I. Call to OrderII. Election of Examiners, President and Secretary of the Residential MeetingIII. Vote whether Residential Owners who are not current in paying their Residential

Assessments as of the date of this meeting, shall have the right to vote on matters brought before this meeting

IV. Certification of QuorumV. Management Report, including update on Hurricane Odile and rebuilding of the resortVI. Income and expense statement for the period ended December 31, 2015VII. Presentation and approval of 2016 Budget and Residential Assessment

a. Proposed 2016 Maintenance Fees (Residential Assessment)b. Approvalc. Proposed 2016 Budgetd. Approval

VIII. Property Management ReportIX. Other Matters/Questions and Answers

a. Advisory Boardb. Civil Associationc. Bulk sale of defaulted inventoryd. Next owners’ meeting - December 1, 2016

Agenda

Income & Expense StatementYear Ended December 31, 2015

Actual Budget Variance Prior Year Variance INCOME

Maintenance Fees 1,880,786 2,387,844 (507,058) 2,911,294 (1,030,508) Rental Income (Net) 2,109 37,500 (35,391) 80,005 (77,896)

Total Income 1,882,895 2,425,344 (542,449) 2,991,299 (1,108,404)

EXPENSESStarwood Expenses 767,033 1,838,130 1,071,097 2,138,258 1,371,225 Other Expenses 660,446 540,156 (120,290) 545,640 (114,806)

Total Expenses 1,427,479 2,378,286 950,807 2,683,898 1,256,419

Income Less Operating Expenses 455,416 47,058 408,358 307,401 148,015

OTHER INCOMEInterest ( Net) 30,821 50,004 (19,183) 23,138 7,683 Late Fees 5,004 - 5,004 22,572 (17,568) Other Income 38,692 - 38,692 27,333 11,359 Miscellaneous - - - 83,684 (83,684)

Total Other Income 74,517 50,004 24,513 156,727 (82,210)

Operating Fund 529,933 97,062 432,871 464,128 65,805

Starwood ExpensesYear Ended December 31, 2015

Actual Budget Variance Prior Year Variance

STARWOOD EXPENSESFront Office 67,719 245,946 178,227 254,628 186,909 HouseKeeping 32,392 205,242 172,850 317,634 285,242 Maintenance 116,474 247,842 131,368 281,520 165,046 Pools 12,181 147,816 135,635 161,189 149,008 Fitness Center / Paddle Court 1,889 16,548 14,659 26,267 24,378 A&G 39,529 116,748 77,219 215,340 175,811 Utilities 67,626 196,536 128,910 189,600 121,974 Master Common & Sub Condominium Phase 1 198,236 263,862 65,626 195,667 (2,569) Management Fees 72,867 144,054 71,187 192,819 119,952 VAT 158,120 253,536 95,416 303,594 145,474

767,033 1,838,130 1,071,097 2,138,258 1,371,225

Other ExpensesYear Ended December 31, 2015

Actual Budget Variance Prior Year Variance

OTHER EXPENSES

Property Tax 9,860 9,996 136 - (9,860) Federal Zone Tax 4,922 6,504 1,582 5,566 644 Rescom Collection Fees 26,437 39,996 13,559 42,554 16,117 Credit Card Fees 94,894 75,000 (19,894) 81,187 (13,707) Reservation Fees 42,551 43,368 817 81,549 38,998 Accounting Fees 12,174 12,000 (174) 13,332 1,158 Outside Counsel - 12,504 12,504 - - Administrative Fees 23,213 21,000 (2,213) - (23,213) Trust Fees 115,296 132,300 17,004 123,615 8,319 Annual Owners Meeting - 9,996 9,996 - - Business Center Office 4,098 6,000 1,902 9,214 5,116 HOA Oversight 32,178 36,000 3,822 58,328 26,150 Room Rental 66,004 - (66,004) - (66,004) Courtesies and Discounts 14,552 - (14,552) - (14,552) Replacement Reserve Units 130,818 60,000 (70,818) 130,295 (523) Insurance - All Risks 77,374 69,996 (7,378) - (77,374) Insurance - Third Party 6,075 5,496 (579) - (6,075)

660,446 540,156 (120,290) 545,640 (114,806)

