Residence Rules and Regulations

REGULATIONS OF “RESIDENCE PORTOROTONDO TRE” UNDER PERIODIC OWNERSHIP. PREAMBLE. These regulations define the rights of each periodic owner (hereinafter P.P.) of Residence Portorotondo Tre (hereinafter the Residence) and govern the exercise of the rights and fulfilment of the obligations of each P.P. of the aforesaid Residence.

Within the Municipality of Olbia, Porto Rotondo district, in the locality of Rudargia, a residential complex known as Rudargia was built on land identified in the Olbia Land Registry, including plots 641-643-647-701-708 and 710. Within this complex is the residence known as “Residence Portorotondo Tre”, intended, suitably furnished and equipped, for periodic ownership with rotating periods of use.

The condominium regulations of the Rudargia Residential Complex, of which the Residence forms part, are or will be drawn up by the prospective seller or by whoever acts on its behalf.

The Rudargia Residential Complex falls within the Porto Rotondo District Consortium, established by deed dated 1 August 1969 and registered in Tempio Pausania on 28 August 1969 under no. 1699/1951.

1.2. The Residence is functionally designed for periodic ownership with rotating periods of use and consists of:

1.2.1. As regards the real estate:

(A) A building comprising:

BASEMENT LEVEL
storage rooms, warehouses, staff accommodation.

LEVEL 0
units 00D01, 00B02, 00B03, 00D04, 00F05, 00B11, 00D12, 00B13, 00B14, 00C24, 00C25, 00C26, 00C27, 00C32, 00C33, 00C34, 00C35, 00B40, 00A41, 00D42, 00B43, 00C52, 00B54, 00C53, 00F56, 00B62, 00D63, reception and staff accommodation.

LEVEL 1
units 01D06, 01B07, 01B08, 01D09, 01F10, 01B15, 01D16, 01B17, 01B18, 01B23, 01C28, 01C29, 01C30, 01C31, 01C36, 01C37, 01C38, 01C39, 01A44, 01B45, 01D46, 01B47, 01F53, 01B57, 01D58, 01F59, 01B64, 01D65, 01B66, 01D67.

LEVEL 2
units 02B19, 02D20, 02B21, 02B22, 02A48, 02B49, 02D50 and 02B51, together with common areas.

(B) The relevant external area, all as more precisely identified in the attached general site plan (Annex 1).

(C) 225.33 thousandths of the common parts of the Rudargia Residential Complex, as identified or to be identified in the regulations of the Rudargia Residential Complex.

As regards movable property, the Residence also includes the items intended for its furniture, equipment and decoration.

1.3. With the agreement of the person responsible for organising the centralised services, one or more words may be added to the name of the Residence in order to indicate that such organisation has been entrusted to that person.

Since the organisation of the centralised services is entrusted to Valtur Casa S.p.A., for the duration of its appointment and with the consent already expressed by Valtur Casa S.p.A., the name “Residence Valtur Portorotondo Tre” shall be adopted.

2.1. The periodic ownership right of each P.P. of the Residence consists of co-ownership of the entire furnished and equipped Residence, conventionally expressed in one-hundred-thousandths A – table of one-hundred-thousandths A / Annex 2 – together with the right to the exclusive periodic use, on a rotating basis, of a specific accommodation unit for a predetermined period, including, where applicable, by way of derogation from Article 1101, paragraph 2, of the Italian Civil Code.

2.2. The combination of the one-hundred-thousandths A constituting shares in the co-ownership of the furnished and equipped Residence, which entitles the holder to exclusive periodic use of a specific accommodation unit for a specified period of each calendar year, constitutes a share in the Residence.

The shares are progressively numbered from no. 1 to no. 910, and the units/periods whose use is assigned to each individual share are indicated in Annex 2.

Each share is indivisible with respect to the Residence. Any joint owners of an undivided share are required to be represented in dealings with the Residence by a common representative chosen from among themselves or from outside their number. The first appointment may be contained in the deed of purchase of the share.

2.3. The co-ownership shares, expressed in one-hundred-thousandths, belonging to each P.P. have been determined at discretion according to the rotating use assigned in time and space to each P.P. and are conventionally accepted, including by way of derogation from provisions that might otherwise be considered applicable.

3.1. The parties agree that the Residence is intended, also pursuant to Article 1112 of the Italian Civil Code, for multiple rotating use by the P.P.s, for the purpose, considered essential by the parties, of allowing the fullest possible use of the Residence throughout the year as well as the rational and economical organisation and management of its general services.

It is acknowledged that the periodic ownership shares were also determined in relation to such multiple rotating use.

