EXHIBIT 10.3


WHEN RECORDED, RETURN TO:

Michael E. Woolf
O'Connor, Cavanagh, et al.
One E. Camelback Road
Suite 1100
Phoenix, Arizona 85012-1656











                             CONDOMINIUM DECLARATION

                                       FOR

               SHADOWROCK SEDONA GOLF RESORT & CONFERENCE CENTER,
                                  A CONDOMINIUM





<PAGE>

                             CONDOMINIUM DECLARATION
                                       FOR
               SHADOWROCK SEDONA GOLF RESORT & CONFERENCE CENTER,
                                  A CONDOMINIUM

                                TABLE OF CONTENTS
                                                                         Page
                                                                         ----
ARTICLE 1

DEFINITIONS..............................................................  1

1.1  General Definitions.................................................  1

1.2  Defined Terms.......................................................  1
     1.2.1    "ARTICLEs".................................................  1
     1.2.2    "Assessments"..............................................  1
     1.2.3    "Assessment Lien"..........................................  1
     1.2.4    "Association"..............................................  1
     1.2.5    "Board of Directors".......................................  1
     1.2.6    "Buildings"................................................  1
     1.2.7    "Bylaws"...................................................  1
     1.2.8    "Common Elements"..........................................  1
     1.2.9    "Common Expenses"..........................................  2
     1.2.10   "Common Expense Assessment"................................  2
     1.2.11   "Common Expense Liability".................................  2
     1.2.12   "Condominium"..............................................  2
     1.2.13   "Condominium Act"..........................................  2
     1.2.14   "Condominium Documents"....................................  2
     1.2.15   "Declarant"................................................  2
     1.2.16   "Declaration"..............................................  2
     1.2.17   "Development Rights".......................................  2
     1.2.18   "Eligible Insurer or Guarantor"............................  3
     1.2.19   "Eligible Mortgage Holder".................................  3
     1.2.20   "Exchange Program".........................................  3
     1.2.21   "Exchange Program User"....................................  3
     1.2.22   "First Mortgage"...........................................  4
     1.2.23   "First Mortgagee"..........................................  4
     1.2.24   "Guests....................................................  4
     1.2.25   "Hotel Operating and Rental Pool Agreement"................  4
     1.2.26   "Hotel Facilities".........................................  4
     1.2.27   "Hotel Furnishings"........................................  4
     1.2.28   "Hotel Operator............................................  4
     1.2.29   "Improvement"..............................................  4

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     1.2.30   "Limited Common Elements"..................................  4
     1.2.31   "Member"...................................................  4
     1.2.32   "Percentage Interest"......................................  5
     1.2.33   "Period of Declarant Control"..............................  5
     1.2.34   "Person"...................................................  5
     1.2.35   "Plat".....................................................  5
     1.2.36   "Public"...................................................  5
     1.2.37   "Public Rental Residential Use"............................  5
     1.2.38   "Purchaser"................................................  5
     1.2.39   "Reciprocal Easement"......................................  5
     1.2.40   "Rules"....................................................  5
     1.2.41   "Special Declarant Rights".................................  5
     1.2.42   "Unit".....................................................  6
     1.2.43   "Unit Furnishings".........................................  6
     1.2.44   "Unit Owner"...............................................  6
     1.2.45   "Year".....................................................  6
     1.2.46   "Zoning Ordinance".........................................  6

ARTICLE 2

SUBMISSION OF PROPERTY; UNIT BOUNDARIES; ALLOCATION OF
PERCENTAGE INTERESTS, VOTES AND COMMON EXPENSE LIABILITIES...............  6

2.1   Submission of Property.............................................  7

2.2   Name of Condominium................................................  7

2.3   Name of Association................................................  7

2.4   Identifying Numbers of Units.......................................  7

2.5   Unit Boundaries....................................................  7

2.6   Allocation of Common Element Interest and Common 
       Expense Liabilities...............................................  8

2.7   Allocation of Votes in the Association.............................  8

2.8   Allocation of Limited Common Elements..............................  8

ARTICLE 3

EASEMENTS................................................................  9

3.1   Utility Easement...................................................  9

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3.2   Easements for Ingress and Egress...................................  9

3.3   Unit Owners' Easements of Enjoyment................................ 10

3.4   Declarant's Use for Sales Purposes................................. 11

3.5   Declarant's Rights and Easements................................... 11

3.6   Easement for Support............................................... 12

3.7   Common Elements Easement in Favor of the Association and 
       Hotel Operator.................................................... 12

3.8   Common Elements Easement in Favor of Unit Owners................... 12

3.9   Units and Limited Common Elements Easement in Favor of Association 
       and Hotel Operator................................................ 13

3.10  Easement for Unintended Encroachments.............................. 13

ARTICLE 4

USE AND OCCUPANCY RESTRICTIONS........................................... 14

4.1   Public Rental Residential Use...................................... 14

4.2   Hotel Operating and Rental Pool Agreement.......................... 14

4.3   Access to Hotel Operator........................................... 14

4.4   Hotel Facilities................................................... 14

4.5   Compliance with Laws............................................... 15

4.6   No Acts in Contravention of Hotel Operating and Rental 
       Pool Agreement.................................................... 15

4.7   Limitation on Right to Lease or Use Unit........................... 15

4.8   Residential Use by Unit Owners..................................... 15

4.9   Antennas........................................................... 16

4.10  Utility Service.................................................... 16

4.11  Improvements and Alterations....................................... 17

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4.12  Trash Containers and Collection.................................... 17

4.13  Machinery and Equipment............................................ 17

4.14  Animals............................................................ 17

4.15  Clothes Drying Facilities.......................................... 17

4.16  Mineral Exploration................................................ 17

4.17  Diseases and Insects............................................... 17

4.18  Trucks, Trailers, Campers and Boats................................ 17

4.19  Motor Vehicles..................................................... 18

4.20  Towing of Vehicles................................................. 18

4.21  Signs.............................................................. 18

4.22  Lawful Use......................................................... 18

4.23  Nuisances and Offensive Activity................................... 18

4.24  Window Coverings................................................... 18

4.25  Limitation on Leasing of Units..................................... 19

4.26  Furnishings........................................................ 19

ARTICLE 5

MAINTENANCE AND REPAIR OF COMMON ELEMENTS AND UNITS...................... 19

5.1   Repair of Common Elements.......................................... 19

5.2   Repair of Units.................................................... 19

5.3   Repair or Restoration Necessitated by Owner........................ 19

5.4   Repair and Recovery Rights of Association.......................... 20

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ARTICLE 6

THE ASSOCIATION; RIGHTS AND DUTIES; MEMBERSHIP........................... 20

6.1   Rights, Powers and Duties of the Association....................... 20

6.2   Directors and Officers............................................. 23

6.3   Rules.............................................................. 23

6.4   Composition of Members............................................. 23

6.5   Personal Liability................................................. 23

6.6   Implied Rights..................................................... 24

6.7   Voting Rights...................................................... 24

6.8   Voting Procedures.................................................. 24

6.9   Transfer of Membership............................................. 24

6.10  Suspension of Voting Rights........................................ 24

6.11  Conveyance or Encumbrance of Common Elements....................... 25

ARTICLE 7

ASSESSMENTS.............................................................. 25

7.1   Preparation of Budget.............................................. 25

7.2   Common Expense Assessment.......................................... 25

7.3   Special Assessments................................................ 26

7.4   Effect of Nonpayment of Assessments; Remedies of the Association... 27

7.5   Subordination of Assessment Lien to Mortgages...................... 27

7.6   Exemption of Unit Owner............................................ 27

7.7   Certificate of Payment............................................. 28

7.8   No Offsets......................................................... 28

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7.9   Reserve Fund....................................................... 28

7.10  Surplus Funds...................................................... 28

7.11  Monetary Penalties................................................. 28

7.12  Transfer Fee....................................................... 28

7.13  Additional Reserves................................................ 29

7.14  Hotel Operating Revenues........................................... 29

7.15  Unit Taxes......................................................... 29

7.16  Utilities.......................................................... 29

ARTICLE 8

INSURANCE................................................................ 29

8.1   Scope of Coverage.................................................. 29

8.2   Fidelity Bonds..................................................... 31

8.3   Payment of Premiums................................................ 32

8.4   Insurance Obtained by Unit Owners.................................. 32

8.5   Payment of Insurance Proceeds...................................... 32

8.6   Certificate of Insurance........................................... 32

8.7   Delegation of Insurance Responsibility............................. 32

ARTICLE 9

RIGHTS OF FIRST MORTGAGEES............................................... 33

9.1   Notification to First Mortgagees................................... 33

9.2   Approval Required for Amendment to Declaration, ARTICLEs or Bylaws. 33

9.3   Right of Inspection of Records..................................... 34

9.4   Prior Written Approval of First Mortgagees......................... 35

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9.5   Condemnation or Insurance Proceeds................................. 35

9.6   Limitation on Partition and Subdivision............................ 35

9.7   Conflicting Provisions............................................. 36

ARTICLE 10

RESERVATION OF DEVELOPMENTAL AND
SPECIAL DECLARANT'S RIGHTS............................................... 36

10.1  Developmental Rights............................................... 36

10.2  Right to Complete Improvements and Construction Easement........... 36

10.3  Offices, Model Units and Promotional Signs......................... 36

10.4  Appointment and Removal of Directors and Officers.................. 36

ARTICLE 11

GENERAL PROVISIONS....................................................... 37

11.1   Enforcement....................................................... 37

11.2   Severability...................................................... 37

11.3   Duration.......................................................... 37

11.4   Termination of Condominium........................................ 37

11.5   Amendment......................................................... 37

11.6   Remedies Cumulative............................................... 38

11.7   Notices........................................................... 38

11.8   Binding Effect.................................................... 38

11.9   Gender............................................................ 39

11.10  Topic Headings.................................................... 39

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11.11  Survival of Liability............................................. 39

11.12  Construction...................................................... 39

11.13  Joint and Several Liability....................................... 39

11.14  Guests and Tenants................................................ 39

11.15  Attorneys' Fees................................................... 39

11.16  Number of Days.................................................... 40

11.17  Declarant's Right to Use Similar Name............................. 40

11.18  Notice of Violation............................................... 40

11.19  No Absolute Liability............................................. 40

                               Exhibits

Exhibit A  Legal Description
Exhibit B  Percentage Interest
Exhibit C  Advance Booking/Use Rights


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<PAGE>


                             CONDOMINIUM DECLARATION
                                       FOR
               SHADOWROCK SEDONA GOLF RESORT & CONFERENCE CENTER,
                                  A CONDOMINIUM


            This  Condominium  Declaration  for ShadowRock  Sedona Golf Resort &
Conference Center, a condominium,  is made this 30th day of October, 1997, by UP
SEDONA, INC., an Arizona corporation.


                                    ARTICLE 1

                                   DEFINITIONS

            1.1 GENERAL DEFINITIONS.  Capitalized terms not otherwise defined in
this Declaration shall have the meanings specified for such terms in the Arizona
Condominium Act, A.R.S. ss.33-1201, ET SEQ., as amended from time to time.

            1.2 DEFINED TERMS.  The following  capitalized  terms shall have the
general  meanings  described  in the  Condominium  Act and for  purposes of this
Declaration shall have the specific meanings set forth below:

                    1.2.1 "ARTICLES" means the ARTICLEs of Incorporation of the
Association, as amended from time to time.

                    1.2.2 "ASSESSMENTS" means the Common Expense Assessments and
Special  Assessments levied and assessed against each Unit pursuant to ARTICLE 7
of this Declaration.

                    1.2.3 "ASSESSMENT  LIEN"  means  the  lien  granted  to the
Association  by the  Condominium  Act to  secure  the  payment  of  Assessments,
monetary penalties and other charges owed to the Association.

                    1.2.4 "ASSOCIATION"  means ShadowRock  Sedona Golf Resort &
Conference Center Condominium Association, an Arizona nonprofit corporation, its
successors and assigns.

                    1.2.5 "BOARD OF  DIRECTORS"  means the Board of Directors of
the Association.

                    1.2.6 "BUILDINGS"   means  the  structures   designated  as
buildings on the Plat.

                    1.2.7 "BYLAWS"  means  the  Bylaws of the  Association,  as
amended from time to time.

                    1.2.8 "COMMON   ELEMENTS"   means  all   portions  of  the
Condominium other than the Units, including but not limited to Tracts A and B on
the Plat.
<PAGE>

                    1.2.9  "COMMON  EXPENSES"  means  expenditures  made  by  or
financial  liabilities  of the  Association,  together with any  allocations  to
reserves, including, without limitation, (i) the cost of cleaning,  maintenance,
management,  operation,  repair and  replacement of the Common  Elements and all
Improvements  thereon;  (ii) the cost of centrally  metered  utilities and trash
removal  which  serve the Units  and/or the Common  Elements;  (iii) the cost of
insurance premiums for the policies and coverages required pursuant to ARTICLE 8
of this Declaration; (iv) the cost of compensation,  wages, materials, services,
supplies  and  other  expenses  required  for  the  administration,   operation,
maintenance and repair of the Condominium,  including  landscape  renovation and
maintenance; (v) the costs of rendering to the Unit Owners all services required
to be rendered by the  Association  under the Condominium  Documents;  (vi) such
other  funds as may be  necessary  to provide  general  operating  reserves  and
reserves for contingencies and replacements  deemed  appropriate by the Board of
Directors;  (vii) maintenance,  repair and other reimbursement obligations under
the Reciprocal Easement attributable to the Condominium;  and (viii) the cost of
any other item or items incurred by the Association,  for any reason  whatsoever
in connection with the Condominium, for the common benefit of the Unit Owners.

                    1.2.10 "COMMON  EXPENSE  ASSESSMENT"  means the  assessment
levied against the Units pursuant to SECTION 7.2 of this Declaration.

                    1.2.11 "COMMON  EXPENSE  LIABILITY"  means the liability for
Common Expenses allocated to each Unit by this Declaration.

                    1.2.12 "CONDOMINIUM"  means the real  property  located  in
Yavapai  County,  Arizona,  which is  described  in EXHIBIT "A" attached to this
Declaration, together with all Buildings and other Improvements located thereon.

                    1.2.13 "CONDOMINIUM ACT" means the Arizona Condominium Act,
A.R.S. ss.33-1201, ET SEQ., as amended from time to time.

                    1.2.14 "CONDOMINIUM  DOCUMENTS"  means this Declaration and
the ARTICLEs, Bylaws, Rules, and the Plat.

                    1.2.15 "DECLARANT"  means  UP  Sedona,   Inc.,  an  Arizona
corporation, and its successors and any person or entity to whom it may transfer
any Special Declarant Rights.

                    1.2.16 "DECLARATION" means this Condominium Declaration,  as
amended from time to time.

                    1.2.17 "DEVELOPMENT  RIGHTS" means any right or combination
of rights reserved by or granted to the Declarant in this  Declaration to do any
of the following:

                           (i)   Add real estate to the Condominium;

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                           (ii)  Create  easements, Units, Common Elements or 
Limited Common Elements within the Condominium, including without limitation the
right to enclose the patio allocated to any Unit as a Limited Common Element;

                           (iii) Subdivide Units, convert Units into Common 
Elements or convert Common Elements into Units;

                           (iv)  Withdraw real estate from the Condominium;

                           (v)   Make the Condominium part of a larger 
condominium or planned community;

                           (vi)  Amend the Declaration during the Period of 
Declarant  Control to comply with the  Condominium  Act or any other  applicable
law, or to correct any error or  inconsistency  in the Declaration  provided the
amendment does not adversely affect the rights of any Unit Owner;

                           (vii) Amend the Declaration during the Period of  
Declarant  Control to comply  with (a) the rules or  guidelines,  in effect from
time to time,  of any  governmental  or  quasi-governmental  entity  or  federal
corporation  guaranteeing or insuring  mortgage loans or governing  transactions
involving  mortgage  instruments,  including,  without  limitation,  the Federal
National  Mortgage  Association   ("FNMA"),   the  Federal  Home  Loan  Mortgage
Corporation  ("FHLMC"),  the  Federal  Housing  Administration  ("FHA")  or  the
Veterans Administration ("VA"), or (d) the rules or requirements of any federal,
state or local governmental  entity or agency whose approval of the Condominium,
the  Plat or the  Condominium  Documents  is  required  by law or  requested  by
Declarant.

                    1.2.18 "ELIGIBLE  INSURER OR GUARANTOR" means an insurer or
governmental guarantor of a First Mortgage who has requested notice
of certain matters in accordance with SECTION 9.1 of this Declaration.

                    1.2.19 "ELIGIBLE  MORTGAGE  HOLDER" means a First Mortgagee
who has requested  notice of certain  matters from the Association in accordance
with SECTION 9.1 of this Declaration.

                    1.2.20 "EXCHANGE  PROGRAM"  means any program  developed by
Declarant  or an  affiliate of  Declarant,  whether now or in the future,  which
entitles an Owner to exchange its right to use and occupy its Unit under the six
months  advance  use rights more fully set forth on EXHIBIT "C" for the right to
occupy a unit in another  resort or project  owned,  developed  or  operated  by
Declarant or an affiliate of Declarant;  however, nothing herein shall be deemed
to obligate  Declarant  or any of its  affiliates  to  initiate or continue  the
operation of any such Exchange  Program,  if one is ever initiated,  and nothing
herein  shall  obligate  any Unit  Owner  to  participate  in any such  Exchange
Program.

                    1.2.21 "EXCHANGE  PROGRAM USER" means a participant  in the
Exchange  Program who has a reservation  to use an Owner's Unit,  which has been

                                       3
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confirmed  by the Hotel  Operator  at least six (6) months (but in no event more
than twelve (12) months) prior to the proposed exchange use of the Unit.

                    1.2.22 "FIRST  MORTGAGE" means any mortgage or deed of trust
on a Unit with first  priority  over any other  mortgage or deed of trust on the
same Unit.

                    1.2.23 "FIRST  MORTGAGEE"  means  the  holder  of any First
Mortgage.

                    1.2.24 "GUESTS"  means those Persons who use and occupy the
Units from time to time and their permitted additional  occupants,  invitees and
guests, excluding Unit Owners using their Units in accordance with EXHIBIT "C".

                    1.2.25 "HOTEL  OPERATING AND RENTAL POOL AGREEMENT" means an
agreement  entered into by and between the Unit Owners and a Hotel  Operator for
the purpose of operating the Condominium for Public Rental Residential Use.

                    1.2.26 "HOTEL  FACILITIES"  means that portion of the Common
Elements  consisting of the front desk,  restaurant,  conference rooms,  fitness
rooms, linen closets not included within Units, janitor closets,  laundry rooms,
offices,  lobby areas,  mechanical  rooms,  parking areas,  recreation areas and
other areas of the Common  Elements which are required or reasonably  convenient
for the use and operation of a hotel facility.

