ARTICLE I

NAME AND LOCATION

The name of the corporation is KANEHOA COMMUNITY ASSOCIATION, hereinafter referred to as the “Association”. The principle office of the corporation shall be located at Kanehoa Subdivision, Kamuela, Hawaii, State of Hawaii, but meetings of Members and directors may be held at such places with the State of Hawaii, County of Hawaii, as may be designated by the Board of Directors.

ARTICLE II
DEFINITIONS

Section 1. “Association” shall mean and refer to KANEHOA COMMUNITY ASSOCIATION, it’s successors and assigns.

Section 2. “Properties” shall mean and refer to that certain real property included within File Plan No. 1845, recorded in the Bureau of Conveyances of Hawaii, and such additions thereto as may hereafter be brought within the jurisdiction of the Association.

Section 3. “Common Area” shall mean all the real property owned in fee by the Association, and, to the extent of the interest of the Association, any real property held by the Association under grant of easement, lease, tenancy agreement or other limited estate or interest, together in each case with all improvements from time to time constructed thereon.

Section 4. “Lot” shall mean and refer to Lots 1 to 26 inclusive as shown on File Plan 1845, currently designated as TMK (3)-6-2-1 through 26.

Section 5. “Owner” shall mean and refer to the record owner, whether one or more individuals, corporations, partnerships or other legal entity or entities, of the fee simple title to any Lot, but excluding mortgagees in such capacity; provided, however, that to such an extent and for such purposes, including voting, as shall be provided in a lease or agreement of sale of an Lot recorded in the Bureau of Conveyances and filed with the Association, the lessee or purchaser of such Lot shall be deemed the Owner thereof while the same is in effect. When a Lot is owned by more than one person, written notice given to one of the Owners shall constitute notice to all Owners.

Section 6. “Declaration” shall mean and refer to the Declaration of Covenants, Conditions and Restrictions for Kanehoa Subdivision recorded in the Bureau of Conveyances of the State of Hawaii.

Section 7. “Members” shall mean and refer to the Owners of each Lot.

Section 8. “Board” shall mean and refer to the Board of Directors of the Association established by the Charter of Incorporation of the Association, the Declaration and these By-Laws, and “Director” shall mean and refer to any individual member thereof.

ARTICLE III
MEMBERSHIP

Section 1. The Owners of each Lot shall collectively (if more than one) constitute a single membership in the Association. There shall be twenty six (26) such memberships.

Section 2. Each membership shall be entitled to two votes in the affairs of the Association. A sole Owner of a Lot shall exercise both votes; each of two co-Owners shall exercise one vote each; whenever three of more Owners own a Lot, it shall be their responsibility to determine who shall be entitled to vote and to communicate such determination to the Association.

Section 3. “Members” shall be defined as those Owners having the right to exercise the votes of a Lot.

Section 4. Membership shall be transferred only as part of a transfer of Ownership in a Lot. When such a transfer is made by execution and delivery of a valid agreement of sale of an ownership interest in a Lot, the vendor’s membership, including voting rights adhering thereto, shall be considered as having been temporarily transferred to the vendee, such transfer becoming permanent upon subsequent delivery of legal title in compliance with the agreement of sale or revesting in the vendor in the event of termination of the agreement of sale. No membership shall be terminated or forfeited, nor may a member withdraw or be expelled.

ARTICLE IV
MEETING OF MEMBERS

Section 1. Annual Meetings. The first annual meeting of the Members shall be held upon such date as the incorporators shall determine. Each subsequent regular annual meeting of the Members shall be held during the month of January on a date and time established by the Board of Directors.

Section 2. Special Meetings. Special meetings of the Members may be called at any time by the President or by the Board, or upon written request of the Members who are entitled to vote one-forth (1/4) of all of the votes of the Association.

Section 3. Notice of Meetings. Written notice of each meeting of the Members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by mailing a copy of such notice, postage prepaid, at least 15 days before such meeting to each Member entitled to vote thereat, addressed to the Member’s address last appearing on the Looks of the Association, or supplied by such Member to the Association for the purpose of notice. Such notice shall specify a place, day and hour of the meeting, and, in the case of a special meeting, the purpose of the meeting.

Section 4. Quorum. The presence at the meeting of Members entitled to cast, or of proxies entitled to cast, fourteen (14) votes shall constitute a quorum for any action except as otherwise provided in the Charter of Incorporation of the Association, the Declaration, or these By-Laws. If, however, such a quorum shall not be present or represented at any meeting, the Members entitled to vote thereat shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum as aforesaid shall be presented or be represented.

Section 5. Proxies. At all meetings of Members, each Member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary. Every proxy shall be revocable and shall automatically cease upon conveyance by the Member of his Lot.

ARTICLE V
BOARD OF DIRECTORS: SELECTION: TERM OF OFFICE

Section 1. Number. The affairs of this Association shall be managed by a Board of Directors. Until the first annual meeting, there shall be four (4) directors. Thereafter the Board shall consist of seven (7) directors. Directors shall be Members of the Association.

