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BY-LAWS OF SADDLEBROOK ESTATES
PROPERTY OWNERS ASSOCIATION, INC.
(AN ARKANSAS NON-PROFIT CORPORATION)

ARTICLE I.
NAME

1.1 Name. The name of the organization shall be SADDLEBROOK ESTATES PROPERTY OWNERS ASSOCIATION, INC., hereinafter called “Association”.

ARTICLE II.
PURPOSE AND OWNER OBLIGATION

2.1 Purpose. The purpose for which this Non-Profit Association is formed is to govern and maintain the common areas for the mutual benefit of the property owners within the Saddlebrook Estates Addition to the City of Searcy, Arkansas, which property is more particularly described in the respective Bill of Assurance and Covenants Agreement filed for record with the Circuit Clerk and Ex-Officio Recorder of White County, Arkansas, reference to which is hereby made.

2.2 Owner Obligation. All present or future owners of lots within the Saddlebrook Estates Addition to the City of Searcy are subject to the regulations set forth in these By-laws. The mere acquisition of property within the Addition will signify that these By-laws are accepted, ratified, and will be strictly followed.

ARTICLE III.
DEFINITIONS AND TERMS

3.1 The following words, when used in these By-Laws shall have the following meaning:

a. “By-Laws” shall mean and refer to this document and all declarations and bylaws contained herein.

b. “Common Properties” shall mean all real property, personal property and any improvements thereon, such as medians, signs, entry ways and the like, owned, leased or hereafter acquired by the Association. Common Properties
arc for the exclusive common use and enjoyment of the Members.

c. “Declaration” shall mean and refer to the Plat and Bill of Assurance and Covenants Agreement for Saddlebrook Estates Addition of White County, Arkansas as reflected upon a plat of said subdivision filed on December 20, 2007 in the records of White County, Arkansas, in the office of the Circuit Clerk and Ex-Officio Recorder of White County, Arkansas and any amendments thereto or hereafter made.

d. “Developer” shall mean and refer to Lewis-Charton Properties, Inc.

e. “Lot” means any numbered Lot designated on the Plat of the Subdivision, except as may be herein below expected.

f. “Member” shall mean and refer to all those persons or entities who arc members of the Association as provided herein.

g. “Owner” shall mean and refer to the record owner, whether one or more persons or entities, of the fee simple title to any Lot subject to these By-Laws, except that such term shall not mean Developer regardless of whether Developer has a fee simple interest in any Lot, but excluding those having such interest merely as security for the performance of an obligation.

h. “Plat” means the plat of Saddlebrook Estates Addition to the City of Searcy, in White County, Arkansas.

i. “Properties” shall mean and refer to all Lots in the Subdivision.

j. “SERC” shall mean and refer to the Saddlebrook Estates Architectural Review Committee.

k. “Subdivision” shall mean and refer to the Saddlebrook Estates Addition to the City of Searcy, in White County, Arkansas, as per plat on file in the office of the Circuit Clerk, and Ex Officio Recorder of the White County, Arkansas.

l. “Association” shall mean and refer to the Saddlebrook Estates Property Owners Association, (an Arkansas non-profit corporation).

ARTICLE IV.
MEMBERSHIP AND VOTING RIGHTS OF THE ASSOCIATION

4.1 Membership. Any person or persons, upon becoming the record title owner of a lot within the Saddlebrook Estates Addition to the City of Searcy, Arkansas, as a consequence of such ownership, shall, individually, or if more than one, collectively, become the holder of a membership in the Association and, consequently, be subject to these Bylaws. Such membership shall terminate, without formal action by the Association at any time such person ceases to be the record title holder of a lot within the said Addition, such termination to be deemed a resignation by such member. Such termination shall not serve to relieve or release any such former owner of or owners from any liability or obligation incurred under or in any way connected with the Association during the period of such ownership and membership in this Association 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 or owners arising out of or in any way connected with such ownership and membership in the Association and the covenants and obligations incident thereto. No certificates of stock or membership shall he issued by the Association to any member, but the Board of Directors, if it so elects, may issue one membership card per lot to the owners of any such lot within the Addition. Such membership card shall be surrendered to the Secretary of the Association whenever ownership of the lot within the Addition designated thereon is terminated.