                    1.2.27 "HOTEL  FURNISHINGS"   means  those   furnishings,
including  furniture,  art  work,  shutters,   blinds,   curtains,   appliances,
decorations,  fixtures and other personal  property  installed or located within
the Condominium,  but excluding the Unit  Furnishings and further  excluding any
fixtures or personal property owned or leased by the Hotel Operator.

                    1.2.28 "HOTEL  OPERATOR" means a hotel manager engaged by or
on behalf of the Unit  Owners  pursuant  to a Hotel  Operating  and Rental  Pool
Agreement  to  operate  and  manage  the  condominium-hotel   business  for  the
Condominium, as such Hotel Operator may change from time to time.

                    1.2.29 "IMPROVEMENT" means any physical structure,  fixture
or facility  existing or constructed,  placed,  erected or installed on the land
included in the Condominium,  including, but not limited to, buildings,  private
drives,  walkways,  tennis  courts,  basketball  hoops and poles,  pools,  spas,
paving,  fences,  walls, hedges,  plants, trees, shrubs and landscaping of every
type and kind.

                    1.2.30 "LIMITED  COMMON  ELEMENTS"  means a portion  of the
Common Elements specifically  designated in this Declaration as a Limited Common
Element and allocated by this Declaration or by operation of the Condominium Act
for the exclusive use of one or more but fewer than all of the Units.

                    1.2.31 "MEMBER" means any Person who is or becomes a member
of the Association.

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<PAGE>

                    1.2.32 "PERCENTAGE  INTEREST"  means  for  each  Unit  that
percentage  applicable  to the  Unit as more  fully  set  forth on  EXHIBIT  "B"
attached hereto.

                    1.2.33 "PERIOD OF DECLARANT  CONTROL" means the time period
commencing on the date this  Declaration is recorded with the County Recorder of
Yavapai  County,  Arizona,  and ending on the  earlier  of: (i) ninety (90) days
after the  conveyance  of  seventy-five  percent (75%) of the Units which may be
created to Unit Owners other than the  Declarant;  (ii) four (4) years after all
Declarants  have  ceased  to offer  Units  for sale in the  ordinary  course  of
business;  or (iii) the date  Declarant  records an  instrument  with the County
Recorder  of  Yavapai  County  relinquishing  its right to  appoint  and  remove
officers and members of the Board of Directors of the Association.

                    1.2.34 "PERSON"  means  a  natural   person,   corporation,
business  trust,  estate,   trust,   partnership,   limited  liability  company,
association,  joint venture, government,  governmental subdivision or agency, or
other legal or commercial entity.

                    1.2.35 "PLAT" means the  Condominium  Plat for Sedona Hotel
Resort,  a  condominium,  which plat has been  recorded in Book of Maps,  page ,
records  of  Yavapai  County,  Arizona,  and  any  amendments,   supplements  or
corrections thereto.

                    1.2.36 "PUBLIC"  means all Persons  other than a Unit Owner
and family members of such Unit Owner.

                    1.2.37 "PUBLIC RENTAL  RESIDENTIAL  USE" means use of a Unit
for commercial rental to the Public for tourist, visitor and transient traveller
accommodation.

                    1.2.38 "PURCHASER"  means  any  Person,   other  than  the
Declarant, who by means of a voluntary transfer becomes a Unit Owner, except for
(i) a Person who purchases a Unit and then leases it to the Declarant for use as
a model in  connection  with the sale of other  Units,  or (ii) a Person who, in
addition to purchasing a Unit, is assigned any Special Declarant Right.

                    1.2.39 "RECIPROCAL  EASEMENT" means that Reciprocal Easement
Agreement with Covenants and Restrictions  Affecting Land recorded in Book 3332,
page 279,  records of Yavapai  County,  Arizona,  which  establishes  reciprocal
rights and  obligations  between the  Condominium  and the health club  facility
located adjacent to the Condominium.

                    1.2.40 "RULES" means the rules and  regulations  adopted by
the Association, as amended from time to time.

                    1.2.41 "SPECIAL   DECLARANT  RIGHTS"  means  any  right  or
combination  of  rights  reserved  by  or  granted  to  the  Declarant  in  this
Declaration or by the Condominium Act to do any of the following:

                           (i)  Construct Improvements provided for in this 
Declaration or shown on the Plat;

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<PAGE>

                           (ii)  Exercise any Development Right;

                           (iii) Maintain sales offices, management offices, 
models, and signs advertising the Condominium;

                           (iv)  Use easements through the Common Elements for
the purpose of making Improvements within the Condominium; and

                           (v)   Appoint or remove any officer of the  
Association  or any  member  of the  Board of  Directors  during  the  Period of
Declarant Control.

                    1.2.42 "UNIT" means a portion of the Condominium  designated
for separate  ownership or occupancy,  the  boundaries of which are described in
SECTION 2.5 of this Declaration.

                    1.2.43 "UNIT FURNISHINGS"   means   those   furnishings,
including,   furniture,  art  work,  shutters,  blinds,  curtains,   appliances,
decorations,  fixtures  and  other  personal  property  initially  installed  by
Declarant  in each Unit and all  replacements,  substitutions,  supplements  and
additions thereto.

                    1.2.44 "UNIT OWNER" means the record  owner,  whether one or
more Persons,  of beneficial or equitable title (and legal title if the same has
merged with the beneficial or equitable  title) to the fee simple  interest of a
Unit.  Unit Owner shall not include  Persons having an interest in a Unit merely
as security for the performance of an obligation,  or a Guest or lessee, tenant,
or licensee of a Unit. Unit Owner shall include a purchaser under a contract for
the conveyance of real property,  a contract for deed, a contract to convey,  an
agreement for sale or any similar contract subject to A.R.S.  ss.33-741, ET SEQ.
Unit Owner shall not include a purchaser under a purchase  contract and receipt,
escrow instructions or similar executory contracts which are intended to control
the rights and  obligations  of the parties to executory  contracts  pending the
closing of a sale or purchase  transaction.  In the case of Units the fee simple
title to which is vested in a trustee pursuant to A.R.S. ss.33-801, ET SEQ., the
trustor  shall be  deemed  to be the Unit  Owner.  In the case of Units  the fee
simple  title to which is vested in a trustee  pursuant to a  subdivision  trust
agreement  or  similar  agreement,  the  beneficiary  of any such  trust  who is
entitled to possession of the Unit shall be deemed to be the Unit Owner.

                    1.2.45 "YEAR" means a calendar year.

                    1.2.46 "ZONING  ORDINANCE"  means the Yavapai County Zoning
Code  applicable to the  Condominium  and the applicable  zoning and development
stipulations  of Yavapai  County,  which  limit the use of the  Condominium  for
Public Rental Residential Use.

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<PAGE>

                                    ARTICLE 2

             SUBMISSION OF PROPERTY; UNIT BOUNDARIES; ALLOCATION OF
           PERCENTAGE INTERESTS, VOTES AND COMMON EXPENSE LIABILITIES

            2.1 SUBMISSION  OF  PROPERTY.  Declarant  hereby  submits  the real
property  described on EXHIBIT "A" attached to this  Declaration,  together with
all Improvements  situated thereon and all easements,  rights and  appurtenances
thereto,  to the provisions of the Condominium Act for the purpose of creating a
condominium in accordance  with the provisions of the Condominium Act and hereby
declares  that the real  property  described  on Exhibit  "A"  attached  to this
Declaration, together with all Improvements situated thereon, and all easements,
rights and  appurtenances  thereto,  shall be held and  conveyed  subject to the
terms, covenants, conditions and restrictions set forth in this Declaration.

            2.2 NAME OF CONDOMINIUM. The name of the Condominium created by this
Declaration is ShadowRock Sedona Golf Resort & Conference Center, a condominium.

            2.3 NAME OF ASSOCIATION. The name of the  Association  is ShadowRock
Sedona Golf Resort & Conference Center Condominium Association.

            2.4 IDENTIFYING NUMBERS OF UNITS. The identifying numbers of the 
Units are as set forth on EXHIBIT "B" attached hereto.

            2.5 UNIT BOUNDARIES.

                    2.5.1  The   boundaries   of  each  Unit  are  the  interior
unfinished surfaces of the perimeter walls, floors,  ceiling,  doors and windows
of the Unit. All lath,  furring,  wallboard,  plasterboard,  plaster,  paneling,
tiles, wallpaper,  paint, finished flooring and any other materials constituting
any part of the finished surfaces of the walls,  floors and ceilings are part of
the Unit, and all other  portions of the walls,  floors and ceilings are part of
the Common Elements.

                    2.5.2 Any chute,  flue, duct, wire,  conduit,  bearing wall,
bearing  column or other  fixture,  whether  located  within or  outside  of the
boundaries of a Unit,  which serve only that Unit, is a Limited  Common  Element
allocated solely to that Unit, and any portion serving more than one Unit or any
portion of the Common Elements is a part of the Common Elements.

                    2.5.3 Subject to the provisions of SUBSECTION  2.5.2 of this
Declaration, all spaces, interior partitions and other fixtures and Improvements
within the  boundaries of a Unit are part of the Unit;  provided,  however,  any
entryway,  vestibule  or foyer shown on the Plat which  serves as an entrance to
more than one Unit shall not be considered  part of any Unit so served but shall
instead be considered a Limited Common Element allocated to the Units so served.

                    2.5.4  Any  shutters,   awnings,  window  boxes,  doorsteps,
stoops,  porches,  balconies,  entryways  or  patios,  and  all  exterior  doors
(including  doors from any  entryway,  vestibule  or foyer) and windows or other
fixtures  designed  to serve a single  Unit,  but  located  outside  the  Unit's
boundaries, are Limited Common Elements allocated exclusively to that Unit.

                    2.5.5 In the event of any  inconsistency or conflict between
the provisions of this ARTICLE 2 and the Plat, this ARTICLE 2 shall control.

                                       7
<PAGE>

                    2.5.6 The physical  boundaries of a Unit shall be considered
to be the  proper  boundaries  regardless  of the  settling,  rising or  lateral
movement of the Buildings and regardless of any variances between the boundaries
shown on the Plat and the actual physical boundaries.

                    2.5.7 Subject to and in accordance with A.R.S.  ss. 33-1222,
Declarant  reserves the right to relocate the boundaries between adjoining Units
owned by the  Declarant  and to  reallocate  each  such  Unit's  Common  Element
interest, votes in the Association, and Common Expense Liabilities.

            2.6 ALLOCATION  OF  COMMON  ELEMENT  INTEREST  AND  COMMON  EXPENSE
LIABILITIES. The allocation of undivided interests in the Common Elements and in
the Common  Expenses of the  Association  is based upon the ratio of Declarant's
initial  determination of value attributable to the initial sales offering price
of each of the Units to Declarant's initial determination of the aggregate value
of all of the Units (such  aggregate  value being  $43,827,100).  Nothing herein
shall obligate Declarant to sell any Unit for Declarant's initial  determination
of value for such  Unit and Units may be sold for more or less than  Declarant's
initial  determination  of value for such units  without any  adjustment  to the
allocation  of  undivided  interests  in the  Common  Elements  and  the  Common
Expenses.  The percentage  interest for each Unit in the Common Elements and the
Common Expenses of the Association is set forth on EXHIBIT "B" hereto.

            2.7 ALLOCATION OF VOTES IN THE  ASSOCIATION.  The total votes in the
Association shall be equal to the number of Units in the Condominium.  The votes
in the  Association  shall be allocated  equally among all the Units,  with each
Unit having one (1) vote.

            2.8 ALLOCATION OF LIMITED COMMON ELEMENTS.

                    2.8.1 The  following  portions  of the Common  Elements  are
Limited  Common  Elements and are  allocated to the exclusive use of one or more
Units as follows:

                          (i)   Each first floor Unit is allocated the patio 
adjoining the Unit, if any, as shown on the Plat;

                          (ii)  Each second and third floor Unit is allocated 
the balcony adjoining the Unit, if any, as shown on the Plat;

                          (iii) Each Unit to which access is provided via an 
entryway, vestibule or foyer which serves another Unit, is allocated use of such
area,  as shown on the Plat,  and use is  exclusively  limited to those Units so
served.

                          (iv)  Any chute, flue, pipe, duct, wire, conduit, 
bearing  wall,  bearing  column or other  fixtures,  whether  located  within or
outside  of the  boundaries  of a Unit,  which  serve only one Unit is a Limited
Common Element allocated solely to the Unit served;

                          (v)   If a chute, flue, pipe, duct, wire,  conduit,
bearing  wall,  bearing  column or other  fixtures  lies  partially  within  and
partially outside the designated  boundaries of a Unit, the portion serving only

                                       8
<PAGE>


the Unit is a Limited  Common Element  allocated  solely to the Unit, the use of
which is limited to that Unit and any  portion  serving  more than one Unit or a
portion of the Common Elements is a part of the Common Elements;

                          (vi)  Any shutters,  awnings, window boxes, doorsteps,
stoops,  porches and exterior  doors and windows or other  fixtures  designed to
serve a single Unit,  located  outside the  boundaries of the Unit,  are Limited
Common  Elements  allocated  exclusively to the Unit and their use is limited to
that Unit; and

                          (vi)  Any gas, electric or water meter which serves 
only one Unit is allocated to the Unit it serves.

                    2.8.2 A Limited  Common  Element  may be  reallocated  by an
amendment to this  Declaration  made in accordance with the provisions of A.R.S.
ss. 33-1218(B) of the Condominium Act.

                    2.8.3 The Board of Directors shall have the right, without a
vote of the Members,  to allocate as a Limited Common Element any portion of the
Common Elements not previously  allocated as a Limited Common Element.  Any such
allocation  by the  Board of  Directors  shall be made by an  amendment  to this
Declaration and an amendment to the Plat if required by the Condominium Act.


                                    ARTICLE 3

                                    EASEMENTS

            3.1 UTILITY  EASEMENT.  There is hereby  created an  easement  upon,
across,  over and under the Common  Elements  for  reasonable  ingress,  egress,
installation,  replacing, repairing or maintaining of all utilities,  including,
but  not  limited  to,  gas,  water,  sewer,  telephone,  cable  television  and
electricity.  By virtue of this easement,  it shall be expressly permissible for
the providing  utility company to erect and maintain the necessary  equipment on
the Common  Elements,  but no sewers,  electrical  lines,  water lines, or other
utility  or service  lines may be  installed  or located on the Common  Elements
except as initially  designed,  approved and  constructed by the Declarant or as
approved by the Board of  Directors.  This  easement  shall in no way affect any
other recorded easements on the Common Elements.

            3.2 EASEMENTS  FOR  INGRESS  AND  EGRESS.  There is hereby  created
easements for ingress and egress for pedestrian traffic over, through and across
sidewalks,  paths,  walks,  and lanes  that from time to time may exist upon the
Common  Elements.  There is also  created an easement for ingress and egress for
pedestrian  and vehicular  traffic over,  through and across such  driveways and
parking  areas as from time to time may be paved and intended for such  purposes
except that such easements shall not extend to any Limited Common Elements. Such
easements  shall run in favor of and be for the  benefit of the Hotel  Operator,
the Unit Owners, Guests and their families and permitted tenants and invitees.

                                       9
<PAGE>

            3.3 UNIT OWNERS' EASEMENTS OF ENJOYMENT.

                    3.3.1  Every Unit Owner  shall have a right and  easement of
enjoyment  in and to the Common  Elements,  which  right and  easement  shall be
appurtenant  to and  shall  pass with the title to every  Unit,  subject  to the
following provisions:

                          (i)   The right of the Association to adopt reasonable
rules and  regulations  governing the use of the Common Elements;

                          (ii)  The  right of the  Association to  convey  the 
Common Elements or subject the Common Elements to a mortgage,  deed of trust, or
other security interest,  in the manner and subject to the limitations set forth
in the Condominium Act;

                          (iii) All rights, easements and restrictions set forth
in this  Declaration  including,  but not limited to, the  provisions of SECTION
3.3.2 and the rights and easements  granted to the Declarant by SECTIONs 3.4 and
3.5 of this Declaration;

                          (iv)  The right of the  Association  to  suspend  the
right of a Unit Owner and any  occupant of such Unit  Owner's Unit (other than a
Guest) to use the Common  Elements for any period during which the Unit Owner is
in violation of any provision of the Condominium Documents;

                          (v)   The right of  the Hotel  Operator to make use of
the  Common  Elements  (including  exclusive  use of the  Hotel  Facilities)  in
accordance with the terms of the Hotel Operating and Rental Pool Agreement; and

                          (vi)  The  right of  each  Owner to  make use  of  the
Common  Elements shall be limited to those times when the Owner has the right to
occupy its Unit,  and then in accordance  with the terms of the Hotel  Operating
and Rental Pool Agreement.

                    3.3.2 If  a  Unit  is  leased,  rented  or  otherwise  made
available  for hotel use, the Guest and the family  members  residing  with such
Guest and any  permitted  invitees  and  guests  shall have the right to use the
Common Elements during the occupancy term, subject to any limitation established
pursuant to SECTION 3.3.3. Unless a Unit Owner is occupying a Unit as a Guest or
is  exercising  its  rights to occupy  its own Unit  pursuant  to the  rights of
occupancy  set forth in any Hotel  Operating and Rental Pool  Agreement  then in
effect,  no Unit Owner shall have the right to occupy or utilize its own Unit or
the  Common  Elements,  it being  understood  that  such use  rights  have  been
delegated and assigned for the use of the Hotel Operator and Guests  pursuant to
the Hotel Operating and Rental Pool Agreement.

                    3.3.3 The Board of  Directors  shall have the right to limit
the  number of guests  and  invitees  of Unit  Owners and Guests who may use the
Common  Elements at any one time and may restrict the use of the Common Elements
by Unit  Owners,  Guests and their  respective  guests and  invitees  to certain
specified  times. The Board of Directors may delegate this right to restrict use
of the Common Elements to any Hotel Operator.

                                       10
<PAGE>

                    3.3.4  Subject  to the  assignment  set  forth in any  Hotel
Operating and Rental Pool  Agreement  for the benefit of Guests,  a Unit Owner's
right and  easement  of  enjoyment  in and to the Common  Elements  shall not be
conveyed,  transferred,  alienated or encumbered separate and apart from a Unit.
Such right and  easement of  enjoyment  in and to the Common  Elements  shall be
deemed to be conveyed, transferred, alienated or encumbered upon the sale of any
Unit,  notwithstanding  that the  description  in the  instrument of conveyance,
transfer, alienation or encumbrance may not refer to such right and easement.

                    3.3.5  Notwithstanding  anything  to the  contrary  in  this
SECTION  3.3,  the  right to the use of the  Limited  Common  Elements  that are
allocated  to one or more but less than all of the  Units  shall be  limited  to
those  Persons  who have the  right to use the Unit to which  the  Limit  Common
Elements are appurtenant.

