Highland Cove Community Homeowners Assoc.

*****Highland Cove Bylaws*******

Updated Bylaws

BYLAWS OF
HIGHLAND COVE COMMUNITY HOMEOWNERS ASSOCIATION, INC.

ARTICLE I

Name and Location

Section 1: Name and Location. These are the Bylaws of the Mississippi nonprofit corporation named:

HIGHLAND COVE COMMUNITY HOMEOWNERS ASSOCIATION, INC.

The corporation is referred to herein at times as the "Association". The principal office of the Association is located at 1007 Craigs Circle, Ridgeland, Mississippi, 39157, or such other place as the Board of Directors may designate from time to time.

ARTICLE II

Definitions

Section 1: Protective Covenants. "Protective Covenants", as used herein, means that certain instrument entitled "Protective Covenants of Highland Cove Subdivision" dated December 10th, 1996, filed for record in the office of the Chancery Clerk of Madison County, at Canton, Mississippi, on December 17th, 1996, and recorded in the land records in Book 1013 at Page 655.

Section 2: Board of Directors. "Board of Directors", as used herein, means the Board of Directors of the Association.

Section 3: Articles. "Articles", as used herein, means the Articles of Incorporation of the Association, as amended from time to time.

Section 4: President, Vice-President, Secretary and Treasurer. The words "President", "Vice-President", "Secretary", "Treasurer", as used herein, mean, respectively, the President, Vice-President, Secretary and Treasurer of the Association.

Section 5: Other Definitions. Unless a different meaning is apparent from the context, all other expressions used herein shall have the same meaning as they are defined to have in the Protective Covenants, except that the word "herein" as used in these Bylaws, shall mean in these Bylaws.

ARTICLE III

Membership and Voting Rights

Section 1: Organization. The Association has been organized by filing Articles of Incorporation with the Secretary of State of Mississippi. The Association shall be responsible for the administration and maintenance of the Common Areas of Highland Cove Subdivision, for the enforcement of the Bylaws of the Association, and for such other activities as determined by the Members and the Board of Directors.

Section 2: Association Membership. Every person who becomes an owner of record of a Lot in Highland Cove Subdivision shall become a member of the Association. Where more than one person owns a Lot, all such persons may be Members. Each such person who joins the Association and pays the Assessments set forth herein shall become a Member.

Section 3: Class of Members. The Association shall have one (1) class of Members.

Section 4: Voting Rights. Except as otherwise provided in the Articles or herein, each Member shall be entitled to one (1) vote for each Lot in which such Member holds the interest required for membership. When more than one person holds such interest or interests in any Lot, all such persons shall be Members, and the vote for such Lot shall be exercised as they, among themselves, determine, but in no event shall more than one (1) vote be cast with respect to any such Lot.

Section 5: Action by Members. Whenever any provision of the Articles or the Bylaws requires a vote of a specified percentage of the voting power of the Members, such provision shall require a vote by the specified percentage of the voting power of the Members voting on such matters.

Section 6: Memberships Appurtenant to Real Property. The membership of each Member shall be appurtenant to the ownership of a Lot. A membership shall not be held, assigned, transferred, pledged, hypothecated, encumbered, conveyed or alienated in any manner except in conjunction with and as an appurtenance to the ownership, assignment, transfer, pledge, hypothecation, encumbrance, conveyance, or alienation of the Lot to which the membership is appurtenant.

Section 7: Voting Conflicts Between Members. If the ownership of a particular Lot is owned of record by more than one Member, the one vote appurtenant to such Lot may be exercised by any one of the such Members, unless the other Members who own an interest in such Lot shall object prior to the completion of voting upon the particular matter under consideration. In the event of any such objection, the vote appurtenant to such Lot shall not be counted, unless the Members unanimously agree on the vote prior to completion of voting upon the particular matter under consideration.

Section 8: No Pre-Emptive Rights. No Member of the Association, simply by virtue of being a Member, shall have any pre-emptive rights to acquire any additional memberships which the Association may issue from time to time.

Section 9: Membership Certificates. If the Board of Directors should consider it necessary or appropriate to issue membership certificates, each such membership certificate shall state (1) that the Association is organized under the laws of the State of Mississippi, and (2) the name of the registered holder or holders of the membership represented thereby. Each membership certificate shall be in such form as shall be approved by the Board of Directors. Membership certificates shall be consecutively numbered, bound in one or more books, and shall be issued therefrom upon certification as to the transfer of title to the Lot to which such membership is appurtenant. Every membership certificate shall be signed by the President or Vice-President and the Secretary or an Assistant Secretary and shall be sealed with the corporate seal. Such signatures and seal may be original or facsimile.

Section 10: Lost Certificates. The Board of Directors may direct that a new certificate or certificates be issued in place of any membership certificate or certificates previously issued by the Association and alleged to have been destroyed or lost, upon the making of an affidavit of the fact by the person claiming the membership certificate to be lost or destroyed. When authorizing such issuance of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the registered holder of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as the Board of Directors shall require and to give the Association a bond in such sum as the Board of Directors may require as indemnity against any claim that may be made against the Association on account of the issuance of such new certificate.

ARTICLE IV

Meetings of Members

Section 1: Place of Meeting. Meetings of the Members shall be held at whatever suitable place or places within the State of Mississippi as are reasonably convenient to the membership as may be designated by the Board of Directors from time to time.

