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landuse case.ts.Prospector Lodge.1983
CASELOAD SUMMARY SHEET City of Aspen No. .~~ ~o~ Staff: _~~.G2i ~li~ PROJECT NAME: B",/ /wu r~ui.~icvw r w- ~ ~ n6~~iYr~~/I~ , APPLICANT: M~~~if ~ / ~ 9lr~% • Phone: ~ l REPRESE f - / NTATIVE: ~./JC/'i1`YI ~,IIfI-(.r/ "~ ~ ~/'i~~~ Phone: ~~J~~~10~ TYPE OF APPLICATION: (Fee) I. GMP/SUBDIVISION/PUD (4 step) 1. Conceptual Submission ($1,840) 2. Preliminary Plat ($1,120) 3. Final Plat ($ 560) II. SUBDIVISION/PUD (4 step) 1. Conceptual Submission ($1,290) 2. Preliminary Plat ($ 830) 3. Final Plat ($ 560) ~ III.EXCEPTION/EXEMPTION/REZONING (2 step) ($1,010) _ _ /~ IV. SPECIAL REVIEW (1 step) ($ 465) - 1. Special Review 2. Use Determination 3. Conditional Use REFERRALS: Date Referred: Attorney Engineering Dept. Housing Water City Electric Sanitation District Mountain Bell -Parks Holy Cross Electric Fire Marshall/Building Dept School District Rocky Mtn. Nat.Ga State Hgwy. Dept. Fire Chief Other u~ZLCIL FINAL ROUTING: Date Routed: ~ ~ > ~ _ ~ Attorney Building ~ Engineering ~. Other "`A~`c1L In `"~-~C-- DISPOSITION: /~ n CITY P&Z REVIEW: L~L2C/Z~{;~~Y ~ r ~z . l ;~ CITY COUNCIL REVIEW: ,~ Ordinance No. CITY P&Z REVIEW: CITY COUNCIL REVIEW: C`~"~ ~"""~-~` ~-.oH.s...Xa,t~.A~~... p~. Ordinance No. 1. The applicant will amend the condominium plat to include ~---, the following: a. Reference encroachment license granted by Council for the rock facade stairs on the north frontage; b. Indicate book and page of easements for the transformer in any vaults or pedestals on the property; 2. The applicant's landscape plan r±ill require final approval of compliance by the Parla Director. The plan should be auymented to include the following: a. The additional sidewalk spur on the west end of the alley; b. Irrigation of the planting areas along the t•~est and north frontages to maintain trees in those locations. 3. The applicant must provide sixteen (16) on-site underground parking spaces. 4. The project must include amenities as proposed including a sundeck on the third floor, on-site parl;ina, lobby, and unit amenities including a hot tub, sauna, wet bar and masonry fireplace. 5. Occupancy by a timeshare owner is limited to thirty (30) days between December 18 and [.arch 26. 6. PIo prohibited marketing practices will be allowed including the giving of gifts in a deceptive manner, use of public malls or streets for sale, phone solicitations to visitors at other lodges, or the giving of transportation, lodging or other gifts valued in ercess of $100.00. 7. The nineteen (19) renovated units found in the Prospector must each be split into fifty-two (52) weeks. Seven (7) weeks must be reserved f-or the maintenance of the project. Four (4) of these seven (7) weeks must be used exclusively for maintenance with no rentals or other uses allowed. Two of the four (4) weeks must be in the spring while the remaining two (2) weeks must be in the fall. The remaining forty-five (45) weeks must be sold as proposed in three (3) week timeshare packages. Each three (3) week package must contain a peak summer/off-winter week, and an off season week in either the spring or the fall. 8. No right-to-use timeshare leasehol<7 o~ill be allowed. All Prospector timeshare interest sales must be on a fee ownership basis. 9. Timber Run P.ealty and Terry Liming as Flan Flanager and local contact will be responsible for the marketing program for the Prospector. The marketing program identified in the timeshare application must be adhered to. 10. As proposed, the applicant must establish four (4) banking accounts for operation of the budget system. Proof that these accounts have been established must be documented Page 3 to the City of Aspen when such accounts are established. 11. The issuance of a Certificate of Occupancy will be sufficient to meet the requirements of Section 20-24(F)(2) of the Code re garding the useful life of mechanical and electrical equipment in the Prospector. 12. The mandatory t~•ao (2) month deposit and any down payments made in conjunction with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent must be a title com_rany in Aspen, a neutral third party. 13. No closing will be allowed until at least eight (8) of the total fifteen (15) timeshare packages are sold for any given unit. 14. [when closing occurs, the declarant as well as the new timeshare owners must then begin to pay their quarterly assessment fees for that unit. For any unsold units the developer is responsible for operating costs. 15. The Interior Reserve Fund and the Rxterior Reserve Fund, both expenditures itemized in the maintenance/assessment fees, cannot be reduced or suspended during the first five (5) years after the fir>t closing. A7.1 other expenditure items used in the calculation. of the assessment fees can be adjusted with the approval of the Board of P•Ianagers. The money designated for the reserve funds must always be held in escrow to be used as needed for interior and es:terior repairs and maintenance. Designated monies going into the reserve fund (estimated at $10,000 per year) cannot be reduced or eliminated until the fund has accumulated $50,000. 16. The Prospector timeshare units are limited to six (6) occupants at any one time. 17. The applicant will submit a fifty (50) year deed-restriction for the employee unit (f;108) meetinr, the form and standards of- the Attorney's Office. 18. The owners are required to o~vn the common areas and common amenities in the Prospector Lodge and this must be reflected in the appropriate documents. 19. The Board of t4anaoers must designate a local managing agent. 20. One deed must be conveyed for each three c•~eek package so that weeks are never sold individually. 21. References must be made throughout the application and exhibits attached to indicate that the project is subject to all of the requirements in Section 20-24 as cvell as the State Timeshare Laws which are already specified in the application and attachments. 22.. The financing for the Prospector must be e~:pressly subject to all restrictions placed on the project. 23. The applicant must provide satisfactory handicap access to the first level of the Prospector Loclge by installation of a handicap lift or by such other means as may be approved by the Aspen Building Department. In addition, the applicant shall make t~•ro (2) units on the first level of the Prospector Lodge suitable for handicap use. 24. The plan manager or the managing agent must apply for and show evidence to the City of a Colorado State Sales Tax Page 4 be applicable to any short term rental of these units. A required real estate transfer tax will apply to initial and subsequent sales of the timeshare interest and will be collected as is done in any other real estate transaction. 25. The Prospector Disclosure Statement, the Prospector Condominium Documents entitled Fractional Estate Declaration, the Prospector Articles of Incorporation of the Fractional Owners Association, and the Ey-La~•~s of. the Association as well as a sample purchase contract must all be amended to reflect the conditions of approval placed on the Prospector through the approval process. The Planning Office and the City Attorney's Office must both review and approve the final documents to ensure the changes and clarifications are accurately made. 2G. Any further updating or amending of the approved timeshare documents must be approved through the City according to the requirements of Section 20-24 of the subdivision regula- tions. 27. The declarant may rent unsold units but the rental money must 9o toward any maintenance which may be necessary as a result of the unit's use as a rental. 28. The applicant must clarify throughout the timeshare application references to timeshare units versus- references to timeshare interests. 29. Thirty percent (30~) of the qualified voters (present or represented by proxy) of the Factional Owners Association must be present to obtain a quorum. 30. The owners may not lease the cemrion elements or amenities (excluding the employee unit) which they own as was proposed in the application. 31. To ensure compliance with the proposed marketing program, the applicant agrees to post with the City suitable security in the amount of a 520,000 irrevocable letter of credit. 32. Full details of .the RCI exchange program (cost, procedures, other projects involved, confirmation percentages, etc.) must be provided to the purchasers of Prospector timeshare interests. 33. Assessment fees cannot be increased without written notice being given to the owners thirty (30) days prior to the effective date of the increase. Such written notice must explain the reason for the increase and document the need for the increase. 34. The applicant must submit to the Finance Director the license fee required by Section 20-24(S) of the Fiunicipal Code, to be paid on a pro rata basis for the remainder of 1984, currently estimated at $2950.00. Prior to obtaining the license from the Finance Director, the applicant must first pay the outstanding fees owed to the Planning Office, currently estimated at 52990.00. The applicant shall annually obtain a new license from the Finance Director on or before January 1st of each subsequent year. ~.~~~ TO: Bill Drueding FROM: Alan Richman RE: Prospector Lodge DATE: October 17, 1984 MEMORANDUM ~~~ ~,~'~ ~n~0 S J~t~ •9 v ~~~ _ V'~ F~ V `~ -------------------------- By this memo, I am responding to your memo to me of October 9, 1984 requesting that the Planning Director allow the covering of two existing stairwells at the front entrance of the Prospector. According to Section 24-3.3 (c) of the Municipal Code, the Planning Director may authorize minor changes to an approved conditional use without an additional public hearing by P&Z. Based on the information submitted to me, I believe this request falls within the parameters of this section, and hereby authorize you to move forward with Building Permit Review and issuance. ~,, .J MF.MnR ANT)TTM T0: Alan Richman, Planning Department FROM: Bill Drueding, Zoning Enforcement Officer RE: The Prospector Lodge DATE: October 9, 1984 The Prospector has applied for a building permit to cover two existing stairwells at the front entrances for safety reasons. This would keep the snow off these stairwells. The Prospector has told me that this minor change would be OK'd by Collette for H.P.C., since very little of the addition is visible, if any. As per Patsy Newbury, the total additional F.A.R. resulting from the enclosed roof covering would be 74.25 sq. ft. (counting only 'Z of each stairway), and 154 sq. ft. landings would result. The Prospector is located in the CC zone, and is conditional use. I believe Sec. 24-3.3(c) gives the Planning Director the authority to grant minor expansions of a conditional use without further P & Z approval. Encluded with this memo are the proposed plans. The Building Department feels this change is minor and is a benefit for safety reasons, and would therefore approve this change. We do need in writing, the Planning Department approval. Copies' Patsy Newbury Jim Wilson jr ~~, CITY ~ A~I'EN 130 ';o nth galena street aspen, Colorado 13.1611 '`303-925-2020 -- .;`;- ._ ~_,. November 30, 1984 Mr. Gideon Kaufman 611 West Main Street Aspen, Colorado 81611 Dear Mr. Kaufman: - 31984 I have reviewed your letter dated November 26, 1984 concerning the Prospec*_or Lodge gift certificate marketing program. The $50 gift certificate is within the $100 gift restrict per the timeshare regulations. The solicitation of clients will occur on private property and not on city streets or malls. Solicita- tion of clients on city streets or malls is prohibited by the timeshare regulations. The city's approval of the Prospector gift certificate marketing program will be limited to a 90 day timeframe from the date of this letter. If you wish to continue the program beyond the 90 day period please submit a written request that I may review. The timeshare regulations require that all approved timeshare projects file their marketing plan with the city. I have copies of brochures on the Prospector Lodge at Aspen. Would you please outline in narrative form your marketing plan and keep me informed of any changes in that plan. Sincerely, Ronald L. Mitchell, Assistant City Manager RLM:klm xc: Harold L. Schilling, City Dianager Paul Taddune, City Attorney Alan Richman, Acting Planning Director EDWARDS BL TADDUNE ATTORNEYS AT LAW B wR RY D. EDWARDS PAVL J. TwDOVNE August 31, 1984 W. Michael Clowdus, Esq. Pendelton & Sabian, P.C. Seventeenth and Grant Building Suite 1000 303 East Seventeenth Avenue Denver, Colorado 80203 Dear Mike: D ; :~ AUG 3 ~ 1984 L~J 600 EwsT HOPRINS, SDITE 304 ASPE H. CO 81611 13031 p26-9180 ^ CITY HALL GFFIC ES: 130 $OVTN GwLENA STREET ASPEN. CO 916)1 13031 9 2 3-3 2 4 7 With regard to the materials forwarded under rnver of your July 31, 1984, I have the following comments: I. GENERAL MATTERS: 1. A fifty-year deed restriction for the employee unit designated at No. 108 should be submitted for my review and approval. Gideon is familiar with need restriction forms which have been approved by my office. A fully executed deed restric- tion should go on record with the timeshare instruments. 2. Your client must provide a $20,000 irrevocable letter of credit to insure compliance with the proposed marketing program. The standard letter of credit form referencing the applicable requirements of Section 20-24 of the Municipal Code should be sub- mitted to my office for approval. 3. Arrangements should be made to tender the $5,000 license fee to the City. 4. Have we entered into an encroachment license which was approved on November 8, 1982? To adequately protect that City with regard to insur- ance, I have been requesting the following insurance endorsement: "It is hereby understood and agreed that this insurance policy may not be cancelled nor the intention not to renew be stated by surety until thirty (30) days after receipt by the City of Aspen by registered mail of a EDWARDS R TADDUNE Letter to W, Michael Clowdus, Esq. August 31, 1984 Page Two written notice of such intention to cancel or not to renew." The above language should be added to Paragraph "5" of the Encroachment License and an executed copy should be tenedered to the City. A copy of what I have reviewed is enclosed for your reference. II. FRACTIONAL ESTATE DECLARATION: 1. Section 1-10 (page 2-3): The definition of fractional estate should refer to the fact that each 1-15th interval encom- passes three "use weeks". Along the same line, Section 1-20 (on page i) should refer to the fact that each timeshare estate com- prises three use weeks. 2. Article VII pertaining to the employee housing unit (page 6) should refer to the fact that the employee housing unit is subject to the employee housing deed restriction discussed above. The last paragraph of this article (on page 7) should read "shall be restricted to use as employee housing for employees of the association or the managing agent as may be permitted by the employee housing deed restrictions entered into pursuant to the requirements of Section 24-11.4(b)(3) of the Municipal Code of the City of Aspen." 3. Article IX (page 7) should read that a fractional estate may be held and owned in any real property tenancy relationship recognized under the laws of the State of Colorado "and as per- mitted by the subdivision regulations of the Municipal Code of the City of Aspen." 4. With reference to Article XXVII (page 11) and Article III (page 5), please keep in mind that I am still pondering the Code language requiring that all common elements be entitled in the association. At this point, I am inclined to agree (and am seeking support from the Planning Office) that the Code provision may be satisfied by the requirement that each owner must be a member of the homeowners association and have a proportionate fee simple interest in the common elements. 5. Article XX, regarding assessments for common expenses (at page 15): The Planning Office has advised that a condition of your approval is that "assessment fees cannot be increased without written notice being given to the owners thirty (30) days prior to EDWARDS 8z TADDUNE Letter to W. Michael Clowdus, Esq. August 31, 1984 Page Three the effective date of the increase. Such written notice must explain the reason for the increase and document the need for the increase." This condition is not addressed in Article XX. 6. Section 27.1 (page 25): The first sentence should read "each lodge unit may be used and occupied for first-class lodge purposes only; ...", not "first-class residential purposes". 7. Section 28.1 (page 26): The nineteenth line should tie in the requirements of Section 20-24 of the Municipal Code of the City of Aspen as follows: "... Marketing thereof as may be per- missible pursuant to the terms of this declaration, Section 20-24 of the Municipal Code of the City of Aspen, and other applicable law." 8. Section 28-3 (page 27): Reference should be made that each fractional estate consists of three use weeks. 9. Article XXXI. The general provisions should refer to the requirements of the timesharing provisions of the Municipal Code of the City of Aspen. 10. I would like to see some language in the fractional estate declarations indicating that the owner of a timeshare interest irrevocably designates the homeowners' association and the managing agent as an agent for service of process pursuant to Section 20-24(I)(3)(b). 11. Section (I)(3)(c) requires that "each timeshare interest with a multiple ownership shall be required to designate one managing agent as the spokesman and voter for all of the owners involved." The declaration does not seem to cover this require- ment. 12. Some reference should be made that the project is governed by the application for timesharing submitted by the developer. III. ARTICLES OF INCORPORATION: I have no comments with respect to this document except to note with regard to Article XII (page 5) that the formation of the association provides for only management, maintenance and care of fractional units might be at odds with requirement of the code that the association should be the title owner. Additionally, .-.. Y +~ EDWARDS ~L TADDUNE Letter to W. Michael Clowdus, Esq. August 31, 1984 Page Four this article should perhaps refer to the fact that the association is going to own the employee housing unit. IV. BYLAWS OF THE PROSPECTOR FRACTIONAL OWNERS ASSOCIATION: No comments. V. FRACTIONAL ESTATE PURCHASE CONTRACT: 1. The escrow agent referred to in Paragraph "A" (page 1) should be identified, so that we can determine that the escrow agent be a neutral third party not having any intererst in the purchase and sale transaction. I believe that the timeshare application identified an Aspen title company as escrow agent. 2. Paragraph 12 (page 4) should indicate that the purchaser may terminate the contract within ten calendar days following his "execution" of the purchase contract, rather than the date of the purchase contract. VI. STATE OF COLORADO DISCLOSURE STATEMENT• I do not have any comments with regard to this document except to observe, once again, that the state rescission provi- sions permit rescission within ten days after the purchaser "exe- cutes" the purchase agreement, not necessarily the date of the purchase contract. VII. CITY OF ASPEN DISCLOSURE STATEMENT: 1. Paragraph "(f)" should read that the City of Aspen restricts occupancy in a unit to not more than thirty days between December 18 and March 20. 2. Paragraph "(h)". As stated previously an executed license agreement should be delivered to the City. 3. Paragraph "(j)". The last sentence should read that the association "shall require an owner to deposit an amount equal to three months of the assessment for common expenses ...". 4. With reference to paragraph "(k)", I believe that a bud- get estimating the fraction estate's share of the assessment should be appended to the disclosure statement or referenced with EDWARDS B: TADDUNE Letter to W. Michael Clowdus, Esq. August 31, 1984 Page Five particularity. I also note that the purchase contract does not contain a budget amount. 5. With reference to paragraph "(q)", this paragraph should be written to indicate that the purchaser has a ten-day right of rescission from the date of execution of the contract. 6. With reference to paragraph "(r)", does this mean that the project will proceed to closing on a lodge "unit" basis or only after all of the units have sold a minimum of eight of the fifteen fractional estates? 7. With reference to paragraph "(y)", the language of this paragraph will again be dependent on how we determine satisfaction with the requirements that the homeowners' association be title owner for the common elements. VIII. MISCELLANEOUS DOCUMENTS: I have also reviewed the RCI guide, the federal disclosure statement, the promissory note, the form of deed of trust to be used to secure the note, the security agreement, and the revised copy of the annual budget of the Prospector Fractional Owners Association, and have no comments with respect to these docu- ments. Please feel free to call after you have had an opportunity to review and consider my comments. Ver truly yours, Paul J. addune City Attorney PJT/mc Enc. cc: Gideon I. Kaufman, Esq. Milan Richman P-~ ~~ PENDLETON £~ SABIAN, P. C. ATTORNEYS AND COUNSELORS AT LAW W MICHAEL CLOWDUS SEVENTEENTH AND GRANT BUILDING TELEPHONE: (3031 839-1204 SUITE 1000 TELECOPIER: (3031 831-0786 303 EAST SEVENTEENTH AVENUE TWX:9I0-931-0407 DENVER,COLORADO 80203 August 28, 1984 Mr. Paul J, Taddune, Esq. VZA FEDERAL EXPRESS City Attorney City of Aspen 130 S. Galena Aspen, Colorado 81611 Re: Alan Richman's August 23, 1984 Memorandum Relating to the Prospector Documents Dear Paul: i have had an opportunity to review the above-described memorandum (the "Richman Memorandum") and believe that I have been able to locate provisions in the documents which expressly deal with the conditions Mr. Richman covers. Enclosed for your reference is this firm's May 23, 1984 memorandum (the "Compliance Memorandum") regarding compliance of the Prospector project instruments with the requirements as set forth in Alice Davis' August 22, 1983 memorandum to the Aspen City Council (the "Davis Memorandum"), Although the conditions have been renumbered in the Richman Memorandum the conditions in issue remain unchanged. The following is organized based upon the conditions as numbered in the Richman Memorandum with cross-references to same conditions as set forth in the Davis Memorandum and in the Compliance Memorandum. 12. Condition No. 12 is numbered as condition No. 14 in the Davis memorandum and the Compliance Memorandum. The mandatory two-month deposit has been changed to the three month deposit and is not collected until closing of the Sale, at which time it will be deposited into a homeowner's association reserve account established pursuant to condition No. 10 of the Richman Memorandum, Since it is collected only at closing and is immediately deposited in the homeowner's association reserve account, there is no necessity for an escrow. With respect to down payments made by purchasers pursuant to the Fractional Estate Purchase Contract, all such down payments will be held by Transamerica Title Company in an escrow account pursuant to the .~. -. Mr. Paul J. Taddune, Esq. City Attorney August 28, 1984 Page 2 escrow agreement referenced in the Purchase Contract. A cony of the Escrow Agreement is enclosed for your review. 14. Condition No. 14 of the Richman Memorandum appears as condition No. 16 in the Davis Memorandum and in the Compliance Memorandum. Sections 20.1 and 20.2 of the Declaration address the condition; however, we have previously discussed with you the possibility of not requiring Owners to commence paying assessments until they are entitled to occupancy. This issue has arisen because we are selling units for occupancy beyinning no earlier than November or December of this year and we feel it unfair to have Owners paying assessments for periods prior to the time that they have any possibility of use. The Declarant remains responsible pursuant to Section 20.2 of the Declaration for payment of the total monthly costs of operating and maintaining the common elements until such time as the Owners commence paying their assessments at which time the Declarant as well must begin paying its assessments. In our prior telephone conversation you indicated that this proposal seemed reasonable. I would appreciate confirmation of your position on this. 17. This condition appeared as condition No. 19 in the Davis Memorandum and Compliance Memorandum. Although I think Article VII of the Declaration serves as an adequate restriction of record for the Employee Housing Unit, we would be more than happy to place the restriction in the Deed conveying the Employee Housing Unit from the Developer to the Association. 18. This condition appeared as condition No. 20 in the Davis Memorandum and the Compliance Memorandum. Pursuant to the requirements of the Davis Memorandum the common areas and amenities of the project are owned by the condominium unit owners as appurtenances to the Fractional Estates and are managed by the Association. 20. This condition appeared as Condition No. 22 in the Davis Memorandum and the Compliance Memorandum. The sections of the the Declaration, the Purchase Contract and the disclosure statement referenced in paragraph 22 of the Compliance Memorandum address the requirement of one deed for each three week package. In addition, Section 28.1 of the Declaration provides that "[i]n no event, however, shall a Fractional Owner convey or encumber less than a Fractional Estate as defined herein, or attempt to subdivide a Fractional Estate into lesser interests." PENDLETON F~ SAB[AN, P. C. .~, Mr. Paul J. Taddune, Esq. City Attorney August 28, 1984 Page 3 •~, ..~. 27. This condition appeared as condition No. 29 in the Davis Memorandum and the Compliance Memorandum. Section 20.2 of the Declaration requires the Declarant to apply rents from unsold units toward maintenance. 31. You should be able to confirm with the City Clerk that a $20,000 irrevocable letter of credit was received by the City of Aspen on June 6, 1984. Enclosed is a copy of the Time Share License as issued with the receipt noted thereon. 33. This condition appeared as condition No. 37 in the Davis memorandum and the compliance memorandum. Section 4.4(iv) of the Bylaws of the homeowners' association covers this requirement. If you have any questions about my responses to the issues raised in the Richman Memorandum, please do not hesitate to call. As you may know sales are proceeding at the Prospector and our client hopes to be able to meet the pre-sale requirements imposed by the City of Aspen and our lender and commence closings in one of the units during the first week of September. Therefore, your final approval of the project documents so that we may record them prior to those closings is imperative. I look forward to hearing from you with respect to all of these matters. Very truly yours, ~~ W. Michael Clowdus WMC:pkm Enclosures cc: L. Vernon Cagle Alan Richman (w/ enclosures) Gideon Kaufman, Esq. (w/ enclosures) PENDLETON ~ SABIAN, P. C. ,.!!# ~~ PENDLETON £~ SAB[AN, P. C. ATTORNEYS AND COUNSELORS AT LAW TELE PHON E:1303) 839-1204 TE LEC OPI E R x3031 831- 0786 TWX:910-931-0407 SEVENTEENTH AND GRANT BUILDING SUITE 1000 303 EAST SEVENTEENTH AVEWE DENVER,COLOR.4D0 80203 May 23, 1984 TO: Aspen Planning and Zoning Commission FROM: Pendleton & Sabian, P.C. RE: Compliance of The Prospector Project Instru.;.ents With the Requirements as Set Forth in Alice Davis' August 22, 1983 Memorandum to the Aspen City Council (the "Memorandum") This memorandum sets forth the sections and provisions in the Disclosure Statement for The Prospector (the "Disclosure Statement"), Fractional Estate Declaration for The Prospector (the "Declaration"), the Articles of incorporation of The Prospector Fractional Owners' Association (the "Articles"), the Bylaws of The Prospector Fractional Owners' Association (the "Bylaws"), and the Fractional Estate Purchase Contract (the "Purchase Contract") (collectively hereinafter referred to as the "Project Instruments") which satisfy the requirements as set forth in the Memorandum relating to the Project Instruments. Sections of the Memorandum and the Project Instruments are referred to by the designated section numbers in the documents for easy reference. Memorandum Section Project Instrtunent Provision 6. Thirty-day occupancy limita- tion. Section f of the Disclosure State- ment provides for such a thirty-day limitation. 8. Division of Units into 52 weeks; requirements for Main- tenance Weeks. Section 1.10 of the Declaration divides each Fractional Estate into 52 Use Weeks. Section 1.15 of the Declaration contains the required provisions concerning Maintenance Weeks. 8. Requirements for Marketing Section u of the Disclosure State- Remaining Use weeks in Three- ment contains the marketing re- Week Packages. quirements relating to peak winter season, peak summer/off-winter and off-season weeks. age 2 , May 23, 1984 Memorandum Sect 9. No right-to-use timeshare leasehold will be allowed. Project Instrument Provision Section 1.10 of the Declaration defines Fractional Estate as a present estate in fee simple in a Lodge Unit. 10. Plan Manager responsible for marketing; local contact. Section b of the Disclosure State- ment designates Terry Liming as the Plan Manager. Mr. Liming is also hereby designated as the local contact for communications purposes. Section c of the Disclosure State- ment designates Timber Run Realty as the marketing entity. 14. Escrow requirement for Section A of the Purchase Contract downpayments; designation of will designate a "neutral" Aspen escrow agent. title insurance company to be the required escrow agent to retain purchase money deposits until closing or Unit availability, whichever later occurs. This provision is also set forth in Section n of the Disclosure Statement. 15. No closing will be allowed until eight of the fifteen timeshare packages are sold for each Unit. This pre-sale requirement is set forth in Section 1 of the Purchase Contract and in Section r of the Disclosure Statement. 16. Commencement of Payment of Quarterly Assessment Fees. 17. Reserve Fund Requirements. Section 20.1 of the Declaration pro- vides that the obligation commences as of the date of the closing of the sale of the first Fractional Estate, while Section 20.2 of the Declaration obligates the Declarant to pay assess- ments on Fractional Estates owned by it after such date. Exterior Reserve Funds to be lished and maintained. This as well as Section 4.4.iv of provides that the assessment be adjusted upon the approva Board of Managers. Section 20.2 of the Declaration re- quires the Interior Reserve and the estab- provision, the Bylaws, fees can 1 of the PENDLETON £~ SAB[AN, P. C. !~je 3 y 23, 1984 , Memorandum Section Project Instrument Provision Limitation. Section as of the Disclosure Statement 18. occupancy requires the Association to promulgate a rule restricting occupancy to six persons. 19. Deed Restriction for the Article VII of the Declaration re- it to be conveyed to U i Employee Unit. n s quires th the Association by General Warranty Deed. 20. Ownership of Common Areas Such areas are owned as appurtrovided the Condominium Units, as p and Amenities. to in Section 1.7 of the Declaration. Local Managing Agent. 21 Section 1.17 of the Declaration defines on or firm . the Managing Agent as a pers while licensed by the City of Aspen, Section 16.4 requires the Board of Managers to delegate certain duties and powers to such a Managing Agent. 22. One Deed for each three- The three-week requirement is set week package. forth in Section 1.10 and Section 28.3 of the Declaration, in the first paragraph of the Purchase Contract, and in Section g of the Disclosure Statement. 23. References to Section 20-24 These references are set forth in and the State Timeshare Laws. the recitals to the Declaration, Section g of the Disclosure State- ment, and Section 12 of the Purchase Contract. 27. The Project Instruments must reflect the conditions of approval. 29. Rental of Unsold Units. These amendments are as noted herein. Section 20.2 of the Declaration re- quires the Declarant to apply rents from unsold Units toward maintenance. 31. Thirty percent Quorum Requirement. 32. The Owners may not lease the Common Elements. This requirement is set forth in Section 2.3 of the Bylaws. This restriction is set forth in Section 17.13 of the Declaration. PENDLETON b SABIAN, P. C. 4 23, 1984 •~ ...~ Memorandum Section 34. Disclosure of RCI Exchange Program. Proiect Instrument Provision Such disclosure will be provided as required by Rule 5-24 of the Regula- tions applicable to Subdivision Developers of Timeshare Projects promulgated by the Colorado Real Estate Commission. 36. Ability to Remove Managers The ability of the Owners to remove by Majority Vote of the Owners. 4h9 ofntherBylawsrovided in Section 37. Increase of Assessment Fees Section 4.4.iv 30 days' prior to the Owners. of the Bylaws requires notice of such increase PENDLETON & SABIAN, P. C. -w, +, .i ESCROW AGREEMENT --, s This Escrow Agreement, dated as of , 19 , is by and between Merit Investment Co. (of Aspen), inc. (hereinafter called "Seller"), and Transamerica Title Insurance Company, 601 E. Hopkins, Aspen, Colorado 81611 (hereinafter called "Escrow Agent"). WHEREAS, Seller intends to sell Fractional Estates in that certain proposed timeshare project known as The Prospector, a Condominium (the "Fractional Estates"), as defined in the Fractional Estate Declaration for The Prospector, a Condominium; and WHEREAS, each purchase contract for a Fractional Estate (the "Contract") will require the purchaser thereunder (the "Purchaser") to provide an earnest money deposit (the "Deposit") to be held in escrow pending the satisfaction of the conditions precedent to the closing of the purchase and sale of the Fractional Estate; and WHEREAS, Seller desires to have each Deposit to be provided by a Purchaser pursuant to a Contract held in escrow by Escrow Agent until the closing of the purchase and sale of the Fractional Estate or the availability of the subject Fractional Unit (herein so called) for occupancy, whichever later occurs, or until such other time as the Deposit is to be released to Seller or Purchaser pursuant to the terms and conditions of the Contract. NOW, THEREFORE, in consideration of the covenants and agreements contained in this Escrow Agreement, Seller and Escrow Agent hereby agree as follows: 1. Escrow Agent. Seller hereby establishes, appoints and designates Escrow Agent as the escrow agent for the purposes herein set forth, and Escrow Agent hereby accepts the appointment as escrow agent upon the terms and conditions herein set forth. 2. Retention of Funds. Seller hereby agrees that each deposit provided by a Purchaser pursuant to a Contract shall be deposited by Escrow Agent in an interest-bearing account with or such other bank or savings and loan association as may be designated by Seller, until (i) the closing of the purchase and sale of the Fractional Estate as contemplated by Contract, or (ii) Seller's certification that the Fractional Unit is available for occupancy, whichever later occurs. Notwithstanding the foregoing, in the event that Seller notifies Escrow Agent (i) that either Seller or Purchaser has failed to satisfy its obligations as set forth in the applicable Contract and (ii) that the other party has elected to terminate such Contract, then in such event Escrow Agent shall return to Seller the Deposit provided pursuant to such Contract so that the Deposit may be disposed of in the manner provided in the Contract. 3. Non-Liability of Escrow Agent. In the event of any controversy involving the parties or any third person with respect to the subject manner of this escrow agreement, its terms or conditions, Escrow Agent shall not be required to determine the same or to take any action in order to resolve such controversy, but may await settlement of such controversy by judicial proceeding or otherwise, as the Escrow Agent shall determine, and/or Escrow Agent may deposit any documents or money in its possession with the District Court in and for the County of Pitkin, State of Colorado, and thereafter be relieved of any liability hereunder. In the event of such controversy involving the parties to this escrow agreement, or any third party, Escrow Agent shall not be held liable for interest or damages and shall not be responsible to make a determination of such controversy. .~, 4. Termination of Escrow. This escrow agreement shall terminate upon the earlier to occur of (i) the closing of the sales of 285 Fractional Estates, or (ii) 30 days' written notice from one party to the other of its desire to terminate this escrow ayreement. 5. Escrow Fees. Seller and Escrow Agent expressly agree that Escrow Agent's compensation for its services hereunder is included in the $25.00 closing fee that will be charged by Escrow Agent for each closing of a purchase and sale of a Fractional Estate during the term of this agreement. IN WITNESS WHEREOF, Seller and Escrow Agent have set their hands and seals this _ day of , 19_ SELLER: MERIT INVESTMENT CO. (OF ASPEN), INC. By: By: ESCROW AGENT: TRANSAMERICA TITLE INSURANCE CO. By: -2- <- * APPLICATION FOR CIT~I OF /iS!'EN TIMESIIAi(E l'ROJI?CT LICENSE, AS REQUIRED BY * SECTION 20-24 OF T1iE FiUNICIPAL COUL•'. OF TIIE CITY OF ASPEN ~ **************************~*******x~*********a************************** * * ****************************~*******a:************************************** 1. NAME OF' TIMESHARE PROJECT: Tie ^roCpcctor 2. FiAILINC ADDRESS: P.O. Box 3678 Aspen, Colorado 81612 3. LOCATION ADURESS: 301 East Hyman Avenue Aspen, Colorado 4. BUSINESS TELEPHONE NUMBER(S) 303-920-2030 S. MANAGER OF TIMESHARE PROJECT: Name(s) Phone Number(s) Address(es) Terry Liming 303-920-2030 Box 3678 Aspen, CO 81612 Jan blanni ng 303-9 2 0•-2 03 0 BOx 3678, Aspen, Colorado 81612 6. PRINCIPAL(S) OF TIMESHARE PROJECT: Name(s) Phone Number(s) L. Vernon Cagle 402/734-7555 President Merit Investment Co. Thanas Sc}r~ber 303-726-9455 Address(es) Box. 12189, Omaha, NB 681.12 Box 318, Winter Pazic, CO 80482 7. NUMBER AND TYPE OF UNITS IN TIMESHARE PROJECT: Number of Units Type (studios, otte-bedroom, etc.) 1 bedroom 1 1 bedroom-manager unit TOTAL 2 0 8. COMPUTATION OF TIMESHARE PROJECT LICENSE FEE SUBMITTED WITH ~I$ ApP.hICIgT;~~N~ j ~qky Fa I l ) c ~+* ~ ***,t******** APPROVAL BY CITY OF ASPEN CITY COUNCIL: First Year of License Issuance $13.70 x no. of days remaining in calendar year Total 1st Year License Fee $13.70 x 216 e $2959.00 Q,K Q,~ Subsequent Year(s) License Fee ~ $5,000.00 Rte etved'. AY Cr+Y~,,,/r'} ~15~ 9. ALSO SUBMITTED WITH THIS APPLICATION IS THE SUM OF $20,000 CASH OR $20 000 RREVO~CAli LETTER OF CREDIT IN THE FAVOR OF THE CITY OF ASPEN FOR THE PURPOSES OF SECURING THE TIMESHARE PROJECT'S RESPONSIBILITY FOR 1'}IE CITY'S POTENTIAL LEGAL FEES AND EXPERT WITNESS FEES IN TFIE EVENT OF THE TIMESHARE PROJECT'S DEVIATION FROM T}[E APPROVED MARKETING PLAN AND SALE TEC1iNIQUES. RC~e-ved .may C:~-q rffFs ~~ u.~ bIGISY. ~6d,(~,~,.,.__ 10. APPLICATION PREPARED AND SUBMITTED BY - Project \-' Manager Sa ~<`< gnat re, title da'te' *kk****ki~****************** ******* ~ ** ** ~ ** ~ ****** taoa~a I, Kat}~ryn S. Koch, duly appointed and act'in~ City Clerk hereby certify that the foregoing application for a City of Aspen Timesi~are Project License was a rcced by eh City Council of tRa City o Aspen, Colorado, af. a meeting held on ~~ day of ~~ ... , 198 1;ar.Fn-yn '' Koch, City lcrlc TO: Paul '~4cdune FROM: Alan Richman RE: Propsector Documents DATE: August 23, 1984 I have reviewed the package of documents submitted in response to condition # 25 in the Propsector approval. According to my review, most of the applicable conditions of approval have been properly addressed. However, I note the following conditions which I do not believe are not expressly dealt with in these documents (although possibly addressed elsewhere). 12. "The mandatory two (2) month deposit and any down payments made in conjunction with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent must be a title company in Aspen, a neutral third party." Status - not addressed. 14. "When closing occurs, the declarant as well as the new timeshare owners must then begin to pay their quarterly assessment fees for that unit. For any unsold units the developer is responsible for operating costs." Status - not addressed. 17. "The applicant will submit a fifty (50) year deed-restriction for the employee unit (8108) meeting the form and standards of the Attorney's Office." Status - This should be submitted for our review. 18. "The owners are required to own the common areas and common amenities in the Prospector Lodge and this must be reflected ,~ in the appropriate documents. Status - your comments seem to have this one covered. From talking to Alice, I have found that our intent was to insure that the owners don't have to pay rent to use common facilities. She also thinks that there may be a legal question which Gideon raised about state legislation prohibiting the owners from possessing these common areas. 20. "One deed must be conveyed for each three week package so that weeks are never sold individually." Status - not clearly stated in documents although purchase contract shows 3 spaces for the weeks being purchased. 27. "The declarant may rent unsold units but the rental money must go toward any maintenance which my be necessary as a result of the unit's use as a rental" Status - not addressed. 31. "To ensure compliance with the proposed marketing program, the applicant agrees to post with the City suitable security in the amount of a $20,000 irrevocable letter of credit. Status - not addressed - has this been done? 33. "Assessment fees cannot be increased without written notice being given to the owners thirty (30) days prior to the effective date of the increase. Such written notice must explain the reason for the increase and document the need for the increase." Status - not addressed. As an aside, I have received a request from Gideon and Terry that they be permitted to package their 3 week intervals to respond to an unexpected demand for summer weeks. Therefore, they would like to sell ,~,.. a package of 2 summec weeks and one spring/fall week to one client, which would allow a package of two prime ski and one spring/fall week to be sold to another person. I feel this combination is in keeping with Council's intent that packages not be sold which only market the winter and responds to our uniquely strong summer attraction. Therefore, by this comment I authorize the Prospector to proceed with the marketing of such an arrangement. Please let me know if you want to meet to discuss any of my comments. cc: Gideon Kaufman 2 h._! GID EON I. KAUFMAN DAVID G. EIS ENSTEIN Alan Richman Planning Office City of Aspen 130 S. Galena Aspen, CO 81611 LAW OFFICES GIDEON I. KAUFMAN eox loool 315 EAST HYMAN AVENUE ASPEN, COLORADO 61611 August 8, 1 O Re: Prospector -- Merit Investment Company Dear Alan: TELEPHONE AREA CODE 303 8258166 I write this letter to confirm my conversation with you and your conversation with Terry Liming concerning the sales of winter and summer weeks at the Prospector. Reiterating our conversation and also the conversation that I had with Alice Davis I believe that the intention of the language in the memo to City Council concerning the packaging of summer, winter and off-season weeks was to assure that the winter season was not marketed to the exclusion of the summer and off-season. I feel that with the unique summer season of Aspen there are as many people who prefer the summer weeks as would like winter weeks. I feel a market package to summer people and winter people not only meets with the intent of the ordinance but also addresses the unique Aspen market and enables us to accommodate summer as well as winter tourists. If this letter does not accurately reflect your understanding or if you have any questions about this interpretation please contact me. Otherwise I will assume my understanding is correct and advise my clients to proceed. I appreciate your help and consideration in this matter and we look forward to working together with the City on any questions that come up concerning the timeshare at the Prospector. Very truly yours, LAW OFFICES OF GIDEON I. KAUFMAN, a Professional Corporation By Gide Kaufman GK/kl Y~~~.TMT^'~MT~w3~' UNt Week Number 1 2 3 4 5 8 7 8 9 10 11 12 13 11 15 i6 17 18 19 20 21 22 23 24 25 27 28 29 30 ' 31 32 33 34 35 38 37 40 41 43 M 45 48 47 48 49 50 51 52 53 ....~.~n.~,.wm...~^+•T'•'r+.-•'i-f~.x-....T.m~.mTA`R-.~."4Yr^' ,i .... _ '~.~/~!^~"' 1993 Jan. 2 -Jan. 9 Jen. 9 -Jan. 18 Jan. 16 -Jan. 23 Jan. 23 -Jan. 30 Jan. 30 -FeD. 8 Feb. 6 -Feb. 13 Feb. 13 -Feb. 20 Feb. 20 -FeD. 27 FeD. 27 -Mar. B Mar. 6 -Mar. 13 Mar. 13 -Mar. 20 Mar. 20 -Mar. 27 Mar. 27 -Apr. 3 Apr. 3 -ADr. 10 Apr. 10 -Apr. 17 Apr. 17 -APc 24 Apr. 24 - MaY t May 1 • May 8 May 6 -May 15 May 15 -May 22 May 22 -May 29 May 29 -June 5 June 5 -June 12 June 12 -June 19 June 19 -June 28 June 26 • July 3 Jury 3 -July 10 July 10 -July 17 July 17 -July 24 July 24 -July 31 July 31 -Aug. 7 Aug. 7 -Aup. 14 Aug. 14 -Aug. 21 Aug. 21 -Aug. 28 Aug. 28 - SeP- 4 Sep.1-Sep. 11 SeP. 71 - Sep. 1B Sep. 18 • Sep. 25 SeD. 25 -Oct. 2 Oct 2 -Oct. 9 Oct. a -Oct. 18 Oct. /6 - ODt. 23 Oct 23 -Oct 30 Oct 30 • Nov. 8 Nw. 8 -Nov. 13 Nw. 13 - Nw. 20 Nw. 20 • Nov. 27 Nw. 27 • Dec. 4 Dee. 4 • Dec. 11 Dec. 17 • Dec. 18 Dec. 18-Dec. 25 Dee. 25 - Jan. 1 19&1 Jan. 1 -Jan. 8 Jan. 8 -Jan. 15 Jan. 15 -Jan. 22 Jan. 22 -Jan. 29 Jan. 29 -FeD. 5 Feb. 5 -Feb. 12 Feb. 12 -FeD. 19 Feb. 19 -Feb. 26 Feb. 26 -Mar. 4 Mar. 4 -Mar. 11 Mar. 11 • Mar. 18 Mar. 18 -Mar. 25 Mar. 25 -ADr. 1 Apr. 1 • Apr. 8 Apr. 8 -Apr. 15 Apr, 15 -Apr. 22 Apr. 22 • Apr. 29 Apr. 29 -May 6 May 8 -May 13 May 13 -May 20 May 20 -May 27 May 27 -June 3 June 3 -June 10 June 10 -June 17 June t7 -June 24 June 24 -July t July 1 -July 8 July 8 -July 15 July 75 -July 22 July 22 -July 29 July 29 -Aug. 5 Aug. 5 -Aug. 12 Aug. 12 - Aug. 19 Aug. 19 -Aug. 28 Aug. 26 - SeP. 2 Sep. 2 - SeP. 9 Sep. 9 -SeD. 18 SeP• 18 -SeD. 23 SeP. 23 -SeD. 30 Sep. 30 -Oct 7 at7-at.u Oct 14 - OCt. 21 Oct 21 -Oct 29 Oct. 28 - Nw. 4 Nw. 4 • Nw. 11 Nw. 11 • Nw. 18 Nw. 18 - Nw. 25 Nw. 25 -Dec. 2 I Oec. 2 • Dec. 9 Dec. 9 • Dec. 18 Dee. 18 • Dec. 23 Dec. 23 • Dec.30 Dec. 30 -Jan. 8 CALENDAR YFJUt 1995 Jan. 6 -Jan. 13 Jan. 13 -Jan. 20 Jan. 20 -Jan. 27 Jan. 27 -Feb. 3 FeD. 3 -Feb. 10 Feb. 10 •FeD. 17 Feb. 17 • Feb. 24 Feb. 24 -Mar. 3 Mar. 3 -Mar. 10 Mat. 10 -Mar. 17 Mar. 17 -Mar. 24 Mar. 24 -Mar. 31 Mar. 31 -Apr. 7 Apr. 7 -Apr. 14 Apr. 14 -Apr. 21 Apr. 21 - Ap. 28 Apr. 28 -May 5 May 5 -May t2 May 12 -May 19 May 19 -May 26 May 26 -June 2 June 2 -June 9 June 9 - Jure 16 June 18 -June 23 June 23 -June 30 June 30 - Juy 7 July 7 -July 14 July 14 - Juty 21 July 21 • July 28 July 28 -Aug. 4 Aug. 4 -Aug. 11 Aug. 11 -Aug. 18 Aug. 18 -Aug. 25 Aug. 25 -Sep. 1 Sep. 1 -SeD- 8 SeP. 8 - SeP- 15 Sep. 15 -Sep. 22 Sep. 22 -Sep. 29 Sep. 29.Oet 8 Oct. 8 -Oct 13 Ocl. 13 -Oct 20 Oct 20 -Oct 27 Oct 27 • Nw. 3 Nw. 3 - Nw. 10 Nw. 10 - Nw. 17 Nw. 17 - Nw. 24 Nw. 24 • Deo. 1 Dee. 1 -Dee- 8 Dec. 8 -Dec- 15 Dec. 15 - Dac. 22 Dec. 22 • Dsa 29 bee. 29 • Ju1.5 Jan. 5 -Jan. 12 Jan. 12 -Jan. 19 Jan. 19 -Jan. 28 Jan. 26 -Feb. 2 Feb. 2 • Feb. 9 Feb. 9 -Feb. 18 Feb. 16 •FeD. 23 Feb. 23 -Mar. 2 Mar. 2 -Mar. 9 Mar. 9 -Mar. 18 Mar. 18 -Mar. 23 Mar. 23 - Mer. 30 Mar. 30 -ADr. 8 Apr. 6 -Apr. 13 Apr. 13 -Apr. 20 Apr. 20 -Apr. 27 Apr. 27 -May 4 Mey t -May 11 May 11-May 18 May t8 -May 25 May 25 -June t June 1 • June B June 8 -June 15 June 15 -June 22 Juna 22 -June 29 June 29 -July 8 July 8 -July 13 July 13 -July 20 July 20 -July 27 July Z7 - Aug. 3 Aug.3-AUg. 10 Aug. 10 • Au0. 17 Aug. 17 • Aug. 24 Aug. 24 -Aup. 31 Aug. 31 • Sep. 7 Sep.7-SeR 14 SeP. 14 - SeP. 21 SeP- 27 -SeD. 28 SeP- 28 -Oct. 5 Oct. 5.OCt. 12 Oct. 12 • Oct. 19 Ocl 19 -Oct 28 Oct 28•Nw.2 Nw. 2 -Nor. 9 Nov.9 -Nov. 18 Nw. 16 - Nw. 23 Nw. 23 • Nw. 30 Nw. 3D • Dee. 7 I Dec. 7 • Dec. 11 Dec. 14-Dec. 21 Dec. 21 -Dee. 28 Oec. 28-Jan.4 '- 1967 Jan. 4 -Jan. 11 Jan. 11 -Jan. 18 Jan. 18 -Jan. 25 Jan. 25 • Feb. 1 Feb. t -Feb. 8 Feb. 8 • Feb. 15 Feb. 15 • Feb. 22 Feb. 22 -Mar. 1 Mar. t -Mar. 8 Mar. B -Mar. 15 Mar. 75 -Mar. 22 Mar. 22 -Mar. 29 Mar. 29 -Apr. 5 Apr. 5 - APr. 12 Apr. 12 • Apr. 19 Apr. 19 - APr. 28 Apr. 26 -May 3 May 3 • May 10 May t0 -May 17 May 17 -May 24 May 24 -May 31 May 31 -June 7 June 7 -June 14 June 14 -June 21 June 21 -June 28 June 28 -July 5 July 5 -July 12 July 12 -July 19 July 19 -July 26 July 26 - Aug. 2 Aug. 2 - Aug. 9 Aug. 9 -Aug. 18 Aug. 18 - AuB• 23 Aug. 23 • Aug. 30 Aug. 30 - SeP. 6 Sep. 6 -Sep. 13 SeD. 13 -Sep. 20 Sep. 20 -Sep. 27 Sep. 27 -Oct. 4 Oct. 4.Oct. 11 Oct. 17 -Oct. 18 Oct. 18 -Oct. 25 Oct. 25 • Nw. 1 Nw. 1 • Nw. 8 Nov. 8 • Nov. 15 Nov. 15 • Nw. 22 Nw. 22 - Nw. 29 Nw. 29 -Dec. 8 Dec. 8 -Dec. 13 Dec. t3 - Dec. 20 Dec: 20 - Oee. 27 Dec.27 • Jen. 3 ' ~~ PROSPECTOR Week Selection Chart PROSPECTOR FRACTIONAL ESTATE OrItJERS HAVE THREE OCCUPANCY NEEKS EA01 YEAR. THIS ENA3LES EVERYONE TD BE EQUAL OHNERS. THE CHOICES OF REEKS ARE fMDE ON A FIRST CONF, FIPST SERVED BASIS AT THE TIME OF PURCHASE. EACH QdIJER CREATES HIS OHN PACKAGE BY USING ONE FIEEK FRO-1 EACH SEASON: PRIME SKI, 51~'FP./FRINGE SKI AND SPRIIJG/FALL. CHOC~~E ONE CHJDSE ANY ONE CHOOSE ANY QJE PRIME SKI SIJr'd1EP,/FRItYJE SKI SPRING/FALL 51 *14 APRIL 15 APRIL 52 CNRISTNAS 25 JWE 16 1 26 17 2 27 16 F1AY 3 28 JULY ]A 4 29 2O 5 21 JUNE 6 FEBRUAP.Y 3 AUGUST 22 T 23 8 33 24 9 34 39 SEPTErL9ER ]A MARO1 35 40 11 36 SEPTEtiQER 41 OCTC~ER 12 37 42 13 38 43 •50 DECEM3ER 44 45 NC1VEDflER 46 47 48 DECE~~ER 49 •EXCEPTIQV: PURCHASERS OF NEEYS 13 OR 51 HAVE FIRST Oi01CE REGARDING 3h OR 50 RESPECTIVELY. SEVEN NEEKS MILL BE LEFT OVER AFTER THE PURCHASERS HAVE CHOSEN THEIR MEEXS AT NHICH TIhg THEY NILL BE DEEDED TO THE HDMEOkiNERS ASSOCIATION fOR MAINTENMlCE. PENDLETON F~ SABIAN, P. C. ATTORNEYS AND COUNSELORS AT LAW W MICHAEL CLOWDUS SEVENTEENTH AND GRANT BUILDING TELEPHONE: (303) 839-1204 SUITE 1000 TELECOPIER: (303) 831-0786 303 EAST SEVENTEENTH AVENUE TWX:910-931-0407 DENVER,COLORADO 80203 HAND DELIVERED July 31, 1984 Paul J. Taddune, Esq. City Attorney City of Aspen 130 S. Galena Aspen, CO 81611 RE: Merit Investment Co. (of Aspen), Inc. -- Final Project Documents Dear Paul: Since the City of Aspen approved the application of Merit Investment Co. (of Aspen), Inc. ("Merit"), to operate The Prospector as a timeshare project, we have had to make a number of changes to the project documents which were previously submitted to and approved by the City of Aspen. The changes in these documents have been made to comply with the requirements of Merit's permanent lender, Security Pacific Finance Corp., to update the documents in order to accurately reflect the current status of the project, or to make the documents internally consistent. In our view, none of the changes affect compliance of the project documents with the requirements of the Aspen Code or of the conditions of the City Council's approval of the project. In order to facilitate your review of the final project documents, as contemplated by paragraph 25 of Alan Richman's May 29, 1984 Memorandum to the City Council (the "Memorandum"), we enclose copies of the following documents blacklined to indicate the changes that have been made: 1. Fractional Estate Declaration for The Prospector; 2. Articles of Incorporation of The Prospector Fractional Owners' Association; ..