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Town Council Resolution 68 1983TOWN OF SNOWMASS VILLAGE TOWN COUNCIL RESOLUTION NO. 68 SERIES OF 1983 A RESOLUTION AUTHORIZING A RELEASE OF A GUARANTEE MORTGAGE GIVEN TO SECURE PERFORMANCE OF OBLIGATIONS CONTAINED IN A CERTAIN SUBDIVISION IMPROVEMENT AGREEMENT FOR A CERTAIN PARCEL IN THE WOODRUN UNIT FIVE SUBDIVISION. WHEREAS, The Snowmass Company, Ltd., a Colorado limited partnership ("Snowmass"), has secured its performance under a certain Subdivision Improve- ment Agreement for Parcel 1, Woodrun Unit Five Subdivision ("Property"), record- ed in the office of the Clerk and Recorder of Pitkin County, Colorado, in Book 403, at Page 251, as amended by Amendment No. 1 to Subdivision Improvements Agreement recorded in such office in Book 440 at Page 225 ("Improvement Agree- ment"), by giving a Guarantee Mortgage recorded in Book 403 at Page 262 of such office, as amended by Amendment No. 1 to Guarantee Mortgage recorded in Book 440 at Page 225 in such office ("Mortgage"); and and WHEREAS, the amount secured by the Mortgage has been reduced to $10,000.00 WHEREAS, Snowmass has requested a final release of the Mortgage upon the escrow by Snowmass of $10,000.00 with Stewart Title Guaranty Company to secure the guaranty by Snowmass to complete the improvements required for the Property in accordance with the Improvement Agreement; and WHEREAS, the Town Council has reviewed the request, determined it to be reasonable and desires to release the Mortgage. NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Snowmass Village, Colorado: Section One: That the Release of Guarantee Mortgage, attached hereto and made a part hereof as Exhibit A, affecting the Property is hereby approved and the Mayor is authorized to execute same on behalf of the Town. INTRODUCED, READ AND ADOPTED by the Town Council of the Town of Snowmass Village, Colorado, on this 6th day of September , 1983, by a vote of 4 to 0 Councilmembers Desmond, Francis and Wall were absent. TOWN OF SNOWMASS VILLAGE, COLORADO By: ATTEST: Jef�'er on i peat, ayi� or Susan Garrison, Town Clerk Exhibit A RELEASE OF GUARANTEE MORTGAGE By that certain Guarantee Mortgage recorded in the office of the Clerk and Recorder of Pitkin County, Colorado, in Book 440 at Page 225, as amended by Amendment NO. 1 to Guarantee Mortgage recorded in Book 440 at Page 225 in such office ("Mortgage"), The Snowmass Company, Ltd. ("Snowmass") mortgaged certain real property in Pitkin County, Colorado described as Parcel 10, Woodrun Unit Five Subdivision, according to the recorded plat thereof ("Property") to the Town of Snowmass Village to secure the performance of obligations as more fully described in the Mortgage. The Town of Snowmass Village hereby releases and forever quit claims to Snowmass and its successors and assigns forever, all the right, title and interest which it has by virtue of the Mortgage to the Property. Executed this 9th day of September , 1983. TOWN OF SNOWMASS VILLAGE, a Colorado Municipal Corporation By: e Inippett, ayor ATTEST: Susan Garrison, Town Clerk STATE OF COLORADO ) ) ss. COUNTY OF PITKIN ) The foregoing instrument was subscribed and sworn to before me this 9th day of September , 1983, by Jefferson Tippett, as Mayor, of the Town of Snowmass Village, Colorado, and by Susan Garrison, as Town Clerk, of the Town of Snowmass Village, Colorado. Witness my hand and official seal. My commission expires: J A Z S e� otary Puif c — Ad ,dress: Cc.t,e�Ga�/G 2.3 CONTRACT TO BUY AND SELL REAL ESTATE This Contract is executed as of September 1, 1983, by and between The Centennial Group, Inc., a Delaware corporation ("Seller"), and the Town of Snowmass Village, Colorado, a Colorado municipal corporation ("Buyer"). Seller is the owner of Lots 4, 5, 6 and 7, Parcel 3, Filing No. 3, Snowmass Club Subdivision, according to the recorded plats thereof (the "Property"), and has received from Buyer approval for the construction of improvements to contain four buildings housing a total of 32 residential units (10 studio, 8 one -bedroom, 8 two-bedroom/one-bath, 6 two- bedroom/two-bath). Seller is constructing such improvements according to the plans and specifications dated (the "Specifications"), submitted to Buyer and Seller by Hunter Construction Corporation (the "Improvements"). Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, upon the substantial completion (as defined below) of the Improvements, the Property and Improvements on the terms and conditions hereinafter set forth. THEREFORE, in consideration of the mutual rights and obligations set .forth in this Contract, Buyer and Seller agree as follows: 1, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, on the Closing Date (as hereinafter defined), the Property and Improvements. 2. The purchase price shall be Seller's cost for development and construction as actually incurred or to be incurred, but in no event to exceed One Million Five Hundred Eighty -Eight Thousand Dollars ($1,588,000). The categories of costs permitted to be.included .within the purchase price, and the estimated budget by category, are shown on Exhibit 1 attached as part hereof. Payment for costs yet to be paid or incurred as of the Closing Date may, at Buyer's option, be placed in escrow with Stewart Title of Aspen, Inc. to be disbursed upon the completion of work and the incurring of such costs. 3. The price is to include all items of property, whether real or personal, set forth in the Specifications. At the closing, Seller shall deliver to Buyer a special warranty deed, a special warranty bill of sale, and a non-recourse assignment of warranties, covering all Property and Improvements. After conveyance, Buyer will immediately record condominium documents for the Property generally in the form attached as Exhibit 2, and a Mortage generally in the form attached as Exhibit 3. 4. Payment from Buyer to Seller at the closing shall be in the form of immediately available cash equivalent funds (including, without limitation, a certified or cashier's check or wire -transferred funds). 5. The Closing Date shall be the tenth business day followino delivery by Seller to Buyer of written notice that Improvements have been substantially completed. Substantial completion means the issuance by the Building Department of the Town of Snowmass Village of certificates of occupancy for 32 apartment units. The place and hour of closing shall be as designated by Buyer within Pitkin County, Colorado, or the City and County of Denver, Colorado. 6. Title shall be merchantable in Seller, except as otherwise provided below. The special warranty deed for the Property and Improvements shall be free and clear of all liens, encumbrances and other charges through Seller except state documentary fees, if any, current real property taxes not yet due and payable, items of record as shown on the plats of the Property recorded as of the date of this Contract, and except all other matters of record in the office of the Clerk and Recorder of Pitkin County, Colorado as of the date of this Contract, not including, however, an exception for any monetary liens or encumbrances. No later than /p,,, business days prior to the Closing Date, Seller shall deliver to Buyer a current commitment for title insurance in an amount equal to the purchase price. Buyer shall have until the Closing Date to review such title insurance commitment, and to notify Seller in writing of defects in the title which are not acceptable to Buyer. If Seller is unable to correct such defects on or before the Closing Date, at Seller's option and upon written notice to Buyer, the closing shall be extended no more than fifteen days for the purpose of correcting such defects. Seller shall use good faith efforts to correct such defects. At the end of such extended closing period, Buyer shall be delivered an update to such title insurance commitment, and Buyer shall proceed to closing, or, if material defects continue to exist which interfere or reasonably can be expected to interfere with Buyer's anticipated use of the Property and Improvements, Buyer shall have the option to terminate this Contract, in which event this Contract shall be void and of no effect, and each party shall be released from all obligations hereunder and under any other instruments executed by Seller relating to the purchase or financing of the Property or Improvements. -2- Any encumbrance required to be paid may be paid at the time of settlement from the proceeds of this transaction or from any other source. General taxes for the year of closing, based on the most recent levy and the most recent assessment, shall be apportioned to the date of delivery of deed, in final settlement of such tax obligations. 7. Possession of the Property and Improvements shall be delivered to Buyer simultaneously with the delivery by Seller to Buyer of the deed, bill of sale, and assignment of warranties. 8. If the Property is damaged by fire or other casualty prior to the Closing Date, and such damage delays the issuance of the certificate of occupancy, or results in the revocation of an existing certificate of occupancy, this Contract shall nonetheless remain in full force and effect, and Seller shall be obligated to repair the same as soon as reasonably possible. If such damage does not.interfere with the issuance of or continued validity of the certificate of occupancy, closing shall proceed as set forth in this Contract, and Seller shall deliver to Buyer at the closing an assignment of all rights to insurance proceeds recoverable on account of such damage. Seller agrees during the existence of this Contract to maintain in full force and effect adequate replacement value casualty and fire insurance on the Property and Improvements. 9. Time is of the essence of this Contract. If any material obligation is not materially performed as provided herein, there shall be the following remedies: (a) If Seller is in default, Buyer may elect to treat this Contract, and all further obligations by Buyer, as terminated, or alternatively, Buyer may elect to treat this Contract as being in full force and effect and Buyer shall have the right to an action for specific performance of Seller's obligations hereunder. (b) If Buyer is in default, Seller may elect to treat this Contract, and all further obligations by Seller, as terminated, and Seller may sell the Property as individual units or collectively as necessary obtain reimbursement of Seller's costs for construction and development, first on a restricted housing basis and thereafter on the free market. (c) In the event of any litigation arising out of this Contract, the court may award to the prevailing party all reasonable costs and expenses, including, without limitation, attorneys' fees. -3- 10. At such time as Seller conveys title to Buyer or, if Seller is ready, willing and able to deliver title to Buyer to the Property and Improvements and Buyer fails or refuses to perform hereunder, Seller's credit for 32 residential units of restricted housing under the terms of Town of Snowmass Village Ordinance No. 17, Series of 1978, shall be fully and finally confirmed. Buyer agrees that such credit shall inure to the benefit of The Snowmass Company, Ltd., a Colorado limited partnership, its successors and assigns. 11. Each party represents and warrants to the other that no commissions or fees are owing to any salesman or broker in connection with this Contract. 12. Seller represents and warrants to Buyer that it has full authority to enter into this Contract and perform all of Seller's obligations hereunder. Buyer represents and warrants to Seller that it has full authority to enter into this Contract and perform all of Buyer's obligations hereunder. Within three business days following the execution by Buyer and Seller of this Contract, each party shall cause to be delivered to the other party an opinion of its legal counsel confirming the foregoing representations and warranties as to power and authority. 13. If Seller, its successors or assigns reacquires title to the Property through its acquisition (by purchase, put, guaranty or otherwise) of Town of Snowmass Village, Colorado Multifamily Housing Revenue Bonds, Series of 1983, any resale of the Property by Seller shall first be made pursuant to regulations of the Town of Snowmass Village Housing Authority relating to the sale of housing units on a restricted basis to qualified low or moderate income buyers. If sales are not successfully concluded within 6 months from the date after taking title that Seller first notifies the Town of Snowmass Village Housing Authority of Seller's intention to market the Property for resale, unsold units may be sold on an unrestricted basis. Until sold, the Property shall be operated as a rental project under the restricted housing guidelines established by the Town of Snowmass Village Housing Authority. Executed and delivered as of the date first set forth above. ATTEST: Cl—e-rF, Town -oT Snowmass Village, Colorado [SEAL] STATE OF CO= OF THE MUMMAL GROUP, INC. , a Delaware corporation By: [Title] Address: c/o The Snowmass Company, Ltd. 5131 Owl Creek Road P.O. Box 5000 Snowmass Village, Colorado 81615 TOW OF SM&MS VILLAGE, COLORADO, a Colorado municipal corporation By: bi Mayor,-Jetter§on7Tippett Address: P.O. Box 5010 Snowmass Village, ss. Colorado 81615 I The foregoing instrument was acknowledged b me this / of 1983, by ��e �fore. _,L-�--r--/-dqy as of The Centennial Group, Inc., a Delaware corporation. WITNESS my hand and official seal. Notary Public Addrp ,ss: �7 My commission expires: [ SEAL] -5- STATE, OF COLOR" ) ss. COUNTY OF PITKIN They foregoin,� instrument was acknowledged before me this day of 1983, by Jefferson Tippett, as Mayor an Susan Garrison, as Clerk, of the Town of Showmass Village, Colorado, a Colorado municipal corporation. WITNESS my hand and official seal. Notaryis Address: My commission expires: SEAL VILLAS.NORTH. LAS NORTH RENTAL HOUSING PROJECT CONSTRUCTION AND DEVELOPMENT BUDGET Development Costs M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1 M1M1M1M1M1M1M1M1M1M1M1M1M1bM1grb without charge to the project 0 Category I Project Management 0 0.00% Category II Land Costs 30 0.00 Category III Design and Engineering Fees 113850 7.17 Category IY Financial and Legal 12600 4.51 Category Y Site Development 105540 6.65 Category YI Building Construction 472546 61.24 Category YII Landscaping 80000 5.04 Category YIII Allocated Costs 152754 4.62 Category IX Nater and Sewer 55000 3.46 Category X Contingency 35680 2.25 ` Subtotal Development Costs ------- 1588000 -------- 100.00X I. Project Management - Centennial & SCL Staff M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1 Code 1. SCL staff 8 & A expense paid by Centennial without charge to the project 0 Sub -total Category I - Management Fees 0 I1. Land Costs 4M1M1M1M1M1M1M1M1M1 Code 2. Land leased to SVHA at $1.00 per year 30 Sub -total Category II - Land 30 III.Design and Engineering Fees 4M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1M1YM1M1M1 Code 3. ARCHITECTURE a. Basic Services - Design of buildings 51000 Code 4. SITE ENGINEERING - $23,750 a. Basic Services - Estimated 0 $10,000 10000 b. Construction Supervision - Estimated i $8,750 8750 c. Basic water and sewer utility design 5000 a. UwiZ�u t 3urvev5 - csurate �V m b. Improvett.._ location surveys - Estimate 200 Code 6. LANDSCAPE ARCHITECTURE -DWI- $20,500 a. Plating process - estimate 10500 b. Full design services estimated D 12% 10000 Code 9. OTHER ENGINEERING a. Town Engineer Inspections - Estimate 600. Code 15. FIELD/SOIL INVESTIGATION - Chen - $4,000 a. Basic Services - Estimate 3000 b. Construction Supervision - 50 Hours X $25/Hour 1000 Code 17. BLUEPRINTS/REPRODUCTIONS a. Estimate 5000 Sub -total Category III - Design and Engineering Fees IV. Financial and Legal Expenses 41r44Y44444 YifrY 44Y444YYY4YYYY4444 Y Construction Interest Title Insurance Construction Insurance Sub -total Category IV - Financial and Legal Expenses V. Site Development YYYYYYYYYYYY444YY44 Code 39. DRAINAGE $42,000 a. Stora drainage estimate b. Site mass grading estimate c. Assume 900 LF subsurface ground water inception drain required at $20/LF Code 46. WATER SERVICE a. Nater services - Tap fee costs exceed actual Code 47. SEWER SERVICE a. Sewer service - Tap fee costs exceed actual Code 49. PARKING LOTS a. Assumes 2,215 SY i $20.00/SY Code 50. ELECTRICAL SERVICE - $13,000 a. Primary service estimate ? b. Secondary service estimate S Code 51. PHONE SERVICE a. 540 F i $6.00/LF Code 52. GAS SERVICE a. 600 L.F. 4 $5/LF Sub -total Category V - Site Development VI. Buildinq Construction 4YY441r44444b4444444444444 Code 32. BUILDING PERMIT a. Assumes fee is waived by Town Code 33. PLAN CHECK FEE 113850 45600 15000 12000 72600 9000 15000 18000 0 0 44300 10000 3000 3240 3000 105540 0 X. Contingency YYYYYYYYYYYYYY Code 94. CONTINGENCY a. Calculated at Approximately 5% of Categories III - VII Costs 35680 Sub -total Category X 35680 TOTAL PRELIMINARY DEVELOPMENT BUDGET 1588000 VN.1 a. Assumes tt, is waived by Town 0 - Code 58. BUILDING CONSTRUCTION a. Building Construction 949346 b. Contractors Performance Bond 20000 Code 66. PRESALE UTILITIES A. Estimated at $100/Unit 3200 Sub -total Category VI - Building Construction 972546 VII. Landscaping Y4YYYYYYYY