PLAYA ENCANTO

 

 

1 Carlos Cabrera Munoz, Esq.

Notary Public

Francisco Javier Cabrera Fernandez, Esq.

Deputy

- - - Volume nine hundred seventy-three -----------------------------------------------------------------------------

- - - Number forty thousand seven hundred and thirty-two--------------------------------------------------------

- - - In the city of Hermosillo, Sonora, Mexico on the 30th thirtieth day of the month of March 1993 nineteen ninety-three, before me, Carlos Cabrera Fernandez, Esq., Deputy Notary Public Number Eleven, appeared; -- ----------------------------------------

- - - Mr. Eleazar Fontes Moreno; Mexican citizen, of legal age, married, an attorney originally from Hermosillo, Sonora, where he was born on the 23rd twenty-third of July 1947 nineteen forty-seven, residing at 122 one hundred twenty-two Serdan Avenue, Altos 10 ten of this city.----------------------------

- - - The party appearing is personally known by me and has the capacity to contract and to comply with obligations assumed, I certify the foregoing and he said that he comes to request the services of the subscribing notary public for the Articles of Incorporation to be recorded in the notarial record book and it literally states:--------------------------------------------------

---------------------------Playa Encanto Articles of Incorporation and Bylaws--------------------

Neighborhood Civil Association, A.C

In the city of Phoenix, Arizona on the first day of September nineteen ninety-two, the persons indicated at the end of this charter appeared to incorporate a civil association that is to be registered under the current regulations of the state of Sonora, Republic of Mexico and which the parties agree to conform to the law by means of this instrument, in accordance with the following: - - - - - - - - - - - - - - -

--------------------------------------------------------Bylaws----------------------------------------------------------

- - - Name, Nationality, Registered Address, Duration, Objectives and Assets;--------------------------------

- - - Article 1. The appearing parties incorporate a civil association to be named Playa Encanto Neighborhood Civil Association (PENCA), to which the words Asociación Civil or its equivalent A.C. shall be added.-------------------------------------------

- - - Article 2. The association being incorporated is Mexican and its partners agree that any foreigner who, during the incorporation or at any time in the future, acquires an interest or shares in the association shall be considered by that simple act as a Mexican citizen in regards to said interest and shares and it is to be understood that they agree to waive any right to seek the protection of their own government, under penalty, in case said agreement is violated, of forfeiting their interest and/or shares in favor of the Republic of Mexico.--------------------------------------------------------------------------------------

- - - Article 3. The registered address of the association will be Puerto Peñasco, Sonora, Mexico even though branch offices may be established in the Republic of Mexico or in a foreign country, but the members’ meeting and the Board will have the express authority to designate or establish conventional addresses to comply with the corporate purpose of the association.----------------------------------------------

- - - Article 4. The term of this association will be 30 years. It is a not for profit organization and it shall remain on the sidelines of any political or religious issue or problem and there shall be no room within its structure for any form of discrimination be it social or racial. ------------------------------------------------

- - - Article 5. The association’s corporate purpose shall be the following. -------------------------------------

- - - - 1.- To promote or support all types of cultural, educational, scientific and artistic activities in general to the benefit of the subdivision known as "Playa Encanto" and its diverse sections such as

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"Playa Encanto Heights," "Playa Encanto Shores," within the same real estate development located at the Morua Estuary, Municipality of Puerto Peñasco, Sonora, Mexico.------------------------------------------

- - - - 2.- To create, promote and support the delivery and maintenance of public works in the areas of trash collection, patrolling and public security, roads and walkways, sidewalks, rain drainage and sewers as well as electric power and street lighting for the aforementioned subdivision.------------------------------

- - - - 3.- To promote and defend the interest of the owners and possessors regardless of the manner in which they hold title of lots and/or buildings within the subdivision named "Playa Encanto" previously referred to.----------------------------------------------------------------------------------------------------------------

- - - - 4.- To execute any legal transactions, contracts and agreements on behalf and in representation of the members as long as said legal transactions have a bearing on the corporate purpose previously described.----------------------------------------

- - - - 5.- The general defense of the common interests of the possessors and owners of the lots and buildings that constitute the "Playa Encanto" subdivision.--------------------------------------------------------

