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Operating Rules

I. Introduction

The Royal Holiday Club (the “Club”) is a corporation in good standing, and duly constituted under the laws of Switzerland, since 1992. For the purpose of implementing the Club Plan the Club has entered into a Management and Service Agreement with Holiday Club Management Company, Ltd., a Cayman Island; B.W.I. corporation organized on July 8, 1993 (the “Management Company”). The Memberships issued by the Club incorporates the number of Holiday Credits indicated therein. This Membership entitles the Member to a specific annual number of Holiday Credits to be redeemed annually by the Member over the life of the Membership, usually thirty (30) years, in exchange for lodging services and Other Benefits offered by the Club. This Membership also carries the obligation of payment of an Annual Club Fee. According to such Entry Levels, Members are entitled to different Club benefits as described herein. Any person (not being a minor) may apply and obtain a Membership at a specified Entry Level to participate in the Club’s Plan. Two or more individuals may apply and obtain a joint Membership, provided however that notices will be sent only to the first person mentioned in the joint application or to such other person designated subsequently by the persons registered as joint Members. The individuals participating in a Joint Membership shall be liable jointly and severally for payment of the Club Fees and any other obligations derived from such Membership. No person shall be admitted to Membership in the Club Plan unless and until his name is entered in the Register of Members in accordance with the provisions of the Operating Rules, and persons whose names appear in the Register of Members shall prima facie be participants in the Club Plan.

As said before, the Club is managed by Holiday Club Management Company, Ltd. (the “Management Company”) in conjunction with its subsidiaries or affiliates who perform different functions pertaining to resort operations, reservations, promotions, and Member services. (See “The Management Company”). As described in the Operating Rules, the Management Company maintains an account for each Member. This account shall be credited annually with an allotment corresponding to the number of Holiday Credits initially purchased plus the amount of any subsequent upgrades and the amount of any credits carried forward or accelerated, as permitted by the Operating Rules. A Member who has paid Annual Club Fees may redeem credits for the right to stay at Club Resorts or to utilize Other Benefits of the Club.

Resorts in the Club are either: (i) owned by the Club or leased under a long-term lease Contract (“Club Resorts”) or (ii) leased under short-term lease Contracts or other contractual arrangements (“Affiliated Resorts”). Within each category, a resort may be a full-service destination complex offering multiple on-site amenities, a full-service hotel or a condominium. Resorts in the Club are described in detail in the Component Site Summary (“Resort Guide”) to be given at the time of purchase to each Member. The Resort Guide may be updated from time to time by the Management Company. The number of Holiday Credits to be redeemed for a stay at a Club Resort, an Affiliated Resort or for Other Benefits are specified in the Resort Guide. It is determined by the Management Company based on: (i) the location of the resort and extent of its amenities, (ii) the size and type of accommodation (iii) the season of the year in which the stay occurs, and (iv) the days of the week involved. The Component Site Summary, or Resort Guide, contains the most complete description of the Resorts and Other Benefits and its related amenities.

II. The Club Program

The purpose of the Club Plan is the creation of a vacation program wherein Members may obtain Lodging Rights to accommodations, or rights to use Other Benefits, for the term of their Membership, and by redeeming all or part of the Holiday Credits allocated to their account.

B. Membership Register

There shall be a Members Register of participants in the Club Plan containing at least the following information: a) The names, addresses and telephone numbers of the Members and the corresponding Entry Levels; b) The date when each Member’s name was entered in the Register as a Member; c) The date when the Holiday Credits are due to lapse pursuant to the terms and conditions of the Operating Rules; d) The date when any Member ceased to be a Member. A separated record of each Membership’s Holiday Credits Account, together with the transactions registered in the Members account shall be maintained. The Club shall, after entering the related information of a Member into the Members Register, and upon payment in full of the purchase price will issue the Membership Certificate.

