CONSTITUTION OF THE KLIPFONTEYN HOME OWNERS ASSOCIATION

CONSTITUTION OF THE KLIPFONTEYN HOME OWNERS ASSOCIATION

2 KLIPFONTEYN HOME OWNER S ASSOCIATION CERTIFICATE OF APPROVAL IT IS HEREBY CERTIFIED THAT THE CONSTITUTION OF THE KLIPFONTEYN HOME OWNER S ASSOCIATION WAS APPROVED IN ACCORDANCE WITH ARTICLE 29 (2) (B) (111) OF THE ORDANANCE OF GROUND USAGE PLANNING, 1985 (NR 15 OF 1985). THE AFRIKAANS VERSION OF THE CONSTITUTION WAS SIGNED AT HERMANUS ON THE 30 TH DAY OF APRIL 2015, BY MR. RIAAN KURCHAR, SENIOR MANAGER TOWN PLANNING, OVERSTRAND MUNICIPALITY. NOTE: Although an effort has been made to translate the Constitution as accurately as possible, the Afrikaans version of the Constitution; titled Grondwet van die Klipfonteyn Huiseienaarsvereniging is the only valid signed copy of the Constitution; and to that end the Afrikaans Version is the only legally binding version. The Afrikaans version of the constitution approved and signed by Mr. Riaan Kurchar at Hermanus on 30 April 2015 is the only valid reference in case of litigation.

3 DIVISION OF CONSTITUTION This constitution is divided as follows: Page No PART 1: DEFINITIONS AND INTRODUCTION 5 1.1 Definitions 5 1.2 Interpretation 7 1.3 Introduction 8 PART 2: HOME OWNERS ASSOCIATION 8 2.1 Incorporation of the Association 8 2.2 Designation and legal status 8 2.3 Membership 9 2.4 Objectives 9 2.5 Powers 10 2.6 Authority of the Association 11 2.7 Conduct Rules 11 PART 3: BOARD OF TRUSTEES 12 3.1 Representation by trustees 12 3.2 Composition of Board 12 3.3 Powers and duties 12 3.4 Fiduciary relationship 13 3.5 Accountability 14 3.6 Proceedings 14 3.7 Quorum 14 3.8 Written decisions 15 3.9 Chairman and Secretary 15 3.10 Vacation of office 16 3.11 Minutes 16 3.12 Remuneration 17 PART 4: MEETINGS 17 4.1 General meetings 17 4.2 Notice of and venue 17 4.3 Agenda 18 4.4 Procedure 19 4.5 Quorum 20 4.6 Voting by owners 20 4.7 Calculation of votes 21 4.8 Proxies 21 4.9 Minutes 21 PART 5: COMMON PROPERTY 22

5.1 Ownership 22 5.2 Dealing with 22 5.3 Maintenance 22 PART 6: FINANCIAL FRAMEWORK 22 6.1 Budget 22 6.2 Levies 23 6.3 Calculation of levies 24 6.4 Insurable interest 24 6.5 Recovering of amounts due or amounts in arrear 25 6.6 Bookkeeping 25 6.7 Financial statements 25 6.8 Expenditure and auditing 25 6.9 Municipal accounts 25 PART 7: OWNERS 26 7.1 Duties of owners 26 7.2 Compulsory orders 26 7.3 Non-compliance 26 7.4 Register of members 27 PART 8: DIVERSE POWERS 27 8.1 Right of access 27 8.2 Sale and/or Letting of land units 27 8.3 Holding of investigation 27 8.4 Beacon and Boundary Agreements 27 PART 9: ARBITRATION 28 PART 10: EXEMPTION 29 PART 11: GENERAL AND SUPPLEMENTARY 29 11.1 Safekeeping of documents 29 11.2 Serving of document and legal papers 29 PART 12: AMENDMENTS TO CONSITUTION 30 ADDENDUM 1 Code of Conduct 31 ADDENDUM 2 Building & Aesthetic Guidelines 39 ADDENDUM 3 Proxy Form 41 4

5 PART 1: DEFINITIONS AND INTRODUCTION 1.1 DEFINITIONS: In this Constitution, unless the context indicates otherwise, the following words shall have the meaning as assigned to them hereunder: Accountant means an accountant appointed by the Board, being a person who qualifies to be appointed as an accounting officer of a Closed Corporation in terms of the Closed Corporation Act, No 64 of 1984; Association means the Klipfonteyn Home Owners Association that was established in terms of section 29(1) of the Ordinance, read together with clause 2.1 of this document; Auditor means the Auditor appointed by the Board of Trustees; Board means the Board of Trustees established in accordance with Part 3 of this document; Building and Aesthetic Manual means the manual issued by the Board of Trustees in which directives with regards to building works and aesthetic guidelines are set out, in accordance with clause 2.8 Chairman means the chairman of the Board of Trustees elected and appointed as such in accordance with the provisions of this document; Common property means the ground in the said subdivision that does not form part of a land unit and with regards to whom ownership vests in the Association in terms of clause 5.1; Conduct Rules means the rules drafted in accordance with the provision of clause 2.7; Developer means the person who is the registered owner of the property on which the development scheme is implemented in terms of the Ordinance; Development scheme means a group housing development scheme as proposed in the Provincial Administration s Group Housing Code in terms of which residential buildings must be erected on the property; Financial year means the period that stretches from the first day of July each year until and including the thirtieth day of June the following year; Foreign Bank Account means a bank account at a recognised financial institution of which the registered office is outside the boundaries of the Republic of South Africa; General meeting means an annual general meeting or special general meeting in accordance with provision of Part 4;