Accordingly, in accordance with the unanimous intention of the participants, without prejudice to any indivisibility arising under Article 1112 of the Italian Civil Code or other provisions of law, the Residence shall remain indivisible for as long as its present intended use is maintained and, in any event, for the longest period permitted by current or future laws of the State.

3.2. In the interest of all P.P.s and of their proper succession in the periods of use, rotating use and its fundamental characteristics may be amended only with the majorities provided for in Article 9.4.3.

The Residence is intended for periodic rotating use.

4.2. The periods of use shall begin and end each year on the Saturday or Sunday nearest to the following dates:

PERIOD 22(/23/24): 03 JUNE / 24 JUNE – 04 JUNE / 25 JUNE
PERIOD 25: 24 JUNE / 01 JULY – 25 JUNE / 02 JULY
PERIOD 26: 01 JULY / 08 JULY – 02 JULY / 09 JULY
PERIOD 27: 08 JULY / 15 JULY – 09 JULY / 16 JULY
PERIOD 28: 15 JULY / 22 JULY – 16 JULY / 23 JULY
PERIOD 29: 22 JULY / 29 JULY – 23 JULY / 30 JULY
PERIOD 30: 29 JULY / 05 AUGUST – 30 JULY / 06 AUGUST
PERIOD 31: 05 AUGUST / 12 AUGUST – 06 AUGUST / 13 AUGUST
PERIOD 32: 12 AUGUST / 19 AUGUST – 13 AUGUST / 20 AUGUST
PERIOD 33: 19 AUGUST / 26 AUGUST – 20 AUGUST / 27 AUGUST
PERIOD 34: 26 AUGUST / 02 SEPTEMBER – 27 AUGUST / 03 SEPTEMBER
PERIOD 35: 02 SEPTEMBER / 09 SEPTEMBER – 03 SEPTEMBER / 10 SEPTEMBER
PERIOD 36: 09 SEPTEMBER / 16 SEPTEMBER – 10 SEPTEMBER / 17 SEPTEMBER
PERIOD 37(/38): 16 SEPTEMBER / 30 SEPTEMBER – 17 SEPTEMBER / 01 OCTOBER

During periods in which the assets of the Residence are not allocated for rotating use, they remain at the disposal of the P.P.s collectively for ordinary or extraordinary maintenance work or for any other purpose decided in accordance with these regulations.

P.P.s and their successors or assignees are prohibited from accommodating, even temporarily, a number of persons greater than the number of sleeping places with which the accommodation unit is equipped, together with any additional beds supplied at their request within the maximum limits permitted by the furniture and equipment provided for each accommodation unit.

4.5. Rotating use may be exercised directly by the P.P. or granted to third parties either free of charge or for consideration. In the latter case, the P.P. undertakes to do so exclusively through the person appointed by the Assembly.

Such person shall be Valtur Casa S.p.A. for the entire period during which it is responsible for organising the centralised services of the Residence.

Valtur Casa S.p.A. shall exclusively provide, directly or indirectly and on the basis of contracts entered into directly with each interested P.P., under the conditions applied by it from time to time, the service of finding tenants for the periods of use of the accommodation units and the service for exchanging such periods.

4.6. The rotating use of the accommodation unit may be exercised exclusively from 5:00 p.m. on the first day of the period until 10:00 a.m. on the last day of the period.

The unit must therefore be vacated of persons, belongings and personal items no later than 10:00 a.m. on the final day of the period.

4.7. During the period of use, the utmost care and respect must be shown for the movable and immovable property, and the accommodation unit must consequently be maintained and preserved in perfect condition, order and decorum.

The P.P. must immediately inform the relevant staff of any work that becomes necessary and shall be responsible for any deterioration caused by occupants, in whatever capacity, that is not due to normal use of the property.

4.8. Upon taking possession of the accommodation unit, the P.P. or the person authorised by the P.P. must be up to date with payment of the contributions referred to in Article 6, sign a handover report and pay a security deposit in the amount determined by the Administrator, not exceeding ITL 300,000, subject to annual adjustment according to the ISTAT consumer price index for families of workers and employees or any replacement index, with October 1988 as the base index.

Upon departure, the condition of the accommodation unit shall be checked and a release report shall be drawn up and signed by the departing person or by the person authorised by them.

The security deposit shall also be returned after deducting any amounts due for damage to movable and/or immovable property, missing furniture or equipment, optional individual services provided by or through the person entrusted with management, or penalties.

However, in the event of departure outside reception opening hours, the security deposit shall be retained and returned after the unit has subsequently been inspected. If the security deposit is insufficient, the balance shall be requested.

