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Home My WebLink Aboutlanduse case.ts.Prospector Lodge.1983-1987~ ~ ~x ~~ „~ ~ ~~ f ~ 2 ~~ ~~~ ,~ :. ,. ~ ~<;~r 21 July, 1987 I~Tr. Steve Burstein Planning Department City of Aspen Dear Steve, Hand Delivered Enclosed you will find a copy of the Week Selection Chart which follows the City Code in the categorization of prime summer, ski season and spring/fall off-season weeks. The week selection chart that you used to check our ratio of prime to off-season weeks sold is out of date. Please call me if you have any questions. Sincerely, ~~ Buzz Fedorka Director of Sales and Iblarketing Enclosure' c.c. Nick PvicGrath, Attorney 301 East Hyman Ave. • Aspen, Colorado 81611 In Colorado 920-2030 • Out of State 1-800-522-4525 WT•,T:K SELECTION CHART Prospector fractional estate o+vners have three occupancy + eeks each year. The choice of specific weeks is made at the time of purchase. Each owner creates his o+vn package. Alost packages ineL~de a weep from each season, Ski, Summer and Spring/Fall. Itowever, other combinations are available, most of which include a Spring/Fall season week. Please ask for details. * Weeks 51 & 52 may not he purchased in combination in a single fractional estate. SKI SEASON SUDIMER SEASON SPRING/FALL i 2 3 4 5 fi 7 8 9 10 11 12 13 14 75 47 48 49 50 51• 52s 24 25 2fi 27 28 29 30 31 32 33 34 35 36 Unit # Phase:_ Price:S 18 19 20 21 22 23 37 38 39 40 41 42 43 44 _ ~ _ __ _ _ -r_ ~ ~. i ~ f p ~j ~- ~~A r f A I ~ ~ ` A ~i[ F`1 ~ C _ i ~ ~~ cube !~ '~ it_ . ~ (^ N e~ I ~ P ~ k n F #~ 1 ,mow i G - ~ ~. S_ ~ ~,- a~ ~ - q ,i. . - . ,.. ,,. _- . , -.~~. .. u..,..v . ..w1..a._.-.. .. _...,....~..,i..... :^;.ZBHi~iil' nED v~llit~i0`: UNIT ~,W ~RFR 1986 1987 1988 1989 1990 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 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 53 Jan. 5-Jan. 12 Jan. 12-Jan. 19 Jan. 19-Jan. 26 Jan. 26-Feb. 2 Feb. 2-Feb. 9 Feb. 9-Feb. 16 Feb. 16-Feb. 23 Feb. 23-March 2 Mar. 2-Mar. 9 Mar. 9-Mar. 16 Mar. 16-Mar. 23 Mar. 23-Mar. 30 Mar. 30-April 6 April 6-April 13 April 13-April 20 April 20-April 27 April 27-May 4 May 4-May 11 May 11-May 18 May 18-May 25 May 25-June 1 June 1-June 8 June 8-June 15 June 15-June 22 June 22-June 29 June 29-July 6 July 6-July 13 July 13-July 20 July 20-July 27 July 27-Aug. 3 Aug. 3-Aug. 10 Aug. 10-Aug. 17 Aug. 17-Aug. 24 Aug. 24-Aug. 31 Aug. 31-Sep. 7 Sep. 7-Sep.14 Sep. 14-Sep. 21 Sep. 21-Sep. 28 Sep. 28-Oct. 5 Oct. 5-Oct. 12 Oct. 12-Oct. 19 Oct. 19-Oct. 26 Oct. 26-Nov. 2 Nov. 2-Nov. 9 Nov. 9-Nov. 16 Nov.16-Nov. 23 Nov. 23-Nov. 30 Nov. 30-Dec. 7 Dec. 7-Dec. 14 Dec. 14-Dec. 21 Dec. 21-Dec. 28 Dec. 28-Jan. 4 Jan. 4-Jan. 11 Jan. 11-Jan. 18 Jan. 18-Jan. 25 Jan. 25-Feb. 1 Feb.t-Feb.B Feb. 8-Feb. 15 Feb. 15-Feb. 22 Feb. 22-Mar. 1 Mar. 1-Mar. 8 Mar. 8-Mar. 15 Mar. 15-Mar. 22 Mar. 22-Mar. 29 Mar. 29-April 5 April 5-April 12 April 12-April 19 April 19-April 26 April 26-May 3 May 3-May 10 May 10-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. 16 Aug. 16-Aug. 23 Aug. 23-Aug. 30 Aug. 30-Sep. 6 Sep. 6-Sep. 13 Sep. 13-Sep. 20 Sep. 20-Sep. 27 Sep. 27-Oct. 4 Oct. 4-Oct. 11 Oct. 11-Oct. 18 OCt. 18-Oct. 25 Oct. 25-Nov. 1 Nov. 1-Nov. 8 Nov. 8-Nov. 15 Nov. 15-Nov. 22 Nov. 22-Nov. 29 Nov. 29-Dec. 6 Dec.6-Dec. 13 Dec. 13-Dec. 20 Dec. 20-Dec. 27 Dec. 27-Jan. 3 Jan.3-Jan. 10 Jan. 10-Jan. 17 Jan. 17-Jan. 24 Jan. 24-Jan. 31 Jan. 31-Feb.7 Feb.7-Feb. 14 Feb. 14-Feb. 21 Feb. 21-Feb. 28 Feb. 28-Mar. 6 Mar. 6-Mar. 13 Mar. 13-Mar. 20 Mar. 20-Mar. 27 Mar. 27-April 3 April 3-April 10 April 10-April 17 April 17-April 24 April 24-May 1 May 1-May 8 May 8-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 26 June 26-July 3 July 3-July 10 July 10-July 17 July 17-July 24 July 24-July 31 July 31-Aug. 7 Aug. 7-Aug. 14 Aug. 14-Aug. 21 Aug. 21-Aug. 28 Aug. 28-Sep. 4 Sep. 4-Sep. 11 Sep. 11-Sep. 18 Sep. 18-Sep. 25 Sep. 25-Oct. 2 Oct. 2-Oct. 9 Oct. 9-Oct. 16 Oct. 16-Oct. 23 Oct. 23-Oct. 30 Oct. 30-Nov. 6 Nov. 6-Nov. 13 Nov. 13-Nov. 20 Nov. 20-Nov. 27 Nov. 27-Dec. 4 Dec. 4-Dec. 11 Dec. 11-Dec. 18 Dec. 18-Dec. 25 Dec. 25-Jan. 1 Jan.1-Jan.8 Jan. 8-Jan. 15 Jan. 15-Jan. 22 Jan. 22-Jan. 29 Jan. 29-Feb. 5 Feb. 5-Feb. 12 Feb. 12-Feb. 19 Feb. 19-Feb. 26 Feb. 25-Mar. 5 Mar. 5-Mar. 12_ Mar. 12-Mar. 19 Mar. 19-Mar. 26 Mar. 26-April 2 April 2-April 9 April 9-April 16 April 16-April 23 April 23-April 30 April 30-May 7 May 7-May 14 May 14-May 21 May 21-May 28 May 28-June 4 June 4-June 11 June 11-June 18 June 18-June 25 June 25-July 2 July 2-July 9 July 9-July 16 July 16-July 23 July 23-July 30 July 30-Aug. 6 Aug. 6-Aug. 13 Aug. 13-Aug. 20 Aug. 20-Aug. 27 Aug. 27-Sep. 3 Sep. 3-Sep. 10 Sep. 10-Sep. 17 Sep. 17-Sep. 24 Sep. 24-Oct. 1 Oct. 1-Oct. 8 Oct. 8-Oct. 15 Oct. 15-Oct. 22 Oct. 22-Oct. 29 Oct. 29-Nov. 5 Nov.5-Nov. 12 Nov. 12-Nov. 19 Nov. 19-Nov. 26 Nov. 26-Dec. 3 Dec. 3-Dec. 10 Dec. 10-Dec. 17 Dec. 17-Dec. 24 Dec. 24-Dec. 31 Dec. 31-Jan. 7 Jan. 7-Jan. 13 Jan. 14-Jan. 21 Jan. 21-Jan. 28 Jan. 28-Feb. 4 Feb.4-Feb. 11 Feb. 11-Feb. 18 Feb. 18-Feb. 25 Feb. 25-Mar. 4 Mar. 4-Mar. 11 Mar. 11-Mar. 18 Mar. 18-Mar. 25 Mar. 25-April 1 April 1-April 8 April 8-April 15 April 15-April 22 April 22-April 29 April 29-May 6 May 5-May 13 May 13-May 20 May 20-May 27 May 27-June 3 June 3-June 10 June 10-June 17 June 17-June 24 June 24-July 1 July 1-July 8 July 8-July 15 July 15-July 22 July 22-July 29 July 29-Aug. 5 Aug. 5-Aug. 12 Aug. 12-Aug. 19 Aug. 19-Aug. 26 Aug. 26-Sep. 2 Sep. 2-Sep. 9 Sep. 9-Sep. 16 Sep. 16-Sep. 23 Sep. 23-Sep. 30 Sep. 30-Oct. 7 Oct. 7-Oct. 14 Oct. 14-Oct. 21 Oct. 21-Oct. 28 Oct. 28-Nov. 4 Nov. 4-Nov. 11 Nov. 11-Nov. 18 Nov. 18-Nov. 25 Nov. 25-Dec. 2 Dec. 2-Dec. 9 Dec. 9-Dec. 16 Dec. 16-Dec. 23 Dec. 23-Dec. 30 Dec. 30-Jan. 6 THE PROSPECTOR CONDOMINIUMS ~,~' Ppilcgin so~~ Report on Ratio of Prime to Off-Season Weeks Sold OWNER UNIT # ~ WEEKS OFF-SEASON PRIME-SEASON Sales Made by Fedorka/Lefkowitz to .6/15/87 Coughenour 201 21, 40, 41 3 U Frischknecht 101 3U, 31, 49 ~ 'Q z Green 204 26, 49, 51 i ~ z~, Green 2U4 27, 48, 52 i 0 "Z 3. Hayes lUl 9, lU, 40 1 2 ` liester 304 32, 48, 52 ~ 0, ~-3 Jenks 1(11 6, 7, 21 1 2 Johnson/John 208 21,22,52 2 1 Kroening 303 IU,27, 52 U 3 Meyers 103 9, 10, 39 1 2 Miller/Council 201 26, 38, 52 0'1~ 3 Miller/Thomas 2U8 23, 47, 48 3Y. ~ $. Norton 104 1, 23, 52 1 2 Palmer 106 28, 29, 40 1 2 Rodriguez 101 22, 23, 51 2 1 Robinson 102 1, 23, 52 1 2 Ross 2U3 31, 32, 47 ~ 0. ~ Z Stacy/Taylor 208 12, 24,40 2 1 Stacy/Taylor lUl 24, 37, 38 I ~S ~~ Stacy/Taylor 101 12, 39, 52 1 2 Stacy/Neil lUl 25, 26, 27 0 3 Schwack/Hasner 102 9, 24, 42 Z L ~ ~ Sandler lU3 11, 24, 52 ~ ~0~. , ~ Sartain 3134 8, 29, 90 1 2 Stevenson 3(14 11, 12, 13 0 3 Smith/Alan 2U4 8, 9, 40 1 2 Zimmet 2134 12, 14, 23 1 2 Zimmet 2U3 12, 23, 36 5,~~( ~'h 2 ,, ~ ~ ~ ~ TOTALS 2 fk it - 59 ~ d ~~. Off 30%/Prime 70% Ratio of Prime to Off- Season weeks s old by Fedorka/Le ow z 'DOTAL OF ALL FRACTIONS SOLll 43 140 Ratio of Prime to Oft-Season weeks sold Total -Off 23%/Prime 77% J. NICHOLAS MCGRATH, P.C. ATTORNEY AT LA W ADDEAST NOPEINS AVENUE SUITE 305 ASPEN. COLORADO B16H June 11, 1987 Mr. Ron Mitchell Assistant City Manager 130 South Galena Aapen, CO 81611 Re: The Prospector Dear Ron: - ~__ t ~ .~. _ APFA CODE 505 TELEPHONE 935~2A13 You may recall that The Prospector agreed to report sales figures on about a quarterly basis to the City so that the City could monitor its compliance with the 74X on/267 off season week ratio on an annual basis. This occurred when Council agreed in November 1986 to give The Prospector a bit more flexibility in sales of three one week intervals. I enclose Council minutes and our application letter to refresh your recollection. I enclose two lists of owners or sales prepared by Buzz Fedorka, Director of Marketing for the project. The second is the remaining original sales by the prior developer showing a ratio of S27 on/18X off, which does not reflect other sales that SPEC voluntarily accepted a quit claim deed back to keep the customers happy. In any event, the first list shows sales made after SPEC took over the project, which shows a ratio of 707/30X, which brings the overall ratio of all units sold to be 77X on/237 off season weeks, only one per cent off to date. Thus it does appear so far that the marketing is successful with regard to off-season weeks. By way of example, one of the recent sales was of three off- season weeks. I apologize for being late on our first report. Sincerely, J. Nicholas McGrath, P.C. ec: Mayor and Council Mr. Steve Burstein Messrs. Lefkowitz and Fedorka n2l;spfc610.1tr THE PROSPECTOR CONDOMINIUMS Report on Ratio of Prime to Off-Season Weeks Sold OWNER UNIT # ~ WEEKS OFF-SEASON PR[bIE-SEASON Sales Made by Merit Investment Ace 207 35, 36, 48 0 3 Barish/Friedman 205 13, 14, 48 0 3 Cargill 207 5, 6, 38 1 2 Coon 207 28, 32, 49 0 3 Carr 2U7 43, 5U, 51 1 2 Calkins 2U5 12, 39, 52 1 2 Dillon 302 5, 6, 25 0 3 Fisher/Schiavone lU6 3, 33, 47 0 3 Frischknecht lUl 29, 32, 48 0 3 Hargreaves/Turek 207 2,22, 37 2 1 Johnson/Guy 2U3 9, 42, 52 1 2 Kamen 207 7, 31, 40 1 2 Kaufman 207 8, 24, 33 0 3 Lancaster lU6 5, 32, 39 1 2 Meneses 2U5 49, 50, 51 0 3 Merritt 205 8, 9, 24 0 3 Merritt 2U5 lU, 25, 26 0 3 Perls 302 31, 32, 47 0 3 Peterson/Nelson 2U7 3, 27, 42 1 2 Potok 203 4, 5, 24 U 3 Prohaska 3U2 10,11,40 1 2 Rosendatil lU6 11, 51, 52 0 3 Ross 2113 6, 7, 43 1 2 Ross 211:3 10, 11, 37 1 2 Ross 2113 30, 38, 39 2 1 Reuhr 3U2 9, 22, 27 1 2 Sartain 3114 7, 28, 41 1 ~ 2 Shelton 3U2 8,24, 33 0 3 Smith/Patrick 2U7 9, 29, 47 0 3 Smith/Alan 2U4 10, 24, 39 1 2 Stevens 2U7 26,41,52 1 2 Stevenson 3U4 14, 26,27 0 3 Vierk lU6 1, 24, 25 0 3 TOTALS 18 81 Ratio of Prime to Off-Season weeks sold by Rlerit Investment -Off 18%/Prime 82% i Rggu~ar Meetinct AsQen City Council No~~mbe 10. 1986 Anderson said for about 57,000, the roof over the restaurant can be patched up. There is some leakage over the part of the lodge; this part may just require a lot of shoveling and patching for this winter. All in favor, motion carried. ORDINANCE #54. SERIES OF 1986 - Utility Connect Charges Councilwoman Fallin moved to read Ordinance #54, Series of 1986; seconded by Councilman Isaac. All in favor, motion carried. ORDINANCE #54 (Series of 1986) AN ORDINANCE AMENDING CERTAIN SECTIONS OF DIVISION 2 OF ARTICLE III, CHAPTER 23 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN, COLORADO, AS AMENDED, ENTITLED "UTILITY CONNECT CHARGE", (AND THEREBY AMENDING ORDINANCE NO. 19. SERIES OF 1984), BY ENACTING THE THIRD YEAR OF A PHASED INCREASE IN CERTAIN WATER UTILITY CONNECTION CHARGES was read by the city clerk Councilwoman walls moved to adopt Ordinance #54, Series of 1986, on first reading; seconded by Councilwoman Fallin. Cindy Shafer, finance director, told Council this is the third of 5 proposed utility connect increases. 20 percent increases were approved in 1963 and 1984. Roll call vote; Councilmembers Isaac, yes; Fallin, yes; Walls, yes; Collins, yes; Mayor Stirling, no. Motion carried. SttnDIVISION EXCEPTION - Prospector Alan Richman, planning director, told Council Security Pacific finance is requesting a change in the way they sell. their integral weeks. As opposed to having the integrals as proposed in the approvals, Security Pacific would like to look at the entire package of integrals they sell on a yearly basis and maintain a certain ratio of 26 percent off-season, 74 percent on- season. Richman told Council the timeshare ordinance requires that 4 weeks of the year be kept off-market for maintenapce; hot ever, the applicant requested and was approved to keep an additional 3 weeks in the off-season off the market. The Prospector only has 45 weeks available for sale, rather than 48 weeks. This request is not to vary from the 74/26 percentage required by ordinance but. the ability to sell packages to people ® that may want more time in the off-season. The applicants are 13 Regular Meeting Aspen City Council Novemher 10. 1986 asking for relief to have to sell 1 ski week, 1 summer week and 1 off-season week as long as they stay with percentage ratios. Richman pointed out the city wanted to make sure that off-season weeks were being sold, and this proposal follows that concept. Nick McGrath, representing the applicant, told Council they plan to give the staff figures on a quarterly basis, justified on an annual basis. They are requesting this change~to give the project more flexibility. McGrath told Council the people who market the. project indicate they have prospective sales that do not fall within weeks specified to be sold. Councilman Isaac moved to approve the change in condition 87 of the Prospector Lodge subdivision agreement, subject to new timeshare documents as approved by the city attorney; seconded by Councilman Collins. All in favor, motion carried. RESOLUTION X41. SERIES OF 1986 - 1986 Office GMP Allocations Alan Richman, planning director, reminded Council they tabled this at their last meeting and separated the GMP allocations from CC and C-1 allocations. There were no applications for the NC/SCI zone. This action is to approve the Office quota and discuss the unallocated square footage in Office zone and NC/SCI. There were two projects in the office zone; Wesson building, requesting 2,480 square feet. This project met the threshold at P & Z. The other project is the 700 East Hyman building of 9,000 square feet; this was not successful in meeting the threshold. The Wesson building received parking reduction and bonus FAR from P & Z. This resolution allocates 2487 square feet to the Wesson building subject to the applicant meeting the representations made in their application and outlined in the resolution. Richman told Council the resolution recommends Council carry over the 1513 square feet of unallocated space in the office zone but not carry over in square footage in the NC/SCI zone. Richman told Council staff feels it would be inappropriate to have 14,000 square feet available in NC/SCI competition for next year. Richman said in the office zone, staff feels there is not a surplus of office space. Richman explained another reason to carry over. this square footage is the 700 East Hyman building. Richman told Council in July he was approached by the applicant on whether parking above grade would count in FAR. Richman said he was unable to respond to the applicant's request bef ore the submission date and hoped to deal with the issue during the application process. Richman said the result was that he and the applicant had a different interpretation of this issue. This was taken to P & Z, who agreed with the applicant saying that no covered parking above grade should be exempt from FAR; however, ® P & Z did find the covered parking to be a major design flaw. 14 T0: Aspen City Council THRU: Robert S. Anderson, Jr., City Mana~~ge~~r,, FROM: Steve Burstein, Planning Office 'f~4~ RE: Prospector Lodge Timeshare Subdivision Exception DATE : November 5 , 1986 SU!lNARY: The Planning Office recommends that the requested change to the conditions of approval be denied. APPLICANT'S RBQOEST: Security Pacific Finance Corporation owner of the Prospector project, requests a change in condition 7 of its permit to allow the sale of three week intervals in any combination of weeks so long as annually the total off season weeks sold is 268 of the total weeks sold. PRBVIODS COONCIL ACTION: On May 29, 1984 Council approved the Prospector timeshare project, subject to thirty-four conditions atta ched to the condominiumization plat. An amendment to condition was approved by Council on February 10, 1986 to accomplish: elimination of the requirement that 8 out of 15 timeshare packets be sold prior to closing on a unit, removing reference to the transportation and lodging gift prohibition, and correcting the name of current plan manager. Council also adopted Ordinance No. 67, Series of 1985 to amend the timeshare ordinance with regard to inspection trip limitation and reducing the annual licensing fee, at the request of the Prospector and Shadow Mountain timeshare operations. Applicable Section of the Municipal Code: Section 20-24 E(3) states the applicable restrictions on packaging of on-season and off-season timeshare weeks, and is quoted in Nick McGrath's September 16, 1986 letter of application. Sections 20-24 B(5) and B(6) define "off-season" and "on-season" for purposes of timeshare week packaging. PROBLEN DISCDSSION: A. Referral Comments: 1. City Nanagers Office: Assistant City Manager Ron Mitchell stated in an October 13, 1986 memorandum that the proposed changes appear reasonable and he would recommend approval of the requested amendment. 2. City Attorney: The City Attorney stated in an October 20, 1986 memorandum that he finds no legal impediment to the composition of timeshare interval package as req uested. B. Planning Office Comments: The purposes for the off-season sales requirement in timeshare projects are as follows: 1) To not leave the least desirable inventory of off- season units unsold and consequently create a drain upon the existing interval owners and threaten the financial security of the project/individual units (as formulated in Mr. McGrath's letter). 2) To bring visitors into Aspen during our shoulder seasons to increase the economic (and social) vitality of the community. 