BERKSHIRE BY THE SEA. TO: All Berkshire By The Sea Owners FROM: Your Board of Directors RE: The 2021 Project DATE: April 2016

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1 BERKSHIRE BY THE SEA TO: All Berkshire By The Sea Owners FROM: Your Board of Directors RE: The 2021 Project DATE: April 2016 Berkshire owners will be facing a major decision in the future. The Declaration of Condominium provides: It is understood that in the year 2021 the purchasers of units committed to interval ownership shall become tenants in common. a vote shall be taken to decide the disposition of the units. In other words, the timeshare week ownership is due to expire in 2021 and the Association members (week owners) will have to decide whether to continue as a timeshare entity or dissolve the timeshare, and close the resort. Enclosed please find very important information regarding this decision. This mailing has been prepared by your Board in conjunction with our attorney, who has been retained to handle the modification of the language regarding the automatic termination of the timeshare resort in 2021, which is set forth in our condominium documents. The attorney will assist with all aspects of the amendment process, including verifying proxies and tallying the vote. With that in mind, the Board is taking a proactive approach and proposing an amendment to create another option amend the documents to remove the 2021 date. We encourage you to read everything we are providing to you. The amendment does not eliminate the option of selling the property in the future if the right opportunity presented itself, and the owners approved the sale. Please understand, if this amendment does not pass, we may be forced to close the resort and sell it in If that happened, it is likely that the Association will not be in a good position to make the best deal, and recover maximum value. Any potential buyer would be aware of our urgent need to sell, resulting in a poor negotiating position for us. Passage of the amendment provides us with the flexibility to sell, if and when an offer is presented, voted on by the owners and approved. If you have questions, please call the Resort. Frequently Asked Questions (FAQs) will be posted on our website berkshireresort.com/owners.asp. Don t forget, for additional updates be sure to enroll in our communication program. PlEasE sign and return the EnclOsEd PrOxy form as soon as POssiblE. Our goal is to attain the required votes within the next few months. We need approximately 1,200 votes to pass the proposed amendment. Your prompt attention and participation are critically important! PAGE 1 OF 6

2 BERKSHIRE BY THE SEA PROPOSED AMENDMENT The Berkshire by the Sea Declaration of Condominium, Article XIX, TERMINATION - Section B. calls for the following: It is understood that in the year 2021, the purchasers of Units committed to Interval Ownership shall become tenants in common.the Board of Directors of the Association shall, no less than 30 days,nor more than 60 days prior to the actual date of such conversion to tenancy in common,call a meeting of all Owners of Unit Weeks in Units committed to Interval Ownership. At such meeting, a vote shall be taken to decide the disposition of the Units committed to Interval Ownership. A quorum at such meeting shall be a majority of the total outstanding votes of all Owners of Unit Weeks in Units committed to Interval Ownership.At such meeting the Owners, by a majority vote, may vote to continue their Intervals, in which case the restrictive covenants set forth below will be adopted as covenants running with the land for a period of ten (10) years.the Board of Directors of the Association shall, no less than 30 days, nor more than 60 days prior to the actual expiration of said ten year period, call a meeting of all Owners of Unit Weeks in Units committed to Interval Ownership.A quorum at such meeting share be a majority of the total outstanding votes of all Owners of Unit Weeks in Units committed to Interval Ownership.The Owners may then vote to continue the Intervals for an additional 10 year period.this process shall be repeated as the end of each successive 10 year period approaches. Should less than a majority of Owners vote to continue the intervals at any such meeting, then the Board of Directors of the Association shall file suit in a Court of competent jurisdiction in Palm Beach County, Florida, for partition of the Units. What this means... The Declaration of Condominium states that in the year 2021, all Owners become tenants in common. The Declaration also states that the Board of Directors shall take a vote which will determine if Owners want to extend the timeshare documents for 10 years. The Association would have to call a meeting of all owners. A quorum at that meeting would be a majority (50% plus one) of the total voting interests - in order to consider the extension of the timeshare ownership. Once a quorum is attained, a majority (50% plus one) of the votes cast can approve the extension. If approved, the extension would be for a period of 10 years (therefore in 2031, this process would have to be repeated). If the vote does not approve the extension of the Declaration, the Association would have to file suit in Palm Beach County Court, for a partition of the units. At that time Berkshire by the Sea would close and cease all operations and all owners of the weeks would become tenants in common, with an undivided ownership interest in the Berkshire by the Sea property as a whole, equal to the week s percentage allocation set forth in the Declaration of Condominium. ALTERNATE OPTION: Amend the condominium documents The condominium documents can be amended so that the language contained in Article XIX of the Declaration regarding the timeframe is removed and replaced by: Voluntary termination of the timeshare plan may be accomplished at any time, with the approval of a majority of the total voting interests, present in person or by proxy at a meeting of the membership, at which a quorum is present. Voluntary termination of the Condominium may be accomplished at any time by approval of a majority of the total voting interests, present in person or by proxy at a meeting of the membership, at which a quorum is present. The amendment requires approval by a full 51% of the total voting interests (in good standing) of the entire membership. If the Declaration provision is amended to remove the automatic termination date, there are several benefits: Flexibility in long-range planning for operations (repairs, improvements, etc.) Ability to present owners with any viable purchase offer(s) that may be made for the property It is the Board s intention to bring this amendment to the Owners. PAGE 2 OF 6

