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COSTA PEDASI HOMEOWNERS ASSOCIATION

INDEX 

TITLE I (PRELIMINARY PROVISIONS) 

CHAPTER FIRST: OVERVIEW

ARTICLE 1. NAME AND CHARACTER: The Association shall be known as “ASOCIACIÓN DE PROPIETARIOS DE COSTA PEDASÍ or COSTA PEDASÍ HOMEOWNERS ASSOCIATION” and shall be considered as a non-profit civil Association, with legal juridical personality and free from all political activity. The association may carry out all kind of acts or contracts for the compliance of its objectives.

ARTICLE 2. DOMICILE:

COSTA PEDASÍ HOMEOWNERS ASSOCIATION shall have its domicile in the Main Checkpoint of the Costa Pedasí Residential Project, Borough and District of Pedasí, Province of Los Santos, Republic of Panama, which may be contacted at telephone 6329-9152, whereat it may establish a common headquarter for the compliance of its purposes. The association shall operate within the Republic of Panama.

ARTICLE 3. OBJECTIVES:

COSTA PEDASÍ HOMEOWNERS ASSOCIATION shall have, among others, the following objectives:

• a) To group and organize the owners of Costa Pedasí Project.
• b) To promote good relations and coexistence among the owners and/or residents of Costa Pedasi Project.
• c) To contribute on the drafting of norms that may be conducive to create an environment of mutual respect, good manners and cordiality among the owners and/or residents of Costa Pedasí Project.
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• d) To establish links with similar organizations at national or regional level, thereby promoting the exchange of the research being performed by them, being able to adhere to or become a part of national institutions connected with the owners, tenants and/or residents of residential areas.
• e) To promote social work on areas of limited resources of the country, by means of the design of donation programs, scholarships, obtained with national or international support to that effect.
• f)  To carry out the publications it deems appropriate to comply with the above stipulated objectives.
• g)  To formalize the obtainment and/or transfer of the property titles on the lands and infrastructures built on common area, and administration thereof in the name of the ASOCIACIÓN DE PROPIETARIOS  DE  COSTA  PEDASÍ  or  COSTA  PEDASÍ  HOMEOWNERS ASSOCIATION for the benefit and enjoyment of the owners of Lots belonging to the Costa Pedasí Project. The purpose of this provision is to impose on the ASSOCAITON an obligation to maintain ownership of the common areas for the benefit of the owners and occupants of the Lots.

ARTICLE 4. DURATION: The duration of the Association shall be perpetual, but may be dissolved pursuant to what has been provided for in the By-Laws and the Law.

ARTICLE 5. PATRIMONY: The patrimony consists of the properties being actually held and the ones successively acquire for any title, and of the resources it obtains by: 1) The ordinary and extraordinary quotas contributed by the members; 2) any property purchased by the ASSOCIATION and any property title of the lands of the common area and infrastructure built upon it, which shall be kept and improved for the joint benefit of all the owners of Lots; 3) The donations, inheritances, legacies and grants of their properties; 4) the product benefits, raffles, festivals and of any other income it may legally obtain pursuant to the non-profit nature of the Association.

ARTICLE 6. To the effects of these By-Laws and its regulations, the following terms shall be understood as follows:

• a) Mortgagee: shall refer to any natural or juridical person, backed up by a public deed duly registered as a First Mortgage on any Lot and/or residence.
• b) Appendix “A”: is the Master Plan that outlines all Lots, number of Lots, common areas, infrastructure of service areas and amenities built or to be built in the Costa Pedasí Project.
• c) Appendix “B”: is the description and scheme of the installations and construction of infrastructures, its design drawings and specifications, plans as to how they have been done, estimated schemes of maintenance of materials, equipment and guarantees associated contemplated by PLGI, its successors and assignees, and their materials, providers of equipment and construction contractors.
• d) Common Areas: shall mean all real estate property not subdivided in Lots for sale to owners, as specified in the PLGI Master Plan (Appendix “A”) for the common use and enjoyment of the Members. The ownership of the “Common Areas” shall be transferred to and owned by the ASSOCIATON after all construction is finalized, after being inspected and accepted by the ASSOCIATON, which must be built according to the design plans and specifications and construction schemes approved by the government. It shall be determined by HOA (abbreviation in English) – Asociación de Propietarios that the same have enough capacity to service the entire Costa Pedasí Project, and that they are fully operational and functional.
• e) ASOCIACIÓN or HOA (por siglas en inglés) shall refer to ASOCIACIÓN DE PROPIETARIOS DE COSTA PEDASÍ, its successors and assignees.
• f) Contributions: the obligation of each owner to cover with its contribution, the administration, conservation, maintenance and operation expenses, as established in the By-Laws or the regulation. It includes the ordinary and extraordinary contributions, fines or any other obligation duly set-forth.
• g) Structure: shall refer to any building, including houses, external annexes such as huts (bohios), or any other portion thereof, that includes fences, sidewalks, driveways or accessories to any of the above.
• h) Lot: shall refer to any parcel of land that has been segregated and/or sold by means of transfer of title to an owner of the Costa Pedasí Project, and any other Lots not yet sold that are still held and owned by PLGI.
• i) Member: shall mean and refer to each Owner of any Lot, within the ones included in the Costa Pedasí Project, and as such shall have a membership within the association.
• j) Playa La Garita Inc. or PLGI: shall refer to the Costa Pedasí Real Estate Promoter, which shall be referred to as “PLGI”, which corporation is duly registered in the Public Registry of the Republic of Panama, at Jacket Number five hundred eighty-seven thousand one hundred sixty (587160), Document Number one million two hundred twenty-four thousand two hundred seventy-three (1224273), and originally registered on the eleventh (11^th) of October of two thousand seven (2007), and/or its successors and assignees, responsible for the payment of contributions of the association, maintenance of infrastructure in the common areas, and related costs, until it has transferred the ownership of the common areas to the Association and/or have sold the rest of the lots that are still in its possession.

