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2 The [Type text] [Type text] [Type text] TABLE OF CONTENTS HISTORY ARTICLE 1 CORPORATE IDENTIFICATION 1.1 Foundational Documents 1 1.1a Declaration of Protective Provisions (DPP). 1.1b. Articles of Incorporation. 1.1c. Rules and Regulations Governing ELRA and Enchanted Lake (Rules and Regulations). 1.2 Registered Office 1.3 Books and Records of Account 1.4 Execution of Instruments ARTICLE 2 MEMBERS 2.1 Categories 2.1a ELRA Members 2.1b ELRA Associate Members 2.1c Honorary Members 2.1d Organizational Members 2.2 Naming Usage 2.3 Responsibilities ARTICLE 3 BOARD OF DIRECTORS 3.1 General 3.2 Nomination Process 3.3 Term of Office 3.4 Powers 3.5 Death, Incapacity, or Resignation 3.6 Conflict of Interest ARTICLE 4 OFFICERS 4.1 General 4.2 President 1 Original Bylaws were amended by majority vote of General Membership Meeting on May 19, 2001 and Special Membership Meeting on February 15,

3 [Type text] [Type text] [Type text] 4.3 First Vice President 4.4 Second Vice President 4.5 Secretary 4.6 Assistant Secretary 4.7 Treasurer 4.8 Assistant Treasurer 4.9 President Emeritus ARTICLE 5 COMMITTEES 5.1 General 5.1a Executive Committee 5.1b Audit Committee 5.1c Nomination Committee 5.1d Operations Committee 5.2 Ad Hoc Committees 5.3 Times of Meetings ARTICLE 6 ELRA MEETINGS 6.1 Full Membership Meetings 6.1a Annual Meetings 6.1b Special Meetings 6.1c Voting and Quorum 6.2 Board of Director Meetings 6.2a Monthly Meetings 6.2b Action by Directors without a Formal Meeting 6.2c Quorum ARTICLE 7 FINANCES 7.1 Fiscal Year 7.2 Financial Transactions 7.3 Assessments 7.3a Annual Maintenance Assessments 7.3b Special Assessments 7.3c Watercraft Registration 7.3d Assessments for Lake Improvements 7.4 Failure to Pay 7.4a Discontinuance of Membership for Associate or Organizational Members 7.4b Suits 7.4c Liens 7.4d Collections at Sale 7.4e Extenuating Circumstances 7.5 Encroachments 7.6 Waiver 3

4 The [Type text] [Type text] [Type text] ARTICLE 8 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS ARTICLE 9 BYLAWS AMENDMENT ARTICLE 10 DISSOLUTION ARTICLE 11 PARLIMENTARY AUTHORITY 4

5 [Type text] [Type text] [Type text] ARTICLE 1 CORPORATE IDENTIFICATION 1.1 Enchanted Lake Residents Association (ELRA) is a non-profit corporation established, organized, and administered in accordance with the following documents: 1.1a Declaration of Protective Provisions (DPP). Enchanted Lake (also known as Ka elepulu Pond) (The Lake) and certain adjoining lots are subject to a Declaration of Protective Provisions, which was both amended and followed by a series of other Declarations of Protective Provisions and which was supplemented by a Supplemental Declaration of Protective Covenants and Supplemental Declaration No. 2 recorded at the Bureau of Conveyances of the State of Hawaii on December 23, 2016 as Document No. A (Collectively known as DPP). The DPP helps provide for the continued care, maintenance, repair and control of The Lake and the interests of the owners of the residential lots identified therein. The DPP allows the ELRA to establish and require payments of assessments from the owners of each of the lots specified in the DPP (Lakeside Lots) to help provide for the care, maintenance, and operation of the Lake. 1.1b. Articles of Incorporation. The ELRA was incorporated in Honolulu on October 29, It is a non-profit corporation organized under the laws of Hawaii and qualified as exempt from certain federal taxes under Section 501(c)(7) of the Internal Revenue Code. It is organized for the purposes of owning, managing, controlling and maintaining The Lake for boating, fishing and other recreational purposes, for the use and enjoyment of the owners of Lakeside Lots (Lakeside Owners). 1.1c. Rules and Regulations Governing ELRA and Enchanted Lake (Rules and Regulations). The Lake is private property owned by the ELRA. The Rules and Regulations have been established by the Board of Directors (BOD) of the ELRA, subject to amendment by the BOD from time to time. The purpose of these Rules and Regulations is to maximize Member use and enjoyment of lake-associated recreation, while minimizing possible harm to The Lake, annoyances and danger to others, to the extent reasonably possible. This is done by, among other things, protecting and regulating the use of the Lake, registration and operation of boats and all floating objects, imposing fines or other measures, minimizing or remediating pollution, regulating docks, swimming, fishing, boat ramps, lakeside vegetation, and ELRA activities. The BOD is the sole authority for enforcing these Rules and Regulations and for arbitrating, defining, and resolving any differences that may arise in the interpretation and application of these Rules and Regulations. 1.2 Registered Office. The principal or registered office of ELRA shall be the home address of the then current President of ELRA, or at such other location within the State of Hawaii, as the BOD shall determine. The mailing address shall be P.O. Box 1485, Kailua, Hawaii ELRA may have such other offices, within the State of Hawaii, as the BOD may designate or as the business of ELRA may require from time to time. The ELRA may also support a website and/or other social media sites for the benefit of its Members. The current ELRA website is: 5