- - - - 6.- To become party to any legal action on behalf and in representation of the members of this association against any individual or entity be it in private or public law to preserve the common interests of said members. -----------------------------

- - - - 7.- The acquisition of personal and/or real estate property, taking into account the restrictions for foreigners established by the Mexican laws, to comply with the corporate purpose of this association and in general to undertake the execution of any legal transactions, contracts and/or agreements to fulfill the corporate purpose.------------------------------------------------

- - - Article 6. The association’s assets will be established by the dues set for the members, the assets and donations that it could receive and by the rights of personal security or on a specific property that the association may receive by any other legal instrument.------------------------------------------------------------

---------------------------------------------------Membership-------------------------------------------------------

- - - Article 7. Membership in the association is open to all owner-possessors be it as owners or beneficiaries regardless of the manner in which they hold title of lots and/or buildings within the subdivision named "Playa Encanto" and its diverse sections such as "Playa Encanto Heights," "Playa Encanto Shores," and others within the same real estate development referred to in "Article 5." ----------

- - - Article 8. To be eligible for membership in the association, the person must be an owner or possessor regardless of the manner in which they hold title of lot(s) and/or building(s) and construction site(s) within the subdivision named "Playa Encanto" and its diverse sections such as "Playa Encanto Heights," "Playa Encanto Shores," and others within the same real estate development referred to in "Article 5." It is established that, prior to determining eligibility for membership, it shall be the responsibility of the applicant to be free of pending debts with the state or federal government of the Republic of Mexico. All persons who subscribe to the current bylaws as well as those who request admission in writing to the Board of Directors and receive the approval of the General Members Meeting will be admitted as members.---------------------------------------------

- - - Article 9. The duties of the association members are as follows, A) To comply with the current bylaws, B) pay the dues which will be set by the Board of Directors with the approval of the General Members Meeting in order to accomplish the corporate purpose of the association.---------------------------

- - - Article 10. The rights of the association members are, A) to obtain the benefits resulting from the services provided by the association, B) to be heard and vote in the members meetings and C) to hold office.--------------------------------------------

- - - Article 11. Membership in this association is personal and thus non transferable.------------------------

---------------------------------------General Members Meeting----------------------------------------------

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- - - Article 12. The General Members Meeting is the governing body of the association and its membership is made up of all the members in good standing who have paid the association dues and have not lost the standing as members.--------------------

- - - Article 13. The General Members Meeting shall decide the following items: 1.- The nomination of the members who shall be on the Board of Directors; 2.- The creation of the regulations for the management of the business administration of the association; 3.- The admission or expulsion of members; 4.- The resolution by virtue of an agreement of the issues designated by these bylaws.----------

- - - Article 14. The President and the Secretary of the Board of Directors shall call a General Members meeting. The Board of Directors shall call at least three General Shareholder meetings per year and the Board of Directors shall call a meeting when ten per cent of the Members so request. The notices of the meeting(s) shall be sent by certified mail or delivered to the registered address the members have given the association at least two weeks before the date of the meeting. Said notice shall include the Agenda to be discussed and any member shall be able to include an item on the agenda by presenting said item to the Board President 30 days before the date the meeting is to take place. Each General Members Meeting agenda shall allow the opportunity for the members to present new items to discuss.--------------

- - - Article 15. One of the Ordinary General Members Meeting has to take place within three months of the end of the fiscal year to: 1.- Approve, if appropriate, the Board of Directors’ annual report paying special attention to the Treasurer’s Report; 2.- Approve the budget for the following year’s expenses; 3.- Elect the following year’s Board Members; 4.- Consider the other items on the agenda.-----------------

