Saratoga Hills ByLaws

These Bylaws (referred to as the "Bylaws") govern the affairs of SARATOGA HILLS HOMEOWNERS ASSOCIATION, INC., a nonprofit corporation organized under the Texas Non- Profit Corporation Act and the Texas Business Organizations Code (referred to collectively as the "Act").

ARTICLE ONE

NAME, PURPOSES AND OFFICES

   1.01   Name. The name of this association is SARATOGA HILLS HOMEOWNERS ASSOCIATION, INC. (herein called the "Association").

   1.02   Purposes. The Association is organized and will be operated exclusively for non-profit purposes. The Association will serve as the homeowners association for Saratoga Hills, a subdivision located in Hays County, Texas.

   1.03   Offices. The principal office of the Association is in the State of Texas and shall be located at 6907 North Capital of Texas Hwy, Austin, Texas 78731. The Association may have such other offices at such places, both within and without the State of Texas, as the Board of Directors may from time to time determine or as the activities of the Association may require.

   1.04   Registered Office and Registered Agent. The Association shall comply with the requirements of the Act and maintain a registered office and registered agent in Texas. The registered office may, but need not, be identical with the Association's principal office. The Board of Directors may change the registered office and the registered agent as provided in the Act.

ARTICLE TWO

DEFINITIONS

   2.01   "Applicable Law" or "applicable law" as used herein shall mean the statutes and public laws, codes, ordinances, rules, and regulations in effect at the time a provision of the governing documents of the Association is applied and pertaining to the subject matter of the governing document provisions. Statutes and ordinances specifically referenced in the governing documents of the Association are "applicable law" on the date of the governing documents and are not intended to apply to the Property if they cease to be applicable by operation of law, or if they are replaced or superseded by one or more other statutes or ordinances.

   2.02   "Association" shall mean and refer to SARATOGA HILLS HOMEOWNERS ASSOCIATION, INC., a Texas non-profit corporation.

   2.03   "Board of Directors" or "Board" shall mean and refer to the Board of Directors of the Association..

   2.04   "Common Properties" or "Common Area" shall mean and refer to the Common Area described in the Declaration, as the same may be amended from time to time, as recorded in the Official Records of Hays County, Texas, together with and all improvements that are now or may hereafter be constructed thereon, and any other common areas, common properties, amenities and/or real property that may be conveyed to the Association, dedicated for the use of the Owners, approved by the Association and/or owned or managed by the Association for the common use and enjoyment of the Owners.

   2.05   "Declarant" shall mean and refer to 400 KR, Ltd., a Texas Limited Partnership and its representatives, successors, heirs, and assigns.

   2.06   "Declaration" shall mean and refer to the Declaration of Covenants, Conditions and Restrictions of Saratoga Hills applicable to the Property, dated February 18, 2014 and recorded under Document 2014-14004080 in Volume 4859, Page 5, of the Official Records of Hays County, Texas, and any amendments, modifications, supplements and additions thereto.

   2.07   "Lot" or "Lots" shall mean and refer to any parcel or parcels of land within the Property shown as a subdivided lot on the Plat, together with all the improvements located thereon, except (a) Lots 157-161 as described in the Plat which is excluded as a Lot as defined herein, and (b) lots or portions of the Property that are part of the Common Properties, including any portion of the Property which constitutes or is described on the Plat as a private street, private road, private drive or local street which shall be considered to be part of the Common Properties and shall not constitute a "Lot" as defined herein, but shall be subject to the casements and other rights applicable thereto for the benefit of the public, local governmental authorities, if applicable, and the Members of the Association pursuant to the Plat and this Declaration.

   2.08   "Member" shall mean and refer to those persons entitled to membership as provided in the Declaration. Voting Members are Members entitled to vote or their proxies. Any Member delinquent in payment of any Assessment is not a voting Member.

   2.09   "Owner" or "Owners" shall mean and refer to, individually or collectively as applicable, every person or entity who is a record owner of a fee or undivided fee interest in any Lot which is subject to the Declaration.

   2.10   "Plat" shall mean the map or plat of the Property and the subdivision known as Saratoga Hills recorded in Volume 16, Pages 352-354, Tracks 1-19, 111-128, and 157-161 of the Plat Records of Hays County, Texas, and any replat of or amendment to the Plat.

   2.11   "Property" shall mean the property which is, and shall be held, transferred, sold, conveyed and occupied subject to the Declaration and which is more particularly described in the Declaration and the Plat, including any additional property which may be added to such property, or which may become subject to the Declaration, including but not limited to the property being more specifically described as follows:

Lots 1-19, 111-128, and 157-161 of Saratoga Hills, a subdivision located in Hays County, Texas, according to the map or plat thereof recorded in Volume 16, Pages 352-354, Plat Records of Hays County, Texas

Capitalized terms used but not defined herein have the meaning set forth in the Declaration.

ARTICLE THREE

BOARD OF DIRECTORS

   3.01   General Powers; Delegation. The activities, Property and affairs of the Association shall be managed by the Board of Directors except as otherwise set forth herein or in the Certificate of Formation of the Association or in the Declaration.