C. Rights to Redeem Holiday Credits

Membership in the Club Plan and the holding of Holiday Credits grants Members rights to use Lodging Units and to obtain any Other Benefits in accordance with the provisions of the Operating Rules. Membership Holiday Credits Accounts shall be credited with the number of Holiday Credits in the Club Plan to which a Member is entitled, based on the particular Member’s Entry level on the Membership anniversary date (January 1st of each year). A Member shall be entitled to redeem accommodations in Lodging Units or the use of Other Benefits, for Holiday Credits currently accumulated in the corresponding Holiday Credits Account of one’s Membership (including those purchased as described in the following paragraph), in accordance with the Holiday Credits Allocation Charts and subject to the Operating Rules. The redeeming of Holiday Credits for accommodations in Lodging Units, or for the use of Other Benefits is subject to limitations related to availability, since the Club’s main policy is that reservation requests for Lodging Units and for the use of Other Benefits shall be handled on a strict “first come, first served” basis. The Management Company shall be entitled to the use of Lodging Units, for such commercial or other purposes as are consistent with the operation of the Club Plan, during times that have not been previously reserved by Members in accordance with the Operating Rules. The Management Company may allow third parties the uses of such Lodging Units, under such terms as the Management Company shall from time to time consider, at its sole discretion, appropriate.

D. Purchase of Additional Holiday Credits

During each Membership Year, a Member in good standing shall have the right, but not the obligation, to purchase Additional Holiday Credits, which shall be valid and included in the Member’s Holiday Credits Account for an unlimited period of time. Therefore, such Additional Credits shall not have an expiration date of twelve months from the date of purchase, however, the purchase of Additional Credits cannot be cancelled or be subject to a refund. Members may purchase annually a maximum amount of Additional Holiday Credits equal to the total Holiday Credits annually credited to one’s account. The purchase price of such Additional Holiday Credits shall be established by the Management Company during each calendar year, and shall be regulated only by the existing market conditions.

E. Accumulation of Unused Holiday Credits

Members may accumulate annually, from one year to the following, up to twenty percent of the Holiday Credits corresponding to their Entry Level Mebership. Those unused Holiday Credits may be used only the following Calendar Year, otherwise, such credits will expire, and be null and voided. Unused Holiday Credits surpassing the above-mentioned percentage are not subject to accumulation. Regardless of what is stated in the previous paragraph, a Member may carry forward up to a total of ten (10) times during the life of one’s Membership, carry from one year to the next an amount equal to the total number of annual Holiday Credits credited to the account, providing such Holiday Credits were not previously redeemed for the use of Lodging Units or Other Benefits. The total number of Accumulated Holiday Credits not redeemed for Lodging or Other Benefits during the year they were accumulated, shall expire, may not be accumulated the following year, and will be considered as null and void. The benefit of carrying forward an amount equal to the total number of Holiday Credits may only be exercised by a Member in good standing, having paid the Annual Club Fee on time for the Membership year to be accumulated. This accumulation feature may not be used in following years. The accumulation of Holiday Credits is not automatic. Any Member requesting to accumulate Holiday Credits not redeemed during a year must provide a written notice to the Management Company on or before December 31st of that year. The benefit of accumulation is not valid for Holiday Credits that have been accumulated from previous years.

F. Accelerated Redemption of Holiday Credits

A Member, who is 50 years old, or older, shall have the right to accelerate the redemption of Holiday Credits over a period of not less than fifteen years. This Member may exercise this benefit by adding to Holiday Credits Account a maximum amount of Holiday Credits corresponding to the Member’s Entry Level in a calendar year, and may only accumulate up to twenty percent of the Holiday Credits of their Entry Level without taking in to account the Holiday Credits accelerated that certain year. Such Accelerated Holiday Credits shall be debited from the last year of the life of one’s Membership. A Member accelerating the redemption of one’s Holiday Credits shall pay the Annual Club Fee for the normal year of usage, as well as for the Accelerated Year.

III. Summary of Rules on utilization of lodging and other Benefits

Each Member has the right, in accordance with the Operating Rules, to use the amount of Holiday Credits owned, to redeem Holiday Credits allocated to one’s account to make reservations of Lodging Units at any of the Resorts participating in the Club’s Plan, or to acquire any Other Benefits available.