4.2 Voting. Members shall be all those persons or entities as defined in § 4.1 Except as otherwise provided herein, the record Owner (or record Owners as the case may be) of any Lot shall be entitled to one (1) vote for each Lot in which said Owner or Owners hold the interest required for membership on all matters which may properly come before the membership of the Association. If more than one individual is the owner of a single membership in the Association, the following rules shall govern the voting entitlement of said membership:

(A) If only one such owner votes, such act binds all individual owners of the membership;

(B) If two or more owners of a single membership vote, the membership vote shall be divided on a pro rata basis.

4.3 Majority of Members. As used in these By-laws, the term “majority of members” shall mean those members with 51% of the votes entitled to be cast.

4.4 Quorum. Except as otherwise provided in these By-laws, the presence in person or by proxy of a “majority of members” as hereinbefore defined, shall constitute a quorum.

4.5 Proxies. Votes may be cast in person or by proxy. Proxies must be filed with the Secretary before the appointed time of each meeting in such form as shall be acceptable to the Secretary of the Association. All proxies shall be in writing and shall be executed by all owners of the lot for which the proxy is delivered.

ARTICLE V.
ADMINISTRATION

5.1 Association Responsibilities. The owners of the lots constituting the Association shall have the responsibility of administering the Association and complying with its purposes through a Board of Directors to be elected as herein set forth.

5.2 Place of Meetings. All annual and special meetings of the Association shall be held at the principal office of the Association as set forth in the Articles of Incorporation or at such other suitable or convenient place as may be permitted by law and from to time fixed by the Board of Directors and designated in the notices of such meeting.

5.3 Annual Meetings. Annual meetings shall be held on the first Tuesday in January each year, beginning with the year 2011.

5.4 Special Meetings. It shall be the duty of the President to call a special meeting of the owners as directed by a resolution of the Board of Directors, or upon a petition signed by a least one-tenth of the owners of lots within the Addition and presented to the Secretary. The notice of any special meeting shall state the time and place of such a meeting and the purpose thereof. No business shall be transacted at a special meeting except as stated in the notice unless by consent of two-thirds of the owners present at such special meeting, either in person or by proxy.

5.5 Notice of Meetings. The Secretary shall mail notices of annual and special meetings to each member of the Association directed to his last known post office address as shown on the records of the Association by uncertified mail, postage prepaid, or by personal delivery of RIO notice to each lot owner. Such notice shall be mailed not less than ten (10) days nor more than twenty (20) days before the date of such meeting, and shall state the date, time and place of the meeting, and the purpose or purposes thereof. Any mortgagee of record, or its designee, shall be entitled to receive similar notices upon written request delivered to the Secretary of the Association. Any member may waive notice of any annual or special meeting by execution of an appropriate waiver of notice which shall he filed with the Secretary of the Association.

5.6 Adjourned Meeting. If any meeting of the owners cannot be organized because a quorum has not attended, the owners who are present, either in person or by proxy, may adjourn t he meeting from time to time until a quorum is obtained.

5.7 Order of Business. The order of business at all meetings of the members of the Association shall be as follows:

(A) Roll call

(B) Proof of notice of meeting or waiver of notice

(C) Reading of minutes of precceding meeting

(D) Reports of officers

(E) Reports of committees

(F) Election of directors

(G) Unfinished business

(H) New business

ARTICLE VI.
BOARD OF DIRECTORS

6.1 Initial Board of Directors. The initial Board of Directors shall be composed of Keri Lynn Lewis and Pamela Diane Charton who shall serve until their successors are duly elected. The initial Board of Directors shall resign when the Developer has conveyed 100% of the Lots or elects to transfer the responsibilities of the non-profit corporation to the Association and the Association holds the first annual Membership Meeting.