   3.02   Number, Qualifications and Tenure of Directors. The number of directors of the Association shall be not less than three (3). The number of directors may be increased or decreased by the Board but may not in any event be decreased to less than three (3). No decrease may shorten the term of a director. Declarant shall select and appoint the initial Board of Directors, and the initial Board of Directors is composed of the Directors appointed in the Certificate of Formation of the Association. Declarant shall also select and appoint subsequent Board of Directors and their term of office until such time as the Association is turned over to the Owners, subject to the other terms of this Section 3.02. Directors may serve consecutive terms. To the extent required by applicable law, within 120 days after the conveyance by Declarant of 75% of the Lots that may be created (including property subject to annexation, if any), at least 1/3 of the Board must be elected by Owners other than Declarant. Declarant construes the applicable law in effect on the date of the adoption of these Bylaws as applying only to improved lots that have been conveyed to Owners other than builders, and not applying to vacant lots conveyed to builders or to affiliates of Declarant. To the extent permissible under applicable law, Declarant shall have the right to exercise the votes of Lots conveyed to builders until such time as a residence complying with the Declaration is completed upon such builders Lot or Lots. Declarant's unilateral right to remove and replace officers and directors applies only to Declarant's appointees. Declarant may terminate its reserved right to appoint officers and directors of the Association without affecting any of Declarant's other rights and reservations under the Declaration, these Bylaws or Applicable Law. Upon notification that the Association shall be turned over to the Owners, the Owners shall nominate a slate of three (3) qualified Owners for the next Board of Directors by way of a nominating committee or by written nominations delivered to the Declarant. A special meeting of the Association shall be called for the purpose of the election of the next Board of Directors with notice of the meeting to be at least five (5) days. Each class of vote entitled to be cast may be cast for five nominees, with no cumulative voting. The Board of Directors shall consist of three (3) Owners until or unless the Declaration is amended as provided therein, except that directors appointed by Declarant need not be Owners or Members. The five nominees securing the most votes cast shall serve for a term of one (1) year, or until the next annual meeting of the Members, whichever is shorter. The terms of the directors shall be staggered, so that at least one-third of the Board of Directors shall be elected each year, and directors may serve consecutive terms. At each annual meeting, the Members shall elect the directors to hold office until the next succeeding annual meeting, as to a director whose term is expiring. At each election, the persons receiving the greatest number of votes shall be the directors. Each director elected shall hold office for the term for which he or she is elected and until his or her successor shall have been elected and qualified or until his or her earlier death, resignation, retirement, disqualification, or removal. A director may be elected to succeed himself or herself as a director. A decrease in the number of directors constituting the entire Board of Directors will not have the effect of shortening the term of any incumbent director.

   3.03   Vacancies. Subject to the rights of Declarant to appoint Directors as provided in these Bylaws or in the Declaration, any vacancy occurring in the Board of Directors, and any director position to be filled due to an increase in the number of directors, shall be filled by the Board of Directors. A vacancy is filled by the affirmative vote of a majority of the remaining directors, even if it is less than a quorum of the Board of Directors, or if it is a sole remaining director. A director elected to fill a vacancy will be elected for the un-expired term of the predecessor in office. A director's position becomes vacant if the director dies, becomes incapacitated, resigns or the director or an entity controlled by a director is no longer a Member.

   3.04   Annual Meeting. An annual meeting of the Board of Directors shall be held at such time and place as is designated by the Chair of the Board of Directors or a majority of the Board of Directors. At the annual meeting, the Directors shall elect officers and transact any and all other business as may properly come before the meeting. Notice of annual meetings will be given to directors, and if notice is required by law to be given to anyone else, such notice will be given in the manner prescribed by law.

   3.05   Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may be designated from time to time by the Chair or a majority of the Board of Directors. Notice of regular meetings will be given to directors not less than ten (10) days before the meeting, and if notice is required by law to be given to anyone else, such notice will be given and posted in the manner prescribed by law.

   3.06   Special Meetings. Except as otherwise specifically set forth in these Bylaws, special meetings of the Board of Directors may be called by the Chair or at the request of any 2 or more directors on ten (10) days’ notice, with such notice to be delivered personally or by mail, facsimile, telegram or electronic means. Except for meetings to be held by telephone or electronically, a person or persons authorized to call special meetings of the Board of Directors may fix the place for holding a special meeting. The person or persons calling a special meeting shall notify the secretary of the Corporation of the information required to be included in the notice of the meeting. The secretary shall give notice to the directors as required in the Bylaws. Except as may be otherwise provided by statute, or by the Certificate of Formation or by these Bylaws, neither the business to be transacted at, nor the purpose of, any 

regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

   3.07   Quorum and Manner of Acting. Each director has one vote. At all meetings of the Board of Directors the presence of a majority of the number of directors then in office shall constitute a quorum for the transaction of business. The directors present at a duly called or held meeting at which a quorum is present may continue to transact business even if enough directors leave the meeting so that less than a quorum remains. However, no action may be approved without the vote of at least a majority of the number of directors required to constitute a quorum. The act of a majority of the directors present and voting at a meeting at which quorum is present shall constitute the act of the Board of Directors unless the act of a greater number is required by law or the Bylaws. A director who is present at a meeting and abstains from a vote is considered to be present and voting for the purpose of determining the decision of the Board of Directors. If the Board of Directors cannot act because a quorum is not present, a majority of the directors who are present may adjourn the meeting to a date not less than 30 days nor more than 60 days from the date the original meeting was called. At the reconvened meeting, if a quorum is present, any business that may be transacted at the meeting originally called may be transacted without further notice.  Directors may vote by written proxy.

   3.08   Rights, Powers and Duties. The Board of Directors shall have all of the rights, powers and duties as set forth in the Declaration, all powers necessary to administer the Association's affairs and the following rights, powers and duties:

(a)   Adopt and publish rules and regulations, including the establishment of non-member 

usage fees, governing the operation and use of the Common Properties, and the personal conduct of the Members, their guests, and other non-members, thereon, and to establish penalties for the infraction thereof, and to amend them from time to time;

(b)   Suspend the voting rights of a Member and the Member's right to use of the Common

Properties (other than roadways, drives and streets necessary to provide a Member with ingress and egress to such Member's Lot or Lots) during any period in which such Member shall be in default in the payment of any maintenance fee or assessment levied by the Association and for any period of time during which the Member is in violation of the rules and regulations adopted and published by the Board of Directors or the Association;

(c)   Exercise for the Association all powers, duties and authority vested in or delegated to the 

Association and not reserved to the Members by other provisions of these Bylaws, the Certificate of Formation, or the Declaration;

(d)   Remove a member of the Board of Directors from office and declare the office of a 

member of the Board of Directors to be vacant for any of the cause set forth in Section 3.10;

(e)   Cause to be kept a complete record of all its acts and corporate affairs and to present a 

statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such statement is requested in writing by one-third (1/3) of the Members who are entitled to vote;

(f)   Supervise all officers, agents and employees of the Association;

(g)   Employ a managing agent or a property manager (Declarant, or an affiliate of Declarant, 

may be the managing agent or property manager), and to contract with any person or entity for the performance of various duties and functions with regard to the Common Properties and in accordance with the Declaration; and

(h)   Borrow money to maintain, repair or restore the Common Area without the approval of the Members, and to borrow money for any other purpose if approved in advance by the Members in the same manner as approving a special assessment.

