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CODE OF REGULATIONS FOR CREEKWOOD CONDOMINIUM

As prepared by the Law Office of Gregory W. Williams. Lewes and Rehoboth Hundred, Sussex County, Delaware.

ARTICLE 1

PLAN OF OWNERSHIP

Section 1. Unit Ownership. The property located in Lewes and Rehoboth Hundred, Sussex County, Delaware (hereinafter called the “Property”), has been submitted to the provisions of the Unit Property Act of the State of Delaware (25 Del. C. para. 2201, et seq.), by the Declaration recorded in the Office of the Recorder of Deeds, in Sussex County, Delaware, simultaneously herewith, in Deed Book 2716, at Page 50, and shall be known as “CREEKWOOD CONDOMINIUM”, (hereinafter called the “Condominium”) and as shown on the Declaration Plan recorded in the Office of the Recorder of Deeds in Sussex County, Delaware, in Plot Book 75, Page 122.

Section 2. Applicability of Code of Regulations. The provisions of this Code of Regulations are applicable to the Property of the Condominium and to the use and occupancy thereof. All present and future owners, mortgages, lessees and occupants of Units and their employees, and any other person who may use the facilities of the Property in any manner, are subject to this Code of Regulations, the Declaration and any Rules and Regulations hereinafter promulgated. The acceptance of a deed or transfer document or the entering into of a lease of the act of occupancy of a Unit shall conclusively establish the acceptance and ratification of this Code of Regulations, any Rules and Regulations and the provisions of the Declaration as they may be amended from time to time, by the person so acquiring, leasing, or occupying a Untit and shall constitute and evidence and agreement by such person to comply with same.

Section 3. Office. The office of the Condominium and of the Council shall be located at the Condominium or at such other place as may be designated from time to time by the Council.

ARTICLE 2

ASSOCIATION OF OWNERS

Section 1. Composition. All of the Owners if Units contained in the Condominium, acting as a group in accordance with the Unit Property Act, the Declaration and this Code of Regulations, shall constitute the “Association of Owners”, incorporated as “CREEKWOOD CONDOMINIUM ASSOCIATION OF OWNERS, INC.”, who shall have the responsibility of administering the Condominium, establishing the means and methods of collecting the contributions of the Common Expenses, arranging for the management of the Condominium, and performing all of the other acts that may be required to be performed by the Association of Owners, by the Unit Property Act and

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Declaration. Except as to those matters which the Unit Property Act specifically requires to be performed by the vote of the Owners of the Units, the administration of the foregoing responsibilities shall be performed by the Council as more particularly set forth in Article III.

Section 2. Annual Meeting. Developer shall give at least thirty (30) days notice of the date, time, and place of the first annual meeting of the Unit Owners, which meeting shall be held within sixty (60) days of the end of the Developer Control Period. At such meeting, the persons designated by the Developer or their successors shall resign as members of the Council, and all of the Unit Owners shall elect a new Council. Thereafter, the annual meetings of the Association of Owners shall be held on the call of the Council each succeeding year. At such annual meetings the Council shall be elected by ballot of the Unit Owners in accordance with the requirements of Section 4 of Article III of this Code of Regulations. The Association of Owners may transact such other business at such meetings as may properly come before them.

Section 3. Place of Meeting. Meetings of the Association of Owners shall be held at a suitable place convenient to the Unit Owners as may be designated by the Council.

Section 4. Special Meetings. It shall be the duty of the President to call a special meeting of the Association of Owners if so directed by Resolution of the Council or upon a petition if so directed by Resolution of the Council or upon a petition signed and presented to the Secretary of Unit Owners owning not less than 25% of the percentage interests of all Unit Owners. 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 as stated in the notice.

Section 5. Notice of Meetings. It shall be the duty of the Secretary to mail a notice of each annual or special meeting of the Unit Owners, at least ten (10) days but not more than twenty (20) days prior to such meeting, stating the purpose thereof as well as the time and place where it is to be held, to each Unit Owner of record, at such address as each Unit Owner shall have designated by notice in writing to the Secretary .The mailing of a notice of meeting in the manner provided in this Section shall be considered service of notice.

Section 6. Adjournment of Meetings. If any meetings of the Association of Owners cannot be held because a quorum is not present, Unit Owners owning a majority of the percentage interests who are present at such meeting, either in person or by proxy, may adjourn the meeting to a time not less than forty-eight (48) hours from the time the original meeting was called.

Section 7. Order of Business. The order of business at all annual meetings of the Association of Owners shall be as follows:

(a) Roll call.
(b) Proof of Notice of meeting.
(c) Reading of minutes of preceding meeting.
(d) Reports of officers.
(e) Reports of the Council.
(f) Reports of the committees.
(g) Election of inspectors of election (when so required).
(h) Election of members of the Council (when so required).
(i) Unfinished business.
(j) New business.

Section 8. Title to Units. Title to units may be taken in the name of an individual or in the names of two or more persons, as tenants in common or as joint tenants or as tenants by the entirety,

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or in the name of a corporation, limited liability company, limited liability partnership, or partnership, or in the name of a fiduciary.

Section 9. Voting. Voting at all meetings of the Association of Owners shall be on a percentage basis and the percentages of the vote to which each Unit Owner is entitled shall be the percentage interest assigned to his Unit in the Declaration. Where the ownership of a Unit shall be in more than one person, then the person who shall be entitled to enter the vote of that Unit shall be the person named in a certificate signed by all of the owners of the Unit and filed with the Secretary. Such certificate shall be valid until revoked by a subsequent certificate. Whenever the approval or disapproval of a Unit Owner is required by the Unit Property Act, the Declaration or this Code of Regulations, such approval or disapproval shall only be made by the person who would be entitled to cast the vote for the Unit Owner at any meeting of the Association of Owners. Except where a greater number is required by the Unit Property Act, the Declaration or this Code of Regulations, a majority of the Unit Owners is required to adopt decisions at any meeting of the Association of Owners.

Section 10. Proxies. A vote may be cast in person or by proxy. Proxies shall be valid only for the particular meeting designated therein, must be in writing and must be filed with the Secretary before the appointed time of the meeting. Section II. Majority of Unit Owners. As used in this Code of Regulations, the term "majority of the Unit Owners" shall mean those Unit Owners having more than fifty percent (50%) of the aggregate in interest of the undivided ownership of the common elements.

Section 12. Quorum. Except as otherwise provided in this Code of Regulations, the presence in person or by proxy of a majority of the Unit Owners shall constitute a quorum at all meetings of the Association of Owners.

Section 13. Conduct of Meeting. The President shall preside over all meetings of the

Association of Owners and the Secretary- Treasurer shall keep the minutes for the meeting and record in a Minute Book all resolutions adopted by the meeting as well as a record of all transactions occurring there at. Roberts Rules of Order shall govern the conduct of all meetings of the Association of Owners when not in conflict with the Declaration, this Code of Regulations or the Unit Property Act.

ARTICLE III

COUNCIL

Section I. Number and Qualification. There shall be five (5) members of the Council, each of whom shall either be a resident of the State of Delaware or a Unit Owner, but need not be both. The Association, in accordance with Article XII, may amend this Code of Regulations to provide for a greater number of Council members.