P.P.s and their successors or assignees are required to keep crockery and all components of the kitchenette clean and to leave the accommodation unit in a condition requiring no more than normal cleaning before it is handed over to the next occupants.

In the event of a breach of the above provision, a penalty shall be due in the amount determined by the Administrator, but not exceeding ITL 200,000, subject to annual adjustment according to the ISTAT consumer price index for families of workers and employees or replacement indices, with October 1988 as the base index.

4.10. In the event that the unit is not returned within the time limits provided for in Article 4.6, without prejudice to compensation for damage suffered by the P.P. succeeding to the period of use and any additional damage, a penalty shall be payable for each hour of delay in the amount determined by the Administrator, but not exceeding ITL 15,000, subject to annual adjustment according to the ISTAT consumer price index for families of workers and employees or replacement indices, with October 1988 as the base index.

Each P.P. may freely use the common areas of the Residence according to their intended purpose and in accordance with these Regulations and the Regulations of the Rudargia Residential Complex, but only during their own period of use of the accommodation unit.

P.P.s and their successors or assignees must comply with these Regulations, the Regulations of the Rudargia Residential Complex and the Regulations of the Porto Rotondo District Consortium.

They are prohibited from:

making any permanent or temporary alteration to the movable or immovable property delivered to them at the beginning of the period of use, or removing from the accommodation unit any furniture or equipment forming part of the unit;

making duplicate keys for the accommodation units and/or appurtenant areas; the keys must be returned at the end of the period of use;

hanging laundry from windows or on terraces and gardens using means not included among the equipment provided with the accommodation unit;

using the premises in such a way as to disturb the tranquillity or decorum of the complex or in such a way as to damage its reputation, hygiene or respectable character;

leaving waste outside the designated collection points;

holding group meetings in common premises and areas without the prior agreement of the Administrator;

keeping animals;

using musical instruments, televisions, radios, recorders and similar equipment at any time at an excessive volume, whether indoors or outdoors;

altering the arrangement of or causing damage to green areas and plants;

leaving objects in common-use areas;

doing anything else that exceeds their rights and/or infringes the rights of others.

In the event of a breach of any provision contained in these Regulations, a penalty in an amount considered appropriate by the Administrator shall be due. Unless otherwise specified, the penalty for each breach shall not exceed ITL 200,000, subject to annual adjustment according to the ISTAT consumer price index for families of workers and employees or replacement indices, with October 1988 as the base index, without prejudice to compensation for any greater damage.

6.1. Each P.P. must contribute to the expenses necessary for the preservation, use and administration of the Residence.

The annual expenses of the Residence consist of all expenses of any kind relating to the financial year in question. Expenses shall be divided into the following two categories:

1st category – expenses relating to the “ownership” of the Residence:

expenses relating to the administration of the Residence, including the Administrator's remuneration in full where centralised management of the services is entrusted to third parties, or limited to 30% where such management is carried out by the Administrator;

insurance premiums for fire, theft and civil liability for damage caused by the building or furniture, together with any other comparable insurance premiums;

extraordinary maintenance expenses for the movable and immovable property of the Residence, including the replacement and replenishment of supplies;

expenses arising from participation in the Porto Rotondo District Consortium;

expenses arising from participation in the Rudargia Condominium;

improvements;

expenses for the person responsible for materials;

other expenses of the Residence which, in the opinion of the Administrator, are by their nature comparable to “ownership” expenses.

Expenses in the first category shall be allocated among all P.P.s according to expense table B contained in Annex 2, conventionally established including by way of derogation from Article 1101 of the Italian Civil Code and any other provision of law that might be considered applicable.

2nd category – expenses relating to the “operation” of the Residence:

expenses for centralised services not expressly included in the first category, including 70% of the Administrator's remuneration where the Administrator is responsible for centralised management of the services, or the remuneration of the person or entity other than the Administrator responsible for providing the centrally managed services;

ordinary maintenance expenses for the movable and immovable property of the Residence;

electricity expenses;

insurance premiums not included in the first category;

gardening expenses;

television subscription and service expenses;

fixed telephone expenses, with the cost of individual calls being charged to the P.P. who made them;

expenses for various supplies;

other expenses of the Residence which, in the Administrator's opinion, are by their nature comparable to “operating” expenses.

The expenses of the second category shall be allocated among all P.P.s according to expense table C contained in Annex 2, conventionally established including by way of derogation from Article 1101 of the Italian Civil Code and any other provision of law that might be considered applicable.

6.2. P.P.s may not release themselves from the obligation to participate fully in common expenses by waiving rotating use, the use of an individual service, performance or supply, by not requesting additional beds, or otherwise.