6 The [Type text] [Type text] [Type text] 1.3 Books and Records of Account. ELRA shall keep correct and complete books and records of account, shall keep minutes of the proceedings of its Members and BOD, and shall keep at its registered office, or principal office in the State, a record of the names and addresses of its Members entitled to vote. Any Member or Member s agent or attorney may inspect all books and records of ELRA for any proper purpose at any reasonable time. 1.4 Execution of Instruments. Except as hereinafter provided or as required by law, all notes, deeds, leases, contracts, licenses, endorsements, powers of attorney, proxies, waivers, consents, returns, reports, applications, notices, mortgages and other instruments or writings of any nature, excepting checks (see 7.3), which require execution on behalf of the ELRA, shall be signed by (a) the President or a Vice President, and (b) one of the following officers: the Secretary, the Treasurer, and Assistant Treasurer. ARTICLE 2 MEMBERS 2.1 The categories of eligible Members of ELRA shall be as follows: 2.1a. ELRA Member. Owners of the Lakeside Lots as set out in the DPP and more specifically identified in Supplemental Declaration No. 2 of the DPP, shall automatically be considered for Membership in ELRA and shall remain Members until such time as their ownership of a Lakeside Lot ceases. Payment to ELRA of all regular and special maintenance assessments set by the BOD and authorized under the DPP, is a responsibility of these Members. ELRA Members, who are current with all of their assessments, may vote on all matters brought before ELRA Members, and may use the Lake, subject to all applicable Rules and Regulations. 2.1b. ELRA Associate Member. Owners of lakeside 2, Kaelepulu Wetlands Adjacent, or canal-side (Ka elepulu Canal and/or Hamakua Canal) residential lots that are not Lakeside Owners as set forth in the DPP, whose Membership the BOD has approved, and who have paid the required fees in full, may become Associate Members of ELRA as set forth below: 2.1b (1) Eligible Associates desiring to be an Associate Member of ELRA shall apply to the BOD by letter. If approved by the BOD, they shall agree to pay the prescribed regular maintenance assessments (prorated from the date that the BOD approves membership until the first full year assessment). 2.1b (2) Associate Members may remain Members so long as they wish, should they continue to own their residential lot that was originally approved by the BOD, abide by the 2 Certain lakeside lots on Akuila Place, parts of Akumu Street, Kiukee Place, and parts of Keolu Drive that may appear to be on the lake are actually abutting the Kaelepulu Wetlands. These wetlands are wildlife and bird sanctuaries that are privately owned. The lake may not be accessed through these wetlands without the owner s permission. Therefore, while owners of such lots are eligible for Associate Membership, access to the lake cannot be guaranteed. 6

