1 spinnakerresorts.com Hilton Head Island, SC | Ormond Beach, FL | Branson, MO

Dear Spinnaker Owner,

Thank you for becoming a Spinnaker Resorts Owner and joining our over 40,000 other vacation Owners. We are committed to ensuring that your ownership and vacation experiences are the best they can possibly be. Whether you have purchased vacation time at a Spinnaker Resort in Hilton Head, S.C., Ormond Beach, FL., or Branson, MO., we are confident that you will be enjoying a lifetime of smooth sailing vacations. In addition to the information you received when you purchased your Spinnaker vacation, we wanted to remind you of the resources available to you - our new Owner. Spinnaker Owners’ Website You will be able to access the Owners’ site once your Owner Contract has been processed. You’ll find the most current Owner information on the secure Owners’ website, including vacation planning information and Spinnaker Rewards information. Vacation planning can be as easy as 1-2-3. If you have a loan, you can access Equiant Financial Online to view your account and make payments. Making Float Reservations As a new Owner, Spinnaker wants to ensure that your most important question is answered, “When and how can I book my float use reservation?”

o Hilton Head, SC and Branson, MO, and Royal Floridian South, FL Owners: You can book your float resort reservation 360 days before your desired check in day.

o Royal Floridian, FL Owners: You can book your float resort reservation 365 days before your desired check in day. Email your reservation requests to: res@spinnakerresorts.com

Exchange Memberships Spinnaker will pay for and enroll you into your purchased resorts respective Exchange Affiliation Membership so that you can enjoy the many benefits of our Exchange affiliates’ programs including exchange, extra vacations, car rental, vacation concierge and other programs. You will receive your Exchange Membership number from them within 60 and 90 business days. Help Us Go Green – Sign Up for “Paperless” Communications If you have an email address, we encourage you to forward it to addressupdate@spinnakerresorts.com so that you may receive your updates and communications via email. Join in our efforts to preserve our resources.

Again, thank you and congratulations. We look forward to providing you with many memorable and fun filled vacations with us! Regards, Owner Services Spinnaker Resorts (877) 842-3201

SPINNAKER

RESORTS

OWNER

PROGRAMS

SPINNAKER REWARDS

Earn additional vacations or offset

your vacation expenses

Participate in this loyalty / referral program

and earn Spinnaker Rewards Credits (SRCs)

that you can allocate however you desire.

EARN REWARDS: Submit referrals, add-on to

your vacation, rent a Spinnaker condominium /

stay at S.R Hotel.

ENJOY REWARDS: Save money by allocating

SRCs toward Association Fees, take additional

vacation – at a Spinnaker Resort, through

Exchange affiliates, or at S.R Hotel. Refer

to your Spinnaker Rewards Guide or email

rewards@spinnakerresorts.com for details.

Owner Programs are subject to change. Visit spinnakerresorts.com for current programs.

OWNER BONUS TIME

Treat yourself to additional

vacations with Owner’s only pricing

Plan incremental vacations at a different

Spinnaker location or add-on to your

designated ownership time and save

fifty percent (50%) off regular pricing for

reservation requests made thirty (30) days

prior to check-in date. Reservations may

be made even farther in advance for Hilton

Head Island and Branson (from November

1st through February 28th).

Refer to your Owner’s website

(under Owner Bonus Time) or email

res@spinnakerresorts.com for pricing

and conditions.

EXCHANGE BENEFITS

Spinnaker’s top resort exchange

Ratings provide greater exchange

opportunities

At Spinnaker we strive to maintain the

highest quality standards at our resorts for

your vacation enjoyment and satisfaction.

As a Spinnaker Owner, you automatically

have priority reservation privileges (over

non-Spinnaker exchange guests) at your

home resort and all Spinnaker properties.

Because Spinnaker Resorts have the

highest resort ratings / designations,

you can exchange to other top-rated

resorts worldwide.

1 spinnakerresorts.com Hilton Head Island, SC | Ormond Beach, FL | Branson, MO

OFFSET ASSOCIATION FEES

EARN EXTRA VACATIONS

Dear Spinnaker Vacation Owner,

As a Spinnaker Owner, you are entitled to the many benefits of Spinnaker Rewards.

Through Spinnaker Rewards, you can earn Spinnaker Rewards Credits (SRCs), which can save you money (offset

/cover your Association Fees), or be allocated toward additional vacations (short or long getaways at any Spinnaker

Resort or through II or RCI). Have a look through the Rewards Guide to understand all the ways you can earn and

redeem Rewards.

The easiest way to earn SRCs is through Referral submissions.

By introducing friends, family, and colleagues to the Spinnaker way of vacationing, you would be helping them improve

their lifestyle.

Refer those who share the same vacation goals as you - those who’d like to who’d like to:

Enjoy an economical way of vacationing

Ensure they vacation regularly (to promote and maintain good health)

Establish a tradition (to reconnect with significant other and/or family)

To submit Referrals, you can find Referral Forms on the Spinnaker website. Also, for your reference and use, all

Rewards information and forms reside on your Owners’ website under REWARDS.

You will have access the Owners’ site once your Owner Contract has been processed.

To access:

1. Go to spinnakerresorts.com , Click on OWNER LOGIN (top right corner)

2. Your login details will be:

I. Username: Owner ID/Email address

II. Password*: Zip Code/Postal Code

*For optimum security, we recommend changing your Password after your initial login.

Please contact us with any questions you have regarding your Spinnaker Rewards loyalty program, we’ll be pleased to

answer any questions you may have.