Income & Expense Statement2 Months Ended February 29, 2016

Actual Budget Variance Prior Year Variance INCOME

Maintenance Fees 650,131 334,880 315,251 892,736 (242,605) Rental Income (Net) 3,963 12,500 (8,537) 2,109 1,854

Total Income 654,094 347,380 306,714 894,845 (240,751)

EXPENSESStarwood Expense 223,792 318,486 94,694 150,613 (73,179) Other Expenses 89,474 110,470 20,996 69,078 (20,396)

Total Expenses 313,266 428,956 115,690 219,691 (93,575)

Income Less Operating Expenses 340,828 (81,576) 422,404 675,154 (334,326)

OTHER INCOMEInterest ( Net) 5,525 5,833 (308) 4,104 1,421 Late Fees 495 - 495 - 495 Miscellaneous 1,500 - 1,500 - 1,500

Total Other Income 7,520 5,833 1,687 4,104 3,416

Operating Fund 348,348 (75,743) 424,091 679,258 (330,910)

Starwood Expenses2 Months Ended February 29, 2016

Actual Budget Variance Prior Year Variance

STARWOOD EXPENSESFront Office 37,107 43,431 6,324 20,483 (16,624) HouseKeeping 29,317 41,806 12,489 3,278 (26,039) Maintenance 23,626 37,139 13,513 21,674 (1,952) Pools 10,838 32,373 21,535 649 (10,189) Fitness Center / Paddle Court 212 287 75 142 (70) A&G 18,883 29,336 10,453 25,830 6,947 Utilities 17,508 34,655 17,147 7,306 (10,202) Master Common & Sub Condominium Phase 1 27,890 30,571 2,681 37,071 9,181 Management Fees 26,743 24,960 (1,783) 10,751 (15,992) VAT 31,668 43,929 12,261 23,428 (8,240)

223,792 318,486 94,694 150,613 (73,179)

Other Expenses2 Months Ended February 29, 2016

Actual Budget Variance Prior Year Variance

OTHER EXPENSES

Property Tax 1,461 1,693 232 10,218 8,757 Federal Zone Tax 782 845 63 5,101 4,319 Rescom Collection Fees 3,423 6,667 3,244 892 (2,531) Credit Card Fees 6,183 12,500 6,317 2,842 (3,341) Reservation Fees/Employees 5,610 7,584 1,974 5,070 (540) Accounting Fees 2,200 2,266 66 1,097 (1,103) Administrative Fees 3,850 3,966 116 - (3,850) Trust Fees 17,225 20,659 3,434 18,456 1,231 Annual Owners Meeting - 1,666 1,666 - - Business Center Office 1,429 1,133 (296) - (1,429) HOA Oversight 5,584 4,881 (703) 3,672 (1,912) HOA Oversight (Owners) - 3,758 3,758 - - Replacement Reserve Units 21,666 21,667 1 21,730 64 Insurance - All Risks 12,833 13,218 385 - (12,833) Insurance - Third Party 1,008 1,038 30 - (1,008) VAT 16% - Indirect Expense 6,220 6,931 711 - (6,220)

89,474 110,470 20,996 69,078 (20,396)

Balance SheetsFebruary 29, 2016 & December 31, 2015

2016 2015ASSETS

Operating Cash 328,354 968,613 Cash Reserves 1,067,694 1,115,983 Foreclosed Inventory Held For Resale 785,984 814,935 Accounts Receivable 5,024,943 2,372,892 Other Assets 244,496 278,649

TOTAL ASSETS 7,451,471 5,551,072

LIABILITIES Accounts Payables & Accrued Liabilities 233,483 429,248 Revenues to be earned 5,024,943 2,372,892 Prc Inventory Weeks 19,900 - Prepaid Maintenance Fees 22,075 407,519 Owner Deposits 8,658 8,658

Total Liabilities 5,309,059 3,218,317 TEMPORARILY RESTRICTED Hurricane Damage 759,152 1,158,567 Replacement Reserve - Units 586,352 584,683 Net excess of assets 1,096,908 589,505

Total Temporarily Restricted 2,442,412 2,332,755 TOTAL LIABILITIES & EQUITY 7,751,471 5,551,072

2016 BudgetCompared to 2015 Actual & 2015 Budget

2016/2015 2016/2015 2016/2015 2016/20152016 2015 2015 Variance % Variance Variance % Variance

