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BYLAWS OF SHADY OAKS II HOMEOWNERS ASSOCIATION, INC.

SECOND, THIRD, AND FOURTH FILING BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE i ARTICLE I - OBJECT ...................................................................................................................1 Purposes ......................................................................................................................................1 Applicability ...............................................................................................................................1 ARTICLE II - DEFINITIONS .......................................................................................................1 Articles ........................................................................................................................................1 Association ..................................................................................................................................1 Common Areas ..........................................................................................................................1 Declaration .................................................................................................................................2 Member .......................................................................................................................................2 Owner .........................................................................................................................................2 Rules ............................................................................................................................................2 ARTICLE III - MEMBERSHIP VOTING, QUORUM, PROXIES, MOTIONS .....................2

......................................................................................................................2 ARTICLE III - MEMBERSHIP VOTING, QUORUM, PROXIES, MOTIONS .....................2 Membership ...............................................................................................................................2 Voting ..........................................................................................................................................2 Quorum .......................................................................................................................................2 Proxies .........................................................................................................................................3 Motions .......................................................................................................................................3 ARTICLE IV - ADMINISTRATION ............................................................................................3 Association Responsibilities ......................................................................................................3 Place of Meetings .......................................................................................................................3 Annual Meeting ..........................................................................................................................3 Special Meeting ..........................................................................................................................3 Notices of Meetings ....................................................................................................................3

.............................................................3 Notices of Meetings ....................................................................................................................3 Presiding Officer and Secretary ...............................................................................................4 Order of Business .......................................................................................................................4 ARTICLE V - BOARD OF DIRECTORS ....................................................................................4 Number and Qualification ........................................................................................................4 Powers and Duties .....................................................................................................................4 Other Powers ..............................................................................................................................4 Delegation of Powers — Managing Agent ...............................................................................6 Election and Term of Office .....................................................................................................6 Vacancies ....................................................................................................................................6 Removal of Directors .................................................................................................................6 Organizational Meeting ............................................................................................................7 Regular Meetings .......................................................................................................................7

.............................................................7 Regular Meetings .......................................................................................................................7 Special Meetings ........................................................................................................................7 Waiver of Notice ........................................................................................................................7 Conduct of Meetings ..................................................................................................................7 Board of Director’s Quorum ....................................................................................................7 Fidelity Bonds ............................................................................................................................7 Compensation .............................................................................................................................8 Actions Without a Meeting .......................................................................................................8 ARTICLE VI - OFFICERS ............................................................................................................8 Designation .................................................................................................................................8 Election of Officers ....................................................................................................................8 Removal of Officers ...................................................................................................................8

..............................................................8 Removal of Officers ...................................................................................................................8 BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE ii President .....................................................................................................................................8 Vice President ............................................................................................................................9 Secretary .....................................................................................................................................9 Treasurer ....................................................................................................................................9 Additional Officers ....................................................................................................................9 Vacancies ..................................................................................................................................10 ARTICLE VII - INDEMNIFICATTON OF OFFICERS AND DIRECTORS .......................10 Indemnification of Officers and Directors ............................................................................10 Treatment of Indemnification Expenses; No Indemnification of Member s ......................10 Terms of Indemnification .......................................................................................................10 Advancement of Expenses .......................................................................................................11 ARTICLE VIII - OBLIGATIONS OF THE HOMEOWNERS ...............................................11

.......................................................................................................11 ARTICLE VIII - OBLIGATIONS OF THE HOMEOWNERS ...............................................11 Assessments ..............................................................................................................................11 Maintenance and Repair .........................................................................................................11 Damage to Common Areas .....................................................................................................11 Mechanic’s Lien .......................................................................................................................11 General .....................................................................................................................................12 Use of Property ........................................................................................................................12 Use of Common Areas or the Association’s Property ..........................................................12 ARTICLE IX - AMENDMENTS TO BYLAWS ........................................................................12 Amendment to Bylaws .............................................................................................................12 ARTICLE X - MORTGAGES .....................................................................................................13 Notice to Association ...............................................................................................................13 Notice of Unpaid Assessments ................................................................................................13

......................................................................13 Notice of Unpaid Assessments ................................................................................................13 ARTICLE XI - COMPLIANCE ..................................................................................................13 Compliance ...............................................................................................................................13 ARTICLE XII - NON-PROFIT ASSOCIATION ......................................................................13 Non-Profit Association ............................................................................................................13 ARTICLE XIII - REGISTERED OFFICE AND AGENT ........................................................13 Registered Office and Agent ...................................................................................................13 ARTICLE XIV - TRANSACTIONS WITH MEMBERS, DIRECTORS AND OFFICE RS .14 Transactions with Members, Directors, and Officers ..........................................................14 ARTICLE XV - EXECUTION DOCUMENTS ..........................................................................14 Execution of Documents ..........................................................................................................14 ARTICLE XVI - ABATEMENT AND ENJOINMENT OF VIOLATIONS BY OWNERS .14 Abatement and Enjoinment of Violations by Owners .........................................................14 ARTICLE XVII - NOTICES ........................................................................................................14

by Owners .........................................................14 ARTICLE XVII - NOTICES ........................................................................................................14 Notices .......................................................................................................................................14 ARTICLE XVIII - SEVERABILITY ..........................................................................................15 Severability ...............................................................................................................................15 BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 1 BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC.

