owners" means the owners, of any of the Lots or of

any condominium unit, townhome, or patio home constructed on

a Lot. :

"Original Declaration" means Island At Rock Creek

Subdivision Declaration of Restrictions, Covenants and

Conditions filed in the office of the Clerk and Recorder of

Carbon County, Montana as Instrument File No. -319575, as

amended from time to time.

"Subdivision" is The Island at Rock Creek Subdivision.

GENERAL RESTRICTIONS

1. Use. Lots shall be used only for residential

purposes except that an occupant may use a portion of his

residence for an office so long as the activities therein

shall not interfere with the quiet .enjoyment or comfort of

any other owner or occupant and provided the use complies

with the applicable zoning ordinances of the City of Red

Lodge. In addition, Developer shall have the right to

maintain a construction office and a sales office on the

property until all units are sold.

ARCHITECTURAL COMMITTEE

2 . The following hereby supplements the Section

entitled "Architectural 'Committee" in the Original

Declaration:

(a) Membership. So long as Developer owns any of the

Lots in the subdivision, or any of the expansion property, it

.shall have the sole authority to appoint an Architectural

Committee, henceforth "AC" , and to review any and all Plans

for residences or for improvements to any Lpt subject to this

Declaration. The initial AC members shall be Bill Kiely, Sue

Kiely and Henry P. Martin. Upon sale of all Lots by

Developer, the Association shall appoint the members of the

AC. Developer, in its sole discretion, may elect to turn

over its power to appoint the AC members to the Association

at any time prior to sale of1 all Lots. Once the Association

is empowered to appoint the AC members, the AC shall have a

at least three (3) and no more than five (5) members.

(d) Non-Liability. Neither the • AC nor any of its

members, nor the Developer nor any member, manager, officer,

employee, agent, successor, or assign of the Developer, shall

be liable to the . Association, .any Lot owner, or any other

person for any loss, 'damage, or injury arising out of or

connected with the AC members' performance :of their duties

and responsibilities by reason of . a mistake in judgement,

negligence, or nonfeasance arising out of or in connection

with the approval, ' disapproval., or failure to approve an

application. The aforementioned parties will not make

decisions on and assume no responsibility for the following:4

a) the structural capacity, safety features, or building code

compliance of any residence or other improvement; b) whether

the proposed location of a residence or other improvement is

free from possible geologic or natural hazards or other

possible hazards caused by conditions occurring either on or

off the subject property; c) the internal operation or

functional integrity of any residence or other improvement;

or d) conformity with or violation of any City of Red Lodge

zoning ordinance or any applicable building code.

•Every person who submits an application to the AC, by

submission of such an application, and every Lot owner by

acceptance of a deed to any Lot agrees not to bring any

action or suit against the Association, its Board, members of

the AC, or the Developer or its members, officers, employees,

agents, successors, or assigns to recover damages resulting

from the architectural review process set forth herein.

(e) Enforcement. The decisions of the AC and the

requirement to obtain approval of the AC may be enforced by

the Association or by any Lot owner by bringing an action for

specific performance or for an injunction,; prohibitory or

mandatory. Such actions- shall be timely if1 brought within

four months after it becomes apparent that any' Lot owner has

not obtained the required approval or has deviated from the

approved Plans, whichever occurs later. In any such action,

the prevailing party shall be • entitled to recover from the

losing party all costs and attorney fees incurred.

^HOMEOWNERS ASSOCIATION

3. Membership in Association. All Lot owners and

Developer shall be members of . a Montana non-profit

corporation, formed or about to be formed, known as "ISLAND

AT ROCK CREEK HOMEOWNERS ASSOCIATION", herein called

"Association". "Lot owner" shall mean each person, as shown

by the records of 'the Carbon County Clerk and Recorder,

owning all of or an undivided interest in a Lot, or in the

5

case of condominiums, townhomes, or patio homes constructed

upon a Lot, owning all of or an undivided interest in any

Unit thereof. If an owner has sold to a third person under

the terms of an agreement for future delivery of title, and

notice of such agreement is recorded with the Carbon County

Clerk and Recorder, the purchaser shall be deemed to be the

Lot owner. Co-owners or joint owners of a Lot or Unit shall

be deemed to be one member for the purposes of voting and

assessment. The affairs of the Association shall be governed

by its Bylaws/ attached hereto as Exhibit "B".

4. Obligations of the Association. The Association

shall have the responsibility for maintaining those areas and

facilities within the subdivision which are available for use

by the public or by all Lot owners, unless such areas or

facilities are maintained by the City of Red Lodge, and for

determining and assessing the costs of such maintenance to

the Lot Owners.

5. Annual assessments. The Association, through its

Board of Directors, shall establish and collect an annual

assessment from each Association member to pay for all costs

of the maintenance described above, for liability insurance

insuring the Association and its members against liability

resulting from the Association's maintenance of the

facilities described above, for Officer's and Director/s

"liability insurance, for administrative and legal expenses,

and for any other expenses authorized or required by the

provisions of the Original Declaration and this Supplemental

Declaration. The Architectural Committee will not determine

the assessments.