7.1.1. The following centrally managed services, referred to as “primary” services, are connected with rotating use:

a) reception/concierge service;

b) telephone switchboard;

c) linen change and cleaning of accommodation units at the beginning of each weekly period;

d) maintenance of the buildings and of the furniture and equipment of the Residence;

e) water and electricity supply;

f) gardening;

g) insurance against fire, theft and civil liability risks.

7.1.2. The following centrally managed services, referred to as “non-primary” services, are also connected with rotating use:

h) closed-circuit television service.

7.1.3. The P.P.s acknowledge that the efficient and economical provision of the services requires unified management and declare that they wish such unified management to be governed by these Regulations both for the services listed above and for any additional services subsequently approved by the Assembly.

7.2.1. The “primary” services referred to in Article 7.1.1 may be changed only with the majorities provided for in Article 9.4.3.

7.2.2. The “non-primary” services referred to in Article 7.1.2 may be changed only with the majorities provided for in Article 9.4.1.1.

7.3. Management of the Residence's services shall be carried out by the Administrator unless, following a resolution of the Assembly, it is entrusted under a specific contract to a third party, which shall provide tourism-type management using its own staff or, in whole or in part, other parties, including the provision of optional individual services, while respecting the rights of use of the P.P.s and these Regulations.

Valtur Casa S.p.A., the first Administrator of the Residence, shall manage the Residence's services until 31 October 1994, subject to termination, renewal or extension.

Upon expiry of the appointment granted to Valtur Casa S.p.A., if it is not renewed, the centrally managed services shall be provided on a unified basis in accordance with the arrangements established by the Assembly with the majority referred to in Article 9.4.1.2.

However, in order to safeguard continuity in the centralised management of services, Valtur Casa S.p.A. – if it agrees – shall continue to manage the services from one financial year to the next where, six months before the beginning of the financial year, no alternative arrangements have been made to ensure such management.

The administrative and representative bodies of the Residence are:

a) the Assembly of the P.P.s;

b) the Supervisory Board;

c) the Administrator.

9.1. The Assembly of the P.P.s shall meet annually in ordinary session no later than eight months after the end of the financial year, or in extraordinary session whenever the Administrator considers it necessary or whenever a written request is submitted to the Administrator by registered letter with return receipt by a number of P.P.s representing at least one sixth of the ownership of the Residence, specifying the matters to be discussed.

If ten days pass without action after the Administrator receives such registered letter, the requesting P.P.s may convene the Assembly directly.

The Assembly shall be convened by individual registered letter sent at least twenty days before the scheduled date, or by any other lawful method considered suitable.

The notice must state the place, day and time of the meeting and the matters to be discussed.

The notice convening the annual ordinary Assembly shall include copies of the accounts for the most recently closed financial year, the annual expense budget for the financial year about to begin and the proposed allocation of expenses.

The documents relating to the expense budget and accounts shall be made available to the P.P.s for inspection during the five days preceding the ordinary Assembly at the Administrator's office during normal office hours.

9.2. Those attending the Assembly shall appoint, on each occasion, a Chairperson and a Secretary, who may also be persons who are not P.P.s.

9.3. Each P.P. shall be entitled to as many votes as the number of one-hundred-thousandths of co-ownership of the Residence included in the Residence share held by that P.P. according to table A in Annex 2.

Each P.P. is entitled to be represented at the Assembly by another person, including a person who is not a periodic owner, by means of written proxy.

In order to allow P.P.s who cannot personally attend Assemblies to express their wishes concerning resolutions to be adopted, they may grant a proxy to the Administrator indicating how the vote is to be cast on the various items on the agenda.

Persons other than the Administrator may not hold more than 15 proxies.

The proxies shall be collected by the Administrator after their validity has been checked and shall be attached to the records of the meeting.

If a Residence share belongs to more than one person, they shall be entitled to a single representative at the Assembly, appointed by the interested parties, including from outside their number, or, failing such appointment, by the Chairperson of the Assembly from among the interested parties present.

Such representative shall have as many votes as the number of one-hundred-thousandths of co-ownership of the Residence included in the undivided share.

A proxy may validly be granted by only one of the joint owners of an undivided share.