- - - Article 16. The quorum necessary to conduct any association business that necessitates a vote is defined as a third of the membership of the General Members Meeting. The right to vote is limited to those members present who have the right to be in the general meeting unless two thirds of the votes of the quorum of a general meeting decide that mailed-in ballots can be used. If mailed-in ballots are used, a summary of the pros and cons of the items shall be sent along with the ballot. A simple majority of the persons present or dully represented shall be sufficient for any decision or action necessitating a vote to be approved. The exception is any revision to these bylaws, for which a different procedure is established elsewhere in this charter.- Voting can be oral or by ballot. Any request by a member of the General Members Meeting to vote by ballot on any particular item shall be considered valid and the results shall be counted by two inspectors who shall be designated by the General Members Meeting. Each member shall have one vote. In the case of corporate ownership or of multiple properties, each lot shall be limited to one vote, which can be executed by proxy letter signed by the grantor in the presence of two witnesses. A proxy letter must be signed and dated by the member for every general meeting; no member shall exercise more than 3 votes by proxy. All General Members Meetings minutes shall be signed by the Secretary, registered and included in the registry book. -----------------------

- - - Article 17. These bylaws may be changed, amended, reformed or partially repealed by the vote of a two-thirds majority as long as fifty per cent of all eligible members with the right to vote are present. Any member of the association may make a motion to propose an amendment during the General Members Meeting. A motion to amend shall be discussed at the general meeting and it shall be further discussed and submitted to vote at the next meeting, if more evidence is desired to clarify whatever points may need clarifying. If such an amendment is approved by a two-thirds majority, it shall be effective immediately. If fifty per cent of all eligible members with the right to vote are not represented in the general meeting, then mailed-in ballots shall be used.-----------

---------------------------------------About the Board of Directors-------------------------------------------

- - - Article 18. The association’s representation and legal transactions shall the responsibility of the Board of Directors made up of the number of members decided at the General Members meeting, but never less than five. The General Members Meeting shall elect a Board of Directors which shall have a President, Vice President, Secretary, Treasurer and one Vocal; others may be elected according to the decision of the General Members Meeting. Board Members must be Association members. The Board

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members shall perform their duties during the period for which they were elected but in case of their tenure expiring they shall continue with the performance of duties until the new members are elected and sworn into office. ------------------------------

- - - Article 19. In order to satisfy all the duties assigned, the Board of Directors shall have ample power of attorney for litigation and collections, for acts of administration and acts of ownership as well as specific authority to substitute such power from any member of the association or person not involved with same. ------------------------------------------------------------------

- - - Article 20. The President of the Board of Directors shall be the legal representative of the Association and shall have the following authority:----------------------------------------------------------------

- - - - 1.- The authority of attorney-in-fact, with ample power of attorney for litigation and collections, and for acts of administration, with general and special power and authority including those requiring a special clause, in accordance with the provisions of Article 2831 of the Civil Code of the State of Sonora and the corresponding article(s) in the rest of the Republic of Mexico. The attorney-in-fact shall have the authority to bring any type of legal action including a writ of amparo, any type of filings and appearances before any government authorities or withdrawal of actions or charges, to file criminal complaints, to suspend charges, to answer or respond to interrogatories and [sic:] appearances before any government authorities or withdrawal of actions or charges, to file criminal complaints, to suspend charges, to answer or respond to interrogatories, to cross-examine witnesses on behalf of the association; to bestow, revoke and delegate authority and power in whatever terms may be deemed appropriate and favorable in the interests of the Association as well as authority to subscribe all manner of documents and to renew the power and authority for any occasion.-----------------------------------------------------------

- - - - 2.- To execute any and all transactions and to agree to arbitrate and to appear before any labor board, be it local or federal, on behalf of the association as well as appearing with ample power of attorney before the Department of Labor and Social Welfare and/or its bureaus where applicable to settle and execute agreements, to answer labor disputes as well as assuming obligations on behalf of the association in all manner of labor disputes according to articles 10, 12, 14 and 162 of the Federal Labor Law.----------------------------------------------------------------------------------------------------------------

- - - - 3.- In addition, [the President] will have the power and authority to acquire movable and immovable goods by any legal means, to sign for its price, to receive payments, to sign titles with the exception of the ones that imply the power of an owner, as well as the corresponding invoices.------------

- - - - 4.- To sign, endorse, guaranty all manner of business documents in accordance with Article 9 of the General Law of Negotiable Instruments and Credit Operations only on behalf of the association.------

- - - Article 21. The positions of the members of the Board of Directors are honorary and may not be delegated to or executed by a representative or agent.--------------------------------------------------------------