YYYYYY Code 69. LANDSCAPE CONSTRUCTION - $00000 a. Estimate for curbs, walks, entry stoops and car bumpers 15000 b. Estimate for planting material, finish grading crib walls, irrigation, etc. 55000 c. Estimate for site lighting 10000 Sub -total Category VII - Landscaping - 80000 VIII. Allocated Costs. YYYYYYYYYYYYYYYYYYYYY Code 95. ALLOCATED COSTS a. Centennial P.U.D. costs - allocated "Area' costs of approximately 152754 Sub -total Category VIII - Allocated Costs 152754 11. Non -Recovered Costs YYYYM1rY Yb YYYYYYYYYYYYY YY . Code 43. CONNECTION FEE a. Nater and Sewer Tap Fee - Assume tap fee and connection charge are cost of project and that installation costs are less than fees 55000 Sub -total Category IX 55000 X. Contingency YYYYYYYYYYYYYY Code 94. CONTINGENCY a. Calculated at Approximately 5% of Categories III - VII Costs 35680 Sub -total Category X 35680 TOTAL PRELIMINARY DEVELOPMENT BUDGET 1588000 VN.1 SECOND MORTGAGE 1. Convevance. The Town of Snowmass Village, Colorado, a Colorado municipal corporation (the "Mortgagor"), whose address is P. O. Box 5010, Snowmass Village, County of Pitkin, State of Colorado, hereby mortgages to The Centennial Group, Inc., a Delaware corporation (the "Mortgagee"), whose address is c/o The Snowmass Company, Ltd., 5131 Owl Creek Road, P. 0. Box 5000, Snowmass Village, County of Pitkin, State of Colorado 81615, to secure the performance of obligations specified herein and repayment to Mortgagee for amounts advanced by Mortgagee referenced in Paragraph 4(b) hereof, that certain real property in the County of Pitkin and State of Colorado described as Lots 4, 5, 6 and 7, Parcel 3, Filing No. 3, according to the recorded plats of The Snowmass Club Subdivision (the "Property"), and warrants title through it to the same subject, however, to general property taxes not yet due and payable, and prior interests of record, including without limitation that certain Indenture of Trust and Mortgage recorded in Book at Page of the Pitkin County, Colorado records, and that certain Assignment of Rents recorded in Book at Page of the Pitkin County, Colorado records, both for the benefit of Central Bank of Denver, which instruments are prior and superior to this Second Mortgage. This Second Mortgage is given (i) in connection with and as consideration for that certain Guaranty Agreement between Mortgagee and Central Bank of Denver, a banking corporation, as Trustee, dated as of September 1, 1983 (the "Guaranty Agreement"), and terms used in the Guaranty Agreement shall have the same meaning when used in this Second Mortgage, unless otherwise noted; and (ii) to secure payments made by Mortgagee to or on behalf of Mortgagor or for mandatory purchase by Mortgagee of the bonds under the Indenture of Trust and Mortgage, as specifically described herein. 2. Obligations of Mortgagor. (a) Mortgagor warrants and covenants forever to defend Mortgagee in the quiet and peaceful possession of the Property against all and every person or persons lawfully claiming the whole or any part thereof. (b) Mortgagor shall not commit or suffer any waste to the Property or permit any use of the Property contrary to restrictions of record or contrary to laws, ordinances or regulations of any proper public authority having jurisdiction. In connection with the foregoing, Mortgagor will permit Mortgagee to enter upon the Property at reasonable times for the purposes of inspecting the Property. (c) Mortgagor will defend, at its own cost and expense, indemnify and hold Mortgagee harmless, from any third -party action, proceeding or claim affecting the Property, or any part thereof, this Second Mortgage, or the Improvements Agreement. (d) Mortgagor will comply with all laws, acts, rules, regulations and orders of any Federal, State, municipal, legislative, administrative or judicial body, commission or officer exercising any power of regulation or supervision over the Mortgagor or the Property, except that the Mortgagor may contest any such law, act, rule, regulation or order in any reasonable manner which will not affect the interest of the Mortgagee to any part of the Property. (e) In the event of any action affecting title or interest in or to the Property, Mortgagor agrees to give timely written notice to Mortgagee, and an opportunity for Mortgagee, at Mortgagor's expense, to defend its interest therein. 3. Release Rights of Mortgagor. The final release of this Second Mortgage shall occur at such time as Mortgagee is released from all its obligations under the Guaranty Agreement. 4. Events of Default. This obligation shall be in default, and this Second Mortgage may be foreclosed, as provided by law, upon the occurrence of any one or more of the following Events of Default, and the failure by Mortgagor to cure the same within 90 days after written notice of default is delivered by Mortgagee to Mortgagor: (a) The insolvency (however evidenced) or the commission of any act of insolvency by the Mortgagor, or the making of an assignment to or for the benefit of creditors of the Mortgagor, or the appointment of a receiver, liquidator, conservator or trustee of the Mortgagor or its Property, or the filing of a voluntary petition or the commencement of any proceeding by Mortgagor for relief under any bankruptcy, insolvency, reorganization, arrangements, or receivership laws or other law relating to the relief of debtors of any state or of the United States, or the filing of any involuntary petition (unless and until discharged within 30 days after such filing) for the bankruptcy, insolvency, reorganization, arrangement or receivership or the involuntary commencement of any similar proceeding under the laws of any state or the United States relating to the relief of debtors, against the Mortgagor; -2- (b) (i) If Mortgagee is required to perform its obligations under the Guaranty Agreement, or (ii) if the Mortgagee is obligated to purchase the bonds pursuant to Section 3.06 of the Indenture of Trust and Mortgage, and the bonds so purchased are not redeemed by the Mortgagor (at 100% Of outstanding principal and interest, without premium) or resold to another party at such price, within 120 days of such purchase by Mortgagee, or (iii) with the consent of Mortgagor and the Trustee under the Indenture of Trust and Mortgage (which consent will not be unreasonably withheld) and pursuant to the terms thereof if Mortgagee advances funds up to Fifty Thousand Dollars ($50,000) in the aggregate under any other arrangement for the protection of Mortgagor's obligations under the Indenture of Trust and Mortgage and Mortgagor fails to repay Mortgagee with proceeds from the Property available after payments are made pursuant to Section 5.09(a) (b) and (c) of the above-described Indenture of Trust and Mortgage; (c) If foreclosure proceedings are commenced under the above-described Indenture of Trust and Mortgage, or a deed in lieu of such foreclosure is given by the Mortgagor, or if the Payee exercises its rights under the above described Assignment of Rents; (d) If Mortgagor fails to maintain a rents structure for the Property which, to the extent permitted by the above- described Indenture of Trust and Mortgage, is adequate when taken together with existing reserves and other sources of revenue available to the Mortgagor, to pay the Property's operating expenses and debt service. 5. Collateral Assignment of Rents. In the case of an Event of Default and the expiration of any cure period related thereto, Mortgagor assigns, transfers and sets over under Mortgagee all of the rents, Profits and income derived from the Property, together with all rights of possession, with full and complete authority and right in Mortgagee to demand, collect, receive and receipt for such rents, profits and income, to take possession of the Property without requiring the appointment of a receiver therefor, to rent and manage the same from time to time and to apply the proceeds derived therefrom, after payment of all costs of collection and all fees and other costs, upon the payment of obligations secured hereby. This assignment is subordinate and inferior to the rights of Central Bank of Denver, as trustee, under the above-described Assignment of Rents given for its benefit. -3- 6. Miscellaneous. (a) Following the occurrence of an Event of Default, the Mortgagee may pay sums in any amount, form or manner deemed expedient by Mortgagee to protect the security of this Second Mortgage or to cure any default, make any payment hereby authorized to be made according to any bill, statement or estimate furnished or procured from the appropriate public officer or the party claiming payment in which event the amounts so paid shall be added to and become a part of the obligations hereunder and be immediately due and payable to Mortgagee and Mortgagee shall be subrogated to any encumbrance, lien, claim or demand, and to other rights and securities for the payment thereof, paid or discharged by mortgagee under the provisions hereof, and any such subrogation rights shall be additional and cumulative security to this instrument. (b) If at any time, in the judgment and the discretion of the Mortgagee, a receiver should be necessary to protect the Property after maturity of the obligation hereunder, or at the time of or after the institution of suit to collect such obligation or to enforce this Second Mortgage, Mortgagee shall have the right to the appointment, by application to any court having jurisdiction, of a receiver to take charge of, manage, preserve, protect and operate the Property as a rental project under the restricted housing guidelines established by the Town of Snowmass Village Housing Authority with any business or businesses located thereon, to collect the rents, issues, profits and income thereof, to make all needed repairs, and to pay all taxes and assessments against the Property and, after the payment of the expenses of the receivership, to apply the net proceeds in reduction of the obligation hereunder, or in such other manner as the court or receiver shall direct, all such expenses to be secured by the lien of this Second Mortgage. Such receivership shall, at the option of Mortgagee, continue until full payment of all sums hereby secured, or until title to the Property shall have passed by foreclosure sale under this Second Mortgage and the period of redemption shall have expired. (c) The Mortgagee may purchase the Property or any part thereof at a foreclosure sale. It shall not be obligatory upon the purchaser at such sale to see to the application of the purchase money. (d) If a release deed is required, it is agreed that the Mortgagor, its successors and assigns will pay the expenses thereof. (e) Any indulgence or departure at any time by the Mortgagee from any of the provisions hereof, or of any obligation hereby secured, shall not modify the same or relate to the future or waive future compliance herewith by Mortgagor. (f) Under no circumstances shall any monetary claim for obligations hereunder or a deficiency be made or enforced against the general assets of Mortgagor, to the end that no obligation hereunder shall be considered as a general obligation of the Mortgagor which would require approval by election in order to be enforceable in accordance with the Town of Snowmass Village Home Rule Charter. (g) Any resale of the Property by Mortgagee or a purchaser at foreclosure hereunder shall first be made pursuant to regulations of the Town of Snowmass Village Housing Authority relating to the sale of housing units on a restricted basis to qualified low, or moderate income buyers. If sales are not successfully concluded within 6 months from the date after taking title that Mortgagee or the foreclosure purchaser first notifies the Town of Snowmass Village Housing Authority of owner's intention to market the Property for resale, unsold units may be sold on an unrestricted basis. Until sold, the Property shall be operated as a rental project under the restricted housing guidelines established by the Town of Snowmass Village Housing Authority. (h) This Second Mortgage shall run with the land, and bind and benefit the parties, their successors and assigns. MORTGAGEE: Dated: The Centennial Group, Inc. IN MORTGAGOR: Dated: Town of Snowmass Village By Mayor ATTEST: By Town Clerk -5- STATE OF COLORADO ) ss: COUNTY OF PITKIN ) The foregoing instrument was acknowledged before me this day of 1983, by as Mayor of the Town of Snowmass Village, —an—d---- as Town Clerk of the Town of Snowmass Village, a Colorado municipality. Witness my hand and official seal. Notary Public Address: My commission expires: STATE OF ) COUNTY OF ss. ) The foregoing instrument was acknowledged before me this _ day of November, 1983, by as of the The Centennial Group, Inc., a Delaware corporation. WITNESS my hand and official seal. My commission expires: [SEAL] RCL:m Notary Public Address: W:M CONDOMINIUM DECLARATION FOR THE VILLAS NORTH SNOWMASS VILLAGE, COLORADO Table Of Contents Section PREAMBLE 1. Definitions 1.1 Additional Property 1.2 Association 1.3 Board 1.4 By -Laws 1.5 Common Elements; General Common Elements; Limited Common Elements 1.6 Common Expense 1.7 Condominium Unit 1.8 Declarant 1.9 Maintenance 1.10 Map 1.11 Mortgage--Mortgagee--Mortgagor 1.12 Owner 1.13 Property 1.14 Unit 2. Submission of the Property 3. Owners' Property Rights and Limitations 3.1 Legal Description 3.2 Recreational Facilities 3.3 Easement to Facilities 3.4 Ownership of Common Elements 3.5 Inseparability 3.6 Right of Entry to Units 3.7 Easements for Encroachment 3.8 Easements to Limited Common Elements 3.9 Individual Tax Liability 4. Residence and Use Restrictions 4.1 Use as Residences Only 4.2 Rental Occupancy Limitations 4.3 Nuisances 4.4 Sign Restrictions 4.5 Parking Restrictions 4.6 Pet Restrictions 4.7 Eyesores and Fire Restrictions 4.8 Out -Building Restrictions 4.9 Limited Common Elements 4.10 Structural Integrity 4.11 Permissions to Declarant 4.12 Right to Combine Units Page Section 4.13 Partition of Units Prohibited 5. The Association 5.1 Business and Membership 5.2 Binding Effect 5.3 Power of the Association 5.4 Additional Activities, Functions or Services 6. Maintenance 6.1 Responsibilities of the Association 6.2 Responsibilities of Owners 6.3 Notice to Maintain 6.4 Approvals Required 6.5 Mechanics' Liens 6.6 Management Agreement 7. Assessments MR EN 12. 7.1 Obligation and Purpose 7.2 Assessments 7.3 Assessment Reserve 7.4 Assessment Lien and Liability 7.5 Grantee and Mortgagee Obligations 7.6 Contribution for Tort Liability Destruction, Damage and Obsolescence 8.1 Association as Attorney -in -Fact 8.2 Use of Insurance Proceeds 8.3 Special Assessments 8.4 Estimates, Notice and Duty to Maintain 8.5 Mandatory Maintenance 8.6 Plan for Maintenance 8.7 Payment for Maintenance 8.8 Sale of Obsolete Property Taking By Eminent Domain 9.1 Taking of Common Elements 9.2 Partial Takings 9.3 Total Taking 9.4 Owners' Claims 9.5 Mortgagee Rights Insurance 10.1 Coverages 10.2 Named Insured and Interests 10.3 Invalidation or Reduction of 10.4 Other Insurance Term, Revocation and Amendment of 11.1 Term of Declaration 11.2 Revocation of Declaration 11.3 Disbursement of Proceeds 11.4 Amendment of Declaration Expansion of Project 12.1 Additions to the Property or Units 12.2 Contents of the Supplemental 12.3 Effect of Expansion 12.4 No Obligation to Expand Coverage Declaration Additional Declaration Page Section 13. Miscellaneous 13.1 Number and Gender 13.2 Construction 13.3 No Dedication 13.4 Notices 13.5 Mortgagee Notice Rights Page CONDOMINIUM DECLARATION FOR THE THE VILLAS NORTH CONDOMINIUMS SNOWMASS VILLAGE, COLORADO This Declaration is made this day of , 1982, by , a (t e "Declar—an—t-11") —. PREAMBLE Declarant is the of certain real property located in Pitkin County,o ora o; as described on Exhibit A attached hereto, and the improvements thereon. Declarant desires to submit such property, together with all its rights and privileges in any way pertaining thereto, to the Colorado Condominium Ownership Act. This Declaration establishes certain rights and easements with respect to.the above-described property and the improvements thereon for the Declarant and all present and future owners of such property. Declarant intends that such owners, occupants, mortgagees and any other persons now or hereafter acquiring any interest in such property and the improvements thereon shall hold their interests subject to the rights, easements, privileges and restrictions set forth below. All such rights, easements, privileges and restrictions are declared to be in furtherance of a plan to promote and protect the value, desirability and attractiveness of such property and the improvements thereon and any additions thereto. Therefore, Declarant declares as follows: 1. Definitions The terms hereinafter set forth shall have the following meaning unless the context clearly requires otherwise. 1.1 "Additional Property" shall mean the real property described on Exhibit B attached hereto, together with all buildings, structures and improvements of any kind thereon, all or portions of which Declarant may make subject to this Declaration from time to time in the future. 1.2 "Association" shall mean the Villas North Corporation, a Colorado non -stock, non-profit corporation, its successors and assigns, by which all Owners act as a group under the Association's Articles of Incorporation, By -Laws and this Declaration. 