Lake Killarney Homeowner Association Bylaws

Section 1 “Association: shall mean and refer to the Lake Killarney Home Owners Association, Inc., a non-profit corporation organized and existing under the laws of the State of Illinois, Inc. – March 15, 1962.

Section 2 “Properties” shall mean and refer to the area known as Lake Killarney Units 1, 2 and 3. Unit 1 being a subdivision of parts of the Northwest Quarter of Section 1 and the Northeast Quarter of Section2, all in the Township 43 North, Range 8 East of the Third Principle Meridian, McHenry County, Illinois, and recorded as Document Number 356643, in the County Recorder’s, in Book 14 of Plats, Page 25; Unit 2 being a subdivision of parts of the Northwest Quarter of Section 1 Township 43 North, Range 8 East of the Third Principle Meridian, McHenry County, Illinois and recorded as Document 368881, in the County Recorder’s Office, in Book 14 of Plats, Page 51; Unit 3 being a subdivision of part of the Northwest Quarter of Section 2, Township 43 North, Range 8 East of the Third Principle Meridian, McHenry County, Illinois, and recorded as Document Number 405460, in the County Recorder’s Office, in Book 14, Page 95.

IN ADDITION: “Properties” Shall include that part of the Northwest Quarter of Section Section 1, Township 43 North, Range 8 East of the Third Principle Meridian, bounded and described as follows: Commencing at the northwest corner of Section 1; thence Easterly along the North line of said section for a distance of 1045.88 feet to a point; thence Southerly along a line that makes an angle of 90 degrees 28 minutes measured to the right with a prolongation of the last described course for a distance of 501.15 feet to the place of beginning; thence continuing Southerly along the last described course for a distance of 65.65 feet to a point; thence Southwesterly along a line that makes an angle of 13 degrees 46 minutes measured to the right with a prolongation of the last described course for a distance of 144.39 feet to a point; thence Northeasterly along a line that makes an angle of 114 degrees 54 minutes measured the left with a prolongation of the last described course for a distance of 568.32 feet to a point; thence Northwesterly along a line that makes an angle of 94 degrees 26 minutes measured to the left with a prolongation of the last described course for a distance of 30.09 feet; thence Southwesterly along a line that makes an angle of 85 degrees 34 minutes measured to the left with a prolongation of the last described course for a distance of 313.03 feet to a point; thence Northerly along a line that makes an angle of 93 degrees 11 minutes measured to the right with a prolongation of the last described course for a distance of 165.76 feet to a point; thence Southwesterly along a line that makes an angle of 93 degrees 11 minutes measured to the left with a prolongation of the last described course for a distance of 188.9 feet to the place of beginning and containing 1.179 acres more or less and situated in McHenry County, Illinois. Recorded as Document Number 470266 in the County Recorder’s Book.

Section 3 “Common Properties and Facilities” shall mean and refer to parks, playgrounds, lake, beaches, including buildings, structures, personal properties incident thereto, and other properties owned and maintained by the Association for the common benefit and enjoyment of the residents within the Properties.

Section 4 “Lot” shall mean and refer to any plot of land shown upon any recorded subdivision map of the properties with the exception of “Common Properties and Facilities” as heretofore defined.

Section 5 “Owner” shall mean and refer to the record owner, owners or legal spousal entitlement, of the Fee Simple Title to any “Lot” situated within the Properties but, notwithstanding any applicable theory of the mortgage, shall not mean or refer to the mortgage unless and until such mortgages has acquired title pursuant to foreclosure or any proceeding in lieu of foreclosure.

Section 6 “Member” shall mean and refer to all those Owners who are paid to date members of the Association as provided in Article IX, Section 1, hereof.

Section 7 “Limited Member” shall mean and refer to all residents other than owners (i.e., renters, etc.).

Section 8 “Resident Senior Citizen” shall refer to any resident Member or Limited Member who has attain retirement age 65.

ARTICLE II

ASSOCIATION: PURPOSE AND POWER

Section 1 The Purpose for which the Association was formed is: to promote, improve and maintain a good community for the benefit of the residents within the Properties and to stimulate interest in the entire community for the further development and improvement of the Common Property and Facilities.

