NOTICE OF ANNUAL MEETING FOR THE CORNERSTONE OWNERS ASSOCIATION, INC. APRIL 17, 2019 AT 2:00 P.M. MOUNTAIN TIME

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1 NOTICE OF ANNUAL MEETING FOR THE CORNERSTONE OWNERS ASSOCIATION, INC. APRIL 17, 2019 AT 2:00 P.M. MOUNTAIN TIME All owners are invited to the Annual Meeting scheduled for Wednesday, April 17 at 2:00 p.m. mountain time. The meeting will be held at 10 Gold Dust Lane Montrose, the Cornerstone Golf Club clubhouse. As it is anticipated that most members will not be able to attend in person, those who wish to participate by phone may do so by calling and entering Pass Code # when prompted. The primary purpose of the meeting will be to present the adopted 2019 budget (dues are set at $1,000 for 2019), provide an update on the status of the community, and the election of 2 directors. To download a full meeting packet, including the budget and other pertinent materials, visit the Meetings page of the website at Board members will be available to give an update and answer questions related to the status of the community. The order of business and the topics to be discussed at the Annual Meeting are as follows: 1. Call to Order, Proof of Notice of the Meeting and Quorum Verification 2. Approval of the April 7, 2018 Member Meeting Minutes (available on website) 3. Community and Metropolitan District Update 4. Presentation of the 2019 Budget (available on website) 5. Election of Two Directors For Two Year Terms 6. General Discussion/ New Business 7. Adjournment If you are unable to attend in person, please follow the instructions on the enclosed proxy for voting. Since we do not expect many in person attendees, receipt of your proxy is essential to ensure that we have a quorum which allows us to conduct business. Please mail, or fax the proxy to Eric Weaver, CPA, Marchetti & Weaver, LLC, 28 Second Street, Suite 213, Edwards, CO 81632, fax no. (970) , Eric@mwcpaa.com. Voting rights assigned by proxy must be assigned to a person physically in attendance. If you provide a proxy and then attend the annual meeting in person, your proxy is simply voided. Voting rights of delinquent owners will be suspended as provided for in the Community Charter for Cornerstone. Sincerely, Eric Weaver, Marchetti & Weaver, LLC, Administrator Cornerstone Owners Association, Inc.

2 PROXY AND RSVP FOR THE ANNUAL MEETING OF THE CORNERSTONE OWNERS ASSOCIATION, INC. Instructions: Please check one of the following two boxes, complete this proxy and , fax or mail to the address at the bottom of this proxy. Thank you. I/we plan to attend, IN PERSON, the Annual Meeting of the Cornerstone Owners Association, Inc. scheduled for April 17, 2019 at 2:00 p.m. mountain time in person. Even though I/we are planning to attend, my/our proxy is also being ed/faxed/mailed. This proxy shall be void if I/we attend the Meeting. Sorry, I/we will not be able to attend, IN PERSON, the Annual Meeting of Cornerstone Owners Association, Inc. scheduled for April 17, 2019 at 1:00 p.m.; however, please see the proxy below. Proxy: I/We represent myself/ourselves to be (a) unit owner(s) and member(s) of the Cornerstone Owners Association, Inc. I/We appoint and grant my (our) proxy to: (print the name of the person that will be attending the Meeting as your proxy, if left blank this proxy will automatically appoint Director Warren Ache.) The designated proxy is authorized to vote on all matters that may be voted upon by me/us at the Annual Meeting, with all the powers that I/we would possess if present in person. This proxy and appointment includes the right of the proxy to substitute a successor proxy and the right of the proxy to vote at all adjourned meetings of the Annual Meeting, if any. All previous proxies given are revoked. I/we ratify and confirm any and all acts and things that my/our designated proxy may do or cause to be done under this proxy. Owner Signature Date Address Print Name Owner Signature Date Print Name This form is requested to be returned by , fax, or regular mail not later than close of business on April 15, 2019 or, in the alternative, the proxy may be brought to the April 17, 2019 meeting and turned in prior to the start of the meeting. Eric Weaver, CPA, Marchetti & Weaver, LLC 28 Second Street, Suite 213 Edwards, CO Fax No.: (970) Eric@mwcpaa.com