            3.4  DECLARANT'S USE FOR SALES PURPOSES.

                    3.4.1  Declarant  shall  have the right and an  easement  to
maintain sales offices, management offices and models throughout the Condominium
and to maintain one or more  advertising  signs on the Common Elements while the
Declarant is selling Units in the Condominium.  Declarant  reserves the right to
place  models,  management  offices  and sales  offices  in any  Units  owned by
Declarant and on any portion of the Common Elements in such number, of such size
and in such locations as Declarant deems appropriate.

                    3.4.2  Declarant  may  from  time to time  relocate  models,
management  offices  and  sales  offices  to  different   locations  within  the
Condominium.  Upon the relocation of a model,  management office or sales office
from any area  constituting a Common Element,  Declarant may remove all personal
property and fixtures therefrom.

                    3.4.3  The  Declarant  reserves  the  right  to  retain  all
personal property and equipment used in the sales, management,  construction and
maintenance  of the  Condominium  that has not been  represented  in  writing by
Declarant as being property of the Association. The Declarant reserves the right
to  remove  from the  Condominium  any and all goods  and  improvements  used in
development,  marketing  and  construction,  whether  or not  they  have  become
fixtures.

            3.5  DECLARANT'S RIGHTS AND EASEMENTS.

                    3.5.1  Declarant shall have the right and an easement on and
over the Common Elements to construct the Common Elements and the Units shown on
the Plat and all other Improvements the Declarant may deem necessary, and to use
the  Common  Elements  and any Units  owned by  Declarant  for  construction  or
renovation  related  purposes   including  the  storage  of  tools,   machinery,
equipment,  building  materials,  appliances,  supplies  and  fixtures,  and the
performance of work in the Condominium.

                    3.5.2  Declarant  shall have the right and an  easement  on,
over and under those  portions  of the Common  Elements  not located  within the
Buildings  for the purpose of  correcting  drainage  of  surface,  roof or storm

                                       11
<PAGE>

water,  for so long as Declarant has any legal  obligation to correct  drainage.
The easement  created by this SUBSECTION  3.5.2 expressly  includes the right to
cut any  trees,  bushes,  or  shrubbery,  to grade the soil or to take any other
action reasonably necessary.

                    3.5.3  The  Declarant  shall  have an  easement  within  and
through  the  Units for any  access  necessary  to  complete  any  construction,
renovations, warranty work or modifications to be performed by Declarant.

                    3.5.4 The Declarant shall have the right and an easement on,
over,  and through the Common  Elements as may be  reasonably  necessary for the
purpose of discharging its obligations and exercising  Special  Declarant Rights
whether arising under the Condominium Act or reserved in this Declaration.

            3.6 EASEMENT FOR SUPPORT.  To the extent necessary,  each Unit shall
have an easement for structural  support over every other Unit in the Buildings,
the Common  Elements  and the  Limited  Common  Elements,  and each Unit and the
Common Elements shall be subject to an easement for structural  support in favor
of every other Unit in the Buildings, the Common Elements and the Limited Common
Elements.

            3.7 COMMON  ELEMENTS  EASEMENT IN FAVOR OF THE ASSOCIATION AND HOTEL
OPERATOR.  The Common  Elements  shall be subject to an easement in favor of the
Association and the Hotel Operator and their  respective  agents,  employees and
independent  contractors  for the purpose of  inspection,  upkeep,  maintenance,
repair and  replacement of the Common  Elements and for the purpose of operating
the  Condominium as a hotel and exercising all rights of the Association and the
Hotel Operator and  discharging all obligations of the Association and the Hotel
Operator as set forth in this  Declaration or in the Hotel  Operating and Rental
Pool Agreement.

            3.8 COMMON ELEMENTS  EASEMENT IN FAVOR OF UNIT OWNERS.  The Common 
Elements  shall be  subject  to the  following  easements  in favor of the Units
benefitted:

                    3.8.1  For  the  installation,   repair,  maintenance,  use,
removal or replacement of pipes, ducts,  heating and air conditioning  equipment
and systems,  electrical,  telephone and other communication  wiring and cables,
plumbing  lines and  fixtures,  fire  sprinkler  lines and  systems,  structural
systems,  and all other utility lines and conduits  which are a part of or serve
any Unit and which pass across or through a portion of the Common Elements.

                    3.8.2  For  the  installation,   repair,  maintenance,  use,
removal or  replacement  of lighting  fixtures,  electrical  receptacles,  panel
boards and other electrical  installations which are a part of or serve any Unit
but  which  encroach  into a part of a Common  Element  adjacent  to such  Unit;
provided that the installation, repair, maintenance, use, removal or replacement
of any such item does not unreasonably interfere with the common use of any part
of the  Common  Elements,  adversely  affect  either the  thermal or  acoustical
character of the Buildings or impair or structurally weaken the Buildings.

                                       12
<PAGE>

                    3.8.3 For  driving and  removing  nails,  screws,  bolts and
other attachment  devices into the Unit side surface of the stone,  block, brick
or other masonry walls  bounding the Unit and the Unit side surface of the studs
which support the dry wall or plaster  perimeter  walls  bounding the Unit,  the
bottom  surface of floor  joists above the Unit and the top surface of the floor
joists  below  the Unit to the  extent  such  nails,  screws,  bolts  and  other
attachment devices may encroach into a part of a Common Element adjacent to such
Unit;  provided that any such action will not  unreasonably  interfere  with the
common  use of any part of the  Common  Elements,  adversely  affect  either the
thermal or  acoustical  character  of the  Buildings  or impair or  structurally
weaken the Buildings.

                    3.8.4 For the maintenance of any lighting devices,  outlets,
medicine  cabinets,  exhaust fans,  ventilation  ducts,  registers,  grilles and
similar  fixtures  which serve only one Unit but which encroach into any part of
the Common Elements.

            3.9  UNITS  AND  LIMITED  COMMON  ELEMENTS   EASEMENT  IN  FAVOR  OF
ASSOCIATION  AND HOTEL  OPERATOR.  The Units and the Limited Common Elements are
hereby made subject to the following  easements in favor of the  Association and
the Hotel  Operator  and their  respective  agents,  employees  and  independent
contractors:

                    3.9.1 For  inspection  of  the  Units  and  Limited  Common
Elements  in  order  to  verify  the   performance  of  all  required  items  of
maintenance, repair and replacement required by the terms of this Declaration or
the Hotel Operating and Rental Pool Agreement;

                    3.9.2 For inspection, maintenance, repair and replacement of
the Common  Elements or the Limited  Common  Elements  situated in or accessible
from such Units or Limited Common Elements;

                    3.9.3 For correction of emergency  conditions in one or more
units or Limited  Common  Elements or  casualties  to the Common  Elements,  the
Limited Common Elements or the Units.

                    3.9.4 For the purpose of enabling the Association, the Board
of  Directors  or any other  committees  appointed  by the Board of Directors to
exercise and  discharge  their  respective  rights,  powers and duties under the
Condominium  Documents  and for the  purpose of enabling  the Hotel  Operator to
exercise and discharge its respective rights,  powers and duties under any Hotel
Operating and Rental Pool Agreement.

                    3.9.5 For   inspection,   at  reasonable   times  and  upon
reasonable  notice  to the Unit  Owner,  of the  Units  and the  Limited  Common
Elements in order to verify that the provisions of the Condominium Documents are
being complied with.

            3.10 EASEMENT FOR UNINTENDED  ENCROACHMENTS.  To the extent that any
Unit or Common  Element  encroaches  on any other  Unit or Common  Element  as a
result  of  original  construction,  shifting  or  settling,  or  alteration  or
restoration  authorized  by  this  Declaration  or any  reason  other  than  the

                                       13
<PAGE>

intentional  encroachment  on the Common Elements or any Unit by a Unit Owner, a
valid easement for the encroachment, and for the maintenance thereof, exists.

                                    ARTICLE 4

                         USE AND OCCUPANCY RESTRICTIONS

            4.1 PUBLIC RENTAL RESIDENTIAL USE. All Units shall be used, improved
and devoted  exclusively to Public Rental Residential Use in accordance with the
Zoning  Ordinance,  subject only to the Unit Owner's limited right to occupy the
Unit as  described  in SECTION 4.8 below.  No use of any Unit shall be permitted
which violates the Zoning Ordinance.

            4.2 HOTEL  OPERATING  AND  RENTAL  POOL  AGREEMENT.  Each Unit Owner
acknowledges and agrees that the development in which the Units are located is a
condominium-hotel project and that rights of the Unit Owner to use the Units and
the Common  Elements are subject to the terms of the Hotel  Operating and Rental
Pool Agreement, and that the Condominium shall be operated by the Hotel Operator
for the benefit of the Unit Owner pursuant to the terms of such Hotel  Operating
and Rental Pool Agreement.  Each Unit Owner shall subject its Unit to the effect
of the Hotel  Operating  and Rental Pool  Agreement and no Unit Owner shall have
the right to use or permit  its Unit to be used in any  manner  contrary  to the
terms of the Hotel Operating and Rental Pool Agreement and this Declaration.  If
at any time a Hotel  Operating  Rental Pool  Agreement  terminates  or otherwise
expires  without a new Hotel  Operating and Rental Pool Agreement being in place
and effective,  the Board of Directors  shall arrange for the  Condominium to be
operated as a  condominium-hotel  project  with a rental pool for the benefit of
all Owners  (the terms of such rental  pool to be  substantially  similar to the
terms  of the  rental  pool  in  effect  immediately  prior  to  termination  or
expiration of the Hotel Operating and Rental Pool  Agreement),  and the Board of
Directors  shall have the right to hire such managers and other personnel as may
be necessary and appropriate until a new Hotel Operator is engaged pursuant to a
new Hotel Operating and Rental Pool Agreement.

            4.3 ACCESS TO HOTEL  OPERATOR.  The Hotel  Operator,  its employees,
agents,  contractors and permittees shall at all times have access to and use of
all portions of the Condominium as are reasonably  required for the operation of
the  condominium-hotel  from time to time, as determined by the Hotel  Operator,
acting reasonably,  including, without limitation, all Hotel Facilities.  During
the term of any Hotel  Operating and Rental Pool  Agreement,  the Hotel Operator
shall have the exclusive right to (i) make use of the Hotel Facilities; and (ii)
make Units  available  to Guests  (who may also have  access to the right to use
those portions of the Common Elements  authorized by Hotel Operator) and no Unit
Owner shall interfere with such exclusive rights.

            4.4 HOTEL FACILITIES. The Hotel Operator shall be entitled to set up
and  maintain  within the  Common  Elements  any  facilities  as are  reasonably
required  by  the  Hotel  Operator  in  connection  with  the  operation  of the
condominium-hotel,  including,  without limitation, the Hotel Facilities and any
interior or exterior signage reasonably desired by the Hotel Operator.

                                       14
<PAGE>

            4.5 COMPLIANCE  WITH LAWS. The Hotel Operator shall comply with all
governmental and other regulatory statutes,  laws, bylaws,  rules,  regulations,
codes,  ordinances  and  licensing  requirements  related to the  operation of a
condominium-hotel.

            4.6 NO ACTS IN  CONTRAVENTION  OF HOTEL  OPERATING  AND RENTAL  POOL
AGREEMENT.  All Unit Owners agree that all bylaws,  rules and regulations of the
Association  shall be  consistent  with the  operation of the  Condominium  as a
condominium-hotel  in  accordance  with the  Hotel  Operating  and  Rental  Pool
Agreement,  as in  effect  from time to time,  and that  they  will not  impair,
interfere with or adversely affect such operation. The Unit Owners further agree
that  they  will not do any act or thing and  shall  cause  the  Association  to
refrain  from doing any act or thing which may impair,  interfere  with or limit
the  ability  of  the  Hotel   Operator  to  operate   the   Condominium   as  a
condominium-hotel  in  accordance  with the  Hotel  Operating  and  Rental  Pool
Agreement.

            4.7 LIMITATION  ON RIGHT TO LEASE OR USE UNIT.  No Unit Owner shall
rent, lease or otherwise use its Unit for any purpose, including personal use by
the Unit Owner, except as expressly permitted pursuant to SECTION 4.8 hereof and
the applicable provisions of the Hotel Operating and Rental Pool Agreement.

            4.8 RESIDENTIAL USE BY UNIT OWNERS.  Notwithstanding  anything in 
this ARTICLE 4 to the contrary,  a Unit Owner may use its Unit only as follows:

                    4.8.1 In order to use its Unit,  the Unit Owner must reserve
the Unit in  accordance  with and otherwise  comply with the  provisions of this
SECTION 4.8 and EXHIBIT "C" attached hereto.

                    4.8.2 A Unit Owner may use its Unit only in accordance  with
the advance  reservation and occupancy duration  provisions of EXHIBIT "C". If a
Unit Owner  reserves  its Unit  pursuant to Paragraph 2 of EXHIBIT "C", but does
not actually use the Unit during the time  reserved,  the Unit Owner shall still
be deemed to have used the Unit for the time so reserved unless, at least thirty
(30) days prior to the Unit Owner's  scheduled  use of the Unit,  the Unit Owner
cancels  such  reservation  with the approval of the Hotel  Operator.  If a Unit
Owner  reserves  its Unit  pursuant  to  Paragraph 3 of EXHIBIT "C" but does not
actually  use the Unit during the time  reserved,  the Unit Owner shall still be
deemed to have used the Unit for the time so reserved unless,  at least five (5)
days prior to the Unit Owner's scheduled use of the Unit, the Unit Owner cancels
such reservation with the approval of the Hotel Operator.

                    4.8.3 If a Unit  Owner  does  not  reserve  or use the full
amount of days permitted to be used by the Unit Owner pursuant to EXHIBIT "C" in
any Year,  the Unit Owner shall not be entitled to  accumulate  or otherwise use
the unused days in any future Year.

                    4.8.4 Subject to the use by Unit  Owners of their  Units as
permitted  by this  SECTION  4.8 and the  rights  of  Declarant  as set forth in
SECTION 3.4, all Units shall be made available at all times for rental to or use
by the Public in  accordance  with the terms of the Hotel  Operating  and Rental
Pool Agreement.  The Hotel Operator may accept reservations at any time from the

                                       15
<PAGE>

Public for the use of any Unit for any future day or days;  however,  provided a
Unit  Owner  has  booked  the use of its Unit in  accordance  with the  terms of
EXHIBIT "C", use of the Unit by the Unit Owner shall take precedence.

                    4.8.5  Each Unit Owner acknowledges  that at all times while
it is  occupying  and making use of its Unit (or if such Unit Owner has reserved
its Unit but does not  actually use the Unit during the time  reserved,  without
having provided the Hotel Operator prior written notice of intent not to use the
Unit as set forth in SECTION 4.8.2), the Unit Owner will not share in the rental
pool  proceeds  for the days the  Unit  Owner  occupies,  or is  deemed  to have
occupied the Unit.

                    4.8.6  Anything  in  this   SECTION  4.8  to  the  contrary
notwithstanding,  the Owner of a Unit designated as an Executive Unit on EXHIBIT
"B" may not reserve, use or authorize or assign to any other Person the right to
use or occupy its Executive  Unit,  except that the Hotel  Operator may make use
and  allow  others  to make  use of such  Executive  Unit as part of the  normal
operation of the condominium - hotel.

                    4.8.7  Anything  in  this   Declaration   to  the  contrary
notwithstanding,  in the event any Unit Owner  sells,  transfers  or conveys its
interest in a Unit,  either  voluntarily or  involuntarily  (including,  without
limitation,  a transfer of a Unit  pursuant to the exercise of any remedies by a
secured party under any deed of trust or other  instrument or lien encumbering a
Unit),  then the  successor  Unit Owner  (including  any trustee or  third-party
foreclosure  purchaser) shall be obligated to honor any outstanding  commitments
to any Exchange  Program  User for use of the Unit which have been  confirmed by
the Hotel Operator as of the date of transfer of the Unit to such successor Unit
Owner.

            4.9 ANTENNAS.  The Board of Directors shall regulate, to the extent
permitted  under federal,  state and local law, any antenna,  aerial,  satellite
television dish or other device for the  transmission or reception of television
or radio signals or any other form of  electromagnetic  radiation proposed to be
erected,  used or maintained  outdoors on any portion of the Condominium whether
attached to a Building or structure  or  otherwise.  To the extent  permitted by
applicable  law, the prior approval of the Board of Directors  shall be required
for the installation,  use or maintenance of any such device, which approval the
Board may condition upon the satisfaction of certain conditions  including,  but
not limited to, the size, placement, height, means of installation and screening
of such devices.

            4.10 UTILITY SERVICE.  Except for lines,  wires and devices existing
on the  Condominium  as of the  date of this  Declaration  and  maintenance  and
replacement of the same,  without the prior written approval of the Association,
no lines,  wires,  or other devices for the  communication  or  transmission  of
electric current or power, including telephone,  television,  and radio signals,
shall be  erected,  placed or  maintained  anywhere  in or upon the  Condominium
unless they are installed and maintained  underground or concealed in, under, or
on Buildings or other structures permitted under this Declaration.  No provision
hereof shall be deemed to forbid the  erection of  temporary  power or telephone
structures  incident  to  the  operation  of  the  Condominium  as  a  hotel  or
construction of Buildings or structures permitted under this Declaration.

                                       16
<PAGE>

            4.11 IMPROVEMENTS  AND  ALTERATIONS.   No  structural   additions,
alterations or improvements shall be made to any Building, Common Area or within
a Unit,  unless  prior  to the  commencement  of each  addition,  alteration  or
improvement,  the Board of Directors has given its prior written approval (which
may be withheld in the sole and absolute  discretion  of the Board of Directors)
and, if required by the Board of Directors,  an architect or engineer,  licensed
in Arizona,  certifies  that such addition,  alteration or improvement  will not
impair the structural,  electrical, mechanical, plumbing or functional integrity
of the  Building  or  Unit to or  within  which  such  addition,  alteration  or
improvement is to be made.

            4.12 TRASH  CONTAINERS AND COLLECTION.  No garbage or trash shall be
placed or kept on the Condominium  except in covered  containers of a type, size
and style which are approved by the Board of Directors  and the Hotel  Operator.
The Board of Directors or the Hotel  Operator  shall have the right to subscribe
to a  trash  service  for  the  use  and  benefit  of the  Hotel  Operator,  the
Association  and all Unit Owners.  The Board of Directors and the Hotel Operator
together  may adopt and  promulgate  rules and  regulations  regarding  garbage,
trash,  trash  containers  and  collection.  No  incinerators  shall  be kept or
maintained in any Unit.