A. Reservations
Any reservation requested by a Member shall be made in accordance with the following procedures:
1. Reservation requests shall be made by Member in person, either via telephone, fax, e-mail or regular mail to any of the Management Company’s offices, and in order to be binding, and the Management Company shall confirm such reservations in writing.
2. Member is entitled to request reservations at Lodging Units or to apply for Other Benefits withi- thirty days after the Purchase Date.
3. Members are encouraged by the Management Company to request reservations for Lodging Units at Club Resorts or Affiliated Resorts, as early as possible, in accordance with the Club Operating Rules, in order to have better chances of obtaining the requested reservation. Since Club Resorts or Affiliated Lodging Resorts are located in tourism areas of high demand, an early reservation request can improve significantly the possibility of Member obtaining the first choice in requested reservations.
4. The Club shall strictly honor reservations on a first-come-first-served basis.
5. Reservations are always subject to the Club’s availability of Lodging Units at the requested area or Resort.
6. In case of unavailability of the requested Lodging Unit, date, or the requested Resort, the Club shall offer Member alternatives including options on dates, accommodations or destinations contained in the Club Plan.
7. Any reservation duly confirmed in writing in accordance with the terms and the corresponding Resort Operator shall honor conditions provided in the Operating Rules of the Club. However, in the event the Resort Operator is unable for any reason to honor a duly confirmed reservation, the Club shall be responsible for providing the confirmed Member with comparable accommodations at an alternative Resort located in the same area. However, if for any reason the Club is unable to provide Member with such comparable accommodations, the Club shall then assume the responsibility to reimburse the verified traveling expenses incurred by Member, expended in reliance upon the confirmed reservation.
8. Members whose Membership Entry levels are Bronze, Bronze Plus, Silver or Silver Plus may request a reservation from one year in advance, and up to thirty days prior to the requested Lodging Period.
9. Members who’s Membership Entry Level is Gold, or Gold Plus may request a reservation from eighteen months up to thirty days prior to the requested Lodging Period.
10. Members who’s Membership Entry Level are Platinum A, Platinum B, Platinum Plus A, Platinum Plus B and Royal A-N may request a reservation from two years in advance, to up to thirty days prior to the requested Lodging Period.

B. Cancellation of Reservations
Once a reservation of a Lodging Unit has been confirmed, a Member has the right to cancel the confirmed reservation as follows:

1. If the cancellation request is submitted by Member and received by the Management Company at least 91 (ninety-one) days prior to the reservation commencement date, Member will be charged $40 (forty) US Dollars as a cancellation fee. However, the Holiday Credits used to perform such reservation, shall be credited back to the Member’s account for future use, in accordance with the Operating Rules of the Club.
2. If the cancellation request is submitted by Member and received by the Management Company at least 31 (thirty-one) days and up to 90 (ninety) days prior to the reservation commencement date, Member will be charged $100.00 (one hundred) Dollars US as a cancellation fee. However, the Holiday Credits used to perform such reservation, shall be credited back to the Member’s account for future use, in accordance with the Operating Rules of the Club.
3. If the cancellation request is submitted by Member and received by the Management Company within 30 (thirty) days prior to the reservation commencement date, Member will be considered to have used all of the Holiday Credits redeemed for such reservation, and no credit shall be applied to the Member’s account.

C. Check-In and Check-Out Times
The Check-In and Check-Out times vary from one Resort to another. The Member must comply with the times established by the Resort Operator and confirmed by the Management Company within the Member’s reservation confirmation.

D. Occupancy limitations in Lodging Units
There are various sizes, types and classes of Lodging Units in the Club Plan. For this reason, each Member will be provided with a Resort Guide, where limit of Lodging Unit occupancy is established. Members must comply with such limitations. Lodging Unit occupancy limits are classified as follows:
1. Maximum Occupancy means the maximum number of people, including children that a Lodging Unit will accommodate in permanent sleeping areas.
2. Maximum Private Occupancy means the number of adults who may occupy a Lodging Unit, in order to have personal privacy. This number is based on private sleeping areas (2 adults per sleeping area) and private lavatory access.
3. In no event shall the maximum occupancy limitations described in the Resort Guide or so established by the Management Company or the Resort Operator be exceeded by a Member.
4. A Member not complying with occupancy limit established by the Management Company for any Resort will be charged a proportional fee for such a breach. The fee to be charged to the Member’s account shall be established by the Management Company at its sole discretion.
5. Any child being 12 years of age or older will be considered as an adult for the purposes of the Club Plan and in particular of those provisions described in this section.