1.3 "Board" shall mean the Board of Managers of the Association as constituted from time to time. 1.4 "By -Laws" shall mean the by-laws of the Association adopted and amended by the Board from time to time, whether or not recorded. 1.5 "Common Elements" shall mean all real estate and improvements located upon Lots within the Property, except the portions thereof which constitute a Unit. From time to time such Lots will be made subject hereto by Declarant recording an instrument making specific reference to this Section 1.5. Such Lots shall be shown on a subdivision plat approved by the Town of Snowmass Village and recorded in the office of the Clerk and Recorder of Pitkin County, Colorado. The initial Lot[s] included herein [is/are] described on Exhibit A hereto. Unless the context otherwise clearly requires, Common Elements shall include "Association Property," which shall mean all real and personal property, other than a Unit, owned or leased by the Association for the use, enjoyment or benefit of the Owners or other occupants of the Property or any part thereof. (a) "General Common Elements" shall mean those Common Elements reserved for use by all the Owners by virtue of not being Limited Common Elements. The General Common Elements shall include all tangible physical properties of the Property including, but not limited to, the land described above; the air above such land; the buildings' structural components including, but not limited to, the foundations, girders, beams, supports, roofs and bearing and structural walls; to the extent not designated on the Map as Limited Common Elements, the yards, gardens, uncovered parking areas and storage spaces; chimneys; electrical, mechanical and plumbing service installations; non -dedicated roads; and any improvements or areas of the Property provided for the community use, recreation or common use of all of the Owners. General Common Elements shall also include all other parts of and improvements upon the Property necessary or convenient to its existence, maintenance and safety, except the Units. (b) "Limited Common Elements" shall mean those Common Elements reserved for use by fewer than all the Owners which are described herein or depicted on the Map. If any chute, flue, duct, wire, conduit, bearing wall, fireplace, bearing column or other fixture lies -2- partly within and partly without the boundaries of a Unit, any portion thereof serving only that Unit is a Limited Common Element allocated for use solely by that Unit, and any portion thereof serving more than one Unit or any portion of the General Common Elements is a part of the General Common Elements. The Limited Common Elements shall include, but not be limited to, any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies and patios. Any storage areas and parking spaces specifically designated as being appurtenant to a particular Unit, either by the Declarant on the date of recordation hereof or subsequently by Declarant or the Association, shall be Limited Common Elements. 1.5 "Common Expense" shall mean the estimated and actual expenditures made or liabilities incurred by or on behalf of the Association, together with any allocations to reserves. 1.6 "Condominium Unit" shall mean the fee simple interest and title in and to a Unit, together with an undivided interest in all Common Elements other than Association Property appurtenant to such Unit and all other rights and burdens created by this Declaration. The undivided ownership interest in the Common Elements appurtenant to each Unit, excluding any Association Property, is the relative percentage which the net interior heated square footage of the Unit bears to the net interior heated square footage of all Units as set forth on Exhibit C hereto (as supplemented from time to time). 1.7 "Declarant" shall mean a and its successors and assigns specs ica ly esignate as such by an instrument executed by Declarant and recorded in the office of the Clerk and Recorder, Pitkin County, Colorado. 1.8 "Lessee" shall mean any person or persons who lease a Villas North Condominium Unit from an Owner and who by lease or other written agreement is subject to the rules and regulations of the Town of Snowmass Village Housing Authority. 1.9 "Lot" shall mean on Exhibits A and B for actual withdrawal from the Property. one of the four lots designated or potential inclusion in or 1.10 "Maintenance" shall mean such repair, upkeep, renovation, restoration, reconstruction, rebuilding or replacement of any portion of the Property as may be necessary to maintain the Property in substantially the same condition as originally or subsequently constructed, altered or improved. -3- 1.11 "Map" shall mean the map of the Property filed for record in the office of the Clerk and Recorder of Pitkin County, Colorado prior to the conveyance of a Condominium Unit to an Owner. The Map, which may be recorded in supplements, shall depict and show at least the following: The legal description and boundaries of the Property; the location of the buildings and other improvements built on the Property; any portion of the Property reserved for the construction of additional Units or other improvements; the floor plans and vertical elevations of the buildings; the location of the Units within the buildings; the thickness of the common walls between or separating the Units or any other portion of a building; the location of any other portion of a building; the location of any structural components or supporting elements of a building; and the Unit designations. The Map shall be certified by a registered professional engineer, licensed architect or registered land surveyor as substantially depicting the Unit locations, designations and Unit measurements; parking and storage locations; elevations of constructed finished floors and ceilings of Units; and an affirmation that the Map was prepared subsequent to substantial completion of the improvements shown thereon. Declarant reserves the right to amend the Map, and any supplements thereto, from time to time in order to conform the Map to the actual location of any of the constructed improvements, to establish certain Common Elements as Limited Common Elements and to establish, vacate or replace utility easements, access road easements and parking areas. Declarant's right to file supplemental Maps shall terminate seven years after the date of recordation of this Declaration. 1.12 "Mortgage" shall mean any mortgage, deed of trust or security instrument creating a real property security interest in a Condominium Unit, excluding any statutory, tax or judicial liens. "Mortgagee" shall include any grantee, beneficiary or assignee of a Mortgage, and "Mortgagor" shall include any grantor, trustor or assignor of a Mortgage. A "first priority Mortgage" shall mean a Mortgage having the highest priority as a Mortgage against a Condominium Unit, but only if the Mortgagee of such Mortgage, the "first priority Mortgagee", claims such status in a written notice delivered to the Association. 1.13 "Owner" shall mean the person, persons, firm, corporation, partnership, association, other legal entity, or combination thereof, holding fee title to a Condominium Unit. 1.14 "Property" shall mean all that real property described in Exhibit A hereto and the Map, together with all buildings, structures and any kind of improvements thereon and the Additional Property, or any part thereof, submitted to this Declaration pursuant to Article 12 hereof and which has -4- not been withdrawn from this Declaration pursuant to Article 12 hereof. 1.15 "Unit" shall mean an individual air space unit designated for separate ownership on Exhibit C hereto and the Map (as supplemented from time to time). Each Unit shall have the finished interior surfaces of walls, floors, ceilings, windows and doors in their closed position as its boundaries, and each Unit shall bound another Unit or the Common Elements. A Unit shall include all lath, furring, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, finished flooring and any other materials constituting any part of the finished surfaces thereof as well as the interior partitions and other spaces, fixtures and improvements within such boundaries. A Unit does not include common physical utility facilities, the undecorated or unfinished surfaces of the perimeter walls, floors or ceilings of a Unit, any utility facilities running through the Unit that serve more than one Unit, or any other Common Element, or part thereof, located within the Unit. The surfaces described in this definition are the boundaries in fact, whether or not they are accurately depicted on such Map. 2. Submission of the Property Declarant, as of the Property, hereby submits the Property to t�`ie "Co orado Condominium Ownership Act and declares that the Property shall at all times be owned, used or occupied subject to the provisions of this Declaration. 3. Owners' Property Rights and Limitations 3.1 Legal Description. The description of a Condominium Unit in every sa es contract, or other instrument which affects the title to or the right to possession of a Condominium Unit, shall be sufficient if the Condominium Unit is described as follows: Condominium Unit as shown on the Villas North Condominium Map (-PR-ase ) filed in the records of the Clerk and Recorder of Pit in County, Colorado, on , 19 , in Plat Book at Page , and as defined and described in the Condominium Declaration for the Villas North Condominiums, Snowmass Village, Colorado, appearing in such records, filed on 19 , in Book at Page [if applica e: and as -defined and -described in t- e Supplemental Condominium Declaration for the Villas North Condominiums, Snowmass Village, Colorado, appearing in -5- such records, filed on , 19 in Book at Page I. -- Every such description shall be construed to include: the Unit; an undivided interest in the Common Elements appurtenant thereto; the exclusive (alone or together with other but fewer than all Owners or their lessees) right to use Limited Common Elements appurtenant thereto; a nonexclusive easement for ingress and egress to and the Property; a nonexclusive easement for the use of the General Common Elements; and other rights, obligations and restrictions created in this Declaration or designated on the Map. Prior to the recording of the Map and this Declaration or any Supplemental Declaration or Map, a contract for the sale of a Condominium Unit, or any other contract or instrument which affects the title to or the right to the possession of a Condominium Unit, may legally describe the Condominium Unit by its subdivision plat Lot description, Unit designation and the words "Villas North Condominiums, Pitkin County, Colorado", and the Map thereafter recorded shall refer to the Unit designation so employed. 3.2 Recreational Facilities. There are no major recreational facilities located on the Property. 3.3 Easement to Facilities. Appurtenant to each Condominium Unit snali be a nonexclusive easement to all General Common Elements. This easement is subject to the following rights of the Association: (a) The right to reasonably limit the number of guests (not including Lessees or members of the Owner's or Lessee's family residing in a Unit) using any facilities on the Property; (b) the right to establish uniform rules as to the use of any facilities on the Property, including without limitation the right to establish and enforce parking restrictions; (c) the right to charge uniform and reasonable admission and any other fees to persons other than Owners, Owners' families, guests residing with Owners, Lessees, Lessees families and guests residing with Lessees for the use of any limited capacity facilities on the Property; and (d) the right to suspend the right of an Owner, a Lessee and their families or guests to use any facilities on the Property for any period of time during which any assessment against a Condominium Unit remains unpaid and delinquent and also for a period of time not exceeding 30 days for any single infraction of the rules of the Association. 3.4 Ownership of Common Elements. The undivided fee interest of an Owner in t e Common E ements (excluding Association Property) created from time to time is the relative percentage which the net interior heated square footage of the Unit bears to the net interior heated square footage of all Units as described on Exhibit C hereto (as supplemented from time to time). Such percentage undivided fee interest shall be amended without prior written consent of the Owners and first priority Mortgagees only under the conditions set forth in Article 12. Such undivided fee interests shall not be otherwise amended without the prior written consent of all Owners and all first priority Mortgagees. Each Owner shall own his appurtenant undivided interest in the Common Elements as a tenant in common with all other Owners. 3.5 Inseparability. An Owner's undivided interest in the Common Elements sHall not be separated from his interest in a Unit to which it is appurtenant and shall be deemed to be conveyed or encumbered with the Unit even though that interest is not expressly mentioned or described in a deed or other instrument. 3.6 Right of Entry to Units. The Association and its designated agents shall ave a limited right of entry in and upon each Unit in case of an emergency originating in or threatening such Unit. This right of entry shall exist whether or not the Owner is present. Furthermore, an Owner shall permit the Association or its designated agents to enter his Unit for the purpose of performing required installation, alterations or repair to the mechanical, plumbing or electrical services for a Unit or for the Common Elements. Requests for entry for this purpose must be made in advance, and entry must be at a reasonable time. In case of an emergency, the right of entry shall be immediate. 3.7 Easements for Encroachment. If for any reason any part of the Common E ements encroac es or shall hereafter encroach upon any part of any Unit, or any part of any Unit encroaches or shall hereafter encroach upon any part of the Common Elements or upon any other Unit, valid easements for the maintenance of such encroachment are established. These easements shall exist for the benefit of any such Unit or Common Elements so encroaching so long as all or any part of the building containing such Unit or Common Elements so encroaching remains standing. No easement for any encroachment is hereby created in favor of a Unit if the encroachment occurred due to the willful conduct of the Owner or Lessee. IWC 3.8 Easements to Limited Common Elements. An exclusive easement, consisting o the rig t to use and occupy the Limited Common Elements appurtenant to a particular Unit, is hereby declared and established for the benefit of each such Unit, subject to such regulations of use as the Association may adopt from time to time. 3.9 Individual Tax Liability. Declarant shall give written notice to the Assessor of Pit in County, Colorado of the creation of condominium ownership of the Property. After such notice, each Condominium Unit shall be subject to assessment and taxation as a separate parcel to the extent permitted by statute. 4. Residence and Use Restrictions 4.1 Use as Residences Only. Each Unit shall be s used only as a ret ence. A Condominium Unit owned by Declarant or by the Association may be used as the residence and office of a manager or managing agent appointed by the Association. 4.2 Restrictive Covenants. Certain Units may be subject to materia covenants and restrictions running with the land. The covenants and restrictions, if any, are set forth in or as a written supplement to the deed given by Declarant to the first Owner of such Unit. Each subsequent Owner of each Unit shall be obligated to inform himself of the nature of the covenants and restrictions. The Association is responsible for enforcing the covenants and restrictions. Certain Units within this Property are originally established for employee and public assistance housing. Owners and Lessees of such Units shall be subject to restrictions and requirements concerning the sale or lease of those Units, according to restrictive covenants of record at the time an Owner acquires his interest in such Unit (and thereafter, with the Owner's consent) or according to a resale restriction agreement executed by the Owner at the time such Unit is acquired, or according to the terms of any lease between a Leasee and an Owner and the rules and regulations of the Town of Snowmass Village Housing Authority. 