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6. 1. F. - Page 40 (b) Shall cause the transferred funds to be restored to the reserve account within one year of the date of the initial transfer; except that the Board may, after giving the same notice required for considering a transfer, and upon, making a documented finding that a delay of restoration of the funds to the reserve account would be in the best interests of the Development, temporarily delay the restoration. (c) Shall exercise prudent fiscal management in maintaining the integrity of the reserve account and shall, if necessary, levy a Special Assessment to recover the full amount of the expended funds within the time limits specified in (b) above. The Board may, at its discretion, extend the date the payment on the Special Assessment is due; however, any extension shall not prevent the Board from pursuing any legal remedy to enforce the collection of an unpaid Special Assessment. Any such Special Assessments shall be subject to the limitations specified in Section 4.4. (d) Subject to the provisions of Article 10 below, when the decision is made to use reserve funds or to temporarily transfer funds from the reserve account to pay for litigation, the Association shall notify the Members of that decision in the next available mailing to all Members pursuant to Section 5016 of the California Corporations Code, and of the availability of an accounting of those expenses. The Association shall make an accounting of such expenses on at least a quarterly basis, and such accounting shall be made available for inspection by Members at the Association's office. (e) The signatures of at least two (2) persons, who shall be members of the Board, or one officer who is not a member of the Board and one member of the Board, shall be required for the withdrawal of moneys from the reserve account. Section 4.22 Reserve Studies At least once every three years, the Board shall cause to be conducted a reasonably competent and diligent visual inspection of the accessible areas of the major components which the Association is obliged to repair, replace, restore or maintain, as part of a study of the reserve account requirements, if the current replacement value of the major components which the Association is obligated to repair, replace, restore or maintain is equal to or greater than one -half of the gross budget of the Association for any fiscal year, which excludes the Association's reserve account for that period. In addition, the Board shall annually review, or cause to be reviewed, the reserve account study and shall consider and implement necessary adjustments to its analysis of the reserve account requirements as a result of that review. The reserve account study shall at a minimum include the items and components set forth in Civil Code Sections 1365.5(e) and 1365.2.5. Section 4.23 Capitalization Fund Pursuant to the terms of Declarant's Purchase Agreement for the sale of the Condominiums, the initial Owner of each Condominium shall be required to pay to the Association an amount equal to two (2) month's worth of Annual Assessments to be used to establish a capitalization fund (the "Fund ") for the Development. The Association shall maintain the Fund in a separate account to be disbursed by the Board to pay for the start-up and initial organization of the Association, the initial occupancy and operation of the Development, additions and upgrades to the Development, and other purposes deemed appropriate by the Board. ARTICLE 5 MAINTENANCE, REPAIR AND IMPROVEMENT Section 5.1 Association's Riehts and Obligations to Inspect, Maintain and Repair the Development Coincident with the first conveyance of a Condominium in Phase 1 by Declarant, the Association shall repair, restore, replace and maintain in good condition and appearance all of the Common Area and all facilities, improvements, furnishings, equipment, utilities, water systems, sewers, 30 CCRS -One Marina. docx