Sincerely,

Spinnaker Rewards

Phone: (888) 809-4054

rewards@spinnakerresorts.com

ROYAL FLORIDIAN

QUICK REFERENCE GUIDE

FLOATING USAGE GUIDE (pgs 1-3)

PROCEDURES FOR RESERVING USAGE (pgs 4-5)

BUDGET (pg 6)

RULES AND REGULATIONS (pgs 7-10)

PRIVACY ASSURANCE POLICY (pg 11)

ADDITIONAL INFORMATION IS AVAILABLE ON SPINNAKER’S WEBSITE

spinnakerresorts.com

VISIT THE OWNER WEBSITE

spinnakerresorts.com/main/owners

BOOK YOUR SPINNAKER VACATION TODAY!

res@spinnakerresorts.com

November 2016

Page 1

Royal Floridian

FLEXIBLE/FLOATING TIME USAGE GUIDE

Reservation requests will be confirmed on a first come, first served, availability basis. In the event an own-

er fails to obtain a confirmed reservation during a given use year, there will be no carryover of such owner’s

reservation rights to the succeeding use year. The earlier a reservation request is submitted, the better

chance that a reservation confirmation can be secured.

All Timeshare Intervals shall be subject to the use restriction of Floating Time, unless there is a clear and

specific intention otherwise stated in the deed to the purchaser of a Timeshare Interval or subsequently

“Fixed” pursuant to the Procedures for Reserving Usage, in which case usage shall be on a Fixed Time

basis. Through acceptance of a conveyance of a Floating Time Timeshare Interval, each Owner acknowl-

edges and agrees that, notwithstanding the specific Timeshare Interval owned, all Timeshare Intervals of the

same premium designation in similar Unit types shall be available for use by all Owners of such Timeshare

Intervals on a first come, first served, reservation basis, in accordance with the Procedures for Reserving

Usage. Notwithstanding the actual time each Day or Unit Week may begin, the Managing Entity has the

discretion to annually vary the beginning and ending day in any given Unit in order to further the collective

enjoyment of the use of the Component Site Timeshare Plan by Owners as a whole. No Owner of a Floating

Time Timeshare Interval shall have the right to use or occupy a Unit without first receiving a confirmed

reservation as provided in the Procedures for Reserving Usage. Owners of Biennial Unit Weeks shall not be

entitled to request and will not be granted a confirmed reservation for use of a Unit in any year other than

years of their Biennial Unit Weeks. The Managing Entity reserves the right, in its sole discretion, to amend

the Procedures for Reserving Usage as more specifically provided therein. Notwithstanding the foregoing,

however, the Managing Entity shall make no amendment to the Procedures for Reserving Usage which

would result in Owners competing for reservations on more than a one-to-one purchaser to accommodation

ratio, as defined in §721.05(23), Florida Statutes. As more specifically set forth in the Procedures for Re-

serving Usage, each Use Year, an Owner may reserve one Use Period of seven consecutive days for each

Unit Week owned. Reservation requests will be accepted up to one year prior to the requested check-in date

(thirteen months for multiple Unit Week Owners reserving concurrent or consecutive Use Periods), and will

be confirmed on a first come, first served, availability basis. Any Use Period not reserved by an Owner

prior to the first day of such Use Period may be reserved by the Association for its own use and benefit. Use

Periods may not be available for reservation or use by Owners, if the Association exercises this right, or if

an owner fails to make a reservation request; is unwilling to accept any available Use Periods; or if the

Owner's request cannot otherwise be confirmed. Subject to restrictions contained in the Procedures for Re-

serving Usage, the Managing Entity shall have the right, but not the obligation, to allow the reservation of

Use Periods of less than three consecutive days, as well as to implement a “banking” and/or “borrowing”

program and to establish wait and holiday request lists.

An Owner may cancel a confirmed reservation thirty (30) days or more days before check-in without penal-

ty, although there is no guarantee that another Use Period will be available for reservation by the Owner

during that Use Year. An Owner who cancels a confirmed reservation less than thirty (30) days before

check-in will not be permitted to reserve another Use Period in that Use Year. Pursuant to the Procedures

for Reserving Usage, the Managing Entity may impose a $35.00 administrative fee for each canceled reser-

vation. Reservation requests will be confirmed on a first come, first served, availability basis. In the event

an Owner fails to obtain a confirmed reservation during a given Use Year, there will be no carryover of

such Owner's reservation rights to the succeeding Use Year. The earlier a reservation request is submitted,

the better the chance that a reservation confirmation can be secured.

Page 2

FLOATING TIME USAGE GUIDE (Detailed)

Reservation Requests.

First Come, First Served. Reservation requests for a particular Interval or Partial Interval will be taken on a

first come, first served basis within each calendar year. To reserve a given Interval or Partial Interval on a

space available basis, the Owner or Principal Contact must call or mail a request to the Managing Entity (i)

no earlier than three hundred sixty-five (365) days and (ii) no later than seven (7) days, in advance of the

first day (the “Check-in Day”) of the Interval or Partial Interval that the Owner wants to reserve. The Man-

aging Entity, upon receipt of the reservation request, shall assign the Owner the use of a designated Unit,

for the time period requested if available.