E. Liability for personal charges incurred in use of Lodging Units or any Other Benefits

Each Member shall be held liable for payment of all Personal Charges derived from the use of Lodging Units or any Other Benefits. Personal Charges may include, but are not limited to (a) charges related to the use of telephone incurred by Member or their invitees; (b) charges for food and beverage consumption incurred by Member or their invitees; (c) any incidentals requested by Member or their invitees; (d) any special services or supplies attributable to Member or their invitees related to the occupancy of Lodging Units or the use of Other Benefits; (e) the cost of replacing or repairing any damage to the Lodging Units, common furnishings, or the common areas due to loss or damage caused by such Member or their invitees; (f) any charges to satisfy any expense attributable to any negligent or intentional act by Members or their invitees; (g) the cost of any additional services contracted by Member or their invitees; and (h) any additional charges, costs or taxes referred to in the paragraph “Other charges” that follows. The collection of these charges will be due and payable at check-out, and must be guaranteed by an imprint of a credit card voucher performed at Check-In.

IV. The Club Budget- Annual Club Fees and other charges

A. Club Fee charge and budget
No later than on November 30 of each Year, the Management Company shall prepare and deliver to all Members a Budget that shows the total estimated amount for costs and expenses incurred by the Club, as well as the income calculated to be received through the proposed Annual Club Fees payable by each Member for the immediately following Financial Year. The Management Company shall prepare this Budget in accordance with the provisions set out in the Operating Rules.
The Annual Club Fee shall be deemed as a personal debt for each Member, payable to the Management Company under the terms described in the next paragraph. The Management Company will issue and deliver a Charge Notice to each Member at least 30 days prior to the Payment Date of the Annual Fee. The submission of the Charge Notice by mail from the Management Company to the relevant Member shall constitute an order for payment.
The Annual Club Fee payable for each Membership Year will be determined by the Management Company each Year based on the number of Holiday Credits allocated to the account of a particular Member, and shall also be based on the costs and expenses anticipated to allow the Club Program to be able to operate.
The total amount of the Annual Club Fees payable that relate to the existing Memberships will be the amount which the Management Company considers necessary for the purpose of covering the total amount of expenses that the Management Company intends to incur in order to operate correctly the Club Program for each Financial Year, as all this is set out in the Budget.
At the sole discretion of the Management Company, the Annual Club Fee may be increased each Year to reflect the increase in costs and expenses incurred in the operation of the Club Program, as provided in the corresponding Budget for any Financial Year .
If the increase in the Annual Club Fees is greater than the increase in the U.S. Consumer Price Index, this increase shall not become effective when it is rejected by Members representing at least 70% of the total Holiday Credits held by the Members at that time.
The Annual Club Fees for the Financial Year starting on January 1, 2017 are:The Annual Club Fees for the Fiscal Year beginning on January 1st, 2017 are as follows:



Membership Type/Level Number of Holiday Credits Annual Club Fees for $ USD
Bronze 0,001 – 5,000 415.00
Bronze Plus 5,001 – 10,000 495.00
Silver 10,001 – 15,000 575.00
Silver Plus 15,001 – 20,000 670.00
Gold 20,001 – 25,000 740.00
Gold Plus 25,001 – 30,000 830.00
Platinum A 30,001 – 35,000 1,065.00
Platinum B 35,001 – 40,000 1,155.00
Platinum Plus A 40,001 – 50,000 1,255.00
Platinum Plus B 50,001 – 60,000 1,320.00
Royal A 60,001 – 70,000 1,455.00
Royal B 70,001 – 80,000 1,625.00
Royal C 80,001 – 90,000 1,775.00
Royal D 90,001 – 100,000 1,965.00
Royal E 100,001 – 110,000 2,110.00
Royal F 110,001 – 120,000 2,280.00
Royal G 120,001 – 130,000 2,450.00
Royal H 130,001 – 140,000 2,620.00
Royal I 140,001 – 150,000 2,785.00
Royal J 150,001 – 160,000 2,950.00
Royal K 160,001 – 170,000 3,110.00
Royal L 170,001 – 180,000 3,280.00
Royal M 180,001 – 190,000 3,460.00
Royal N 190,001 – 200,000 3,645.00


