Who is owner of Residential Cruise Line, Ltd.?

Randall B. Jackson, a prominent Arizona real estate developer, luxury motor yacht dealer, former commercial airline and military pilot, is the owner and C.E.O of Residential Cruise Line, Ltd.

What was the inspiration behind Magellan?

A long time yachting and cruising enthusiast, Mr. Jackson was inspired to build the world’s most luxurious residential cruise ship while he and his family were enjoying a holiday cruise through the Straits of Magellan.

Who are the ship architects?

Magellan is designed by the internationally acclaimed Norwegian firm of Petter Yran and Bjorn Storbraaten Architects A.S.

Who will build Magellan?

Aker Yards has been selected to build Magellan at its shipyard in Saint-Nazaire, France. Aker Yards, a part of the Aker Group, is one of the largest and most renowned shipbuilders in the world. The Memorandum of Understanding (MOU), a written statement from the shipyard that they intend to build the ship, was agreed to and signed by both Aker Yards ASA and the owner of Residential Cruise Line, Ltd.

Where will the ship be flagged?

Magellan will be flagged out of the Bahamas.

How large will the ship be when completed?

When completed, the Magellan will displace 76,000 GWT and will measure more than 860 feet long by 106 feet wide. The ship will feature 15 decks with a multinational crew of 500.

How long will it take to build the ship?

Construction of the ship is estimated to take approximately three years, commencing once the construction contract has been signed with the shipyard.

What happens to my money paid toward my purchase?

Any deposit paid toward your purchase will be deposited in an escrow account between Wells Fargo Bank and the Magellan Owners Association.

What is the criteria to release the Wells Fargo deposits to the shipyard?

When the following conditions are met, the deposits in the Wells Fargo Escrow Account will be released to the shipyard or its construction lender: • The construction contract has been executed. • A full financial guarantee has been provided to the ship builder. • The shipyard has issued a Letter of Credit as collateral for release of the deposits.

May I review the escrow agreement?

Yes, a copy of the escrow agreement will be provided with the full/fractional contract paperwork.

If construction of the ship is delayed, will my money be returned?

Yes, your purchase contract provides that we have a maximum of 2 years to sign a contract with the shipyard and 3 years from the signing of that contract in which to construct the ship. In the event either one does not occur within the specified timeframe, your money will be promptly returned at your request.

When do you anticipate completion of Magellan?

It is anticipated that Magellan will be completed by mid 2010.

How is Magellan different from any other residential cruise ship?

Magellan is the most luxurious residential cruise ship ever conceived, so it is different from other residential cruise ships in many ways: • Magellan is the ONLY residential cruise ship to offer fractional ownership, in addition to full ownership. • Magellan is larger than other residential cruise ships. It will be 860 feet long and will displace 76,000 GWT. It will feature 15 decks. • Magellan’s size also means more amenities, including four fine dining restaurants, two executive helicopters, an observatory, a greenhouse, indoor golf simulators, a putting green, a tennis court and an onboard, retractable marina. • The large size also means better access to the ship, including round-the-clock use of our all-weather heliport (weather and sea conditions permitting).

What is the maximum capacity for Magellan?

At maximum capacity, Magellan can carry 1,100 passengers and 500 crew.

Does Magellan offer financing or installment plans?

Yes, we offer both a financing plan and a zero-interest installment plan! Please contact your regional sales manager for details.

Who is the management company for Magellan?

Residential Cruise Line, Ltd. (the owner of the vessel) will contract with V. Ships (www.vship.com) to professionally staff and manage the ship. V. Ships, an international company with 68 offices in 26 countries, has more than 24,000 sea staff and crew, with 900 of the world’s largest vessels under management.

Will there be a hotel management company?

Residential Cruise Line will contract with a five-star hotel management company to operate the hospitality portion of Magellan, providing exceptional service for owners and guests.

How many ways are there to purchase aboard Magellan?

There are two ways to purchase aboard Magellan. Units are available for purchase to full or fractional ownership residents. Fractional owners may purchase their time via a fixed or variable ownership plan.

Do I own my residence on Magellan?

The Magellan Owners Association has entered into a 100 year Master Lease with Residential Cruise Line, Ltd. for the residential areas of the ship. Full owners will have unlimited access to their residences. Fractional owners will have unlimited access to their residences during the time that they have purchased via a 50 year leasehold from the Magellan Owners Association.

What are the benefits to purchasing on a Platinum Deck?

Security card access, priority reservations and priority transportation are just a few of the services available exclusively to Magellan Owners on Platinum Decks 10 and 11. Other exclusive services include concierge and butler services, personal shopper, private chef, companion program and private day-care.

Is the Ship’s Operating Expense (SOE) similar to HOA dues? What does it include?

The SOE is similar to HOA dues in that it pays for expenses such as crew, fuel, all port charges the vessel incurs, utilities such as electricity, water, basic television and onboard telephone service. The SOE also includes insurance on the vessel and each residential unit, maintenance and replacement of the ship’s mechanical systems, replacement of interior items in a unit as necessary, and all housekeeping for both public and residential spaces.

What is not included in the Ship’s Operating Expense (SOE)?

