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Articles of Association WHITEMUD HILLS SUBDIVISION BROCHURE September 1990 Carma Developers Ltd. (“Carma”) at its separate cost is in the course of constructing and developing certain facilities (the "Facilities") which are further described in the Whitemud Hills Facilities Agreement attached hereto as Schedule “A” and which are or will be situate on the residential subdivision lands owned by Carma in the southwest portion of the City of Edmonton, being generally called Whitemud Hills Subdivision (the “Subdivision Lands”). The final acreage and boundaries of the Facilities are subject to the approval of the City of Edmonton and other regulatory authorities. Attached to and forming part of this Brochure are the following Schedules: Schedule “A” Whitemud Hills Facilities Agreement Schedule “B” Memorandum of Association Schedule “C” Articles of Association Schedule “D” Encumbrance Schedule “E” Restrictive Covenant Schedule “F” Restrictive Covenant and Easement Whitemud Hills Homeowners Association (the "Association”) has been incorporated by Carma for the purpose of holding title to the Facilities and for operating the Facilities for its members (the “Members”). The title to and the management of the Facilities will be transferred to the Association in accordance with the terms of the proposed Whitemud Hills Facilities Agreement. The resident homeowner(s) or tenant(s) in the Subdivision Lands and the spouse and unmarried children resident with such homeowner(s) or tenant(s) are entitled to become and remain Members of the Association incidental to such persons' ownership or rental of a home located in the Subdivision Lands, subject to their abiding by the rules and regulations of the Association and the timely payment of membership fees to the Association, as hereinafter set forth. A copy of the Memorandum of Association and Articles of Association of the Association are attached hereto as Schedules “B” and “C”. On or before the 31st day of December, 1999, Carma intends to transfer to the Association both title to and the management of the Facilities for the sum of $1.00. Carma will, for the benefit of the Association, attempt to have the title of each as yet undeveloped, [1] single family residential lot and rental project located in the Subdivision lands made subject to the appropriate rent charge Encumbrance generally in the form of Schedule “D” hereto and to have such lots made subject to the appropriate restrictive covenant generally in the form- of Schedule “E” hereto and, where applicable, to the restrictive covenant and easement generally in the form of Schedule “F” hereto. As long as Carma is operating the Facilities, an operating budget so as to allow for their proper operation, as determined in the sole opinion of Carma, shall be approved by Carma. In the period of time prior to title to and the management of the Facilities being transferred to the Association, each Member of the Association will be allowed the use of the Facilities subject to such rules and regulations as are provided by Carma. A breach of such rules and regulations may result in the suspension of the right of a Member to use the Facilities. Carma will use its best efforts to carry out the above commitments; however, its ability to do so and the timing of their completion are subject to receiving all required governmental approvals and to any events beyond its reasonable control which may delay such completion. Carma will operate, maintain, and manage the Facilities until it has both fully transferred title to and the management of the Facilities to the Association. To pay for the operation and maintenance of the Facilities, each single family residential lot and rental project in the Subdivision Lands will be subject to the rent charge encumbrance, requiring payment to the Association of a rental fee of THREE HUNDRED ($300.00) DOLLARS per year as provided in the Encumbrance. The payment of annual rental fees, membership in the Association, and for the use of the Facilities is more fully explained in the Articles of Association of the Association. The undersigned acknowledges and is aware that, pursuant to the Whitemud Hills Facilities Agreement, Carma has undertaken the full responsibility for the design, engineering, development, and construction of and initial management and operation of the Facilities, and has the complete and unfettered right and authority from the Association to carry out such responsibilities in such manner as it sees fit. The undersigned acknowledges that the Association, as set out in Articles 54 and 55 of its Articles of Association, has instructed its officers and directors to fully cooperate with Carma and has relieved its officers and directors of any responsibility to investigate or to determine whether or not Carma