B. Other charges
The laws of some countries in which the Resorts are established impose certain occupancy taxes or fees, which are not included in the Annual Budget.
This is due to the fact that such taxes or fees are usually not attributable to the Club Program, but constitute special charges applicable only in certain countries. Therefore, the Annual Club Fee does not cover such expenses, which may be charged to the Member when he/she enters into such countries or when the Accommodation Unit is occupied precisely in those countries. Members are individually responsible for the payment of these occupancy taxes or fees.
In addition to the Annual Club Fee, each Member shall be responsible for paying for any Special Club Fees to the Management Company, as these may be determined to be applied to the Membership by the Management Company. This type of Special Club Fees corresponds to extraordinary expenses, costs or events that are not included in the Budget and must be covered by the Club Program within the Financial Year, in accordance with the Club’s Operating Rules.
If a Special Fee is generated, it will be determined by the Management Company, who shall prepare a Budget to cover, to the extent possible, the variation of prices in order to avoid the imposition of additional charges. This Special Fee cannot be more than twice the amount paid for the Ordinary Annual Fee corresponding to the Year in which the Special Fee is generated.
In the event that both Ordinary and Special Fees are insufficient, it will be ROYAL HOLIDAY CLUB’s sole responsibility to cover the difference.

C. Payment of Club Annual Fee and other charges
Each Member is responsible for paying the Annual Club Fee corresponding to their Membership, according to the following:
The Annual Club Fee for each Membership shall be due and payable on or before January 15 of each calendar Year, or when the Member requests a reservation for a particular Accommodation Unit or when he/she intends to make use of any other benefit, whichever happens first.
Notwithstanding the foregoing, the method and procedures for the payment of the Annual Club Fee may be amended from time to time by the Management Company, which may introduce alternative methods for payment and for the granting of discounts or other incentives for advance payment, all this as the Management Company, in its sole discretion, deems appropriate.
The Charge Notice signed and issued at any time by and on behalf of the Management Company, stating the amount due for a given Member in accordance with the terms of the Operating Rules, will constitute prima facie evidence (first sight) of said indebtedness by the Member.
If there is any outstanding balances from the due date, a collection fee equivalent to 5% of the amount due and unpaid will be charged to the Member. Subsequently, if the amount due and payable remains unpaid for more than thirty days, then a charge will be applied for interests on the unpaid balance by the Management Company, at a rate of 2.5% per month, until the total unpaid amount is covered, provided that said interest rate does not contravene the applicable legal provisions. If so, the rate will be reduced to the maximum rate permitted by such laws.
The Member will fully and effectively indemnify the Management Company for all costs incurred (including all reasonable attorneys’ fees) in connection with the collection of unpaid amounts charged to the Member.
In order to be able to cancel the membership, the member must be up to date with the payment of the annual fee and their obligations settle in this agreement herein, in which acquires their membership.

V. General Obligations of Members

Each Member of the Club shall be subject to the following obligations:

1. To comply with the provisions of the Operating Rules, the reservation procedures of the Management Company and any policies issued by any Resort Operator or supplier of any Other Benefits included in the Club’s Plan.
2. To comply together with guests and invitees with all the provisions, rules, internal regulations, statutory regulations, laws, bylaws, ordinances, proclamations, decrees or conditions of any license or permit relating to the use of Lodging Units or any Other Benefits, which may be in force from time to time. In the event that any Member or guests may breach the above-mentioned provisions, Member shall be considered responsible and be subject to any penalties established by the Resort Operator or any other entity. The Club shall in no case be responsible for the actions, omissions or wrongful conduct of any Member or Member’s guest at any time, while using the Lodging Units and/or Other Benefits.
3. To notify promptly the Management Company in writing of any change in Member’s personal information, permanent addresses or telephone numbers.
4. Each Member shall be individually responsible for payment of Annual Club Fees and other Charges, in order to offset the costs and expenses for the proper operation and administration of the Club Plan.