Section 2: First Meeting. The first meeting of the Members shall be held at whatever time and place as may be designated by the initial Board of Directors, but shall be held within ninety (90) days of filing Articles of Incorporation for the Association.

Section 3: Annual Meetings. The annual meeting of the Members shall be held at 7:00 o'clock P.M. on the first Tuesday of February in each year. The Board of Directors may reschedule the Annual Meeting to a later date upon written notice to the Members. At the annual meeting, there shall be elected by ballot the individuals who shall serve on the Board of Directors in accordance with the provisions of Article V of these Bylaws, and officers of the Association in accordance with the provisions of Article VI of these Bylaws. The Members also may transact such other business as may properly come before the meeting.

Section 4: Special Meetings. It shall be the duty of the President or the Secretary to call a special meeting of the Members whenever such is directed by resolution of the Board of Directors, or whenever such is requested by a petition presented to the President or to the Secretary after first having been signed by at least thirty percent (30%) of the Members. The notice of any special meeting shall state the time and place of such meeting and the purpose thereof. No business shall be transacted at a special meeting except such as is stated in the notice.

Section 5: Notice of Meetings. The Secretary shall mail or deliver a notice of each annual or special meeting, stating the purpose thereof, as well as the time and place where the meeting is to be held, to each Member of record, at his address as it appears on the membership roster of the Association or, if no such address appears, at his last known address, at least ten (10) but not more than sixty (60) days prior to such meeting. Any notice so mailed shall be considered as notice properly served. Attendance by a Member at a meeting of the Members shall be a waiver by him of the lack of notice or defective notice of the meeting, unless the Member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting and deliver to the secretary a written objection thereto. Notice of any annual or
Special meeting of the Members also may be waived in any other manner by any Member either prior to, at or after any such meeting.

Section 6: Roster of Membership. The Secretary shall maintain a current roster of the names and addresses of the Members of the Association. Each Member, upon becoming a Member, shall furnish the Secretary with his current mailing address, and thereafter shall notify the Secretary immediately in writing of any change or changes in his current mailing address. In giving notices required hereunder, the Association may rely on such Roster.

Section 7: Quorum and Voting Requirements. The quorum and requirements for all meetings of Members shall be as follows:

At each meeting of the Members called, as herein Provided, the presence of Members, or of proxies, entitled to cast not less than thirty percent (30%) of all votes of each class of membership at the meeting shall constitute a quorum.

Section 8: Adjourned Meetings. If at any particular meeting of the Members, the number of Members present should be less than or should fall below the number required for a quorum, and if such deficiency is brought to the attention of the presiding officer by a proper call or request for a determination of quorum (which call and the results thereof shall be shown on the Minutes of the meeting), no further business may be transacted at such meeting until the proper quorum is present. If such event occurs, the presiding officer shall adjourn the meeting to a later date. If the later date, time and place is announced before adjournment, no further notice shall be necessary. If no such announcement is made, the adjourned meeting may be reconvened only upon notice required hereunder for a special meeting of the Members. Such subsequent meeting shall be held not more than thirty (30) days following the initial meeting at which the quorum requirements were not met.

Section 9: Voting. At every meeting of the Members, the Members shall have the voting rights specified in Article III. The affirmative vote of the Members having at least fifty-one (51) percent of the total number of votes represented at the meeting, In person or by proxy, shall be necessary to decide any question properly brought before the meeting, unless the question be one as to which, by provision of law, the Articles or these Bylaws, a different vote is required, in which case such provision of law, the Articles or these Bylaws shall govern and control. No Member who is shown by the books of the Association to be more than thirty
(30) days delinquent in any payment due the Association shall be eligible to vote, either in person or by proxy. No such delinquent Member shall be eligible to be elected to the Board of Directors or as an officer of the Association.

Section 10: Proxies. A Member may appoint only another Member or the Management Agent, if any, as his proxy. All proxies must be in writing and must be in such form as has been approved by the Board of Directors and must be filed with the Secretary prior to the appointed time of the meeting at which the proxy is to be exercised. Unless limited by its provisions to a shorter term, each proxy shall continue until (1) revoked by a writing properly filed with the Secretary, (2) the death or incapacity of the Member who gave the proxy, or (3) the date one hundred eighty (180) days after the date of the proxy. All proxies shall automatically cease when a Member conveys his or her Lot.

Section 11: Order of Business. The order of business at regularly scheduled meetings of Members shall be as follows:

(a) Roll call and certification of proxies;
(b) Proof of notice of meeting or waiver of notice of meeting;
(c) Reading and approval of minutes of preceding meeting;
(d) Reports of officers on the activities and financial
condition of the Association and any other reports of interest to the Members;
(e) Reports of committees, if any;
(f) Unfinished business;
(g) New business;
(h) Election of directors;
(i) Election of officers;
(j) Adjournment.

In the case of special meetings, Item (a) through (d) above shall be applicable, and thereafter the agenda shall consist of the items specified in the notice of the meeting.

Section 12: Rules of Order and Procedure. The rules of order and all other matters of procedure at all annual and special meetings of the Members shall be determined by the presiding officer of such meeting.

ARTICLE V

Board of Directors

Section 1: Authority. The affairs of the Association shall be managed and controlled by the Board of Directors of the Association, which shall have all of the power and authority necessary or appropriate for such management and control.