Section 2 The Association shall have general power and jurisdiction over all community matters among the Members of the Properties, and shall have the power to levy and collect assessments from all Members as may necessary for the management, maintenance and improvement of the Community Properties and Facilities, or other property within the Properties that the Association feels will improve the welfare of the community, and to stimulate interest in the use of the Common Properties and Facilities.

Section 3 Additions to the Properties and Membership. Additions to the Properties as described in Article I, Section 2, must have the assent of two-thirds of the votes of the Members who are voting at a meeting duly called for this purpose, written notice of which shall be sent to all Members at least thirty (30) days in advance and shall set forth the date, time, place and purpose of the meeting.

Section 4 Mortgages: Other Indebtedness. The Association shall not make any commitments beyond the amount of funds on deposit and belonging to the Association, provided that authority to exceed said maximum in any particular case may be given by and affirmative vote of two-thirds of the votes of Members who are voting in person at a meeting duly called for this purpose, written notice of which shall be sent to all Members at least thirty (30) days in advance and shall set forth the date, time, place and purpose of the meeting.

Section 5 When the execution of any contract, conveyance or other instrument has been authorized by resolution or motion of the General Membership, but such resolution or motion fails to specify the executing officers, the Board of Directors shall have authority to execute any instrument on behalf of the Association, and to affix the corporate seal thereto.

ARTICLE III

LOCATION

Section 1 The only official address of the Association shall be P.O. Box 176, Cary, IL 60013 or any other address as designated by the Association to its Members and the State of Illinois.

ARTICLE IV

ASSOCIATION: BOOKS, RECORDS AND PAPERS

Section 1 The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Members.

Section 2 The Board of Directors shall see that the books and financial reports of the Association are audited within ninety (90) days after a) a change in the Office of the Treasurer or b) the annual regular meeting of Members, whichever occurs first. Further the audit shall be performed in a manner consistent with the provisions of the laws of the State of Illinois and standard accounting practices.

ARTICLE V

ASSOCIATION: OFFICIAL PUBLICATION

Section 1 The official publication of the Association shall be known as the Lake Killarney Newsletter.

Section 2 The Lake Killarney Newsletter shall be published bi-monthly beginning with a combined January/February issue each year. Issues preceding the general membership meetings shall be distributed at least one week in advance of said meetings. The newsletter shall contain local news items of general interest, announcements of Association activities, and anything else of general interest to the community, subject to the approval of the Board of Directors. Reprinting from the Lake Killarney Newsletter shall be by permission of the Board of Directors only.

ARTICLE VI

ASSOCIATION: DISSOLUTION

Section 1 The Association may be dissolved only with the assent given in writing and signed by two-thirds of the members entitled to vote. Written notice of a proposal to dissolve, setting forth the reason therefore and disposition to be made of the assets (which shall be consistent with Section 2 hereof) shall be mailed to every Member at least ninety (90) days in advance of any action taken.

Section 2 Upon dissolution of the Association, the assets, both real and personal of the Association, shall be dedicated to an appropriate public agency or utility to be devoted to purposes as nearly as practicable the same as those to which they were required to be devoted by the Association. In the event that such dedication is refused acceptance such assets shall be granted, conveyed and assigned to any nonprofit corporation, association, trust or other organization to be devoted to purpose as nearly as practicable the same as those to which they were required to be devoted by the Association. No such disposition of Association properties shall be effective to divest or diminish any right or title of any member vested in him under the recorded covenants and deeds applicable to the Proper ties unless made in accordance with the provisions of such covenants and deeds.

ARTICLE VII

ASSOCIATION: CORPORATE SEAL

Section 1 The Association shall have a seal in circular form having within its circumference the words “Lake Killarney Home Owners Association, Inc. Illinois”.

ARTICLE VIII

CORPORATION: DISSOLUTION

Section 1 The Association may be dissolved only with the assent given in writing and signed by two-thirds of the Members entitled to vote. Written notice of a proposal to dissolve, setting forth the reason therefore and the disposition to be made of the assets (which shall be consistent with the Section hereof) shall be sent to every Member at least ninety (90) days in advance of any action taken.

Section 2 Upon the dissolution of the Association, the assets, both real and personal of the corporation shall revert back to the Association.

ARTICLE IX

MEMBERSHIP: RIGHTS OF MEMBERS

Section 1 The Rights of Memberships are subject to the payment of all assessments levied by the Association, the obligation of which assessments are imposed against each Owner of the Property against which such assessments are made.