6. Payment o£ assessments. Each Lot . owner shall be

responsible for the payment of assessments within 30 days

after the Board gives notice of the assessment. Assessments

paid more than 3 0 days after the date when. due shall bear

interest at the rate of 12% per annum from the due date until

paid. All payments shall be applied first 'to interest and

then ' to the earliest assessment due. Interest collected

S

shall become part of the Association's account. In no event

shall the interest charged be more than permitted by the

Montana usury, statutes. All assessments collected by the

Association may be commingled in a single fund. The

Secretary-Treasurer of the Association shall maintain records

showing the amounts of all assessments paid and unpaid. Such

records shall be available for inspection at all reasonable

times by Lot owners or their representatives.

7 . Covenant to pay maintenance assessments. Each Lot

owner, by acceptance of a deed, whether or not it shall be

expressed in said deed/ is deemed to covenant and agree to

pay to the Association all assessments lawfully made by the

Association and to waive any right said Lot owner may have,

under the laws of the United States or the State of Montana,

to claim a homestead exemption for 'said assessments. Lot

owners and their grantees s.hall be jointly and severally

liable for all unpaid assessments due .and payable at the time

of conveyance of any Lot, b.ut without prejudice to the rights

of the grantee to recover from the grantor the amounts paid

by the grantee therefor. The Secretary-Treasurer of the

Association shall notify third parties, upon their request,

of the amount of unpaid assessments on any Lot.

8. Remedies for non-payment of assessments. All unpaid

sums assessed by the Association to any Lot, together with

interest, collection costs, costs of • suit, and .reasonable

attorney fees/ shall constitute a lien on such Lot, arid if

.filed of record,- may be foreclosed in the same manner as a

'construction lien. Such lien shall not .take priority over

any sums unpaid on a first mortgage or trust indenture of

record prior to the recording of the lien for assessments.

Each assessment, together with ' interest, collection costs,

costs of suit, and reasonable attorney fees shall also be the

personal obligation of the Lot owner of the Lot against which

the assessment was made at the time the assessment fell due.

Furthermore, suit to recover a money judgment for unpaid

assessments shall be maintainable by the Association against

7

said Lot owner without foreclosing or waiving the lien

securing the same. All costs of collection of delinquent

assessments, including but not limited to, court costs, costs

of filing liens, and attorney fees, shall be the obligation

of the non -paying Lot owner, and may be added to the next

regular assessment for that Lot. No sale or transfer of a

Lot shall relieve the grantee or transferee from liability

for past due assessments or from the lien thereof. All

rights, remedies and privileges granted to the Association or

the Lot owners pursuant to the terms hereof shall be deemed

to be cumulative.

MISCELLANEOUS

9. Severability. Invalidation of any one of these

covenants by judgment or court order shall in no way affect

any of the other provisions which shall remain in full force

and effect.

10. Alterations to these restrictions. Unless otherwise

provided herein, any alteration or amendment to the Original

Declaration or this. Supplemental Declaration must be in

writing and signed by all of owners of no less than 75% of

the number of Lots, townhomes and condominium units subj ect

to the Original Declaration and this Supplemental

Declaration. These restrictions may be revoked in whole or

in part and additional provisions may be added by written

amendment signed by al 1 owners of no less than 90% of the

total number of • Lots and the total' number of individual

fcownhome or condominium units subject to these restrictions.

No amendment shall be effective until it is recorded in the

office of the Carbon County Clerk and Recorder. Unless

approved by Developer, in writing, no amendment or revocation

of these any of the original Declaration or- this Supplemental

Declaration shall take effect prior .to sale of all Lots by

Developer.

11. Enforcement. The Association and each and every one

of the Lot owners shall have the right to enforce the

provisions of the Original Declaration and the restrictions

and covenants in this Supplemental Declaration, and any and

all amendments thereto, by civil action, including the right

to injunctive relief and for damages. It is presumed that

some damage would be occasioned by reason of the failure of

any Lot owner or owners to comply with these restrictions and

the covenants herein contained. If litigation is commenced,

the prevailing party shall have, in addition to any other

remedy applicable at law or in equity, a reasonable

attorney's fee and expenses.

In the event that any Lot owner shall permit the

exterior of any residence or other improvement, including any

landscaping which it is the responsibility of such Lot owner

to maintain, to fall into disrepair so as to create a

dangerous, unsafe, unsightly, or unattractive condition, or

violate the provisions of the Original Declaration, the

Association may notify the Lot owner to take corrective

action. If corrective action is not taken by the Lot owner

within a reasonable time, as determined by the Board, the

Board may cause such corrective action to be taken and shall

assess the expense of correction to the Lot owner as a

special assessment, payable only by that Lot. owner. If a Lot

owner fails or refuses to pay such an assessment, the

Association may file and foreclose a lien for the amount of

the assessment.