• k) Promoter: natural or juridical persona that promotes the construction of a property.
• l) Owner: shall refer to the owner or holder of the title, whether it be one or more natural or juridical persons, on any Lot that forma a part of the Urbanization, excluding those that have such interest merely as security for the compliance of an obligation. For the purposes of this document, “Owner” means a person or entity that holds complete title of a Lot, including PLGI that holds the title of lots not yea sold or transferred.
• m) Costa Pedasí Project: A Closed Residential Development project, as presented in the master Plan “Appendix A”. The Costa Pedasí project consists of subdivided properties (the Urbanization). The numbered individual Lots, common areas and amenities are described in detail in the attached Appendix “A”.
• n) Regulation: norms prescribed by the Association to ensure the better use and maintenance of the common properties, which must implement the provisions contained hereunder, and to never contradict them. It shall refer to the General Regulations and provisions contained in the By-Laws of the ASSOCIATION and the Covenants, Rights, Tasks and Restrictions applicable to the properties or Lots of the Costa Pedasí Project.
• o) Urbanization: Shall exclusively refer to the conformation of Lots, common areas and Real estates of the Costa Pedasí Project, which properties are outlined in Article seven (7), that constitute a set of works equipped with roads, public services, social facilities, areas of public and private use and served lots with capability to build upon them.

ARTICLE 7. SCOPE: All provisions, rights and obligations established in this By-Laws shall be solely applicable to the properties that are included within Lots one (1) to sixty-eight (68), lots one hundred seventeen (117) to one hundred thirty-seven (137) and common areas associated to the Master Plan of the Costa Pedasí Project, as well as Real Estates Number thirty-seven thousand nine hundred twenty-one (37921), registered under Document Number one million two hundred forty-one thousand forty-one (1241041); Real Estate number thirty-seven thousand nine hundred thirty-three (37933), registered under Document Number one million two hundred forty-two thousand five hundred three (1242503); Real Estate Number forty-five thousand five hundred fifty-nine (45559), registered under Document Number one million five hundred seven thousand six hundred twenty-two (1507622); Real Estate Number thirty-five thousand eight hundred forty-eight (35848), registered under Document one million one hundred sixty-five thousand six hundred two (1165602); Real Estate Number forty-seven thousand three hundred forty-seven (47347), registered under Document Number one million seven hundred twenty-nine thousand two hundred fifty-seven (1729257); Real Estate Number thirty-nine thousand three hundred thirty-nine (39339), registered under Document Number one million three hundred ten thousand thirty-two (1310032); all of them registered in Location Code Number seven thousand four hundred one (7401), Real Estate Section, Province of Los Santos, of the Public Registry of Panama.

CHAPTER SECOND OF MEMBERS

ARTICLE 8. MEMBERS: Persons that show that they are the owners of one or several real estates within the perimeter of the Project are considered as associates of ASOCIACIÓN DE PROPIETARIOS DE COSTA PEDASÍ or COSTA PEDASÍ HOMEOWNERS ASSOCIATION.

ARTICLE 9. KIND OF MEMBERS: The following category of associates is established:

• a) Founding Members: The natural or juridical persons that are credited with that character in the Minutes of incorporation, with the same powers, rights and obligations of the active associates.
• b) Active Members: the natural or juridical persons registered as such in the BOOK OF REGISTRATION OF ASSOCIATES, who have validated the ownership of their real estate, that have paid the quota of admission, contribute with an annual quota, who are up-to-date with their economic obligations. All of them must be of legal age.
• c) Promoter: Juridical Person, Playa La Garita Inc. o PLGI, promoter of the Costa Pedasí Real Estate Project, and which shall be referred to as “PLGI”, which corporation is duly registered in the Public Registry of the Republic of Panama, at Jacket Number five hundred eighty-seven thousand one hundred sixty (587160), Document Number one million two hundred twenty-four thousand two hundred seventy-three (1224273), and/or its successors, which on the basis of a previously established agreement, maintains the obligation of payment of annual contributions (and or extraordinary contributions) on the lots which are a part of this project not yet sold or in the process of being sold that still are under its ownership with the right to attend and be heard in the meetings of the Association, but without the right to vote and/or participate or run as members of the Board of Directors.

ARTICLE 10. RIGHTS AND TASKS: The founding members and active associates have the following rights and tasks: a) to pay the ordinary and extraordinary contributions established by the General Assembly; b) To comply with the other obligations imposed by these By-Laws, regulation and the resolutions of the Assembly and the Board of Directors; c) to participate with voice and vote at the assemblies; d) be elected to form a part of the social bodies; e) to enjoy the benefits granted by the entity. Each member shall have the right to cast one vote per lot owned by it, save for the exceptions contained in these By-Laws pertaining to the Promoter and others contained in Article 34, Chapter Third, of the Second Title concerning the Rights to Vote.