-- - :,_~ Paul J. Taddune, Esq. July 31, 1984 Page 2 3. Bylaws of The Prospector Fractional Owners' Association; 4. Fractional Estate Purchase Contract; 5. State of Colorado Disclosure Statement; 6. City of Aspen Disclosure Statement; 7. RCI Guide, which explains the exchange program (new document); 8. Federal Disclosure Statement; 9. Promissory Note to be used in connection with the seller carryback financing (the "Note"); 10. Form of Deed of Trust to be used to secure the Note ; 11. Form of Security Agreement to be used to encumber the furnishings and furniture in order to provide additional security for the Note (new document); and 12. Revised copy of the annual budget of The Prospector Fractional Owners' Association. In order to facilitate the review of these documents by the Aspen City Planning Office, as contemplated by the Memorandum, we are simultaneously transmitting a duplicate set of the enclosed documents to Collette Penne for her review. Since our client intends to begin its marketing efforts by the end of this week, we would appreciate your prompt review to the enclosed documents. Please let me know if I may answer any questions concerning the enclosed documents. Very truly yours, ~LG~~ W. Michael Clowdus WMC:mg En losures cc Aspen City Planning Office (Attn: Collette Penne) Merit Investment Co. (of Aspen), Inc. (L. Vernon Cagle, President) Ms. Janet Manning PENDLETON £~ SABIAN, P. C. .~~ FRACTIONAL ESTATE DECLARATION FOR THE PROSPECTOR, A CONDOMINIUM This Declaration of Covenants, Conditions and Restrictions (hereinafter "Declaration")~ lda~of and executed 19841tbynMerit County, Colorado, this Y ' Investment Co. (of Aspen), Inc., a Colorado corporation, (hereinafter "Declarant") pursuant to the provisions of the Colorado Condominium Ownership Act as amended. WHEREAS, Declarant is the owner of certain real property situate in the County of Pitkin, State of Colorado, as more particularly described in Exhibit A attached hereto and hereby incorporated by reference (the "Property"); WHEREAS, Declarant desires to establish a Fractional Estate project to be known as The Prospector, a Condominium, upon the Property and to sell and convey the same to various purchasers subject to the covenants, conditions and restrictions herein reserved to be kept and observed; and WHEREAS, Declarant desires and intends by filing this Declaration to submit the Property and all buildings, structures and other improvements thereon, together with all appurtenances thereto, to the provisions of the Colorado Condominium Ownership Act and Section 20-24 of the Municipal Code of the City of Aspen as a Fractional Estate project and to impose upon said property. mutually beneficial restrictions under a general plan of improvement for the benefit of all of the Lodge Units and the Owners thereof; NOW, THEREFORE, Declarant does-hereby publish and declare that the Fractional Estate project describe3 above shall be held, conveyed, hypothecated, encumbered, leased, rented, occupied and used subject to the following terms, covenants, conditions, easements, restrictions, uses, limitations and obligations, all of which shall be deemed to run with the land, shall be a burden and a benefit to Declarant, its successors and assigns and any person acquiring or owning an interest in the Project and improvements, their grantees, succcessors, heirs, executors, administrators, devisees or assigns. 1 r 'M= . ~/ ARTICLE I DEFINITIONS Unless the context shall expressly provide otherwise: Section 1.1. "Fractional Owners' Association" or "Association" means The Prospector Fractional Owners' Association, a Colorado corporation not-for-profit, its successors and assigns, the Articles of Incorporation and Bylaws of which, together with this Declaration shall govern the administration of this Project, the members of which shall be all of the Owners of the Lodge Units. Section 1.2. "Board of Managers" means the governing body of the Association, elected as hereinafter provided, to carry out the obligations of the Association. Section 1.3. "Common Elements" means and includes all items defined as General Common Elements and Limited Common Elements. Section 1.4. "Common Expenses" means and includes expenses of administration, operation and management of the Project, and the expense of maintenance, repair or replacement of the General Common Elements and all other expenses declared Common Expenses by provisions of this Declaration and the Bylaws of the Association. Section 1.5. "Condominium Map" or "Map" means the map of The Prospector, a Condominium. Section 1.6. "Condominium Project" or "Project" means all of the Property and improvements subject to this Declaration. Section 1.7. "Condominium Unit" or "Lodge Unit" means the fee simple interest in and title to a Unit, together with the undivided interest in the General Common Elements appurtenant thereto and the exclusive right to use any Limited Common Element assigned thereto on the Condominium Map as designated by the provisions relating to Limited Common Elements within this Declaration. Secton 1.8. "Declarant" means Merit Investment Co. (of Aspen), Inc., its successors and assigns. Section 1.9. "Declaration" means the Fractional Estate Declaration for The Prospector, a Condominium, together with all supplements and amendments thereto of record. Section 1.10. "Fractional Estate" means a time-span estate consisting of an undivided interest of not less than one-fifteenth (1/15), as tenant-in-common, in the present estate in fee simple in a Lodge Unit together with the right to possession and -2- ,~^ .~, ~,~ occupancy of the Lodge Unit during the Use Weeks defined herein. The sum of the "Use Weeks" and "Maintenance Weeks" in a Lodge Unit dedicated to Fractional Estate Ownership shall equal fifty-two (52) weeks. Section 1.11. "Fractional Owner" or "Owner" means any person or entity vested with legal title to a Fractional Estate during his designated Use Weeks. Section 1.12. "Fractional Unit" means a Lodge Unit which is dedicated to Fractional Ownership pursuant to Article XXVIII of this Declaration. Section 1.13. "General Common Elements" mean and include the Property and all easements and rights appurtenant thereto; the structural components of the building; amenities including the third floor sun deck and covered parking spaces; and all other parts of the Property and the improvements thereon necessary or convenient to its existence, maintenance and safety which are normally and reasonably in common use, including the air above the Property, all of which shall be caned by the Owners as tenants-in-common, the Owner of a Unit having an undivided percentage interest in such General Common Elements as is provided hereinafter. Section 1.14. "Limited Common Elements" mean those parts of the General Common Elements which are either limited to and reserved for the exclusive use of an Owner or are limited to and reserved for the common use of more than one but fewer than all of the Owners. Section 1.15. "Maintenance [+Ieek" means seven or more Use Weeks designated by Declarant, by notice duly recorded, as Daintenance Weeks. Maintenance Weeks shall be appurtenant to the Fractional Estates in a Fractional Unit and the transfer of a Fractional Estate shall transfer to the grantee an interest in the Maintenance Weeks without further reference thereto; provided, however, that the Fractional Owners' Association shall have a superior and prior right to use, possess and occupy the Fractional Unit during the Maintenance Weeks in order to service, clean, repair, maintain and refurbish the Fractional Unit and for such other purposes as the Fractional Owners' Association may deem necessary or desirable. At least two Use Weeks in the fall and two Use Weeks in the spring shall be designated as Maintenance Weeks for each Fractional Unit. Section 1.16. "Manager" means a member of the Board of Managers. -3- ,~- ..~, Section 1.17. "Managing Agent" means a person or firm licensed by the City of Aspen to whom the Board of Managers has delegated certain of its administrative and management functions. Section 1.18. "Mortgagee" means a mortgagee, holder, insurer or guarantor of any first mortgage on a Fractional Estate or a Lodge Unit. Section 1.19. "Unit" means an individual air space Unit which is contained within the perimeter walls, floors, ceilings, windows and doors of such Unit as shown on the Condominium Map to be filed for record in the office of the Clerk and Recorder of the County of Pitkin, Colorado, together with all fixtures and improvements therein contained, but not including any of the structural components of the building, if any, within a Unit. Section 1.20. "Use Weeks" mean a period of exclusive possession and occupancy of a Fractional Unit. Use Weeks are computed as follows: Use Week No. 1 is the seven days commencing at noon on the first (specify day) of each calendar .year. All other Use Weeks are calculated by working forward from Use Week No. 1. All extra days which accumulate become a part of Use week No. 52 as established by the calendar prepared by the Fractional Owners' Association. Use Weeks run from noon on the first (specify day) of the Use Week to noon on the last day of the Use Week; provided, however, that tine right of possession and occupancy shall not commence until 4:00 p.m. local time on the first day of the Use Week and shall end at 10:00 a.m. on the last day thereof; and provided further, however, that if Use Week No. 51 as so compute oes not inc u e Christmas Dav then Use Week No. 51 shall extend until and sha71 PnA ~., All Use Weeks in a Lodge Unit shall be computed on the same basis and,__except as otherwise provided herein, shall commence and end at the same time and day of the week, according to this paragraph. ARTICLE II CONDOMINIUM MAP Section 2.1. Filin4. The Map shall be filed for record prior to the conveyance of a Fractional Estate to a purchaser. The Map shall depict and show at least the following: the legal description of the Property and a survey thereof; linear -4- ~. ~. ~. ~ measurements and the location of all improvements on the Property with reference to the exterior boundaries of the Property; the location of the Units within the improvements both horizontally and vertically and the Unit designations; the dimensions of the Units; the elevations of the unfinished floors and ceilings as constructed; the location of the General Common Elements and Limited Common Elements; the thickness of the common walls between or separating the Units; and the location of any structural components or supporting elements of a building located within a Unit. The Map shall contain a Certificate of Survey by a registered land surveyor certifying that the Map fully and accurately depicts the location and dimensions of all buildings and other improvements, easements and rights-of-way of record or known to the surveyor and that there exist no encroachments by or on the Property except as specifically set forth on the Map. The Map also shall contain a certificate of a registered land surveyor, a registered professional engineer or a licensed architect certifying that the Map substantially depicts: the location of the Units within the buildings both horizontally and vertically and the Unit designations; the dimensions of the Units; the elevations of the unfinished floors and ceilings as constructed; the location of the General Common Elements and Limited Common Elements; the thickness of the common walls between or separating the Units; and the location of any structural components or supporting elements of a building located within a Unit. Such certificate shall also certify that such Map was prepared subsequent to substantial completion of the Units and of the improvements. Any amendment to the Map shall set forth a like certificate when appropriate. In interpreting the Map, the existing physical boundaries of each separate Unit as constructed shall be conclusively presumed to be its boundaries. Section 2.2. Declarant's Right to Amend. Declarant reserves the right until August 1, 1989, to amend the Map without the approval of any Owner or mortgagee, to conform it to the actual location of any of the constructed improvements, to establish, vacate and relocate easements and to designate General Common Elements as Limited Common Limits. Thereafter, such rights shall be reserved to the Board of Managers of the Association. ARTICLE III DIVISION OF PROPERTY The Property is hereby divided into twenty (20) fee simple estates, each such estate consisting of one Lodge Unit. The General Common Elements shall be held in common by the Owners of Lodge Units in the percentages set forth in Exhibit 8 attached hereto and incorporated herein by this reference. Declarant hereby submits all of the Lodge Units in the Project, except the Employee Housing Unit, to the plan of Fractional Ownership set forth in Article XXVIII. -5- ,.. ARTICLE IV LIMITED COMMON ELEMENTS Certain portions of the General Common Elements are reserved for the exclusive use of the individual Owners of the respective Units, and such areas are referred to as "Limited Common Elements". Any balcony or deck which is solely accessible from, associated with, and attached to a Unit, and any fixture or personalty located thereon, without further reference thereto, shall be deemed Limited Common Elements and shall be used in connection with such Unit to the exclusion of the use thereof by the other Owners of the General Common Elements, except by invitation. ARTICLE V INSEPARABILITY OF A LODGE UNIT Each Unit, the appurtenant undivided interest in the General Common Elements and the appurtenant Limited Common Elements shall together comprise one Lodge Unit, shall be inseparable and may be conveyed, leased, devised or encumbered only as a Lodge Unit. ARTICLE VI RIGHTS NOT RESERVED BY DECLARANT The Declarant specifically does not reserve any right to: (i) lease the General or Limited Common Elements to the Association; (ii) to accept a lease from the Association for the General or Limited Common Elements; (iii) to accept franchises or licenses from the Association for the provision of central television antenna or like services; and (iv) to retain the right, by virtue of continued Association control or otherwise, to veto acts of the Association or to enter into management agreements or other contracts which extend beyond the date the Owners obtain majority control of the Association. ARTICLE VII EMPLOYEE HOUSING UNIT Prior to the first conveyance of a Fractional Estate to t initial purchaser thereof, the Declarant shall transfer to the Association by general warranty deed the following Lodge Unit: Unit 108, according to the Fractional Estate Declaration and Map for The Prospector of record, Pitkin County, Colorado. -6- ~.... ..~, So long as the separate condominium estates created by this Declaration continue as described in Article XXX, this Lodge Unit shall be restricted to use as employee housing for employees of the Association or the Managing Agent,/~or such other purpose as e Associa ion may eem consis en with Section 24-11.4(b)(3) of the Municipal Code of the City of Aspen.^ ARTICLE VIII SEPARATE ASSESSMENT AND TAXATION - NOTICE TO ASSESSOR All taxes, assessments and other charges of the State of Colorado or of any political subdivision or of any special improvement district or of any other taxing or assessing authority shall be assessed against and collected on each Lodge Unit separately and not on the Project as a whole, and each Lodge Unit shall be carried on the tax records as a separate and distinct parcel. For the purposes of valuation for assessment, the valuation of the Common Elements shall be apportioned among the Lodge Units in proportion to the appurtenant undivided interests in the Common Elements. The lien for taxes assessed on any Lodge Unit shall be confined to that Lodge Unit. No forfeiture or sale of any Lodge Unit for delinquent taxes, assessments or other governmental charges shall divest or in any way affect the title to any other Lodge Unit. The Declarant shall deliver a written notice to the County Assessor as required by the Condominium Ownership Act, setting forth descriptions of the Lodge Units, and shall furnish all necessary information with respect to such apportionment of valuation for assessment. Said notice shall request that all tax bills be forwarded to the Association. ARTICLE IX OWNERSHIP - TITLE A Lodge Unit or a Fractional Estate may be held and owned by more than one person as joint tenants or as tenants-in-common, or in any real property tenancy relationship recognized under the laws of the State of Colorado. ARTICLE X NON-PARTITIONABILITY OF GENERAL COMMON ELEMENTS The General Common Elements shall be owned in common by all of the Owners of the Units and shall remain undivided, and no Owner shall bring any action for partition or division of the General Common Elements or of anv Lodge Unit or Fractional Unit. -7- ~. -.~ ..~.. ARTICLE XI USE OF GENERAL COMMON ELEMENTS Each Owner shall be entitled to exclusive ownership and possession of his Fractional Estate. Each Owner may use the General Common Elements in accordance with the purpose for which they are intended, without hindering or encroaching upon the free exercise of the lawful rights of the other Owners. ARTICLE XIZ COMBINATION AND RESUBDIVISION OF UNITS Neither the Declarant nor any Owner shall be able to combine, divide or subdivide any Unit or interest therein so as to convey or to create more than one Unit therefrom or to enlarge any Unit beyond its original perimeters. ARTICLE XIII EASEMENTS Each Lodge Unit in the Project shall be subject to the following easements: Section 13.1. Owners' Rights in Limited Common Elements. Each Owner, his family and such Owner's guests, shall have the exclusive right to use and enjoy the Limited Common Elements designated herein, in the Map or in the initial deed from the Declarant as appurtenant to the Unit owned by such Owner. Section 13.2. Easement for Access, Suovort and Utilities. Each Owner shall have a nonexclusive easement for access between his Unit and the public roads and streets, along halls, corridors, stairs, elevators and sidewalks, and for access to other easements which are a part of the General Common Elements. Each Owner shall have a nonexclusive easement in and over the Common Elements including those that are within the Unit of another Owner, for horizontal and lateral support of his Unit, and for utility service to his Unit, including but not limited to water, sewer, gas, electricity, telephone and television service. Section 13.3. Easement for Encroachments. If any portion of the General or Limited Common Elements encroaches upon a Unit or Units, a valid easement for the encroachment and for the maintenance of same, so long as it stands, shall and does exist. If any portion of the Unit encroaches upon the General or Limited Common Elements, or upon an adjoining Unit or Units, a valid easement for the encroachment and for the maintenance of same, so long as it stands, shall and does exist. Such encroachments and easements shall not be considered and determined to be encumbrances either on the General or Limited Common Elements or the Units. Encroachments referred to herein include, but are not -8- ,..~_ limited to, encumbr construction o£ any settling, rising or position of Project specifically do not act Of any Owner. -~., snces caused by error in the original improvements, by error in the Map, by shifting of the earth, or by changes in the caused by repair or reconstruction, but include encumbrances caused by the intentional Section 13.4. Easement for Repairs, Maintenance and Emergencies. Some of the General Common Elements are, or may be, located within a Unit or may be conveniently accessible only through a Unit or Limited Common Element. The Association, Managing Agent, and each Owner shall have an easement, which may be exercised for any Owner by the Association or the Managing Agent as his Agent, for access through each Unit and to all General Common Elements and Limited Common Elements, from time to time, during such reasonable hours as may be necessary for the maintenance, repair or replacement of any of the General Cocnmon Elements located therein or accessible therefrom or for making any repairs therein necessary to prevent damage to the General Common Elements or to another Unit. Damage to the interior or any part of a Unit resulting from the maintenance, repair, emergency repair or replacement of any of the General Common Elements, or as a result of emergency repairs within another Unit, at the instance of the Association, shall be a Common Expense of all Owners. No diminution or abatement of Common Expenses assessments shall be claimed or allowed for inconvenience or discomforts arising from the making of repairs and improvements or for action taken to comply with any law, ordinance or order of any governmental authority. Restoration of the damaged improvements shall be to substantially the same condition in which they existed prior to the damage. The foregoing notwithstanding, if any such damage is the result of the carelessness or the negligence of any Owner, then such Owner shall be solely responsible for the costs and expenses of repairing such damage. ARTICLE XIV OWNERS' RESPONSIBILITY FOR UNIT All maintenance, repair and refurbishment shall be the responsibility of the Association. An Owner shall do no act nor any work that will impair the structural soundness or integrity of any improvements or impair any easement. An Owner shall promptly report any defect or necessary repair to the Association or Managing Agent and shall not attempt to repair or alter any item in the Unit except as reasonably necessary in an emergency situation to prevent further damage to the Unit. -9- ARTICLE XV ,..,. r TERMINATION OF MECHANIC'S LIEN RIGHTS No labor shall be performed or materials furnished and incorporated in a Unit with the consent or at the request of the Owner or his agent without the consent of the Association. No such labor or material shall be the basis for filing of a lien against the Fraotional Estate of any other Owner not expressly consenting to or requesting the same, or against the General Common Elements. ARTICLE XVI ADMINISTRATION AND MANAGEMENT; ASSOCIATION; MANAGING AGENT Section 16.1. General Provisions. The Association will be formed as a Colorado not- or-pro it corporation to manage the General Common Elements as provided in this Declaration and to further the interests of all Owners of Fractional Units in the Project. The Association shall have all powers necessary or desirable to effectuate such purposes. Subject to the provisions of this Declaration, the administration and management of the Association shall be governed by the Articles of Incorporation and Bylaws thereof. An Owner of a Fractional Estate, upon becoming an Owner, shall be a member of the Association and shall remain a member for the period of his ownership. Section 16.2. Voting. A Fractional Owner shall be entitled to a vote, the size of which vote shall be based upon each Fractional Owner's undivided interest as tenant-in-common in the Fractional Unit. Voting by proxy shall be permitted. Section 16.3. Management. The affairs of the Association shall be managed by a Board of Managers as is provided in the Articles of Incorporation and Bylaws of the Association. Notwithstanding anything to the contrary provided herein, until the date by which title to one hundred percent (100$) of the Fractional Estates in the Project have been conveyed by Declarant to the initial purchasers, or until August 1, 1989, whichever first occurs, the members of the Board of Managers shall be appointed by the Declarant and shall serve at the pleasure of Declarant and need not be Owners. The Declarant shall have the option at any time to turn over control of the Board of Managers to the Fractional Owners upon sixty (60) days' prior notice. Section 16.4. Mana in A ent; Offices. The Board of Managers may by reso ution de egate certain of its duties, powers and functions to a person or firm which will act as Managing Agent. A portion of the General Common Elements including improvements thereon may be used by either the Association or both the Association and Managing Agent as and for offices in connection with administration and management. -10- -~° ARTICLE XVII w POWERS AND DUTIES OF THE ASSOCIATION By way of enumeration and without limitation the Association shall have the following powers and duties: Section 17.1. Association as Attorney-in-Fact for Owners. The Association is hereby irrevocably appointed attorney-in-fact for the Owners separately and collectively, to manage, control and deal with the interest of such Owner in the General Common Elements so as to permit the Association to fulfill all of its duties and obligations hereunder and to exercise all of its rights hereunder, to deal with the Project upon its destruction or obsolescence as hereinafter provided and to grant utility and other easements and rights of way through any portion of the General Common Elements. The acceptance by any Fractional Owner of any interest in any Lodge Unit shall constitute an appointment of the Association as attorney-in-fact as provided above and hereinafter. The Association shall be granted all of the powers necessary to govern, manage, maintain, repair, administer and regulate the Project and to perform all of the duties required of it. Notwithstanding the above, unless at least seventy-five percent (758) of the first Mortgagees of the Fractional Estates, (based upon one (1) vote for each first Mortgage maned or held), and Fractional Owners (other than Declarant) have given their prior written approval, the Association shall not be empowered or entitled to: i. by act or omission, seek to abandon or terminate the Project; ii. by act or omission seek to abandon, partition, subdivide, encumber, sell or transfer any of the General or Limited Common Elements; iii. use hazard insurance proceeds from loss to the improvements for other than repair, replacement or reconstruction of such improvements; or iv. change the pro rata ownership interest or obligation of any Lodge Unit for the purpose of levying assessments or charges, or allocating the proceeds of hazard insurance or condemnation awards, or in order to alter the percentage -11- -.. ,,. of ownership interest of a Fractional Unit in the General Common Elements. Section 17.2. General Common Elements. The Association shall provide for the care, operation, manage;nent, maintenance, repair and replacement of the General Common Elements. Without limiting the generality of the foregoing, said obligations shall include the keeping of such General Common Elements in good, clean, attractive and sanitary condition, order and repair; removing snow and any other materials from such General Common Elements which might impair access to the Project or .the Units; keeping the Project safe, attractive and desirable; and making necessary or desirable alterations, additions, betterments or improvements to or on the General Common Elements. The Association shall provide reasonable written notice to all affected Owners, at their registered addresses as provided in Article XXIX hereof, of all matters affecting the Project. Section 17.3. Coordination of Occupancy. The Association shall coordinate the plans of Fractional Owners for moving their personal effects into and out of the Fractional Units with a view toward scheduling such move so that there will be a minimum of inconvenience to other Fractional Owners. Section 17.4. Service Requests. The Association shall maintain business-like relations with Fractional Owners whose service requests shall be received, considered, and recorded in a systematic fashion in order to show the action taken. Section 17.5. Maintenance. The Association shall cause each Fractional Unit to be maT ed in a first class manner and condition. The Fractional Owners' Association shall determine the color scheme, decor and furnishing of each Fractional Unit as well as the proper time for redecorating and replacement thereof. Section 17.6. Invoice Expenses. The Association shall bill each Fractional Owner for the expense of occupancy of a Fractional Unit during said Fractional Owners' Use Weeks, which the Association determines are the individual expenses of the particular Fractional Owner including, but not limited to: long-distance and other extraordinary telephone charges; extraordinary repairs or charges for damages to the Fractional Unit, its furniture, furnishings, equipment, fixtures, appliances and carpeting caused by a Fractional Owner or his guest; ^ other charges rendered by the Managing Agent on behalf of the particular Fractional Owner; andnmaid service. Section 17.7. Collection of Fees. The Association shall collect the assessments provided for in Article XX. -12- ~~ Section 17.8. Title. The Association shall accept from the Declarant, conveyance title to the Employee Housing Unit as provided for in Article VIZ. Section 17.9. Calendar of Uae Weeks. The Association shall prepare a calendar of Use Weeks which shall at all times establish the dates of each Use Y7eek at least five (5) years into the future. Section 17.10. Other Association Functions. The Association may undertake any activity, function or service for the benefit of or to further the interests of all, some or any Owners of Units on a self-supporting, special assessment or common assessment basis. Such activities, functions or services may include but are not limited to the providing of police or similar security services and the providing of garbage and trash collection services. Section 17.11. Labor and Services. The Association (i) may obtain and pay for the services of a Managing Agent to manage its affairs, or any part thereof to the extent it deems advisable, as well as such other personnel as the Association shall determine to be necessary or desirable for the proper operation of the Project, whether such personnel are furnished or employed directly by the Association or by any party with whom or with which it contracts; (ii) may obtain and pay for legal, accounting and other professional services necessary or desirable in connection with the operation of the Project or the enforcement of this Declaration; and (iii) may arrange with others to furnish lighting, heating, water, trash collection, sewer service and other common services. Section 17.12. Property of Association. A. The Association may pay for, acquire and hold tangible and intangible personal property and may dispose of the same by sale or otherwise. Subject to the rules and regulations of the Association, each Owner and each Owner's family and guests may use such property. B. The Association may hold title to the Employee Housing Unit and a proportionate share in all Common Elements as a result of such ownership. C. Upon termination of fractional estate ownership of the Project and dissolution of the Association, if ever, the beneficial interest in any such property shall be deemed to be owned by the then Fractional Owners as tenants-in-common in the same proportion as their respective interest in the General Common Elements. -13- ,.-.. Section 17.13. Common Elements. lease or license Housing Unit. sociation' The Associ ~~ ~.~. ease and Licen not have the r any part of the project except the Section 17.14. Mortgagee Inspection. The Association shall grapt to each first Mortgagee of a Unit the right to examine the books and records of the Association at any reasonable time. Section 17.15. Rules and Regulations. The Association shall have the right to adopt such Bylaws and to promulgate such reasonable rules and regulations as it deems necessary or desirable to effectuate the intent and to enforce the duties and obligations set forth in the Declaration and the Articles of Incorporation and Bylaws of the Association. Section 17.16. Enforcement by Association. The Association may suspend any Owner's voting rights in the Association or the right of an Owner to use the General Common Elements during any period or periods during which such Owner fails to comply with the Association's rules and regulations, or with any other obligations of such Owner under this Declaration. The Association may also take judicial action against any Owner to enforce compliance with such rules, regulations or other obligations or to obtain damages for noncompliance to the extent permitted by law. Section 17.17. Implied Rights. The Association shall have and may exercise any right or privilege given to it expressly by this Declaration, or reasonably to be implied from the provisions of this Declaration, or given or implied by law, or which may be necessary or desirable to fulfill its duties, obligations, rights or privileges. ARTICLE XVIII INSURANCE Section 18.1. Polices. The Managing Agent, or if there is no Managing Agent then the Board of Managers, shall obtain and maintain at all times to the extent possible fire insurance with extended coverage in the amount of the aggregate maximum replacement value of all the Units and all personal property placed in the Units by Declarant or the Association; casualty and public liability insurance; business interruption insurance, if reasonably available, sufficient to provide comparable alternativ accommo ations or Owners or one year during any verioo or aamage and/or reconstruction of the Project; and insurance covering such other risks, of a similar or dissimilar nature, as are or shall hereafter customarily be covered with respect to other timeshare projects issued by a responsible insurance company or companies authorized to do business in the State of Colorado. The insurance -14- shall be carried in blanket policy form naming the Association the insured, as attorney-in-fact for all of the Owners, which policy or policies shall identify the interest of each Fractional Owner as set forth herein, and which policy or policies shall provide a standard, non-contributory mortgagee clause in favor of each first Mortgagee, and that the policy cannot be cancelled or substantially modified without thirty days' prior written notice to the Association, each Owner and each first Mortgagee. The public liability insurance shall be in such limits as may from time to time be determined and shall cover each Owner, each member of the Board of Managers and the managing Agent. Such public liability coverage shall also cover cross liability claims of one insured against another and shall contain waivers of subrogation. All such policies shall contain such other provisions deemed necessary and desirable by the Board of Managers to protect the interest of the Association and all the Owners in the Project. Section 18.2. Owner Policies Permitted. Each Owner may obtain additional insurance at his own expense for his own benefit provided that all such policies shall contain waivers of subrogation and provided, further, that the liability of the carriers issuing insurance to the Association hereunder shall not be affected or diminished by reason of any such insurance carried by any Owner. Insurance coverage on personal property belonging to the Fractional Owner shall be the responsibility of the Owner thereof. ARTICLE XIX WITH PROVISIONS OF Each Owner shall comply strictly with the provisions of this Declaration, the Articles of Incorporation and Bylaws of the Association, and the decisions, rules and resolutions of the Association as lawfully adopted or amended. Failure to comply with any of the same shall be grounds for an action to recover sums due and for damages or injunctive relief or both, maintainable by the Managing Agent or Board of Managers in the name of the Association on behalf of the Owners or, in a proper case, by an aggrieved Owner. ARTICLE XX ASSESSMENTS FOR COMMON EXPENSES Section 20.1. Owner's Obligation. All Owners shall be obligated to pay the estimated pro rata assessments imposed by the Board of Managers of the Association to meet the Common Expenses. The assessments shall be made pro rata according to each Fractional Owner's, including the Declarants, undivided interest as tenant-in-common in the Fractional Unit. Such assessments -15- ~~ shall be due and payable pursuant to a schedule established by the Board of Managers beginning as the date of the closing of the sale of the first Fractional Estate in a Fractional Unit. Section 20.2. Calculation of Assessments. The assessments made for Common Expenses shall be based upon the cash requirements deemed to be such aggregate sum as the Board of Managers of the Association shall from time to time determine is to be paid by all of the Owners to provide for the payment of all estimated expenses growing out of or in connection with the maintenance and operation of the Common Elements and Fractional Units; provided, however, that for a period of five (5) years following the closing of the sale of the first Fractional Estate in a Fractional Unit the amount budgeted for interior reserves shall not be less than $1,500.000 per Fractional Unit and the amount budgeted for exterior reserves shall not be less than $526.00 per Fractional Unit; provided further, that the amount budgeted for exterior reserves shall not be reduced or eliminated until at least $50,000.00 has accumulated in the exterior reserve fund. All such reserve amounts shall be placed in an interest bearing escrow account. Such sum shall include but shall not be limited to: expenses of management; real estate and other taxes and special assessments; premiums for insurance; telephone; firewood; landscaping and care of grounds; lighting and heats g; repairs, replacement and renovations of Common Elements, and all furniture and furnishings located in the Fractional Unit and used for the operation thereof, including but not limited to furniture, fixtures, appliances, carpeting, window coverings and utensils; trash collections; wages; water charges; legal, accounting and other professional fees; expenses incurred by the Association to facilities, pnysical fitness facilities, or otner amenities; expenses and liabilities incurred by the Managing Agent or Board of Managers under or by reason of this Declaration; any deficit remaining from a previous period; the creation of a reasonable contingency and replacement funds as well as other costs and expenses relating to the General Common Elements or incurred in the normal operation of .the Project which is attributable to the operation of the Lodge Unit as a Fractional Unit. In making the assessments for Common Expenses pursuan Association shall assess each Owner for the percentage interest 1n the General Common Elements appurtenent to such Fractional Unit. Declarant shall have no obligation to pay the estimated Common Expense assessment on Fractional Units owned by Declarant until the closing of the sale of the first Fractional Estate in such Fractional Unit or until Declarant turns over control of the Association to Fractional Owners, whichever first occurs; provided, however, that should Declarant rent -16- ~. .. unsold Fractional Units the proceeds of rental shall be applied to the cost of maintenance resulting from the rental. Declarant shall, however, pay to the Association a sum equal to the difference between the monthly cost of operating and maintaining the Common Elements, exclusive of reserves, and the amount of assessments payable by other owners. The Association may require an Owner, other than Declarant, upon the acquisition of a Fractional Estate, either from Declarant or from a previous Owner, to deposit with the Association up to an amount equal to three (3) times the amount of the then current monthl assessment for Common Expenses, which sum shall be used for wor ing capital and/or to establish the initial replacement reserves. Such deposit shall not relieve an Owner from making the regular payments of the assessment for Common Expenses as the same becomes due. Upon transfer of his Fractional Estate, an Owner shall be entitled to a credit from his transferee for any unused portion thereof. Section 20.3. Failure to Fix Assessment. The omission or failure of the Board of Managers to fix the assessment for any year shall not be deemed a waiver, modification or release of the Owners from their obligation to pay. ARTICLE XXI OWNER'S PERSONAL OBLIGATION FOR PAYMENT OF ASSESSMENTS The amount of the assessment shall be the personal and individual debt of the Owner. No Owner may exempt himself from liability for the assessment by waiver of the use or enjoyment of any of the General Common Elements or by abandonment of his real property interest. In the event of default in the payment of the assessment, the Owner shall be obligated to pay interest and late charges at the rate and in the amount set by the Board of Managers from the due date of the assessment together with all expenses, including attorneys' fees, incurred in the collection thereof. Suit to recover a money judgment for unpaid Common Expenses shall be maintainable without foreclosing or waiving the lien securing same. ARTICLE XXII ASSESSMENT LIEN Section 22.1. Lien Priority. All unpaid sums assessed for the share of Common Expenses chargeable to any Fractional Estate shall constitute a lien on such Fractional Estate superior to all other liens and encumbrances, except only for: i. tax and special assessment liens on the Unit in favor of any governmental entity; and -17- ,~,, ._ ii. all sums unpaid on a first mortgage or first deed of trust of record, including all unpaid obligatory sums as may be provided by such encumbrance. Section 22.2. Notice; Enforcement. To evidence such lien, the Board of Managers or the Managing Agent shall prepare a written notice of lien assessment setting forth the amount of such unpaid indebtedness, the name of the Owner of the Fractional Unit and a description of the Fractional Estate. Such notice shall be signed by one member of the Board of Managers or by one of the officers of the Association or by the Managing Agent, and shall be recorded in the office of the Clerk and Recorder of the County of Pitkin, Colorado. Such lien for the Common Expenses shall attach from the date of the failure of payment of the assessment. Such lien may be enforced by the foreclosure of the defaulting Owner's Fractional Estate by the Association in like manner as a mortgage on real property subsequent to the recording of a notice or claim thereof. In any such proceedings the Owner shall be required to pay the costs, expenses and attorneys' fees incurred for filing the lien, and, in the event of foreclosure proceedings, all additional costs, expenses and reasonable attorneys' fee incurred. The Owner of the Fractional Estate being foreclosed shall be required to pay to the Association the Assessments for Common Expenses for the Fractional Estate during the period of foreclosure, and the Association shall be entitled to appoint a receiver to collect the same. The Association shall have the power to bid on the Fractional Estate at foreclosure or other legal sale and to acquire and hold, lease, mortgage, vote the votes appurtenant to, convey or otherwise deal with the same. A. Default Notice to First Morn shall give written notification, upon reque Mortgagee of any default in the performance of any obligation under the Declaration, or Incorporation and Bylaws of the Association within sixty (60) days. lagee. ,t, to by an ArtiC which The Association any first individual Owner ies of is not cured B. Unpaid Assessments After Foreclosure. Any first Mortgagee who obtains title to a Fractional Estate pursuant to foreclosure of the mortgage or deed of trust, or by a deed in lieu thereof, will not be liable for such Fractional Estate's unpaid assessments which accrue prior to acquisition of title to such Fractional Estate by the Mortgagee. ARTICLE XXIII JOINT LIABILITY FOR COMMON EXPENSE UPON TRANSFER OF Section 23.1. Grantee's Liability. The grantee of a Fractional Estate, except a first Mortgagee who acquires title by foreclosure or a deed in lieu of foreclosure, shall be jointly and -18- .~ ., severally liable with the grantor for all unpaid assessments against the latter for his proportionate share of the Common Expenses up to the time of the grant or conveyance, without prejudice to the grantee's right to recover from the grantor the amounts paid by the grantee therefor; provided, however, that upon payment of a reasonable fee, and upon written request, any such owner or prospective grantee shall be entitled to a written statement from the Association setting forth the amount of the unpaid assessments, if any, with respect to the subject Fractional Estate, the amount of the current assessment for Common Expenses, the date that such assessment becomes due, which statement shall be conclusive upon the Association. Unless the request for such a statement shall be complied with within ten (10) days, then such requesting grantee shall not be liable for, nor shall the Fractional Estate conveyed be subject to, a lien for any unpaid assessments against the subject Unit. The provisions contained in this Article shall not apply upon the initial transfer of the Fractional Estates by Declarant. Section 23.2. Mortgagee's Liability. Upon payment of a reasonable fee and upon the written request of any Owner or any mortgagee or prospective mortgagee of a Fractional Estate, the Association shall issue a written statement setting forth the amount of the unpaid assessments on Common Expenses, if any, with respect to the subject Unit, the amount of the current assessment and the date that such assessment becomes due, which statement shall be conclusive upon the Association in favor of all persons who rely thereon in good faith. Unless the request for a statement of indebtedness shall be complied with within ten (10) days, all unpaid Common Expenses which become due prior to the date of making such request shall be subordinate to the lien of the person requesting such statement. ARTICLE XXIV MORTGAGING A LODGE UNIT - PRIORITY Any Owner shall have the right from time to time to mortgage or encumber his Fractional Estate or Lodge Unit by deed of trust, mortgage or other security instrument. A first mortgage shall be one which has first and paramount priority under applicable law. An Owner of a Fractional Estate may create junior mortgages on the following conditions: (i) that any such junior mortgages shall always be subordinate to all of the terms, conditions, covenants, restrictions, uses, limitations, obligations, lien for Common Expenses and other obligations created by this Declaration, the Articles of Incorporation and the Bylaws of the Association; and (ii) that the mortgagee under any junior mortgage shall release, for the purpose of restoration of any improvements upon the mortgaged premises, all of his right, title and interest in and to the proceeds under all insurance policies upon said premises which insurance policies were effected and placed upon the mortgaged -19- ~~ ,, premises by the Association. Such release shall be furnished forthwith by a junior mortgagee upon written request of the Association, and if not furnished, may be executed by the Association as an attorney-in-fact for such junior mortgagee. ARTICLE XXV DAMAGE, DESTRUCTION, OBSOLESENCE, OR CONDEMNATION Section 25.1. Association as Attorney-in-Fact. This Declaration does hereby make mandatory the irrevocable appointment of an attorney-in-fact to deal with the Project upon its destruction, repair or obsolescence. Title to any Fractional Estate is declared and expressly made subject to the terms and conditions hereof, and acceptance by any grantee of a deed or other instrument of conveyance from the Declarant or from any Owner or grantor shall constitute appointment of the attorney-in-fact herein provided. All of the Owners irrevocably constitute and appoint the Association their true and lawful attorney in their name, place and stead for the purpose of dealing with the Project upon its destruction or obsolescence as hereinafter provided. As attorney-in-fact, the Association, by its President and Secretary or Assistant Secretary, shall have full and complete authorization, right and power to make, execute and deliver any contract, deed or any other instrument with respect to the interest of an Owner which is necessary and appropriate to exercise the powers herein granted. Repair and reconstruction of the improvement(s) as used in the succeeding sections means restoring the improvement(s) to substantially the same condition in which it existed prior to the damage, with each Unit and the Common Elements having substantially the same vertical and horizontal boundaries as before. The proceeds of any insurance collected shall be available to the Association for the purpose of repair, restoration or replacements unless the Owners and all first Mortgagees agree not to rebuild in accordance with the provisions set forth hereinafter. Section 25.2. Fully Insured DamaGe to Improvements. Zn the event of damage or destruction due to fire or other disaster, the insurance proceeds, if sufficient to reconstruct the improvement(s), shall be applied by the Association, as attorney-in-fact, to such reconstruction, and the improvement(s) shall be promptly repaired and reconstructed. The Association shall have full authority, right and power, as attorney-in-fact, to cause the repair and restoration of the improvement(s). .Section 25.3. Special Assessment. If the insurance proceeds are insufficient to repair and reconstruct the improvement(s), and if such damage is not more than seventy-five percent (758) of the Project, not including land, such damage or destruction shall be -20- ~.