Section 2 The Membership Rights of any person whose interest in the Properties is subject to assessments whether or not they be personally obligated to pay such assessments, shall be automatically suspended during the period when the assessments remain unpaid; but, upon payment of such assessments, their rights and privileges shall be automatically restored.

Section 3 ((If t)) The Association has adopted and published rules and regulations governing the use of the Common Grounds and Facilities. The Board of Directors may, at their discretion after notification and review, suspend the rights of any person for violation of such rules and regulations for a period not to exceed ninety (90) days.

Section 4 Membership rights shall include but not be limited to:

a) The right to vote on all matters at any meeting of Members.

b) The right to hold office in accordance with the requirements for office.

c) The use and enjoyment of the Common Properties and Facilities by themselves, family and guests.

d) The right to receive proper identification to substantiate that membership rights have been acquired. (See Article XIV, Section 5 for issuance.)

ARTICLE X

MEMBERSHIP: RIGHTS OF LIMITED MEMBERS

Section 1 The rights of Limited Members are subject to their payment of annual assessments levied by the Association.

Section 2 The rights of Limited Members shall be automatically suspended during the period when the annual assessments remain unpaid: but, upon payment of such annual assessments, the rights and privileges shall be automatically restored.

Section 3 ((If t)) The Association has adopted and published rules and regulation governing the use of the Common Properties and Facilities. The Board of Directors may, at their discretion after notification and review, suspend the rights of any person for violation of such rules and regulations for a period not to exceed ninety (90) days.

Section 4 The rights of Limited Members shall be limited to:

a) The use and enjoyment of the Common Properties and Facilities by themselves, family and guests.

b) To receive proper identification to substantiate that limited rights have been acquired (see Article XIV, Section 5, for issuance).

ARTICLE XI

MEMBERSHIP: MEETINGS

Section 1 A regular meeting of the Members shall be held on the first Tuesday of every sixth (6th) month starting with the November 2, 1999 Annual Meeting of the Membership. The hour and location of the regular meeting of the Members shall be set by resolution at any meeting of the Members. A minimum of thirty (30) days advance written notice to all Members shall be required before any change will take effect. However the President shall have the power to temporarily reschedule a regular meeting of the Members, when such change becomes necessary. Furthermore, when such a change becomes necessary, the Members shall be notified in accordance with the provision of Section 4 of this Article.

Section 2 The President may call for a special meeting at any time. The President, upon written request of not fewer than fifteen (15) members or upon request of a majority of the Board of Directors, shall call a special meeting of the Members. Any special meeting must be called in accordance with the provisions of Section 4 of this Article.

Section 3 The annual regular meeting of Members shall be held in the month of November each year. The agenda for the annual regular meeting of Members shall include, in addition to the normal order of business, elections in accordance with the provisions of Article XXIX, Section 1 and 2, and the presentation and approval of the annual budget in accordance with Article XXVII, Section 3 and 5.

Section 4 Notice of any meeting of the Members shall be given to the Members by the Secretary. Notice may be given to the Members either personally, through the Official Publication or sending a copy of the Notice through the mail, postage thereon fully prepaid to his address with the Secretary, and notice of Member Meetings shall be sent to them at such address. Notice of any Regular or Special Meeting of Members shall be delivered at least seven (7) days in advance of the meeting and shall set forth in general the nature of the business to be transacted, provided however that if the business of any Meeting of Members shall involve an election governed by Article XI, Section 3. Notice of such Meetings shall be given or sent as therein provided.

Section 5 Except as hereinafter provided, at any Meeting of the Members, Fifteen (15) Members with voting rights shall constitute a quorum. If no quorum is present, an adjournment may be taken to a date not fewer than seven (7) or more than fifteen (15) days thereafter. The Members with voting rights present at such an adjourned meeting shall automatically constitute a quorum, regardless of the number present. The same notice shall be given for the adjourned meeting as is described in Section 4 of this Article.

Section 6 Each member shall register with the Secretary at each Meeting of Members to receive the appropriate identification for use in voting. The identification to be used in voting shall from time to time be determined by the Board of Directors.

Section 7 Roberts Rules of Order Revised shall govern in all cases not in conflict with these By-Laws.

ARTICLE XII

OFFICERS: GENERAL

Section 1 The officers shall be President, Vice-President, Treasurer and Secretary.