3) To encourage the timeshare visitors who enjoy the off- season to tell others of the merits of that time and further bolster the shoulder period. Staff feels that these purposes are still valid and alterna- tive intervals packaging should not substantially compromise this positive aspect of our timeshare projects. Section 20-24 (E)(5) requires that one off-season week must be sold with each on-season week in a timeshare interval package. Dividing a year into the on-season and off-season weeks, minus the four non-rental weeks that must be used for maintenance, 69~ of the year is composed of on-season weeks and 31$ of the year is composed of off-season weeks. The approved Prospector marketing plan conforms to this ratio of 69& on-season week sales and 31$ off-season week sales. The applicant reports that actual sales total 798 on-season week sales and 218 off-season week sales, which reflects vio- lations in their marketing plan. At this time the applicant requests a formula of 748 on- season to 268 off-season week sales. This represents a reduction in the need to sell off-season weeks intervals below the Code guidelines by five percent (58) . The on- season/off-season imbalance would likely become more pronounced. Furthermore, it does not appear to be feasible for the City to require the "variation to be eliminated in the following year's sales", as the applicant has suggested. While it is reasonable for the applicant to seek a more workable marketing plan, we believe that this proposal would 2 create a large inventory of unsold off-season weeks, which is contrary to the intent of our off-season week sales requi rement. The timeshare ordinance does allow for more than 1 off- season week to be sold in a package; and we would have no problem allowing the Prospector to amend their plan to allow for such sales (for fisherman and other, as suggested). ALTSRNATIVBS: Council could 1) approve the change as requested, 2) allow 318 off-season week sales depending upon an enforceable procedure to bring the off-season into annual compliance, or 3) deny the requested amendment. MOTION: "Move to deny the requested amendment to the Prospector interval sales plan". CITY MANAGER RECOMMENDATIONS: r i9'G2EE ~/tr/t ~P~i/ /gyp G,~oucp ~e C ~ ~n rfiN ~ /t~'?R~ yA~L nc 3 .I. NICHOLAS MCGRATH, P.C. ATTORNEY AT LAW 000 FA91HORKINS AVENUE SUITE FOJ ASPEN. COLORADO 81611 September 16, 1986 Mr. Steve Burstein Aspen/Pitkin Planning Office 130 South Galena Aspen, CO 81611 AREA CODE JOJ TELFRHONF 9RS-IAI] Re: SPEC-Prospector-minor permit amendment application Dear Steve: Security Pacific Finance Corp., the owner of the Prospector project through a foreclosure, seeks an amendment --we think minor--to the existing Prospector permit, condition 7 (sea Exhibit A). As you know, the existing permit requires the sale of a three-week interval, with one week to come from each of three columns of a printed schedule (see Exhibit B). Those schedules of weeks were submitted by the previous developer and approved as part of the original permit, although not required by the Code. SPEC, having engaged in sales through Barry Lefkowitz for several months, would like the permit amended, to give greater flexibility to meet requests of prospective buyers. This request will still satisfy the City Code, by allowing the individual sale of three week interval of any combination of weeks, so long as annually the total off season weeks sold is 268 of the total weeks sold, as will be explained below. This change is, we believe, a minor one, because (a) it is entirely consistent with City Code timeshare requirements, and (b) because it is slight in light of changes others (e.g., potential project buyers) have suggested SPEC seek, such as selling individual weeks, rather than a three-week package, which SPEC has declined to do. The relevant Code provisions require at a minimum either a two week package (on and off-season weeks) or an alternate packaging that "adequately accomplishes the marketing and sales of off-season weeks". The Code provisions are as follows: Section 20-24(B): "(5) 'Off-season' means the time between the date of the closing of Aspen Mountain ski lifts and June 15th of any J. NICHOLAS MCGRATH, P. C. ATTORNEY AT LA W Mr. Steve Burstein September 16, 1986 Page 2 year and also the time between September 15th to the date of the opening of Aspen Mountain ski lifts in any year." "(6) 'On-season' means any time of year not included in the off-season." Section 20-24(E)(3) "The marketing plan shall satisfactorily demonstrate that off-season timeshare weeks are being packaged and included in the proposed sales packages, and that off- season periods will be adequately marketed and sold. The marketing shall include, at a minimum, a multi-week package including one off-season week sold with one on- season week. A marketing plan may present alternative packaging of weeks to be sold, if it can be proven to the city council that the proposed packaging adequately accomplishes the marketing and sales of off-season weeks." The obvious purpose of the Code sections is to make sure that a developer does not sell the choice weeks, and leave an unsold and unsalable inventory of off-season weeks, with a consequent financial drain upon the then existing individual interval owners, since the owners' assessments pay for the project when that developer is gone. The new plan will insure the sale of off-season weeks. Before illustrating that, let's look at the inconsistencies in the existing three-week schedule (see Exhibits B and C), remembering that the developer sought approval of those schedules--they were not the fault of Council. The three columns supposedly coincide with high Winter/ski season, Spring/Fall off-season, and high Summer season. In fact, depending upon the opening and closing of the lifts, Easter, and miscellaneous other factors, many of the weeks do not fit in a clear category. For example, week 14 is under the "Prime Summer" column; yet it is the first week in April. Similarly, week 50 is in the same column; it is in early December. Under the Code's off-season, on-season definitions, the J. NICHOLAS MCGRATH. P.C. ATTORNEY AT LAW Mr. Steve Burstein September 16, 1986 Page 3 following is an approximate appropriate categorization of weeks at the Prospector: Ski weeks (prime ski) 20 Summer (prima Summer) 13 Off-season 12 Unsold off-season 3 Maintenance 4 52 Thus, in order to sell the 12 off-season weeks with the 20 on-season ski and 13 on-season Summer weeks, or 33 weeks, out of the total weeks sold over a period of time, 268 (12 divided by 45) should be off-season, and about 748 (33 divided by 45) should be on-season. That ratio would mean the project would properly sell out, all other sales factors being positive (e. ., assuming a demand for timeshare units, etc.). The Prospector would report its sales to the City quarterly, and the 268/748 ratio would be observed on a yearly basis. If there were a variation, then the City would require and the Prospector would agree the variation to be eliminated in the following year's sales. While such a plan is less precise than "pick one from each of three columns," you can monitor and enforce it nonetheless. By the way, the existing total sales of weeks, without this plan, has less than a 58 variance from it. Total sales to date are 57 on-season ski weeks, 35 on-season Summer weeks and 25 off-season weeks, or 778 on and 218 off. Since the sales efforts by Barry Lefkowitz began, there have been four new sales consistent with the permit. But there are at least six prospective sales that SPFC would like to close, but cannot absent this amendment. These prospective sales include several with two on-season Summer weeks, and an off-season week; several with two Winter on- season and an off-season week, etc. SPFC believes this change will give greater flexibility for sales efforts, and for buyers--thus making the project a more viable one. For example, some buyers interested in the J. NICHOLAS McGrtnrH, a.c. ATTORNEY AT lAW Mr. Steve Burstein September 16, 1986 Page 4 Music Festival may want two on-season Summer weeks; a budget. oriented visitor who likes the Fall colors may want two off- season Fall weeks. The sales staff have had inquiries from fly fisherman who return to Aspen each year in off-season Spring weeks (before the run off), and off-season Fall weeks. Sales to meet those interests can not occur under the existing permit. And there are several interested prospective buyers of three ski weeks who have said that will not buy unless they can buy three ski weeks. Those ski week sales could be balanced by sales to those interested as mentioned, in off-season fly fishing and in the Music Festival. We should also mention that some of the recent sales are to existing owners: e•a•, one person has purchased four separate intervals. These repeat sales speak well for the project. And several of the sales are to real estate professionals. SPFC has demonstrated its good faith and stewardship by, e•g•, paying in excess of $100,000.00 to creditors of Merit, mostly local people, that it was not legally obligated to pay. It has, it believes, achieved the good will of almost all existing owners. It needs, however, this additional' assistance for the project and asks for your approval. Sincerely, J. Nicholas McGrath, P.C. cc: Mr. Ron Mitchell Paul Taddune, Esq. 6:lburste1.904 bcc: Pir. K.C. Mead Pir. Charles M. Arrison Mark Brody, Esq. Mr. Barry Lefkowitz weeks each year. The choice of specilic his own package by selecting one week te owners have Three occupancy t a Prospector iraclional es urchase. Each owner creates weeks is made al the time of p ime Summer and Spring/Fat. P i , Irom each season: Prime Sk r Choose One Choose One Spr{ng/Fall Choose One prime SW prime Summer • ~ 15 ~ 14 1 s 51 25 17 52 26 18 1 27 19 2 28 20 3 29 21 ' 4 30 22 5 31 23 6 32 ,24 ~ 7 33 39 8 34 40 9 35 41 10 36 42 11 ~7- 43 12 ~ 38 44 13 •50 45 4~ 4 48 49 ~ " ;" EXHIBIT 6 1~ i `1 i~ ~U ,ww Sunday to Sunday VACATIC ~C CALENDAR u4rl' WFEK M1A11lFA - 1985 t pn.6-Jan.13 2 Jan.1}-Jan. 20 3 lan• 20.Jari. 27 4 Jan. 2n-Feb.3 S Feb. 3-Fcb. 10 _ 6 Feb. l0.Fcb. i7 7 Fcb. t7-Feb. 24 B Feb. 24-Minch 3 t 9 Mud, }Much to to A1ar.10.1.tu. 17 11 Mar. 17-Mu. 24 12 Mu. 24-Mar. 3i 13 Flu. 31-Apri17 14 April 7-Apri114 `IS April t4-April 21 16 Apr1121-Apr1128 17 Mrll 20.May S IB .~ S-May 12 19 May 12-Ahy 19 20 ~ - Mry 19-May 26 2t ~MaY 26-June 2 22 June 2-June 9 23 June 9-June.16 X24 June I(rjtme 23 2T June 23-Juw 30 26 June 3o-JuN 7 n Juts 7>uty u 28 July 14-July 21 29 Jutr 2!-JuN zg 30 July 28-August 4 31 Aug 4-Aug. 11 32 Aug. II-Aug 18 33 Aug 18-Aug. 25 34 71c'g- 25-Scp. l 35 Sep. 1-Scp. B 36 Sip. &Scp. IS 37 Sep. 15-Sep. 22 3g Sep 22-Scp. 29 39 Sep.'29-Oct 6 40 OR 6-On. 13 41 Oct 13-Oct 20 42 Oct 20-Oct. 27 43 Oct 27-tJw. 3 44 Nw. 3-Nw. 10 45 rbv. l0.tJw. 17 46 tow. 17-Pbv. N , 47 tow. 24-Dec.l 48 Dcc 1-Dec B 49 Dec ILDcc IS SO Dcc IS-Dec 22 51 Dec 22-Dec. 29 52 Dec 29--tan. S -1986 pn. S Jan- 12 Jan. IZ Jan. 19 Jan. 19 pn. 26 Jan. 26-Fcb. 2 Fcb. 2-Fcb. 9 Fcb. 9-Fcb. 16 Fcb. I(rFeb. 23 Fcb. 23-Much 2 Ruch 2-Ftatcfi 9 Atu. 9-Mu. 16 Fiu. 16-Mar. 23 Mu. 23-Mar. 30 Mar. 30-Mill 6 April (rAprll 13 April 13-April 20 Agil 20.Apr11 n April 27-Mry 1 May 4-Mry 11 May II-Mry IB Mry 10.AIry 25 May zs-June 1 ~)une 1-June e Jmie a-June IS June IS-June 22 June 22-June 29 June 29--July 6 July 6-lutY !3 July 13-July 20 July zo-July n July 27-Auguq 3 Aug. 3-Aug. 10 Aug. 10.k~g 17 Aug. 17-Aug. 24 Aug. 24-Aug 31 keg. ~1-Scp.7 Scp. 7-Scp. 14 Scp. 14-Scp. 21 Scp. 21-Scp. 28 Scp 2l1-Oct S Oa S-Oct 12 Oct 12-Oct 19 Oct 19-0.t 26 0.t 2CrNw. 2 Nov. 2-Nov. 9 Nov. 9-tow. 16 t4ov. Ib-t4ov. 23 t4ov. 23-tow. 30 Nw. 30.Dcc. 7 Dcc. l-Dec 14 Dcc: 14-Dcc. 21 Occ. 21-Dec. 2g Dcc 28-Jan 4 1987 1988 1989 J+~ 4-Jan I l )art }jan IO )an. 1 Jan. 8 JK 11JK 18 Jan. t0.Jan. 17 )an. 8-Jan. IS Jan IB-Jan. 2S pn. 17 pn. 24 J?n. IS-)an. 22 )an 2S-Fcb. i Jan. 24-pn. 31 Jan. 22-Jan. 29 Fcb. l-Ftb. a Jan. 31-Feb. 7 Jan. 29-Feb. 5 Fcb. B-Fcb. IS Fcb. 7-Fcb. 14 Fcb. S-Feb. 12 Fcb. IS-Feb. 22 Feb. 14-Feb. 21 Feb. l2-Feb. 19 Feb. 22-Muds 1 Feb. 21-Fcb. 28 Fcb. 19-Fcb. 26 Mudr 1-Much B Fcb. 20.Mud~ 6 Feb. 25-Much S Mar. g-Mar. IS A~ 6-Match 13 Dlvcfi S-FUrt~h 12 ALr. IS-Mar. 22 Much 13-tducfi 20 Match 12-Much 19 Mar. 22-Mu. 29 Mardi 20.Martfi 1) Much 19-A4n3~ 26 Mu. 29-April S Atarth 27-Alxll 3 Much 2CrAprll 2 Aprl) S-Ag1I 12 April 3-April 10 April 2-Mrll 9 April l2-Api1119 AIx1110-/yxfl l7 /y~rll 9-Mr1116 April 19-April 26 Apr1117-Apil 24 Apr1116-Apr1123 April 2(r64y 3 April 24-ay 1 April 2J-Aprg 30 May 3-May 10 Ahy 1-Mry 8 April 30-May 7 Utry 10.May 17 Ffay B-May IS Mry 7-May 14 Mry t7-Mry N Atry IS-Mry 22 Mry 14-Mry 21 May 24-Airy 31 Afay 22-May 29 May 21-May 28 May 31 June 7 'Afry 29-June S May 28-June 4 June 7 June N June S-June 12 June 4-June 11 June 14-June 21 June 12-June 19 June l l June 18 June 21-June 2g June 19-June 26 June IB-June 2S J,me 28July S June 26-July 3 )urc 2S-July 2 >uly s htr 12 Juh' 3 July to ><dy z-July 9 july 12-July 19 July l0.)uly 17 July 9-July 16 July 19-July 26 July 17 July 24 July 1(rjuly 23 July 26-AuguA 2 July 24 July 31 holy 23-July 30 Aug. 2-kig 9 July 31-Aug. 7 h~tY 30-keg. 6 Aug 9-Aug 16 Aug 7-Aug N Aug. 6-Aug. 13• keg. 16-kig 23 Mpg. 14-Aug 21 keg 13-Aug 20 Aug. 23-Aug 30 Aug. 21-Aug 28 Aug. 20.Aug 27 Aug. 30-Scp. 6 Aug. 2g-Sep. 4 Aug 27-Sep. 3 Sep. 65cp. 13 Sep. 4-Scp. 11 Scp. 3-Scp. 10 Sep. 13-Scp. 20 Scp. 11-Sep. 18 Scp. 10-Sep. 17 Sep. 20-Scp. 27 Sep. lB-Sep. 25 Sep. 17-Scp. 24 Scp. 27-Oct 4 Scp. 25-0.1.2 Scp. 24-Oct 1 Oct 1-Oq. 11 Oct 2-Oct. 9 Oct 1-Oct 8 Oct 11-QA. 19 Oct 9-Oct 16 Oct. 8-Oct. l5 Oct IB-Oct. 25 Qt 16-OR. 23 Oa. IS-Oct 22 Oct 25-Nw. 1 Oct. 23-Oct. 30 OR. 22-Oct 29 Nw. 1-Nw. a Qt 30.Nw. 6 On. 29-Nw. S t4ov. 8-Nw. IS tow. 6-t4ov. 13 tow. S-tow. 12 Nov. 15-tow. 22 Nw. 13-Nw. 20 t4ov. i2-t4w. i9 t4uv. 22-Nw. 29 14ov. 20.t4ov. 27 tow. 19-Nw. 26 Nw. 29-Dcc. 6 Nw. 27-Dec.1 Nw. 2(fOcc 3 Dcc. 6-Dcc. 13 Dcc 4-Dec. 11 Dcc. 3-Dec. 10 Dcc. 13-Dec. Zo Dcc. 11-Dcc. i8 Dec. 10-Dec. n Dec.20.Dec. 27 Dec. lB-Dcc. 25 Dec. 17-Dcc. 24 Dcc. 27 Jan. 3 Dcc 2S-Jn 1 Dec. 24-Occ 31-Jan 7 EXHIBIT C MEMORANDUM TO: City Attorney "building Department ~C~ty Engineer ~F'inance Department PLANNER: Alice RE: Prospector Lodge Timeshare Project DATE: July 5, 1983 A The attached application requests approval from the City of Aspen for its plan to timeshare and condominiumize the lodge known as the Prospector. The application also requests a conditional use permit for timeshare use at the lodge's location and to amend the existing conditional use permit governing the parking spaces provided on the property. Please review the materials and return them to the Planning Office by July 18 so that may adequately prepare for its presentation before the City P&Z on August 2. Thank you. ~ECEI'~ED .°~~ o ~ ~sa3 CITY CF ASP[N FINANCE DEPT: c Security Pacific Finance Corp. 10089 WILLOW CREEK ROAD • TELEPHONE (619) 578-6150 • SAN DIEGO, CALIFORNIA 92131.1690 ~,_ ~ ~ay 15, 1986 ` ~, ~i r~,~l ! ~t~1, ri ~~ Ir ~_.~._.-.~ ~i~l -_ .'!~~ s l ~ .: ~ i t t..,( UiT'Y Nir( vS~„ t ~~rF~:GE J. Nicholas McGrath, Jr., Esq. 600 East Hopkins Avenue Suite 203 Aspen, CO 81611 Re: $25,000 Irrevocable Letter of Credit from Merit Investment Co. (of Aspen), Inc. Dear Nick: A December 31, 1984 corporate statement found in the papers from Tom Schober's offices indicated that the above reference has been on file with the City of Aspen in conjunction with Merit's operating permit. Please check with Ron Mitchel, Assistant Manager of the City, for verification. If it is still outstanding, please see if SPFC could get a copy; if it has matured or no longer exists, try to get a date from Ron. Sincerely, yy~ ~~ ~ Fre yer Projecis~ministrator Resort & Real Estate Financing FDM:klr ~ - ^ _ t cc: Mark A. Brody, Esq. 'I(_`~u'Q' Kathy J. Machir ~ ~ ~~i (~ Kenneth C. Mead ~ ~ie/Q"- C y ~cL ~~ ~ `~ SUISIOIRM:SECURITY RRCIFK CORIORRTION ,. ,.~ .~. :_ .T ar.nxry 2, ].,35 ID 1G~) I'~ /- `i.~' -,~, IRRIsVOf,ASLC L?!'PT7sR Ol? CKEDI'P i`fi5Q102 City of Aspen 130 Sou`h Caleaz Aspcs CO 87 61 AttenL:ion: llirector of Finance ;~~ it7 : ~~ JIi ,t1 C. `,i it [-.c ~i0 1 -tt ~ ` t) -_t 7_11 ~Oll1 1.V JY-, I-d to .c r.~rlcs Dra~nl on Y ckc-, ii•alionai '=~.i~,. L:=ttii of C~1~.t 12.;0102 .~- -':1 J an!,: _~ry %, 19 5. iicne 5.:: ~~,-y: Gi_ty of .1~spen Avlcun!:: 'ltaenty Thousand and no/iC0 Dol~ars ($20,000.00) 1;;ip r^. i:1Un Dflt e.: DeCCP.:bor 31, i~fij 1'Or the AcCOti 1t. Of: TtOri.t I7]CC'-5 t1TiP i11. CO. (Of AS pi C'il) , 111:,. - A Colorado Co::poration. nl r - ~.~ust be aCl C it ::in 1C'd by: A s ~ ect st a e,~ent o` *_hc Cit} of Ps.pen ~~ D1r.PC LOL Or )'1nanC O1: any Otl!flr }~ YFCn Or en tit}' do°::i ;Dated i.n raritin~; b}' the C: ~y of Aspen ,-cadir,g: ~~pursuaui: to Chat certain 1i_cense y,ranted l+y the City of Aspen pursuant to Section 70-24 of the Municipal C~~~e of the City u{ 4sp~r. for the marketing and sale of t;me share units. You are avtl~or-izeci anc direcied Co pay tllc alnctmT. of. $20,0(10.C0 under tY:c Letter of Credit 1185oi02 to the City of Aspen". We hereby agree with you that drafts drawn under and in compliance e*ith the Lt l'ms ui chi. r; ;r~~9 it c~i-IL be honored upon present atipn ar,3 del:iv cry of tihe duel' ~ni- ~ as sped%ied if presented to this uf~ ice on or before tl:c• e~ p_. ~i.on date in:'.icated above. ~ l~~) '. li'. )~_'~117 ~ •Cr~'Y l h'(ifl:., ~ Flu U4 .k ( '.l U: (~'U'~ 7~i 1-`7 S~lUO January %, 1485 Page Too 'Phis Letter of Credit i.:: suh;ec!- Co and sbai:; 1::.. yovcrned ~y tL~: Unify,-.. GllF COA15 arul Practice .for DocomenCary Credits ('974 l: ev i.sionj, Int ernat ~> ::1 Chamber of Cummerce PuLlication Nu. 290 and, :.o the estenC not i_ncuns5_s.-~ -nt- there~~rith> b}~ Article 5 of the L'rifoma Co,u.u~rci_,,.1. Go~io- as in effect in Colorado on the date hereof. All noti_a:,s and other communications with yes-,acct Co this T eater of Credit sha71 be in on-iY.iu~, ancT, if to us, .:ha11 b < < re .;cd Lo u~ at P cl;ors Dlatlor.al P~anl" Attuiticn Don3l.d L. Themps~n, 6~raor Vice Prc>ident, /:?10 South 23 Street, Cnnah.a, Nebr_cska 681.07, specifTcal.ly ~.-ef_en-ii;8 thcrsin to Paclcere b'atienal. Punk, Irrevocable Letfcr ~.i CrrU.i ~{850:IU2 and iS to you, a? City of Aspen, 130 South Galena, Aspen, Colorado S'611. Since,cly, f ~/ : ! / ~ / '.>.. Donald L . T~P~ompson Sr. Vice 1?r~ai deny. liEi: /cas TF,E UIdDF;RSI-GNED INSTRpCTP,D PACI:EkS NATIONAL PF'•.