Directors shall discharge their duties, including any duties as committee members, in good faith, with ordinary care, and in a manner they reasonably believe to be in the best interest of the Association, Ordinary care is care that ordinarily prudent persons in similar positions would exercise under similar circumstances. In the discharge of any duty imposed or power conferred on directors, they may in good faith rely on information, opinions, reports or statements, including financial statements and other financial data, concerning the Association or another person that were prepared or presented by officers and employees of the Association, professional advisors or experts, or accountants or legal counsel. Directors are not deemed to have the duties of trustees of a trust with respect to the Association or with respect to any property held or administered by the Association, including property that may be subject to restrictions imposed by the donor or transferor of the property.

   3.09   Director's and Officer's Compensation. The Corporation may reasonably compensate directors, or officers, for services rendered to or for the Corporation in furtherance of one or more of its purposes. No director shall receive compensation for his or her services as a director or as a member of a standing or special committee of the Board. The Corporation may not pay dividends to its directors, or officers, or otherwise accrue distributable profits, or permit any realization of private gain. Nothing herein contained shall be construed to preclude any director from receiving reimbursement for expenses incurred on behalf of the Corporation or in attending meetings of the Board of Directors or any such committee or from serving the Association in any other capacity and receiving reasonable compensation therefore.

   3.10   Removal of Directors. The Board of Directors may vote to remove a director at any time with or without good cause. Cause for removal shall include (a) absence from three consecutive meetings of the Board or three consecutive absences from meetings of any committee on which the director serves, (b) failure to attend 50% of Board meetings within one (1) year, (c) delinquency in payment of an assessment for more than 180 days, or (d) the director being subject to an enforcement action by the Association for violation of the Declaration or these Bylaws or other governing documents of the Association. A meeting to consider removal of a director may be called and notices given following the procedures provided in these Bylaws. The notice of the meeting shall state that the issue of possible removal of the director will be on the agenda. The director sought to be removed shall be notified and shall have the right to present evidence at the meeting as to why he or she should not be removed. A director may be removed by the affirmative vote of a majority of the Board of Directors. Any director may be removed from the Board, with or without cause, by a majority vote of the Members of the Association. In the event of death, resignation, or removal of a director, his or her successor shall be selected by the remaining members of the Board of Directors and the successor shall serve for the un-expired term of his or her predecessor.

   3.11   Places of Meeting: Meetings by Telephonic Electronic or Other Method of Communication; Compliance with Applicable Law.  Meetings of the Board of Directors are also subject to the following terms and conditions:

(a)   Places of Meetings. Except for a meeting held by electronic, telephonic or other means 

as set forth in this Section 3.12, a Board meeting must be held in a county in which all or part of the Property is located or in a county adjacent to that county to the extent required by Applicable Law.

(b)   Meetings by Telephonic, Electronic or Other Method of Communication; Routine, 

Administrative and Emergency Matters. Directors or members of any committee designated by the Board of Directors may participate in and hold a meeting by any method of communication, including telephonic, electronic or similar communications equipment without prior notice to Owners (subject to any requirements of Applicable Law), as long as each director may hear and be heard by every other director, and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. The Board of Directors may take action by unanimous written consent to consider routine and administrative matters or a reasonably unforeseen emergency or urgent necessity that requires immediate board action.

(c)   Compliance With Applicable Law. Meetings of the Board of Directors must comply with     

Applicable Law, including but not limited to, Section 209.0051 of the Texas Property Code, as same may be amended from time to time, relating to open meetings and notice requirements (including notices to Members, if required by Applicable Law), among other requirements.

ARTICLE FOUR

EXECUTIVE COMMITTEE

   4.01   Executive Committee. The Board of Directors, by resolution adopted by a majority of the directors, may designate and appoint an Executive Committee of the Board of Directors. The Executive Committee will consist of three or more directors and will include the Chair, Vice Chair, Secretary and such other directors as determined by the Board of Directors. The Executive Committee will have and may exercise the authority of the Board of Directors in the management of the Association, except to the extent limited by these Bylaws and the resolutions appointing the Executive Committee. The Executive Committee will not have the authority of the Board of Directors to: amend the Corporation's Certificate of Formation; amend, alter or repeal the Bylaws; elect, appoint or remove any member of any committee or any director or officer of the Association; authorize the sale, lease, exchange or mortgage of all or substantially all of the Property and assets of the Association; authorize the voluntary dissolution of the Association or revoke proceedings therefore; adopt a plan for the distribution of the assets of the Association; or amend, alter or repeal any resolution of the Board of Directors which by its terms provides that it shall not be amended, altered or repealed by the Executive Committee. The designation and appointment of an Executive Committee and the delegation thereto of authority will not operate to relieve the Board of Directors, or any individual director, of any responsibility imposed on them by law.

   4.02   Other Committees.  Other committees not having and exercising the authority of the Board of Directors in the management of the Association may be designated by a resolution adopted by a majority of the directors present at a meeting at which a quorum is present. Except as otherwise provided in such resolution, members of each such committee shall be Members of the Association, and the Chair of the Board of Directors shall appoint the members thereof.

   4.03   Term of Office.  Each member of a committee shall serve until the next annual meeting of the Board of Directors and until his or her successor is appointed, unless the committee is sooner terminated, or unless such member resigns or is removed from such committee, or unless such member ceases to qualify as a member thereof. Any member of a committee may be removed by the person or persons authorized to appoint such member whenever in their judgment the best interest of the Association will be served by such removal.

   4.04   Chair. One member of each committee shall be appointed chair by the person or persons authorized to appoint the members thereof.

   4.05   Vacancies.  Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments.

   4.06   Quorum.  Unless otherwise provided in the resolution of the Board of Directors designating a committee, a majority of the whole committee shall constitute a quorum and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee.

   4.07   Rules.  Each committee may adopt rules for its own government not inconsistent with these Bylaws or with rules adopted by the Board of Directors.

