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A PRIVATE RESIDENCE CLUB

Owner Information The Palms at Playa Flamingo is a member-owned private residence club providing a luxurious

sanctuary on Costa Rica’s premier beach. Combining all the advantages of vacation home

ownership with the services and amenities of a first-class hotel, The Palms offers its owners a

lifetime of hassle-free Costa Rica vacations.

Playa Flamingo is located in the heart of the Guanacaste region of Costa Rica’s Northern Pacific

Coast – The Gold Coast – and is known for the breathtaking beauty of its beaches. Renowned

for its clear warm waters, soft white sand, beautiful sunsets and world class sport fishing, Playa

Flamingo has been awarded the prestigious Blue Flag designation by the global Foundation for

Environmental Education (“FEE”). This recognition distinguishes Playa Flamingo as an

ecological beach meeting FEE’s most stringent standards for water quality, safety and

environmental sensitivity. Just offshore the Catalina Islands offer outstanding scuba diving,

snorkeling and fishing.

The Palms is just 45 minutes drive from Liberia International Airport offering convenient access

for international visitors from major US cities including Houston, Dallas, Atlanta, Miami,

Denver, Los Angeles and New York. Costa Ricans enjoy easy commuter access via a short 45

minute flight from San José to nearby Tamarindo Airport, a quick 25 minute drive from Playa

Flamingo.

The Palms private residence club is comprised of 32 two bedroom Villas and 2 three bedroom

Villas within an exclusive gated community. Built with the highest standards, the Club Villas

feature natural Costa Rican materials combined with old world craftsmanship. Each Villa has

been appointed with the highest quality appliances (Sub Zero and Viking) and natural Costa

Rican materials (marble, granite and native Costa Rican woods). All Villas are oriented to

maximize enjoyment of the beautiful beach and the glory of each Costa Rican sunset.

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Owner Amenities and Services

Owners, their family and guests can enjoy services and amenities not available with most other

Costa Rican vacation homes.

Location, Location, Location! The Palms enjoys one of Costa Rica’s most scenic beaches.

Rarely do you find a Pacific beach with such warm water (80+ degrees year round), soft white

sand and gentle slope – ideal for swimming, boogie-boarding, body or paddle boarding. Your

beach view of the ocean and the Catalina Islands offshore is framed by swaying palms and

golden sunsets. The Palms is simply unmatched. Its gardens are adorned with an array of exotic

plants, beautiful tropical flowers and stately Royal palms. These lush gardens attract butterflies

and dozens of tropical bird species – just as nature intended.

Private, Gated Community -- The Palms is within a gated compound where your privacy and

security is ensured by the Club’s 24-hour security.

Outdoor Infinity-Edge Swimming Pool and Tropical Spa Pool – The Club’s tropical spa pool

flows gently into a spectacular infinity edge pool that seemingly pours into the warm, blue

waters of the Pacific Ocean. Enjoy the view from your terrace or from the palm-lined, pool-side

sunning decks just steps from your door. Quench your thirst with your favorite beverage from

the Club’s poolside bar. It’s the ultimate location for your relaxation.

Beach Services - The Club staff provides signature umbrellas, luxurious chaises, side tables and

beach towels each morning.

Grilling and Entertainment Area – For the grill master in the family, the Club has an

entertainment palapa equipped with two large, commercial grade Weber grills, refrigerators and

bar-style seating. Fresh local fish and lobster are abundant and the local master butcher can

provide the best in fresh meats for your family barbecue. A private chef and bartender can also

be arranged to provide a gourmet dinner palapa style. Best of all, since you’re on vacation,

whether you do the grilling yourself or allow your family to be served by a chef, the Club staff

cleans and maintains the grills and entertainment area so you can maximize your relaxation and

quality time with family.

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Fitness Center – Start your day with an exhilarating jog or walk down the beach or maintain

your fitness program in the Club’s well-equipped fitness center overlooking the ocean.

Airport Transportation – While you may prefer the scenic drive from San José or the mobility

to explore the area with a rental car, the Club provides a personal welcome and transportation

from either Liberia or Tamarindo airports for those arriving by air.