9.4.1.1. Resolutions concerning the following matters shall be approved by an absolute majority of votes cast, regardless of the number of P.P.s present or represented, even where the matters exceed ordinary administration:

the annual expense budget, including the expenses approved pursuant to Article 9.4.2.5 for the portion attributable to the financial year;

increases in the maximum amounts of the “extraordinary expenses fund” and the “treasury requirements reserve fund”, to be set aside for future extraordinary maintenance and improvements and for treasury requirements;

allocation of expenses among P.P.s;

the Administrator's annual accounts;

coverage of any deficits and use of any surpluses;

maintenance, replacement, purchase and sale of movable property;

maintenance of immovable property within an expenditure limit of 2% of the reconstruction value of the property;

improvements intended to enhance the Residence or make its use more convenient or profitable within an expenditure limit of 2% of the reconstruction value of the property;

legal proceedings as claimant or defendant concerning matters outside the powers of the Administrator;

changes to the services referred to as “non-primary”;

methods of insuring against fire, theft and civil liability risks;

matters similar in nature to the foregoing relating to the Rudargia Residential Complex or the Porto Rotondo District Consortium which must be examined and/or decided by their governing bodies and which the Administrator considers appropriate to submit to the Assembly;

in general, any other matter of ordinary administration not listed in Article 9.4.2.

9.4.1.2. Resolutions concerning the following shall be approved by a relative majority of votes cast, regardless of the number of P.P.s present or represented:

appointment and remuneration of the Administrator and the contractual terms with the Administrator, including the duration of the appointment, which may exceed two years;

appointment and remuneration of the person or entity responsible for providing centrally managed services and the contractual terms with that person or entity, including a duration exceeding two years where such management is not carried out by the Administrator;

appointment of the members of the Supervisory Board, it being specified that each P.P. may vote for up to three candidates and that the candidates obtaining the greatest number of votes shall be elected.

9.4.2. Resolutions concerning the following matters shall be approved by a majority of votes cast at the Assembly, provided that such majority represents not less than one third of all votes of the P.P.s, even where the matters do not exceed ordinary administration:

maintenance of immovable property involving expenditure exceeding 2% of the reconstruction value of the property;

the execution of multi-year contracts exceeding two years, without prejudice to Article 9.4.1.2;

improvements intended to enhance the Residence or make its use more convenient or profitable involving expenditure exceeding 2% of the reconstruction value of the property;

removal of the Administrator and termination of the management agreement in the cases provided for by these Regulations and/or the agreement itself;

amendments to these Regulations for which no different majority is specified, without prejudice to Article 24.2;

matters similar in nature to the foregoing relating to the Rudargia Residential Complex or the Porto Rotondo District Consortium which are to be examined and/or decided within their governing bodies and which the Administrator considers appropriate to submit to the Assembly;

in general, any other matter of extraordinary administration not provided for in Articles 9.4.1.1 and 9.4.1.2 above or Article 9.4.3 below.

9.4.3. Without prejudice to Article 24.2, resolutions shall be approved by a majority of votes cast at the Assembly, provided that such majority represents not less than one half of all votes of the P.P.s, where they concern amendments to these Regulations relating to:

rotating use and its fundamental characteristics;

the services referred to as “primary”;

centralised management of services;

the intended use of the Residence.

9.5.1. For each Assembly an attendance sheet shall be drawn up indicating the surname and first name of the P.P.s present or represented, or of the common representative of P.P.s holding an undivided share, together with the surname and first name of any representative and the respective shares.

9.5.2. Minutes shall be drawn up of the resolutions and must contain:

the place and date of the meeting and the agenda;

the appointment of the Chairperson and Secretary;

confirmation that the Assembly has been validly constituted;

the number of one-hundred-thousandths of co-ownership of the Residence represented by the P.P.s present or represented at the Assembly;

a summary of the discussion and the text of the resolutions adopted, specifying the majority obtained for each.

The minutes must be entered in the appropriate register, signed by the Chairperson and Secretary, communicated to the P.P.s by registered letter or other lawful method considered suitable within 45 days following the date of the Assembly, and remain available to P.P.s at the Administrator's office.

9.6. All resolutions adopted by the Assembly shall be binding also on minorities and absent parties, without prejudice to their right to challenge them as provided by law.

9.7. The Assembly may be convened in Rome, in the locality where the Residence is situated, or in the capital of a Region in which P.P.s representing 20% of the one-hundred-thousandths of co-ownership of the Residence are resident.

10.1. A Supervisory Board of the Residence is established.

The Board shall consist of three members selected from among the P.P.s and shall appoint a Chairperson from among its members.

The members of the Supervisory Board shall be appointed by the annual Assembly with the majority and according to the procedures referred to in Article 19.1.2.

If a legal entity or an entity with separate assets is appointed, it shall designate a natural person as its permanent representative on the Board, with the right subsequently to replace that representative.

The Board shall remain in office until the following annual Assembly and its members shall be entitled to reimbursement of expenses.

10.2. The Board shall supervise the administration of the Residence.

It shall authorise the Administrator to carry out acts in which the Administrator may have a conflict of interest with the Residence.