Section 2: Number and Qualifications. Prior to the first meeting of the Members, the Board of Directors shall consist of three individuals appointed by the Incorporator. Thereafter, the Board of Directors shall consist of eight (8) individuals, who shall be elected as prescribed by these Bylaws. Directors shall be Members of the Association.

Section 3: Election of Directors. The Directors shall be elected by the Members. Four (4) Directors shall be designated as Even Year Directors and four (4) of the Directors shall be designated as Odd Year Directors.

Section 4: Term of Office. At the annual meeting of the Members in each even numbered year, the Even Year Directors shall be elected and at the annual meeting of the Members in each odd numbered year, the Odd Year Directors shall be elected. The term of office of each director shall begin at the annual meeting at which he or she is elected and shall run until the end of the annual meeting in the next succeeding even numbered or odd numbered year, as the case may be, after he or she is elected. If a director is elected or appointed other than at an annual meeting; his or her term shall end when the term of the Director being replaced would have ended.

Section 5: Election of Directors. The election of Directors shall be by written ballot, unless such be dispensed with for any particular election by the vote of two-thirds (2/3) of the Members present, in person or by proxy, at the meeting during which the election is held. Such consent may be by voice vote. Each Member shall be entitled to vote the number of votes granted to such Member for each position on the Board of Directors for which such Member is entitled to vote. There shall be no cumulative voting.

Section 6: Change in Number. The number of Directors may be changed from time to time by appropriate amendment to these Bylaws; however, there shall be no more then nine members of the Board of
Directors unless approved by two-thirds (2/3) of the total Members of the Association. Any decrease in the number of Directors shall not operate to shorten the term of any incumbent Director. If any change is made, the additional Directors shall be classified as Odd Year Directors or Even Year Directors as necessary to cause the classification to differ by not more than one.

Section 7: Nomination. Nomination for election to the Board of Directors shall be made from the floor at the annual meeting of the Members.

Section 8: Powers and Duties. In the management and administration of the Association?s affairs, the Board of Directors shall have power, authority and duty to do all acts and actions, except acts and actions which by law, the Protective Covenants, the Articles or these Bylaws may be exercised only by or are reserved only to the Members. Such powers, authorities and duties of the Board of Directors to create, establish or approve policies or decisions relating to the management and administration of the Association's affairs include, but shall not be limited to, the following:

(a) To provide for the maintenance, care, upkeep, surveillance, services and efficient operation of the Common Areas. The Association shall have no responsibility for the maintenance or repair of any residence or its appurtenances or for the maintenance and care of any Lot. The Association shall have the responsibility and duty only for the maintenance, repair and care of the Common Area.

(b) To establish, determine, assess, collect, use and expend the Assessments from the Members, and to file and enforce liens for such Assessments.

(c) To select, designate, train, hire, supervise and discharge personnel necessary or appropriate for the proper maintenance, care, upkeep, surveillance, services and efficient operation of the Common Areas, and to establish the compensation and other benefits of or for such personnel.

(d) To maintain, repair, restore, reconstruct or demolish all or any portion of the Common Areas after any casualty loss, and to otherwise improve the Common Areas.

(e) To lease and to grant licenses, easements, rights-of-way, and other rights of use in or to option, sell, assign, exchange, trade, transfer, quitclaim, surrender, release, abandon, mortgage or encumber or otherwise convey all or any portion of the Common Areas upon such terms, conditions and provisions as the Board of Directors considers to be advisable, appropriate, convenient or advantageous for or to the Association, subject to any requirements or limitations herein.

(f) To retain or employ a Management Agent for such compensation and for the performance of such duties and services as established or prescribed by the Board of Directors from time to time.

(g) To negotiate, prepare, execute, acknowledge and deliver all contracts, agreements, commitments and other documents relating to the Association's affairs.

(h) To prosecute, defend, appeal, settle, compromise or submit to arbitration, any suit, action, claim or proceeding at law or in equity or with or before any governmental agency or authority which involves or affects the Association, including the Common Area.

(i) To retain or employ and pay the fees, expenses or other compensation of accountants, attorneys, architects, contractors, engineers, consultants or other Persons who may be helpful, necessary, appropriate or convenient in or to the Association's affairs, whether or not related to or affiliated with any director or officer of the Association or any Member.

(j) To borrow any funds required for the Association's affairs from any Person on such terms, conditions and provisions as may be acceptable to the Board of Directors, and to secure the repayment of any such loans by executing deeds of trust or by pledging or otherwise encumbering or subjecting to a security interests all or any portion of the assets of the Association.

(k) To accept title to any property, either alone or with covenants, as a Common Area or as Property owned by the Association for such purposes and on such terms as the Board of Directors may approve.

Section 9: Vacancies. Should the Director's position become vacant, such vacancy shall be filled by appointment by majority vote of the remaining Directors within thirty (30) days of the vacancy. If no person is elected by the remaining Directors, the President shall call a special meeting of the Members for the purpose of electing a replacement Director. The individual so elected shall serve as Director for the balance of the term of the Director whose position was vacated or until his successor has been elected and has been duly qualified.