Concierge - A level of personal attention reminiscent of days gone by will enrich each of your

vacations. You arrive relaxed and ready to enjoy the very first moment in your Costa Rican

retreat. Whether you seek a rare butterfly or a battle with a mighty marlin, any and all area

excursions will be pre-arranged to ensure that you fully experience the area’s multitude of flora

and fauna. A multi-lingual driver and car can be arranged to ensure that you get the most of your

tours. Diner reservations or a private chef can be scheduled. In-Villa massages services are also

available.

Pre-arrival Grocery Shopping Service - At your request, your favorite foods and beverages

will be purchased on your account and placed in your spacious kitchen just prior to your arrival.

Daily Housekeeping – Club owners receive full housekeeping upon their departure and a daily

tidy consisting of bath linen replenishment, bed-making and trash removal. The Club also

replaces bath linens mid-week to ensure freshness.

Massage Services – The Club concierge will arrange in-Villa massage services to maximize

your enjoyment and relaxation.

Clothing and Equipment Storage — Residence Club owners are freed from the burden of

transporting vacation clothing and beach gear. Your personal items may be stored in a secure,

climate-controlled area, awaiting your next hassle-free visit. Just prior to your arrival, your

belongings will be placed in your Club Villa.

Bellman Service – Club staff are available to assist you with luggage upon arrival and departure

and also care for your Owner storage containers.

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Business Center – Stay in touch with your business if needed at the Club’s business center

which provides computer, printer, fax and internet services. Each Club Villa is also equipped

with internet service and a Vonage telephone providing international long distance service.

Private Staff — Your professional, friendly, attentive Club staff ensures that every visit is fun-

filled and worry-free.

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ANSWERS TO FREQUENTLY ASKED QUESTIONS

What is The Palms private residence club?

The Palms is a private, member-owned residence club comprising elegant two bedroom Villas

and amenities in a secure and luxuriously landscaped sanctuary on Playa Flamingo, one of Costa

Rica’s premier beaches. The Club is designed to offer owners unlimited, flexible usage of the

Club’s luxuriously furnished Villas, a variety of amenities and hospitality services, worry-free

ownership and hassle-free vacations.

If I purchase at the Club, do I own real estate?

Yes. Ownership is evidenced by a real estate deed, which is extremely rare for oceanfront

property in Costa Rica. Less than 5% of Costa Rica’s coastline is privately titled property.

These other properties can only be leased from the government through a Concession

Agreement, which does not provide the benefits of private property ownership. The opportunity

to own privately titled beachfront property along Costa Rica’s beautiful Gold Coast of

Guanacaste is extremely rare and valuable.

Each Club owner is conveyed one-tenth (1/10th) undivided, fee simple deeded interest inVilla 16

at The Palms. . Like other real estate, ownership may be sold, willed or transferred at any time.

For ease of maintenance and replacements, the Club’s Owners’ Association retains ownership of

the Villa furnishings on behalf of the Owners.

What are the advantages of Private Residence Club ownership?

Residence Club ownership is the fastest growing segment of the luxury vacation home market

around the globe. This innovative concept provides the ultimate vacation experience and the

benefits of real estate ownership while dramatically reducing the responsibilities and financial

burdens associated with traditional ownership. The Palms Private Residence Club has been

created for those who desire a worry-free Costa Rican home with hotel-style services and

amenities.

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Have residence clubs been developed at other prestigious locations?

Yes. Residence Clubs are well established at many other premier ski, beach, golf and urban

destinations throughout North America, including Aspen and Vail, Colorado; Deer Valley, Utah;

Napa Valley, Lake Tahoe and La Quinta, California; New York City; Bermuda and Mexico.

More recently, the Club concept has been established in Europe including Florence, Italy and in

rural Tuscany. Each of these residence clubs is operated much like The Palms. New residence

clubs are in development in a variety of other prestigious beach, golf, mountain and urban

destinations worldwide. Through Peter Kempf International, the most experienced and successful

creators of residence clubs worldwide are part of the development team for The Palms.

As a Residence Club Owner, how often can I vacation at the Club?

Owners can vacation at The Palms as often as they wish, in accordance with the Club’s generous

and flexible reservation privileges. The Residence Club is operated much like a prestigious

equity golf country club where there is no limit on use. If some owners visit their Club less

often, other owners can visit more. As an Owner, you have the flexibility of reserving vacations

well in advance as well as booking additional space available and short-notice vacations

whenever available.