12. Conflicts. . In the event of a conflict between the

provisions of the Original Declaration and this Supplemental

Declaration, the provisions of this Supplemental Declaration

• shall control and be binding upon all Lot owners and all

residents of the Lots.•

13. Exhibit "A" . Exhibit "A" , referenced in the

Original Declaration is attached hereto.

Except as provided herein, the Declaration of

Restrictions, Covenants' and Conditions for ^Island of Rock

Creek Subdivision described above, shall remain as written.

9

The covenants, restrictions and' conditions herein

contained shall run with the land and 'shall be binding on all

owners of the Lots and. all persons claiming under_ them. The

grantees of any of the lots -or of any duplex unit,

condominium, townhorne, or patio home constructed on a Lot, by

acceptance of a conveyance, covenanb and agree faithfully to

observe and abide by all of said conditions,, covenants and

restrictions.

IN WITNESS WHEREOF, _ the parties have executed this

Supplemental Declaration of Restrictions for Island at Rock

Creek Subdivision, the day a/id̂ year first above written.

KIELY Caka.Kie

INSTRUCTION, L .L .C.Ly/Construction Company LLC

Its Manager

COLT COMMUNICATIONS, LLfl: MONEYPURCHA.$9 /P^SIOl/ PLA^J- ':

ROCKY MQUitfTAIN PIPE & ^CEEL, aMontan

By:

DONALD ALLEN THOMAS

STATE OF MONTANA

COUNTY OF CARBON

This instrument was acknowledged before me on May 32006, by W i l l i a m Kie.ly, Manager of kieLy Construction,L.L.C, aka Kiely Construction Company LLC

SHELLY LINK

\Y PUBLIC MONTANA

/ tosldina In Red Lodes, MontanaJ

.EXPIRES JUNE 28,20Tfj

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Nunary P db 1 i c f o/fV t h e "state of MTResiding at Red Vodge , MT •My Commission Expires: 6-28-2009

10

The covenants, restrictions and conditions herein

contained shall run with the land and shall be binding on all

owners of the Lots and all persons claiming under them. The

grantees of any of the lots or of any duplex unit,

condominium, townhome, or patio home constructed on a Lot, by

acceptance of a conveyance, covenant and agree faithfully to

observe and abide by all of said conditions, covenants and

restrictions.

IN WITNESS WHEREOF, the parties have executed this

Supplemental Declaration of Restrictions for Island at Rock

Greek Subdivision, the day and year first above written.

KIELY CONSTRUCTION, L.L.C.aka Kiely Construction Company LLC

•By: ;Its Manager

COLT COMMUNICATIONS, LLC MONEY-PURCHASE PENSION PLAN

By:.Its:

ROCKY MOUNTAIN PIPE & STEEL, aMontana corporation.

By:Its:

DONALD ALLEN THOMAS

10 a

STATE OF MONTANA

County ofS3 .

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of COLT COMMUNICATIONS, LLC MONEYasPURCHASE PENSION PLAN.

(prinf or r>pe nn/Ae oj notary)

Notary Public for the Stfete ofResiding atMy Commission Expires \ 200

STA1 MONTANA

County ofss .

This instrument was_, 2006, by*

of ROCICflcorporation.

wledgted I before \e on\s

EN PIPE & STEEL, a Montana

(print or type nam£ oj notary)

Notary Public^for.the Stat^ ofResiding at ~ - --''My Commission Expires yy

STATE OF MONTANA

County ofss .

This instrument was acknowledged before me on'' 2006, by DONALD ALLEN THOMAS.

(SEAL}

(print or type name of notary)

Notary Public for the State ofResiding at 'My Commission Expires

11

STATE OF MONTANA

County of

This

ss .

instrument was, 2006, by

acknowledged before me on

as . •__PURCHASE PENSION PLAN.

Of COLT COMMUNICATIONS, LLC MONEY

(SEAL;

'(print or type name of notary) ~"Notary Public for the State ofResiding atMy Commission Expires

STATE OF MONTANA ) . .

County of

200

ss .

This instrument was acknowledged before me on, 2006, by , asof ROCKY MOUNTAIN PIPE & STEEL, a Montana

corporation.

(SEAL)

~(prini~or~fype name 'of notary)

Notary Public for the State ofResiding atMy Commission Expires

STATE OF

County of

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instrument was ' acknowledged beforel. 3-X *~ , 2005 , by*)DONALD. ALLEN THOMAS.

me on

'(print ortypename oj notary) 7Notary Public for-.-the State ofResiding, atMy Commission Expires

OFFICIAL SEALROBERT T. SIEGEL

NOTARY FU8UC - State of Arizonalla

Lots 1, 2 and 3, of Island At Rock CreekSubdivision, Phase 1, according to the officialplat thereof on file and of record in the office ofthe Clerk and Recorder of Carbon County, Montana',as Plat No. 1552.AM.

