STATE OF CALIFORNIA TIME-SHARE PLAN DISCLOSURES (PART I) RE 622I (New 6/05) BUREAU OF REAL ESTATE SUBDIVISIONS For use with all time-share plans. Following are the standard time-share plan disclosures for California public reports. The general disclosures listed under Section 1 must be included in all time-share public reports. The remaining disclosures should be reviewed and included in the public report if applicable to the subject time-share plan. 1. General disclosures for all public reports. This time-share plan is registered with the California Bureau of Real Estate as required by law. Registration does not constitute an endorsement of the time-share plan and the California Bureau of Real Estate has not passed on the merits of the time-share property being offered for sale. As a general rule, a sponsor's promotional and marketing costs in a time-share offering constitute a major portion of the purchase price. Should you purchase a time-share interest, you may find it difficult to resell your time-share interest without the use of an extensive promotional and advertising campaign or use of a sales organization. You are urged to visit and inspect the time-share property before entering into an agreement to purchase. You should determine for yourself that the property meets your personal requirements and expectations. Misunderstandings more easily arise as to the desirability of the property when this is not done. You should also carefully review the purchase contract to ensure that any promises of importance to you are included in the contract. Failure to pay the assessments levied by the time-share association will prevent you from occupying and using the time-share accommodation and result in a lien on your interest. In the event of any other breach by a time-share owner of any of the project's governing documents, the time-share association may, after notifying the time-share owner, suspend such owner's right to occupy his accommodation. The developer must, prior to close of escrow, provide you with a notice describing any and all material changes to the offering since the date of issuance of this public report. (Refer Section 11226(f)(2) of the Business & Professions Code.) The ability of time-share owners to control operations and management of the time-share plan may be severely limited as long as the developer controls the association or management or the reservation system. You should thoroughly review the governing documents for the time-share plan so that you will have a better understanding of your rights as a member of the time-share plan association. You have a duty to pay assessments even if you are unsuccessful in reserving an accommodation. 2. Conditional public reports only. This is not a final time-share plan public report. This is a conditional time-share plan public report. As the developer has not as yet satisfied all of the conditions necessary for the issuance of a final time-share plan public report, escrow may not close, funds may not be released from escrow to the developer, and title shall not be conveyed until issuance of a final time-share plan public report covering this time-share plan. Under this conditional public report, the developer may not enter into a binding agreement with you for the purchase or lease of time-share interests in this time-share plan unless: A. The developer first provides you with a copy of this conditional time-share plan public report and a written statement containing certain disclosures required by B&P Code Section 11227); B. Provision is made in the purchase agreement and escrow instructions for the return to you of the entire sum of money paid or advanced (purchase money) by you if a final time-share plan public report has not been issued within six months after the date this conditional public report was issued; C. Provision is made in the purchase agreement/contract and escrow instructions for the return to you of the entire sum of money paid or advanced by you if you are dissatisfied with the final time-share plan public report because of a material and adverse change in the setup of the offering. (Refer to B&P Code Section 11227.) American LegalNet, Inc. www.FormsWorkFlow.com D. As a condition of the purchase, delivery of legal title or other interest contracted for will not take place until issuance of a final time-share plan public report. Before entering into a contract under the authority of this conditional public report, you should review the agreement carefully to make sure that you will be able to honor your obligations when it is time to close escrow. Before signing, you should read and thoroughly understand all sales agreement and loan documents. If you do not understand the terms of your contracts, you may wish to consider consulting with your own attorney before entering into an agreement to purchase the time-share interest. The term of this conditional public report is six months. When the conditional public report expires, you may wish to consider contacting the developer to discuss the status of your purchase agreement/contract, since a conditional public report may be renewed for one additional six month term. If not renewed, your contract may be rescinded and all monies advanced by the purchaser shall be refunded. This is a "conditional public report" which allows the developer to enter into a binding contract with you, subject to your receipt, examination, and acceptance of a final public report within the time period indicated in your purchase agreement/contract. The following conditions must be satisfied by the developer before a final time-share plan public report can be issued: (Complete list of conditions.) 3. Include the following disclosure if a conditional public report has been issued for this time-share plan. If you entered into an agreement to purchase or lease an interest in the time-share plan under authority of a conditional public report, the purchase agreement and the escrow instructions contained arrangements for the return to you of monies paid or advanced if you are dissatisfied with this final time-share plan public report because of a material and adverse change in the setup of the offering. You are advised to carefully read this final time-share plan public report since it contains information that is more current and possibly different from that included in the conditional public report. 4. Include the following disclosure if a preliminary public report has been issue