It shall issue a binding opinion in the case provided for in Article 11.6 and an advisory opinion, when requested by the Administrator, on annual budgets and accounts and on any other matters considered appropriate.

It shall propose candidates for the position of Administrator or for the provision of centralised management services to an Assembly convened for that purpose.

It may request that items be included on the agenda of Assemblies.

It shall meet whenever requested by the Administrator or whenever the Chairperson or two of its members consider it appropriate.

In cases of urgency or necessity, the Administrator may obtain the opinions of the members of the Supervisory Board concerning measures the Administrator intends to adopt by communicating separately with each of them, including by telephone.

11.1. The administration of the Residence, including by way of derogation from Article 1106 of the Italian Civil Code and any other provision that may be considered applicable, shall be entrusted under a specific contract to an Administrator appointed by the Assembly.

The Administrator may be a natural person, an entity with separate assets, a legal entity, a P.P. or an external person.

The Administrator shall remain in office from the date of the Assembly that elected the Administrator until the following annual Assembly or, where the Administrator also manages the centralised services, for the longer period determined by the Assembly, and may be reappointed.

Valtur Casa S.p.A. is appointed as the first Administrator of the Residence and, in that capacity, shall manage the centralised services and remain in office until 31 October 1994, subject to termination, renewal or extension.

The first Administrator may be removed only for just cause.

11.3. The Administrator's remuneration shall be determined by the Assembly of the P.P.s and paid from the common fund.

11.4. The remuneration of the first Administrator is already specified in the agreement with Valtur Casa S.p.A.

11.5. In compliance with these Regulations, the Administrator shall ensure ordinary administration and, in particular, shall also be responsible for the following, even where exceeding ordinary administration:

regulating use of the Residence so as to ensure the best possible enjoyment for all, with the power, where appropriate, to suspend or reduce all or part of a particular service and/or a particular use of common areas during periods of low occupancy, while preserving the full exclusive enjoyment of occupied accommodation units;

managing the centralised services where such management has not been entrusted to third parties;

preparing the annual expense budget and allocating expenses according to the criteria established by these Regulations, for submission to the Assembly;

preparing annual accounts of income and expenditure for submission to the Assembly;

convening the Assembly at least once a year, within eight months after the end of the financial year, to examine the accounts for the previous year and the budget for the following year;

implementing the resolutions of the Assembly and ensuring compliance with these Regulations;

where considered appropriate, deciding, even without a prior resolution of the Assembly, measures intended to improve services and the enjoyment of the accommodation units or common areas, including measures involving innovations and improvements, within an expenditure limit of 1% of the reconstruction value of the property and subject to Article 11.6;

experimentally introducing “non-primary” services, subject to Article 11.6;

ordering extraordinary maintenance work not approved by the Assembly or included in an approved expense budget, including outside the spending limits of Article 11.6, only where such work is urgent, with the obligation to consult the Supervisory Board and report to the next Assembly;

collecting expense contributions from the P.P.s and paying expenses necessary for administration or use of common assets within the limits established by these Regulations;

taking legal action against P.P.s to recover contributions or any other amounts owed by them;

carrying out acts necessary to preserve the common property of the P.P.s;

taking steps, where possible, to resolve any disputes between P.P.s;

hiring, dismissing and replacing any employees of the Residence and determining their remuneration and working hours in accordance with applicable provisions;

requesting the secondment of personnel;

negotiating, entering into and terminating insurance contracts provided for in these Regulations or approved by the Assembly, paying the relevant premiums and collecting any compensation due;

requesting banking facilities in the name of the Residence up to a maximum of 2% of the reconstruction value of the property;

opening and closing current accounts with banks, credit institutions or the Postal Administration;

crediting any amounts belonging to the Residence to the appropriate current accounts and withdrawing amounts by cheques drawn on those accounts or by other means, including overdrafts within the limits of credit facilities obtained;

collecting receivables, payment orders, cheques and money orders issued for any reason in the name of the Residence or in the Administrator's name and, where applicable, depositing them in the designated current accounts;

ensuring compliance with legal requirements;

managing relations with the Rudargia Residential Complex and the Porto Rotondo District Consortium, including attendance at their Assemblies or meetings of other bodies as common representative of all P.P.s, including pursuant to Article 67, paragraph 2, of the implementing provisions of the Italian Civil Code and/or as representative of individual P.P.s or of the Residence as a whole;

doing anything else necessary or appropriate in the interests of the Residence and the P.P.s, within the limits imposed by law and these Regulations.

The Administrator may delegate part of these duties to the Administrator's own employees, employees of the Residence or third parties.