7 [Type text] [Type text] [Type text] Rules and Regulations, and pay the annual maintenance assessments. Payment of any special assessments is voluntary for ELRA Associate Members. 2.1b (3) Associate Members of ELRA may participate in any lakeside activities, to include boating, fishing and recreational purposes, may use the Lake, subject to all applicable Rules and Regulations. They must pay the boat, kayak, and/or barge fee to operate in The Lake in accordance with the Rules and Regulations and violators are subject to such prescribed fines. 2.1b (4) Associate Members of ELRA are not eligible to vote nor may they serve on the BOD: however, they are encouraged to serve as non-voting Members on certain ELRA Committees as determined by the BOD from time to time. 2.1c. Honorary Members. Persons who desire to be Members, but whose property does not abut the lake, wetlands, or the canals may apply for Membership through a BOD Sponsor and may become Honorary Members upon the approval of the BOD. BOD approval will be based on the potential benefit their Membership will bring to The Lake or to ELRA. Honorary Members are not eligible to vote on ELRA related issues, nor may they serve on the BOD. Access to The Lake for these Honorary Members will be coordinated by the BOD Sponsor. The BOD will determine, from time to time but no more than annually, whether such honorary Membership should be continued. 2.1d. Organizational Members. Organizational Members are persons who belong to an organization that has entered into an agreement with ELRA and who are sponsored by that organization for use of the Lake. The ELRA and local organizations may enter into an agreement on use of the Lake in a way that enhances and benefits the care, maintenance and long-term viability of the lake. These agreements will describe, among other things, the rights, responsibilities, and obligations of the organization s Membership in ELRA and the amount and timing of regular or special maintenance assessments. The BOD and the organization must approve these agreements. 2.2 Unless the category of Membership is necessary to connote certain rights or privileges, all ELRA Members shall be referred to simply as Members 2.3 In addition to the various responsibilities inherent to each Membership category, all Members are responsible for the actions and activities of their family members and guests. Should Members (excepting Honorary who may not pass on their Membership) sub-let or rent their properties, they must ensure their renters are aware of the requirements to pay the boat, kayak, and/or barge fee to operate in the Lake. Importantly, Members are responsible for their renters acting in accordance with the Rules and Regulations of the Lake. ARTICLE 3 BOARD OF DIRECTORS 7

8 The [Type text] [Type text] [Type text] 3.1 The BOD shall consist of fourteen (14) active ELRA Members elected by the majority of a quorum of active ELRA Members at the Annual Meeting. 3.2 Nomination Process. A Nominations Committee selected by the BOD will work throughout the year to identify potential BOD Members. Nominations can be made two months prior to the Annual Meeting by providing the committee a Letter of Nomination signed by one or more active ELRA Members, together with a brief biography of the nominee. 3.2a Nominees must meet the following qualifications: Nominees must be an active ELRA Member and reside on the island of Oahu. Nominees must be current with all ELRA Assessments, both regular and special. Nominees should commit to attend a majority of the monthly Board Meetings. Nominees must have one-year gap if they have previously served on the BOD for three consecutive terms. Nominees should identify potential conflicts of interest with ELRA matters to the BOD at the time of nomination and be prepared to recuse themselves in relevant votes. 3.3 Term of Office. The term of office of an elected Director shall be three (3) years. The goal of the Nominations Committee is to stagger these terms so that there is always a core of experienced Members on the BOD. Directors may serve two (2) additional terms of three (3) years (for a total of nine years) but must retire after that third term. Individuals who have previously served as Director, but who have been off the BOD for a one-year period, may run again for a position on the BOD. 3.4 Powers. The BOD shall have the following powers, in addition to those expressly granted by applicable law in the State of Hawaii: 3.4a. To provide for the care, maintenance and operation of the Lake. 3.4b. To exercise any and all rights and remedies to enforce any obligations, prohibitions and restrictions contained in the DPP and assigned to ELRA, including without limitation the right to impose a fine against a Lakeside Lot Owner or a Member of ELRA and the right to suspend or bar of the use of the Lake by any person, including without limitation Lakeside Lot Owners, Members of ELRA, or any persons under them, including but not limited to family Members, tenants, guests, contractors or the like. 3.4c. To make rules and regulations consistent with law or the Articles of Incorporation for the operation of ELRA and regulating the use and care of the Lake. 3.4d. To authorize, create, delete, and amend the Rules and Regulations. At such time as the BOD feels it is warranted, but at least once every five (5) years, the BOD shall review, and amend, or update the Rules and Regulations. 3.4e. To directly control all general funds of ELRA. 8