VI. Breach of contract of Member pertaining operational rules or payments due

If any member does not comply with the terms and Operating Rules of the Club or does not make the required payments in accordance with the Contract of Purchase and Sale or with the Operational Rules of the Club, the Management Company on behalf of the Club will have full power and authority to cancel the Membership and declare null and unenforceable each and every right the member gets or might receive derived from the Membership(s) and Holiday Credits as guarantee of prompt and timely enforcement of his obligations in accordance with the Operating Rules.
During the contract’s period of non-fulfillment and in case it is not amended during such period, The Club shall suspend permanently all Member rights derived from the membership contract if:

a) The Member does not pay promptly any of the amounts owned to the Management Company on the expiration date, and subsequently fails to pay within the following ninety (90) days via a deposit as indicated and adhere to the payment terms requested to the Member; or

b) If the Member does not comply with his obligations in accordance with the Operating Rules and notwithstanding the possibility to rectify the non-fulfillment contract, or clarification of such is not reached within ninety (90) following from the time an email communications message is sent to the member requesting to proceed this way; or

c) If The Member does not comply with his obligations in accordance with the Operating Rules and non-fulfillment of contract cannot be amended within the period of the aforementioned notice in the subparagraph or if in general terms it is impossible to resolve, or if

d) The Member is a legal person whose debt may be provisionally or definitely dissolved or settled, or placed under judicial administration, or if a legal person seized provisionally or definitely, or if his succession has been opened. Should the above circumstances happen, the Management Company has the right, without prejudice of any other rights to the following:

a) for the Member to declare all the indebted amounts in favor the Management Company, regardless that these are due and must be paid immediately of the Member will be responsible to make the payment of such amounts immediately;

b) Return the Membership(s) and the Holiday Credits based on the terms these were assigned to the person or entity that gained the right to sell the Holiday Credits or cancel, sell or transfer or pay off in any other form as it is established at the sole discretion of the Management Company and which may consider relevant such Membership(s) and Additional Holiday Credits in accordance with the terms of pledged assets under this instrument. Each Member irrevocably appoints the Management Company as its representative and legal proxy so that on the Management Company’s behalf to subscribe the entire document transmission and other instruments that might be requested to give effect to the provisions contained on this Clause. Should the Management Company sell or transfer one or more Member Memberships and to return Additional Holiday Credits in conformity with the requirements of the Mandate’s section b) above mentioned, the profits of that sale, disposition or transfer will be applied primarily to free the amounts owed by the Member or the Management Company and the remaining balance will be credited to the Member’s Account. The references about owed amounts mentioned in this subparagraph which, from time to time the Member may have, will cover interest of such owed amounts, as well as costs incurred by the Management Company, in relation to the recovery of all the amounts due by the Member on a base of total compensation, including attorney fees.