Section 2 No Officer shall hold more than one (1) office at a time.

ARTICLE XIII

OFFICERS: REQUIREMENTS FOR OFFICE

Section 1 All Officers must reside within the Properties as defined in Article 1, Section2.

Section 2 To hold office is a right of membership and is therefore subject to the provisions of Article IX, Section 1.

ARTICLE XIV

OFFICERS: DUTIES

Section 1 The President shall act as the administrative head of this organization; preside at all meetings of the Members and the Board of Directors; shall countersign all checks in excess of $500, drafts and any other orders for the disbursement of Association funds and shall perform such other duties as ordinarily pertain to the office of President and as he or she may be directed to perform by Resolution of the Board of Directors, not inconsistent with the Provisions of Law or these By-Laws.

Section 2 The Vice-President shall have and exercise all the powers, authority and duties of the President during his or her absence or inability to act. He or She shall perform such other duties as he may be directed to perform by Resolution of the Board of Directors no inconsistent with the Provisions of Law or these By-Laws.

Section 3 The Treasurer shall receive and deposit in the appropriate bank accounts, within five (5) business days, all monies of the Association and shall disburse such funds by check, drafts or any other orders of disbursement as directed by Resolution of either the Board of Directors or the Members provided however, that a Resolution of the Board of Directors or the Membership shall not be necessary for disbursements made in the ordinary course of business conducted within the limits of the adopted budget. The treasurer is authorized to sign all checks, drafts and any other orders for disbursement of Association funds, provided that such checks, notes, etc. in excess of $500, shall also be signed by the President or Vice-President. Before entering upon the duties of Treasurer, the Treasurer shall be given by the Association, a bond with good and sufficient surety in an amount to be determined by the Board of Directors.

Section 4 The Treasurer shall keep proper Books of Account and assist with annual audit of the Association’s books as provided in Article IV, Section 2, and shall prepare an annual balance sheet statement and such statement shall be presented to the Board of Directors.

Section 5 The Treasurer shall issue to the Members and Limited Members, upon receipt of full payment of all assessments, fees or penalties, seven (7) Beach tags, one (1) Boat Sticker for each boat registered and one (1) Car Sticker for each car registered.

The Treasurer may also issue a refund, of a maximum of one-half of the Members annual assessment, if a) the Owner sells their property prior to June 1^st, and b) the Owner returns all issued Beach Tags to the Treasurer. The Treasurer shall then assess the subsequent Owner the full amount prior to June 1^st or one-half of the assessment after June 1^st.

Limited Members may also receive a refund a) upon presentation of sufficient proof of days of vacancy to the Treasurer, and b) if the Limited Member returns all issued Beach Tags to the Treasurer. Each Member and Limited Member shall appeal the Treasurer’s decision to the Board of Directors. It is the responsibility of the Member or Limited Member to notify the Treasurer of their desire to exercise the provisions of this paragraph.

Section 6 The Treasurer shall send notification of assessments in accordance with Provisions of Article XXVII, Section 13.

Section 7 The Secretary shall record and maintain complete and accurate minutes of all proceedings, including votes that occur at any Meeting of the Members and the Board of Directors.

ARTICLE XV

OFFICERS: TERMS OF OFFICE

Section 1 The term of office for all Officers shall be for the period from adjournment of the Annual Regular Meeting of Members where said Officers were elected to the adjournment of the Annual Regular Meeting of Members two (2) years following. Continuation in office shall be restricted to two (2) consecutive terms in that office.

ARTICLE XVI

OFFICERS: VANCANCIES

Section 1 If the Office of the President be declared vacant by the Board of Directors, the Vice-President shall immediately assume the duties of the Office of the President for the remainder of the unexpired term.

Section 2 If the Office of the Vice-President be declared vacant by the Board of Directors, or the Incumbent succeeds to the Office of President, the Board of Directors at their next Regular Meeting shall elect a Vice-President from the Members to fill the unexpired term of the Vice-President.

Section 3 If both the Office of the President and Vice-President shall be declared vacant by the Board of Directors, the Secretary shall immediately call a Special Meeting of the Board of Directors for the purpose of electing, from the Members, a President and Vice-President to fill the unexpired terms of office.