11.6. The Administrator may assume obligations for the Residence and the P.P.s and incur expenses, but only within the limits of the duly approved budget and an additional amount not exceeding 20% of that budget as a whole, which may be the subject of a request for supplementary contributions from the P.P.s.

The Administrator shall be required to obtain the prior binding opinion of the Supervisory Board in order to exceed the budget by more than 20% and up to the maximum limit stated in the source document, and to request the corresponding supplementary contributions from the P.P.s.

The Administrator must convene the Assembly without delay if total expenditure exceeds the amount budgeted for the current financial year by more than 30%.

If an annual budget has not been approved before the beginning of the financial year, contributions may be requested, obligations assumed and expenses incurred on the basis of an annual budget involving total expenditure within the limits of the annual budget for the previous financial year increased by 20%.

Within the limits of the powers established by these Regulations and by the Assembly, the Administrator shall represent the Residence and, where necessary, the P.P.s in their capacity as co-owners of the Residence.

The Administrator may carry out all acts and enter into all contracts useful or necessary for the performance of the Administrator's duties and, by way of example and without limitation, may enter into and terminate contracts of any kind, particularly with RAI/TV, insurance companies and service providers supplying electricity, gas, telephone services and water, as well as services for the disposal of municipal solid waste and water treatment.

The Administrator may pay security deposits and provide any guarantees that may be necessary and, in general, carry out any operations useful or necessary for the exercise of the Administrator's duties with the Postal Administration, credit institutions and any other public or private office.

The Administrator may bring or defend legal proceedings against P.P.s or third parties and may appoint lawyers and legal representatives for this purpose.

The Administrator shall manage relations with the Rudargia Residential Complex and the Porto Rotondo District Consortium, including by attending their respective assemblies or meetings of other bodies as common representative of all P.P.s, including pursuant to Article 67, paragraph 2, of the implementing provisions of the Italian Civil Code and/or as representative of individual P.P.s or of the Residence as a whole.

The Administrator may delegate part of the powers of representation to the Administrator's employees, employees of the Residence or third parties.

The Administrator must keep:

the register of minutes of the Assembly;

the register of minutes of the Supervisory Board;

the cash book recording income and expenditure, divided into the relevant accounting categories;

a register of the P.P.s containing their personal details and addresses;

plans of the property;

copies of the insurance policies;

any other documents required by law.

Contributions of any kind paid by the P.P.s shall be paid into a common fund.

Contributions accumulated in the common fund must be deposited with banks or credit institutions selected by the Administrator or with the Postal Administration.

Withdrawals from the common fund shall be made by the Administrator in accordance with these Regulations and the law.

15.1. The financial year shall begin on 1 November of each year and end on 31 October of the following year.

The first financial year shall end on 31 October 1990.

15.2. Administration and management expenses and, in general, all other expenses relating to the Residence, as determined, must be paid by the P.P.s in the manner and within the time limits indicated, 90 days before the beginning of their respective period of use.

15.3. Any debit balance resulting from accounts approved by the Assembly may, depending on treasury requirements assessed by the Administrator, be requested separately or together with the first contribution payable after approval of those accounts.

Any credit balance shall instead be deducted from the contribution due for the financial year following that during which the accounts were approved by the Assembly or, at the Administrator's discretion, allocated to increase the treasury funds according to expense table C or the extraordinary expense fund according to the applicable expense table.

15.4. A “treasury requirements reserve fund” of the Residence is established for a maximum amount equal to 100% of the annual budget for second-category expenses, to which all P.P.s must contribute according to expense table C.

An “extraordinary expenses fund” is also established for future extraordinary maintenance or replacement work at the Residence, in an amount equal to up to 100% of the annual budget for first-category expenses, to which all P.P.s must contribute according to expense table B.

Such funds shall be paid when requested by the Administrator.

15.5. If payments are not made in accordance with the required procedures and deadlines, an initial reminder shall be sent, possibly with a penalty charged in an amount considered appropriate by the Administrator.

Subsequently, for all persons in arrears and from the date considered appropriate by the Administrator, default interest may be charged on the amount due at a rate equal to the prime rate applicable at the beginning of the financial year as recorded by the A.B.I., increased by three percentage points, without prejudice to any additional penalties provided for by these Regulations, legal proceedings to recover the debt and compensation for any greater damage.

15.6. If a P.P. does not pay the expenses in accordance with the agreed terms and procedures, the key to the accommodation unit shall not be delivered to that P.P., thereby preventing the P.P. from using the commonly owned property during the relevant period.

Failure to deliver the key and the consequent inability to use the unit shall not prevent the Administrator from taking legal action against the defaulting P.P. until the interests adversely affected have been fully satisfied.