9 [Type text] [Type text] [Type text] 3.4f. To acquire and dispose of property, real, administrative, logistical, or mixed. This will include consideration of design and approval of all structures that may encroach into The Lake. 3.4g. To establish such Annual Lake Maintenance Assessments, Special Assessments, late fees, penalties, and fines as it deems appropriate with respect to enforcement of the provisions of DPP and these by-laws, provided such penalties and fines are not inconsistent with public law or the provisions of these bylaws. The unpaid amount of such penalties and fines against any Lakeside Owners shall constitute a lien against his interest in his property. 3.4h. To appoint agents or employees of the ELRA, establish their role and responsibilities, fix salaries, require security of any of them for the performance of their duties, and to delegate to them by power of attorney or otherwise such power or authority, as it shall determine. These will include, but are not limited to: - Safety Officer - Assistant Safety Officer - Administrative Assistant 3.4i To conduct the ELRA Annual Meeting, Special Meetings and call for scheduled and special BOD meetings as deemed appropriate to conduct ELRA business. Further, to convene, at their discretion, in Executive Session with only Directors in attendance. 3.4j. And generally, to do any and every lawful act necessary or proper to carry into effect the powers, purposes and objectives of ELRA. 3.5 Death, Incapacity or Resignation of Director or Officer. In the event that a Director (a) dies, (b) resigns or (c) is physically or mentally unable to serve as a Director, as determined by a majority of the Board, for a period of more than three (3) months, a majority of the remainder of the Board may appoint a replacement, (consistent with paragraph 3.2a above) to serve until the next Annual Meeting. A Director appointed to fill a vacancy in this manner shall fill the term of the Director s predecessor in office and may stand for election to a full term at the next election. 3.6 Conflict of Interest. Any Director who has a conflict of interest shall disclose such conflict to the Board and shall refrain from voting on any matter on which he has a conflict. In the event of a failure to comply with the provisions of this section, the vote of such Director shall be nullified. ARTICLE 4 OFFICERS 4.1 Officers. The Officers of ELRA shall consist of a President, 1st Vice President, 2nd Vice President, Secretary, Assistant Secretary, Treasurer and Assistant Treasurer. The BOD shall elect all Officers during the first Board Meeting following the Annual Meeting. They will serve for 9

10 The [Type text] [Type text] [Type text] one (1) year or until their respective successors have been elected. The last serving President may be considered as President Emeritus and serve on the Board in an advisory status. 4.2 President. The President shall preside at all meetings of the Members and BOD. The President may call Special Meetings at his/ her discretion and may call Annual Meetings, as provided by these Bylaws. Subject to the directions and control of the BOD, the President shall: 4.2a Be in personal charge of the principal office of ELRA; 4.2b. Have the general management, supervision and control of all of the property, business and affairs of ELRA; 4.2c. Appoint and discharge all employees, representatives and independent contractors of ELRA, and fix their duties and compensation; 4.2d. Keep the BOD fully advised as to all of ELRA s business st Vice President. The 1st Vice President shall assume and perform all of the duties and exercise all of the powers of the President provided by these Bylaws or otherwise during the absence or disability of the President or whenever the office of President shall be vacant and shall perform all of the duties assigned by the BOD or the President nd Vice President. The 2nd Vice President shall assume and perform all of the duties and exercise all of the powers of the 1st Vice President during the absence or disability of the 1st Vice President and shall perform all other duties assigned by the BOD or President. 4.5 Secretary. The Secretary shall attend all meetings of the Members, the BOD and, if created, the Executive Committee, and shall record, or shall cause to be recorded, the proceedings thereof. The Secretary shall give notice, in conformity of these Bylaws, of meetings of Members and, where required, of the BOD. The Secretary shall perform all other duties incident to the Office of Secretary or that may be assigned by the President or BOD. 4.6 Assistant Secretary. The Assistant Secretary, if appointed, shall in such order as the BOD may determine, perform all of the duties and exercise all of the powers of the Secretary, as applicable, during the absence or disability, or upon delegation of certain responsibilities, and shall perform all of the duties assigned by the President, the Secretary, or BOD Treasurer. The Treasurer, except as the BOD may otherwise order and direct from time to time and subject to its control at all times shall: 4.7a. ELRA; Have custody of all the funds, notes, bonds and other evidences of property of 4.7b. Keep full and accurate books of account of ELRA s transactions and business, which shall be and remain the property of ELRA; 4.7c. Deposit or cause to be deposited in the name of ELRA, all monies or other valuable effects in such banks, trust companies or other depositories, as shall from time to time be designated by the BOD; 10

