4. Master Assembly

4.1. Authority. The Master Condominium Assembly is the ultimate authority in the

Condominium and its resolutions validly taken are binding upon all Owners.

4.2. Ordinary Master Condominium Assembly.

(a) Frequency. Pursuant to the Law, at least one Ordinary Master Condominium Assembly must be held by foreign condominium owners each year. Although only one annual Ordinary Master Condominium Assembly is required by the Law, additional Ordinary Master Condominium Assemblies may be scheduled to conduct the business of the Master Condominium. The annual Ordinary Master Condominium Assembly will be held during the months of November or December each year, in the place indicated in the call to that effect; except that the annual Ordinary Master Condominium Assembly may be held prior to November, if it is identified in the call as the annual assembly, in which case there shall be no requirement that the Ordinary Master Condominium Assembly be held during the months of November or December that year.

(b) Call; Legally Convened; Quorum; Resolutions. Ordinary Master Condominium Assemblies may be called by the Master Condominium Assembly, Administrators, the Master Surveillance Committee, or Master Representatives representing 25% (twenty-five percent) of the Master Condominium’s total Undivided Interest Percentage with voting rights and must be held in the place designated in the applicable call. An Ordinary Master Condominium Assembly is considered legally convened in first call with the attendance of Master Representatives representing at least 75% (seventy-five percent) of the Master Condominium’s total Undivided Interest Percentage with voting rights, and its resolutions are validly taken with the favorable vote of Master Representatives representing at least a majority of the Master Condominium ́s total Undivided Interest Percentage with voting rights. An Ordinary Master Condominium Assembly is considered legally convened in second call with the attendance of the Master Representatives representing 51% (fifty-one percent) of the Master Condominium ́s total Undivided Interest Percentage with voting rights, and its resolutions are validly taken with the favorable vote of Master Representatives representing a majority of the Master Condominium ́s total Undivided Interest Percentage. An Ordinary Master Condominium Assembly is considered legally convened in third call with the attendance of those Master Representatives present, and the resolutions are validly taken with the favorable vote of the majority of those present. In the event, however, that one Master Representative represents more than 50% (fifty percent) of the Master Condominium’s total Undivided Interest Percentage at any assembly in any call, in order for a resolution to be validly taken it requires the affirmative vote of half of the remaining votes attending the meeting. Master Representatives representing a Sub-Condominium or Private Unit not subject to a Sub-Condominium regime that owes two or more monthly Assessments are not entitled to vote at any assembly on behalf of such Sub-Condominium or Private Unit, and they are not to be taken into account for quorum and voting requirement purposes. In case of a deadlock any Master Representative or Administrator may submit the dispute to the competent courts.

(c) Agenda. The agenda must be included with the document making the first call; however, the agenda may be reasonably modified to conduct the business of the meeting, if 100% of the Master Condominium total Undivided Interest Percentage with voting rights is present or represented at the meeting. The annual Ordinary Master Condominium Assembly must consider and act on agenda items i, ii, iii, and iv below. In addition, all agenda items listed below may be considered at any Ordinary Master Condominium Assembly.

(i) Review, discuss, and approve the Administrators reports and the Surveillance Committee’s report for the current calendar year;

(ii) Review, discuss, and approve the budget presented by the Administrators for the new calendar year and the determination of Common Expenses and Assessments corresponding to such year, and review, discuss, and approve the amounts necessary for the reserve fund;

(iii) Appoint, ratify, or remove Administrators, establish compensation, if any, and establish any accounting or auditing requirements deemed necessary to a smooth transition between Administrators, if necessary;

(iv) Review, discuss, and approve any Administrators’ experience or training in condominium administration as adequate, waive any requirement for specific experience or training, or require or provide specified training by a date certain, any of which must be approved by a vote of the Master Representatives representing at least 75% (seventy-five percent) of the Master Condominium ́s total Undivided Interest Percentage with voting rights;

(v) Appoint, ratify, or remove members of the Master Surveillance Committee;

(vi) Review, discuss, and approve all bank accounts, other financial accounts, and monthly financial statements, including the approval of designated authorized signatories, together with the review of any supporting documentation deemed necessary by the Master Surveillance Committee;

(vii) Hold Administrators responsible for acts performed in excess of its powers and duties or otherwise in violation of these Master Rules;

(viii) Direct Administrators regarding duties not expressly provided for in these Master Rules;

(ix) Amend the Administrators Rules;

(x) Appoint, ratify, or remove members of the Design Review Committee;

(xi) Change the intended use and characteristics of any common areas; and

(xii) Resolve any other issues permitted by the Law or these Master Rules and not expressly reserved for resolution by the Extraordinary Master Condominium Assembly.