How many Residence Club ownerships will be sold?

The Palms will offer a maximum of only ten (10) ownerships for the Club Villa. With a limit of

ten owners in the Residence Club, ownership affords frequent, flexible and totally relaxing

Costa Rican vacations.

Can a company purchase a Residence Club Ownership?

Yes. In fact, properties in Costa Rica are typically sold as an asset within a personal Costa Rican

corporation. The advantages of this are that the sale is not subject to sales tax (a savings of

13%); the corporation can be subsequently sold thereby avoiding property transfer tax; and, a

corporation shields an owner from liability. Additionally, a personal corporation allows non-

residents to have a Costa Rican cell phone and certain other advantages.

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Can more than one family or individual share a single Residence Club ownership?

Yes. Multiple individuals or families can share a single Club Ownership through a jointly owned

corporation; however, their reservation privileges are not increased beyond that of a single Club

Ownership.

Is The Palms a typical timeshare development?

No. The Palms offers rare deeded ownership of real estate in Costa Rica. While often confused

with timesharing, the Residence Club is enjoyed much like a private equity golf country club.

Rather than reserving tee times, Residence Club Owners reserve a Club Villa. Timesharing

typically provides the right to use only a specific week or weeks and lodging is limited to a

specific unit. The Residence Club doesn’t sell “weeks of vacation”. Residence Club Owners

have access to the Club Villa with unlimited usage, in accordance with the Club’s reservation

privileges and availability.

How do Residence Club owners reserve lodging?

The Club’s reservation privileges enable Owners to reserve vacations well in advance, while also

accommodating more spontaneous visits. Each May, Owners reserve their most important

vacation dates for the coming Club Year, which starts in November. Additional Club vacations

may be reserved throughout the year based on availability. A detailed explanation of Club

reservation procedures is provided in the Reservation Privileges section of this document.

Do Residence Club Owners have guest privileges?

Yes. Owners may invite guests to stay with them and they may also send unaccompanied guests

to enjoy their confirmed Planned Vacation reservations without a guest fee.

Do Residence Club Owners pay Club fees?

Yes. Club owners pay fees for the professional management, operation and maintenance of all

Club Villas, facilities and common areas. These fees are significantly lower and are more

comprehensive than those of a wholly-owned vacation home. Included in these annual fees are

funds for maintenance, insurance, utilities, administrative salaries, supplies, property taxes, trash

removal, legal/accounting and reserves for the replacement and/or refurbishing of Club facilities

and common areas. Please request a Financial Information sheet for the current Club Fees.

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Who establishes the dues and controls the affairs of the Residence Club?

A non-profit Club Owners’ Association has been formed to administer the Club under the

direction of its owner-elected Board of Directors. The Board of Directors have, in turn, engaged

a professional hospitality management firm to manage the day-to-day operations of the Club.

The Manager annually prepares a zero-based budget for approval by the Board of Directors.

Will The Residence Club be open to the public?

When fully subscribed, the Club Villas will be operated for the exclusive use and benefit of

Residence Club Owners and their guests. Prior to full subscription, limited public use by

invitation may be permitted for marketing purposes. This type of use will not diminish lodging

availability for Owners.

Do Residence Club owners pay any lodging charges when they stay at their Club?

No. Owners do not pay nightly lodging fees for use of Club Villa. They do pay for housekeeping

and any additional requested services such as personal chefs and massage services.

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Reservation Privileges

The Reservation Privileges for Owners of The Palms Private Residence Club have been designed

to ensure that all Owners have equal access Owners can use lodging during Planned Vacations,

Space Available Vacations and Short Notice Vacations. These usage options are described

below. There is no limit on the amount of vacations an Owner can enjoy at the Club. Use is

subject only to the procedures described below and availability.

The Reservation Privileges have been carefully formulated in an attempt to be fair and equitable

to all Owners. Each Owner’s Planned Vacations, Space Available Vacations and Short Notice

Vacations will be confirmed in Club Villain which the Owner has deeded ownership.