6 Land unit means a residential group erf which originates from the subdivision of a part of the Property and is registered or is capable of being registered in the Deeds Office, including any improvements that may be affected thereon; Maintain includes repairs, renovations, replacement, cleaning and removal and maintenance has a corresponding meaning; Member means an owner who in terms of section 29(2)(c) of the Ordinance automatically becomes a member at registration of the land unit into his or her name; Member entitled to vote means a member who has fulfilled all his or her duties towards the Association, including the payment of levies and other moneys, as approved; (6.2.3, 6.2.5 and 6.2.6 must be read in conjunction with this definition. Municipality means the Overstrand Municipality (Administration: Gansbaai); Ordinance means the Land Use Planning Ordinance, No 15 of 1985, as amended; Ordinary resolution means a resolution passed by a normal majority of the members present or represented by a proxy or a representative recognized by law and who is entitled to vote or alternatively a resolution agreed to in writing by a normal majority of the members personally or by proxy or by a representative recognized in law. Abstention from voting shall not be deemed to be a vote for or against the said resolution; Owner means with regards to a land unit situated in the development scheme the person in whose name the unit is registered in the Deeds Office (Division Cape Town) or with whom ownership lies in terms of any Act and may include any successor in title of such a person or the person with whom the administration of such a land unit lies as executor, trustees, administrator, liquidator or judicial manager, as the case may be; Pet means any animal, bird or reptile. Property means the property described as Part of parts 12 and 27 of the farm Klipfonteyn No 711 in the division of Caledon and on which a group housing development scheme was implemented; Residential unit means an independent, inter-accessible set of rooms, with sufficient sanitary and kitchen facilities, that is only used as a residence for and the accommodation of a single family (in broader context), with understanding that a residential home may not have more than two kitchens, including the outbuildings, garages and verandas that are usually present. Outbuildings can either be detached or attached to the main residence. Special resolution means a resolution passed by a majority of not less than 66% (two thirds), calculated in numbers of the members of the Association, entitled to vote, present or

7 represented by proxy or by a representative recognized by law at a general meeting of which at least 21 days written notice, specifying the proposed resolution, has been given. This document means the Constitution and any addendum; Trustee means a trustee elected in accordance with Part 3; Unanimous resolution means a resolution passed unanimously by all the members of the association, entitled to vote, present or represented by proxy or by a representative entitled to vote and recognized by law at a general meeting, of which at least 21 days written notice, specifying the proposed unanimous resolution, has been given, and at which meeting at least 75% of all the members entitled to vote are present or represented or alternatively a resolution agreed to in writing by each member entitled to vote or his or her proxy or representative recognized by law; 1.2 INTERPRETATION 1.2.1 In the interpretation of the provisions of the Constitution, unless the context otherwise indicates: (i) (ii) (iii) Words importing the singular number only shall include the plural, and the converse shall also apply; Words importing the masculine gender shall include the feminine, and neuter genders; and the neuter gender shall include the masculine and feminine genders; and Trustee shall include an alternate or co-opted trustee. 1.2.2 For purposes of defining a Special Resolution and Unanimous Resolution in clauses 1.1, a notice, as intended in the definition shall be deemed to be sufficiently given if: (i) (ii) (iii) It is delivered by hand to a member not less than 21 days before such a general meeting; or it is sent by registered post not less than 21 days before such meeting to the address of a member s land unit within the Association or such other address the member has previously indicated in writing for purposes of such notices; or It is sent by electronic post (e-mail) or faxed to a member not less than 21 days before the said general meeting to the address or fax number which the member has indicated in writing for such purposes.

8 1.3 INTRODUCTION i. Construction The headings to the respective provisions of this document are provided for convenience of reference only and do not form part of the Constitution. Accordingly it is not to be taken into account in the construction and interpretation of the provisions. ii. Calculation of periods When any number of days is prescribed in these Rules, the same shall be reckoned exclusive of the first and inclusive of the last day unless the last day falls on a Saturday, Sunday or proclaimed public holiday in the Republic of South Africa, in which event the last day shall be the next succeeding day which is not a Saturday, Sunday or public holiday. PART 2: HOME OWNERS ASSOCIATION 2.1 INCORPORATION OF THE ASSOCIATION With effect from the date on which any other person than the developer becomes an owner of a land unit, it shall be deemed that an Association was established for the development scheme of which the developer and such other person are the members. 2.2 DESIGNATION AND LEGAL STATUS 2.2.1 The Association shall be called the Klipfonteyn Home Owners Association. 2.2.2 The Association exists independently from its members and is a separate legal entity and juristic person with perpetual succession. 2.2.3 All actions or lawsuits, legal steps or any other arbitration by or against the Association with regards to any contract concluded by the Association, any damage to the common property, any matter with regards to land for which the Association is responsible or for which the owners are jointly liable or any matter arising from the exercising of the Association s powers or the execution or non-execution of any of its duties in terms of this Constitution, must be instituted in the name of the Association and the Association may authorise any person or persons to act on behalf of the Association and to sign all documents and to take all steps necessary that may be required in terms of such proceedings. 2.2.4 No member shall have any claim against the Association s assets. Such assets shall vest in the Association and shall be managed and controlled by the Board in accordance with the provisions of this document. 2.2.5 In general the Association may take such steps and do such things juristic persons may legally perform and exercise.