ARTICLE 11. AFFILIATION: May be an affiliate any person that is interested in belonging to the Association and is an owner of house or more in the Costa Pedasí Project, of legal age and pays the contributions established by the Board of Director. The manner of affiliation is as follows: it shall have to previously fill out a form to be established by the Board of Directors of the Association to that effect, to accept the regulation and the By-laws of the Association.

ARTICLE 12. DISAFFILIATION: The character of associate shall be lost, the one that has ceased to meet the required conditions by these By-Laws to be an associate. The character of associated shall also be lost by demise, resignation or removal. The Board of Directors my file proceedings against associates that incur in: 1) non-compliance of the obligations imposed by the By-Laws, regulation or resolutions of the assemblies and of the Board of Directors; 2) Notorious gross misconduct; 3) voluntary harming the Association, provoke serious disorders within it or observe behavior that is notoriously harmful to the social interests; 4) to public act or subscribe any documentation, in the name of the Institution, without having been authorized to that effect by the Board of Directors, that may impose the following penalties:

• a) admonishments; b) suspension, partial or definitive, at the judgment of the Board of Directors; and c) removal. These penalties shall be graduated according to the seriousness of the fault and the circumstances of the case. The decisions of the Board of Directors shall be subject to appeal before the General Assembly.

The disciplinary sanctions in the preceding paragraph shall be resolved by the Board of Directors prior to the defense of the accused party.

CHAPTER THIRD OF CONTRIBUTIONS

ARTICLE 13. CONTRIBUTIONS: The annual contributions shall be fixed on an annual basis for all owners of Lots, Members and Lots with the right to vote which is the property of / owned by PLGI, its successors and assignees. The Board of Directors shall set the amount of the annual contributions of each Lot, at least thirty (30) calendar days in advance of each period of the annual Assembly. It shall be delivered to each Owner/Member the annual quota to be paid together with the annual Budget submitted by the Board of Directors. The annual contributions (and extraordinary contributions, if any) shall be fixed by the Board of Directors. The associate that is behind in the payment of the quota or of any other contribution established for more than ninety (90) calendar days after the date of expiration shall have a penalty equivalent to the twelve (12%) percent annual of the quota in arrears and a monthly capitalization.

ARTICLE 14. PAYMENT OF CONTRIBUTIONS AND USE THEREOF: The payment of annual

contributions to the ASSOCIATION must be paid in accordance with the payment schedule stipulated by the Board of Directors. The contributions paid and collected shall be used to pay the fixed and variable costs. The variable costs include the actual cost to provide water supply, safety, maintenance and pruning of common areas and vacant or unoccupied lots of members, and other maintenance costs that may come-up. Each Lot/proprietor shall pay for its personal use of water by means of metering system installed in its Lot, The cost of irrigation the landscape of the common area for the development of Costa Pedasí and the costs of the operation and maintenance of the water systems, shall be assumed by all the owners of Lots as described in the Regulation and shall be included as part of the Annual Contributions of the ASSOCIATION.

ARTICLE 15. INCREMENT OF THE ANNUAL CONTRIBUTIONS: After consideration of the actual maintenance costs and additional needs of the ASSOCIATON, the Board of Directors may increase the Annual Contributions by no more than 10% in any given year. Any increase proposed in excess of 10% must be submitted for approval before the members of the General Assembly for voting. Such increment must be approved by two (2/3) thirds of the active associates that cast their vote in person or by proxy, following the formalities pertaining to voting established in these By-Laws.

ARTICLE 16. EXTRAORDINARY CONTRIBUTIONS: In addition to the annual contributions authorized above, the ASSOCIATION may establish an extraordinary quota in any year, and such special or extraordinary quota shall only be applicable only for that year. This quota would be for the purpose of paying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of an improve on the common Area or to finance any legal expense in connection with the maintenance and protection of the legal rights and faculties of the Members as a group. The same formalities must be followed pertaining to voting contained in Chapter III, of Title III of this document.

….. Such special contributions shall require the approval of two (2/3) thirds of the active associates that are up-to-date and that cast their vote personal or by proxy. An electronic mail, Fax or invoice in writing of the annual or extraordinary quota shall be forwarded to each Member not before thirty (30) calendar days after the adoption of the decisions. The failure to pay the extraordinary quota may result in the proceedings and sanctions as outlined in Article 17 of Chapter Third of Title First.

ARTICLE 17. RESOURCE OF THE ASSOCIATION IN THE EVENT OF NON-COMPLIANCE OF PAYMENT OF THE CONTRIBUTIONS.

The Association may at its discretion:

• a) Furnish an admonishment in writing or by any other means of legal notice;
• b) Impose a sanction and annual interests on any outstanding balance;
• c) The Board of Directors may restrict the services, or;
• d) May file and initiate the corresponding legal formalities to recuperate the contributions and/register a lien against the property, plus the interests, costs and reasonable attorney’s fees in connection with any action shall be added to the amount of such quota not paid on time. No member may waive or otherwise escape from its responsibility for the payment of the contributions contemplated in this document for not using the Common Area or abandonment of its Lot.

TITLE II BRANCHES OF MANAGEMENT

(GENERAL ASSEMBLY, BOARD OF DIRECTORS AND COMMITTEES)

ARTICLE 18. This Association is governed by the National Constitution, the Laws, Decrees and Administrative Orders, as well as by these By-Laws, its regulations and by the decisions duly adopted by its organizations.

ARTICLE 19. The branches of the Association are: The General Assembly, the Board of Directors, Directors’ Committees and other Committees to be appointed by the Board of Directors.

The General Assemblies consist of two kinds: the Ordinary General Assembly and the Extraordinary General Assembly.