11 [Type text] [Type text] [Type text] 4.7d Pay out and disburse funds as directed by the BOD or is authorized by the Bylaws; 4.7e. Receive all monies and funds and sign all receipts and vouchers and endorse for collection or deposit all notes, checks, drafts and similar commercial instruments payable to ELRA or its order received for payments made to ELRA, and in the absence of specific instruments from the BOD may delegate this authority to an employee or independent contractor of ELRA; 4.7f. Make and render to the proper municipal, state, federal and other governmental officials, all exhibits, all returns and reports required by law; 4.7g. Make and render to the BOD such reports and financial statements as it may request; 4.7h. Upon request, present and exhibit to the Members of ELRA or to the Executive Committee all the books, accounts, records and evidence therefore kept by him; 4.7i. Perform all other duties incident to the office of Treasurer or which may be assigned by the President or the BOD. 4.8 Assistant Treasurer. The Assistant Treasurer, if appointed, shall in such order as the BOD may determine, perform all of the duties and exercise all of the powers of the Treasurer, as applicable, during the absence or disability, or upon delegation of certain responsibilities, and shall perform all of the duties assigned by the President, the Treasurer or the BOD. 4.9 President Emeritus. If desired, the President Emeritus may serve as an advisor (without vote) to the BOD. ARTICLE 5 COMMITTEES 5.1. The BOD will designate the following standing committees: 5.1a. The Executive Committee will consist of the President, First Vice President, Treasurer and Secretary. The President Emeritus may also participate, as appropriate. 5.1b. The Audit Committee will consist of three Directors with the Treasurer assisting as a non-voting Member. It shall be the responsibility of the Audit Committee to inspect and detail the Treasurer s accounts once each year and to report the results of said inspection in a written report to the BOD. 5.1c. The Nomination Committee will consist of two or more Directors and will nominate and qualify candidates and regulate, conduct and supervise all elections by ELRA Members. 11

12 The [Type text] [Type text] [Type text] 5.1d The Operations Committee will consist of two or more Directors. This committee shall be responsible for managing and enforcing The Lake related tasks of safety, maintenance, and security. Membership on this committee can be, and should be encouraged to be, made up of volunteer ELRA Members who are not Members of the BOD The creation of an ad hoc committee or the appointment of Members to such a committee shall be approved by a majority of the Directors in office at the time the action is taken. There shall be at least two Directors on each committee. Membership on these committees can be and is encouraged to be made up of ELRA Members who are not Members of the BOD Each committee shall meet at the convenience of a majority of its Members. ARTICLE 6 ELRA MEETINGS 6.1 Full Membership Meetings 6.1a. Annual Meetings. The Annual Meeting of the Members of ELRA shall be held in either September or October, as designated by the BOD. Notice for this Annual Meeting shall be given no less than 30 days in advance of said meeting date. The Annual Meeting is for the purpose of informing the ELRA Membership of on-going activities, approval of the annual budget, and for the election of the Directors of ELRA. (Hawaii Revised Statutes Section 414D-150, 414D-164, 414D-182, 414D-202, 414D-222, 414D-241 and 414D-242.) 6.1b. Special Meetings. Special Meetings may be called to address topics that are timesensitive in nature or are so topic specific (for example Bylaws approval) that it is best addressed in a dedicated meeting. Special Meetings may be held at any time upon the call of the President, the BOD, or should the President receive a petition signed by at least twenty five percent (25%) of the voting power of active ELRA Members. The Secretary shall give notice of the meeting to all Members at least ten (10) days before the date of the meeting. Only those matters that are within the purpose or purposes described in the notice of the meeting may be considered at a Special Meeting. 6.1c. Voting and Quorum. There will be one vote per Lakeside Lot, regardless of how many individuals appear on the deed. At any Annual or Special meeting, the presence in person or by written proxy of twenty five percent (25%) of all voting power, shall constitute a quorum. A quorum, once established, shall not be broken by the absence or withdrawal of one or more Members before the meeting is adjourned. However, maintenance of a quorum is required to conduct business, notwithstanding the use of a proxy. 6.2 Board of Director Meetings 6.2a. Monthly Meetings. The BOD usually meet once a month, however may schedule regular or special meetings to be held at other stated times and places. Special meetings of the 12