9 2.3 MEMBERSHIP 2.3.1 Every person who becomes the owner of a land unit shall be a member of the Association. A person, who is entitled to obtain a certificate of registered title in respect of any such land unit, shall in terms of this document be deemed to be the registered owner thereof. Where a land unit is the subject of co-ownership, the registered owners of the particular land unit shall be regarded as one member of the Association. 2.3.2 The developer shall cease to be a member on the moment he or she does not have ownership of a land unit within the development scheme anymore. An owner may not resign as a member of the Association and any such member shall only cease to be a member of the Association when he or she ceases to be the owner of a land unit within the development scheme. The registration of transfer of a land unit into the name of the transferee shall ipso facto make the transferee a member of the Association. 2.3.3 A member who ceases to be a member of the Association for any reason (as well as such member s executor, curator, trustee or liquidator) shall have no claim on or against the funds or any other property of the Association, but this clause does not negate the Association s right to recover from such member or his or her estate any arrear levies or other amounts owed by him or her to the Association at the time he or she ceases to be a member of the Association and with regards to the recovering of such moneys owed, the provisions of this document still apply as if such person is still a full member of the Association. 2.3.4 The rights and duties of an owner shall not be transferable and every member shall to the best of his or her abilities promote the objectives and aims of the Association and obey the Conduct Rules issued in terms of this Constitution: Provided that nothing contained in this document will prohibit a member to cede his of her rights in respect of this as security to the mortgager of the member s land unit. 2.4 OBJECTIVES 2.4.1 The Association shall have as its main objective the control over and the maintenance of the buildings, services, and amenities arising from the said subdivision; including the common property. 2.4.2 In general the objectives of the Association, who acts through the Board are: (b) (c) (d) To promote and maintain the aesthetic, architectural and ecological standards of all the buildings and structures within the Association; To promote and protect the common and group interest of the members in general; promoting and maintaining security; the collection of levies; and

10 (e) Any further necessary and reasonable steps for the realising of the objectives of the Association, as contained in the provisions of this document. 2.4.3 The Association is not incorporated for profit but for the benefit of its members. 2.5 POWERS 2.5.1 The Association shall perform the powers entrusted to it in accordance or in terms of the provisions of this document or Conduct Rules and such powers shall include: - To established for administrative expenses a fund sufficient in the opinion of the Association for the repair, upkeep, maintenance, control, management and administration of the common property (including reasonable provision for future maintenance and repairs), for the payment of taxes, service fees and other local authority charges for the supply of electricity, water, sanitary and other services to the land units and common property to the degree to which the Association may be held liable for such taxes, charges and rates, any insurance premiums (if any) and legal expenses for the execution of any power or for the fulfilment of any obligation of the Association; (i) To require from owners, whenever necessary, to make contributions to such fund for the purposes of exercising or satisfying any duties of or claims against the Association (ii) To determine from time to time the amounts to be raised for the aforementioned purposes; (iii) To raise the amounts so determined by levying contributions on the owners in accordance with the provisions of part 6; (b) To open an account or accounts with a recognised banking institution; (c) To, should the Association so decide on a general meeting, insure, or keep insured, any buildings on the common property to the replacement value thereof against fire or such other risks as the owners may determine. (d) To apply any insurance money received in respect of damage to a building or buildings in rebuilding or reinstating the building or buildings in so far as it is possible; (e) to pay the premiums on any policy or insurance effected by the Association; (f) to properly maintain the common property; (g) to comply with notice or order by any competent authority requiring repairs or work in respect of the relevant land or buildings; (h) to notify the Municipality of its domicilium citandi et executandi, which shall be its address for service of any documents or notices;

11 (i) to ensure compliance with any law relating to the common property or to any improvement effected on the common property; (j) to keep the machinery, equipment, additions and fittings used in connection with the common property in a proper working, useable and safe condition; (k) subject to the rights of the Municipality to repair and maintain pipes, wires, cables and ducts existing on the land and capable of being used in connection with the enjoyment or to the benefit of more than one land unit or the common property or to the benefit of one land unit as well as the common property; (l) In general, to develop, control, and administer common property to the benefit of all owners. 2.6 POWERS OF THE ASSOCIATION 2.6.1 The Association may perform the powers granted to it in terms of this document and such powers include: - To appoint such agents and employees as it may see fit; (b) to invest any of the fund referred to in clause 2.5.1; (c) (d) (e) to enter into an agreement with the local authority or any other body for the supply of services to the Association; to enter into an agreement with any owner or occupier of a land unit for the provision of amenities or services by the Association to the owner or occupier concerned; and To do all things necessary for the enforcement of the provisions of this document and the Conduct Rules for the control, management and administration of the common property. 2.7 CONDUCT RULES 2.7.1 Detailed conduct rules are contained in Addendum 1, and form part of this constitution in as far as the legal application thereof. 2.7.2 Conduct rules will be established by means of special resolution of the members, and the Association may, from time to time, modify, repeal or add to the rules of conduct; also by means of special resolution. 2.7.3 Any Conduct Rule made by the Association shall be reasonable and shall apply equally to all owners or occupiers of land units.