CHAPTER FIRST OF THE GENERAL ASSEMBLY

ARTICLE 20. COMPOSITION: The GENERAL ASSEMBLY of the ASOCIACIÓN DE PROPIETARIOS DE COSTA PEDASI or COSTA PEDASI HOMEOWNERS ASSOCIATION is

the maximum branch of control and administration of the Association and is constituted by all the regular active members/associates with the right to voice and vote.

It is understood as active members with the right to voice and vote those who are up-to-date in the payment of contributions and other similar expenses of the Association at the time of holding the General Assembly.

ARTICLE 21. TASKS: The General Assembly shall be in charge of and shall be responsible for the administration and conservation of the common properties and shall have all those tasks and faculties that the Law or the Regulation does not attribute to the Board of Directors or any other committee or authority of the association. Specifically it shall have the following tasks:

• a) Hold meetings at least once a year in ordinary session and in extraordinary session, it shall hold meetings as many times as the circumstances so require it;
• b) To elect in due time the members of the Board of Directors; each one for a period of two years;
• c) To approve and modify the Financial Statements, Inventory, the Account of Expenses and Revenues;
• d) To approve the Project of the Annual Budget of the Association, maintenance contributions and extraordinary contributions;
• e) To approve amendments to the By-Laws of the Association;
• f) To decide on the admission, rejection or removal of members;
• g) To agree upon on the dissolution of the Association;
• h) To decide on matters that the Board of Directors submits for its consideration;
• i) To authorize the execution of works, improvements or new buildings that may affect or may become common properties;
• j) To establish the maximum amount of investments not budgeted to which the Board of Directors may decide without consulting with the Assembly. As of the amount established by the Assembly, those investments or projects that exceed said amount, it must be approved by the General Assembly;
• k) To deal on any other matter included in the Agenda, which are established in the By-Laws and all those that are inherent to the maximum branch of control and administration of an organization, especially the ones pertaining to its existence, destiny, finance and purpose.

ARTICLE 22. NOTICE OF THE MEETING: The Ordinary General Assembly shall be convened by the Board of Directors once a year, within the first three (3) months of each year. The Extraordinary General Assembly may hold meetings at any chance by the initiative of the Board of Directors or by virtue of a petition of the members that at least represent 30% of the members of the Association with the right to voice and vote, and who are up-to-date in the payment of the common contributions and other financial obligations, presented before any member of the Board of Directors. Once the Board of Directors has verified the 30% requirement, it has the obligation to make sure that the corresponding notices of the meeting are made.

Meetings of the General Assembly that are convened by the initiative of 30% of the members of the Association must fulfill the normal requirements of quorum of the Ordinary General Assembly.

The Board of Directors shall convene ordinary and extraordinary sessions of the General Assembly, in no less of twenty-five (25) calendar Days or more that fifty (50) calendar Days in advance of the date of the meeting, in the same notice will be establish a secondary date in case that the first meeting cannot be done for not having enough quorum, the publication or communication of the meeting shall be made using e-mail, fax, notice in writing or any other conventional means of communication addressed to the work or residential domicile of each and every one of the members of the Association, indicating the day, time and place of the meeting.

Members may waive their right to be previously notified to participate in any meeting of the General Assembly, whether in writing before or during the meeting, or verbally during the meeting.

Associates may grant special powers of attorney to another associate or third parties for their representation with voice and vote in the General Assemblies.

ARTICLE 23. REPRESENTATIONS by PROXIES. Members may vote or act personally or by proxies. It is not necessary for the person appointed as representative to be a Member of the ASSOCIATION. The appointment by a Member of a representative to vote and act in its representation shall be notified in writing to the Board, and shall be revocable at any time by means of formal notice to the Board of Directors by the Members making the appointment. Such situation shall be notified to the Board of Directors in writing or in an open session, about the revocation of the appointment of its representative, which fact shall not affect any vote or act previously accepted or authorized.

ARTICLE 24. QUORUM: For the valid celebration of the General Assembly, the attendance of sixty (60%) percent of the members of the Association with the right to vote and who are up-to-date in the payment of their contributions, shall be required, who shall make a quorum to hold a meeting in a General Assembly.

If at the time indicated in the notice of the meeting, there should not exist the required quorum of the members, a half hour waiting period shall made, and if at that time there is not present the sixty (60%) percent of the owners or their representatives duly accredited, the meeting shall not be held, and will be done according to the secondary date establish for the meeting.

In this second meeting, the quorum shall be constituted by two (2/3) thirds of the required quorum in the preceding meeting, that is to say 40% of members with the right to vote and that are up-to-date in the payment of their contributions, and if at the time indicated there were not represented the two (2/3) third of the owners, a half hour waiting period shall be made and the Assembly shall be valid with the number of owners present.

ARTICLE 25. DECISION TAKING: Save that otherwise is provided for in these By-Laws, the decisions to be adopted in the General Assembly must be backed-up with the favorable vote of sixty (60%) percent of the associates, among which it shall be included those owners that have granted a Power of Attorney in order to be represented in their absence.

CHAPTER SECOND OF THE BOARD OF DIRECTORS

ARTICLE 26. COMPOSITION: The Board of Directors is the administrative branch of the

ASOCIACIÓN DE PROPIETARIOS DE COSTA PEDASI o COSTA PEDASI HOMEOWNERS

ASSOCIATION and shall consist of five (5) incumbent members or directors who shall take the offices of: President, Vice-President, Secretary, a Treasurer and an Alternate. The five Members of the Board of Directors shall be elected on a rotating basis with two (2) new Directors initiating in their offices en even years, and three (3) new Directors initiating in their offices in odd years. Each director shall exercise the position for a period of two years. To form apart of the Board of Directors, it is required to belong in the category of founding member or active member, to be of legal age. All procedures for the election of the Board of Directors must follow the guidelines established in Chapter III of this title.