~R. TO ISSP.R TII!s AP:U`1F. 1dT'?'L'R OF CRI3DIT AND AGRLr.';; 7'0 THL TERMS UNDLR WHICII IT IS 1SSUlill. MERITTNVESTI'i;;1~T CO. (cf Aspen) , INC. A COLCT:ADO COR'ORAT.T_ON * .,,,, * APPLICATION FOR CITY OF gS!'EN TIMGSIIAiZE PROJECT LICENSE, AS REQUIRED BY ,*4 * SECTION 20-24 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN I. NAME OF TIMESHARE PROJECT: The Prospector 2. MAILING ADDRESS: P.O. Box 3678 Aspen, Colorado 81612 3. LOCATION ADDRESS: 301 East Hyman Avenue Aspen, Colorado 4. BUSINESS TELEPHONE NUMBER(S) 303-920-2030 5. MANAGER OF TIMESHARE PROJECT: Name(s) Phone Number(s) Address Terry Liming 303-920-2030 Box 3678 Aspen, CO 81612 Jan P•7anning 303-920-2030 Box 3678, Aspen, Colorado 81612 6. PRINCIPAL(S) OF TIMESHARE PROJECT: Name(s) Phone Number(s) Addresses L. Vernon Cagle 402/734-7555 Box 12189, Omaha, NB 68112 President Merit Investment Co. Tlnmas Sclrober 303-726-9455 Box 318, Winter Park, 00 80482 7. NUMBER AND TYPE OF UNITS IN TIMESHARE PROJECT: Number of Units TYPe (studios, one-bedroom, etc.) 1 TOTAL 2 0 8. COMPUTATION OF TIMESHARE PROJECT LICENSE FEE SUBMITTED WITH Tj}I$ A~P1.LC¢T~•ONq ~ 1Q84 First Year of License Issuance $13.70 x no. of days r~te--maining in calendar year Total 1st Year License Fee $13.70 x 216 _ $2959.00 Q,K.~ Subsequent Year(s) License Fee = $5,000.00 Rset:~td 0 Y Cr+y .i Atpe •~ s'~osldy '7~b:1~„ 9. ALSO SUBMITTED WITH THIS APPLICATION IS THE SUM OF $20,000 CASH OR $20,000 IRREVOCABLE LETTER OF CREDIT IN THE FAVOR OF THE CITY OF ASPEN FOR THE PURPOSES OF SECURING THE TIMESHARE PROJECT'S RESPONSIBILITY FOR 1'HE CITY'S POTENTIAL LEGAL FEES AND EXPERT WITNESS FEES IN THE EVENT OF THE TIMESHARE PROJECT'S DEVIATION FROM THE APPROVED MARKETING PLAN AND SALE TECHNIQUES. R«e--ved 3Y C:~y~ffFs ~~ uh bI~ISY.7(g~,G,u,.,,~_ -~ Project 10. APPLICATION PREPARED AND SUBMITTED BY~, Manager ,Sa (~-s gnat re title da'tf APPROVAL BY CITY OF ASPEN CITY COUNCIL: I, Kathryn S. Koch, duly appointed and actin City Clerk hereby certify that the foregoing application for a City of Aspen Timesi~are Project License was ap reed by th City Council of the City o Aspen, Colorado, at a meeting held on _day of 198! Kathryn Kocl:, City Clerk 1 bedroom 1 bedroom-manager unit pack¢rs national bank P\IC May 25, 1984 IRREVOCABLE LETTER OF CREDIT 4840525 City of Aspen 130 South Galena Aspen, CO 81611 Attention: Director of Finance We hereby establish our Irrevocable Letter of Credit in your favor, drafts to be marked "Drawn on Packers National Bank Letter of Credit 44840525 dated May 25, 1984. Beneficiary: City of Aspen Amount: Twenty Thousand and No/100 Dollars ($20,000.00) Expiration Date: December 31, 1984 For the Account of: Merit Investment Co. (of Aspen), Inc. A Colorado Corporation Drafts must be Accompanied by: A signed statement of the City of Aspen Director of Finance or any other person or _. _. entity designated in writing by the City - ---~ ;-~; t~ of Aspen reading: "Pursuant to that certain -.R,~ ~ .t ,„"~°'~-~„~,~ ""' Y -ate. ,, license granted by the City of Aspen pursuant to Section 20-24 of the Municipal Code of the City of Aspen for the marketing and sale of time share units, you are authorized and directed to pay the amount of $20,000.OC under the Letter of Credit 44840525 to the City of Aspen". We hereby agree with you that drafts drawn under and in compliance with the terms of this credit will be honored upon presentation and delivery of the documents as specified if presented to this office on or before the expiration date indicated above. 4710 South 23rd Street .Omaha, Nebraska 68107 • (402) 731-4900 0 0 May 25, 1984 Page 2 This Letter of Credit is subject to and shall be governed by the Uniform Customs and Practice for Documentary Credits (1974 Revision), International Chamber of Commerce Publication No. 290 and, to the extent not inconsistent therewith, by Article 5 of the Uniform Commercial Code as in effect in Colorado on the date hereof. All notices and other communications with respect to this Letter of Credit shall be in writing and, if to us, shall be addressed to us at Packers National Bank, Attention Donald E. Thompson, Senior Vice President, 4710 South 23 Street, Omaha, Nebraska 68107, specifically referring therein to Packers National Bank, Irrevocable Letter of Credit 4840525 and if to you, at City of Aspen, 130 South Galena, Aspen, Colorado 816ll. Sincerely, ~~! '~ Donald E. Thompson Sr. Vice President DET/cas THE UNDERSIGNED INSTRUCTED PACKERS NATIONAL BANK TO ISSUE THE ABOVE LETTER OF CREDIT AND AGREES TO THE TERMS UNDER WHICH IT IS ISSUED. MERIT INVESTMENT CO. (of Aspen), Inc. A Colorado Corpo~tion By v v 4 ernon Cagle, Pre August 17, 1983 Alice Davis Planning Office City of Aspen 130 S. Galena Aspen, CO 81611 Re: Prospector Timeshare Dear Alice: Merit Investment has been granted a 4'~ million dollar ($4,500,000) direct purchase loan commitment by Security Pacific Corporation for the purpose of providing consumer loans to purchasers of fractional estates at the Prospector. These loans will be available to all qualified purchasers. Normal financing provided will be 80~ loans financed over ten years at market rates, secured by promissory notes and trust deeds against individual fractional estates. If you have any other questions please give me a call. Sincerely, Terry Li inc~`~ TL/ks cc: Gideon I. Kaufman, Esq. GIDEON I. KAUFMAN DAVID G. EISENSTEIN Alice Davis Planning Office 130 S. Galena Aspen, Co 81611 LAW OFFICES OF GIDEON I. KAUFMAN R PROFESSIONAL CORPORATION BOX 10001 611 WEST MAIN STREET ASPEN, COLORADO 61611 August 9, 1983 ~ ~~ ~, . ir:. L-_ ._ ~ i I I '? ~ I ~1 F,,~^ l ~ 1983 iP'_?fJ i i't i Y~Pd CO. ~~:'',~ 1 n~ICF_ Re: Application for Timeshare Use Approval of the Prospector Dear Alice: TELEPHONE AREA CODE 303 925-8188 This letter is written to comply with the request of the Planning and Zoning Commission to provide information concerning management service and amenities offered when the Prospector was previously operated as a lodge. As I expressed to you in our initial meeting before the P&Z I feel that we have already complied with the requirements of the ordinance since the Prospector has not been operated in the previous three years as a lodge. Nonetheless, over my objections the Planning and Zoning Commission- determined that it wanted information on this matter. You will find this letter has been verified by Pete Stone who was the owner previous to the Cantrups. According to Pete, the Prospector was last operated as a lodge during the 1979-1980 ski season. During that time and the three years previous breakfast was served during the high season. There was service available at the front desk between the hours of 7:00 a.m. and 10:00 p The lodge did not provide any transportation. Check-i between 7:00 a.m. and 10:00 p.m., and if anyone could meet those hours a key was left for him. There was a outdoor pool that was used only during the summer. lodge had no lobby however it had a living room which .m. n was not small The was used as a lobby type meeting-socializing area by the guests. Very few amenities were offered by the lodge. There were no television sets or telephones in the rooms. The lodge was intended to provide people with an opportunity to get away from the city lifestyle and its distractions. The newly reconstructed Prospector with its new design and new purpose clearly is offering amenities and services much different from the old Prospector. The amenities offered by the new Prospector are equal to or Alice Davis August 9, 1983 Page 2 greater in quality and quantity than were found in the old lodge. It is obvious that the new Prospector has been designed to serve clientele in a manner different from the old lodge. A timeshsare project is a completely different concept appealing to a different segment of the population and therefore offers a different kind of amenity package and ambience. The intent of the lodge condominiumization ordinance was to preserve the character of a lodge as it was previous to its condominiumization. This intent clearly is not applicable to the timeshare use proposal now before you. I hope this letter satisfies any questions the P&Z had. If you have any additional questions please feel free to contact me. Very truly yours, LAW OFFICES OF GIDEON I. KAUFMAN, a Professional Corporation ~~ By Gi eo K ufman GK/ks VERIFICATION STATE OF COLORADO ~ ss COUNTY OF PITKIN ) I have read the foregoing letter and I believe it to be an accurate statement of the services and amenities that the Prospector provided when it was last operated as a lodge. F. Pete Stone Acknowle~ed and sworn to before me this i~~~day of -~rrz~ 19 ~~ by F. Pete Stone. My commission expires: ~-~~~~~~ - ? _ /~ ~ / No ry Public Address (,~////,'.~~~~~„ ~-. . , M E M O R A N D U M T0: Alice Davis FROM: Sheree Bonfield DATE: July 15, 1983 ,.., RE: Prospector Lodge & 825 E. Hopkins, Timeshare Applications The Finance Department has reviewed the above mentioned applica- tions and would like to make the following comments: A. Prospector Lodge 1. Sales Taxes a. As a condition of approval, evidence of a Colorado State Sales Tax license should be presented to the City. b. City, County & State Sales taxes will be applicable to any short term rentals of these units. These taxes should be paid to the State, who is the City's Sales tax collection agent. 2. Real Estate Transfer Tax a. RETT will apply to initial and subsequent sales of these timeshare interests. B. 825 E. Hopkins 1. Sales Taxes a. Sales tax collection was not addressed in the application. b. As a condition of approval, evidence of a Colorado State Sales Tax license should be presented to the City. c. City, County ~ State Sales taxes will be applicable to any short term rentals of these units. These taxes should be paid to the State, wh.o is the City's Sales tax collection agent. 2. Real Estate Transfer Tax a. RETT will apply to .initial and subsequent sales of these timeshare units. 3. Bond or Letter of Credit for upgrade a. The requirement for a bond or letter of credit to * insure completion of the renovation was not addressed. ,.,, Page Two a... Alice Davis July 15, 1983 As appropriate, a bond or letter of credit whould be obtained prior to final approval. b. Neither applicant addresses the Business License fi Sales Tax Licnese that requires payment of the Occu- pation Tax. These requirements should be addressed. SS/kmz ASPEN*PITKIN REGIONAL BUILDING DEPARTMENT M E M O RAN D U M T0: Alice Davis FROM: Patsy Newbury DATE: July 8, 1983 RE: Prospector Lodge - Timesharing The Certificate of Occupancy for the Prospector Lodge was conditional to May 30th, 1983. 1. The requirement for Handicapped access was given a variance by the Board of Appeals but the ammendment was never approved by the City Council which was a part of that variance approval (see letter attached). 2. They agreed to go through process for one (1) additional parking space since one was taken up in the underground parking by mechanical egiupment. No evidence has. been provided that this has been done. 3. Landscaping plan to be completed as per'"plans by May 30th, was not done of course because of snow;. An `extension of one .month was granted. Original plans'', showed location of trash .receptacles. The new proposed changes approved by Jim Holland do not show where the trash bins will be. These may be a problem since there is no alley.: Requirement should be reinforced that they be provided and accessible. All conditions have not been met therefore the Certificate of Occupancy expired on June 30, 1983. ~; ,; offices: mail address: 110 East 1-laltam Street 506 East Main Street Aspen, Colorado 81611 3o3/9t35-5973 Aspen, Colorado 81611 r GIDEON I. KAUFMAN DAVID G. EIS ENSTEIN LAW OFFICES OF GIDEON I. KAUFMAN A PgOFE5510 NAL CO gPOFATION 9070 10001 fill WEST MAIN STREET ASPEN. COLORADO 81611 July 5, 1983 Alice Davis City of Aspen Planning Office 130 S. Galena Aspen, CO 81611 Re: Prospector Application for Timeshare Use Dear Alice: TELEPHONE AREA CODE 303 925-8166 This letter is intended to provide you with supplementary information for the above referenced application. This information is submitted to comply with the requirements of of the Municipal Code of the City of Aspen (Lodge Condominiumization ordinance) as such may apply to this application. Proof of ownership, an improvement survey, site inventory, draft of the proposed condominium declaration and a draft of the proposed condominium declaration have already been submitted to the Planning Office. The requirement set forth in Section 20-23(a)(3) to submit an affidavit concerning services does not apply to this application. Due to the demolition and subsequent reconstruction of the Prospector, it has not been operated as a lodge for the three winters previous to the date of this application. Unit No. 108 of the Prospector has traditionally been used for employee housing. The Applicant agrees to designate permanently this unit as employee housing. This unit can provide two pillows of employee housing. On-site management, maintenance and other tourist accommodation services will be provided to the users of the units, year round. These services are better in quality and quantity to those provided previously by the Prospector lodge. As was indicated above the Prospector has not been operated as a lodge for at least three years as it was in the process of being demolished and rebuilt. Alice Davis July 5, 1983 Page 2 The common areas of the lodge indicated on the site plan will be continuously maintained and no changes, alterations or renovations will be made to the common areas which will diminish their quality. As is indicated on Exhibit 1 attached hereto and incorporated herein by this reference, capital expenditures incurred in rebuilding the Prospector totalled not less than three million dollars ($3,000,000.00). Because this is a timeshare use project and not a lodge condominiumization project those portions of the lodge condominiumization ordinance concerning the owner's personal use restriction, the tourist market and the economic character of the clientele are not directly applicable. It is important to note however that a typical purchaser will not purchase more than one fractional estate in the project and each fractional estate allows only one week of use in the high season. It is expected that the purchasers of these units will have a varied economic character from moderate to wealthy. If you need any further information on this please let us know. Very truly yours, LAW OFFICES OF GIDEON I. KAUFMAN, a Professional Corporation By Gid o Kaufman GK/ks F STATE OF COLORADO ) ss. CITY AND COUNTY OF DENVER ) nFFrnnvrm I, L. Vernon Cagle being duly sworn, state and affirm that: 1. I am President of Merit Investment Company, Inc., the applicant for timeshare use at The Prospector Lodge in Aspen, Colorado. 2. The required documentation provided pursuant to Section 20-24(D) of the Municipal Code of the City of Aspen and the facts contained therein, are true and accurate to the best of my knowledge and belief. 3. The requirements of Section 20-24 shall be binding on the successors and assigns of the applicant Merit Investment Company, Inc. FURTHER AFFIANT SAYETH NOT. // L. Vernon Cagle The foregoing was acknowledged before me this ~~S day of 1983, by L. Vernon Cagle, President of Meri( Investment Company, Inc. Witness my hand and official seal. My commission expires: [SEAL] ?dy Cornission Expires March 3,1956 + ~ ^ /% (~ J ~' c~-~.- ~k"~ Notary Public i Address: •°-- SUITE 1`„', ,..... , . , ..>:i-~-5'. 1660 LIICCOL`; S ~a_![5 . DENVER, COU~'I:.?L`-U 80264 ,r.-. ~.., PUBLIC NOTICE RE: 825 E. Hopkins Condominiums Timeshare Project Conditional Use and the Prospector Lodge Timeshare Project Conditional Use NOTICE IS HEREBY GIVEN that a public hearing will be held before the Aspen Planning and Zoning Commission on Tuesday, August 2, 1983 at a meeting which begins at 5:00 p.m. in the City Council Chambers of City Hall, 130 S. Galena Street, Aspen to consider conditional use approval for two applications submitted (825 E. Hopkins Condominiums and the Prospector Lodge, 301 E. Hyman) for conversion from their existing status to timeshare projects. For further information, contact the Planning Office, 130 S. Galena Street, Aspen, 925-2020, ext. 227. s/Perry Harvey Chairman Aspen Planning and Zoning Commission Published in the Aspen Times on July 14, 1983. City of Aspen account. P y w' /°`\ Block ;8 - continued - es Lots P1, N [falter b'. }lampel, Jr. Box 1034 Aspen, CO 8161'1 Bloch 77 Lots B, C Augustus Felton HaIlum Plargcry L. Hall.um 410 South Aspen Street Aspen, CO 81612 Lots C - I Leroy C. 1'aas 228 L. Cooper Aspen, CO 81612 lots I. -0 Mans B. Cantrup P.O. Box 388 Aspen, CO 81612 Lots l' - S Canada llouse o1 Aspen, Ltd. 411 5. Monarch Aspen, CO 81611 141ue1: 7') Luis U - I Barry W, and Mary A. Bass 110 Mercantile i)allas Building Da11as 1, 'texas 75'101 Lots fl - S Kivcrview Condominium Association 1034 GasC Cuuper Street Aspen, CO 81612 Number of Units - 27 Block 76 Lots A. B, Frances Willoughby Herron pt. C P.O. Box 545 Aspen, CO 81612 Lots D, E. Snow Flake Lodge, Inc. pt. C 221 E. Hyman Avenue Lots F - I Aspen, CO 81612 Lots '< - N "L 10 Cooper Association, Ltd. 210 Cooper Street Aspen, CO 81612 Lots 0 - S Lim^lite, Inc. Leroy G. Paas 228 E. Cooper Street Aspen, CO 81612 "~. -Block 83 k~ffjner Park Block 82 Lots A -D IntraWest Bank of Denver, National Association 633 - 17th Street Denver, CO 80270 Lots E - G Hyman Avenue Limited Partnership 415 East Hyrnan Avenue Aspen, CO 81611 Lots fl & I Aspen Conunercial Condominiums Robert Barnard P. O. Box 1880 Rifle, CU Number of Units - 3 Lots I - S City of Aspen Block 81 Lots A & B Aspen Arcade Limited 301 E. Hopkins Avenue Aspen, CO 81612 Lot C Ferenc and Mirte Berko P. O. Box 360 Aspen, CO 81612 Lots D - I Mill Street Plaza Associates 434 E. Cooper Avenue Aspen, CO 81612 Lots K 8 L Crystal Palace Corporation P. O. Box 32 Aspen, CO 81612 Lot M Grand Finale, Ltd. P. O. Box 32 Aspen, CO 81612 Lot N & 0 Gordon L. Whitener Howard Ross 314 E. Hyman Avenue Aspen, CO 81612 Lot P Estate of 'v.'illiam R. Shaw Harry [. Shaw 6711 E. 50th Avenue Commerce City, CO 80222 Lot R & S City of Aspen Block 88 Lots A & B Sabbatini Sport, Inc. 208 S. Mill Street Aspen, CO 81612 Lots K, L, Mountain Enterprises - 806 pt. M P. O. Box 5727 Snowmass Village, CO 81615 i° ~.