            4.13 MACHINERY AND EQUIPMENT.  No machinery or equipment of any kind
shall be  placed,  operated  or  maintained  upon the  Condominium  except  such
machinery  or equipment as is usual and  customary in  connection  with the use,
maintenance or construction of buildings,  improvements or structures  which are
within the uses permitted by this Declaration, and except for such machinery and
equipment as the Hotel Operator  reasonably  deems  necessary in order to permit
the Hotel Operator to operate the Condominium as a condominium-hotel.

            4.14 ANIMALS. No animals, birds, fowl, poultry or livestock shall be
maintained  or kept in any Units or on any  other  portion  of the  Condominium,
except for physical  impairment,  assistive  animals,  to the extent that a Unit
Owner or Guest or any employee or  contractor  of the  Association  or the Hotel
Operator requires the use of such assistive  animals,  and in any such instance,
in accordance  with any Association  rules and regulations  which then may be in
effect.

            4.15 CLOTHES  DRYING  FACILITIES.  Outside  clotheslines  or  other
outside facilities for drying or airing clothes shall not be erected,  placed or
maintained on the Condominium.

            4.16 MINERAL  EXPLORATION.  No portion of the  Condominium  shall be
used  in any  manner  to  explore  for or to  remove  any  water,  oil or  other
hydrocarbons, minerals of any kind, gravel, earth, or any earth substance of any
kind.

            4.17 DISEASES AND INSECTS.  No Unit Owner shall permit any thing or
condition  to exist upon the  Condominium  which could  induce,  breed or harbor
infectious plant diseases or noxious insects.

            4.18 TRUCKS,  TRAILERS,  CAMPERS AND BOATS.  No truck,  mobile home,
travel  trailer,   tent  trailer,   trailer,   camper  shell,  detached  camper,
recreational vehicle,  boat, boat trailer, or other similar equipment or vehicle
may be parked, kept, maintained,  constructed,  reconstructed or repaired on any

                                       17
<PAGE>

part of the Condominium,  except for temporary  parking for Guests which must be
in accordance with applicable Association rules and regulations.

            4.19 MOTOR VEHICLES.  Except for emergency  repairs,  no automobile,
motorcycle,   motorbike   or  other   motor   vehicle   shall  be   constructed,
reconstructed,  serviced or repaired on any portion of the  Condominium,  and no
inoperable vehicle may be stored or parked on any portion of the Condominium. No
automobile,  motorcycle,  motorbike or other motor  vehicle shall be parked upon
any part of the Condominium except in such parking spaces as may exist from time
to time  on the  Common  Elements  and  then  only in  accordance  with  parking
regulations jointly adopted by the Board of Directors and the Hotel Operator.

            4.20 TOWING  OF  VEHICLES.  The  Board of  Directors  and the Hotel
Operator shall have the right to have any truck,  mobile home,  travel  trailer,
tent trailer,  trailer,  camper shell,  detached camper,  recreational  vehicle,
boat,  boat  trailer  or  similar   equipment  or  vehicle  or  any  automobile,
motorcycle,   motorbike,  or  other  motor  vehicle  parked,  kept,  maintained,
constructed, reconstructed or repaired in violation of the Condominium Documents
or any  parking  regulation  adopted  by the  Hotel  Operator  or the  Board  of
Directors towed away at the sole cost and expense of the owner of the vehicle or
equipment.  Any expense  incurred by the  Association  or the Hotel  Operator in
connection with the towing of any vehicle or equipment shall be paid upon demand
by the owner of the vehicle or equipment.

            4.21 SIGNS. Except for signs of the Hotel Operator incidental to the
operation  of  the  Condominium  as a  hotel  as  reasonably  determined  to  be
appropriate by the Hotel Operator and any "For Sale" or other  advertising signs
which  Declarant  may  elect to post in  connection  with its  marketing  of the
development,  no signs (including,  but not limited to, "For Sale" or "For Rent"
signs)  shall be  permitted on the exterior of any Unit or Building or any other
portion of the  Condominium  without the prior written  approval of the Board of
Directors and any Hotel Operator.

            4.22 LAWFUL USE. No immoral,  improper,  offensive,  or unlawful use
shall be made of any part of the Condominium. All valid laws, zoning ordinances,
and  regulations  of  all  governmental  bodies  having  jurisdiction  over  the
Condominium shall be observed.  Any violation of such laws, zoning ordinances or
regulations shall be a violation of this Declaration.

            4.23 NUISANCES  AND  OFFENSIVE  ACTIVITY.   No  nuisance  shall  be
permitted to exist or operate  upon the  Condominium,  and no activity  shall be
conducted  upon the  Condominium  which is  offensive or  detrimental,  or is an
annoyance, to any portion of the Condominium or any occupant of the Condominium.
No exterior speakers,  horns, whistles, bells or other sound devices, except (i)
security or other emergency  devices used  exclusively for security or emergency
purposes,  or (ii)  sound  systems  used by or with  the  consent  of the  Hotel
Operator for outdoor  functions and activities in connection  with the operation
of the  Condominium  as a  hotel,  shall  be  located,  used  or  placed  on the
Condominium.

            4.24 WINDOW  COVERINGS.  No  reflective  materials,  including,  but
without  limitation,  aluminum  foil,  reflective  screens or glass,  mirrors or
similar  items,  shall be  installed or placed upon the outside or inside of any

                                       18
<PAGE>

windows  of a Unit or of any  Limited  Common  Elements  allocated  to the  Unit
without the prior  written  approval of the Board of Directors.  No  enclosures,
drapes, blinds, shades, screens or other items affecting the exterior appearance
of a Unit  or any  Limited  Common  Elements  allocated  to the  Unit  shall  be
constructed  or  installed  without  the prior  written  consent of the Board of
Directors.

            4.25 LIMITATION  ON LEASING  OF UNITS.  No Unit Owner may lease its
Unit or permit any Person to use its Unit or any of the Common  Elements  except
in accordance  with this ARTICLE 4. Under no  circumstances  will any Unit Owner
directly or indirectly  charge rent or any form of consideration  for the use of
such  Unit  Owner's  Unit  except  in  accordance  with the  terms of the  Hotel
Operating and Rental Pool Agreement.

            4.26 FURNISHINGS. No Owner may remove, replace,  substitute,  alter,
repair or add to any of the Unit Furnishings or Hotel Furnishings.  Redecorating
and  repair,  refurbishment  and  replacement  of  Unit  Furnishings  and  Hotel
Furnishings  shall be  scheduled  and  accomplished  by the Hotel  Operator,  in
accordance with the terms of the Hotel Operating and Rental Pool Agreement.


                                    ARTICLE 5

               MAINTENANCE AND REPAIR OF COMMON ELEMENTS AND UNITS

            5.1 REPAIR OF COMMON  ELEMENTS.  Except as  otherwise  set forth in
SECTION  5.3, the  Association  shall  clean,  maintain,  repair and replace all
Common  Elements and all Limited  Common  Elements.  Subject to the provision of
SECTION 5.3, the expense thereof shall be a Common Expense.

            5.2 REPAIR OF UNITS.The repair and maintenance of the Units and the
cost of repairs,  refurbishing,  replacement  and maintenance of all Furnishings
shall be the  responsibility  of the Unit Owners,  each of which shall cause its
Unit and the  Furnishings  for such  Unit to be  maintained  in good  order  and
repair,  reasonable  wear and tear  excepted.  To enable the  Condominium  to be
properly  operated as a hotel,  each Owner shall delegate its  obligation  under
this SECTION to the Hotel  Operator  under the Hotel  Operating  and Rental Pool
Agreement,  and except as set forth in SECTION 5.3, all costs of such  cleaning,
repair,  maintenance,  refurbishing  and  replacement  of the  Units  and  their
Furnishing shall be jointly shared by all Unit Owners,  as part of the operating
costs of the hotel operation.

            5.3 REPAIR OR  RESTORATION  NECESSITATED  BY OWNER.  Each Unit Owner
shall be liable to the extent  permitted  by Arizona law, for any damage to such
Unit Owner's  Unit,  any  Furnishings  within its Unit,  or the Common  Elements
(including the Improvements,  landscaping, personal property or equipment) which
results from the  negligence or willful  conduct of the Unit Owner or its family
members or invitees  (other than Guests).  If the  Association or Hotel Operator
pays the cost of any such repair,  maintenance or replacements  required by such
act of a Unit Owner,  the Unit Owner shall pay all such costs upon  demand.  The

                                       19
<PAGE>

Association may enforce collection of any such amounts in the same manner and to
the same  extent as  provided  for in this  Declaration  for the  collection  of
Assessments.

            5.4 REPAIR AND RECOVERY  RIGHTS OF  ASSOCIATION.  It is  anticipated
that the Hotel  Operator  will  undertake  the  responsibility  to  perform  the
cleaning, repair,  maintenance,  replacement and refurbishment of the Units, the
Unit  Furnishings,  Hotel  Furnishings,   Common  Elements  and  Limited  Common
Elements, pursuant to the terms of the Hotel Operating and Rental Pool Agreement
and that the costs  thereof will be jointly  charged to the Unit Owners.  To the
extent such costs are included in the annual proposed operating budget submitted
to the  Association  by the Hotel  Operator,  such costs  relating to the Common
Elements  and  Limited  Common  Elements  shall  not be  included  in  initially
establishing  the  annual  Assessments  to be levied  by the Board of  Directors
pursuant  to SECTION  7.2;  however,  if at any time (i) a Hotel  Operating  and
Rental Pool Agreement is not in effect;  or (ii) such agreement does not provide
for the Hotel  Operator to pay the costs of complying with SECTIONs 5.1 and 5.2;
or (iii) the Hotel Operator is in default under such agreement and is not paying
such costs,  the Association  shall be responsible for assuring  compliance with
SECTION 5.1 and 5.2, and any costs incurred by the Association in performing any
cleaning,  repair,  maintenance,  refurbishing  or  replacement  obligations  of
SECTIONs  5.1 or 5.2  shall  become  Common  Expenses  and shall be  payable  in
accordance  with the  terms of  SECTION  7.21 and the  Association  may  enforce
collection  of any such  amounts in the same  manner  and to the same  extent as
provided for in this Declaration for the collection of Assessments.


                                    ARTICLE 6

                 THE ASSOCIATION; RIGHTS AND DUTIES; MEMBERSHIP

            6.1 RIGHTS, POWERS AND DUTIES OF THE ASSOCIATION.  No later than the
date on which the first Unit is conveyed to a Purchaser,  the Association  shall
be organized as a nonprofit  Arizona  corporation.  The Association shall be the
entity through which the Unit Owners shall act. Unless the Condominium Documents
or the Condominium Act specifically require a vote of the Members,  approvals or
actions to be given or taken by the Association shall be valid if given or taken
by the Board of Directors.  The Association  shall have such rights,  powers and
duties  as are  prescribed  by  law  and as are  set  forth  in the  Condominium
Documents  together  with such  rights,  powers and duties as may be  reasonably
necessary in order to effectuate the objectives and purposes of the  Association
as set  forth in this  Declaration  and the  Condominium  Act.  The  rights  and
obligations  of the  Association  under this  Declaration  may be  assigned  and
delegated  to a Hotel  Operator to enable the Hotel  Operator to comply with its
obligations  under  any Hotel  Operating  and  Rental  Pool  Agreement.  Without
limiting  the  generality  of the  foregoing,  the  Association  shall  have the
following rights, powers and duties:

                    6.1.1  The  Association  shall  have the  right  to  finance
capital  improvements  in the Condominium by encumbering  future  Assessments if
such  action is  approved by the  written  consent or  affirmative  vote of Unit
Owners  representing  more  than  fifty  percent  (50%)  of  the  votes  in  the
Association.

                                       20
<PAGE>

                    6.1.2 The   Association  has  the  specific  duty  to  make
available,  during normal business hours,  to the Declarant,  Eligible  Mortgage
Holders, Unit Owners, and Eligible Insurers or Guarantors, current copies of the
Declaration,  Bylaws,  ARTICLEs,  Rules and other books,  records and  financial
statements  of the  Association  as may be  requested  from time to time by such
parties.  Such requests shall be in writing,  and the Association shall have the
right to charge for copying expenses.

                    6.1.3 The Association  shall control,  manage and administer
the Common  Elements for the benefit of all Unit  Owners,  subject to the rights
granted  to the Hotel  Operator  under  any  Hotel  Operating  and  Rental  Pool
Agreement.

                    6.1.4 The  Association  shall  assure that the Units and the
Common  Elements and all Limited  Common  Elements are kept and  maintained in a
clean,  safe and  attractive  condition  and in a state of good and  serviceable
repair (reasonable wear and tear excepted) and that all Unit Furnishings and all
Hotel Furnishings are properly  maintained,  repaired and replaced and if not so
maintained  by the Unit Owners (or on their behalf by the Hotel  Operator),  the
Association is authorized to undertake all such upkeep, maintenance,  repair and
replacement  and  recover  the  cost  thereof  from  any  Person(s)  responsible
therefor.

                    6.1.5 Subject to the right of the Association to pay amounts
to the Hotel Operator as set forth in this  Declaration,  the Association  shall
collect and receive all Assessments  levied by the Association and other amounts
payable to the Association and shall pay all sums of money properly  required to
be paid on account of all services,  supplies and  obligations  pertaining to or
for the benefit of the Association.

                    6.1.6 The Association  shall conduct all  negotiations  with
the Hotel  Operator on behalf of the Unit Owners,  including  but not limited to
negotiating  the terms of the Hotel  Operating and Rental Pool Agreement and all
extensions,  renewals,  amendments,  supplements  and  replacements  thereto and
perform all reasonable  obligations undertaken by the Association under any such
agreement.

                    6.1.7 The Association may:

                          (i)    purchase,  hire or  otherwise  acquire personal
property  to enable the  Condominium  to be used for hotel purposes;

                          (ii)   borrower  money  required  by  it  in  the
performance of its duties or the exercise of its powers,  including arranging an
operating line of credit, on terms and at rates of interest which are consistent
with prudent business practices;

                          (iii)  secure the  repayment of money  borrowed by it,
and the payment of interest,  by negotiable  instrument or encumbrance of unpaid
Assessments, whether levied or not, or mortgage any property vested in it, or by
combination of those means;

                                       21
<PAGE>

                          (iv)   invest, as  it  may  determine,  in  separate 
accounts, Association funds, including but not limited to reserve funds;

                          (v)    designate  by special  resolution an  area  as 
Limited Common Element and specify the Unit or Units that are to have the use of
such Limited Common Element;

                          (vi)   do all  things  necessary  for  the enforcement
of this  Declaration,  the Bylaws and the Rules of the Association,  and for the
control, management and administration of the Common Elements or other assets of
the  Association,   including  removing   privileges  for  the  use  of  certain
facilities, or fixing and collecting fines for contravention of the Declaration,
Bylaws or Rules;

                          (vii)  set  up and  maintain  separate  contingency  
reserve  funds for such  purposes  and in such amounts as the Board of Directors
deems appropriate;

                          (viii) grant,  revise, amend and supplement  easements
over  Common  Elements  (including  but not  limited to  parking  areas) for the
benefit of any governmental  agency  (including the County of Yavapai),  for the
use of the general public and for the benefit of adjoining landowners, upon such
terms as the Board of Directors deems to be reasonably prudent;

                          (ix)   hire a management  company,  managing  agent or
executive  director and establish  committees to assist the  Association and the
Board of Directors in performing their respective  duties and  responsibilities;
and

                          (x)    initiate,  pursue,  compromise,  and  settle  
(including  dismissal)  real estate tax  protests  and  appeals  relative to the
Condominium,  including  individual Units, in the name of the Association and/or
the individual Unit Owners, and upon request,  each Unit Owner will grant to the
Association  a limited  power of  attorney,  in the form  required by any taxing
authority,  to permit the Association to pursue any such real estate tax protest
or appeal on behalf of the respective Unit Owner.




                                       22
<PAGE>

            6.2 DIRECTORS AND OFFICERS.

                    6.2.1 During the Period of Declarant Control,  the Declarant
shall have the right to appoint and remove the members of the Board of Directors
and the officers of the Association.  Such members of the Board of Directors and
officers are not required to be Unit Owners.

                    6.2.2 Upon  the  termination  of the  Period  of  Declarant
Control,  the Unit Owners shall elect the Board of Directors  which must consist
of at least five (5)  members,  at least a majority of whom must be Unit Owners.
The Board of Directors  elected by the Unit Owners shall then elect the officers
of the Association.

                    6.2.3 The Declarant may  voluntarily  surrender its right to
appoint and remove the members of the Board of Directors and the officers of the
Association before  termination of the Period of Declarant Control,  and in that
event the  Declarant  may  require,  for the duration of the Period of Declarant
Control, that specified actions of the Association or the Board of Directors, as
described in a recorded instrument executed by the Declarant, be approved by the
Declarant before they become effective.

            6.3 RULES. The Board of Directors,  from time to time and subject to
the provisions of this  Declaration and the Condominium  Act, may adopt,  amend,
and repeal Rules. The Rules may, among other things, restrict and govern the use
of any area by any Guest,  any Unit Owner, or by any family member or invitee of
such  Unit  Owner;  provided,  however,  that  the  Rules  may not  unreasonably
discriminate   among  Unit  Owners  and  shall  not  be  inconsistent  with  the
Condominium Act, this Declaration,  the ARTICLEs,  Bylaws or any Hotel Operating
and Rental Pool Agreement,  nor shall such Rules discriminate  against the Hotel
Operator or unreasonably  restrict the Hotel Operator from performing its duties
or exercising its rights under the Hotel Operating and Rental Pool Agreement.  A
copy of the Rules as they may from time to time be adopted, amended or repealed,
shall be mailed or otherwise delivered to each Unit Owner and may be recorded.

            6.4 COMPOSITION OF MEMBERS. Each Unit Owner shall be a Member of the
Association.  The  membership  of the  Association  at all times  shall  consist
exclusively of all the Unit Owners. A Unit Owner (including Declarant) of a Unit
shall  automatically,  upon becoming the Unit Owner thereof,  be a Member of the
Association and shall remain a Member of the Association until such time as such
Unit Owner's  ownership ceases for any reason,  at which time, such Unit Owner's
membership in the Association shall automatically cease.

            6.5  PERSONAL  LIABILITY.  Neither  Declarant  nor any member of the
Board of Directors or of any  committee of the  Association,  any officer of the
Association  nor any  manager  or other  employee  of the  Association  shall be
personally liable to any Member, or to any other person or entity, including the
Association, for any damage, loss or prejudice suffered or claimed on account of
any act, omission,  error or negligence of the Declarant,  the Association,  the
Board  of  Directors,  the  manager,  any  representative  or  employee  of  the
Association,  or any committee,  committee member or officer of the Association;
provided, however, the limitations set forth in this SECTION 6.5 shall not apply

                                       23
<PAGE>

to any person  who has  failed to act in good faith or has  engaged in wilful or
intentional misconduct.