Section 2. Powers and Duties. The affairs of the condominium shall be governed by the Council. The Council shall have all of the powers and duties necessary for the administration of the affairs of the Condominium and may do all such acts and things as are not by the Unit Property Act or by this Code of Regulations directed to be exercised and done by the Association of Owners. The Council shall have the power from time to time to adopt any Rules and Regulations deemed necessary for the enjoyment of the Condominium provided such Rules and Regulations shall not be in conflict with the Unit Property Act or the Declaration or this Code of Regulations. The Council shall delegate to one of its members the authority to act on behalf of the Council on all matters relating to the duties of the managing agent, if any, which might arise between meetings of the Council. In addition to the duties imposed by this Code of Regulations or by any resolution of the Association of Owners that may hereafter be adopted, the Council shall have the power to, and be responsible for, the following:

(a) Preparation of an annual budget, in which there shall be established the contribution of each Unit Owner to the common expenses.
(b) Making assessments against Unit Owners to defray the costs and expenses of the Condominium, establishing the means and methods of collecting such assessments from the Unit Owners, and establishing the period of the installation payment of the annual assessment for common expenses. Unless otherwise determined by the Council, the annual assessment against each Unit Owner for his proportionate share of the common expenses shall be payable in equal monthly installments, each such installment to be due and payable in advance on the first day of each month for said month.
(c) Providing for the operation, care, upkeep, maintenance and surveillance of all of the common elements and services of the Condominium.
(d) Designating, hiring and dismissing the personnel necessary for the maintenance operation, repair and replacement of the common elements, and providing services for the Property, and, where appropriate, providing for the compensation of such personnel and for the purchase of equipment, supplies and materials to be used by such personnel in the performance of their duties, which supplies and equipment shall be deemed the common property of the Unit Owners.
(e) Collecting the assessments against the Unit Owners, depositing the proceeds thereof in a bank depository which it shall approve, and using the proceeds to carry out the administration of the Property.
(f) Making and amending Rules and Regulations respecting the use of the Property, including the power to levy fines for infractions or violations of this Code of Regulations and the Declaration.
(g) Opening of bank accounts on behalf of the Condominium and designating the signatories required therefor.
(h) Making, or contracting for the making of, repairs, additions, and improvements to, or alterations of, the Property and repairs to, and restoration of, the Property in accordance with the other provisions of this Code of Regulations, after damage or destruction by fire or other casualty.
(i) Enforcing by legal means including, but not limited to, the levying of fines, the provisions of the Declaration, this Code of Regulations and the Rules and Regulations for the use of the Property adopted by it, and bringing any proceedings which may be instituted on behalf of the Unit Owners.
(j) Obtaining and carrying insurance against casualties and liabilities, as provided in Article VI of this Code of Regulations, and paying the premium cost thereof.
(k) Paying the cost of all services rendered to the Condominium and not billed to Unit Owners of individual Units.

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(I) Keeping books with detailed accounts in chronological order of the receipts and expenditures affecting the Property, and the administration of the Condominium, specifying the maintenance and repair expenses of the common elements and any other expenses incurred. The said books and vouchers accrediting the entries thereupon shall be available for examination by the Unit Owners, their duly authorized agents or attorneys, during general business hours on working days at the times and in the manner that shall be set and announced by the Council for the general knowledge of the Unit Owners. All books and records shall be kept in accordance with good and accepted accounting practices, and the same shall be audited at least once a year by an outside auditor employed by the Council who shall not be a resident of the Condominium or an owner of a Unit therein, and the cost of such audit shall be a common expense.
(m) Notifying the mortgagee of any Unit of any default by the Unit Owner whenever requested in writing by such mortgagee to send such notice.
(n) To do such other things and acts not inconsistent with the Unit Property Act and with the Declaration which it may be authorized to do by a resolution of the Association of Owners.

Section 3. Managing Agent. The Council may (but is not required to) employ for the Condominium a professional managing agent at a compensation established by the Council, to perform such duties and services as the Council shall authorize, including, but not limited to, the duties listed in paragraphs (a), (c), (d), (e), (h), (j), (k), (I), (m), and (n) of Section 2 of this Article III. The Council may delegate to the managing agent all of the powers granted to the Council by this Code of Regulations other than the powers set forth in paragraphs (b), (f), ( g), and (i) of Section 2 of this Article III. No agreement with a professional managing agent may bind the Association unless said agreement provides for the right of the Association to terminate the same without cause or penalty at any time after transfer of control of the Association from Developer to the Unit Owners, upon not more than ninety (90) days notice. Any such agreement shall be for a reasonable term.

Section 4. Election and Term of Office. At the first annual meeting of the Association of Owners, the term of office of two (2) members of the Council shall be fixed for three (3) years, the term of office for two (2) members of the Council shall be fixed at two (2) years, and the term of office of one (1) member of the Council shall be fixed atone (1) year. At the expiration of the initial term of each respective member of the Council, his successor shall be elected to serve for a term of two (2) years. The members of the Council shall hold office until their respective successors shall have been selected by the Association of Owners; provided, however, that Developer shall have the exclusive right to select members of the Council during the Developer Control Period.

Section 5. Removal of Members of the Council. At any regular or special meeting of the Association of Owners duly called, anyone or more of the members of the Council may be removed with or without cause by a majority of the Unit Owners, and a successor may then and there be elected to fill the vacancy thus created. Any member of the Council whose removal has been proposed by the Unit Owners shall be given at least ten (10) days notice of the calling of the meeting and the purpose thereof and he shall be given an opportunity to be heard at the meeting.

Section 6. Vacancies. Vacancies in the Council caused by any reason other than the removal of a member by a vote of the Association of Owners shall be filled by a vote of a majority of the remaining members of the Council at a special meeting of the Council held for that purpose promptly after the occurrence of any such vacancy, even though the members present at such meeting may constitute less than a quorum, and each person so elected shall be a member of the Council for the remainder of the term of the member so removed and until a successor shall be elected at the next meeting of the Association of Owners.

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Section 7. Organization Meeting. The first meeting of the members of the Council following the annual meeting of the Association of Owners shall be held within ten (10) days thereafter at such time and place as shall be fixed by the Association of Owners at the meeting which such Council shall have been elected, and no notice shall be necessary to the newly elected members of the council in order legally to constitute such meeting provided a majority of the whole Council shall be present thereat.

Section 8. Regular Meetings. Regular meetings of the Council may be held at such time and place as shall be determined from time to time by a majority of the members, but at least one (1) such meeting shall be held during each fiscal year. Notice of regular meetings of the Council shall be given to each member of the Council, by mail or telegraph, at least three (3) business days prior to the day named for such meeting. Meetings of the Council shall be posted in accordance with 25 Del. C. §2241.

Section 9. Special Meetings. Special meetings of the Council may be called by the President on three (3) business days' notice to each member given by mail, fax or e-mail, which notice shall state the time, place and purpose of the meeting. Special meetings of the Council shall be called by the President or Secretary- Treasurer in like manner and on like notice on the written request of at least two (2) members.