Unit Type Restriction. There are four categories of units, designated on Exhibit B to the Declaration, with a

letter from A through C and E, inclusive, as follows:

Two Bedroom Deluxe A

Two Bedroom Standard B

One Bedroom Deluxe C

Studio E

An owner of an A unit week may reserve a unit with a designation of A, B, C, or E;

An owner of an B unit week may reserve a unit with a designation of B, C, or E;

An owner of an C unit week may reserve a unit with a designation of C or E;

An owner of an E unit week may reserve a unit with a designation of E;

Reservation Priorities. Reservation requests are subject to the following priorities:

The Managing Entity shall have the right to reserve, at any time, any week it chooses for each Unit each

year (one week per Unit annually), in its sole discretion, for maintenance purposes.

If a reservation request is not received by the beginning of the fourteenth day preceding the Check-in Day,

the Managing Entity’s ability to confirm a Floating Unit Week Owner’s reservation request for the request-

ed Interval or Partial Interval will be limited by and subject to the following reservations: (I) any rental

reservations made by the Association, in its sole and absolute discretion, for Association’s own benefit as

permitted by the Declaration; (ii) any reservations made by the Association, in its sole and absolute discre-

tion, and banked with a third party exchange program on behalf of Floating Unit Week Owners who are

members of the third party exchange program and who have failed to reserve a Floating Unit Week in a

timely fashion, and have no other use alternative; or who canceled late due to unusual circumstances and

risk losing use for that calendar year; (iii) any use of the third party exchange program by the Association

for its own purposes including for exchange, promotional use, rental or any other purpose as the Associa-

tion determines in its sole discretion. Although the Managing Entity will continue to take reservation re-

quests up to the Check-in Day of any given Interval or Partial Interval, the ability of the Managing Entity to

confirm reservations shall be limited by the reservation priorities.

Other Restrictions. The reservation system shall be subject to such other conditions, restrictions and limita-

tions as the Association shall deem necessary under the circumstances in order to assure a manageable and

fair system to Floating Unit Week Owners as a whole.

Reservation Required for Rental or Exchange. Before a Floating Unit Week Owner may rent or exchange

an Interval or Partial Interval in the Time Share Plan system, the Floating Unit Week Owner must first re-

ceive a confirmed reservation from the Managing Entity for a particular Interval or Partial Interval.

Page 3

Confirmations: Unit Preferences. Written confirmation for a particular accommodation type will be

emailed, if available, to each Owner or Principal Contact by the Managing Entity to document all confirmed

reservations. Designated Units will be assigned by the Managing Entity at the time of reservation confirma-

tion; however, the Managing Entity shall have the right to change the designated Unit up to the time of the

Check-in Day of the assigned Interval or Partial Interval, as long as the occupant is reserved into a Unit of

comparable type within the same use period. Special accommodations assignments cannot be guaranteed,

but will be noted as a preference in the reservation confirmation.

Changes, Cancellations and No-Shows. A Floating Unit Week Owner may change or cancel a confirmed

reservation one time each year without penalty; the Association may impose a $35.00 charge for each ex-

cess cancellation or change. If the Owner changes or cancels his reservation prior to fourteen days of the

Check-in Day, he may thereafter make a new reservation for a new Interval or Partial Interval within the

same calendar year on a space available basis. If the Owner changes or cancels his reservation within seven

(7) days of the Check-in Day, he may thereafter only make a new reservation for a new Interval or Partial

Interval during that calendar year on a space available basis, subject to all priorities set forth in these Float-

ing Use Plan Rules and Regulations from time to time. Floating Unit Week Owners who fail to arrive on

the Check-in Day of the reserved Interval or Partial Interval must notify the Managing Entity that they will

be arriving subsequent to such Check-in Day or risk losing the reservation.

Assessment Fee or Ad Valorem Property Tax Delinquency. A Floating Unit Week Owner who is delin-

quent in the payment of any Assessment fee or Ad Valorem Real Estate Tax assessment imposed against

that Owner’s Floating Unit Week shall not be allowed to reserve a Floating Unit Week under the reserva-

tion program of the Floating Use Plan, and any previously confirmed Floating Unit Week reservation may

be cancelled, until the delinquency is satisfied in full.

Amendments to the Rules and Regulations. Pursuant to the Declaration, the Board of Directors of the Asso-

ciation shall be responsible for amending the Floating Use plan Rules and Regulations from time to time as

may be necessary in the opinion of the Board of Directors to improve upon the quality and operation of the

Floating Use Plan and to further the collective enjoyment of the use of the Units committed to the Plan by

the present and future Floating Unit Week Owners as a whole.

Conflicts. These Rules and Regulations are subordinate to and designed to supplement the Declaration, and

in the event of a conflict therewith, the Declaration shall control.

Royal Floridian

PROCEDURES FOR RESERVING USAGE

1.1 RESERVATON AND CONFIRMATION OF FLOATING TIME USE PERIODS. For each Unit

Week with Floating Time Rights, the Owner thereof must reserve and have confirmed a Unit and a check-in

-check-out day according the following rules:

Owners with Floating Time Rights must make their reservation request in writing. An online reservation

request form is available for completion and submission at spinnakerresorts.com, or email your reservation

request to res@spinnakerresorts.com, alternatively you can fax your reservation request to 843-341-

6504. All reservation requests will be processed on a first come first served basis.

Purchasers of a Unit Week with Floating Time Rights becomes eligible to make a reservation request thirty

(30) days after the purchase agreement has closed by the Developer for the Unit Week purchased.