            6.6  IMPLIED  RIGHTS.  The  Association  may  exercise  any right or
privilege  given to the Association  expressly by the Condominium  Documents and
every other right or privilege  reasonably  to be implied from the  existence of
any right or privilege given to the Association by the Condominium  Documents or
reasonably necessary to effectuate any such right or privilege.

            6.7 VOTING RIGHTS.  Subject to SECTION 6.8 below, each Unit Owner of
a Unit,  including  Declarant,  shall be  entitled to cast one (1) vote for each
Unit owned by such Unit Owner, on any Association  matter which is put to a vote
of the  membership  in accordance  with this  Declaration,  the ARTICLEs  and/or
Bylaws.

            6.8 VOTING PROCEDURES. No change in the ownership of a Unit shall be
effective for voting  purposes  unless and until the Board of Directors is given
actual written notice of such change and is provided satisfactory proof thereof.
The vote for each such Unit must be cast as a unit, and  fractional  votes shall
not be  allowed.  In the event  that a Unit is owned by more than one (1) Person
and such Unit Owners are unable to agree among  themselves  as to how their vote
or votes  shall be cast,  they shall  lose their  right to vote on the matter in
question.  If any  Member  casts a vote  representing  a certain  Unit,  it will
thereafter  be  conclusively  presumed for all purposes that such Unit Owner was
acting with the  authority and consent of all other Unit Owners of the same Unit
unless objection thereto is made at the time the vote is cast. In the event more
than one (1) vote is cast by a Member for a particular  Unit,  none of the votes
shall be counted and all of the votes shall be deemed void.

            6.9 TRANSFER OF MEMBERSHIP. The rights and obligations of any Member
other than the Declarant shall not be assigned,  transferred,  pledged, conveyed
or  alienated  in any way except upon  transfer of  ownership  of a Unit Owner's
Unit,  and then only to the  transferee  of ownership to the Unit. A transfer of
ownership to a Unit may be effected by deed, intestate succession,  testamentary
disposition, foreclosure of a mortgage of record, or such other legal process as
now in effect or as may hereafter be  established  under or pursuant to the laws
of the State of Arizona.  Any  attempt to make a  prohibited  transfer  shall be
void.  Any  transfer  of  ownership  to a Unit  shall  operate to  transfer  the
membership  appurtenant  to said  Unit  to the  new  Unit  Owner  thereof.  Each
Purchaser of a Unit shall notify the Association of its purchase within ten (10)
days after becoming the Unit Owner of a Unit.

            6.10 SUSPENSION OF VOTING RIGHTS. If any Unit Owner fails to pay any
Assessments  or other  amounts  due to the  Association  under  the  Condominium
Documents  within  fifteen  (15) days after  such  payment is due or if any Unit
Owner  violates  any  other  provision  of the  Condominium  Documents  and such
violation is not cured within fifteen (15) days after the  Association  notifies
the Unit Owner of the violation,  the Board of Directors shall have the right to
suspend  such  Unit  Owner's  right to vote  until  such  time as all  payments,
including interest and attorneys' fees, are brought current, and until any other
infractions or violations of the Condominium Documents are corrected.

                                       24
<PAGE>

            6.11 CONVEYANCE  OR  ENCUMBRANCE  OF COMMON  ELEMENTS.  The  Common
Elements shall not be mortgaged,  transferred,  dedicated or encumbered  without
the prior written  consent or affirmative  vote of Unit Owners  representing  at
least  eighty  percent  (80%) of the  votes of the  Members.  In  addition,  any
conveyance,  encumbrance,  judicial sale or other transfer (whether voluntary or
involuntary)  of an  individual  interest in the Common  Elements  shall be void
unless the Unit to which that interest is allocated also is transferred.


                                    ARTICLE 7

                                   ASSESSMENTS

            7.1 PREPARATION OF BUDGET.

                    7.1.1 At least thirty (30) days before the beginning of each
fiscal  year of the  Association  commencing  with the fiscal  year in which the
first Unit is  conveyed to a  Purchaser,  the Board of  Directors  shall adopt a
budget for the  Association  containing an estimate of the total amount of funds
which the Board of Directors believes will be required during the ensuing fiscal
year to pay all  Common  Expenses,  excluding  any  Common  Expenses  which  are
proposed  to be paid by the Hotel  Operator  pursuant to the terms of the annual
operating budget prepared by the Hotel Operator for the ensuing year. The budget
shall  separately  reflect any Common Expenses to be assessed  against less than
all of the Units pursuant to SUBSECTION 7.2.4 of this Declaration.

                    7.1.2 Within  thirty  (30)  days  after the  adoption  of a
budget,  the Board of  Directors  shall  send to each Unit Owner the budget or a
summary  of the  budget and a  statement  of the  amount of the  Common  Expense
Assessment  assessed  against  the Unit of the Unit  Owner  in  accordance  with
SECTION 7.2 of this Declaration.  The failure or delay of the Board of Directors
to prepare or adopt a budget for any fiscal year shall not  constitute  a waiver
or release in any manner of a Unit Owner's obligation to pay his allocable share
of the Common Expenses as provided in SECTION 7.2 of this Declaration,  and each
Unit Owner shall continue to pay the Common Expense  Assessment against his Unit
as established  for the previous  fiscal year until notice of the Common Expense
Assessment  for the new  fiscal  year  has  been  established  by the  Board  of
Directors.

                    7.1.3 The Board of  Directors  is  expressly  authorized  to
adopt and amend budgets for the  Association,  and no ratification of any budget
or amended budget by the Unit Owners shall be required.

            7.2 COMMON EXPENSE ASSESSMENT.

                    7.2.1 For each  fiscal  year of the  Association  commencing
with the fiscal  year in which the first Unit is conveyed  to a  Purchaser,  the
Common Expense  Assessment for each Unit shall be determined by multiplying  the
total estimated  Common Expenses set forth in the budget adopted by the Board of
Directors  (except for the Common Expenses which are to be assessed against less
than all of the  Units  pursuant  to  SUBSECTION  7.2.4)  times  the  applicable

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<PAGE>

Percentage  Interest as set forth on EXHIBIT "B"  attached  hereto (the  "Common
Expense  Share").  If the Board of Directors  determines  during any fiscal year
that  funds  budgeted  or  available  for that  fiscal  year are or will  become
inadequate  to meet all  Common  Expenses  for any  reason,  including,  without
limitation,  reduced income and expense  reimbursement from the operation of the
hotel, or increased  Common Expenses,  nonpayment of Assessments by Members,  or
nonpayment of hotel  operating costs  (including  maintenance and repairs of the
Common  Elements,  Unit  Furnishings,  Hotel  Furnishings and Units by the Hotel
Operator) the Board of Directors may increase and  reallocate the Common Expense
Assessment for that fiscal year and the revised  Common  Expense  Assessment for
each Unit shall commence on the date designated by the Board of Directors.

                    7.2.2 The Common  Expense  Assessments  shall commence as to
all Units on the first day of the month  following  the  conveyance of the first
Unit to a  Purchaser.  The first  Common  Expense  Assessment  shall be adjusted
according  to  the  number  of  months  remaining  in  the  fiscal  year  of the
Association.  The  Board  of  Directors  may  require  that the  Common  Expense
Assessments or be paid in installments.  For the period from the date upon which
this  Declaration is recorded  through the first day of the month  following the
conveyance of the first Unit to a Purchaser,  the Declarant shall be responsible
for assuring that the actual Common Expenses accrued through such date are paid.

                    7.2.3 Except as  otherwise  expressly  provided for in this
Declaration,  all Common Expenses shall be assessed  against all of the Units in
accordance with SUBSECTION 7.2.1 of this Declaration.

                    7.2.4 If any Common  Expense is caused by the  negligence or
other  misconduct of any Unit Owner,  or if any Unit Owner fails to pay when due
any amount owing to the Hotel Operator under the Hotel Operating and Rental Pool
Agreement (a "Rental Pool  Delinquency"),  the  Association (i) shall assess any
such  Common  Expense  exclusively  against  such Unit  Owner to the  extent not
covered  by  insurance;  and (ii) may assess any such  Rental  Pool  Delinquency
exclusively against such Unit Owner.

                    7.2.5 All Assessments, monetary penalties and other fees and
charges levied against a Unit shall be the personal obligation of the Unit Owner
of the Unit at the time the  Assessments,  monetary  penalties or other fees and
charges  became due. The personal  obligation  of a Unit Owner for  Assessments,
monetary  penalties and other fees and charges levied against his Unit shall not
pass to the Unit Owner's successors in title unless expressly assumed by them.

            7.3 SPECIAL ASSESSMENTS.  In addition to Common Expense Assessments,
the  Association  may levy,  in any fiscal  year of the  Association,  a special
assessment applicable to that fiscal year only for the purpose of defraying,  in
whole  or in part,  the  cost of any  construction,  reconstruction,  repair  or
replacement  of a capital  improvement  of one or more  Units  and/or the Common
Elements,  including fixtures and personal property related thereto,  or for any
other lawful  Association  purpose,  provided that any Special  Assessment shall
have first been  approved by Unit Owners  representing  two-thirds  (2/3) of the
votes in the  Association who are voting in person or by proxy at a meeting duly
called for such purpose.  Unless otherwise  specified by the Board of Directors,

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<PAGE>

Special  Assessments  shall be due thirty (30) days after they are levied by the
Association and notice of the Special Assessment is given to the Unit Owners.

            7.4 EFFECT OF  NONPAYMENT OF  ASSESSMENTS; REMEDIES  OF  THE 
                ASSOCIATION.

                    7.4.1 Any  Assessment,  or any installment of an Assessment,
which is not paid within  five (5) days after the  Assessment  first  became due
shall be deemed  delinquent and shall bear interest from the date of delinquency
at the rate of interest established from time to time by the Board of Directors.

                    7.4.2 All Assessments, monetary penalties and other fees and
charges imposed or levied against any Unit or Unit Owner shall be secured by the
Assessment  Lien as provided for in the  Condominium  Act. The recording of this
Declaration constitutes record notice and perfection of the Assessment Lien, and
no further  recordation  of any claim of lien shall be  required.  Although  not
required in order to perfect the Assessment Lien, the Association shall have the
right but not the obligation, to record a notice setting forth the amount of any
delinquent  assessments,  monetary penalties or other fees or charges imposed or
levied  against a Unit or the Unit Owner  which are  secured  by the  Assessment
Lien.

                    7.4.3 The  Association  shall have the right, at its option,
to enforce collection of any delinquent Assessments,  monetary penalties and all
other fees and  charges  owed to the  Association  in any manner  allowed by law
including,  but not limited  to: (i)  bringing an action at law against the Unit
Owner personally  obligated to pay the delinquent amounts and such action may be
brought  without  waiving  the  Assessment  Lien  securing  any such  delinquent
amounts; or (ii) bringing an action to foreclose its Assessment Lien against the
Unit in the manner provided by law for the foreclosure of a realty mortgage. The
Association shall have the power to bid at any foreclosure sale and to purchase,
acquire,  hold,  lease,  mortgage and convey any and all Units purchased at such
sale.

            7.5 SUBORDINATION  OF ASSESSMENT LIEN TO MORTGAGES.  The Assessment
Lien shall be subordinate to the lien of any First Mortgage. Any First Mortgagee
or any other party  acquiring  title or coming into possession of a Unit through
foreclosure of a First Mortgage, purchase at a foreclosure sale or trustee sale,
or through any equivalent  proceedings,  such as, but not limited to, the taking
of a deed in lieu of  foreclosure,  shall  acquire  title  free and clear of any
claims for unpaid  Assessments,  monetary  penalties  and other fees and charges
against  the Unit  which  became  payable  prior to such sale or  transfer.  Any
delinquent Assessments,  monetary penalties and other fees and charges which are
extinguished pursuant to this SECTION 7.5 may be reallocated and assessed to all
Units as at Common Expense.  Any Assessments,  monetary penalties and other fees
and charges  against the Unit which accrue prior to such sale or transfer  shall
remain the obligation of the defaulting Unit Owner.

            7.6 EXEMPTION OF UNIT OWNER.  No Unit Owner may exempt  itself from
liability  for payment of  Assessments,  monetary  penalties  and other fees and
charges levied pursuant to the Condominium Documents by waiver and nonuse of any
of the Common Elements or by the abandonment or non-use of its Unit.

                                       27
<PAGE>

            7.7 CERTIFICATE OF PAYMENT. The Association on written request shall
issue or cause to be issued to a lienholder,  Unit Owner or Person designated by
a Unit Owner, a statement setting forth the amount of unpaid Assessments against
the Unit.  The  statement  shall be  furnished  within  fifteen  (15) days after
receipt of the  request and the  statement  is binding on the  Association,  the
Board of Directors, and every Unit Owner. In addition, upon receipt of a written
notice of a pending sale that  contains  the name and address of the  Purchaser,
the Association shall mail or deliver to a Purchaser within seven (7) days after
receipt of the notice a written statement setting forth the amount of the Common
Expense Assessment for the Unit and any unpaid Common Expense Assessment, fee or
charge  currently  due from the  selling  Unit Owner,  together  with such other
information as may be required under the  Condominium  Act. The  Association may
charge the Unit Owner a reasonable fee in an amount  established by the Board of
Directors for each such statement.

            7.8 NO OFFSETS.  All Assessments,  monetary penalties and other fees
and  charges  shall  be  payable  in  accordance  with  the  provisions  of this
Declaration,  and no offsets against such  Assessments,  monetary  penalties and
other fees and charges  shall be permitted  for any reason,  including,  without
limitation,  a claim that the Association is not properly  exercising its duties
and powers as provided in the  Condominium  Documents or the  Condominium Act or
that insufficient revenue is being generated by the Hotel Operator.

            7.9 RESERVE FUND. To assist the Association in maintaining  adequate
funds to pay any hotel operation expenses and to establish  appropriate reserves
therefor,  each  Purchaser  of a  Unit  from  the  Declarant  shall  pay  to the
Association,  immediately upon becoming the Unit Owner of the Unit, an operating
cash reserve  fund payment  equal to $250,000  multiplied  times the  Percentage
Interest attributable to the Unit as such amount is set forth on EXHIBIT "B" for
each Unit.  Such amount  shall not be  considered  as an advance  payment of any
Assessments  levied  by  the  Association  pursuant  to  this  Declaration.  The
Association shall make such reserve fund payment available to the Hotel Operator
following the first year's operation of the Hotel to apply against any operating
cash required to be funded by the Unit Owners  pursuant to the term of the Hotel
Operating and Rental Pool Agreement.

            7.10 SURPLUS FUNDS. Surplus funds of the Association remaining after
payment  of or making  provisions  for  Common  Expenses  and  establishing  any
reserves may in the  discretion of the Board of Directors  either be returned to
the Unit Owners pro rata in  accordance  with each Unit Owner's  Common  Expense
Liability  or be  credited on a pro rata basis to the Unit Owners to reduce each
Unit  Owner's  future  Common  Expense  Assessments  or  may  be  added  to  any
contingency or other reserve funds maintained by the Association.

            7.11 MONETARY PENALTIES. In accordance with the procedures set forth
in the Bylaws,  the Board of Directors  shall have the right to levy  reasonable
monetary  penalties  against a Unit  Owner  for  violations  of the  Condominium
Documents.

            7.12 TRANSFER  FEE.  Each  Purchaser  of a  Unit  shall  pay to the
Association  immediately  upon  becoming the Owner of the Unit a transfer fee in
such amount as is established from time to time by the Board of Directors.

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<PAGE>

            7.13 ADDITIONAL   RESERVES.   The  Association  may  establish  and
maintain,  from Common Expense  Assessments,  additional reserves to provide for
the replacement and capital repairs of the Common  Elements,  Unit  Furnishings,
Hotel   Furnishings  and  other   Improvements  to  the  Condominium  which  the
Association is obligated to repair, maintain and replace. In determining whether
to  establish  such  reserves  and the  amount  of such  reserves,  the Board of
Directors may take into account the reserves provided for in SECTION 7.9 and any
other reserves established by the Hotel Operator pursuant to the Hotel Operating
and Rental  Pool  Agreement  which are  established  for similar  purposes.  The
Association may make such additional reserves available to the Hotel Operator in
order to enable the Hotel  Operator  to comply  with its  obligations  under the
Hotel  Operating  and Rental Pool  Agreement to repair or replace  Improvements,
Unit Furnishings and Hotel Furnishings.

            7.14 HOTEL OPERATING REVENUES. Notwithstanding anything contained in
this ARTICLE 7 to the contrary,  all or any portion of  distributions  otherwise
due and payable to a Unit Owner pursuant to the Hotel  Operating and Rental Pool
Agreement  may be  collected by the  Association  from the Hotel  Operator  upon
demand and may be used by the  Association  to pay and offset against all or any
portion of the  Assessments  or other amounts due and payable by such Unit Owner
pursuant to this Declaration. The foregoing shall not, however, relieve any such
Unit Owner of its obligation to pay  Assessments or any  deficiencies  resulting
after the  application  of  revenues  from the Hotel  Operating  and Rental Pool
Agreement.

            7.15 UNIT TAXES.  Each Unit Owner shall be responsible  for all real
estate taxes  attributable to its Unit and all income,  sales,  use,  privilege,
bed,  lodging and other taxes  attributable  to any revenue  earned by such Unit
Owner in connection  with  participating  in the rental pool  arrangement or any
other income produced  relative to its respective  Unit. It is anticipated  that
the Hotel Operator will file and remit to the appropriate  governmental agencies
the sales,  use,  privilege,  bed or lodging taxes applicable to the rental pool
arrangement.

            7.16 UTILITIES.  Utility usage shall be considered a Common  Expense
and as such shall be governed by the  provisions of SUBSECTION  7.1 and 7.2.

                                    ARTICLE 8

                                    INSURANCE

            8.1 SCOPE OF COVERAGE.

                    8.1.1  Commencing  not  later  than  the  date of the  first
conveyance of a Unit to a Purchaser,  the  Association  shall  maintain,  to the
extent reasonably  available,  the following  insurance  coverage from generally
acceptable insurance carriers:

                          (i)  Property  insurance on  the Common  Elements and
Units,  including Hotel  Furnishings  and Unit  Furnishings but exclusive of all
other personal  property of Unit Owners,  issued under a standard form "All Risk

                                       29
<PAGE>

of Direct  Physical  Loss  Form" in an  amount  equal to the  maximum  insurable
replacement  value of the Common  Elements and Units, as determined by the Board
of  Directors;  provided,  however  that the  total  amount of  insurance  after
application of any deductibles shall not be less than one hundred percent (100%)
of the current  replacement  cost of the insured  property,  exclusive  of land,
excavations,  foundations  and other  items  normally  excluded  from a property
insurance policy.