VII. Transfer of Membership and Holiday Credits

The transfer of any Membership and its corresponding Holiday Credits may be carried out by the Member (hereinafter referred to as the “Benefactor”), or in the event of death, bankruptcy, liquidation of Benefactor in a collective group; the Benefactor, his personal representative, trustee or executor as the case may be, is entitled to give, donate or transfer the Membership along with the corresponding Holiday Credits, subject to the conditions contained in this instrument, in favor of a third party (hereinafter referred to as the “Beneficiary”), under the following conditions:
1. The Beneficiary accepts the Membership in the Club together with all the rights and related obligations that correspond to said Membership; and
2. The Beneficiary accepts to assume the liabilities and responsibilities of the Benefactor generated by said Membership in accordance with the Operating Rules of the Club. Should a Member want to transfer his own Membership together with the corresponding Holiday Credits to a third party, a written request must be submitted to the administrating company together with the corresponding Membership Certificate, a transfer request signed by the Beneficiary ratifying Beneficiary’s acceptance of the obligations associated with the Membership under the Operating Rules of the Club and the pre-payment of a reasonable transfer fee. Once all the necessary documentation and payment is received, the administrating company will cancel the original existing Membership in the name of the Benefactor, enter the Beneficiary’s name in the Registry of Members, and request the Club to proceed immediately with the issue and delivery of a Membership Certificate to the Beneficiary, in accordance with the Operating Rules of the Club. The Management Company reserves at it's sole discretion the right to accept or reject any assignment, transfer or donation of Memberships and/or the corresponding Holiday Credits of such Membership, with simple notice in written way to the Member of the result of said request.

VIII. The Management Company

A. General Powers
The Management Company shall have the power to do all things that may be necessary to perform its duties while carrying out the purposes of the Club Plan and its management responsibilities. Without prejudice of the generality of the foregoing, the Management Company shall have the following specific powers to be used for the exclusive benefit of the Club and its members:
1. The power to borrow financial resources in order to fulfill its responsibilities related to the Club’s Plan;
2. The power to purchase, lease or otherwise acquire property or equipment related with the Club purposes;
3. The power to grant security interests and to tender mortgages encumbering any of its properties and rights;
4. The power to sell, lease or otherwise dispose of any of its properties and rights.
5. The power to enter into agreements to acquire or otherwise obtain Other Benefits such as travel incentives, leisure products, cruise ship accommodations or other related products or services for the use of Members of the Club.

B. Maintenance of Registration
The Management Company shall maintain a Members Registration of participants in the Club Plan. The Management Company shall maintain or cause to be maintained a separated record of each Membership’s Holiday Credits Account, together with the transactions registered in the Member’s account. The Management Company shall also maintain a Register available for the inspection of the Members, which shall specify:
1. The names and addresses of the Resorts in which Lodging Units that are part of the Club Plan are located, indicating if such Resorts are Club or Affiliate Resorts;
2. The number or other kind of identification of the Lodging Units;
3. The description of the size and other characteristics of the Lodging Units;
4. The maximum number of persons permitted, in accordance with the Operating Rules of the Club, to occupy the Lodging Units;
5. The kind of facilities available to Members, while using the Lodging Units;
6. The Furniture included in the Lodging Units;
7. A description of any Other Benefits available, such as accommodations in cruise ships, travel discounts, leisure items or any related products, which may be introduced to the Club Plan from time to time.

C. Introduction of new lodging units and/or other benefits The Management Company may from time to time Introduce Lodging Units and Other Benefits into the Club Plan as above provided.
1. As a further prerequisite for the Introduction of a Lodging Unit and/or Other Benefits into the Club Plan, the Management Company shall determine the Holiday Credits Grading of such Lodging Unit and/or Other Benefits.
2. The aggregate annual number of Holiday Credits initially allocated to a Club Lodging Unit shall not be increased once so allocated and determined by the Management Company. Regarding the Lodging Units of Club’s Affiliated Resorts, the Management Company, may from time to time, always submitting changes to the approval of the Directors, make the necessary adjustments to the grading of Holiday Credits to be allocated to the Affiliated Lodging Units in accordance with the quality, demand and service standards established by the Affiliated Resorts.
3. The aggregate number of Holiday Credits allocated to all participating Club Lodging Units and Other Benefits available to Members for a specific Calendar Year shall be equal to or shall exceed the aggregate number of Holiday Credits in the Club Plan held by Members. The Management Company will cause an independent accounting firm to prepare a review and certify that the Club Plan is in full compliance with this requirement, as of December 31st of each year.
4. The Management Company may make arrangements for Club Members to redeem their Holiday Credits for Lodging in Affiliate Lodging Units. Such Units will be designated as Affiliate Lodging Units in the Resort Guide. These Affiliate Lodging Units are completely separate from any exchange program that may be contracted with an independent exchange organization, such as Resort Condominiums International (RCI).
5. Holiday Credits Grading of Lodging Units and any Other Benefits, as determined by the Club Plan shall be conclusive and binding upon Members.
6. Holiday Credits Grading of additional Lodging Units subsequently introduced into the Club Plan but which are in the same Resort as Lodging Units already forming part of the Club Plan shall be the same as the Holiday Credits Grading of those Lodging Units of the same size and standards in that Resort. If there is no existing like Lodging Units of the same standards in the Resort, then a comparison of the units shall be taken into consideration in setting the Holiday Credits Grading of the additional Lodging units being introduced into the Club Plan.
7. The Holiday Credits Grading of additional Lodging Units in new Resorts introduced to the Club Plan shall take into account the current value and demand of the additional Lodging Unit and Amenities of the new Resort, as compared to the then current value and demand of existing Lodging Units and Amenities in the Club Plan.
8. The Management Company shall utilize its best efforts to provide Members with the use of Club Lodging Units in Club Resorts available on the Purchase Date.