Section 10: Removal of Directors. At any special meeting of the Members duly called for such purpose, any Director may be removed from office, with or without cause, by the affirmative vote of at
least two-thirds (2/3) of the votes the Members who are present and voting, in person or by proxy, at such meeting, with each Member to have the votes as set forth in Article III. In the event of such removal, a successor to the Director thus removed may be elected then and there to fill the vacancy thus created. Any Director whose removal has been proposed shall be given an opportunity to be heard at the meeting called for the purposes of considering such removal. If any Director who is a Member becomes more than thirty (30) days delinquent in payment of any assessment owed to the Association, such Director may be removed from his office as a Director by a resolution adopted by a majority of the remaining Directors, unless such delinquency is paid within five (5) days of the adoption of the resolution. In the event of such removal, the vacancy shall be filled as set forth herein.

Section 11: Compensation. Except upon resolution of at least two-thirds (2/3rds) of the Members of the Association, no compensation shall be paid to any Director for services as a Director. After the first annual meeting of the Members, no renumeration shall be paid to any Director who is also a Member for services performed by him for the Association in any other capacity unless a resolution authorizing such renumeration shall have been adopted by the Board of Directors before such services are undertaken. A Director may be reimbursed for actual out-of-pocket expenses necessarily incurred in connection with services as a Director.

Section 12: Organizational Meeting of Board of Directors. The first meeting of a newly constituted Board of Directors shall be held within thirty (30) days after the initial meeting of the Members at which the elected Directors were elected. Such first meeting shall be held at such place as may have been fixed by the Members. Notice shall be the same as for a regular meeting.

Section 13: Regular Meetings. Regular meetings of the Board of Directors may be held at such time and place as shall be determined, from time to time, by a majority of the Directors, but at least two (2) such meetings shall be held during each fiscal year. Notice of regular meetings of the Board of Directors shall be given by the Secretary to each Director, personally or by mail, telephone, facsimile, or telegraph, at least three (3) days prior to the day fixed for such meeting.

Section 14: Special Meetings. Special meetings of the Board of Directors may be called by the President on three (3) days notice to each Director, given personally or by mail, telephone, facsimile, or telegraph, which notice shall state the time, place and purpose of the meeting. Special meetings of the Board of Directors shall be called by the President or Secretary in like manner and upon like notice if requested in writing by at least one-half (1/2) of the Directors.

Section 15: Waiver of Notice. Before, at or after any meeting of the Board of Directors, any Director may waive, in writing, notice of such meeting, and such waiver shall have the same effect as if notice of the meeting had been properly and timely given to such Director. Attendance by a Director at any meeting of the Board of Directors shall be a waiver of notice by him of the time, place and purpose thereof unless at the beginning of the meeting the Director objects to the holding of the meeting because notice was not properly given. If all the Directors are present at any meeting of the Board of Directors, no notice shall be required and business of any type may be transacted at such meetings, unless at the beginning of the meeting a Director object to the holding of the meeting because notice was not property given.

Section 16: Attendance by Telephone. A Director unable to be physically present at a meeting shall nonetheless be counted present if a telephonic conference is arranged by which the Director may be heard and may hear the proceedings of the meeting.

Section 17: Quorum. At all meetings of the Board of Directors a majority of the Directors shall constitute a quorum for the transaction of business, and the actions of the majority of the Directors present at any meeting at which a quorum is present shall be the actions of the Board of Directors. If at any meeting of the Board of Directors, including any one or more adjourned meetings, there should be less than a quorum present, the majority of those present may adjourn the meeting to a later time. At any such adjourned meeting, any business which might have been transacted
at the meeting as originally called shall be postponed to a future meeting where a quorum is present.

Section 18: Action Without Meeting. Any action by the Board of Directors required or permitted to be taken at any meeting may be taken without a meeting if all of the members of the Board of Directors shall consent individually or collectively in writing to such action. Such written consent or consents shall be filed as part of the minutes of the Board of Directors.

Section 19: Fidelity Bonds. All officers, directors and employees of the Association who regularly handle or otherwise are responsible for the funds of the Association shall furnish adequate fidelity bonds or equivalent insurance against acts of dishonesty. The premiums on such bonds or insurance shall be paid by the Association.

Section 20: Committees. The Board of Directors, by Resolution adopted by a majority of the Directors, may appoint committees to perform such tasks and to serve for such periods as the Board may deem desirable. Such committees shall perform such duties and have such powers as may be provided in the Resolution. Each committee will be composed as required by law and shall operate in accordance with the terms of the resolution of the Board of Directors designating the committee or with rules adopted by the Board of Directors and such provisions as designated in the Protective Covenants.

ARTICLE VI

Officers

Section 1: Designation. The principal officers of the Association shall be a President, a Vice-President, a Secretary, and a Treasurer, all of whom shall be elected by the Members. Only those individuals who are members of the then current Board of Directors shall be eligible to serve as officers of the Association. However, a Director, merely by virtue of being a Director, shall not be considered an officer of the Association. In addition to the officers named above, the Board of Directors may elect, from among the members of the Board of Directors, one or more Assistant Secretaries and one or more Assistant Treasurers and such other officers as in their judgment may be necessary or appropriate. The offices of Secretary and Treasurer may be filled by the same individual, and likewise, the offices of the Assistant Secretary and Assistant Treasurer may be filled by the same individual.

Section 2: Election of officers. The officers of the Association shall be elected annually at each annual meeting of the Members. Each officer so elected shall hold office until his successor has been elected at the next ensuing annual meeting of the Members, and has duly qualified. Each Member shall be entitled to vote the number of votes granted to such Member in Article III.