3 R E C O R D O F P R O C E E D I N G S Minutes of the Annual Meeting Of the Members of Cornerstone Owners Association April 7, 2018 The annual meeting of the members of the Cornerstone Owners Association, Montrose and Ouray Counties, Colorado, was held Saturday, April 7, 2018 at 1:00 p.m. mountain time at 896 Birdsong Lane, Montrose, Colorado, in accordance with the applicable statutes of the State of Colorado. Attendance The following Members were in physical attendance (number of homestead votes in parenthesis): Bill Fugazzi (1) Mike Henderson (1) The following Members were in attendance via proxy (number of homestead votes in parenthesis): Gail Stein (1) Tom Musselman (2) Warren & Marijo Ache (1) David Flatt (1) Bob Aisner (1) Robert Star (1) Michael Loehr (2) Ed Sheridan (1) Carol & Bill Lawler (4) Scott & Mary Heape (1) Jon Nelson (1) Curtis Anderson (1) Robert Trenary (1) Roy Jedeikin (1) Ronald Schwarz (1) Ross Hauck (1) Kari Wage (1) Robert Weisel (1) Members in attendance via conference call were: Bob Aisner Robert Trenary Tom Musselman Doug Buss Warren & Marijo Ache Steve Lemmon & Boyd Faust Page 1

4 R E C O R D O F P R O C E E D I N G S CORNERSTONE OWNERS ASSOCIATION April 7, 2018 Annual Member Meeting Minutes Mary Heape Also in attendance via conference call were: Jason Stroehlein, Golf Course Superintendent Candyce, Cavanagh, Orten Cavanagh & Holmes Eric Weaver, Marchetti & Weaver, LLC Rick Gonzales, Marchetti & Weaver, LLC Call to Order The annual member meeting of the Cornerstone Owners Association was called to order on April 7, 2017 at 1:00 p.m. by Mr. Aisner. Mr. Weaver reported proxies were received for the multiple members noted above and that since only 25% of the 55 members which are current in their dues are needed to establish a quorum that there were adequate members in attendance either in person or via proxy to constitute a quorum. Minutes Minutes from meeting held February 2, 2017 were considered for approval. Upon motion duly made and seconded, it was unanimously RESOLVED to approve the minutes for the meeting held February 2, Metropolitan District Update Mr. Ache reported on the status of the water and sewer system owned and maintained by the Metropolitan District Budget Mr. Aisner reported the 2018 budget was adopted at a previously held Board Of Directors meeting and annual assessments for 2018 were set at $1,000 per homestead. The budget was distributed to the members with the notice of the annual meeting and was also available on the Association website at Mr. Aisner also explained that the budget could be rejected with a 75% vote of eligible voting members. There was no discussion or objection from members and the budget adopted by the Board of Directors remained unchanged. Page 2

5 R E C O R D O F P R O C E E D I N G S CORNERSTONE OWNERS ASSOCIATION April 7, 2018 Annual Member Meeting Minutes Elections Mr. Weaver reported that the two year term had expired for Directors Bob Aisner, Bill Fugazzi, Scott Heape and they were up for re-election for a two year term. Director Jon Nelson is up for re-election for one year, to complete Ms. Lawler s two year term to which he was appointed in Mr. Aisner informed members that all Directors have expressed their willingness to continue serving. Mr. Aisner then asked the members if there were others who want to serve on the Board of Directors. No nominations were made. Upon motion duly made and seconded it was unanimously RESOLVED via acclimation to approve Bob Aisner, Bill Fugazzi and Scott Heape to serve 2 year terms on the Board and Jon Nelson to serve the remaining year of former Director Lawler s two year term. Community Update Mr. Aisner informed the members that since the sale to the prospective new developers did not close a group of owners have formed a lending group to fund the renovation of the golf course and general community maintenance. The lenders group believes that these activities will make it easier to market and/or spark development of the community. Personnel have been hired and work started in late summer of last year. Additional personnel will be hired this spring with the goal of opening the driving range with very limited golf pro services and food and beverage service during this summer starting on July 4. The goal is to have the entire golf course opened in Mr. Aisner informed members that a substantial amount of capital has been raised to fund these activities and efforts to raise additional capital are underway and asked any member who has interest in investing or knows someone who does to contact him. Mr. Aisner then informed members that none of the aforementioned work is funded by assessments on the Association but that it is the responsibility of the Association to maintain trails and fences in the community and that a substantial portion of the 2018 Annual Assessment will be used to fund this work, particularly fencing Page 3

