**Exhibit 3.2**

**BY-LAWS**

**OF**

**KIMBALL HILL, INC.**

**ARTICLEI**

**OFFICES**

The corporationshall continuously maintain in the State of Illinois a registered office and aregistered agent whose office is identical with such registered office, and mayhave other offices within or without the state.

**ARTICLEII**

**SHAREHOLDERS**

SECTION1.  ANNUAL MEETING.  An annual meeting of the shareholders shallbe held on the date designated by the board of directors for the purpose ofelecting directors and for the transaction of such other business as may comebefore the meeting.

SECTION2.  SPECIAL MEETINGS.  Special meetings of the shareholders may becalled either by the Executive Chairman, by the board of directors or by theholders of not less than one-fifth of all the outstanding shares of the corporation,for the purpose or purposes stated in the call of the meeting.

SECTION3.  PLACE OF MEETING.  All meetings of the shareholders shall beheld at the principal office of the corporation, except that the board ofdirectors may designate another place, either within or outside the State ofIllinois, as the place of meeting for any annual meeting or for any specialmeeting called by the board of directors.

SECTION4.  NOTICE OF MEETINGS.  Written notice stating the place, date andtime of the meeting, and in the case of a special meeting, the purpose orpurposes for which the meeting is called, shall be delivered, either personallyor by mail, to each shareholder of record entitled to vote at such meeting notless than ten nor more than sixty days before the date of the meeting, or inthe case of a meeting to consider a merger or consolidation not less thantwenty nor more than sixty days before the meeting.  Written notice of the annual meeting or anyspecial meeting shall be sent by or at the direction of the Executive Chairmanor the Secretary.  If mailed, such noticeshall be deemed to be delivered when deposited in the United States mail,addressed to the shareholder at his address as it appears on the records of thecorporation, with postage thereon prepaid. When a meeting is adjourned to another time or place, notice need not begiven of the adjourned meeting if the time and place thereof are announced atthe meeting at which the adjournment is taken.

SECTION5.  FIXING OF RECORD DATE.  For the purpose of determining theshareholders entitled to notice of or to vote at any meeting of shareholders orany adjournment

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thereof, or toexpress consent to corporate action in writing without a meeting, or to receivepayment of any dividend, or other distribution or allotment of any rights, orto exercise any rights in respect of any change, conversion or exchange ofshares or for the purpose of any other lawful action, the board of directors mayfix in advance a record date which shall not be more than sixty days and notless than ten days before the date of such meeting or other action, except thatwith respect to a meeting of shareholders to consider a proposed merger orconsolidation, the record date shall be not more than sixty days and not lessthan twenty days before the date of such meeting.  If no record date is fixed, the record datefor the determination of shareholders entitled to notice of or to vote at ameeting of shareholders shall be the date on which notice of the meeting ismailed, and the record date for the determination of shareholders for any otherpurpose shall be the date on which the board of directors adopts the resolutionrelating thereto.  A determination ofshareholders of record entitled to notice of or to vote at a meeting ofshareholders shall apply to any adjournment of the meeting.

SECTION6.  VOTING LISTS.  The officer or agent having charge of thetransfer books for shares of the corporation shall make, within twenty daysafter the record date for, or ten days before, each meeting of shareholders,whichever is earlier, a complete list of the shareholders entitled to vote atsuch meeting, arranged in alphabetical order, showing the address of and thenumber of shares registered in the name of the shareholder, which list, for aperiod of ten days prior to such meeting, shall be kept on file at theregistered office of the corporation and shall be open to inspection by anyshareholder for any proper purpose at any time during usual businesshours.  Such list shall also be producedand kept open at the time and place of the meeting and may be inspected by anyshareholder during the whole time of the meeting.  The original share ledger or transfer book,or a duplicate thereof kept in this State, shall be primafacieevidence as to who are the shareholders entitled to examine such list or shareledger or transfer book or to vote at any meeting of shareholders.