Section 3: Vacancies. Should the office held by an officer become vacant, such vacancy shall be filled by appointment by a majority vote of the Board of Directors within thirty (30) days of the vacancy. If no person is elected by the Directors, a special meeting of the Members shall be called for the purpose of electing a replacement officer. The individual so elected shall hold the office to which elected until his successor has been elected at the next ensuing annual meeting of the Members, and has duly qualified.

Section 4: Removal of Officers. At any special meeting of the Members duly called for such purpose, any officer may be removed from office, with or without cause, by the affirmative vote of two-thirds (2/3) of the Members present and voting, in person or by proxy, at such meeting. In the event of such removal, a successor to the officer thus removed may be elected then and there to fill the vacancy thus created. Any officer whose removal has been proposed shall be given the opportunity to be heard at the meeting called for the purpose of considering such removal.

Section 5: President. The President shall be the chief executive officer of the Association. He shall preside at all meetings of the Members and all meetings of the Board of Directors. He shall have all of the general authorities, powers and duties which are normally vested in the office of president of a corporation, provided, however, that such authorities, powers and duties, from time to time, and at any time, may be restricted or enlarged by the Board of Directors.

Section 6: Vice-President. The Vice-President shall take the place of the President, and shall have the authorities and powers and perform the duties of the President, whenever the President is unwilling or unable to act. If neither the President or the Vice- President is willing or able to act, the Board of Directors shall appointed another Director to act as the chief executive officer of the Association on an interim basis. The Vice-President shall assist the President generally, and when acting for the President, shall have the same authorities, powers and duties as the President. The authorities, powers and duties of the Vice- President, from time to time and at any time, may be restricted or enlarged by the Board of Directors.

Section 7: Secretary. The Secretary shall keep the minutes of all meetings of the Members and the minutes of all meetings of the Board of Directors. The Secretary shall give notice of all annual and special meetings of the Members and all regular and special meetings of the Board of Directors. The Secretary shall have custody of the seal of the Association, if any. The Secretary shall have charge of the membership transfer books and of such other
books and papers as the Board of Directors may specify. In addition, the Secretary shall have whatever other authorities, powers and duties, but only such authorities, powers and duties, as may be prescribed by the Board of Directors. If, at any one or more times, the Secretary is unwilling or unable to perform his duties, such duties may be performed by any one or more individuals designated by the Board of Directors.

Section 8: Treasurer. The Treasurer shall have responsibility for the funds and securities of the Association, and shall have the responsibility for keeping, or causing to be kept, full and accurate accounts of all receipts and disbursements in books belonging to the Association. The Treasurer shall have responsibility for causing the deposit of all monies and other valuable effects in the name, and to the credit, of the Association in such depositories as from time to time may be designated by the Board of Directors. In addition, the Treasurer shall have whatever other authorities, powers and duties, but only such authorities, powers and duties, as may be prescribed by the Board of Directors. If, at any one or more times, the Treasurer shall be unwilling or unable to perform any part of his duties, such duties may be performed by one or more other individuals designated by the Board of Directors.

ARTICLE VII

Indemnification of Officers and Directors

Section 1: Indemnification. As provided by Section 79-11-281 of the Mississippi Code of 1972, as amended, the Association shall indemnify every officer and director of the Association, and every person who may serve at the request of the Board of Directors as a director or officer of another association in which the Association owns an interest or shares of stock or of which the Association is a creditor, against all costs actually and reasonably incurred by any such officer, director or person in connection with the defense of any action, suit or proceeding, civil or criminal, to which any such officer, director or person is a party by reason of his being or having been such officer, director or person, provided that such indemnification shall not extend to any matters concerning which such officer, director, or person shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall include amounts payable as the result of the settlement of any such action, suit or proceeding, so long as any such settlement shall be approved in writing by the Board of Directors. No officer or director of the
Association shall not be liable to the Members of the Association for any mistake of judgment, or otherwise, except as provided by law and except for such person's own individual willful misconduct or bad faith. The officers and directors of the Association shall have no personal liability with respect to any contract or other commitment made by them, in good faith, on behalf of the Association, and the Association shall indemnify and forever hold each such officer and Director free and harmless against any and all liability to others on account of any such contract or commitment. Any right to indemnification provided for herein shall not be exclusive of any other rights to which any officer or director of the Association, or former officer or director of the Association, may be entitled, whether by law, by resolution adopted by the Members after notice, or otherwise.

Section 2: Conflict and Identity of Interest. The Directors and officers shall exercise the powers and duties in good faith and with a view to the interest of the Association. No contract or other transaction between the Association and one or more of its Directors or officers, or between the Association and any corporation, firm or association in which one or more of the Directors or officers of this Association are directors or officers or are pecuniarily or otherwise interested, shall be either void or voidable because such Director or Directors or officer or officers were present at the meeting of the Board of Directors or any committee thereof which authorized or approved the contract or transaction, or because his or their votes were counted for such purpose, if any, if the conditions specified in any of the following paragraphs exist:

(a) The fact of the common directorate or interest is disclosed or known to the Board of Directors or a majority thereof or noted in the minutes of the Board, and the Board authorizes, approves, or ratifies such contract or transaction in good faith by a vote sufficient for such purpose; or

(b) The fact of the common directorate or interest is disclosed or known to the Members, or a majority thereof, and they approve or ratify the contract or transaction in good faith by a vote sufficient for such purpose; or

(c) The contract or transaction is commercially reasonable to the Association at the time it is authorized, ratified, approved or executed.