Section 10. Waiver of Notice. Any member may, at any time, in writing waive notice of any meeting of the Council, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a member at any meeting the Council shall constitute a waiver of notice by him at the time and place of such meeting. If all members are present at any meeting of the Council, no notice shall be required and any business may be transacted at such meeting.

Section 11. Quorum of Council. At all meetings of the Council, a majority of the members shall constitute a quorum for the transaction of business, and the votes of a majority of the members present at any meeting at which a quorum is present shall constitute the decisions of the Council.

Section 12. Fidelity Bonds. The Council may require adequate fidelity bonds for all officers and employees of the Condominium handling or responsible for Condominium funds. The premiums on such bonds shall constitute a common expense.

Section 13. Compensation. No member shall receive any compensation from the Condominium for acting as such.

Section 14. Conduct of Meeting. The President shall preside over all meetings of the Council and the Secretary- Treasurer shall keep a minute book of the Council recording therein all resolutions adopted by the Council and a record of all transactions and proceedings occurring at such meetings. Roberts Rules of Order shall govern the conduct of the meetings of the Council when not in conflict with the Declaration, this Code of Regulations or the Unit Property Act.

Section 15. Liability of the Members of the Council. The members of the Council shall not be liable to the Unit Owners for any mistake of judgement, negligence, or otherwise except for their own individual willful misconduct or bad faith. The Unit Owners shall indemnify and hold harmless each of the members from and against all contractual liability to others arising out of contracts made by the Council on behalf of the Unit Owners unless any such contract shall have been made in bad faith or contrary to the provisions of the Declaration or of this Code of Regulations. It is intended that the members of the Council shall have no personal liability with respect to any contract made by them on behalf of the Unit Owners. It is also intended that the liability of any Unit Owner arising out of any contract made by the Councilor out of the aforesaid indemnity in favor of the members

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of the Council shall be limited to such proportion of the total liability thereunder as his percentage interest bears to the percentage interests of all Unit Owners. Every agreement made by the Council or by the managing agent on behalf of the Owners shall, if obtainable, provide that the members of the Council, or the managing agent, as the case may be, are acting only as agents for the Unit Owners and shall have no personal liability thereunder (except as Unit Owners), and that each Unit Owner's liability thereunder shall be limited to such proportion of the total liability thereunder as his percentage interest bears to the percentage interests of all Unit Owners. The Unit Owners shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he is or was a member of the Council, against expenses (including attorneys' fees), judgements, fines and amounts paid in settlement incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believes to be in or not opposed to the best interests of the Unit Owners.

ARTICLE IV

OFFICERS

Section 1. Designation. The principal officers of the Condominium shall be the President, the Vice-President, and the Secretary- Treasurer, all of whom shall be elected by the Council. The Council may appoint an assistant treasurer, an assistant secretary, and such other officers as in its judgement may be necessary .The President shall be a member of the Council. Any other officers may be, but shall not be required to be, members of the Council.

Section 2. Election of Officers. The officers of the Condominium shall be elected annually by the Council at the organization meeting of each new Council and shall hold office at the pleasure of the Council. Any vacancy in an office shall be filled by the Council at a regular meeting or special meeting called for such purpose.

Section 3. Removal of Officers. Upon the affirmative vote of a majority of the members of the Council, any officer may be removed, either with or without cause, and his successor may be elected at any regular meeting of the Councilor at any special meeting of the Council called for such purpose.

Section 4. President. The President shall be the chief executive of the Condominium. He shall preside at all meetings of the Association of Owners and of the Council. He shall have all of the general powers and duties which are incident to the office of president of a stock corporation organized under the General Corporation Law of the State ofDelaware, including by not limited to, the power to appoint committees from among the Owners from time to time as he may in his discretion decide is appropriate to assist in the conduct of the affairs of the Condominium.

Section 5. Vice-President. The Vice-President shall take the place of the President and perform his duties whenever the President shall be absent or unable to act. If neither the President nor the Vice-President is able to act, the Council shall appoint some other members of the Council to act in the place of the President, on an interim basis. The Vice President shall also perform such duties as shall from time to time be imposed upon him by the Councilor by the President.

Section 6. Secretary-Treasurer. The Secretary- Treasurer shall keep the minutes of all meetings of the Association of Owners and of the Council, he shall have charge of such books and papers as the Council may direct; he shall have the responsibility for Condominium funds and securities and shall be responsible for keeping full and accurate financial records and books of account showing all receipts and disbursements, and for the preparation of all required financial data;

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he shall be responsible for the deposit of all monies and other valuable effects in the name of the Council, or the managing agent, in such depositories as may from time to time be designated by the Council, and he shall, in general, perform all the duties incident to the office of secretary and treasurer of a stock corporation organized under the General Corporation Law of the State of Delaware.

Section 7. Agreements, Contracts, Deeds, Checks, etc. All agreements, contracts, deeds, leases, checks and other instruments of the Condominium for expenditures or obligations of over $1,000.00, shall be executed by any two officers of the Condominium or by such other person or persons as may be designated by the Council.

Section 8. Compensation of Officers. No officers shall receive any compensation from the Condominium for acting as such.

ARTICLE V

OPERATION OF THE PROPERTY

Section 1. Determination of Common Expenses and Assessments Against Owners.

(a) Fiscal Year. The fiscal year of the Condominium shall consist of the twelve month period commencing on January 1 of each year and terminating on December 31 of the same year.
(b) Preparation and Approval of Budget. Each year on or before November 30th the Council shall adopt a budget for the Condominium containing an estimate of the total amount which it considers necessary to pay the cost of maintenance, management, operation, repair and replacement of the Common Elements and those parts of the Units as to which it is the responsibilityof the Council to maintain, repair and replace, and the cost of wages, materials, insurance premiums, services, supplies and other expenses that may be declared to be Common Expenses by the Unit Property Act, this Code of Regulations or a resolution of the Association of Owners, and which will be required during the ensuing fiscal year of the administration, operation, maintenance and repair of the property and the rendering of the Unit Owners of all related services. Such budget shall also include such reasonable amounts as the Council considers necessary to provide working capital for the Condominium, a general operating reserve, and reserves for contingencies and replacements. The Council shall send to each Unit Owner a copy of the budget, in a reasonably itemized form which set forth the amount of the Common Expenses payable by each Unit Owner, on or before November 15, preceding the fiscal year to which the budget applies. The said budget shall constitute the basis for determining each Unit Owners' contribution for the Common Expenses of the Condominium.
(c) Assessment and Payment of Common Expenses: The total amount of the estimated funds required for the operation of the property set forth in the budget for the fiscal year adopted by the Council shall be assessed against each Unit Owner in proportion to his respective percentage interest, and shall be alien against each Unit Owner's unit as of the first day of the fiscal year to which such budget applies. On or before the first day of each fiscal year, and the first day of each of the succeeding eleven (11) months in such fiscal year, each Unit Owner shall be obligated to pay to the Councilor the managing agent (as determined by the Council), one-twelfth (1/12) of the assessment for such fiscal year made pursuant to the foregoing provisions; provided, however, if the Council so determines, assessments may be collected quarterly in which event each Unit Owner shall be obligated to pay to the Councilor the managing agent ( as determined by the Council) one-fourth (1/4) of the assessment for such fiscal year on the first day of each fiscal year, and one-