SECTION7.  QUORUM.  The holders of a majority of the outstandingshares of the corporation, present in person or represented by proxy, shallconstitute a quorum at any meeting of shareholders; provided that if less thana majority of the outstanding shares are represented at said meeting, amajority of the shares so represented may adjourn the meeting at any time withoutfurther notice.  If a quorum is present,the affirmative vote of the majority of shares represented at the meeting shallbe the act of the shareholders, unless the vote of a greater number or votingby classes is required by law, the articles of incorporation or these by-laws.At any adjourned meeting at which a quorum shall be present, any business maybe transacted which may have been transacted at the original meeting.  Withdrawal of shareholders from any meetingshall not cause failure of a duly constituted quorum at that meeting.

SECTION8.  PROXIES.  Each shareholder entitled to vote at ameeting of shareholders or to express consent or dissent to corporate action inwriting without a meeting may authorize another person or persons to act forhim by proxy, but no such proxy shall be valid after eleven months from thedate of its execution, unless otherwise specifically provided in the proxy.

SECTION9.  VOTING OF SHARES.  Each outstanding share shall be entitled toone vote upon each matter submitted to vote at a meeting of shareholders,unless voting rights as to such shares have been limited or denied.

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SECTION10.  VOTING OF SHARES BY CERTAINHOLDERS.  Shares standing in the name ofanother corporation, domestic or foreign, may be voted by such officer, agent,or proxy as the by-laws of such corporation may prescribe, or, in the absenceof such provision, as the board of directors of such corporation may determine.

Sharesstanding in the name of a deceased person, a minor ward or an incompetent personmay be voted by his administrator, executor, court appointed guardian orconservator, either in person or by proxy without a transfer of such sharesinto the name of such administrator, executor, court appointed guardian orconservator.  Shares standing in the nameof a trustee may be voted by him, either in person or by proxy.

Sharesstanding in the name of a receiver may be voted by such receiver, and sharesheld by or under the control of a receiver may be voted by such receiverwithout the transfer thereof into his name if authority so to do be containedin an appropriate order of the court by which such receiver was appointed.

Ashareholder whose shares are pledged shall be entitled to vote such sharesuntil the shares have been transferred into the name of the pledgee, andthereafter the pledgee shall be entitled to vote the share so transferred.

Anynumber of shareholders may create a voting trust for the purpose of conferringupon a trustee or trustees the right to vote or otherwise represent theirshares for a period not to exceed ten years by entering into a written votingtrust agreement specifying the terms and conditions of the voting trust, and bytransferring their shares to such trustee or trustees for the purpose of theagreement.  Any such trust agreementshall not become effective until a counterpart of the agreement is depositedwith the corporation at its registered office. The counterpart of the voting trust agreement so deposited with the corporationshall be subject to the same right of examination by a shareholder of thecorporation, in person or by agent or attorney, as are the books and records ofthe corporation, and shall be subject to examination by any holder of abeneficial interest in the voting trust, either in person or by agent orattorney, at any reasonable time for any proper purpose.

Sharesof its own stock belonging to this corporation shall not be voted, directly orindirectly, at any meeting and shall not be counted in determining the totalnumber of outstanding shares at any given time, but shares of its own stockheld by it in a fiduciary capacity may be voted and shall be counted indetermining the total number of outstanding shares at any given time.

SECTION11.  NO CUMULATIVE VOTING.  In all elections for directors, there shallbe no cumulative voting by any shareholder of any shares permitted to vote.

SECTION12.  INSPECTORS.  At any meeting of shareholders, the presidingofficer may, or upon the request of any shareholder shall, appoint one or morepersons as inspectors for such meeting.

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Suchinspectors shall ascertain and report the number of shares represented at themeeting, based upon their determination of the validity and effect of proxies,count all votes and report the results, and do such other acts as are proper toconduct the election and voting with impartiality and fairness to all theshareholders.