Section 2. Term of Office. Each Director shall be elected by the members at the annual meeting and shall server for a term of one year of until his or her successor is duly elected.

Section 3. Removal. Any director may be removed from the Board, with or without cause by a majority vote in a validly called meeting of the Members of the Association for which the notice stated that such removal was to be considered. In the event of death, resignation or removal of a director, a successor shall be selected by the remaining members of the Board who shall server for the remainder of the term.

Section 4. Compensation. No director shall receive compensation for any service he may render to the Association. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties.

ARTICLE VI
NOMINATION AND ELECTION OF DIRECTORS

Section 1. Nomination. Nomination for election to the Board shall be made by a nominating committee. Nominations may also be made from the floor at the annual meeting. The nominating committee shall consist of a chairman, who shall be a member of the Board, and two or more Members of the Association. The nominating committee shall be appointed by the Board prior to each annual meeting of the Members, 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 nominating committee shall make as many nominations for election to the Board as it shall in its discretion determine, but not less than the number of vacancies that are to be filled.

Section 2. Election. Election to the Board shall be by secret written ballot. At such election the Members of their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise. The persons receiving the largest number of votes shall be elected.

ARTICLE VII
MEETINGS OF DIRECTORS

Section 1. Regular Meetings. Regular meetings of the Board shall be held at least every quarter without the necessity of formal written notice so long as each director has actual or constructive notice, at such place and hour as maybe fixed from time to time by resolution of the Board.

Section 2. Special Meetings. Special meetings of the Board shall be held when called by the President of the Association, or by any two Directors, after not less than three (3) days notice to each Director.

Section 3. Quorum. A majority of the number of Directors shall constitute a quorum for the transaction of business. Every act of decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Board.

ARTICLE VIII
POWERS AND DUTIES OF THE BOARD OF DIRECTORS

Section 1. Powers. The Board shall have the power to:
(a) adopt and amend rules and regulations to be known as the Kanehoa Subdivision Rules governing the use of any common areas, the use of any streams or waterways, roads or paths through the Subdivision (other than public roads), the collection and disposal of refuse within the Subdivision, the burning of any open fires, parking restrictions and limitations in the Subdivision, and other reasonable restrictions governing the use of occupancy of Lots so as to promote the purposes of the Association;

(b) levy assessment pursuant to Chapter 4 of the Declaration, and enforce payment thereof;
(c) exercise for the Association all powers, duties and authority vested in or delegated to the Association and not reserved to the Members by any other provisions of these By-Laws, the Charter of Incorporation of the Association, or Declaration;
(d) declare the office of a member of the Board to be vacant in the event such a member shall be absent from three (3) consecutive regular meetings of the Board and;
(e) employ a manager, an independent contractor, or such other employees as they deem necessary, and to prescribe their duties.

Section 2. Duties. It shall be the duty of the Board to:
(a) cause to be kept a complete record of the minutes of its meetings and of the meetings of the Members as well as financial records and to make same available to review to the Members upon request under reasonable conditions;
(b) supervise all officers, agents and employees of this Association, and to see that their duties are properly performed;
(c) as more fully provide in Declaration, to:
(1) fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period; and
(2) send written notice of each annual assessment period.
(d) issue, or to cause inappropriate office to issue, upon demand by any person, an Estoppel Certificate, stating the Indebtedness secured by the Association’s lien upon the Lot of any Owner. A reasonable charge may be made by the Board for the issuance of these certificates. Such a certificate shall be conclusive upon the Association and the Owners in favor of all who rely thereon in good faith as to the amount of such indebted ness as of the date of the certificate.
(e) procure and maintain adequate liability and hazard insurance on property owned or leased by the Assocation;
(f) cause the Common Area, including roadways, to be maintained.

ARTICLE IX
OFFICERS AND THEIR DUTIES

Section 1. Enumeration of Offices. The officers of this Association shall be a president and vice president, who shall be members of the Board, a secretary, and a treasurer, and such other officers as the Board may from time to time by resolution create.

Section 2. Election of Officers. The election of officers shall take place at the first meeting of the Board following each annual meeting of the Members.

Section 3. Term. Each officers shall be elected annually by the Board and each shall hold office for one (1) year or until his or her successor is duly appointed unless he or she shall sooner resign or be removed.

Section 4. Special Appointments. The Board may elect such other officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may, from time to time, determine.

Section 5. Resignation and Removal. Any officer may be removed from office with or without cause by the Board. Any officer may resign at any time by giving written notice to the Board, the President or the Secretary. Such resignation shall take effect on the date of receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 6. Vacancies. A vacancy in any office may be filled by appointment by the Board. The officer appointed to such vacancy shall serve for the remainder of the term of the officer replaced.

Section 7. Multiple Offices. The offices of secretary and treasurer may be held by the same person. No person shall simultaneously hold more than one of any of the other offices except in the case of special offices created pursuant to Section 4 of this Article.

Section 8. Duties. The duties of the officers are as follows:

President
(a) The President shall preside at all meetings of the Board; shall see that orders and resolutions of the Board are carried out; shall sign all leases, mortgages, deeds and other written instruments and shall co-sign all checks and promissory notes.