3 SNAPSHOT OF AMENDMENT PROCESS Proposed Amendment to Eliminate 2021 Date YES amendment PassEs NO amendment fails Berkshire by the Sea LIVES ON!! Business as usual Resort Improvements continue Probable End of berkshire by the sea in 2021 simply stated, If the Amendment Passes: 2021 expiration date is removed At any time, if a reasonable purchase offer is received: It would be presented for an Owner vote We would be negotiating from a position of strength PleAse RetuRn YouR PRoxY... Every vote is important!! PAGE 3 OF 6

4 YOUR BERKSHIRE BY THE SEA BOARD OF DIRECTORS RECOMMENDS ADOPTING THE PROPOSED AMENDMENT The current Declaration has a mandatory 2021 expiration date for Berkshire by the Sea as a timeshare resort. By passing the amendment, we take away the fixed deadline, and we maximize our options for the Resort going forward. We own a prime parcel of oceanfront property. By amending the Declaration, we will give ourselves choices in the future. If there were a serious purchase offer for the entire property, we would have the leverage we need to hold out for the best offer, getting all of our owners the best possible return on their investment. for those who want to sell: We don t think that anyone would want to sell for less than what the property is worth, or net less money from a possible sale, which is what would likely happen if the amendment fails and we were forced to sell in 2021 when the timeshare would automatically terminate. Any prospective buyer would be aware of the fact that we have to sell, and that would dramatically affect the amount of any purchase offer. for those who don t want to sell: Assuming the amendment passes, nothing changes. The resort goes on as before. However, if a buyer were to make a credible offer, the Board would present the offer to the owners, and they would vote whether or not to accept it. No matter what side of the issue you are on, voting in favor of the amendment is the best option. PAGE 4 OF 6