~ ,. ., promptly repaired and reconstructed by the Association, as attorney-in-fact, using the proceeds of insurance and the proceeds of an assessment, for any deficiency to be made against-all of the Owners and their Fractional Estates. Such deficiency assessment shall be a Common Expense and assessed pro rata according to each Owner's percentage interest in the Common Elements and shall be due and payable within thirty (30) days after written notice thereof. The Association shall have full authority, right and power, as attorney-in-fact, to cause the repair or restoration of the improvements using all of the insurance proceeds for such purpose notwithstanding the failure of an Owner to pay the assessment. The assessment provided for herein shall be a debt of each Owner and a lien on his Fractional Estate and may be enforced and collected as provided herein. In addition thereto, the Association, as attorney-in-fact, shall have the absolute right and power to sell the Fractional Estate of any Owner refusing or failing to pay such deficiency assessment within the time provided. If not so paid, the Association shall cause to be recorded a notice that the Fractional Estate of the delinquent Owner shall be sold by the Association, as attorney-in-fact, pursuant to the provisions of this Article. The delinquent Owner shall be required to pay to the Association the costs and expenses for filing the notices, interest on the amount of the assessment and all reasonable attorneys' fees. The proceeds derived from the sale of such Fractional Estate shall be used and disbursed by the Association, as attorney-in-fact, in the following order: i. for payment of taxes and special assessment liens in favor of any governmental assessing entity and customary expenses of sale; ii. for payment of the balance of the lien of any first mortgage; iii. for payment of unpaid Common Expenses and all costs, expenses and fees incurred by the Association; iv. for payment of junior liens and encumbrances in the order of and to the extent of their priority; and v. the balance remaining, if any, shall be paid to the Owner. Section 25.4. Reconstruction or Liquidation. If more than seventy-five percent (75$) of the Project, not including land, is destroyed or damaged, and if the Owners representing an aggregate ownership interest of seventy-five percent (75$) or more of the General Common Elements, do not voluntarily, within one hundred -21- y "~ eighty (180) days thereafter, make provisions for reconstruction, which plan must have the approval or consent of seventy-five percent (75$) of the first Mortgagees, the Association shall forthwith record a notice setting forth such fact or facts, which shall be executed by the Association's President, Secretary or Assistant Secretary, and the entire remaining Project shall be sold by the Association, pursuant to the provisions of this paragraph, as attorney-in-fact for all of the Owners, free and clear of the provisions contained in this Declaration, the Map, Articles of Incorporation and Bylaws of the Association. The insurance settlement proceeds shall be divided by the Association according to each Owner's percentage interest in the Common Elements, and such divided proceeds shall be paid into separate accounts, each such account representing one of the Lodge Units. Each such account shall be in the name of the Association, and shall be further identified by the Fractional Estate designation and the name of the Owner. From each separate account the Association, as attorney-in-fact, shall forthwith use and disburse the total amount of each of such accounts, without contribution from one account to another, toward the partial or full payment of the lien of any first mortgage against the Unit represented by such separate account. Thereafter, each such account shall be supplemented by the apportioned amount of the proceeds derived from the sale of the entire Project. Such apportionment shall be based upon each Owner's percentage interest in the Common Elements. The total funds of each account shall be used and disbursed, without contribution from one account to another, by the Association, as purposes and in the same order as is provided in section 25.3. If the Owners representing an aggregate ownership interest of seventy-five percent (75~) or more of the Common Elements adopt a plan for reconstruction, which plan has the/approval of seventy- five percent (75$) of the first Mortgagees, then all of the Owners shall be bound by the terms and other provisions of such plan. Any assessment made in connection with such plan shall be a Common Expense and paid pro rata according to each Owner's percentage interest in the Common Elements, and shall be due and payable as provided by the terms of such plan, but not sooner than thirty (30) days after written notice thereof. The Association shall have full authority, right and power, as attorney-in-fact, to cause the repair or restoration of improvements using all of the insurance proceeds for such purpose notwithstanding the failure of an Owner to pay the assessment. The assessment provided for herein shall be a debt of each Owner and a lien on his Fractional Estate and may be enforced and collected as is provided herein. In addition thereto, the Association, as attorney-in-fact, shall have the absolute right and power to pay such assessment within the time provided, and if not so paid, the Association shall cause -22- ~^ .., to be recorded a notice that the Fractional Estate of the delinquent Owner shall be sold by the Association. The delinquent Owner shall be required to pay to the Association the costs and expenses for filing the notices, interest at the rate of ten percent (108) per annum on the amount of the assessment and all reasonable attorneys' fees. The proceeds derived from the sale of such Fractional Estate shall be used and disbursed by the Association, as attorney-in-fact, for the same purposes and in the same order, as is provided in section 25.3. Section 25.5. Reconstruction of Common Elements. The Owners representing an aggregate ownership interest o eighty-five percent (858) or more of the Common Elements may agree that the Common Elements are obsolete and adopt a plan for the renewal and reconstruction, which plan has the/~approval of seventy-five percent (758) of the first Mortgagees of record at the time of the adoption of such plan. If a plan for the renewal or reconstruction is adopted, notice of such plan shall be recorded, and the expense of renewal and reconstruction shall be payable by all of the Owners as Common Expenses; provided, however, that an Owner not a party to such a plan for renewal or reconstruction may give written notice of objection to the Association within fifteen (15) days after the date of adoption of such plan and demand that such Unit be purchased by the Association for the fair market value thereof. The Association shall then have thirty (30) days thereafter within which to cancel such plan. If such plan is not cancelled, the Fractional Estate of the requesting Owner shall be purchased. A. Determination of Price. If such Owner and the Association can agree on the fair market value thereof, then such sale shall be consummated within thirty (30) days thereafter. If the parties are unable to agree, the date when either party notifies the other that he or it is unable to agree with the other shall be the commencement date from which all periods of time mentioned herein shall be measured. Within ten (10) days following the commencement date, each party shall nominate in writing an appraiser and give notice of such nomination to the other party. If either party fails to make such a nomination, the appraiser nominated shall, within five (5) days after default by the other party, appoint and associate with him another appraiser. If the two designated or selected appraisers are unable to agree, they shall appoint another appraiser to be umpire between them, if they can agree on such person. If they are unable to agree upon such umpire, each appraiser previously appointed shall nominate two appraisers and from the names of the four appraisers so nominated one shall be drawn by lot by any judge of any court of record in Colorado, and the name so drawn shall be such umpire. The nominations from whom the umpire is to be drawn by lot shall be submitted within ten (10) days of the failure of the two -23- r~ 4~ appraisers twenty (20) appraiser. ..,. ..r to agree, which, in any event, shall not be later than days following the appointment of the second B. Decision Binding. The decision of the appraisers as to the fair market value, or in the case of their disagreement, then such decision of the umpire, shall be final and binding. The expenses and fees of such appraisal shall be borne equally by the Association and the Owner. The sale shall be consummated within fifteen (15) days thereafter, and the Association, as attorney-in-fact, shall disburse such proceeds for the same purposes and in the same, order as is provided in section 25.3, except as modified herein. Section 25.6. Eminent Domain Proceedings. In the event any part or all of the Common Elements are the subject of an eminent domain proceeding or the threat thereof, the Board of Managers shall have the authority to prosecute or to compromise the proceeding. The Board of Managers shall also determine whether or not to apply any sums payable with respect to the taking, to the repair, or replacement thereof. Any sums not so applied shall be distributed to the Owners according to section 25.3. ARTICLE XXVZ REVOCATION OR At9ENDMENT TO DECLARATION This Declaration shall not be revoked unless all of the Owners and all of the holders of any recorded mortgage or deed of trust covering or affecting any or all of the Lodge Units unanimously consent and agree to such revocation by instrument(s) duly recorded. This Declaration shall not be amended unless the Owners representing an aggregate ownership interest of seventy-five percent (758) or more of the General Common Elements and seventy-five percent (758) of the holders of any recorded mortgage or deed of trust covering or affecting any or all Fractional Estates unanimously consent and agree to such amendment by instrument(s) duly recorded; provided, however, that except as provided in the Article relating to the combination and resubdivision of Units, the percentage of the undivided interest in the General Common Elements appurtenant to each Unit, as expressed in this Declaration, shall have a permanent character and shall not be altered without the consent of all of the Unit Owners expressed in an amended Declaration duly recorded. -24- ,. ., ARTICLE XXVII .R, .... RESTRICTIVE AND AFFIRMATIVE COVENANTS Each Owner, upon purchase of a Lodge Unit, submits to the restrictions and/or obligations of this Article. Section 27.1. Use and Occupancy. Each Lodge Unit may be used and occupied for first class residential purposes only; provided, however, Declarant reserves the right to use one or more of the Units and the Common Elements as sales offices and for marketing purposes during the sales period, which period shall be deemed to continue until thehdate by which title to one hundred percent (1008) of the Fractional Estates in the Project, as expan e , ave een conveyed by Declarant to the initial purchasers',,-or until August 1, 1989, whichever first occurs. Section 27.2. Animals. No animals of any kind shall be raised, bred or kept on the Property, except pursuant to rules and regulations adopted and amended by the Association; provided, however, that nothing herein contained shall be construed to require the Association to permit animals to be reared, bred or kept in the Project. Section 27.3. Restricted b;odifications. No modification of the Unit, the interior of the Unit, or Common Elements shall be changed in appearance without the consent of the Board of Managers. No unsightly object or nuisances shall be erected, placed or permitted to remain on the Project, nor shall the Project be used in any way or for any purpose which may endanger the health or unreasonably disturb the Owners of any Lodge Unit or any occupant thereof. The foregoing covenants shall not apply to the business activities, signs and billboards or the construction and maintenance of the improvements by the Declarant, its agents, contractors or assigns during the construction and sales period, nor to the Association, its successors and assigns, in furtherance of its powers and purposes as hereinafter set forth. Section 27.4. Restrictions of Record. Restrictions of record encumbering the Property are hereby incorporated by reference. The recording data for recorded easements and licenses appurtenant to, or included in, the Project or to which any portion of the Project is or may become subject, is set forth in Exhibit D attached hereto and incorporated herein by this reference. Section 27.5. Nuisances. No nuisances shall be allowed on the Property, nor any use or practice which is the source of annoyance to residents or which interferes with the peaceful enjoyment or possession and proper use of the Property by its -25- .. ~ ~, residents. All parts of the Property shall be kept in a clean and sanitary condition, and no rubbish, refuse or garbage shall be allowed to accumulate nor any fire hazard to exist. No Owner shall permit any use of his Fractional Unit or make use of the General Common Elements which will unreasonably increase the rate of insurance upon the Project. Section 27.6. Prohibited Use. No immoral, improper, offensive or unlawful use shall be permitted or made of the Property or any part thereof. All valid laws, ordinances and regulations of all governmental bodies having jurisdiction shall be observed. Section 27.7. Leases and Rental Agreements. All rental agreements for Fractional Estates shall be subject to the requirements of this Declaration and the Bylaws and rules of the Association. ARTICLE XXVIII FRACTIONAL OWNERSHIP Section 28.1. Plan of Fractional Ownership. Declarant hereby submits all of the Lodge Units in the Project, except the Employee Housing Unit, to the plan of Fractional Ownership set forth in this Article. The provisions of this Article XXVIII relate to all Lodge Units and shall govern the ownership of Fractional Estates in said Lodge Units and the rights, duties and obligations of Fractional Owners for so long as a Lodge Unit remains a Fractional Unit. The Project and the plan of Fractiona Ownership are further described in the Disclosure Statement rovided pursuan unlClpol Code O Statement"). Declarant reserves the r Statement, without the prior approval. ance w ons e otherwise to implement such changes in the Project or the marketing thereof as may be permissible pursuant to t e terms of this Declaration and applicable law. Except as otherwise set forth in the Disclosure Statement, a purchaser may acquire more E an one ) Fractiona Estate and thereafter convey or encumber each Fractional Estate so acquired separately. In no event, however, shall a Fractional Owner convey or encumber less than a Fractional Estate as defined herein, or attempt to subdivide a Fractional Estate into lesser interests. The provisions of this Declaration shall apply to the Fractional Estates created hereunder; provided, however, in the event of an inconsistency between this Article XXVIII and the remaining provisions of the -26- ~~ /~ ~4../ Declaration with respect to the ownership of a Fractional Estate and the rights, duties, and obligations of Fractional Owners, then the provisions of this Article XXVIII shall control. Section 28.2. Separate Estates. Each Fractional Estate shall constitute an estate in rea property separate and distinct from all other Fractional Estates in the Unit and other Units, which estate may be separately conveyed and encumbered. By acceptance of a deed to a Fractional Estate, each Fractional Owner waives his right to bring a suit for partition except in accordance with the provisions of this Declaration. Section 28.3. Legal Description of a Fractional Estate. A contract for sale of a Fractiona Estate written prior to tTie filing for record of this Declaration and the Map may legally describe a Fractional Estate as follows: An undivided interest as tenant-in-common in Unit , according to the Fractional Estate Declaration for The Prospector and the Map thereof to be filed for record, together with the exclusive right to possession and occupancy of said Unit during Use Weeks and Subsequent to the filing of the Map and recording of the Declaration, every contract for sale, deed, lease, mortgage, trust deed, or other instrument relating to a Fractional Estate will legally describe the Fractional Estate as follows: An undivided interest as tenant-in-common in Unit , according to the Fractional Estate Declaration for The Prospector recorded , 1984, at Reception No. and tFe Map thereof recorded on the day of 196 together with the exc u~~sive right to possession and occupancy of said Unit during Use Weeks , and _, commencing at noon on the-~ rst of the Use Week and ending at noon o he last day of the Use Week. Every such description shall be good and sufficient for all purposes to sell, convey, transfer and encumber or otherwise effect a Fractional Estate and all common elements and limited -27- ~'. •~. `. , ..+ common elements and easements appurtenant thereto. Such legal description shall also convey to the grantee named in the document an undivided interest in all furniture and furnishings then located in the Fractional Unit and used for the operation thereof in the same ownership interest as the Fractional Owner's undivided interest as tenant-in-common in the Fractional Unit, as well as any furniture and furnishings thereafter acquired for the Fractional Unit. The transfer of an interest in a Fractional Estate shall transfer to the grantee ownership of all of the transferor's undivided interest in such personal property without further reference thereto. Section 28.4. Acceptance of Plan of Fractional Ownership; Enforcement; indemnification. By acceptance of a deed to an Fractional Estate a Fractional Owner agrees to be bound by the terms and conditions of the Declaration, specifically including, but not limited to, the provisions of this Article XXVIII. In addition to the foregoing, in the event any Fractional Owner fails to vacate an Fractional Unit after termination of his Use Weeks or otherwise uses or occupies or prevents another Fractional Owner from using or occupying a Use Week, that Fractional Owner shall be shall be deemed to have waived any notices required by law with respect to any legal proceedings regarding the removal eviction or ejection; and shall pay to the Fractional Owner entitled to use the Fractional Unit during such wrongful occupancy, as liquidated damages for the wrongful use of the Fractional Unit, a sum equal to two hundred percent (200$) of the fair rental value per day for the Fractional Unit wrongfully occupied as determined by the Fractional Owners' Association in its sole discretion for each day, or portion thereof, including the day of surrender, during which the Fractional Owner wrongfully occupies a unit; plus all costs and reasonable attorneys' fees involved in the enforcement of this provision which amount may be collected by the Fractional Owners' Association in the manner provided herein for the collection of assessments. Any Fractional Owner who suffers or allows a Mechanic's Lien, Federal tax or other lien to be placed against his Fractional Estate or the entire Lodge Unit shall indemnify, defend and hold each of the other Fractional Owners harmless from and against all liability or loss arising from the claim of such lien. The Fractional Owners' Association shall enforce such indemnity by collecting from the Fractional Owner who suffers or allows such a lien the amount necessary to discharge the lien and all costs incidental thereto, including reasonable attorneys' fees. If such amount is not promptly paid, the Fractional Owners' Association may collect the same in the manner provided herein for the collection of assessments. -28- s->. - •w ~..~ ARTICLE XXIX REGISTRATION BY OWNER OF MAILING ADDRESS Each Owner shall register his mailing address with the Association, and except for monthly statements and other routine notices, all other notices or demands intended to be served upon an Owner by the Association or Managing Agent shall be either hand delivered or sent by either registered or certified mail, postage prepaid, addressed in the name of the Owner at such registered address. All notices, demands or other notices intended to be served upon the Board of Managers of the Association or the Association shall be sent by certified mail, postage prepaid, to 303 East Seventeenth Avenue, Suite 1000, Denver, Colorado 80203, to the attention of W. Michael Clowdus, until such address is changed by a notice to all Owners. Each Owner appoints the Association as designated agent for service of process and all notices pertaining to the Fractional Estate. ARTICLE XXX PERIOD OF COtdDOMINIUM OWNERSHIP The separate condominium estates and Fractional Estates created by this Declaration and the Map shall continue until this Declaration is revoked in the manner and as is provided in Article XXVI relating to revocation or amendment of this Declaration or until terminated in the manner and as is provided Article XXV relating to damage, destruction, obsolesence or condemnation of the Project. ARTICLE XXXI GENERAL Section 31.1. Severability. If any of the provisions of this Declaration or any section, sentence, clause, phrase or word, or the application thereof in any circumstance, be invalidated, such invalidity shall not affect the validity of the remainder of this Declaration, and the application of any such provision, section, sentence, clause, phrase or word in any other circumstance. Section 31.2. Colorado Condominium Ownership Act. The provisions of the Condominium Ownership Act are hereby incorporated by reference into this Declaration; provided, however, that the provisions of this Declaration shall be paramount to the provisions of the Condominium Ownership Act where permissive variances are permitted. Otherwise, the provisions of the Condominium Ownership Act shall prevail. Section 31.3. Gender and Number. Whenever used herein, unless context shall otherwise provide, the singular number shall -29- .~~ w ~. .. include the plural, the plural the singular, and the use of any gender shall include the other gender. IN WITNESS WHEREOF, Declarant has duly executed this Declaration this day of 1983. DECLARANT: Merit Investment Co. (of Aspen), Inc. a Colorado corporation. By: L. Vernon Cagle, President STATE OF COLORADO ) )SS: COUNTY OF ) The foregoing instrument termed Fractional Estate Declaration for The Prospector was acknowledged before me this day of 19 by L. Vernon Cagle as President of hlerit Investment Co. (Aspen), Inc., a Colorado corporation. Witness my hand and official seal. My commission expires: (SEAL) Notary Public Address: -30- r^~ ,~ 'W < r EXHIBIT A Lots A, B, C and D Block 82 City and Town Site of Aspen, Accordin to the Map Recorded December 16, 19 9 Un er Reception No. 109023, in County, Colorado EXHIBIT B Unit No. 101 102 103 104 105 106 108 201 202 203 204 205 206 207 208 301 302 303 304 305 (Employee Housing Unit) ,, Interest in Common Elements 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/zo 1/20 .... EXHIBIT C TO THE FRACTIONAL ESFORE DECLARATION THE PROSPECTOR *USE WEEK 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. *"Use Week" means atperUse USE WEEK 27. 28. 29 . 30. 31. 32. 33. 34. 35. 36. 37. 38. 39 . 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. of exclusive possession and occupancy of a Fractional Uni Weeks are computed as follows: Use Week No. 1 is the seven days commencing at noon on the of each year. All other Use Weeks are first forward from Use Week No. 1. All extra days calculated by working which accumulate become a part of Use Week No. ~ Weekstrunlfrom by the calendar prepared by the Association. of the Use Week to noon on hteof noon on the first-rovided, however, that the rig last day of the Use Week; p possession and occupancy shall not COmmofcthenUse Week and shall local time on the first thereof; a~_ end at 10:00 a.m. on the last provided further, however, that if Use Week No. 51 as so com ute ., nn~,_ then Use Week No. 51 shall oes not lnclua+= ~"'--- extend until and end on Christmas Day. ~..~ -~, ~.; ..r EXHIBIT D TO THE FRACTIONAL ESTATE DECLARATION FOR THE PROSPECTOR 1. Terms, provisions and obligations as contained in Notice of Historic Designation recorded in the real property records of Pitkin County, Colorado, in Book 295 at Page 515. 2. A seven foot by ten foot easement for the existence and maintenance of a transformer located at the southeastern corner of the Property will be granted to the City of Aspen in the Condominium Map to be filed pursuant to Article II of this Declaration. 3. A license for certain encroachments of the Project onto property of the City of Aspen was approved by the Aspen City Council on November 6, 1982. It is anticipated that this license will be memorialized by means of a written agreement which, when executed, will be recorded in the real property records of Pitkin County, Colorado. --. ~.~ .~.+ EXHIBIT E [Disclosure Statement] ~~ 1.../ r ARTICLES OF INCORPORATION OF THE PROSPECTOR FRACTIONAL OWNERS' ASSOCIATION -The undersigned natural person hereby establishes a not-for-profit corporation pursuant to the Colorado Nonprofit Corporation Act and adopts the following Articles of Incorporation. ARTICLE I NAME The name of this corporation shall be The Prospector Fractional Owners' Association (the "Association"). ARTICLE II DURATION This Association shall have perpetual existence. ARTICLE III PURPOSES The objects and purposes for which this Association is formed are as follows: i. to be and constitute the Association to which reference is made in Article XVII of the Fractional Estate Declaration for The Prospector (the "Declaration"), to be recorded in the records of the Clerk and Recorder of Pitkin County, Colorado, pursuant to C.R.S. 1973, § 38-33-101 to -111, as amended, and to perform all obligations and duties of the Association and to exercise all rights and powers of the Association; and ii. to provide an entity for the furtherance of the interests of all Fractional Owners with the objective of establishing and maintaining The Prospector as a prime Fractional Ownership Project of the highest possible quality and value and enhancing and protecting its value, desirability and attractiveness. ,~., ~,.. , ARTICLE IV POWERS In furtherance of its purposes, this Association shall have all of the powers conferred upon corporations not-for-profit by the statutes and common law of the State of Colorado in effect from time to time, including all of the powers necessary or desirable to perform the obligations and duties and exercise the rights and powers of the Association under the Declaration which will include, but shall not be limited to, the following: i. to make and collect assessments for Common Expenses; ii. to enforce the terms, covenants, restrictions, conditions, uses, limitations and obligations set forth in the Declaration and in the Bylaws of this Association and to make and enforce rules and regulations as provided therein; and iii. to engage in activities which will actively foster, promote and advance the interests of all Fractional Owners. ARTICLE V MEMBERSHIP Section 5.1. General. This Association shall be a membership Association without certificates or shares of stock. There shall be one class of membership, and each Owner of a Fractional Estate shall be a member. Section 5.2. Votin Each member shall have the voting rights set forth in~eclaration on all matters in which members are entitled to vote. Each member, or group of members, owning a Fractional Estate shall be entitled to a vote, the size of each vote being based on the undivided interest as tenant-in-common in the Fractional Unit as set forth in the Declaration. Section 5.3. Non-Assignability. A member of this Association shall not assign, encumber or transfer his membership in any manner and shall automatically cease to be a member upon termination of his ownership interest in his Fractional Estate. -2- ~ , ..~ ~._r x Section 5.4. New Membership. Upon conveyance of a Fractional Estate to a new Fractional Owner or group of Fractional Owners, each such new Fractional Owner shall automatically become a member of this Association. Section 5.5. Multiple Estates. Members shall have the right to be or become Fractional Owners of more than one Fractional Estate. Section 5.6. Suspension. This Association may suspend the voting rights of a member for failure to comply with the rules and regulations of this Association or with any other obligations of Fractional Owners under the Declaration or Bylaws of this Association. Section 5.7. Bylaws. The Bylaws of this Association shall contain provisions setting forth the rights, privileges, duties and responsibilities of its members. ARTICLE VI BOARD OF MANAGERS Section 6.1. Management and Control. The business and affairs of this Association shall be conducted, managed and controlled by a Board of Managers. The Board of Managers shall consist of that number of persons set forth in the Bylaws of this Association, all of whom shall be members of this Association. Notwithstanding anything to the contrary provided herein, until all of the Fractional Estates in the project, as expanded, have been sold (meaning that title to said Fractional Estates have been conveyed by the Declarant), or until August 1, 1989, whichever first occurs,_ the members of the Board of Managers shall be appointed by the Declarant and need not be Fractional Owners; Declarant shall have an option at any time to turn over control of the Board of Managers to the Fractional Owners at any meeting of this Association called for that purpose. Section 6.2. Manner of Election. Except as provided in section 6.1 above, members of the Board of Managers shall be elected by the members of this Association in the manner set forth in the Bylaws of this Association. Section 6.3. Removal. Managers may be removed and vacancies filled in the manner set forth in the Bylaws of this Association. -3- ~-~. ~~ -~,, a d' Section 6.4. Members. The names and addresses of the members of the first Board of Managers who shall serve until their successors are duly qualified, are as follows: NAME ADDRESS L. Vernon Cagle P. 0. Box 7534 Omaha, Nebraska 68107 Jeffrey L. Cagle P. O. Box 1356 Winter Park, Colorado 80482 Harold C. Hansen 129 South McKenna Gretna, Nebraska 68028 Any vacancies in the Board of Managers occurring before the first election of Managers shall be filled by the remaining Managers. ARTICLE VII OFFICERS The Board of Managers may appoint a President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers as the Board believes will be in the best interest of this Association. The officers shall have such duties as may be prescribed in the Bylaws of this Association and shall serve at the pleasure of the Board of Managers. ARTICLE VIII CONVEYANCES AND ENCUMBRANCES Subject to the terms and conditions of the Declaration, Association property may be conveyed or encumbered by authority of the Board of Managers or by such person or persons to whom such authority may be delegated by resolution of the Board. Conveyances and encumbrances shall be by an instrument executed by the President or a Vice President and attested by the Secretary or an Assistant Secretary, or executed by such other person or persons to whom such authority may be delegated by the Board. ARTICLE IX INITIAL REGISTERED OFFICE AND AGENT The Association shall serve as the Owners' designated agent for service of process and all notices pertaining to the timeshare interest. The initial registered office of the Association for such purposes shall be 303 East Seventeenth Avenue, Suite 1000, Denver, Colorado 80203. The initial registered agent shall be W. Michael Clowdus. -4- A ~,"'' ARTICLE X AMENDMENTS Amendments to these Articles of Incorporation shall be adopted by majority vote of the Board of Managers; provided, however, that no amendment to these Articles of Incorporation shall be contrary to or inconsistent with the provisions of the Declaration. ARTICLE XI MANAGER'S FUNCTIONS This Association, by its Board of Managers, shall obtain and pay for the services of a Managing Agent to administer and manage the affairs of this Association and be responsible for the operation, maintenance, repair and the improving of the Fractional Units, and to keep the same in good, attractive and sanitary condition, order and repair. The cost of such services shall be borne by the members as provided in the Declaration and in the Bylaws of the Association. ARTICLE XII GENERAL This Association is formed exclusively to provide for the management, maintenance and care of the Fractional Units within The Prospector. The Association is not formed for pecuniary profit or financial gain, and no part of the Association's net earnings, profits or income is distributable to or shall inure to the benefit of its members, directors or officers or any other private individual except to the extent permitted under the Colorado Nonprofit Corporation Act. ARTICLE XIII DISSOLUTION Upon the dissolution of the Association, the balance of all assets after payment of all liabilities and obligations of the Association shall be disposed of exclusively for purposes within these Articles of Incorporation. -5- ARTICLE XIV INCORPORATION L. Vernon Cagle, acting as the incorporator under the Colorado Nonprofit Corporation Act, signs and acknowledges these Articles of Incorporation for such Association on the date indicated herein below. INCORPORATOR: L. Vernon Cagle STATE OF COLORADO ss: COUNTY OF ~ The foregoing instrument was acknowledged before me this day of 19E33, by L. Vernon Cagle. My commission expires: Witness my hand and official seal. Notary Public Address: -6- .~-, ;ter BYLAWS OF THE PROSPECTOR FRACTIONAL ._. OWNERS' ASSOCIATION The name of the corporation shall be The Prospector Fractional Owners' Association ("Association"). ARTICLE I OBJECT Section 1.1. Purpose. The purpose for which the Association is formed is to govern the Fractional Ownership Project ("Project") situated in the County of Pitkin, State of Colorado, described in the Fractional Estate Declaration for The Prospector. Section 1.2 Acceptance. All present or future Fractional Owners, tenants, future tenants or any other person that might use the facilities of the Condominium Project in any manner are subject to the regulations set forth in these Bylaws. The mere acquisition of any interest in a Fractional Estate or the rental of a Use Weeks in the Condominium Project or the mere act of occupancy of any of the Fractional Units will signify that these Bylaws are accepted, ratified and will be complied with. Section 1.3 Definitions. The following terms when used in these Bylaws shall have the meanings ascribed to them in Article I of the Declaration for the Prospector: "Declarant", "Residence", "Declaration", "Project", "Map", "Common Elements", "Limited Common Elements", "Condominium Unit" or "Lodge Unit", "Common Expenses", "Owner", "Association", "Board of Managers", "Manager", and "Managing Agent", "Fractional Estate", "Fractional Owner", "Fractional Unit", "Maintenance Week", "Use Week", "Fractional Owners' Association". ARTICLE II MEMBERSHIP, VOTING, MAJORITY OF OWNERS, QUORUM, PROXIES Section 2.1 Membership. Any person or becoming a Fractional Owner of a Fract o al Estate shall automatically become a member of the Association and be subject to these Bylaws. Such 5/23/84 ~ ~, membership shall terminate without any formal Association action whenever such person ceases to own a Fractional Estate, but such termination shall not relieve or release any such former Fractional Owner from any liability or obligation incurred through or in any way connected with the Association during the period of such ownership and membership in the Association , or impair any rights or remedies which the Board of Managers of the Association or others may have against such former Fractional Owner and member arising out of or in any way connected with such ownership and membership and the covenants and obligations incident thereto. Section 2.2. Voting. The Fractional Owners of each Fractional Estate shall be entitled to a vote, the size of which vote shall be based upon the undivided interest of the Fractional Owner as tenant-in-common in the Fractional Unit. The aggregate of all of the undivided interests submitted to and making up the total of Fractional Estates shall be considered one hundred percent (100$) for such voting purposes. Except as otherwise specifically provided, as affirmative vote of the members representing a majority of the total votes present, either in person or by proxy, shall be required to transact business. Section 2.3. Quorum. Except as otherwise provided in these Bylaws, the presence in person or by proxy of member holding thirty percent (30$) of the votes entitled to be cast shall constitute a quorum. An affirmative vote of a majority in interest of the members present, either in person or by proxy, shall be sufficient to transact the business of the meeting. Section 2.4. Adjourned Meetings. If any meeting of the members of the Association cannot be organized because a quorum of thirty percent (30$) has not attended, the members present, either in person or by proxy, may adjourn said meeting until a future date not to exceed ten (10) days, at which time a quorum of twenty percent (20$) shall be required to transact the business of the meeting. In the event that at such second meeting a quorum of twenty percent (20$) has not attended, the members present, either in person or by proxy may adjourn said meeting until a future date not to exceed ten (10) days, at which time a quorum of ten percent (10$) shall be required to transact the business of the meeting. Section 2.5. Proxies. Votes may be cast in person or by proxy. Proxies must be Wiled with the Secretary before the appointed time of each meeting. -2- gyp.. ~._/ ARTICLE III ADMINISTRATION .-'y Section 3.1. Association Responsibilities. The Fractional Owners will constitute the Association, who will have the responsibility of administering the Project through a Board of Managers and Managing Agent. Section 3.2. Place of Meetings. Meetings of the Association shall be held at such place as the Board of Managers may determine. Section 3.3. Annual Meetings. The first annual meeting of the Association at which the Owners shall elect the Board of Managers, shall be held within one hundred twenty (120) days after (i) the date by which title to one hundred percent (1008) o t e Fractional Estates in the Project have been sold, or (ii) ,, .._..,.~-r- na~T,,,, n~t,~a rrnn Declarant of the exercise of whichever first occurs. Thereafter, the annual meetings or the Associa ion s a e eld in the month of November on a day and at a time designated by the Board of Managers of each succeeding year. Section 3.4. Special Meetings. It shall be the duty of the President to call a special meeting of the Association as directed by resolution of the Board of Managers or upon presentation to the Secretary of a petition signed by Fractional Owners representing at least one-third of all votes. The notice of any special meeting shall state the time and place of such meeting and the purpose thereof. Any such meeting shall be held within thirty (30) days after receipt by the President of such resolution or petition. Section 3. 5. Notice of Meetings. It shall be the duty of the Secretary to mail a notice of each annual or special meeting, stating the purpose thereof as well as the time and place it is to be held, to each Fractional Owner of record, at least ten (10) but not more than thirty (30) days prior to such meeting. The mailing of a notice by regular mail shall be considered notice served. Section 3.6. Performance of Functions by Declarant. Until all of the Fractional Estates in the Project, as expanded, have been sold (meaning title to said Fractional Estate have been conveyed by the Declarant), or until August 1 1989 whichever first occurs, the rights, duties and functions of the Board of Managers shall, at the Declarant's option, be exercised by a Board of Managers consisting of three (3) individuals appointed by Declarant who need not be Fractional Owners. The D r•l arwnr ah all -3- ~~ -~ ~.~ Section 4.1. 1 meeting Of ARTICLE IV BOARD OF MANAGERS and Oualificat el the Board of Managers as provigeg in aecciv„ ~.~ .._~_~~. affairs of the Association shall be overned b a Board of Managers appointe y the Declarant. At the first meeting of the Association at which the Owners elect the Board of Man ers, there shall be electe to the Board of Managers five (5) Fractional Owners and thereafter the Board of Managers shall consist of five (5) Fractional Owners. Section 4.2. Election of Board Members. The respective candidates for the Office of Manager shall be elected by members who own Fractional Estates. A majority of the eligible votes cast, either in person or by proxy, shall determine an election of a Manager. Section 4.3. Powers and Duties. The Board of Managers shall have the power and duties necessary for the administration of the affairs of the Association and for the operation and maintenance of a first class Cond aninium Project. Section 4.4. Other Powers and Duties. Without limitation, the Board of Managers shall be empowered and shall have the duties as follows: i. to administer and enforce the covenants, conditions, restrictions, easements, uses, limitations, obligations and all other provisions set forth in the Declaration and supplements thereto, submitting the properties to the provisions of the Colorado Condominium Ownership Act; ii. to establish, make and enforce compliance with such reasonable house rules as may be necessary for the operation, use and occupancy of the Project with the right to amend same from time to time. The Fractional Owners may, either at any annual meeting or at a special meeting called for such purpose, amend the house rules and may adopt new house rules. House rules amended or adopted by the Fractional Owners may only be changed by the Fractional Owners. A copy of all such house rules shall be delivered or mailed to each member promptly upon adoption thereof; iii. to at all times keep the Project in good order, condition and repair; -4- .~~ .~~ f iv. to fix, determine, levy and collect assessments for Common Expenses to be paid by each of the Fractional Owners, which fee includes the proration for Common Expenses of the entire premises and Project; to adjust, decrease or increase the amount of the assessments for Common Expenses based on current needs and past operating history, provided that no increase in such assessments shall be effective until thirty (30) days' prior written notice thereof, including an explanation of the reason(s) for such increase, shall have been provided to each Owner; to levy and collect special assessments whenever in the opinion of the Board of Managers it is necessary to do so in order to meet increased operating or maintenance expenses or costs, or additional capital expenses or because of emergencies; v. to maintain a working capital account which shall be treated as an escrow account for each individual Fractional Owner; vi. to collect delinquent assessments by suit or otherwise and to enjoin or seek damages from a Fractional Owner as is provided in the Declaration and these Bylaws; vii. to protect and defend the entire premises from loss and damage by suit or otherwise; viii. to borrow funds for any purpose in connection with their duties and to execute all such instruments evidencing such indebtedness as is expressly authorized, including mortgages and other security agreements; ix. to establish a bank account or accounts for the common treasury and for all separate funds which are required or may be deemed advisable; x. to keep and maintain full and accurate books and records showing all of the receipts, expenses or disbursements and to permit examination thereof at any reasonable time by each of the Fractional Owners and their mortgagees; xi. to meet at least semi-annually; xii. to designate the personnel necessary for the maintenance and operation of the Fractional Units through a Managing Agent; and xiii. in general, to carry on the administration of this Association and to do all of those things necessary and reasonable for operation of the Project. Section 4.5. No Waiver of Rights. The omission or failure of the Association or any Owner to enforce the covenants, conditions, restrictions, easements, uses, limitations, -5- ,-,. , , obligations or other provisions of the Declaration, the Bylaws or the regulations and house rules adopted pursuant thereto, shall not constitute or be deemed a waiver, modification or release thereof, and the Board of Managers or the Managing Agent shall have the right to enforce the same thereafter. Section 4.6. Managing Agent. The Board of Managers shall employ for the Association a Managing Agent at a compensation established by the Board to perform the duties listed in section 4.4; provided, however, that any agreement for professional management of the project may not exceed three years and shall provide for termination by either party without cause and without payment of a termination fee on sixty (60) days or more written notice, or with cause and without payment of termination fee on thirty (30) days or more written notice. The Contract of Employment shall specify the Managing Agent's duties of management and maintenance. Section 4.7. Election and Term of Office. At the first annual meeting of the Association, the term of office of three (3) Managers shall be fixed for one (1) year and the term of office for two (2) Managers shall be fixed for two (2) years. At the expiration of the initial term of office for each respective Manager, his successor shall be elected to serve a term of two (2) years. The Managers shall hold office until their qualified successors have been elected and hold or attend their first meeting. Section 4.8. Vacancies. Vacancies on the Board of Managers caused by any reason other than the removal of a Manager by a vote of the Association shall be filled by vote of the majority of the remaining Managers, even though they may constitute less than a quorum; and each person so elected shall be a Manager until a successor is elected at the next annual meeting of the Association. Each vacancy shall be filled consistent with the qualifications set forth in section 4.1. Section 4.9. Removal of Managers. At any regular or special meeting of the Association duly called, any one or more of the Managers may be removed with or without cause by a majority in ownership interest of the Fractional Owners, and, consistent with the qualifications set forth in section 4.1, a successor may be elected at that time to fill the vacancy thus created. Any Manager whose removal has been proposed by the Fractional Owners shall be given an opportunity to be heard at the meeting. Section 4.10. Organization Meeting of Managers. The Board of Managers shall hold an organization meeting within ten (10) days after the annual meeting of the Association at such place as shall be fixed by the Board of Managers at said annual meeting, -6- ...~ and no notice shall be necessary elected Managers in order legally providing a majority of the whole to the incumbent or the newly to constitute such meeting, Board shall be present. Section 4.11. Regular Meetings. Regular meetings of the Board of Managers may be held at such time and place as shall be determined by a majority of the Managers, but at least two (2) such meetings shall be held during each fiscal year. Notice of regular meetings of the Board of Managers shall be given to each Manager, personally or by mail, telephone or telegraph, at least three (3) days prior to the day named for such meeting. Section 4.12. Special Meetings. Special meetings of the Board of Managers may be called by the President and Secretary on five (5) days' notice to each Manager, given personally or by mail, telephone or telegraph, which notice shall state the time, place and purpose of the meeting. Special meetings of the Board of Managers shall be called by the President or Secretary in like manner and on like notice on the written request of at least two (2) Managers. Section 4.13. Waiver of Notice. Before or at any meeting of the Board of Managers, any Manager may, in writing, waive notice of such meeting and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a Manager at any meeting of the Board of Managers shall be a waiver of notice by him of the time and place thereof. If all Managers are present at any meeting of the Board of Managers, no notice shall be required and any business may be transacted at such meeting. Section 4.14. Board of Managers' Quorum. At all meetings of the Board of Managers, a majority of the Managers shall constitute a quorum for the transaction of business, and the acts of the majority of the Managers present at a meeting at which a quorum is present shall be the acts of the Board of tanagers. If, at any meeting of the Board of Managers, there be less than a quorum present, the majority of those present may adjourn the meeting. At any such adjourned meeting, any business which might have been transacted at the meeting as originally called may be transacted without further notice. A Manager may attend a meeting of the Board of Managers by telephone or other electronic medium. Section 4.15. Fidelity Bonds. The Board of Managers may require that all officers a- n- d employees of the Association handling or responsible for Association funds furnish adequate fidelity bonds. The premiums on such bonds shall be paid by the Association. -7- r'+., '~~ ...