BY-LAWS OF THE USERS ASSOCIATION OF THE COSTA BAJAMAR
TURISTIC COMPLEX, A CIVIL ASSOCIATION
D E N O M I N A T I O N
FIRST. The denomination of the Association shall be: “ASOCIACION DE USUARIO DEL COMPLEJO TURISTICO COSTA BAJAMAR,” and shall always be followed by the words “Civil Association” or its abbreviation: “A.C.”
D O M I C I L E
SECOND. The domicile of the association shall be in Ensenada, Baja California, without prejudice to establish branches, agencies or dependencies in any part of the Mexican Republic or in a foreign country. The association may indicate conventional domiciles in the contracts executes.
D E F I N I T I O N S
THIRD. Complex: It shall refer to the Costa Bajamar Touristic Complex, actually the fiduciary property of “Banco de Londres y Mexico” Sociedad Anonima, that functions as trustee (the Trustee) pursuant to the trust herein below described.
Trust. Shall refer to the contract entered into between Desarrollos Urbanos de Baja California, S.A. and Banco de Londres y Mexico, S.A. on November fourth, one thousand nine hundred seventy four, amended on January ten, one thousand nine hundred seventy five, registered in the Public Registry of Property and Commerce in Ensenada, Baja California, Mexico under entry number fourteen thousand two hundred eleven, page ninety-two of Book fifty-three and entry number fourteen thousand five hundred ninety-two, page two hundred twenty-eight, Book fifty-four, both of the First Section, dated December second, one thousand nine hundred seventy- five, respectively.
Trustee: Shall refer to “Banco de Londres y Mexico, S.A.” or its substitute pursuant to the Trust.
Developer: Shall refer to “Desarrollos Urbanos de Baja California” . S.A.
Protections: Shall refer to the document which contains the covenants, Conditions and restrictions granted pursuant to the trust, and which regulates, among other things, the property use and enjoyment, possession and improvements made within the complex.
Association: Shall refer to the “Asociación de Usuarios de Complejo Turístico Costa Bajamar”, Asociación Civil.
Government: Shall refer to the government of the State of Baja California.
Design Committee: is the committee of the Association that is described in the Protections.
Design Rules: are the rules established by the Design Committee from time to time pursuant to the protections.
P U R P O S E
FOURTH. The association shall have as its purpose:
a). The organization, maintenance and up keeping of the public services in the complex.
b). The determination of the monthly assessments that in a proportional manner shall be paid by its members, successors, residents, beneficiaries, users or owners of the complex for the services set forth in the above item.
c). The establishment and collection of dues and special assessments for recreational services of the complex, as well as any other type of fees.
d). The judicial or extra judicial collection of the assessments set forth in the above paragraphs, being empowered to enter into contracts or agreements with the Government, as necessary, in order to effect collections trough said Government.
e). The entering into contracts with third parties for the work that may be required in order to upkeep, maintain, improve or beautify the complex.
f). To accept as part of the Complex the lands and the properties that presently form part of the patrimony of the Trust, as well as such other land properties that in the future the Developer or its successors subject to trust for similar purposes to that heretofore indicated and which because of its location may constitute a unit with the lands and properties presently pledged in said Trust.
g). To carry out any type of maintenance required by the common areas of the complex and the recreational facilities on it.
h). To be able to carry out the required maintenance of any of the private areas of the complex according to the rules established in the By-Laws, when the member to whom this corresponds fails to do so.
i). To make payments of taxes and fees assessed to the common and recreational areas of the complex when they have not been imposed directly to the members, successors, beneficiaries, residents or owners, and to collect said taxes and fees proportionately from them, according to the criteria established for this purpose.
j). To provide insurance for the common and recreational areas, as well as to provide security and protection for the complex, its beneficiaries, resident, guests, the association and its officers and members.
k). To process and carry out the necessary procedures to comply with request presented to the association for the development of recreational facilities en the complex.
l). To carry out the required action in the private areas of the complex in order to comply with the Protections.
m). To carry out the judicial and extrajudicial actions required for the compliance of the regulations applicable to the complex.
n). To enter into agreements to obtain the services of professionals or third parties as required for the accomplishment of its objectives.
o). To establish, amend and revoke Rules of Conduct in the complex, as well as construction regulations, in order to comply with applicable legal dispositions.
p). To make sure that the development of the complex be completed substantially in the manner originally planned by the Developer as authorized by the corresponding authorities, with the modifications required from time to time on the original project and protect their community relations.