The first members of the Board of Directors shall be:

---------- President

---------- Vice-President

---------- Secretary

---------- Treasurer

---------- Alternate

The legal representation shall be exercised by the majority opinion of the Board of Directors, and initially through Jayne Michelle Moreno Rodríguez, female, Panamanian, of legal age, holder of personal identity card four-seven hundred twenty-six-two thousand forty-six (4-726-2046); practicing attorney-at-law, with a legal domicile in Urbanización Valle Dorado, Lot #8, Borough and District of Las Tablas, Province of Los Santos, Republic of Panama.

ARTICLE 27. TASKS: It shall be the attribution and general tasks of the Board of Directors, among others, the following:

• a) To execute the resolutions of the Assemblies, to enforce these By-Laws and Regulations; construing them, in the case of doubt, with the responsibility to give accountability at the next Assembly to be held;
• b) To exercise the administration of the Association;
• c) Convene Assemblies;
• d) To resolve the admission of applicants who wish to enter as associates, and in the case of adherents, to submit it for approval of the Assembly;
• e) To layoff, admonish, suspend associates. The removal of an associate must be brought for consideration and approval of the General Assembly;
• f) To appoint employees, including the Administrator (should it exist), and all the necessary staff for the compliance of the social purposes, set its salary, indicate their obligations, admonish, suspend and dismiss them;
• g) To submit to the Ordinary General Assembly the Balance Sheet, the Financial Statement, with its accounts of revenues and expenses duly explained and backed-up, and the following administration Budget, and all these document must become known by the Associates, with the same required advance for the notification of the Ordinary General Assembly, contained in Article 22, of Chapter First, contained in Title Second of this document;
• h) To apply to the associates the contributions established by the Assembly:
• i) To annually inform the owners about the financial situation of the Association or whenever so requested by the Board of Directors, by means of an Assembly:
• j) To take care of complaints and recommendations submitted by the Administrator in connection with violations of the norms by the owners and residents, and to take the necessary steps conducive to restitute order in the Residential area;
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• k) To settle disputes among the owners, and among the later and the Administration, if any;
• l) To create support Committees and to appoint the owners that shall act on it.
• m) Celebrate any kind of contracts necessary for the realization of their functions.

ARTICLE 28. MODE OF CONVENING: The Board of Directors shall hold meetings when and how it deems it appropriate, in the place, day and hour to be agreed upon by the director members, upon request of the President or in his/her absence, when any other directors convenes it upon petition of at least two (2) director members.

The convening of the meeting of the Board of Directors, shall be made in a personal manner, by e-mail or any other legal mean with no less than fifteen (15) calendar days in advance, to the holding of the meeting. Meetings may be held physically or through any electronic means, such as telephone, internet and the like.

At some meetings, only the Members of the Board shall be present, and the other meetings shall be open for attendance of all Owners of Lots, when and how the Board deems it appropriate. The Members of the ASSOCIATION may request at any time in writing a petition with justification to the Board to hold a meeting that is open for attendance of all owners. The representatives of PLGI may at any time request in writing for a representative of PLGI to be allowed to attend and speak to the Board and/or all the owners of Lots, until the date that all lots which are the property of PLGI are sold, and that it has complied with the commitment with the Home Owners Association of Costa Pedasí by PLGI that all construction of infrastructures in the Common Area has been completed, and/or all the construction guarantee periods furnished by PLGI have expired, whichever occurs later.

ARTICLE 29. QUORUM: The required quorum in order for the Board of Directors to hold a meeting is half plus one of the whole of its members. Decisions must be approved by the simple majority of vote of the members of the Board, and in the event of a tie, the vote of the President shall be the decisive vote. The Secretary shall keep a registration of all the acts of the Board of Directors and the Minutes drafted by him/her, must be approved by the Board, and be signed by the President and the Secretary in the next meeting, or in its absence by the persons that are replacing them. The way to publish the internal actions of the Board of Directors shall be by e-mail, bulletins, circulars and any other means indicated in the regulation.

ARTICLE 30. ELECTION: The first board rotation will be in this way, President and Secretary for a period of 3 years, Vice-president, Treasurer and Vocal for a period of 2 years. From the second board the members of the Board of Directors shall be elected by the simple majority of the associates with the right to vote and that are up-to-date in the payment of their contributions, those shall exercise their offices for a period of two (2) years, without prejudice that they may be reelected. The five member of the Board of Directors shall be elected on a rotation basis with two (2) new Directors initiating in their position in even years, and three (3) new Directors initiating in their position in odd years.

ARTICLE 31. ELEGIBILITY OF MEMBERS TO EXERCISE: All matters of the ASSOCIATION

and/or the exercise of tasks in the Board of Directors, several Committees, and/or as Election Inspector, have the exclusive purpose of representing the best interests of the ASSOCIATION and its members, in such a manner that it achieves high ethical standards and that is not committed by potential conflict of interests. Consequently, no Member that is actually employed by, or in any manner linked to and/or receives a pecuniary retribution from PLGI is eligible to exercise any office within the ASSOCIATON, except in the Architectural Review Committee (ARC) – (Comité de Revisión Arquitectónica – CRA, abbreviation in Spanish). All candidates to perform offices within the Board of Directors of this Association must sign such statement of eligibility.

