(continued from previous page) occurred: (a) the initial annual assessment has commenced as provided in this Section 7, and (b) a Certificate of Occupancy for the Residence located thereon has been issued by the County of Douglas, Colorado, or other governmental entity with jurisdiction thereover. The annual assessments shall be due and payable in advance, on such date(s), with such frequency, and in as many installments, as the Board of Directors of the Association may determine in its discretion from time to time. Any Owner purchasing a Lot between installment due dates shall pay a pro-rata share of the last installment due.

Section 8. Effect of Non-Payment of Assessments: Remedies of the Association Any assessment or portion thereof which is not paid when due shall be delinquent. Any assessment or portion thereof which is rot paid within ten (10) days after the due date may bear interest from the due date at the rate of twenty-one percent (21%) per annum, or at such lesser rate as may be set from time to time by the Board of Directors of the Association, and the Association may assess a monthly late charge thereon. The Association may bring an action at law against the Owner personally obligated to pay the same, or foreclose the lien against such Owner's Lot, and in the event a judgment is obtained, such judgment shall include interest and late charges on the assessment, as above provided, and a reasonable attorney's fee to be fixed by the court, together with the costs of the action. No Owner may waive or otherwise escape liability for the assessments provided for herein by non-use of the Maintenance Property or by abandonment of his Lot.

Section 9. Working Capital: The Association or the Declarant shall require the first owner of Such Lot (other than Declarant), who purchases that Lot from the Declarant, to make a non-refundable contribution of capital to the Association in an amount equal to one-sixth (1/6) of the annual common expense assessment against that Lot in effect on the date of conveyance. All such contributions shall be held in a segregated account by the Association for its use and benefit as it deems desirable, including but not limited to the use to insure that the Board of Directors of the Association will have cash available to meet unforeseen expenditures, or to acquire additional equipment, property or services. Such deposit shall not relieve an Owner from making the regular payment of assessments as the same become due. Upon the transfer of his Lot, an Owner shall be entitled to a credit from his transferee (but not from the Association) in an amount equal to the unused portion of the aforesaid contribution to capital for such Lot.

Section 10. Subordination of the Lien to Mortgage: The lien of the assessments provided for herein, including without limitation any fees, costs, late charges or interest which may be (continued next page)


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