12 2.7.4 The Association shall, at the request of any owner or any other person authorised thereto in writing by such owner, make available for inspection the rules then in force for such owner or authorised person. 2.8 BUILDING AND AESTHETIC GUIDELINES 2.8.1 The Building and Aesthetic Guidelines are contained in Addendum 2, and form part of this Constitution in as much as the legal application thereof. 2.8.2 Building and Aesthetic Guidelines will be compiled by means of special resolution of the members, and the association may from time to time amend, repeal or add to the Aesthetic Guidelines; also, by means of special resolution. 2.8.3 The Building and Aesthetic Guidelines shall be reasonable; and will be equally applicable to all land owners and/or residents. 2.8.4 The Association shall, at the request of any owner or any other person authorised thereto in writing by such owner, make available for inspection the Building and Aesthetic Guidelines then in force for such owner or authorised person. 2.8.5 The Building and Aesthetic Guidelines may not be amended or modified, without prior authorization by the Municipality. PART 3: BOARD OF TRUSTEES 3.1 REPRESENTATION BY THE TRUSTEES With effect from the date of establishment of the Association and subject to the provisions of this document and decision of the Association at a general meeting, the Association shall be controlled, managed and represented by the Board of Trustees as composed in accordance with the provisions of clause 3.2 and all actions of such Board shall be deemed to be the actions of the Association. 3.2 COMPOSITION OF THE BOARD 3.2.1 The Board shall consist of five (5) to seven (7) members which are annually appointed at the Annual General Meeting. The trustees serve for a period of one year, but may be re-elected with the understanding that such position becomes, ipso facto redundant, on the date that the trustee ceases to be an owner at Klipfonteyn. Unless members determine differently at an AGM, any incidental vacancy may be filled by the board, but the trustee thus appointed will be required to resign at the next AGM; unless officially re-elected on that occasion. 3.3. POWERS AND DUTIES 3.3.1 The powers and duties of the Association shall, subject to the provision of this document, the Conduct Rules and any restriction imposed or directives given at a general meeting of the members, be performed and exercised by the Board. 3.3.2 The Board shall have the right to amend, repeal or adapt any of its decisions from time to time.

13 3.3.3 A co-opted member shall have the same rights and be subject to all the duties of an appointed trustee; except that he may not necessarily be an owner. 3.3.4 The Board may, should it so decide, investigate any presumed or alleged contravention by an owner or occupier of a property, in accordance with the provision of this document or Conduct Rules. 3.3.5 Save as determined otherwise in this document, the Board shall at all times have the power to, on behalf of the Association, appoint such employees and/or contractors and secure the services of Accountants, Advocates, Attorneys, Engineers or any other professionals as they deem necessary on such terms and conditions as they may determine from time to time. 3.3.6 The Board may in its name and on behalf of the Association conclude contracts for any purpose necessary or desirable or incidental, supplementary or additional to or in connection with powers, duties and authority of the Association. The value of such a contract must be established and communicated annually at the AGM. 3.3.7 All contracts entered into in terms of clause 3.3.6 must be in writing and signed by the chairman and two trustees. 3.4 FIDUCIARY RELATIONSHIP Every trustee of the Association shall stand in a fiduciary relationship to the Association. Without prejudice to the generality of the expression fiduciary relationship the provisions thereof shall imply that a trustee shall - 3.4.1 In relation to the Association act honestly and in good faith and in particular - (b) Shall exercise such powers as he or she may have to manage and represent the Association in the interest and for the benefit of the Association; and Shall not act without or exceed the powers aforesaid. 3.4.2 Avoid any material conflict between his or her own personal interests and those of the body corporate, and in particular (b) Shall not derive any personal economic benefit from the Association or any other person to which he or she is not entitled by reason of his or her office as trustee of the Association, in circumstances in which that benefit is obtained is in conflict with the interest of the Association. Shall notify every other trustee, at the earliest opportunity practicable, of the nature and extent of any direct or indirect material interest that he or she may have in any contract of the Association.