   4.08   Minutes.  Each committee shall cause minutes of its proceedings to be prepared and shall report the minutes to the Board of Directors. Minutes of committee meetings shall be delivered to the Secretary for placement in the Association's minute book.

ARTICLE FIVE

MEMBERS

   5.01   Membership. Every owner of a Lot shall automatically be a Member of the Association. Membership is appurtenant to and may not be separated from the ownership of a Lot that is subject to the Declaration or otherwise subject to assessment by the Association.

   5.02   Classes of Membership. The Association shall have two (2) classes of voting membership:

CLASS A. Class A Members shall be all of the Owners entitled to Vote, other than Declarant. Class A Members shall be entitled to one vote for each Lot. When more than one person holds an interest or interests in any Lot, all such persons shall be a Class A Member but only one vote may be cast for a Lot, and the vote for such Lot shall be exercised as they, among themselves, may determine, but in no event shall more than one vote be cast with respect to any such Lot except as otherwise provided in the Declaration.

CLASS B. The Class B Member shall be the Declarant. The Class B Member shall have three (3) votes for each Lot owned by the Class B Member until the earlier of (1) February 18, 2034, or (ii) when the Class A Members votes exceeds the total of the Class B Members votes. Thereafter, the Class B membership ceases and converts to a Class A membership, and the Class B Member shall have all of the voting rights of a Class A Member.

   5.03   Annual Meetings. The first annual meeting of the Members shall be called by the Chair of the Board of Directors of the Association, shall be held within 12 months after the formation of the Association, on a date and at a time and place specified in the notice of the meeting. Each subsequent regular annual meeting of the Members shall be held on a date to be determined by the Board of Directors and at a time and place specified in the notice of the meeting. If the day for the annual meeting of the Members is a legal holiday, the meeting will be held at the same hour on the first day following which is not legal holiday.

   5.04   Special Meetings. Special meeting of the Members may be called at any time by the Chair of the Board of Directors, by the President of the Association, by a majority of the Board of Directors, or upon written request of the Members who are entitled to vote one-half (1/2) of all of the votes of the membership.

   5.05   Notice of Meetings. Written notice of each meeting of the Members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by mailing a copy of such notice, postage prepaid, or personally delivering same, at least 10 days (except as otherwise provided herein) before such meeting to each Member entitled to vote thereat, addressed to the Member's address last appearing on the books of the Association. Such notice shall specify the place, day, and hour of the meeting, and, in the case of a special meeting, the purpose of the meeting. Notice to a Member is deemed given when hand-delivered or mailed. If mailed, notice deemed given (whether actually received or not) when deposited with the United States Postal Service, postage prepaid. A Member may, in writing, waive notice of a meeting.

   5.06   Quorum; Voting. The presence at any meeting of the Association, in person or by proxy, of Members entitled to cast sixty-six percent (66%) of all of the votes of the Association, regardless of class, shall constitute the quorum required for any action to be taken by the Members of the Association. If however, such quorum shall not be present or represented at any meeting, the Members entitled to vote thereat shall have power by vote of a majority of the voting Members present at the meeting to adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum as aforesaid shall be present or be represented (the meeting may be adjourned and recalled on the same day, and the required quorum at such meeting shall be one-half (1/2) of the required quorum at such meeting immediately preceding, and this procedure may be continued until a quorum has been obtained), Written notice of the place, date and hour of each reconvened meeting must be given to each Member at least 10 days before the reconvened meeting. Votes representing more than sixty-six percent (66%) of the voting Members present at a meeting at which a quorum is present are a majority vote. The voting rights of an Owner may be cast or given:

   (a)  in person;

   (b)  by proxy (all proxies shall be in writing and filed with the Secretary or other person as 

   noted in any notice of proxy delivered to a Member, and every proxy shall be revocable and    

   shall automatically cease upon conveyance by the Member of such Member's Lot);

   (c)  by absentee ballot or electronic ballot in accordance with Applicable Law; or

   (d) by any method of representative or delegated voting provided by the Declaration or other   

   dedicatory instrument

An absentee or electronic ballot (i) may be counted as an Owner present and voting for the purpose of establishing a quorum only for items appearing on the ballot (ii) may not be counted, even if properly delivered, if the Owner attends any meeting to attend in person, so that any vote cast at a meeting by an Owner supersedes any vote submitted by absentee or electronic ballet previously submitted for that proposal, and (iii) may not be counted on the final vote of a proposal if the motion was amended at the meeting to be different from the exact language on the absentee or electronic ballot.

For the purposes of this Section, "electronic ballot" means a ballot (1) given by email, facsimile, or posting on an Internet website, (2) for which the identity of the Owner submitting the ballot can be confirmed, and (3) for which the Owner may receive a receipt of the electronic transmission and receipt of the Owner's ballot. If an electronic ballot is posted on an Internet website, a notice of the posting shall be sent to each Owner that contains instructions on obtaining access to the posting on the website. All voting and quorum procedures must comply with Applicable Law, including Section 209.00592 of the Texas Property Code, as amended from time to time.

   5.07   Proxy Voting. Any Member, including Declarant, may give a revocable written proxy to any person, authorizing such person to cast the Member's votes on any matter, Such written proxy shall be in such form as may be prescribed by the Board, but no such proxy shall be valid for a period of greater than eleven (11) months, and shall not be valid unless filed with the Secretary of the Board of Directors. All proxies shall be revocable and shall automatically cease upon conveyance by the Member of such Member's Lot.

   5.08   Cumulative Voting. The cumulative system of voting shall not be allowed.

ARTICLE SIX

OFFICERS, EMPLOYEES AND AGENTS: POWER AND DUTIES

   6.01   Elected Officers. The elected officers of the Association shall be a President, Vice President, Treasurer and Secretary and such other offices as the Board of Directors may from time to time appoint. Two or more offices may be held by the same person, except the offices of President and Secretary. Officers are to be elected from the Members.