The name of the organization shall be SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC.

ARTICLE I OBJECT 1.01. Purposes . The purposes for which this non-profit corporation has been formed are (a) to administer the common affairs of all of the owners of the “PROPERTY ”, as that term is defined in the Restrictive Covenants hereinafter described; (b) to assure the upkeep, maintenance, improvement, and administration of the “Common Areas ” as defined in the Restrictive Covenants hereinafter described; (c) to assure the upkeep, maintenance, improvement, and administration of any additional property which may lat er be acquired by or placed under the control of Shady Oaks II Homeowner’s Association, Inc.; (d) to assure the upkeep, maintenance, improvement, and administration of any facilities us ed in connection with the above-described Property; and (e) more generally, to carry out the functions and exercise the powers described in the Articles of Incorporation of Shady Oaks II Homeowner’s Association, Inc.

ith the above-described Property; and (e) more generally, to carry out the functions and exercise the powers described in the Articles of Incorporation of Shady Oaks II Homeowner’s Association, Inc.

1.02. Applicability . All present or future owners, tenants, or any other person that mig ht use the facilities of Shady Oaks II Homeowner’s Association, I nc. in any manner, are subject to the regulations set forth in these Bylaws. The mere acquisition, occupancy, or r ental of any of the platted lots within the Property, or in any additional property lat er placed under the jurisdiction of Shady Oaks II Homeowner’s Association, Inc. will signify that these Bylaws are accepted and ratified and that the owner, tenant, or occupant thereof will comply w ith the terms and provisions hereof.

ARTICLE II DEFINITIONS 2.01. Articles . “Articles” shall mean and refer to the Articles of Incor poration of Shady Oaks II Homeowner’s Association, Inc., as amended from time to time.

2.02. Association . “Association” shall mean and refer to Shady Oaks II Homeowne r’s Association, Inc., its successors and assigns.

2.03. Common Areas . “Common Areas” shall mean and refer to the “Common Areas” as that term is defined in the Restrictive Covenants, as amended or supplemented from time to time.

BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 2 2.04. Declaration . “Declaration”, sometimes referred to herein as “Restrictive Covenants”, shall mean and refer to the Declaration of Covenants, Rest rictions and Easements for Shady Oaks Second, Third and Fourth Filing recorded in Volume 11910, Pa ge 2285 of the Official Records of Tarrant County, Texas, and any addition to or modi fication or amendment of

and Easements for Shady Oaks Second, Third and Fourth Filing recorded in Volume 11910, Pa ge 2285 of the Official Records of Tarrant County, Texas, and any addition to or modi fication or amendment of same. Unless otherwise expressly provided herein, all terms used herein shall have the same meaning as those terms have in the Restrictive Covenants.

2.05. Member . “Member” or “Members” shall mean and refer to any person or entity who is an Owner, and therefore a member of the Association.

2.06. Owner . “Owner” or “Owners” shall mean and refer to the record owner, whether one or more persons or entities, of any fee simple interest to any Site, as defined in the Restrictive Covenants, excluding the beneficiary and trustee of any deed of tr ust.

2.07. Rules . “Rules” shall mean and refer to such reasonable rules as the Board of Directors shall promulgate from time to time as may be necess ary for the operation and use of the Property.

ARTICLE III MEMBERSHIP VOTING, QUORUM, PROXIES, MOTIONS 3.01. Membership . Any person or entity, upon becoming an Owner, shall automatically become a Member of this Association and be subject to these Bylaw s. Membership shall be appurtenant to and shall run with the property interest which qualifies the Owner thereof for membership, and membership may not be severed from, or in any way transferred, pledged, mortgaged, or alienated except together with the title to the pr operty interest. Membership shall terminate without any formal Association action whenever such pers on or entity ceases to be an owner, but such termination shall not relieve or release any such former Owner f rom any liability or obligation incurred under or in any way connected with the Associat ion during the period of

be an owner, but such termination shall not relieve or release any such former Owner f rom any liability or obligation incurred under or in any way connected with the Associat ion during the period of such ownership and membership in this Association, or impair any rights or remedies which the Board of Directors of the Association or others may have against such former owner and Member arising out of or in any way connected with such ownership and m embership and the covenants and obligations incident thereto. No certificates of stock shall be issued by the Association, but the Board of Directors may, if it so selects, is sue certificates or cards evidencing membership in the Association such certificate or card shall be surrendered to the Secretary whenever ownership of the lot designated thereon shall terminate.

3.02. Voting . The voting rights of each Member shall be determined under the term s of the Restrictive Covenants and the Articles. Cumulative voting is prohibited.

3.03. Quorum . The presence in person or by proxy of persons entitled to cast at least a majority of the eligible votes of the membership of the Associat ion shall constitute a quorum. If any meeting cannot be held because a quorum is not present, the members present, either in person or by proxy, may adjourn the meeting to a time not less than 48 hours nor more than 30 days from the time set for the original meeting, at which adjourn ed meeting the quorum BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 3 requirement shall be waived. Except as otherwise provided herein, ac tion may be taken by a vote of a majority of the eligible votes present at such adjourned meeting.

3.04. Proxies . Votes may be cast in person or by proxy. All proxies shall be in writing

d herein, ac tion may be taken by a vote of a majority of the eligible votes present at such adjourned meeting.