Owners will have the ability to request a reservation for an accommodation on a first come, first served

basis, with other owners, beginning 365 days in advance of the requested check-in day. Multiple Unit

Week Owners can reserve concurrent or consecutive Use Periods 395 days in advance of the first requested

check-in day for the first Use Period reserved, however, no more than fifty percent (50%) of the available

inventory can be reserved in this manner. Any cancellation for a Use Period reserved in this manner must

include all concurrent or consecutive Use Periods following the Use Period cancelled.

Except as indicated in Section 1.5 and except to the extent that the Managing Entity institutes a program of

“banking” as described in Section 1.7, owners with Floating Time Rights are entitled to request three (3),

four (4) or seven (7) nights of occupancy during each Use Year in which they have the right to reserve and

use a Unit for each Use Period owned. All nights must be used in the same Use Year. Unused or unre-

served nights may not be carried over into subsequent Use Years, unless the program of banking is estab-

lished.

An Owner may cancel a reservation without penalty by giving notice at least thirty (30) days before the

check-in date, but is not guaranteed another reservation for such Use Year. An Owner who cancels his or

her reservation less than thirty (30) days before the check-in date will be assessed a $35.00 fee and may not

be allowed another reservation for such Use Year.

Owners desiring to exchange their right to use a Unit through an exchange company must first obtain a

confirmed reservation pursuant to these Rules prior to seeking to trade within any exchange system. If des-

ignation of a specific Unit is required to effectuate an exchange, the Managing Entity, upon notification of

this fact by the Owner, will provide the Owner with a designated unit and week to effectuate an exchange.

1.2 USE OF UNRESERVED USE PERIODS. The Association has the right to reserve and use any unre-

served Use Periods prior to the first day of the Use Period. If the Association makes use of the such Use

Period, that Use Period may not be available for reservation or use by Owners. If the Association exercises

this right, or if an Owner fails to make a reservation request; is unwilling to accept any available Use Peri-

ods; or if the Owner's request cannot otherwise be confirmed, an Owner could lose the opportunity to use a

Use Period in a given Use Year.

1.3 UNIT ASSIGNMENTS. Unit assignments shall be made by the Managing Entity prior to or upon

arrival.

Page 4

1.5 GENERAL RULES FOR RESERVATION AND USE.

(a) Reservation requests will not be accepted from Owners who have outstanding charges and Owners or oth-

ers claiming a right to use through them will not be assigned or allowed to use a Unit until all outstanding

charges, property taxes, annual assessments, special assessments, to include interest and late charges, if any,

have been paid in full.

(b) Failure to request a reservation for a Use Period in a Use Year, or to receive a particular desired reserva-

tion, does not relieve the Owner from the obligation to pay all charges attributable to each Unit Week owned.

(c) Members of exchange programs who desire to exchange their Use Period through the exchange company

should consult their exchange company directory and membership material for trading rules which govern

reservation exchange requests.

(d) If an Owner purchased a Biennial Unit Week, all of these rules provided herein shall apply for each Use

Year in which that Owner is entitled to exercise reservation and occupancy rights.

For purposes of this Section, "Weekend Occupancy Period shall mean a period of three (3) consecutive nights

commencing on a Friday (or another starting day designated by the Managing Entity at 4:00 p.m. and ending

on the next following Monday at 10:00 a.m. "Weekday Occupancy Period" shall mean a period of four (4)

consecutive nights commencing on Monday (or another starting day designated by the Managing Entity) at

4:00 p.m. and ending on the following Friday at 10:00 a.m. Reservations for a Partial Interval may be made

no more than ninety (90) days in advance of the first day of the reservation and not later than seven (7) days in

advance of the first day of the reservation. However, confirmation of the reservation of the remaining portion

of the split week will depend on the number and timing of other similar split week requests, and will be sub-

ject to the Managing Entity's ability to match up complementary requests. In the event an Owner's request

cannot be matched up with a complementary request, the Owner's request will be denied and the Owner may

lose the use of the remaining Weekend Occupancy Period or Weekday Occupancy Period. The Managing

Entity shall establish, from time to time, the additional charges for housekeeping that will be imposed on

Owners who utilize any Weekend Occupancy Period and/or any Weekday Occupancy Period. This charge is

to pay for such additional costs as may be incurred by the Association and/or Managing Entity as a result of

the Weekend Occupancy Period and/or Weekday Occupancy Period.

1.6 DAILY USAGE. The Managing Entity shall have the right, but not the obligation, to amend these rules

in its sole discretion to allow Owners to reserve daily occupancy.

1.7 EVENT WEEKS. Owners of Event Weeks shall be entitled to the use and occupancy of a unit, in accord-

ance with the use period established in Section 2.27 of the Declaration of Condominium. The weeks will float

with the scheduled date of the event, however, Owners of Event Weeks shall not be required to reserve or

confirm a Unit or a check-in/check-out day.

1.8 NON-EVENT WEEKS. Non-Event Week owners shall not be entitled to reserve use periods which fall

within an Event Week during any calendar year.

Page 5

2017 Annual Budget

Royal Floridian Resort Association, Inc.