Budget Budget Actual Budget/Budget Budget/Budget Budget/Actual Budget/Actual

IncomeMaintenance Fees 3,348,800 2,984,800 2,984,800 364,000 364,000 Bad Debt (1,046,500) (596,960) (1,104,014) (449,540) 57,514 Resale of HOA weeks 142,700 - 166,859 142,700 (24,159) Rental Income 149,613 37,500 2,109 112,113 147,504 Interest Income 35,000 50,000 30,821 (15,000) 4,179

2,629,613 2,475,340 2,080,575 154,273 6.2% 549,038 26.4%

ExpensesStarwood Expenses 1,927,628 1,838,123 767,033 89,505 4.9% 1,160,595 151.3%Other Expenses 697,553 540,173 722,837 157,380 29.1% (25,284) -3.5%

Total Expneses 2,625,181 2,378,296 1,489,870 246,885 10.4% 1,135,311 76.2%

Surplus (Deficit) 4,432 97,044 590,705 (92,612) (586,273)

Maintenance Fees: Two Bedroom 1,825$ 1,625$ 200$ 12.3% Three Bedroom 2,325 2,075 250 12.0%

2016 Budget – Starwood ExpensesCompared to 2015 Actual & 2015 Budget

2016/2015 2016/20152016 2015 2015 Variance Variance

Budget Budget Actual Budget/Budget Budget/Actual

Starwood ExpensesFront Office 229,344 245,949 67,719 (16,605) 161,625 Housekeeping 261,319 205,239 32,392 56,080 228,927 Maintenance 258,506 247,841 116,474 10,665 142,032 Pools 153,560 147,817 12,181 5,743 141,379 Fitness Center/Paddle Court 11,827 16,547 1,889 (4,720) 9,938 A & G 190,536 116,749 39,529 73,787 151,007 Util ities 208,973 196,535 67,626 12,438 141,347

Sub-Total, Operations 1,314,065 1,176,677 337,810 137,388 976,255

Master Common & Sub Condominium Phase I 196,614 263,858 198,236 (67,244) (1,622) Management Fee, Starwood 151,068 144,054 72,867 7,014 78,201 VAT 265,880 253,534 158,120 12,346 107,760

Total Starwood Expenses 1,927,628 1,838,123 767,033 89,505 1,160,595

2016 Budget – Other ExpensesCompared to 2015 Actual & 2015 Budget

2016/2015 2016/20152016 2015 2015 Variance Variance

Budget Budget Actual Budget/Budget Budget/Actual

Other ExpensesTrust Fees 115,689 132,305 115,296 (16,616) 393 Reservation/Employees 42,468 43,368 42,551 (900) (83) Credit Card Fees 75,000 75,000 94,894 - (19,894) Other 71,024 16,500 99,436 54,524 (28,412) Rescom 40,000 40,000 26,437 - 13,563 Owners' Oversight 51,829 52,000 32,178 (171) 19,651 Insurance 85,533 75,500 83,449 10,033 2,084 Administrative Fees 23,793 21,000 23,213 2,793 580 Accounting Fees 13,596 12,000 12,174 1,596 1,422 Outside Counsel 12,360 12,500 33,679 (140) (21,319) Marketing 36,261 - 28,712 36,261 7,549 Replacment Reserve Units 130,000 60,000 130,818 70,000 (818)

Total Other 697,553 540,173 722,837 157,380 (25,284)

2016 BudgetExpenses By Type

Ratio 2016 Budget

Starwood

Fixed Expenses 40% 771,051 Variable Expenses 60% 1,156,577

1,927,628 Other

Fixed Expenses 35% 244,144 Variable Expenses 65% 453,409

697,553 Total Expenses

Fixed Expenses 1,015,195 Variable Expenses 1,609,986

2,625,181

Apportionment Factor for Policy Allocation

Policy Insured ActualAllocation Values Claim Weighted Average

Grand Regina 3,264,699 24.9% 36.5% 32.647%Club Regina 6,735,301 75.1% 63.5% 67.353%

Policy Limits 10,000,000

Cost to Rebuild

Building 5,051,787 Contents 1,103,296 Credit Card Fees on Collections 63,948

Total Rebuild Costs 6,219,031

Hurricane Assessment Collected 2,502,150

Insurance Proceeds 3,264,699

Additional Construction Funding Required 388,234

Current Policy Allocation

AssumedDeductible Coverage Allocation

Grand Regina 816,175 4,080,874 33%Club Regina 1,683,825 8,419,126 67%

Policy Limits 2,500,000 12,500,000

Current Policy In Place

Hurricane damage reserve of approximately $820,000 is required to cover the insurance deductible. Any damage that exceeds $5 million may result in special assessment.