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fourth on the first day of the fourth, seventh and tenth months of each fiscal year. Within sixty (60) days after the end of each fiscal year, the Council shall supply to all Unit Owners an itemized accounting of the Common Expenses for such fiscal year actually incurred and paid, together with a tabulation of the amounts collected pursuant to the budget adopted by the Council for such fiscal year, and showing the net amount over or short of the actual expenditures plus reserves. Any amount accumulated in excess of the amount required for actual expenses and reserves shall, if the Council deems it advisable, be credited according to each Unit Owner's percentage interest to the next monthly installments due from Unit Owners under the current fiscal year's budget, until exhausted, and any net shortage shall, if the Council deems it advisable, be added according to each Unit Owner's percentage interest to the installments due to the succeeding six (6) months after the rendering of the accounting.
(d) Reserves. The Council may build up and maintain reasonable reserves for working capital, operations, contingencies and replacements. Extraordinary expenditures not originally included in the annual budget which may become necessary during the year shall be charged first against such reserves. If the reserves are inadequate for any reason, including non-payment of any Unit Owners assessment, the Council may at any time levy a further assessment, which shall be assessed against the Unit Owners according to their respective percentage interests, and which may be payable in a lump sum or in installments as the Council may determine. The Council shall serve notice of any such further assessment on all Unit Owners by a statement in writing giving the amount and reasons therefor, and such further assessments shall, unless otherwise specified in the notice, become effective with the next monthly (or quarterly, if payments are required by the Council to be made quarterly) payment which is due more than ten (10) days after the delivery or mailing of such notice of further assessment. All Unit Owners shall be obligated to pay the adjusted monthly (or quarterly) amount or, if the additional assessment is not payable in installments, the amount of such assessment.
(e) Initial Assessment. An initial payment, in addition to all assessments, of TWO HUNDRED DOLLARS ($200.00) is hereby levied to provide the initial working capital of the Condominium and is payable by each Unit Owner upon the purchase of his Unit. This assessment shall be levied against the initial purchaser and each and every subsequent purchaser of the Unit. When the first Council appointed by the Developer and under this Code of Regulations takes office, it shall determine the budget, as defined in this Section, for the period commencing upon the sale of the first Unit by the Developer and ending on December 31 of the fiscal year in which such first sale occurs. Assessments shall be levied against the Unit Owners during said period as provided in paragraph (c) of this section.
(f) Effect of Failure to Prepare or Adopt Budget. The failure or delay of the Council to prepare or adopt the annual budget for any fiscal year shall not constitute a waiver or release in any manner of a Unit Owner's obligation to pay his allocable share of the Common Expenses as herein provided, whenever the same shall be determined, and in the absence of any annual budget or adjusted budget, each Unit Owner shall continue to pay the monthly charge at the then existing monthly rate established for the previous fiscal period until the monthly payment which is due more than ten (10) days after such new annual or adjusted budget shall have been mailed or delivered.
(g) Accounts. All sums collected by the Council with respect to assessments against the Unit Owners may be co-mingled into a single fund.
(h) Developer Control Period. During the Developer Control Period, Developer shall pay the actual common expenses and shall be reimbursed for the same by the assessments paid by the Unit Owners; provided, however, that Developer shall not be required at any time prior to the

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termination of the Developer Control Period to assess its unsold units for the payment of common expenses until sixty (60) days after the submission of said unit to the Unit Property Act.
(I) Increase of Assessment. Any increase in assessments that would increase the annual assessments more than twenty-five percent (25%) from the previous year shall require the affirmative approval of sixty-seven percent (67%) of the percentage interests entitled to be voted.

Section 2. Payment of Common Expense. All Unit Owners shall be obligated to pay the Common Expenses assessed by the Council pursuant to the provisions of Section 1 of this Article V. No Unit Owner may exempt himself from liability for his contribution toward common expenses by waiver of the use of enjoyment of any of the Common Elements or by abandonment of his Unit. The purchaser of a Unit shall be jointly and severally liable with the selling Unit Owner for all unpaid assessments against the latter for his proportionate share of the common expenses up to the time of the conveyance, without prejudice to the purchaser's right to recover from the selling Unit Owner the amounts paid by the purchaser therefore; provided, however, that any such purchaser shall be entitled to a statement from the Councilor managing agent setting forth the amount of the unpaid assessments against the selling Unit Owner and such purchaser shall not be liable for, nor shall the Unit conveyed be subject to a lien for, any unpaid assessments in excess of the amount therein set forth; and provided, further, that if a mortgagee of a first mortgage of record or other purchaser of a Unit obtains title to the Unit as a result of foreclosure of a first mortgage, such purchaser, its successors and assigns shall not be liable for, and such Unit shall not be subject to, a lien for the payment of common expenses assessed prior to the acquisition of title to such Unit by such purchaser pursuant to the foreclosure sale. Such unpaid share of the common expenses assessed prior to the acquisition of title to such Unit by such purchaser pursuant to the foreclosure sale shall be collectible from all Unit Owners, including the purchaser of the foreclosure sale, in proportion to their respective percentage interests.

Section 3. Collection of Assessments. The Council shall take prompt action to collect any assessments for common expenses due from any Unit Owner which remain unpaid for more than thirty (30) days from the due date for payment thereof.

Section 4. Statement of Common Expenses. The Council shall promptly provide any Unit Owner so requesting the same in writing, with a written statement of all unpaid assessments for common expenses due from such Unit Owner.

Section 5. Maintenance and Repair.

(a) By the Council. The Council shall be responsible for the maintenance, repair and replacement (unless necessitated by the negligence, misuse or neglect ofa Unit Owner, in which case such expenses shall be charged to such Unit Owner) of the following, cost ofwhich shall be charged to all Unit Owners as a common expense:

(1) All of the common elements, whether located inside or outside of the Units.

(2) All exterior walls and exterior surfaces (including the painting of the exterior surfaces) repair, of the roof, party walls and all other portions of the Units which contribute to the support of any building, such as the outside walls of a building and all fixtures which are not unit elements on the exterior thereof, the boundary walls of Units, floor joists and attached ceilings and walls, interior ceilings and interior floors of Units, and excluding the surfaces of all walls, floors and ceilings of a Unit.

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(3) All water and plumbing facilities and systems that are declared common elements, including all conduits, ducts, plumbing, wiring and other facilities for the furnishing of such utility services into two or more Unit, but excluding therefrom all plumbing, fixtures, systems located outside the specific boundaries of any Unit; and including all catch basins located outside the specific boundaries of any Unit; the roof and all roof drainage pipes, gutters and leaders.

(4) All incidental damage caused to any Unit by such work as may be done or caused to be done by the Council in accordance therewith.

