BYLAWS

 OF

PINON RANCH HOMEOWNERS ASSOCIATION, INC.

Article I

OFFICES

                                    Section 1.1            Business Offices.  The principal office of Pinon Ranch Homeowners Association, Inc., a Colorado nonprofit corporation (then “Association”), shall be located in Colorado Springs, Colorado.

                                    Section 1.2            Registered Offices.  The registered office of the Association required by the Colorado Nonprofit Corporation Act to be maintained in Colorado may be, but need not be, the same as the principal office, and the address of the registered office may be changed from time to time by the Board of Directors or by the officers of the Association.

ARTICLE II

MEMBERS

                                    Section 2.1            Membership.  The Association shall have one class of voting Members.  The qualifications for and terms of membership, and the rights, powers and privileges, including time in the Declaration of Covenants, Conditions, Restrictions and Easements for Pinon Ranch Subdivision, including amendments thereto (the “Declaration”).

                                    Section 2.2            Assessments.  Members shall be obligated to pay Assessments (as defined in the Declaration) to the Association as provided in the Declaration.

                                    Section 2.3            Suspension and Termination of Membership.  A Member who fails to pay any Assessment or other amount owed to the Association within 10 days after written notice of such failure to pay is delivered to such Member shall be automatically suspended from membership until all such des and Assessments are fully paid, at which time such Member shall be automatically reinstated.  During any period of suspension a Member shall not be entitled to exercise the rights and privileges of membership, including without limitation the right to vote.

                                    Section 2.4            Transfer of Membership.  Membership in the Association is nontransferable except in connection with the transfer of the Member’s Lot.  Members shall have no ownership rights or beneficial interests of any kind in the assets of the Association, except as expressly provided in the Declaration.     

                                    Section 2.5    Annual Meeting of Members.  Annual meeting of the Members shall be held on the first Tuesday in the month of December in each year, beginning with the year 1998, at the time and place, within the City of Colorado Springs, Colorado, determined by the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting  If the day fixed for the annual meeting shall be a legal holiday in Colorado, such meeting shall be held on the next succeeding business day.  If the election of directors shall not be held on the day designated herein for the annual meeting of the Members, or at any adjournment thereof, the Board of Directors shall cause the election to e held at a meeting of the Members as soon thereafter as may be convenient.  Failure to hold an annual meeting as required by these bylaws shall not work a forfeiture or dissolution of the Association or invalidate any action taken by the Board of Directors or officers of the Association.

                                    Section 2.6    Special Meetings.  Special meetings of the Members, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the President or the Board of Directors, and shall be called by the President at the request of Members having at least 20 percent of the votes entitled to be at such meeting.

                                    Section 2.7    Place of Meeting.  Each meeting of the Members shall be held at such place within Colorado Springs, Colorado, as may be designated in the notice of meeting, or, if no place is designated in the notice, at the registered office of the Association in Colorado.

                                    Section 2.8    Notice of Meeting.  Except as otherwise prescribed by statute, written notice of each meeting of the Members stating the place, day and hour of the meting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 50 days before the date of the meeting, either personally, by private commercial delivery service, or by the first class, certified or registered mail, by or at the direction of the President, or the  Secretary, or the other Officer or person calling the meeting, to each Member entitled to attend such meeting.  If mailed, such notice shall be deemed delivered when deposited in the United States mail, addressed to each Member at such Member’s address as it appears in the records of the Association, with postage thereon prepaid.  Any Member may waive notice of any meeting before, at or after such meeting.  The attendance in person or by proxy of a Member at a meeting shall constitute a waiver of notice of such meeting, expect where a Member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

                                    Section 2.9            Proxies.  At each meeting of the Members, a Member entitled to vote thereat may vote by proxy executed in writing by the Member or by such Member’s duly authorized attorney in fact.  Such proxy shall be filed with the secretary of the Association before or at the time of the meeting.  No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy.

                                    Section 2.10            Quorum.  Except as otherwise required by the laws of Colorado or the articles of incorporation, 10 percent of the Members entitled to vote shall constitute a quorum at each meeting of the Members, and, except as otherwise expressly provided in the Declaration, the article of incorporation or these bylaws, the affirmative vote of a majority of the Members represented at a meeting at which a quorum is present and entitled to vote on the subject matter shall be the act of the Members; provide, however, that an affirmative vote of two-thirds of the Members represented at a meeting at which a quorum is present and entitled to vote thereon shall be required to amend the articles of incorporation or to adopt a plan of merger, requiring the approval of Declarant, as provided in the Declaration, may be taken at any meeting without the presence and approval of Declarant.  If less than quorums of the Members are represented at a meeting, a majority of the Members so represented any adjourn the meeting from time to time for a period not to exceed 60 days at any one adjournment without further notice other than an announcement at the meeting.  At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

                                    Section 2.11  Voting. 

                                                (a)  Each voting Member is entitled to one vote for each Lot owned on each matter submitted to a vote of the Members entitled to vote thereon either at a meeting thereof or pursuant to Section 2.13.  Cumulative voting shall not be allowed.

                                                (b)  The right to vote of any Member which is a corporation or unincorporated association may be exercised by such officer, agent or proxy as the bylaws, constitution or other governing instrument of such corporation or association may prescribe or, in the absence of such provision, as the Board of Directors of such corporation or association may determine.

                                                (c)  Members may vote by mail, but only in connection with the election of directors, for or against a proposed amendment to the articles of incorporation, and for or against a proposed plan of merger, consolidation or liquidation.  Election of any directors by mail shall require at least a majority of the votes which all Members are entitled to cast in the lection.  To amend the articles of incorporation or to adopt a plan of merger, consolidation or liquidation by mail vote shall require the affirmative vote of at least two-thirds of the votes which all Members are entitled to cast on such question.