15.7. If a P.P. is in default, the Administrator may, at the Administrator's complete discretion and at the expense of the P.P., arrange for the accommodation unit to be rented during the period of exclusive use belonging to the defaulting P.P., applying any rental income, net of expenses, towards the amount owed by that P.P.

For this purpose, by accepting these Regulations, the P.P.s grant irrevocable mandates to the Administrator of the Residence.

Failure to rent the unit may under no circumstances be relied upon by the P.P. as grounds for any claim or counterclaim against the Residence or its Administrator.

Each P.P. shall be liable pursuant to Articles 2043 et seq. of the Italian Civil Code for damage suffered by commonly owned property as a result of the acts of that P.P. or of persons, animals or things for which the P.P. is responsible.

17.1. The Residence shall take out insurance:

a) against fire damage to all movable and immovable property of the Residence;

b) against the risk of theft of movable property and removable immovable property of the Residence;

c) against civil liability risks towards P.P.s, occupants, visitors and third parties in general and their property, and towards employees;

d) against the risk of accidents involving employees;

e) against any other risks approved by the Assembly with the majority provided for in Article 9.4.1.1.

17.2. Responsibility for custody and the risk of theft, loss or deterioration of property belonging to individual P.P.s, occupants, visitors or third parties generally and brought into the Residence shall remain with those persons, with the resulting exclusion of any liability on the part of the Residence, without prejudice to the possibility of insurance pursuant to Article 17.1(e).

17.3. The Assembly or, failing a decision by the Assembly, the Administrator shall determine the insured capital and coverage limits.

The Administrator shall select the insurance company and carry out whatever else is necessary.

The first insurance policies have already been entered into with a leading Italian insurance company.

17.4. Any insurance compensation shall be collected by the Administrator and used, depending on the circumstances, for reconstruction, except where a decision made in accordance with law excludes reconstruction, for repair or replacement, or for payment of compensation for damage.

If the compensation received is less than the amount required, all P.P.s shall contribute to make up the difference in proportion to their respective one-hundred-thousandth co-ownership shares in the Residence.

If the compensation received exceeds the amount required, the surplus shall be distributed among all P.P.s in the same proportions, giving priority to offsetting amounts that individual P.P.s may owe for the current financial year, the following financial year and previous financial years.

If a P.P. transfers the P.P.'s share in the Residence to another person, in addition to the obligations arising by law, the P.P. shall be required, where necessary, to require the purchaser to comply with these Regulations, the agreement with the Administrator and any management agreement, and to notify the Administrator of the personal details of the new P.P.

The transferee shall be required to pay all expense contributions requested after the transfer, even where they relate to expenses incurred before the transfer, and shall be jointly and severally liable with the transferor for contributions owed by the transferor but not yet paid.

The transferring P.P. shall guarantee to the Residence the amounts owed by the transferee in respect of expense contributions requested after the transfer but relating to expenses incurred before the transfer.

If a P.P. authorises a third party in any manner to use the accommodation unit to which that P.P. is entitled during the P.P.'s period of exclusive use, in order for the third party to be granted access the P.P. must issue a written authorisation to the third party, to be delivered to the reception staff.

20.1. P.P.s must notify the Administrator of their address and of any subsequent change.

Communications provided for by these Regulations or otherwise relating to the Residence shall be sent to the most recently notified address.

Where a share is jointly owned, communications may be sent to the common representative or, if no representative has been notified to the Administrator, to any one of the joint owners.

In the event of inheritance and where all heirs are unknown, communications may be sent to the last address of the deceased.

Valtur Casa S.p.A., in its capacity as Administrator, elects domicile in Rome, Via Giulio Caccini no. 1.

The following annexes form an integral part of these Regulations:

1 – plans of the properties;

2 – tables concerning co-ownership, allocation of expenses and periods of use.

The provisions agreed herein are accepted by the P.P.s as a whole and individually. The possible invalidity of one or more provisions shall not result in the invalidity of all the remaining provisions.

All provisions of these Regulations shall be binding on the P.P.s and on their successors and/or assigns on any basis whatsoever.

24.1. For matters not governed by these Regulations and insofar as they do not conflict with the provisions contained herein, the legal provisions concerning co-ownership or other provisions of law directly applicable or applicable by analogy shall apply.

24.2. If new legislation governing rotating use applicable to the Residence, or timeshare ownership generally, is introduced, these Regulations may be amended or replaced by the Assembly with the majority provided for in Article 9.4.1.1 or in accordance with the procedures provided for by the new legislation, using the minimum majorities required, in order to bring the applicable rules into line with the statutory provisions, including provisions that are non-mandatory rather than compulsory.

The Court of Rome shall have exclusive jurisdiction.