-a ,, . ;k 9U A Park Place londominium Association, Inc. ;: D.J. Fleisher 620 E. Hyman Avenue Ps pen, CO 81611 Number of Units - 12 Scott Investco, a co-partnership Box 4257 Aspen, CO 01612 Block 89 Lot A F~ B B E F: Associates 308 South 11111 Street Aspen, CO 81611 Amelia L. Kopp & Company P.O. Box 100 Aspen, CO X1612 -pt Lot C Birkwood lssociates P.O. Box 3421 Aspen, CO 31612 pt Lots C & D Roaring Fork Condominium Association, Inc. 417 E. Hyman Street Suite 402 Aspen, CO 81612 Number of Units - 3 ~t Lots D, E,F, Roaring Fork Arms Condominium Association, Lac. and pt G 417 E. ~Ilyman Street Suite 402 Aspen, CO 81612 Number of Units - 18 pt G 8 all James E. Cox H & I P.O. Box 111 Martinez, CA 94553 Lot K & pt L Golden Flora Building, Ltd. P.O. Box 4947 320 South Mill Street Aspen, CO 81612 Aspen Sports, Inc. 408 East Cooper Street Aspen, CO II1611 Lot M & N Red Onion Condominium Association, Inc. a Charles Israel 600 East Hopkins Street Aspen, CO 81611 Number of Units - 3 CERTIFICATE OF MAILING I hereby certify that on ~ '~ / oL- 1 correct copy of the Notice of P lic Baring re arding /~ .~ ~ _ //, - - 2 ~, . _ ~ti, m ,..a'~~ Av, .him. a true and was deposited into the United States mails, postage prepaid, and addressed to the followi~ng~:-~ p ,~P ~ ~~~.e~~i ~~~ ~ ~~l ze.~.~ ~ lL ? ~ c~~ Martha Eichelberger '/ ASF+EN~PITKIN~..,~EGIONAL BUILDII._.~ DEPARTMENT M E M O R A N D U M T0: Alice Davis FROM: Patsy Newbury ~,/] ~ DATE: July 8, 1983 ~ RE: Prospector Lodge - Timesharing The Certificate of Occupancy for the Prospector Lodge was conditional to May 30th, 1983. 1. The requirement for Handicapped access was given a variance by the Board of Appeals but the ammendment was never approved by the City Council which was a part of that variance approval (see letter attached). 2. They agreed to go through process for one (1) additional parking space since one was taken up in the underground parking by mechanical egiupment. No evidence has been provided that this has been done. 3. Landscaping plan to be completed as per plans by May 30th, was not done of course because of snow'. An extension of one month was granted. Original plans showed location of trash receptacles. The new proposed changes approved by Jim Holland do not show where the trash bins will be. These may be a problem since there is no alley. Requirement should be reinforced that they be provided and accessible. All conditions have not been met therefore the Certificate o£ Occupancy expired on June 30, 1983. offices: '1'10 East Hallam Street ,\ Aspen, Colorado 8'16'1'1 303/925-5973 mail address: 506 East Main Street Aspen, Colorado 816'11 C Colin C Johnston Vice President /irtraWest/~ IntraWest Bank of Denver, N.n. 633 Seventeenth Street Denver, Colorado 80270 (303) 293-5141 June 30, 1983 Ms. Alice Davis City Planning Department Aspen, Colorado RE: Renovation Expenditures for The Prospector Dear Ms. Davis: This letter is to confirm that the following amount represents the total expenditure for renovations and repairs to The Prospector Lodge in Aspen, Colorado: $3,983,677.71 Enclosed with this letter is documentation evidencing the expenditure of this amount. Note that the schedule filed in the United States Bankruptcy Court for the District of Colorado indicates an amount of $4,362,897.39, which includes interest on the total expenditure. Please contact me if you have any further~},uestions regarding this matter. Colin C. Vice Pres r'^ d~ /ntraWest~~ ea.>~ IntraWest Bank of Denver, r.~. 633 Seventeenth Slreet Denver, Colorado 80270 (303) 2932211 3/3/83 Cantrup Foreclosure Sale Data Prospector Gross Loan at 3/1 3,916,003.62 Advance to complete, per MDC 100,000.00 MDC Fee 50,000.00 Interest through Default Dates -- 9/30/82 10/1/82 12/31/82 225,134.62 Default Rate Interest (18%) thru 3/2!83 ~• 118,599.45 3/3/83 Interest at per diem ,, ~ 1,958.00 Principal & Interest through 3/3 4,411,695.69 Legal Fees '" 12,054.70 Receivership Costs ~" ~. 8,103.33 Collection Costs _' ~. 3,866.60 Other _ '_ 1,368.54 Settlement - Mechanics Lien Total Debt at Sale Date - _ 4,437,088,86 .. iahl-Kern, Inc. Mechanic's lien ./o Herbert C. Phillips Aspen Inn 3333 S. Bannock St., Suite 600 7/30/82 3nglewood, CO 80110 Disputed 3oly Cross Electric Assn L301 Grand Avenue ?.0. Drawer 250 Glenwood Springs, CO 81601 [FG Leasing Company L00 Dain Tower ?.0. Box 1160 Minneapolis, MN 55440 Mechanic's lien? Wildwood Inn Date unknown Disputed Savin Copier Date unknown [nternal Medicine Specialists Medical Group, Inc. .ddress unknown Security and date unknown Disputed teferred to: )avid M. Powell Gorsuch, Rirgis, Campbell, walker and Grover 318 Seventeenth St., Suite 1200 Denver, CO 80202 _ntraWest Sank of Denver ?.0. Box 5808 )enver, CO 80217 Deed of trust Prospector Lodge 1/6/ 81 Deed of trust Aspen Inn Aspen Inn Apts., Onits 21,22; 23, 31, 33 1/6/81 Deeds of trust Chase Lots Robinson Parcel Blue Spruce Snowchase Top of Mill Sparr Barbee A Stirling 925 Durant Aspen Mt. Mining Claims 18,947.92 3,165.15 6,980.48 226,926.00 4,362,897.39 4,394,717.00 5,493,996.29 Subtotal $14,507,630.23 ,-., . _. a a - CNITED STATES BANKRUPTCY COIBT For the District of Colorado 1\ RE Hans B. Cantrup S.S. No. 074-26-5744, and June Allen Dioss Cantrup, aka June Moss, aka June Cantrup, aka June M. Cantrup S,S. No. 375-20-1891, . (caption continued on attachment) IinduJr here :Jl names ustJ l+y Debtor within lest h) Car+j DEBTOR. iJN 1;;1583 G i --_--..-~.---._. _ _ _~.%UTy CLARK CASE NO. 83 B 01161 G STATEMENT OF FINANCIAL AFFAIRS FOR DEBTOR ENGAGED IN BUSINESS Fa.h yue+tion shoulJ he answaeJ or the failure to answer espleintJ. If the grower is "none." this shoulJ he +tateJ. If aJJjtional space is needed for the Jnaw rrs to any queuion, a separate shee[ properly iJentifirJ anJ male a part hereof. shoulJ be useJ unJ attacheJ. If the JrMnr is a pannenhip ur a wrporatiun. the yueuioro shall he JeemeJ m be aJJresseJ to. anJ shall bt umwercd oa behalf of. the paztnership or aorpaamtion: nnJ t he statement shall he etr[ifieJ br a member of the partnership or by a July authorized officer of the corporation. The term. 'briginrl petition." az useJ in the following questions, shall mean the petition file) unJer Rule 1003. 1061. or 1005.1 I. \alure.location-andnamr ofhusiness QUESTION 1: See attachment. a. CnJ<r what name anJ where Jo rou earn on agar huaine++'.' h. In whal hwine+. urr you engageJ'! IIf huxi• ' n<+• operation. have hren IerminateJ. give the Jale o(wch t<rminatiun.l N'htn JiJ rou rmnmenrt zurh busintxs^ J. R'herc elx. anJ unJu what ghee names. hoar avu carrirJ un hunine++ within the 6 years ' immeJlm<1) preceding the filing of the original . pawun herein'.' IGivc st reel aJJresses. the name. of an) pumm~. joint adv<nturcrs. or - other a+wwimr+. the nature uhhe husin<sx, anJ the perenin tirt which it wm carrieJ un.l e. what is cuur employer iJenti(ication numR•r:' lour aawial +rcuntc number'! Bwkv and rrrilydc a. da as hnnl. .rt unJer whose aupeni+ion. haae ),•ur h,e,i,. al' ; count :mJ rraa.rJn hren krill Juring the ] ?e:v. immrJnmK preceding the 'ilmt .•I Ihr origmal pcwiun hrrcm'! IGrr name.. .:JJrr.•c.. :mJ pcri.W+ul Jme.l h. ba as Aum hoar cnur honk. of account anJ re:nrJ. hren auJiteJ Juring the ] )eon im- meJaetria prccrJmg Ihr tiling of the original peti- tion A<rem! rGrr name.. aJJrous. anJ Jatt+ol auJit+.l .. In whax rya.x++ion are cuur hawk. of uc- Jnunt anJ re:orJ+:' IGi va• namee :mJ uJJre++e>.1 J. li .Ina ,d the.e h,wk+ or recoNs are nut .aa:n table. r+plam. e. Haae am Mwk. of araawnt or reavJ+relat- mg :a ?our alfair. hren JJHrgroJ. loot. or alhrrw n. Jl+panrJ ..1' within the year. im- mrJnaeia pra•.eJing Ihr tiling .d lhr original peu- mm ha^em' dl piar p,uticulan, incluJmg Jmt .•i Jr.l nt:uan1 lo... .rt JiatNa+ition. anJ rea- .on rhrrehvt a. Books and records have been kept by Debtors. b. See attachment. c. Debtors. d. See attachment. e. No. FOR\I ~O. K Slatemrm of Financial Affairs for Detnnr Eneaeed in Business- Re?.'87 ~l rnunuNi tlreJterJ Pu PL•hinr. yw:. N" nrp is c.. L+4...W. QtRlq la-~?J?a.p.nwla- I`.M] Resort Condominiums International International Headquarters: 9333 North Meridian Slrcct P.O. Boy 80229 Indianapolis, Indiana 46280-0229 317-846-4724 Toles: 2761 I8 RCIIND June 29, 1983 Mr. Terry Liming Merit Investments PO Box 5432 Snowmass Village, Offices in: London Mexico City Monte Carlo Nagoya rM Sydney The vnrld is oldest and Irslges! orscallan e~ehrsnge nehaork. CO 81615 RE: The Prospector Dear Mr. Liming: Please accept this letter as an indication of our interest in affiliating your new vacation project "The Prospector" in Aspen, Colorado. I have personally inspected the project and feel it would be a welcome add- ition to our exchange network of quality resorts worldwide. Resort Condominiums International (RCI) has had a good business relationship with you and Timber Run Realty. We feel with your experience in the market- ing of fractional ownership estates and the professional reputation you have built should increase the marketability and credibility of "The Prospector". Affiliation of "The Prospector" with RCI, of course, is subject to your sub- mission of all documentation and fees and approval by the RCI Executive Committee. If I can be of any as stance in this process please contact me. U~r~+ truly y ors 1 ''~ ' ~ !' Geor Donahoe ( I_~ `-' ~' Marketing Director ! ,', ~.; ~~ GMD:Ibk , t - _ -_ :: --~ ~~`' ,a5~._.. i 'fi~ t. ~ •.. Member- American Society of Travel Agents ~p N ® American Hotel & Motel Association 'u,~- ~'~ National Timesharing Council of A.L. D.A. FOR APPROVAL OF TIMESHARING PROJECT Pursuant to Section of 20-24 of the Municipal Code, the City of Aspen (Ordinance No. 52, Series of 1982)(hereinafter the "Timeshare Ordinance"), Merit Investment Company, Inc. (hereinafter referred to as "Applicant"), hereby applies for approval from the City of Aspen for its plan to timeshare and condominiumize the lodge existing on certain real property situate in the City of Aspen described as Lots A, B, C and D, Block 82, City and Townsite of Aspen, Pitkin County, Colorado, commonly known as the Prospector. Further, this application shall constitute an application for a conditional use permit for timeshare use at this location and to amend the existing conditional use permit governing the parking spaces provided on the property. SECTION 20-24(D), PROCEDURE 1. Fees. Enclosed herewith are the fees for subdivision and conditional use review in the amount of $1,475.00. 2. Proof of Ownership. Attached hereto as Exhibit 1 and by this reference incorporated herein is a copy of the public trustee's deed to the IntraWest Bank of Denver, N.A., along with a copy of the contract between the IntraWest Bank of Denver, N.A., and Applicant demonstrating Applicant's interest in the Prospector and Applicant's right to use and deal with the Prospector. 3. Survey. Enclosed herewith is a current improvement survey for the property. 4. Site Plan. Enclosed herewith is a site plan for the property which shows landscaping and project amenities. The Prospector was newly rebuilt and was issued a Certificate of Occupancy in January of 1983. It has nineteen (19) units averaging 756 square feet each of living space and one (1) employee unit of approximately 900 square feet. The units feature private decks with hot tubs and saunas, wetbars and masonry fireplaces. 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. The general common elements for the use and enjoyment of all owners include: the sundeck attached to the third floor on the east side of the building, all on-site parking spaces, lobby area and the laundry facilities which are planned for the project. Because the Prospector is newly rebuilt in accordance with all current building code health and safety requirements and regulations additional upgrading of the property is not required. 5. Vicinity Map. Enclosed herewith is a vicinity map showing all adjacent and surrounding uses and their zoning. Attached hereto as Exhibit 2 and incorporated herein by this reference is a list of the names and addresses of the owners of the surrounding properties. 6. Employee Housing. Unit No. 108 of the Prospector has traditionally served as employee housing for the project and will be retained as such. This unit contains approximately 900 square feet and can house two pillows of employee housing. 7. Disclosure Statement. Enclosed herewith is The Prospector Disclosure Statement promulgated pursuant to - 2 - 20-24 (F) of the Municipal Code of the City of Aspen, Colorado. 8. Condominium. This application is a concurrent application for timeshare and conditional use approvals and for amendment to the existing conditional use permit. The subdivision of the property into timeshare estates involves the creation of condominium units and within each condominium unit the creation of fractional estates. Because the timeshare review process is subdivision review there is no necessity to go through the lodge condominiumization review process. The real estate ownership plan and subdivision being created is not a condominiumized lodge; rather, it is a timeshare project governed by the provisions of Section 20-24 of the Municipal Code of the City of Aspen, Colorado. The Fractional Estate Declaration for the Prospector specifically allows timesharing. All mortgagees of the Prospector have approved the proposed timeshare project and all condominium units in the timeshare project shall be included in the same sales and marketing program. 9. Marketing Plan. The Marketing Plan for the Prospector Lodge will be straightforward. There will be no gift give away programs, no use of public malls or streets for sales and no phone solicitations. The approach is simply a low-key, honest sales presentation. During the peak seasons of winter and summer the marketing will be directed toward the tourist. Local magazines, the newspapers, and television will be used for informative advertising. During the low seasons of spring and fall, the marketing will be mostly directed at our target areas (Houston, Dallas, Chicago, etc.). Publications such as the - 3 - Wall Street Journal, Barrons, Ski, and the airline magazines will be utilized. The person who responds to these ads will be sent an information package on the real estate which discloses fully all pertinent details on the real estate being offered. The package will outline the concept, program, maintenance fees and dues, financing and the exchange program, Resort Condominiums International. If and when the respondent calls back, he will be invited to visit the property and to look over the area. He will be offered a subsidy to help pay transportation to Aspen and his lodging in Aspen. The program will be explained simply as it is, a 1/15 fractional estate which provides for three weeks of use per year. One week will be selected from each of three different seasonal categories: winter, summer, and spring/fall. Each 1/15 fractional estate is conveyed with its own general warranty deed, title insurance and mortgage. There are seven remaining weeks which can be used for cleaning and maintenance. The prospective purchaser after viewing the property and hearing the sales presentation, may then decide whether he would like to purchase a fractional estate. The following is a list of the publications used by Timber Run Realty, the marketing entity, to advertise Timber Run Condominiums, a fractional estate project in Winter Park, Colorado. The Prospector Lodge will be promoted in much the same manner using the most productive of these publications and various local media. Business Week Barrons Chicago Tribune Colorado Lawyer Continental Extra Dallas Business Journal Miami Business Journal Metro Magazine Playboy Powder Resort to Colorado Rocky Mountain News - 4 - Dallas Morning News Denver Post Gentleman's Quarterly Houston Business Journal Houston Chronicle Houston Post Kansas City Star Viking Ski Shop Ski Skiing Ski America Directory Sports Illustrated Texas Flyer Texas Homes Texas Monthly United Mainlines Wall Street Journal Submitted with this application are copies of "Advertising Portfolio" and the marketing brochure (entitled "Fractional Estates, an Alternative for the Eighties") for the Timber Run Condominiums which provide a representative example of the marketing approach used by the marketing entity, Timber Run Realty. Basically the marketing approach and plan for the Prospector will not be any different from that utilized for any other real estate in the Aspen community. It will not be promoted any differently from typical real estate promotions utilized by well-respected offices in Aspen. This project cannot be classified as a typical timeshare project because of the small relative number of sales necessary to sell out the project. This is not a huge multi-unit project which has each unit divided into fifty use weeks of the year. Rather, each unit is only divided into fifteen Fractional Estates and thus the more traditional sales methods would seem to be the better approach. This is coupled with the fact that the project is located in the City of Aspen which carries with it a prestige and ambience that again allows for the traditional real estate sales approach typically utilized by the respected real estate offices here in town. - 5 - 10. Real Estate Transfer Tax. The real estate transfer tax will_ be collected at the closing of the sale of any timeshare in -~ Each purchaser will be given a deed for the fractional estate purchased and thus such deed will not be able to be recorded unless and until the purchaser demonstrates that the real estate transfer tax has been paid. This is the typical and customary procedure for all real estate closings for property within the City of Aspen. 11. Upgrading of the Project. The upgrading required by the Timeshare Ordinance does not apply in this instance as the project is a newly rebuilt lodge. 