Vice President
(b) The Vice President shall act in the place and stead of the President in the event of his absence, inability or refusal to act, and shall exercise and discharge such other duties as may be required of him by the Board.

Secretary
(c) The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the Members; keep the corporate seal of the Association and affix it on all papers requiring said seal; server notice of meetings of the Board and of the Members; keep appropriate current records showing the Members of the Association together with their addresses, and shall perform such other duties as are required by the Board.

Treasurer
(d) The treasurer shall receive and deposit in appropriate bank accounts all monies of the Association and shall disburse such funds as may be directed by resolution of the Board; shall sign all checks and promissory notes of the Association; keep proper books of account; cause an annual audit of the Association books to be make by a public accountant at the completion of each fiscal year; and shall prepare a proposed annual budget for consideration by the Board and shall prepare the final budget as approved by the Board, along with a statement of income and expenditures, to be presented to the membership at regular and annual meeting, and deliver a copy of each to the Members.

ARTICLE X
RULES AND REGULATIONS

Section 1. Adoption. The Board shall from time to time adopt and publish the Kanehoa Subdivision Rules, consistent with the Charter of Incorporation, these By-Laws and Declaration, governing the use of the Common Area and roadways, and covering such other matters within the Board’s purview which seem reasonably to require the promulgation of rules or regulations. Inasmuch as the Subdivision is rural in nature, it shall be the policy of the Association to leave unregulated that which seems not in need of same.

Section 2. Promulgation. The Secretary shall mall a true and correct copy of all rules and regulations, or amendments thereto, to each Member of the Association as appears on the membership roll of the Association at his last known address, and shall enter upon the records of the Association his certificate of such mailing.

Section 3. Effective Date. Any such rule or regulation or amendment thereto adopted by the Board shall be effective commencing at 12:01 AM. on the fifth (5th) day following the date of such mailing, unless the Board, in adopting the same, shall specify some other effective date.

Section 4. Advisory Committee. The President, with the approval of the Board, may appoint a committee of Members to prepare drafts of such rules and regulations, to suggest amendments thereto, and generally to advise the Board in regard to the use of the facilities of the Association.

ARTICLE XI
COMMITTEES

Section 1. Standing Committees. The Association shall have two standing committees, the Nominating Committee, provided for in Article VI above, and the Auwai Committee. The Auwai Committee shall have as its members all of the Member of the Association whose Lots currently receive waters from the auwai system which has been in operation on this land since 1953. The Auwai Committee shall serve as a communicative body and forum for all who are concerned with the auwai. It is the goal of this Committee that all maters concerning the auwai, its maintenance, and the use of waters therefrom, may be resolved informally and with mutual respect by the Members. The Association’s operative principles with respect tot the auwai are:

Section 2. Ad Hoc Committees. The Board shall have authority to appoint such other committees as it may deem appropriate in carrying out the purposes of the Association. Ad hoc committees which have served their purpose should be disbanded.

ARTICLE XII
BOOKS AND RECORDS

The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Member. The Declaration, the Charter of Incorporation of the Association and the By-Laws of the Association shall be available for inspection by any Member from the Secretary of the Association.

ARTICLE XIII
ASSESSMENTS

As more fully provided in the Declaration, each Member is obligated to pay to the Association annual and special assessments which are secured by a continuing lien upon the Lot against which the assessment is made. Any assessments which are not paid when due shall be delinquent and shall bear interests at the rate of twelve (12) percent per annum until paid. If the assessment is not paid within twenty (20) days after the due date, the delinquent Owner or Owners shall be liable for and shall pay a late charge of $25.00 or five (5) percent of the amount due, whichever is greater.

The Association may bring an action at law against the Owner personally obligated to pay the same or foreclose the lien against the property, and interest, costs, and reasonable attorney’s fees of any such action shall be added to the amount of such assessment. No Owner may waive or otherwise escape liability for the assessments provided for herein by non-use of the Common Area or abandonment of his Lot.

ARTICLE XIV
CORPORATE SEAL

The Association shall have a seal in circular form having within its circumference the words “KANEHOA COMMUNITY ASSOCIATION, KAMUELA, HAWAII”.

ARTICLE XV
AMENDMENTS

Section 1. These By-Laws may be amended, at a regular or special meeting of the Members for which the Notice has specified the amendments proposed, by a vote of a majority of a quorum of Members present in person or by proxy.

Section 2. In the case of any conflict between the Charter of Incorporation of the Association and these By-Laws, the Charter shall control; and in the case of any conflict between the Declaration and these By-Laws, the Declaration shall control.

ARTICLE XVI
MISCELLANEOUS

The fiscal year of the Association shall begin on the first day of January and end on the 31st day of December of every year, except that the first fiscal year shall begin on the date of incorporation.

ADOPTION OF BY-LAWS

The undersigned signers of the petition for the Charter of Incorporation of KANEHOA COMMUNITY ASSOCIATION hereby adopt the foregoing as the By-Laws of the Association this 6th day of June, 1985.