Definitions

Certain terms and phrases have been defined below to clarify their intended meaning and usage.

Throughout the following policies and procedures, these terms and phrases can be identified

because they begin with capital letters.

“Accompanied Guest” — Any guest who lodges with an Owner in the Owner’s reserved Club

Villa. The total number of persons lodged in a Club Villa cannot exceed the Sleeping Capacity of

that Club Villa. No lodging fees are charged for Accompanied Guests.

“Club” –The Palms – A Private Residence Club.

"Club Management” — The professional company selected by the Board of Directors of the

Club to supervise the day-to-day operations of the Club in accordance with the Management

Agreement.

“Club Villa” — A condominium that is part of The Palms Private Residence Club and is owned

by the Club Owners.

“Club Year” — The Club Year (reservations year) begins November 1st and ends October 31st.

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“Club Fees” — The fees paid by Owners for the professional management, operation and

maintenance of all Club Villas, Club facilities and common areas. Included in these fees are

funds for staff salaries, supplies, repairs, trash removal, legal/accounting, fuel, utilities, property

taxes and periodic replacements and/or refurbishments.

"Owner" — The owner of record of a Club Ownership, including their spouse and children, or

the person designated in writing by the Ownership (the "Designated Owner") to have Ownership

privileges during a particular Club Year.

"Ownership" — An Ownership provides a one-tenth (1/10th) undivided, deeded ownership

interest in a particular Club Villa and lodging privileges. Each Ownership must identify one

person whose responsibility it is to submit reservation requests. For the purposes of this

document, Owner and Ownership are used interchangeably. However, it should be noted that in

cases where an Ownership is owned by more than one Owner or family or by a non-personal

entity such as a corporation, the Ownership must designate one of the Owners (the “Designated

Owner”) to exercise the reservation privileges of the Ownership for that particular Club Year.

Other co-Owners are considered to be Guests of the Designated Owner. Designated Owners can

be changed each Club Year simply by notifying Club Management in writing.

“Reservation Priority Number” — A Reservation Priority Number is assigned to each Owner

for each Club Year. This number is used by Club Management to allocate Planned Vacations

and certain Space Available Vacations for Owners when demand exceeds lodging supply as

described below. This Reservation Priority Number changes each year, based on the original

Ownership number (assigned at closing), to equitably allocate Planned Vacations and initial

Space Available Vacations over the years.

“Flex-Res System™” — A flexible reservations system that has been established to ensure that

Planned Vacation and initial Space Available use of Club Villa by all Owners is equitable. The

Flex-Res System is used to determine reservation confirmations in the rare occasions that the

number of Planned Vacation reservation requests for a certain time periods exceed the

availability during that time period. It is also used to allocate initial Space Available reservation

requests (as described below).

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“Sleeping Capacity” — The maximum number of persons permitted to lodge in a Club Villa.

The Sleeping Capacity of a two bedroom Club Villa is six.

“The Palms – A Private Residence Club” or “The Palms Private Residence Club” — The

shared ownership real estate development in Flamingo Beach, Guanacaste, Costa Rica.

“Unaccompanied Guest” — Any guest who lodges in a Club Villa without an Owner during an

Owner’s confirmed Planned Vacation reservation. An Owner requesting lodging for an

Unaccompanied Guest must specify the Unaccompanied Guest’s name, address and telephone

number in writing at least fourteen (14) days prior to the arrival date so that Club Management

can send a confirmation notice and pre-arrival information to that Unaccompanied Guest.

Unaccompanied Guests are required to pay all housekeeping fees and incidental charges upon

departure unless the sponsoring Owner has arranged payment in advance. The sponsoring Owner

is responsible for any unpaid charges incurred by their Unaccompanied Guests and is responsible

for any damages to a Club Villa or Club facilities caused by their Unaccompanied Guests. The

number of persons lodged with an Unaccompanied Guest in the Club Villa cannot exceed the

Sleeping Capacity of that Club Villa.