5 BERKSHIRE BY THE SEA LIMITED PROXY The undersigned, owner(s) or designated voter of Unit Weeks No. _ - in Berkshire-By-The-Sea, a Condominium, hereby appoints a. Richard Guzzardi, Secretary of the Association, on behalf of the Board of Directors; or b. as my proxyholder to attend the Special Meeting of the members of Berkshire-By-The-Sea Condominium Association, Inc., to be held March 22, 2017, at 1:00 p.m., at 126 N. Ocean Boulevard, Delray Beach, Florida. The proxyholder named above has the authority to vote and act for me to the same extent that I would if personally present, with power of substitution, except that my proxyholder s authority is limited as indicated below: general POWErs I authorize and instruct my proxy to use his or her best judgment on all other matters which properly come before the meeting and for which a general power may be used. Or limited POWErs I specifically authorize and instruct my proxyholder to cast my vote in reference to the following matters as indicated below: Proposed amendments to the Declaration of Condominium, Article XIX, Section B, to read as follows: xix termination B. Voluntary termination of the timeshare plan may be accomplished at any time, with the approval of a majority of the total voting interests, present in person or by proxy at a meeting of the membership, at which a quorum is present. Voluntary termination of the Condominium may be accomplished at any time by approval of a majority of the total voting interests, present in person or by proxy at a meeting of the membership, at which a quorum is present. It is understood that in the year 2021, the purchasers of Units committed to Interval Ownership shall become tenants in common. The Board of Directors of the association shall, no less than 30 days, nor more than 60 days prior to the actual date of such conversion to tenancy in common, call a meeting of all Owners of Unit Weeks in Units committed to Interval Ownership. At such meeting, a vote shall be taken to decide the disposition of the units committed to Interval Ownership. A quorum at such meeting shall be a majority of the total outstanding votes of all Owners of Unit Weeks in Units committed to Interval Ownership. At such meeting the Owners, by a majority vote, may vote to continue their intervals, in which case the restrictive covenants set forth below will be adopted as covenants running with the land for a period of ten (10) years. The Board of Directors of the Association shall, no less than 30 days, nor more than 60 days prior to the actual expiration of said ten year period, call a meeting of all Owners of Unit Weeks in Units committed to Interval Ownership. A quorum at such meeting shall be a majority of the total outstanding votes of all Owners of Unit Weeks in Units committed to Interval Ownership. The Owners may then vote to continue the intervals for an additional 10 year period. This process shall be repeated as the end of each successive 10 year period approaches. Should less than a majority of the Owners vote to continue the intervals at any such meeting, then the Board of Directors of the Association shall file suit in a Court of competent jurisdiction in Palm Beach County, Florida, for partition of the Units. In the event the Owners vote to continue their Unit Weeks as provided above, then each Owner shall have the exclusive right to occupy his Unit, and as between Owners to use and enjoy the common elements of the Condominium, and the rights and easements appurtenant to this Unit during his Unit Weeks (and, in the case of Developer, during all Unit Weeks not theretofore conveyed, and to authorize others so to do, together with the non-exclusive right in common with all other Owners, but only when acting through the Association), to maintain and repair the Units during maintenance weeks. No Owner shall occupy his Unit, or exercise any other rights of Ownership in respect of his Unit other than the rights herein provided to him, during any other Unit Weeks unless expressly so authorized by the Owner entitled to occupy the Unit during such Unit Weeks or during any maintenance week except when acting through the Association. Each Owner shall keep his Unit and all furnishings in good condition and repair during his Unit Weeks, vacate the Unit at the expiration of his Unit Weeks, remove all persons and property therefrom excluding only furnishings, leave the Unit in good and sanitary condition and repair, and otherwise comply with such reasonable checkout and other procedures as may from time to time be contained in rules promulgated by the Association. PAGE 5 OF 6

6 No Owner or other person or entity acquiring any right, title or interest in a Unit shall seek or obtain through any legal procedures, judicial partition of the Unit or sale of the Unit in lieu of partition at any date prior to the expiration of each successive ten (10) year period voted by a majority of Owners. If, however, any Unit Weeks shall be owned by two or more persons as tenants-in-common or as joint tenants, nothing herein contained shall prohibit a judicial sale of the Unit Weeks in lieu of partition as between such co-tenants or joint tenants. NOTE: NEW TEXT INDICATED BY UNDERLINING; UNAFFECTED TEXT INDICATED BY DELETED TEXT INDICATED BY STRIKE THROUGHS; YES NO DATE: SIGNATURE(S) of OWNER(S) OR DESIGNATED VOTER do not complete this section. This section is only to be filled in by the proxyholder if they wish to appoint a substitute proxyholder. substitution Of PrOxy The undersigned, appointed as proxy above, does hereby designate to substitute for me in the proxy set forth above. Dated:, 20 PrOxyhOldEr THIS PROXY IS REVOCABLE BY THE UNIT OWNER AND IS VALID ONLY FOR THE MEETING FOR WHICH IT IS GIVEN AND ANY LAWFUL ADJOURNMENT. IN NO EVENT IS THE PROXY VALID FOR MORE THAN NINETY (90) DAYS FROM THE DATE OF THE ORIGINAL MEETING FOR WHICH IT WAS GIVEN. PAGE 6 OF 6