6 R E C O R D O F P R O C E E D I N G S CORNERSTONE OWNERS ASSOCIATION April 7, 2018 Annual Member Meeting Minutes General Discussion Mr. Aisner then responded to questions from participants regarding future development plans, marketing plans, and efforts to raise additional capital. Adjournment There being no further business to come before the Membership at this time, upon motion duly made and seconded, it was unanimously RESOLVED to adjourn the annual member meeting of the Cornerstone Owners Association this 7 th day of April Respectfully submitted, Rick Gonzales Secretary for the meeting Page 4

7 Cornerstone Owners Association Dear Cornerstone Owners Association Members, For 2019, the Association dues have been set by the Board of Directors at $1,000 per year. This is the same amount as last year s dues. Dues provide the funds necessary for the Association to cover normal operating and other costs. It is the obligation of the Association to maintain fences, trail systems, and other common property of the community. The 2019 budget includes funds to continue these tasks with a step up in activity commensurate with the restart of Cornerstone. There is a significant amount of deferred maintenance to address and although dues at this current level are not adequate to cover all anticipated expenses, the shortfall for 2019 will be covered by the proceeds from the sale to Cornerstone Acquisition Group ( CAG ). Please keep in mind that although this budget has been approved by the Association s Board of Directors, it can be altered with a 75% or greater vote of the entire membership who are authorized to vote at the Member Annual Meeting on April 17, 2019 referenced in the accompanying notice. Also, please note that two board seats are up for election. Warren Ache and Jon Nelson have agreed to serve for another two-year term. However, if other members of the Association have an interest in serving please let the board know of your interest as soon as possible. Your dues invoice is included with this letter in anticipation that the budget and dues amount will not be changed by the membership. Please be sure to pay timely to avoid any late fees and/or interest. If you have any questions, please don't hesitate to contact any of the board members. Bob Aisner, President Warren Ache, Secretary Bill Fugazzi, Treasurer Scott Heape Jon Nelson rsaisner@icloud.com wfache@q.com bfugazzi@q.com sgh@hspi.net jonnelson@seminerals.com We hope that you will make an effort to either attend the meeting in person or by phone to provide your input and to hear an update on Cornerstone Administrative & Financial Management Provided By Marchetti & Weaver, LLC Mountain Office Website & Front Range Office 28 Second Street, Suite Century Circle, Suite 103 Edwards, CO Admin@mwcpaa.com Louisville, CO (970) (720)

8 CORNERSTONE OWNERS ASSOCIATION ASSOCIATION OPERATIONS FUND 2019 Adopted 2018 Actual Budget REVENUES Annual Assessments- Owner Lots 58, ,250 Comments Annual fee per property of $1,000 for Net of amount assumed to be uncollected from certain individual owners and collection of only 9 months fee for lots being sold to CAG. Late Fees, Interest, & Other Income 29,072 - Transfer fees and collection of delinquent balances in Conservatively budgeting $0 for Sale Proceeds 129,400 Proceeds from sale of properties to Cornerstone Acquisition Group (CAG) EXPENSES TOTAL REVENUES 87, ,650 = = Accounting, Assoc Management 22,371 32,000 Fees for consultants of the Association. Legal 10,199 25,000 General legal services and legal services related to sale to new ownership entity. Fence, Trail, & Common Area Maintenance 25,300 96,226 Labor and supplies for trail and fence maintenance, surveying, wildlife report, weed control, and other maintenance costs Insurance & Property Taxes 4,119 9,340 General liability and Directors and Officers, multiple years of property taxes on mineral and water rights Office Supplies & Misc 1,024 1,360 Office supplies, postage, bank fees, meeting expenses, etc. Operations Contingency - 15,500 Allowance for unforeseen expenses due to large ramp up in activity for TOTAL EXPENSES 63, ,426 = = CHANGE BEFORE TRANSFERS 24,059 54,224 TRFR FROM (TO) OTHER FUNDS - (50,000) Transfer of portion of sales proceeds to the reserve fund CHANGE IN FUND BALANCE 24,059 4,224 = =