(d) Continuance. If all items on the agenda are not addressed prior to adjournment, the meeting must be continued to a date specified to discuss those issues not addressed, in which case no further call is required.

4.3. Extraordinary Master Condominium Assembly.

(a) Frequency. Extraordinary Master Condominium assemblies may be held as often as deemed necessary.
(b) Call; Legally Convened; Quorum; Resolutions. Extraordinary Master Condominium Assemblies may be called by the Master Condominium Assembly, Administrators, the Master Surveillance Committee, or Master Representatives representing 25% (twenty-five percent) of the Master Condominium’s total Undivided Interest Percentage with voting rights and must be held in the place designated in the applicable call. An Extraordinary Master Condominium Assembly, to make valid decisions, must have the favorable vote of at least 75% of the Undivided Percentage Interest; therefore, an Extraordinary Master Condominium Assembly may only be convened in first call, or it must be declared that there is not a quorum and the Extraordinary Master Condominium assembly cannot be legally convened.

(c) Agenda. Extraordinary Master Condominium assemblies have the exclusive authority to consider the following agenda items:

(i) Amend the Master Condominium Declaration, these Master Rules, or the Design Guidelines by the vote of Master Representatives representing at least 75% (seventy-five percent) of the Master Condominium ́s total Undivided Interest Percentage with voting rights;

(ii) Terminate the Master Condominium regime by the vote of Master Representatives representing at least 75% (seventy-five percent) of the Master Condominium ́s total Undivided Interest Percentage with voting rights;

(iii) Initiate, conduct, or settle a lawsuit to force an Owner to sell a Sub-Condominium Unit or Private Unit in the case of delinquency or default on its obligations to the Master Condominium by the vote of Master Representatives representing at least 75% (seventy- five percent) of the Master Condominium ́s total Undivided Interest Percentage with voting rights.

(iv) Resolve any other issue permitted or required by the Law or these Master Rules at an Extraordinary Master Condominium Assembly, in accordance with the voting requirements pertaining to such assemblies.

(v) A Master Condominium Assembly may be called as both an Ordinary and Extraordinary Master Condominium Assembly, and in such case the rules that apply to an Ordinary Master Condominium Assembly must be applied to issues that may be raised in an Ordinary Master Condominium Assembly and the rules that apply to an Extraordinary Master Condominium Assembly must be applied to the issues that must be raised in an Extraordinary Master Condominium Assembly.

4.4 Urgent Assembly.

An Urgent Assembly may be specially convened in accordance with the Law to address emergency circumstances that may arise when an act of God or major force arises and destroys or threatens to destroy the condominium, any part of it, or otherwise endangers the common assets. When any such Urgent Assembly is convened, it may address only such emergency circumstances.

4.5. Participants.

(a) Master Representatives; Proxies; Conflict of Interest. The Master Condominium Assembly is constituted of the Master Representatives attending, whether personally, by proxy witnessed by two witnesses, or in any manner allowed by these Master Rules; provided, however, that an individual may not represent by proxy more than 50% of the Undivided Interest Percentage. Fully executed proxies delivered via fax, e-mail or any other electronic means prior to the assembly are acceptable if and only if the signed originals are subsequently promptly delivered to the Administrators to be added to the official assembly minutes book. A Master Representative represents all Owners of the Sub-Condominium or Private Unit not subject to a Sub-Condominium regime if such Person is acting as the duly appointed Master Representative of such Sub-Condominium or Private Unit not subject to a Sub-Condominium regime. A Master Representative who is disqualified from voting, for whatever reason, may attend the assembly and voice their opinion but may not cast a vote on behalf of the Sub-Condominium or Private Unit. No Administrator may represent any Sub-Condominium or Private Unit, unless such Administrator is the Master Representative of the Sub-Condominium or a Private Unit not subject to a Sub-Condominium. Master Representatives must recuse themselves in the event of a conflict of interest. In the case of recusal, a Master Representative may execute a limited proxy, enabling another person to act in the matter, so long as such person does not share the conflict of interest and is able to act independently on behalf of the Sub-Condominium or Private Unit not subject to a Sub-Condominium regime.

(b) President; Secretary; Scrutineers. Master Condominium Assemblies must be presided over by a President elected by the assembly. The assembly must also elect a Secretary and two persons to act as scrutineers. The Secretary and scrutineers need not be Master Representatives. The Secretary and scrutineers must attend the entire assembly and insure that a record of the assembly is prepared, certified, and delivered to Administrators and any other necessary authority to be filed and maintained as required by these Master Rules and the Law.