                          (ii)  Broad  form  comprehensive  general liability  
insurance,  for a  limit  to be  determined  by the  Board,  but not  less  than
$1,000,000.00  for  any  single  occurrence.  Such  insurance  shall  cover  all
occurrences  commonly  insured  against for death,  bodily  injury and  property
damage arising out of or in connection with the use, ownership or maintenance of
the Common  Elements.  Such policy shall include (i) a cross liability clause to
cover  liabilities  of the Unit Owners as a group to a Unit Owner,  (ii) medical
payments  insurance and contingent  liability coverage arising out of the use of
hired and nonowned automobiles,  and (iii) coverage for any legal liability that
results from lawsuits  related to employment  contracts to which the Association
is a party.

                          (iii) Worker's  compensation  insurance to  the extent
necessary to meet the requirements of the laws of Arizona.

                          (iv)  Directors'  and officers'  liability  insurance 
covering all the directors and officers of the Association in such limits as the
Board of Directors may determine from time to time.

                          (v)   Such other  insurance as the  Association  shall
determine from time to time to be appropriate  to protect the  Association,  the
members of the Board of Directors,  the members of any committee or the Board of
Directors or the Unit Owners.

                          (vi)  The  insurance  policies  purchased  by  the 
Association  shall, to the extent  reasonably  available,  contain the following
provisions:

                                (a) Each Unit Owner shall be an insured  under 
the  policy  with  respect  to  liability  arising  out of his  ownership  of an
undivided interest in the Common Elements or membership in the Association.

                                (b) There shall be no subrogation  with  respect
to the Association,  its agents, servants, and employees against Unit Owners and
members of their household.

                                (c)  No act or  omission by any Unit Owner shall
void the policy or be a condition  to recovery on the policy.

                                (d)  The  coverage  afforded  by  such  policy  
shall be primary and shall not be brought into  contribution  or proration  with
any  insurance  which may be  purchased  by Unit Owners or their  mortgagees  or
beneficiaries under deeds of trust.

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<PAGE>

                                (e)  A "severability  of  interest"  endorsement
which shall  preclude the insurer from denying the claim of a Unit Owner because
of the negligent acts of the Association or other Unit Owners.

                                (f)  The  Association  shall  be  the  insured  
for use  and  benefit  of the  individual  Unit  Owners  (designated  by name if
required by the insurer).

                                (g)  For  policies of  hazard  insurance,  a 
standard  mortgagee clause providing that the insurance carrier shall notify the
Association  and each First  Mortgagee  named in the policy at least thirty (30)
days in advance of the effective date of any  substantial  change in coverage or
cancellation of the policy.

                                (h)  Any insurance  trust agreement  will  be 
recognized by the insurer.

                          (vii)  Boiler  explosion  insurance  evidenced  by the
standard form of boiler machinery insurance policy and providing coverage in the
minimum amount of $50,000.00 per accident per location.

                          (viii) If the  Condominium is  located  in  an  area  
identified  by the  Secretary of Housing & Urban  Development  as an area having
special flood hazards,  a "blanket policy" of flood insurance on the Condominium
in the lesser of one hundred percent (100%) of the current  replacement  cost of
the Buildings and any other  property  covered on the required form of policy or
the maximum  limit of coverage  available  under the National  Insurance  Act of
1968, as amended.

                          (ix)   "Agreed  Amount"  and  "Inflation  Guard" 
endorsements.

                    8.1.2 If, at the time of a loss  insured  under an insurance
policy purchased by the Association, the loss is also insured under an insurance
policy purchased by a Unit Owner, the Association's policy shall provide primary
coverage.

            8.2 FIDELITY BONDS.

                    8.2.1 The Association  shall maintain blanket fidelity bonds
for all officers,  directors,  trustees and employees of the Association and all
other  persons  handling  or  responsible  for funds of or  administered  by the
Association including, but without limitation, officers, directors and employees
of any  management  agent  of the  Association,  whether  or  not  they  receive
compensation  for  their  services.  The  total  amount  of the  fidelity  bonds
maintained by the Association  shall be based upon the best business judgment of
the Board of Directors,  and shall not be less than the greater of the estimated
maximum funds, including reserve funds, in the custody of the Association or the
management  agent, as the case may be, at any given time during the term of each
bond, or the sum equal to three months aggregate  Common Expense  Assessments on
all Units plus reserve funds.  Fidelity bonds obtained by the  Association  must
also meet the following requirements:

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<PAGE>

                          (i)   The fidelity bonds shall name the Association as
an obligee;

                          (ii)  The bonds shall  contain  waivers by the issuers
of the bonds of all defenses based upon the exclusion of persons serving without
compensation from the definition of "employees" or similar terms or expressions;

                          (iii) The  bonds shall  provide that  they  may not be
cancelled or substantially  modified (including  cancellation from nonpayment of
premium)  without at least ten (10) days prior written notice to the Association
and each First Mortgagee.

                    8.2.2 The Association  shall require any management agent of
the  Association  to maintain  its own  fidelity  bond in an amount  equal to or
greater than the amount of the fidelity bond to be maintained by the Association
pursuant to SUBSECTION 8.2.1 of this  Declaration.  The fidelity bond maintained
by the  management  agent shall cover funds  maintained  in bank accounts of the
management agent and shall name the Association as an obligee.

            8.3 PAYMENT OF PREMIUMS.  Premiums for all insurance obtained by the
Association  pursuant to this ARTICLE shall be Common Expenses and shall be paid
for by the Association.

            8.4 INSURANCE  OBTAINED BY UNIT  OWNERS.  The issuance of insurance
policies to the  Association  pursuant to this ARTICLE  shall not prevent a Unit
Owner  from  obtaining  insurance  for its own  benefit  and at its own  expense
covering  its Unit,  its  personal  property and  providing  personal  liability
coverage.

            8.5 PAYMENT OF  INSURANCE  PROCEEDS.  Any loss  covered by property
insurance  obtained by the  Association in accordance with this ARTICLE shall be
adjusted with the Association and the insurance proceeds shall be payable to the
Association and not to any mortgagee or beneficiary  under a deed of trust.  The
Association  shall  hold any  insurance  proceeds  in trust for Unit  Owners and
lienholders as their  interests may appear,  and the proceeds shall be disbursed
and applied as provided for in A.R.S. ss.33-1253.

            8.6 CERTIFICATE  OF  INSURANCE.  An  insurer  that  has  issued  an
insurance policy pursuant to this ARTICLE shall issue  certificates or memoranda
of insurance to the Association  and, on written  request,  to any Unit Owner or
First  Mortgagee.  The insurer  issuing the policy shall not cancel or refuse to
renew it until  thirty (30) days after notice of the  proposed  cancellation  or
nonrenewal has been mailed to the  Association,  each Unit Owner, and each First
Mortgagee to whom a  certificate  or  memorandum of insurance has been issued at
their respective last known addresses.

            8.7 DELEGATION OF INSURANCE RESPONSIBILITY. The Association shall be
deemed  to have  complied  with its  obligations  under  this  ARTICLE  8 if the
insurance  required by the terms hereof is obtained by the Hotel  Operator.  Any
such  insurance  may include the Hotel  Operator as a named insured and any such
insurance may include business interruption  insurance to the extent required in
any Hotel Operating and Rental Pool Agreement.

                                       32
<PAGE>
                                    ARTICLE 9

                           RIGHTS OF FIRST MORTGAGEES

            9.1 NOTIFICATION  TO  FIRST   MORTGAGEES.   Upon  receipt  by  the
Association  of  a  written  request  from  a  First  Mortgagee  or  insurer  or
governmental  guarantor of a First  Mortgage  informing the  Association  of its
correct name and mailing  address and number or address of the Unit to which the
request relates,  the Association shall provide such Eligible Mortgage Holder or
Eligible Insurer or Guarantor with timely written notice of the following:

                    9.1.1  Any  condemnation  loss or any  casualty  loss  which
affects a material  portion of the  Condominium  or any Unit on which there is a
First Mortgage held,  insured or guaranteed by such Eligible  Mortgage Holder or
Eligible Insurer or Guarantor;

                    9.1.2 Any  delinquency  in the  payment  of  Assessments  or
charges  owed by a Unit  Owner  subject  to a First  Mortgage  held,  insured or
guaranteed by such Eligible  Mortgage Holder or Eligible Insurer or Guarantor or
any other default in the  performance by the Unit Owner of any obligation  under
the Condominium Documents,  which delinquency or default remains uncured for the
period of sixty (60) days;

                    9.1.3 Any lapse,  cancellation  or material  modification of
any insurance policy or fidelity bond maintained by the Association;

                    9.1.4 Any proposed  action  which  requires the consent of a
specified percentage of Eligible Mortgage Holders as set forth in SECTION 9.2 of
this Declaration.

            9.2 APPROVAL REQUIRED FOR AMENDMENT TO DECLARATION, ARTICLES OR 
                BYLAWS.

                    9.2.1 The  approval of  Eligible  Mortgage  Holders  holding
First  Mortgages  on Units  owned  by Unit  Owners  who have at least  fifty-one
percent  (51%) of the votes in the  Association  allocated to Unit Owners of all
Units  subject to First  Mortgages  held by Eligible  Mortgage  Holders shall be
required to add or amend any material provisions of the Declaration, ARTICLEs or
Bylaws which establish, provide for, govern or regulate any of the following:

                          (i)    Voting rights;

                          (ii)   Assessments, assessment liens or subordination 
of assessment liens;

                          (iii)  Reserves  for  maintenance,  repair  and 
replacement of Common Elements;

                          (iv)   Insurance or fidelity bonds;

                          (v)    Responsibility for maintenance and repairs;

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<PAGE>

                          (vi)   Expansion or  contraction  of the  Condominium,
or  the  addition,   annexation  or  withdrawal  of  property  to  or  from  the
Condominium;

                          (vii)  Boundaries of any Unit;

                          (viii) Reallocation  of interests  in  the  Common 
Elements or Limited Common Elements or rights to their use;

                          (ix)   Convertibility of Units into Common Elements or
of Common Elements into Units;

                          (x)    Use of the  Units for  other than Public Rental
Residential Use;

                          (xi)   Imposition of  any  restrictions  on  a  Unit 
Owner's right to sell or transfer its Unit;

                          (xii)  A  decision by  the  Association to  establish 
self-management when professional  management previously had been required by an
Eligible Mortgage Holder;

                          (xiii) Restoration  or  repair of  the  Condominium  
(after a hazard  damage or  partial  condemnation)  in a manner  other than that
specified in the Condominium Documents;

                          (xiv)  Any action to terminate the legal status of the
Condominium  after  substantial  destruction or condemnation occurs;

                          (xv)   Any  provisions which  expressly  benefit First
Mortgagees, Eligible Mortgage Holders or Eligible Insurers or Guarantors.

                    9.2.2 Any  action  to  terminate  the  legal  status of the
Condominium  for reasons other than  substantial  destruction or condemnation of
the  Condominium  must be approved by Eligible  Mortgage  Holders  holding First
Mortgages  on Units owned by Unit Owners who have at least  sixty-seven  percent
(67%) of the  votes in the  Association  allocated  to Unit  Owners of all Units
subject to First Mortgages held by Eligible Mortgage Holders.

                    9.2.3 Any First  Mortgagee who receives a written request to
approve additions or amendments to the Declaration, ARTICLEs or Bylaws, who does
not deliver or mail to the requesting  party a negative  response  within thirty
(30) days shall be deemed to have approved such request, provided the notice was
delivered by certified or registered mail, with a return receipt requested.

                    9.2.4 The  approvals  required by this SECTION 9.2 shall not
apply to amendments that may be executed by the Declarant in the exercise of its
Development Rights.

            9.3 RIGHT OF INSPECTION OF RECORDS.  Any Unit Owner, First Mortgagee
or Eligible Insurer or Guarantor will, upon written request, be entitled to: (i)
inspect the current copies of the Condominium  Documents and the books,  records

                                       34
<PAGE>

and financial  statements of the Association  during normal business hours; (ii)
receive  within  ninety  (90) days  following  the end of any fiscal year of the
Association,   an  audited  financial  statement  of  the  Association  for  the
immediately  preceding  fiscal  year of the  Association,  free of charge to the
requesting  party;  and (iii)  receive  written  notice of all  meetings  of the
Members of the  Association  and be permitted to designate a  representative  to
attend all such meetings.

            9.4 PRIOR WRITTEN APPROVAL OF FIRST  MORTGAGEES.  Except as provided
by  statute  in case of  condemnation  or  substantial  loss to the Units or the
Common Elements, unless at least two-thirds (2/3) of all First Mortgagees (based
upon one vote for each First  Mortgage  owned) or Unit  Owners  (other  than the
Declarant  or other  sponsor,  developer or builder of the  Condominium)  of the
Units have given their prior  written  approval,  the  Association  shall not be
entitled to:

                    9.4.1 By act or omission,  seek to abandon or terminate this
Declaration or the Condominium;

                    9.4.2 Change the pro rata  interest or  obligations  of any
individual  Unit for the  purpose  of:  (i)  levying  Assessments  or charges or
allocating distributions of hazard insurance proceeds or condemnation awards, or
(ii)  determining  the pro rata  share of  ownership  of each Unit in the Common
Elements;

                    9.4.3 Partition or subdivide any Unit;

                    9.4.4 By act  or  omission,  seek  to  abandon,  partition,
subdivide,  encumber,  sell or transfer  the Common  Elements.  The  granting of
easements for public utilities or for other public purposes  consistent with the
intended use of the Common  Elements  shall not be deemed a transfer  within the
meaning of this Subsection; or

                    9.4.5 Use hazard insurance  proceeds for losses to any Units
or the Common  Elements for any purpose  other than the repair,  replacement  or
reconstruction of such Units or the Common Elements.

Nothing  contained  in  this  SECTION  9.4  or  any  other  provisions  of  this
Declaration  shall be deemed to grant the Association the right to partition any
Unit  without the consent of the Unit Owners  thereof.  Any  partition of a Unit
shall be  subject  to such  limitations  and  prohibitions  as may be set  forth
elsewhere in this Declaration or as provided under Arizona law.

            9.5 CONDEMNATION OR INSURANCE PROCEEDS.  No Unit Owner, or any other
Person,  shall have priority over any rights of any First  Mortgagee of the Unit
pursuant  to its  mortgage in the case of a  distribution  to such Unit Owner of
insurance  proceeds  or  condemnation  awards for losses to or a taking of Units
and/or Common Elements.

            9.6 LIMITATION  ON  PARTITION  AND  SUBDIVISION.  No Unit  shall be
partitioned  or subdivided  without the prior written  approval of the Holder of
any First Mortgage on such Unit.

                                       35
<PAGE>

            9.7 CONFLICTING  PROVISIONS.  In  the  event  of  any  conflict  or
inconsistency  between the provisions of this ARTICLE and any other provision of
the  Condominium  Documents,  the  provisions  of this  ARTICLE  shall  prevail;
provided,  however,  that in the event of any conflict or inconsistency  between
the different SECTIONs of this ARTICLE or between the provisions of this ARTICLE
and any other provision of the Condominium  Documents with respect to the number
or percentage of Unit Owners,  First  Mortgagees,  Eligible  Mortgage Holders or
Eligible  Insurers or  Guarantors  that must  consent to (i) an amendment of the
Declaration, ARTICLEs or Bylaws, (ii) a termination of the Condominium, or (iii)
certain  actions of the Association as specified in SECTIONs 9.2 and 9.4 of this
Declaration,  the  provision  requiring  the consent of the  greatest  number or
percentage  of Unit  Owners,  First  Mortgagees,  Eligible  Mortgage  Holders or
Eligible  Insurers or Guarantors  shall  prevail;  provided,  however,  that the
Declarant,  without  the  consent  of any Unit  Owner or First  Mortgagee  being
required, shall have the right to amend this Declaration, the Plat, the ARTICLEs
or the Bylaws as set forth in SECTION 11.5.3.


                                   ARTICLE 10

                        RESERVATION OF DEVELOPMENTAL AND
                           SPECIAL DECLARANT'S RIGHTS

            Pursuant  to the  Condominium  Act,  Declarant  reserves  all of the
development  and special  declarant  rights in the  Condominium  afforded  under
A.R.S.  ss.ss.33-1202(14)  and (21),  respectively,  subject  to the  expiration
deadlines  set forth  below.  Specifically,  but without  limitation,  Declarant
reserves the following rights:

            10.1 DEVELOPMENTAL  RIGHTS.  Declarant hereby reserves,  during the
Period of Declarant Control, all Development Rights under A.R.S. ss.33-1202(14).

            10.2 RIGHT TO  COMPLETE  IMPROVEMENTS  AND  CONSTRUCTION  EASEMENT.
Declarant  hereby  reserves the right,  for a period of five (5) years following
the  recordation  of  this   Declaration,   to  complete  the   construction  of
Improvements  on  the  Condominium,   and  an  easement  over  and  through  the
Condominium,  including  all Common  Elements,  for the purpose of doing so. Any
damage caused to a Unit or the Common Elements by Declarant or its agents in the
use or exercise of such right  and/or  easement  shall be repaired by and at the
expense of Declarant.

            10.3 OFFICES,  MODEL UNITS AND PROMOTIONAL SIGNS. Declarant reserves
the right to maintain offices for sales and management and models as provided in
SECTION 3.4 above,  and to maintain signs on the Common  Elements for so long as
Declarant owns one or more Units and is actively marketing the Units for sale.

            10.4 APPOINTMENT  AND REMOVAL OF DIRECTORS AND OFFICERS.  Declarant
reserves the right to appoint and remove any officer of the  Association  or any
member of the Board of Directors as set forth in SECTION 6.2 above, for the time
period set forth therein.

                                       36
<PAGE>
                                   ARTICLE 11

                               GENERAL PROVISIONS

            11.1 ENFORCEMENT.  The  Association, or any  Unit Owner, shall have 
the right to enforce,  by any proceeding at law or in equity,  all restrictions,
conditions, covenants,  reservations, liens and charges now or hereafter imposed
by the provisions of the Condominium Documents. Failure by the Association or by
any  Unit  Owner  to  enforce  any  covenant  or  restriction  contained  in the
Condominium Documents shall in no event be deemed a waiver of the right to do so
thereafter.

            11.2 SEVERABILITY.  Invalidation  of any one of these  covenants or
restrictions  by judgment  or court  order  shall in no way  affect  any  other
provisions which shall remain in full force and effect.

            11.3 DURATION. The covenants and  restrictions of this  Declaration
shall  continue  in full force and effect and run with and bind the  Condominium
until terminated in accordance with the provisions of SECTION 11.4.

            11.4 TERMINATION OF CONDOMINIUM.  The Condominium may be terminated
only in the manner provided for in the Condominium Act.