ARTICLE 32. REMOVAL: Any one (1) or more Director(s) of the Board may be removed from the Board, with or without cause, by means of a majority vote of the Member of Lot that are not owned by PLGI.

In the event of the demise, resignation or removal of a Director, the successor of that Director shall be elected by the remaining Directors of the Board, and shall exercise until the next annual meeting, unless the election of a successor Director of a Member takes place in the same meeting, when a Director shall be elected to complete the period of such deceased Director, or has resigned or has been removed.

CHAPTER III RULES OF ELECTION

ARTICLE 33. Elections shall be made in accordance with the Rules of Election of Costa Pedasí, defined in Articles 33-41 of this Chapter. The Rules of Election of Costa Pedasí provides for the existence of an Election Inspector to guarantee the validity of all elections. The Election Inspector shall be appointed by the Board of Directors from time to time as required.

ARTICLE 34. Voting Rights. One vote shall be assigned to each Lot that is the property of a natural or juridical person. In the event that two (2) or more Lots are combined in one (1), the Member only shall have the right to cast one vote. When more than one person holds interest in any Lot, they will decide among themselves as to how the vote shall be issued, but in no case more than one vote shall be issued with respect to any Lot or any single residential home built in two or more Lots.

ARTICLE 35. Active Member. Each Member is entitled to cast one vote per Lot, given that the owner is an “Active Member”. An active member is the one that is-up-to-date with all its debts to the ASSOCIATION y that is not in violation of the By-Laws, regulations, future covenants, conditions and restrictions. It is the responsibility of the Election Inspector to determine the eligibility of the voting Members. This should be done in no less than twenty-five (25) calendar days before calling the Member to cast its vote.

ARTICLE 36. Quorum for Election. A quorum is constituted by 60% of the Members issuing the ballot on line and/or attending a meeting with the declared purpose of participating in an election. Should the required quorum is not present, another electronic ballot box and/or meeting may be convened, and the required quorum in any such subsequent meeting shall be two (2/3) thirds of the required quorum in the preceding meeting or 40% of the Members. No subsequent meeting shall be held in more than sixty (60) subsequent calendar days of the preceding meeting.

ARTICLE 37. Representations. Members may vote or act personally or by means of representation. It is not necessary for the appointed person as representative be a Member of the ASSOCIATON. The appointment by a Member of a representative to vote or act in representation of the Member shall be submitted in writing to the Board, and shall be revocable at any time by means of actual notice to the Board by the Member making such appointment. The notice to the Board in writing or at an open session about the revocation of the appointment of a representative shall not affect any vote or act previously accepted or authorized.

ARTICLE 38. Electoral Schedule. Notice about the elections shall be given through e-mail and/or an open session in no less than twenty-five (25) calendar days and no more than fifty (50) calendar days before the final date for voting. The information pertaining to the candidates and the matters for discussion shall be furnished in writing in no less than 2 weeks before the final voting date at the election.

ARTICLE 39. Should there be two or more members being elected, the most voted candidates shall be elected. In the case of a tie, there will be a second round programmed within a period of 7 days of the original election.

ARTICLE 40. For the nomination deadline, if the amount of candidates coincides with the amount of vacancies of Members of the committee, it is not necessary to hold an election, and it may be deemed complete for the Election Inspector. The required quorum for these elections shall be the same as the one established in Article 36, Chapter III, Title Second of this document.

ARTICLE 41. Volunteering/Nominations, Voting Procedure and Maintenance of Registries: Notices in writing to all Members must be forwarded in ten (10) Calendar Days in advance of the deadline of nominations to inform that volunteers and nominations are being accepted for any open position in the ASSOCIATION. The offer of an associate as volunteer, or the nomination of other associates for any office in the ASSOCIATION must be submitted in writing, in any format, to the administrator of the Website of ASSOCIATION, or another person appointed to receive nominations for the established “Nomination Deadline”. If a person chooses to decline the nomination, this should be submitted in writing with the five (5) days before the closure of the nomination deadline. Registers must be kept of all nominations, by the appointed person that is accepting the nominations in writing. The votes of the active Members that are up-to-date in the payment of their contributions, shall be annotated and the results thereto shall be registered and used to determine who is elected for the open office of the ASSOCIATION according to the provisions of this Chapter. All these nominations and registration of votes must be retained for a period of five years after the closure of the election.

CHAPTER FOURTH OF DIRECTORS

ARTICLE 42. THE PRESIDENT: The President or whoever replaces him/her statutorily must conform to the following tasks:

• a) To exercise the legal representation of the Association, save as designed otherwise;
• b) Convene the Assemblies and call the meetings of the Board of Directors and chair them;
• c)  To sign together with the Secretary, the Minutes of the Assemblies and meetings of the Board of Directors, the correspondence and all other document of the Association:
• d) To authorize with the Treasurer the expense accounts, signing receipts and other documents of the Treasury in accordance with what has been resolved by the Board of Directors. Will not allow for the social funds be invested objectives other than what has been prescribed by these By-Laws;
• e) Lead the discussions, suspend and adjourn the sessions of the Board of Directors and Assemblies whenever the order of day is altered or due respect is missing;
• f) To ensure the successful operation and administration of the Association, by observation and action.