4.3 Rental Occupancy Limitations. No Unit, when occupied by a Lessee, shall be occupied for living or sleeping purposes by more persons than it was designed to accommodate safely and comfortably or such lesser number as is specified by any lease between a Lessee and an Owner or by the Town of Snowmass Village Housing Authority. Each Unit shall be deemed to have been designed to accommodate safely and comfortably a maximum of 2 adults per bedroom. For the purpose of this Section, an adult shall mean any person over the age of 12 and a bedroom shall mean an enclosed living space originally designed primarily as a sleeping area. 4.4 Nuisances. There shall be no noxious or offensive activity carried on, in or upon any Common Element, and no loud noises or noxious odors shall be permitted anywhere on the Property. Nothing shall be done on the Property which may be or become an unreasonable annoyance or a nuisance to any other Owner, Lessee or occupant of a Unit. The Board shall have the right to determine if any activity, noise or odor constitutes a nuisance. No Owner or Lessee shall permit or cause anything to be done or kept on the Property which will increase the rate of insurance obtained under Section 10.1 hereof or which will result in the cancellation of such insurance. Each Owner and Lessee shall be accountable to the Association and the other Owners and Lessee for the conduct and behavior of persons visiting his Unit. Any damage to the Common Elements, or the property of another Owner or Lessee, which is caused by any such visitors shall be repaired at the sole expense of the Owner or Lessee in whose Unit such persons are visiting. 4.5 Sign Restrictions. Without the prior written consent of the Board, no sign or advertising device shall be displayed to the public view on any portion of the Common Elements, except as may be used by Declarant or its designated agents to advertise the availability.of Condominium Units. 4.6 Parking Restrictions. No Owner or Lessee shall park any vehicle on the Property except wholly within a designated parking area. No inoperable vehicle shall be stored on the Property, and no Owner or Lessee shall park any large commercial -type vehicle on the Property. The Board may restrict or prohibit parking on the Property of trailers, camper -type vehicles and motor homes. No Owner or Lessee shall conduct major repairs or restorations of a vehicle or permit any such activity to be conducted upon the Property. 4.7 Pet Restrictions. Usual and customary domestic animals may be kept in a Unit provided that they are not kept, raised or bred for commercial purposes or in unreasonable numbers. The Board shall have the right to issue any rules it deems appropriate concerning the keeping of pets and the obligations of Owners or Lessees and residents in connection therewith. Such rules may be different for pets of Owners and pets of Lessees. The Board, in its sole discretion, may elect to prohibit any or all pets in any Unit. An Owner or Lessee shall be absolutely liable to the Association and to all other Owners, Lessees and their guests for any unreasonable noise or damage to any person or property caused by any animal brought or kept on the Property by such Owner or by members of his family, his guests or lessees. It is also the absolute M919 responsibility of each Owner and Lessees to clean up after any animal which has used the Common Elements or any other portion of the Property in any manner. 4.8 Eyesores and Fire Restrictions. Nothing which itself is not a Common Element all e ung out or exposed on any part of the Common Elements visible to the public. The Common Elements shall be kept free and clear of rubbish, debris and other unsightly materials. Trash, garbage or other waste shall be disposed of in a designated trash container. No portion of the Common Elements visible to the public shall be used for the storage of building materials, refuse or any other materials, other than in connection with approved construction. There shall be no exterior fires except in contained barbeques unless otherwise regulated or permitted by the Board. 4.9 Out -Building Restrictions. No temporary building shall e p ace upon any portlon of the Common Elements, except as permitted by the Board or except in connection with approved construction. No garage, storage unit, trailer, camper, motor home or recreation vehicle shall be used, either temporarily or permanently, as a residence on the Property. 4.10 Limited Common Elements. No Owner or Lessee shall decorate, tence or alter or expand the use of any Limited Common Element without the prior written authorization of the Board. 4.11 Structural Integrity. Except as otherwise provided in this Dec aration, no -t - '1' -ng shall be done in any Unit or to the Common Elements which will impair the structural integrity of or structurally change any improvement on the Property. 4.12 Permissions to Declarant. In order that Declarant's work may be comp ete an t e Property may be established as a fully occupied residential community, Declarant and its agents, employees and contractors shall have the broadest possible rights during any period of construction on the Property and during the period of the disposition of Condominium Units, subject to Declarant's responsibility for mechanics' liens as set forth in Section 6.5 hereof. Neither the Association nor any Owner or Lessee shall do anything to prevent Declarant and its agents, employees and contractors from the following: (a) Doing whatever Declarant deems necessary or advisable in connection with the completion of any work to a Unit owned by Declarant or to the Common Elements, including without limitation the alteration of -10- construction plans and designs and the alteration or addition of easement locations for utilities and rights of way as Declarant deems advisable in the course of development of the Property; (b) erecting, constructing and maintaining such structures on any portion of the Property as may be reasonably necessary for the completion of the work, the establishment of the Property as a residential community and the disposition of the Condominium Units by sale, lease or otherwise; (c) conducting the business of developing, subdividing, grading and constructing Units and other improvements on the Property; and (d) maintaining such sign or signs on the Property as may be necessary in connection with the sale or lease of Condominium Units. 4.13 Partition of Units Prohibited. No Owner shall partition or su ivi e any on om.inium Unit so as to encumber or convey an interest in less than an entire Condominium Unit. This Section is not intended, however, to prohibit joint or common ownership of a Condominium Unit by two or more persons or entities. 5. The Association 5.1 Business and Membership. The business and affairs of the con ominium su Ject to this Declaration shall be governed and managed by the Association through its Board. All Owners shall automatically be members of the Association, and such membership shall automatically cease upon termination of the Owner's interest in his Condominium Unit. Membership shall be appurtenant to a Condominium Unit and shall not be separately conveyed, encumbered or abandoned. 5.2 Binding Effect. Each Owner and Lessees and their families, guests an any other persons using or occupying a Unit or the Common Elements shall be bound by and shall strictly comply with the provisions of this Declaration, the By -Laws, any deed restrictions and covenants and all rules and agreements lawfully made by the Association. The Association shall have the right and power to bring suit in its own name for either legal or equitable relief for any lack Of compliance with any such provisions. An Owner or Lessee aggrieved by lack of compliance may also bring suit for legal or equitable remedies. -11- 5.3 Power of the Association. Each Owner and Lessee agrees that the Associ.ati.on s a exercise all powers granted it by the Colorado Non -Profit Corporation Act and the Colorado Condominium Ownership Act and any amendments or supplements thereto and replacements thereof. Such powers shall include without limitation the making of assessments chargeable to the Owners, the imposing of a lien on Condominium Units for any Common Expenses and the foreclosing of any such lien, the enforcing of any deed restrictions and covenants and the acquiring, holding, leasing, mortgaging or conveying of the Common Elements or Association Property for itself and on behalf of all Owners as their attorney-in-fact. Each Owner shall be deemed to have waived all rights of partition, homestead, or exemption under state or federal law including banckruptcy laws. 5.4 Additional Activities, Functions or Services. The Association may undertake, to the extent the Board, in its sole discretion, so elects, to provide any activity, function or service, for the benefit of or to further the interests of all, some or any Owners or Lessees on a self-supporting, special assessment, or general assessment basis. Such activities, functions or services, which may be provided by the Association's employees or by an independent contractor retained by the Association, may include, but are not necessarily limited to, a security service, a garbage and trash collection service, a firewood service, and maid and cleaning service for Units. The Board shall determine in its sole discretion, whether the costs and expenses in connection with any such service shall be designated as a Common Expense or as a charge allocated solely to Owners utilizing such service. Any such charge shall be reasonable and shall be uniformly applied. If any such activity, function or service includes furnishing or providing services for the care and maintenance of a Unit, no Owner shall be required to utilize the Association for such services. 6. Maintenance 6.1 Responsibilities of the Association. The Association is response e or Maintaining as a Common Expense: (a) All Common Elements (except as expressly provided in Section 6.2); (b) a Unit to the extent of incidental damage caused through Maintenance or the need therefor by the Association; and (c) a Unit to the extent the Owner thereof defaults in his responsibility therefor, but only if Maintenance is deemed desirable by the Association. -12- Any such Maintenance under (c) shall be subject to the reimbursement to the Association by such Owner by way of a special assessment which, together with interest at 21%, and shall, until paid by the Owner, constitute a lien against his Condominium Unit subordinate only to the first priority Mortgage on the Condominium Unit. Such lien, which may be foreclosed as a mortgage on real property, shall be evidenced by a statement executed by the Association and filed in the office of the Clerk and Recorder of Pitkin County, Colorado. Maintenance responsibility for the Common Elements shall include, at a minimum, Maintenance of any and all storm sewer facilities located on the Property but not within a publicly dedicated right-of-way, professional landscaping, general grounds Maintenance, reseeding, replanting, reshrubbing and rechipping. 6.2 Responsibilities of Owners. Each Owner and Lessee is response e or prove ing a Maintenance within his Unit at his own expense, except as provided in Section 6.1(b). Such responsibility shall include without limitation Maintenance of the interior surfaces of the walls, ceilings, doors, windows and floors which define the Unit and any finished or additional surfaces, decoration or materials installed by Declarant, the Owner or their predecessors -in - interest such as carpets, wallpaper, countertops, painting or staining, plug-in appliances and personalty of any kind in the Unit. Each Owner and Lessee is also responsible, at his own expense, for the cleaning of any balcony adjacent to the Unit, the door thereto, all other doors or windows on the Unit, and all machines, attachments, installations and fixtures within the Unit. 6.3 Notice to Maintain. An Owner or Lessee shall immediately report to t e Boar the need for any Maintenance which is the Association's responsibility to provide. In the event of any disagreement as to the need for or the responsibility of the Association to provide the Maintenance, the decision of the Board shall be final. 6.4 Approvals Required. Subject to the provisions of Article 8 hereo no improvement to the Property (other than for Maintenance) which results in a Common Expense shall be constructed by the Association except with the prior approval of the members of the Association having at least 80% of the total number of votes outstanding and entitled to be cast at a membership meeting as provided in the By -Laws. Dissenting Owners shall be not relieved of their obligation to pay their proportionate share of any Common Expenses. -13- 6.5 Mechanics' Liens. As against the Association and the Owners, Declarant shall be responsible for the release Of all mechanics' liens filed with respect to the Common Elements, or any part thereof, if any such liens arise or are alleged to arise from labor performed or materials furnished at the instance of Declarant, its agents, contractors or subcontractors. Except as the result of labor performed or materials furnished at the instance of the Association, no labor performed or materials furnished with respect to the Property shall be the basis for filing a lien against the Common Elements or against any Condominium Unit whose Owner did not expressly consent to or request the performance of such labor or the furnishing of materials. Each Owner and Lessee shall indemnify and hold harmless each of the other Owners and the Association from and against all liability arising from the claim of any lien claimant against the Condominium Unit of any other Owner or against the Common Elements for labor performed or materials furnished at such Owner's or Lessee's request or with his consent. The Association may pay the amount necessary to discharge any lien or encumbrance levied against any portion of the Property which may, in the Board's sole opinion, constitute a lien against the Property or Common Elements rather than merely a lien against a Condominium Unit of the particular Owner at whose interest with whose consent the labor was performed or material furnished. Such Owner, or Lessee shall be liable to the Association for the cost, including reasonable attorneys' fees, of discharging such lien or encumbrance. Such cost, together with interest thereon at 21%, shall be specifically assessed to such Owner and shall, until te a lien on the Owner's Condominium Unit subordinate nonly uto the first priority Mortgage on the Condominium Unit. Any such lien shall be evidenced by a statement executed by the Association and filed in the office of the Clerk and Recorder of Pitkin County, Colorado and may be foreclosed as a mortgage on real property. 6.6 Management Agreement. The Association shall enter into a management agreement (the "Agreement") with a professional managing agent which shall provide for the management of the Property. No Agreement shall be for a term exceeding one year, but it may be renewed by agreement of the parties for successive one-year periods. Professional managing agents shall be selected by the Board. Each Owner, his successor and assigns, shall be bound by the Agreement for the purposes therein expressed, including but not limited to: (a) Adopting, ratifying, confirming, and consenting to the execution of the Agreement by the Association; -14- (b) covenanting and promising to perform each and every one of the covenants, promises, and undertakings to be performed by Owners as provided in the Agreement; and (c) recognizing that some or all of the persons comprising the original Board are or may be partners, shareholders, officers, directors or employees of the managing agent or the Declarant, and that such circumstances shall not and cannot be construed or considered as a breach of their duties and obligations to the Association, nor as grounds to invalidate the Agreement, in whole or in part. The Town of Snowmass Village Housing Authority shall be considered a professional managing agent for the purposes of this Declaration. 7. Assessments 7.1 Obligation and Purpose. Each Condominium Unit shall be subject to Such assessments as the Association may levy from time to time. The assessments collected shall be used exclusively to promote the recreation, health, safety or welfare of the residents on the Property. Each Owner shall be obligated to pay all such assessments assessed against his Condominium Unit. 7.2 Assessments. General assessments, which shall be based on a budget To—a fiscal year designated by the Association, shall include funds for the current Common Expenses of the Association and shall also include funds as a reserve for Maintenance which cannot be expected to occur on a regular annual basis. Assessments shall be apportioned among the Owners according to each Owner's undivided interest in the Common Elements as reflected on Exhibit C hereto (as supplemented from time to time). A brief summary of the annual budget shall accompany each general assessment notice. 