            11.5 AMENDMENT.

                    11.5.1 Except in cases of amendments that may be executed by
a  Declarant  in  the  exercise  of  its  Development  Rights  or  under  A.R.S.
ss.33-1220,  by the Association under A.R.S.  ss.ss.33-1206 or 33-1216(D), or by
certain  Unit  Owners  under  A.R.S.   ss.ss.33-1218(B),   33-1222,  33-1223  or
33-1228(B), or in cases where a higher percentage is required by the Condominium
Act, the  Declaration,  including the Plat, may be amended only by a vote of the
Unit  Owners  to which at least  sixty-seven  percent  (67%) of the votes in the
Association are allocated.

                    11.5.2 An amendment to the  Declaration  shall not terminate
or decrease any unexpired  Development Right,  Special Declarant Right or Period
of Declarant Control unless the Declarant approves the amendment in writing.

                    11.5.3 During the Period of Declarant Control, the Declarant
shall have the right to amend the Declaration, including the Plat, to (i) comply
with the Condominium  Act or any other  applicable law if the amendment does not
adversely  affect  the  rights  of any Unit  Owner,  (ii)  correct  any error or
inconsistency  in the Declaration if the amendment does not adversely affect the
rights of any Unit Owner,  (iii) comply with the rules or  guidelines  in effect
from time to time of any  governmental or  quasi-governmental  entity or federal
corporation  guaranteeing or insuring  mortgage loans or governing  transactions
involving mortgage instruments,  including without limitation,  the VA, the FHA,
the FNMA or the FHLMC, or (iv) the rules or  requirements of any federal,  state

                                       37
<PAGE>

or local  governmental  entity or agency whose approval of the Condominium,  the
Plat or the Condominium Documents is required by law or requested by Declarant.

                    11.5.4 To the extent that any First Mortgages insured by the
FHA or  guaranteed  by the VA are  held  on  any of the  Units  at the  time  of
amendment,  and to the extent that it is required by any  regulations  governing
FHA/VA mortgages,  during the Period of Declarant Control,  any amendment to the
Declaration or the Plat must be approved by the VA or the FHA.

                    11.5.5 Any amendment  adopted by the Unit Owners pursuant to
SUBSECTION  11.5.1 of this Declaration  shall be signed by the President or Vice
President of the  Association  and shall be recorded with the County Recorder of
each  County  in which any  portion  of the  Condominium  is  located.  Any such
amendment shall certify that the amendment has been approved as required by this
SUBSECTION  11.5.5.  Any amendment made by the Declarant  pursuant to SUBSECTION
11.5.3 of this  Declaration  or the  Condominium  Act shall be  executed  by the
Declarant and shall be recorded with the County Recorder of each County in which
any portion of the Condominium is located.

            11.6 REMEDIES CUMULATIVE.  Each  remedy  provided  herein is 
cumulative and not exclusive.

            11.7 NOTICES.   All   notices,   demands,   statements   or  other
communications  required  to be given to or served on a Unit  Owner  under  this
Declaration  shall be in writing and shall be deemed to have been duly given and
served if delivered  personally or sent by United States mail,  postage prepaid,
return receipt requested,  addressed to the Unit Owner, at the address which the
Unit Owner shall  designate in writing and file with the  Association  or, if no
such  address is  designated,  at the address of the Unit of such Unit Owner.  A
Unit Owner may change his  address on file with the  Association  for receipt of
notices by delivering a written  notice of change of address to the  Association
pursuant  to this  SECTION  11.7.  A  notice  given by  mail,  whether  regular,
certified, or registered, shall be deemed to have been received by the person to
whom the notice was  addressed on the earlier of the date the notice is actually
received  or three days  after the notice is mailed.  If a Unit is owned by more
than one person, notice to one of the Unit Owners shall constitute notice to all
Unit Owners of the same Unit.  Each Unit Owner  shall file its  correct  mailing
address with the  Association,  and shall  promptly  notify the  Association  in
writing of any subsequent change of address.

            11.8 BINDING  EFFECT.  By  acceptance  of a deed or by acquiring any
ownership interest in any portion of the Condominium,  each Person, for himself,
his heirs, personal representatives,  successors, transferees and assigns, binds
himself,  his  heirs,  personal  representatives,  successors,  transferees  and
assigns, to all of the provisions,  restrictions,  covenants, conditions, rules,
and  regulations now or hereafter  imposed by the Condominium  Documents and any
amendments  thereof.  In  addition,   each  such  Person  by  so  doing  thereby
acknowledges  that the Condominium  Documents set forth a general scheme for the
improvement  and  development  of the real property  covered  thereby and hereby
evidences  his  intent  that  all  the  restrictions,   conditions,   covenants,
easements,  rules and regulations  contained in the Condominium  Documents shall
run with the land and be  binding on all  subsequent  and  future  Unit  Owners,
grantees, purchasers, assignees, and transferees thereof. Furthermore, each such

                                       38
<PAGE>

person fully understands and acknowledges  that the Condominium  Documents shall
be mutually  beneficial,  prohibitive and enforceable by the various  subsequent
and future  Unit  Owners.  Declarant,  its  successors,  assigns  and  grantees,
covenants and agrees that no Unit and the membership in the  Association and the
other rights created by the Condominium  Documents related to such Unit shall be
separated or separately conveyed,  and such membership and other rights shall be
deemed to be conveyed or  encumbered  with the  respective  Unit even though the
description in the instrument of conveyance or encumbrance may refer only to the
Unit.

            11.9  GENDER. The singular, wherever used in this Declaration, shall
be construed to mean the plural when applicable,  and the necessary  grammatical
changes  required to make the  provisions  of this  Declaration  apply either to
corporations or individuals,  or men or women,  shall in all cases be assumed as
though in each case fully expressed.

            11.10 TOPIC  HEADINGS.  The  marginal  or topical  headings  of the
SECTIONs  contained  in this  Declaration  are for  convenience  only and do not
define, limit or construe the contents of the SECTIONs or of this Declaration.

            11.11 SURVIVAL OF LIABILITY.  The  termination of membership in the
Association  shall not  relieve or release  any such former Unit Owner or Member
from any liability or obligation  incurred  under, or in any way connected with,
the Association during the period of such ownership or membership, or impair any
rights or remedies which the Association may have against such former Unit Owner
or Member  arising  out of, or in any way  connected  with,  such  ownership  or
membership and the covenants and obligations incident thereto.

            11.12 CONSTRUCTION.   In   the   event   of   any   discrepancies,
inconsistencies  or conflicts between the provisions of this Declaration and the
ARTICLEs,  Bylaws or the Association  Rules,  the provisions of this Declaration
shall prevail.

            11.13 JOINT AND SEVERAL LIABILITY. In the case of joint ownership of
a Unit,  the  liabilities  and  obligations of each of the joint Unit Owners set
forth in, or imposed by, the Condominium Documents shall be joint and several.

            11.14 GUESTS AND TENANTS.  Each Unit Owner shall be responsible  for
compliance  by his  agents,  tenants,  guests,  invitees,  licensees  and  their
respective   servants,   agents,  and  employees  with  the  provisions  of  the
Condominium  Documents.  A Unit  Owner's  failure to insure  compliance  by such
Persons shall be grounds for the same action available to the Association or any
other  Unit   Owner  by  reason  of  such  Unit   Owner's   own   noncompliance.
Notwithstanding  the foregoing,  no Unit Owner shall be responsible for the acts
or omissions of any Guest who may occupy the Unit Owner's Unit.

            11.15 ATTORNEYS'  FEES. In the event the Declarant,  the Association
or any Unit  Owner  employs an  attorney  or  attorneys  to enforce a lien or to
collect  any  amounts  due from a Unit  Owner or to enforce  compliance  with or
recover  damages  for  any  violation  or  noncompliance  with  the  Condominium

                                       39
<PAGE>

Documents,  the prevailing party in any such action shall be entitled to recover
from the other party his reasonable attorneys' fees incurred in the action.

            11.16 NUMBER OF DAYS.  In computing  the number of days for purposes
of any  provision  of the  Condominium  Documents,  all days  shall  be  counted
including Saturdays,  Sundays and holidays; provided, however, that if the final
day of any time period falls on a Saturday, Sunday or holiday, then the next day
shall be deemed to be the next day which is not a Saturday, Sunday or holiday.

            11.17 DECLARANT'S RIGHT TO USE SIMILAR NAME. The Association  hereby
irrevocably consents to the use by any other nonprofit  corporation which may be
formed or  incorporated  by Declarant  of a corporate  name which is the same or
deceptively  similar to the name of the  Association  provided one or more words
are  added  to the  name of such  other  corporation  to  make  the  name of the
Association distinguishable from the name of such other corporation. Within five
(5) days after being requested to do so by the Declarant,  the Association shall
sign such letters, documents or other writings as may be required by the Arizona
Corporation  Commission in order for any other nonprofit  corporation  formed or
incorporated  by the  Declarant  to use a  corporate  name  which is the same or
deceptively similar to the name of the Association.

            11.18 NOTICE OF VIOLATION.  The Association  shall have the right to
record a written  notice of a violation by any Unit Owner of any  restriction or
provision  of the  Condominium  Documents.  The  notice  shall be  executed  and
acknowledged by an officer of the  Association  and shall contain  substantially
the  following  information:  (i) the name of the  Unit  Owner;  (ii) the  legal
description  of the Unit  against  which the notice is being  recorded;  (iii) a
brief  description  of the nature of the  violation;  (iv) a statement  that the
notice is being recorded by the Association  pursuant to this  Declaration;  and
(v) a statement of the  specific  steps which must be taken by the Unit Owner to
cure the violation. Recordation of a Notice of Violation shall serve as a notice
to the Unit Owner and to any  subsequent  purchaser  of the Unit that there is a
violation  of the  provisions  of  the  Condominium  Documents.  If,  after  the
recordation  of such  notice,  it is  determined  by the  Association  that  the
violation  referred to in the notice does not exist or that the actual violation
referred to in the notice has been cured, the Association  shall record a notice
of compliance which shall state the legal  description of the Unit against which
the  Notice of  Violation  was  recorded,  the  recording  data of the Notice of
Violation,  and shall  state  that the  violation  referred  to in the notice of
violation has been cured, or if such be the case, that it did not exist.

            11.19 NO  ABSOLUTE  LIABILITY.  No  provision  of  the  Condominium
Documents  shall be  interpreted  or  construed  as  imposing  on any Unit Owner
absolute  liability for damage to the Common Elements or the Units. A Unit Owner
shall only be responsible  for damage to the Common  Elements or Units caused by
such Unit Owner's negligence or intentional acts.

                                       40
<PAGE>

                                          UP Sedona, Inc.,
                                          an Arizona corporation


                                          By: William S. Oliver
                                             -----------------------------
                                          Name: /s/ William S. Oliver
                                               ---------------------------
                                          Its: President
                                              ----------------------------


STATE OF ARIZONA      }
                      } ss.
County of Maricopa    }


          The  foregoing  instrument  was  acknowledged  before me this 24th day
of October, 1997, by William S. Oliver, the President of UP Sedona, Inc.,  an  
Arizona corporation, on behalf of the corporation.


                                             /s/ Stacia M. Poirier
                                             -----------------------------
                                             Notary Public

                                             My commission expires: May 27, 2001
                                                                   -------------


                                       41
<PAGE>
                                    EXHIBIT A


             Legal Description of Property Submitted to Condominium


A portion of the  Northeast  quarter of Section 24,  Township 16 North,  Range 5
East of the Gila and Salt River Base and Meridian, Yavapai County, Arizona, more
particularly described as follows:

COMMENCING at the Northeast corner of said Section 24;
thence North 89 degrees  54  minutes  13 seconds  West along the North line of
       said Section,  799.11 feet to the TRUE POINT OF  BEGINNING,  said point
       lying on the South line of RIDGEVIEW as recorded in Book 13 of Maps and
       Plots, Page 35 of Records of Yavapai County;
thence departing said North line,  South 10 degrees 56 minutes 23 seconds West
       320.00  feet,  to a point on a curve the radius of which bears South 10
       degrees 04 minutes 30 seconds East 60.50 feet;
thence Southeasterly  along the arc said  curve  through a central  angle of 63
       degrees  29 minutes  38 second a  distance  of 67.05 feet  to a  point 
       of  tangency;
thence South 36 degrees 34 minutes 52 seconds East 230.39 feet;  
thence South 00 degrees 21  minutes 42 seconds  West  137.06  feet;  
thence North 89 degrees 51 minutes 40  seconds  West  149.11  feet;  
thence South 86 degrees 46 minutes 34 seconds West 440.73  feet to a  point on 
       the Easterly  line of AMENDMENT  NO. 1 TO THE RIDGE AT SEDONA as recorded
       on Book 23 of Maps & Plots,  Pages 85--88 of Records of Yavapai County, 
       the following courses will follow said Easterly line until otherwise  
       mentioned;  
thence North 00 degrees 21 minutes 42 seconds  East 370.00  feet;
thence South 89 degrees 43 minutes  59  seconds  East  21.99  feet;  
thence North 00 degrees 21 minutes 53 seconds  East 60.94  feet;  
thence North 89 degrees 31 minutes 27 seconds  West 21.97 feet;  
thence North 00 degrees 20 minutes 34 seconds East 253.94 feet to a point on the
       North line of said  Section 24;  
thence South 89 degrees 54 minutes 13  seconds  East  along  said  North  line  
       450.00  feet to the  TRUE  POINT OF BEGINNING.


                                      A-1
<PAGE>
                                    EXHIBIT B

                    SEDONA GOLF RESORT AND CONFERENCE CENTER
                                                                       OPERATING
UNIT               UNIT             UNIT          PERCENTAGE             CASH
NUMBER             TYPT          DESCRIPTION       INTEREST             RESERVE
------             ----          -----------       --------             -------
1008               OB 1             1 BED           0.448353%           $1,121
1009               ST 1             STUDIO          0.378533%             $946
1010               OB 1             1 BED           0.448353%           $1,121
1011               EX 1             EXECUTIVE       0.436488%           $1,091
1012               OB 1             1 BED           0.448353%           $1,121
1013               EX 1             EXECUTIVE       0.436488%           $1,091
1014               OB 1             1 BED           0.448353%           $1,121
1015               OB 1             1 BED           0.448353%           $1,121
1016               OB 1             1 BED           0.448353%           $1,121
1017               OB 1             1 BED           0.448353%           $1,121
1018               OB 8             1 BED           0.455426%           $1,139
1019               OB 1             1 BED           0.448353%           $1,121
1020               OB 1             1 BED           0.448353%           $1,121
1021               OB 1             1 BED           0.448353%           $1,121
1022               OB 1             1 BED           0.448353%           $1,121
1023               OB 8             1 BED           0.455426%           $1,139
1024               ST 1             STUDIO          0.378533%             $946
1025               ST 1             STUDIO          0.378533%             $946
1026               OB 1             1 BED           0.448353%           $1,121
1027               OB 3             1 BED           0.455426%           $1,139
1028               OB 1             1 BED           0.448353%           $1,121
1030               OB 2             1 BED           0.455426%           $1,139
1032               OB 2             1 BED           0.455426%           $1,139
1034               OB 1             1 BED           0.448353%           $1,121
1035               OB 3             1 BED           0.455426%           $1,139
1036               OB 1             1 BED           0.448353%           $1,121
1037               ST 1             STUDIO          0.378533%             $946
1038               ST 1             STUDIO          0.378533%             $946
1039               OB 1             1 BED           0.448353%           $1,121
1040               OB 1             1 BED           0.448353%           $1,121
1041               ST 1             STUDIO          0.378533%             $946
1042               ST 1             STUDIO          0.378533%             $946
1043               OB 7             1 BED           0.455426%           $1,139
1044               OB 7             1 BED           0.455426%           $1,139
1052               EX 1             EXECUTIVE       0.436488%           $1,091
1053               ST 1             STUDIO          0.378533%             $946
1054               EX 1             EXECUTIVE       0.436488%           $1,091

                                      B-1
<PAGE>
                    SEDONA GOLF RESORT AND CONFERENCE CENTER
                                                                       OPERATING
UNIT               UNIT             UNIT          PERCENTAGE             CASH
NUMBER             TYPT          DESCRIPTION       INTEREST             RESERVE
------             ----          -----------       --------             -------
1055               EX 1             EXECUTIVE        0.436488%          $1,091
1056               OB 1             1 BED            0.448353%          $1,121
1057               EX 1             EXECUTIVE        0.436488%          $1,091
1058               OB 1             1 BED            0.448353%          $1,121
1059               OB 1             1 BED            0.448353%          $1,121
1060               OB 1             1 BED            0.448353%          $1,121
1061               OB 1             1 BED            0.448353%          $1,121
1062               OB 8             1 BED            0.455426%          $1,139
1063               OB 1             1 BED            0.448353%          $1,121
1064               OB 1             1 BED            0.448353%          $1,121
1065               OB 1             1 BED            0.448353%          $1,121
1066               OB 1             1 BED            0.448353%          $1,121
1067               OB 8             1 BED            0.455426%          $1,139
1068               ST 1             STUDIO           0.378533%            $946
1069               ST 1             STUDIO           0.378533%            $946
1070               OB 1             1 BED            0.448353%          $1,121
1071               OB 3             1 BED            0.455426%          $1,139
1072               OB 1             1 BED            0.448353%          $1,121
1074               OB 2             1 BED            0.455426%          $1,139
1076               OB 2             1 BED            0.455426%          $1,139
1078               OB 1             1 BED            0.448353%          $1,121
1079               OB 3             1 BED            0.455426%          $1,139
1080               OB 1             1 BED            0.448353%          $1,121
1081               ST 1             STUDIO           0.378533%            $946
1082               ST 1             STUDIO           0.378533%            $946
1083               OB 1             1 BED            0.448353%          $1,121
1084               OB 1             1 BED            0.448353%          $1,121
1085               ST 1             STUDIO           0.378533%            $946
1086               ST 1             STUDIO           0.378533%            $946
1087               OB 7             1 BED            0.455426%          $1,139
1088               OB 7             1 BED            0.455426%          $1,139
2003               OB 8             1 BED            0.468432%          $1,171
2005               OB 1             1 BED            0.461358%          $1,153
2006               OB 10            1 BED            0.461358%          $1,153
2007               ST 2             STUDIO           0.397015%            $993
2008               OB 1             1 BED            0.461358%          $1,153
2009               ST 1             STUDIO           0.391539%            $979
2010               OB 1             1 BED            0.461358%          $1,153
2011               OB 1             1 BED            0.461358%          $1,153