Section 4 If the Office of the Treasurer shall be declared vacant by the Board of Directors, the Board of Directors shall, at their next scheduled meeting, elect a Member to fill the vacancy for the remainder of the unexpired term. The books and financial records of the Association shall be immediately turned over to the Board of Directors and audited in accordance with the provision of Article IV, Section 2.

Section 5 If the Office of Secretary shall be declared vacant by the Board of Directors, the Board of Directors shall, at their next Regular Meeting, elect a Member of the Association to fill the vacancy for the remainder of the unexpired term.

ARTICLE XVII

OFFICERS: REMOVAL

Section 1 If an Officer fails to comply with these By-Laws, fails to attend meetings of the Board of Directors for three (3) consecutive months, or otherwise fails to perform any of the duties required of the office with or without cause, the Office may be declared vacant by two-thirds vote of the Board of Directors and the vacancy filled in accordance with the provisions of Article XVI.

ARTICLE XVIII

DIRECTORS: GENERAL

Section 1 The Directors shall be eight in number plus President, Vice-President, Treasurer and Secretary (12 in all) and shall not receive compensation for serving as Director.

ARTICLE XIX

DIRECTORS: REQUIREMENTS FOR OFFICE

Section 1 To be a Director is a right of Membership and is therefore subject to the provisions of Article IX, Section 1.

ARTICLE XX

DIRECTORS: TERM OF OFFICE

Section 1 The term of Office for all elected Directors shall be for the period from adjournment of the Annual Regular Meeting of the Members where said Directors were elected to the adjournment of the Annual Regular Meeting of the Members two (2) years following. Continuation in Office shall be restricted to two (2) consecutive terms in that office.

ARTICLE XXI

DIRECTORS: VACANCY

Section 1 If the Office of any Director shall be declared vacant by the Board of Directors, the Board of Directors shall at their next Regular Meeting elect a Member of this Association to fill the unexpired term of the Director in accordance with the provision of Article XIX.

ARTICLE XXII

DIRECTORS: REMOVAL

Section 1 If a Director fails to comply with these By-Laws, fails to attend a Meeting of the Board of Directors for three (3) consecutive months, or otherwise fails to perform any of the duties as a Director, with or without cause, his or her office may be declared vacant by two-thirds vote of the Board of Directors and vacancy shall be filled in accordance with the provisions of Article XIII.

ARTICLE XXIII

BOARD OF DIRECTORS: POWERS AND DUTIES

Section 1 The Board of Directors shall have the power:

a) To call Special Meetings of the Members whenever it deems necessary upon written request to the President signed by a majority of the Directors.

b) To appoint and remove at pleasure all agents and employees of the Association, prescribe their duties, fix their compensation, and require of them such security or fidelity bond as it may deem expedient.

c) To require of any others such security or fidelity bond as it deem necessary.

d) To collect assessments referred to in Article XXVII, Section 2 and 3.

e) To remove from Office any Director or Officer in accordance with provisions of Article XXI or Article XVII.

f) To fill the vacant office of any Director or Officer in accordance with provisions of Article XXI or Article XVI.

g) To establish Committees other than those established under Article XXV, as it deems necessary.

h) To appoint all Committee Chairpersons.

i) To appropriate funds and make expenditures within the limits set by the Approved Annual budget and the provisions of Article XXVI, Section 5.

j) To suspend the Membership rights of any person who does not comply with the provisions of Article IX, Section 2 and 3 and Article X, Section 2 and 3.

Section 2 It shall be the duty of the Board of Directors:

a) To cause to be kept a complete record of all its Acts and Corporate Affairs and to present a statement thereof to the Members at the Annual Meeting of the Members or any Special Meeting when such is requested in accordance with the provisions of Article XI, Section 2.

b) To supervise all Officers, Agents and Employees of this Association and to see that their duties are properly performed.

c) To send written notice of each assessment to every owner subject thereto.

d) To publish Rules and Regulations governing the use of the Common Properties and Facilities, as established by the General Membership (See Article XXXI).

e) To prepare the Annual Proposed Budget in accordance with the provisions of Article XXVI, Section 1.

f) To establish the Annual Assessments in accordance with the provisions of Article XXVII, Section 2.

g) To file liens in accordance with the provisions of Article XXVIII, Section 6.

h) To cause an Annual Audit of the Association’s Books and financial records in accordance with Article IV, Section 2.

i) To keep the Members up-to-date and informed on issues of importance and concern to the Membership.

j) To designate the depository or depositories for the funds, securities, valuable papers and other assets of the Association.

k) To see that a minimum of two (2) bids are secured for expenditures whose aggregate cost exceeds $1000.00.

l) Issue certificates for payment of assessments.

m) Procure liability and hazard insurance.

n) Exercise for the Association all powers vested in or delegated to this Association not reserved to the Membership and do all required acts under the Illinois not for profit corporation act.

o) To keep a current record of owners names and addresses along with a current record of Members, Limited Members and Senior Citizen names and addresses.