3.04. Proxies . Votes may be cast in person or by proxy. All proxies shall be in writing and filed with the Secretary of the Board at or before, the appoi nted time of each meeting. All proxies shall be revocable, and no proxy shall be valid for a period of greater than 11 months.

3.05. Motions . Any owner present at a meeting representing two or more lot s may make a motion and have the same voted upon without the necessity of a “second.”

ARTICLE IV ADMINISTRATION 4.01. Association Responsibilities . The Members will have the responsibility of administering the affairs of the Association through its Board of Directors.

4.02. Place of Meetings . Meetings of the Association shall be held at the registered office of the Association or at such other place as the Board of Directors may determine.

4.03. Annual Meeting . The first annual meeting of the Association shall be called by the initial Board of Directors (as appointed in the Articles). After the first annual meeting, the annual meeting of the Association shall be held at the registered offic e of the Association or at such other place as determined by the Board during the month of January or February of ea ch calendar year as more specifically set forth in the Notice of Meeti ng sent to each Owner of record in accordance with the provisions of Section 4 05 hereof. At such meetings there shall be elected by ballot of the Owners a Board of Directors in accordance with the requirements of these Bylaws, the Articles, and the Declaration. The Owners may also transact such other business of the Association as may properly come before them.

Directors in accordance with the requirements of these Bylaws, the Articles, and the Declaration. The Owners may also transact such other business of the Association as may properly come before them.

4.04. Special Meeting . It shall be the duty of the President to call a special meeting of the Owners as directed by resolution of the Board of Directors or upon a petition signed by a majority of the Owners and having been presented to the Secretary. The notice of any special meeting shall state the time and place of such meeting and t he purpose thereof. No business shall be transacted at a special meeting except as stated in the notice unless by consent of the owners entitled to cast at least two-thirds of the eligible votes held by the Members present at the meeting in person or by proxy.

4.05. Notices of Meetings . Notice must be given of the annual meeting of the Association (except for the first annual meeting) stating the ti me and place set out in these Bylaws. In the case of each annual meeting, it shall be the duty of the Secret ary to mail or deliver in person a notice of such meeting, stating the purpose thereof as we ll as the time and place where it is to be held, to each owner of record, at least 10 but not mor e than 50 days prior to such meeting.

BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 4 4.06. Presiding Officer and Secretary . At every meeting of the Association, the President, or in his or her absence the Vice President, or in his or her absence the Secretary, or in his or her absence any Director regardless of whether such pers on is an officer, shall call the meeting of the Members to order and act as Chairperson in the abs ence of all of the above, any

, or in his or her absence any Director regardless of whether such pers on is an officer, shall call the meeting of the Members to order and act as Chairperson in the abs ence of all of the above, any member entitled to vote or any proxy of any such Member may cal l the meeting to order and a Chairman of the meeting shall be elected. The Secretary of the Association shall act as Secretary of all meetings of the shareholders. In the absence at such meeti ng of the Secretary, the Chairman may appoint another person to act as Secretary of the meeting.

4.07. Order of Business . The order of business at all annual meetings of the owners shall be as follows: (a) Certifying proxies; (b) Reading of minutes of preceding meeting; (c) Reports of officers; (d) Reports of committees, (e) Election of Directors; (f) Unfinished business; and (g) New business.

ARTICLE V BOARD OF DIRECTORS 5.01. Number and Qualification . The affairs of this Association shall be governed by a Board of Directors composed of three persons. The following persons s hall act in such capacity and shall manage the affairs of the Association until the first m eeting of the Association: James R. Harris, Fronna Patnoe, and Robert H. Barham.

5.02. Powers and Duties . The Board of Directors, acting on behalf of the Association, shall have and perform each of the powers and duties enumerated in t he Restrictive Covenants, and may do all such acts and things as are not by these Bylaws, t he Articles, or by the Restrictive Covenants directed to be exercised and done by the Owners. In addition to the express powers and duties of the Board of Directors granted in these Bylaws, the A rticles, and the Restrictive Covenants, the Board of Directors shall, unless expressly prohibited by these Bylaws, the

xpress powers and duties of the Board of Directors granted in these Bylaws, the A rticles, and the Restrictive Covenants, the Board of Directors shall, unless expressly prohibited by these Bylaws, the Articles, or the Restrictive Covenants, have all powers and authority granted to Board of Directors of non profit corporation organized under the laws of the State of Texas .

5.03. Other Powers . The Board of Directors is, without limitation, additionally empowered as follows: (a) To administer and enforce the covenants, conditions, restrictions, uses, limitations, obligations, and all other provisions as set forth in t he Restrictive Covenants, by lawsuit, or otherwise; (b) To establish, make, and enforce compliance with Rules with the r ight to amend same from time to time; BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 5 (c) To keep in good order, condition, and repair all of the Common Areas and all items, if any, of personal property used in the enjoyment of the Common Areas; (d) To insure and keep insured improvements if any, located in the Common Areas in an amount equal to their maximum replacement value, and to obtain and m aintain comprehensive liability Insurance covering the entire premises. The limits and coverage shall be reviewed at intervals of not less than three yea rs and adjusted, if necessary, to provide such coverage and protection as the Board of Direc tors may deem prudent. Worker’s Compensation insurance shall at all times be carried to the extent required to comply with any applicable law with respec t to the employees, if any, of the Association; (e) To levy, assess, and collect all assessments authorized a nd permitted by the Declaration; (f) To collect delinquent assessments by suit or otherwise a nd to enjoin or seek