EXHIBIT' "A1

BYLAWS OF ISLAND AT .ROCK CREEK

' OWNERS' ASSOCIATION

(a non-profit corporation)

The initial Board of Directors of ISLAND. AT'ROCK CREEK OWNERS'

ASSOCIATION, a Montana. non-profit corporation, ("the Association"), hereby

adopts the following Bylaws:

DEFINITIONS

In the interpretation of these Bylaws the following definitions shall apply:

"Class "C" Control Period" means the period of time during which the

Developer, as the Class "C" Member, is entitled to appoint a majority of the

members of the Board. The Class "C" Control'Period shall terminate on the first

to occur of the following:

(a) when 75% of the total acreage "of property described in the MasterPlan for The Island Of Rock Creek has been conveyed to persons otherthan Developer and 75% of the total number of residences permittedby applicable zoning for such property have been issued certificates ofoccupancy and have been conveyed to Class "A" or Class "B" Membersother than Developer;

(b) 20 years after the date on which tills Declaration is recorded in theOffice of the Clerk and Recorder for Carbon County, Montana; or

(c) when, in its discretion, the Class "C" Member so determines.

"Developer" means Kiely Construction, L.L.C., or any, person or entity to

whom Kiely Construction, . L.L.C. transfers or assigns its, development rights

hereunder. '. • . '

"Original Declaration" means Island At Rock Creek Subdivision Declaration

of Restrictions, Covenants and Conditions filed in the office of the Clerk and

Recorder of Carbon County, Montana as Instrument File No. 319575, as amendedfrom time to time.

" Supplemental Declaration" means the Supplemental Declaration of

Restrictions for Island at Rock Creek Subdivision.

"Subdivision" is The Island at Rock Creek Subdivision.

EXHIBIT "B"

OFFICES

1. Principal Office. The principal" office of this Association is situated at

501 North Hauser, Red Lodge Montana 59068. The Board of Directors may change

the principal office,

MEMBERS

2. Membership- Each owner of the following described lots, including

each owner of a unit of Aspens on Rock Creek Townhomes located on Lot 1,

described below, shall be a; Member of the Association, together with all of the

owners of Townhome Units or Lots in all subsequent phases of Island At Rock

Creek Subdivision, if the Lots or townhonie units in subsequent phases of Island at

Rock Creek Subdivision are subjected to the provisions of the Original Declaration

and the Supplemental Declaration.Lots 1, 2 and 3, of Island At Rock Creek Subdivision, Phase 1,according to the official plat thereof on file and of record in theoffice of the Clerk and Recorder of Carbon County, Montana, as PlatNo. 1552 AM.

Co-owners, or joint owners of a Lot or Unit shall be deemed to be oneMember for the purposes of voting and assessment. If any Lot is subsequently

subdivided or subjected to the provisions 'of the Montana Unit Ownership Act, the

owners of each subdivided Lot and the owners of each Unit shall be members of

the Association.3. Classes of Membership and Voting Rights. The Association initially

shall have three classes of membership, Class "A", Class "B" and Class "C" as follows:(a) Class "A". : Class "A" Members .shall be all owners of townhome

units, except the Class "C" Member. Class "A" Members shall haveone equal vote for each townhome unit owned.

(b) Class "B". Class "B" Members shall be all owners of residentialsingle-family lots units, except the Class "C" Member. Class "B"Members shall have one equal vote for each Lot owned.

(c) Class "C". ..The sole Class "C" Member shall be the Developer, KielyConstruction, L.L.C., aka Kiely Construction Company, LLC, or itsassigns. The Class "C" Member shall have one vote for each singlefamily lot owned by it, and one vote for each townhome unit ownedby it. In .addition, the consent .of the Class "C" Member shall berequired for various actions of the Board, the members and

committees of the Board, as specifically provided herein. The Class"C" member may appoint a majority of the members of the Boardof Directors during the Class "C" Control Period, as specified below.Additional rights of the Class "C" Member are specified herein.After termination of the Class "C" Control Period, the Class "C"Member shall have a right to disapprove actions of the Board, themembership and committees as provided below. Upon terminationof the Class "C" membership, Developer shall be entitled to class"A" membership and voting rights for each residential townhomeunit which it owns and Class "B" membership and voting rights foreach single-family residential lot which it owns.

4. Voting Rights. Only the Class "A" Members and the Class "C" Membershall be permitted to vote on those issues which relate to and affect only residentialtownhome units, and only the Class "B" Members and the Class "C" Member shall bepermitted to vote on those issues which affect only single-family Lots. All Members

shall be entitled to vote on matters affecting the entire subdivision.5. Animal Meeting. The annual meeting of the Members for election of

Directors, approval of an annual budget, and the transaction of such other businessas may properly come before them shall be held at the principal office of thisAssociation or at such other .place that shall be set forth in the Notice of meeting.The annual meeting shall be held on the first Saturday of June, 2007, at 1:00 o'clockP.M. and on the first Saturday 'of June of each and every year thereafter.