~ ARTICLE V FISCAL DSANAGEtQENT Any Fractional Owner or Mortgagee shall have the right to inspect all records maintained by or on behalf of the Board of Managers during convenient week-day business hours. ARTICLE VZ COMMITTEES The Board of Managers may appoint the following committees: Executive Committee, Nominations Committee, Maintenance Committee, Audit Committee, and such other committees as in the judgment of the Board of Managers are necessary. ARTICLE VII OFFICERS Section 7.1. Designation. The officers of the Association shall be a President, a Vice-President, a Secretary, and a Treasurer, all of whom shall be elected by and from the Board of Managers, and such assistant officer positions as the Board of Managers may, from time to time, direct be filled. Assistant officers need not be Board members. The Office of Assistant Secretary need not be a member of the Association or a Board member. Section 7.2. Election of Officers. The officers of the Association shall be elected annually by the Board of Managers at the organization meeting of each Board of Managers and shall hold office at the pleasure of the Board of Managers. Section 7.3. Removal of Officers. Upon an affirmative vote of a majority of the members of the Board of Managers, any officer may be removed, either with or without cause, and his successor elected at any regular meeting of the Board of Managers, or any special meeting of the Board called for such purpose. Section 7.4. President. The President shall be the chief executive officer of the Association. He shall preside at all meetings of the Association and of the Board of Managers. He shall have all of the general powers and duties which are usually vested in the office of president of an association, including but not limited to the power to appoint committees from among the -8- -` ~,,. Fractional Owners except as is otherwise provided in these Bylaws, as he may in his discretion decide is appropriate. Section 7.5. Vice President. The Vice President shall have all the powers and authority and perform all the functions and duties of the President in the absence of the President, or if the President is unable to exercise such powers and functions or perform such duties for any reason. Section 7.6. Secretary. The Secretary shall keep all the minutes of the meetings of the Board of Managers and the minutes of all meetings of the Association; shall have charge of such books and papers as the Board of Managers may direct; and shall, in general, perform all the duties incident to the Office of Secretary. The Secretary shall compile and keep up to date at the principal office of the Association a complete list of members and their registered mailing addresses. Such list shall also show the number or other appropriate designation of the Use Week(s) owned by such member opposite each member's name. Such list shall be open to inspection by members and other persons lawfully entitled to inspect the same at reasonable times during regular business hours. Section 7.7. Treasurer. The Treasurer shall cause to be furnished to him monthly a copy of the receipts and disbursements in proper accounting form. The Treasurer may delegate the responsibility for the deposit of all monies and all valuable effects to the Managing Agent, and the Treasurer, from time to time, shall review such deposits. ARTICLE VIII INDEt4NIFICATION OF OFFICERS, MANAGERS AND MANAGING AGEPIT Section 8.1. Indemnification. The Association shall indemnify each Manager, officer, Managing Agent, their respective successors, personal representatives and heirs, against all losses, costs and expenses, including counsel fees, reasonably incurred by them in connection with any action, suit or proceeding to which they may be made a part by reason of being or having been a Manager, officer, or Managing Agent of the Association, except as to matters as to which such person(s) shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct. In the event of a settlement, indemnification shall be provided only in connection with such matters covered by the settlement as to which the Association is advised by counsel that the person to be indemnified has not been -9- d guilty of gross negligence or willful misconduct in the performance of his duty as such Manager, officer or Managing Agent in relation to the matter involved. The foregoing rights shall not be exclusive of other rights to which such Manager, officer or Managing Agent may be entitled. Section 8.2. Common Expense. All liability, loss, damage, cost and expense incurred or suffered by the Association by reason of or arising out of or in connection with the foregoing indemnification provisions, shall be treated and handled by the Association as a Common Expense. ARTICLE IX OBLIGATION OF' THE OWNERS Section 9.1. Notice of Lien or Suit. A Fractional Owner shall give notice to the Association of every lien or encumbrance upon his Fractional Unit, other than for taxes and special assessments, and notice of every suit or other proceeding whicki may affect the title to his Fractional Unit, and such notice shall be given within five (5) days after the Fractional Owner has knowledge thereof. Section 9.2. Dama e. A Fractional Owner shall be obligated to reimburse the Association promptly upon receipt of a statement for any expenditures incurred by the Association in repairing, replacing or restoring any General Common Element or the interior or any part of Fractional Unit damaged as a result of his negligence or the negligence of his tenants or agents. Section 9.3. Mechanic's Lien. Each Fractional Owner agrees to indemnify and to hold each of the other Fractional Owners harmless from any and all claims of mechanic's lien filed against other Fractional Units and the appurtenant General Common Elements for labor, materials, services or other products incorporated in the Fractional Owner's Fractional Unit. In the event such a lien is filed and/or a suit for foreclosure of mechanic's lien is commenced, the Board of Managers may require such Fractional Owner to deposit with the Association cash or negotiable securities equal to one and one-half (1 1/2) of the amount of such claim plus interest for one (1) year together with the sum of One Hundred Fifty Dollars ($150.00), which latter sum may be used by the Association for any losses, costs and expenses incurred, including attorneys' fees. Except as is otherwise provided, such sum or securities shall be held by the Association pending final adjudication or settlement of the claim or litigation. Disbursement of such funds or proceeds shall be made by the Association to insure payment of or on account of such final -10- ,..,~ ,~, . , judgment or settlement. Any deficiency shall be paid forthwith by the subject Fractional Owner, and his failure to so pay shall entitle the Association to make such payment, and the amount thereof shall be a debt of the Fractional Owner and a lien against his Fractional Unit which may be foreclosed as is provided in the Declaration. All costs, losses and expenses incurred by the Association shall be forthwith reimbursed to it by such Fractional Owner(s). Section 9.4. General. A. Each Fractional Owner shall comply strictly with the provisions of all legal and other documents affecting his Fractional Unit and the General Common Elements, including these Bylaws. B. Each Fractional Owner shall always endeavor to observe and promote the cooperative purposes for which the Project was built. Section 9.5. Use of Units. All Fractional Units shall be utilized only for residential occupancy by the Fractional owner, his family and guests and by persons renting the Fractional Units. Section 9.6. Use of General Common Elements and Limited Common Elements. Each Fractional Owner may use the General Common Elements and the Limited Common Elements of the completed Project in accordance with the purpose for which they were intended without hindering or encroaching upon the lawful rights of the other Fractional Owners. Such General and Limited Common Elements include hot tubs, saunas and sun deck. Use of such facilities shall not involve any fee or change in addition to the regular assessment. Each Fractional Owner in the Project shall be entitled to the use of those parts of the General Common Elements such as walks and other such facilities, all of which are intended to enhance the utility and value of each of the Condominium Units in the Project. Section 9.7. Ri4ht o~t=Y• A. A Fractional Owner shall grant the right of entry to the Managing Agent or to any person authorized by the Board of Managers in case of an emergency originating in or threatening his Fractional Unit, whether the Fractional Owner is present at the time or not. B. A Fractional Owner shall permit other Fractional Owners, or their representatives, when so required, to enter his Fractional Unit for the purpose of performing installations, -11- ,. a„> alterations or repairs to the mechanical or electrical services, provided that request for entry is made in advance and that such entry is at a time convenient to the Fractional Owner. In case of an emergency, such right of entry shall be immediate. ARTICLE X AMENDMENTS TO BYLAWS These Bylaws may be amended by majority vote of the Board of Managers of the Association at a meeting duly constituted for such purpose. The Fractional Owners may, at any annual meeting, or a special meeting called for such purpose, amend these Bylaws. Any such amendment adopted by the Fractional Owners may only be changed by the Fractional Owners. ARTICLE XI MORTGAGES; SALES Section 11.1. Notice to Association. A Fractional Owner who intends to sell or mortgage his Fractional Unit shall notify the Association through the Managing Agent or the Secretary of the Board of Managers prior thereto, giving the name and address of his Purchaser or Mortgagee. The Association shall maintain such information in its files. Section 11.2. Notice of Unpaid Assessments. The Association shall report any unpaid assessments due rom the Fractional Owner within ten (10) days of the request of a Fractional Owner, Purchaser or Mortgagee of a Fractional Estate. ARTICLE XII Section 12.1. Proof of Ownership. Any person on becoming a Fractional Owner shall furnish to the Managing Agent or Board of Managers a photocopy of a certified copy of the recorded instrument vesting that person with an interest or ownership which instrument shall remain in the files of the Association. A member may be deemed not to be in good standing and may be denied the right to vote at any annual or at a special meeting of members unless this requirement is first met. -12- ,r w.. Section 12.2. Registration of Mailing Address. Fractional Owners shall by written notice to the Association specify his mailing address to be used by the Asociation and/or Managing Agent for the mailing of monthly statements, notes, demands and all other communications. Section 12.3. Required Proxies. If title to a Fractional Estate is held by more than one person or by a firm, corporation, partnership, cooperative association, association, other legal entity or any combination thereof, such Fractional Owners shall execute a proxy appointing and authorizing one (1) person or alternate persons to attend all annual and special meetings of members and thereat to cast whatever vote the Fractional Owner himself might cast if he were personally present. Such proxy shall be effective and remain in force unless voluntarily revoked, amended or sooner terminated by operation of law; provided, however, that within thirty (30) days after such revocation, amendment or termination, the Fractional Owner shall reappoint and authorize one person or alternate persons to attend all annual and special meetings as is provided by this section. The requirements contained in this Article XII shall be first met before a Fractional Owner shall be deemed in good standing and entitled to vote at any annual or special meeting of members. ARTICLE XIII ABATEMENT AND ENJOINMENT OF VIOLATIONS BY UNIT OWNERS The violation of any rule or regulation adopte6 by the Board of Managers, or the breach of any Bylaw, or the breach of any provisions of the Declaration, shall give the Board of Managers or the Managing Agent the right, in addition to any other rights set forth therein (i) to enter the Fractional Unit in which, or as to which, such violation or breach exists and to summarily abate and remove, at the expense of the defaulting Fractional Owner, any structure, thing or condition that may exist therein contrary to the intent and meaning of the provisions thereof, and the Board of Managers or Managing Agent shall not be deemed liable for any manner of trespass or any other civil or legal violation; and (ii) to enjoin, abate or remedy by appropriate legal proceedings, either at law or in equity, the continuance of any breach. ARTICLE XIV NON-PROFIT This Association is not organized for profit. No member, member of the Board of Managers or person from whom the Association may receive any property or funds shall receive oz -13- ~., ...~ shall be lawfully entitled to receive any pecuniary profit from the operation thereof, and in no event shall any part of the funds or assets of the Association be paid as salary or compensation to, or distributed to, or inure to the benefit of any member of the Board of Managers; provided, however, always (i) that reasonable compensation may be paid to any member or Manager while acting as an agent or employee of the Association for services rendered in effecting one or more of the purposes of the Association; and (ii) that any member or Manager may be reimbursed for his actual and reasonable expenses incurred in connection with the administration of the affairs of the Association. ARTICLE XV EXECUTION OF DOCUMENTS The persons who shall be authorized to execute any and all instruments of conveyance under the provisions of the Declaration shall be the President, Secretary or Assistant Secretary of the Association, and the same persons shall be authorized to execute promissory notes as is provided in section 4.4.ix of these Bylaws. n IN WITNESS WHEREOF, the undersigned have hereunto set their hands this day of ~ 19 BOARD OF MANAGERS KNOW ALL MEN BY THESE PRESENTS: That the undersigned Secretary of the corporation does hereby certify that the above and foregoing Bylaws were duly adopted by the Managers of said corporation as the Bylaws of said corporation on the day of 19~, and that they do now constitute the Bylaws of said corporation. ATTEST: Secretary -14- ~~ ~.. FRACTIOi~!'CL ESTATE PURCHASE CONTRACI4.~' THE PROSPECTOR RECEIVED FROM ~ Purchaser (as joint tenants), the sum Dollars ($ ), in the form of , as earnest money part payment or the following-described real estate situate in the County of Pitkin, Colorado, to wit: An undivided 1/15 interest as tenant-in-common in Unit , according to the Fractional Estate Declaration for The Prospector, and Map thereof to be filed for record, together with the exclusive right to possession and occupancy of said Unit during Use Weeks , , and , commencing at noon on the first of the Use Week and ending at noon of the last day of the Use Week. Purchaser acknowledges receipt of Estate Declaration for The Prospector, Statement required by .the City of Aspe thereto; the Disclosure Statement Rega ro ec , e n ac na wners copies of the Fractional including the Disclosure which appears as Exhibi ng the um Estate Commission; and the Articles of Incorporation and By-Laws of The Prospector Fractional Owners' Association, all of which are incorporated herein by reference. Defined terms herein shall have meanings ascribed to them in the Declaration. Seller reserves the right to amend or revise such documents to the extent permitted therein. Purchaser agrees to buy and Merit Investment Co. (of Aspen), Inc., a Colorado corporation ("Seller"), agrees to sell the Fractional Estate for a purchase price of $ payable as follows: A. $ hereby receipted for, to be held in escrow by until the closing of this transaction or the availability of the Unit for occupancy, whichever later occurs. B. $ , as adjusted for usual and customary closing costs payable in cash or certified funds at closing. *C. A portion of the purchase price is to be paid from the proceeds of a loan from with in the amount of interest at the rate of percent per annum amortized over years (thee The promissory note evidencing the Loan shall provide for equal monthly amortized installments of principal and interest of $ each, payable in arrears on the first day of each month commencing , 19 , and shall be secured by a deed of trust for the benefit of covering the Fractional Estate and a`security agreement covering -__ __ .........ems ~r.nl , anraC and utensils reseu~i ~+~ •~_«~- -- ------- Unit. If the Closing occurs on a date other than t e first ay of any month, interest shall be prorated from the Closinfromte until the end of the month and collected by Purchaser at Closing. Purchaser shall apply for the Loan within fifteen (15) days of the date of this contract and shall supply _ with such credit information as requests, shall pay the usual charges therefor and shall execute all loan documents at closing as required. Purchaser's obligations under this purchase contract are contingent upon obtaining the Loan as set forth above. *Strike if inapplicable. ,-. .-~ This Purchase Contract is subject to the provisions enumerated below: 1. Closing. The closing of this transaction is specifically contingent upon the sale of eight (8) of the fifteen (15) Fractional Estates in the Unit. Seller shall by notice to Purchaser designate a date of closing of this transaction upon satisfaction of this contingency not less than five (5) days after such notice becomes effective, which closing date shall be on or before r 198_• The hour and place of closing shall also be designated by Seller. A current title insurance commitment (ALTA) insuring the Fractional Estate in an amount equal to the purchase price thereof shall be furnished to Purchaser prior to closing. Seller will deliver the title insurance policy to Purchaser after closing and pay the premium thereon. Title shall be merchantable in Seller subject to the terms, covenants, payments and provisions of the Declaration; the lien for real estate taxes for the year of closing; and easements, restrictions, covenants and rights-of-way of record. On the date of closing, Seller shall execute and deliver to Purchaser a good and sufficient general warranty deed conveying the Fractional Estate to Purchaser. Hazard insurance premiums, assessments of Common Expenses, and real estate taxes and assessments for the current year (based on the levy for the preceding year and the most current assessed valuation or estimate of assessed valuation or estimate of valuation for the Fractional Estate) shall be apportioned to the date of closing. Purchaser shall pay the one- half percent (1/28) Aspen Real Estate Transfer Tax. In addition, Purchaser shall pay a sum equal to three (3) months' Common Expenses to the Association at closing, to be maintained as a reserve for working capital and/or other purposes set forth in the Declaration. Items of uncompleted construction in the Unit or in the Common Elements which do not materially affect occupancy of the Unit shall not delay the closing. A memorandum of the said items shall be made in writing and siyned by Seller and Purchaser on or before the date of closing. Seller shall complete said items within a reasonable time thereafter at Seller's expense. Unless otherwise agreed to in writing, possession of the Fractional Estate shall remain in Seller until full payment of the purchase price to Seller. Any encumbrance required to be paid may be paid from the proceeds of this transaction. 2. Destruction of the Project. In the event the Project is damaged by fire or other casualty prior to the time of closing in an amount of not more than ten percent (108) of the total purchase price of all the Units in the Project, Seller shall use its best efforts to repair the same before the date of closing. In the event such damage cannot be repaired within said time, or if such damage shall exceed ten percent (108), this Purchase Contract may be cancelled at the option of either party. Should both parties elect to carry out this Purchase Contract despite such damage, then Seller shall be entitled to all the insurance proceeds resulting from such damage to be used to repair or reconstruct the premises. If either party elects to terminate this Purchase Contract, then Purchaser shall be entitled only to so much of the insurance proceeds as is required to repay Purchaser's earnest money payment hereunder without interest. 3. Time of the Essence. Time is of the essence, and if any payment or other condition hereof is not made, tendered or performed by either the Seller or Purchaser as herein provided, then this Purchase Contract, at the option of the party who is not in default, may be terminated by such party. in the event of such default by Seller, if Purchaser elects to treat the Purchase Contract as terminated, then all payments made hereunder shall be returned to Purchaser without interest. In the event of such default by Purchaser, if Seller elects to treat the Purchase Contract as terminated, then all payments made hereunder shall be returned to Purchaser without interest. In the event, however, that the non-defaulting party elects to treat this contract as -2- ~~ l'"9, V ~ ~ being in full force and effect, the non-defaulting party shall have the right to an action for specific performance and damages. 4. No Representation of an Investment Opportuni~. Purchaser acknowledges that Seller has not represented or offered the Fractional Estate as an investment opportunity for appreciation of value or as a means of obtaining income from the rental thereof; that there is no rental arrangement available to Purchaser by or through Seller or the Association; that any non- personal use of the Fractional Estate made by Purchaser will be solely within the prerogative of Purchaser. 5. Disclosures to Purchaser. Purchaser understands that his Fractional Estate constitutes for all purposes an estate or interest in property, separate and distinct from all other Fractional Estates in the same Unit or any other Unit and that such estate may be separately conveyed and encumbered. The foregoing notwithstanding, the Association is responsible for the payment of property taxes on and maintenance of the Condominium Unit from the proceeds of the assessments for Common Expenses. The Association's failure to pay the taxes or failure to pay for maintenance work performed may result in a tax sale of the entire Condominium Unit or a mechanic's lien being filed against it. Further, Purchaser understands that Colorado eviction law and procedure involves a minimum of ten (10) days and that Purchaser's only effective remedy against another Fractional Owner who wrongfully interferes with Purchaser's rights of use and occupancy in the Unit is the liquidated damage provision of section 28.4 of the Declaration. Any Fractional Owner who allows or suffers a mechanic's lien, or other lien against the Unit shall similarly be subject to the indemnification provision of said section 28.4. Purchaser's Fractional Estate will be closed when eight (6) of the fifteen (15) Fractional Estates in the Unit are sold, with the remaining unsold Fractional Estates being held by the Seller for sale; no guaranty can be given that the balance of the Fractional Estates in the Unit will be sold. The Seller will be responsible for payment of Common Expenses attributable to unsold Fractional Estates. 6. Other Inclusions. Furnishings are included in the purchase price and are specified in the inventory attached hereto. Also included in the urchase rice is one-half of cost. inc using oth the Annual Fee and the Monthnv Fee~~'hf Full Tennis Mem~en health and physica conditions as set Membership, a copy re a ved. Said me' through February 2 and guests to use said persons are o suc user shall be the Annual Fee and ri„ c aci rues. ~h Purchaser o is or t e and entitl i hies o t g the Purcha sible for an nthly Fees, ion the terms and ~b Application for ereby acknowledges having erio Decem er , the Purchaser, his famil s~en__u a suc rme is Fractional Unit. Eac and all fees, other than curred in using The Aspen as rs , or o t ~, Warranties. Seller warrants the Unit and all general and limited common elementP appurtenant thereearafromstheeclosing, labor and materials for a eriod of one (1) Y and will repair or replace, at Seller's sole discretion, defective work as necessary to bring the Unit and appurtenances into conformity with the requirements of this agreement at its sole expense; provided however, any latent defects in materials or workmanship which are not discoverable by the Purchaser prior to the expiration of one year from the closing shall not be limited to the one-year period commencing with closing, but will be limited to a one-year period commencing with the date that such defect is discovered or should have been discovered in the exercise of due care; further provided thaears from closbngach of warranty may be made more than three (3) y Seller's warranty is strictly limited as follows: -3- ~ ~~ U ~~ a. Any defect in an appliance incorporated in the Unit and appurtenances which is subject to a manufacturer's or dealer's warranty is limited to the express warranty given by such manufacturer or dealer, and Seller's obligations hereunder are limited to fulfilling the warranty claim procedures prescribed by such manufacturer or dealer and reinstalling such applicable as corrected or supplied by such dealer or manufacturer. b. All warranty claims must be made promptly upon discovery by Purchaser and Purchaser must undertake all reasonable steps to mitigate any damages to the Unit and appurtenances occasioned by failure of warranty; in no event will Seller be responsible for any consequential damages resulting from any defect in the Unit and appurtenances unless it fails to remedy such defect within a reasonable period of time after it is notified of such defect. C. THE WARRANTY GIVEN BY SELLER HEREUNDER IS GIVEN IN LIEU OF ANY WAPRANTY WHICH MAY BE IMPLIED UNDER THIS AGREEMENT OR BY LAW AND ALL OTHER WARRANTIES NOT EXPRESSLY STATED HEREIN, WHETHER EXPRESSED OR IMPLIED BY LAW OR OTHER~QISE ARE DISCLAIMED BY SELLER. 8. Prohibition Against Assignment. This Purchase Contract may not be assigned by Purchaser without the express written consent of Seller, which consent shall not be unreasonably withheld. 9. Notices. All notices required hereunder shall be in writing and shall be hand-delivered or sent by first class mail to the addresses hereinafter set forth. Any change of address shall be promptly reported to the other party in the same manner. All notices so given shall be deemed effective upon deposit in the United States mail, properly addressed with sufficient postage thereon. 10. Entire Agreement. This Purchase Contract embodies the entire agreement between the parties hereto relative to the subject matter hereof, and there are no oral agreements existing between the parties which are not expressly set forth herein and covered hereby. This Purchase Contract may not be amended except by an agreement in writing executed by both Seller and Purchaser. 11. General. Upon acceptance hereof by Seller, this agreement shall become a Purchase Contract between Seller and Purchaser and shall inure to the benefit of and be binding upon the heirs, successors and assigns of said parties. This agreement shall be construed in accordance with the laws of the State of Colorado. The captions used herein are merely for easy reference and have no effect on the terms and conditions herein. OF 12. Recission Notice. PURSUANT TO SECTION 20-24(F)(q THE MUNICIPAL CODE OF THE CITY OF ASPEN, COLORADO, AND SECTION 6-1-105(1)(s)(III) OF THE COLORADO REVISED STATUTES, EITHER PARTY HAS THE RIGHT TO RESCIND THIS TRANSACTION WITHIN TEN (10) CALENDAR DAYS FOLLOWING THE DATE OF THIS PURCHASE CONTRACT. PURCHASER: SELLER: (Print or Type Name) MERIT INVESTMENT CO. (OF ASPEN), INC., a Colorado corporation By (Signature) -4- ,.:,~ ~W (Signature) (Date) (Date) PURCHASER'S ADDRESS: Te ephone: SELLER'S ADDRESS: MERIT INVESTMENT CO., INC. P.O. Box 12197 Omaha, Nebraska 68112 ACCOUNTING INFORMATION: Fractional Estate Sales Price $, Payment (Receipted for Herein) $ Additional Payment Due at Closing $ -5- ~ w ~. A~ j DISCLOSURE STATEMENT REGARDING THE CONDOMINIUM PROJECT, THE PLAN OF FRACTIONAL OWNERSHIP AND THE EXCHANGE PROGRAM provided to the Purchaser he Rules for Subdivision promulgated by the Colorado Real used herein shall have the Fractional Estate Declaration for and in the Fractional Estate 1 Estate in a Unit in the O HAS NOT PREPARED OR ISSUED THIS DOCUMENT NOR HAS IT PASSED ON THE MERITS OF THE TIME SHARE PLAN DESCRIBED HEREIN. The following information is pursuant to the requirements of t Developers of Time Share Projects Estate Commission. Defined terms meanings ascribed to them in the the The Prospector, a Condominium Purchase Contract for a Fractiona Prospector. THE STATE OF COLORAD I. DISCLOSURES REGARDING THE PROSPECTOR CONDOMINIUM PROJECT AND THE PLAN OF FRACTIONAL OWNERSHIP a. The Developer of the Project is Merit Investment Co. (of Aspen), Inc., whose address is 301 East Hyman Ave., Aspen, Colorado 81611. b. The Fractional Estates offered pursuant to the Plan of Fractional Ownership consist of an undivided one-fifteenth interest as tenant-in-common in the present estate in fee simple of a Condominium Unit together with the right of exclusive occupancy of the Unit during the Owner's "Use Weeks," as defined in Section 1.20 of the Declaration. c. The Project includes the following amenities, which are General Common Elements: lobby area laundry facilities, third-floor sun deck and covered parking spaces. In addition, entitle the owner, his family and guests to use The Aspen a health and physical fitness facility, at such time as said ons occupy a owner s unit, or t e perio December 1, 11984 use ruary_ _9 One- a o t e cost o __suc , orchin_ nr aooroximately 5125...00, will be paid by each owner ___as~a_rt of the assessment for Common Expenses. d. Each Fractional Unit in the Project will be divided into 52 weeks, some of which will be Maintenance Weeks as defined in Section 1.15 of the Declaration. Each Use Week constitutes a period of exclusive possession and occupancy of a Fractional Unit, more artiuclarly described in Section 1.20 of the as p Declaration. ,~, ~, ..~ e. PURCHASER !!AY RESCIND THE PURCHASE CONTRACT BY TENV(DIONGDAYSLAFTERTTHE DATENOFOTHEEPURCHASE ONTRACT,N WITHIN f. There are no judgments or administrative orders issued against the Seller which are material to the time-share plan contemplated in the Declaration. g. The identity of the managing agent under the time- share plan has not yet been determined. Section 16.4 of the Declaration provides that the Board of Managers of the Prospector Fractional Owners' Association shall, by resolution, delegate certain duties, powers and functions to a person or firm which will act as Managing Agent. The powers and duties of the Fractional Owners' Association or, upon delegation of such powers and duties, of the Managing Agent, are enumerated in Article XVII of the Declaration. h. Seller estimates that the assessments for Common Expenses which will be assessed against each undivided one- fifteenth interest in and to a Unit at the time of the closing under the Fractional Estate Purchase Contract will be approximately per quarter. Such estimate is provided for the Purc aser s in ormation as a good faith estimate only, is not binding upon the Seller, and shall not prohibit or otherwise restrict the Seller from adjusting the assessment for Common Expenses in the manner and for the purposes provided in the Declaration. i. Pursuant to Article XVIII of the Declaration, the Association will obtain and maintain at all times, to the extent possible, fire insurance with extended coverage in the amount of the aggregate maximum replacement value of all of the Units in the Project, and casualty and public liability insurance. j. There are no special assessments, existing or proposed, to which the Purchaser may be subject. However, each owner will be responsible for one-half of the cost of a membership in The Aspen Club, as more fully described in subparagraph c. above. k. Section 4.6 of the Bylaws provides that any agreement for professional management of the Project may not exceed three (3) years and shall provide for termination by either party without cause and without payment of a termination fee upon sixty (60) days or more written notice, or with cause and without payment of a termination fee upon thirty (30) days or more written notice. -2- g/'h siA~ ~~.++ vwi 1. Colorado mechanics' lien law may authorize enforcement of the lien by the sale of the entire time-share unit. II. DISCLOSURES REGARDING THE EXCHANGE PROGRAM a. The time-share exchange company providing the exchange service to the Purchaser of the Fractional Estate is Resort Condominiums International Inc. ("RCI"), 9333 North Meridian Street, P.O. Box 80229, Indianapolis, Indiana 46280- 0229. b. The Purchaser's contract with RCI is separate and distinct from the Purchaser's contract with the Seller. c. The Purchaser's participation in the exchange program is not dependent upon the Seller's continued affiliation with the .exchange program. If the contractual relationship between RCI and the Prospector is not renewed or is terminated, the Owner's subscription to RCI may nonetheless remain active so long as the Project continues to meet the criteria required for_ inclusion in the exchange program, and if the Project continues to recognize exchanges with this program. d. Following the initial membershi eriod the Purchaser' cipa ion in a exc ange program is voluntary. e. The terms and conditions of the Purchaser's membership with RCI are set forth at page 396 of RCI's Annual Directory (the "Annual Directory"), and in the attached "Guide to Vacation Exchange" (the "Guide"), copies of both of which will be provided to Purchaser prior to the execution of the Fractional Estate Purchase Contract. The terms and conditions as set forth in the Annual Directory provide that RCI's exchange program may be changed from time to time by RCI upon notice to its subscribing members. f. Subscribing members will be notified in RCI's publications of any changes in the exchange program and in the resorts available for exchange. y. A description of the limitations, restrictions, accrual rights and priorities employed in the exchange program are described at pages 354-382 of the Annual Directory, as well as in the Guide. -3- n m. The sales of time-share units within the Project will be made by brokers and salesmen licensed by the State of Colorado. .. h. All exchanges depend upon the availability of the Exchange Units, and are processed on a space-available basis. Therefore, there is no guarantee that a member will receive a specific exchange request. i. If a subscribing member's Use Week is assigned and the choices listed on his or her exchange request form are unavailable, the member may either: (a) accept available alternate choices for exchange, or (b) accrue the unused time for subsequent use. j. The Seller will pay the Purchaser's membership and subscription fees for the balance of the calendar year in which the Closing occurs, and for the calendar year immediately following the year of the Closing. Effective January 1, 1984, a one-year subscription to the exchange program's publications and benefits costs $47.00. An exchange fee of $52.00 for each exchange other than an Internal Exchange (i.e., an exchange at the same resort from which the member has deposited vacation time) for each week for which the Purchaser requests an exchange must accompany each exchange request; an exchange fee of $12.00 must accompany each request for an Internal Exchange. Fees may be changed from time to time upon notice provided in the exchange program's publications. k. The names and locations of the resorts participating in the exchange program are set forth in the Annual Directory. -4- ,, ,,,, EXHIBIT A TO THE PROSPECTOR DISCLOSURE STATEMENT RESUME OF L. VF.RNON CAGLE TIME-SHARE AND OTHER EXPERIENCE: ~r the past twenty-rive nvolved in the construct usiness. During the pas mpleted construction ro ec ue in excess of $25,000 000.0 omn ete section of this res agle•s ve investment and development and have provided tinancing services to purc asers o rac Iona estates in a Timber Run Condominiums. In 1980, Mr. Cagle entered the time share business with the Timber Run Condominiums in Winter Park, Colorado. This project pioneered the concept of fractional ownership, which is the most rapidly growing form of real estate ownership time sharing in Colorado. To date, 50 of the planned 100 units in the project have been completed. Other of Mr Cagle's companies constructed all of the condominium buildings at Timber Run^ and provided financing for purchasers of the fractional estates in Timber Run by originating loans, reviewing credit histories, and preparing, closing and funding loan transactions. The loans provided to the Timber Run purchasers have been sold or hypothecated in order to provide additional financing. BA~~K REFERENCES: Packers National Bank 4710 South 23rd Street Omaha, Nebraska 68107 Denny Woods - President Donald Thompson - Executive Vice President (402) 731-4900 Bank of Winter Park P. O. Box 123 Winter Park, Colorado 80482 Larry Chance - President (303) 726-5531 f ~ /~ ~ A O~ Security Pacific Finance Corporation 3033 South Parker Road, Suite 300 Aurora, Colorado 80014 Garrett Raetz - Branch Manager (303) 696-7732 PROFESSIONAL REFERENCE: Braun/Vanderlip/Fulton, Architects 1664 Lafayette Avenue Denver, Colorado 80218 Jay Vanderlip (303) 832-4942 LEGAL COUNSEL: Pendleton & Sabian, P.C. Suite 1000 303 East Seventeenth Avenue Denver, Colorado 80203 W. Michael Clowdus (303) 839-1204 PROJECTS COMPLETED: - 1978-1983 a. Timber Run Condominiums Winter Park, Colorado Architect - D. K. Rice & Associates Denver, Colorado b. Dental Office/Shopping Center 90th & Fort Streets Omaha, Nebraska 66152 Owner - Benjamin Nachman, D.D.S. 5156 North 90th Street Omaha, Nebraska 68152 (402) 572-8000 A-2 -, . ~ ~. c. Office & Warehouse Venger Distributing Company 4990 "G" Street Omaha, Nebraska 63134 Architect - Dana, Roubal, Larson & Associates Omaha, Nebraska d. Office Building 9910 North 49th Street Omaha, Nebraska Owner - A. Thompson Architect - Leo A. Daly S Company Omaha, Nebraska e. Cooper Creek Square - I - Commercial Shopping Center Approximately 70,000 sq. ft. Winter Park, Colorado (Downtown) Architect - Braun/Vanderlip/FUlton Denver, Colorado PERSONAL DATA: n ~ Business Address: P. O. Box 7354 Omaha, Nebraska 68107 Telephone ido, (402) 734-7555 A-3 i, f"^4 \/ EXHIBIT B TO THE PROSPEC'POR DISCLOSURE STATEMENT RESUME OF THOMAS A. SCHOBER CURRENT BUSINESS ACTIVITIES: President, Midtown Development Corp. Midtown Development Corp. is a Colorado corporation formed in 1983 to develop a 234 unit Holiday Inn/Condomnium Hotel in Winter Park, Colorado. Construction and marketing is anticipated to begin in the Fall of 1984 with completion scheduled for November of 1985. PRIOR BUSINESS ACTIVITIES: Vice President, Di Development Corpor Shareholder of Col s Since 1971, Colorado Rockies Development Corporation has developed and constructed over 450 condominium units in the Winter Park area. Vice President, Direc and Associates d Shareholder of Bradl Bradley/Schober and Associates was formed in 1971 to market and manage the units built by Colorado Rockies Development Corp., and to handle re-sales and general real estate in the Winter Park area. Prior to 1983 it was the leading real estate company in Grand County, Colorado, according to statistics compiled by the Grand County Board of Realtors. Bank Reference: Bank of Winter Park P. O. Box 123 Winter Park, Colorado 80482 Larry Chance - President (303) 726-5531 t..y r •1r / Professional Reference: Atwater and Blodgett Attorneys at Law Winter Park, Colorado 80482 Randy Atwater - President (303) 726-5775 Legal Counsel: Pendleton & Sabian, P.C. Suite 1000 303 East 17th Avenue Denver, Colorado 80203 W. Michael Clowdus (303) 839-1204 Personal Data: Business Address: P.O. Box 318 Winter Park, Colorado 80481 Phone Number: (303) 726-9455 B-2 . ,.~ t, r EXHIBIT C TO THE PROSPECTOR DISCLOSURE STATEMENT RESUME OF TERRY LIMING Terry Liming is one of the plan managers. His mailin address is P.O. Box 5432, Snowmass Village, Colorado 81615. 1~, Limin will oversee and coordinate the securing of all governmental approvals necessary to implement the Fractional Estate project as well as the implementation of the marketing and sales programs. He will be responsible for setting up the initial budget and method of assessment and dues collection. Mr. Liming will also serve as the local on-site representative of the developer to look after the project and accomplish any daily or other regular functions. Terry Liming has been involved in the timeshare industry since 1978 when he began as a salesman and then was promoted to sales manager for the Snowmass Inn Resort Club. Beginning in January 1979 and continuing through August of 1980, Mr. Liming served as the project director for the Snowmass Inn Resort Club. In August of 1980 he left the Snowmass Inn Resort Club to found Timber Run Realty, the marketing entity for the project. Mr. Li in has been the plan manager for the Timber Run Con ominiums, a fractional ownership condominium, in Winter Park, Colorado, since the fall of 1980. Mr. Liming serves on the advisory board for Resort Condominiums International, which has corporate headquarters in Indianapolis, Indiana./ Mr. Liming has also been speaker for the Colorado Association of Realtors on the topic of timesharing, and spoke on that topic at the Western Slope Conference of the Colorado Association of Realtors. REFERENCES Dick Moebius - Dick Moebius Real Estate - Snowmass inn Resort Club - P. O. Box 5640, Snowmass Village, Colorado 81615 - (303) 923-3584 John Dehahn - President, Resort Condominiums International 933 Meridian Street, Indianapolis, Indiana 46260 - (317) 846-4724 J. David Penwell - Vice President, Corporate Counsel, R.C.I. - Bozeman, Montana - (406) 587-0693 ~..~ Bank of Winter Park - President, Larry Chance - P. O. Box 123, Winter Park, Colorado 80482 - (303) 726-5531 Joe 'Chernow - President, Timber Run Fractional Owner's Association - C.P.A. - President, Yellow Cab Co., Houston, 'Pexas 77098 - (713) 224-4445 John Cooley - Office Broker, Cooley Investment Co., 521 E. Hyman Avenue, Aspen, Colorado 81611 - (303) 925-4614 Guy DeCarlo - Office Broker, Snowmass Real Estate Co., P. O. Box 5000, Snowmass Village, Colorado 81615 - (303) 923-3704 C-2 r ~r w-a; \.,! EXHIBIT D TO TtIE PROSPECTOR DISCLOSURE S'PATEMENT RESUME OF JANET MANNING Janet Manning, Administrative Assistant to the Developer, has for the past four years worked with all aspects of the Timber Run Fractional Ownership program in Winter Park, Colorado. Ms. Manning's experience with Timber Run has given her the knowledye and expertise to act as Plan Manager for The Prospector, Aspen, Colorado. Her duties at The Prospector will include, but not be limited to, the following: (a) Keeping and maintaining complete and accurate accounting records. (b) Providing the Board of idanagers with financial information on a regular basis. (c) Conducting all day-to-day business as deemed necessary by the Board of Managers. References: Donald E. Thompson Senior Vice President Packers National Banic P.O. Box 7340 Omaha, Nebraska 68107 402-731-4900 Taylor Owen Executive Vice President United Bank of Skyline 1055 - 16th Street Denver, Colorado 80217 303-893-9881 Kenneth Patry, C.P.A. Deloitte Haskins & Sells 1444 Woodmen Tower Omaha, Nebraska 68102 402-348-1444 ~, Monte Taylor Attorney at Law 2120 So. 72nd Street Omaha, Nebraska 68124 402-391-3712 D-2 ..r t~ ~~ r. .,.. EXHIBIT E TO THE PROSPECTOR DISCLOSURE STATEMENT RESUME OF TIMER RUN REALTY OF WINTER PARK, COLORADO The name of the marketing entity is Timber Run Realty. Its address is P. O. Box 169, minter Park, Colorado, 80482. Timber Run Realty was formed in September, 1980, and was responsible for the marketing of the Fractional Estates in the Timber Run Con ominiums. The current officers of the company are as follows: Jeffrev L. Cagle President L. Vernon Ca le Vice President Harold C. Hansen Secretary Treasurer Thomas A. Schober Assistant Secretary Mr. Liming will be the Associate Broker for Timber Run Real in charge of the company's Aspen office, and will serve as the sa es an mar eting erector or t e sa e o e rospec or Fractional Estates. Personal re erences or ernon agle, omas c o er an erry iming may a oun~ in eir respec eve resumes w is are attac a as ex i its to t is Disc osure Statement. There are no lawsuits pending or investigations that have been undertaken ayainst the marketing entity or listing broker. ~. ti. E1{HIBIT F TO THE PROSPECTOR llISCLOSURE STATEMENT FINANCING Merit Investment Co. (of Aspen), Inc., will provide financing to creditworthy purchasers at favorable rates. It is presently anticipated that such financing will require from ten percent to twenty percent or more of the purchase price as a down payment, will be provided at fixed interest rates ranging from ten percent to eighteen percent, and will be fur a term of up to ten years from the date of closing. All such terms are subject to variation as deemed necessary or desirable by Merit based upon the purchaser's creditworthiness, current market conditions and rates, and requirements imposed by lenders involved in the secondary mortgage market for the loans made by Merit. THE PROSPECTOR - ASPEN Annual Cost per Unit Spa $ 527.00 Gas 725.00 Water and Sewer 200.00 Electricity 868.00 Building Insurance 403.00 Content Insurance Liability Insurance 105.00 Cable T.V. 250.00 Trash Collection 46.00 Time Share Tax Telephone 360.00 Snow Removal 150.00 Exterior Maintenance 250.00 Interior Maintenance 250.00 Condominium Property Management 1,475.00 firewood 100.00 Common Amenities 30.00 Property Tax 1,200.00 F F & E Reserve 1,500.00 Building Reserve 526.00 Bookkeeping, Telephone, Administration 250.00 CPA Review 125.00 License Fee 265.00 ., , ;< r ... .r A GUIDE TO VACATION EXQ3ANGE ,~ ~..~ this booklet is provided to explain the exchange program made available by Resort Condominiums International, Inc. ("RCI"). We urge you to review carefully this information to insure that you understand fully the terms, conditions, use and operation of the ICI ex~ange program. WHO Y7E ARE RCI is an Indiana corporation with its principal offices located at 9333 N. Meridian Street, P. O. Box 80229, In3ianapolis, Indiana 46280-0229. Tne RCI exchange program is coordinated from this principal office location. Officers of RCI are: Jon H. IkkHaan, President Christel DeHaan, Executive Vice-President Gary Q~affee, Vice-President Larry B. Gildersleeve, Vice-President M. R. Choate II, Secretary F~len McWilliams, Treasurer Directors of RCI are: Jon H. DeH3an " Glenn Cunningham Helen McWilliams RCI is a whollybwned subsidiary of f7~dless Vacation Systems, Inc., a privately held corporation whose shareholders are Jon H. DP1~an and Christel DeHaan. .•, ~ °* ;", ~.. DEFINITIONS Definitions of certain special words and gases which you will find in the text of this booklet are set forth below. '- Demand Designation - Vacation time is designated for exd~ange purposes as Fed (higher demand), Yfiite (average demand), and ffiue (lesser demand). You may not request vacation time which has a demand designation greater-than the vacation time you deposit in the RCI SPACEBTiNK® pool. Exchange Occupancy - Tne number of persons who may occupy a unit at a host resort, based upon the exd~ange occupancy of the vacation time you deposit in the RCI SPACEH=1NK® pool. Fair Exchange - The RCI Exchange Program operates on this concept whid~ requires that the demand designation and exchange occupancy of vacation time requested from the RCI SPACEBAD7K® pool r~nnot exceed the demand designation and exchange occupancy of vacation time deposited. H>tne Resort - ~e resort location from which vacation time is deposited into the RCI SPACEBANK® pool. Host Fesort - Z7~e resort location at whidi an RCI Member has received a confirmed exdiange. RCI Affiliated Resort - A resort location at whid~ RCI has a contractual relationship with the resort's developer or bane amens association(s). RCI Member - A person who purchases vacation time at an RCI Affiliated Resort, executes an RCI Membezship Acgeement, and is enrolled with RCI. SPACIDADIIC® ,cool-= fie-collection of deposited vacation time from which RCI confirms exdiange requests. Unit Return - A written notice .from RCI returning the use of yots deposited vacation time to you. ~e Unit Return notice returns your -2- /~h ~/ .. `i6 r-..nP ' SPACEBAI@C® pool de_nosit to you because it was not withdrawn by another RCI Me~iber and you did not receive or cancel a confirmed exc3~ange. I~bwever, you are still eligible to request aii exchange in the current calendar year. Vacation time - Week interval(s) that you purchase or week interval(s) that you deposit in the RCI SPACE64NK® pool, RCI IS AN INDEPENDfS7P EXCHANGE O~~ANY RCI makes available an exchange program (the "RCI Exchange Program"), together with related benefits and services, to individuals who purd~ase at resort locations with which RCI has a contractual relationship ("Affiliated Resorts"). ~e business relationship between ICI and an Affiliate Resort is governed solely by this contract ("FZ==sort Affiliation Agreement") and no other relationship exists between RCI and Affiliated Resort developers, sellers, or managing entities. RCI is an independent exchange service c~npany and is not avned, operated, or controlled by any Affiliated sort developer, seller, or - managing entity. Neither RCI nor any of its officers or directors has any legal at beneficial interest in any developer, seller, managing entity, or timesharing plan participating in the RCI Exchange Program. ~e RCZ Exchange Program is designed for intermittent use, so purd~asers should select a Ii-une Resort location, demand designation, and unit occupancy that best meet their vacation needs. the Exthange 1SYvilege should not be the only reason for making a purchase. YOUR PARTICIPATION IN TF~ RCI EXCHANGE PROGRAM Purchasers of ti~~~+~*-ing plans at Affiliated Resorts enter into two separate contracts, the first with the developer or seller of the timesharing plan to purchase a timesharing interest, and the second with RCI for membership and eligibility to participate in the RCI ncdiange program w` 1 `4 9~ (the "Rf:I Membership Agreement") } ~e RCI Membership Agreement between you and RCI is a separate a~ distinct contract from the agreement between you and the developer or seller of a timesharing plan. You are entitled to become an RCI Exd~ange Program member ("RCI Member") and to participate in the F;.I Exchange Program based upon the following four conditions: (1) the resort location at which you have purchased has a contract with RCI (the resort location is an Affiliated Resort); (2) based upon the terms of that oantract the developer has ca~m~itted to RCI, among other things, that the Affiliated Fesort will maintain high qualitative, fiscal, and managerial standards and honor all confirmed RCI exchanges; (3) the developer or seller arranges at the time of purchase for your initial participation in the RCI Exchange Program, including submission of a subscription fee for Fhdless Vacation, the publication c-hosen by RCI to communicate information concerning the Ekd~ange Program to RCI Members and {j 4) the developer ar seller sends a completed RCI Membership Agreement, -together with other pertinent information concerning you arri your timeshare purdiase to RCI. 4he collection and submission to RCI of the foregoing payment, together with this ownership information allows us to waive the RCI initial membership fee (currently $150) which is otherwise required for RCI Membership. Your participation in the RCI ~cchange Program is governed then by two agreements: the I~sort Affiliation Agreement, which is the contract between a resort developer and RCI, and the RCI Membership Agreement between you and RCI. If the developer of an Affiliated Pesort fails to perform his contractual obligations, or if the Pesort Affiliation Agreement is not renewed or is terminated either by RCI or the Affiliated I~sort, your right to exchange yois timeshare purchase located at that resort terminates.' RCI will allow existing RCI MP+++r+~rs at such a resort to continue to exchange only if -4- .. q q •> (1) that resort maintains the high qualitative, fiscal, and managerial standazds required by the original Resort ,affiliation Agreement; and (2) the resort continues to honor exchange confirmations submitted by RCI. Individual RCI D7emberships may be maintained and renewed by owners at a resort which no longer has a I~sort Affiliation Agreement only if conditions stated above continue to be met. Your participation in the RCI Exc-hange Prcxgam is governed as well by the RCI Membership Agreement, whic3i you will be asked to sign. the present terms and conditions of the RCI Membership Agreement are also set out on page _ of this booklet. ACI reserves the right to add to, delete, or modify these terms and conditions, and will notify all RCI Members in Endless Vacation regarding any such addition, deletion, or modification. ~e RCI N~mbership Agreement requires us to make the RCI E~cchange program available to youu, subject to the terms and conditions contained in that agreement, and _requires you to be an RCI Member in order to participate in the RCI E~cchange Program. As an RCI Member your participation in the RCI E~cchange Program is voluntary. ESy signing the RCI Membership Agreement and agreeing to its terms at the time you purchase a timesharing interest, you are eligible to participate in the RCI Ebcd~ange Program as an RCI Member for the initial period arranged by the developer or seller of the Affiliated Resort at which you purchased (the "Initial Membership'). Follaaing the Initial M°nioership period, you must remain an RCI 3~7ember to participate in the RCI Ebcc3~ange Program. 