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7.1.F. - Page 131 <br /> B. Notice of Action: Upon written request to the Association, identifying the <br /> name and address of the Eligible Mortgage Holder or Eligible Insurer or Guarantor, and the <br /> Condominium number or address, such Eligible Mortgage Holder or Eligible Insurer or Guarantor <br /> will be entitled to timely written notice of: <br /> (1) Any condemnation loss or any casualty loss that affects either a <br /> material portion of the Project or any Condominium on which there is a First Mortgage held, <br /> insured, or guaranteed by such Eligible Mortgage Holder or Eligible Insurer or Guarantor, as <br /> applicable; <br /> (2) any default in performance of obligations under the Governing <br /> Documents or delinquency in the payment of Assessments or charges owed by an Owner of a <br /> Condominium subject to a First Mortgage held, insured or guaranteed by such Eligible Mortgage <br /> Holder or Eligible Insurer or Guarantor, which remains uncured for a period of sixty (60) days; <br /> (3) any lapse, cancellation or material modification of any insurance policy <br /> or fidelity bond maintained by the Association; and, <br /> (4) any proposed action which would require the consent of a specified <br /> percentage of Eligible Mortgage Holders. <br /> The Association shall discharge its obligation to notify Eligible Mortgage Holders or Eligible <br /> Insurers or Guarantors by sending written notices required by this Declaration to such parties, at <br /> the address given on the current request for notice, in the manner prescribed by Section 9.10. <br /> C. Reserves: The Association shall establish and maintain a Reserve Fund for <br /> replacements and a general operating reserve sufficient in amount to satisfy the minimum amounts <br /> necessary to comply with the requirements of FNMA, FHLMC, and FHA. <br /> D. First Lenders Rights Confirmed: The "Declarant Mortgage" shall mean the <br /> Mortgage made by Declarant for a construction loan for the Project with Wells Fargo Bank, N.A., <br /> which encumbers the Project. Any First Lender who comes into possession of the Condominium by <br /> virtue of Foreclosure of the Mortgage, or any purchaser at a Foreclosure, will take the <br /> Condominium free of any claims for unpaid Assessments and fees, late charges, fines or interest <br /> levied in connection with such claims, against the Condominium, and for other than the Declarant <br /> Mortgage, which accrue more than six (6) months prior to the time such First Lender or purchaser <br /> at a Foreclosure takes title to the Condominium, except for fees or costs related to the collection of <br /> the unpaid Assessments, claims for a pro rata share of such Assessments or charges to all <br /> Condominiums including the mortgaged Condominium, and except for Assessment Liens as to <br /> which a Notice of Delinquent Assessment has been recorded prior to the Mortgage. Any First <br /> Lender who comes into possession of the Condominium by virtue of Foreclosure of the Declarant <br /> Mortgage, or any purchaser at a Foreclosure in connection therewith, will take the Condominium <br /> free of any claims for unpaid Assessments and fees, late charges, fines or interest levied in <br /> connection with such claims, against the Condominium, which accrue any time prior to, the time <br /> such First Lender or purchaser at a Foreclosure takes title to the Condominium. <br /> E. Distribution of Proceeds of Insurance, Condemnation or Termination: No <br /> provision of the Governing Documents gives an Owner, or any other party, priority over any rights <br /> of First Lenders in the case of a distribution to Owners of proceeds of termination or any insurance <br /> proceeds or condemnation awards for losses to or taking of Condominiums and/or Common Area. <br /> No provisions hereof shall govern or limit the rights of the beneficiary of the Declarant Mortgage. <br /> F. FHA/HUD Provisions: As long as any First Mortgage which is a lien on a <br /> Condominium is insured or guaranteed by the Federal Housing Administration ("FHA"), the <br /> following provisions shall apply to the Project, unless and until not required by FHA: <br /> (1) Availability of Governing Documents: The Association shall make <br /> available to Condominium Owners and First Lenders, and to Eligible Mortgage Holders and Eligible <br /> Insurers or Guarantors, current copies of the Governing Documents concerning the Project and the <br /> books, records and financial statements of the Association. "Available" means available for <br /> inspection, upon request, during normal business hours or under other reasonable circumstances. <br /> 68 <br /> [DRAFT][05.03.14] C:\Program Files\Neevia.Com\Document Converter\temp\4056.doc <br />