Annual Budget to Budget Comparison by Department

Budget Budget Variance Studio 1 Bedroom 2 Bedroom2017 2016 $ % 728 Intervals 780 Intervals 4,472 Intervals

REVENUESOwner Assessments 3,677,446$ 3,600,414$ 77,032$ 2.14% 332.00$ 540.00$ 674.00$ HOA Inventory Revenue Loss (96,255) - (96,255) na (8.86) (14.48) (17.56) Rental Revenue 406,211 376,211 30,000 8.0% 37.39 61.09 74.09 Tiki Bar Revenue 93,246 89,573 3,673 4.1% 8.58 14.02 17.01 Collection/Late Fee Income 45,836 38,084 7,752 20.4% 4.22 6.89 8.36 Miscellaneous Income 108,986 63,549 45,437 71.5% 10.03 16.39 19.88

TOTAL REVENUE 4,235,470 4,167,831 67,639 1.6% 383.37 623.92 775.78

OPERATING EXPENSESGENERAL AND ADMINISTRATIVE

Resort Operations Payroll Expense 191,197 191,368 (171) (0.1%) 31.97 31.97 31.97 Shared Services Payroll Expense 125,562 139,745 (14,183) (10.1%) 21.00 21.00 21.00 Reservations Payroll Expense 48,460 47,081 1,379 2.9% 8.10 8.10 8.10 Credit Card Fees 49,307 46,436 2,871 6.2% 3.13 6.92 9.31 Professional Fees 18,000 18,000 - 0.0% 3.01 3.01 3.01 Overhead Expense 215,926 209,131 6,795 3.2% 36.11 36.11 36.11

SUBTOTAL 648,452 651,761 (3,309) (0.5%) 103.32 107.11 109.50

FRONT DESK Payroll Expense 234,096 204,180 29,916 14.7% 39.15 39.15 39.15 Overhead Expense 23,909 27,765 (3,856) (13.9%) 4.00 4.00 4.00

SUBTOTAL 258,005 231,945 26,060 11.2% 43.14 43.14 43.14

HOUSEKEEPINGPayroll Expense 269,056 245,687 23,369 9.5% 17.09 37.75 50.79 Contract Labor Housekeeping 384,860 335,016 49,844 14.9% 24.45 54.00 72.65 Annual Cleaning Fees 21,116 17,889 3,227 18.0% 1.34 2.96 3.99 Guest Supplies & Condo Items 73,662 70,000 3,662 5.2% 4.68 10.33 13.91 Linens & Towels 40,000 36,000 4,000 11.1% 2.54 5.61 7.55 Cleaning Supplies and Other 64,232 55,296 8,936 16.2% 4.08 9.01 12.13

SUBTOTAL 852,926 759,888 93,038 12.2% 54.18 119.67 161.01

PROPERTY MANAGEMENTPayroll Expense 253,156 275,521 (22,365) (8.1%) 16.08 35.52 47.79 Pest Control 11,400 11,028 372 3.4% 0.72 1.60 2.15 Pool Service/Supplies/Repairs 31,578 26,142 5,436 20.8% 2.01 4.43 5.96 Landscaping 10,287 10,287 - 0.0% 0.65 1.44 1.94 Supplies, Repairs and Other 101,022 124,163 (23,141) (18.6%) 6.42 14.17 19.07

SUBTOTAL 407,443 447,141 (39,698) (8.9%) 25.88 57.17 76.91

TIKI BARCost of Sales 30,347 30,095 252 0.8% 1.93 4.26 5.73 Payroll Expense 42,231 42,231 - 0.0% 2.68 5.93 7.97 Overhead Expense 929 837 92 11.0% 0.06 0.13 0.18

SUBTOTAL 73,507 73,163 344 0.5% 4.67 10.31 13.88

ACTIVITIESPayroll Expense 85,164 84,107 1,057 1.3% 5.41 11.95 16.08 Supplies and Other 40,392 49,264 (8,872) (18.0%) 2.57 5.67 7.62

SUBTOTAL 125,556 133,371 (7,815) (5.9%) 7.98 17.62 23.70

UTILITIESCable TV and Internet 55,262 53,445 1,817 3.4% 3.51 7.75 10.43 Contract Services 4,574 4,029 545 13.5% 0.29 0.64 0.86 Electricity 129,709 134,790 (5,081) (3.8%) 8.24 18.20 24.49 Propane Gas 28,457 32,409 (3,952) (12.2%) 1.81 3.99 5.37 Trash Removal 21,218 21,401 (183) (0.9%) 1.35 2.98 4.01 Water and Sewer 72,148 75,112 (2,964) (3.9%) 4.58 10.12 13.62

SUBTOTAL 311,368 321,186 (9,818) (3.1%) 19.78 43.69 58.78

FIXED EXPENSESBad Debt Expense 364,174 364,628 (454) (0.1%) 23.13 51.09 68.75 Management Fees 245,180 222,755 22,425 10.1% 41.00 41.00 41.00 Property Insurance Expense 138,859 151,994 (13,135) (8.6%) 8.82 19.48 26.21

SUBTOTAL 748,213 739,377 8,836 1.2% 72.96 111.58 135.96

TOTAL OPERATING EXPENSES 3,425,470 3,357,831 67,639 2.0% 331.92 510.28 622.88 Reserves for Replacements 810,000 810,000 - 0.0% 51.46 113.64 152.90

TOTAL OPERATING EXPENSES AND RESERVES 4,235,470$ 4,167,831$ 67,639$ 1.6% 383.37$ 623.92$ 775.78$

Year Ended December 31,

Page 7

Royal Floridian

CONDOMINIUM RULES AND REGULATIONS

1. VIOLATIONS OF CONDOMINIUM RULES AND REGULATIONS

Violations should be reported in writing to the Management Company or an officer of the Association. If no separate

Management Company exists, then to the Board of Directors of the Association. Violations will immediately be

called to the attention of the violating Owner by the Management Company or President of the Association, Rules

Violation Committee, and the appropriate committee of the Board of Directors, if applicable, or the members of the

Board of Directors, if follow-up action is necessary Violations needing follow-up action will be presented to and con-

sidered by the Board of Directors for appropriate action at its next regularly scheduled meeting or at a special meeting

called for this purpose.

