ARTICLE XIV

Mortgagees' Protection

Section 14.1.    Definitions
As used in this Declaration: (1) "mortgagee" includes the beneficiary of a deed of trust, a secured party, or other holder of a security interest; (2) "foreclosure" includes a notice and sale proceeding pursuant to a deed of trust or sale on default under a security agreement; and, (3) "institutional holder" means a mortgagee which is a bank or savings and loan association or established Mortgage company, or other entity chartered under federal or state laws, any corporation or insurance company, or any federal or state agency.

Section 14.2.    Approval
The prior written approval of at least seventy-five percent (75%) of the First Mortgagees (based on one vote for each first Mortgage owned) of the individual Lot shall be required for any of the following:
  (a)    The abandonment or termination of the PDD status of the project, except for abandonment or termination, if any, provided by law in the case of substantial destruction by fire or other casualty or in the case of a taking by condemnation or eminent domain.
  (b)    Any material amendment to this Declaration or to the Articles of Incorporation or Bylaws of the Association, including, but not limited to, any amendment which would change the ownership interests of the Owners in this project, change the pro rata interest or obligation of any individual Owner for the purpose of levying assessments or charges or for allocating distributions of hazard insurance proceeds or condemnation awards.
  (c)    The effectuation of any decision by the Association to terminate professional management and assume self-management (however this shall not be deemed or construed to require professional management).
  (d)    Partitioning or subdividing any Lot.
  (e)    Any act or omission seeking to abandon, partition, subdivide, encumber, sell or transfer the Common Areas; provided, however, that the granting of easements for public utilities or other public purposes consistent with the intended use of the Common Areas shall not be deemed a transfer within the meaning of this clause.
  (f)    Any act or omission seeking to change, waive or abandon any scheme of regulations or enforcement thereof, pertaining to the architectural design or the exterior appearance of buildings and other improvements, the exterior maintenance of buildings and other improvements, the maintenance of common walks or common fences and driveways, or to the upkeep of lawns and plantings in the Property.
  (g)    Use of hazard insurance proceeds for losses to any Common Areas for other than the repair, replacement or reconstruction of such Common Areas.

Section 14.3.    Notice
Each First Mortgagee (as well as each Owner) shall be entitled to timely written notice of:
  (a)    Any significant damage or destruction to the Common Areas.
  (b)    Any condemnation or eminent domain proceeding effecting the Common Areas.
  (c)    Any default under this Declaration or the Articles of Incorporation or Bylaws which gives rise to a cause of action against the Owner of a Lot subject to the mortgage of such holder or insurer, where the default has not been cured in thirty (30) days.
  (d)    Any proposed abandonment or termination of the PDD status of this project.
  (e)    Any material amendment of this Declaration or to the Articles of Incorporation or Bylaws of the Association.

Section 14.4.    Request for Information
Each First Mortgagee shall be entitled, upon request, to:
  (a)    Inspect the books and records of the Association during normal business hours.
  (b)    Require the preparation of, at its expense, or if preparation is required, receive, an annual audited financial statement of the Association for the immediately preceding fiscal year, except that such statement need not be furnished earlier than ninety (90) days following the end of such fiscal year.
  (c)    Receive written notice of all meetings of the Association and be permitted to designate a representative to attend all such meetings.

Section 14.5.    Payment of Taxes on Common Areas
First Mortgagees of any Lot may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against the Common Areas, and may pay overdue premiums on hazard insurance policies, or secure new hazard insurance coverage on the lapse of a policy, for such Common Areas, and the First Mortgagees making such payments shall be owed immediate reimbursement therefor from the Association.