6. Notice of Annual Meeting. The Secretary-Treasurer of thisAssociation shall give written notice stating the place, day and hour of the meetingby delivering the same not less than ten (10) days .prior to the, date of the meeting, ifnotice is personally delivered, or not less than thirty days, nor more than fifty (50)days before the date of the meeting, if notice is delivered by.mail, to each Memberof record entitled to vote at such meeting. The notice shall be deemed deliveredwhen deposited, postage prepaid, in the United'States mail addressed to the Memberat the Member's address as it appears on records of the Association with postageprepaid thereon. : .

7. Special Meeting., Special meetings .of the Members may be called bythe Board of Directors or by not less than 25% of all the Members entitled to vote atthe meeting. Notice of said special meeting shall' be given in the same manner asnotice for the annual meeting as outlined in' Section 6 above, except that the notice,in addition to all other requirements, must state the purpose or purposes for whichthe meeting is called. No business other than that specified in the Notice of Meetingshall be transacted at any such special meeting.

8. Quorum of .Members. A majority of the Members in each class31

entitled to vote and represented in person or by proxy shall constitute a quorum at

a meeting of Members. The Members present at a duly organized meeting may

continue to transact business until adjournment, notwithstanding the withdrawal of

enough Members to leave :less than a quorum. If a quorum is present, theaffirmative vote of the majority of Members represented, at the meeting and

entitled to vote on the subject matter shall be the act of the Members unless thevote of a greater .number is required by the Articles of Incorporation, these Bylaws,

or the Original Declaration or Supplemental-Declaration.

If a meeting cannot be organized because a quorum is not present, thosepresent .may adjourn the meeting from time to time until a quorum is present and at

which time any business may be transacted that could have been transacted at the

meeting as originally called.

9. Proxies. Every proxy must be dated and signed by the Member and

given to the Secretary-Treasurer before or at the :time of the meeting. No proxy

shall be valid -after the expiration of eleven (11) months from the date of itsexecution. Every proxy shall be revocable by the Member executing it. Said

revocation must be in writing,, dated and signed by the Member and given to the

Secretary-Treasurer before or at the time of:the Association's next meeting.

10. Order of Business. The order, of ^business at all meetings of the

Members shall be as follows: :(a) Proof of notice of meeting or waiver of notice.

(b) Reading of minutes of preceding meeting.

(c) Reports.

(d) Business.

11. Informal Action. Resolutions required or permitted to be approved by

Members may be approved without a meeting of Members if the written resolution

is signed by at least 51% of the Members in each class entitled to vote, approved by

the Class "C" Member and filed with the corporate records.

BOARD OF DIRECTORS i

.12. Directors. The Association shall be governed by a Board of than five(5) persons, all of whom shall be Members of the Association and who shall beelected by majority vote of the Members of each Class present at the annual

meeting. Until termination of the Class "C" Control period, Class "A" Members

shall elect one Director, Class "B" Members shall elect one Director, and the Class

"C" Member shall elect the remaining three (3) Directors. After termination of the

Class "C" control period, two Directors shall be elected by the Class "A" Members,

two by the Class "B" Members, and one by-the Class "C" Member. The Directors

shall serve without compensation.

13. Term. At the first annual meeting of the Association, five Directors

shall be elected. The term of three of the Directors shall be fixed for one year.

The term of two of the Directors shall be fixed at two years. At the expiration of

the initial term of each Director, an election shall be held; all successor Directors

shall serve two-year terms. .A Director may be re-elected to successive terms.

' 14. Initial Directors. Until the first annual meeting, WILLIAM KIELY

and SUE KIELY, shall serve as the only Directors.

15. Powers and Duties of Directors. The Board of Directors shall have the

powers and duties necessary for the administration of the affairs of the

Asspciation, and may do all acts and things as are not by law, by these Bylaws, by

the Original Declaration, or by the Supplemental Declaration directed to be

exercised and done by the Members.

(a) The Directors shall have the poAver to contract for improvements toand maintenance of the areas of Island at Rock Creek Subdivisiondescribed in .the Supplemental Declaration, and such othermaintenance as may be required by vote of a majority of themembers of each class entitled to vote.

(b) The Board shall have the power to levy and collect regular annualassessments for. the purposes set forth in the SupplementalDeclaration.

(c) The Board shall have the power to levy and collect specialassessments approved by a majority the Members in each voting class.

. • (d) The Board shall prepare an annual.;budget-and obtain contractors'bids for insurance, and/or maintenance for which the Association isresponsible.

(e) The Board shall have the authority to take appropriate legal action tocollect delinquent assessments, to file a lien against any Lot havingdelinquent assessments, and to levy penalties and interest charged inaccordance with the Original Declaration and the SupplementalDeclaration.

(f) The Board shall have the power to enter into and carry out contractsas necessary to its duties herein.

(g) The Board shall have the power to establish a bank account for the5

Association and to keep records in accordance with commonaccounting procedures.

(h) The Board shall have the power to employ and pay a •Secretary-Treasurer.

(i) The Board shall file annual corporate reports with the MontanaSecretary of State and to pay the required fee, and to prepare andfile tax returns for the Association and to pay any taxes due.