14 3.5 LIABILITY 3.5.1 Should a trustee s mala fide or gross negligence act or omission constitute a breach of his or her duties arising from his or her fiduciary relationship, he or she shall be liable to the Association for - (b) Any loss the Association suffered as a result thereof; or Any economic benefit obtained by the trustee as a result thereof. 3.5.2 When a trustee neglects to comply with the provisions of clause 3.4.2 and the Association becomes aware that a trustee has an interest as referred to in that sub-clause, the contract in question shall be voidable to the choice of the Association. 3.5.3 With the exception of his or her duty referred to in sub-clause 3.4.1, any specific conduct of a trustee shall not constitute a breach of his or her fiduciary relationship in relation to the Association, provided that such conduct was preceded or followed by the written approval of all the members of the Association, provided that all such members are familiar with all the relevant facts. 3.6 PROCEDURES 3.6.1 The Board may meet for the conclusion of business, adjourn and otherwise organise their meetings as they may see fit. Questions that arise at any meeting of the Board shall, unless determined otherwise in this document, be decided by way of a majority vote of the trustees present. In the event of withholding of a vote, the chairman shall have a second or decisive vote. 3.6.2 All trustees present at any meeting of the Board shall vote and any trustees that refuse or fail to vote with regards to any matter, shall when so ordered by the Chairman, withdraw him or herself from the meeting and leave the room in which the meeting is held until after the voting with regards to that matter is concluded. 3.6.3 A meeting of the Board shall at least be held once in four months (quarterly): Provided that if all the trustees renounce the requirement with regards to a certain quarter, in writing, no meeting of the Board is required to be to be held during that quarter. 3.7 QUORUM 3.7.1 The quorum needed for the conclusion of business by the Board is three (3) trustees if the Board consists of five (5) members and four (4) trustees if the Board consists of six (6) or seven (7) members. 3.7.2 If after fifteen minutes after the appointed time for the meeting a quorum is not present and an owner is not nominated under the circumstances as proposed in clause 3.7.4, the meeting shall stand adjourned for a period of not less than one day and not more than fourteen days after the

15 date of the first mentioned meeting and if at the resumption of such meeting a quorum is not present after fifteen minutes after the appointed time for the meeting, the trustees present shall form a quorum for purposes of the Constitution. 3.7.3 When a meeting is adjourned as mentioned above, the Chairman shall as soon as possible after the adjournment send a notice to every trustee in which the following is stated: (b) The date, time and place to which the meeting is adjourned; The matter that was before the meeting when it was adjourned and the reasons for the adjournment. 3.7.4 If at any time a sufficient number of trustees is not present or competent to act as trustees, for purposes to form a quorum, or if there is no trustees, any three (3) owners may convene a general meeting and the Association shall have the power at such general meeting to appoint trustees to comply with the provisions of this Constitution. 3.8 RESOLUTIONS IN WRITING A resolution in writing, signed by the trustees, which in terms of clause 3.7.1 forms a quorum, shall be as valid and effective as if it had been passed at a meeting of the trustees duly convened and held. 3.9 CHAIRMAN AND SECRETARY 3.9.1 Within seven (7) days after the Annual General Meeting, the Board shall meet and appoint a chairman and secretary among their numbers, who will occupy such offices up and until the following Annual General Meeting: Provided that the office of Chairman and Secretary, as the case may be, shall become ipso facto vacant as soon as the office bearer ceases to be a trustee or the Board revoke his or her appointment as Chairman or Secretary. If a vacancy in the aforementioned offices arises at any time, the Board shall meet as soon as possible to appoint one of the trustees in the said office. 3.9.2 Except in so far as determined otherwise in this Constitution, the Chairman shall act as Chairman at all the meetings of the Board: Provided that should the Chairman not be present at a meeting of the Board within fifteen (15) minutes of the time appointed for the meeting, the trustees present shall appoint a chairman for that specific meeting by way of voting, the latter who will then exercise all the powers of the Chairman with regards to the said meeting. 3.9.3 The Chairman shall exercise all duties incidental to the office of Chairman and may refuse or permit that invitees take part in the discussions at meetings: Provided that such invitees shall, however, not be entitled to vote at such meetings. 3.9.4 The Board may from time to time, as they see fit, assign or grant such powers and mandates as they may have to the Chairman and/or Secretary and/or trustee and may assign and grant such powers and mandates for such time and to be exercised for such purposes and upon such

16 conditions and subject to the restrictions the Board may determine. The Board may from time to time revoke or amend any or all of the powers and mandates so granted. 3.10 VACATION OF OFFICE 3.10.1 Except as set out in clause 3.10.2 hereunder, each trustee shall occupy his or her office from the date of the election up and until the date of the annual general meeting that follows such appointment, whereupon at the last mentioned meeting the trustee shall be deemed to have resigned from his or her office as trustee, but he or she may be available for re-election to the Board on that occasion. 3.10.2 The office of trustee shall become vacant when: - (b) (c) (d) (e) (f) (g) (h) His or her estate is sequestrated, whether temporarily or finally or in the case of voluntary surrender of estate; or he or she committed a deed of insolvency as contemplated in section 8 of the Insolvency Act; or he or she is convicted of any offence which involves dishonesty; or he or she becomes mentally deficient or be declared of an unsound mind; or a written resignation to the chairman or secretary from the office; or he or she dies or ceases to be an owner of a land unit; or He or she is absent without submission of acceptable excuse from two consecutive meetings of the trustees. it is found that he or she breached the fiduciary relationship in relation to the Association: Provided that anything done by a person in good faith in his or her capacity as a member of the Board after he or she has ceased to be a trustee due to the aforementioned provisions and until the fact that he or she is no longer a member of the Board is recorded in the Minutes Book of the Board, shall be completely valid as if performed by a trustee. 3.11 MINUTES 3.11.1 The Board shall by way of the Secretary keep minutes of all its proceedings and in specific: (b) (c) (d) Surnames and names of trustees present at each meeting of the Board; The appointment of officials and employees All expenses approved, and All decisions taken.