Eachreport of an inspector shall be in writing and signed by him or by a majorityof them if there be more than one inspector acting at such meeting.  If there is more than one inspector, thereport of a majority shall be the report of the inspectors.  The report of the inspector or inspectors onthe number of shares represented at the meeting and the results of the votingshall be primafacie evidence thereof.

SECTION13.  INFORMAL ACTION BYSHAREHOLDERS.  Any action required to betaken at a meeting of the shareholders, or any other action which may be takenat a meeting of the shareholders, may be taken without a meeting if a consentin writing, setting forth the action so taken, shall be signed by shareholdersentitled to vote with respect to the subject matter thereof owning such numberof shares as may be required by law, the articles of incorporation or theseby-laws to take or authorize such action, provided that the corporation and theshareholders who sign such consent take all action that may be required by lawin order for such consent to be valid and effective.

SECTION14.  VOTING BY BALLOT.  Voting on any question or in any election maybe by voice unless the presiding officer shall order or any shareholder shalldemand that voting be by ballot.

**ARTICLEIII**

**DIRECTORS**

SECTION1.  GENERAL POWERS.  The business of the corporation shall bemanaged by or under the direction of its board of directors.

SECTION 2.  NUMBER, TENURE AND QUALIFICATIONS.  The number of directors of the corporationshall be not less than five and not more than ten, as determined from time totime by the board of directors.  Eachdirector shall hold office until the later of (a) the next annual meeting ofshareholders, or (b) the election of his successor.  Directors need not be residents of Illinoisor shareholders of the corporation.  Thenumber of directors may be increased or decreased from time to time by anamendment of this section; but no decrease shall have the effect of shorteningthe term of any incumbent director.

SECTION3.  REGULAR MEETINGS.  A regular meeting of the board of directorsshall be held without other notice than this by-law immediately after theannual meeting of shareholders.  Theboard of directors may provide, by resolution, the time and place for theholding of additional regular meetings without other notice than suchresolution.

SECTION4.  SPECIAL MEETING.  Special meetings of the board of directorsmay be called by or at the request of the Executive Chairman or anydirector.  Unless otherwise

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determined byresolution of the board of directors, special meetings shall be held at theprincipal office of the corporation.

SECTION5.  NOTICE.  Notice of any special meeting shall be givenat least two days previous thereto by written notice sent by mail, telefax orelectronic mail to each director at his business address as it appears on therecords of the corporation.  If notice isgiven by mail, such notice shall be deemed to be delivered on the third dayafter deposit in the United States mail so addressed, with postage thereonprepaid.  If notice is given by telefax,such notice shall be deemed to be delivered when the telefax is transmitted fromthe corporation’s telefax machine.  Ifnotice is given by electronic mail, such notice shall be deemed to be deliveredwhen the electronic mail is sent from the corporation’s computer; provided thata copy of such notice is transmitted by telefax promptly after having been sentby electronic mail.  The attendance of adirector at any meeting shall constitute a waiver of notice of such meeting,except where a director attends a meeting for the express purpose of objectingto the transaction of any business because the meeting is not lawfully calledor convened.  Neither the business to betransacted at nor the purpose of any regular or special meeting of the board ofdirectors need be specified in the notice or waiver of notice of such meeting.

SECTION6.  QUORUM.  A majority of the number of directors then inoffice, but not less than a majority of the minimum number of directorsspecified in Section 2 of this Article III, shall constitute a quorum fortransaction of business at any meeting of the board of directors, provided thatif less than a majority of such number of directors is present at said meeting,a majority of the directors present may adjourn the meeting at any time withoutfurther notice.

SECTION7.  MANNER OF ACTING.  The act of the majority of the directorspresent at a meeting at which a quorum is present shall be the act of the boardof directors, unless the act of a greater number is required by law, thearticles of incorporation or these by-laws.