7.3 Assessment Reserve. The Association from time to time shall require each Owner, other than Declarant, to deposit with the Association an amount determined by the Board but not exceeding one quarter of the estimated annual Common Expenses. This amount shall be held, without interest, and may be used by the Association for working capital and for Maintenance which cannot be expected to occur on a regular annual basis. Such an advance payment shall not relieve an Owner from making the regular payment of the Common Expenses as the same comes due. Upon the transfer of the fee simple interest to his Condominium Unit, an Owner shall be entitled to a credit from his transferee for any unused portion of the reserve. -15- 7.4 Assessment Lien and Liability. Installments of the annual assessment shall become due and payable at such time or times as the Board may determine. The Board has the right to accelerate the due date of the unpaid installments of the annual assessment if an Owner defaults on his obligation to pay an installment when due. The Association shall have a lien for any amount unpaid on the Condominium Unit affected. This lien shall be subordinate only to the lien of the first priority Mortgage on such Condominium Unit, and the Association shall have the right to foreclose such lien in the manner provided by Colorado law for mortgages upon real property. The lien and amount unpaid shall be evidenced by a statement executed by the Association and recorded in the office of the Clerk and Recorder of Pitkin County, Colorado. If the collection of the assessment requires legal proceedings, any costs of such proceedings, including without limitation reasonable attorneys' fees, shall be added to the assessment and shall be collectible in the same fashion as the assessment. The Association shall have the power to bid on the Condominium Unit at a foreclosure sale and to acquire, hold, lease, mortgage and convey the same. A suit to recover a money judgment for unpaid assessments shall be maintainable without foreclosing or waiving the lien securing the same, and this provision or any institution of suit to recover a money judgment shall not constitute an affirmation of the adequacy of money damages. Any recovery resulting from such a suit shall include costs of the suit and reasonable attorneys' fees. An assessment shall be the personal obligation of the Owner of the Condominium Unit at the time the assessment is levied against the Condominium Unit affected. An Owner may not exempt himself from liability by waiver of the use or enjoyment of any of the Common Elements or by an abandonment of his Condominium Unit. Overdue assessments shall bear interest at 21% per annum until paid, and there shall also be such additional late charge as the Association may from time to time determine. 7.5 Grantee and Mortgagee Obligations. No Owner shall convey or mortgage his Condominium Unit unless and until all sums due the Association, whether or not evidenced by a recorded statement, are currently paid. If there is a delinquency, an Owner's grantee or Mortgagee shall apply the proceeds of any such transaction first to the payment of delinquent amounts due the Association before paying or disbursing any amount to the Owner. The grantee of a Condominium Unit shall be jointly and severally liable with his grantor for all unpaid assessments against the latter up to the time of the grant or conveyance, without prejudice to the grantee's right to recover from the grantor the amounts paid by the grantee therefor. Upon written request and payment of such reasonable fee as may be set by the Association, the Association shall issue a written statement under signature of the Treasurer or other person designated by the Board to such grantee or Mortgagee verifying the status of all assessments or charges affecting the Condominium Unit. Any statement that there are no delinquencies shall conclusively bind the Association. At or prior to the closing of the first sale of a Condominium Unit by Declarant to a prospective Owner, Declarant shall certify to such person that no assessments have been levied against such Condominium Unit, or Declarant shall secure a certificate from the Treasurer of the Association or other person designated by the Board which states that all due assessments against such Condominium Unit have been paid and which further states the total amount of assessments which have been levied against such Condominium Unit. 7.6 Contribution for Tort Liability. In the event of any tort lia i ity wHich is not covere completely by insurance, each Owner shall contribute for the payment of such liability as a Common Expense. The Association may, however, require a larger contribution from fewer than all Owners under any rule of law regarding liability for negligent or willful acts or omissions. Additionally, the Association may require a contribution from one or more Lessees under any rule of law regarding liability for negligent or willful acts or omissions. 8. Destruction, Damage and Obsolescence 8.1 Association as Attorney -In -Fact. The Association is here5y ma3e t e irrevocanie attorney-in-fact of each Owner and Lessee to deal in any manner with the Property, or any part thereof, upon its destruction, damage, obsolescence or condemnation. An acceptance by the grantee of a deed or other instrument of conveyance from the Declarant or from any Owner or the signing of any Lease by a Lessee shall constitute appointment of such attorney-in-fact. As attorney- in-fact, the Association shall have complete authorization to execute any contract, deed, or other instrument with respect to the interest of an Owner or Lessee which is appropriate to exercise the power herein granted. If the Association is dissolved or becomes defunct, a meeting of the Owners shall be held within thirty days after such event. At that meeting a new attorney-in-fact shall be appointed to deal with the Property upon its destruction, damage, obsolescence, or condemnation. This appointment must be approved by Owners of 66-2/3% or more of the votes outstanding and entitled to be cast under the By -Laws and at least 66-2/3% of the first priority Mortgagees. 8.2 Use of Insurance Proceeds. The proceeds collected from any insurance purc ase y the Association -17- shall be available to the Association for itself as owner of any Association Property and as attorney-in-fact for the Owners and Lessees. Any such proceeds shall be used for the purpose of Maintenance unless the Owners decide to terminate this Declaration in accordance with the provisions set forth in Section 11.2. In the event of Maintenance, all present and future Mortgagees hereby release all right to the proceeds under all insurance policies purchased by the Association. 8.3 Special Assessments. In order to raise the remainder of t e un s require or Maintenance after the application of any proceeds of insurance, the Association may levy one or more special assessments against all Owners in the proportions described in the second sentence of Section 7.2 hereof. However, the Association shall have the right to require a larger contribution from fewer than all Owners under any rule regarding liability for negligent or willful acts or omissions. Additionally, the Association shall have the right to seek a contribution from one or more Lessees under any rule regarding liability for negligent or willful acts or omissions. 8.4 Estimates, Notice and Duty to Maintain. If there is any destruction of the Property, the Association shall prepare an estimate of the damage and the cost of Maintenance, an inventory of the Association's funds from all sources (including insurance) which are available for such Maintenance, and an estimate of the assessment against each Condominium Unit which would be necessary to enable the Association to meet such Maintenance costs in full. The Association shall promptly deliver a summary of each of such information to each Owner. In the event of damage, destruction, or obsolescence of any Unit, or any portion thereof, or any part of the Common Elements, exceeding a Maintenance cost of $10,000, then the holder of any first priority Mortgage with an interest in the damaged property will be entitled to prompt written notice from the Association of any such damage, destruction, or obsolescence. 8.5 Mandatory Maintenance. In the event of damage or destruction due to tire or other disaster, if the insurance proceeds are sufficient to reconstruct the improvements, the Association shall promptly cause such Maintenance to occur. Assessments for Common Expenses shall not be abated during the period of insurance adjustments and repair and reconstruction. 8.6 Plan for Maintenance. of the votes outstanding and entitled Laws may agree that the Property, or obsolete and may adopt a written plan such plan shall have the approval of priority Mortgagees of record at the Owners of 66-2/3% or more to be cast under the By - any part thereof, is for Maintenance. Any 66-2/3% of the first time of the adoption of such plan. The Association shall duly record such plan in the office of the Clerk and Recorder of'Pitkin County, Colorado. 8.7 Payment for Maintenance. The expense of Maintenance shall e payable y a of the Owners as a Common Expense. Assessments for the estimated cost of Maintenance shall be levied in advance pursuant to Article 7 hereof and shall be allocated and collected as provided in that Article. Further levies may be made in like manner if the amounts collected prove insufficient to complete the Maintenance. Dissenting Owners shall not be relieved of their obligation to pay their proportionate share of any Common Expenses. If the Association collects more money pursuant to this Section than is ultimately required for Maintenance, the Association shall return such excess to the Owners by a credit against the next installments of the annual assessment, or by a cash distribution to each Owner, in an amount proportionate to the respective amount collected from each Owner. The Association shall have full authority, right, and power to Maintain the improvements on the Property notwithstanding the failure of an Owner to pay the assessment. 8.8 Sale of Obsolete Property. Owners of 66-2/3% or more of the votes outstanding and entitled to be cast under the By -Laws may agree that the Property, or any part thereof, is obsolete and should be sold. Such an agreement must have the written approval of 66-2/3% of the first priority Mortgagees of record at the time such agreement is made. In such an instance, the Association shall forthwith record a notice setting forth such fact or facts, and upon the recording of such notice by the Association, the Property shall be sold by the Association, for itself and as attorney- in-fact for the Owners, free and clear of the provisions contained in this Declaration, the Map, and the By -Laws. In the event of such a sale, condominium ownership under this Declaration shall terminate, and the proceeds of the sale shall be distributed as provided in Section 11.3 hereof. 9. Taking By Eminent Domain 9.1 Taking of Common Elements. If all or any part of the Common Elements are taken or condemned by any authority having the power of eminent domain, all compensation and damages on account of the taking of the Common Elements, exclusive of compensation for consequential damages to affected Condominium Units, shall be payable to the Association for itself and as attorney-in-fact for the Owners owning an interest in such Common Elements. Such proceeds shall be used promptly by the Association to the extent necessary for Maintenance of such remaining Common Elements in as substantial compliance to the original or subsequent plan of development as possible. If there is an award in excess of the amount necessary to so substantially Maintain such remaining Common Elements, it shall be retained by the Association for such use as the Board deems appropriate. This Section does not prevent Owners whose Condominium Units are specially affected by the taking or condemnation from joining in the condemnation proceedings and petitioning on their own behalf for consequential damages relating to loss of value of their Condominium Units or personal improvements therein. 9.2 Partial Takings. If some but fewer than all Condominium Units are ta`c`en or condemned by any authority having the power of eminent domain, the Owners thereof shall automatically cease to be Members of the Association. The Association shall in good faith reasonably allocate the condemnation award among compensation, damages, or other proceeds and shall apportion the amount so allocated among the affected Owners as follows: (a) The total amount allocated to taking of or injury to the Common Elements shall be apportioned among the Owners to whose Units such Common Elements are appurtenant on the basis of each Owner's interest in those Common Elements; (b) the total amount allocated to severance damages shall be apportioned to those Condominium Units which were not taken or condemned; (c) the respective amounts allocated to the taking of or damage to a particular Condominium Unit and to the improvements an Owner has made within his own Unit shall be apportioned to the particular Condominium Unit involved; and (d) the total amount allocated to consequential damages and any other takings or injuries shall be apportioned as the Association determines to be equitable. Distribution of the apportioned proceeds shall be disbursed as soon as practicable in the same manner as provided in Section 11.3. 9.3 Total Taking. If all the Condominium Units shall be taken or condemned by any authority having the power of eminent domain, this Declaration shall terminate, and the Association shall commence winding up its affairs in liquidation. Unless otherwise ordered by a court of competent jurisdiction, the total condemnation award shall be distributed as provided in Section 11.3. -20- 9.4 Owners' Claims. Where all or part of the Property is taken y eminent domain, each Owner and Lessee shall have the exclusive right to claim all of the award made for his personal property and any relocation, moving expense or other allowance of a similar nature designed to facilitate relocation. 9.5 Mortgagee Rights. If the Common Elements, or any portion thereo excee ing a fair market value of $10,000, or any Condominium Unit, or portion thereof, is made the subject matter of any condemnation or eminent domain proceeding, then the holder of any first priority Mortgage affected thereby shall be entitled to timely written notice by the Association of any such proceeding or proposed acquisition. 10. Insurance 10.1 Coverages. The Association shall maintain to the extent reasonably available, the following insurance coverages: (a) Property and fire insurance with extended coverage and standard all-risk endorsements, including vandalism and malicious mischief, on the Common Elements and all Units. This insurance will be exclusive of furniture, furnishings, personal property, or improvements installed in Units by Owners or Lessees. The total amount of insurance, after application for deductibles, shall be 100% of the replacement value of the insured property, exclusive of land, foundations, and other items normally excluded from property policies. The insurance policy is to be without deduction for depreciation if such coverage is available; (b) public liability and property damage insurance, including medical payments insurance, in an amount to be determined by the Board covering all occurrences commonly insured against for death, bodily injury and property damage arising out of or in connection with the use, ownership, operation, Maintenance, or other use of the Property. This policy shall also cover operation of automobiles on behalf of the Association. The policy shall be in an amount not less than $500,000 per injury, per person, per occurrence, with an umbrella liability limit of $1,000,000 per occurrence. This policy shall contain a "severability of interest" endorsement; (c) workmen's compensation and employer's liability insurance with respect to employees of the Association in the amounts and forms required by law; -21- (d) fidelity coverage against the dishonesty of employees, destruction, or disappearance of money or securities and forgery. This policy shall also cover persons who serve the Association without compensation; and (e) coverage against such other risks of a similar or dissimilar nature as the Association deems appropriate. Such insurance shall be at standard premium rates as established by the Colorado Insurance Commissioner and written with companies licensed to do business in Colorado having the Best's Insurance Report rating of Class 6 or better. No Policy shall be obtained where: (a) Contributions or assessments may be made against the mortgagor or mortgagee's designee under the terms of the insurance company's charter, by-laws or policy; (b) by the terms of the carrier's charter, by- laws or policy, loss payments are contingent upon action by the company's board of directors, policyholders or members; or (c) the policy includes any limiting clauses (other than insurance conditions) which could prevent mortgagees or the mortgagor from collecting insurance proceeds. 10.2 Named Insured and Interests. Policies of property insurance s a name the Association as the insured and the person to which payment is to be made as owner of the Association Property and as attorney-in-fact for all Owners and first priority Mortgagees. Such policies shall provide that they may not be cancelled or substantially modified until after at least 30 days' prior written notice is first given to each Owner, each first priority Mortgagee and the Associa- tion. Certificates or memoranda of insurance, duplicate originals of all policies and renewals and proof of payment of premiums shall be issued to the Association, and upon request, to any Owner or Mortgagee. Each policy shall identify the interest of each Owner and each first priority Mortgagee. 