16. Removal of Directors. At any regular or special meeting of the

Association called for that purpose, any Director may be removed for good cause

by a vote of a majority of the Members in each Class which elected the Director by

the Members of that Class. In the event of such removal, a successor may then

and there be elected to fill the vacancy thus created.

17. Vacancies in Board of Directors. Vacancies in the Board of Directors

caused by resignation of a Director shall be filled by a vote of the majority of the

remaining Directors, and each person so selected shall serve until the next annual

meeting of the Association, a successor shall be elected.

IS. Regular Meetings. Regular meetings of the Board of Directors may be

held at such time and place as shall be determined, from time to time, by a

majority of the Directors, but at least one 'such meeting shall be held during each

fiscal year. Notice of such regular meetings of the Board of Directors shall be

given to each Director, personally or by mail, telephone, or facsimile at least threedays prior to the date of such meeting.

19. Special Meetings. Special meetings of the Board of Directors may be

called by the President on three days' notice to each Director. Notice may be givenpersonally or by mail, telephone, or facsimile and shall state the time, date, place,

and purpose of the meeting.

20. Quorum. A quorum of the Board for transaction of business at anymeeting shall be a majority of the Directors.

21. Proxies. Only Directors will be allowed an official vote. No proxiesshall be allowed under any circumstances.

'• OFFICERS22. Designation. The Officers of this Association shall be a President, a

Vice-President, and a Secretary-Treasurer.23. Election and Term of Officers. The Officers shall be elected by the

Board of Directors for a one-year term. Officers may be re-elected for successiveterms. The President and Vice-President shall be Members of the Association; the

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Secretary-Treasurer need not be a Member of the Association.

24. Payment of Officers. The President and Vice-President shall serve

without salary; the Secretary-Treasurer may be paid a reasonable salary, as

determined by the Board.

25. Removal of Officers. Any Officer may be removed at any time for

cause by vote of a majority, of the Directors then in office.

26. Filling Vacancies. A vacancy in any office because of death,

resignation, removal, disqualification, or otherwise, may be filled by a vote of a

majority of the Board of Directors. The newly elected Officer shall serve for the

unexpired portion of' the term.

27. President. The President shall be the chief executive officer of this

Association and shall, subject to the control of the Board of Directors, have general

supervision, direction, and control of the affairs of this Association. The President

shall preside at all meetings of the Board of Directors and of the Members.

28. Vice-President. In the absence or disability of the President, the

Vice-President shall perform all the duties of the President, and when so acting,

the Vice-President shall have, all the powers of the President and shall be subject to

all the restrictions upon the President.

29. Secretary-Treasurer. The Secretary-Treasurer shall keep the minutes

of every meeting held and conduct such correspondence as the Board deems

necessary. The Secretary-Treasurer shall have the care and custody of and be

responsible 'for all funds and securities of this Association and shall deposit such

funds and securities in the name of this Association in such bank or safe deposit

companies as the Board of Directors may designate. The Secretary-Treasurer shallalso have authority to pay out and dispose of all orders for payment of money

under the direction of the President or the Board of Directors. The

Secretary-Treasurer shall keep at the principal office of this Association accurate

books of accounts of all its business and transactions and shall at all reasonable

hours exhibit books and accounts to any Director or Member of this Association.

The Secretary-Treasurer shall render a report of the condition of the finances ofthis Association, at each regular meeting of the Board of Directors and regular

meeting of Members and shall perform all other duties incident to the office ofSecretary-Treasurer.

CONTRACTS. CHECKS, DEPOSITS AND FUNDS

30. Contracts and Instruments. The President or Vice-President shall signand approve all contracts and instruments on behalf of this Association after

7

authorization has been granted and approval obtained from a majority of the

Board of Directors,31. Checks and Drafts. All checks, drafts, or other orders for payment of

money, notes, or other evidence of indebtedness, issued in the name of or payable

to this Association, shall be signed or endorsed by such person or persons and in

such manner as, from time to time, shall be determined by resolution of the Board

of Directors. In the absence of such determination by the Board of Directors, such

instruments shall be signed by any two of the Officers of this Association.

32. Depository- All funds of this Association shall be deposited from time

to time to the credit of this Association in such banks, trust companies, or other

depositories as the Board of Directors may select.

DEVELOPER RIGHTS

33. Administration,

(a) Right of Class "C" Member to disapprove Actions. So long as the Class

"C" Membership exists, the Class "C" Member shall have a unilateral right to

disapprove any action, policy or program of the Association, the Board and any

committee which, in the sole judgment of the Class "C" Member, would tend to

impair rights of Developer or Builders under the Declaration or these Bylaws, orinterfere with development or construction of any portion of the subdivision, or

diminish the level of services being provided by. the Association. The Class "C"

Member may exercise this right to disapprove to block proposed action or to

require reversal of actions taken in violation of this Section. The Class "C"

Member-otherwise may not use its unilateral right to disapprove: to require anyaction on behalf of any committee, the Board, or the Association; to reduce thelevel of services which the Association is obligated to provide; to prevent capitalrepairs; or to block any action or expenditure required to comply with applicablelaws and regulations.