ARTICLE 43. THE VICE-PRESIDENT: The Vice-President shall replace the President in the event of temporary absence or impediment with the same responsibilities. It shall be understood by temporary absence being out of the office for a period of more than three (3) months. Should the President leaves office definitively, the Vice-President shall exercise the Presidency until the termination of the corresponding period. In the event of temporary or definitive absence or impediment of the Vice-Presidents, his/her functions shall be exercised with the same character by the member of the Board of Director that it so appoints.

ARTICLE 44. THE SECRETARY: The Secretary will be in charge of the daily management of the Association, mainly holding the following tasks of its office:

• a) To attend the Assemblies and sessions of the Board of Directors, drafting the respective Minutes that will register in the corresponding Book and shall sign with the President;
• b) To sign with the President the correspondence and all other document of the Association;
• c) Call for meetings of the Board of Directors;
• d) Keep the Book of Minutes of the meetings of the Assemblies and the Board of Directors;
• e) Any other tasks that may be commissioned to it by the Board of Directors.

ARTICLE 45. THE TREASURER: The Treasurer shall be mainly in charge of keeping the accounts of the Association, as well of maintaining the economic viability of the organization, exercising in his office, the following tasks:

• a) To attend the meetings of the Board of Directors and the assemblies;
• b) To keep the Register of Associates, dealing with everything pertaining to the collection of social contributions;
• c) To keep the Accounting Records;
• d) To submit before the Board of Directors the monthly balances and to prepare the annual inventory, Balance Sheet and Account of Expenses and Revenues that must be subjected to approval by the Directors’ Committee, for presentation before the Ordinary General Assembly;
• e) To sign with the President the receipts and other documents of the Treasury, making the payments resolved by the Board of Directors;
• f) To make in a banking institution, in the name of the Association and joint order of the President, deposits of money, being able to retain the same up to the sum to be determined by the Board of Directors;
• g) Be accountable for the economic situation of the Association and the Board of Directors.

ARTICLE 46. THE ALTERNATE: In addition to the responsibilities assigned by the President, the Board of Directors or the General Assembly, the alternate may be commissioned to make the pertinent notices or notifications for the meetings of the Board of Directors or the General Assembly. The same may chair the commissions so assigned to him/her.

ARTICLE 47. SUBSTITUTES: They may be appointed subsequently and the same shall attend the meetings of the Board of Directors, in the absence of the incumbents, and shall assume the functions of incumbents, when an incumbent member, resigns or abandons the office or is dismissed according with Article 32 of these By-Laws.

TITLE THIRD FINANCES AND BUDGET

ARTICLE 48. FISCAL YEAR: The fiscal year begins on the 1^st of January and ends on the 31^st of December. The Board of directors, o the natural or juridical person it appoints, shall prepare the project of budget of revenues and expenses and shall submit it for consideration of the Board of Directors no later than the first (1^st) of November of every year, for approval of the General Assembly in the annual ordinary meeting.

ARTICLE 49. PREPARATION OF THE ESTIMATED ANNUAL BUDGET: Before the thirty

(30) Calendar days of the celebration of each Ordinary General Assembly, the Board shall notify and present in writing or email to each one of the members of the Association an ESTIMATED ANNUAL BUDGET, which shall contain the total amount needed to pay the fees administration cost, salaries, materials, insurance, tax on common areas, services and supplies that are required during the next calendar year for the provision of all services that are associated with the COSTA PEDASÍ PROJECT, together with a reasonable amount that must be considered by the Board that becomes necessary for a reserve for contingencies and replacements, with reasonable detailed information thereof. The estimated cash requirements shall be assigned to the Members in accordance with the number of Lot.

ARTICLE 50. On or before the date of celebration of each Ordinary General Assembly, the Board of Directors shall furnish all Members a thorough description of maintenance expenses actually incurred in the preceding calendar year, together with a tabulation of the sums collected pursuant to the estimate provided, and that shows the net amount over or under the actual expenses plus reserves. Any sum accumulated in excess of the required sum for the actual expenses and reserves shall be maintained in reserve and credited in favor of next year’s budget. The annual budget, including the initial budget of the ASSOCIATON shall be established on an annual basis.

ARTICLE 51. BOOKS AND REGISTERS OF THE ASSOCIATION: The Board of Directors, through the Treasurer, or the natural or juridical persona assigned by it, shall maintain complete and accurate books of accounts, and the same shall be available for inspection by anyone or any representative of any Member duly authorized in writing, in reasonable dates during normal business hours and on the basis of a request by a Member or its representative. On the basis of thirty (30) Calendar days prior notification of the Board and on payment of a reasonable fee, to any Member shall be furnished a statement of accounts that establishes the sum of any of the un-paid quotas or other outstanding charges owed by such Member.

ARTICLE 52. The Board has the capacity to develop, update and use other procedures and registers as it may deem it appropriate as far as these procedures do not contradict or interfere with the rights of individual owners, Agreements of Purchase of Lots, other provisions of the Founding Charter and/or with any Panamanian Law.

TITLE FOURTH FINAL PROVISIONS

CHAPTER FIRST AMENDMENT TO THE BY-LAWS 

ARTICLE 53: The amendments to these By-Laws must be made at a Meeting of the Board of Directors, especially convened to that effect, y to be validly adopted, require the approval of the General Assembly by the favorable vote of seventy-five (75%) percent of all Members with the right to voice and vote and are up-to-date in the payment of contributions of the Association and other financial obligations. Afterwards it shall be notified to the Ministry of Government and Justice.