   6.02   Election. So far as is practicable, all elected officers shall be elected by the Board of Directors annually at the Board's annual meeting. If the election of officers is not held at this meeting, the election shall be held as soon thereafter as conveniently possible. Each officer shall hold office until a successor is duly elected and qualified, or until such officer's prior resignation or removal. An officer may be elected to succeed himself or herself in the same office.

   6.03   Appointive Officers. The Board of Directors may also appoint such other officers as it shall from time to time deem appropriate, who shall exercise such powers and perform such duties as determined by the Board.

   6.04   Removal, Filling of Vacancies. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors with or without good cause. The removal of any officer shall be without prejudice of the contract rights, if any, of the officer. If any office becomes vacant for any reason, the Board of Directors shall fill the vacancy for the un-expired portion of the officer's term. An officer may resign at any time by giving written notice to the Board of Directors or the President or Secretary of the Association, and such resignation takes effect on the date of the receipt of the notice or at any later time specified in the notice.

   6.05   President. The Board of Directors shall elect a President of the Association. The President is the chief executive officer of the Association and shall preside when present at meetings of the Board of Directors and shall have such other powers and perform such other duties and services as are from time to time prescribed or delegated to him or her by the Board of Directors. In the absence or disability of the President, his/her duties shall be performed and his/her powers may be exercised by the Vice President or by any other officer appointed by the Board of Directors. The President and Vice President shall be members of the Board of Directors.

   6.06   Vice President. The Board of Directors shall elect a Vice President of the Association. The Vice President shall generally assist the President and will have such powers and perform such duties and services as are from time to time prescribed or delegated to him or her by the President of the Association or the Board of Directors. The Vice President shall be a member of the Board of Directors.

   6.07   Treasurer. The Board of Directors shall elect a Treasurer of the Association to serve as chief financial officer. The Treasurer will have active control of and will be responsible for all matters pertaining to the accounts and finances of the Association and shall direct the manner of certifying the same; shall supervise the manner of keeping all payrolls and vouchers for payments by the Association and all other documents relating to such payments; shall receive, audit and consolidate all operating and financial statements of the Association and its departments; shall have supervision of the books of accounts of the Association, their arrangements and classification; shall supervise the budget, account and auditing practices of the Association and shall have charge of all matters relating to taxation. The Treasurer shall prepare the annual budget of the Association and recommend approval thereof by the Board of Directors. The Treasurer shall also review all financial statements of the Association.

The Treasurer shall have the care and custody of all monies, funds and securities of the Association; shall deposit or cause to be deposited all such funds in and with such depositories as the Board of Directors shall from time to time direct or as shall be selected in accordance with procedures established by the Board of Directors; shall advise upon all terms of credit granted by the Association; shall be responsible for the collection of all its accounts and shall cause to be kept full and accurate accounts of all receipts, disbursements and contributions of the Association. The Treasurer shall have the authority to endorse for deposit, collection, or otherwise all checks, drafts, notes, bills of exchange, and other commercial papers payable to the Association and to give proper receipts and discharges for all payments to the Association. The Treasurer shall perform such additional duties as the Board of Directors may direct or prescribe from time to time.

In the absence or disability of the Treasurer, his/her duties shall be performed, and his/her powers may be exercised by any Assistant Treasurers (ranked in order of seniority), unless otherwise determined by the Treasurer, the Chair or the Board of Directors.

   6.08   Secretary. The Board of Directors shall appoint a Secretary of the Association. The Secretary shall give all notices as provided in the Bylaws or as required by law; take minutes of the meetings of the Board of Directors and keep the minutes as part of the Association records; maintain custody of the Association records and of the seal of the Association, if any; keep a register of the name and mailing, delivery and fax address of each director, officer and employee of the Association and each Member of the Association perform such other duties as may be assigned by the President of the Association or by the Board of Directors; and perform all duties incident to the office of Secretary. In the absence or disability of the Secretary, his/her duties shall be performed and his/her powers may be exercised by any Assistant Secretaries (ranked in order of seniority), unless otherwise determined by the Secretary, the Chair or the Board of Directors.

ARTICLE SEVEN

SPECIAL PROCEDURES CONCERNING MEETINGS

   7.01   Actions Without a Meeting: Waiver of Notice. Any action required to be taken at a meeting of the Board of Directors or the Members or any action that may be taken at a meeting of the Board of Directors or the Members, including the members of any committee, may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed by a sufficient number of directors, Members or committee members as would be necessary to take that action at a meeting at which all of the directors, Members or members of the committee were present and voted. Attendance at a meeting is a waiver of notice of the meeting unless the Member attends the meeting specifically to object to lack of notice and does object to the lack of notice when the meeting is called to order. In addition:

   (a)  Each written consent shall bear the date of signature of each director or committee 

member who signs the consent. A written consent signed by less than all of the directors or   

committee members is not effective to take the action that is the subject of the consent   

unless, within 60 days after the date of the earliest dated consent delivered to the 

Association in the manner required, a consent or consents signed by the required number of    

directors or committee members is delivered to the Association at its registered office,   

registered agent, principal place of business, transfer agent, registrar, exchange agent, or an   

officer or agent of the Association having custody of the books in which proceedings of 

meetings of directors or committees are recorded. Delivery shall be by hand delivery or 

certified or registered mail, postage prepaid, return receipt requested, Delivery to the 

Association's principal place of business shall be addressed to the president or principal 

executive officer of the Association.

   (b)  The Association will give prompt notice of the taking of any action without a meeting to       

persons who do not sign consents. If the action requires documents to be filed with the 

secretary of state, the filed documents will state that the written consent procedures have     

been properly followed.

   (c)  A telegram, telex, cablegram, facsimile, email, electronic or similar transmission by a  

director, Member or member of a committee or a photographic, facsimile or similar reproduction

of a signed writing shall be regarded as signed by the director, Member or member of

a committee for purposes hereof.

   7.02   Telephonic and Electronic Meetings. Members may participate in and hold a meeting by means of conference telephone, electronic or similar communications equipment by means of which all persons participating in the meeting can hear and be heard by every other Member, and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

   7.03   Rules for Meetings. The Board of Directors may adopt rules for the conduct of meetings of Members, the Board of Directors and committees. In the absence of other adopted rules by the Board of Directors, the President of the Association will preside over Member's meetings. The Secretary of the Association will keep minutes of the meetings and will record in a minutes book the votes of the Members.