Analysis of Collections(Weeks and Dollars)

Total Weeks Paid % $ Paid

2 BR 1,040 637 61.3% 1,449,175 3 BR 624 379 60.7% 1,089,625

Total 1,664 1,016 61.1% 2,538,800

Note: Through March 31.

Available Inventory

2-BEDROOM UNITS In Surrender Currently In Future Total Good Default Saleable Process Lawsuit Lawsuit

Holidays 120 84 36 9 7 2 18New Year 20 15 5 1 4President 20 11 9 3 2 1 3

Holy 20 13 7 3 2 2Easter 20 13 7 1 3 1 2

Thanksgiving 20 17 3 1 2Christmas 20 15 5 5

Fixed Weeks 123 40 83 15 21 8 39Prime Floating 600 395 205 17 80 11 97Value 197 112 85 13 31 6 35TOTAL 1040 631 409 54 139 27 189

3-BEDROOM UNITS In Surrender Currently In Future Total Good Default Saleable Process Lawsuit Lawsuit

Holidays 72 52 20 1 4 7 8New Year 12 9 3 1 2President 12 9 3 1 2

Holy 12 9 3 1 2Easter 12 9 3 2 1

Thanksgiving 12 5 7 1 1 1 4Christmas 12 11 1 1

Fixed Weeks 79 46 33 6 3 12 12Prime Floating 356 216 140 66 16 58Value 117 57 60 4 30 4 22TOTAL 624 371 253 11 103 39 100

2016 Budget & ActualOccupancy Rate

Budget Actual

January 75.5% 45.0%

February 77.5% 44.5%

2016 60.8%

Candidate For Advisory Board

Mark Clark

My professional life has all been associated with the insurance industry. I have executive experience both on the company side and as a broker.

After thirty years I retired from Wells Fargo as the Senior Vice President in charge of the Managed Care Department at the national level.

When I retired, I started my own company to provide actuarial consulting services for a few of my favorite clients and have been doing so for the last twelve years.

My charitable life has also involved medical issues. I have nine years of board experience with the largest mental health provider in Multnomah County, including three as Chairman of the Board.

In 1996 l received the Mutual of America Community Partnership Award for my participation in developing an emergency response program for dealing with mentally ill crisis in the downtown area.

I also have six years of board experience for a nonprofit that provided services for the visually impaired.

I have been a Grand Regina owner since before construction started and have made many special friends while visiting. I look forward to helping in any way I can to make our resort visits the best experience possible.

Candidate For Advisory Board

Raul A. DejuSenior Partner, Brightstar Capital Partners, CEO Deju Management Advisors

Dr. Raul A. Deju served as President/COO of Energy Solutions. Prior to that, he was SVP of IT Corporation, now Chicago Bridge & Iron; CEO of URS, now AECOM; and President of several major entities within the Waste Management family of companies. He was also a founder of Isadra, Inc., a technology venture sold to Vertical Net and ISG Resources a construction materials company merged into Headwaters, a public company. Currently, Dr. Deju is a Board member in a number of private companies in diverse fields (Glue Networks, Axis Teknologies, and PTI) and has created in the past 5 years a program to help entrepreneurs, especially service disabled veterans so they can succeed in their business ventures.

Dr. Deju has been named one of the 25 Most Influential Hispanics in the San Francisco Bay Area. He is also the recipient of the 2015 John F. Kennedy Lifetime of Entrepreneurship Award and is currently working on his 7th book “We Got Mojo- Stories of Inspiration and Perspiration”. Dr. Deju is experienced participating in Condominium and Homeowners Association Boards. In the past, he served for 5 years as Vice President of the Cypress Homeowners Association Board and as Vice President and President of the Pajaro Dunes Association Board. He has owned and continues to own several weeks at the Grand Regina for a number of years and spends at least a month a year on vacation on site the Grand Regina.

Other Matters/Questions and Answers

• Election of Advisory Board Candidate

• Civil Association

• Bulk Sale of Defaulted Inventory

• Next owners’ meeting - December 1, 2016