4.6. Call for Assembly.

(a) Call. Master Condominium assemblies must be called at least 20 (twenty) calendar days prior to the date on which the meeting is to be held. The call must be fixed in a visible area of the Administrators Office, at least one other visible area within the Master Condominium, and must

be provided to all to all Master Representatives in accordance with the notice to Owners provisions in these Master Rules. In addition, as a courtesy, the call may be sent to the most recent email address each Master Representative has provided.

(b) Contents. The same document containing the first call for a Master Condominium Assembly must also contain the second, and third calls. There must be a period of at least 10 minutes between the scheduled first call meeting and the scheduled second call meeting, and there must be a period of at least 10 minutes between the scheduled second call meeting and the scheduled third call meeting. The calls must include: the type of assembly to be held; the date and place of the assembly, provided that all assemblies must take place in the Municipality of Loreto, Baja California Sur, Mexico; the agenda to be discussed; and the identity of the Person(s) calling the assembly.

(c) Signing the Call. The Person calling the assembly must sign and issue minutes certifying that the call was fixed in a visible area at the Administrators Office and at least one other visible area of the Master Condominium and was provided to the Master Representatives pursuant to the notice to Owners provisions in these Master Rules, or a notary public must issue the certification. No call is required upon certification in the minutes that 100% of the Master Condominium’s Undivided Interest Percentage with voting rights is present or represented at the meeting.

(d) Invalid Call. An assembly may not be held in second, or third calls, in the event the quorum required to hold the assembly in a prior call is not achieved, unless the dates and times for such assemblies, and other required information, were contained in the first call sent with the 20-day advance notice. If the assembly called is not held in first, second, or third call and it is still necessary or desirable to hold the assembly, the Person calling the assembly must issue a new first call for the assembly and send it at least 20 days prior to the newly scheduled assembly.

4.7. Votes.

(a) Voting Rights. Each Sub-Condominium and Private Unit not subject to a Sub- Condominium regime is represented at Master Condominium assemblies by a Master Representative or a duly appointed proxy. The vote of each Master Representative is equal to the Undivided Interest Percentage corresponding to its Sub-Condominium or Private Unit not subject to a Sub-Condominium regime provided, however, that with respect to resolutions to appoint, re- elect or remove Administrators or members of the Master Surveillance Committee, voting shall not be based on Undivided Interest Percentages and each Master Representative casts one vote. The adoption of these Master Rules by the Master Condominium Assembly is deemed to be the express resolution passed by the Master Condominium Assembly resolving the foregoing. An Owner of a Private Unit not subject to a Sub-Condominium regime may designate a Master Representative in writing. Administrators must be notified of such decision in writing immediately upon execution of the designation. The voting rights of a Private Unit not subject to a Sub-Condominium regime the title to which is held by a trust is exercised by the appointed beneficiary thereunder or their legally designated representative, which designation must be evidenced in writing and provided to Administrators immediately upon execution thereof. If such a Private Unit not subject to a Sub-Condominium regime is subject to a mortgage or to a purchase money security interest (reserva de dominio) or other type of security interest, the creditor thereof may notify the Administrators in writing that a portion of the votes corresponding

to the relevant Private Unit will be exercised by the creditor in proportion to the outstanding balance of the amounts secured by the relevant Private Unit. Master Representatives representing a Sub-Condominium or Private Unit not subject to a Sub-Condominium regime that owe two or more monthly Assessments are not entitled to vote at any assembly on behalf of such Sub- Condominium or Private Unit, and they are not to be taken into account for quorum and voting requirement purposes.

(b) Absentee Voting. Absentee voting may be permitted at any Master Condominium Assembly, if conducted in compliance with applicable provisions of the Law.

4.8. Master Condominium Assembly Minutes. The Secretary must cause the minutes to be transcribed into the Master Condominium Assembly Book, which minutes must be duly signed by the President and Secretary of the assembly, the scrutineers of the assembly, the attending members of the Master Surveillance Committee, and, if required, by a notary public. The minutes must include a certification that the call was fixed in a visible area at the Administrators Office, in other visible areas of the Master Condominium, and was provided to the Master Representatives pursuant to the notice to Owners provisions in these Master Rules. Administrators must gather and keep a copy of the call, the attendance list, and copies of any and all documents discussed and reviewed during the meeting. If required by the Law or resolution of the assembly, Administrators must have the Master Condominium Assembly minutes notarized and recorded.