10.3 Invalidation or Reduction of Coverage. Insurance policies Carrie pursuant to Section 10.1(a) must provide the following: aahinsurer waives tright to subrogation underthepolicyagainstanyOwnehis lessee or family; -22- (b) that no act or omission by any Owner, his lessee or family, will void the policy or be a condition to recovery under the policy, unless that person is acting within the scope of his authority as an officer of the Association or as a member of the Board; and (c) that if, at the time of a loss under the Policy, there is other insurance in the name of an Owner or Lessee covering the same property covered by the Policy, the policy is primary insurance not contributing to the Owner's or Lessee's individual insurance. 10.4 Other Insurance. An Owner or Lessee may purchase such a itiona insurance as they deem appropriate for their own benefit providing any such insurance contains a waiver of subrogation. 11. Term, Revocation and Amendment of Declaration 11.1 Term of Declaration. The term of this Declaration sha e perpetua 11.2 Revocation of Declaration. This Declaration may be revoked i a o t e Owners agree to such revocation by an executed, acknowledged instrument duly recorded in the office of the Clerk and Recorder of Pitkin County, Colorado. If there is destruction rendering 66-2/3% or more of the Units untenantable, this Declaration shall be revoked if Owners holding 66-2/3% or more of the votes of the Association so elect at a special meeting. Such meeting shall be called and held within 90 days after the occurrence of the event causing the destruction. The Association shall send written notice of any such revocation to all Mortgagees at the last address set forth in the recorded Mortgages. The prior written approval of each first priority Mortgagee will be required for the abandonment or termination, by act or omission, of the condominium regime, except in the case of obsolescence, substantial destruction by fire or other casualty, taking by condemnation or eminent domain or abandonment or termination provided by law. 11.3 Disbursement of Proceeds. Upon revocation of this Declaration, the Property shall be sold by the Association for itself and as attorney-in-fact for the Owners, in whole or in parcels, as the Association may deem appropriate. Any contract for sale of a substantial portion of the Property shall be subject to the Association's right to terminate such contract, without penalty or damages, within 30 days if Owners having 66-2/3% of the total votes of the Association so elect as provided in the next sentence. As -23- promptly as possible after entering into a contract for the sale of a substantial portion of the Property, the Association shall mail a copy thereof to all Owners and advise them that they may vote in writing (executed by each Owner of a Condominium Unit) to reject such contract, such vote to be received by the person and at the address designated in the notice no later than 15 days from the date of mailing of the notice. Voting must be in strict compliance with the preceding sentence, may not be contingent, and may not be verbally or telegraphically given. All sales proceeds and all amounts recovered under any insurance policy shall be allocated among the Owners in the proportions described in the second sentence of Section 7.2 herein. The funds allocated to each Condominium Unit shall be disbursed, without contribution from one Owner to another, by the Association for the following purposes and in the following order: of sale; (a) Payment in full of the customary expenses (b) payment in full of the allocable taxes and special assessment liens in favor of any Governmental assessing entity; (c) payment in full of the balance of the lien of any first priority Mortgage on the Condominium Unit; (d) payment in full of allocable unpaid Common Expenses and the unpaid costs, expenses and fees incurred by the Association; (e) payment in full of junior liens and encumbrances on the Condominium Unit in the order of and to the extent of their priority; and (f) payment of any balance to the Owner. 11.4 Amendment of Declaration. This Declaration shall be amended if Owners olding 66-2/3% or more of the votes outstanding and entitled to be cast under the By -Laws agree thereto by an executed instrument duly recorded in the office of the Clerk and Recorder of Pitkin County, Colorado. Until seven years from the date of recording this Declaration or completion of all construction on the Property and Additional Property, whichever comes first, no amendment to the Declaration may be made without Declarant's consent. No material amendment to the Declaration shall be made without the prior written approval of each first priority Mortgagee. -24- 12. Expansion of Project 12.1 Additions to or Withdrawals from -the Property. Declarant reserves t e rig t to su sect one or more o t e Lots constituting the Additional Property to this Declaration or to withdraw any Lots in which no person other than Declarant is an Owner from this Declaration, subject to the provisions of this Article, at any time and from time to time, but within seven years from the date of recording this Declaration. Declarant may expand the project by submitting the Lot or Lots desired to be added to the Declaration by recording a Supplemental Declaration and a Supplemental Map in the office of the Clerk and Recorder in Pitkin County, Colorado. Declarant may withdraw a Lot or Lots from the Project by removing the Lot or Lots from the Declaration by recording a Supplemental Declaration and a Suplemental Map in the Office of the Clerk and Recorder of Pitkin County, Colorado. Upon the recording of a Supplemental Declaration, the definitions used in this Declaration shall automatically be adjusted to encompass and refer to the Property as so altered. 12.2 Contents of the Supplemental Declaration. The Supplemental Declaration sha contain the ollowing __ provisions at a minimum: (a) As applicable, the legal description of the Lot or Lots being added or withdrawn (such designations being dissimilar to any other Unit designation in use on any Map); (b) a schedule of the square footage assigned to each added or subtracted Unit, determined on a basis comparable to that used for the purposes of such allocations in Exhibit C hereto; and (c) a schedule of the reallocated undivided interests of the Owners of the Units in the Common Elements constituting or in the Lots which are subject to the Declaration after the filing of the Supplemental Declaration and Supplemental Condominium Map. Following the designation of the Lot or Lots to be withdrawn or the designation of the Lot or Lots to be added and the substantial construction of additional Units, Declarant shall record a Supplemental Condominium Map depicting the added or withdrawn Lot or Lots and Units. Except as specificallly provided in the Supplemental Declaration, all of the provisions of this Declaration shall apply to all added Lots and all additional Units following the recording by Declarant of the Supplemental Declaration and the Supplemental Condominium Map. -25- Notwithstanding any provisions to the contrary contained in this Declaration and this Article 12, Declarant shall not be obligated to enlarge, expand or reduce the Property. 13. Miscellaneous 13.1 Number- and- Gender. Unless the context shall otherwise provide, a singular—number shall include the plural, a plural number shall include the singular and the use of any gender shall include all genders. 13.2 Construction. The provisions of this Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for the development of a residential community and for the Maintenance of the Common Elements. Headings have been inserted for convenience only and shall not be considered in resolving questions of interpretation or construction. 13.3 No Dedication. Declaration shall e dee—m--e—to or any part of the Property to use. Nothing contained in this be a gift or dedication of all the public or for any public 13.4 Notices. Any notice permitted or required to be delivered as--p—r-671-Ted in this Declaration shall be in writing and may be delivered either personally or by mail. If delivery is made by mail, it shall be deemed to have been delivered 48 hours after a copy of the same has been deposited in the United States mail, postage prepaid for first class mail and addressed to the Owner at the address last given by such person to the Association, or to the Condominium Unit owned by such person if no address has been given to the Association, or to the Mortgagee at the address stated in the recorded Mortgage or any recorded amendment thereto. Any notice to the Association shall be sent to such address as it may from time to time designate in writing to each Owner. 13.5 Mortgagee Notice Rights. Any holder of a first priority Mortgage will, upon request, be entitled to: (a) Inspect the books and records of the Association during normal business hours; (b) receive financial statements of the Association certified by the Association within 90 days following the end of any fiscal year; (c) receive written notice of meetings of the Association and be permitted to designate a representative to attend all such meetings; and -26- (d) receive written notice of any default on the part of its respective Mortgagor(s) regarding any obligations imposed under this Declaration which are not cured within 30 days. IN WITNESS WHEREOF, the Declarant has duly executed this Declaration this day of 19 M -27- a STATE OF � COUNTY OF ss. this The foregoing instrument was acknowledged before me day of December, 1980, by of as WITNESS my hand and official seal. Notary Pubic - ----- Address: My Commission expires: [SEAL] MAS:j -28- EXHIBIT A Property Initially Subject to this Declaration EXHIBIT B Property Potentially Subject to this Declaration EXHIBIT C Lot Unit % Ownership of Comrmn Elements Unit Square Footage** 'J�* ^NeE-se`ated interior square footage. ARTICLES OF INCORPORATION OF THE VILLAS NORTH CORPORATION The undersigned person, acting as the incorporator of a corporation under the Colorado Nonprofit Corporation Act, signs and acknowledges in duplicate the following Articles of Incorporation for such corporation and states: FIRST: The name of the corporation is the Villas North Corporation. SECOND: The period of its duration is perpetual. THIRD: The corporation is organized as a non -stock, non-profit membership corporation exclusively as a condominium management association to own, operate, manage and maintain the property and facilities located within the property described in the Condominium Declaration, and Supplements thereto, for the Villas North located in Parcel 3, The Snowmass Club Subdivision, as recorded in the office of the Clerk and Recorder, Pitkin County, Colorado, and to advance the common interests of the corporation's members. Terms which are defined in such declaration shall have the same meaning when used in these Articles, unless the context clearly requires otherwise. FOURTH: The corporation shall have all powers granted to corporations by the Colorado Nonprofit Corporation Act, as amended from time to time, and all powers granted by the Colorado Condominium Ownership Act, as amended from time to time, and any substitute statute therefor. FIFTH: No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to, its managers, officers or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third. No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any Political campaign on behalf of any candidate for public office. SIXTH: The address of the initial registered office of the corporation is ___ , Snowmass Village, Colorado 81615 and the name of its initial registered agent at such address is SEVENTH: The number of managers constituting the initial Board of Managers of the corporation is three, and the names and addresses of the persons who are to serve as the initial managers are: NAME ADDRESS EIGHTH: Upon dissolution or final liquidation of the corporation, other than by merger or consolidation, the assets of the corporation shall be allocated and disbursed (net of expenses and debts of the corporation) to its members in the same proportion as is provided in the Declaration for such member's ownership of appurtenant General Common Elements. NINTH: Membership in the corporation shall be automatically awarded to each Owner and shall terminate when a person ceases to be an Owner. The corporation shall have one class of voting membership. Members, including Declarant, shall be entitled to one vote for each Unit owned. Incorporator: Ric ar C. Linquant+ i �------- Address: `--- -�'-" Address: 1675 Broadway, Suite 2600 Denver, Colorado 80202 -2- BY-LAWS OF THE VILLAS NORTH CORPORATION Table of Contents Page ARTICLE I GENERAL .................................... 1 1.1 Purpose ............................... 1 1.2 Binding Effect ........................ 1 ARTICLE II MEMBERSHIP AND VOTING RIGHTS ............... 1 2.1 Membership ............................ 1 2.2 Voting Rights ......................... 1 2.3 Additional Condominium Units.......... 2 2.4 Withdrawn Condominium Units........... 2 2.5 Cumulative Voting ..................... 2 2.6 Majority Vote ......................... 2 2.7 Quorum ................................ 2 2.8 Proxies ............................... 2 ARTICLE III ADMINISTRATION ............................. 2 3.1 Place of Meetings ..................... 2 3.2 Regular Meetings ...................... 3 3.3 Special Meetings ...................... 3 3.4 Attendance ............................ 3 3.5 Notice of Meetings .................... 3 3.6 Adjournment ........................... 3 3.7 Action Without Meeting ................ 3 3.8 Order of Business ..................... 4 3.9 Waiver ................................ 4 3.10 Minutes .............................. 4 ARTICLE IV BOARD OF MANAGERS .......................... 5 4.1 Managers .............................. 5 4.2 General Powers ........................ 5 4.3 Specific Powers ....................... 5 4.4 Election of Managers .................. 7 4.5 Vacancies ............................. 7 4.6 Removal ............................... 8 4.7 Board Meetings ........................ 8 4.8 Special Board Meetings ................ 8 4.9 Waiver of Notice ...................... 9 4.10 Quorum ............................... 9 4.11 Action by Managers ................... 9 4.12 Committees ........................... 9 ARTICLE V OFFICERS ................................... 9 5.1 Officers .............................. 9 5.2 Removal ............................... 10 Page 5.3 Compensation .......................... 10 5.4 President ............................. 10 5.5 Vice President ........................ 10 5.6 Secretary ............................. 10 5.7 Treasurer ............................. 11 ARTICLE VI FISCAL MANAGEMENT .......................... 11 6.1 Assessment Roll ....................... 11 6.2 Statement of Assessments .............. 11 6.3 Budget ................................ 12 6.4 Fiscal Year ........................... 12 6.5 Notice of Mortgagee ................... 12 ARTICLE VII MISCELLANEOUS .............................. 12 7.1 Indemnity ............................. 12 7.2 Conflicts Null and Void ............... 13 7.3 Amendment ............................. 13 7.4 Copy of By -Laws ....................... 13 MAS:j -ii- VNByLawMAS #10 5147.201 By -Laws of the Villas North Corporation ARTICLE I GENERAL 1.1 Purpose. The purpose for which this non-profit corporation, herei eferred to as the "Association", is formed is to govern the condominium property located in Pitkin County, Colorado, which is otherwise known as the Villas North. The applicable property has been submitted to the provisions of the Colorado Condominium Ownership Act by the Condominium Declaration for the Villas North dated , 1981 and recorded - - -, 1981, in the office of the Clerk and Recorder, Pitkin County, Colorado, in Book at Page (the "Declaration"). Additional property may be adde3hereto from time to time by a Supplemental Declaration filed with the Clerk and Recorder, Pitkin County, Colorado. Terms which are defined in the Declaration shall have the same meaning when used in these By - Laws, unless the context clearly requires otherwise. 1.2 Binding Effect. All present and future Owners, lessees or any other person who might reside in a Unit or use the Common Elements in any manner are subject to the regulations set forth in these By -Laws. The mere acquisition, rental or occupancy of any Condominium Unit will signify that these By -Laws are accepted, ratified and will be complied with. ARTICLE II MEMBERSHIP AND VOTING RIGHTS 2.1 Membership. All Owners are automatically Members of the Association. Such membership shall automatically cease upon termination of an ownership interest in a Condominium Unit. Membership is appurtenant to a Condominium Unit and may not be separately conveyed, encumbered or abandoned. 2.2 Voting Rights. The Association shall have one class of voting mem ers ip. Each Owner, including the Declarant, shall be entitled to one vote for each Condominium Unit owned. 2.3 Additional Condominium Units. If additional Condominium Units are create uner t e power reserved in the Declaration, the Owner of each additional Condominium Unit shall automatically be a Member of the Association and shall be subject to all obligations and shall enjoy all rights of a Member. 