ARTICLE XI

SECTION 1. Membership in other Organizations

The Cooperative shall not become a member of or purchase stock in any other organization without an affirmative vote of the members at a meeting duly held, the notice of which shall specify that action is to be taken upon such proposed membership or stock purchase, provided, however, that the Cooperative may upon authorization of the board of directors, purchase stock in or become a member of any corporation or organization organized for the purpose of engaging in or furthering the cause of rural electrification or telecommunication, so long as it does not violate any covenant of any security interest of the Cooperative.

Notwithstanding the limitation contained in this section, the Cooperative, upon affirmative of a majority of its board of directors, may create a wholly owned Chapter 351 subsidiary, the purpose of which shall be:

1. To generate, manufacture, purchase, acquire and accumulate electric energy and to transmit, distribute, furnish, sell and dispose of such electric energy; to construct, erect, purchase, lease as lessee and in any manner acquire, hold, own, maintain, operate, sell, dispose of, lease as lesser, exchange and mortgage plant buildings, works, machinery, supplies, apparatus, equipment and electric transmission and distribution lines and the systems necessary, convenient, or useful for carrying out and accomplishing any of the foregoing purposes; and to utilize its facilities and equipment and lines for communication or for any other purpose.

2. To assist its consumers by wiring or causing to be wired, their premises, and by installing or causing to be installed therein electric and plumbing appliances, fixtures, machinery, supplies, apparatus, and equipment of any and all kinds and character and in connection therewith and for such purposes to enter into and carry out all agreements necessary and advisable in connection therewith, and to purchase, acquire, lease, sell, distribute, install and repair, electric and plumbing appliances, fixtures, machinery, supplies, apparatus, and equipment of any and all kinds and character.

3. To do and perform any and all acts and things and to have and exercise any and all powers as may be necessary or convenient for accomplishing any or all of the foregoing purposes; and to exercise any of its powers anywhere.

SECTION 2. Waiver of Notice

Any member or director may waive in writing any notice of a meeting required to be given by these bylaws. The attendance of a member or director at any meeting shall constitute a waiver of notice of such meeting by such member or director, except in case a member or director shall attend a meeting for the whole express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

SECTION 3. Rules and Regulations

The Board of Directors shall have power to make and adopt such rules and regulations, not inconsistent with law, the articles of incorporation or these bylaws, as it may deem advisable for the management of the business and affairs of the Cooperative.

SECTION 4. Accounting System and Reports

The board shall cause to be established and maintained a complete accounting system which, among other things, and subject to applicable laws and rules and regulations of any regulatory body, shall conform to such accounting system as may from time to time be designated by the Administrator of the Rural Electrification Administration of the United States of America. The board shall, at such time and upon such date as the board shall fix, cause to be made by a certified public accountant, a full and complete audit of the accounts, books and financial condition of the Cooperative as of the date selected by the board of directors. A report of such audit shall be submitted to the members at the next following annual meeting. Such audit need not be the same as the fiscal year.

SECTION 5. Area Coverage

The board shall make diligent effort to see that electric service is extended to all unserved persons within the Cooperative service area who: a. desire such service; and b. meet all reasonable requirements established by the Cooperative as a condition of such service.

SECTION 6. Rules of Order

Parliamentary procedure at all meetings of the members, of the Board of Directors, of any committee provided for in these Bylaws and of any other committee of the members or Board of Directors which may from time to time be duly established shall be governed by the most recent edition of Robert's Rules of Order, except to the extent such procedure is otherwise determined by law or by the Cooperative's Articles of Incorporation or Bylaws.

SECTION 7. Indemnification of Directors, Officers and Employees

The Cooperative shall indemnify directors, officers, including the General Manager, agents and employees, against liability to the extent that their acts or omissions constituting the grounds for alleged liability were performed in their official capacity and, if actionable at all, were based upon good faith business judgments in the belief the acts or omissions were in the best interest of the Cooperative or were not against the best interests of the Cooperative. The Cooperative may purchase insurance to cover such indemnification.