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                                                                          Corporate Office
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                                                                          St Thomas, 00802-1104
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S T. T H O M A S, V I R G I N     ISLANDS



November 15, 2011
Fellow Owners,
        It has been two and a half months since our annual owner’s meeting in St Thomas. At that
meeting you elected three board members to augment the four remaining sitting board members and
tasked the board with several specific objectives to be accomplished in the near term.
1.      Determination of the optimal organizational structure for the Hotel.
2.      To give SHBRA the right to rewrite the rental agreement prior to its current term’s expiration.
3.      A review of the impact of the OL position on the status of SHBRA’s EDC renewal application.
4.      A review of the Owner’s Liaison position.
5.      Provide the resort’s insurance terms to Jolyon Stern for potential savings.

        It should be noted that in the weeks immediately following the owner’s meeting your new board
had to focus its energies on understanding and then taking action to solve the impending Hotel/Resort
cash flow issue. This required updated and projected cash flow analysis, loan options analysis, obtaining
owner' approval, developing loan documents and the formation of a loan oversight committee which took
top priority for the board members. The board, with the consent of the owners, secured a line of credit
from the Condo Association for the Hotel to utilize to cover cash shortfalls during the slow seasons of the
year. Additionally the board empanelled a Loan Oversight Committee consisting of owners; Feltes, Brown
and Evans. The LOC must review and make a recommendation on each future draw request made by the
Hotel. The Hotel is now able to meet its account payables and other obligations while providing the Condo
Owners with a better than market return on their investment. Unfortunately these activities took priority
during the first month of the new board’s term but progress has been made in several areas and progress
continues to be made in the others.

        First, the board was to determine which organizational structure would best insure that the
interest of the owners of SHBRA was fairly represented by the elected board of directors by potentially
moving from the current LLP structure with the replacement of B&R Inc. with an LLC structure, or if an LLC
structure was disadvantageous from a tax and liability standpoint, can the by-laws of the current LLP
structure be modified to accomplish the wishes of SHBRA ownership. Also the owners were clear that the
board of the hotel should be the same seven people who have been elected to the Condo Board. Our first
meeting with a tax attorney, Marjorie Rawls is scheduled for this week with a report to be made at the
November BOD meeting. Status – Open / continuing

        Secondly, to "Give the SHBRA Board of Directors the right to rewrite the rental agreement in
advance of the current agreement’s expiration, with Crescent, and come back to the owners with a
recommendation". This had to do with rotation of units due to the quality rating (A,B,C,D). Status – After
further review of the agreement it was not required.

        Third, "The Limited Partners directed the Board of Directors to contact the EDC attorney and give
the EDC attorney all the facts and ask for an opinion as to the effect, negative or positive, that Mike's
contract as Owner’s Liaison has on Secret Harbour's EDC application, within five business days". The
opinion of the EDC attorney is that the OL position as fulfilled by Mike Brady is not in violation of the EDC
guidelines and will not pose a threat to the pending EDC renewal of Secret Harbour. Status – Completed

         Fourth, To "Review and Re-evaluate the OL Position". Ed Stauffer and Guy Keller, as the two newly
elected members to the SHBOA Board and the SHBRA Board, were requested to complete an overview of
the Owner’s Liaison Position and presented those findings to the full Board by the end on October 27,
2011. The scope of this review is limited to the Owner’s Liaison “position” and was not a review or an
evaluation of the individual filling the position. The Owner’s Liaison position’s characteristics that were
reviewed included it’s; general responsibilities, organizational considerations, financial consideration and
ethical consideration. Information to assist in completing this review and which was reflected in the
report was gathered from the following sources: First hand conversations and email feedback from
Owner’s who have utilized the services of the Owner’s Liaison position, Members of the Crescent
Management Team, Current and former Board Members as well the personal experiences and points of
view of both Ed and Guy. The board, by a majority vote, has slated the for the OL position to continue
until the end of February 2012, when at that time the position will be eliminated. Status - Completed.

         Fifth, to "Send our insurance policy information to Jolyon Stern for his review and to identify
potential future savings". The policy information was sent to Jolyon Stern by Janet Mazzulo on October
5th and 6th. On November 4th, Mr. Stern returned his evaluation. Mr. Stern's goal was to evaluate the
quality of the insurance program and determine if the current coverage properly reflect the exposure. As
the policies were reviewed after our policy was already renewed, Mr. Stern did not go into the market for
pricing. Mr. Stern’s subsequent recommendations are currently being reviewed by the board. Status - In
progress and almost complete.

        On behalf of the Board of Directors I wish to thank all of you for your patience and your continued
support. Please be assured that the board is working hard on your behalf to help make Secret Harbour
the best place to own in the USVI!

Happy Thanksgiving!
Regards,

Guy R. Keller
SHBOA / SHBRA Secretary




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