A common or interested Director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes, approves or ratifies any contract or transaction, and may vote to authorize any contract or transaction with like force and effect as if he were not a common or interested Director.








ARTICLE VIII

Assessments

Section 1: Assessments. Each Member agrees to pay to the Association the Member's Assessments for such Lot which shall be such Lot's proportionate share of the amount estimated by the Board of Directors to be required for the purposes contained in Section 2 or Section 3, or otherwise considered to be an Assessment under these Bylaws.

Section 2: Annual Assessments. The Board of Directors shall establish the initial Annual Assessment at its first meeting. Thereafter, the Board of Directors shall determine the amount of the Annual Assessment with respect to each Lot annually or at such more frequent intervals as the Board of Directors considers appropriate. The Annual Assessment for each fiscal year may be paid in two (2) equal semiannual installments during such year, unless the Board of Directors requires or permits the Annual Assessment to be levied and collected in other increments. The due date for each installment payment of the Assessment shall be the first day of January and the first day of July. Any Assessment installment may be prepaid without penalty or premium.

The Board of Directors shall prepare, or cause to be prepared, an annual operating and capital expenditure budget for the Association. The Board of Directors shall make reasonable efforts to determine and to calculate the amount of the Annual Assessment against each Lot for each fiscal year at least thirty (30) days prior to the start of such fiscal year. Within a reasonable time after determining the Annual Assessment, notice thereof shall be given to the Members. The Association shall prepare and maintain at the Association's office a schedule of the Annual Assessment for the Lots and the schedule shall be available for inspection by any Member at any reasonable time during the Association's normal business hours. The omission or failure by the Board of Directors to determine or calculate the amount of the Annual Assessment applicable to the next fiscal year shall not constitute a waiver
or modification of any provision of these Bylaws, and shall not constitute a release of any Member from the obligation to pay the Annual Assessment against the Member's Lot, or to pay any installment of such Assessment for the next or any subsequent fiscal year. The Annual Assessment for the prior fiscal year shall continue to be the Annual Assessment payable by the Members until a new Annual Assessment is determined or calculated by the Board of Directors. Subject to the limitations in Section 6, the Board may change the Annual Assessment at any time during the year.

Except as permitted by Section 4, the Annual Assessments levied by the Association shall be used (i) to promote the health, safety and welfare of the residents of the Subdivision, including the improvement, maintenance and repair of the Common Area, and (ii) to pay the costs of labor, the purchase or rental of equipment, and materials used or required for, and the management, care and supervision of the Common Area. The purposes for which the Annual Assessments may be levied include, but are not limited to, the following purposes:

The amount of all operating and maintenance expenses of or for the Common Area and the services furnished or provided to or in connection with the Common Area, including charges for any services furnished or provided by the Association.

(b) The costs of appropriate or necessary management and administration of the Association, including fees or other compensation paid to a Management Agent.

(c) The amount of all taxes and assessments levied against the Common Area.

(d) The costs of fire and extended coverage and liability insurance on the Common Area, the Association's other assets, and the costs of such other insurance with respect to the Common Area and the Association's other assets and affairs as the Board of Directors considers appropriate.

The costs to maintain, replace, repair and landscape the Common Area.

(f) The costs to fund all reserves established by the Association, including any appropriate general operating reserve and/or reserve for replacement of the Common Area.

Section 3: Special Assessments. In addition to the Annual Assessments authorized in Section 2 of this Article, the Association may levy Special Assessments as follows:

In any fiscal year the Association may levy a Special Assessment applicable only to that fiscal year for the purpose of paying all or a portion of the costs of any construction, reconstruction, replacement or inordinate repair or maintenance of improvements to the Common Area. Any such Special Assessment shall be approved by a vote of two-thirds (2/3rds) in interest of the Members. As used herein, inordinate repair or maintenance shall mean such repair or maintenance which is not necessary on an annual basis, but rather is necessary on an irregular or as needed basis, or which arise because of a casualty or catastrophe.

The Association may levy a Special Assessment against any Lot or any Member for reimbursement of or for repairs to the Common Area occasioned by the willful or negligent acts of the Member or Lot Owner.

Section 4: Dwelling and Lawn Maintenance. The Association shall have no responsibility for the maintenance or repair of any residence or its appurtenances or for the maintenance and care of any Lot. The Association shall have the responsibility and duty only for the maintenance, repair and care of the Common Area.

Section 5: Reserves for Replacements. The Association shall establish and maintain a reserve fund for replacements of the Common Area, and shall allocate and pay such amount to the reserve fund from time to time as may be designated by the Board of
Directors. Amounts paid to the reserve fund shall be included in the Annual Assessment under Section 2. All amounts paid into the reserve fund shall be deposited in such bank account or accounts in federally insured banks or in such investment accounts or investment assets as shall be designated by the Board of Directors from time to time. The reserve fund for replacements of the Common Area may be expended only (i) for the repair and replacement of the Common Area, (ii) for repairs to any sidewalks, streets, roads or parking areas located on the Common Area, (iii) for equipment replacement, or (iv) for non-recurring start-up expenses and operating contingencies of the Common Area.