Since the Association is constituted by Mexican person and entities, it cannot acquire real estate property nor shall it pursue predominantly economic objectives.
T E R M
FIFTH. The term of the Association is of fifty ( 50 ) years, that shall begin to run on the day this document is singed. Said term General Assembly of Members.
P A T R I M O N Y
SIXTH. The patrimony of the Association shall be constituted by the cash from the fees paid by its members for the maintenance and other purpose of the Association, and by those other personal properties which through other right it acquires for the better realization of its objectives.
Notwithstanding any disposition to this effect in the Protections, the Developer and/or its legal successors by any rights, shall be obligated to pay the same fees that are imposed on the other members, for their lots or for their Beneficiary “B” rights, as long as these assessments are in force for the other members, for each lot or Beneficiary “B” right that remains unsold by the developer and/or its successor, and that it is shown as a lot for sale in the approved plans authorized by the Government or by any other official entity to whom the granting of said approval corresponds.
A S S O C I A T E S
SEVENTH. The Association shall issue to each member a Certificate of Membership, which shall accredit the status of the associate. The associate shall lose his status as such when he fails to comply with the requirements established in Clause Ninth of these By-Laws, but shall remain subject to the compliance of the obligations that he acquired while he was a member. Each associate has right to only one vote in the Assemblies of Associates, without regard to the number of lots or beneficiary rights they own within the complex.
EIGHT. The status as an associate is not transferable. The Board of Directors shall admit temporary members and their admission to the Association shall be ratified or denied by the General Assembly. The member admitted temporarily by the Board of Directors shall have all rights and obligations as a regular member. The Board of Directors and the General Assembly shall make sure that members meet the requirement set forth in Clouse
Ninth of these By-Laws.
NINTH. Only the following person may be members of the Association:
a). The Developer or its successors, or such other company or companies that in the future continue to develop the complex.
b). The Government, directly or trough an appointed entity, corporation or organism.
c). The municipality of Ensenada, Baja California, directly or through an appointed entity, corporation or organism.
e). The beneficiaries under the Trust or Trusts that substitute the one previously indicate.
f). The owners of lands located within the complex.
g). The Trustees subject to a contract of Trust different than the one indicated in the foregoing paragraph ( e ), when such trusts refer to the real estate presently subject to the trust indicated in said paragraph ( e ) above, or the real estate that in the future forms part of the complex . – Cause for exclusion from the Association shall be that the member fails to meet the requirements to have the status of such; the right to vote of any member shall be suspended if ( a ) he does not comply with any obligations imposed upon him by these By-Laws; ( b )does not pay punctually the fees assessed by the Association; c) does not comply with the obligations imposed upon him by the Trust or the Trustees that substitute same, and ( d ) does not comply with the obligations derived from the agreements or contracts through which he acquired the right to become a member of the Association.
A S S E M B L Y O F A S S O C I A T E S
TENTH. The General Assembly of the Associates is the supreme body of the Association. The General Assembly shall resolve over the following matters: ( a ) Final Admission or exclusion of members to the Association; ( b ) about the advance liquidation of the Association or its extension for more time that the set by these By-Laws; ( c ) the appointment of two of he Directors to the Board of Directors, and of all of them when the assumption established in the Seventeenth Clause arises, and on the revocation of said appointments; ( d ) on the appointment of one Director to the Executive Board; ( e ) on the appointment of the external auditor of the Association, and if the approval of the annual balance sheet of the Association.