ny, of the Association; (e) To levy, assess, and collect all assessments authorized a nd permitted by the Declaration; (f) To collect delinquent assessments by suit or otherwise a nd to enjoin or seek damages from any defaulting Owner as is provided in the Restri ctive Covenants and these Bylaws; (g) To suspend a member’s voting rights and right to use the Common Ar eas and facilities as authorized and permitted by the Declaration; (h) To protect and defend the Association or any property owned thereb y from loss and damage by suit or otherwise; (i) To borrow funds in order to pay for any expenditure or outlay pursuan t to the authority granted by the provisions of the Restrictive Covenants, the Articles, and these Bylaws; to pledge or otherwise grant a security inter est in the Association’s assessments or funds to secure such indebtedness; and to execute all such instruments evidencing such indebtedness as this Board of Directors ma y deem necessary or appropriate, including, without limitation, the power to borr ow money for the purpose of improving the Common Areas and for constructing or improving facilities thereon and in connection therewith to mortgage the Common Areas or portions thereof; (j) To purchase or lease real property for use by the Associati on and to execute on behalf of the Association any contracts, leases, mortgages, or oth er appropriate instruments for the same; (k) To enter into contracts within the scope of their duties and powers; (l) To establish one or more bank accounts, savings accounts, or other inv estment accounts for the common treasury and for all separate funds which are required or may be deemed advisable by the Board of Directors;

one or more bank accounts, savings accounts, or other inv estment accounts for the common treasury and for all separate funds which are required or may be deemed advisable by the Board of Directors; BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 6 (m) To keep and maintain full and accurate books and records showing all of the receipts, expenses, or disbursements and to permit examination thereof at any reasonable time by each of the owners; (n) To prepare and deliver annually to each owner upon request, a stat ement summarizing all receipts, expenses, or disbursements since the last such statement; (o) To meet at least once each year; (p) To designate and employ the personnel necessary for the mainten ance and operation of the Common Areas and of the business of the Association; and (q) In general, to carry on the administration of this Association and to do all of those things necessary and reasonable, in order to carry out the functions and duties of the Association under the Declaration and the Articles.

5.04. Delegation of Powers — Managing Agent . Notwithstanding any provision contained herein to the contrary, the Board of Directors may del egate any of its administrative powers, duties, or functions to a managing agent provided that any su ch delegation shall be revocable upon notice by the Board of Directors. The members of the Boa rd of Directors shall not be liable for any omission or improper exercise by the mana ging agent of any such duty, power, or function so delegated by written instrument executed by a majority of the Board of Directors. The managing agent, if any, shall be employed by the Association at a fair and reasonable compensation to be established by the Board based upon the se rvices, duties, and

of the Board of Directors. The managing agent, if any, shall be employed by the Association at a fair and reasonable compensation to be established by the Board based upon the se rvices, duties, and functions to be performed by the managing agent.

5.05. Election and Term of Office . At the first annual meeting of the Association, the owners shall elect two members of the Board of Directors for a term of two years and one member of the Board of Directors for a term of one year. At each annual meeting thereafter, the Association shall elect such members of the Board of Directors for a term of two years as vacancies occur by expiration of any Director’s term of offic e. The three persons acting as the original Directors shall hold office until their first annual me eting pursuant to the terms and provisions of these Bylaws and the Restrictive Covenants.

5.06. Vacancies . Vacancies on the Board of Directors caused by any reason other t han the removal of a Director by a vote of the Association shall be filed by vote of the majority of the remaining Directors, even though they may constitute less than a quoru m; and each person so elected shall be appointed as Director until the next annual meeting of the Association at which meeting his or her appointment shall be ratified or a successor shall be elected to serve the remaining term of his or her predecessor.

5.07. Removal of Directors . At any regular or special meeting of the Association duly called, any one or more of the Directors may be removed with or wi thout cause by a Majority of the owners, and a successor may then and there be elected to f ill the vacancy thus created. If the vacancy is not then and there filled, it may be filled at any r egular or special meeting called for

the owners, and a successor may then and there be elected to f ill the vacancy thus created. If the vacancy is not then and there filled, it may be filled at any r egular or special meeting called for BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 7 the purpose, but in any event, such vacancy shall be filled at the next annual meeting of the Association. Any Director whose removal has been proposed by the Owne rs shall be given an opportunity to be heard at the meeting.

5.08. Organizational Meeting . The organizational meeting of the Board of Directors elected at the annual membership meeting shall be held within 10 d ays of the annual meeting of the Association at such place as shall be fixed by the Direct ors at the annual meeting of the Association and no notice shall be necessary to the Board of Directo rs in order legally to constitute such meeting, provided of the whole Board shall be present.

5.09. Regular Meetings . Regular meetings of the Board of Directors may be held at s uch time and place as shall be determined, from time to time, by a majority of the Directors, but at least one such meeting shall be held during each fiscal year. T he annual organizational meeting of the Board shall be considered a regular meeting. Notice of re gular meetings of the Board of Directors other than the organizational meeting shall be given to each Director, personally, or by mail, telephone, or telegraph, at least three days prior to the day named for such me eting.