ARTICLE XXIV

BOARD OF DIRECTORS: MEETINGS

Section 1 The Regular meeting of the Board of Directors shall be held on the first Tuesday of each month. The time and place of Regular Meetings of the Board of Directors, shall from time to time, be fixed be resolution, by the Board of Directors.

Section 2 The President, or in his or her absence, the Vice-President, may call a special meeting of the Board of Directors at any time. The President or the Vice-President must call a Special Meeting of the Board of Directors upon written request of a majority of the Directors. The President, or in his/her absence, the Vice-President, shall fix the time and place of Special Meetings, unless the Board, by resolution, prescribes otherwise.

Section 3 In the event both the President and Vice-President are absent at a meeting of the Board of Directors a temporary chairman will be appointed from the Board of Directors present by a majority vote of the Directors in attendance.

Section 4 Notice of all meetings of the Board of Directors shall be given in such manner as the Board of Directors may from time to time, by resolution, prescribe.

Section 5 Except as hereinafter provided, at any meeting of the Board of Directors, seven (7) members shall constitute a quorum. If no quorum is present, an adjournment may be taken to a date not fewer than seven (7) nor more than fifteen (15) days thereafter. The Members present at such an adjourned meeting shall automatically constitute a quorum, regardless of the number present. The President shall have the responsibility to give notice of the Adjourned Meeting to all Board Members.

Section 6 For the purpose of transacting business, each Member of the Board present, except for the Presiding Member, shall be entitled to one (1) vote. The Presiding Member shall be entitled to one (1) vote only in the event of a tie vote by the other Directors present and voting.

ARTICLE XXV

COMMITTEES

Section 1 The Standing Committee of the Associations shall be:

The Nominations Committee

The Common Grounds Committees – Lake, East Beach, West Beach, Park, Dam and Entrance Gates Landscaping.

The Security Committee

The Lake Committee

Unless otherwise provided herein, each Committee shall consist of a Chairperson and two (2) or more members. The Committee shall be appointed by the Board of Directors prior to each Annual Meeting to serve from the close of such Annual Meeting until the close of the next Annual Meeting and such appointment shall be announced at each Annual Meeting. The Board of Directors may appoint such other committees as it deems desirable.

Section 2 The Nomination Committee shall have the duty and function of obtaining nominees and it shall make as many nominations for election as it shall in its descretion determine, but not less than the number of vacancies that are to be filled in accordance with Article XXVIII, Section 1. Such nominations shall be made from the Members who have earned the right to hold Office as established by Article IX, Section 1. Nominations shall be placed on a written ballot as provided in Article XXVIII, Section 3 for the Notification of Nominations to Members.

Section 3 The Common Grounds Committee shall advise the Board of Directors on all matters pertaining to the maintenance, repair or improvement of the Common Properties and Facilities of the Association, and shall perform such other functions as the Board, in its discretion, determines.

Section 4 The Security Committee shall advise the Board of Directors on all matters pertaining to the protection of the Properties and shall perform other duties as the Board, in its discretion, determines.

Section 5 The Lake Committee shall advise the Board of Directors on all matters pertaining to the waters in the lake and the lakebed and shall perform other duties as the Board, in its discretion, determines.

Section 6 With the exception of the Nominations Committee each Committee shall have the power to appoint a Subcommittee from among its membership and may delegate to any such Subcommittee any of its powers, duties and functions.

Section 7 It shall be the duty of each committee to receive complaints from Members on any matter involving Association functions, duties and activities within its field of responsibility. It shall dispose of such complaints, as it deems appropriate or refer them to such other Committee, Director or Officer of the Association as is further concerned with the matter presented.

ARTICLE XXVI

ANNUAL BUDGET

Section 1 The Board of Directors shall prepare the Proposed Annual Budget in time to meet the provisions of notification as provided in Sections 3 and 4 of this Article.