SECTION8.  VACANCIES.  Any vacancy occurring in the board ofdirectors and any directorship to be filled by reason of an increase in thenumber of directors may be filled by the board of directors.  A director appointed to fill a vacancy or byreason of an increase in the number of directors shall serve until the nextmeeting of shareholders at which directors are to be elected.

SECTION9.  ACTION WITHOUT A MEETING.  Unless specifically prohibited by thearticles of incorporation or these by-laws, any action required to be taken ata meeting of the board of directors or any other action which may be taken at ameeting of the board of directors or a meeting of any committee thereof may betaken without a meeting if a consent in writing, setting forth the action sotaken, shall be signed by all the directors entitled to vote with respect tothe subject matter thereof, or by all the members of such committee, as thecase may be.  Any such consent signed byall the directors or all the members of the committee shall have the sameeffect as a unanimous vote, and may be stated as such in any document filedwith the Secretary of State or with any third party.

SECTION10.  COMPENSATION.  The board of directors, by the affirmativevote of a majority of directors then in office, and irrespective of anypersonal interest of any of its

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members, shallhave authority to establish reasonable compensation of all directors forservices to the corporation as directors, officers or otherwise.  The corporation shall reimburse thosedirectors who are not employees of the corporation for their expenses, if any,of attending meetings of the board. Reimbursement of such expenses shall not preclude any director fromserving the corporation in any other capacity and receiving compensation therefor.

SECTION11.  PRESUMPTION OF ASSENT.  A director of the corporation who is presentat a meeting of the board of directors at which action on any matter is takenshall be conclusively presumed to have assented to the action taken unlesseither (a) his dissent shall have been entered in the minutes of the meeting,or (b) before the adjournment of the meeting, he shall have filed his writtendissent to such action with the person acting as the secretary of the meeting,or (c) within two days after the adjournment of the meeting, he shall have deliveredhis written dissent by registered mail to the Secretary of thecorporation.  Such right to dissent shallnot apply to a director who voted in favor of such action.

SECTION12.  COMMITTEES.  The board of directors may create committees(including, for example and not by way of limitation, an executive committee,an audit committee and a compensation committee), each consisting of no lessthan two directors designated from time to time by the board of directors,which shall exercise such authority with respect to the management anddirection of the corporation as may be specified from time to time by the boardof directors.  Unless otherwise providedby the board of directors, committees shall be subject to the following:

(a)           Each committee may determine theprocedural rules for meeting and conducting its business and shall act inaccordance with them, except as otherwise provided in the by-laws or requiredby law;

(b)           Appropriate provision shall be madefor notice of meetings to all committee members;

(c)           A majority of the members of thecommittee shall constitute a quorum unless the committee shall consist of oneor two members, in which event one member shall constitute a quorum, and allmatters shall be determined by a majority vote of the members present at themeeting;

(d)           Any member of a committee may beremoved at any time, with or without cause, by the board of directors, and anymember of a committee may resign from a committee at any time by giving writtennotice to the Executive Chairman of the corporation;

(e)           Any vacancy on a committee may befilled by action of the board of directors;

(f)            Each committee shall make periodicreports as appropriate to the board of directors.

SECTION 13. TELEPHONE AND SIMILAR MEETINGS. The board of directors and any committee established by the board mayhold meetings, and the directors and committee members may participate inmeetings, required or permitted under these by-laws by telephone or othercommunications equipment by means of which all persons participating in themeeting can

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hear eachother.  Participation in a meetingpursuant to this section shall constitute presence in person at such a meeting,except where a director participates in the meeting for the express purpose ofobjecting to the transac­tion of any business because the meeting is notlawfully called or convened.

**ARTICLEIV**

**OFFICERS**

SECTION1.  NUMBER.  The officers of the corporation shall be anExecutive Chairman, one or more Vice Chairmen, a President and Chief ExecutiveOfficer, one or more Vice Presidents, a Chief Financial Officer, a Treasurer, aSecretary, one or more Assistant Treasurers and Assistant Secretaries, and suchother officers as may be elected or appointed by the board of directors.  Any two or more offices may be held by thesame person.