5.10. Special Meetings . Special meetings of the Board of Directors may be called b y the President or the Secretary on three days notice to each Director , given personally, or by mail, telephone or telegraph, which notice shall state the time, place ( as hereinabove provided), and

y the President or the Secretary on three days notice to each Director , given personally, or by mail, telephone or telegraph, which notice shall state the time, place ( as hereinabove provided), and purpose of the meeting. Special meetings of the Board of Direct ors shall be called by the President or Secretary in like manner and on like notice on the written request of an y Director.

5.11. Waiver of Notice . Before or at any meeting of Board of Directors, any Direc tor may, in writing, waive notice of such meeting, and such waiver shall be dee med equivalent to the giving of such notice. Attendance by a Director at any meeting of the Board shall be a waiver of notice by him of the time and place thereof. If all the Direct ors are present at any meeting of the Board, no notice shall be required and any business may be transacted at such meetin g.

5.12. Conduct of Meetings . At all meetings of the Board of Directors, the President, or in his absence, the Vice President, or in his absence a Chairman chos en by a majority of the Directors present, shall preside. The Secretary of the corporati on shall act as Secretary of the Board of Directors. In case the Secretary shall be absent f rom any meeting, the chairman may appoint any person to act as Secretary of the meeting.

5.13. Board of Director’s Quorum . At all meetings of the Board of Directors, a majority of the Directors shall a quorum for the transaction of business, and the acts of the majority of the Directors present at a meeting at which a quorum is present s hall be the acts of the Board of Directors. If, at any meeting of the Board of Directors there be less than a quorum present, the priority of those present may adjourn the meeting from time to time, without notice other than

Board of Directors. If, at any meeting of the Board of Directors there be less than a quorum present, the priority of those present may adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum is obtained.

5.14. Fidelity Bonds . The Board of Directors may require that all officers and e mployees of the Association handling or responsible for Association finds shall f urnish adequate fidelity bonds. The premiums on such bonds shall be paid by the Association.

BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 8 5.15 Compensation . No member of the Board of Directors shall receive any compensation for acting as such.

5.16. Actions Without a Meeting . Notwithstanding any other provisions of these Bylaws, any action required or permitted to be taken at a meeti ng of the Board of Directors may be taken without a meeting if a consent in writing, setting for th the action so taken, is signed by all of the members of the Board of Directors. Such consent shall have the same force and effect as a unanimous vote at the meeting.

ARTICLE VI OFFICERS 6.01. Designation . The officers of the Association shall be a President, a Vice President, a Secretary, a Treasurer, and an Assistant Secretary, all of whom shall be elected by the Board of Directors. Any Director may hold a position as officer of the As sociation and any person may hold two or more offices, except that the President shall not also be Secretary.

6.02. Election of Officers . The officers of the Association shall be elected annually by the Board of Directors at the organizational meeting of each new Board of Directors and shall hold office at the pleasure of the Board of Directors.

rs of the Association shall be elected annually by the Board of Directors at the organizational meeting of each new Board of Directors and shall hold office at the pleasure of the Board of Directors.

6.03. Removal of Officers . Upon an affirmative vote of a majority of the Members of the Board of Directors, any officer may be removed, either with or without cause, and his or her successor elected at any regular meeting of the Board of Direc tors, or at any special meeting of the Board of Directors called for such purpose.

6.04. President , The President shall be the chief executive officer of the As sociation. He shall preside at all meetings of the Association and have all of the general powers and duties which are usually vested in the office of president of an associati on, including, without limitation, the power to appoint committees from among the Owners t o assist in the conduct of the affairs of the Association. The President shall sign cert ificates of membership, any deeds, mortgages, bonds, contracts, leases, or other instruments which the Boar d of Directors has authorized him to execute, except in cases where the signing and execution thereof has been expressly delegated by the Board of Directors to some other of ficer or agent of the Association, or is required by law to be otherwise signed and executed. The Pr esident shall not have the power to bind the Association to any employment agreement on behal f of the Association unless such employment agreement has been expressly approved and authorized in advance by resolution of the Board of Directors. In the event that any such e mployment agreement provides for the Association employing any person who, at the time of such employment or at any time

n advance by resolution of the Board of Directors. In the event that any such e mployment agreement provides for the Association employing any person who, at the time of such employment or at any time during such employment, is an officer of the Association, then no prov ision of such contract purporting to amplify the authority of such officer beyond the authorit y set forth in these Bylaws shall be valid or effective unless these Bylaws are amended in a manner consistent with such employment agreement. The mere signing of such an employment ag reement on behalf of the Association and its approval at a meeting of the Board of Direc tors or the Association shall not constitute an amendment of those Bylaws. In the event any such em ployment agreement BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 9 (whether or not these Bylaws be amended incident thereto) limi ts or qualifies the authority of any such officer in a manner inconsistent with these Bylaws or imposes on such officer duties not provided for under these Bylaws, then the provisions of such employment agreem ent limiting or qualifying such authority and imposing such duties shall be valid and effective notwithstanding any Inconsistency between the provisions of the employm ent agreement and the provisions of these Bylaws.

6.05. Vice President . The Vice President shall have the power and authority to perform all functions and duties of the President, in the absence of the Pres ident, or his or her inability for any reason to exercise such powers and functions or perform such duti es, and shall also perform any duties he is directed to perform by the President or the Board of Directors.

6.06. Secretary . The Secretary shall: (a) keep all the minutes of all meetings of the Boa rd

s, and shall also perform any duties he is directed to perform by the President or the Board of Directors.