Section 2 The Annual Budget shall reflect the best estimates of all Committee Chairpersons and the Board of Directors as to anticipated needs for fiscal appropriations and of the Treasurer as to anticipated income from all sources during the next fiscal period.

Section 3 The President shall, at the Annual Regular Meeting of Members, present the Board of Director’s Proposed Annual Budget for discussion, modification and approval by a majority vote of those Members present with voting rights.

Section 4 The President shall also cause a copy of the Board of Director’s Proposed Annual Budget to be published and sent to each Member prior to the Annual Regular Meeting of Members and that is shall be sent at least seven (7) days in advance of that meeting.

Section 5 The Annual Budget shall be approved by a majority of the Members with voting rights present at the Annual Regular Meeting of Members with all discussion, questions and modifications, by the Members having been heard and recorded. Approval of the Annual Budget, however, shall not limit additional expenditures over and above the budgeted amounts appropriated to meet unanticipated requirements that may occur during the fiscal period, provided that the additional expenditures are approved by the Membership at any Regular or Special Meeting of Members called for that purpose, or by the Board of Directors if the amount does not exceed $1000.00.

Section 6 The Annual Budget shall take effect immediately upon approval with all outstanding appropriations against the prior Budget becoming null and void.

ARTICLE XXVII

ASSESSMENTS

Section 1 Purpose of Assessments: The assessments levied by the Association shall be used exclusively to promote, improve and maintain a good community for the benefit of the residents within the Properties and in particular for the improvement and maintenance of properties, services and facilities devoted to this purpose.

Section 2 Annual Assessment (also referred to as dues), shall be that dollar amount required of each Member to support the approved Annual Budget, taking into consideration a) the number of Members eligible for a reduction and b) the rate of non-payment from the preceding year, and shall be payable by February 1^st (due date) of each year. Resident Senior Citizens and vacant lot owners shall be entitled to a 50% reduction of the Annual Assessment. In no case shall any Member be entitled to more than a 50% reduction of the Annual Assessment, unless approved by the Board of Directors.

Section 3 Special assessments shall be brought to the attention of the General Membership in the form of a referendum.

Section 4 Members shall be subject to and liable for any and all assessments, fees and penalties.

Section 5 Limited Members shall be subject to annual assessments, fees and penalties.

Section 6 Effect of non-payment of assessments; the personal obligation of the Owner; the Lien; remedies of Association. If the assessments are not paid by the due date (see Section2), then such assessments shall be considered delinquent, and shall, together with such interest and cost of collection as provided, become a continuing lien on the property which shall bind such property in the hands of the Owner, their heirs, devises, personal representatives and assigns. The personal obligation for the statutory period and shall not pass to their successors in title unless expressly assumed by them.

Section 7 Assessments not paid by March 1st shall owe an additional penalty of 5% of the original assessment and if not paid by May 1^st an additional 10% of the original assessment will be due.

Section 8 Subordination of the lien to mortgages. The lien of the assessments provided for herein shall be subordinate to the lien of any mortgage or mortgages now or hereafter placed upon the properties subject to assessment; provided, however, that such subordination shall apply only to the assessments which have become due and payable prior to a sale or transfer of such property pursuant to a decree of foreclosure, or any other proceeding in lieu of foreclosure. Such sale or transfer shall not relieve such property from liability for any assessment thereafter becoming due, nor from the lien of any such subsequent assessment.

Section 9 Exempt property. The following property shall be exempted from the assessments, charges and lien created herein: a) all properties to the extent of any easement or other interest therein dedicated and accepted by the local public authority and devoted to public use; b) all Common Properties and Facilities as defined in Article 1, Section 3, hereof; c) all the extent of such legal exemption; d) a non-developed single lot property, adjoining, or contiguous to developed property containing a members dwelling, providing said property is held under common ownership or trust.

Section 10 Each and every Member shall have the right to appeal to the Board of Directors, their annual assessments.

Section 11 If a Member finds that he or she is eligible for a reduced annual assessment (see Section 2 of this Article) but has already paid, the Member shall have the right to request, in writing, reimbursement. The written request shall be presented to the Treasurer and must contain a) the Member’s name and address and c) a short explanation for the requested reduction of the Article, the Treasurer shall have the authority to issue a refund, otherwise the Treasurer shall notify the requestor in writing, that the request was denied and the reason for the denial. If the requestor is still not satisfied he or she may appeal to the Board of Directors for a final decision.