12. Proposed Budget for the Prospector. The estimated annual budget of the Prospector is as follows: PER UNIT ITEM OF EXPENSE COMPLEX PER YEAR* COMMON ELECTRICITY 3,800 200 SNOW REMOVAL 2,850 150 CABLE TELEVISION 3,420 180 WATER & SEWAGE 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 MANAGEMENT 22,800 1,200 FIREWOOD 1,900 100 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 MAINTENANCE 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 BILLED SEPARATELY BY THE MANAGER. - 6 - This budget system uses four separate banking accounts: 1. General operating; 2. Escrow for taxes; 3. Escrow for furniture reserve; and 4. Escrow for building reserve. This budget has been estimated on the basis of Terry Liming's experience as plan manager of the Timber Run Condominium, a fractional estate project in Winter Park, Colorado and by consulting with various other local property managers in Aspen. The figures have also been determined by taking into account the cost of living in Aspen and the size of the project. 13. Management/Assessment Fee Information. The management/assessments fees will be held as per the above itemized budget in the four separate banking accounts of the Association. The estimated dues and assessments have been computed on the basis of the above itemized budget and in accordance with the provisions of Article XX of the Fractional Estate Declaration for the Prospector. 14. Reserve Fund. The reserve fund for the project has been broken down into two components: (1) for the upkeep, preservation and maintenance of the interior of an owner's unit; and, (2) for the exterior of the building. Please note from the above itemized budget that these amounts are being held ,over and above regular annual amounts utilized for regular maintenance and upkeep of the interior and exterior of the building. It is anticipated that the Exterior Building Reserve Fund will be used when necessary to repaint the exterior of the building, to repair or replace the roof or other structural components, to replace - 7 - any landscaping, to wash the windows and to repair or replace the indoor/outdoor carpeting throughout the common areas of the building. As the project is brand new now, with normal upkeep and maintenance these funds should not have to be expended for some time. It appears that the earliest anything would have to be done other than the regular annual cleaning chores, would be in four or five years when the outside would be repainted. The new roof should last at least ten, more likely fifteen years. Thus with $10,000 being put into the Exterior Building Reserve Fund each year, in five years there will be $50,000 accumulated in the account which should be more than enough to meet any exigent circumstances. The Interior Reserve, for furniture, furnishings and appliance replacement will be utilized to periodically renovate the interior of the unit so that the units continue to remain in excellent condition and the owners of the project will be better served and their stays there will be more comfortable. It is anticipated that, if anything, the estimated reserve funds are high and that once project is operating, the owners may agree to lower the amounts required to be paid into the reserve or to suspend for some limited period of time further payments into the reserve so that large accumulations of the owners' cash will not just be sitting in an account and not earning any benefit for the owners. It is important to note however that this is a right of the owners subject to the terms of the Fractional Estate Declaration of the Prospector Lodge. 15. Affidavit. Enclosed herewith is an affidavit from the Applicant attesting that the required documentation and facts contained herein are true and accurate and acknowledging that the requirements of Section 20-24 of the Municipal Code shall be binding on the successors and assigns of the Applicant. - 8 - SECTION 20-24 (E), TIMESHARE STANDARDS AND REVIEW CRITERIA 1. Ri ght to use. This is not a right to use project. It is a deeded ownership of real estate. 2. Integ ration. All of the units in the project are included in the timeshare plan. 3. Marketing and sales practices. Applicant's marketing program utilizes responsible, ethical sales practices. The marketing program will not permit the following practices: a. Use of public malls and streets for sales. b. Sales campaigns using phone solicitations. c. The giving of gifts in a deceptive manner. No gifts are to be given. d. Any unethical sales and marketing practices which would tend to mislead potential purchasers. Use weeks for the Prospector are selected by choice of one week from each of three 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 and are more likely to be used than if such weeks were conveyed separately. As has been previously explained above, the availability of the units will be advertised in - 9 - well-respected national magazines and other publications and the project will be marketed and promoted consistent with marketing and promotion typically utilized for other real estate in the Aspen area. 4. Amenities. The project's recreational facilities and amenities shall be sufficient so as not to create an undue burden on public facilities. The facilities and amenities will sufficiently service the needs of the project during both the summer and winter seasons. As was previously explained above, the amenities include private decks with hot tubs and saunas, wetbars and masonry fireplaces in each unit, common sundeck, on-site parking, lobby area and laundry facilities. 5. Parking. Parking shall be sufficient and meet the demands of the project. There are sixteen (16) underground off-street parking places in the project which will be available to occupants of the project. This large number of spaces should be more than adequate to meet the needs of those persons occupying the project at any one time. As the present conditional use permit governing the property provided for seventeen (17) underground off-street parking places, this application requests that permit be amended to reflect the number of spaces that were actually built, sixteen (16). This request is being made becasue it is impossible to add a seventeenth (17th) parking space on the property. 6. Maintenance. Maintenance services for the units are provided for in Article XVII the Fractional Estate Declaration. In addition to the weekly maintenance services provided, a minimum of seven (7) fall and spring weeks per year shall be set aside as maintenance weeks during which the Association will provide major maintenance, repair and replacement service to the units. - 10 - 7. Budget. The proposed budget for the Prospector, previously set forth above, is the best estimate at this time of the budget and demonstrates an accurate indication of necessary costs and expenditures. 8. Conversions. No upgrading is necessary for this project as it has been newly rebuilt. 9. Escrow. Deposits or down payments made in connection with timeshare units shall be held in an escrow e! C.O. account until closing. The escrow agent shall be a title company in Aspen, Colorado, a neutral third party not having any interest in the purchase and sale transaction. 10. Management/Assessment Fees. In addition to common expenses each fractional owner will be assessed a prorata assessment. Included in this amount is an owner's prorata share of common expenses, maintenance expenses, management fees, property taxes, utility charges, charges for upkeep or replacement of furniture and furnishings in each unit, insurance and any other expenses incurred in the normal operation of the project and attributable to the fractional estate. The elements of this fractional unit maintenance fee and the method by which it is assessed are explained in Article XX of the Fractional Estate Declaration. 11. Reserve. A reserve account shall be established to assure that the project will be satisfactorily maintained throughout the lifetime of the project. The determination of the amounts held in this reserve account has been previously explained above. 12. Occupancy standards. Although the units in the Prospector are spacious enough to accommodate more than - 11 - six (6) persons according to the Aspen Building Code, the Applicant believes that the optimum comfort for the occupants will be ensured by limiting their number at any one time to six (6). Therefore the Association may promulgate a rule restricting occupancy to this number. Occupancy throughout the project shall be in compliance with the applicable building code requirements. SECTION 20-24 (F), DISCLOSURE 1. Disclosure Statement. Enclosed herewith is the Prospector Disclosure Statement promulgated pursuant to Section 20-24 (F) of the Municipal Code of the City of Aspen, Colorado. 2. Conversion property. As this project has been newly rebuilt thi:; ~.oda aection's requirements for conversion of property do not apply. 3. Updating and filing. The Applicant shall update the disclosure statement as necessary and fila :aich the City all amendments to the time timeshare prc:~r.~rc instruments. All amendments shall be initially submitted for review to the Planning Director. 4. Time for provision of disclosure statement. The Applicant shall provide a prospective purchaser with a copy of the disclosure statement before any transfer of a timeshare unit and no later than the date of execution of any contract of sale. 5. Right to rescind. A statement that there is a ten (10) calendar day mutual right of rescission is contained in the Fractional Estate Purchase Contract for the Prospector. - 12 - .~., ,..n, 6. Escrow deposits. Any deposits made in connection with the purchase or reservation of a timeshare unit from Applicant shall be placed in escrow and held in an account with a title insurance company in Aspen, Colorado until: (a) delivered to the seller at the expiration of the time for rescission or such later time as may be specified in the purchase contract; or (b) delivered to the seller because of purchaser's default under a contract to purchase the timeshare; or (c) refunded to the purchaser. 7. Effect. All instruments of conveyance shall indicate that title is being transferred subject to the Fractional Estate Declaration which shall include the disclosure statement as an exhibit thereto. SECTION 20-24(G), BUILDING CODE HEALTH AND SAFETY REQUIREMENTS The structure is newly rebuilt and complies with all applicable fire and building codes and health and safety requirements. SECTION 20-24(H), UPGRADING TIMESHARE PROJECT Because the project has been newly rebuilt, no physical upgrading of the project is necessary. SECTION 20-24(I), TIMESHARE PROJECT INSTRUMENTS 1. Disclosure Statement is enclosed herewith. 2. Enclosed herewith are the following project instruments: (a) Fractional Estate Declaration for the Prospector, (b) Articles of Incorporation of the - 13 - Prospector Fractional Owner's Association, (c) Bylaws of the Prospector Fractional Owner's Association. These timeshare project instruments comply with all the requirements set forth in Section 20-24(I)(2) and (3). See Memorandum of Compliance filed herewith. SECTION 20-24(J), MARKETING OF TIMESHARE UNITS Applicant's marketing plan has been previously outlined above. To assure compliance with Applicant's marketing plan, as approved, Applicant shall post with the City suitable security as provided in Section 20-24 (G) of the-Time-sha-re Ordinance. SECTION 20-24(K), UNSOLD UNITS Applicant shall pay with respect to unsold timeshare units, assessments and fees equal to those assessed or levied on sold timeshare units. The Applicant may rent unsold timeshare units and any funds realized from the rental, to the extent necessary, shall be utilized to defer any maintenance costs. SECTION 20-24(L), EXCHANGE PROGRAMS All condominium units in the project will be able to participate in an exchange program. The largest and most sophisticated condominium exchange program in existence is Resort Condominiums International (R.C.I.) with corporate headquarters in Indianapolis, Indiana, R.C.I. has over 500 resort locations and over 250,000 members. R.C.I. executives have inspected the Prospector and determined that it will blend well into their system. Before actual marketing of the Prospector begins the developer will join - 14 - R.C.I. to allow purchasers vacation exchanges. R.C.I. procedure requires member resorts provide two years membership dues be paid for by the developer. After two years each owner has the option of paying a membership fee (currently $48 per year) or dropping out of the system. No owners are ever required to remain members of R.C.I., although historically a very high percentage do continue affiliation because of the obvious benefits. SECTION 20-24(P), CITY SALES TAX Occupancy of any timeshare unit by anyone other than the owner thereof who pays a fee for the use of the unit shall be subject to the City Sales Tax the same as if such occupancy were of a hotel or a lodge unit. In the event of such occupancy, the owner of the unit shall notify the owner's association and the manager of the association shall collect at or prior to the time of such occupancy the requisite City Sales Tax. Thereupon the tax shall be paid over to the City of Aspen. The manager of the Association shall be authorized to disallow such occupancy unless and until he is assured that the City Sales tax will be paid. WHEREFORE, Applicant respectfully requests this application for timeshare and condominiumization approval, for a conditional use permit to allow timeshare use at the Prospector Lodge and for amendment to the existing conditional use permit be presented before the Planning and Zoning commission at its next regularly scheduled meeting. Dated this ~( day of ~ `"~- , 1983. OFFICES OF GIDEON I. KAUFMAN, P.C. GIDEON I. KAUFMAN, ESQ. DAVID G. EISENSTEIN, ESQ. BY Attorneys for Applicant Merit Investment Company, Inc. - 15 - /~~ ~~~N~ti ~' 6~6~t t. PENDLETON ~ SABIAN, P.C. Arronr>EYS ANID (puNSF.I.ORS AT uw BRIAN PENDLETON MICHAEL A. SABIAN ALAN C. FRIEDBERG W. MICHAEL CI.OWDUS MARTIN A. ROSEN ROBERT A WILSON ANTHONY K. MALLGREN ANDREA BLOOM June 21, 1983 CHRISTA K. MEYER RONALD A. MRZER RICHARD E HENNESSEY TO: Aspen Planning and Zoning Commission FROMs Pendleton 8 Sabian, P.C. suITE noo urxoLN cENncR 1660 LINCOLN STREET DENVER, COLORADO 80261 TELEPHONE: (303) 839-INM TWX: 910-931-0107 Re: Compliance of The Prospector Project Instruments with the Requirements Set Forth in Section 20-24(I) of the Municipal Code of the City of Aspen, Colorado (the "Ordinance") In order to comply with the Ordinance, 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"); Articles of Incorporation of The Prospector Fractional Owners' Association (the "Articles")s Bylaws of The Prospector Fractional Owners' Association (the "Bylaws")t and Fractional Estate Purchase Contract (the "Purchase Contract") (the "Project Instruments") which meet the requirements of the Ordinance. Sections of the Ordinance and the Project Instruments are referred to by the designated section numbers in the documents for easy reference. Aspen Ordinance Project Instrument (I)(1) Disclosure Statement (i)(2)(a) Description of Property (I)(2)(b) Identification of Timesharing Time Periods The Disclosure Statement is an exhibit to the Declaration. See Exhibit A to the Declaration. "Use Weeks" are identified by number in Bxhibit C to the Declaration and are defined in $ 1.20 of the Declaration. i (i)(2)(c) Identification of The estate created by the Timeshare Estate Declaration, a "Fractional Estate', is defined in S 1.10 therein. The entire project has been dedicated to timeshare use (S 28.1). ,: ~': . Aspen Planning June 21. 1983 Page Two and Zoning Commission Aspen Ordinance (I)(2)(d) Expense Formula and Voting Rights (I)(2)(e) Restrictions on Use, Occupancy, Alterations or Alienation Project Instrument Each Condominum Unit's share of Common Expenses is set forth in Exhibit B to the Declaration. A Fractional Owner is liable for a pro rata share thereof based on such owner's undivided interest as tenant-in-common in the Fractional Unit. (S 28.4)• Voting rights are defined in S 16.2. Use is limited to residential purposes (Declaration S 27.1)• Occupancy may be limited to six (6) persons (Disclosure Statement (ag)). Alterations to the Units are controlled by the Association (Declaration Article XV, S 17.5). There are no restraints on alienation (Declaration S 28.2). (I)(2)(f) Additional Matters informationnn tncontained in the Project Instruments which is reasonably necessary to the application. rs' The Prospector Fractional Owners' (i)(3)(a) Homeowne Association will be established as Association Colorado not-for-profit corporation. The Association's duties are described in Articles XVI and XVII of the Declaration. Title to the common areas is in the Owners (Declaration S 1.7). The Association ~ja appoint a Managing Agent ( claration S 16.4) whose contract shall be terminable by either party upon 60 days' notice (Bylaws S 4.7). The Managing Agent's contract of employment shall specify his PENDLEI'ON & SABIAN, P.C. ~.~. ~,... Aspen Planning and Zoning Commission June 21, 1983 Page Three Aspen Ordinance Project Instrument (I)(3)(b) Stipulation of Agent for Process (I)(3)(c) Proxy for Multiple Owners (i)(3)(d) Obligation to Pay Maintenance Fees; Enforcement (I)(3)(e) Distribution of Proceeds in the Event of Condemnation or Taking by Eminent Domain. management and maintenance duties (Bylaws S 4.6). The Association is designated agent for the Owners (Declaration Article XXIX). Section 12.3 of the Declaration requires that, in the event of multiple Owners of one Fractional Estate, one will be authorized to attend Association meetings and vote. The obligation to pay is set forth in g 20.1 of the Declaration, with the Association's right to compel payment included in Article XXi, XXIi and XXVIII. The Association has the right to enjoin violations of rules and regulations (Declaration Article XIX). This contingency is dealt with in Article XXV of the Declaration. PENDLEPON & SABIAN, P.C. ... EXHIBIT A TO THAT CERTAIN COMMERCIAL CONTRACT TO BUY AND SELL REAL ESTATE (THE "CONTRACT") DATED JUNE 6, 1983 BETWEEN MERIT INVESTMENT CO., INC. AND/OR ASSIGNS ("PURCHASER") AND INTRAWEST BANK OF DENVER, N.A. ("SELLER") This Exhibit A is attached to and forms an integral part of the Contract. In the event this Exhibit A conflicts with, varies from or modifies the terms and provisions of the preprinted por- tion of the Contract then, in such event, the terms and provisions hereof shall control and govern the rights and obligations of Pur- chaser and Seller. 