6.06. Secretary . The Secretary shall: (a) keep all the minutes of all meetings of the Boa rd of Directors and the minutes of all meetings of the Association i n books provided for that purpose; (b) see that all notices are duly given in accordance wit h the provisions of these.

Bylaws or as required by law; (c) be custodian of the Board of Di rectors’ and Association’s records and books; (d) keep a register of the post office address of each Owner; (e) keep records of and send notices to mortgages as required by these Bylaws and the Restrictive Covenants; (f) sign with the President all certificates of membership whic h may be approved by the Board of Directors; and (g) in general, perform all the duties incident t o the office of Secretary as may be assigned to him by the President or by the Board of Directors . The Secretary shall compile and keep up to date at the principal office of the Association a complet e list of Members and their last known addresses as shown on the records of the Association. Such l ist shall also identify opposite each Member’s name the property interest in the community ow ned by such Member.

Such list shall be open to inspection by Members and other persons lawf ully entitled to inspect the same at reasonable times during regular business hours. The addre ss of each member shown in such list shall be the address to which all notices shall be sent.

6.07. Treasurer . The Treasurer shall have responsibility for Association funds and be responsible for keeping full and accurate accounts of all receipts and disbursements in books belonging to the Association; and be responsible for the deposit of al l moneys and other valuable

and be responsible for keeping full and accurate accounts of all receipts and disbursements in books belonging to the Association; and be responsible for the deposit of al l moneys and other valuable effects in the name, and to the credit, of the Association in such de positories as may from time to time be designated by the Board of Directors. The Treasure r shall have the power to perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or Board of Directors and shall have the power to make disbursements of Association funds in the ordinary course of business provi ded, however, that a resolution of the Board of Directors shall be required for any disbur sements made for an amount in excess of $1,000.00.

6.08. Additional Officers . Officers in addition to the President, Vice President, Secretary, and Treasurer may be appointed by the Board of Dir ectors and shall be determined from time to time by the Board by resolution not inconsistent wit h these Bylaws. The Assistant Secretaries as thereunto authorized by the Board of Directors may sign, with the President, all certificates of membership the issue of which have been authorized b y resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the discharge of their duties, provide a fidelity bond in such sums and with such sureties as the Pre sident or Board of BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 10 Directors shall determine, the cost of which shall be paid by the Association. The Assistant Treasurers and Assistant Secretaries, in general, shall perfor m such duties as shall be assigned to

AGE 10 Directors shall determine, the cost of which shall be paid by the Association. The Assistant Treasurers and Assistant Secretaries, in general, shall perfor m such duties as shall be assigned to them by the Treasurer or the Secretary, respectively, or b y the President or the Board of Directors.

6.09. Vacancies . A vacancy in any office because of the death, resignation, removal , disqualification, or otherwise of the officer previously filling such office, may be filed by the Board of Directors for the unexpired portion of the term.

ARTICLE VII INDEMNIFICATTON OF OFFICERS AND DIRECTORS 7.01. Indemnification of Officers and Directors . The Association shall indemnify any person who was or is a party, or is threatened to be made a part y to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, adminis trative, or investigative by reason of the fact that he is or was a Director, officer, c ommittee member, employee, servant, or agent of the Association against expenses (including attorney’s fee s, judgments, fines, and amounts paid in settlement) actually and reasonably incurred by hi m in connection with such action, suit, or proceeding if it is found and determined by the Board or a Court that he (a) acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Association, or (b) with respect to any cri minal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by settlement, or upon a plea of Nolo Contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith or in a m anner which he reasonably

r proceeding by settlement, or upon a plea of Nolo Contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith or in a m anner which he reasonably believed to be in, or not opposed to, the beat interests of the Association, or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct wa s unlawful.

7.02. Treatment of Indemnification Expenses; No Indemnification of Members . All liability, loss, damage, costs, and expense incurred or suffered by t he Association by reason or arising out of or in connection with the foregoing indemnification provis ions shall be treated and handled by the Association as common expenses, provided however, that nothing contained in this Article shall be deemed to obligate the Association to indemni fy any Member or Owner, who is or has been a Director, officer, committee members, or noncompe nsated agent of the Association, with respect to any duties or obligations assumed or lia bilities incurred by him under and by virtue of the Restrictive Covenants as a Member of the Association or owner of a lot covered thereby.

7.03. Terms of Indemnification . The rights of indemnification herein provided may be insured against by policies maintained by the Association; shall be severable; shall not affect any other rights to which any Director, officer, committee member, e mployee, servant, or agent may now or hereafter be entitled; shall continue as to a person who has ce ased to be such Director, officer, committee member, or agent; and shall inure to the bene fit of the heirs, executors, and administrators of such a person. Nothing contained herein shall aff ect any rights to

e such Director, officer, committee member, or agent; and shall inure to the bene fit of the heirs, executors, and administrators of such a person. Nothing contained herein shall aff ect any rights to indemnification to which Association personnel, other than members of the Board of Directors, BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 11 officers, committee members, or noncompensated agents, may be entit led by contract or otherwise under law.

7.04. Advancement of Expenses . Expenses in connection with the preparation and presentation of a defense to any claim, action, suit, or proceeding of the characters described in this Article may be advanced by the Association prior to final di sposition hereof upon receipt of an undertaking by or on behalf of the person who may be entitled to indem nification, secured by a surety bond or other suitable insurance issued by a company authorize d to conduct such business in the State of Texas, to repay such amount if it is ulti mately determined that he is not entitled to indemnification under this Article.