7b insure that you are accurately informed concerning the terms, conditions, and operation of the l~I Exchange program, as well as Affiliated Resorts participating in the program,-RCI Members must have a current subscription to Endless Vacation. Subscriptions to Endless Vacation aze on a calendar year basis and all subscriptions expire L~oember 31. If your status as an RCI Member ceases due to ten-renewal and you do not renew your -5- . ~~ wi ....s..r subscription within 90 days, you must pay the RCI Initial M~nbership fee (currently $150) and resubscribe to Endless Vacation. Subscription fees effective in 1984 are: Initial - $ 47.00 - $64.00 Renewal - 1 year - $ 47.00 3 year - $119.00 5 year - $184.00 The subscription fees set forth above are effective for 1984 only and such fees are subject to change thereafter at the sole discretion of the publisher of Endless Vacation. You will be advised in ?lidless Vacation publications prior to implementation of any subscription fee rate change, -_ -_ HOW TO USE T1-~ RCI EXCHANGE PROGRAM An exd~ange may be reouested through the RCI Exchange Program only if an RCI Member first deposits ('banks") vacation time in one week intervals ("vacation time") into the RCI SPACEBANK® pool. The RCI Exchange Program works on a calendaz year basis with a "deposit" and "withdrawal" system similar to a checking account. In,order to make a "withdrawal," a Member must first "deposit" vacation time in the SPACEBANK® pool from units available for occupancy as determined by RCI.' Depositing time in the SPACEBANK® pool does not relieve the Member's obligation to pay any maintenance fee assessment, or similar charge, at his own resort. CUnversely,--the receipt of a confirmed exchange does not obligate the member to pay these fees to the resort into which he is confirmed. ~- ~. \e.:A J DEPOSITING VACATION TIME You may bank vacation time with RCI as muds as one year and as little as 14 days before the commencement of each week deposited. I-bwever, the RCI Ekchange Program permits three types of banking, each of which is determined by when and how you bank your vacation time. 1. Standard Banking' -Vacation time must be deposited by an RCI Member not more than one ear and not less than 60 days before the cormnencement of that week by completing and submitting to RCI a SPACEBAD7K® deposit card ("SPACE6~NK® Card^), 2. Iate Banking' -Vacation time must be deposited by an RCI Member not more than 59 days and not less than 14 days before the commnencement of that week by completing and submitting to RCI a SPACEB4NK® Card . _ ^ 3. Instant Banking' -Vacation time must be deposited by an RCI ~~- limber by telephone at the same time an Instant Exd~ange' (see -- = RD~~I`ING AN EXC1-]ANGE below) is accepted by that RCI PSetnber. This vacation time must be deposited no less than 14 days before the commencement of that week and must be for the same calendar year as the vacation time accepted through the Instant Dcd~ange', The following terms apply to all vacation time deposits: A. Vacation time located at resorts outside the Lhited States, Canada, or the Caribbean must be deposited not less than 60 d_a~ prior to the wmmen~~~t of that vacation time; Late Parking' girl Instant Banking' may not, therefore, be used for suds deposits. Sd~eduling policies observed by resorts located in the United States, Canada, or the Caribbean may also restrict use of Iate Banking' and Instant Banking'. we urge you to contact your home resort fos information relating to suds scheduling policies. -7- ', p+'^. -•e W.,/ •./ S. Tnose RCI Members who own unspecified or "floating" vacation time must obtain an assignment from the resort at whid~ that vacation time is owned before it may be banked with RCI. RCI PL?mbers who have deposited vacation time into the RCI SPACEBANK® pool receive a written deposit ac]crmwledgement from RCZ. ASSICdP~NP OF DEPOSITID VACATION TII~'4. Following receipt of an RCI Member's SPACEBANKm Card or Instant Banking', information concerning the deposited vacation time is entered into the SPACEBANK® pool. Vacation time which is deposited through Standard Banking', Late Banking', or Instant Banking` may then be assigned by RCI to another RCI Number. Submission or fulfillment of an exdiange request made by an RCI Member depositing vacation time is not required in order for RCI to ---assign that vacation time to another RCI Mem ber. Once deposited, vacation .. _ _..,. _ time"may be removed from the SPACEBANK® pool only at the written request of the RCI Member who deposited it. Deposited vacation time may not be removed if assigned to another RCI Member or if the RCI Member who deposited it has received an Exd~ange Confirmation. If you utilize the Standard Banking' procedure, and your deposited vacation time is assigned to another RCI Member, the priority of your exc3~ange request is increased (see PROCESSING AN EXCHANGE REQiJFSP: PROCIDIA2FS AND PRIORITIES below). If you do not receive a confirmed exchange (or cancel a confirmed exc3~ange) in the same calendar year as that in which your vacation time assigned to another RCI Member occurs, you may request an Accrual Exchange' in the following calendar year (see RAPING AN EXCHANGE below).--- -8- 'v,./ 4./ If you have utilized the Standazd Banking' procedure and your deposited vacation time is not assigned to another RCZ Member, and if you have not received a confirmed exchange (or cancelled a confirmed exchange), your deposited. vacation time will be returned to you ("Unit Return"). You will receive a Unit Fbturn Notice from ACI 14 days prior to the mimnencement of your deposited vacation time and you may use this returned vacation time yourself. If you utilize Late Banking', you are only eligible to request an exchange in the calendar year in which your deposited vacation time occurs, Late Banking' has a lower exc-hange priority than Standard Banking' (see PROCESSING AN EX~NGE REQUEST: PROC®URFB AND PRIORITIES below). Neither an Accrual Exchange` nor an International EScc-hange is available if late Eanking' is used, and Lfiit Return does not occ--ur for vacation time deposited through " -Iate-Banking`. - REQUESTING AN EXQ3AD7GE - _ _ -- The RCI Exchange Program is based upon the "Fair Exchange" ocx-icept. For exchange a,~s, vacation time at each resort is designated as Fed (higher demand), Nh~ite (average demand), and glue (lesser demand), you may not request vacation time which has a demand designation eater than the vacation time you deposited, althcxx~i you may request vacation time which has an equal or lesser demand designation than that deposited. 9~e "Fair Exdiange" concept also applies to unit occupancy designated for ex~ange purposes ("Exchange Occupancy"): ~e Exchange Oecup3ncY of the unit(s) requested may equal but cannot exceed the Exchange Occupancy of the unit(s) - deposited. Demand designation and Exc3~ange OoLUpancy aze applicable to all exchange requests made by RCI Members. However, RCI at its sole dis¢etion reserves the right to waive these restrictions on a case~y~-.ase basis when processing Instant FScchange' requests. 4he deposit of vacation time into the RCI SPACE.BAD7K® pool by an RCI Diember allows the member to request an exc3~ange for the same amount of vacation time deposited, subject to space availability. ~e RCI Ekchange Program operates on a calendar year basis: travel dates requested must fall in the same calendar year as the vacation time deposited, unless the RCI P'hunber is eligible for an Accrual Exdiange' (see "Accrual F]cchange"' below). Exchange requests to ICI may be made in either of two ways: in writing or by telelphone. Five exd~ange options are available to RCI Members: 1. Standard Exchange' - An exchange requested by an RCI Member in writing by completing and submitting an RCI EScrhange Request Form. A Standard Exchange Request is for resorts located in the "'-~__ _ _ - _ Lhiited States, Canada, and the Caribbean and may be made not more - -- "than one year and not less than 30 days prior to the commencement -_ of the earliest travel date sought. 2. International Exchange - An exchange requested by an RCI umber in writing by completing and submitting an RCI FScchange Request Form. An International Exdzange Request is for resorts located outside .the United States, Canada, or the Caribbean and may be made not more than one +~ and not less than 60 days prior to the commencement of the earliest travel date sought. 3. Instant Fbcchange' - An exdiange requested by placing a .telephone call to RCI 29 d~ to 2 days prior to the coamiencement of the travel tlate-sought.- If the RCI membPS-has not already done so, vacation time may be deposited at the same time an Instant Exchange' is requested and confirmed. Only resorts located in io- .~ ~ ~-., .~.. 4. 5 the United States, Canada, and the Caribbean may be requested through the Instant Exchange`, and only those RCI Members served by RCI's Indianapolis office are eligible to use the Instant Exchange'. Accrual Exchange - An exchange requested for a travel date(s) occurring in the calendar year following the calendar year for whidi vacation time was deposited. An RCI Member may request an Accrual Exdzange" only if deposited vacation time is assigned and no Exdiange Confirmation against that deposited vacation time is received or cancelled in the calendar year in which the deposited vacation time occurs. Vacation time provided to an RCI Member and owned by an Affiliated Fesort developer or seller ("Supplemental Week") does not qualify the RCI M~nbei who deposited it to an Accrual f5cchange'. An Accrual F~cc3uange" -request may be submitted in writing or by telephone, but must be for travel dates occurring in the calendaz year following the calerdar year for which vacation time was deposited. In order to request an Accrual Exchange^, one must be an IiCI t~ni~er for the calendar year in which the travel dates requested for the Accrual Exchange occur. Internal Exohange" - An exchange requested at the same resort (or group of resorts, :if owned by the same Affiliated I~sort developer) from which the RCI Member has deposited vacation time. An Internal Exchange" may be submitted in writing or by telephrne. An exd~ange service fee of $52.00 ("Exchange Fee") for ead~ week requested is required by PCI to goo_ss all excharx~e requests in 1984 other 11- ~ ... a,. / than an Internal Exd~ange~ request. An exd~ange service fee of $12.00 is required for all Internal Exchange" requests ("Internal Exchange Fee"). 4he above exd~ange fees are applicable only for exchanges processed in 1984 and may be changed by RCI in subsequent years. RCI Members will receive advance notification of any such change in Endless Vacation publications. FScchange fees aze refunded if RCI is unable to provide an RCI Me~nbPS a confirmed exchange. PROCESSING AN DCCIIANGE RDOIJEST: PROCEDURES AND PRIORITIES All exd~ange requests are entered and searched against available vacation time contained in the RCI SPACEH~NK® pool. RCI's ability to confirm an exchange request is based upon space availability and RCI cannot guarantee that it can fulfill specific exchange requests. 4b in¢ease the likelihood --that-an exthange request will be fulfilled, RCI encourages RCI M,~nbess to + provide more than one resort choice and travel date. In the event requested _=-resort locations and/or travel dates are not available in the RCI SPACEHTaNK® pool, RCI will offer alternative resort locations and/or travel dates which are available. If deposited vacation time is assigned and requested resort location(s) and/or travel dates aze unavailable, an RCI Member may (a) accept alternative resort locations and/or travel dates, or (b) request an Ac¢ual Exchange` (an Ac¢ual Exd~ange~ may-not be requested if the assigned time is deposited through late Banking':'). Processing of an exchange request is determined by the priority of that exchange request. Exchange requests aze prioritized, from highest to lowest, in the following order: - .--=. 1. Requests from RCI Members whose vacation time has been assigned to another ACI Member; 12- 2. ~~ests from RCI Members who seek an Internal E7cc~ange'; 3. Requests from RCI Members whose vacation time has not been assigned to another RCI Member or returned through a Unit Return Notice, based upon the likelihood that the deposited vacati~ time will be assigned to another RCI Member; 4. Rquests from RCI Members whose vacation time is returned through a Unit Return Notice; 5. Requests from RCI Membezs using Late Banking', regardless of whether deposited vacation time has been assigned to another RCI Because an Instant E7cchange' is made simultaneously with Instant Banking', the above exchange priorities do not apply to Instant Banking'. F7CCHANGE OONFIR[~Y.TIONS Resort location/travel date exd~ange requests received from RCI Members are entered and searched against space available in the RCI SPACEB~NK® pool. If any resort location/travel date which you request is available, the computer automatically confirms that exchange request, subject of course to seasonal demand designation, F~cchange Occupancy, and priorities set out above. As the above exchange request priorities indicate, you may receive an Dcrhange Confirmation even if the vacation time which you deposited is not assigned to another RCI Member.' All exchange confirmations are sent to you in writing, except Instant E7cchange' confirmations, which may be sent in writing ar simply confirmed by telephane. If no resort location/travel date requested by an RCI Member is available, an RCI Ekd~ange Coordinator will orntact you, either in writing or by telephone, to offer alternative resort locations and/or travel dates whic3i are available.. You may accept or reject suth an -13- w..q alternative resort location(s) or travel date(s). If you accept an alternative resort location or travel date, you will receive ari EJcchange Confirmation. If you receive an Dcchange Confirmation and have not received a Unit Return Notice, you relinquish all right to use the vacation time which you deposited with F%I. Vacation time deposited by an RCZ Member and against which RCI has provided an F~cchange Confirmation may be used by RCI for inspection visits or other corporate purposes, if such vacation time is not assigned to another RCI Member. FJcchange Confirmations may be used only by the RCI A7ember receiving the exchange, unless the Fbcchange Confirmation is given to another person through the use of an RCI Guest Certificate. An RCI Guest Certificate may be obtained from the FScthange Department at RCI's principal office in Indianapolis, Indiana. The fee for an RCI Guest Certificate in 1984 is $15.00. You may cancel an bcchange Confirmation only if you notify RCI in writing. Your ~cdiange Fee is not refunded if you cancel an ncchange Confirmation. If you cancel an F~cc3~ange Confirmation more than 30 days prior to the coa~m~cement of the exchange you received, you may request another exchange without depositing additional vacation time. You must submit an additional Ekchange Fee {or Internal bcd~ange Fee) and may request another exchange either in writing or through Instant FScchange~. If you cancel an Ekrl,ange Confirmation less than 3U dates but not more than 14 dam prior to the commencement of the exchange yW received, you may request another exchange without depositing additional vacation time. However, you must submit an additional Fkdiange Fee (or Internal FScdzange Fee) and may only request an Instant EScchange~.- If you cancel an FScchange Confirmation less than 14 dam prior to the ~~ncement of the exchange you received and wish to request another exchange, you must, for ead~ exchange requested, deposit additional 14- vacation time into the SPACEHr,NK® pool and submit an additional F~cchange Fee (or Internal Dcd~ange~ Fee) . TER[•LS AND O~NDITIONS OF 1. RCI utilizes Fhdless Vacation publications as the vehicle through whidi it provides information and lists all services to IiCI r~mbers. 2. The Membership Agreement signed by a purchaser enrolled in RCI is a separate and distinct contract from the purd~aser's acueement with the seller of the timeshazing plan. ACI is not a real estate offering, nor is there an agency or vunership relationship between RCI and its affiliated resorts. RCI is an independent service company. Dither the company, its officers nor directors has any legal or beneficial interest in any developing, selling, or managing entity for any timeshazing plan participating in the EScchange Program. - -- -_ 3. All RCI~affiliated resorts are under contract with RCI and arrange _for the Initial Membership in RCI for their purchasers and also remit payment of the initial subscription fee for 17~dless Vacation publications. Tn subsequent years, all Members are billed directly for their F}~dless Vacation subscriptions. RcZ Member status must be maintained to participate in the RCI EJcc3~ange Program. 4b insure that RCI Members are accurately informed concerning the terms, conditions and operation of the RCI•Ekohange Program, as well as resorts participating in that program, RCI Members must have a current subsription to Fhdless Vacation. SUbs¢iptions to II~dless Vac-ation pvblications_areon a_calerdaz yeaz basis and ari subs¢iptions expire December 31. If status as an RCI Member ceases due to ncnrenewal and you do not renew yocs subsription within 90 days, payment of the RCI -IS- ~. -~` ,.,,, . . Initial Membership fee of $150 and a current subscription fee for F}~dless Vacation is required. Following the initial membership period, participation in the RCI F7cd~ange Program is voluntary. 4. All exchanges depend upon the availability of units in the SPACEBTiNK® pool, and requests can only be confirmed if space is available. Therefore, RCI cannot guarantee that a Member will receive a specific d~oice. If a umber's unit is assigned and the d~oices listed on his FScchange Request Form are not available, he has the option of (a) accepting alternate d~oices that are available or (b) accruing into the following year. Members submitting a Late SPACEBANK® deposit are not eligible for Accrual. Because RCI operates on a SPACF~A[~C® concept, RCI has the right to assign any vacation time deposited by a Dfembez, even if the Member has not yet received a confirmed exchange. 5. Vacation time of a Member who has received a confirmed exd~ange, _ ~ but which is not assigned to another MP~nber, is rot returned to the Member and may be used by RCI for inspection visits and other purposes. If the Member does not receive a oonfirmed exd~ange and the MembPS's vacation week is not assigned by RCI, then the deposited vacation time is~returned to him for his own use. (Late SPACEBANK® deposits are not returned.) 6. SpA(~BADIK® deposits and exchange requests must be made on the forms Provided by 1~I. Instant SPACEBANK® deposits and Instant Fycd~ange" requests aze accepted by tele~-one. bb one other than RCI may confirm exd~ange requests, and crnfirmations are valid only if firmed in writing by RCI. -16- ~y,.J a.J 7. The RCI Flcchange Program works on a calendar year basis with a "deposit" and "withdrawal" system similar to a checking account. In order to make a "withdrawal," a Member must. first "deposit" vacation time in the SPACF~AANlC® pool from units available for occupancy as determined by RCI. I~positing time in the SPACEH~NK® pool does not relieve the Members obligation to pay any maintenance fee assessment, or similar charge, at his own resort. Conversely, the receipt of a confirmed exdiange does not obligate the member to pay these fees to the resort into whid~ he is confirmed. 8. ~e RCI Fxc-hange Proggam operates with a priority system, seasonal classifications (IYme Divisions) and occupancy limits. ~e exchange options available and the procedures whic3~ govern the F~cchange Program are contained in the "Ii~w to Use the System" section of this _ publication. ~e exd~ange accommodations may be different in relation - - - ~ to unif-size, design, furnishings or recreational amenities from those -- _ = at the Member's home resort. Members are responsible for the payment of any expenses incurred as well as any damages caused by them or their -- guests while staying in an exdzange unit and for the replace~nes~t of any missing items. 9. ~e RCI FScchange Program is designed for intermittent use, so -- purchasers should select the resort, 4Yme Division and unit size that best meet their vacation needs. 4he E7cchange privilege should not be the only reason for making a purdiase. 10. Affiliated resorts still active in sales agree to provide RCI with ta~sold vacation time periods. If these vacation time periods are no --~'-- - longer available or become unavailable to the system, Members from that -17- resort may only be confirmed into units that are deposited into the SPAC~~ADIlC® pool by RCI Members. 11. If the contractual relationship between a resort and RCI is not renewed or is terminated by either RCI or the resort, Nbmbers who own at that resort may a~ntinue to deposit time in the SPACE6~7K~ pool and zequest exchanges only if the resort maintains the high qualitative, fiscal and managerial standards required by the RCI Fbsort Affiliation Agreement for inclusion in the RCI Exchange Program and if the resort continues to honor ICI exchanges. These resorts are listed in Endless Vacatim publications as "serving members only" indicated by the symbol (.). Persons who own only at such resorts and who allow their Endless Vacation subscriptions to expire, terminate their membership status and may no longer participate as members. If a Member's resort no longer _ ___.- -meets the qualitative, fiscal and managerial standazds required by RCI, - _ _ :the Exchange privilege for that Member will cease. An individual who -- = - -•owns-only at such a resort may continue in the status of a subscriber to fhdless Vacation publications or request a refund of prepaid - subs¢iption fees far future years, calculated at the annual subs¢iption rate. - 12. A Member's Exchange privilege may be suspended in the event an affiliated resort at which the Member owns no longer meets RCI's required standards. Reinstatement of the Exchange privilege will occur only when the deficiencies have been remedied by the resort. At that time, a Member whose Endless Vacation subscription is current may use his Exchange privilege: -- - - -- _ - _ --_ 13. ~e terms and oorditions of membership, and the Exchange Proggam operated by RCI may be dhanged from time to time, including, but -18- - ,, , ~..,; without being limited to, fees, benefits, priorities and prooeduzes for effectuating exchanges. Members aze notified in F?~dless Vacation publications of any changes and of the resorts available for exchange. Representations made other than in these publications are not binding on RCI. Q~rrent Fwblications supersede all prior publications. 14. Members may exchange into the same resort once every four years. Same resorts do not allow exchanges from other resorts within the same geographical area. Consult your documents for the home resort to determine the policies currently in force. Resorts with such restrictive requirements may be identified by contacting RCI. 15. In the event RCI has onfirmed an exchange for a Member, and, because of fire, storm, earthquake or any other natural disaster or act of God or other reason beyond RCI's control, .the confirmed unit is not ._ -=_' --' available, the Member waives any and all claims against RCI. ._ - If for any reason a unit that has been deposited into the _ - - - SPACE~A[@(® pool becomes unusable, the Member who deposited the unusable _ unit is not eligible to exchange, and any onfirmed exchange held by - the Member will be cancelled. 16. termination or suspension of the E7crhange privilege can occur when RCI trading rules or the rules pertaining to the host resort aze violated, in the event of abusive behavior toward the host resort or RCI personnel, or when the Member's unit or the resort facilities no longer meet RCI's criteria for inclusion in the Ebcchange Program. 17. RCI's liability for any loss or damage arising out of membership in or use of the Ekchange Program is limited to the annual exd~ange fees paid by-the Member. _,o_ ~ • }r+0 1 ~y ~e 18. ht~ere available, all discounts and services provided other than by RCI are subject to change without notice. 19. All published resort information has been obtained from the zespective resorts, and to the best of RCI's knowledge, it is accurate and complete. I2CI is not responsible for errors of ~mmission or omission in the publication of suds information. 20. The MembPSShip Acgeement between the Member and RCI shall be governed by the law of the State of Indiana, and venue far any action at law or in equity initiated pursuant to that Acgeement shall be in Msrion County, Indiana. 21. Fees, if any, charged by resorts for the use of amenities are determined and levied by each resort. These fees may differ among resorts. Individual RCI Members are responsible for obtaining - - = information regarding additional amenity fees charged by the host _ - resort. -- 22.~ If an RCI Member sells a timeshare interest or condominium at an affiliated resort,_RCI will waive the Initial Mam}wrship fee for the purchaser to participate in the RCI FScthange Program, if the buyer bemnes an RCZ Member at the time of r ,*d~ase. 23. All RCI materials are copyrighted a~ cannot be reproduced in any form, by photocopy or any other means, without Isior written permission from RCI. TIME-SHARING AND OTHER RESOKt'IOCATIONS PARTICIPATINu IN THE RCI EXC[-F~NGE PROGRAM - (F~cisting Resort Iocaticns will be Included) 03331 3/20/84 Imo". rrs° ~1 W EXHIBIT E TO 'PilE FRACTIONAL ESTATE DECLARATION FOR THE PROSPECTOR CITY OF ASPEN DISCLOSURE STATEMENT This Disclosure Statement is promulgated pursuant to the requirements of Section 20-24(F) of the Municipal Code of the City of Aspen, Colorado (the "Ordinance"). The lettered paragraphs below correspond to the lettered subparagraphs of section (F) which require certain specific disclosures about a timeshare project, its developer and the way in which it will be marketed and operated. Capitalized terms in this Disclosure Statement are defined in the Fractional Estate Declaration for The Prospector to which this Disclosure Statement is attached as Exhibit E, or in the Ordinance. (a) The Developer. The Prospector is a development of Merit Investment Co. (of Aspen), Inc., a Colorado corporation, 301 East Hyman Avenue, Aspen, Colorado 81611. Its president, L. Vernon Cagle, has been in the construction, real estate and development business for the past 25 years. Another of Mr. Cagle's companies was the developer of a highly successful timeshare project ~ Timber Run Condominiums in Winter Park, Colorado, which has served as a prototype for timeshare projects in several other mountain communities. Mr. Cagle's resume is attached hereto as Exhibit A. Merit's vice resident-marketin , Thomas A. Schober has been in a construction an rea estate ~_._..,,....~,,..~ ti~.~;,,~~~ fnr rha oast 13 years. Another of Mr. r s extreme y successful nt consists of over 50 second-home conoomin (b) The Plan Manager. Terry Liming, Thomas A. Schober and Janet Manning are the Plan [•tanagers. Mr. Liming, the on-site licensed real estate broker, has developed expertise in all phases of timeshare operation and management and has provided consulting services to timeshare developers in Winter Park and Mt. Crested Butte. He was the project director at Snowmass Inn Resort Club fir r,~r, vPars_ Mr. Liminq's resume is attached hereto as Exhibit r'\ e resume is attached hereto as Exhibit D. (c) The marketing entity. The Prospector is being marketed by Timber Run Realty of Winter Park, Colorado. This company is more fully described in Exhibit E. (d) The Timeshare Unit. The newly-rebuilt Prospector contains nineteen (19) lodge units available for timesharing which average 756 square feet of living space. They feature private decks with hot tubs and saunas, wet bars and masonry fireplaces. The project is complete and is not a phased project. (e) Description of the Project. The Prospector Lodge was issued a certificate of occupancy in January, 1983, and will be dedicated to timeshare use upon receipt of governmental approvals by recording the "Fractional Estate Declaration for The Prospector, a Condominium" in the office of the Clerk and Recorder of Pitkin County, Colorado. The provisions pertinent to the timeshare plan are found in Article XXVIII of the Declaration. (f) Restraints on Transfer. There are no restraints on the transfer of a purchaser's Fractional Estate, except that an Owner may not convey or encumber less than his Fractional Estate (see (g) below). Although an Owner may purchase multiple Fractional Estates in the same Unit, the City of Aspen restricts occupancy in a Unit to thirty (30) days between December 16 and March 20. (g) The Timeshare Ownership Plan. Each unit in the Project is divided into fifteen (15) fractional estates. A "Fractional Estate" means a time-span estate consisting of an undivided interest of not less than one-fifteenth (1/15), as tenant-in-common, in fee simple in a Fractional Unit, together with the right to possession and occupancy of the Fractional Unit during the Use Weeks assigned to the Fractional Estate in the Deed from Declarant to the Purchaser. A Fractional Estate includes a minimum of three (3) Use Weeks per year in the Owner's specific unit. A "Use Week" is a~,period of exclusive possession and occupancy of a Fractiona~Unit, computed in the manner set forth in the Declaration. The sum of the Use Weeks and Maintenance Weeks in a Fractional Unit dedicated to Fractional Estate ownership shall equal fifty-two (52) weeks. The Owner's rights in the Fractional Unit include: use, occupancy or rental of the unit during his or her use weeks, subject to any governmental restrictions, including but not limited to the Ordinance, and the Restrictive and Affirmative Covenants in Article XXVII of the Declaration; the right to vote in the Association; and other rights more fully described in the Bylaws of the Association ,~. ,~,. +.», ~.:' of the Association and Declaration as well as those incident to real property ownership. Owner responsibilities include payment of the assessments described in Section 20.2 of the Declaration and compliance with the provisions of the Declaration and the Articles of incorporation and Bylaws of The Prospector Fractional Owners' Association. (h) Notice of Liens, Title Defects anc obtained for acquisition financing for the Project. This loan an deed of trust contain partial release provisions allowing for the conveyance of clear title to any timeshare purchaser. The Developer will grant, in the Condominium Map, a seven foot by ten foot easement for the existence and maintenance of a transformer which has previously been placed upon the sout east corner o t e prope;tymby}che Crha Prospector ontocnroperty ofrthenCity of Aspen anticipated that this license will be memoralized by means or a wri en agreement wi e i v o seen w is , w en execu e , will be recorded in the real property records of Pitkin County, 0 ora o. one adversely affect any purc aser s i e o a (i) Notice of Legal Actions. The Developer has no knowledge or notice of any pending or anticipated legal actions that are material to the timeshare units or plan. (j) Purchaser's Financial Obligation. The total financial obligation of the purchaser is the sales price of the Fractional Estate plus the one-half percent (1/28) Aspen Real Estate Transfer Tax which is paid by the purchaser. There are no additional charges to which the purchaser may be subject in purchasing the unit, other than usual and customary closing costs and prorations. The Association may require an Owner to deposit an amount equal to three (3) months of the assessment for Common Expenses escribed in (k) below with the Association for working capital and/or replacement reserves. (k) Estimate of Periodic Expenses. Each Fractional Owner will be obligated to pay a pro rata assessment. included in this amount are maintenance expenses, management fees, property taxes, replacement costs, utility charges, insurance and any other expenses incurred in the normal operation of the project and attributable to the Fractional Estate. The elements of this assessment and the method by which it is assessed are explained in Article XX of the Declaration. A budget estimating each Fractional Estate's share of the assessment will be delivered to each Purchaser prior to execution of a Purchase Contract. ... ~.,~ -~ 4./ (1) Availability of Financing. The Developer will provide financing to initial purchasers/fit favorable rates. The financing package is outlined in Exhibit F. (m) Warranties. Each Fractional Owner purchasing a Fractional Estate from the Developer will be the beneficiary of a one year limited warranty of habitability covering the unit and common elements, as described in the Purchase Contract. The warranty is limited to repair or replacement of defective items. Any manufacturers' warranties for furnishings or appliances in the units will be assigned to the Association. (n) Escrow of Deposits. A title company will act as escrow agent for deposits made in connection with the purchase of Fractional Estates. The title company will hold the deposited funds until closing of the transaction or availability of the unit for occupancy, whichever is later, or until purchaser's default under the Purchase Contract. The title company will be a neutral third party not haviny any interest in the purchase and sale transaction. (o) Fees or Cnarges for Use of Facilities. There are no current or expected fees or charges to be paid by Fractional Owners for the use of any facilities at The Prospector. Part ownership of, and the right to use, the facilities of the Prospector is included in the purchase price. Extraordinary expenses for long distance phone calls, damages or special service will be separately invoiced as set forth in section 17.6 of the Declaration. Each Owner will pay, as part of the assessment for Common Expenses, one-half of the cost of a membership in The Aspen C ub, w is wi entit e t e caner, is ami y or au orize ues s o use is aci i a suc Imes as ey are occupying the Owner's Fractional Unit. T e mem ership is a ective rom December 1, 1984 through February 28, 1987, an wi cost eac (p) Tax or Other Lien on the Timeshare Unit. A Fractional Owner who suffers or allows a lien to be placed against his Fractional Estate or the entire unit must indemnify, defend and hold each of the other Fractional Owners harmless from and against all liability or loss arising from the claim of such lien. The Association may require the Fractional Owner to deposit cash or negotiable securities to be held by the Association pending final outcome. This protection is more fully described in Section 28.4 of the Declaration and Section 9.3 of the Bylaws. The Association is responsible for the payment of property taxes on and maintenance of the Fractional Unit from the proceeds of the assessment for Common Expenses. The Association's failure to pay such taxes or failure to pay for maintenance work performed -4- ,~ --~~ ~,,,- ,., may result in a tax sale of the entire Fractional Unit or a mechanic's lien being filed against it. (q) Mutual Right of Rescission. A statement that there is a ten (10) calendar day mutual right of recission is contained in the Purchase Contract. (r) Sales Requirement Prior to Closing. The Developer will not proceed to close any of the r^ractional Estate purchase transactions until a minimum of eight (8) of the fifteen (15) Fractional Estates in a Fractional Unit are under contract. This statement is included in the Purchase Contract. (s) Maintenance. Maintenance services for the Unit are provided for in Article XVII of the Declaration. In addition to the routine maintenance services provided, a minimum of seven (7) weeks per year shall be set aside as Maintenance Weeks during which the Association will provide major maintenance, repair and replacement service to the Unit. Four of these seven Maintenance Weeks will be used exclusively for maintenance with no rentals or other uses allowed. Of the seven (7) Maintenance ~Teeks, a minimu;r of two (2) will be designated in the fall and two (2) in the spring. (t) Hold-over Occupants. Section 28.4 of the Declaration provides remedies to the rightful occupant in the event that a unit is not promptly surrendered at the end of a Use Week. The hold-over occupant is deemed to have waived any notices required by law with respect to eviction or ejection. Further, he must pay to the rightful occupant a sum equal to two hundred percent (200) of the daily fair rental value of the Fractional Unit, as determined by the Fractional Owners' Association in its sole discretion, for each day during which the unit is wrongfully occupied. Damages also include costs and reasonable attorneys' fees incurred in the enforcement of this provision. (u) High and Low Season Marketing. Aspen Mountain is typically open for skiing between Thanksgiving and early April. Use Weeks for The Prospector are selected by choice of one week from each of three (3) groups: prime ski weeks, summer/fringe ski weeks, and spring/fall weeks. The price of the Fractional Estate is determined by the prime ski week in the three-week package. Because of this three-week combination marketing program, and the indivisibility of the Fractional Estate, off-season weeks are sold to each purchaser. Since the purchaser pays for an off-season week, it is very likely to be used. -5- ~. (v) Exchange Programs. All Fractional Estates in the project will be able to participate in an exchange program, but participation will not be required. (w) Unusual and Material Characteristics. The only unusual and material circumstances, feature and or characteristic of or affecting The Prospector is its designation in the Historic Overlay, which requires HPC approval for exterior building chanyes. (x) Insurance. The Developer has obtained casualty insurance for The Prospector at full replacement value for the property. At the time the Association becomes operational, all policies will be assigned to it. The insurance provision is Article XVIII of the Declaration. (y) On-Site Amenities. Located on the deck attached to each unit is a separate hot tub and sauna for the exclusive use of the owners of that particular unit. General common elements, for the use and enjoyment of all Fractional Owners, include: the sun deck attached to the third floor on the east side of the building, all on-site parking spaces, the lobby area and the laundry facilities which are planned for the project. These amenities and any other Common Elements will not be owned by the Association; rather a Fractional Estate will include a pro rata fractional share of the Common Elements. The Developer will not own, nor charge any fee for the use of, any amenities. This is prohibited by Article VI of the Declaration. As set forth in subparaaraph (o) above, each Owner will pay, as a part of the assessment for Common Expenses, a portion of the cost of a membershi in The Aspen u . (z) Kitchen Facilities. The Employee Housing Unit (Unit 108) is the only unit containing a full kitchen. Wet bars and refrigerators are included in the units. (aa) Limitations on Occupancy. Although the units in The Prospector are spacious enough to accommodate more than six (6) persons according to the Aspen building codes, the Developer believes that optimum comfort for the occupants will be insured by limiting their number at any one time to six (6). Therefore, the Association will promulgate a rule restricting occupancy to this number. (bb) Agent for Notice. Article IX of the Articles of Incorporation for The Prospector Fractional Owners' Association and Article XXIX of the Declaration designate the Association as the Owner's designated agent for the service of process or legal notices pertaining to the Fractional Estates. -6- ~ is ~, m J (cc) Applicability of this Disclosure Statement. All Fractional Estates in The Prospector are expressly subject to the requirements and representations set forth in this disclosure statement and any amendments to it, filed with the Pitkin County Clerk and Recorder as an exhibit to the Declaration. The Developer, Merit Investment Co. (of Aspen), Inc., hereby affirms under oath that all of the above disclosures are true and accurate to the best of its knowledge and belief. MERIT INVESTMENT CO. (OF ASPEN), INC., a Colorado corporation By: L. Vernon Cagle, President SPATE OF COLORADO ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 19F34, by L. Vernon Cagle as President of Merit Investment Co. (of Aspen), Inc., a Colorado corporation. Witness my hand and official seal. My commission expires: Notary Public Address: -7- r FEDERAL DISCLOSURE STATEMENT Creditor: Merit investment Co. (of Aspen), Inc., a Colorado corporation Borrower: Date: ANNUAL PERCENTAGE FINANCE RATE CHARGE The oust of The dollar your credit amount your as a yearly credit will rate cost you 8 $ Your Payment Schedule will be: Number of Payments Security: Amount Total of Financed Payments The mount The amount of credit you will provided to have paid you or on after you your behalf have made all pay- ments as scheduled $ $ Amount of Payments he total mst ~f your purchasE ~ credit, ncluding your town payment of When Payments are Due Monthly beginning 196 You are giving a security interest in the real property being purchased in Pitkin County, Colorado, and in the furniture, furnishings, equipment, fixtures, appliances and utensils present v or rea ter ovate upon suchs~rea~ property. Prepayment: If you pay off early, you will not have to pay a penalty. Late Charge: If a payment is more than 10 days late, you will be chan3ed $50.00. Assumption: Someone buying the property you are purchasing cannot necessarily assume the reminder of the mortgage on the original terms. s /' .,-... See your contract documents, note, aryl deed of trust for additional informatics about nonpayment, default, any required paymern in full before the scheduled date and acceleration due to sale or transfer of the security, and prepayment refunds and penalties. i acknowledge receipt of a completed copy of this statement prior to coasumration of the transaction. Itemization of Acrount Financed of $ $ -o- Amount given to you directly. $ Amourn paid on your accourn with Creditor. Amount Paid to Others on Your Behalf: $ to Credit Reporting Agency. $ to Public Officials. $ ~ $ Prepaid Finance Charge. Date Executed Date Executed ,.~~ ,~,. PROMISSORY NOTE AMOUNT FINANCED: Aspen, Colorado 19 FOR VALUE RECEIVED, ("Maker") promises to pay to the order of Merit investment Co. (of Aspen), inc. ("Payee") at P.O. Box 1356, Winter Park, Colorado 80482 or at such place as Payee may from time-to-time designat($to Maker in ) writing the principal sum of in U.S. currency or certified funds, with interest at the rate of percent ( $) per annum on the oustandina Principal balance, payable in equal amortized monthly installments of principal and interest of $ The monthly installments shall be due on the twentieth day of each month commencing on , 19 The entire remaining principal indebtedness and accrued unpaid interest thereon shall be due and payable on 19 Amoant Financed. The amount financed is $ and equals the amount paid to the Seller of the Frac~ nel Estate more particularly hereinafter described on behalf of Maker for the purchase price of such Fractional Estate. The amount financed includes no other charges. Prepaid Finance Charge. Maker and Payee acknowledge that Maker has previously paid to Payee a prepaid finance charge of $ which amount consists of a Twenty-Five Dollar ($25.00) fee for a credit report and a $ loan origination fee. ANNOAL PERCENTAGE RATE. TercentU(L PEg;EperGannumE of this note is equal to p Prepayment. This Note may at anv time, in whole, or in from time to time without notice, premium or enal All sucn prepaymcu~~ .