ELEVENTH. The General Assembly shall meet at least once a year, within the first four months thereof, on the date on which it is called by the Board of Directors, in addition, a meeting shall be held at any time of the year when so called by said Board of Directors, which is obligated to do so at the request of five per cent ( 5% ) or more of the associates, and if it were not to call, the civil Judge of the Associations domicile shall do so at the request of the associates. The Board shall summon each assembly with at least ten days advance notice through summon that shall be published in a newspaper of grater circulation in the domicile of the Association. In addition, an individual notification by mail shall be sent to each associate to the domicile that he has established pursuant to clause SIXTEENTH of these By-Laws. The General Assembly shall only undertake those matters set forth in the Agenda.
TWELFTH. The General Assemblies shall be considered legally convened, whatever the number of attending associates be, and the resolutions shall only be valid when taken by majority of the votes present, except ( a ) in the case of the assemblies that will undertake the matter set forth on item ( b ) of Clause TENTH, in which case it shall be represented by at least three fourths of the associates and the resolution shall be taken by the favorable vote of the same seventy five per cent ( 75% ) of the total associates and ( b ) those cases that pursuant to the Protections require a quorum or special majority to celebrate any Assembly and to take resolutions in it, in which case the requirement for a quorum or special majority shall be respected in the terms of the mentioned protections. If the assembly could not meet en the date indicated for the aforementioned case, a second summons shall be undertaken in the meeting, whatever the number of represented associates be; however, the decisions shall always be made by the favorable vote of seventy five per cent (75%) of the total associates.
THIRTEENTH. The associates may be represented in the Assembly by proxies, by they or not associates, and it shall be sufficient that the representation, even that associates who reside abroad, be conferred by means of power of attorney signed by addresses to the Board of Directors. To be admitted to the Assemblies, the associates or their representatives shall present their Certificate of Membership or an admission card to be issued by the Secretary of the Board of Directors upon verification of the status as associate of the respective party.
FOURTEENTH. Before installing the Assembly, he who presides over same shall designate two scrutineers to make the up a list of the persons that were present as associates or in their representation. It shall be sufficient that the list of attendance be signed by the President, the Secretary of the Assembly and by the Scrutineers; however, the associates present shall also have the right to sign it. The list shall be added to the appendix of the corresponding record or shall be inserted therein.
FIFTHENTH. If in the future, one or several of the associates or their representatives present at an Assembly were not to understand the Spanish language, a translation of all discussed and resolved by the Assembly shall be made, for which purpose the interested party ( ies ) shall designated an interpreter who may be any of the present or an outsider. The interpreter ( s ) shall sing the respective record to verify his ( their ) intervention. The expenses for the interpreter shall be borne by the interested party ( ies ).
SIXTEENTH. The Association shall carry a Book of Registration of Associates in which their name, address and nationality shall be recorded. Said book shall serve to verify the status of associates and the Association shall inscribe therein those who are admitted provisionally or permanently. Any communication that the Association has to address to the associates shall be sent to the domicile that these have furnished for the effects of the Book of Registration. These associates shall notify the Association of their change of address and request that the change be recorded.
A D M I N I S T R A T I O N O F T H E A S S O C I A T I O N
SEVENT. The administration of the Association shall be composed by five and their alternates in the manner to be determined by them and the other three directors shall be designated by the Developer or its successor. The Developer or its successor shall retain this last right until after six years have elapsed from the date of the first public report and permit granted by the State of California Department of Real Estate or until after three years from the most recent new permit issued by said Department, whichever date occurs first. If at the arrival of either of these two dates less that seventy five per cent of the lots that at that time are included in the aforementioned permits or of the respective beneficiary rights remain unsold the manner of the Directors election shall remain the same until 75 per cent of said lots or rights are sold, with the exception that the Developer shall retain for itself or its successors the rights and faculties to control the Design Rules for a period not exceed eight years from the date of the first public report and permit granted for the complex by the aforementioned State of California Department of Real Estate. Furthermore, there shall be General Managers and such other General or Special Assistant Managers that the Board Designated. The Directors as well as the General Managers and Assistant Manager may be associates or persons alien to the Association. The status as Director is compatible with that of Member of the Board of Directors and that of General Manager or Assistant Manager. Furthermore, there shall be an Executive Board that shall have the functions and powers set forth in Clause Twenty Fourth of this instrument. Also, there shall be such Committees as the Board of Directors designates, with the powers granted to them and which will function in the accordance with the rules that the Board of Directors establishes. The members of the committees may be associates or person alien to the association and their duties shall be compatible with the others that are established en these By-Laws, except for that of eternal auditor.