2. FACILITIES

The facilities, if any, which are part of the Common Elements of the Condominium or Association Property are for

the exclusive use of Association Owners, lessees, resident house guests, guests accompanied by a owner and other

authorized users, unless otherwise provided that such use shall not be exclusive. Any damage to the buildings, recrea-

tional facilities or other common areas or equipment caused by any of the foregoing authorized users shall be repaired

at the expense of the Owner and/or the authorized user.

3. NOISE

Should noise transmission create a disturbance or a nuisance, the responsibility is with the Owner to abate the noise

transmission and not the Association. In order to insure the comfort of all Association Owners and authorized users,

between the hours of 10:00 p.m. and 8:00 a.m. radio, stereo and television sets, and all other such audio equipment

should be turned down to a minimum volume so as not to disturb other persons. All other unnecessary noises between

these hours should be avoided.

4. NUISANCES

No nuisance shall be allowed upon the Condominium Property or within a Unit, nor any use or practice that is the

source of annoyance to Owners or which interferes with the peaceful possession and proper use of the Condominium

Property by the Owners. No Owner shall permit any use of a Unit or make or permit any use of the Common Ele-

ments that will increase the cost of insurance upon the Condominium Property.

5. LAWFUL USE

No improper, offensive or unlawful use shall be made of the Condominium Property or a Unit, and all valid laws,

zoning ordinances and regulations of all governmental bodies having jurisdiction shall be observed. The responsibility

of meeting the requirements of governmental bodies for maintenance, modification or repair of the Condominium

Property or a Unit shall be the same as the responsibility for the maintenance and repair of the property concerned.

6. PETS

Except for dogs that are certified as handicapped assistance animals, as may be required by an owner or authorized

user, no bird, reptile, animal or pet of any kind shall be kept or harbored in the Unit, Common Elements, Limited

Common Elements or on the Condominium or Association Property by a timeshare interval owner.

7. OBSTRUCTIONS

Sidewalks, entrances, driveways, passages, patios, courts, vestibules, stairways, corridors, halls and/or all other areas

intended for common use must be kept open and shall not be obstructed in any manner. Rugs or mats, except those

either permitted or placed by the Association or the Management Company, must not be placed outside of doors in

corridors. No sign, notice or advertisement shall be inscribed or exposed on or at any window of a Unit or any part of

the Condominium or Association Property, except that the right is specifically reserved to the Developer to place and

maintain "For Sale" or "For Rent" signs on the Condominium Property for as long as it may have Units or Unit

Weeks to sell, and except as shall have been approved in writing by the Association; nor shall anything be projected

out of any window in the Condominium Property without similar approval. No radio or television aerial or antenna

shall be attached to or hung from the exterior of the Condominium Property or the roof thereon without the express

approval of the Association. All personal property of the Owners shall be stored within the Unit.

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8. CHILDREN

Children are to play only in areas either designated or clearly intended for play, and they are not to play in public halls, on stair-

ways, or other common areas which would cause an obstruction. Reasonable supervision by parents or guardians must be exer-

cised at all times when children are playing on the Condominium or Association Property.

9. DESTRUCTION OF OR MISSING PROPERTY

Neither owners, their dependents, nor guests shall mark, damage, destroy, deface or engrave any part of the buildings or im-

provements. Owners shall be responsible for any such damage. The authorized user(s) and/or the Owner of a Unit subject to

interval Ownership shall be responsible for theft or breakage of or damage to the personal property contained within the Unit

authorized for use and shall reimburse the Association for all costs and expenses to repair and/or replace such personal property.

10. EXTERIOR APPEARANCE

The exterior of the Condominium Property and all other areas appurtenant to it shall not be painted, decorated or modified by

an Owner (or their dependents and guests) in any manner without prior written consent of the Association, which consent may

be withheld on purely aesthetic grounds within the sole discretion of the Association. No awnings, window guards, light reflec-

tive materials, hurricane or storm shutters, ventilator, fans or air conditioning devices shall be used in or about the Condomini-

um Property except as shall have been approved by the Association in writing, which approval may be withheld on purely aes-

thetic grounds within the sole discretion of the Association.

11. DECORATION OF UNITS

No Owner shall alter the furnishings, appliances, personal property or decor of any Unit committed to the Timeshare Plan with-

out the prior written consent of the Board of Directors. The Association shall determine the interior color scheme, decor and

furnishings of each Unit committed to the Timeshare Plan as well as the proper time for redecorating and renovating such Unit

and its contents.

12. CLEANLINESS

All garbage and refuse from the Condominium or Association Property shall be deposited with care in garbage containers and

trash chutes intended for such purposes only at such times and in such manner as the Association will direct. All in-sink dispos-

als shall be used in accordance with instructions given to the Owner by the Association.

13. BALCONIES

Plants, pots, receptacles and other movable objects must not be kept, placed or maintained on ledges or balconies. No objects

shall be hung up or shaken from balconies or window sills. No cloth, clothing, rugs, beach blankets, beach towels or mops shall

be hung up or shaken from windows, doors or balconies. No cooking, including but not limited to, the use of any type of barbe-

que grill, shall be permitted on any balcony of a Unit. Owners shall not allow anything to be thrown or to fall from windows,

doors, balconies or the interior of the building.