•«_~••~~- -••--- -- - accrued~interest on the unpaid principal balance, and the remainder to principal. Late Payment Charge. A late payment charge equal to Fifty Dollars ($50.00) shall be automatically assessed without notice for all payments received more than ten (10) days after the due date. Default; Penalty Interest. It is agreed that if this Note or any installment due hereunder is not paid when due or declared due hereunder, the entire outstanding principal balance and accrued interest thereon shall draw interest at the rate of eighteen percent (188) per annum. It is agreed that failure to pay any installment when due or any default under any encumbrance or agreement securing this Note shall cause the whole Note to become due at once, or the interest to be counted as principal, at the option of Payee. Maker and all of the persons liable or to become liable for all or any part of this indebtedness, jointly or severally, hereby waive presentment for payment, protest, notice of nonpayment, demand and of protest, and agree to any extension of time and payment and partial payment before, at or after maturity, and if this Note or any installment due hereunder is not paid when due, or suit is brought, agrees to pay all reasonable costs of collection, including a reasonable sum for attorneys' fees, and if foreclosure is made by the Public Trustee, for attorney's fees to be added by the Public Trustee to the cost of foreclosure. No Modifications. This Note may not be amended, modified, or changed, nor shall any waiver of any provisions hereby be affected, except only by an instrument in writing and ~~, signed by the party against whom enforcement or any waiver, amendment, change, modification or discharge is sought. Successors and Assigns. Whenever used herein the words "Maker" and "Payee" shall be deemed to include their respective heirs, personal representatives, successors, and assigns. This Note shall be construed, enforced and governed in accordance with the laws of the State of Colorado. The singular shall include the plural, the plural the singular, the words of one gender shall include the other gender. Joint and Several Liability. Maker, if more than one person or entity, shall be jointly and severally liable for the obligations under this Note. Security Interest. This Note is secured by a first Deed of Trust of even date herewith, executed by Maker on the following described real property in the County of Pitkin, Colorado, to wit: An undivided interest as tenant-in-common in Unit , according to the Fractional Estate Declaration for The Prospector, a Condominium, and the Map thereof of record, together with the exclusive right to possession and occupany of said Unit during Use Weeks , and IN WITNESS WHEREOF, Maker has caused this Note to be executed as of the date first hereinabove written. Maker acknowledges receipt of a duplicate copy of this document. DUE: MAKER: -2- Recorded at _ Reception No. THIS INDENTURE, Made this whose address is o'clock M.. Recr•2er DEED OF TRUST day of hereinafter refereed to az grantor, and the Public Tmstee of the in the State of Colorado, hereinafter referred to az Public Tmstee. Witnesseth: THAT, WHEREAS, has executed a promissory note or notes, hereinafter referred [o in [he singular. dated principal sum of Dollars, payable to the order of whose address is at the rate of percent per annum, payable 19 'County of between for the after the date hereof, with inerest thereon from the date thereof AND WHEREAS, The grantor is desirous of securing payment of the principal and interest of sail promisson note in whose hands soeyer the said I note or any o(them may be. NOW. THEREFORE. The grantor. inconsideration of the premises and for the purpose aforesaid. does hereby gram. bargain. sell and convey unro the said Public Tmstee in trust forever, the folhrwing described property. situace in the Counts of ,State of Colorado, to wit: I also known b}' street and number as TO HAVE AID TO HOLDthe same. togetherw ith all and singular the pris ileees and appuncnances thereunto belonging: In Trust neserthcles+. that in case of default in the payment o(said note or any of them.ar any part thereof. orin the payment of th interest thereon. accordmgto the tenor and effect of said note or any ofthem. or in the paymem of anc prior encumbrances. principal arimcrest. ifam or in case default shall be made in or in case of ciolatron or breach of any of the term, conditions. comenants or agreemenu herrcin contained. the ben Brien hereunder or the legal holder o(the ind Madness I ~, secured hereby' ma} declare a violation of any of the awenants herein contained and steel w udseruse sail properly for sale and demand su h al .then. I upon filing notice of wch election and demand for>ale with the Public Trustee. who shall upon receipt o(wch nonce of election and demand (or sale came '~ a copy of the same to be recorded in the recorder's office of the counry~ in which said real estate a situated. it shall and may be lawful far the Public Trustee ' to sell and dispose of the same fen masse orin separate parcels, as the said Public Tmstee may think best I. and all the right. title and interest o(the grantor. his heirs or assigns therein, at public aunion at the from dtxx of thz Court House, in the County of ,State of Colorado, or on said premises, or any pan thereo(as mq~ be specified in the notice of said sale, for the highest and best price the same will bring in cash, four weeks public notice haying been previously given of the time and place of such sale, by advertisement. weekly, in some newspaper of general circulation at that time published in said County of , a copy of which notice shall be mailed ~I~ii within ten days from the date of the first publication thereof to the grantor at the address herein given and to such person or persons appearing to have i acquired a subsequem record interest in said real estate at the address given in [he recorded inswment where only the county and state is given as the address then such notice shall be mailed to the county seat, and to make and give to the purchaser or purchasers of such property at such sale, a certificate or certificates in writing describing such properly purchased. and the sum or sums paid therefor. and the time when the purchaser or purchaser f or other i' person entitled thereto) shall be entitled toa deed or deeds therefor. unless the same shall be redeemed as is provided by law; and said Public Tmstee shall. , upon demand by the person or persons holding the said certificate or certificates of purchase, when said demand is made. or upon demand by the person i entitled to a deed to and for the property purchased, at the time such demand is made. the time far redemption having expired, make and execute to such person or persons a deed or deeds to the said properly purchased. which said deed or deeds shall be in the ordinary form of a conveyance. and shall be signed, acknow9edged and delivered by the said Public Tmstee and shall convey and quitclaim to such perwn or persons entitled to such deed. the said property purchased az aforesaid and all the right title. interest benefit andequity of redemption of the grantor, his heirs and assigns therein. and shall recite the sum or sums for which the said properly was sold and shall refer to the power of sale therein contained, and to the sale or sales made by virtue thereof: and in case of an assignment of such certificate or certificates of purchase, or in case of the redemption of such property, by a subseyuem encumbrancer. such assignment or redemption shall also be referred to in such deed or deeds: bm the mice of sale need not be set out m such deed or deeds and the Public Tmstee shall. om of the proceeds or axails of such sale. after first pa)'ing and retaining all fees. charges and costs of making said sale. ~, pay to the benefician~ hereunder or the legal bolderof said note the principal and interest due on said note according to [he tenor and effect thereof. and all ~'~ I moneys advanced by such beneficiary or legal holder of said note for insurance. [axes and assessmems, with interest thereon at per cent per annum, rendering the m~erplus. if am', unto [he grantor. his legal representatives or assigns: which sale or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against the grantor. his heirs and assigns. and all other persons claiming [he said property. or an)' part thereof, by. ~i from, through or under the grantor. or any o(them. The holder or holders of said note or notes may purchase said propene or any part Thereof: and it shall not be obligatory upon the purchazer or purchazers at any such sale to see to the application of the purchase money. If a release deed be required. it a '~ ~I agreed that the grantor, his heirs or azsigns, will pay the expense thereof. ~. ii I I'. ''. I •If in Demror, insert "City and." 3-bo NO. St1A. Rev. 2•Ri. DEED OF TRCST IPOblia Trustetl Nith We on Sok Ckuu Bnd(ord Publishing.58'_5W 6rh Ave_lskewoad. CO 80211-X3031'_33-6900 \1Ten recorded, return to .-'~ And the grantor, for himxlf and his heirs, personal representatives or assigns covenants and agrees to and with the Public Trustee, that at the time of the ensealing of and delivery of thex prexnts he is well seized of the said land and tenements in fee simple. and has good right, full power and lawful authority [o grant. bargain, x11 and convey the same in the manner and form as aforesaid: hereby fully and absoluteh waiving and releasing all rights and claims he may have in or to said lands, tenements, and properly as a Homestead Exemption, or other exemption, under and by virtue of any act of the General Asxmbly of the State of Colorado, or az any exemption under and by virtue of any act of the United States Congress, now existing or which may hereafter be pazxd in relation thereto and that the same are free and clear of all liens and encumbrances whatever. and the above bargained property in [he quiet and peaceable possession of the Public Tmstee, his successors and assigns. against all and every person or persons lawfully claiming or to claim the whole or any pan thereof, the grantor shall and will Warrant and Forever Defend. Until payment in full o(Ihe indebtedness. the grantor shall timely' pay all taxes and assessments levied on the properly: any and all amounts due on account of principal and interest or other sums on any senior encumbrances, if any: and will keep all improvements that may be on said lands insured against any cazualty loss, including extended coverage, in a company or companies meeting the net worth requirements of the beneficiary' hereof in an amount not less than the then total indebtedness. Each policy shall contain a loss payable clause naming the beneficiary az mortgagee and shall further provide that the insurance may not be canceled upon less than ten days written notice to the beneficiary. A[ the option of the benefiaary. [he original policy or policies of insurance shall be delivered to the beneficiary az further security' for the indebtedness. Should the grantor fail to insure and deliver the policies or to pay razes or azxssments az the same fall due, or to pay any amounts payable upon senior encumbrances, if any, the beneficiary may make any such payments or procure any such insurance. and all monies so paid w ith interest thereon at the rate of r1 per annum shall be added Io and become a pan of the indebtedness secured by this Deed of Tms[ and maybe paid out of the proceeds of the sale of the progeny if not paid by the grantor. In addition, and at its option, the beneficiary may declare the indebtedness secured hereby and this Deed of Trust m be m default for failure to procure insurance or make any of the payments required by [his paragraph. 1(all or any part of the progeny or an interest therein is sold or transferred by the grantor witho W beneficiary's prior written consent, exdudine I a I the creation of a lien or encumbrance subordinate to this Deed of Trust, lb) the creation of a purchase money secunry tmerest for household appliances. Ic) a transfer by devise, descent or by operation of law upon the death of a join tenant or Idl the grant of any leasehold interest of three }ears or less not containing an option ro purchase. beneficiary may. at beneficiary's option. declare all the sums secured by this Deed of Trust to be immediately due and payable. Beneficiary shall have waived such option to accelerate d. prior to the sale or transfer. beneficiary and the person to whom [he progeny is m be sold or transferred reach agreement in writing that the credit of such person is satisfactory to beneficiaq~ and that the mterev payable on the sums secured by this Decd of Tmst shall be at such rate as beneficiary shall request. AVD THAT IV CASE OF AVY DEFACLT, Whereby the right of foreclosure ocean hereunder. the Public Tmstee or [he holder o(said note ur certificate of purchase, shall at once become entitled to the posxssion, me and enjoyment u(ihe property aforesaid. and to the ants, issues and profits thereof, from the accruing of such right and during the pendent} of loredosure prucccdings and the period of redemption. if arty there be. and such posxssion shall at once be delivered to the Public Trustee or the holder u(said note or certificate of purchase un rcyuest. and on refusal. the Delivery u( such possession may be enforced by the Public Tmstee or the holder u(baid note or certificate of purchase be any appropriate civil suit or proceeding. and the Public Trustee, or the holder of said note or certificate of purchase, or any thereof shall be entitled m a Receiver for said property, and of the rents. issues and profits [hereof, after such Je(ault, including the time covered b} (oreclowre proceeJings and the period of redemption. if any there be. and shall be entideJ [hereto as a matter of right without regard nr [he wlrency ur iroulrency u(the grantor ur of the then owner of said property' and without regard to the value thereof, and such Receiver ma} be appointed by any court of armpdem jurisJiction upon ex pane applicanonand w ithout notice - nu«a being hereby expressly waived -and all rents, issues and profits. income and revenue therefrom shall be applieJ M weh Receiver to the payment of the indebtedness hereby secured. according to the law and the orders anJ directiuro of the coon. AV D, That in case o(default in am of snit paymeno of principal or insert st, according to the tenor and effect o(said prumiswn note aforesaid. or any of them, or any pare Ihereuf, or ul a breach or violation o(am of the mrenam, or aenemenis hzrein. by the grantor. hi, personal reprcxnta«ves ur asst em. then anJ in that Gaze [he whole of sail principal sum hereby securcJ, anJ the imerest thereon w the time of the sale. mar at once, at the option of the Icgal holder thereof, become due and payable, and the eaid property be xdJ in the manner and wish the same etfeet as it sail indebtedness haJ mamreJ, anJ that if firredosnre be made by the Public Tmstee. an at«rmey's fee uY tha ,wn of dollars for sen'ices in the supenisiun of sail tirreclu,urc pnsecJines +hull be alloweJ h} the Public Trmtee us a part of the cost of loredosure. and it loredmure be made through the coons a reasunahle assume}'s fee shall be taseJ by the coon as a part ui the ant of such (oreclwure pnrceedinps. The singular number shall include the plural. the plural the ,ingular. anJ the me of any Bender shall he applicable m all gender. Executed [his day of ATTEST: ~SEA1.~ State of Colorado ,+. County' of The foregoing instmment was acknowledged before me in the Cuumy of State of .this day of . 19 . by Witness my hand and xal. My commission expires AJam~• . ,- ,-•,. .,~ u>« STATE OF COLORADO -UNIFORM COMMERCIAL CODE SECURITY AGREEMENT Debror: Addreu: Residann No. Street Ciy State Zip Code Busimss Stete Zi Code No. Street Clry p Secured Party: rwams. No. Street Ciy State Zip Code Debtor, 4or roruideretion, Mreby graph b Seared Percy a NNrly interest in the following property, arrd arty and ail property of like type now owmd or hereafter acqulrcd by Debtor, together with all additions, acttasions, aubsikutionn, protteds end produch therefrom, including natural inueese of livestock, all heroin tilled TM "Collateral": To secure payment of the indebtedness evidenced by certain promissory note_of even date herewith, payable to the Secured Perry, or order, es follows: end all other liabilities of Debtor to Secured Parry, absolute or contingent, due or to become due, now existing or hereafter arising including liabilities arising because of iunda advanced in the future at the option of Secured Pary, ell herein celled the "OBLIGATIONS". DEBTOR EXPRESSLY WARRANTS AND COVENANTS: The Collateral is used or bought primarily fors Personal, family or household purposes; ~ Use in farming operations; ~ Use in business. That Debtor i residence is es stated above, and the Collateral will be kepi st If any of the Cellaeral is crops, oil, gsa, or minerals ro be extracted or timber to be cut, or goods which ere or ere to become fixtures, said Collateral con- cerns the following described real estate situate in the County of and State of Colorado, to-wit: The undersigned acknowledge receipt of a ropy of this Security Agreement on date hereof, and agrce that it includes and is subject to the ADDITIONAL PROVISIONS on tha reverse side hereof, the same being incorporated herein by mferen<e. Debror: 19 No. 651. Rev. B-83. SECURITY AGREEMIEM Bkdtad PublishinE. 58_'5 N'. ua Arr.. Iaknrood. CO PA21i-IND1233fi9gD- 5-8a t ~, .',, ~.e :~ ADDITIONAL PROVISIONS FUkTHER WAP.RANTIES AND COVENANTS OF THE DEBTOR. The Debtor hereby warrants and covenants that:- ' L Except for the security interest granted hereby, the Debtor is.cr to the extent shot this agreement states that the Coliaterd i; to be acG_ured af~e• the dote hereof, will be, the owner of the Collateral free from any poor lien, security interest « en<um'tronce; and the Debtor will defend the Coiictero. ogams! alt chins and demands of all persons m any time claiming tke same or eny interest therein. '2. Irrespective of whether the Secured Party doims a security interest in proceeds hereunder, the Debtor will not sell or offer to sell or o~herwi;e twn;fer or encumber the Collaterai or any interest therein without the prior written consent o4 the Secured Party. The Collateral will 6e located at and kept a• the Debtor's address shown an the reverse side hereof and shall not Le removed withcut the pri« written consent of the Secwed Party. 3. The Dtbt« will pay all taxes and assessmeNS of e~xry mture which maybe levied or assessed against the Colbferol. " - ~4. the Debt« wi0 keep the Collatercl at all times insured against risks of bss or damage by fire (including so-called eztende? coverage), chef! and such other msualties as the Secured Party may reasorwbly require, indud~rg collision in the case of ary mot« vehicle, dl in such amounts, under such forms of policies, upon such terms, for such periods, and wrinen by such mmponies « underwriters as the Secured Party may approve, losses in all cosec to be payable to the Secured Party and the Debtor as their interest may appear. AI! poGciez of insurance shca provide for of Ins' ten days' prior written notice of cancellation to the Secured Party; and the Debt« shall furnish the Secured Party with certi{icotes of such insurance or other evidence safisfxtory to the Secured Party as to compliance with the provsions o1 this paragraph. The Secured Party may act as att«ney for the Debtor in making, adjusfiny and settling claims under or cancellirp such insurance and endorsing the Debtor's name on any drafts drawn by inures of the Collateral. S. The Debtor wilt not permit « allow any adverse lien, security interest « encumbrance whatsoever upon the Collateral, and will not permit tfie same to be attached «replevined. - 6. The Collateral is in good condition, and the Debtor will, at the Debtor's own expense, keep the some in good condition and from time to time. fwihwifh, replace and repair all such ports of the Collateral as may be broken, worn out, or damaged without allowing any lien to be ueoted upon the Collateral on account of such replacement « repairs, and will allow the Secured Party to examine and inspect the Collateral of any time, wherever located. 7. The Debtor will not use Me Collateral in violation of any applimbk statutes, regulation « «dinonms. ADDITIONAL RIGHTS OF PARTIES. At its option, but without obligation ro the Debtor, the Secured Party may discharge razes, lien, or security interesh « ocher encumbrances of any time levied or placed on the Collateral, may place and pay for inswance (hereon, may order and pay ter the repair, maintenance and preservation thereof and may pay any necessary filing or recording fees. The Debtor agrees to reimburse the Secured Party on demand for any payment mode or any expense in<«red by the Secured Party pursuant to the f«egoing authorization. Until default, the Debtor may have possession of the Collateral and use it in any hwful monrror, and upon default the Secured Party shall hove the immediate right to the possession of the Collateral. Borrower hereby waives all right of homestead exemption in the collateral, includingthot granted by CR.S. § 38-41-201.6. THE DEBTOR SHALL BE IN DEFAULT under Nsis agreement upon the happening of any of the folbwing events « conditions: (a) defouh in the payment «performance of any obligation, coverwnt « liability contained or referred to herein or in any note secured hereby; (b) the making w furnishing of any warranty, representation or statement to the Secured Party by « on behalf of tfre Debtor which proves to hove been false in any material respect when made or furnished. _ (c) loss, theh, damage, destruction, sak or encumbrance to « of any of the Colateral, or the making of any buy, seizure or attachment thereof or thereon; (d) death, change of name, dissolution, merger, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, asspnment f« the benefit of veditors by, or the commencement of any proceeding under arty bankrupiq « insoherxy laws of, by or against the Debtor « any guarant« « surety f« the Debtor. UPON SUCH DEFAULT and at arty time thereafter, or if t deems hseli insecure, the Secured Party may declare all Obligations secured hereby immediately due and payable subject to the provisions of sectim 5-5-112 of the Colorado Unform Consumer Credit Code, and shall have the remedies of a secured party under Article 9 of the Colorado Uniform Commercial Code. The Secured Party may require the Debtor to assemble the Collateral and deliver or make it available to the Secured Party at c place to be designated by the Secured Party which is reasonably convenient to both parties. Expenses of retaking, holding, prep«ing for sole, selling « the like shall include the Secured Party's reasonable att«neys' tees and legal expenses. Unless the Collateral is perisfwble or threatens to decline speedily in value « is of a type tustomorily sold on a recognized market, the Secured Party will give the Debtor reasonable notice of the time and plum of any public sale thereof « of the time after which any private sak or any other intended disposition thereof is to be made The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of the Debt« shown at 1Fie beginning of this Agreement at least hue days before the time o4 the sole or disposdion. As respects crops covered by this Security Agreement, upon such default, it is agreed by the porkies hereto that said cops ore perisMbk or may decline speedily in value, and that the Secured Party may protect, cultivate, mre for, harvest, or process said sops at hse expense of the Debtor and may sell and dispose of said crops of private sale os the same mature or are Fnrvested, at the best price then available. Where the Collateral is livestock, it is agreed that o commercially reasonable meets of disposing of the collateral shall include sole of such collateral in the ' customary manner on the Denver, Colorado livesrock market or i!trough a licensed livestock sales ring in Colorado, and it is agreed that such Collateral is of a type custortarily sold on such recognized morkeh. Sales of such livestock may be afhervirse as permitted by law. N is expressly agreed that it will not be necessary, aher default and before the sak of any livestock Collateral, to ml{ect said livestock « to Fsave the some preseN at the place of sak, but such sale r- aay ye Fred at the court house in the wanly first mentioned herein vlhik said livestock ore absam therefrom «at brge.,. ,. . r ~ ~No waiver by the Seewed Parry of arty default shall operate m a waiver-of my other defeat or of the some defauhon a suture occasion. The taking of ~.:. _ this security agreemeN shall not waive « impair «ry other security the Secured Parry may fwve « frereaftar acquire f« the payment of the above obligations, car shalt the raking of any such odditiorol seatriry waive« impair this sew[iry agreement; but the Sec«ed Party may nsOrt ro any security it may hwe in the «der it may deem proper... .: ~.. :. - ~ -' _ : - ~ -. .n :..t....-t sz,~ e......1 o~.w ~hwrermder shell imrre ro ttse benefit o~ its successors and assign; asd all prosuses asd duties of tfre Debt« shall bind the _ ,.• ._._ __J .~_I r.i a r~r ..~-v^.~~~ y ...arm:- ..~.~7rnr-^R-" :.'.4^ •.~ ~~~. .n - a t m °w' a E a m r T ~~ d L s N .. F- y~ ~~ m3 i~ ~y a .`ro3 m QG~~'eFO^'~ 0 4 Gam'. p° U C H ttl S O Y tC T V.~ ~O wU O Y FQ a4 O.G bpC~ N+~-' w W ~.b .L' U W N C v ~$ ~ y .F o'er >, X07 °'O a~ ~~ a°i ~i .o ~ ~ ~ F k ~~b c oro F `W° c 3~ C d G.~ ~v °y'a c°i q F m o ~ ~ [ a mQ q C~ ~ v,D a~i ~ "' a c jg ai .~ v m °i o o awi °° c a+ E c~ v v ttl w ... 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L ~ O w` ~~ • }~~ 'W^ ^V1 V, i Q N o u C 7J"°. ~ W d d~ O m.4 i0 d a A m a~ Y'C ~~ ~ ~ ^' N .~4 ... y ~•'~ t0 W ~ y ^ Cl ~ ~ •U F V Gl y 4) '4 a'T7 ub'OH^ 00 i°. yy M? 'O'D w;b W ~.by N O P~:O QFj p'b_ d ~ U.o O o'F dw.~~w°. M~•~ c ~ 3 0 ~ ~ a ~ 0.~8 a~'Y cC: ~ ° W y.: a+ N,{qY ~w~~LC~M~O~q'Ya~ +~' C Td'y U NpM 1+ .~ Oy q v~~~i 7 W~.~,, a•a'.~J y.b a~ a O Y y'^ N 'o w~ pw^ v y ° pq ~." m 3y yy m ~FJi Fi ~ O ~ Y ~ ~ 'l7 ,~ C ,~ ~ Na ~ d w'~' ~ w >" Av vl. ~ v 6• ~d3.~ ,FQ..'flq„ .d~3 ~ q ~'3^ W B aw° c .mws v a~i F ct ~° d N~ O.~ w~ p ~-. w "~ ''~L ~ Y ~4 L C U B FJ .4 'a".. b O ~d O S c~ r:E 1oRAr1 Dv 1 T0: Aspen City Council FRO r:: Alan F.ichman, Planning Office RE: Prospector Timeshare DA^lE: riay 29, 1984 APPROVED AS TO FORM: P.t your regular meeting on riay 14, 1984, you moved to reconsider the application to timeshare the Prospector and directec; the Planning Office to submit a report to you on the application. As I am sure you recall, the application was previously reviewed by P&7„ Goith a recommendation of approval, including a grant of conditional use, having been made on August 2, 1983. City Council subsequently held several meetings on the application, including a detailed revie~r of the proposed conditions of approval, before finally denying the application. As you also probably recall, P.lice Davis, Goho is no longer with this office, was the planner responsible for reviewing this application. I have spent considerable time with Alice to insure that I understand the details of this proposal and also have had the benefit of a complete file available to review. I am also attaching for your review a copy of the original memo submitted to you by Alice Davis, up through the identification of conditions of approval. It is the purpose of this memo to consolidate the original conditions, the chances you recommended to these conditions at your earlier meetings, and the requirements of our amended timeshare regulations. First, I trould like to briefly identify for you why P&7 and the Planning Office feel this represents an excellent timeshare application under our current regulations. 1. The project is located in an area which is already intensely used on a year-round basis and is within walking distance of amenities which can be used by the occupants all year. 2. The past record of the applicant is a positive factor, since the applicant has not just been a marketing agent but also is a developer. Their current application demonstrates that they have the experience to address the details of our regulations and have learned from any mistaY.es they> made in the past. 3. The Prospector cannot be profitably operated as either a traditional lodge or as a condominiumized lodge. This application permits a brand new facility to be occupied, thereby adding quality units to our inventory and solving the problems associated with its foreclosure. The application also will allow the conditions of the prior reconstruction approval to be met, including a good landscaping plan. 4. The application proposes seven (7) weeks of maintenance, rather than our minimum standards of four (4) weeks. In many other aspects, the proposal also ea;ceeds the minimum standards of our Code (see Alice Davis memc). If there are any negatives associated with this app?lication, they more directly reflect conceptual problems arith timesharing in general than with the specific proposal. The only negative ure found related to this project is that the units in the building are small and the amenity package is limited erhen compared to other timeshare projects nationwide. However, this will probably be the standard case given our lodging inventory, and will imply that the timeshare o~•rner is e,ctually buying Aspen and not just a unit in a complex. Page 2 Should you have other questions about this application, I refer you directly to Alice's attached memo. The Planning and Zoning Commission and the Planning Office recommend your approval of this application via the following motion: "t'tove to grant subdivision exception to the applicant for the purpose of timesharing the Prospector, subject to the following conditions: 1. The applicant will amend the condominium plat to include the following: a. Reference encroachment license granted by Council for the rock facade stairs on the north frontage; b. Indicate book and page of easements for the transformer in any vaults or pedestals on the property; 2. The applicant`s landscape plan will require final approval of compliance by the Parks Director. The plan should be augmented to include the following: a. The additional sidewalk spur on the ~~rest end of the alley; b. Irrigation of the planting areas along the west and north frontages to maintain trees in those locations. 3. The applicant must provide sixteen (16) on-site underground parking spaces. 4. The project must include amenities as proposed including a sundeck on the third floor, on-site parking, lobby, and unit amenities including a hot tub, sauna, wet bar and masonry fireplace. 5. Occupancy by a timeshare owner is limited to thirty (30) days between December 18 and [larch 26. 6. PIO prohibited marketing practices will be allowed including the giving of gifts in a deceptive manner, use of public malls or streets for sale, phone solicitations to visitors at other lodges, or the giving of transportation, lodging or other gifts valued in excess of $100.00. 7. The nineteen (1_9) renovated units found in the Prospector must each be split into fifty-two (57) weeks. Seven (7) vreeks must be reserved for the maintenance of the project. Four (4) of these seven (7) weeks must be used exclusively for maintenance with no rentals or other uses allowed. Tcao of the four (4) weeks must be in the spring while the remaining two (2) weeks must be in the fall. The remaining forty-five (45) weeks must be sold as proposed in three (3) week timeshare packages. Each three (3) week package must contain a peak summer/off-winter week, and an off season week in either the spring or the fall. 8. tdo right-to-use timeshare leasehold will be allowed. All Prospector timeshare interest sales must be on a fee ownership basis. 9. Timber Run Realty and Terry Liming as Plan h?anager and local contact will be responsible for the marketing proc,.ram for the Prospector. The marketing program identified in the timeshare application must be adhered to. 10. As proposed, the applicant must establish four (4) banking accounts for operation of the budget system. Proof that these accounts have been established must be documented ,.. Page 3 to the City of Aspen when such accounts are established. 17.. The issuance of a Certificate of Occupancy will be sufficient to meet the requirements of Section 20-24(F)(2) of the Code regarding the useful life of mechanical and electrical equipment in the Prospector. 12. The mandatory two (2) month deposit and any down payments made in conjunction with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent must be a title company in Aspen, a neutral third party. 13. ?1o closing will be allowed until at least eight (8) of the total fifteen (15) timeshare packages are sold for any given unit. 14. When closing occurs, the declarant as well as the new timeshare owners must then begin to pay their quarterly assessment fees for that unit. For any unsold units the developer is responsible for operating costs. 15. The Interior Reserve Fund and the Exterior Reserve Fund, both expenditures itemized in the maintenance/assessment fees, cannot be reduced or suspended during the first five (5) years after the first closing. All other expenditure items used in the calculation of the assessment fees can be adjusted with the approval of the Board of Ttanaaers. The money designated for the reserve funds must always be held in escrow to be used as needed for interior and exterior repairs and maintenance. Designated monies going into the reserve fund (estimated at $10,000 per year) cannot be reduced or eliminated until the fund has accumulated $50,000. 16. The Prospector timeshare units are limited to six (6) occupants at any one time. 17. The applicant will submit a fifty (50) year deed-restriction for the employee unit (tk108) meeting the form and standards of the Attorney's Office. 18. The owners are required to own the common areas and common amenities in the Prospector Lodge and this must be reflected in the appropriate documents. 19. The Board of Managers must designate a local managing agent. 20. One deed must be conveyed for each three oreek package so that weeks are never sold individually. 21. References must be made throughout the application and exhibits attached to indicate that the project is subject to all of the requirements in Section 20-24 as well as the State Timeshare Laws which are already specified in the application and attachments. 22,. The financing for the Prospector must be expressly subject to all restrictions placed on the project. 23. The applicant must provide satisfactory handicap access to the first level of the Prospector Lodge by installation of a handicap lift or by such other means as may be approved by the Aspen Building Department. In addition, the applicant shall make two (?.) units on the first level of the Prospector Lodge suitable for handicap use. 24. The plan manager cr the managing agent must apply for and show evidence to the City of a Colorado State Sales Tax ~,~ ~~ Page 4 be applicable to any short term rental of these units. A required real estate transfer tax will apply to initial and subsequent sales of the timeshare interest and caill be collected as is done in any other real estate transaction. 25. The Prospector Disclosure Statement, the Prospector Condominium Documents entitled Fractional Estate Declaration, the Prospector Articles of Incorporation of the Fractional Owners Association, and the Sy-La~•~s of the Association as well as a sample purchase contract must all be amended to reflect the conditions of approval placed on the Prospector through the approval process. The Planning Office and the City Attorney's Office must both review and approve the final documents to ensure the changes and clarifications are accurately made. 26. Any further updating or amending of the approved timeshare documents must be approved through the City according to the requirements of Section 2.0-24 of the subdivision regula- tions. 27. The declarant may rent unsold units but the rental money must go toward any maintenance which may be necessary as a result of the unit's use as a rental. 28. The applicant must clarify throughout the timeshare application references to timeshare units versus references to timeshare interests. 29. Thirty percent (300) of the qualified voters (present or represented by proxy) of the Factional Owners Association must be present to obtain a quorum. 30. The owners may not lease the common elements or amenities (excluding the employee unit) which they oFOn as was proposed in the application. 31. To ensure compliance with the proposed marketing program, the applicant agrees to post with the City suitable security in the amount of a $20,000 irrevocable letter of credit. 32. Full details of the RCI exchange program (cost, procedures, other projects involved, confirmation percentages, etc.) must be provided to the purchasers of Prospector timeshare interests. 33. Assessment fees cannot be increased without written notice being given to the owners thirty (30) days prior to the effective date of the increase. Such written notice must explain the reason for the increase and document the need for the increase. 34. The applicant must submit to the Finance Director the license fee required by Section 20-24(S) of the Ptunicipal Code, to be paid on a pro rata basis for the remainder of 1984, currently estimated at $2950.00. Prior to obtaining the license from the Finance Director, the applicant must first pay the outstanding fees owed to the Planning Office, currently estimated at $2990.00. The applicant shall annually obtain a new license from the Finance Director on or before January 1st of each subsequent year. 1 OIDEON I, xAUf MAN DAVID G. EIS ENSTEIN HAND DELSVERY ~ ~Q ~'~ ~Awornccs ~ ~ G~ GIDEON 1. KAUFMAN Sox loool 31! EAST MVMAN AVENUE ASPEN. COLORADO 91311 January 1S, 1985 TELEPHONE AREA CODE !O] r"~~= s 92l-9169 Ronald L. Mitchell Assistant City Manager ~r '~ ( 7 City of Aspen 130 S. Galena St. Aspen, CO 81611 Re: Prospector -- Timeshare Marketing Program Dear Ron: Pursuant to our meeting on 47ednesday, January 9, 1985, I write this letter to confirm your approval of the new marketing techniques that the Prospector intends to utilize. Enclosed are the two ads that will be distributed offering three days of free skiing and a fifty dollar gift certificate at participating restaurants. These ads will be placed in in-flight magazines with both Rocky tountain Airways and Aspen Airways and may also be placed in magazines of some major airlines flying into the Denver area. In addition these offers will be placed in the "Aspen :1e '.come Bag" that is placed in numerous condominiums and hotels ir. the Aspen/Snowmass area. We also expect to advertise these offers on boarding passes of Rocky Mountain Aitwals and Aspen Airways. It is my client's intention to get this information concerning the Prospector to people as soon as possible during their Aspen stay. They are also contemplating placing these ads in the Aspen Daily News and the Aspen Times once or twice a week to further inform people of the project. My clients feel that this advertising tec::ni:lue meets the spirit of the Aspen Timeshare Ordinance as the gifts being offered have a clear value and there is no deception surrour;dina the value of the gifts in the ad. The qualifications that must be met to receive a gift are in bold print and are prominently displayed in our ads. The Pr.ospector's latest advertising employs mechanisms utilized in real estate and timesharing sales to generate interest in a project. b:y clients feel ttie Prospector is a quality project and if enough people become aware of the project and tour it they will become purchasers. Z want to thank you for your help and constant availability which has been inva]_uable in insuring our ~ ~~ ~. Ronald L. Mitchell January 15, 1985 Page 2 compliance with the myriad requirements of the Timeshare Ordinance. Again I would like to extend an offer to you to tour the Prospector so that you can become familiar first hand with the project and our marketing techniques. If this letter correctly reflects those matters approved at our meeting and the Prospector can employ these new marketing techniques please sign as indicated below.. Very truly yours, LAW OFFICES OF GIDEON I. KAUFMAN, a Professional Corporation By Gideon Kaufman GK/kl Enclosures cc: Brad Cagle ~4 Agreed to this ~~ day of January, 1985. ASSISTANT CITY MANAGER Ronald L. Mitchell _. ~ti4, ~- ~ :~' t - - ___ ~ - Tour The Prospector Lodge as our guest ...and , receive 3 mays Litt Tickets. _ __ Luxury Condominium ®vtirnership' from $6,50® i BY When you own a condominium at The Prospector Lodge you pur- chase only what you use ...and that costs a fraction of what full owner- ship costs. ASPEN'S PREMIER DOWNTOWN LOCATION ... on Hyman St. Mall 2 blocks from Aspen Mt. Lifts. •Spacious designer suites, with in- dividual spa and sauna on each private sundeck. •Each suite has an unobstructed view of Aspen's mountains. •Comfortable accommodations for ~ six adults. I OUALIFICAT!ONS Because of the unique nature of The Prospector Lodge at P.spen, this of- fer has been specially designed for Aspen visitors, 30-65 years of age with a combined family income of at . least $50,000 per year. If married, both husband and wife must attend a one-hour presentation of the advan- tages of Fractional Ownership in Aspen. Oniy one certificate per group. Of course, there is no obliga- tion to purchase. Please do not confuse Fractional Ownership with traditional timeshare; it is not, nor do we employ high- pressure sales tactics. If you have es~er desired to own real estate in Aspen, do not miss this rare oppor- tunity! (This gift is a limited offer and may be ~r withdrawn at anytime.) Y ~e ~~1` ~-- - ~t TOIJ R~ , APPC?i~~TMI=SIT ONLY Call X03/920-2C?:3~ ~ <"` 9 a.m. 40 ~ rte. K~• ~ ~si~9 i ' Laxli;c at Asix~n .. ,~~. Th® Prosp$ctor Lodge as our guest .. ,and receive a } . 55O ~I~Tt certificate redeemable at participating restau®nts* Luxury ~ondomfnlu m ~~*dners~~ip ~ ,.~ ,. •~a.R`.~G.Fr41r.SluF~ ~r .:rl~T4 ~ ~P frorr~ X26,5®~ Wtien you own a condominium at The Prospector Lodge you pur- chase only what you use ...and that costs a fraction of what full owner- ship costs. ASPEN'S PREMIER DOWNTOWN LOCATION ... on Hyman St. Mall 2 blocks from Aspen Mt. Lifts. -Spacious designer suites, with in- dividual spa and sauna on each private sundeck. -Each suite has an unobstructed view of Aspen's mountains. -Comfortable accommodations for six adults. (This gift is a limited offer and may be withdrawn at anytime.) OUALIFICATIORiS Because of the unique nature of The Prospector Lodge at Aspen, this offer has been specially ' -designed for Aspen visitors, 30-65 years of age with a com- bined family income of at least $50,000 per year. If married, both husband and wife must at- tend aone-hour presentation of the advantages of Fractional Ownership in Aspen. Only one certificate per group. Of course, there is no obligation to pur- chase. Please do not confuse Fractional Ownership with traditional timeshare; it is not, nor do we employ high-pressure sales tac- tics. if you have ever desired to own real estate in Aspen, do not miss this rare opportunity! *Participating Restaurants ~ Fins Restaurant Smuggler Land Office Restaurant Green House Restaurant T~1~ 'i'OlJ f3~ tl F3Yp.~~FaE~ryO/I~PJT(~e~r~4~t~T/'~~RILY ( ~` ~~t~• 4Q i.~ ~. ~. ~i ft ~.7 ~~~ i I ~4 , .. ~... ~, RECORD OF PROCEEDINGS 100 Leaves iBRM !0 L. F. XOE CN EL B. B. B l ORDINANCE NO. 55 (Series of 1983) AN ORDINANCE AMENDING SECTION 20-24 OF THE MUNICIPAL CODE PERTAIDI- ING TO TIMESHARING SO AS TO: AMEND SUBSECTION (C)(1) BY DELETING REFERENCE TO THE "RP1N"' ZONE, THEREBY RESTRICTING TIMESHARING TO ONLY THE "L-1", "L-2", "L-3", "CC" and "CL" ZONES; At4END SUBSEC- TIONS (E)(3)(c) AND (O)(2) TO REGULATE THE GIVIl~G OF GIFTS; ADD A SUBPARAGRAPH (13) TO PARAGRAPH (E) REQUIRING COMPLIANCE WITH HANDICAP ACCESS IN TIMESHARE PROJECTS; ADD A PARAGRAPH (S) TO REQUIRE THAT A LICENSE BE OB^1AINEU FOR ALL TIMESHARE PROJECTS; ANll AMEND PARAGRAPH (J) WHIJREAS, having conducted a review of timeshare regulations pursuant to Section 2U-24(R) of the Municipal Code, the City Coun- cil deems it to be in the best interest of the City of Aspen, its inhabitants and visitors to amend Section 20-24 of the Municipal Code as hereinbelow provided; NOiti', THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF `THE CITY OF ASPEN, COLORADO: Section 1 That subsection (C)(i) of Section 20-24 of the Municipal Code of the City of Aspen be and the same is hereby amended to allow timesharing in only the L-1, L-2, L-3, CC and CL zones, said section to read as follows: "(C) Zones in which timesharing shall be permitted; struc- tures allowed to be timeshared. (1) Timesharing as defined herein shall be allowed in the L-1, L-2, L-3, CC and CL zones. Timesharing shall only be permitted as a cronditional use in the above zones, requiring a permit in accordance with the procedures and requirements for obtaining a conditional use set forth in Chapter 24 of this Code, in addition to subdivision approval as required by this Chapter. To the extent practi- cable, subdivision and conditional use approval shall occur simultaneously." Section 2 That subsection (E)(3)(c) of Section 20-24 of the Municipal Code of the City of Aspen is hereby amended to regulate the giving of gifts, said amended subsection to read as follows: ~.-, ~. RECORD OF PROCEEDINGS 100 Leaves FMM !0 C. i, xOCC Y.EL B. B. G L. "(c) Gifts of free transportation or free lodging or other gifts valued in excess of one hundred dollars ($700.00) to induce prospective purchasers to attend sales presentations or to purchase timeshare estates." Section 3 That subsection (0)(2) pertaining to prohibited practices in connection with the giving of gifts is hereby amended to read as follows: "(2) The giving of free transportation or free lodging or other gifts valued in excess of one hundred dollars ($100.00) to induce prospective purchasers to attend sales presentations or to purchase a timeshare estate." Section 4 That subsection (E) of Section 20-24 of the N~unicipal Code of the City of Aspen pertaining to timesharing standards and review criteria is hereby amended by the addition of a subparagraph (13) thereto to require compliance with handicap access, said subpara- graph to read as follows: "(13) Bandica access. Satisfactory provisions shall be made to provi e handicap access to ten percent (10~) of the units and to and throughout the project as required by the Uniform Building Code." Section 5 That Section 20-24 of the [Municipal Code of the City of Aspen is hereby amended by adding a subsection (S) pertaining to the licensing of timeshare projects, said subsection to read as fol- lows: "(S) Licensing. In order to properly administer and assure compliance with the requirements of this section, it shall be unlawful for any timeshare project to operate in the City of Aspen without a license first having been obtained therefor in accordance with the following pro- cedures: (1) The license required by this section shall be granted and reviewed only upon approval of the timeshare project by the City Council and upon the submission of a license application stating the address of the project, the manager thereof, and such other facts as the Director of Finance may require. 2 r~ .M*. RECORD OF PROCEEDINGS 100 Leaves fpgM ~0 C. i. NOf CR fI. B. B. ] I. CJ. ("l) For each license issued under the provisions of this paragraph, a fee of five thousand dollars ($5,000.00) per year shall be paid, which fee shall accompany the application. In the first year of issuance, the amount of the license fee shall be prorated according to the number of days left in the year. The initial license fee shall be returned to the applicant if the timeshare application is denied. (3) All license fees, from the time they are due and pay- able, shall become and remain a lien upon the timeshare project until paid, and may be collected by an action in personam or in rem, or both. Additionally, any lien for unpaid license fees against the timeshare project may also be collected as provided by the statutes of the State for the collection of taxes and other liens and assessments against real estate. (4) A license required by this paragraph shall be granted and issued by the Director of Finance and shall be in force and effect until the 31st day of December of the year in which it is issued, and annually thereafter. (5) It shall be the duty of each licensee under the provi- sions of this paragraph on or before January 1 of each year to obtain a renewal thereof if the project remains as a timeshare project. (6) Licenses shall be granted only if the project is in com- pliance with the regulations of this section and its approval by the City Council pursuant to this section." Section 6 That since this ordinance implements a licensing scheme, sub- section (J) of Section 20-24 of the Municipal Code of the City of Aspen is hereby amended to delete the sentence reserving the right to implement a licensing scheme, said subsection to read as fol- lows: "(J) The marketing and sale of timeshare units shall be governed by the real estate laws set forth in Title 12, Article 61, C.R.S. 1973, as amended. The applicant and licensed marketing entity shall present to the City the plan for marketing the timeshare units. In addition to all other remedies or penalties, any deviation from the approved marketing plan shall give the City the right to enjoin these sale techniques. The applicant shall be responsible for paying the costs of such legal action to enjoin, including the City's legal fees and expert wit- ness fees. To secure this responsibility, a sum of twenty thousand dollars ($20,000.00) cash or a twenty thousand dollar ($20,000.00) irrevocable letter of credit for each timeshare project in which the applicant or. marketing entity is involved shall be required to 3 r., 4 r e .~ 4/ RECORD OF PROCEEDINGS 100 Leaves roxv w c r eocan c . • ca. be posted with the city to ensure that the applicant and the marketing entity do not deviate from the approved marketing plan." Section 7 If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 8 A public hearing on the ordinance shall be held on the day of 1984, at 5:00 p.m. in the City Council Chambers, Aspen City Hall, Aspen, Colorado. INTRODUCED, READ AND ORDERED published as provided by law by the City Council of the City of Aspen on the day of 1984. h~illiamT-L. Stirling, bfayor ATTEST: Kathryn S. Koch, City Clerk FINALLY adopted, passed and approved this day of 1984. William L. Stirling, Mayor ATTEST: Kathryn S. Koch, City Clerk 4 ,. e. s i ~ ~ .. ~..{... ~ -' i „s .- _„ 1984 i;. "~;.' ,~~' _. May 16, '''` Mr. Paul J. Taddune, Esq. City Attorney City of Aspen 130 South Galena Aspen, Colorado 81611 t; ~. , ~ ~ 1 *:: 1 i,::.: + ~~~ I' f '' N9AY 21 19~4_f!,~ ~g~, /1SPEN : Pi ~ ~:irv CO. RE: Amendment to Application for Approval of Time Sharing Project Dear tor. Taddune: Pursuant to the undertaking set forth in W. Michael Clowdus' May 8, 1984 letter to you, please consider this letter an amendment to the Application for Approval of Time Sharing Project (the "Application") previously submitted by Merit Investment Co., Inc. (the Applicant") for the Prospector Lodge. The Application is hereby amended as follows: 1. Applicant's marketing plan will comply with the requirements of Ordinance No. 55 (Series of 1983). To this end Applicant will not yive any gift valued in excess of $100.00 to induce prospective purchasers to attend sales presentations or to purchase a time share estate. This limitation specifically includes free transportation or free lodging. Condition Number 11 set forth in Alice Davis' August 22, 1983 Memorandum (the "Memorandum") to the Aspen City Council (the "Council") should be changed to reflect this amendment. 2. Applicant shall provide handicap access as discussed with the Council at the May 14, 1984 meeting. Specifically, Applicant shall provide handicap access to the first level of the Prosector Lodge by installation of a handicap lift or by such other means as may be approved by the Aspen Building Department. In addition, Applicant shall make two units on the first level of 25eoErtheeMemorandum shouldlbef~hanged1topreflectCthastamendmentr 3. Applicant shall comply with the license requirement set forth in Ordinance No. 55 and shall tender to the Director of Finance a check or S in exchange for issuance of the license simultaneously w>_th approval of the Application by the Council. In addition, Applicant will tender irrevocable letter of credit in the amount of $20,000.00 to secure its obligations as required by Condition Number 33 of the Memorandum and Ordinance ,. .,, Mr. Paul J. Taddune, Esq. May 18, 1984 Page 2 No. 55. Condition Number 33 should be changed to clarify that a single $20,000.00 letter of credit meets the requirements of Condition Number 33 and Ordinance No. 55. 4. Condition No. 10 shall be amended to provide that there will be a plan manager and local contact who is a licensed real estate broker and that the initial plan manager and local contact shall be Terry Liming. 5. It is our understanding that Condition Number 13 of the Memorandum has been deleted. Except as otherwise specifically noted above, the Application remains in full force and effect as submitted. Submitted this day of May, 1984. APPLICANT: MERIT INVESTMENT COMPANY, INC., By MEMORANDUM TO:~ Aspen City Council FROM; Alice Davis, Planning Office . RE: Prospector Lodge - Conditional Use Review and Subdivision Exception Review for Timesharing DATE: August 22; 1983 Location: 301 East Hyman Avenue - Lotis A, II, C, D, IIlock B2, Aspen Original Townsite. ~ Zoning: CC - Commercial Core. Applicant's ', Request: The applicant, Merit investment Company, is requesting approval for a timeshare project at the Prospector Lodge. The project requires conditional use approval from P&Z pursuant to Section 24-3.3 as well as approval to a two step subdivision exception review for converting the Prospector to a lodge condominium and a timeshare use pursuant to Code Sections 20-23 and 20-24 of the Code. Project Summary: The Prospector Lodge currently consists of 19 newly renovated lodge units, with an average unit size of 75G square feet. If approved as a timeshare project the 19 lodge units would each be split in 52 interests, one interest for each week of the year. Seven weeks ~oill be reserved for maintenance while the remaining 45 weeks will be sold in three week timeshare packages. (15 total packages to be sold for each unit.) Each three week pacY.age will contain a peak season winter ski week, a peak sumrner week and an off season week in either the spring or the fall. Planning Office Review: The following is a review of the Prospector Lodge timeshare application based en the 12 standards and review criteria established in Section 20-24 of the Code. 1. Right-To-Use. As required by the regulations, the Prospector timeshare interests will be fee owner:,hip, not the prohibited right-to-use leases. 