ARTICLE 54: The Board of Directors may dictate and amend from time to time the regulations it deems convenient for the better operation of the Association, which must develop the statements contained in this document, and to never contradict them.

CHAPTER SECOND OF DISSOLUTION AND LIQUIDATION

ARTICLE 55. DISSOLUTION: The Association may be dissolved by agreement of the Board of Director, for the unlikelihood of complying with its By-Laws, prior approval of 75% of the members with the right to voice and vote and that are up-to-date in the payment of the contributions of the association and other financial obligations, at the Extraordinary General Assembly convened to that effect. Said dissolution must be notified to the Ministry of Government and must be registered on the marginal of the Public Registry.

ARTICLE 56: During the period of dissolution the Association shall exist to the effects of its liquidation.

ARTICLE 57. LIQUIDATION: In the unlikely event of the dissolution of the ASSOCIATON, the members of the Board of Directors shall act as Liquidators of the property, taking decisions by the majority of vote of its members. In the first place, the parcels of the Common Area and infrastructure of the ASSOCIATION, shall be sold at the best price possible after a reasonable period of time necessary to sell these assets, and the money generated by such sale shall be combined with the cash reserves of the ASSOCIATION, and then be used to compensate the liabilities, and then the remaining monies after payment of all liabilities, shall be divided in equal parts by members, and shall be distributed to each member so that at the end the ASSOCIATION shall not have assets. This dissolution must be notified subsequently to the Ministry of Government and Justice.

IN WITNESS WHEREOF, these By-Laws are signed on the first (1st) day of November of the year two thousand fifteen (2015).

WORK PLAN

ASOCIACIÓN DE PROPIETARIOS DE COSTA PEDASI or COSTA PEDASI HOMEOWNERS ASSOCIATION

The primary objective of the Costa Pedasí Homeowners Association is to bring together the owners, residents, and/or property owners of the Costa Pedasí Residential Project; to promote positive relationships and harmonious coexistence among the owners, residents, and/or property owners of the Costa Pedasí Project; to contribute to the development of standards that foster an environment of mutual respect, good conduct, and cordiality among the owners, residents, and/or property owners of the Costa Pedasí Project; to express its opinion, either voluntarily or at the request of public authorities or private entities, on matters of general interest related to the owners, residents, and/or property owners of the Costa Pedasí Project; to establish relationships with similar organizations at the national and regional levels, promoting the exchange of studies and information, and to join or become part of national institutions related to owners, residents, and/or property owners of residential communities; and to promote charitable work in underserved areas of the country through the development of donation and scholarship programs supported by national and international organizations. To achieve these objectives, the Costa Pedasí Homeowners Association will implement the following work plan.

2016 ESTABLISHMENT OF THE COSTA PEDASÍ HOMEOWNERS ASSOCIATION Establishment of the administrative offices of the Costa Pedasí Homeowners Association. The offices will be located within the Costa Pedasí Residential Project, in the Corregimiento and District of Pedasí, Province of Los Santos, Republic of Panama. From these offices, the activities and programs promoted by the Association will be coordinated. Outreach: An intensive effort will be undertaken to publicize the objectives of the Costa Pedasí Homeowners Association and the activities it will carry out, with the purpose of keeping the residents of the Costa Pedasí Project informed and up to date.

2017 PROMOTION OF COMMUNITY AND NEIGHBORHOOD ACTIVITIES This initiative will be carried out through the assignment of special responsibilities to the Board Member-at-Large (Vocal), who will organize recreational, social, and cultural activities designed to strengthen relationships and promote interaction and community among all property owners within the Costa Pedasí Project.

2018 DEVELOPMENT OF COMMUNITY STANDARDS Establish a series of standards designed to create an environment of mutual respect, good conduct, and cordiality. These standards shall apply to all property owners, residents, guests, service personnel, contractors, subcontractors, workers employed within the community, and any other person entering the residential development.

2019 EDUCATION AND TRAINING REGARDING COMMUNITY STANDARDS Through training programs, workshops, educational courses, conferences, and seminars, residents will be informed and educated regarding the various community standards applicable to property owners within the Costa Pedasí Project. These standards may also be distributed through printed materials such as brochures, flyers, and informational handouts provided to property owners, tenants, residents, neighbors, and other stakeholders within the Costa Pedasí Project, ensuring that the information is readily available and accessible.

2020 MANAGEMENT OF CHARITABLE PROJECTS Coordinate with property owners and commercial institutions engaged in charitable activities for the purpose of organizing an annual outreach effort, particularly during the Christmas season, in a rural area of the Republic of Panama. The objective is to spend time with those most in need, share meaningful experiences, and enjoy a personally and spiritually rewarding day while helping others who have fewer resources and greater needs.

INDEX 

TITLE I:	Preliminary Provisions
Chapter First	Overview	(Articles 1-7)
Chapter Second	Of Members	(Articles 8-12)
Chapter Third	Of Contributions	(Articles 13-17)
TITLE II	Branches of the Government	(Articles 18-19)
Chapter First	Of the General Assembly	(Articles 20-25)
Chapter Second	Of the Board of Directors	(Articles 26-32)
Chapter Third	Of the Rule of Election	(Articles 33-41)
Chapter Fourth	Of the Directors	(Articles 42-47)
TITLE III	Finances and Budget	(Articles 48-52)
TITLE IV	Final Provisions
Chapter First	Of Amendment to By-Laws	(Articles 53-54)
Chapter Second	Of Dissolution and Liquidation	(Articles 55-57)

Work Plan 2016-2020