(b) By the Unit Owner. Except for the portions ofhis Unit required to be maintained, repaired and replaced by the Council, each Unit Owner shall be responsible for the maintenance, repair and replacement at his own expense, of the following: (I) the non-structural walls and framing constituting the entrance of each unit; (2) the electric panel for each unit; (3) the hot water heater; (4) interior nonload-bearing walls or partitions; (5) all electrical outlets and lights serving the unit (whether within or without the unit); ( 6) all stoves, refrigerators, air conditioning units, ceiling fans, washer-dryers, sinks, baths, or other plumbing or heating or cooling facilities located within or without the unit but solely serving the unit, including the air conditioner-heat pump; (7) the plumbing and water lines serving each unit commencing at the collector from the main lines serving each unit; (8) all interior stairs, stair wells and stair carriages solely serving a unit; (9) any fireplaces; (10) any screened porch or storage area; (II) all windows and screens; (12) microwave and garbage disposal. Each Unit Owner shall keep the interior of his Unit and its equipment and appurtenances in good order, condition and repair and in a clean and sanitary condition, and shall do all redecorating painting and varnishing which may at any time be necessary to maintain the good appearance and condition of his Unit. In addition, each Unit Owner shall be responsible for all damages to any and all other Units or to the common elements resulting from his failure to make any of the repairs required to be made by him by this Section. Each Unit Owner shall perform his responsibility in such manner as shall not unreasonably disturb or interfere with the other Unit Owners. Each Unit Owner shall promptly report to the Councilor the managing agent any defect or need for repairs for which the Council is responsible.
(c) Manner of Repair and Replacement. All repairs and replacement shall be substantially similar to the original construction and installation. The method of approving payment vouchers for all repairs and replacement shall be determined by the Council.

Section 6. Additions, Alterations, or Improvements by the Council. Whenever in the judgment of the Council the common elements shall require additions, alterations, or improvements costing in excess of TWO THOUSAND DOLLARS ($2,000.00) during any twelve (12) consecutive months, and the making of such additions alterations or improvement shall have been approved by a majority of the Unit Owners, the Council shall proceed with such additions, cost thereof as a common expense. Any additions, alterations or improvements costing TWO THOUSAND DOLLARS ($2,000.00) or less during any period of twelve (12) consecutive months may be made by the Council without the approval of the Unit Owners and the cost thereof shall constitute part of the common expenses.

Section 7. Additions, Alterations, or Improvements By Unit Owners. No Unit Owner shall make any structural addition, alteration or improvement in or to his Unit without the prior written consent thereto of the Council. The Council shall be obligated to answer any written request by a Unit Owner for approval of a proposed structural addition, alteration or improvement in such Unit Owner's unit within sixty (60) days after such request, and its failure to do so within the stipulated time shall constitute a consent by the Council to the proposed addition alteration or improvement.

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Any application to any governmental authority for a permit to make an addition, alteration or improvement in or to any Unit may be executed by the Council without however, incurring any liability on the part of the Councilor any of them to any contractor, subcontractor or materialman on account of such addition, alteration or improvement, or to any person having any claim for injury to person or damage to property arising therefrom.

Section 8. Restrictions on Use of Units. Each Unit and the common elements shall be occupied and used in accordance with the provisions of the Declaration.

Section 9. Right to Access. A Unit Owner shall grant a right of access to his Unit to the Councilor the managing agent, or any other person authorized by the Councilor the managing agent, or any group of the foregoing, for the purpose of making inspections or for the purpose of correcting any condition originating in his Unit and threatening another Unit or the common elements, or for the purpose of performing installations, alterations or repairs to the mechanical or electrical services of the common elements in his Unit or elsewhere in the property, or to correct any condition which violates the provisions of any mortgage covering another Unit, provided that requests for entry are made in advance and that any such entry is at a time reasonably convenient to the Unit Owner. In case of an emergency, such right of entry shall be immediate, whether the Unit Owner is present at the time or not. The Unit Owner shall, at all times, cause a key to its unit to be in the possession of the Councilor the Management Agent.

Section 10. Rules and Regulations. Rules and regulations concerning the operation and use of the common elements may be promulgated and amended by the Council, provided that such rules and regulations are not contrary to or inconsistent with the Unit Property Act, the Declaration or this Code of Regulations. Copies of the rules and regulations shall be furnished by the Council to each Unit Owner prior to the time when the same shall become effective.

Section 11. Electricity. Electricity shall be supplied by the public utility company serving the Units directly to each Unit through separate meters and each Unit Owner shall be required to pay the bills for electricity consumed or used in his Unit. The electricity serving the common elements shall be separately metered, and the Council shall pay all bills for electricity consumed in such portions of the common elements as a common expense.

Section 12. Sewer Service. Sewer service shall be supplied by Sussex County directly to each Building; provided, however, that maintenance of portions of the sewer lines may be the responsibility of Bald Eagle Associates in the event Developer should elect to tie into the lines owned by Bald Eagle Associates. In the event sewer service is provided through lines owned and maintained by Bald Eagle Associates, the cost for such maintenance shall be a common expense.

(a) Easement. An easement for the installation, maintenance and inspection of the sanitary sewage disposal lines and appurtenances thereto is granted and reserved unto the Developer through, under, over and across the property.

Section 13. Water Service. Water service shall be supplied by Tidewater Utilities, the user fees for which shall be billed directly to the individual Unit Owners.

Section 14. Parking Spaces. The General Common Elements identified as parking areas in the Declaration Plan recorded simultaneously with the Declaration of this Code of Regulations shall be used by the Unit Owners for self-service parking. Each Unit shall be assigned a designated parking space by the developer as shown upon the Declaration Plan and any amendments thereto. The remaining parking spaces shall be available to Unit Owners, their guests, invitees, etc., on a

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"first-come, first-serve" basis. The cost of maintenance and repair of all parking areas shall be a common expense.

Section 15. Roads. The roads as shown upon the Declaration Plan are private roads. A non-exclusive easement over and across said roads for ingress, egress, and regress is granted to the unit owners of CREEKWOOD CONDOMINIUM. Maintenance of the roads shall be a common expense of the owners of units in CREEKWOOD CONDOMINIUM, except to the extent contributions are made by the owner or owners of the commercial parcel (Parcel "C" as shown upon the Declaration Plan) pursuant to a certain Declaration of Access Easement.

ARTICLE VI

INSURANCE

Section 1. Authority to Purchase. Except as otherwise provided in Section 3 of this Article VI, all insurance policies relating to the property shall be purchased by the Council as trustee for the Unit Owners and their respective mortgagees, as their interests may appear, which insurance shall be to the extent available, at least the following:

(a) Casualty or physical damage insurance in an amount equal the full replacement value (i.e., 100% of ONE THOUSAND DOLLARS ($1,000.00) per loss per occurrence, if said deductible amount is not objected to by any mortgagee) of the Condominium project with an "agreed amount" endorsement, and a "Condominium replacement cost" endorsement without deduction or allowance for depreciation, (said amount to be redetermined annually by the Council with the assistance of the insurance company affording such coverage), such coverage to afford protection against at least the following:

(1) Loss or damage by fire or other hazards covered by the standard extended coverage endorsement.

(2) Such other risks as shall customarily be covered with respect to projects similar in construction, location and use, including, but not limited to, vandalism malicious mischief, windstorm, water damage, machinery explosion or damage, and such other insurance as the Council may from time to time determine.