EIGHTEENTH. The names of the members of the Board of Directors designated by the Developer or its successor, shall be made known to the Assembly of Associates the designates the others directors. The designation to be made by the developer shall be communicated to the Association in writing, as well as any removals or new designations. As long as the performance of the designated directors is not approve by the Developer, besides the responsibility of these, said Developer shall be responsible for the handling of said directors. In the first meeting that the Board of Directors holds after his election, it shall designate from among its members a President, a Secretary, a Treasurer and such Manager and Assistant Manager shall be designated by the Board of Directors.
NINETEENTH. The members of the Board of Directors, the General Manager and Assistant Managers, shall hold their offices for an indefinite period of time or for certain term, as determined at the time of the appointment. The years for this purpose shall be counted from one Annual General Assembly to the other of the same kind. They shall continue in the performance of their duties until new appointments are made ant those designated take possession of their posts, and they may be reelected indefinitely. The Directors designated by the Developer may be removed by it at any time ant their appointment shall last only until the new appointees take over; the foregoing without prejudice of the responsibility set forth in Clause Eigthteenth.
TWENTIETH. The appointment of General Manager and Assistant Manager shall always be revocable by the Board of Directors. The Assembly may further revoke at any time the appointment of Directors designated by it.
TWENTY FIRST. The members of the Board of Directors ant the Executive Board, General Manager and Assistant Managers, shall guarantee their performance by depositing the amount of $1,000.00 (ONE THOUSAND PESOS MEXICAN CURRENCY), or posting a bond to the satisfaction of the Assembly, which will not be refunded until after approval of the accounting corresponding to the period of their office. A single deposit shall be sufficient when one person holds more than one post.
TWENTY SECOND. The Board of Directors shall always meet when called by the President or by the three of its members and it shall legally function with the attendance of the majority of its members. The resolution shall be taken in all cases by majority of votes of those present, be these the regular members or alternates will votes of those present, be these the regular members or alternates of the Board Directors; those who have the status of alternates will vote in those sessions in which the regular members form whom they are alternates are not present, their vote having the same value as that of the regular members for all effects, and, therefore, the presence of alternate members of the Board of Directors may integrate the necessary quorum for the session, provided that the regular members for whom they are alternates are not present. At each session of the Board of Directors minutes of the meeting shall be taken containing the approve resolutions, and the same shall be signed by those who presided the session and by the Secretary. The other directors may also sign the minutes of the meeting.
TWENTY THIRD. The Board of Directors shall have the following powers: ( a ) Those comprised in the general powers of attorney for lawsuits and collections for the administration of property and to exercise acts of dominium with all general and special powers that required especial clause pursuant to the law in the terms of Article 2554 of the Civil Code for the District and Federal Territories and for the Republic in Federal matters, and shall represent the Association before the federal, state or municipal administrative and judicial authorities, and before the Board of Conciliation and Arbitration and other labor authorities and before arbiters or arbitrators with all general and special powers that required special powers or clause pursuant to the law. The foregoing powers and faculties includes irunciative and not imitatively powers to interpose and to interpose and to de desist in all kinds of lawsuits and recourses even “amparo”; to compromise, agree in the arbitration, to formulate and reply to interrogatories; to make conveyance of rights, to appeal, receive payments, debate, execute and review collective agreements, to make the waivers, submissions and agreements that were to be necessary pursuant to Article 27 Constitutional and its regulatory or interpretative legislation, as well as the Nationality and Naturalization Law; ( b ) to conduct all operations relatives to the purpose of the Association, including the assessment of fees that must be paid by the associates and to enter into, modify and rescind agreements inherent to the purpose of the Association; ( c ) to grant, Issue, draw, accept, endorse, co-sing, guarantee or for any other reason subscribe credit instruments ant to protest the same; ( d ) to handle bank accounts; ( e ) to make and withdraw all kinds of deposits; ( f ) to appoint and remove managers, assistant managers, factors, agents and employees of the association and determine their powers, obligation and earnings; ( g ) to grant and revoke general or special powers of the attorney; ( h ) to open and close branches, agencies or dependencies: ( i ) to carry out the resolution of the Assemblies of Associates; ( j ) to representations of national or foreign persons or businesses, whether to contract in their names or to appear in trails.