• External telephone service • Aqua Spa Services • Premium television service • Onboard Marina Amenities • Internet service • Casino Gaming • Medical Services • Pharmacy Services • Veterinary Services • Helicopter Service • Entertainment • Dry Cleaning • Meals and Drinks • Educational Programs • Guest Lectures • Port Excursions/Tours • Transportation to/from Ship • Childcare Services

Is there protection from rising SOE costs from year to year?

The components of Ship Operating Expenses identified as Controllable Costs will not exceed one hundred six percent (106%) of the Controllable Costs for the prior Lease Year. Some examples of non-controllable costs are fuel and insurance.

Who is responsible for the SOE for unsold residences on the ship?

The ship owner, Residential Cruise Line Ltd., is obligated to contribute the portion of the Ship Operating Expenses with respect to residences that have not previously been sold.

What happens to revenue from the casino/restaurants/services on board?

Income or loss of income from shipboard services is the responsibility of the ship owner, Residential Cruise Line, Ltd. Owners of the residences on board Magellan will not participate in the income or loss of income from the shipboard services.

May I sell my residence at any time?

You may sell your residence after the delivery of the vessel with a 1% transfer fee paid to Residential Cruise Line, Ltd.

May I rent my residence? What is the rental process?

Yes, your residence may be rented either through your personal agent or via the ship's management office for a fee. Your residence may not be sublet for occupancy with respect to any departure of the Ship from a United States port unless and until we have complied with the financial responsibility requirements of the Federal Maritime Commission of the United States in respect to both casualty and non-performance of transportation.

Can a residence be purchased in an LLC or trust?

Yes, but an authorized officer needs to personally sign and provide proper documentation.

Is purchase of a residence on Magellan eligible for a 1031 exchange?

We are willing to fully cooperate with you regarding a 1031 exchange. However, that is a matter between you and your accountant. Our understanding is that the 1031 regulations do not currently address this type of personal property.

How is the itinerary determined?

Magellan’s first two years' itinerary was developed by V. Ships, the ship's management company. As an owner aboard Magellan, you may offer suggestions regarding the itinerary.

How often are ports repeated?

The itinerary may repeat ports every four years. The cruise ports are very dynamic; new ports and excursions will be added every year worldwide.

How long is the Magellan expected to remain operational?

By utilizing the latest technology and maintaining a rigorous maintenance schedule, Magellan is expected to remain in operational condition for the 100 year life of the vessel. The ship will be dry docked for a 30 day period every two and a half years for maintenance. During the last fifty years of the life of the vessel, the ship may be permanently moored/docked at a destination similar to the Queen Mary Cruise Ship now permanently moored in Long Beach, California.

If the ship is dry docked during my month, am I required to pay the SOE for that month?

Yes. Per Section 6 (d) of the Proprietary Unit Lease, during such periods of time that the Ship Owner is performing maintenance to the Ship and Lessee is denied access to the Unit and/or Ship, the Ship Operating Expense shall accrue. However, a credit will be applied to the following year's SOE.

What measures will be in place to ensure the safety and security of Magellan and its owners?

Magellan will be equipped with the latest technology regarding all forms of safety, including fire safety, with passenger loads limited to lifeboat capacities. Magellan’s security plan is being developed in accordance with the criteria of the ISPS code (International Ship and Port Security Code). This code stipulates various minimum standards, including the fitting of a Ship Security Alert System, Closed Circuit TV controlling sensitive areas, and the restriction of access to sensitive areas using X-ray and other means of screening at embarkation areas. The crew will undergo background checks and security screening measures prior to recruitment. The ship will be insured for damage or loss.

Do the engines run on Diesel fuel?

Yes. The diesel engines produce the power that provides electricity for the ship and operates the electric motors. The only emissions from Magellan will be diesel exhaust, seawater or gray water that has been treated to adhere to the most rigorous environmental standards.

What is the allowed occupancy per unit aboard Magellan?

Lifeboat and fire regulations allow for two people per bedroom (ages 2 and up) for example: a one-bedroom unit can accommodate two occupants; a two-bedroom unit can accommodate four occupants; a three-bedroom, six occupants; and a four-bedroom unit can accommodate eight occupants.

How high are the ceilings in the residences?

Ceiling height in the individual residences is approximately 7 ½ feet.

What is the pet policy?

Owners are permitted to have two domestic pets that weigh less than 15 lb. each, for a combined weight not to exceed 30 lbs. Pets must be crated in public areas. Magellan also has a veterinarian and kennel located on Deck 4. Pets are only allowed in residences located on decks 7, 9 & 11.

Is smoking permitted on Magellan?

Public areas aboard Magellan have been designated as non-smoking. Smoking is permitted in the smoking lounge and specific areas of the exterior teak deck, including the balconies and outdoor pool area. Full owners may smoke in their units.

May I bring food and liquor on board?

Yes, although there will be restrictions regarding fresh fruits, vegetables and meats.

Is there a storage facility for my use?

Yes, as an owner you will have a storage locker for your use located on the deck on which your residence is located, to be used during your ownership period.

Is there a safe for my use?

Yes, similar to a five-star hotel, each residence will contain a small personal safe in the master bedroom closet.

May owners access the ship via a private boat?

With prior approval and the proper insurance, a private boat may pick up and drop off owners from the Magellan's tender platforms.