   7.04   Compliance with Applicable Law. All meetings, including notices of meetings, must comply with Applicable Law, including but not limited to, Section 209.0051 of the Texas Property Code, as amended from time to time.

ARTICLE EIGHT 

BOOKS AND RECORDS

   8.01   Required Book and Records. The Association shall keep correct and complete books and records of account. Accounting and controls must conform to good accounting practices. Accounts will not be commingled with accounts of other persons. The Association's books and records shall include:

   (a)  Copies of all documents filed with the Secretary of State of Texas relating to the Association, including but not limited to, the Certificate of Formation, any articles of amendment, restated articles, articles of merger, articles of consolidation, and statements of change of registered office or registered agent.

   (b)  A copy of the Declaration and the Bylaws, and any amended versions or amendments to the Declaration and the Bylaws.

   (c)  Minutes of the meetings of Owners, the Board of Directors and committees having any of the authority of the Board of Directors shall be retained for seven years.

   (d)  A list of the names and addresses (mailing, delivery and fax) of the directors, officers, and any committee members of the Association.

   (e)  Annual financial reports, including an income statement reflecting all income and expense activity for the previous period, a statement reflecting all cash receipts and disbursements for the preceding period, a variance report reflecting the status of all accounts in an "actual" versus "approved" budget format and a balance sheet as of the last day of the preceding period (financial books and records shall be retained for seven years).

   (f)  Account records of current Owners shall be retained for five years.

   (g)  Contracts with a term of one year or more shall be retained for four years after the expiration of the contract term.

   (h)  The Association's federal, state, and local information or income tax returns and audit records shall be retained for seven years.

   (i)  A delinquency report listing all Owners whom are delinquent by more than 60 days in paying any assessment and describing the status of any action to collect those delinquent assessments.

Notwithstanding anything herein to the contrary, the Association shall only be required to retain those certain Association documents required by Applicable Law, and only for the period of time required by Applicable Law, including Section 209.005 of the Texas Property Code, as same may be amended from time to time.

   8.02   Inspection and Copying. After written request to the Association, a Member may examine and copy, in person or by agent, any Association books and records relevant to a proper purpose related to the Member's interest in the Association. The Board of Directors may establish rules regarding the (a) written request, (b) hours, days of the week and place, (c) payment of costs related to a Member's inspection and copying of books and records, and (d) security procedures and confidentiality. A director of the Association has the right, at any reasonable time, and at the Association's expense, to (i) examine and copy the Association's books and records at the Association's principal office, and (ii) inspect the Association's properties. The Association may produce books and records requested under this Section in hard copy, electronic or other format reasonably available to the Association. The Association has adopted, and shall comply with, the Association's Records Production and Copying Policy, and shall otherwise comply with Applicable Law, including but not limited to, Section 209.005 of the Texas Property Code, as same may be amended from time to time.

   8.03   Audits. The Board of Directors may require an annual audit of the Association's books, at the Association's expense, by an accounting firm selected by the Board of Directors. Any director may require an audit of the Association's books by an accounting firm selected by the director, such audit to be at the director's expense unless the Board of Directors votes to authorize payment. A director may exercise the right to compel an audit only once in any fiscal year.

   8.04   Fiscal Year. The Board of Directors may establish the fiscal year of the Association by resolution. In the absence of a Board of Directors resolution determining otherwise, the Association's fiscal year is a calendar year beginning on the first day of January and ending on the last day of December of each year, except that the first fiscal year shall begin on the date of incorporation, unless changed by the Board of Directors.

ARTICLE NINE

ASSESSMENTS

   9.01   Assessments in General. Except as may be provided in the Declaration as to Declarant, Owners shall pay to the Association the assessments described in the Declaration (or to an entity or collection agency designated by the Association).

   9.02   Purpose of Assessments. The assessments levied by the Association shall be used exclusively for the purposes set forth in the Declaration and in particular for the improvement and maintenance of the Common Properties, streets, roadways, landscaping of the Common Properties, entrance and any other properties, services, improvements and facilities devoted to this purpose and related to the use and enjoyment of the Common Properties. The assessments to be levied are intended to pay for items which may include, but not be limited to, the following: taxes on the Common Properties; insurance relating to the Common Properties and the repair, replacement, and additions thereto; costs of labor, management and supervision of the Association; maintenance, repair, upkeep, improvement and replacement of the Common Properties; replacement reserve, including a reserve fund for emergency purposes or to pay for unexpected costs, fees and expenses; costs, fees and expenses of enforcing the restrictions, rules and regulations, costs, fees and expenses incurred for carrying out the duties of the Board of Directors of the Association as set forth herein and for carrying out the purposes of the Association as stated in its Certificate of Formation.

   9.03   Basis and Amount of Regular Assessments. The amount of the regular assessments for each year shall be determined in accordance with the provisions of the Declaration. The regular assessments may include a reserve fund for working capital and for maintenance, repairs, improvement, upkeep and replacements of the Common Properties. The initial regular assessment may be established by the Declarant. Written notice of regular assessment to be paid by each Owner shall be sent to every Owner, but only to one (1) joint owner.

   9.04   Special Assessments. In addition to the special assessments authorized in the Declaration, the Declarant or the Board of Directors may declare and levy special individual assessments against Owners of Lots for reimbursement for repairs occasioned by the willful or negligent acts of such Owners or their guests, tenants and invitees but not for ordinary wear and tear.

  9.05   Duties of the Board of Directors with Respect to Assessments.

   a.  The Board of Directors shall prepare a roster of the Lots and assessments applicable thereto which shall be kept in the office of the Association. Written notice of all assessments shall be delivered or mailed to every Owner subject thereto.

   b.  The Board of Directors shall upon demand at any time furnish to any Owner liable for said assessment a certificate in writing signed by an officer of the Association, setting forth whether said assessment has been paid. Such certificate shall be conclusive evidence of payment of any assessment therein stated to have been paid. A reasonable charge may be assessed by the Board for the issuance of such certificates.

