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Latest update from Simpson Bay Resort:
Dear Members,

We hope you are enjoying a happy and healthy 2018!

First, we want to apologize for the delay in sending you this update. As you already know, the resort suffered serious and substantial damage in Hurricane Irma. We have spent the weeks since the hurricane assessing and making repairs as quickly as possible, and we felt it was important for everything to be as accurate as possible. After assessing the overall damage to the property as well as the individual damage to each building, we would like to report the following:

We are sad to report that the Caladium, Croton and Dieffenbachia buildings have not only suffered cosmetic damage, but also have severe structural damage. This is consistent with other concrete buildings in the area near the resort, such as the concrete block homes immediately next to the Caladium and Croton buildings, that were completely destroyed by the storm. It appears that the winds on that particular side of the hill were incredibly strong, and may have actually been compounded by tornados. Small tornados are known to form in hurricanes, and are usually the cause of the most significant damage. The winds were strong enough to stack cars on top of each other like blocks, and to cause structural damage to concrete structures, including the Caladium, Croton and Dieffenbachia buildings. The out-of-pocket cost to tear down and rebuild those buildings and spread the burden among the general membership makes repair of these buildings an extremely expensive proposition. Without considering these buildings, the total budget to repair all the other damage is US$5,523,073.00. Adding the cost of repair for the Caladium, Croton and Dieffenbachia buildings increases the total cost by US$15,000,000.00, as those buildings must be completely demolished and rebuilt to be safe.

The membership agreements for the Caladium, Croton and Dieffenbachia buildings contain "force majeure" clauses, which allow for the cancellation of membership agreements in the event of storms, acts of God and the like. This clause appears in the old Pelican Resort contracts as well as the newer Simpson Bay Resort contracts. It is clear that the Resort and its members cannot afford to rebuild these buildings and therefore must exercise its option to cancel the contracts, simply because there is no other legal option. This does not mean you will lose your piece of paradise! We want to ensure that members whose units were destroyed still have the opportunity to return to their St. Maarten home. Therefore, we have decided to offer members that have weeks in the Caladium, Croton and Dieffenbachia buildings the option to join the Royal Resorts Caribbean Collection ("RRCC") at no cost other than the continuation of payment of their current maintenance fees (and the payment of any points club fees, which go to the exchange company and not to Simpson Bay Resort). Each member will get an amount of points that corresponds with their type of unit and their membership week. In this way, even though the units were destroyed, these members will be able to return to the Resort if they wish. Affected members who wish to take advantage of this offer should contact Rose Blackwell and team by email at: rblackwell@simpsonbayresort.com, or by telephone at 1-888-852-8305. Members who do not wish to accept the RRCC offer should also contact Rose or a member of her team to ensure that they do not receive any additional billing. Members who have paid their 2018 maintenance fees and do not elect to accept the RRCC offer will have their maintenance fees refunded.

The renovation of the other buildings is on target with the Villas Building scheduled for occupancy by March 3, 2018, the delivery of Marina, Flamboyant Beaumontia and Bougainvillea by April 28, 2018, and delivery of the Allamanda building by the end of September, 2018. As stated above, the total budget to repair those buildings and the public areas is US$5,523,073.00. The members will pay approximately 40% of this amount via a proportional assessment based on the type of unit owned, while the Resort Developer will pay for the unsold weeks. A complete breakdown of the costs associated with repair of the Resort is in the member’s section at www.simpsonbayresort.com.

The assessment will be as follows:

RRCC members will be assessed the amount that corresponds to the type of unit available for reservation based on the number of points they currently hold and pay yearly fees on. Members in the 10-year program (points or fixed weeks) will pay the same assessment as regular members.

These assessments will be sent out in late February or early March, and will be due 90 days after they are invoiced. Any owner who owns three or more intervals will be able to elect to finance the balance due over 6 months, subject to a 15% administrative surcharge to cover administration of the financing.

We are very proud that the Resort was able to face the storm without any major injuries to our employees or guests, that no employee was dismissed or had their hours reduced on account of the storm, that we were able to host the military force as well as the red cross, and also that we were the only major resort of the island that continued to be opened for business travelers and also will hopefully be the first major resort to be reopen for tourism. We are very proud of all of our employees and we are very appreciative with all the members that continue to support the resort and their "island home".

Best Regards,

Simpson Bay Resort & Marina Management.