SECTION2.  ELECTION AND TERM OF OFFICE.  The officers of the corporation shall beelected annually by the board of directors at the first meeting of the board ofdirectors held after each annual meeting of shareholders.  If the election of officers shall not be heldat such meeting, such election shall be held as soon thereafter as convenientlymay be.  Vacancies may be filled or newoffices created and filled at any meeting of the board of directors.  Each officer shall hold office until hissuccessor shall have been duly elected or until his death, resignation orremoval.  Election of an officer shallnot of itself create contract rights.

SECTION3.  REMOVAL.  Any officer elected or appointed by the boardof directors may be removed by the board of directors whenever in its judgmentthe best interests of the corporation would be served thereby, but such removalshall be without prejudice to the contract rights, if any, of the person soremoved.

SECTION4.  EXECUTIVE CHAIRMAN.  The Executive Chairman shall preside at allmeetings of the board of directors and shall have and perform such other dutiesand responsibilities as may be assigned from time to time by the board ofdirectors.  In the absence of the ChiefExecutive Officer or in the event of his inability or refusal to act, theExecutive Chairman shall perform the duties and responsibilities of the ChiefExecutive Officer, and when so acting, shall have all the powers assigned tothat office.  Except in those instancesin which the authority to execute is expressly delegated to another officer oragent of the corporation or a different mode of execution is expresslyprescribed by the board of directors, the Executive Chairman may execute forthe corporation any contracts, deeds, mortgages, bonds, or other instrumentswhich the board of directors has authorized to be executed.

SECTION5.  VICE CHAIRMEN.  The Vice Chairman (or Chairmen) shall assistthe Executive Chairman in the discharge of his duties as the Executive Chairmanmay direct and shall have and perform such other duties and responsibilities asmay be assigned from time to time by the Executive Chairman or by the board ofdirectors. Except in those instances in which the authority to execute isexpressly delegated to another officer or agent of the corporation or adifferent mode of execution is expressly prescribed by the board of directors,each Vice Chairman may execute for the corporation any contracts, deeds,mortgages, bonds or other instruments which the board of directors hasauthorized to be executed.

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SECTION6.  PRESIDENT AND CHIEF EXECUTIVEOFFICER.  Subject to the direction andcontrol of the board of directors, the President and Chief Executive Officer (“ChiefExecutive Officer”) shall be the chief executive officer of the corporation andshall have and perform the following general duties and responsibilities:  be in overall charge of the business of thecorporation; see that the resolutions and directions of the board of directorsare carried into effect except in those instances in which that responsibilityis specifically assigned to some other person by the board of directors;establish and communicate the mission, objectives, goals and operatingprinciples applicable to all business operations of the corporation; and, ingeneral, discharge all duties incident to the office of Chief ExecutiveOfficer.  In addition, the ChiefExecutive Officer shall have and perform such other duties and responsibilitiesas may be assigned from time to time by the board of directors.  Except in those instances in which theauthority to execute is expressly delegated to another officer or agent of thecorporation or a different mode of execution is expressly prescribed by theboard of directors, the Chief Executive Officer may execute for the corporationany contracts, deeds, mortgages, bonds or other instruments which the board ofdirectors has authorized to be executed.

SECTION7.  VICE PRESIDENTS.  Each of the Vice Presidents shall assist theChief Executive Officer in the discharge of his duties as the Chief ExecutiveOfficer may direct and shall perform such other duties as may be assigned fromtime to time by the Chief Executive Officer, the Executive Chairman or theboard of directors.  Except in thoseinstances in which the authority to execute is expressly delegated to anotherofficer or agent of the corporation or a different mode of execution isexpressly prescribed by the board of directors, each of the Vice Presidents mayexecute for the corporation any contracts, deeds, mortgages, bonds or otherinstruments which the board of directors has authorized to be executed.