13 [Type text] [Type text] [Type text] BOD may be called by either the President of the Board or any three (3) Directors. The Board may alter the time and place for such meetings from time to time. The President, or the designated representative, shall give notice to BOD Members of every BOD meeting by or telephone not less than two (2) days prior to any such meeting. ELRA Members may attend the BOD meetings, however, they may not attend the Executive Sessions. 6.2b. Action by Directors Without a Formal Meeting. Should time-sensitive BOD decisions be required, discussion and decisions may take place via , electronically (various digital meeting-software), telephonic meetings or similar communications equipment, by means of which all persons participating in the meeting can hear each other at the same time. Any action required or permitted to be taken at any meeting of the Directors may be taken in this manner if all of the Directors sign a Written Consent setting forth the action taken or to be taken at any time before or after the intended effective date of the action. The consent shall be filed with the minutes of the Directors meetings, as the case may be, and shall have the same effect as a unanimous vote. 6.2c. Quorum. At any BOD meeting, a quorum of fifty percent (50%) plus one of BOD Members is required to conduct business. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the BOD. In the absence of a quorum, the President, or a majority of the Directors present, may adjourn the meeting from time to time without further notice until a quorum shall be had. BOD Members must be in attendance, in person or linked in telephonically /electronically, at the BOD meeting in order to vote. BOD Members who are absent cannot give another BOD Member a proxy to vote on their behalf. ARTICLE 7 FINANCES 7.1 Fiscal Year. The fiscal year of ELRA shall be July 1 through June 30 each year unless otherwise fixed by resolution of the BOD. 7.2 Financial Transactions. Two directors, or one director and the Administrative Assistant shall sign all bank checks and drafts issued on behalf of the ELRA, unless the Board determines otherwise 7.3 Assessments. 7.3a. Annual Maintenance Assessments. Annual Maintenance Assessments will be billed and paid annually. These assessments are mandatory for Lakeside Lot Owners and for Associate Members (who wish to maintain Membership). The amount of the Annual Maintenance Assessment shall be set by the BOD. 7.3b. Special Assessments. Special assessments may be levied by a majority vote of active ELRA Members who are present at any meeting whish announces the request for this vote. Funds derived from special assessments shall be used for such purposes as the BOD may direct. 13