17 3.11.2 Such minutes shall after the confirmation of the correctness thereof, be signed by the chairman at the following meeting. Certified minutes shall be kept in safety by the Secretary in a Trustees minutes book and shall at all reasonable times be open for inspection by a trustees, the Accountant and Auditor. 3.11.3 All competent resolutions recorded in the minutes of any trustees meeting shall be valid and enforceable and effective from the date upon which the resolution was taken until it is amended or revoked by the Board, but no resolution or alleged resolution shall have any power or effect, unless it was a competent resolution taken within the powers of the Board. 3.12 REMUNERATION Trustees shall be entitled for the repayment of all reasonable and bona fide expenses incurred during or in connection with the carrying out of their duties as member of the Board. With the exception as mentioned above, the said trustees shall not be entitled to any remuneration, fees or salary with regards to the carrying out of their duties of powers as trustees. PART 4: MEETINGS 4.1 GENERAL MEETINGS 4.1.1 The Association shall hold an annual general meeting on a yearly basis: Provided that not more than fifteen (15) months may lapse between two consecutive annual general meetings and that the annual general meeting shall be held within nine (9) months of the conclusion of the Association s financial year. 4.1.2 All general meetings other than the annual general meeting shall be called special general meetings. 4.1.3 The Board may when they think it fit and is compelled to when requested in writing by the majority of the members, to call a special general meeting. 4.1.4 Should the Board fail to call a meeting, requested in accordance with clause 4.1.3 within 14 days after receiving the request, the owners concerned may convene the meeting themselves. The provisions of clause 4.2 shall mutatis mutandis be applicable to such a meeting. 4.2 NOTICE OF MEETING AND VENUE 4.2.1 A general meeting shall only be convened after at least 21 day s written notice has been given to the following persons: (b) Every owner registered as required in terms of clause 7.4 of this document and with an address within the Republic of South Africa; To the auditor who at that time serves the Association; and

18 (c) All holders of registered bonds over land units and who have informed the Association of their interests. No other person shall be entitled to receive a notice of a general meeting. 4.2.2 The written notice referred to in sub-rule 4.2.1 shall specify the following information of the meeting: (b) (c) (d) (e) Place; Date; Time as determined by the Board; In the case of special business, the general nature of such business; In the case of a unanimous and/or special resolution, the terms and effect of the resolution(s) and reasons for it must be set out in such a way, if any, as may be prescribed by the Association. 4.2.3 A general meeting of the Association may be convened on shorter notice than required in clause 4.2.1, provided that: - (b) In the event of an annual general meeting, all the members entitled to receive notice and entitled to vote, agree to it in writing; or In the event of a special general meeting, the majority of the members entitled to receive notice and entitled to vote, agree to it in writing. 4.2.4 The inadvertent omission to give notice of a meeting or any resolution or to give any other information or to submit or send a document, as required in terms of this document, or the non-receipt of any notice, communication or document by a member or person who is entitled to receive such notice, communication or document does not invalidate the proceedings or any resolution made at such meeting. 4.3 AGENDA 4.3.1 The following business shall be discussed at each Annual General Meeting: - (b) (c) (d) Consideration of the Chairman s report as delivered by the Board; election of the trustees; consideration of the balance sheet of the Association for the financial year preceding the date of such meeting; consideration of the Accountant s report;

19 (e) (f) consideration of the total estimated income and expenditure for the current and ensuing financial year, as the case may be, for purposes of Part 6 of this document; and Consideration and determination of the remuneration of the Auditors for the Association s financial year preceding the Annual General Meeting. 4.4 PROCEDURE 4.4.1 The Annual General Meeting shall consider and conclude all matters prescribed by the Constitution and may deal with matters submitted to it for consideration: Provided that voting may only take place with regards to those matters listed in the agenda that accompanied the notice in terms of which the meeting was convened. 4.4.2 If after fifteen (15) minutes from the time appointed for the start of the meeting the chairman is absent or incapable or not willing to act as Chairman, the members present and entitled to vote shall appoint a chairman for that specific meeting by voting about it. The latter shall subsequently exercise all the powers and duties of the chairman with regards to the meeting concerned. 4.4.3 The Chairman may, with the consent of any meeting at which a quorum is present (and must if so instructed by the meeting) adjourn the meeting from time to time and from place to place, but no business may be concluded at the latter meeting except that business that was not concluded at the first meeting. When a meeting is adjourned, the provisions of clause 3.7.3 shall apply mutatis mutandis on such adjournment. 4.4.4 Except where determined otherwise in this document or the Conduct Rules, the proceedings at a general meeting shall take place in such reasonable manner and form as the Chairman may decide at the meeting and also in accordance with general accepted practices. 4.4.5 At any general meeting a resolution put to the vote shall be decided on a show of hands, unless either prior to or on the declaration by the chairman of the result of such voting, a poll (ballot paper), is proposed and seconded by persons entitled to vote at such meeting. 4.4.6 Unless any member present or represented at a general meeting object to any declaration made by the chairman with regards to the result of any voting at the meeting or the correctness or validity of the procedure at such meeting, such declaration by the chairman shall be deemed to be the true and correct declaration of the votes and the meeting shall be deemed in all aspects to have been properly and validly convened and conducted. 4.4.7 Any entry in the minutes to the effect that any motion was accepted or rejected, with or without recording the number of votes for or against such motion, shall be conclusive proof of the vote so recorded if such entry coincide with the declaration made by the chairman with regards to the result of the voting at the meeting.