(b) Public Liability Insurance in such amounts (but not less than One Million [$1,000,000.00] Dollars) and in such form as may be considered appropriate by the Council including, but not limited to, water damage, legal liability , hired automobile, non-owned automobile and any and all other liability incident to the ownership and/or use of the Condominium project or any portion thereof, said Public Liability Insurance to name the Developer and the Association of Owners as Insureds as their interests may appear.
(c) Workmen's compensation insurance to the extent necessary to comply with any applicable law; and
(d) Such other policies of insurance, including insurance for other risks of a similar or dissimilar nature, as are or shall hereafter be considered appropriate by the Council.
(e) Insurance coverage for the following property contained within the individual Units:
(i) fixtures, improvements and alterations which are part of the building,

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(ii) refrigerators, heat and air conditioning units, cooking ranges, dishwashers, clothes washers and dryers, microwaves, garbage disposals.

Section 2. Limitations. Any insurance obtained pursuant to the requirements of this Article, shall be subject to the following provisions:

(a) All policies shall be written with a company or companies licensed to do business in the State of Delaware and holding a rating of "A+" or better in "Best's Insurance Guide".
(b) Exclusive authority to negotiate losses under said policies shall be vested in the Councilor its authorized representative, including any trustee with which the Councilor Association of Owners may enter into any insurance trust agreement, or any successor trustee, each of which shall be herein elsewhere referred to as the "Insurance Trustee."
(c) In no event shall the insurance coverage obtained and maintained pursuant to the requirements of this Article be brought into contribution with insurance purchased by the Unit Owners or their mortgagees, as herein permitted, and any "no other insurance" or similar clause in any policy obtained by the Council pursuant to the requirements of this Article shall exclude such policies from consideration.
(d) All policies shall provide that such policies may not be canceled or substantially modified without at least thirty (30) days' prior written notice to any and all insureds named thereon, including any and all mortgagees of the Condominium Units and shall further provide that the coverage thereof shall not be terminated for non-payment of premiums without thirty (30) days' notice to all of the insureds, including all mortgagees of the Condominium Units. Duplicated originals of the insurance policies and all endorsements thereto, together with proof of payment or premiums, shall be delivered to all Unit Owners at their request and shall be delivered to all mortgagees of Condominium units at the times such policies are issued and at least thirty (30) days prior to the expiration of the then current policies.
(e) That the net proceeds of such policies, if less than FIVE THOUSAND DOLLARS ($5,000.00) shall be payable to the Council, and if more than FIVE THOUSAND DOLLARS ($5,000.00) shall be payable to the Insurance Trustee designated in Section 4 of this Article.
(f) All policies shall contain a waiver of subrogation by the insurer as to any claims against the Council, the Unit Owner and/or their respective agents, employees or invitees and of any defenses based upon co-insurance or invalidity arising from the acts of the insured. Said policies cannot be canceled, invalidated or suspended on account of any conduct of the Council, the Unit Owner and/or their respective agents, employees or invitees, and of any defenses based upon co-insurance or invalidity arising from the acts of the insured. Said policies cannot be canceled, invalidated or suspended on account of any conduct of the Council, the Unit Owner, and/or their agents, employees or invitees.
(g) All policies shall contain the standard mortgage clause. In the event a mortgagee endorsement has been issued as to a Unit, the proceeds payable shall be held in trust for the mortgagee and the Unit Owner as their interests may appear.

Section 3. Separate Insurance. Each Unit Owner shall have the right, at his own expense, to obtain additional insurance for his own Unit and for his own benefit and to obtain insurance coverage upon his personal property and for his personal liability , provided that no Unit Owner shall be entitled to exercise his right to acquire or maintain such additional insurance coverage so as to

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decrease the amount which the Council, on behalf of all Unit Owners, may realize under any insurance policy which it may have in force on the property at any particular time or to cause any insurance coverage maintained by the Council to be brought into contribution with such additional insurance coverage obtained by the Unit Owner, and provided further that all such additional policies shall contain waiver of subrogation.

(a) Each Unit Owner shall be required to notify the Council of all improvements made by the Unit Owner to his Unit, the value of which is in excess of TWO THOUSAND DOLLARS ($2,000.00).
(b) Any Unit Owner who obtains individual insurance policies covering any portion of the property, other than personal property belonging to such Unit Owner shall be required to file a copy of such individual policy or policies with the Council within thirty (30) days after the purchase of such insurance.

Section 4. Insurance Trustee.

(a) The Council shall have the right to designate any bank, trust company, savings and loan association, insurance company, or any institutional lender as the Insurance Trustee, and all parties beneficially interested in such insurance coverage shall be bound thereby. The Insurance Trustee at the time of the deposit of such policies and endorsements shall acknowledge that the policies of any proceeds thereof will be held in accordance with the terms of the Code of Regulations.

(b) The Insurance Trustee shall not be liable for payment of premiums, the renewal of the policies, the sufficiency of coverage, the form or contents of the policies, the correctness of any amounts received by it on account of the proceeds of any insurance proceeds. The sole duty of the Insurance Trustee shall be to receive such proceeds as are paid to it and to hold the same in trust for the purposes elsewhere stated in this Code of Regulations, for the benefit of the Unit Owners and their respective mortgagees.

Section 5. Council as Agent. The Council is hereby irrevocably appointed the agent for each Unit Owner and for each mortgagee of a Unit and for each Unit Owner of any other interest in the property to adjust all claims arising under insurance policies purchased by the Council and to execute and deliver releases upon the payment of claims.

Section 6. Premiums. Premiums upon all insurance policies purchased by the Council shall be deemed to be a common expense.

ARTICLE VII

REPAIR AND RECONSTRUCTION AFTER FIRE OR OTHER CASUALTY

Section I. When Repair and Reconstruction are Required. In the event of damage to or destruction of all or any of the buildings as a result of fire, or other casualty (unless there is substantially total destruction of one or more of the buildings or if seventy- five percent (75% ) of the Unit Owners affected by such destruction or damage duly resolve, at a meeting called within ninety (90) days after the occurrence of the casualty, not to proceed with repair or restoration), the Council shall arrange for and supervise the prompt repair and restoration of the buildings (including any damaged Units, and any floor coverings or any kitchen or bathroom fixtures initially installed therein by the Owner, and replacements thereof installed by the Units Owners, but not including any other furniture, furnishings, fixtures or equipment installed by the Unit Owners in the Units).

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Section 2. Procedure for Reconstruction and Repair.

(a) Cost Estimates. Immediately after a fire or other casualty causing damage to any building, the Council shall obtain reliable and detailed estimates of the cost of repairing and restoring the building (including any damaged Units, and any floor coverings and kitchen and bathroom fixtures initially installed by the Owner, but not including any other furniture, furnishings, fixtures or equipment installed by the Unit Owner in the Unit) to a condition as good as that existing before such casualty. Such costs may also include professional fees and premiums for such bonds as the Council determines to be necessary .

(b) Assessments. If the proceeds of insurance are not sufficient to defray the said estimated costs of reconstruction and repair as determined by the Council, or if at any time during reconstruction and repair, or upon completion of reconstruction and repair, the funds for the payment of the costs thereof are insufficient, assessments shall be made against the Unit Owners directly affected by the damage or destruction in proportion to their respective percentage interests, in sufficient amounts to provide payment of such costs.