2. Integration. The project is purely residential, all ua~its will be timeshared and the project is backed by 100 percent of the owners and the potential purchasers who have the property under a sales contract. 3. Marketing and Sales Techniques. As required, the applicant- states that- the marketing o£ the Prospector timeshare interests will not involve the giving o£ gifts in a deceptive manner, no use oL• public malls or streets for sales and no local pt-,one solicitations. The sales pr,ograrn will be run by Timber Run Realty out o£ Winter Park, Co~.orado,•a company which has been involved in timeshare projects in Winter Park and Snoc•rmass. • ~,~ v '' . w_ e.f emo:• Prospector Lodge Timeshare Page Two • August 22, 1983 , ' Timeshare sales will be directed at tourists . in the peak summer and winter seasons through 'the use of local ma~azines, newspapers and ., television. Low season sales will be directed • at several target cities including Dallas, Houston and Chicago. National magazines and. ' newspapers (Sports Illustrated, Ski, Gentlemen's Quarterly, Houston Post, etc.) dill be the primary source•of advertisement in these areas. • Interested persons calling on at timeshare ad will be sent an information package. If the person calls again and is still interested, he will be invited to come visit the project and may be offered a subsidy to help pay transportation and lodging costs. To ensure that this aspect of the program operates in a responsible way, the Planning Office recommends that the program be reviewed after it is in operation. The Prospector sales period should be relatively short in that there are only 15 packages to }ie sold for each of the 19 units. 4. Amenities. Common area amenities include a sun deck on the third floor, on-site parking and a lobby area.. Laundry facilities are .planned, but must be reviewed through the conditional use process. Individual units each have private decks, a hot tub and sauna, a wetbar and a masonry fireplace. All common areas and common amenities must be owned by the timeshare owners. S. Parking. There is no mandatory parking requirement for a lodge use in the CC zone, but 17 under- ground spaces were required as part of a previous conditional use approval in order to replace spaces removed in the renovation. The applicant states that only 16 spaces are possible given the limitations of the parcel and the existing structure since one space was used for necessary mechanical space. The Planning Office feels that 16 spaces are adequate given that no parking is required in the CC zone and that the spaces are often not fully utilized in the winter. 6. Maintenance. Section 20-24(E)(6) requires a minimum of four weeY,s to be reserved for main- tenance due to the intensive, high impact nature of timeshare projects. (Two weeks in the spring and two weeks in the fall.) The applicant has agreed to provide seven maintenance weeks. The Planning Office feels that two weeY.s in the spring and two weeks in the fall trust be reserved for maintenance only and no rentals or other. use besides maintenance should be allowed in this period. The remainirq three of the seven weeY.s can be used f.or maintenance in either the spring or fall hs is necessary. ..~..d.w_._._..~... Memo: Prospector Page Three August 22, 1983 -~ w/ Ldoge Times},are Project 7. Budget: The~~rospector application included . an itemized budget Misting expenditures such as common electricity, snow removal, firewood, ~-•property taxes, interior maintenance, exterior building reserve fund and administrative costs. The total cost comes out to S8,306 per condominium unit (19 units), $553.73 per timeshare interest (1/15 interest in one unit) and $138.43 quarterly for each timeshare interest. The budget system will use four banking accounts, including 1) ~ general operating; 2) an escrow for taxes; 3) an excrow for furniture reserve; and 4) an escrow for a building reserve. The budget estimates were based on the marketing entity's timeshare experience in Winter Park and information from local property managers in Aspen. 8. Conversions. All existing structures converting to a timeshare use are required to be physically upgraded through expenditures equal to a minimum of 30 percent of the fair marY.et value of the property prior to conversion, unless the applicant demonstrates to the satisfaction of the City Council that funds previously expended have sufficientJ.~• upgraded the project. The applicant has submitt©d an appraisal and documentation that well over this amount has been spent for the renovation of the Prospector. 9. Escrow. Deposits or downpayments made in connection with the purchase of a timeshare unit must be held.i.n an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent will be a title company in Aspen, a neutral third party. The proposal states that no closing on any timeshare interest within a unit will be completed until at least eight of the 15 packages are sold in that unit. 10. Management/Assessment Pees. As discussed in the budget, the Prospector's assessment fees are estimated at 5138.43, quarterly. This amount includes necessary operating expenditures as well as money to be placed in a reserve fund for interior unit maintenance and repairs and exterior building maintenance and repairs. In addition, the applicant states that a deposit equal to a thzee month assessment fee may be required at the time of purchase for security i.n case the fees are not paid. The Planning Office feels this deposit should be mandatory and the applicant has agreed that it be mandatory. The application states that. the assessment £ees are due and payable to a schedule established by the Board of Managers, the Board which handles the affairs of the Fractional Owners Association. As proposed, the Board csill be established 120 days after 75 percent: of the timeshare intr_resta have beer, conveyed (or August 1, 1988, whichever is fzrst). An Memo:' Prospector Timeshare Porject Page Four . August 22, 19 Q3 • interim Doarc~ of Managers appointed by the developers will be established until this ' time. The declarant is responsible for all ' '' required assessment fees and expenditures related to the unsold units after the first timeshare pacY,age is sold. 11. Reserve. The quarterly assessment fee includes a collection for a reserve fund for interior • and exterior repairs and maintenance. The Bxterior Fund, estimated at $lOj,000 per year, will be used when necessary for such things as repainting, roof repairs and other structural repairs, landscape replacements and carpet repairs in common areas. The fund should build up sufficiently until it is needed in 5 - 10 years. The Interior Reserve will be used for individual unit ,rep airs such as furniture, furnishings anti appliance replacement. The Reserve Fund, as proposed, may be reduced or suspended for a few years .if 75 percent of t)~e owners agree to the change. The Planning and Zoning Commission and the Planning Office feel that the Reserve Fund, even if unused, should be mandatory for a few years since this fund is our major assurance that the high impact, intensive timeshare use will not deteriorate the lodge, but will ensure that the lodge is continually maintained and repaired. We recommend L-hat the amount going into the reserve fund not be adjusted until five 'years after the first closing on a timeshare package. At this time, the owners can adjust the fund .zf 75 percent of the owners and 100 percent of the mortgagees agree to the amendment. 12. Oc_c~uQancy Standards. The Prospector units will ~e limited to sir, occupants at any one time as the applicant feels that this is the maximum allowed to maintain an optimum comfort level. This is within the Building Code occupancy standards. Lodge condominiumization regulations limit an owner's occupancy to 14 days during the winter peak season to ensure that lodge units remain available for short term use. A timeshare project must meet the lodge condominiumization requirements (Section 20-23) as well as the timeshare requirements (Section 20-24). If a timeshare purchaser in the Prospector buys more than two packages, he will be violating the 14 day restriction if he occupies the lodge during the ski reeks he purchased. Since the intent of the condo regulation was to ensure a short term use of the lodge, and since timeshare is by its very nature a short term use, the Planning Uffice feels this requirement can be extended from 14 to 30 days for the Prospector. (Limits a purchase to 34 packages.) The City Attorney's Office rgrecs that, when appropriai:.^, this requirement can be determined inc:pplicable for L•he purposes of timesharing. • ,... Memo: Prospector Lodge Timeshare Project Page Five August 22,,1983 • ~. Referral ~ • Comments;.' The Attorney's Office commented that several clarification$ and chariges were needed in the timeshare documents. These comments are summarized below: 1• A•title commitment is needed in addition. to the warranty deed supplied. 2• The actual 50 year deed restription for the employee unit must be ra~:iewed'and approved by the Attorney's Office as soon as possible. 3• Timber Run, the marketing entity, should be licensed in Aspen and should maintain a local office. 4• The timeshare owners are required to own the common areas and amenities - this is 'not reflected in the declaration, but should be. 5• Tile IIoard of Managers must 'designate a local managing agent. This is o by the applicant. Ptional as submitted 6• One deed should be conveyed for each three week package so that weeks are never resold individually. ~• References should be made throughout the application that the project is subject to all the requirements of Section 20-24 as well a~ the State Timeshare Laws which are specified. 8• The financing for the Prospector must be expressly subject to all restrictions placed on the project. 9• The proposed unit amenities and the employee unit (#108) must be shown on the condominium plat. Engineering is requesting several minor plat amendments which are stated in the attached memorandum from Jay Hammond. It is also recommended that the landscaping plan contain the addition of the sidewalk spur on the west end of the alley and the irrigation of planting areas along the north and west frontages to maintain the trees in these locations. Jim Holland, Director of Parl;s, has conceptually approved the landscaping plan. The applicant is amending the landscaping plan from the'plan ori- ginally approved through t-he conditional use review since the previous owner removed trees and constructed in areas which were to be preserved. The new plan retains all seven existing firs, includes sodding, several aspen clusters, a rocY, retaining wall, bricY,ing the alley and a sprinkteT system for mair:taining the landscaping. ~• ~ ~ ~ Memo: Prospector Timeshare Project. Page Six August 22, 1983 The Building Department stated that a conditional Certificate of Occupancyrwas issued on the Prospector in January, 1983 and was extended through June 30, 1983. The C.O: expired .Tune 30th, as three conditions were still unsatisfied. These three conditions must still be met prior to is^uance of a C.O.; 1. The required handicapped access must be approved by Council. P&Z recommended that this access requirement be~waived. 2• The parking requirement must be,reduced, from 17 to 16 or the additional space must b~ provided., Ps2 approved the parking reduction to 16 spaces. 3. The landscaping plan must be approved by Council. PGZ approved the landscaping plan as a conditional use modification. T},e Finance Department stated that .the plan manager or managing agent must apply for and show evidence to the City of a Colorado State Sales Tax License' since City, County and State sales tax will be applicable to any short term rental of these units. The required real estate transfer tax will apply to initial and subsequent sales of the timeshare interests and will be collected as in any other real estate sale. The submission requirements for a timeshare appli- cation require a Disclosure Statement, Condominium Documents (Fractional Estate Declaration), Articles of Incorporation of the Fractional Owner's Association and the Bylaws of the Association as well as a sample purchase contract. The documents have been submitted by the applicant and reviewed by the Planning Office and Attorney's Office. Changes will reed to be made to these documents as conditions are placed on the Prospector through the approval process. The Planning Office and Attorney's Office should both review and approve the final documents to ensure the changes and clarifications are made. Lodge Condomin- iumization Review: . Most elements of the lodge condominiumization review are covered in the above timeshare review. The Planning Office is, however, recommending a Code amendment to the timeshare regulations which clarifies this situation by including the condominium regulations as guidelines (not requirements} in the timeshare review. The following is a review of the lodge condominium regulations/yuidelines which were not covered in the previous timeshare review. 1. An affidavit has been submitted which verifies that the Prospector Lodge has not been in operation for three years but the quality and quantity of services, maintenance and rnanaaeme;^t of the operation prior to this three year period is being improved in the new facility. i ~. ,i ~ w>~ ' i Memo:. Prospector Timeshare Project ` Page Seven ~ ~ August 22, 1903 2. The applicant is providing the required two pillows of employeeihousing. This unit (t 108) .must be deed restricted to the employee guidelines for 50 years and must be shown on the condominium plat: 3. Section 20-23(A)(1)(a) limits an owner's occu- pancy. during the winter season to 14 days. It is recommended that this requirement be adjusted to 30 days for the Prospector so that more • than two timeshare packages can be purchased and utilized by one owner. Conditional Use Review (Sec. 20-3.3): The primary purpose of requiring a conditional use review for a timeshare project is so that a public hearing will be seta A public hearing is not normally required in a two step subdivision exception process. Section 20-3.3 established three suitability require- ments to be used in evaluating a conditional use. These zequirements are met since the project complies with the zoning code and is consistent with the objectives of the zoning code and the CC zone district. Also, the project is compatible with surrounding land uses in that it is located in an area with other lodge and corvnercial uses, blends in well with the neighborhood and will not significantly inorease parking, noise or traffic impacts in the area. Laundry facilities are proposed as part of the Prospector. Since these facilities have not 'yet been reviewed as a modifica*..ion of a conditional use, they would zequire a~tother conditional use review. In order to avoid a second review and fee, the P&2 conceptually reviewed the applicant's plans for the laundry facilities, then tabled this review until further information is obtained. Planning and Zoning Commis- sion and Planning Office Recommendation: The Planning and Zoning Commission and the Planning Office feel that the applicant has submitted an excellent proposal for timesharing. Although we recommend approval, we also suggest that a very ,,~, ~, ~,~ CITE ANN 13G souei7 g:ricna sircet aspen, Colorado 81611 303-925-2U2U CONFIDEN'PIAL MEMORAP7DUM DATE: May 9, 1984 T0: City Council FROM: pity Attorney RE: Megit Investment Co. v'. City of Aspen Pursuant to settlement discussions in the timesharing lawsuit, I have received the annexed correspondence which I am attaching for your inf~prmation. ' The discussions are ongoing, and I expect to receive another let- ter with a signed Stipulation of Settlement within the next few days, which I will hold in escrow pendiny approval. Basically, the applicants propose to amend their application to conform to the amended timeshare regulations. I would then reco,n- mend that Council move to reconsider the application. The amended application would be then reconsidered in the ordinary course of the approval process. The Stipulation of Dismissal would become effective after Council approves the amended application. Of course, if the dialogue in the approval process is not mutual, the applicants would be permitted to withdraw the Stipulation of Dis- missal. I have asked the applicants to identify all acceptable conditions of approval, working from Alice Davis' memo before the moratorium was enacted. The only problem I perceive at this poin*_ is what Council intends regarding handicap access. Gideon advises that installation of an elevator would be difficult; that the Building Department did not insist upon an elevator in the course of issuing a building permit and that Tom Isaac, in making handicap access recommendations did not have an elevator in mind with respect to this building. I am seeking a clarification of these issues. As with all settlements, time is of the essence, and I request an opportunity to discuss this with you at the May 14 meeting. PJT/mC Attachment 1 FNllL1'I~ON ~3 SABIAN, P. C. A"PORN f.7S ANU (:JUN tiCLORS AT LAW W, MICHAEL CLOWDUS SEVENTEENTI{ AND GRANT HIIILDING SUIiE IUUU 303 EAST' SEVEN'I'E ENTH .4VF.N UE DENVLR,COLORADO H0203 May 2, 1984 Mr. Paul J. Taddune City Attorney City of Aspen 130 South Galena Aspen, Colorado 81611 RE: Merit Investment Co., Inc. Plaintiff, vs. The City of City, a municipal corporat 1n the District Court, C Colorado (the "Lawsuit") Dear Mr. Taddune: .~ TELEPHONE: (303) 839-I~OJ TELE(:OPI[R: (303) a.a -07riG TWX:010-03~-0.107 a Colorado corporaton spen, a Colorado Home n, et, al .; Case No. 8 y of Pitkin, State of le The purpose of this letter is to outline a settlement proposal pursuant to which Plaintiff would dismiss with prejudice the Lawsuit. Enclosed with this letter is a proposed form of stipulation dismissing the Lawsuit. Plaintiff will dismiss the Lawsuit after the Aspen City Council (the "Council"). approves Plaintiff's prior Application for Timeshare and Conditional Use Approval and for Amendment to the Existing Conditional Use Permit (hereinafter referred to as the "Application") pursuant to Section 20--24 of the Municipal Code of the City of Aspen (Ordinance No. 52, Series of 1982) (hereinafter referred to as the "Timeshare Ordinance") upon the Council's own motion to reconsider. Prior to such approval, the Application would be amended to comply with the additional requirements of Ordinance No. 55 (Series of 1983) which amended the Timeshare Ordinance. The amendment to the Application and the Council's approval of the Application, as amended, would specify the requirements to be imposed pursuant to subp,xragraph 13 of subsection (E) of the Timeshare Ordinance which now provides "satisfactory provisions shall be made to provide handicap access to and throughout the Project." Such requirements must be acceptable to Plaintiff. Further, dismissal of the Lawsuit would be conditioned upon issuance of all permits and approvals required by the City of Aspen for comp le*_ion of renovation of the improvements on the real property which is subject to the Application and the good faith ~/ Mr. Paul J. Taddune May 2, 19II4 Page Two cooperation of the City of Aspen in allowing Plaintiff to sell timeshare interests pursuant to the requirements of the Timeshare Ordinance. If the foregoing proposal is acceptable to the Council, please advise me immediately and this office will proceed to amend the Application. If this matter is not sett Led in the next several weeks, Plaintiff will be unable to close the purchase of the property and proceed with the project. Plaintiff's only recourse would then be prosecution of the Lawsuit. I look forward to hearing from you. Very truly yours, W. Michael Ciowdus WMC:sd cc: Daniel M. Fowler, Esq. PENDLETON £~ SABIAN, P. C. ~, ~..~ DISTRICT COURT, COUN'PY OF PITKIN, S'PATL•' OF COLD uTIPULATIOiI ANP AGREEMENT Case No. 83 CV 371 MERIT INVESTMENT COMPANY, INC., a Colorado corporation,- Plaintiff, vs. THE CITY OF ASPEtd, a Colorado home rule City, a municipal corporation; THE CITY COUNCIL FOR THE CITY OF ASPEN; and WILLIAM STIRLING, as Mayor of the City of Aspen and Indivi- dually, RICHARD KNECHT as a Member of the City Council and Individiaully, CHARLES C. COLLINS as a Member of the City Council and Individually, ALLAN BLOMQUIST, as a Member of the City Council and Individually, and CHARLOTTE WALLS, as a Member of the City Council and Individually, Defendants. Plaintiff and Defendants, by and through their attorneys, stipulate and agree as follows: 1. The parties having resolved all matters in contro- versy agree that Plaintiff's Complaint shall be dismissed with prejudice. The parties to bear their own costs. PENDLETON & SABIAN, P.C. By: W. Michael Clowdus 6851 Attorneys for Plaintiff 303 E. 17th Avenue, Suite 1000 Denver, Colorado 80203 (303) 839-1204 WOOD, RIS & HAMES, P.C. By :. Daniel M. Fowler #6357 Attorneys for Defendants 1100 Denver Club Building 518 Seventeenth Street Denver, Colorado 80202 (303) 595-.8145 ,~. , g. MEMORANDUM TO: Aspen City Council FROM: Alice Davis, Planning Office RE: Prospector Lodge - Conditional Use Review and Subdivision Exception Review for Timesharing DATE: August 22, 1983 Location: 301 East Hyman Avenue - Lots A, B, C, D, Block 82, Aspen Original Townsite. Zoning: CC - Commercial Core. Applicant's Request: The applicant, Merit Investment Company, is requesting approval for a timeshare project at the Prospector ~0~~.1752 Lodge. The project requires conditional use approval ~`^'~J~ ~~ from P&Z pursuant to Section 24-3.3 as well as ~`^^`J approval to a two step subdivision exception review c,~h ~• for converting the Prospector to a lodge condominium and a timeshare use pursuant to Code Sections 20-23 and 20-24 of the Code. Project Summary: The Prospector Lodge currently consists of 19 newly renovated lodge units, with an average unit size of 756 square feet. If approved as a timeshare project 7 the 19 lodge units would each be split in 52 interests, J~W~S~~1'S; 3 one interest for each week of the year. Seven weeks will be reserved for maintenance while the ~''~ ~(5u,,,~w(~jremaininq 45 weeks will be sold in three week ~ of.~ timeshare. packages. (15 total packages to be sold for each unit.) Each three week package will contain a peak season winter ski week, a peak summer week and an off season week in either the spring or the fall. Planning Office Review: The following is a review of the Prospector Lodge timeshare application based on the 12 standards and review criteria established in Section 20-24 of the Code. 1. Right-To-Use. As required by the regulations, the Prospector timeshare interests will be fee ownership, not the prohibited right-to-use leases. 2. Integration. The project is purely residential, all units will be timeshared and the project is backed by 100 percent of the owners and the potential purchasers who have the property under a sales contract. 3. Marketing and Sales Techniques. As required, the applicant states that the marketing of the T(MfT2r ~n - ~+-~•P••+'S~S Prospector timeshare interests will not involve the giving of gifts in a deceptive P~k_ ~h,ur~s~ manner, no use of public malls or streets for ~ rn~ sales and no local phone solicitations. The 4""'ti" ~1~'!eJ` sales program will be run by Timber Run Realty Rdu2rtt~~_ in~ ,,,,,I,,o-~ out of Winter Park, Colorado, a company which Vi51~ has been involved in timeshare projects in Winter Park and Snowmass. Memo: Prospector Page Two August 22, 1983 Lodge Timeshare Timeshare sales will be directed at tonr;c+~ in the peak summer and winter seasons through the use of local magazines, newspapers and television. Low season sales. will be directed at several target C1{'~PG ~*+cluding Dallas, Houston and Chicago. National magazines and newspapers (Sports Illustrated, Ski, Gentlemen's Quarterly, Houston Post, etc.) will be the primary source of advertisement in these areas. Interested persons calling on a timeshare ad will be sent an information package. If the person calls again and is still interested, he will be invited to rnma visit the. project and may be offered a subsidy to help pay transportation and lodging costs. To ensure that this aspect of the program operates in a responsible way, the Planning Office recommends that the program be reviewed after it is in operation. The Prospector sales period should be relatively short in that there are only 15 packages tom berms sold for each of the 19 units. 2£S5 -{c~~.( f`°"="z 4~ Amenities. Common area amenities include a OWR~rS sun deck on the third floor, on-site parking ~U~h and a lobby area. Laundryfacilities are planned, but must be reviewed through the conditional use process. Individual units each have private decks, a hot tub and sauna, a wetbar and a masonry fireplace. All common areas and common amenities must be owned by the timeshare owners. 5. Parking. There is no mandatory parking requirement for a lodge use in the CC zone, but 17 under- ground spaces were required as part of a previous conditional use approval in order to replace spaces removed in th,~ renovation. The applicant states that only 6 paces are possible given the limitations of the parcel and the existing structure since one space was used for necessary mechanical space. The Planning Office feels that 16 spaces are adequate given that no parking is required in the CC zone and that the spaces are often not fully utilized in the winter. 6. Maintenance. Section 20-24(E)(6) requires a minimum of four weeks to be reserved for main- tenance due to the intensive, high impact nature of timeshare projects. (Two weeks in the spring and two weeks in the fall.) The applicant has agreed to provide seven maintenance weeks. The Planning Office feels that two weeks in the spring and two weeks in the fall must be reserved for maintenance only and no rentals~r other use besides maintenance should be allowed in this period. The remaining three of the seven weeks can be used f~r- maintenance in either the spring or fall as is necessary. ~~~ ~., ~,, Memo: Prospector Ldoge Timeshare Project Page Three- August 22, 1983 7. dget. The Prospector application included Bu , an itemized budget listing expenditures such as common electricity, snow removal, firewood, property taxes, interior maintenance, exterior building reserve fund and administrative costs. The total cost comes out to $8,306 per condominium unit (19 units), $553.73 per timesh nterest (1/15 interest in one unit) /~ 4 ~ and 138.43 uarterly for each timeshare l intere~ The budget system will use four banking accounts, including ~ a creneral operating; 2) an escrow for taxes; 3) an L~ ~Cd(-5 egcrow for furniture reserve; and 4) an PG~r^~-• for a building reserve. The budget estimates ~r~{v Qg{G(h, were based on the marketing entity's timeshare I experience in Winter Park and information from local property managers in Aspen. 8. Conversions. All existing structures converting to a timeshare use are required to be physically upgraded through expenditures equal to a minimum of 30 oercent of the fa'r market value of the property prior to conversion, unless the applicant demonstrates to the satisfaction of the City Council that funds previously expended have sufficiently upgraded the project. The applicant has submitted an appraisal and documentation that well over this amount has been spent for the renovation of the Prospector. 9. Escrow. De ooits or downpayments made in connection with the purc ase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent will be a title company in Aspen, a I~ P~~S neutral third party. The proposal states that g O-F~ no closing on any timeshare interest within a Prior- ~ unit will be completed until at least eight of C,10 SI(l~ the 15 packages are sold in that unit. 10. Management/Assessment Fees. As discussed in the budget, the Prospector's assessment fees are estimated at $138.43, quarterly. This amount includes necessary operating expenditures as well as money to be placed in a reserve fund for interior unit maintenance and repairs and exterior building maintenance and repairs. In addition, the applicant states that a x13$.43 deposit equal to a three month assessment fee may be required at the time of purchase for security in case the fees are not paid. The Planning Office feels this deposit should be mandatory and the applicant has agreed that it be mandatory. The application states that the assessment ~"~ 6~ o-~ ~n~Q( fees are due and payable to a schedule established ~lulW~ b d by the Board of Managers, the Board which 9~ t7P ~ handles the affairs of the Fractional Owners Association. As proposed, the Board will be (~UJ(~ PIGks j5'~" ford established 120 days after 75 percent of the l1O da~5 ~f 15°~ timeshare interests have been conveyed (or August 1, 1988, whichever i.s first). An Memo: Prospector Page Four August 22, 1983 ~,. ~. Timeshare Porject . -, .~ interim Board of Managers appointed by the developers will be established until this time. The declarant is responsible for all required assessment fees and expenditures related to the unsold units after the first timeshare package is sold. 11. Reserve. The quarterly assessment fee includes a collection for a reserve fund for interior and exterior repairs and maintenance. The Exterior Fund, estimated. at $10,000 oer year, will be used when necessary for such things as repainting, roof repairs and other structural repairs, landscape replacements and carpet repairs in common areas. The fund should build up sufficiently until it is needed in 5 - 10 years. The Interior Reserve will be used for individual unit repairs such as furniture, furnishings and appliance replacement. i ~~ The Reserve Fund, as proposed, may be reduced or suspended for a few years if 75 percent of the owners agree to the change. The Planning and Zoning Commission and the Planning Office feel that the Reserve Fund, even if unused, _ should be mandatory for a few years since this ~ fund is our major assurance that the high '~ impact, intensive timeshare use will not G~ deteriorate the lodge, but will ensure that the lodge is continually maintained and repaired. we recommend that the amount going into the ~0.f5 reserve fund not be adiusted until five years_ 5y _,~jr after the first closing on a timeshare package. At this time the owners can adjnsr he fund if 75 percent of the nwnPra and 100 nerc~enf of the mortgagees agree to the amendment. 12. Occupancy Standards. The Prospector units will be limited to s~occupants at any one time as the applicant feels that this is the maximum allowed to maintain an optimum comfort level. This is within the Building Code. occupancy standards. Lodge condominiumization regulations limit an owner's occupancy to 14 days during the winter peak season to ensure that lodge units remain available for short term use. A timeshare project must meet the lodge condominiumization requirements (Section 20-23) as well as the timeshare requirements (Section 20-24). If a timeshare purchaser in the Prospector buys more than two packages, he will be violating the 14 day restriction if he occupies the lodge during the ski weeks he purchased. Since the intent of the condo regulation was to ensure a short term use of the lodge, and since timeshare is by its very nature a short term use, the Planning Office feels this requirement can be extended from 14 to 0 days for the Prospector. (Limits a purchase packages.) The City Attorney's Office agrees that, when appropriate, this requirement can be determined inapplicable for the purposes of timesharing. Memo: Prospector Lodge Timeshare Project Page Five August 22, 1983. Referral Comments: The Attorney's Office commented that several clarifications and changes were needed in the timeshare documents. These comments are summarized below: 1. A title commitment is needed in addition to the warranty deed supplied. 2. The actual 50 year deed restriction for the employee unit must be reviewed and approved by the Attorney's Office as soon as possible. 3. Timber Run, the marketing entity, should be licensed in Aspen and should maintain a local office. 4. The timeshare owners are required to own the common areas and amenities - this is not reflected in the declaration, but should be. 5. The Board of Managers must designate a local managing agent. This is optional as submitted by the applicant. 6. One deed should be conveyed for each three week package so that weeks are never resold individually. 7. References should be made throughout the application that the project is subject to all the requirements of Section 20-24 as well as the State Timeshare Laws which are specified. 8. The financing for the Prospector must be expressly subject to all restrictions placed on the project. 9. The proposed unit amenities and the employee unit (#108) must be shown on the condominium plat. Engineering is requesting several minor plat amendments which are stated in the attached memorandum from Jay Hammond. It is also recommended that the landscaping plan contain the addition of the sidewalk spur on the west end of the alley and the irrigation of planting areas along the north and west frontages to maintain the trees in these locations. Jim Holland, Director of Parks, has conceptually approved the landscaping plan. The applicant is amending the landscaping plan from the plan ori- ginally approved through the conditional use review since the previous owner removed trees and constructed in areas which were to be preserved. The new plan retains all seven existing firs, includes sodding, several aspen clusters, a rock retaining wall, bricking the alley and a sprinkler system for maintaining the landscaping. Y. .~.../ Memo: Prospector Timeshare Project Page Six August 22, 1983 The Building Department stated that a conditional Certificate of Occupancy was issued on the Prospector in January, 1983 and was extended through June 30, 1983. The C.O. expired June 30th, as three conditions were still unsatisfied. These three conditions must still be met prior to issuance of a C.O.: 1. The required handicapped access must be approved by Council. P&Z recommended that this access requirement be waived. 2. The parking requirement must be reduced, from 17 to 16 or the additional space must be provided. P&Z approved the parking reduction to 16 spaces. 3. The landscaping plan must be approved by Council. P&Z approved the landscaping plan as a conditional use modification. The Finance Department stated that the plan manager or managing agent must apply for and show evidence to the City of a Colorado State Sales Tax License since City, County and State sales tax will be applicable to any short term rental of these units. The required real estate transfer tax will apply to initial and subsequent sales of the timeshare interests and will be collected as in any other real estate sale. The submission requirements for a timeshare appli- cation require a Disclosure Statement, Condominium Documents (Fractional Estate Declaration), Articles of Incorporation of the Fractional Owner's Association and the Bylaws of the Association as well as a sample purchase contract. The documents have been submitted by the applicant and reviewed by the Planning Office and Attorney's Office. Changes will need to be made to these documents as conditions are placed on the Prospector through the approval process. The Planning Office and Attorney's Office should both review and approve the final documents to ensure the changes and clarifications are made. Lodge Condomin- iumization Review: Most elements of the lodge condominiumization review are covered in the above timeshare review. The Planning Office is, however, recommending a Code amendment to the timeshare regulations which clarifies this situation by including the condominium regulations as guidelines (not requirements) in the timeshare review. The following is a review of the lodge condominium regulations/guidelines which were not covered in the previous timeshare review. 1. An affidavit has been submitted which verifies that the Prospector Lodge has not been in operation for three years but the quality and quantity of services, maintenance and management of the operation prior to this three year period is being improved in the new facility. ,~ , :, Memo: Prospector Page Seven August 22, 1983 Timeshare Project 2. The applicant is providing the required two pillows of employee housing. This unit (#108) must be deed restricted to the employee guidelines for 50 years and must be shown on the condominium plat. 3. Section 20-23(A)(1)(a) limits an owner's occu- pancy during the winter season to 14 days. It is recommended that this requirement be adjusted to 30 days for the Prospector so that more than two timeshare packages can be purchased and utilized by one owner. Conditional Use Review (Sec. 20-3.3): The primary purpose of requiring a conditional use review for a timeshare project is so that a public hearing will be set. A public hearing is not normally required in a two step subdivision exception process. Planning and Zoning Commis- sion and Planning Office Recommendation: Section 20-3.3 established three suitability require- ments to be used in evaluating a conditional use. These requirements are met since the project complies with the zoning code and is consistant with the objectives of the zoning code and the CC zone district. Also, the project is compatible with surrounding land uses in that it is located in an area with other lodge and commercial uses, blends in well with the neighborhood and will not significantly increase parking, noise or traffic impacts in the area. Laundry facilities are proposed as part of the Prospector. Since these facilities have not yet been reviewed as a modification of a conditional use, they would require another conditional use review. In order to avoid a second review and fee, the P&Z conceptually reviewed the applicant's plans for the laundry facilities, then tabled this review until further information is obtained. The Planning and Zoning Commission and the Planning Office feel that the applicant has submitted an excellent proposal for timesharing. Although we recommend approval, we also suggest that a very detailed list of conditions be established to ensure the project is carried out as it is proposed. With this in mind, the P&Z and the Planning Office recommend the approval of the Prospector Lodge timeshare application subject to the following conditions: 1. The applicant must provide a current title commitment from a title insurance company prior to City Council review. 2. The condominium plat must be amended to include the following: a. Reference encroachment license granted by Council for the rock facade stairs on the north frontage. f Memo: Prospector Timeshare Project Page Eight August 22, 1983 b. Indicate book and page of easements for the transformer in any vaults or pedestals on the property. c. Show common areas. d. Locate trash facilities. e. Add necessary approval certificates. f. Add unit amenities, including hot tubs and saunas. g. Designate employee unit #108. 3. The landscape plan should. be subject to the approval of the Parks Director. The plan should contain the following: a. The additional sidewalk spur on the west end of the alley. b. Irrigation of the planting areas along the west and north frontages to maintain trees in those locations. 4. The applicant must provide 16 on-site underground parking spaces. 5. The project must include amenities as proposed including a sundeck on the third floor, on- site parking, lobby, and unit amenities including a hot tub, sauna, wet bar and masonry fireplace. l./ Occupancy by a timeshare owner is limited to v 30 days b~ ~ '~CC• (g t iY~Gtrct~. ~';-l~ 7. No prohibited marketing practices will be allowed including the giving of gifts in a deceptive manner, use of public malls or streets for sale, and phone solicitations to visitors at other lodges. 8. The 19 renovated lodge units found in the Prospector must each be split into 52 weeks. Seven must be reserved for the maintenance of the project. Four of these seven weeks must be used exclusively for maintenance with no rentals or other uses allowed. Two of the four weeks must be in the spring while the remaining two weeks must be in the fall. The remaining 45 weeks must be sold as proposed in three week timeshare packages. EaFKt~xhree week 3 ~ ,v,~t•,,,,y package ~st,~ontain a peak^season s week, a t"'~°"'ti peak sum~er~week, and an off season week in either the spring or the fall. 9. No right-to-use timeshare leasehold will be allowed. All Prospector timeshare interest sales must be on a fee ownership basis. p 'f = il/ Memo: Prospector Page Nine August 22, 1983 Timeshare Project 10. Timber Run Realty and Terry Liming as Plan Manager will be responsible for the marketing program for the Prospector. A local contact must be identified to the City of Aspen for communication purposes. The marketing program identified in the timeshare application must be adhered to. 11. Subsidies for transportation and lodging will be allowed for parties interested in visiting the Prospector Timeshare Project. The Planning Office must review this subsidy program six (,~-'~-.5 after the program is initiated to ~h~ ensure that it is operating in the responsible ~• way in which it was proposed. ~~ 12. As proposed, the applicant must establish four banking accounts for operation of the budget system. Proof that these accounts have been established must be documented to the City of q~,I/~ Aspen when such accounts are established. "'13. The issuance o. a ~ertifica e of Occupancy will be suffi Tent to mee the r quiremen of Section 20-2 (F)(2) of t Code egardi the useful lif of mech~ii_ 1 and ele tric e~u~pme in the Prospector. 14. The mandatory two month deposit and any downpayments made in conjunction with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent must be a title company in Aspen, a neutral third party. 15. No closing will be allowed until at least 1k eight of the total 15 timeshare packages are Vy. sold for any given unit. 16. When closing occurs, the declarant as/well as the new timeshare owners must then begin to pay their quarterly assessment fees., For any unsold units the developer is responsible for operating costs. '~ 17 The Interior Reserve Fund and the Exterior Reserve Fund, both expenditures itemized in the maintenance/ assessment fees, cannot be reduced or suspended during the first five years after the first closing. All other expenditure items used in the calculation of the assessment fees can be adjusted with 9-5- ~- ~ -f{~ ~CCVi~ D~ (Pll~rS • g The money designated for the reserve funds must always be held in escrow to be used as needed for interior and exte io r pairs and maintenance. Qp~' ~afcd monies go1~ tick ++,e p~uq+.ed , r~ser~.~.''~l, ea~+m..'~d. •~ x~o,oeo ems' YQ^~1 c+.ne+ ~~ reds °r (,li MiM VA'f.1 '~~ ~y~~ 41CVM41l<C~CQ LSD X00. 18. The Prospector timeshare units are limited to six occupants at any one time. 19. The actual 50 year deed restriction for the employee unit (#108) must be reviewed and approved by the Attorney's Office as soon as possible. Memo: Prospector Page Ten August 22, 1983 Timeshare Project 20. The. owners are required to own the common areas and common amenities in the Prospector Lodge and this must be reflected in the appropriate documents.. 21. The Board of Managers must designate a local managing agent. 22. One deed must be conveyed for each three week package so that weeks are never sold individually. 23. References must be made throughout the application and attached exhibits to indicate that the project is subject to all of the requirements in Section 20-24 as well as the State Timeshare Laws. which are already specified in the application and attachments. 24. The financing for the Prospector must be expressly subject to all restrictions placed ~~`~ on the project. (~ J 25 The applicant must meet the last unmet condition ~~ of the Certificate of Occupancy which states that the required handicapped access must be approved by Council. The P&Z recommends that ~~~~~ ~~,r~>~the handicapped access requirement be waived. 26. The plan manager or the managing agent must. apply for and show evidence to the City of a Colorado State Sales Tax License since the City, County and State sales tax will be applicable to any short term rental of these units. A required real estate transfer tax will apply to' initial and subsequent sales of the timeshare interest and will be collected as is done in any other real estate transaction. 27. The Prospector Disclosure Statement, the Prospector Condominium Documents entitled Fractional Estate Declaration, the Prospector Articles of Incorporation of the Fractional Owners Association, and. the By-Laws of the Association a,s well as a sample purchase contract must all be amended to reflect the conditions of approval placed on the Prospector through the approval process. The Planning Office and the Attorney's Office must both review and approve the final documents to ensure the changes and clarifications are accurately made. 28. Any updating or amending of the approved timeshare documents must be approved through the City according to the requirements of Section 20-24 of the subdivision regulations. 29. declarant may rent unsold units but the rental money must go toward any maintenance which may be necessary as a result of the unit's use as a rental. a ~ . Memo: Prospector Page Eleven August 22, 1983 .~ Timeshare Project 30. The applicant must clarify throughout the timeshare application references to timeshare units versus references to timeshare interests. 31. 30 percent of the qualified voters (present or represented by proxy) of the Fractional Owners Association must be present to obtain a quorum. 32. The owners may not lease the common elements or amenities (excluding the employee unit) which they own as was proposed in the application. ---j33. To ensure compliance with the proposed marketing program, the applicant must post with the City suitable security in the amount of $20,000 cash~~a 520,.000 irrevocable letter of credit or00 suret ._"Thio Gi_'( CoUnci~ G~(~5 ~Lke ab~ 34. Full details of the RCI exchange program (cost, procedures, other projects involved, Confirmation percentages, etc.) must be provided to the purchasers of Prospector timeshare interests. 35. The applicant, not the applicant's attorney, should sign the timeshare application. ~~ ~ c~._ ~~ ~ ~tl 1T ~Q ~ ti NON I ~ p -~ I~~L „'IA~~ l f ,i Mt ~ . (~.~ ~ q F P~ G\ • ~ A ~ ~4 ~~ .rte p,I ~ - ~^-0 ~ ~.,.,k --.,oc ti u-L~-. ~ S i we ¢n.¢_ ~ S r ~~[ ~gn„La.Q ~c,,.,-s~J --1,~~+.iC.c-; )c .r-~Jn,o/u=~~-~ ~~ div.-~..~ - Gi~1-_='~~ w~,~s i ~f~,-•~r~~,.,..~~L( h~ ~~` ~/" ~~ ~1 it ~ n~.J~-; Ga k ~ ~^', •^~[, ,, ~ ~ ~Y~ ~..Ye...~_ „ ti ~ t ~,,..~n,v,.~.~ 1 ~ ~ w y-'~ I,~ ~ \ kV II //nn ~ ~ 1~ CMS ~ So ~-J~ ~jQf o ..Q.. I' i~~,kr.,\s ~1\tc.~ lkc,SesS,~ S~o~~, ~~cK,..o~Ke~ l,~As ~4.c~ AJ~-~^~L+~ ~. a~,.~~a ink-.$,9- .---~'~ ,;'~A ~ ~~s~R. ~~BR.~~S~, ~o SS~ g~~.~ ~ e 1 ~ i n 7 tree Ceti \.i~e,..ce ~0..9_:h~~ ~ , l~ =~ ~ Po R,. ~. Aspen/Pitkin Planning Office 130 south galena street aspen., Colorado 81611 September 13, 1983 Merit Investment Company Inc. c/o Gideon I. Kaufman Box 1001 611 West Main Street Aspen, Colorado 81611 RE: "Additional Billing" on Prospector Lodge Timeshare and Conditional Use Project Enclosed is the "Additional Billing" for the time spent over the allocated hours on the Prospector Timeshare and Conditional Use project. There are. 16 hours allocated for a timeshare and condi- tional use process and 44.5 hours were spent on this project. Therefore, 28.5 hours at a rate of $90.00 per hour has been charged for a total amount due of $.2,565.00. Should you have any question in regard to this bill, please do not hesitate to call. Sincerely, ~~ ~~~ Alice Davis, Planner Aspen/Pitkin Planning Office AD:klm Enclosure RESOLUTION OF THE ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING THE APPROVAL OF THE PROSPECTOR LODGE TIMESHARE PROJECT PURSUANT TO SECTION 20-24, TIMESHARE REGULATIONS, SECTION 24-3.3, CONDITIONAL USE REVIEW AND SECTION 20-23, LODGE CONDOMINIUMIZATION Resolution No. 83 - 8 WHEREAS, the Aspen Planning and Zoning Commission held a public hearing on August 2, 1983 at which time the Prospector Timeshare Project, located at 301 East Nyman Avenue (Lots A, B, C, D, Block 82, Aspen Original Townsite), was considered, and WHEREAS, since the project is a conditional use in the applicable CC zone district and is also considered a subdivision and condominiumization,the application had to comply with Sections 24-3.3 (conditional use review), 20-23 (lodge condominiumization), , and 20-24 (timesharing) of the City Code, and WHEREAS the application does comply with all applicable requirements of the City Code. NOW, THEREFORE, BE IT RESOLVED by the Aspen Planning and s Zoning Commission that it does hereby recommend that the City Council approve the proposed Prospector Timeshare Project subject to tjze following conditions: 1. The applicant must provide a current title commitment from a title insurance company prior to City Council review. 2. The condominium plat must be amended to include the following: a. Reference encroachment license granted by Council for the rock facade stairs on the north frontage. b. Indicate book and page of easements for the transformer in any vaults or pedestals on the property. c. Show common areas. d. Locate trash facilities. e. Add necessary approval certificates. f. Add unit amenities, including hot tubs and saunas. g. Designate employee unit #108. -2- 3. The landscape plat. should be subject to the approval of the Parks Director. The plan should contain the following: a. The additional sidewalk spur on the west end of the alley. b. Irrigation of the planting areas-along the west and north frontages to maintain trees in those locations. 4. The applicant must provide 16 on-site underground parking spaces. 5. The project must include amenities as proposed including a sundeck on the third floor, on- site parking, lobby, and unit amenities including a hot tub, sauna, wet bar and masonry fireplace. 6. Occupancy by a timeshare owner is limited to 30 days in the winter season. 7. No prohibited marketing practices will be allowed including the giving of gifts in a deceptive manner, use of public malls or streets for sale, and phone solicitations • to visitors at other lodges. 