14 The [Type text] [Type text] [Type text] 7.3c. Watercraft Registration. All watercraft used on The Lake must be registered with ELRA and meet the requirements of The Lake Regulations. Registration of boats, kayaks, barges, etc. will be conducted annually, usually in conjunction with the Annual Maintenance Assessment. 7.3d. Assessments for Lake Improvements. Any Members specially benefited by any improvements to The Lake requested by them in writing, or who themselves or by any persons under them, including but not limited to tenants, guests, contractors or the like, cause any damage to The Lake or appurtenances thereto which necessitate repairs or remediation, shall be liable for the cost of such improvements, repairs or remediation. 7.3 Failure to Pay Annual Maintenance Assessment or Special Assessments. In the event of a default or defaults in payment of any annual maintenance assessments and/or any special assessments required to be paid, the BOD may give a notice to the defaulting Member, stating the date of the delinquency, the amount of the delinquency, and making demand for payment thereof. If such delinquency is not paid within thirty (30) days delivery of the notice, the Board may: 7.3.a. Discontinue ELRA Membership of Associate or Organizational Members who are in arrears. 7.3b By suit or suits, enforce such assessment obligations. Each such action must be authorized, by a majority of the BOD at a regular BOD or special BOD meeting, and any one Member of the Board may institute any such suit. Each such action shall be brought in the name of ELRA, and ELRA shall be deemed to be acting on behalf of all the Members. Any judgment rendered in such action shall include a sum for attorneys fees in such amount as the court may adjudge against such defaulting Member. Upon full satisfaction of any such judgment, it shall be the duty of the BOD to execute and deliver to the judgment debtor an appropriate satisfaction thereof. 7.3c. File a lien against the Lakeside Lot of such delinquent Lakeside Lot owner. Said lien shall state: (1) the name of the delinquent owner; (2) a designation of the property against which the claim of lien is made; (3) the amount claimed to be due and owing: (4) that the claim of lien is made by the BOD pursuant to the DPP, and the terms of these Bylaws; and (5) that a lien is claimed against the property in an amount equal to the net amount of the stated delinquency plus any accrued interest and costs of enforcement, including attorneys fees, if any. Said lien shall be signed and acknowledged by any two or more Members of the BOD, by the attorney for the Board and shall be dated as of the date of the execution by such attorney or the last such Board Member to execute said lien. The lien shall then be duly filed with the Bureau of Conveyances. 7.3d. Should a sum or sums of delinquent assessments be due at the time a Lakeside Lot, encumbered by the DPP is sold, ELRA will collect said sums due, to include late charges and attorneys fees, through the applicable escrow at the time of closing. 14

15 [Type text] [Type text] [Type text] 7.3e. Should extenuating circumstances, such as illness or age, be brought to the attention of the BOD, the Board may vote to waive certain assessments. 7.4 Encroachments. Periodically, an owner will wish to build something that may extend into the Lake, e.g. a dock that is supported by beams/supports that are grounded in The Lake or extending a sea wall into The Lake. ELRA views these circumstances as having created an encroachment and requires owners to request permission of the BOD. Once approved by the BOD, the encroachment must be documented and recorded. The BOD shall, from time to time, set the fees required for the documentation and recording of a new encroachment or the transfer of an encroachment Waiver. The failure of the BOD to insist in any one or more instances upon a strict performance of or compliance with any of the covenants, Rules and Regulations, and/or restrictions by the Member or to exercise any right or option herein contained or to serve any notice or to institute any action or summary proceeding shall not be construed as a waiver or a relinquishment for the future, of such covenant, option, or right, but such covenant, option, or right shall continue and remain in full force and effect. The receipt by the BOD of any sum paid by the Member, with or without knowledge by the BOD of the breach of any covenant, Rules and Regulations, and/or restrictions, shall not be deemed a waiver of such breach; and no waiver, express or implied, by the BOD of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the President pursuant to authorization contained in a resolution of the BOD. ARTICLE 8 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS Consistent with the protections cited in the 1987 Articles of Incorporation, ELRA shall indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of ELRA) by reason of the fact that the person is or was an agent of ELRA against expenses (including reasonable attorneys fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding if the person acted in good faith and in a manner the person reasonably believed to be in and not opposed to the best interests of ELRA, and, with respect to any criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction 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 and in a manner which the person reasonably believed to be in or not opposed to the best interests of ELRA, or that the person had reasonable cause to believe that the persons conduct was unlawful. ARTICLE 9 BYLAWS AMENDMENT 15

16 The [Type text] [Type text] [Type text] The Bylaws, or any part thereof, may, from time to time and at any time, be amended, altered, repealed or restated, by a majority vote of the active ELRA Members at any Annual or Special meeting of the Membership; provided, that the notice of said meeting shall state that a purpose of said meeting is to consider the adoption, amendment, alteration, repeal or restatement of the Bylaws. ARTICLE 10 DISSOLUTION In the event of the dissolution of ELRA, the assets shall be distributed in accordance with the regulations and laws of the State. ARTICLE 11 PARLIAMENTARY AUTHORITY The rules contained in the current edition of Robert s Rules of Order, Newly Revised shall govern the proceedings of ELRA in all cases to which they are applicable and in which they are not inconsistent with any special rules of order ELRA may adopt. 16