SECTION8.  CHIEF FINANCIAL OFFICER.  The Chief Financial Officer shall be theprincipal financial and accounting officer of the corporation.  The Chief Financial Officer shall have chargeof and be responsible for the maintenance of adequate books of account for thecorporation, have charge and custody of all funds and securities of thecorporation and be responsible for the receipt and disbursement thereof, andperform all the duties incident to the office of Chief Financial Officer andsuch other duties as may be assigned from time to time by the Chief ExecutiveOfficer, the Executive Chairman or the board of directors.

SECTION9.  TREASURER.  The Treasurer shall be responsible for thecorporation’s cash management systems and procedures and the corporation’sbanking and finance relationships with lenders and investors, and shall performall the duties incident to the office of Treasurer and such other duties as maybe assigned from time to time by the Chief Executive Officer, the ExecutiveChairman or the board of directors.

SECTION10.  SECRETARY.  The Secretary shall record the minutes ofmeetings of the board of directors or actions taken by unanimous writtenconsent of the board of directors, be custodian of the corporation’s recordsand the corporate seal (if any), sign with the Executive Chairman or a ViceChairman or the Chief Executive Officer or a Vice President or any otherofficer authorized by the board of directors any contracts, deeds, mortgages,bonds or other instruments which the board of directors has authorized to beexecuted, except when a different

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mode of executionis expressly prescribed by the board of directors, and shall perform all dutiesincident to the office of Secretary and such other duties as may be assignedfrom time to time by the Chief Executive Officer, the Executive Chairman or theboard of directors.

SECTION11.  ASSISTANT TREASURERS.  The Assistant Treasurers shall perform suchduties as from time to time shall be assigned to them by the Chief ExecutiveOfficer, the Executive Chairman, the Chief Financial Officer, the Treasurer orthe board of directors.

SECTION12.  ASSISTANT SECRETARIES.  The Assistant Secretaries shall perform suchduties as from time to time shall be assigned to them by the Chief ExecutiveOfficer, the Executive Chairman, the Secretary or the board of directors.

SECTION13.  DELEGATION OF AUTHORITY.  Each officer shall have the power andauthority, in his sole discretion, to delegate any and all of his duties andresponsibilities as an officer of the corporation.

SECTION14.  COMPENSATION OF OFFICERS.  The salaries and other compensation of theofficers shall be fixed from time to time by the board of directors or in suchmanner as may be approved by the board of directors, and no officer shall beprevented from receiving a salary or other compensation by reason of the factthat he or she is also a director of the corporation.

**ARTICLEV**

**CONTRACTS, LOANS, CHECKS AND DEPOSITS**

                SECTIONl.  CONTRACTS.  The board of directors may authorize anyofficer or officers, agent or agents, to enter into any contract or execute anddeliver any instrument in the name of and on behalf of the corporation, andsuch authority may be general or confined to specific instances.

SECTION2.  LOANS.  No loans shall be contracted on behalf of thecorporation and no evidences of indebtedness shall be issued in its name unlessauthorized by a resolution of the board of directors.

SECTION3.  CHECKS, DRAFTS, ETC.  All checks, drafts or other orders for thepayment of money, notes or other evidences of indebtedness issued in the nameof the corporation, shall be signed by such officer or officers, agent oragents of the corporation and in such manner as shall from time to time to bedetermined by resolution of the board of directors.

SECTION4.  DEPOSITS.  All funds of the corporation not otherwiseemployed shall be deposited from time to time to the credit of the corporationin such banks, trust companies or other depositaries as may be authorized by theboard of directors.

SECTION5.  GENERAL OR SPECIFIC AUTHORITY.  Any authorization granted by the board ofdirectors under this Article V may be general or confined to specificinstances.