8. The 19 renovated lodge units found in the Prospector must each be split into 52 weeks. Seven must be reserved for the maintenance of the project. Four of these seven weeks must be used exclusively for maintenance with no rentals or other uses allowed. Two of the four weeks must be in the spring while the remaining two weeks must be in the fall. The remaining 45 weeks must be sold as proposed in three week timeshare packages. Each three week package must contain a peak season ski week, a peak summer week, and an off season week in either the spring or the fall. 9. No right-to-use timeshare leasehold will be allowed. All Prospector timeshare interest sales must be on a fee ownership basis. • 10. Timber Run Realty and Terry. Liming as Plan .Manager will be responsible for the marketing program for the Prospector. A local contact must be identified to the City of Aspen for communication purposes. The marketing program identified in the timeshare application must be adhered to. 11. Subsidies for transportation and lodging will be allowed for parties interested in visiting the Prospector Timeshare Project. The Planning Office must review this subsidy program six months after the program is mitigated to ensure that it is operating in the responsible way in which it was proposed. 12. As proposed, the applicant must establish four banking accounts for operation of the budget system. Proof that these accounts have been established must be documented to the City of Aspen when such accounts are established. ~. ~.. -3- 13. The issuance of a Certificate of Occupancy will be sufficient to meet the requirements of Section 20-24(F)(2) of the Code. 14. Deposits or downpayments made in conjunction with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent must be a title company in Aspen, a neutral third party. 15. No closing will be allowed until at least eight of the total 15 timeshare packages are sold for any given unit. 16. When closing occurs, the declarant as well as the new timeshare owners must then begin to pay their quarterly assessment fees. For any unsold units the developer is responsible for 'operating costs. 17. The Interior Reserve Fund and the Exterior Reserve Fund, both expenditures itemized in the maintenance/ assessment fees, cannot be reduced or suspended during the first five years after the first closing. All other expenditure items used in the calculation of the assessment fees can be adjusted with 75 percent of the owners and 100 percent of the mortgagees approving the adjustment. The money designated for the reserve funds must always be held in escrow to be used as needed for interior and exterior repairs and maintenance. 18. The Prospector timeshare units are limited to six_occupants at any one time. - 19. The actual SO year deed restriction for the employee unit (#108) must be reviewed and approved by the Attorney's Office as soon as possible. 20. The owners are required to own the common areas and common amenities in the Prospector Lodge and this must be reflected in the appropriate documents. 21. The Board of Managers must designate a managing agent, a local agent. 22. One deed must be conveyed for each three week package so that weeks are never sold individually. 23. References must be made throughout the application and attached exhibits to indicate that the project is subject to all of the requirements in Section 20-24 as well as the State Timeshare Laws which are already specified in the application and attachments. r 4 -9- 24. The financing for the Prospector must be expressly subject to all restrictions placed on the project. 25. The applicant must meet the original three conditions of the Certificate of Occupancy issued by the Building Department. These three conditions include: a. The required handicapped access must be approved by Council. The P&2 recommends that the handicapped access requirement be waived. b. The parking requirements must be reduced with Council approval from 17 to 16 spaces or the additional space must be provided. The P&Z approved that the .parking requirement be 16 spaces. c. The landscaping plans must be approved by City Council. P&Z approved the landscaping plan. 26. The plan manager or the managing agent must apply for and show evidence to the City of a Colorado State Sales Tax License since the City, County and State sales tax will be applicable to any short term rental of these units. A required real estate transfer tax will apply to initial and subsequent sales of the timeshare interest and will be collected as is done in any other real estate transaction. 27. The Prospector Disclosure Statement, the Prospector Condominium Documents entitled Fractional Estate Declaration, the Prospector Articles of Incorporation of the Fractional Owners Association, and the By-Laws of the Association as well as a sample purchase contract must all be amended to reflect the conditions of approval placed on the Prospector through the approval process. The Planning Office and the Attorney's Office must both Yeview and approve the final documents to ensure the .changes and clarifications are .accurately made: 28. Any updating or amending of the approved timeshare documents must be approved through the City according to the requirements of Section 20-'L4 of the subdivision regulations. 29. The declarant must be responsible for all required assessment fees and expenditures related to the unsold timeshare units. The declarant may rent unsold units but the rental money must qo toward any maintenance which may be necessary as a result of the unit's use as a rental. 30. The applicant must provide further information on the financing to be offered prior to Council review. 31. The applicant must clarify throughout the timeshare application references to timeshare units versus references to timeshare interests. ~ _ ~ ~. municipalities with timeshare experience, a strong emphasis has been placed on the necessity for a marketing group with past timeshare experience due to the complexity and uniqueness found in a timeshare project and the risk taken with an inexperience marketing entity. d. The lack of on-site management for the timeshare project. The short-term nature of timeshare ownership would be more effectively handled by on- site management proposed. 3. With respect to the general intents and purposes of Chapters 20 and 24 of the Code, the Planning and Zoning Commission found the overall proposal to be a projec t with too great an impact on the neighborhood as well as finding that the impacts could not be sufficiently mitigated. The project has therefore been determined to be incompatible and inappropriate in this location. APPROVED by the Aspen Planning and Zoning Commission at their regular meeting on September 6, 1983. ATTEST: ~~~, ~~.~ Sally Ha s Deputy Clerk ASPEN PLANNING AND ZONING COMMISSION By ~~ '%~~ Perry Ha ey, Chairman i - 3 - ,~ ~, RESOLUTION OF THE ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING THE APPROVAL OF THE PROSPECTOR LODGE TIMESHARE PROJECT PURSUANT TO SECTION 20-24, TIMESHARE REGULATIONS, SECTION 24-3.3, CONDITIONAL USE REVIEW AND SECTION 20-23, LODGE CONDOMINIUMIZATION Resolution No. 83 - WHEREAS, the Aspen Planning and Zoning Commission held a public hearing on August 2, 1983 at which time the Prospector Timeshare Project, located at 301 East Hyman Avenue (Lots A, B, C, D, Block 82, Aspen Original Townsite), was considered, and WHEREAS, since the project is a conditional use in the applicable CC zone district and is also considered a subdivision and condominiumization,the application had to comply with Sections 24-3.3 (conditional use review), 20-23 (lodge condominiumization), and 20-24 (timesharing) of the City Code, and WHEREAS the application does comply with all applicable requirements of the City Code. NOW, THEREFORE, BE IT RESOLVED by the Aspen Planning and Zoning Commission that it does hereby recommend that the City Council approve the proposed Prospector Timeshare Project subject to the following conditions: 1. The applicant must provide a current title commitment from a title insurance company prior to City Council review. 2. The condominium plat must be amended to include the following: a. Reference encroachment license granted by Council for the rock facade stairs on the north frontage. b. Indicate book and page of easements for the transformer in any vaults or pedestals on the property. c. Show common areas. d. Locate trash facilities. e. Add necessary approval certificates. f. Add unit amenities, including hot tubs and saunas. g. Designate employee unit #108. fi ~...' - 2- ., 3. The landscape plan should be subject to the approval of the Parks Director. The plan should contain the following: a. The additional sidewalk spur on the west end of the alley. b. Irrigation of the planting areas along the west and north frontages to maintain trees in those locations. 4. The applicant must provide 16 on-site underground parking spaces. 5. The project must include amenities as proposed including a sundeck on the third floor, on- site parking, lobby, and unit amenities including a hot tub, sauna, wet bar and masonry fireplace. 6. Occupancy by a timeshare owner is limited to 30 days in the winter season. 7. No prohibited marketing practices will be allowed including the giving of gifts in a deceptive manner, use of public malls or streets for sale, and phone solicitations to visitors at other lodges. 8. The 19 renovated lodge units found in the Prospector must each be split into 52 weeks. Seven must be reserved for the maintenance of the project. Four of these seven weeks must be used exclusively for maintenance with no rentals or other uses allowed. Two of the four weeks must be in the spring while the remaining two weeks must be in the fall. The remaining 45 weeks must be sold as proposed in three week timeshare packages. Each three week package must contain a peak season ski week, a peak summer week, and an off season week in either the spring or the fall. 9. No right-to-use timeshare leasehold will be allowed. All Prospector timeshare interest sales must be on a fee ownership basis. 10. Timber Run Realty and Terry Liming as Plan Manager will be responsible for the marketing program for the Prospector. A local contact must be identified to the City of Aspen for communication purposes. The marketing program identified in the timeshare application must be adhered to. 11. Subsidies for transportation and lodging will be allowed for parties interested in visiting the Prospector Timeshare Project. The Planning Office must review this subsidy program six months after the program is initiated to ensure that it is operating in the responsible way in which it was proposed. 12. As proposed, the applicant must establish four banking accounts for operation of the budget system. Proof that these accounts have been established must be documented to the City of Aspen when such accounts are established. o~. -3- 13. The issuance of a Certificate of Occupancy will be sufficient to meet the requirements of Section 20-24(F)(2) of the Code. 14. Deposits or downpayments made in conjunction with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent must be a title company in Aspen, a neutral third party. 15. No closing will be allowed until at least eight of the total 15 timeshare packages are sold for any given unit. 16. When closing occurs, the declarant as well as the new timeshare owners must then begin to pay their quarterly assessment fees. For any unsold units the developer is responsible for operating costs. 17. The Interior Reserve Fund and the Exterior Reserve Fund, both expenditures itemized in the maintenance/ assessment fees, cannot be reduced or suspended during the first five years after the first closing. All other expenditure items used in the calculation of the assessment fees can be adjusted with 75 percent of the owners and 100 percent of the mortgagees approving the adjustment. The money designated for the reserve funds must always be held in escrow to be used as needed for interior and exterior repairs and maintenance. 18. The Prospector timeshare units are limited to six occupants at any one time. 19. The actual 50 year deed restriction for the employee unit (#108) must be reviewed and approved by the Attorney's Office as soon as possible. 20. The owners are required to own the common areas and common amenities in the Prospector Lodge and this must be reflected in the appropriate documents. 21. The Board of Managers must designate a managing agent, a local agent. 22. One deed must be conveyed for each three week package so that weeks are never sold individually. 23. References must be made throughout the application and attached exhibits to indicate that the project is subject to all of the requirements in Section 20-24 as well as the State Timeshare Laws which are already specified in the application and attachments. /^~ ~~ -4- r~~ w.i 24. The financing for the Prospector must be expressly subject to all restrictions placed on the project. 25. The applicant must meet the original three conditions of the Certificate of Occupancy issued by the Building Department. These three conditions include: a. The required handicapped access must be approved by Council. The P&Z recommends that the handicapped access requirement be waived. b. The parking requirements must be reduced with Council approval from 17 to 16 spaces or the additional space must be provided. The P&Z approved that the parking requirement be 16 spaces. c. The landscaping plans must be approved by City Council. P&Z approved the landscaping plan. 26. The plan manager or the managing agent must apply for and show evidence to the City of a Colorado State Sales Tax License since the City, County and State sales tax will be applicable to any short term rental of these units. A required real estate transfer tax will apply to initial and subsequent sales of the timeshare interest and will be collected as is done in any other real estate transaction. 27. The Prospector Disclosure Statement, the Prospector Condominium Documents entitled Fractional Estate Declaration, the Prospector Articles of Incorporation of the Fractional Owners Association, and the By-Laws of the Association as well as a sample purchase contract must all be amended to reflect the conditions of approval placed on the Prospector through the approval process. The Planning Office and the Attorney's Office must both review and approve the final documents to ensure the changes and clarifications are accurately made. 28. Any updating or amending of the approved timeshare documents must be approved through the City according to the requirements of Section 20-24 of the subdivision regulations. 29. The declarant must be responsible for all required assessment fees and expenditures related to the unsold timeshare units. The declarant may rent unsold units but the rental money must go toward any maintenance which may be necessary as a result of the unit's use as a rental. 30. The applicant must provide further information on the financing to be offered prior to Council review. 31. The applicant must clarify throughout the timeshare application references to timeshare units versus references to timeshare interests. ,, ~~ -5- 32. 30 percent of the qualified voters (present or represented by proxy) of the Fractional Owners Association must be present to obtain a quorum. 33. The owners may not lease the common elements or amenities (excluding the employee unit) which they own as was proposed in the application. 34. To ensure compliance with the proposed marketing program, the applicant must post with the City suitable security in the amount of $20,000 cash, a $20,000 irrevocable letter of credit or a $100,000 surety bond. 35. Full details of the RCI exchange program (cost, procedures, other projects involved, confirmation percentages, etc.) must be provided to the purchasers of Prospector timeshare interests. 36. The applicant, not the applicant's attorney, should sign the timeshare application. 37. An affidavit regarding the management, services and maintenance offered when the Prospector was previously in operation should be submitted to verify that the services to be offered in the timeshare project are of equal or greater quality and quantity. 38. Further conditions may need to be placed on the Prospector timeshare approval subject to the presentation of the proposed laundry facilities. APPROVED by the Aspen Planning and Zoning Commission at their regular meeting on August 2, 1983. ASPEN PLANNING AND ZONING COMMISSION By: ~ 7i C ~L W Perry H ~vey, Chairm/~n/ ATTEST: Jo Ann Brooks, Deputy ity Clerk MEMORANDUM T0: FROM: RE: DATE: Aspen Planning and Zoning Commission Alice Davis, Planning Office Prospector Lodge - Conditional Use Review and Subdivision Exception Review for Timesharing - Public Hearing August 2, 1983 Location: 301 East Hyman Avenue - Lots A, B, C, D, Block 82, Aspen Original Townsite. Zoning: CC - Commercial Core. Applicant's Request: The applicant, Merit Investment Company, is requesting approval for a timeshare project at the Prospector Lodge. The project requires conditional use approval from P&Z pursuant to Section 24-3.3 as well as approval to a two step subdivision exception review for converting the Prospector to a lodge condominium and a timeshare use pursuant to Code Sections 20-23 and 20-24 of the Code. Project Summary: The Prospector Lodge currently consists of 19 newly renovated lodge units, with an average unit size of 756 square feet. If approved as a timeshare project the 19 lodge units would each be split in 52 interests, one interest for each week of the year. Seven weeks will be reserved for maintenance while the remaining 45 weeks will be sold in three week timeshare packages. (15 total packages to be sold.) Each three week package will contain a peak season winter ski week, a peak summer week and an off season week in either the spring or the fall. Planning Office Review: The following is a review of the Prospector Lodge timeshare application based on the 12 standards and review criteria established in Section 20-24 of the Code. 1. Right-To-Use. As required by the regulations, the Prospector timeshare interests will be fee ownership, not the prohibited right-to-use leases. 2. Integration. The project is purely residential, all units will be timeshared and the project is backed by 100 percent of the owners and the potential purchasers who have the property under a sales contract. 3. Marketing and Sales Techniques. As required, the applicants states that the marketing of the Prospector timeshare interests will not involve the giving of gifts, no use of public malls or streets for sales and no phone solicitations. The sales program will be run by Timber Run Realty out of Winter Park, Colorado, a company which has been involved in timeshare projects in Winter Park and Snowmass. 1 i n Memo: Prospector Timeshare Project Page Two August 2, 1983 Timeshare sales will be directed at tourists in the peak summer and winter seasons through the use of local magazines, newspapers and television. Low season sales will be directed at several target cities including Dallas, Houston and Chicago. National magazines and newspapers (Sports Illustrated, Ski, Gentlemen's Quarterly, Houston Post, etc.) will be the primary source of advertisement in these areas. Interested persons calling on a timeshare ad will be sent an information package. If the person calls again and is still interested, he will be invited to come visit the project and may be offered a subsidy to help pay transportation and lodging costs. Although this subsidy may be interpreted as "the giving of a gift" (a prohibited sales practice in Section 20-24) the Planning Office feels it is within the original intent of the adopted Timeshare Ordinance as it is in no way deceptive. To ensure that this aspect of the program operates in a responsible way, the Planning Office recommends that the program be reviewed after it is in operation. The Prospector sales period should be relatively short in that there are only 15 packages to be sold for each of the 19 units. 4. Amenities. Common area amenities include a sun deck on the third floor, on-site parking and a lobby area. Laundry facilities are planned, but must be reviewed through the conditional use process. Individual units each have private decks, a hot tub and sauna, a wetbar and a masonry fireplace. All common areas and common amenities must be owned by the fractional owners association. 5. Parking. There is no mandatory parking requirement for a lodge use in the CC zone, but 17 under- ground spaces were required as part of a previous conditional use approval in order to replace spaces removed in the renovation. The applicant states that only 16 spaces are possible given the limitations of the parcel and the existing structure since one space was used for necessary mechanical space. The Planning Office feels that 16 spaces are adequate given that no parking is required in the CC zone and that the spaces are often not fully utilized in the winter. 6. Maintenance. Section 20-24(E)(6) requires a minimum of four weeks to be reserved for main- tenance due to the intensive, high impact nature of timeshare projects. (Two weeks in the spring and two weeks in the fall.) The applicant has agreed to provide seven maintenance weeks. The Planning Office feels that two weeks in the spring and two weeks in the fall must be reserved for maintenance only and no rentals or other use besides maintenance should be allowed in this period. The remaining three weeks can be used for maintenance in either the spring or fall as is necessary. .~. ,~.~ Memo: Prospector Timeshare Project Page Three August 2, 1983 7. Budget. The Prospector application included an itemized budget listing expenditures such as common electricity, snow removal, firewood, property taxes, interior maintenance, exterior building reserve fund and administrative costs. The total cost comes out to $8,306 per condominium unit (19 units), $553.73 per timeshare interest (1/15 interest in one unit) and $138.43 quarterly for each timeshare interest. The budget system will use four banking accounts, including 1) a general operating; 2) an escrow for taxes; 3) an excrow for furniture reserve; and 4) an escrow for a building reserve. The budget estimates were based on the marketing entity's timeshare experience in Winter Park and information from local property managers in Aspen. 8. Conversions. All existing structures converting to a timeshare use are required to be physically upgraded through expenditures equal to a minimum of 30 percent of the fair market value of the property prior to conversion, unless the applicant demonstrates to the satisfaction of the City Council that funds previously expended have sufficiently upgraded the project. The applicant has submitted an appraisal and documentation that well over this amount has been spent for the renovation of the Prospector. The applicant still must, however, provide the information required in Section 20-24(F)(2) on the present condition of all structural components and mechanical and electrical installations materials and the expected useful life of these items. 9. Escrow. Deposits or downpayments made in connection with the purchase of a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, whichever is later. The escrow agent will be a title company in Aspen, a neutral third party. The proposal states that no C.O.s will be issued for any unit until at least eight of the 15 timeshare packages are sold. The applicant should prove that eight packages are enough to guarantee the economic success of the project. 10. Management/Assessment Fees. As discussed in the budget, the Prospector's assessment fees are estimated at $138.43, quarterly. This amount includes necessary operating expenditures as well as money to be placed in a reserve fund for interior unit maintenance and repairs and exterior building maintenance and repairs. In addition, the applicant states that a deposit equal to a three month assessment fee may be required at the time of purchase for security in case the fees are not paid. The Planning Office feels this deposit should be mandatory. The application states that the assessment fees are due and payable to a schedule established by the Board of Managers, the Board which handles the affairs of the Fractional Owners Association. As proposed, the Board will be established 120 days after 75 percent of the Memo: Prospector Timeshare Project Page Four August 2, 1983 timeshare interests have been conveyed (or August 1, 1988, whichever is first). The declarant does not have to pay assessment fees on the unsold units until the Board is established. The Planning Office feels that the Board should be established within 30 days after the C.O.s are issued for the first eight packages conveyed since owners may actually be using the project at this time. The declarant and the new owners should not have to pay the monthly fees until the Board is formed, but the initial deposit can be collected at the time of sale and placed in the escrow with the downpayments. The total number of Board members should be submitted by the applicant. The Planning Office suggests that approximately 75 percent of the members be fractional estate owners - the applicant states that members do not have to be owners. 11. Reserve. The quarterly assessment fee includes a collection for a reserve fund for interior and exterior repairs and. maintenance. The Exterior Fund, estimated at $10,000 per year, will be used when necessary for such things as repainting, roof repairs and other structural repairs, landscape replacements and carpet repairs in common areas. The fund should build up sufficiently until it is needed in 5 - 10 years. The Interior Reserve will be used for individual unit repairs such as furniture, furnishings and appliance replacement. The Reserve Fund, as proposed, may be reduced or suspended for a few years if 75 percent of the owners agree to the change. The Planning Office feels that the Reserve Fund, even if unused, should remain and continue and only be allowed to be increased. This fund is our major assurance that the high impact, intensive timeshare use will not deteriorate the lodge, but will ensure that the lodge is continually maintained and repaired. The total assessment fees can be adjusted through other expenditures with 75 percent owner approval, but the money designated for the reserve fund must always be held in escrow to be used as needed for interior and exterior repairs and maintenance. 12. Occupancy Standards. The Prospector units will be limited to six occupants at any one time as the applicant feels that this is the maximum allowed to maintain an optimum comfort level. This is within the Building Code occupancy standards. Lodge condominiumization regulations limit an owner's occupancy to 14 days during the winter peak season to ensure that lodge units remain available for short term use. A timeshare project must meet the lodge condominiumization requirements (Section 20-23) as well as the timeshare requirements (Section 20-24). If a timeshare purchaser in the Prospector buys ..+. •.. w' ~....v Memo: Prospector Timeshare Project Page Five August 2, 1983 more than two packages, he will be violating the 14 day restriction if he occupies the lodge during the ski weeks he purchased. Since the intent of the condo regulation was to ensure a short term use of the lodge, and since timeshare is by its very nature a short term use, the Planning Office feels this requirement can be extended from 14 to 30 days for the Prospector. (Limits a purchase to 4 packages.) The City Attorney's Office agrees that, when appropriate, this requirement can be determined inapplicable for the purposes of timesharing. Referral Comments: The Attorney's Office commented that several clarifications and changes were needed in the timeshare documents. These comments are summarized below: 1. A title commitment is needed in addition to the warranty deed supplied. 2. The actual 50 year deed restriction for the employee unit must be reviewed and approved by the Attorney's Office as soon as possible. 3. Timber Run, the marketing entity, should be licensed in Aspen and should maintain a local office. 4. The Fractional Owners Association is required to own the common areas and amenities - this is not reflected in the declaration, but should be. 5. The Board of Managers must designate a managing agent (preferably a local one). This is optional as submitted by the applicant. 6. One deed should be conveyed for each three week package so that weeks are never resold individually. 7. References should be made throughout the application that the project is subject to all the requirements of Section 20-24 as well as the State Timeshare Laws which are specified. 8. The financing for the Prospector must be expressly subject to all restrictions placed on the project. 9. The proposed unit amenities and the employee unit (#108) must be shown on the condominium plat. Engineering is requesting several minor plat amendments which are stated in the attached memorandum from Jay Hammond. It is also recommended that the landscaping plan contain the addition of the sidewalk spur on the west end of the alley and the irrigation of planting areas along the north and west frontages to maintain the trees in these locations. Engineering recommends 20 on-site parking spaces. ~~ w.~ Memo: Prospector Timeshare Project Page Six August 2, 1983 Jim Holland, Director of Parks, has conceptually approved the landscaping plan. The applicant is amending the landscaping plan from the plan originally approved through the conditional use review since the previous owner removed trees and constructed in areas which were to be preserved. The new plan retains all seven existing firs, includes sodding, several aspen clusters, a rock retaining wall, bricking the alley and a sprinkler system for main- taining the landscaping. The Building Department stated that a conditional Certificate of Occupancy was issued on the Prospector in January, 1983 and was extended through June 30, 1983. The C.O. expired June 30th, as three conditions were still unsatisfied. These three conditions must still be met prior to issuance of a C.O.: 1. The required handicapped access must be approved by Council. 2. The parking requirement must be reduced, with Council approval, from 17 to 16 or the additional space must be provided. 3. The landscaping plan must be approved by Council. The Finance Department stated that the plan manager or managing agent must apply for and show evidence to the City of a Colorado State Sales Tax License since City, County and State sales tax will be applicable to any short term rental of these units. The required real estate transfer tax will apply to initial and subsequent sales of the timeshare interests and will be collected as in any other real estate sale. The submission requirements for a timeshare appli- cation require a Disclosure Statement, Condominium Documents (Fractional Estate Declaration), Articles of Incorporation of the Fractional Owner's Association and the Bylaws of the Association as well as a sample purchase contract. The documents have been submitted by the applicant and reviewed by the Planning Office and Attorney's Office. Changes will need to be made to these documents as conditions are placed on the Prospector through the approval process. The Planning Office and Attorney's Office should both review and approve the final documents to ensure the changes and clarifications are made. Lodge Condomin- iumization Review: It is unclear, at this point, whether or not a timeshare project requires condominiumization approval. Most elements of the lodge condominiumi- zation review are covered in the above timeshare review. The Planning Office is, however, recommending a Code amendment to the timeshare regulations which clarifies this situation by including the condominium regulations as guidelines (not requirements) in the timeshare review. The following is a review of the lodge condominium regulations/guidelines which were not covered in the previous timeshare review. Memo: Prospector Page Seven August 2, 1983 ...- Timeshare Project ., ..~ 1. An affidavit has been submitted which verifies that the Prospector Lodge has not been in operation for three years, therefore the quality and quantity of services, maintenance and management of the new facility will be an improvement over those offered in the past three years. The Planning Office feels that the applicant should, however, verify that these services are equal or better than those previously provided when the lodge was in operation. 2. The applicant is providing the required two pillows of employee housing. This unit (#108) must be deed restricted to the employee guidelines for 50 years and must be shown on the condominium plat. 3. Section 20-23(A)(1)(a) limits an owner's occu- pancy during the winter season to 14 days. It is recommended that this requirement be adjusted to 30 days for the Prospector so that more than two timeshare packages can be purchased and utilized by one owner. Conditional Use Review (Sec. 20-3.3): The primary purpose of requiring a conditional use review for a timeshare project is so that a public hearing will be set. A public hearing is not normally required in a two step subdivision exception process. Planning Office Recommendation: Section 20-3.3 established three suitability require- ments to be used in evaluating a conditional use. These requirements are met since the project complies with the zoning code and is consistant with the objectives of the zoning code and the CC zone district. Also, the project is compatible with surrounding land uses in that it is located in an area with other lodge and commercial uses, blends in well with the neighborhood and will not significantly increase parking, noise or traffic impacts in the area. Laundry facilities are proposed as part of the Prospector. Since these facilities have not yet been reviewed as a modification of a conditional use, they would require another conditional use review. In order to avoid a second review and fee, the Planning Office recommends that P&Z conceptually review the applicant's plans at the meeting. The facilities can either be conditionally approved or that aspect of the application can be tabled until further information is obtained. The Planning Office feels that the applicant has submitted an excellent proposal for timesharing. Although we recommend approval, we also suggest that a very detailed list of conditions be established to ensure the project is carried out as it is proposed, with this in mind, we recommend that P&Z recommend the approval of the Prospector Lodge timeshare application subject to the following conditions: Memo: Prospector Page Eight August 2, 1983 1 2. 3 4. Timeshare Project ~~ ~~ The applicant must provide a current title commitment from a title insurance company prior to City Council review. The condominium plat must be amended to include the following: a. Reference encroachment license granted by Council for the rock facade stairs on the north frontage. b. Indicate book and page of easements for the transformer in any vaults or pedestals on the property. c. Show common areas. d. Locate trash facilities. e. Add necessary approval certificates. f. Add unit amenities, including hot tubs and saunas. g. Designate employee unit #108. The landscape plan should be subject to the approval of the Parks Director. The plan should contain the following: a. The additional sidewalk spur on the west end of the alley. b. Irrigation of the planting areas along the west and north frontages to maintain trees in those locations. The applicant must provide 16 on-site underground parking spaces. 5. The project must include amenities as proposed including a sundeck on the third floor, on- site parking, lobby, and unit amenities including a hot tub, sauna, wet bar and masonry fireplace. 6. Occupancy by a timeshare owner is limited to 30 days in the winter season. 7. No prohibited marketing practices will be allowed including the giving of gifts, use of public malls or streets for sale, and phone solicitations. 8. The 19 renovated lodge units found in the Prospector must each be split into 52 weeks, one interest for each week of the year. Seven weeks must be reserved for the maintenance of the project. Four of these seven weeks must be used exclusively for maintenance with no rentals or other uses allowed. Two of the four weeks must be in the spring while the remaining two weeks must be in the fall. The remaining 45 weeks must be sold as proposed in three week timeshare packages. Each three week package must contain a peak season ski week, a peak summer week, and an off season week in either the spring or the fall. ~.r Memo: Prospector Lodge Timeshare Project Page Nine August 2, 1983 9. No right-to-use timeshare leasehold will be allowed. All Prospector timeshare interest sales must be on a fee ownership basis. 10. Timber Run Realty and Terry Liming as Plan Manager will be responsible for the marketing program for the Prospector. A local contact must be identified to the City of Aspen for communication purposes. The marketing program identified in the timeshare application must be adhered to. 11. Subsidies for transportation and lodging will be allowed for parties interested in visiting the Prospector Timeshare Project. The Planning Office must review this subsidy program in six months to ensure that it is operating in a responsible way. 12. As proposed, the applicant must establish four banking accounts for operation of the budget system. Proof that these accounts have been established must be documented to the City of Aspen. 13. As required in Section 20-24(F)(2), the applicant must provide information on the present condition of all structural components and mechanical and electrical installation materials and the expected useful life of these items. 14. Deposits or downpayments made in conjunction with the purchase or a timeshare unit must be held in an escrow account until closing or the issuance of a Certificate of Occupancy, which- ever is later. The escrow agent must be a title company in Aspen, a neutral third party. 15. No C.O. will be issued until at least eight of the total 15 timeshare packages are sold for any given unit. 16. A Board of Managers must be established within 30 days after eight of the total 15 timeshare packages are sold for any given unit. when the C.O.s are issued, the declarant as well as the new timeshare owners must then begin to pay their quarterly assessment fees. 17. The total number of Board of Managers members must be submitted by the applicant prior to Council review. Approximately 75 percent of these members must be Prospector Fractional Estate owners. 18. The Interior Reserve Fund and the Exterior Reserve Fund, both expenditures itemized in the maintenance/ assessment fees, cannot be reduced or suspended for any length of time. All other expenditure items used in the calculation of the assessment fees can be adjusted with 75 percent of the owners approving the adjustment. The money designated for the reserve funds must always be held in escrow to be used as needed for interior and exterior repairs and maintenance. ,~ Memo: Prospector Timeshare Project Page Ten August 2, 1983 14. The Prospector timeshare units are limited to six occupants at any one time. 20. The actual 50 year deed restriction for the employee unit (#108) must be reviewed and approved by the Attorney's Office as soon as possible. 21. The Fractional Owners Association is required to own the common areas and common amenities in the Prospector Lodge and this must be reflected in the appropriate documents. 22. The Board of Managers must designate a managing agent, preferably a local agent. 23. One deed must be conveyed for each three week package so that weeks .are never sold individually. 24. References must be made throughout the application and attached exhibits to indicate that the project is subject to all of the requirements in Section 20-24 as well as the State Timeshare Laws which are already specified in the application and attachments. 25. The financing for the Prospector must be expressly subject to all restrictions placed on the project. 26. The applicant must meet the original three conditions of the Certificate of Occupancy issued by the Building Department. These three conditions include: a. The required handicapped access must be approved by Council. b. The parking requirements must be reduced with Council approval from 17 to 16 spaces or the additional space must be provided. c. The landscaping plans must be approved by City Council. 27. The plan manager or the managing agent must apply for and show evidence to the City of a Colorado State Sales Tax License since the City, County and State sales tax will be applicable to any short term rental of these units. A required real estate transfer tax will apply to initial and subsequent sales of the timeshare interest and will be collected as is done in any other real estate transaction. 28. The Prospector Disclosure Statement, the Prospector Condominium Documents entitled Fractional Estate Declaration, the Prospector Articles of Incorporation of the Fractional Owners Association, and the By-Laws of the Association as well as a sample purchase contract must all be amended to reflect the conditions of approval placed on the Prospector through the approval process. The Planning Office and the Attorney's Office must both review and approve the final documents to ensure the changes and clarifications are accurately made. Memo: Prospector Timeshare Project Page Eleven August 2, 1983 29. Any updating or amending of the approved timeshare. documents must be approved through the City according to the requirements of Section 20-24 of the subdivision regulations. 30. The declarant must be responsibly assessment fees and expenditures the unsold timeshare units. The rent unsold units but the rental toward any maintenance which may as a result of the unit's use as for all related to declarant may money must go be necessary a rental. 31. The applicant must describe the financing to be offered prior to Council review. 32. The applicant must clarify throughout the timeshare application references to timeshare units versus references to timeshare interests. 33. 30 percent of the qualified voters of the Fractional Owners Association must be present to obtain a quorum. The developer's control of 30 percent of the votes does not constitute a quorum. 34. The Fractional Owners Association may not lease the common elements or amenities which are owned by the Association, as was proposed in the application. 35. To ensure compliance with the proposed marketing program, the applicant must post with the City suitable security in the amount of $20,000 cash, a $20,000 irrevocable letter of credit or a $100,000 surety bond. 36. Full details of the RCI exchange program (cost, procedures, other projects involved, confirmation percentages, etc.) must be provided to the purchasers of Prospector timeshare interests. 37. The applicant, not the applicant's attorney, should sign the timeshare application. 38. An affidavit regarding the management, services and maintenance offered when the Prospector was previously in operation should be submitted to verify that the services to be offered in the timeshare project are of equal or greater quality and quantity. 39. Further conditions may need to be placed on the Prospector timeshare approval subject to the presentation of the proposed laundry facilities. ~)~b~ 6,~ ~ ~~ ~ E PN `;~~;;~POPP\NG a as S J OdOd -yb, Oy Otis 60 d C ~ ~ 0 H ~ ~° w Z ~ W f. C to ~ Z Q - ;~ VIII/( Zµ P~v !~- PAR K ~v S rrl 03 =~ ~~a~~ _LIFT 4_ -¢ ~, z w®r •~ o uu uu uu~~Lm,'8~ 8=~~°~18 ~~~~8 aCl CIF ~_- l 4j ~VJ Z~= h~.~l w J v ~.. Proposed Budget for the Prospector. The estimated annual budget of the Prospector is as follows: PER UNIT ITEM OF EXPENSE CODiPLEX PER YEAR* COMMON ELECTRICITY 3,800 200 SNOW REMOVAL 2,850 150 CABLE 'TELEVISION 3,420 180 WATER & SEPlAGE 3,800 200 TRASH REMOVAL 2,375 125 GAS/HOT WATER HEAT 13,300 700 EXTERIOR MAINTENANCE 4,940 260 INTERIOR COMMON AREA MAINTENANCE 2,850 150 CONDOMINIUM MANAGE[9ENT 22,800 1,00 FIREWOOD 1,900 00 COMMON. AMENITIES 570 30 BUILDING INSURANCE 5,035 265 INDIVIDUAL .UNIT ELECTRICITY 10,260 540 TELEPHONE 3,420 180 FURNITURE, APPLIANCE RESERVE 28,500 1,500 CONTENT INSURANCE 1,900 100 PROPERTY TAXES 22,800 1,200 C.P.A. REVIEW 1,900 100 INTERIOR UNIT bIAINTENANCE 3,800 200 INTERIOR JACUZZI/SAUNA 3,800 200 EXTERIOR BUILDING RESERVE 10,000 526 ADMINISTRATIVE (phone, postage) 3,800 200 TOTAL $157,820 $ 8,306 * rounded to nearest dollar TOTAL DUES PER YEAR PER UNIT = $8,306.00 1/15 SHARE = 553.73 PAID QUARTERLY = 138.43 CHARGES FOR MAID SERVICE AFTER OWNER CHECK OUT WILL BE BILLEll SEPARATELY BY THE MANI3GER. ~ . ~, fi.. ~Vr.,,.. MEMORANDUM "(E)(3) Marketing. and sales practices. A project's marketing program should reveal responsible, ethical sales practices, and such marketing program should not permit the following practices: (c)The giving of gifts in a deceptive manner to encourage people to attend sales presentations or to encourage people to buy a timeshare estate. Any exact description of gifts proposed to be given by the developer to prospective purchaser and the cost to the .developer of any gift used in a dales or marketing program must be disclosed and shall be subject to prior approval by council." TO: FROM: RE: Aspen City Council Alice Davis, Planning Office Council Concerns with the Prospector Timeshare Project DATE: August 22, 1983 APPROVED AS TO FORM: At the City Council work session on the Prospector Timeshare Project on August 17, 1983 three areas of concern were identified. These concerns are discussed below: 1. Free Transportation and Lodging for Potential Timeshare Purchasers The Prospector marketing entity intends to invite persons who have shown continued interest in buying a timeshare interest to visit the project. As proposed, free or subsidized transportation to Aspen and overnight lodging may be offered to visiting parties. During the timeshare ordinance review the "giving of gifts" was discussed at length. P&Z and Council both agreed that the giving of gifts may not necessarily be bad, if done in a responsible, ethical way. Council did, however, maintain the right to review any gift programs to evaluate. if the programs were to be conducted in a deceptive way. The exact Code language is as follows: Free transportation, as proposed by the Prospector, was found to be an acceptable gift by the previous Council which is one reason why the giving of gifts was not completely prohibited. The regulations do however allow you to determine if you think their program is acceptable. The major drawback to offering free transportation is the pressure it places on potential purchasers to buy a timeshare interest. Anyone accepting a free trip would probably expect some sales pressure, but how much and how intense the pressure is or should be is hard to evaluate. The Planning Office has recommended a condition to the oanPCrnr anprowal which requires the Planning ~_. . _ ______ ___ ~~:.. ~~..e,.t .,f tt,o markari nv nroaram after six w~. We would evaluate the number of trips given, the results, the number of contracts rescinded during the 10 day right-of- recision period, and. any public or owner reaction to the program. If any problems are identified., we would bring them before Council to determine if the free transportation and lodging program should be eliminated. 2. Assessment Fee Adjustments The applicant wishes to allow the Board of Managers to reduce or increase the Prospector's quarterly assessment fees as opposed to requiring 75 percent of the owners to agree to such changes. The difficulty of achieving 75 percent agreement to increase fees may result in insufficient funds for properly maintaining the project. ~..:. . ~ ,~„ Memo: Council Concerns re: Prospector Timeshare Page Two August 22, 1983 Even though the Planning Office feels this is reasonable, we do believe that the assessment fee increases should be controlled in some manner as this has been a major problem with timeshare projects in other areas. If the Board of Managers increase fees unreasonably or too often, the owners can always vote them out of office. so some protection is provided. This statement should be articulated ;n the timeshare documents so that owners are totally aware of this protection. Another protection would be to not allow the Board to increase fees without written notice to the owners as to the reason necessitating the increase and documention of the need. The Planning Office recommends that these two protections be added as conditions of approval.- 3. Reserve Account The Prospector budget identified $10 000 n__~year in the exterior fund wh;nh o~i~~ ha ^^-^~-•~~ and used only for such things as re- painting, structural repairs, landscaping replacements and common area carpet repairs. As proposed, with the Board of Manager's approval,. these funds can be reduced or eliminated. The Planning Office recommended (and the applicant agreed) that the Board not be allowed to reduce or eliminate this escrowed fund for the first five years of operation to ensure that the fund builds up to a sufficient level before the annual amount going into the fund is reduced. New timeshare owners do not have to pay into the fund until the sale of their timeshare package is closed. No timeshare closing is allowed within a unit until eight of the 15 packages are sold and closed in that unit. The developer only pays into the fund for the remaining timeshare packages in a unit which has closed on at least eight of the 15 packages. Therefore, $~0 000 per are s In addition to this reserve account, additional funds have been identified through the budget for maintenance and repairs. The budget also earmarks $d 940 per dear fnr ex+arinr ,na;nranance, $28,500 er a and appliance repairs and replacement, $J 00 per yQar for Jacuzzi sZnd sauna maintenance, and $3,800 n=er _ yea~for_interior_mainter~ance..- Again, these funds will be obtained as units are sold and assessment fees are paid. The applicant has agreed to amend his proposal so that the $10.000 annual reserve fund ~annnr he rPAUnad or a ;m;na d by the Board until there is 550.000 in the account. Since the fund will most probably not be needed until this amount is acquired, the Planning Office feels this is an adequate solution. At the Council meeting on August 22, the Planning Office will go over the 35 recommended conditions of approval for the Prospector. All aspects of the project should be covered through this discussion. The Planning Office will be prepared to add, delete or change conditions as Council makes a decision on the above issues or any other area of concern.