- - - Article 22. The Board of Directors shall convene as frequently as necessary. The quorum needed to convene a board meeting is three fifths of its membership. The minute entries of all board meetings shall be registered in the registry book, which is to be maintained for that purpose by the secretary. The minutes shall be signed by the secretary or his/her designee, to be chosen according to the current bylaws. In the alternative, the remaining member(s) shall designate the replacements, whose appointment shall be considered provisional until the General Meeting can ratify their position.----------

- - - Article 23. The terms of office for the members of the board of Directors shall be as follows: President, one year; Vice president, one year; Secretary, three years; Treasurer, three years; Vocal, one year, which shall commence on the date when the board starts its duties. The terms for the secretary and the treasurer shall be intermittent. -------------------------------------

- - - Article 24. The President is the executor of the decisions made by the Board of Directors unless the Board designates someone else to carry them out; the President has the main duty of ensuring that the provisions of the current bylaws, the decisions made by the members at the General Members Meeting and by the Board be implemented. The President shall present a report of the actions taken by the Board to any regularly convened General Members Meeting.-----------------------------------

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- - - Article 25. The Secretary shall maintain the minutes from the Board and General Members meetings, which shall be registered in the corresponding minutes book.----------------------------------------

- - - Article 26. The Treasurer shall have the duty of managing the funds and properties included in the Association’s assets and shall have joint signing authority, with the President, in the documents that imply an obligation for the Association. The Treasurer shall be in charge of accounting and shall present a report to the Board re: the funds and properties of the Association at every Board meeting and shall submit a balance statement to the General Members Meeting with the corresponding support documents disclosing the financial state of affairs of the Association during the current fiscal year. --------------------

- - - Article 27. The Members have the right to verify that their contributions as well as the Association’s assets are being used for the corporate purpose stated. Thus, they shall have access to the Association’s books and records and for this purpose shall designate a supervising officer or a statutory auditor who shall be elected at the Annual Members Meeting. The balance statement and the supporting books and records shall be available for inspection at least fifteen days before each General Members meeting.------

--------------------------------------------Dissolution and Liquidation----------------------------------------

- - - Article 28. The dissolution of the Association may be effected for the following reasons: 1).- By the General Members Meeting agreement to that effect with the participation of 75 seventy-five percent of the members; 2).- The expiration of the duration set by these bylaws; 3).- The corporate purpose having been fully accomplished; 4).- Inability to fulfill its stated corporate purpose; 5).- A judgement rendered by a competent authority. ------------------------------------------------------

- - - Article 29. In case of dissolution, all net assets of the association shall be distributed among the members in proportion to their contributions after deducting the liabilities, in proportion to the members’ contributions, unless the General Members Meeting decides something different.----------------

- - - Article 30. In regard to the items that have not been provided for in these bylaws, the provisions of Volume Five, Part II, Title XII of the Civil Code of the State of Sonora shall be applicable.----------------

----------------------------------------------TRANSITION ARTICLES-----------------------------------

- - - First.- The agreements herein contained in the foregoing articles were unanimously adopted by the members of the Association gathered at the Charter Meeting and thus become the Bylaws of the Association to be complied with at all times for the duration of the Association.------------------------------- - - - Second.- The members present, comprising in this case the General Members Meeting, designate unanimously the members that are to be the Board of Directors during the first term as follows:------------ - - President:------------------------------------------------Mr. Gary Curtis------------------------------------------ - -         Vice president: -----------------------------------------  Mr. James Weeks --------------------------------------- - -           Treasurer: -----------------------------------------------Ms. Pamela Powers ------------------------------------- - -           Secretary: -----------------------------------------------Ms. Mary Ann Appleton ------------------------------- - -             Vocal: ---------------------------------------------------John Hurts ------------------------------------------------ - - Being present at this proceeding, Mr. Gary Curtis, Mr. James Weeks, Ms. Pamela Powers, Ms. Mary Ann Appleton and John Hurts accept the positions bestowed upon them and affirm that they will duly comply with the bylaws of this Association in performing the duties of their positions.---------------]