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**ARTICLEVI**

**CERTIFICATESFOR SHARES AND THEIR TRANSFER**

SECTION1.  CERTIFICATES FOR SHARES.  Certificates representing shares of thecorporation shall be signed by the Executive Chairman, or a Vice Chairman, orthe President and Chief Executive Officer, or a Vice President or such otherofficer as may be designated by resolution of the board of directors and by theSecretary or an Assistant Secretary, and shall be unsealed or sealed with theseal or a facsimile of the seal of the corporation.  If both of the signatures of the officers beby facsimile, the certificate shall be manually signed by or on behalf of aduly authorized transfer agent or clerk. Each certificate representing shares shall be consecutively numbered orotherwise identified, and shall also state the name of the person to whomissued, the number and class of shares (with designation of series, if any),the date of issue, that the corporation is organized under Illinois law, andthe par value or a statement that the shares are without par value.  If the corporation is authorized and doesissue shares of more than one class or of series within a class, thecertificate shall also contain such information or statement as may be requiredby law.

Thename and address of each shareholder, the number and class of shares held andthe date on which the certificates for the shares were issued shall be enteredon the books of the corporation.  Theperson in whose name shares stand on the books of the corporation shall bedeemed the owner thereof for all purposes as regards the corporation.

SECTION2.  LOST CERTIFICATES.  If a certificate representing shares hasallegedly been lost or destroyed, unless otherwise required by law, thecorporation shall issue a new certificate upon such indemnification and otherreasonable requirements as it may impose.

SECTION3.  TRANSFERS OF SHARES.  Transfers of shares of the corporation shallbe recorded on the books of the corporation and, except in the case of a lostor destroyed certificate, on surrender for cancellation of the certificate forsuch shares.  A certificate presented fortransfer must be duly endorsed and, if requested by the corporation,accompanied by proper guaranty of signature and other appropriate assurancesthat the endorsement is effective.

**ARTICLEVII**

**FISCAL YEAR**

Subjectto change by resolution of the board of directors, the fiscal year of thecorporation for income tax purposes shall end on the 31st day of December ineach year and the fiscal year of the corporation for financial reporting andrelated accounting purposes shall end on the 30th day of September in eachyear.

**ARTICLEVIII**

**DIVIDENDS**

Theboard of directors may from time to time declare, and the corporation may pay,dividends on its outstanding shares in the manner and upon the terms andconditions provided by law and its articles of incorporation.

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**ARTICLEIX**

**SEAL**

Shouldthe board of directors deem a corporate seal appropriate, then the corporateseal shall have inscribed thereon the name of the corporation and the words “CorporateSeal, Illinois”.  The seal may be used bycausing it or a facsimile thereof to be impressed or affixed or in any mannerreproduced.

**ARTICLEX**

**WAIVER OF NOTICE**

Wheneverany notice is required to be given under the provisions of these by-laws, thearticles of incorporation or applicable law, a waiver thereof in writing,signed by the person or persons entitled to such notice, whether before orafter the time stated therein, shall be deemed equivalent to the giving of suchnotice.

**ARTICLEXI**

**AMENDMENTS**

Thepower to make, alter, amend or repeal the by-laws of the corporation shall bevested in the board of directors, unless reserved to the shareholders by thearticles of incorporation.  The by-lawsmay contain any provisions for the regulation and management of the affairs ofthe corporation not inconsistent with law or the articles of incorporation.

**ARTICLEXII**

**INDEMNIFICATIONOF OFFICERS,**

**DIRECTORS, EMPLOYEES AND AGENTS**

SECTION 1.  The corporation shall indemnify any personwho was or is a party or is threatened to be made a party to any threatened,pending or completed action, suit or proceeding, whether civil, criminal,administrative or investigative (other than an action by or in the right of thecorporation) by reason of the fact that he or she is or was a director,officer, employee or agent of the corporation or any other corporation,partnership, joint venture, trust or other entity in which the corporation hasan interest or that he or she is or was serving at the request of thecorporation as a director, officer, employee or agent of another corporation,partnership, joint venture, trust or other entity or enterprise, includingwithout limitation any employee benefit plan, (collectively, an “Action”)against expenses (including attorneys’ fees), judgments, fines and amounts paidin settlement actually and reasonably incurred by such person in connectionwith such Action if such person acted in good faith and in a manner he or shereasonably believed to be in or not opposed to the best interests of thecorporation, and, with respect to any criminal action or proceeding, had noreasonable cause to believe his or her conduct was unlawful.  The termination of any Action by judgment orsettlement, conviction or upon a plea of nolo contendere or its equivalentshall not, of itself, create a presumption that the person did not act in goodfaith and in a manner which he or she reasonably believed to be in or notopposed to 