Section 6: Commencement of Assessments. Every person who becomes an owner of record of a Lot in Highland Cove Subdivision shall be liable to pay semiannual installments of the Annual Assessment with respect to such Lot beginning on the first day of the next succeeding month of January or June, as the case may be, following the date a deed or other conveyance document to the Lot is delivered to the Member, as Grantee. If any Member sells his Lot, such Member shall not be entitled to any refund of any Assessments.

Section 7: Changes in Annual Assessments. The Board of Directors may change the Annual Assessment for each Lot at any time; however, any increase in the Annual Assessment may be (i) not more than twenty percent (20%) above the immediately prior fiscal year's Annual Assessment only if approved by a majority vote of the Members represented at the meeting, or (ii) more than twenty percent (20%) above the immediately prior fiscal year's Annual Assessment only if approved by a vote of two-thirds (2/3rds) of the Members represented at the meeting.

Section 8: Meetings to Approve Assessments. If the consent or approval of any class of the Members is required for any action hereunder, the Board of Directors shall call a meeting of the Members pursuant to the Bylaws for the purpose of considering the consent or approval for such action.

Section 9. Notices. The Association may send notices to Members advising each Member of the status of his or her Annual and Special Assessments. Failure of the Association to send notice of assessments or any notice of non-payment or delinquency shall not release the Member from the obligation to pay such Assessments nor
prevent any delinquent Member from being subject to any provision of these Bylaws which provides for removal of such Member as an Officer or Director or prohibits such Member from being elected as an Officer or Director.

ARTICLE IX

Enforcement of Assessments

Section 1: Lien of Assessments. All Assessments with respect to or against a Lot plus such additional amounts as are specified in Section 3 shall be (i) a charge on the land, (ii) a continuing lien upon and against the Lot, (iii) binding upon such Lot and (iv) the continuing joint and several personal obligation and liability of each Member owning such Lot when any portion of such Assessment became due and payable, and the heirs, devisees, personal representatives, successors and assigns of each such Member, which shall not be extinguished or diminished by any transfer or conveyance of any Lot.

The Association shall have the right to accept or reject partial payments of an Assessment and to demand the full payment of such Assessment; however, acceptance of any partial payment shall not relieve the Member of the obligation to pay the balance of the Assessment. The lien for unpaid Assessments shall be unaffected by any sale or other transfer of the Lot subject to the Assessments, and the lien shall continue in full force and effect. No Member may waive or otherwise avoid or escape personal liability for payment of any Assessment by abandonment of the Member's Lot or by abandonment or release of the Member's rights to the use, benefit and enjoyment of the Common Area.

The Board of Directors may post or publish in any prominent location on the Property a list of Members who are delinquent in the payment of any portion of an Assessment or other fees which may be due to the Association, including any installment of an Assessment.

Section 2: Assessment Certificate. Upon receipt of a written request, the Board of Directors or the Management Agent, within five (5) business days, shall furnish to any Member liable for the
payment of any Assessment, or to any other person having legitimate interest in the payment of such Assessment, a certificate signed by an Association officer or the Management Agent stating whether or not the Assessment has been paid. The certificate shall be conclusive evidence of the payment of any Assessment stated to have been paid in the certificate. The Board of Directors may require the payment of a reasonable charge for the issuance of a certificate.

Section 3: Amount of Lien. Upon the default in the payment of any installment of an Assessment, the entire unpaid balance of all Assessments shall immediately be and become due and payable, unless the Board of Directors shall otherwise direct. In addition to the amount of the unpaid Annual or Special Assessments, the following amounts shall be considered to be Special Assessments against the Lot and the Owners of such Lot and shall be subject to the lien of Assessments provided under Section 1:

All reasonable costs and expenses of collection of Assessments including attorneys? fees, court costs and other costs and expenses relating to the collection of Assessments or enforcement of the lien of Assessments, whether or not suit is filed.

Such late payment charges or fees as shall be established by the Board of Directors from time to time.

(c) Such Association overhead charges as shall be established by the Board of Directors from time to time which reimburse the Association for overhead or indirect costs and expenses incurred to collect unpaid Assessments or to perform or satisfy any obligation or duty imposed upon such Owners under these Bylaws.

Section 4: Priority of Lien. The lien to secure payment of an Assessment against a Lot shall have preference over any other liens, assessments, judgments or charges of whatever nature, except (i) general and special assessments for ad valorem property taxes on or against such Lot, (ii) the lien of any First Mortgage on such Lot made in good faith and for value received and duly recorded
prior to the Assessment creating the lien against the Lot or duly recorded after receipt of a certificate under Section 2 of Article 8 stating that payment of the Assessment was current as of the date the First Mortgage was filed of record.

Section 5: Filing of Notice of Delinquency. If any Owner becomes more than sixty (60) days delinquent in paying any Annual or Special Assessment, the Association may file a Notice of Delinquency in the Land Records of Madison County, Mississippi, referencing such Owner and the Lot to which such delinquency applies. As and when such Assessments have been paid, the Notice shall be canceled.

ARTICLE X

Management Agent

Section 1: Management Agent. The Board of Directors may retain or employ a Management Agent at a rate of compensation established by the Board of Directors to perform such duties and services as the Board of Directors from time to time may authorize. The Management Agent shall perform such duties and services as the Board of Directors shall direct and authorize.

