27 October 2021

Dear Owners,

The Board of Korora Bay Village Resort (KBV) is sending all financial members this survey to complete. Your responses to the survey questions are due by no later than 13 November 2021 which will assist us as we work through the resort’s upcoming 5-year plan. This plan determines expenditure at the resort. We also want to ensure that our long-term goals for the management and operation of the resort are in line with what the majority of our owners envisage.

Accordingly, there is an important question in the survey.

Question 8: Given the choice, would you prefer that the KBV timeshare scheme be wound up and the property sold?

Your response to this question will provide the Board with an indication of how many members would like to see the KBV properties sold (i.e. the resort with its fixtures and fittings together with the house at 3 Tropic Lodge). This is a process that could take around 2+ years to complete, following the resolution to do so. If the survey of members shows that the majority are in favour of selling the properties (resort and house) and winding up the timeshare scheme, the following is a summary of the subsequent wind-up process.

1. Obtain legal advice on the process.
2. Obtain market valuations (for the resort and house).
3. Hold an Extraordinary General Meeting (EGM) to approve resolutions that deal with:
   a. a court application to appoint a trustee and liquidator for the purpose of vesting of the property, including amalgamating all Resort titles to enable a sale of the properties and voluntary liquidation for the winding up of the company affairs
   b. set an agreed amount or % of an updated market valuation for sale of the properties
   c. approval to terminate or surrender the 99-year lease
   d. approval to use cash reserves or raise a special levy for legal fees and other costs associated with the sale of the property, such as tax advice, etc.
4. Appoint a trustee to engage real estate agents and market the property for sale and to negotiate a sale contract on conditions as approved by the EGM
5. On settlement of the sale, the liquidator will wind up the club’s affairs and distribute the net proceeds from the sale of the properties and company (Club) to each member in accordance with their ownership and the Constitution.

Estimated costs: (excluding GST) $150,000-$200,000 legal fees plus disbursements payable up front. Trustee and Liquidator fees of $40,000-$75,000 plus disbursements, dependent on agreement terms but usually as work is completed. Real estate commissions and sale costs are deducted from the sale proceeds.

As you can appreciate this is a crucial decision that all owners should consider, and we ask you to take the time to complete the survey.

The Board represents all KBV owners, and we acknowledge the fact that the number of forfeitures and surrenders of KBV ownership weeks continues to increase. I have written previously in my Chairman’s Annual Report regarding the need to offset lost revenue from levies with rental market income. The Board has an initiative-taking position on all matters before it and whilst the financial position of the Club is sound, we are deliberating with your help how much longer we can continue to bridge the ever-widening gap between these two forms of revenue.

To wind up the Club and sell the buildings and equipment the members must cast their ‘in favour’ vote at an Extraordinary General Meeting called specifically for that purpose. The first step, however, is to complete the survey form.

The Board will analyse the survey responses and report on the results, together with its recommendations, in due course.

Yours Faithfully

Grahame Edgell

Chairman