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the best interests of thecorporation, and with respect to any criminal action or proceeding, that theperson had reasonable cause to believe that his or her conduct was unlawful.

SECTION2.  Any indemnification under Section 1of this Article XII (unless ordered by the court) shall be made by thecorporation only as authorized in the specific case upon a determination thatindemnification of the director, officer, employee or agent is proper in thecircumstances because such person has met the applicable standard of conductset forth therein.  Such determinationshall be made (a) by the board of directors by a majority vote of a quorumconsisting of directors who were not parties to such Action, or (b) if such aquorum is not obtainable, or, even if obtainable, a quorum of disinteresteddirectors so directs, by independent legal counsel in a written opinion, or (c)by the shareholders.  Notwithstanding theforegoing, to the extent that a present or former director, officer, employeeor agent of the corporation has been successful on the merits or otherwise in thedefense of any Action, or in the defense of any claim, issue or matter therein,such person shall be indemnified against expenses (including attorneys’ fees)actually and reasonably incurred by him or her in connection therewith if suchperson acted in good faith and in a manner he or she reasonably believed to bein or not opposed to the best interests of the corporation.

SECTION3.  Expenses (including attorneys’ fees)actually and reasonably incurred by a director, officer, employee or agent ofthe corporation in connection with the defense or disposition of any Action maybe paid from time to time by the corporation in advance of the finaldisposition thereof upon receipt of (a) an affidavit by such person of his goodfaith belief that he has met the standard of conduct necessary for indemnificationunder Section 1 of this Article XII, and (b) an undertaking by such person torepay to the corporation the amounts so paid if it is ultimately determinedthat he is not entitled to indemnification as authorized in Section 1 of thisArticle XII, which undertaking may be accepted by the corporation withoutreference to the financial ability of such person to make repayment.  Any payment of expenses under this Section 3shall be made in the sole discretion of the corporation and on such terms andconditions as the corporation, in its sole discretion, deems appropriate.

SECTION4.  If both the corporation and anyperson to be indemnified are parties to an Action, legal counsel representingthe corporation therein may, at the request of such person, also represent suchperson (unless such dual representation would involve such legal counsel in aconflict of interest in violation of applicable law or principles ofprofessional ethics), and the corporation shall pay all fees and expenses ofsuch legal counsel incurred during the period of dual representation other thanthose, if any, that would not have been incurred if legal counsel wererepresenting only the corporation.  Anyallocation of fees and expenses between the corporation and such person made bylegal counsel shall be final and binding upon the corporation and such person.

SECTION5.  The indemnification and advancementof expenses provided in this Article XII shall not be deemed exclusive of anyother rights to which a director, officer, employee or agent of the corporationmay be entitled under any contract, agreement or otherwise, both as to actionin his official capacity and as to action in another capacity while holdingsuch position or office, and shall continue as to a person who has ceased to bea director, officer, employee or agent and shall inure to the benefit of theheirs, executors and administrators of such person.

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SECTION6.  The corporation shall have power topurchase and maintain insurance on behalf of any person who is or was a director,officer, employee or agent of the corporation, or is or was serving at therequest of the corporation as a director, officer, employee or agent of anothercorporation, partnership, joint venture, trust or other enterprise against anyliability asserted against him and incurred by him in any such capacity, orarising out of his status as such, whether or not the corporation would havethe power to indemnify him or her against such liability under the provisionsof this Article XII.

 

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