D. Deletions of lodging units or other benefits The Management Company shall be entitled from time to time to Delete Club Lodging Units from the Club Plan. In such case, the Club will be responsible of substituting the deleted Lodging Units with others of equal or superior quality, in areas of similar demand. In the event that any Club Lodging Units are deleted from the Club Plan then the aggregate number of Holiday Credits currently allocated to that Club Lodging Unit should also cease to form part of the Club Plan. However, the Management Company shall not be entitled to remove Club Lodging Units from the Club Plan if to do so would result in a violation of the requirement stated in paragraph 3 in Section C3 above.

IX. General Meetings of the Club

All Members, as participants in the Club Plan, shall be notified by the Management Company of any General Meeting of Shareholders of the Club and the minutes of such meetings shall be at their disposal for review at the registered address of the Club, currently located at Rue de Vermont 9a, Case Postale 45, CH-1211 Genève 16, Switzerland. Annual General Meetings of the Club are held once every Calendar Year but not later than the 31st of December. The business to be transacted at the Annual General Meeting of the Club shall be in accordance with the Business Rules of the Club and/or as specified by the Directors. Members are entitled to receive, at least thirty days prior to the Annual Meeting or at least twenty days prior to any Special Meeting, a summary of matters to be discussed at such Meeting, and also to receive within a reasonable period of time after such meeting, a summary of the business transacted. Any duly taken resolution adopted by the Management Company increasing the Annual Club Fees, as stated in this Operating Rules, shall be valid and binding to all Members, unless at least 70% of the outstanding Holiday Credits held by Members are in disapproval of such an increase. Written notice of such disapproval should be given to the Management Company within 45 days after such resolution was taken.

X. Amendment to the Operating Rules

The provisions contained in the Operating Rules of the Club may be varied or amended by the Management Company if approved by the Directors and provided that no such amendment shall be enforceable unless Members have received prior notice in accordance with the Operating Rules of the Club. In any event, no amendment shall be in force and effect until no less than thirty (30) days have elapsed, following the mailing of notices to Members announcing such amendments to the Operating Rules. The Regulations contained in the Operating Rules of the Club may not be waived or amended in any way, except as provided in such Operating Rules and also provided that no such waiver or amendment may diminish or negatively affect Members rights as already acquired.

XI. Service of Notice

A notice may be given to any Member by sending such notice by fax, post mail or e-mail to the Member’s registered address in the Register. Any notice so sent by fax or e-mail shall be deemed to have been received the day it was successfully sent and any notice by post mail shall be deemed to have been given on the fifteenth day following that on which the letter containing the notice is posted, and as a proof of such service it shall be sufficient to prove that such letter was properly addressed, stamped and posted. Service of a notice of document on any one of several joint Members shall be deemed effectively serviced to the other joint Members.

XII. Disputes

For purposes of interpretation, regulation, ruling and execution of the Purchase and Sale Membership Agreement and the Operating Rules shall be governed and construed in accordance with the laws of Switzerland.