2.4 Withdrawn Condominium Units. If Condominium Units are with rawn trom the Property under the power reserved in the Declaration, the Declarant's votes shall automatically be reduced by the number of Units withdrawn. 2.5 Cumulative- Voting. Cumulative voting shall not be permitted in the election o -Managers. 2.6 Majority Vote. Unless otherwise expressly provided in these By -Laws or the Declaration, any action which may be taken by the Association may be taken by a majority vote of a quorum of the Membership. 2.7 Quorum. Except as otherwise provided in these By -Laws, the presence in person or by proxy of Members representing at least 25% of the total votes of the Association then entitled to be cast, shall constitute a quorum of the Membership. Members present at a duly called and held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum. 2.8 Proxies. Votes may be cast in person or by proxy. All proxies s all be in writing and must be filed with the Secretary before the appointed time of each meeting. Each proxy shall be revocable and shall automatically cease to be effective on the earlier of one year from the date of the proxy, or, if applicable, after completion of the particular meeting for which the proxy was filed, or, upon conveyance by the Member of title to his Condominium Unit. ARTICLE III ADMINISTRATION 3.1 Pi -ace of Meetings. Meetings of the Members shall be held at such suitable place in Town of Snowmass Village, Pitkin County, Colorado as may be designated by the Board of Managers. 3.2 Regular Meetings. The first annual regular meeting of the Association shall be held on Thereafter, the annual regular meeting of the Association IWZ shall be held on a date selected by the Board of Managers between and of each year. 3.3 Special -Meetings. It shall be the duty of the President to cali a special meeting of the Members, as directed by resolution of the Board of Managers, or upon a petition stating the purpose for the meeting signed by Members having 10% of the votes of the Association and presented to the Secretary. 3.4 Attendance. Each first priority Mortgagee of a Condominium UniE`3`r-`o�-,7ssociation Property which is real property may designate a representative to attend all special and regular meetings of Members. Meetings shall be open to attendance by all Members and any persons holding currently valid voting proxies of Members, and by Lessees. 3.5 Notice of-M-eeti-ngs. It shall be the duty of the Secretary to mai a notice o each regular or special meeting to each Member of record and and to each first priority Mortgagee of a Condominium Unit if such Mortgagee has filed a written request for such notice with the Secretary at least ten days prior to any such meeting. The notice shall state the purpose of the proposed meeting or that it is a regular meeting, as well as the day, hour and place where it is to be held. Each notice must be sent by first class mail, postage prepaid, at least ten days prior to the date of the proposed meeting. If no other address has been furnished the Secretary, notice shall be deemed to have been given to a Member if mailed to his Unit. The notice may set forth time limits for speakers and nominating procedures for the meeting. No business shall be transacted at a special meeting except as stated in the notice, unless by consent of Members present, either by person or by proxy, representing at least 50% of the votes of the Association. 3.6 Adjournment. If any meeting cannot be organized because a quorum -`-Pias noE-attended, the Members who are present, either in person or by proxy, may adjourn the meeting from time to time until a quorum is obtained. Adjourned meetings may be reconvened only upon the giving of further notice as above provided. 3.7 Action Without Meeting. Any action which, under the provisions of the Colorado Non -Profit Corporation Act, may be taken at a meeting of the Members, may be taken without a meeting if such action is authorized by a writing signed by all of the Members who would be entitled to vote at a meeting and filed with the Secretary. 3.8 Order of Business. The order of business at all meetings of the Mem ers s a e as follows: -3- (a) Roll call; notice; (b) proof of notice of meeting or waiver of meeting; (c) reading of minutes of the preceding (d) report of officers; (e) report of committees; (f) election of Managers; (g) unfinished business; and (h) new business. Meetings of the Members shall be conducted by the officers of the Association. 3.9 Waiver. The transaction of business at any regular or specia meeting of the Members, however called and noticed, shall be valid as though transacted at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the Members not present in person or by Proxy signs a written waiver of notice, a consent to the holding of such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. 3.10 Minutes. Minutes or a similar record of the proceedings of meet nl gs of Members, when signed by the President or Secretary, shall be presumed to truthfully evidence the matters set forth therein. A recitation in the minutes of any such meeting that notice of the meeting was properly given shall be prima facie evidence that such notice was given. ARTICLE IV BOARD OF MANAGERS 4.1 Managers. The affairs of the Association shall be governed by--a--B—o-a—r-T of Managers composed of three persons, all of whom, except for those appointed and serving on the initial Board as named in the Association's Articles of -4- Incorporation, either must be members or must be agents of a Member which is a corporation, a partnership, a trust, or other legal entity. The Board may increase, by resolution, the authorized number of Managers, but only Members shall have the right to elect the new Managers. Managers shall not receive any salary for their services as Managers, but any Manager may serve the Association in some other capacity and receive compensation therefor, and any Manager may be reimbursed for his actual expenses incurred in the performance of his duties as a Manager. 4.2 General Powers. The Board has the powers and duties necessary or t e a ministration of the affairs of the Association and may do all acts which are not by law, the Declaration or these By -Laws directed to be exercised exclusively by the Members. The Board shall not enter into any service contract for a term exceeding one year without the approval of the Members, except for any contract with a public utility company which requires a term in excess of one year or any maintenance contract with the seller or entity related to the seller of an asset which the Association has purchased or leased. 4.3 Specific Powers. Without limitation on the general powers stated in Section 4.2, the Board is vested with, and responsible for, the following powers and duties: (a) To select, appoint and remove all officers, agents and employees of the Association, to prescribe such powers and duties for them as may be consistent with law, the Articles of Incorporation, the Declaration and these By -Laws, to fix their compensation and to require from them security for faithful service when and in the amount deemed advisable by the Board; (b) to conduct, manage and control the affairs and business of the Association; (c) to change the principal office for the transaction of the business of the Association from one location to another within the Town of Snowmass Village, Colorado, to designate any place within the Town of Snowmass Village, Colorado for the holding of any regular or special meeting of Members and to adopt and use a corporate seal and to alter the form of such seal from time to time, as the Board in its sole judgment may deem best and in compliance with the provisions of law; (d) to borrow money and to incur indebtedness for the Association, but only upon approval of the Members if the debts outstanding at any one time exceed $15,000 and to cause to be executed and delivered therefor, in the -5- Association's name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor; (e) to prepare the Association's annual budget for approval of the Members, to fix and levy from time to time assessments upon the Owners, as provided in the Declaration, to determine and fix the due date for the payment of installment of such assessments and the date upon which the same shall become delinquent and to hold all funds collected by reason of such assessments for the Owners and in accordance with the purpose for which the assessments were collected; (f) to enforce the provisions of the Declaration, these By -Laws, its rules, deed restrictions and covenants or other agreements of the Association; (g) to contract for and pay the premiums for insurance coverage in accordance with provisions of the Declaration and to review, not less frequently than annually, all insurance policies and bonds obtained by the Board; (h) to contract for and pay maintenance, gardening, snow removal, utilities, materials and supplies and services relating to the Common Elements and Association Property and to employ personnel necessary for the operation of the Property, including legal and accounting services, to contract for and pay for alterations, improvements and maintenance and to procure bids from at least two firms for any work estimated to cost in excess of $5,000, which work shall be submitted to the Members for their consideration at a regular or special meeting; (i) to delegate, subject to the approval of the Members, its powers according to law; (j) to adopt and amend these By -Laws; (k) to grant, for the Association on behalf of itself and as attorney-in-fact for the Owners, easements to and over the Common Elements or Association Property; (1) to take and hold by purchase, gift or otherwise real and personal property for the Association, to exercise all of the rights, powers and privileges of ownership to the same, and to use, manage, mortgage, sell, transfer, lease, license or otherwise dispose of any such property or any interest therein, provided that the Board procures bids from at least two firms for any contract which will likely produce more than $5,000 revenue to the Association; (m) to adopt such rules consistent with the Declaration, the Articles of Incorporation and these By - Laws as the Board may deem necessary for the management and operation of the Property, which rules and regulations shall become effective and binding after they are posted in a conspicuous place on the Common Elements; . (n) to engage the services and set the compensation of a manager or managing agent to perform such duties and services as the Board shall authorize, including but not limited to the duties listed in Section 4.3 other than this subparagraph (n); and (o) to establish orderly procedures for an impartial hearing upon notice to any Owner who is alleged to be in default in paying his assessments or the installments thereof or to have violated the Declaration, Articles of Incorporation, these By -Laws or the Association's rules. 4.4 Election of Managers. Two Managers will be elected by a vote o a t e Owners. The Third Manager shall be selected by all Owners, except that the Declarant shall not be entitled to vote for this Manager. Any Member serving as Manager may be re-elected, and there shall be no limitation on the number of terms during which he may serve. Any person desiring to be a candidate for Manager shall submit a written statement to that effect to the Secretary, signed by the candidate, or be nominated orally by another Member at the meeting at which the voting is to occur, at any time prior to the election. 4.5 Vacancies. Vacancies on the Board caused by any reason other than the removal of a Manager by a vote of the Members shall be filled by a 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 regular meeting of the Members or at a special meeting of the Members called for that purpose. A successor shall be elected for the unexpired term of his predecessor in office. A vacancy shall be deemed to exist in the case of death, resignation, an adjudication of the incompetence of any Manager, or in the case the Membersr fail to elect the full number of authorized Managers at any meeting at which such election is to take place. 4.6 Removal. At any regular or special meeting of the Members duT_y__c`a1Ted, if the prior notice of the meeting = states this as one of its purposes, any one or more of the Managers may be removed with or without cause, by a vote of the majority of the Members present in person or by proxy then entitled to vote at an election of Managers, and a successor may then and there be elected to fill the vacancy thus created. A successor shall be elected for the unexpired term of his predecessor in office. Any Manager whose removal has been proposed by any Member shall be given an opportunity to be heard at the meeting, if he is present. If any one or all of the Managers are removed, the new Managers may be elected at the same meeting. 4.7 Board Meetings. The first meeting of the newly elected Board shall e e as soon as practicable following the meeting at which the Board is elected. Other regular meetings of the Board may be held at such time and place as shall be determined, from time to time, by a resolution adopted by the majority of the Managers, but at least one such meeting shall be held during each fiscal year. Notice of regular meetings of the Board (other than the first meeting of the newly elected Board) shall be given by the Secretary to each Manager, personally or by mail, telephone or telegraph, at least two days prior to the date set for such meeting. 4.8 Special Board Meetings. Special meetings of the Board may be caE Te-Ty—the Presi ent or, if he is absent or refuses to act, by the Vice President or by any two Managers. At least two days' notice shall be given by the Secretary to each Manager, personally or by mail, telephone or telegraph. Such notice shall state the time, place and purpose of the meeting. If service is by mail, each such notice shall be sent, postage prepaid, to the address reflected on the records of the Association and shall be deemed given, if not actually received earlier, at 5:00 p.m. of the second day after it is deposited in a regular depository of the United States mail. Whenever any Manager has been absent from any special meeting of the Board, an entry in the minutes to the effect that notice has been duly given shall be conclusive evidence that due notice of such meeting was given to such Manager. 4.9 Waiver of Notice. Before, at or after any meeting of the—B—o—a-Td--o-F Managers, any Manager may, in writing, waive notice of such meeting, and such waiver shall be deemed equivalent to the giving and receipt of such notice. Attendance by a Manager at any meeting of the Board shall be a waiver of notice by him of the time and place thereof. If all the Managers are present at a meeting of the Board, no notice shall be required, and any business may be transacted at such meeting. 4.10 Quorum. At all meetings of the Board, a majority of the Managers shall constitute a quorum for the transaction of business, and the acts of the majority of the Managers present at a meeting at which a quorum is present shall be the acts of the Board. If at any meeting of the Board there is less than a quorum, the majority of those present may adjourn the meeting from time to time. At any such adjourned meeting, which shall be reconvened only upon the giving of notice as above provided, any business which might have been transacted at the meeting as originally called may be transacted. 4.11 Action by Managers. The Managers shall have the right to take any action wit out a meeting which they could have taken at a meeting by obtaining the vote or written consent of all the Managers. Any action so approved shall have the same effect as though taken at a meeting of the Board. 4.12 Committees. The Board may, by resolution, from time to time designate such committees as it shall desire and may establish the purposes and powers of each such committee created. The resolution designating and establishing the committee shall provide for the appointment of its members, as well as a chairman, shall state the purposes of the committee and shall provide for reports, termination and other administrative matters as deemed appropriate by the Board. ARTICLE V OFFICERS 5.1 Officers. The Association shall have a President, one or more Vice Presidents, a Secretary and a Treasurer (who may be the Secretary). All such officers shall be elected by the Board and hold office at its pleasure. Only the President need be a Manager, although other officers may be Managers. 5.2 Removal. Upon an affirmative vote of a majority of the entire Boar any officer may be removed, either with or without cause, and his or her successor elected. Any officer may resign at any time by giving written notice to the Board, the President or the Secretary, such resignation taking effect at the date of receipt of the notice or at any later time specified therein, and unless otherwise specified in the notice, acceptance of such resignation by the Board shall not be necessary to make it effective. WE 5.3 Compensation. Officers, agents and employees shall receive such reasonable compensation for their services as may be authorized or ratified by the Board. Appointment of any officer, agent or employee shall not of itself create contractual rights of compensation for services performed by such partner, officer, agent or employee, and no officer, employee or director of Declarant may receive any compensation. 