Section 2: Management Agreement. Any management agreement entered into by the Association and any Management Agent shall permit termination for cause by the Association upon thirty (30) days written notice to the Management Agent. The term of any such management agreement shall not exceed one (1) year, but may be renewable by mutual agreement for successive one-year terms.

ARTICLE XI

Fiscal Management

Section 1: Fiscal Year. The fiscal year of the Association shall begin on the first day of January of each year, except for the first fiscal year, which shall begin on the date the Articles are filed with the Secretary of State of Mississippi. The commencement date of the fiscal year as herein established shall be subject to change from time to time by resolution of the Board of Directors should the Board of Directors deem any such change or changes appropriate.

Section 2: Change of Principal Office. The principal office of the Association shall be at the location set forth in Article I of these Bylaws. The Board of Directors may change the location of the principal office of the Association from time to time.

Section 3: Books and Accounts. Books and accounts of the Association shall be kept under the direction of the Treasurer in accordance with generally accepted accounting practices,
consistently applied. The same shall include books with detailed accounts in chronological order, of receipts and expenditures and other transactions of and for the Association. The receipts and expenditures of the Association shall be credited and charged to other accounts under classifications consisting of no less than the following:

(a) "Current Operations" which shall involve the control of actual expenses of the Association, including reasonable allowances for necessary contingencies and working capital funds in relation to the assessments and expenses herein elsewhere provided for; and

(b) "Reserves for Replacement" which shall involve the control of such reserves for replacement as are provided for in these Bylaws and as may be approved from time to time by the Board of Directors; and

(c) "Other Reserves" which shall involve the control over funding of and charges against any other reserve funds which may be approved from time to time by the Board of Directors; and

(d) "Investments" which shall involve the control over investment of reserve funds and such other funds as may be deemed suitable for investment on a temporary basis by the Board of Directors.

Section 4: Reporting. At the close of each fiscal year, the Association shall furnish the Members with an annual financial statement, which shall set forth a summary of all pertinent financial data, including the income and disbursements of the Association. Such annual financial statement shall be furnished within ninety (90) days following the end of each fiscal year.

Section 5: Inspection of Books. The books and accounts of the Association, the vouchers accrediting the entries made thereupon and all other records maintained by the Association shall be
available for examination by any Member and his or her duly authorized agents or attorneys, during normal business hours and for purposes reasonably related to such Member's respective interest and after reasonable notice to the Association. All such information shall be confidential information and shall not be disclosed.
Section 6: Execution of Corporate Documents. With the prior authorization of the Board of Directors, all notes and contracts shall be executed on behalf of the Association by either the President or a Vice-President, and all checks shall be executed on behalf of the Association by such officers, agents or other person as may be authorized from time to time by the Board of Directors.

Section 7: Seal. The Board of Directors may provide a suitable corporate seal containing the name of the Association, which seal shall be in the charge of the Secretary. If so directed by the
Board of Directors, a duplicate seal may be kept and used by the Treasurer or any Assistant Secretary or Assistant Treasurer.

Section 8: Assessments. The Board of Directors shall determine and collect all Assessments as permitted or required in the Protective Covenants. The Declarant shall not be subject to any Assessments.

ARTICLE XII

Amendment

Section 1: Amendment by Members. Subject to any other applicable limitations set forth herein, these Bylaws may be amended by vote of the Members if, and only if, the number of votes cast in favor of any particular amendment shall be equal to at least two-thirds (2/3) of the total number of votes held by the Members present in person or by proxy at the time of the vote. Amendment of these Bylaws may be considered at a special or annual meeting of Members if a description of the proposed amendment accompanied a proper notice of such meeting. Amendment of the Bylaws may also be accomplished by a written proposal to Members, if such proposal is approved by two-thirds (2/3) of the Members, which approval shall be given to the Board of Directors in written form. If any such amendment is approved in this manner, notice of such approval shall be provided to the Members within sixty (60) days of such approval, either in writing or by announcement at any annual or special meeting of the Members held within such sixty (60) day period.

Section 2: Amendment by Board of Directors. The Board of Directors may amend the Bylaws without the consent of the Members for the purpose of complying with the laws and ordinances of any governmental entity having authority over the Subdivision.





Section 3: Proposal of Amendments. Amendments to these Bylaws may be proposed by the Board of Directors or by petition signed by Members having at least thirty percent (30%) of the total votes of all Members, which petition shall be delivered to the Secretary. A description of any proposed amendment shall accompany the notice of any annual or special meeting of the Members at which such proposed amendment is to be considered and voted upon.

ARTICLE XIII

Interpretation - Miscellaneous

Section 1: Conflict. The Bylaws are subordinate and subject to all provisions of the Articles. All the words and expressions in these Bylaws shall have the same meanings, respectively, as are attributed to them by the Articles, except where such is clearly repugnant to the context. In the event of any conflict between these Bylaws and the Articles, the provisions of the Articles shall control.

Section 2: Notices. Unless another type of notice is herein elsewhere specifically provided for, any and all notices required by these Bylaws shall be given in writing.

Section 3: Severability. Invalidation of any provision of these Bylaws shall not render invalid, void or unenforceable any other provisions hereof which can be given effect.