                                      B-2
<PAGE>
                    SEDONA GOLF RESORT AND CONFERENCE CENTER
                                                                     OPERATING
UNIT               UNIT             UNIT          PERCENTAGE           CASH
NUMBER             TYPT          DESCRIPTION       INTEREST           RESERVE
------             ----          -----------       --------            ------
2012               OB 1             1 BED          0.461358%           $1,153
2013               OB 1             1 BED          0.461358%           $1,153
2014               OB 1             1 BED          0.461358%           $1,153
2015               OB 1             1 BED          0.461358%           $1,153
2016               OB 1             1 BED          0.461358%           $1,153
2017               OB 1             1 BED          0.461358%           $1,153
2018               OB 8             1 BED          0.468432%           $1,171
2019               OB 1             1 BED          0.461358%           $1,153
2020               OB 1             1 BED          0.461358%           $1,153
2021               OB 1             1 BED          0.461358%           $1,153
2022               OB 1             1 BED          0.461358%           $1,153
2023               OB 8             1 BED          0.468432%           $1,171
2024               ST 1             STUDIO         0.391539%             $979
2025               ST 1             STUDIO         0.391539%             $979
2026               OB 1             1 BED          0.461358%           $1,153
2027               OB 3             1 BED          0.468432%           $1,171
2028               OB 1             1 BED          0.461358%           $1,153
2030               OB 2             1 BED          0.468432%           $1,171
2032               OB 2             1 BED          0.461358%           $1,153
2034               OB 1             1 BED          0.454285%           $1,136
2035               OB 3             1 BED          0.468432%           $1,171
2036               OB 1             1 BED          0.454285%           $1,136
2037               ST 1             STUDIO         0.391539%             $979
2038               ST 1             STUDIO         0.384465%             $961
2039               OB 1             1 BED          0.461358%           $1,153
2040               OB 1             1 BED          0.454285%           $1,136
2041               ST 1             STUDIO         0.391539%             $979
2042               ST 1             STUDIO         0.384465%             $961
2043               OB 7             1 BED          0.468432%           $1,171
2044               OB 7             1 BED          0.461358%           $1,153
2047               OB 8             1 BED          0.468432%           $1,171
2049               OB 1             1 BED          0.461358%           $1,153
2051               ST 2             STUDIO         0.397015%             $993
2052               OB 1             1 BED          0.454285%           $1,136
2053               ST 1             STUDIO         0.391539%             $979
2054               OB 1             1 BED          0.454285%           $1,136
2055               OB 1             1 BED          0.461358%           $1,153
2056               OB 1             1 BED          0.454285%           $1,136
2057               OB 1             1 BED          0.461358%           $1,153

                                      B-3
<PAGE>
                      SEDONA GOLF RESORT AND CONFERENCE CENTER
                                                                       OPERATING
UNIT               UNIT             UNIT          PERCENTAGE             CASH
NUMBER             TYPT          DESCRIPTION       INTEREST             RESERVE
------             ----          -----------       --------             -------

2058               OB 1             1 BED         0.454285%             $1,136
2059               OB 1             1 BED         0.461358%             $1,153
2060               OB 1             1 BED         0.454285%             $1,136
2061               OB 1             1 BED         0.461358%             $1,153
2062               OB 8             1 BED         0.461358%             $1,153
2063               OB 1             1 BED         0.461358%             $1,153
2064               OB 1             1 BED         0.454285%             $1,136
2065               OB 1             1 BED         0.461358%             $1,153
2066               OB 1             1 BED         0.454285%             $1,136
2067               OB 8             1 BED         0.468432%             $1,171
2068               ST 1             STUDIO        0.384465%               $961
2069               ST 1             STUDIO        0.391539%               $979
2070               OB 1             1 BED         0.454285%             $1,136
2071               OB 3             1 BED         0.461358%             $1,153
2072               OB 1             1 BED         0.454285%             $1,136
2074               OB 2             1 BED         0.468432%             $1,171
2076               OB 2             1 BED         0.468432%             $1,171
2078               OB 1             1 BED         0.461358%             $1,153
2079               OB 3             1 BED         0.461358%             $1,153
2080               OB 1             1 BED         0.461358%             $1,153
2081               ST 1             STUDIO        0.384465%               $961
2082               ST 1             STUDIO        0.391539%               $979
2083               OB 1             1 BED         0.454285%             $1,136
2084               OB 1             1 BED         0.461358%             $1,153
2085               ST 1             STUDIO        0.384465%               $961
2086               ST 1             STUDIO        0.391539%               $979
2087               OB 7             1 BED         0.461358%             $1,153
2088               OB 7             1 BED         0.468432%             $1,171
3001               ST 1             STUDIO        0.397471%               $994
3002               OB 1             1 BED         0.460218%             $1,151
3003               OB 8             1 BED         0.474364%             $1,186
3004               OB 1             1 BED         0.460218%             $1,151
3005               OB 1             1 BED         0.467291%             $1,168
3006               OB 10            1 BED         0.467291%             $1,168
3007               ST 2             STUDIO        0.402947%             $1,007
3008               OB 1             1 BED         0.467291%             $1,168
3009               ST 1             STUDIO        0.397471%               $994
3010               OB 1             1 BED         0.467291%             $1,168
3011               OB 1             1 BED         0.467291%             $1,168

                                      B-4
<PAGE>
                    SEDONA GOLF RESORT AND CONFERENCE CENTER
                                                                      OPERATING
UNIT               UNIT             UNIT          PERCENTAGE            CASH
NUMBER             TYPT          DESCRIPTION       INTEREST            RESERVE
------             ----          -----------       --------            -------
3012               OB 1             1 BED          0.467291%           $1,168
3013               OB 1             1 BED          0.467291%           $1,168
3014               OB 1             1 BED          0.467291%           $1,168
3015               OB 1             1 BED          0.467291%           $1,168
3016               OB 1             1 BED          0.467291%           $1,168
3017               OB 1             1 BED          0.467291%           $1,168
3018               OB 8             1 BED          0.474364%           $1,186
3019               OB 1             1 BED          0.467291%           $1,168
3020               OB 1             1 BED          0.467291%           $1,168
3021               OB 1             1 BED          0.467291%           $1,168
3022               OB 1             1 BED          0.467291%           $1,168
3023               OB 8             1 BED          0.474364%           $1,186
3024               ST 1             STUDIO         0.397471%             $994
3025               ST 1             STUDIO         0.397471%             $994
3026               OB 1             1 BED          0.467291%           $1,168
3027               OB 3             1 BED          0.474364%           $1,186
3028               OB 1             1 BED          0.467291%           $1,168
3030               OB 2             1 BED          0.474364%           $1,186
3032               OB 2             1 BED          0.467291%           $1,168
3034               OB 1             1 BED          0.460218%           $1,151
3035               OB 3             1 BED          0.474364%           $1,186
3036               OB 1             1 BED          0.460218%           $1,151
3037               ST 1             STUDIO         0.397471%             $994
3038               ST 1             STUDIO         0.390398%             $976
3039               OB 1             1 BED          0.467291%           $1,168
3040               OB 1             1 BED          0.460218%           $1,151
3041               ST 1             STUDIO         0.397471%             $994
3042               ST 1             STUDIO         0.390398%             $976
3043               OB 7             1 BED          0.474364%           $1,186
3044               OB 7             1 BED          0.467291%           $1,168
3045               ST 1             STUDIO         0.397471%             $994
3046               OB 1             1 BED          0.460218%           $1,151
3047               OB 8             1 BED          0.474364%           $1,186
3048               OB 1             1 BED          0.460218%           $1,151
3049               OB 1             1 BED          0.467291%           $1,168
3050               OB 10            1 BED          0.460218%           $1,151
3051               ST 2             STUDIO         0.402947%           $1,007
3052               OB 1             1 BED          0.460218%           $1,151
3053               ST 1             STUDIO         0.397471%             $994

                                      B-5
<PAGE>
                    SEDONA GOLF RESORT AND CONFERENCE CENTER
                                                                       OPERATING
UNIT               UNIT             UNIT          PERCENTAGE             CASH
NUMBER             TYPT          DESCRIPTION       INTEREST             RESERVE
------             ----          -----------       --------             -------
3054               OB 1             1 BED          0.460218%             $1,151
3055               OB 1             1 BED          0.467291%             $1,168
3056               OB 1             1 BED          0.460218%             $1,151
3057               OB 1             1 BED          0.467291%             $1,168
3058               OB 1             1 BED          0.460218%             $1,151
3059               OB 1             1 BED          0.467291%             $1,168
3060               OB 1             1 BED          0.460218%             $1,151
3061               OB 1             1 BED          0.467291%             $1,168
3062               OB 8             1 BED          0.467291%             $1,168
3063               OB 1             1 BED          0.467291%             $1,168
3064               OB 1             1 BED          0.460218%             $1,151
3065               OB 1             1 BED          0.467291%             $1,168
3066               OB 1             1 BED          0.460218%             $1,151
3067               OB 8             1 BED          0.474364%             $1,186
3068               ST 1             STUDIO         0.390398%               $976
3069               ST 1             STUDIO         0.397471%               $994
3070               OB 1             1 BED          0.460218%             $1,151
3071               OB 3             1 BED          0.467291%             $1,168
3072               OB 1             1 BED          0.460218%             $1,151
3074               OB 2             1 BED          0.474364%             $1,186
3076               OB 2             1 BED          0.474364%             $1,186
3078               OB 1             1 BED          0.467291%             $1,168
3079               OB 3             1 BED          0.467291%             $1,168
3080               OB 1             1 BED          0.467291%             $1,168
3081               ST 1             STUDIO         0.390398%               $976
3082               ST 1             STUDIO         0.397471%               $994
3083               OB 1             1 BED          0.460218%             $1,151
3084               OB 1             1 BED         0.467291%              $1,168
3085               ST 1             STUDIO        0.390398%                $976
3086               ST 1             STUDIO        0.397471%                $994
3087               OB 7             1 BED         0.467291%              $1,168
3088               OB 7             1 BED         0.474364%              $1,186
TOTAL                                           100%                   $250,000

                                      B-6
<PAGE>

                                    EXHIBIT C

                     SEDONA GOLF RESORT & CONFERENCE CENTER

                             USE OF UNITS BY OWNERS

1.   DEFINITIONS. For the purposes of this EXHIBIT C:

     (a)  capitalized  terms used in this EXHIBIT C and not defined  herein have
          the meanings ascribed to such terms in the Declaration;

     (b)  "Day" means any period of 24  consecutive  hours,  commencing  at 2:00
          p.m. on any day and ending at 2:00 p.m. on the  immediately  following
          day;

     (c) "Public" means all persons other than the Unit Owner;

     (d)  "Registered  Owner" means the person shown in the Official  Records of
          Yavapai County, Arizona as owner in fee simple of the Unit;

     (e)  "Unit Owner" means the Registered  Owner and the spouse,  children and
          parents of such  Registered  Owner and the  parents of the  Registered
          Owner's spouse; and where there is more than one Registered Owner, all
          the  Registered  Owners and their spouses,  children,  parents and the
          parents of their spouses will together constitute the "Unit Owner" for
          the  Unit  and,  where  the  Registered  Owner  is  a  corporation  or
          corporations, all directors, officers,  shareholders and employees and
          the spouses, children and parents of corporations constitute the "Unit
          Owner"  for the  Unit;  and  "Unit  Owner"  will  include  any  person
          permitted  by any of the  foregoing  to Use the Unit  free of  charge,
          including an Exchange Program User;

     (f)  "Use"  includes  the  purpose to which the Unit is put,  and  includes
          reside, sleep, inhabit, or otherwise occupy;

     (g)  "Year" means a calendar year.

2.   SIX MONTH ADVANCE RESERVATIONS.

     (a)  A Unit Owner (other than an Exchange Program User) may reserve and Use
          its Unit for up to a  maximum  of 14 days per Year  provided  that the
          Registered Owner (or any other person permitted by the Hotel Operator,
          in its sole  discretion,  to reserve  the use of the Unit on behalf of
          the Unit  Owner)  first  reserves  the Use of the Unit by a notice  in
          writing  to the  Hotel  Operator  at  least  six  months  prior to the
          commencement  of the period in which the Unit Owner  wishes to Use the
          Unit.  In no event  may a Unit Owner  reserve the Use of any Unit more
          than  twelve (12) months in  advance of the commencement of the period
          in which the Unit Owner wishes to Use the Unit.

                                      C-1
<PAGE>

     (b)  If a Unit is reserved for a stay which commences at or after 2:00 p.m.
          on a Friday or a  Saturday,  the Unit must be  reserved  for Use for a
          minimum of 2 Days.  A Unit Owner may use the Unit no more than 4 times
          per Year  (including  any use  pursuant  to  Paragraph  3 below)  with
          respect to 2 or 3 Day stays that  commence  at or after 2:00 p.m. on a
          Friday or a Saturday.

     (c)  If the  Unit  Owner  (or  any  other  person  permitted  by the  Hotel
          Operator,  in its sole  discretion,  to reserve the Use of the Unit on
          behalf of the  Registered  Owner other than an Exchange  Program User)
          reserves  the Use of the Unit  pursuant to this  Paragraph 2, the Unit
          Owner  shall be entitled to Use such Unit during the period or periods
          so reserved  regardless  of whether the Hotel  Operator has accepted a
          reservation  from the Public for the Use of the Unit for the period or
          periods  reserved by the Registered  Owner. Use shall be in accordance
          with the applicable  provisions of the Hotel Operating and Rental Pool
          Agreement,  including  Section 10.3 of the Hotel  Operating and Rental
          Pool Agreement regarding payment for any services utilized by the Unit
          Owner and payment of any restocking/cleaning  charges. For purposes of
          determining  whether the Registered  Owner  participates in any rental
          pool provided for in the Hotel Operating and Rental Pool Agreement (or
          as operated by the Association,  if no Hotel Operating and Rental Pool
          Agreement  is in effect),  a  Registered  Owner will be deemed to have
          Used the Unit during the period or periods so reserved, whether or not
          the Unit Owner  actually  Uses or occupies the Unit during such period
          or periods  unless the Unit is available  for rental to the Public and
          at least 30 Days prior to the Unit Owner's  scheduled  Use of the Unit
          the Unit Owner  cancels  such  reservation,  with the  approval of the
          Hotel Operator, acting reasonably.

     (d)  If the Unit Owner does not Use the Unit for the full 14 Days permitted
          to be Used by the Unit Owner pursuant to this Paragraph 2 in any Year,
          the Unit Owner will not be entitled to accumulate or otherwise use the
          unused Days in any future Year.

     (e)  The Unit may only be reserved and Used for a total of 14 Days per Year
          pursuant to this  Paragraph 2,  regardless of the number of Registered
          Owners of the Unit or Unit Owners during such Year.

3.   FIFTEEN DAY ADVANCE  RESERVATION.  In addition to the  reservation  and Use
     rights set forth in Paragraph 2 above, a Unit Owner may reserve and Use the
     Unit under the following terms and conditions:

     (a)  The Unit Owner (other than an Exchange  Program User) may request that
          the Hotel Operator  reserve the Unit for Use by the Unit Owner no more
          than 15 Days prior to the date of requested Use.

     (b)  If less than 80% of the Units  available  for rental to the Public are
          booked  for all  Days  requested  as of the date  the  reservation  is

                                      C-2
<PAGE>

          requested and the Unit has not been  reserved for Use by a Guest,  the
          Unit shall be reserved for Use by the Unit Owner.

     (c)  Use shall be in accordance with the applicable provisions of the Hotel
          Operating  and Rental Pool  Agreement,  including  Section 10.3 of the
          Hotel  Operating and Rental Pool Agreement  regarding  payment for any
          services and payment of any restocking/cleaning charges.

     (d)  If a Unit is reserved for a stay which commences at or after 2:00 p.m.
          on a Friday or a  Saturday,  the Unit must be  reserved  for Use for a
          minimum of 2 Days.  A Unit Owner may Use the Unit no more than 4 times
          per Year  (including  any use  pursuant  to  Paragraph  2 above)  with
          respect to 2 or 3 Day stays that  commence  at or after 2:00 p.m. on a
          Friday or a Saturday.

     (e)  For purposes of determining  whether the Registered Owner participates
          in any rental pool provided for in the Hotel Operating and Rental Pool
          Agreement (or as operated by the  Association,  if no Hotel  Operating
          and Rental Pool Agreement is in effect),  the Registered Owner will be
          deemed to have Used the Unit for the Days so  reserved  whether or not
          the Unit Owner  actually  uses or  occupies  the Unit during such Days
          unless, at least 5 Days prior to the Unit Owner's scheduled Use of the
          Unit, the Unit Owner cancels such reservation with the approval of the
          Hotel Operator.

     (f)  The Unit may only be reserved and Used for a total of 14 Days per year
          pursuant to this  Paragraph 3,  regardless of the number of Registered
          Owners of the Unit or Unit Owners during such Year.

     (g)  If the Unit Owner does not Use the Unit for the full 14 Days permitted
          to be Used by the Unit Owner pursuant to this Paragraph 3 in any Year,
          the Unit Owner will not be entitled to accumulate or otherwise use the
          unused Days in any future Year.

     (h)  The  Registered  Owner  understands  that  there  may be  adverse  tax
          consequences  in  making  Use of the Unit for more than 14 Days a Year
          and neither  Declarant nor the Hotel Operator shall have any liability
          or  responsibility  for such tax  consequences if the Registered Owner
          exercises  its rights  under this  section  and Uses the Unit for more
          than 14 Days per Year.

     (i)  In no event  may a Unit Owner  reserve the Use of any Unit more than
          twelve (12) months in  advance of the commencement of the period in
          which the Unit Owner wishes to Use the Unit.

4.   Subject to the Use by the Unit Owners  pursuant to this EXHIBIT C, the Unit
     will be available at all times for rental to the Public; the Hotel Operator
     may  accept  reservations  from the  Public for the Use of the Unit for any
     future Day or Days,  unless the Registered  Owner has already reserved that
     Day or those Days pursuant to section 2 or 3 hereof.

                                    C-3
<PAGE>

        THERE ARE TAX  CONSEQUENCES  TO A  REGISTERED  OWNER  (SOME OF
        WHICH MAY BE ADVERSE)  THAT RESULT FROM THE USE OF A UNIT BY A
        UNIT  OWNER.  THE  REGISTERED  OWNER  SHOULD  CONSULT  ITS TAX
        ADVISOR  REGARDING  HOW THE USE OF THE  UNIT  MAY  AFFECT  THE
        REGISTERED OWNER'S TAX SITUATION.

THE  REGISTERED  OWNER IS  RESPONSIBLE  FOR MONITORING THE IMPACT ANY USE OF ITS
UNIT MAY HAVE ON THE REGISTERED  OWNER'S TAXES.  NEITHER DECLARANT NOR THE HOTEL
OPERATOR SHALL HAVE ANY LIABILITY OR RESPONSIBILITY  FOR THE TAX CONSEQUENCES TO
A REGISTERED  OWNER  RESULTING FROM THE USE OF THE REGISTERED  OWNER'S UNIT BY A
UNIT OWNER.






                                      C-4