                                    Section 2.12  Committees.  The Members at any time and from time to time may establish one or ore other committees of Members for any appropriate purposes and may dissolve any such committee.  Either the Members of the Association or the members of the committee shall elect a chairperson who shall preside at all meetings of the committee and generally supervise the conduct of the committee’s affairs.  Rules governing procedures for meetings of any such committee and for the conduct of such committee’s affairs shall be as established by the committee.

                                    Section 2.13  Action without a Meeting.  Any action required or permitted to be taken at a meeting of the Members or any committee thereof may be taken without a meeting if consent in writing, setting forth the action so taken, shall be signed by all of the Members entitled to vote with respect to the subject matter thereof.  Such consent (which may be signed in counterparts) shall have the same force and effect as a unanimous vote of the Members entitled to vote thereon.

ARTICLE III

BOARD OF DIRECTORS

                                    Section 3.1            General Powers.  The business and affairs of the Association shall be managed by its Board of Directors, except as otherwise provided in the Colorado Nonprofit Corporation Act, the articles of incorporation or these bylaws.

                                    Section 3.2            Directors During Declarant Control Period.  During the period of Declarant’s control as set forth in Section 4.5 of the Declaration (the “Declarant Control Period”), the number of Directors of the Association shall be three, all of whom shall be appointed by Declarant.  As provided in the articles of incorporation, the initial directors of the Association shall be Lon P. Frohling, Gary A. Torrance and Albert M Rogers, who shall serve until the first annual meeting of the Association.  Thereafter, throughout the Declarant Control Period, Declarant shall appoint three directors, at each anal meeting of the Association, each of whom shall serve for a period of one year, or until his or her successor is duly qualified and elected or appointed or until such director’s earlier death, resignation or removal.  The directors appointed by Declarant need not be Members of the Association and may be shareholders, directors, officers, employees or agents of Declarant.  All directors must be at least 18 years old.  During the Declarant Control Period, directors appointed by Declarant may be removed only the Declarant.

                                    Section 3.3            Directors After Declarant Control Period.  After expiration of the Declarant Control Period, the number of directors of the Association shall be at least three but not more than seven as determined by the Members or the Board of Directors from time to time.  Any action of the Members or Board of Directors to increase or decrease the number of directors, whether expressly by resolution or by implication through the election of additional directors, shall constitute an amendment of these bylaws effecting such increase or decrease.  All directors shall be elected by the Members at each annual meeting of the Members after expiration of the Declarant Control Period.  Each director so elected shall hold office until the next annual meeting of the Members and thereafter until such director’s successor shall have been elected and qualified or until such director’s death, resignation or removal. Directors must be at least 18 years old, and after expiration of the Declarant Control Period, all directors must be Members of the Association.  Directors shall be removable in the manner provided by the statutes of Colorado after expiration of the Declarant Control Period.

                                    Section 3.4            Vacancies.  Any director may resign at any time by giving written notice to the president or to the secretary of the Association.  A director’s resignation shall take effect at the time specified in such notice, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.  If a vacancy in the Board of Directors occurs because of the death, resignation or removal of a director appointed by Declarant, Declarant shall appoint a new director to fill the vacancy.  Any vacancy occurring in the Board of Directors after expiration of the Declarant Control Period may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum.  A director elected to fill a vacancy shall be elected for the unexpired term of such director’s predecessor in office.  Any directorship to be filled by reason of an increase in the number of directors after expiration of the Declarant  Control Period shall be filled by the affirmative vote of a majority of the directors then in office or by an election at a meeting of the Members called for that purpose, and a director so chosen shall hold office until the next election of directors and thereafter until such director’s successor shall have been elected and qualified or until such director’s earlier death, resignation or removal.

                                    Section 3.5            Regular Meetings.  A regular meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of the Members, or as soon as practicable thereafter at the time and place determined by the Board, for the purpose of electing officers and for the transaction of such other business as may come before the meeting.  The Board of Directors may provide by resolution the time and place within the City of Colorado Springs, Colorado, for the holding of additional regular meetings.

                                    Section 3.6    Special Meetings.  Special Meetings of the Board of Directors may be called by or at the request of the president or any two directors.  The person or person authorized to call special meetings of the Board of Directors may fix any place within the City of Colorado Springs, Colorado, as the place for holding any special meeting of the Board called by them.

                                    Section 3.7    Notice.  Notice of each meeting of the Board of Directors stating the place, day and hour of the meeting shall be given to each director’s at such director’s business address at least five days prior thereto by the mailing of written notice by first class, certified or registered mail, or at least two days prior thereto by personal delivery of written notice or by telephonic, telegraphic, telex or facsimile notice (and the method of notice need not be the same as to each director).  If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage thereon prepaid.  If telegraphed, such notice shall be deemed to be given when the telegram is delivered to the telegraph company.  If transmitted by telex or facsimile, such notice shall be deemed to be given when the transmission is complete.  The foregoing notice requirements do not apply to regular meetings of the Board of Directors for which the time ad place have been established by resolution of the Board of Directors, provided that all directors have actual notice of  such resolution.  No notice is required for such regularly scheduled meetings.  Any director may waive notice of any meeting before, at or after such meeting.  The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting unless otherwise required by statute.

                                    Section 3.8            Presumption of Assent.  A director of the Association who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless such director’s dissent shall be entered in the minutes of the meeting or unless such director shall file a written dissent to such