1. Delivery and Approval of Documents. On or before ten business (10) days following the execution of this Contract by both parties, Seller shall deliver to Purchaser true, correct and complete copies of all of the following documents in Seller's possession: a. Plans and specifications for improvements con- structed on the Property; b. An inventory of the personal property on the Prop- erty; c. Survey of the Property; d. Appraisals of the Property; e. All contracts (except loan documents), service agreements, maintenance records, and construction drawings or documents relating to the Property. If said documents are not acceptable to Purchaser, Purchaser, at its option, may elect to terminate this Contract by written notice to Seller on or before 5:00 P.M. on the fifth business day after receipt by Purchaser of all of said documents, and, in such event, this Contract shall terminate, be o£ no further force and effect, the Earnest Money Deposit plus all accrued interest thereon shall promptly be returned to Purchaser, and the parties shall be re- leased from any further obligation hereunder. If notice o£ termi- nation is not given to Seller by Purchaser as provided herein, the documents shall be deemed to be approved by Purchaser. 2. Condition Precedent. Purchaser's obligation to purchase the Property pursuant to the terms of this Contract is specifical- ly conditioned upon the following condition precedent which is for the sole benefit of Purchaser and may be waived by Purchaser, in its sole discretion, by written notice from Purchaser to Seller. In the event the condition precedent contained herein is not either waived or satisfied on or before August 23, 1983 ("Contin- gency Period"), upon written notice by Purchaser to Seller before the expiration of the Contingency Period of Purchaser's election to terminate this Contract, this Contract shall terminate, be of no further force and effect, the Earnest Money Deposit plus all accrued interest thereon shall promptly be returned to Purchaser and the parties shall be released from any further obligation hereunder. In the event that notice of termination is not given as provided herein on or before the expiration of the Contingency Period, the Contingency Period for the satisfaction or waiver of the condition precedent shall be deemed automatically extended to the closing date, as defined in paragraph 4, provided that the Earnest Money Deposit shall become non-refundable and forfeitable on August 24, 1983 if for any reason, other than Seller's default, Purchaser fails to complete this purchase and sale in accordance with the terms of this Contract and regardless of whether the fol- lowing condition precedent has been waived or satisfied. Purchaser's obtaining any and all necessary approvals of the City of Aspen to subdivide, use and sell the improvements on the Property as a time-share project. Purchaser shall ,.~. _, y ~+ diligently proceed with its application to the City of Aspen, doing all things reasonably necessary and using its best ef- forts to obtain said approvals. 3. Public Trustee's Deed. Seller and Purchaser acknowledge that the Property was subject to a public trustee's sale and has been within the jurisdiction of the Bankruptcy Court since the filing of a petition in bankruptcy by Hans Cantrup, debtor in possession of the Property. This Contract is contingent upon the Seller's delivery to Purchaser, on or before June 30, 1983, of a copy of the recorded Public Trustee's Deed to the property from the Public Trustee of Pitkin County to Seller. Seller shall do all things reasonably necessary and shall use its best efforts to obtain said Public Trustee's Deed. The requirement of delivery of a copy of said deed is for the sole benefit of Purchaser and may be waived by Purchaser at any time. Within five business days of the delivery of a copy of said deed, Seller shall deliver to Pur- chaser an opinion £rom Seller's counsel for the benefit of Purcha- ser and in form and substance reasonably satisfactory to Purcha- ser, that this contract is a valid, binding and enforceable obli- gation of Seller in accordance with its terms and that the sale of the Property to Purchaser may not be defeated, prohibited, or otherwise affected by a trustee in bankruptcy or the bankruptcy court. 4. Closing. The closing of the purchase and sale contem- plated by this Contract shall occur on or before the date ten (10) days £rom the satisfaction or waiver by Purchaser of the condition precedent set forth in Paragraph 2, but in no event later than September 1, 1983; provided, however, that said closing date o£ September 1, 1983 may be extended, at Purchaser's election, to oc- cur no later than October 20, 1983, upon the payment by Purchaser to Seller of an Additional Earnest Money Deposit in the amount o£ $50,000.00 in cash or certified funds on or before September 8, 1983. Said closing date and the extension thereof as provided herein may be further extended pursuant to the terms of Para- graph 3. Twenty-five thousand dollars of the Additional Earnest Money Deposit as set forth herein shall be applied to the payment of the purchase price at closing, and $25,000.00 thereof shall in- crease the purchase price to $3,125,000.00, provided that the en- tire Additional Earnest Money Deposit shall be non-refundable and forfeitable i£, for any reason, other than Seller's default, Pur- chaser fails to complete this purchase and sale in accordance with the terms of this Contract. The Additional Earnest Money Deposit shall be held pursuant to the provisions for the original Earnest Money Deposit. At closing, Seller shall deliver to Purchaser a good and sufficient Special Warranty Deed conveying the Property, executed and acknowledged as required by law, free and clear o£ all liens and encumbrances except for general taxes for the year of closing and subsequent year$ and the matters otherwise set forth in this Contract. Any and all mechanics' liens shall be re- moved as liens on the Property by means of the statutory bonding procedure, at Seller's sole cost and expense. 5. Seller`s Conditions. Upon the receipt by Purchaser o£ a commitment for the loan, Purchaser shall promptly deliver to Seller a copy of the commitment or written notice that said loan is available. In the event Purchaser fails to so deliver such document on or before the expiration of twenty (20) business days after the effective date of this Contract, Seller, at its option, may elect to extend said period of time or terminate this Contract by written notice to Purchaser within fifty (50) business days after the effective date of this Contract, and in such event this Contract shall be terminated, null and void and of no further force and effect and the Earnest Money Deposit plus all accrued interest thereon shall promptly be returned to Purchaser. 6. Title Insurance. On or before July 1, 1983, Seller shall deliver the Commitment to Purchaser, together with copies of all instruments pertaining to exceptions referred to therein. In the event that the Commitment contains any exceptions from cover- age which are unacceptable to Purchaser, Purchaser shall have the -2- ,,... ,~~ __ .right to notify Seller of any such objection within thirty (30) days after receipt of such Commitment. Seller shall then have fifteen business (15) days from the receipt of such notice in which to cure the matters reasonably objected to by Purchaser. In the event Seller shall be unable to cure the defects reasonably objected to by Purchaser within such period of time, Purchaser, at Purchaser's sole option, may elect to (i) require Seller to secure, at its expense, affirmative title insurance coverage with respect to the matters objected to if such coverage is reasonably available to Seller; (ii) terminate this Contract, in which event, the Earnest Money Deposit plus all accrued interest thereon being held by Seller shall be returned to the Purchaser and this Con- tract shall become null and void; or (iii) waive such objections and proceed to close this purchase and sale transaction in accord- ance with paragraph 4 above. Purchaser hereby waives any objec- tion to exceptions for: Unpatented mining claims; reservations or exceptions in patents or in Acts authori2ing the issuance thereof; water rights, claims or title to water; Terms, provisions and obligations as contained in Notice of Historic Designation recorded in Book 295 at Page 515; and Airy tax, assessments, fees or charges by reason of the inclusion of the subject property in Aspen Fire Protec- tion District, Aspen Sanitation District and Aspen Val- ley Hospital District. Purchaser shall give notice to Seller of its decision with regard to the above alternatives within ten (10) days of receipt of notice from Seller of Seller's inability to cure such defects. The Commitment to be delivered by Seller to Purchaser shall pro- vide for the deletion of the standard preprinted exceptions 1 through 3 and, if such coverage is reasonably available to Seller, preprinted exception 4 contained in the ALTA owner's policy (Form B-1970), which is the form of title insurance policy to be delivered by Seller hereunder.. Seller shall deliver to the title insurance company any instruments, documents, payments, releases and agreements as the title insurance company shall reasonably re- quire in order to issue, amend or update the Commitment as herein provided, but Seller shall not be required to indemnify the title insurance company with respect to any matter. Seller shall have no liability to Purchaser except as provided in this Paragraph 6 if Seller is unable to deliver the Commitment or 'any endorsement thereto as herein provided. -2A- shall deliver the Commitment to Purchaser, together with c ies of al'1'instruments pertaining to exceptions referred to the in. In the event that the Commitment contains any exceptions om coverage which are unacceptable to Purchaser, Purch~s r shall have the right to notify Seller of any such objection w hin thirty (30) days after receipt. of such Commitment. Se er shall then have fifteen (15) days from the receipt of suc}~ notice in which to cure the matters objected to by the Purchasee{{ In the event the Seller shall be unable to cure such defec within such period of • time, Purchaser, at Purchaser's sole op on, may elect to either (i) require Seller to secure, at its pense, affirmative title insurance coverage with respect to a matters objected to; (ii) elect to terminate this Contract, n which event, the Earnest Money Deposit plus all accrued terest thereon being held by ' Seller shall be returned to t~Purchaser and this Contract shall become null and void; or (i~ ) elect to waive such objections and proceed to close this purafiase and sale transaction in accordance with paragraph 4 above. Purchaser shall give notice to Seller of its decision with re d to the above alternatives within ten (10) days of receipt of otice from Seller of Seller's inability to cure such defect The Commitment to be .delivered by Seller to Purchaser shal provide for the deletion of the standard preprinted a eptions 1 through 4 contained in the ALTA owner's policy (Fo B-1970) which is the form of title insurance policy to be de yered by Seller hereunder. Seller shall deliver to the title surance company any instruments, documents, payments, inde ities, releases and agreements as the title insurance co any shall reasonably require in order to issue, amend or. _ 7. Completion of Construction. At the closing, Seller shall assign to Purchaser all warranties received by Seller, if any, relating to the construction of improvements on the Property and installation of machiziery, equipment or other personal property therein. 6. Brokerage Commissions. Seller and Purchaser each represent and warrant to the other as of the date of Closing that there are no brokerage commissions, finder's fees or other compensation due or incurred in connection with this transaction and Seller and Purchaser each shall indemnify, defend and hold the other harmless from and against any and all claims, losses or damages. including attorneys' fees, pertaining to or arising out of any claim for brokerage commissions, finder's fee and other such compensation claiming by oz' through such indemnifying party. 9. Survival. All warranties, representation, covenants, obligations and agreements contained herein shall survive the execution and delivery of this Contract and of any and all documents or instruments delivered in connection herewith and the warranties, representations, covenants and obligations contained in Paragraphs 8, 12, and 16 shall survive the Closing hereunder and the transfer and conveyance of the Property hereunder and any and all performances in accordance with this Contract. 10. Assignability. Seller shall not assign or transfer Seller's rights or obligations under this Contract without the prior written consent of Purchaser. Purchaser hereby consents to the transfer of Seller's rights hereunder to First Interstate. No consent given by Purchaser .to any transfer or assignment ofBa~ik of Denvez Seller's rights or obligations hereunder shall be construed as a N. consent to any other transfer or assignment of Seller's rights or obligations hereunder. No transfer or assignment in violation of the provisions hereof shall be va;id or enforceable. Purchaser shall have the right to assign all or any part of its interest in this Contract and in *t,,~e Earnest Money Deposit Purchaser shall provide Seller within frft-ee~t-jfi~~ days of such assignment with an erecuted counterpart of any assignment agreement wherein the assignee shall assume the obligations of the Purchaser under this Contract. Subject to the foregoing, this Contract and the terms * subject to the prior consent of Seller, which consent shall not be unreasonably withhe: ** five business days -3- ** which ccnsent shall not b~nreasonably w_-hc:eld. "~ +~'~*'*~ c`;e busiaess day's ""` and provisions hereof shall inure to the benefit of and be binding upon, the successors and assigns of the parties hereto. In the event the rights and obligations of Purchaser shall be transferred and assigned as provided herein, such tzansferee and assignee will be substituted in place of such assignor in the above provided for documents and shall be entitled to the benefit of, and may enforce, Seller's covenants, representations ahd warranties hereunder and the assignor shall be released from any further obligation hereunder. 11. Use of the Property Prior to Closing Date. From and after the date hereof, Seer shall not grant or convey any easement, lease, license, permit or any other legal or beneficial interest in or to the Property without the prior written consent of Purchasers**'~eller shall do or cause to be done all things reasonably within its ecnttrol to preserve, intact and unimpaired, any and all rights of way, easements, grants, appurtenances, privileges and licenses in favor of or constituting any portion of the Property.- Further, Seller shall pay, as and when due, all _ payment on any and all taxes, assessments and levies in respect of the Property through the closing date. From and after the date hereof, Purchaser shall be entitled to have access to the Property at reasonable times and -after*'S~otice to Seller to make whatever reasonable inspections and tests Purchaser deems necessary or desirable. y"~` Purchaser shall pay when-aad-due all costs and fees of such tests and shall indemnify,: defend and hold Seller harmless from any mechanic's liens filed in connection with such inspections and testS.Seller agrees that Purchaser may have the roof of the Prospector Lodge repaired. it no cost to Seller, subject to Seller's approval of the contractor,, the specific work to be dot - 12. Cooperation. Seller shall cooperate with Purchaser to and the do all things reasonably requested by Purchaser, at no cost or materials expense to Seller, inr_luding execution of applications and other be used. documents, to obtain the necessary approval of the City of Aspen to subdivide, use and sell. the improvements on the Property as a time-share project, at no cost or expense to Seller. 13. Notices. Any notice., demand or document which any party is required to or desires to give, deliver, or make upon any other party shall, in the case of a notice or demand, be in writing, and may be delivered personally or by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: To Seller: IntraWest'Bank of Denver, 633 17th Street Denver, Colorado 80270 Attention: Special Loans To Purchaser: With a copy to: N.A. Miss Myra Rainey Hughes & Dorsey Suite 1600 DepartmentIntrakest Tower Denver, Colorado 80202 Merit Investment Co. P.O. Box 12197 Omaha, Nebraska 68112 With copy to: W. Michael Clowdus, Esq. Pendleton 6 Sabian, P.C. Suite 1700 Lincoln Center 1660 Lincoln Street Denver, Colorado 80264 subject to the right of. any party to designate a different address for itself by. notice similarly given. Any such notice, demand or document so given, delivered or made by registered or certified mail shall be deemed to be given, delivered or made upon the earlier of actual receipt -aa-re.c:eia.t. of the same by the party or parties to whom the same is to be given, delivered or made or forty-eight (48) hours after deposit in the United States mail, postage prepaid return receipt requested. -4- ,~. A.,. ~ a/ V ~ ~ .. ,1,4. Choice of Law. This Cort:act shall be construed and enforced in accordance with the laws of the State of Colorado. 15. Time of the Essence. The time of performance of the obligations of Seller and Purchaser under this Contract shall be of the essence. 