No action, policy or program subject • to the right of disapproval set forthherein shall become effective or be implemented until and unless the requirementsof subsection (b) below have been met and either-the Class "C" Member has waivedits right to disapprove or a 15-day period has expired without the Class "C"Member exercising its right to disapprove. Any action taken in violation of thisSection or in disregard of the Class "C" Member's exercise of such right ofdisapproval shall be outside the scope of the Association's authority and invalid and

the Class "C" Member shall be entitled to pursue any and' all remedies available atlaw or in equity, including damages or injunctive relief, to remedy such violation

of its rights hereunder. In the event of such action, the prevailing party shall beentitled to collect its costs and attorney fees, incurred in the action.

(b) Notice. The Class "C" Member shall be give written notice of allmeetings and proposed actions approved at meetings (or by Avritten consent in lieuof a meeting) of the Association, the Board or any committee. Such notice shall begiven by certified mail, return receipt requested, or by personal delivery at theaddress the Class "C" member has registered with the Secretary of the Association,which notice shall set forth with reasonable particularity the agenda to be followedat such meeting.

.(c) Opportunity to be Heard. The Class "C" Member shall be given theopportunity at any such meeting to join in or to have its representatives or agentsjoin in discussion from the .floor of any prospective action, policy, or programwhich would be subject to the right to disapproval set forth herein.

34. Amendment of Declaration.(a) Prior to termination of the Class "C" Control Period, the Class "C"

Member may unilaterally amend these Bylaws for any purpose. Thereafter,Developer may unilaterally amend these Bylaws1 if such amendment is necessary (a)to bring any provision in to.: compliance with anyi applicable governmental statue,rule, regulation, or judicial determination; (b); to enable any reputable titleinsurance company to issue title insurance coverage on the lots or units; (c) toenable any institutional or governmental lender, purchaser, insurer or guarantor ormortgage loans, including, for example, the Federal National Mortgage Associationor Federal Home Loan Mortgage Corporation, to make purchase, insure orguarantee mortgage loans on the lots or units; of (iv) to satisfy the requirements ofany local, state, or federal governmental agency.

In addition, so long as Developer owns property described in Exhibit "C" fordevelopment, it may' unilaterally amend these Bylaws for any other purpose,provided the amendment has no material adverse effect upon any right of anyowner without such owner's consent in writing.

(b) Validity' and Effective Date of Amendments. Amendments to theseBylaws shall become effective upon, recordation^unless a later effective date isspecified therein. ' • ' '

No amendment may remove, revoke, or :modify any right or privilege ofDeveloper or the Class "C"! Member without the'written consent of Developer, the

. • ' 9 i

Class "C" Member, or the.assignee of such right or privilege.

MISCELLANEOUS PROVISIONS

35. Waiver of Notice. Whenever any notice is required to be given'under

the provisions of law or under the provisions of the Articles of Incorporation orthese Bylaws, or the Original or Supplemental Declaration, a waiver thereof in awriting signed by the person or persons entitled to such notice, whether before orafter the time stated therein, shall be deemed equivalent to the giving of such

notice.36. Amendment of Bylaws. Except as otherwise provided in these Bylaws,

at any regular meeting or at any special meeting of this Association these Bylaws

may be altered, amended, or repealed, and new Bylaws may be adopted by 75% ofthe Members of each Class.

37. Transfer of Membership. .One Class "A" or Class "B" Membership isattached to each of the lots and units subject to the Original Declaration and

Supplemental Declaration. Class "A" and Class "B" Membership shall not betransferable except upon transfer of said Lot or Unit. Said Membership is

appurtenant to and runs with the Lot or Unit.38. Expulsion of Members. Members may not be expelled from the

Association and their voting rights cannot be canceled. No Member may withdrawfrom the Association so long as that Member owns a Lot or Unit in Island At RockCreek Subdivision.

39. Reimbursement of Costs and Expenses. All Officers and Directorsshall be reimbursed their costs and expenses directly incurred in work performedin furthering the purposes of. this Association.

40. Dissolution. The Association shall be dissolved only if improvementsor.maintenance required to be done by the Association is assumed by some otherentity. In the event of dissolution of the Association, the funds of the Associationshall be divided equally among its Members after payment of all debts of theAssocic

,AWS DATED /WdUA^-M ji^^^ 2006.

WfLLTAMDirector

10

STATE OF MONTANA

County of Carbon; ss,)

This instrument w&s acknowledged before me onWILLIAM KIELY as Director of the Associajj

(SEAL)

2006 by

fprfntln black

Notary Public lor the State of MontanaResiding at Red Lodge, MontanaMy Commission Expires , 200.