5.4 President. The President shall be the chief executive officer 3-f—t-Fie Association. He or she shall preside at all meetings of the Association and of the Board. He or she shall have all of the general powers and duties which are usually vested in the office of the President of a corporation, including but not limited to the power to appoint committees from among the Members from time to time as he or she may deem appropriate to assist in the conduct of the affairs of the Association. The President shall be ex officio a member of all standing committees and shall have such of er powers and duties as may be prescribed by the Board or these By -Laws. 5.5 Vice President. The Vice President in the order designated at the time o e ection, if more than one, shall take the place of the President and perform his or her duties whenever the President shall be absent, disabled, unwilling or unable to act. If neither the President nor any Vice President is able to act, the Board shall appoint some member of the Board to do so on an interim basis. The Vice President shall also perform such other duties as shall from time to time be imposed upon him or her by the Board or these By -Laws. 5.6 Secretary. The Secretary shall keep the minutes of all meetings of -TE Board and the minutes of all meetings of the Association at the principal office of the Association or at such other place as the Board may order. The Secretary shall perform all other duties given to him or her by the Board or these By -Laws. The Secretary shall keep the seal of the Association, shall have charge of such books and papers as the Board of Managers may direct, shall give or cause to be given notices of meetings of the Members and of the Board, shall maintain a book of record Members listing the names, addresses and telephone numbers of the Members as furnished to the Association and shall ascertain certify, record and publicize the outcome of all votes taken by the Managers or the Members, as the case may be. The Secretary shall also be responsible for all filings required by law, except tax returns. 5.7 Treasurer. The Treasurer shall have responsibility for Association funds and securities and shall be responsible for keeping, or causing to be kept, full and accurate accounts, tax records and business transactions of the Association, including accounts of all assets, liabilities, receipts and disbursements and books belonging to the Association. The Treasurer's books and records shall be open to inspection by all Owners and first priority Mortgagees at convenient weekday business hours. The Treasurer shall make a report, at least once annually, to the Board containing the Association's balance sheet as of the end of the fiscal period covered by the report and a statement of the Association's income and expenses for the same period. The Board shall cause to be transmitted a summary of the Treasurer's Report to each Member. The Treasurer shall co- sign with another person designated by the Board all checks and promissory notes on behalf of the Association. The Treasurer shall be responsible for keeping the assessment roll required in the fiscal management of the Association and for filing tax returns as required by law. ARTICLE VI FISCAL MANAGEMENT 6.1 Assessment Roll. The Treasurer shall maintain an assessment ro 1 w is s a 1 include a separate account for each Condominium Unit. Such account shall designate the name and address of the Owner, the amount of each assessment against the Owner, the due dates of all assessment installments, the amounts paid by the Owner and all unpaid assessments. 6.2 Statement of Assessments. Upon written request of any Owner, Mortgagee or prospective purchaser of any Condominium Unit to the Treasurer, and payment of a reasonable service fee established by the Association, the Treasurer shall issue a written statement of the unpaid assessment receivable or other charges due and owing from the Owner for the Condominium Unit involved, and such statement shall be conclusive upon the Association if the person to whom it is given relies upon it in good faith. If the statement is not given within three days of the making of an authorized request for it, the person making the request shall, as against the Association, be entitled to assume that no assessments or other charges are unpaid, unless the lien securing the same shall have been recorded in the land records in Pitkin County, Colorado or unless the person making the request has actual notice that assessments or other charges are unpaid. 6.3 Budget. It shall be the responsibility of the Board to see t amt an orderly budgeting procedure is established as soon as practicable. Assessments shall be in - 1 1 - an amount sufficient to pay for the Common Expenses, including a reasonable reserve for working capital, repairs and replacements. Regular assessments shall be in an amount at least sufficient to pay for the following services and expenses on a normal basis: grounds maintenance (including gardening and snow removal), upkeep of any facilities, insurance, trash removal, service and leasing contracts (including water, utilities and sewage) for the Association and the Common Elements, printing supplies and postage, employees' compensation and taxes paid by the Association. 6.4 Fiscal Year. As soon as practicable, the Board shall, by resolution, fix a suitable fiscal year, which shall be the Association's budgeting and accounting period. The assessments against Owners shall be prepared, levied and collected at such times and in such manner as to insure that sufficient funds are available for budgeted expenditures and operations when needed. 6.5 Notice of Mortgagee. Every Owner who mortgages his Condominium Unit shall nota y the Association through the managing agent or the Secretary of the name and address of his Mortgagee. The Secretary shall maintain such information in records established for that purpose. Any such Owner shall notify the Association in the same manner of the release or discharge of any such Mortgage. ARTICLE VII MISCELLANEOUS 7.1 Indemnity. The Association, to the extent permitted by law, agrees to indemnify and otherwise hold harmless each Manager, officer, committee member or employee of the Association against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by reason of such person's acting as such Manager, officer, committee member or employee, unless the Board (if disinterested) or otherwise the Members (in the Board's or Members' sole discretion, as the case may be) or a court of competent jurisdiction, determines that such liability is the result of willful or gross negligence or culpability, or of actions or omissions which such person should reasonably have believed to be opposed to the best interests of the Association. Expenses (including attorneys' fees) of such person may be paid by the Association in advance of the final disposition of the matter in question in the sole discretion of the Board (if disinterested) or otherwise in the sole discretion of the Members, and upon receipt of an undertaking by or on behalf of such person to repay the amount -12- advanced unless the Board or Members, as the case may be, ultimately determines that he or she is entitled to indemnification as above provided. 7.2 Conflicts Null and Void. In case any of these By -Laws conflict with any provisions of the laws of the State of Colorado, the Articles of Incorporation or the Declaration, such conflicting By -Laws shall be null and void, but all other By -Laws shall remain in full force and effect. 7.3 Amendment. These By -Laws may be amended by the Association in a cTu'[y -constituted meeting of the Members for such purpose. 7.4 Copy of By -Laws. This Association shall keep in its office for the transaction of business the original or a copy of these By -Laws, as amended from time to time, certified by the Secretary, which shall be open to inspection by the Members and first Mortgagees at reasonable times during office hours. The foregoing By -Laws of the Villas North Corporation were adopted by its Board of Managers with the approval and consent of Declarant on the day of , 1981. BOARD OF MANAGERS: DECLARANT: By -13- CERTIFICATE OF SECRETARY I, the undersigned, do hereby certify that: 1. I am the duly elected and acting Secretary of the Villas North Corporation, a Colorado non-profit corporation; and 2. The foregoing By -Laws comprising pages including this page constitute the By -Laws of the corporation duly adopted by unanimous written consent in lieu of a meeting of the Board of Managers, as of , 1981. In Witness Whereof, I have hereunto subscribed my hand and affixed the seal of the corporation this day of -- - , 1981. Secretary [SEAL] MAS:j -14- ESCROW AGREEMENT This Escrow Agreement is entered into as of this 14th "day of September., 1983, between. The' Snowmass Company, - Ltd. , a ,Colorado limited,.partnership (."-Snowmass"), the Town of Snowmass Village, a municipal corporation'(the "Town") and Stewart Title Guaranty Company ("Stewart"). RECITALS 1. Snowmass secured its performance under a certain Subdivision Improvement Agreement for Parcel 1, Woodrun Unit Five Subdivision ("Property"), recorded in the office of the Clerk and Recorder of Pitkin County, Colorado, in Book 403, at Page 251, as amended by Amendment No. 1 to Subdivision Improvements Agreement recorded in such office in Book 440 at Page 225 ("Improvement Agreement"), by giving a Guarantee Mortgage recorded in Book 403 at Page 262 of such office, as amended by Amendment No. 1 to Guarantee Mortgage recorded in Book 440 at Page 225 in such office ("Mortgage"). 2. The amount secured by the Mortgage has been reduced to $10,000. 3. Snowmass has requested a final release of the Mortgage upon the escrow by Snowmass of $10,000 with Stewart to secure the guaranty by Snowmass to complete the improvements required by the Improvement Agreement. 4. The Town has agreed to release the Mortgage upon the escrow by Snowmass of $10,000 in accordance with the terms and conditions set forth in this Agreement. In consideration of the mutual covenants contained herein, Snowmass, the Town and Stewart agree as follows: 1. Snowmass hereby deposits cash in the amount of $10,000 ("Funds") with Stewart to be held in escrow in accordance with the terms of this Agreement. 2. Until the Funds are disbursed as provided herein, Stewart shall invest the Funds in a federally -insured, interest-bearing account at a bank or savings and loan association designated by Snowmass.` Any interest earned on the Funds shall belong to Snowmass. 3. Upon the receipt by Stewart of a letter from the Town Engineer indicating the completion. by Snowmass of the improvements required by the Improvement Agreement and the approval by the Town Engineer, Stewart shall release the Funds, together with accrued interest thereon, to Snowmass. At such time, this Agreement shall be terminated and the parties shall have no further obligations or liability hereunder. 4. If the improvements required by the Improvement Agreement have not been completed and approved in accordance with the Improvement Agreement on or before November 15, 1983 Stewart shall, upon receipt of a written request from the Town, disburse the Funds to the Town and disburse any interest earned thereon to Snowmass. Upon receipt of the Funds from Stewart, the Town shall have the right to use any portion of the Funds which is necessary to complete any improvements required by the Improvement Agreement. Any portion of the Funds remaining after completion by the Town of any improvements required by the Improvement Agreement shall be returned to Snowmass. -1- 5. Snowmass agrees to pay Stewart's escrow fee in the amount of 6. This Agreement shall be construed in a reasonable manner to effectuate the purposes intended by the signators to this Agreement. 7. If Stewart fully complies with the terms of this Agreement, Snowmass and the Town will have no right to contest any action taken by Stewart or to take any action to frustrate this Agreement. 8. This Agreement may be supplemented, altered, amended, modified or revoked by writing only, signed by all of the parties hereto, and approved by Stewart, upon payment of all fees, costs and expenses incident thereto. 9. No assignment, transfer, conveyance or hypothecation of any right, title or interest in and to the subject matter of this escrow shall be binding upon Stewart unless written notice thereof shall be served upon Stewart and all fees, costs and expenses incident thereto shall have been paid and then only upon Stewart's assent thereto in writing. 10. Any notice required or desired to be given by Stewart to any party to this Agreement may be given by mailing the same addressed to such party at the address given below the signature of such party or the most recent address of such party shown on the records of Stewart, and notice so mailed shall for all purposes hereof be as effectual as though served upon such party in person at the time of depositing such notice in the mail. 11. Stewart shall not be personally liable for any act it may do or omit to do hereunder as escrow agent, while acting in good faith and in the exercise of its own best judgment, and any act done or omitted by it pursuant to the advice of its own attorneys shall be conclusive evidence of such good faith. 12. Except as provided for herein, Stewart is hereby expressly authorized to disregard any and all notices or warnings given by any of the parties hereto, or by any other person, firm or corporation, excepting only orders or process of court, and is hereby expressly authorized to comply with and obey any and all process, orders, judgments or decrees of any court, and in case Stewart obeys or complies with any such process, order, judgment or decree of any court it shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such process, order, judgment or decree be subsequently reversed, modified, annulled, set aside or vacated, or found to have been issued or entered without jurisdiction. 13. In consideration of the acceptance of this escrow by Stewart, the undersigned agree, jointly and severally, for themselves and their successors and assigns, to indemnify and hold Stewart harmless as to any liability by Stewart incurred to any other person, firm or corporation by reason of Stewart's having accepted the same, or its carrying out any of the terms thereof, and to reimburse Stewart for all its expenses, including, among other things, reasonable counsel fees and court costs incurred in connection herewith. 14. Stewart shall be under no duty or obligation to ascertain the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver this Agreement or any payments deposited hereunder, and assumes no responsibility or liability for the validity or sufficiency of this Agreement or payments deposited hereunder. 1WM 15. Stewart any rights under any laches in respect to deposited. shall not be liable for the outlawing of statute of limitations or by reason of this Agreement or any documents or papers 16. In the event of any dispute between the parties hereto as to the facts of default, the validity or meaning of this Agreement or any other fact or matter relating to the transaction between the parties, Stewart is instructed as follows: (a) That it shall be under no obligation to act, except under process or order of court, or until it has been adequately indemnified to its full satisfaction, and shall sustain no liability for its failure to act pending such process or court order or indemnification; and (b) that it may in its sole and absolute discretion, deposit the Funds, together with any accrued interest thereon, or so much thereof as remains in its hand with the then Clerk, or acting Clerk, of the District Court in and for the County of Pitkin, State of Colorado, and interplead the parties hereto, and upon so depositing such property and filing its complaint in interpleader it shall be relieved of all liability under the terms hereof as to the property so deposited, and furthermore, the parties hereto for themselves and their respective successors, and assigns do hereby submit themselves to the jurisdiction of such Court and do hereby appoint the then Clerk, or acting,Clerk of such Court as their agent for the service of all process in connection with such proceedings. The institution of any such interpleader action shall not impair the rights of Stewart under paragraph number 13 above. 17. This Agreement may be executed in one or more counterparts and as executed shall constitute one instrument binding on all parties notwithstanding that all parties are not signatory to the original or the same counterpart. ATTEST: Susan Garrison, Town Clerk THE SNOWMASS COMPANY, LTD., a Colorado limited partnership By , Genera Partner Address: P.O. Box 5000 Snowmass Village, Colorado 81615 TOWN OF SNOWMASS VILLAGE, a Municipal corporation By Jefferson Tippett, Mayor Address: P.O. Box 5010 Snowmass Village, Colorado 81615 STEWART TITLE GUARANTY COMPANY By Stewart Titl f As , By Au orize Signatory Address: 602 East Hyman P.O. Box 3050 Aspen Colorado 81611 JKL:t -3-