Types of Vacation Reservations

“Planned Vacations” — Those reservations by which Owners may reserve lodging for

themselves or an Unaccompanied Guest prior to commencement of the Club Year and which are

subject to the Flex-Res System™. Each Planned Vacation reservation can be for up to seven (7)

nights each. Owners are given the opportunity to reserve up to two (2) Planned Vacations,

totaling up to fourteen (14) Planned Vacation days, during each Club Year. Owners have the

flexibility of requesting Planned Vacations as either two separate Planned Vacations of up to

seven (7) days each; or, two consecutive Planned Vacation totaling up to fourteen (14) days

In the event an Owner wishes to cancel a Planned Vacation reservation, that request for

cancellation must be received by Club Management, in writing, at least fourteen (14) days prior

to the scheduled arrival, in order for the Owner to retain the usage rights associated with the

canceled Planned Vacation. If the written cancellation notice is not received by Club

Management at least fourteen (14) days prior to the scheduled arrival (“Failed Reservation”),

then all of the Planned Vacation days not properly canceled will be forfeited by Owner.

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“Space Available Vacations” — In addition to their Planned Vacations and Short Notice

Vacations, each Owner has unlimited access to and usage of Club Villa on a space-available

basis. Owners can occupy the Club Villa during confirmed Space Available Vacations for

periods up to seven (7) days per reservation.

Each 1/10th Owner can have only one (1) Space Available Vacation on the books at a time.

Once used, Space Available reservations for all Owners can be renewed again and again

throughout the Club Year. Usage is considered to be arrival at the Club for the scheduled

reservation. Therefore, once you arrive at the Club, you could immediately request another

Space Available reservation. In order to maximize availability for Owners and their families,

Unaccompanied Guests are not permitted during Space Available Vacations.

If an Owner fails to arrive at the Club on the reserved Space Available date without notice to

Club Management at least ten (10) days prior to scheduled arrival ("Failed Reservation"), the

Owner will be prohibited from making another Space Available or Short-Notice reservation for

a period of thirty (30) days from the scheduled departure date of the Failed Reservation.

“Short-Notice Vacations” — In addition to Planned and Space Available Vacations, each

Owner can reserve Short-Notice Vacations anytime within thirty (30) days or less of the

scheduled arrival date for that reservation. Owners can occupy a Club Villa during confirmed

Short-Notice Vacations for periods up to seven (7) days per reservation.

Each 1/10th Owner can have only one (1) Short Notice Vacation on the books at a time.

Once used, Short-Notice reservations can be renewed again and again throughout the Club Year.

Usage is considered to be arrival at the Club for the scheduled reservation. Therefore, once you

arrive at the Club, you could immediately request another Short-Notice reservation.

Unaccompanied Guests are not permitted for Short-Notice Vacations.

If an Owner fails to arrive at the Club on the reserved date without notice to Club Management at

least twenty-four (24) hours prior to the scheduled arrival ("Failed Reservation"), the Owner will

be prohibited from making another Short-Notice or Space Available reservation for a period of

thirty (30) days from the scheduled departure date of the Failed Reservation.

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Reservation Procedures

Planned Vacations

On approximately May 1st of each year, Owners are sent a Planned Vacation reservation

form, which allows Owners to request their Planned Vacation dates for the upcoming Club

Year. Club Management will note the Reservation Priority Number for each Owner on the

Planned Vacation reservation form. If the Owner does not receive the Planned Vacation

reservation request form by May 15th, the Owner should immediately notify Club Management.

Each Owner is allowed up to two (2) Planned Vacations during the Club Year that begins

November 1st and ends October 31st. Owners can reserve a total of fourteen (14) Planned

Vacation days within two (2) reservations. Owners have the flexibility of requesting Planned

Vacations as either two separate Planned Vacations of up to seven (7) days each; or, two

consecutive Planned Vacation totaling up to fourteen (14) days;. A Planned Vacation

reservation can be a maximum of seven (7) consecutive days with arrivals and departures

occurring on or between Saturdays or as is otherwise determined by Club Management for each

Club Year, (i.e., each seven-day Planned Vacation period begins and ends on Saturday).

Planned Vacations can be less than seven days if desired with arrivals and departures on or

between the designated arrival/departure day. The designated arrival/departure day will be noted

on the Planned Vacation request form. Exceptions to the arrival and departure times will be at

the sole discretion of Club Management.