20 4.5 QUORUM 4.5.1 No business shall be transacted by any general meeting unless a quorum of members is present at the time the meeting proceeds to business. The quorum necessary to hold a general meeting is such amount of members representing one half (50%) of the total amount of members of the Association that is entitled to vote, either in person or by proxy or a representative recognized by law. 4.5.2 If after ten (10) minutes of the time appointed for a general meeting a quorum is not present, the meeting shall, be adjourned for ten (10) minutes, and if a quorum is not present within ten (10) minutes after reconvening the meeting as contemplated above, the members present in person or by proxy shall form a quorum for purposes of this Constitution. 4.5.3 In the case of a special annual general meeting, if a quorum is not present within 10 minutes of the proposed time of the meeting; the meeting shall be adjourned. 4.6 VOTING BY OWNERS 4.6.1 Every member present or represented at a general meeting shall be entitled to one vote for each land unit registered in his or her name. In the case of co-ownership, the vote of the owner whose name appears first in the title deed and brings out a vote, whether in person or by proxy, shall be accepted with exclusion of the vote of any other co-owner. 4.6.2 Unless as expressly determined otherwise in this document, no other person than one who is a proper registered member of the Association and who has paid all levies and other amounts (if any) which is due and payable to the Association with regards to or arising from his or her membership, shall be entitled to vote at a general meeting, either in person of by proxy. 4.6.3 Notwithstanding the provisions of clause 4.4.5, voting (if necessary) with regards to the Chairman of a general meeting or the question as to the postponing of the meeting, shall be decided by way of an ordinary resolution by way of the showing hands of members personally present or by way of proxy and entitled to vote. 4.6.4 Every intended resolution and amendment thereof introduced for approval at a general meeting, shall at the meeting be seconded, and if not seconded, be deemed to have expired. 4.6.5 Except where determined otherwise, all questions or business before a meeting of the Associations shall be decided by way of an ordinary resolution 4.6.6 The retraction of an ordinary resolution within six (6) months from the date upon which it was taken must be done by way of a special resolution. The retraction or amendment of a special or unanimous resolution may respectively be done by way of a special or unanimous resolution.

21 4.7 CALCULATION OF VOTES For purposes of a unanimous or special resolution, if a member is not entitled to vote at a general meeting or refuses or neglects to vote, such member will be deemed to have voted in favour of such resolution. 4.8 PROXIES 4.8.1 A member may, unless determined otherwise, be represented at a general meeting by way of proxy. The proxy document in terms of which the representative is appointed must be in writing and signed by the appointee or his or her agent, duly authorised in writing. In the event of co-owners, the vote of the person whose name appears first in the title deed as kept in the register contemplated in clause 7.4 and who offers his vote, whether in person or by proxy, shall be accepted with the exclusion of the vote of any co-owner. 4.8.2 The proxy holder, appointed by a member, whether the holder is a member him or herself or not, shall be entitled to attend the meetings and take part in the proceedings of the meetings, including to vote on a matter placed before the meeting, if properly authorised in terms of the proxy to attend the proceedings of such meeting and to vote thereat. 4.8.3 The document in terms of which the proxy is appointed and the power or any other authorisation, if any, in terms of which it is signed or a notarially certified copy of such power or authorisation, shall be delivered to the office of the Chairman, or as communicated to the members in the notice of the meeting, at least 48 hours before the time appointed for the meeting at which the person mentioned in the proxy is of the intention to vote. Failure to do so shall invalidate the proxy document. 4.8.4 No document in terms of which a proxy is appointed shall be valid after a period of six (6) months from the date of signing it, unless expressly determined otherwise in the document itself and no proxy shall, when a meeting is adjourned, be used at the continuation thereof if it could not be used on the date of the first meeting. 4.8.5 The document in which a proxy is appointed shall be in the form, or as close to it as practically possible, as contained in Addendum 3 as attached to this document. 4.9 MINUTES The provisions of clause 3.11 shall mutatis mutandis apply to the minutes that must be kept with regards to general meetings of the Association.