ARTICLE VIII OBLIGATIONS OF THE HOMEOWNERS 8.01. Assessments . All Owners shall be obligated to pay the assessments imposed by the Association to meet the expenses of the Association and all asses sments shall be levied in accordance with the Declaration. A Member shall be deemed to be in good standing and entitled to vote at any annual or special meeting of Members, within the meaning of these Bylaws, if and only if the Member has fully paid all assessments made or l evied against him. No diminution or abatement of assessments shall be allowed or claimed for inc onveniences or discomfort arising from the making of repairs or improvements to the Common Areas or f rom any action taken to

diminution or abatement of assessments shall be allowed or claimed for inc onveniences or discomfort arising from the making of repairs or improvements to the Common Areas or f rom any action taken to comply with any law, ordinance, or order of a governmental authority.

8.02. Maintenance and Repair . Each Owner, at his expense, shall comply strictly with the Restrictive Covenants in the construction of any building and other i mprovements on such Owner’s property, including, without limitation, any provision therei n requiring prior approval by the Architectural Control Committee established under the Rest rictive Covenants. Each Owner shall also keep his property in good repair and in a clean and sa nitary condition and shall do all redecorating, painting, varnishing, and other activities or undert akings which may from time to time be necessary to maintain the good appearance and condit ion thereof and shall maintain and care for all trees, plants, or foliage on such Owner’ s property except for such items located in areas maintained by the Association, all in accordance with the R estrictive Covenants.

8.03. Damage to Common Areas . Each member and any lessee of any member shall be liable to the Association for any damage to property of the Associ ation which may be sustained by reason of the negligence or intentional misconduct of such person o r of his family, guests, or invitees. If the property, the ownership or leasing of which entit led the owner or lessee thereof to use Association property, is owned or leased jointly or in common, the l iability of all such joint or common Owners or lessees shall be joint and several. The amount of such damage may be assessed, without limitation, against such person’s real and personal property, including the

all such joint or common Owners or lessees shall be joint and several. The amount of such damage may be assessed, without limitation, against such person’s real and personal property, including the leasehold estate of any lessee or the lessor of such lessee, a nd may be collected as provided in the Restrictive Covenants for the collection of assessments.

8.04. Mechanic’s Lien . Each owner agrees to indemnify and to hold each of the other Owners harmless from any and all claims of mechanic’s lien f iled against the Common Areas for BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 12 labor, materials, services, or other products incorporated in the Owne r’s property. in the event suit for foreclosure is commenced, then within 10 days thereafter such Owner shall be required to deposit with the Association cash or negotiable securities eq ual to double the amount of much claim plus interest at the rate of 10 percent per annum for one y ear together with a sum equal to 10 percent of the amount of such claim but not less than $150.00, which latter sum may be used by the Association for any costs and expenses incurred, including a ttorney’s fees. Except as is otherwise provided, such sum or securities shall be held by the Ass ociation pending final adjudication or settlement of the litigation. Disbursement of such fi nds or proceeds shall be made to insure payment on account of such final judgment or settlement. An y deficiency, including attorney’s fees, shall be paid forthwith by the subject owner, and hi s failure to so pay shall entitle the Association to make such payment, and the amount thereof shall be a debt of the Owner to the Association. The Owner shall be liable to the Association for t he, payment of interest at the

entitle the Association to make such payment, and the amount thereof shall be a debt of the Owner to the Association. The Owner shall be liable to the Association for t he, payment of interest at the highest rate permitted by applicable law an all such sums pai d by the Association until the date of repayment by such Owner.

8.05. General . Each Owner shall comply strictly with the provisions of the Res trictive Covenants, the Articles, these Bylaws, and the Rules, and amendments a nd supplements thereto.

Each Owner shall always endeavor to observe and promote the general w elfare of and the purposes for which the Association was established.

8.06. Use of Property . Each Owner shall comply strictly with the obligations imposed on such Owner and the restrictions placed on such Owner’s property or int erest in the community under the Restrictive Covenants. If any Owner, the Architectural Control committee, as defined in the Restrictive Covenants, or the Association, acting through its Board of Directors, believes an Owner is in violation of the Restrictive Covenants, complaints may be lodged and abatement of the violation may be obtained through any and all procedures allowed under the Restrictive Covenants.

8.07. Use of Common Areas or the Association’s Property . The Owners may use the Common Areas, the facilities, and the Association’s property in ac cordance with the terms of the Restrictive Covenants and the purpose for which they were intended wit hout hindering or encroaching upon the lawful rights of the other Owners, and may, in accordance with the Restrictive Covenants, delegate his or her rights to use such C ommon Areas and facilities to members of his immediate family, his tenants, contract purchase rs, and guests, subject to these Bylaws and the Rules.

Covenants, delegate his or her rights to use such C ommon Areas and facilities to members of his immediate family, his tenants, contract purchase rs, and guests, subject to these Bylaws and the Rules.

ARTICLE IX AMENDMENTS TO BYLAWS 9.01. Amendment to Bylaws . These Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by a vote totaling more than two-thirds of the eligible votes entitled to be cast by record owners present in person or by proxy, but in no event less than 51 percent of the total eligible votes entitled to be cast by all record Ow ners in the Association, as specified in the Restrictive Covenants and the Articles. An Owner whose voting r ights have been suspended under the Declarations shall not be entitled to vote.

BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 13 ARTICLE X MORTGAGES 10.1. Notice to Association . An Owner who mortgages his property which is subject to the Declaration shall notify the Association through the Board of Directors, or any representative of the Board of Directors authorized for such purpose, giving the name and address of his mortgagee. The Association shall maintain records of such information.

10.2. Notice of Unpaid Assessments . The Association shall, at the request of a mortgagee, report any unpaid assessments due from the Owner.

ARTICLE XI COMPLIANCE 11.01. Compliance . These Bylaws are set forth to comply with requirements of the Texas Non-Profit Corporation Act. If any of these Bylaws conflict with the provisions of said Act, it is hereby agreed and accepted that the provisions of the Act will a pply and govern. In the event of any conflict between the Bylaws and the Restrictive Covenants , the provisions of the Restrictive Covenants will govern.

ARTICLE XII NON-PROFIT ASSOCIATION

Act will a pply and govern. In the event of any conflict between the Bylaws and the Restrictive Covenants , the provisions of the Restrictive Covenants will govern.

ARTICLE XII NON-PROFIT ASSOCIATION 12.01. Non-Profit Association . This Association is not organized for profit. No Member, member of the Board of Directors, or person from whom the Associ ation may receive any property or funds shall receive or shall be lawfully entitled to r eceive any pecuniary profit from the operation thereof, and in no event shall any part of the funds or assets of the Association to be paid as salary or compensation to, or distributed to, or inure to the be nefit of any member of the Board of Directors; provided, however, (a) that reasonable compens ation may be paid to any Member while acting as an agent or employee of the Association for services rendered in effecting one or more of the purposes of the Association, and (b) that any member of the Board of Directors may, from time to time, be reimbursed for his act ual and reasonable expenses incurred in connection with the administration of the affairs of the Association.

ARTICLE XIII REGISTERED OFFICE AND AGENT 13.01. Registered Office and Agent . The initial office for the transaction of business of this Association shall be Shady Oaks II Homeowner’s Association, Inc., 6300 Ridglea Place, Suite 824, Fort Worth, Texas 76116, and the initial Registered Agent shal l be James R. Harris.

The Registered Agent may resign upon delivery of written notice to the Associat ion.

BYLAWS OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 14 ARTICLE XIV TRANSACTIONS WITH MEMBERS, DIRECTORS AND OFFICERS 14.01. Transactions with Members, Directors, and Officers . The Association may

OF SHADY OAKS II HOMEOWNER’S ASSOCIATION, INC. – PAGE 14 ARTICLE XIV TRANSACTIONS WITH MEMBERS, DIRECTORS AND OFFICERS 14.01. Transactions with Members, Directors, and Officers . The Association may enter into contracts or transact business with one or more of its D irectors, officers, or Members, or with any firm of which one or more of its Directors, office rs, or Members are members, or with any corporation, association, company, organization, or entity in whi ch one or more of its Directors, officers, or Members are directors, officers, truste es, shareholders, beneficiaries, or are otherwise interested. In the absence of fraud, such contract or trans action shall not be invalidated or in any way affected by the fact that such Directors, offic ers, or Members having such adverse interest may have been necessary to obligate the Association upon such contract or transaction.

ARTICLE XV EXECUTION DOCUMENTS 15.01. Execution of Documents . The persons who shall be authorized to execute any and all contracts, documents, instruments of conveyance or encumbrances, inc luding promissory notes, shall be the President, Vice President, and the Secretary or any Assistant Secretary of the Association.

ARTICLE XVI ABATEMENT AND ENJOINMENT OF VIOLATIONS BY OWNERS 16.01. Abatement and Enjoinment of Violations by Owners . The violation of any rule or regulation promulgated by the Board of Directors, or the breach of any Bylaw, or the breach of any provision of the Restrictive Covenants, shall give the Board of Directors the right, in addition to any other rights set forth therein, (a) to enter the property in accordance with the provisions of the Restrictive Covenants, and remove any person, structure, thing, or condition

ght, in addition to any other rights set forth therein, (a) to enter the property in accordance with the provisions of the Restrictive Covenants, and remove any person, structure, thing, or condition that may exist therein contrary to the intent and meaning of the provisions thereof; without being deemed guilty in any manner of trespass to expel, remove, and put out s ame, using such force as may be necessary in so doing, without being liable to prosecution or in da mages therefor, and to charge all expenses thereof, if any, to the defaulting owner; a nd (b) to enjoin, abate, or remedy by appropriate legal proceedings, either at law or in equity, the continuance of any breach, and to recover from such owner all its expenses and costs in connection the rewith, including, without limitation, attorneys fees and court costs.

ARTICLE XVII NOTICES 17.01. Notices . It shall be the responsibility of any person or entity who is a n Owner to furnish to the Secretary of the Association such owner’s mailing a ddress. Upon receipt of the Owner’s mailing address, the Secretary of the Association shal l thereafter send to the Owner all notices required hereunder. All notices to Members of the Associati on shall be given by delivering the same to each Owner in person or by depositing the no tices in the U.S. mail, postage prepaid, addressed to each owner at the address last give n by each Owner to the Secretary of the Association.

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