Why is this reputable law firm telling Derek how to AVOID the law?" This law was designed to protect us!

PRIVILEDGED AND CONFIDENTIAL

Memorandum

To Derek Elliott (Elliott) ;Greg Clark (Elliott); Brian Tenpenney (Elliott); Will Lambert (GR); Catherine Carscallen (GR)

From Greenberg Traurig LLC.

Date March 1, 2007

Re Sun Village Juan Dolio

Procedures During Real Estate Sales for Avoiding Application of U.S. Securities Law

A. Guidelines For Rental Program Offerings

In connection with the proposed offering of residential beneficial interests in the Sun Village Juan Dolio project (“Residential Interests”) within the U.S. by an affiliate of Elliott (“Elliott”), the following guidelines must be followed in order to conform with the “Condominium Release”, (“Release”) issued by the U.S. Securities and Exchange Commission (“SEC”) and the applicable SEC No Action Letters interpreting the Release and avoid characterization as a security.

1. No representations may be made in sales presentations with regard to the potential economic or tax benefits of ownership of a Residential Interest, or projections or representations of potential profitability of including the Residential Interest in the rental program.¹
2. Advertisement or discussions of the rental management services by the sales people prior to execution of a purchase contract is limited to a statement to the effect that “ownership may include the opportunity to place the Residential Interest in a rental arrangement”.²
3. No contract may be entered into for the provision of rental management services prior to the signing of a contract for the sale of a Residential Interest.³
4. The rental management program may not involve a pooling arrangement.⁴ Rental income must be allocated to separate accounts for each Residential Interest owner.⁵
5. The Residential Interest owner’s right to use the Residential Interest may not be unreasonably restricted.⁶ Elliott cannot require that the Residential Interest be available for rent for any part of the year or otherwise materially restrict the owner’s occupancy prior to entry of the owner into a voluntary rental agreement.⁷ The owner may enter into a voluntary rental arrangement for a fixed term, such as five or ten years.⁸

B. Procedures For Offering The Sun Village Juan Dolio Rental Program

Based on the foregoing, the sales and rental program offering for the Sun Village Juan Dolio project (“Project”) must he handled with strict adherence to the following procedure:

1. No written materials sent to a sales prospect and no statement made during a sales presentation may refer to a rental program in any way EXCEPT the following:

a. “You may use the Residential Interest, rent it to others through your efforts or an independent real estate broker or agent or you may elect to join the rental program sponsored by Elliott”;

b. “Ownership of a Residential Interest may include the opportunity to place the Residential Interest in a rental arrangement sponsored by Elliott.” .

2. IF AND WHEN a prospect asks about the Elliott sponsored rental program during a sales presentation, the prospect must be referred to a rental agent who is separate from the sales agent working with the prospect. Whether the rental agreement questions come up in a sales meeting or as a result of receiving written materials, only the rental agent may provide the details and terms of the rental program for the prospect to consider prior to execution of a purchase agreement. The rental agent will be a representative of Elliott who may be reached by phone during the sales presentation at a phone number to be provided by Elliott and who will explain the terms of the rental program and answer questions but will not provide any projections, estimates, promises of potential income or profit.

3. Once the prospect receives the information about the rental program and indicates a desire to buy a Residential Interest, the prospect may sign a purchase agreement, and only after signing the purchase agreement, can the prospect be given the rental agreement and then decide to sign it. The rental agreement must be faxed or emailed to the prospect by the rental agent and cannot provided by the sales agent. The rental agreement can be sent to the prospect by the rental agent while the prospect is in the sales office or with the sales representative and when signed must be returned to the rental agent and not kept as part of the sales document package or file. The signed rental agreements must be kept separate from the signed sales documents and held by the rental agent only.

4. All of the sales and rental documentation are designed to comply with the U.S. securities laws discussed previously so as long as the sales agents follow the above procedure in sections 1 through 3, the sales and rental transactions should comply with the applicable rules.

C. Absolute Rules and Prohinitions

In connection with the offering and sale of the Residential Interests, please note and remember the following:

1. ALL SALES MUST BE SUPERVISED AND APPROVED BY THE HOLDER OF A VALID REAL ESTATE SALES OR BROKERAGE LICENSE IN THE STATE WHERE THE SALE IS MADE. THE LICENSES MUST BE HELD IN COMPLIANCE WITH THE LAW OF THE STATE WHERE THE SALE IS MADE.

2. NO OFFERS OR SALES MAY BE MADE IN ANY STATE WHERE THE OFFERING OF THE RESIDENTIAL INTERESTS IS NOT REGISTERED WITH THE STATE UNLESS THE OFFERING IS EXEMPT FROM REGISTRATION AS CONFIRMED BY ELLIOTT IN WRITING.

3. ALL OFFERS OF THE RESIDENTIAL INTERESTS IN STATES WHERE REGISTRATION IS REQUIRED WILL INCLUDE A RIGHT OF THE PURCHASER TO RESCIND THE PURCHASE (A “COOLING OFF PERIOD”) OF VARYING PERIODS (USUALLY 3 TO 10 DAYS). THIS RIGHT OF RESCISSION CANNOT BE WAIVED. A SALE CONTRACT CANNOT BECOME EFFECTIVE UNTIL AFTER PASSAGE OF THE APPLICABLE RESCISSION PERIOD. A RENTAL AGREEMENT MAY BE SIGNED DURING THE RESCISSION PERIOD SO LONG AS IT IS SIGNED AFTER THE PURCHASE CONTRACT IS SIGNED.

4. UNDER NO CIRCUMSTANCES CAN SALES AGENTS DISCUSS ANY POTENTIAL FOR INCOME, GAIN OR PROFIT RESULTING FROM PURCHASE OF THE RESIDENTIAL INTERESTS OR CAN ANY SALES AGENT OR OTHER PERSON PROVIDE A PROSPECTIVE PURCHASER WITH ANY ESTIMATE, PROJECTION OR OTHER INFORMATION ABOUT SUCN POTENTIAL FOR INCOME, GAIN OR PROFIT. THE PURCHASER IS REQUIRED TO SIGN A STATEMENT AS PART OF THE PURCHASE DOCUMENTS STATING THAT NO SUCH DISCUSSION HAS OCCURRED AND NO SUCH MATERIALS HAVE BEEN PROVIDED.