- - Third. – Mr. Gary Curtis and Mr. Eleazar Fontes Moreno are authorized to appear together or on their own to formally request the notary public of their choosing to record these Articles of Incorporation and Bylaws in the notarial record book and to register them at the Public Registry of Real Estate Property and Commerce of the corresponding jurisdiction.-------------------------------------------------------------------- - - The content of the aforementioned Articles of Incorporation and Bylaws was read and the appearing parties, appraised of its content, as stated in the English and Spanish languages, sign and agree to consider this legal instrument the Articles of Incorporation and Bylaws of Playa Encanto Neighborhood Civil Association, sign at the bottom and ratify its content for any legal purpose on the day it is dated.---

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- - - Gary Curtis.- Signature.- James Weeks.- Signature.- Pamela Powers.- Signature.- Mary Ann Appleton.- Signature.- John Hurts.- Signature.----------------------------------------------------------------------

The permit issued by the Department of Foreign Affairs is truly and correctly transcribed as follows:------ - - On the upper left margin.- Stamped seal with the national coat of arms that reads: United Mexican States.- Department of Foreign Affairs.- Mexico.- On the right upper margin.- Permit 26000259.- File 9326000258.- Page 266.- Original text: In regard to the application made by Mr. Eleazar Fontes Moreno, this Department grants permission for the use of the name Playa Encanto Civil Neighborhood Association when the aforementioned corporate entity is formed. This permit shall be contingent upon the insertion of the Exclusion of Foreigners Clause in the Articles of Incorporation and Bylaws, as provided for in Article 30 or the agreement noted in Article 31, both contained in the Regulations of the Foreign Investment Act to Promote Mexican Investment and Regulate Foreign Investment. The Notary Public or the Public Commercial Attestor [Commercial Notary Public] who records this permit in the notarial record book shall notify the Department of Foreign Affairs, within 90 working days from the date of the authorization document, about the use of the permit or, if applicable, about the agreement to waive [its use] as mentioned in the preceding paragraph.- Notice is given of the foregoing based on Constitutional Article 27, paragraph I, Article 1 of its Internal Regulations, Article 17 of the Foreign Investment Act to Promote Mexican Investment and Regulate Foreign Investment and the terms of Article 28, paragraph V of the Federal Public Administration Act.- This permit shall be rendered null and void if not used within 90 working days from the date it was issued and this is granted notwithstanding the provisions of Article 91 of the Industrial Development and Protection Act.- Hermosillo, Sonora.- February 4, 1993 Real Democracy, No Reelection.- Regional Director. Pacific Region.- P.A. Alejandro Sobarzo Loaiza, Esq. Signed.- P.A.-1.------------------------------------------------------------------------------------------------------Legal Capacity-------------------------------------------------------- - - Mr. Eleazar Fontes Moreno shows evidence of his position as representative with a true and correct transcription of the minutes.---------------------------------------------------------------------------------------------- - - For the purpose of paying income tax, the grantors attest under affirmation that they do not have any pending indebtedness without substantiation.------------------------------------------------------------------- - - This document was read by the appearing parties, the legal force and effect of its content was explained as well as the necessity of registering it with the Public Registry of Real Estate Property and Commerce of this jurisdiction and having stated to be in agreement with its terms, they ratified and signed it before me.- I certify the foregoing.- Eleazar Montes Moreno.- Carlos Cabrera Fernandez, Esq.- Notary Public Number Eleven.- Deputy. Signed. Notary Public seal.--------------------------------------------- - - In Hermosillo, Sonora, Mexico, on the eighteenth day of the month of June of nineteen ninety-three, having complied with the statutory requirements, I approve this document.- I certify the foregoing.- Carlos Cabrera Fernandez.- Notary Public Number Eleven.- Deputy. Signed. Notary Public seal.----------- - - This First Official Transcript, third copy, was taken from the original for the use of Playa Encanto Neighborhood Civil Association, A. C., consisting of ten pages duly verified, initialed, numbered, signed and stamp sealed, and it is issued in the city of Hermosillo, Sonora, Mexico on the twenty-fifth day of the month of November of two thousand and four. I certify the foregoing.----------------------------

[

Francisco Javier Cabrera Fernandez, Esq.

Deputy Notary Public of Notarial Office Number Eleven

 

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