14. HALLWAYS

Bicycles, garbage cans, laundry, dry cleaning, supplies or other articles shall not be placed in the halls or on staircase landings.

No owner shall allow doors to the corridor to remain open for any purpose other than for immediate ingress and egress.

15. ENTRY FOR EMERGENCIES

In case of emergency originating in or threatening any Unit, regardless of whether or not the Owner is present at the time of

such emergency, the Board of Directors of the Association, the Management Company or any other person authorized by them,

shall have the right to enter such Unit for the purpose of remedying or abating the cause of such emergency, and such right of

entry shall be immediate, and to facilitate entry in the event of any such emergency.

16. PLUMBING

Plumbing shall not be used for any other purpose than those for which it was constructed, and no sweepings, rubbish, rags or

other foreign substances shall be deposited into plumbing. The cost of any damage resulting from misuse shall be borne by the

Owner.

17. ROOF

Owners are not permitted on the roof of any building within the Condominium or Association Property for any purpose without

the express approval of the Board of Directors or Management Company.

18. SOLICITATION

There shall be no solicitation by any person anywhere on the Condominium or Association Property for any cause,

charity or purpose whatsoever, unless specifically authorized in writing by the Board of Directors or the Management

Company, except for solicitation by the Developer in marketing the Condominium and other timeshare resorts devel-

oped or under development by the Developer. The foregoing shall not be deemed to restrict any owner's right arising

under Chapter 718 to peaceably assemble or right to invite public officials or candidates for public office to appear

and speak at or within the administration building in accordance with reasonable rules that either the Board of Direc-

tors or the Management Company may from time to time adopt.

19. PARKING

No vehicle belonging to any Owner or to a member of the family of an Owner or guest, tenant or employee of an

Owner shall be parked in any unauthorized area or in such manner as to impede or prevent access to another Owner's

or authorized user's parking space or any fire lane (s). The Owners, their employees, servants, agents, visitors, licen-

sees and the Owner's family will obey all posted parking regulations. Vehicles parked in any unauthorized areas or

impeding another Owner's or authorized user's parking space or any fire lane (s) are subject to being towed away at

the Owner's or authorized user's sole expense. No repair of vehicles shall be made within the Condominium or Associ-

ation Property. No Owner shall store or leave boats, trailers, mobile homes, recreational vehicles and the like on the

Condominium Property. No trucks or buses may be parked anywhere on Condominium or Association Property,

except for those of the Developer and/or the Management Company of the Condominium, if any. Parking spaces are

not assigned as appurtenances to particular Condominium Parcels. As such, each space may be used by any Owner,

family member, lessee or guest. Owners may not park vehicles in spaces designated for handicapped persons, unless

they fall within this category of individuals, and the Association or Management Company shall have the right to

notify local authorities of any such violations. Vehicles should be parked within the painted lines. Parking will be

limited as follows:

(a) Each unit shall have access to one (1) parking space.

(b) Each two (2) bedroom lockout unit, if split, shall have access to two (2) parking spaces.

There shall be no reserved parking. Owners, members or guests violating the parking limitation shall be subject to

having additional vehicles towed.

20. GUESTS

Owners shall notify the Management Company in advance by written notice of the arrival and departure dates of

guests who have permission to occupy the Unit in their absence. Owners should have such guests check in at the front

desk of the Association or Management Company upon arrival in order that service can be extended to them. Owners

will be responsible for compliance by guests with these Condominium Rules and Regulations.

21. TRANSFER. LEASE OR EXCHANGES OF UNITS OR UNIT WEEKS

Upon any permitted transfer of any interest in a whole Unit or Unit Week, an Owner shall give written notice to the

Management Company within 15 days of the date of the transfer to an individual, by registered or certified mail. Any

transfer by an Owner to a Corporation or LLC shall abide by, and be in compliance with, the Association Adopted

Property Transfer Requirements for Corporations and LLCs.

The foregoing written notice shall state the name and address of the transferee and shall be accompanied by a non-

refundable administrative fee of FIFTY DOLLARS ($50.00) for individual transfers and One Hundred and Twenty-

Five Dollars ($125.00) for Corporation and LLC transfers to cover administrative expenses. The notice should also be

accompanied by a copy of the recorded deed or other evidence of title being vested in the new Owner. The transfer of

interests in the Condominium is subject to those restrictions contained in the Declaration of Condominium,, and as

amended per the Board of Directors.

Any lease of a Unit or Unit Week shall contain a covenant stating that the lessee shall comply with all present and

future Rules and Regulations of the Association, and lessees shall not be permitted to bring a pet of any kind onto the

Condominium or Association Property or facilities leased by or licensed to the Association. Persons entitled to use of

a Unit pursuant to an approved exchange program or through some other means must comply with these Rules and

Regulations, as amended from time to time.

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22. USE OF RECREATIONAL FACILITIES

Owners and authorized users of the recreational facilities do so at their own risk. All users are required to obey the posted rules. Children under

twelve (12) years of age using any recreational facilities must be accompanied and supervised by a responsible adult. Owners and authorized

users shall observe all posted Condominium Rules and Regulations governing the use of all available recreational facilities.

23. STORAGE OF DANGEROUS ITEMS

No inflammable, combustible, or explosive fluid, chemical or substance, shall be kept in any Unit or Limited Common Element except as are

required for normal household use.