Section 12 It shall be the duty and responsibility of each Member to pay the assessment and to pay them on time even if an invoice is not received.

Section 13 Notification of assessments. Notification shall be sent no later than January 15^th each year for annual assessments and no later than thirty (30) days after the establishment of any special assessment(s).

ARTICLE XXVIII

ELECTIONS

Section 1 Every even numbered year, elections will be held to fill the expired term of four (4) Directors, the Secretary and Treasurer. Every odd numbered year, elections will be held to fill the expired term of four (4) Directors, the President and Vice-President.

Section 2 Nominations shall be made by a Nominating Committee that shall be one of the Standing Committees of the Association. Additional nominations shall be asked for and accepted by the President from the floor at the Annual Regular Meeting of Members.

Section 3 All elections shall be made on a written ballot which shall: a) Describe the vacancies to be filled; b) set forth the names of those nominated by the Nominating Committee for such vacancies; and c) contain a space for a write-in candidate by the Members for each vacancy.

Section 4 Before the nominations from the floor have been placed before Members, Tellers who have been appointed by the President will distribute the Official Ballots. The voting will then take place, after which the votes will be immediately tallied by the Tellers, and the results announced. All elections shall be plurality vote except where there is only one (1) nominee for the office, in which case the nominee is automatically elected.

ARTICLE XXIX

VOTING

Section 1 All voting shall be based upon the principle of two (2) votes per Membership and excludes Limited Members. A Membership shall be considered, for the purpose of voting, to be a Property which is owned and upon which dues have been paid.

Section 2 Proxy voting shall not be permitted.

Section 3 Absentee ballots shall not be permitted.

ARTICLE XXX

AMENDMENTS TO THE BY-LAWS

Section 1 Amendments to these By-Laws must be adopted by an affirmative vote of two-thirds of the Members present at any Regular or Special Meeting of Members. Advance written notice shall be given to all Members before any action can be taken.

Section 2 Written notice of an amendment shall be given at least thirty (30) days in advance of the Meeting of Members and may be presented either in the Official Publication or through the distribution of a Special Notice which must be distributed to all members.

Section 3 The written notice shall state the exact wording of the proposed By-Law change.

Section 4 Amendment #1-Each residence shall use a common garbage hauler, which has been reviewed by the Board of Directors and voted upon by the General Membership at a bi-annual membership meeting.

ARTICLE XXXI

RULES AND REGULATIONS

Section 1 The Board shall cause to exist and maintain Standing Rules and Regulations governing the use of the Common Grounds and Facilities and the personal conduct of any person thereon. Furthermore, these Rules and Regulations shall not be part of these By-Laws, with the exception of the following which are herewith made a part of these By-Laws, but shall be published and maintained in conjunction with these By-Laws.

Rule 1 The Common Properties and Facilities are restricted to Members, Limited Members and their guests. Each party must display the current identification of special use permit when using said property.

Rule 2 No motors of any kind will be permitted on the Common Properties and Facilities including the Lake whether it is open water or ice, at any time, except by special permission of the Board of Directors.

Rule 3 Hunting within the Properties is absolutely prohibited.

Rule 4 The Association shall not be liable for any personal injuries, property damage, or death sustained by Members, Limited Members, heirs of, assigns or guests while on any part of said Properties, Common Properties and Facilities.

Rule 5 “Special usage permits” are available when the number of “Member” or “Limited Member” guests exceed the number of allotted identification tags. “Special Permits” may be obtained through committee chairpersons, or the Board of Directors. Failure to display proper identification, or “Special Permit” could lead to suspension of “Member”, or “Limited Member” “Rights”, as outlined in these By-Laws.

Rule 6 A “Member”, or “Limited Member” guest may not include any “Owner” (or their immediate families) of “Properties” in the Lake Killarney Home Owners Association, Inc., as outlined in Article 1, Section 2, who have not paid their current assessments, fees, and/or penalties.

Rule 7 All (“Member”, “Limited Member” or guest) boats using the Association Lake, must display a current Lake Killarney boat sticker.

Rule 8 Lake Killarney is a privately owned lake. Fishing on Lake Killarney requires an Illinois State Fishing License, and the Lake is subject to Illinois State Fishing Regulations.