(c) Plans and Specifications. Any such reconstruction or repair shall be substantially in accordance with the plans and specifications under which the property originally constructed.

(d) Encroachments. Encroachments upon or in favor of Units which may be created as a result of such reconstruction or repair shall not constitute a claim or basis for any proceeding or action by the Unit Owner upon whose property such encroachment exists, provided that such reconstruction is substantially in accordance with the Declaration Plan under which the property was originally constructed. Such encroachments shall be allowed to continue in existence for so long as the reconstructed building shall stand.

Section 3. Disbursements of Construction Funds.

(a) Construction Fund. The net proceeds of insurance collected on account of a casualty and the funds collected by the Council from assessments against Unit Owners on account of such casualty shall constitute a construction fund which shall be disbursed in payment of the cost of reconstruction and repair in the manner set forth in this Section. If the net proceeds of insurance collected on account of a casualty exceed FIVE THOUSAND DOLLARS ($5,000.00), then the funds collected by the Council from assessments against the Unit Owner shall be deposited by the Council with the Insurance Trustee, and the entire construction fund shall be disbursed by the Insurance Trustee; otherwise the construction fund shall be held and disbursed by the Council.

(b) Method of Disbursement. The construction fund shall be paid by the Councilor the Insurance Trustee, as the case may be, in appropriate progress payments, to such contractors, suppliers and personnel engaged in performing the work or supplying materials or services for the repair and reconstruction of the buildings as are designated by the Council.

(c) Surplus. It shall be presumed that the first monies disbursed in payment of the cost of reconstruction and repair shall be from insurance proceeds; and if there is a balance in the construction fund after the payment of all the costs of the reconstruction and repair for which the fund is established, such balance shall be distributed jointly to the Unit Owners and their mortgages who are the beneficial owners of the fund; provided, however, that the part of the distribution to a beneficial Unit Owner which is not in excess of assessments paid by the Unit Owner into the construction fund shall not be made payable to any mortgagee.

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(d) Common Elements. When the damage is to both common elements and Units, the insurance proceeds shall be applied first to the cost of repairing the common elements and the balance to the cost of repairing the Units in the share set forth above.

(e) Certificate. The Insurance Trustee shall be entitled to rely upon a certificate executed by the President or Vice President, and the Secretary of the Condominium certifying (1) whether the damaged property is required to be reconstructed and repaired; (2) the name of the payee and the amount to be paid with respect to disbursements from any construction fund held by it or whether surplus funds to be distributed are less than the assessments paid by the Unit Owners; and (3) all other matters concerning the holding and disbursing of any construction fund held by it. Any such certificate shall be delivered to the Insurance Trustee promptly after request.

(f) When Reconstruction is Not Required. If there is substantially total destruction of one or more of the buildings or if seventy- five percent (75% ) of the Unit Owners directly affected by the damage or destruction duly resolve at a meeting called within ninety (90) days after the occurrence of the casualty, not to proceed with repair or reconstruction, then, and in that event, the salvage value of the property or of the substantially destroyed building or buildings, shall be subject to a suit for partition at the suit of any Unit Owner directly affected by such destruction or damage, in which event the net proceeds of the sale, together with the proceeds of insurance policies held by the Council, shall be considered one fund and shall be divided among the Unit Owners directly affected by such destruction or damage in proportion with their percentage interests after discharging out of the respective shares of such Unit Owners to the extent sufficient for the purpose all liens against the Units of such Unit Owners.

ARTICLE VIII

SALES. LEASES. AND ALIENATION OF UNITS

Section 1. No Severance of Ownership. No Unit Owner shall execute any deed, lease, mortgage, or other instrument conveying or mortgaging the title to his Unit without including therein the undivided interest of such Unit in the common elements, it being the intention hereof to prevent any severance of such combined ownership. Any such deed, mortgage, or other instrument purporting to affect one or more of such interests, without including all such interests, shall be deemed and taken to include the interest or interests, so omitted, even though the latter shall not be expressly mentioned or described therein. No part of the interests in the common elements of any Unit may be sold, leased, transferred, given, devised, or otherwise disposed of, except as part of the Unit to which such Interests are appurtenant, or as part of a sale, lease, transfer, gift, devise or other disposition of such part of the interests in the common elements of all Units.

Section 2. Payment of Assessments. No Unit Owner shall be permitted to convey, mortgage, hypothecate, sell, lease, give, or devise his Unit unless and until he ( or his personal representative) shall have paid in full to the Council all unpaid common expenses theretofore assessed by the Council against his Unit and payable prior to the date of conveyance, except permitted mortgages.

ARTICLE IX

MORTGAGES

Section I. Notice to the Council. A Unit Owner who mortgages his Unit shall notify the Council of the name and address of his mortgagee and shall file a conformed copy of the note and mortgage with the Council.

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Section 2. Notice of Unpaid Assessments for Common Expenses. The Council, whenever so requested in writing by a mortgagee of a Unit, shall promptly report any then unpaid assessments for common expenses due from, or any other default by, the Unit Owner of the mortgaged Unit.

Section 3. Notice of Default. The Council, when giving notice to a Unit Owner of a default in paying the assessment for common expenses or any other default, shall send a copy of such notice to each holder of a mortgage covering such Unit Owner's unit whose name and address has theretofore been furnished to the Council.

Section 4. Notice of Condemnation or Casualty Loss. Upon written request, Council shall provide a mortgagee with notice of condemnation or casualty loss affecting a material portion of the project or the unit securing the mortgage.

ARTICLE X

COMPLIANCE AND DEFAULT

Section 1. Relief. Each Unit Owner shall be governed by, and shall comply with, all of the terms of the Declaration, this Code of Regulations, and any amendments of the same. A default by a Unit Owner shall entitle the Association of Owners, acting through its councilor through the managing agent, to the following relief:

(a) Legal Proceedings. Failure to comply with any of the terms of the Declaration, this Code of Regulations, and the Rules and Regulations shall be grounds for relief which may include, without limiting the same, an action to recover any sums due for money damages, injunctive relief, foreclosure of the lien for payment of all assessments, any other relief provided for in this Code of Regulations, or any combination thereof, and all of which relief may be sought by the Association of Owners, the Council, the managing agent, or, if appropriate, by any aggrieved Unit Owner.
(b) Additional Liability .Each Unit Owner shall be liable for the expense of all maintenance, repair or replacement rendered necessary by his act, neglect or carelessness of any member of his family or his employees, agents or licensees, but only to the extent that such expense is not covered by the proceeds of insurance carried by the Council. Such liability shall include any increase in fire insurance rates occasioned by use, misuse, occupancy or abandonment of any Unit or its appurtenances. Nothing contained herein, however, shall be construed as modifying any waiver of any insurance company of its rights of subrogation.
(c) Costs and Attorney's Fees. In any proceeding arising out of any alleged default by a Unit Owner, the prevailing party shall be entitled to recover the costs of the proceedings, and such reasonable attorneys' fees as may be determined by the court.
(d) No Waiver of Rights. The failure of the Association of Owners, the Council, or of a Unit Owner to enforce any right, provisions, covenant, or condition which may be granted by the Declaration, this Code of Regulations or the Rules and Regulations shall not constitute a waiver of the right of the Association of Owners, the Councilor the Unit Owner to enforce such rights, provisions, covenant, or condition in the future. All rights, remedies and privileges granted to the Association of Owners, the Council, or any Unit Owner pursuant to any terms, provision, covenant or condition of the Declaration, this Code of Regulations, or the Rules and Regulations shall be deemed to be cumulative, and the exercise of anyone or more thereof shall not be deemed to constitute an election of remedies, nor shall it preclude the party exercising the same from exercising such privileges as may be granted to such party by the Declaration, this Code of Regulations or the Rules and Regulations, or at law or in equity.