SHELLY LINKNOTARY PUBLIC MQNTAKA

- '•• SEAL, /T/ ReskJlnQ In Red Lodoe, Montana

"^OF^O^MY COHM- m^s 4UNE 2fl' 20

11

Tracts A and B of Certificate of Survey 1552 lying in the City of Red Lodge andlocated in the NE1/4 and the SE1/4 of Section-27, Township 7 South, Range 20 East,P.M.M., Carbon County, Montana. • .

EXCEPTING therefrom Lots 1, 2 and 3 of Island at Rock Creek Subdivision, Phase1, according to the official plat thereof on file and of record in the office of theClerk and Recorder of Carbon County, Montana, as Plat No. 1552 AM.

EXHIBIT "C"

Return To:Pedersen & Hardy1001 S. 24th Street West, Suite 110Billings MT 59102Copyristx 2006File No. 34144

SUlc of Mon,a« t « ThtS mSlCl"'rl '1Ie **' myCounlj'.oi Carbon J " office UlisJ3/< ty °1 rert'l 20JLfcu_

at j/j:<?7p'ctock P _m.Lierfa M.'Ladvah.

County ejcrk/- Recorder

322352

PARTY 'WALL AGREEMENT FORTHE ASPENS ON ROCK CREEK

. The undersigned, being the sole owner of all townhomes in The Aspens On RockCreek, located on the following described real property in Carbon County, Montana,hereby establishes and declares that the following party wall restrictions shall beapplicable to said townhomes and the real property on which they are located:

Lot 1 of Island at Rock Creek Subdivision, Phase 1, according to theofficial plat thereof on file and of record in the office of the Clerk andRecorder of Carbon County, Montana, as Plat No. 1552 AM.

KIELY CONSTRUCTION. L.L.C., aka Kiely Construction Company LLC or itsassigns, has the right, but is not obligated, to expand The Aspens On Rock Creek projectin the future, to include all or part of the following real property, hereinafter referredto as the expansion property:

Tracts A and B of Certificate of Survey 1552 lying in the City of RedLodge and located in the 'NE174 and the SE1/4 of Section 27, Township 7South, Range 20 East, P.M.M., Carbon County, Montana.

EXCEPTING therefrom Lots 1, 2 and 3 of Island at Rock CreekSubdivision, Phase 1, according to the 'official plat thereof on file and ofrecord in the office of the Clerk and Recorder of Carbon County,Montana.

In the event an amendment to the Declaration, of Unit Ownership for The AspensOn Rock Creek, which includes all or any part of the expansion property in The AspensOn Rock Creek project, is placed of record in the office of the Carbon County Clerkand Recorder, the provisions : of this Party Wall Agreement shall thereafter beapplicable to all of the property included in The Aspens On Rock Creek project and toall persons who use the facilities of the project.

1. General Rules ol Law to. Apply. Each wall which is .built as a part of theoriginal construction of The Aspens On Rock Creek and which is shared by twotownhomes shall constitute a party wall, and, to the extent not inconsistent with theprovisions of this Agreement, the general rules of law regarding party walls andliability for property damage due to negligence or willful acts or omissions shall applythereto.

2.' Sharing of Repair and Maintenance. The cost of reasonable repair and

maintenance of a party wall shall be shared by the owners of the townhomes who makeuse of the wall in proportion to such use.

3. Destruction by Fire p_i Other Casualty. If a party wall is destroyed ordamaged by fire or other casualty, The Aspens On Rock Creek Homeowners Associationshall restore it if the owners sharing use of the Party "Wall refuse to do so, using theproceeds of insurance purchased .by those owners, without prejudice, however, to theright of any owner or the Association to maintain an action against another ownerunder any rule of law regarding liability for negligent or willful acts or omissions andsubject to the right of tie owners of all townhomes in The Aspens On Rock Creekproject to determine not to repair or restore the party wall with consent of the holdersof all mortgages or trust indentures on any townhome in the project.

4. Weather proof ing. Notwithstanding any other provision of this Agreement,an owner who by his negligent or willful act causes the party wall to be exposed to theelements shall bear the whole cost of furnishing the necessary protection against suchelements.

5. Provisions of this Agreement Run With Land. The covenants, provisionsand restrictions contained herein shall be appurtenant to the land and shall pass to suchowner's successors in title and all parties and persons claiming under them.

6. Arbitration. In the event of any dispute arising concerning a party wall,or under the provisions of this Agreement, each party shall choose one arbitrator, andsuch arbitrators shall choose one additional arbitrator, and the decision shall be by amajority of .all the arbitrators.

DATED this day of 2006.

STRUCTION, L.L.C.onstrtf&ion Company LLC

STATE OF MONTANA

County of Carbon

; On this I ML day of UlfaJt; 2006,before me, the undersigned, a Notary Public for the State of Montana, personallyappeared JAJILUAM ftl&L\ as M/=/&&£& of KIELY CONSTRUCTION,L.L.C., aka Kiely Construction Company LLC.

*(SBState of Montana

T*S-

,T

Jrwtf or type name of notary]

Notary Public f or• .

Residing atMy Commission Expires / — £=>

or