   9.06   Effect of Non-Payment of Assessment; Personal obligation of the Owner; Lien; Remedies of Association.

   a.  If any assessment or any part thereof is not paid on the date(s) when due, then the unpaid amount of such assessment shall become delinquent and shall, together with such interest thereon and cost of collection thereof as hereinafter provided or as provided in the Declaration, thereupon become a continuing lien on the Lot or Lots of the non-paying Owner. The obligation of the non- paying Owner to pay such assessment, however, shall be and remain a personal obligation and shall be binding upon Owner and Owner's heirs, executors, devisees, personal representatives, successors and assigns except as otherwise provided herein or in the Declaration. The lien for unpaid assessments shall be unaffected by any sale or assignment of a Lot and shall continue in full force and effect except as otherwise provided herein or in the Declaration. No Owner may waive or otherwise escape liability for the assessment provided herein by non-use of the Common Properties or abandonment of the Lot or Lots owned by Owner. The Association shall have the right to reject partial payments of an assessment and demand the full payment thereof.

   b.  The lien for unpaid assessments may be enforced by the foreclosure of the defaulting Owner's Lot by the Association in like manner as a mortgage on real property subsequent to the recording of a notice provided for above. In any such proceeding, the Owner shall be required to pay the costs, expenses, and attorney's fees incurred in connection with filing the lien, and in the event of any foreclosure proceeding, all additional costs, expenses and attorney's fees incurred in connection with any such foreclosure proceeding. The Association shall have the power to bid on the Lot at foreclosure or other legal sale and to acquire and hold, lease, mortgage, vote, convey, or otherwise deal with the same in the same manner as any other Owner of a Lot. Any mortgagee holding a lien on a Lot may pay, but shall not be required to pay, any unpaid assessments owing with respect to such Lot, but such payment shall not be deemed a waiver of the Owner's default by either the Association or such mortgagee.

   c.  Each Owner, by acceptance of a deed to a Lot hereby expressly vests in the Association or its agents or trustees the right and power to bring all action against such Owner personally for the collection of such charges as a debt, and to enforce the aforesaid liens by all methods available for the enforcement of such liens, including non-judicial foreclosure pursuant to the applicable provisions of the Texas Property Code as same may be amended from time to time, and Owner hereby expressly grants to the Association the private power of sale in connection with said liens, The Association may also suspend the Association membership and voting rights of any Owner who is in default in payment of any assessment in accordance with the Bylaws and the Declaration.

   9.07   Enforcement Procedures in general.

   a.  Notice. Before the Board may (1) suspend an Owner-s right to use the Common Properties or portion thereof, (2) file a suit against an Owner other than a suit to collect any Assessment, (3) foreclose the Association-s lien, (4) charge an Owner for property damage, or (5) levy a fine for a violation of the governing documents of the Association, the Association or its agent must give written notice to the Owner by certified mail, return receipt requested. The notice must describe the violation or property damage that is the basis for the suspension action, charge, or fine and state any amount due the Association from the Owner. The notice also must inform the Owner that the Owner (1) is entitled to a reasonable period to cure the violation and avoid the fine or suspension unless the Owner was given notice and a reasonable opportunity to cure a similar violation within the preceding six months and (2) may request a hearing on or before the thirtieth day after the date the Owner receives the notice,

   b.   Hearing. If the Owner is entitled to an opportunity to cure the violation, the Owner has the right to submit a written request for a hearing to discuss and verify facts and resolve the matter in issue before a committee appointed by the Board or before the Board if the Board does not appoint a committee. If a hearing is to be held before a committee, the notice must state that the Owner has the right to appeal the committee-s decision to the Board by written notice to the Board. The Association must hold a hearing under this section not later than the thirtieth (30th) day after the date the Board receives the Owner-s request for a hearing and must notify the Owner of the date, time, and place of the hearing not later than the tenth day before the date of the hearing. The Board or the Owner may request a postponement, and, if requested, a postponement will be granted for a period of not more than ten days. Additional postponements may be granted by agreement of the parties. The Owner or the Association may make an audio recording of the meeting. The hearing will be held in executive session affording the alleged violator a reasonable opportunity to be heard. Before any sanction hereunder becomes effective, proof of proper notice will be placed in the minutes of the meeting. Such proof will be deemed adequate if a copy of the notice, together with a statement of the date and manner of delivery, is entered by the officer, director, or agent who delivered the notice. The notice requirement will be satisfied if the alleged violator appears at the meeting. The minutes of the meeting will contain a written statement of the results of the hearing and the sanction, if any, imposed. The Board may, but will not be obligated to, suspend any proposed sanction if the violation is cured within a ten day period. Such suspension will not constitute a waiver of the right to sanction violations of the same or other provisions and rules by any person.

   c.  Appeal. Following hearing before a committee, if any, the violator will have the right to appeal the decision to the Board. To perfect this right, a written notice of appeal must be received by the managing agent, if any, president, or secretary within ten days after the hearing date.

   d.  Changes in Law. The Board may change the enforcement procedures set out in this section to comply with changes in law.

   9.08   Statement of assessments. Upon written request of the holder(s) of a mortgage on the Lot ("mortgagee"), the Association may provide notice to such mortgagee of the non-paying Owner of such Owner's default in paying any assessment when such default has not been cured within thirty (30) days. Upon payment to the Association of a reasonable fee, and upon the written request of any Owner, holder of a lien on a Lot or prospective purchaser of a Lot, the Association shall issue a written statement setting forth the status of the payment of any assessments made against the applicable Lot, the amount of any unpaid assessments, the date the next assessment or assessment becomes due and the current amount of the maintenance assessment.

ARTICLE TEN

MISCELLANEOUS

   10.01   Legal Authorities Governing Construction of Bylaws. The Bylaws shall be construed in accordance with the laws of the State of Texas. All references in the Bylaws to statutes, regulations, or other sources of legal authority will refer to the authorities cited, or their successors, as they may be amended from time to time.

   10.02   Legal Construction. If any Bylaw provision is held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceability shall not affect any other provision and the Bylaws shall be construed as if the invalid, illegal, or unenforceable provision had not been included in the Bylaws. The Declaration controls over these Bylaws, including any conflict between the provisions of the Declaration and these Bylaws.