24. OCCUPANCY

Unit occupancy shall be a maximum of four (4) occupants for a studio and a one (1) bedroom Unit and a maximum of six (6) occupants for a

two (2) bedroom Unit, at any one time, unless modified by the prior written approval of the Association or Management Company.

25. WEAPONS

No explosives, firearms, knives and/or fireworks shall be kept in any Unit and/or brought onto the Condominium Property at any time.

26. EMPLOYEES/AGENTS CONTROL AND ENTRY OF UNITS FOR MAINTENANCE

Employees and/or agents of the Association or Management Company, and employees and/or agents of the Developer during the Developer's

ongoing sales program, shall not be sent off the Condominium premises by any Owner or authorized user of a Unit at any time for any reason.

No Owner or resident shall direct, supervise or in any manner attempt to assert any control over the employees of the Management Company or

the Association. Employees or agents of the Management Company shall be permitted to enter Units for maintenance and repairs during reason-

able hours.

27. COMPLAINTS

Complaints regarding the services of the Condominium shall be made in writing to the Management Company, as long as a Management

Contract remains in effect, and thereafter, to the Board of Directors.

28. PAYMENT OF ASSESSMENT FEES, SPECIAL CHARGES AND FINES

Payment of assessment fees, special charges, and fines shall be made at the office of the Management Company, as designated in the Manage-

ment Contract. Payments made in the form of checks shall be made to the order of such party as the Management Company shall designate.

29. CHECK-IN/CHECK-OUT OF TIME-SHARE UNITS

All Owners of Unit Weeks or their authorized users shall vacate Units no later than 10:00 A.M. on the last day of their use

period. In addition to all other remedies provided in the Declaration of Condominium and Bylaws, failure to vacate by

10:00 A.M. will subject the Owner(s) and/or authorized user(s) to an administrative fee of $300.00 per day. Possession of a

Unit shall not begin before 4:00 P.M. on the day on which the use period commences, unless permitted in writing by the

Association or Management Company in its sole discretion. Each Owner or their authorized users shall return all keys to

the Unit possessed at the end of their use period. There will be a $5.00 charge for each unreturned key. Beach towels will

be placed in each unit, prior to check-in, in accordance with the occupancy limit detailed. A charge of $5.00 for each towel

will be charged to the owner if the same number of towels are not returned at the time of check-out. Please feel free to

swap out your towels for clean towels at any time during your stay.

30. NO SMOKING POLICY

Effective 2011, no owner, family member, tenant, resident, guest, business invitee, or visitor shall smoke cigarettes, cigars, or any other tobacco

product within the vacation unit. Smoking will only be permitted on the balcony area of each unit. If found that an Owner and/or Guest has

violated this policy a fine of $150 for a professional cleaning of the unit will be charged to the Owner and/or Guest who is registered at the Re-

sort. If the next occupant to this unit must be relocated due to the smoke smell, the previous occupant will also be charged for any additional fees

that may be incurred by the relocation.

31. AMENDMENTS TO RULES

The Board of Directors of the Association reserves the right to make additional rules and regulations as may be required from time to time with-

out consent of its owners. These additional rules and regulations shall be binding as all other Condominium Rules and Regulations previously

adopted.

Spinnaker Resorts

PRIVACY ASSURANCE POLICY

Spinnaker Resorts, and each of our affiliates, respects the confidential nature of both your personal and account information. To ensure your privacy, we have, and will continue to safeguard the information with which we are entrusted. Below, we have outlined the type of information that is typically collected from our owners and how this information is used. Please read this policy carefully and be assured of our commitment to safeguard the privacy policy rights of our owners. I. Type of personal information collected Information typically obtained for the purchase of property, from your purchase contract, credit application and other paperwork includes: your name, address, telephone number, social security number, employment, income, bank account information and monthly pay-ment liability. Information obtained from third parties, as part of the purchase process, include credit re-ports and bank account information necessary to maintain your account. Information is also received from our regular transactions and experiences, which help us maintain the accuracy of your account information.

II. Sharing your personal information We DO NOT share personal information on present or former customers with any nonaffili-ated third parties, who are not directly involved in the process of handling or servicing your purchase. We do share your information with our title company to secure your title policy; and with our financial institution, as part of the mortgage servicing and collection process. We also use information for our own (internal) marketing programs. We DO NOT SELL your name, address or telephone number to any unaffiliated third parties. Here at Spinnaker Resorts, your personal information is private and is used to help us make your vacation own-ership experience the best that it can be. III. Control of your personal information Spinnaker Resorts, and its affiliated companies, safeguard your information, both physically and electronically. Only parties with proper authority are permitted access to your personal information. All employees and related parties are required to adhere to the company’s Pri-vacy Assurance Policy and violations would result in disciplinary action. IV. Your right to "Opt Out" While Spinnaker Resorts does not presently share personal information with non-affiliated third parties, or have any plans to do so. you have the option to "opt out", please contact us at 866-455-3577 to notify us of your choice. We will process your request within thirty (30) days and maintain this information on file until we receive further direction from you. While we may, as permitted by federal law, continue to share information such as your account history and balance with affiliates of the company, no information will be shared with no-naffiliated parties. While our Privacy Assurance Policy is designed for the primary signatory on each account, we honor the opt out request of all joint signatories, as well. ( If one signatory on an account "opts out", the entire account will be coded accordingly. ) We thank you for choosing Spinnaker Resorts to provide you and your family with a lifetime of vacation experiences. You may be assured that your personal information is properly safeguarded.

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