16. Miscellaneous. A. Merger• Counterparts; Readings. This Contract contains the entire agreement between the parties respecting the matters herein set forth and supersedes all prior agreements between the parties hereto respecting such matters. This Contract may be executed in any number of counterparts which together shall constitute the contract of the parties. The paragraph headings herein contained are for purposes of identification only and shall not be considered in construing this Contract. 8. Attorneys' Fees; Remedies. If any party obtains a judgment against any other party by reason of breach of this Contract, reasonable attorneys'-fees as fixed by the court, shall be included in such judgment. Except as otherwise herein provided, no remedy conferred upon any party in this Contract is intended to be exclusive or any other remedy herein or by law provided or_ permitted, but each shall be cumulative and shall be in addition-to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute. Every power or remedy given by this Contract to any party or to which any. party may otherwise be entitled may be exercised concurrently or independently, from time to time, and as often as may be deemed expedient by such party and a party may pursue inconsistent remedies. .. C. Waiver. Except as herein expressly provided, waiver by a party of any breach of this Contract or of any warranty or representation hereunder by another party shall deemed to be a waiver of any further breach of this Contract any representation or warranty hereunder by such other party whether or not the first party knows of such a breach at the no be or of time it accepts such payment or performance. No failure on the part a party to exercise any right it may have by the terms hereof or by law upon the default of another party, and no delay in the exercise thereof by the first party at any time when such other party may continue to be so in default, and no such failure or delay shall operate as a waiver of any default, or as a modification in any respect of the provisions of this Contract. of D. Gender and Number. Whenever the singular or plural number, or masculine, feminine or neuter gender is used herein, it shall equally include the other. SELLER: A. By: C~ M. a B /rJ~'i% PURCHASER ". ~ .v 7Lc priaLLA Mr[ieaa ef[kbfo[>•approred by rke I ~~ Celer~deaeal Estate Coa,aiuba ISC YY-3.917 iIUS 6 A IEGL INSRUNEMT. R NUf UNUENSTU00, IEGL TEE ON OINEN COUNSEL SNBUID aE CBNSUOEB NEFUNE SICIINI0. ~ ,I COMMERCIAL ' j D SELL REAL ESTATE (Seller's Remedy limited to Liquidated Damages) i June 6 is 83 Seller ~ M i Inv stm n -o. TnC._ a '~ 1. The undersigned agent hereby acknowledges having received from ,~_ i ~lnrado cor~o a ion, and/or assigns the sumot$ SOe000.00 ,in the form of check (earnest Money Deposit") ,to be held by Seller to tr[e[t {n an in s _h aring[t brokeri[r~[el<erbeaerew~r~.raeteraeeeeett sa earnest money and part payment for the following described real ' ~ estate in the County of Pitkin ,Colorado, towit• i. Lots A, B, C and D ~ Block 82 I City and Town Site of Aspen, Pitk~n Colora~o ~~' together w) dll Basemen s and rights of way appurtenant thereto, all improvements thereon and all fixtures of a ' ~I permanent nature currently on the premises except as hereinafter provided, in their present condition, ordinary ' wear and tearexcepted,knownasNo.'Phe Prospector Iodga Site, 301 Symms=, Aepa*+, " ,and hereinafter called the Property. j 1 [ree[Address, City, Zip) li 2. Subject to the provisions of paragraph 17, the undersigned person(s) a Colorado corporation, and/or assil.tls (aey,ineee„aetsfee,ra„e,.;,*•eo,n,am,l,hereinaftercaued Purchaser, hereby agrees to buy the Property, and the undersigned owner(s), hereinafter called Seller, hereby agrees to sell the Property upon the terms and conditions stated herein. 3. The purchase price shall be U.S. $~.,,1nC~ nnn UQ, payable as follows: $ S(1 ~ f10f1" flfl hereby receipted for; The balance of $3,050,000.00 as adjusted for closing prorations as set forth in other provisions of this Agreement shall be paid in cash from the proceeds of a new loan to be obtained by Purchaser from a third party containing terms and conditions satisfactory to Purchaser in Purchaser's sole discretion as reasonably necessary for the acquisition and development of the Property. * account with interest payable to Purchaser unless Purchaser shall be in default hereunder, in which event any interest accrued thereon shall be payable to Seller. 4. Price to include the following personal property: all personal property CULrently located on the Property and owned by Seller, if any to be conveyed by bill of sale at time of closing in their present condition, free and clear of al] personal property taxes, liens and encumbrances,ezcept: personal-property taxes for the year of closing and subsequent years and except any personal property liens tae[nany encumbrance specified in paragraph 11. The fo]lowing fixtures of a permanent nature are excluded from this sale: None 5r-Ifai[ew-learrialo-beoblaiae&ir~PerrehaserfroeRaBMrd party,-RmbesereSreeatolfPeweplFyaeddile6eaNr(~aj aPP1Sim~aekivnn; (ti}exeeaee-ail•deem[mewls-e++d4e~rrr:e+`*•nrRria-rr;atSon~er[ddeeeemeMe _ --}e++der,-et[d regln- ~- -- -- - (e}pay-lheeastemarreostaofebta+aia6arcFrleanr3'd+ew+fenelrbewis-Iwle~ore_ -_ _ _____- 19_-erif ao-approoed~[atis~eotavailable-rt~tirne•oftlosi[[g-thisemrtraerslraftbe-rmilandeoid-andatlpaymentsanU e}rings~of~alve~teeived~herem[dersha1Fbezeb[n-ned~<cPerehaser. 8:-tE~at[ote•ardtwsl~deed•era[erlgads-ko-brsssaared-Pcrehaseragreesla-app}y fvrr}oavaasumptiomig regaifed ~andagreea to'Pa7{i}e-Iea+rkrsewaferfeeaelMeeeeeed$---------------------nadt2laninterestrate set-Mexeeed------------11Epernmxx[r.-IENrrlea[rM-breaaa~aed-Feer~preriaienaforasharedegeit7ror~ariabie iMereebreter erwrieblr psyfnerM.e,-bbie-eewirae6 ie-eewdeiiewe& upeo-PwrehasernrieMag-sad-coaseating•te~aek provieiene.-~t'-tkeaeeeder'seoneewtrio-a-ie-a-aeeumptiewtare~it~edri},iaeow6*aeiiseewi+6iewed-wpowob6s+n4+~-aweh eer[eew6wfapeuEebawge~ w ihe-te*fasawL eondiaiens~Eeuok-leawe>FeepRes~ereiw pw.vded. 7 -I~a+Isle-iessbe•wwde-pagable~e-SeAenas~attial-or-feApayrwefwotihe-put~ebasegrieert hie~eewbrnet~leeH-ne! baasca6r++aSleby~~sahoces-wiikwL,wriiiwr¢oswawtoTShces. ~. -' i No.SC22-2-81.GatnettaBgvadSellRealEata[e(Ca.aercidl 9-t2 ~>/ Bradford Publiahin9 Co., 5825 W.6tA Ave., Lakewood, Colorado 90Yt~ -10001 YYS-8900 .}!~Ptl R`l'M!ef'911~~`l~eT'a~TeC•y1ftL~IT~IY!",lT.l~f"SS'SZTT"~Te':~Ticf o. v..,~, .hCCS1ZR,~':ZIfOI7Pt~t}P~SI•~7S°U}II~M. wwasc-rwnsw~wr+aiew+wnt w~~kienrrree•iled-L-;~-b+erker, bnmTr~ar.-,t~beregair~edtcrai~esncacriv:r•btr.~.n~e'.ttY ~,y.pr.>eeed ir~.ee~tfirekcr eept+ee~ewd~d+aete Nen;~atlyiw tery}eads trr me ne_rsvr things•af1•alne'intveonreTtCmat~ ilePYCV 16tl1il6PiPiwd~1'ffllM(Ra~r}P9tt0f`nfMSfleb 19. Additional provisions: See Exhibit A attached hereto and incorporated herein by reference. 20. Neither this Contract nor any portion .hereof shall be recorded or filed in an executed original 20. If this proposal is accepted by Seller in writing end Purchaser receives rtaticevtsmir'accEptam.'e on or before 5:00 p.m. , June2.i2, 1983 ,this instrument shall become a contract between Seller and Purchaser and shall inure to the benefit of the heirs, successors and assigns otsuch parties,e+reepberata4ed-iepen+grapiri. MERIT INVESTMENT ., INC., a COlOrad6'COrp0 at n_ ~ Broker s PurchasersAdd,•ess P•O• Box 1[197, Florence Station; Omaha. Nebraska 68112 (The following section to be eompkted by Sege~~~~ieting AgenQ ~~ a~ag',ees 21. Seller accepts the above proposal this~~ dal• of JJ//// G ,19~, t:~ ",.~roaw+issiwa.a! ------------Q•otilao-pwtike~-griee-Fsr~see. -'-- ~-this-trenxetie,rand•atreeatt*srt- r ~~~.~- Seller'sAddress 633 Seventeenth Street Denver Colorado 80270 Listing B roker's 1\ ame and Address ,„.., ,~ 4...../ .,ry. L ~_ 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. Pu~r~os_e_. The purpose for which the Association is formed is to govern tfie 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 aveFi~t~ a 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 ZI MEMBERSHIP, VOTING, MAJORITY OF OWNERS, QUORUM, PROXIES Section 2.1. Membership. Any person on becoming a Fractional Owner of a Fract oval Estate shall automatically become a member of the Association and be subject to these Bylaws. Such 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 .~. ~~ ,~, .r 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 shaIT-6e 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 (1008) for such voting purposes. Except as otherwise specifically provided, an 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 (308) 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 a organized because a quorum of thirty percent (308) 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 (208) shall be required to transact the business of the meeting. In the event that at such second meeting a quorum of twenty percent (208) 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 (108) 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~e~iled with the Secretary before the appointed time of each meeting. ARTICLE III ADMINISTRATION Section 3.1. Association Responsibilities. The Fractional Owners will constitute t e Association, w o wi 1 have the responsibility of administering the Project through a Board of Managers or Managing Agent. Section 3.2. Place of Meetings. Meetings of the Association shall be held at suc p ace as t e Board of Managers may determine. -2- ,~, w Section 3.3. Annual Meetings. The first annual meeting of the Association, at w is time t e members of the Board of Managers shall be elected, shall be held within one year after the date of the adoption of these Bylaws. Thereafter, the annual meetings of the Association shall be held 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 specia 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 mai a notice o 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 b Declarant. Until all of the Fractiona Estates in t e project as expan e , have been sold (meaning title to said Fractional Estate have been conveyed by the Declarant), 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. ARTICLE IV BOARD OF MANAGERS Section 4.1. Number and Qualification. Until the first meeting of the Association, t e a airs o this Association shall be governed by the Declarant. At the first meeting of the Association, there shall be elected to the Board of Managers five (5) Fractional Owners and thereafter the Board of Managers shall consist of (5) five Fractional Owners. Section 4.2. Election of Board Members. The respective candidates for the O ce o Manager s a e 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. -3- -~ .... Section 4.3. Powers and Duties. The Board of Managers shall have the power and utmes necessary for the administration of the affairs of the Association and for the operation and maintenance of a first class Condominium Project. Section 4.4. Other Powers and Duties. Without limitation, the Board of Managers s all a empowere 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. Bouse 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; iv. to fix, determine, levy and collect assessments Eor 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; 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; -4- r,.• 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, 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 may 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 t e 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) -5- .~», .., 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 o er an 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 u y ca e , 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 ho an organization mee ing wit in 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, and no notice shall be necessary to the incumbent or the newly elected Managers in order legally to constitute such meeting, providing a majority of the whole Board shall be present. Section 4.11. Regular Meetings. Regular meetings of the Board of Managers may e e 7~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 a ca e y 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. -6- r °• .w.n aw..~ ~ 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 ma7ori y o e anagers 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 Managers. 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 an emp oyees of the Association handling or responsible for Association funds furnish adequate fidelity bonds. The premiums on such bonds shall be paid by the Association. ARTICLE V FISCAL MANAGEMENT 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 VI 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. Desi nation. The officers of the Association shall be a Presiden , a ce- resident, a Secretary, and a Treasurer, all of whoa shall be elected by and from the Board of Managers, and such assistant officer positions as the Board of -7- ,~. .~ ,~k 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 a ecte annua y y 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 mem ers o t e 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 o~ a 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 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 au on y an 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 o e 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 mon i-EFIy 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 -8- .~. .~.~ ,... effects to the Managing Agent, and the Treasurer, from time to time, shall review such deposits. ARTICLE VIII INDEMNIFICATION OF OFFICERS, MANAGERS AND MANAGING AGENT Section 8.1. indemnification. The Association shall indemnify each Manager, o icer, 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 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 incurre~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 t e Assoc anon o every lien or encumbrance upon his Fractional Unit, other than for taxes and special assessments, and notice of every suit or other proceeding which may affect the title to his Fractional Unit, anQ such notice shall be given within five (5) days after the Fractional Owner has knowledge thereof. Section 9.2. Damage. A Fractional Owner shall be obligated to reimburse the Associa ion 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 oz agents. -)- ~.. .,.s Section 9.3. Mechanic's Lien. Each Fractional Owner agrees to indemnify and to o eac o e 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 (i 1/2) of the amount of such claim plus interest for one (1) year together with the sum of One Bundred 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 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 res en is 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. Eac Fract ona ner may use t e Genera Common E emen s an a 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 club house, swimming pool and tennis courts. Use of such -10- ~^°~ .-.. ~.. ,..., facilities shall not involve any fee or change in addition to the regular assessment. Each Fractional Ownez 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. Right of Entry. 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, 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 s 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 unpai assessments ue rom t e Fractional Owner -11- ~... 4w+' t.~+ 'within ten (10) days of the request of a Fractional Owner, ' Purchaser or Mortgagee of a Fractional Estate. ARTICLE XII EVIDENCE OF OWNERSHIP, REGISTRATION OF MAILING DDRE D UIR D PR XIE Section 12.1. Proof of Ownership. Any person on becoming a Fractional Owner sha urnis o t e 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. Section 12.2. Registration of Mailing Address. Fractional Owners shall by written no ice to t e soda ion 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 t an 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 XIZI ABATEMENT AND ENJOINMENT OF VIOLATIONS BY UNIT OWNERS The violation of any rule or regulation adopted 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 -12- A "A ~/ ~, 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 or 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. ARTICLE XVI ATTORNEY-IN-FACT The Fractional Owners shall have the right to irrevocably constitute and appoint the beneficiary of a trust deed their true and lawful attorney to vote their Fractional [Jnit memberships in this Association at any and all meetings and to vest in such beneficiary or his nominee any and all rights, privileges and -13- ~~ w~ ~e a..r powers that they have as Fractional Owners under the Certificate of Incorporation and Bylaws of this Association or by virtue of the Declaration. Such proxy shall become effective upon the filing of notice by the beneficiary with the Secretary at such time or times as the beneficiary shall deem its security in jeopardy by reason of a default under the trust deed or the failure, neglect or refusal of the Association, the Managing Agent or the .Fractional Owners to carry out their duties as set forth in the Declaration. A release of the beneficiary's deed of trust shall operate to revoke such proxy. Nothing herein contained shall be construed to relieve the Fractional Owners, as mortgagors, of their duties and obligations as Fractional Owners or to impose upon the beneficiary of the deed of trust the duties and obligations of a Fractional Owner. IN WITNESS WHEREOF, the undersigned have hereunto set their hands this day of 19 BOARD OF MANAGERS RNOW ALL MEN BY TAESE 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 consti~~the Bylaws o said corporation. ATTEST: Secretary -14- 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, S 38-33-101 to -111, as amended, and to perform all obligations and duties of the Association and to exercise all rights and posers 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 qualitp and value and enhancing and protecting its value, desirability and attractiveness. ~-~ ,,Y, ~.., 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 Frac~iona wT~rs of more than one Fractional Estate. Section 5.6. Suspension. This Association may suspend the voting rights of a mem-be~or 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 seaming 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 Associa ion s a e con acted, 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), 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, mem ers o t e 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 mannerr se~forth in the Bylaws of this Association. -3- .. 