   10.03   Headings. The headings used in the Bylaws are used for convenience and shall not be considered in construing the terms of the Bylaws.

   10.04   Gender. Wherever the context requires, all words in the Bylaws in the male gender shall be deemed to include the female or neutral gender, all singular words shall include the plural, all plural words shall include the singular.

   10.05   Parties Bound. The Bylaws will be binding upon and inure to the benefit of the directors, officers, committee members, employees, and agents of the Association and their respective heirs, executors, administrators, legal representatives, successors and assigns except as otherwise provided in the Bylaws.

   10.06   Dividends Prohibited. No part of the net income of the Association shall inure to the benefit of any private individual and no dividend shall be paid and no part of the income of the Association shall be distributed to its directors or officers. The Association may pay  compensation in a reasonable amount to its officers for services rendered and may reimburse its directors as provided herein.

   10.07   Notices. Any notice required or permitted by the Bylaws, the Declaration or other governing documents of the Association must be in writing. Notices regarding enforcement actions must be given by certified mail, return receipt requested. All other notices may be given by regular mail. Notice is deemed delivered (whether actually received or not) when properly deposited with the United States Postal Service, addressed to (1) a Member at the Member-s last known address according to the Association-s records; and (2) the Association, the Board, or a managing agent at the Association-s principal office or another address designated in a notice to the Members. Unless otherwise required by law or the governing documents of the Association, actual notice, however delivered, is sufficient.

ARTICLE ELEVEN

INDEMNIFICATION

The Association shall indemnify any person who was, is, or is threatened to be made a named defendant or respondent in a proceeding (as hereinafter defined) because the person (i) is or was a director or officer of the Association or (ii) while a director or officer of the Association, is or was serving at the request of the Association as a director, officer, partner, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic Association, employee benefit plan, other enterprise, or other entity to the fullest extent that a Association may grant indemnification to a director under the Act or the Texas Business Organizations Code, as the same exists or may hereafter be amended. Such right shall be a contract right and as such shall run to the benefit of any director or officer who is elected and accepts the position of director or officer of the Association or elects to continue to serve as a director or officer of the Association while this Article is in effect. Any repeal or amendment of this Article shall be prospective only and shall not limit the rights of any such director or officer or the obligations of the Association with respect to any claim arising from or related to the services of such director or officer in any of the foregoing capacities prior to any such repeal or amendment of this Article. Such right shall include the right to be paid or reimbursed by the Association for expenses incurred in defending any such proceeding in advance of its final disposition to the maximum extent permitted under the Act or the Texas Business Organizations Code, as the same exists or may hereafter be amended. If a claim for indemnification or advancement of expenses hereunder is not paid in full by the Association within 90 days after a written claim has been received by the Association, the claimant may at any time thereafter bring suit against the Association to recover the unpaid amount of the claim, and if successful in whole or in part, the claimant shall also be entitled to be paid the expenses of prosecuting such claim. It shall be a defense to any such action that such indemnification or advancement of costs of defense are not permitted under the Act or the Texas Business Organizations Code, but the burden of proving such defense shall be on the Association. Neither the failure of the Association (including its Board of Directors or any committee thereof, special legal counsel, or members) to have made its determination prior to the commencement of such action that indemnification of, or advancement of costs of defense to, the claimant is permissible in the circumstances nor an actual determination by the Association (including its board of directors or any committee thereof, special legal counsel, or members) that such indemnification or advancement is not permissible, shall be a defense to the action or create a presumption that such indemnification or advancement is not permissible. In the event of the death of any person having a right of indemnification under the foregoing provisions, such right shall inure to the benefit of such person's heirs, executors, administrators, and personal representatives. The rights conferred above shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, bylaw, resolution of members or directors, agreement, or otherwise. The Association may additionally indemnify any person covered by the grant of mandatory indemnification contained above to such further extent as is permitted by law and may indemnify any other person to the fullest extent permitted by law. To the extent permitted by then applicable law, the grant of mandatory indemnification to any person pursuant to this Article shall extend to proceedings involving the negligence of such person. As used herein, the term "proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, any appeal in such an action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding.

ARTICLE TWELVE

LIMITATION OF LIABILITY

    To the fullest extent permitted by applicable law, a director of the Association shall not be liable to the Association or its Members for monetary damages for an act or omission in the director's capacity as a director, except that this Article does not eliminate or limit the liability of a director of the Association to the extent the director is found liable for:

   a.   A breach of the director's duty of loyalty to the Association or its Members; or

   b.   An act or omission not in good faith that constitutes a breach of duty of the director to the Association or an act or omission that involves intentional misconduct or a knowing violation of the law; or

   c.   A transaction from which the director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's office; or

   d.   An act or omission for which the liability of a director is expressly provided by applicable law.

Any repeal or amendment of this Article by the Members of the Association shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Association arising from an act or omission occurring prior to the time of such repeal or amendment. In addition to the circumstances in which a director of the Association is not personally liable as set forth in the foregoing provisions of this Article, a director shall not be liable to the Association or its Members to such further extent as permitted by any law hereafter enacted, including without limitation any subsequent amendment to the Texas Non-Profit Association Act.

ARTICLE THIRTEEN

AMENDMENTS

These Bylaws may be altered, amended or repealed, or new Bylaws may be adopted by the Declarant as provided in the Declaration, by the Board of Directors at any annual, regular or special meeting of the Board of Directors or by the vote of 67% of the voting Members in the Association. This provision will not be construed as limiting the Board of Director's power to amend the enforcement procedures to comply with changes in law. The notice of any meeting at which the Bylaws are altered, amended, or repealed, or at which new Bylaws are adopted shall include the text of the proposed Bylaw provisions as well as the text of any existing provisions proposed to be altered, amended or repealed. Alternatively, the notice may include a fair summary of those provisions. In case of any conflict between the Certificate of Formation and these Bylaws, the Certificate of Formation shall control; and in the case of any conflict between the Declaration and these Bylaws, the Declaration shall control.