By May 15th of each year, Owners must return their completed Planned Vacation reservation

request forms to Club Management. It is the Owner’s responsibility to complete and return the

Planned Vacation reservation request form by May 15th to preserve priority rights for the

upcoming Club Year. Planned Vacation reservation request forms received after May 15th will

be considered on a first-come, first-served basis after the Planned Vacation reservation request

forms that were received in a timely manner have been processed.

After June 1st, Club Management allocates the Planned Vacations in the following manner:

First Planned Vacation — Owners are confirmed for either seven (7) days or fourteen

(14) consecutive days based on their requests and their Reservation Priority Numbers. On

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the rare occasion when demand for certain dates exceeds lodging supply, Owners with

the lowest Reservation Priority Numbers will be confirmed.

Second Planned Vacation — After the First Planned Vacations are confirmed for

Owners, Owners are confirmed for a Second Planned Vacation, the length of which may

be the lesser of the balance of their allocated two (2) Planned Vacations, if any, or seven

(7) days. When demand for certain dates exceeds lodging supply, Owners with the

highest Reservation Priority Numbers will be confirmed.

By May15th, written confirmation of the Planned Vacations is sent to each Owner.

Additionally, a reservations calendar will be provided indicating the remaining available dates.

Owners that reserved less than their full entitlement of Planned Vacations will then have the

opportunity to make additional reservation requests after May 15th on a first-come, first-served

basis. These reservations will be made for days shown to be available on the reservations

calendar.

Space Available Vacations

Beginning June 1st, 1/10th Owners may request one Space Available reservation for the

upcoming Club Year. Processing of Space Available Vacation requests will take place during

the week following June 1st. If Space Available Vacation requests for available dates exceed

supply, Owners with the lowest Reservation Priority Numbers will be confirmed. After June 7th,

Club Management will process all Space Available Vacation reservation requests on a first-

come, first-served basis. Once used, Space Available reservations can be renewed again and

again throughout the Club Year.

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Short-Notice Vacations

Short Notice Vacations may be requested anytime within thirty (30) days of the requested

arrival date. Owners of 1/10th Ownerships may have only one (1) Short Notice reservation on

the books at a time Once used, Short-Notice reservations can be renewed again and again

throughout the Club Year.

Additional Policies

Use Restrictions – Except for Planned Vacations, Owners are prohibited from renting confirmed

Club vacations of any type and from using confirmed vacations of any type for commercial

purposes. The Board of Directors has the right to suspend Club reservation privileges of any

Owner who is more than 60 days in arrears in the payment of Club Fees.

Exchanging Planned Vacations - Owners may exchange their confirmed Planned Vacations or

portions thereof with other Owners. After Planned Vacations for Owners have been confirmed,

Club Management will use its best efforts to facilitate intra-Club exchanges and exchanges can

also be made directly between Owners. Written notice of an exchange must be provided to Club

Management at least fourteen (14) days prior to the arrival date of the Owner using the earliest

vacation involved in the exchange.

Owners may also exchange their confirmed Planned Vacations with other similar Residence

Clubs in accordance with the rules and regulations of any exchange company or reciprocal use

plan adopted or approved by the Club’s Board of Directors.

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Reservation Summary Each Owner can reserve up to two (2) Planned Vacations which can be scheduled separately or

consecutively during the Club Year, provided that the total of all Planned Vacations does not

exceed fourteen (14) days. Additional vacations can be reserved repeatedly throughout the Club

Year as Space Available and Short Notice Vacations. There is no limit to the number of

vacations an Owner may enjoy at the Club. If some Owners use their Club less, other Owners

can enjoy it more. All Owners have equal access to the Club Villaon an annual basis. The Flex-

Res System ensures that over the years all Owners have equal access to Club Villas during peak-

demand periods.

Important Dates May 1st Planned Vacation reservation request forms are sent to Owners. May 15th Completed Planned Vacation reservation request forms are returned to Club Management. May 15th Club Management confirms Planned Vacation dates. June 1st

Owners may begin requesting Space Available reservations for the upcoming Club Year that

begins November 1st.

November 1st

The new Club Year begins. Owners may request a Short-Notice Vacation anytime during the

Club Year within thirty (30) days or less of their requested arrival date.

Rev. Jan 2019