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 MEMBERSBIP Section 5.1. General. This Association shall be a membership Associatio" n w~hout 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. Voting. Each member shall have the voting rights set forth in ti~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, encum er 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- .., ~,~; Section 6.4. Members. The names and addresses of the members of the firsts of Managers who shall serve until their successors are duly qualified, are as follows: NAME L. Vernon Cagle Jeffrey L. Cagle Harold C. Bansen ADDRESS P. O. Box 12197 Florence Station Omaha, Nebraska 68112 P. O. Box 1356 Winter Park, Colorado 80482 129 South McRenna 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 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 ezecuted 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 Suite 1700 Lincoln Center, 1660 Lincoln Street, Denver, Colorado 80264. The initial registered agent shall be W. Michael Clowdue. -4- ~. ~'\ M"°q ARTICLB 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, may 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: . Vernon ag e STATE OF COLORADO ) ss: COONTY OF ) The foregoing instrument was acknowledged before me this day of , 1983, by L. Vernon Cagle. My commission expires: Witness my hand and official seal. No ary Pu c Address: -6- ~,,, ~v TAE PROSPECTOR his -°~'~"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. Capitalised terms in this Disclosure Statement are defined in the Fractional Estate Declaration for The Prospector or in the Ordinance. (a) The Developer. The Prospector is a development of Merit investment o., Inc., a Colorado corporation, P.O. Box 12197, Florence Station, Omaha, Nebraska 68112. 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, Edgewater Management Co., was the developer of the 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 as Exhibit A. (b) The Plan Manager. Terry Liming is the plan manager. Mr. Liming as eve ope expertise in all phases of timeshare operation and management, and has provided consulting services to timeshare developers in Winter Park and Mt. Crested Butte. Ae was the project director at Snowmass Inn Resort Club for two years. Mr. Liming's resume is attached as Exhibit B. (c) The marketing entity. The Prospector is being marketed by Timber Run Rea ty o in er Park, Colorado. The Company is more fully described in Exhibit C. (d) The Timeshare Unit. The newly rebuilt Prospector contains nineteen o ge 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 not a phase project. (e) Description of the Project The Prospector Lodge was C <<, issued a cer_ti__cate o occupancy in January,__1983, and will be dedicated Eo timeshare use upon receipt of governmental approvals by recording the "Fractional Estate Declaration for The Prospector" in the office of the Clerk and Recorder of Pitkin County, Colorado. The provisions pertinent to timeshare are found in Article XXVIII of the Declaration. (f) Restraints on Transfer. There are no restraints on the transfer o a purc seer s times are interest, except that an Owner .. r"w ~, •,.r may not convey or encumber less than his Fractional Estate (see (g) below). (g) The Timeshare Ownership Plan. Each unit in the Project is divided into i teen ) ractional 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 week long period of exclusive possession and occupancy of a Fractional Unit. 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 Owners' rights in the Fractional Unit include: use, occupancy or rental of the unit during his or her use weeks, subject to any governmental restrictions 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 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 Articles of Incorporation and Bylaws of The Prospector Fractional Owners' Association. (h) Notice of-Liens, Title Developer is a contract liens and encumbrances. affecting the property. the property. However, provision allowing for timeshare purchaser. o w or Encumbr nces. The wee of all There is no known defect of title The Developer will thereafter encumber any such loan will have a partial release the conveyance of clear title to any (i) Notice of ~Legal-Actions. The Developer has no knowledge or notice o any pen ing or an icipated legal actions that are material to the timeshare units or plan. (j) Purchaser's Financial -Obligation. The total financial obligation o e purc aser is a sa es 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 ~p`~C unit, other than usual and customary closing costs and ~~~ prorations. The Association may require an Owner to deposit three (3) months of the annual assessment described in (k) below with the Association for working capital and/or replacement reserves. (k) Estimate of Periodic~Expenses. Each Fractional Owner will be obligate 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 -2- r .~ ..., 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. (1) Availability of Financing. The Developer will provide financing to initia purc asers t rough Merit Investment Co. at favorable rates. (m) Warranties. Each Fractional Owner purchasing from the Developer wi e t e 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 eposits ma e n 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 having any interest in the purchase and sale transaction. (o) Fees or Charges for Use of Facilities. There are no current or expecte ees or c arges to a pa by Fractional Owners for the use of any facilities related to The Prospector. Part ownership of, and the right to use, the facilities 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. (p) Tax or Other Lien on the Timeshare Unit. A Fractional Owner who su ers or a ows a ien to e p ace 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 annual assessment. The Association's failure to pay such taxes or failure to pay for maintenance work performed may result -3- ,~ in a tax sale of the entire Fractional Unit or a mechanic's lien being filed against it. (q) Mutual Right of Recission. A statement that there is a ten (10) ca en ar ay mutua rig t of recission is contained in the Purchase Contract. (r) Sales Requirement Prior to Closing. The Developer will not procee to c ose any o e Fractiona 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 inn Article XVII of the Declaration. In addition to the routine maintenance services provided, a minimum of seven (7) fall and spring 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. (t) Hold-over Occupants. Section 28.4 of the Declaration provides reme ies to a rig tful 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 (2008) 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 or s ling etween an sgiving 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. (v) Exchange Programs. All Fractional Estates in the project wi e a e o participate in an exchange program, but participation will not be required. (w) Unusual and Material Characteristics. The only unusual and materia circumstance, ea ure an or c aracteristic of or affecting The Prospector is its designation in the Historic Overlay, which requires HPC approval for exterior building changes. -4- .~-• ~-. ~.,, ,, (x) Insurance. The Developer has The Prospector under contract. A ter t is closing, insurance at full replacement coverage will be obtained 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 of to 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. (z) Ritchen Facilities. The Employee Housing Unit (Unit 108) is the on y uni con a Wing a full kitchen. Wet bars and refrigerators are included in the units. (a a) Limitations on Occupancy. Although the units in The Prospector are spacious enouq 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 ay promulgate a rule restricting occupancy to this number. (bb) Agent for Notice. Article IX of the Articles of Incorporation or a rospector Fractional Owners' Association and Article XXIX of the Declaration designate the Association as the Owners' designated agent for the service of process or legal notices pertaining to the timeshare interest. (cc) A plicabilit of this Disclosure Statement. All timeshare in eyes s in a rospec or are express y 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. -5- t ..® The Developer, Merit Investment Company, 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 COMPANY, INC. By: L. Vernon Cagle, President STATE OF COLORADO 1 )ss. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this day of , 1983, by L. Vernon Cagle as Presid nt of Merit investment Company, Inc. Witness my hand and official seal. My commission expires: Notary Pu is Address: -6- .~~, ~.~ EXHIBIT "A" ~~ To the Prospector Disclosure Statement RESUME of L. VERNON CAGLE ,~,, L. VERNON CAGLE CURRENT BUSINESS ACTIVITIES: President, Edgewater Management, Inc. Edgewater Management, Inc. is a construction company which, over the past ten years, has completed construction projects in Nebraska and Colorado valued in excess of $25,000,000 as outlined in the Completed Projects section of this resume. President, Continental Divide View, Inc. Continental Divide View, Inc. is a real estate investment firm which acquires land for investment and development. President, Merit Investment Company, Inc. Merit Investment Company, Inc. is a company formed in 1981 to provide financing services to purchasers of fractional estates in the Timber Run Condominiums. TIME SHARE EXPERIENCE: 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. Edgewater Management, inc. has constructed all of the condominium buildings. Acting as an independent loan company, Merit Investment Company provides financing for purchasers of the fractional estates in Timber Run by originating loans, reviewing credit histories, and preparing, closing and funding loan transactions. Merit Investment Company either sells or borrows against the loans it makes in order to provide additional financing. BANK REFERENCES: Packers National Bank 4710 South 23rd Street Omaha, Nebraska 68107 *.,, r J 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 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 Ave. Denver, Colorado 80218 Jay Vanderlip (303) 832-4942 LEGAL COUNSEL: Pendleton & Sabian, P.C. Suite 1700 Lincoln Center 1660 Lincoln Street Denver, Colorado 80264 W. Michael Clowdus (303) 839-1204 PROJECTS COMPLETED: - 1978-1983 (a) Timber Run Condominiums Winter Park, Colorado Architect - D.R. Rice & Associates Denver, Colorado -2- (b) Dental Office/Shopping Center 90th & Fort Streets Omaha, Nebraska 68152 Owner - Benjamin Nachman, D.D.S. 5156 North 90th Street Omaha, Nebraska 68152 (402) 572-8000 (c) Office & Warehouse Venger Distributing Company 4990 "G" Street Omaha, Nebraska 68134 Architect - Dana, Roubal, Larson & Associates Omaha, Nebraska (d) Office Building 9910 North 49th Street Omaha, Nebraska Owner - A. Thompson Architect - Leo A. Daly & Company Omaha, Nebraska (e) Cooper Creek Square - I - Commercial Shopping Center Approximately 70,000 sq. ft. Winter Park, Colorado (Downtown) (Photo Enclosed) Architect - Braun/Vanderlip/Fulton Denver, Colorado PERSONAL DATA: Date of Birth: June 28, 1934 Business Address: P. O. Box 12197, Florence Station, Omaha, Nebraska 68112 Telephone No.: (402) 451-8180 -3- ~-~ --~ ~,, ..> EXHIBIT "B" To The Prospector Disclosure Statement RESUME Terry Liming The name of the plan manager is Terry Liming. His address is P.O. Box 5432, Snowmass Village, Colorado 81615. The plan manager 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. The Plan Manager 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 tis~eshare 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 through August of 1980, Terry 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. Terry has been the plan manager for the Timber Run Condominiums a fractional ownership condominium, in Winter Park, Colorado, since the fall of 1980. Terry Liming serves on the advisory board for Resort Condominiums International, which has corporate headquarters in Indianapolis, Indiana. Resort Condominiums International is the largest, most sophisticated condominium exchange program in existence. Mr. Liming has also been a 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 Jon Dehahn - President, Resort Condominiums International - 9333 Meridian St., Indianapolis, Indiana 46280 - 317/846-4724 J. David Penwell - Vice President, Corporate Counsel, R.C.I. - Bozeman, Montana - 406/587-0693 .w, 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, TX 77098 - 713/224-4445 John Cooley - Office Broker, Cooley Investment Co., 521 E. Hyman Ave., Aspen, Colorado 81611 - 303/925-4616 Guy DeCarlo - Office Broker, Snowmass Real Estate Co., P.O. Box 5000, Snowmass Village, Colorado 81615 - 303/923-3704 - 2 - _ ,.~, EXHIBIT "C" To the Prospector Disclosure Statement RESUME Timber Run Realty of Winter Park, Colorado The name of the marketing entity is Timber Run Realty. Its address is P.O. Box 169, Winter Park, Colorado, 80482. Timber Run Realty was formed in September 1980 by three Aspen area residents who are the three general partners of Timberrun Realty. The partners and their positions in the company are as follows: Terry Liminq President Bill Venner Vice President Boone Schweitzer Secretary Terry Liming, from Bucyrus, Ohio, worked as a foreman at the Timken Company. He spent ten years visiting Aspen on ski vacations before deciding to move to Aspen in 1978. Bill Venner, from Virginia Beach, Virginia, worked in the timesharing industry before moving to Aspen in 1978. Boone Schweitzer, from Appleton, Wisconsin, moved to Snowmass Village to teach skiing in 1972. Terry Liming and Bill Venner are both licensed Colorado real estate brokers. Boone Schweitzer is a licensed Colorado sales associate. The three met at the Snowmass Inn Resort Club where they sold timesharing and general real estate. It was then that the three determined the time was right for the responsible creation and marketing of some form of shared or fractional ownership. The consumer had a real need for this type of ownership as most out of state condominium owners are actually able to use their units only two or three weeks each year and the remaining time is rented out or vacant. The extreme negative cash flow involved in a condominium investment prevented people from investing in housing or lodging in a resort community. The principals of Timber Run Realty, after much research, thought and preparation, devised a one fifteenth (1/15) fractional estate for the Aspen market. Colorado's seasonal variations would produce inequitable ownership under typical timesharing. Selling one condominium unit fifty times (for fifty different weeks of the year, to people of all income levels requires a very intensive,'' high pressure sales campaign not suited to a resort community like Aspen. Fifty different owners would have widely varying dollar investments because a week in the month of May or October does not have one tenth the value of a week at Christmas time or during the prime ski time in March. It was determined that Aspen has a fifteen week prime ski season and the development of a deeded one fifteenth fractional ownership program seemed best suited to r...~ ~. ~ l this location. Each condominium unit is subdivided into fifteen separate fractional interests in real estate and each purchaser receives a general warranty deed as a tenant in common. The deed reflects ownership of a one fifteenth undivided interest and the owner receives exclusive use of the unit during three specific weeks of the year. These elections are made at the time of purchase. An owner selects one week from each season: winter, summer and spring/fall. Each owner is equal in ownership rights and equity. All voting rights are handled through a homeowner's association. In 1980, Aspen had no ordinance allowing any form of timesharing. Consequently the move to Winter Park was made to test market this plan of fractional ownership. In the fall of 1980 Timber Run Realty began marketing and selling Timber Run Condominiums. In two and a half years a total of thirty-six condominium units have been sold with approximately eighteen units sold using the one fifteenth fractional estate program in spite of the fact that Winter Park does not have the prestige as a resort compared to Aspen. Undoubtedly this program will be better received in Aspen, the town for which it was designed. There are no lawsuits pending or investigations that have been undertaken against the marketing entity or listing broker. REFERENCES Dick Moebius - Dick Moebius Real Estate - Snowmass Inn Resort Club - P.O. Box 5640, Snowmass Village, Colorado 81615 - 303/923-3584 Jon Dehahn - President, Resort Condominiums International - 9333 Meridian St., Indianapolis, Indiana 46280 - 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, TX 77098 - 713/224-4445 John Cooley - Office Broker, Cooley Investment Co., 521 E. Hyman Ave., Aspen, Colorado 81611 - 303/925-4616 Guy DeCarlo - Office Broker, Snowmass Real Estate Co., P.O. Box 5000, Snowmass Village, Colorado 81615 - 303/923-3704 - 2 - ~:, 'fir" EXHIBIT 2 TO APPLICATION FOR APPROVAL OF TIMESHARING PROJECT -, 1 1 1 1 1 1 ~; 1 1 1 i fry I ; I ;I, e ~-- 1 1 ICJ ~ E. HOPI I ~ ~ ~ ~ :, 1 H I ~, ~ ~ i . 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