is properly carrying out its obligations as set out above. [2] The undersigned, as a potential Member of the Association, acknowledges and unanimously agrees with all other Members or potential Members that, as set out in Articles 54 and 55 of the Articles of Association, it is intended and he agrees that the officers and directors of the Association should fully cooperate with Carma and that all of their rights, duties and obligations that conflict with Carma's rights as set out in the Whitemud Hills Facilities Agreement are and have been suspended during the time of development, planning, construction, and initial operation of the Facilities except to the extent required in order for them to carry out such cooperation. No Member of the Association or homeowner shall have any personal or legal interest in the Facilities or in any part thereof or to the proceeds of the said encumbrances other than as a Member of the Association. As well, a Member's right to membership in the Association is not transferable and it only takes effect and is enforceable for so long as he remains a resident owner or tenant of such residential lot which is located in the Subdivision Lands and where (if required) he maintains membership in the Association. The undersigned is the purchaser of: Lot ____, Block ____, Plan ___________ in the Subdivision Lands against which the Encumbrance is or will be registered, and the undersigned agrees to pay THREE HUNDRED ($300.00) DOLLARS each year hereafter as required by the Encumbrance. The undersigned hereby irrevocably appoints the Association, as his attorney on his behalf and for the Association's use and benefit, to execute and deliver a new rent charge Encumbrance generally in the form of Schedule “D” hereto in the event that a previous encumbrance has been foreclosed off or otherwise removed from the title to the above-mentioned lot. This Brochure and the Schedules hereto constitute the entire agreement and understanding between Carma and the undersigned regarding the Facilities, and no representations, warranties, covenants, or promises have been made by Carma save as those herein expressly contained. As Purchaser(s) of the above lot the undersigned acknowledges having read all of the attachments hereto and agrees to their terms. Signed by the Purchaser(s) of the above specified lot: __________________________________ [3] Schedule “A” WHITEMUD HILLS FACILITIES AGREEMENT THIS AGREEMENT MADE THE ____ DAY OF _____________, 19____, BETWEEN: CARMA DEVELOPERS LTD., a body corporate incorporated pursuant to the laws of the Province of Alberta (hereinafter called “Carma") OF THE FIRST PART - and - WHITEMUD HILLS HOMEOWNERS ASSOCIATION, a body corporate incorporated pursuant to the 'laws of the Province of Alberta (hereinafter called the “Association”) OF THE SECOND PART WHEREAS: A. Carma is the owner of lands generally situated in the southwest part of the City of Edmonton, Alberta as described in Exhibit 1 hereto, and being generally called Whitemud Hills (the "Subdivision Lands") on which it proposes to create residential subdivisions and to benefit such residential subdivisions by creating certain facilities to be determined solely by Carma (the "Facilities") on the Subdivision Lands. The final acreage and boundaries of the Facilities are subject to the approval of the City of Edmonton and other regulatory authorities; B. Carma has determined to create and develop the Facilities with the intention that they be private, non-profit facilities for the benefit of the residents of the Subdivision lands; C. The complete development of the Subdivision Lands is expected to take a number of years; D. The Association is desirous that Carma fully complete the development of the Subdivision Lands and the Facilities; E. The Association acknowledges that it has had no part in the planning or the development of the Facilities or the Subdivision Lands, that all the planning has been done by Carma and that the responsibility for developing the Subdivision Lands and the Facilities is Carma’s; F. Carma will attempt to have each of its purchasers sign a copy of the Whitemud Hills Subdivision Brochure setting out the rights and responsibilities of the members of the [4] Association. Attached to and forming part of the Brochure as Schedule “A” is this Agreement and the following additional Schedules: Schedule “B”: Memorandum of Association Schedule “C”: Articles of Association Schedule “D”: Encumbrance Schedule “E”: Restrictive Covenant Schedule “F”: Restrictive Covenant and Easement which additional Schedules are incorporated in this Agreement and form a part hereof. G. Carma has caused the Association to be incorporated pursuant to the Companies Act (Alberta) and the Association has been organized pursuant to the Memorandum
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