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(e) Interest. In the event of a default by any Unit Owner in paying any common expenses or other sum assessed against him which continues for a period in excess of thirty (30) days such Unit Owner shall be obligated to pay interest on the amounts due at the legal rate of interest provided on judgment in the State of Delaware from the due date thereof.
(f) Abatement and Enjoinment of Violations by Unit Owners. The violation of any rule or regulation adopted by the Council, or the breach of any regulation contained herein, or the breach of any provision of the Declaration, shall give the Council the right, in addition to any other rights pursuant to law or set forth in this Code of Regulations: (a) to enter the Unit in which, or as to which, such violation or breach exists and summarily to abate and remove, at the expense of the defaulting Unit Owner, any structure, thing or condition that may exist therein contrary to the intent and meaning of the provisions hereof, and the Council shall not thereby be deemed guilty in any manner of trespass; or (b) to enjoin, abate or remedy by appropriate legal proceedings, either at law or in equity, the continuance of any such breach.

Section 2. Lien for Contributions.

(a) The total annual contribution of each Unit Owner for the common expenses pursuant to Article V, Section 1 of this Code of Regulations is hereby declared to be a lien levied against the unit of such Unit Owner, which lien shall be effective as of the first day of each fiscal year of the Condominium. The Council, or the managing agent, may file or record such other or further notice of lien, or such other or further document as may be required by the then laws of the State of Delaware to confirm the establishment of such lien.
(b) In any case where an assessment against a Unit Owner is payable in installments, upon a default by such Unit Owner in the payment of any single installment, which continues for thirty (30) days after written notice of such default has been sent to the Unit Owner, the maturity of the remaining total of the unpaid installations of such assessments may be accelerated, at the option of the Council and the then balance owing may be declared due and payable in full by the service of notice to such effect upon the defaulting Unit Owner by the Councilor the managing agent.
(c) The lien for contribution may be foreclosed in the manner provided by the laws of the State of Delaware by suit brought in the name of the Council, or the managing agent, acting on behalf of the Association of Owners. During the pendency of such suit the Unit Owner shall be required to pay a reasonable rental of the unit for any period prior to sale pursuant to any judgment or order of any court having jurisdiction over such sale. The plaintiff in such proceeding shall have the right to the appointment of a receiver, if available under the then laws of the State of Delaware.
(d) Suit to recover a money judgment for unpaid contributions shall be maintainable without foreclosing or waiving the lien securing the same, and foreclosure shall be maintainable notwithstanding the pendency of any suit to recover a money judgment.
(e) The lien for contributions shall be subordinate to the lien of any first mortgagee.

ARTICLE XI

MISCELLANEOUS

Section 1. Notices. All notices, demands, bills, statements, or other communications under this Code of Regulations shall be in writing and shall be deemed to have been duly given if delivered personally or if sent by registered or certified mail, return receipt requested, first class postage prepaid; (I) if to a Unit Owner, at the address which the Unit Owner shall designate in writing and

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file with the Secretary, or if no such address is designated, at the address of the unit of such Unit Owner, or (2) if to the Association of Owners, the Councilor the managing agent, at the principal office of the managing agent or at such other address as shall be designated by notice in writing to the Unit Owners pursuant to this Section.

Section 2. Invalidity. The invalidity of any part of this Code of Regulations shall not impair or affect in any manner the validity, enforceability or effect of the balance of this Code of Regulations.

Section 3. Captions. The captions herein are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Code of Regulations, or the intent of any provision thereof.

Section 4. Gender. The use of the masculine gender in this Code of Regulations shall be deemed to include the feminine gender and the use of the singular shall be deemed to include the plural, whenever the context so requires.

Section 5. Conflicts. To the extent that provisions herein might conflict with or be inconsistent with the Declaration, the Declaration shall prevail.

ARTICLE XII

AMENDMENTS TO CODE OF REGULATIONS.

Section 1. Amendments. Except as otherwise provided hereinabove or hereinbelow, this Code of Regulations may be modified and amended either (I) by a vote of sixty-seven percent (67%) of the Unit Owners at any regular or special meeting, provided that notice of the proposed amendment shall have been given to each Unit Owner at least ten (10) days in advance of such meeting, or (2) pursuant to a written instrument duly executed by sixty-seven percent (67%) of the Unit Owners.

Section 2. Recording. A modification or amendment of this Code of Regulations shall become only effective if such modification or amendment is recorded in the Office of the Recorder of Deeds in and for Sussex County, Delaware.

Section 3. Conflicts. No modification or amendments of this Code of Regulations may be adopted which shall be inconsistent with the provisions of the Unit Property Act. A modification or amendment once adopted and recorded as provided for herein shall then constitute part of the official Code of Regulations of the Condominium, and all Unit Owners shall be bound to abide by such modification or amendment.

Section 4. Approval of Mortgagees. This Code of Regulations contains provisions concerning various rights, priorities, remedies, and interests of the mortgagees of Units. Such provisions herein are to be construed as covenants for the protection of the mortgagees on which they may rely in making loans secured by mortgages on the Units. Accordingly, no amendment or modification of this Code of Regulations impairing or affecting such rights, priorities, remedies or interests of a mortgagee shall be adopted without the prior written consent of such mortgagee. If there is more than one mortgagee holding mortgages on the Units, it shall be sufficient to obtain the written consent of the mortgagee or mortgagees holding mortgages on more than fifty percent ( 50% ) of the Units encumbered by mortgages. The rights, priorities, remedies or interests of a mortgagee for the purposes of this Section shall include, but shall not be limited to, the following:

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(a) Voting rights.
(b) Assessments, assessment liens or subordination of such liens.
(c) Reserves for maintenance repair and replacement of common elements.
(d) Insurance or fidelity bonds.
(e) Expansion or contraction of project or addition, annexation or withdrawal of property to or from project.
(f) Decision by Association of Owners to establish self-management when professional management had been required previously by an eligible mortgage holder.
(g) Restoration or repair of project (after hazard damage or partial condemnation) in a manner other than that specified in the documents.
(h) Responsibility for maintenance and repairs.
(i) Boundaries of any unit.
(j) Reallocation of interests in general or limited common elements or rights to their use.
(k) Convertibility of units into common elements or vice versa.
(I) Imposition for any restrictions on a unit owner's right to sell or transfer his unit.
(m) Any action to terminate the legal status of the project after substantial destruction or condemnation occurs.
(n) Any provisions for express benefit of mortgage holders, insurers or guarantors.