6.2 Election of Directors. Upon the end of the term or the resignation of the Initial Directors as set forth above in paragraph 6.1, the membership shall eleo the Board of Directors, which, unless a special meeting is held to have the first election, shall be held at the annual meeting of the membership.

6.3 Number and Tenure of Directors. The number of Directors to be elected, after the initial Directors, shall be five (5). The term for each Director shall be as follows: The Developer shall be entitled to fill one Director position for the Association for so long as the Developer, or Successor in interest to Developer, shall own any Lot within the Subdivision, and thereafter shall become a vacant Directors seat and tilled as described herein. The Developer will notify the Association of the selected individual. The remaining four Directors shall be seisstelaLfc211ov: One receiving the highest number of votes for Director shall serve a four (4) year term. The one receiving the next highest number of votes for Director shall serve a three (3) year term. The one receiving the next highest number of votes for Director shall serve a two (2) year term. The one receiving the lowest number of votes for Director shall serve a one (1) year term. Thereafter, the vacant Directors seat will be voted upon by the Members at its annual meeting and that Director will serve a three (3) year term. The Director to be appointed by the Developer without election shall not be subject to the voting requirements. Directors and Officers shall serve with no compensation.

6.4 Powers and Duties. The Board of Directors shall have the powers and duties necessary for the administration of the affairs of the Association and for the operations and maintenance of the common areas maintained by the Association. The Board of Directors is authorized to do such further acts and things as are directed to be done by the owners of lots within the Addition or members of the Association.

6.5 Other Powers and Duties. The Board of Directors shall additionally have the following duties:

(A) To s, conditions, restrictions, uses, limitations, obligations and all other provisions set forth in the Declaration.

(B) To establish, make, and entbrce compliance with rules necessary for the orderly operation and use of the common areas controlled by the Association, if any. To the extent that the Board of Directors shall make such rules, a copy of such rules and regulations as may be adopted shall be delivered or mailed to each member promptly upon the adoption thereof

(C) To keep in good order, condition and repair all improvements located upon the common areas and all items of personal property used in the enjoyment of the common areas.

(D) To insure and keep insured all insurable improvements and personal property used in conjunction therewith which may be located upon the common areas in an amount equal to their maximum replacement value, provided that the Board of Directors may elect to forego insurance on any such improvement in the absolute discretion of the Board.

(E) To fix, determine, levy and collect assessments to be paid by each of the owners of lots within the said Addition, and by a majority vote of the Board, to adjust, decrease, or increase the amount of the annual or monthly assessments, subject to the provisions of the Declaration; to levy and collect special assessments in order to meet increased operating or maintenance expenses or costs, and additional capital expenses. All assessments shall be in itemized statement form and shall set forth in detail the various expenses for which the assessments are being made.

(F) To collect delinquent assessments by suit or otherwise, and to enjoin or seek damages from any owner as provided in the Articles or these Bylaws.

(G) To protect and defend common areas from loss and damage by suit or otherwise.

(H) To borrow funds in order to pay for any required expenditure or outlay; to execute all such instruments evidencing such indebtedness which shall be the several obligations of all of the owners; provided that any such borrowing may he authorized only upon the four-tilths vote of the Board of Directors.

(I) To enter into contracts within the scope of their duties and powers.

(J) To establish a bank account for the common treasury and for all separate funds which are required or may he deemed advisable by the Board of Directors.

(K) 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 of a lot within the Addition, and to the extent deemed advisable, or upon the request of two-thirds of the owners of lots within the Addition, to cause a complete audit of the books and accounts by a competent accountant, once each year.

(L) To meet at least once each year or more often as may be deemed appropriate by the Board of Directors.

(M) To designate the personnel necessary for the maintenance and operation of the common areas.

(N) In general, to carry on the administration of the Association and to do all those things necessary and reasonable in order to carry out the purposes for which the Association is fornied.