11. To admit and exclude provisionally members of the Association, establishing the admission fees. The Board of Directors will thus have, in general, all the aforementioned powers with the sole limitation to carry out the acts that are reserved for the Board of Directors pursuant to clause Twenty Fourth.
TWENTY FOUR. The executive Board shall be composed of three directors, one of whom shall be designated by the State Government and shall represent such Government in said Board; other will be designated by the Developer or its successor, or the fiduciary institution that functions as such whit regards to the land that integrates the Complex and the third one by the Assembly of the Associates. The executive Board shall handle the organization, maintenance and up keeping of the complex, of the public services related to the police, sewage, treatment of plants to purify water , street maintenance, roads, lights, traffic signs and cleaning services. In the performance of the aforementioned duties, the executive Board shall have the following powers: ( a ) those contained in the general powers of attorney for law suits and collection, to administer property and to exercise acts of dominium with all general and special powers that required special clause pursuant to the law, in the terms of Article 2554 of the Civil Code for the District and Federal Territories and for the entire Republic in Federal matters and its correlative in the Civil Code for the State of Baja California.
TWENTY FIFTH. In the absence of special designation, the President of the Board of Directors shall represent the same and execute the resolutions. He shall preside the meetings of the Board of Directors and the Assemblies of Associates and he shall have quality vote in case of a tie. The Vice President, should there be one, shall substitute the President in all his prerogatives and obligations in the absence of the latter. The Secretary shall authorize the certified copies or extracts of the Minutes of the Board or of the Assemblies and of other documents of the Association and shall handle the filing and correspondence of the Board of Director. Treasurer shall have the control of the funds and assets of the Association and shall make sure that the accounting is carried in a proper manner. The Directors, like wise, shall have the same attributions that this instrument, the Assembly of the Board of Directors provides for them.
TWENTY SIXTH. The General Manager and Assistant Managers shall have the powers conferred upon them at the time of their designation, which in all cases, may be amplified or restricted by express agreement of the Board of Directors. Within the scope of said attribution, they shall enjoy the greatest extent of representation and execution powers.
V I G I L A N C E O F T H E A S S O C I A T I O N
TWENTY SEVENTH. The Associates have the right to guard that the fees are allotedfor the purposes of the Association and for this reason they may review the accounting books and others papers of the Association.
TWENTY EIGHTH. The Association shall be liquidated at the end of the terms set forth in Clause Fifth, unless it is extended before its expiration date; it shall be liquidated in advance; (a) when agree upon by the General Assembly of Associates, pursuant of these By-Laws, (b) for becoming unable to accomplish the objectives for which it was formed and (c) by resolution of a competent authority.
TWENTY NINTH. Upon determining the dissolution of the Association, it shall be placed in a state of liquidation, which shall be in charge of one or more liquidators, as it may be decided by the Assembly, and they shall work jointly if there were to be several. The Liquidator or Liquidators shall process the liquidation and distribution of the proceeds among the Associates up to the amount of their contributions; the balance, if there were to be any, shall be applied to the Autonomous University of the State of Baja California.
THIRTIETH. The associates who voluntarily withdraw or who are excluded from the Association shall have no right to the assets of the Association.
N A T I O N A L I T Y
THIRTY FIRST. The Association is of Mexican nationality: “Every foreigner who in the act of the constitution or any other later time acquires the status of associate, provisionally or permanently, shall be considered by that mere fact it shall be understood that he consents not to invoke the protection of his Government, under the penalty, in case he fails in his agreement, to lose said right or participation in benefit of the Mexican Republic.”
G E N E R A L D I S P O S I T I O N S
THIRTY SECOND. The Association shall be rule by the dispositions of these By-Laws, by the Protection and in all that is not provided for in the aforementioned documents, the respective disposition of the Civil Code for the State of Baja California shall applied.