22 PART 5: COMMON PROPERTY 5.1 OWNERSHIP The common property and all the buildings and structures thereon are the property of the Association. 5.2 DEALING WITH 5.2.1 The common property in the whole or any part thereof shall not be: - (b) (c) (d) Sold, leased, alienated or otherwise be disposed of, subdivided or transferred; or mortgaged; or subjected to any rights, whether registered in the Deeds Office or not, for the usage, occupation or servitude (except those enjoyed by the members of the Association in terms of this document); or be built upon or be improved or be increased in value by means of the construction of buildings, establishments, facilities or attractions of which the costs, whether direct or indirect, amounts to R10 000,00 (ten thousand rand) for the Association, except with the approval of the Association by way of a unanimous resolution where upon the Association shall have the power to deal with such common property or any part thereof in accordance with such resolution and to execute any deed required for such purpose. 5.2.2 Any transaction concluded following a resolution referred to in clause 5.2.1 shall be accompanied by a copy of the said resolution, certified by two (2) trustees of the Association: Provided that when it is required that the transaction concerned be notarially executed, such resolution shall so be certified and presented to the notary and be kept in safekeeping by him in accordance with protocol. 5.3 MAINTENANCE The Association is responsible for the maintenance of all buildings and structures on the common property, the improvement and management of public open spaces, and maintenance of wooden paved access routes to the beach area. PART 6: FINANCIAL FRAMEWORK 6.1 BUDGET The Board shall before each annual general meeting prepare a detailed budget of expected income and expenditure in connection with the maintenance of the common property, payment of services rendered to the Association and in general for the payment of all reasonable expenses incurred in the management of the Association, the common property

23 and the Association s business, for the ensuing financial year. Reasonable provision should be made for unexpected expenses, as well as expected future expenditure that is not paid on a yearly basis and for any estimated shortfall for the previous financial year, which budget must be sent, together with the notice of the annual general meeting, to the members and thereafter must be submitted at the annual general meeting for the approval of the members, with or without amendments. 6.2 LEVIES 6.2.1 The Board shall impose a total levy upon all the members as reasonably equal possible to the estimated amount in clause 6.1. The Board may include in such levies an amount to be kept in reserve. Any such levy shall be payable yearly, in advance within two months after issuing the invoice; or in equal monthly instalments, payable in advance by debit order on the first day of each and every following month, of such year for the remaining calendar months of the said year. 6.2.2 The payment of levies by debit order is only applicable to those who have a bank account at a recognised financial institution within South Africa. 6.2.3 Members with a foreign bank account: (b) May only pay their levy and/or any other amounts owned by debit order if it is a once off yearly payment; and that transfer amounts owed to the Association s account are liable for the bank charges in connection with such transfer and the Association may add such charges to the owner s contribution which an owner is obliged to pay in terms of clause 6.2.1 and may be claimed by the Board as part of the yearly instalments payable by the owner. 6.2.4 The Board s decision in terms of clause 6.2.1 shall be recorded and levies become lawfully payable on the date of the Board s decision. 6.2.5 Should the budget be insufficient of should there be unforeseen expenses, or when the Board of Trustees deem it necessary, the Board may impose a special levy on the owners and such levies may be made payable in one sum or by such instalments as the Board may determine from time to time. 6.2.6 Any contributions levied in terms of the provisions of this document, shall be due and payable on the passing of a resolution to that effect by the trustees of the Association. Any contribution owed by a member in terms of a levy shall be a debt due to the Association. The duty of a member to pay further levies shall fall away when he or she ceases to be a member of the Association, but it does not have an effect on the Association s right to recover arrear contributions by way of action in a competent court of law from the person(s) who was an owner of the land unit at the time such levies were imposed and became due and payable.

24 6.2.7 No levy paid by a member shall under any circumstances be repayable by the Association if such a person ceases to be a member of the Association. A member s successor in title shall be credited with any levies from the date upon which he or she becomes a member resulting from the transfer of the land unit. No member shall transfer his or her land unit until the Association has certified that the member has, on the expected date of transfer, fulfilled all his or her financial obligations towards the Association in terms of this document. 6.2.8 No owner or his or her proxy shall be entitled to the privileges of ownership unless he or she has paid every levy and any other amount (if any) due to the Association in terms of the provisions of this document. Privileges associated with membership include, but is not limited, to the following: - The right to vote at a general meeting; (b) The right to approval and signing of buildings plans; and (c) The right to use and enjoy the facilities of the Association (if any). 6.3 CALCULATION OF LEVIES The levies payable by a member shall be the total levy imposed on all members divided by the number of land units on the Property and multiplied by the number of land units registered in such owner s name. 6.4 INSURABLE INTEREST The Association shall for purposes of obtaining insurance in terms of clause 2.5.1 be deemed to have an insurable interest for the replacement value of the buildings and shall for the purposes of effecting any other insurance under that clause, be deemed to have an insurable interest in the subject matter of such insurance. 6.5 COLLECTION OF MONEYS DUE OR IN ARREAR 6.5.1 An owner shall be liable for the payment of all legal costs, including costs as between attorney and client, collection commission, expenses, penalties and other charges incurred by the Association in the recovery of arrear levies or other arrear amounts owed by such owner to the Association, or in enforcing compliance with the provisions of this Constitution or Conduct Rules. 6.5.2 The Board is entitled to collect interest and charges related to a letter of demand on arrear amounts against a rate as determined by them from time to time: Provided that such interest rate and other charges are made known to the owners in writing. 6.5.3 If an owner falls to indicate his name and erf number on his or her transfer or deposit slip, such owner shall be liable for the bank charges in connection with the enquiry. Such cost will be added to the contribution which an owner is obliged to pay in terms of clause 6. 2.1 and may be claimed by the Board as part of the monthly or yearly instalments payable by the owner.