(O) To sell real and personal property which may be acquired by or conveyed to the Association upon the unanimous vote of the Board of Directors of the Association; provided, however, that after such vote, the membership shall be given written notice mailed by first class mail to each member of such proposed sale, and the membership shall have twenty (20) days from and after the date of mailing of such notification within which time to call a special meeting of the membership, at which time the members may by a two-thirds vote of the membership overrule the decision of the Board of Directors to cause the sale or transfer of such real property. The Board of Directors shall have the unilateral authority to authorize by a majority vote the sale or other disposition of any personal property acquired by or used in connection with the operations of the Association, which such sale may he consummated by the Association after such vote without notice to the general membership.

6.6 Resignation and Removal. Any member of the Board of Directors may resign by giving notice to the Secretary, and any director may be removed with or without cause by a majority of the owners, and a successor may then and there be elected to complete the unexpired term of the director so removed. Any director whose removal has been proposed by the owners shall be given notice of and an opportunity to be heard at the meeting.

6.7 Vacancies. Vacancies on the Board of Directors caused by any reason other than removal of a director by a vote of the Association, shall be filled by a vote of the majority of the remaining directors, even though they may constitute less than a quorum. Each director so elected shall serve the remaining term of his predecessor.

6.8 Meetings. Notice of regular and special meetings to the Board of Directors shall be given to each director personally, by mail or telephone, at least three (3) days prior to the date fixed for such meeting. Special meetings of the Board of Directors may be called by the President or Secretary or upon the written request of at least two (2) directors.

6.9 Waiver of Notice. Before or at any meeting of the Board of Directors, any director may, in writing, waive notice of such meeting, and such waiver shall be deemed equivalent to giving of such notice. Attendance by a director at any meeting of the Board shall be and constitute a waiver of notice by him of the time and place thereof If all directors are present at any meeting of the Board, no notice shall be required, and any business may be transacted at such meeting.

6.10 Informal Action. The Board of Directors is expressly empowered to act informally upon any matter without the necessity of a formal meeting or notice thereof if all directors shall agree. Any such action shall be evidenced by minutes reflecting the action of the Board of Directors manually executed by each member of the Board of Directors.
6.11 Board of Directors Quorum. A majority of the directors shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors, there is less than a quorum present, the majority of those present may adjourn the meeting from time to time.

ARTICLE VII.
OFFICERS

7.1 Designation of Officers. The officers of the Association shall be a President and Secretary-Treasurer and such Vice-Presidents or other officers as the Board of Directors shall deem appropriate, all of whom shall be elected by the Board of Directors.

7.2 Election of Officers. The officers of the Association shall be elected by the Board of Directors and shall hold office at the pleasure of the Board.

7.3 Removal of Officers. Upon an affirmation vote of the majority of the members of the Board of Directors, any officer may be removed, either with or without cause, and his successor may be elected at any regular meeting or special meeting of the Board of Directors.

7.4 Duties of Officers. The officers of the Association shall have the following duties:

(A) President. The President shall be the chief executive officer of the Association and preside at all meetings of the Association and the Board of Directors. He shall have all the general powers and duties which are usually vested in the office of President of an Association, including, but not limited to, the power to appoint committees from amongst the owners to assist in the administration of the affairs of the Association.

(B) Secretary-Treasurer. The Secretary-Treasurer shall keep the minutes of all meetings of the Board of Directors and minutes of all meetings of the Association and shall have charge of such hooks and papers as the Board of Directors may direct and shall, in general, perform all duties incident to the office of the Secretary. The Secretary-Treasurer shall further compile and maintain a list of all members of the Association and such other matters relevant to the membership of the Association as the Board of Directors may direct. The Secretary-Treasurer shall further receive and deposit in appropriate bank accounts, all money of the Association and shall disburse the same as directed by resolution of the Board of Directors: provided, however, that a resolution of the Board of Directors shall not be necessary for disbursements made in the ordinary course of business conducted within the limits of the budget adopted by the Board of Directors, including, without limitation, authority to sign all checks, keep proper books of account, cause an annual statement of the Association books to be made at the completion of each fiscal year, prepare an annual budget and statement of income and expenditures to be presented to the membership at its regular annual meeting, and deliver a copy of the same to each of the members.

ARTICLE VIII.
INDEMNIFICATION OF OFFICERS AND DIRECTORS

8.1 Indemnification. The Association shall indemnify every director or officer, his heirs, executors and administrators against all loss, cost and expense, including attorneys fees, reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director or officer of the Association, except in matters of gross negligence or wilful misconduct. In the event of a settlement, indemnification shall be provided only in connection with such matters in which the Association is advised by counsel that the person to be indemnified has not been guilty of gross negligence or wilful misconduct in the perfbrmance of his duty as such director or officer in relation to the matter involved. The foregoing rights shall not be exclusive of other rights to which such director or officer may be entitled. All liability, loss. damage, cost and expense incurred or suffered by the Association in connection with the foregoing indemnification provision shall he treated and handled by the Association as an expense of the Association, provided, however, nothing contained in this Article shall be deemed to obligate the Association to indemnify any member or owner of a lot within the Addition who is or has been a director or officer of the Association with respect to any duties or obligations assumed or liabilities incurred by him under or by virtue of the Articles of Incorporation for the Association, the Declaration, or these By-laws as such member or owner. The Board of Directors of the Association is expressly authorized to purchase a policy or policies of director’s, officers’ and employees’ liability insurance as the Board of Directors of the Association may deem appropriate, the expense of which shall be properly chargeable as an operating expense of the Association.

ARTICLE IX
AMENDMENTS TO BY-LAWS

9.1 Procedure for Amendments. These By-laws may be amended by the Association at a duly constituted meeting for such purpose upon the vote of 66 2/3% of the members, as determined by ownership of Lots within the Subdivision, and not by number of members entitled to vote to such meeting. In no event shall the By-laws be amended to conflict with any provision of the Articles of Incorporation or the Declaration, and in the event of any such conflict, the provision of the Articles of Incorporation and/or the Declaration shall control.

ARTICLE X.
NON-PROFIT ASSOCIATION

10.1 Non-Profit Association. This Association is a non-profit corporation. No lot owner, member of the Board of Directors or person from whom the Association may receive any property of funds or shall receive or shall be lawfully entitled to receive any pecuniary gain or profit from the operation of the Association, and in no event shall any part of the funds or assets of the Association he paid as a salary or as compensation to, or distributed to or inure to the benefit of any member of the Board of Directors; provided, however, that reasonable compensation may be paid to any member while acting as an agent or employee of the Association for services actually rendered in effecting one or more of the purposes of the Association and that any member of the Board of Directors may, from time to time, be reimbursed for his actual and reasonable expenses incurred in connection with the administration of the affairs of the Association.

10.2 Residential Real Estate Management Association. The corporation is organized and operated for purposes of acquiring, building, managing and caring for the Saddlebrook Estates Addition to the City of Searcy, Arkansas, and in particular the common areas maintained for the benefit of the owners of property therein. It is intended that the Association shall at all times qualify as a residential real estate management association as that term is defined within the provisions of Section 528 of the Internal Revenue Code and the regulations thereunder.

ARTICLE XI.
EXECUTION OF INSTRUMENTS

11.1 Authorized Agents of Association. The President and Secretary-Treasurer of the Association shall be authorized to execute any and all instruments of conveyance, encumbrance or debt, including promissory notes, mortgages, security agreements and other instruments in the name of and on behalf of the Association upon resolutions of the Board of Directors of the Association for such purpose.

ARTICLE XII
PRINCIPAL OFFICE

12.1 Location of Principal Office. The principal office of the Association shall be located at 1221 Saddlebrook Dr., Searcy, AR 72143, or such other suitable and convenient place as shall he permitted by law and designated by the Board of Directors.