ARTICLE XI - EASEMENTS
Section 11.01. Encroachment Easements for Owners. There is hereby reserved by Declarant, together with the right to grant and transfer the same to Owners, an easement appurtenant to each Unit over all adjoining property (including Units, Association Property and Common Area) for the purpose of accommodating maintaining, improving, modifying and removing the property including the original construction and appurtances to the Property. Any work done shall be in accordance with applicable governing documents and good practice. Approvals of the the Architectural Committee and applicable agencies will be secured.
Section 11.02. Encroachment Easements for Association. The reservations in Section 11.02 are extended to the Association.
Section 11.03. Reservation of Easements by Declarant.
(a) Utilities. Easements over the Property for the installation, maintenance, reconstruction and replacement of utilities, services and facilities as are needed to serve the Property or as are shown on the recorded subdivision map or maps and parcel map or maps of the Property are hereby reserved by the Declarant, together with the right to grant and transfer the same.
(b) Construction and Sale. There is hereby reserved by the Declarant, including without limitation, its sales agents and representatives and prospective purchasers of Units, together with the right in the Declarant to grant and transfer the same, over the Property as the same may from time to time exist, easements for construction, display, sales offices and and exhibit purposes to such limitations as may be provided in the Section entitled "Construction by Declarant," provided however, that such use by the Declarant and others shall not unreasonably interfere with the reasonable use and enjoyment of any of the Common Area or any Association Property by the Members.
(c) Discharge of Rights and Obligations. There is hereby reserved by Declarant, together with the right to grant and transfer the same to the Association and others, easements over the Property for the purpose of permitting the Association, the Board, the Architectural Committee, the Declarant and others to exercise their rights and discharge their obligations as described in this Declaration, the Articles, Bylaws or Association Rules.
(d) Access, Use and Enjoyment. There is hereby reserved by Declarant, together with the right to grant and transfer the same to the Owners, a nonexclusive easement of access, use and enjoyment in and to the Common Area of each Project. Such easement shall be subject to the rights and limitations set forth in the Article entitled "Common Area and Association Property Rights and Limitations".
(e) Exclusive Use Common Areas. There is hereby reserved by Declarant, together with the right to grant and transfer the same to Owners, an exclusive easement of reasonable use and enjoyment over the Exclusive Use Common Areas. Such use and enjoyment shall be subject to the provisions of this Declaration. No Owner shall sell or otherwise transfer his Exclusive Use Common Areas, or any interest in such areas, except upon the sale or other transfer of his Unit and then only to the purchaser or other transferee of his Unit. Any attempt to make a prohibited sale or transfer will be void and of no force or effect.
(f) Repairs. There is hereby reserved by Declarant, together with the right to grant and transfer the same to Owners, an easement over the Property for the purpose of permitting the Owners to exercise their rights and discharge their obligations set forth in the Article entitled "Additional Obligations".
Section 11.04. Modification and Transfer of Easements. This Declaration shall not be amended to modify or eliminate the easements reserved to Declarant without the prior written approval of the Declarant and any attempt to do so shall have no effect. As to easements reserved to the Declarant together with the right to grant and transfer the same to the Owners or the Association, the Declarant shall convey said easements to the Owners in the instrument by which title to their Units is conveyed or in any other instrument and to the Association in the instrument by which any Association Property is conveyed to the Association or any other instrument. If any such conveyance is not accomplished through inadvertence, mistake or any other cause, the easements shall nevertheless be deemed to be conveyed to each Owner and the Association by their Unit and any Association Property conveyancing instruments, respectively.
ARTICLE XII - Insurance
Section 12.01. Types. The Association, to the extent available, shall obtain and continue in effect the following types of insurance:
(a) A comprehensive policy of public liability insurance covering the Common Area, any Association Property and any Maintenance Area with a limit of not less than One Million Dollars for claims for personal injury and/or property damage arising out of a single occurrence, such coverage to include protection against water damage liability, liability for non-owned and hired automobiles and liability for property of others, and such other risks as are customarily covered with respect to similar situations on other passenger and cruise ships and as shall customarily be 'required by private institutional mortgage investors for projects similar in construction, location and use to the Property. The policy shall contain a "severability of interest" endorsement or the equivalent which shall preclude the - insurer from denying the claim of an Owner because of negligent acts or omissions of the Association or other Owners.
(b) A policy of fire and casualty insurance with extended coverage endorsement, for the full replacement value of all dwelling units and Common Areas (including without limitation, furniture, fixtures and equipment), such improvements within the interior of the Units as the Board deems necessary or as may be required under this Article, any Association Property (including without limitation, improvements, furniture and equipment), and the improvements upon any Maintenance Area, without deduction for depreciation, with an "agreed amount endorsement" or its equivalent and clauses waiving subrogation against Members and the Association and persons upon the Property with the permission of a Member. Such insurance shall afford protection against at least loss or damage by fire and other hazards covered by the standard extended coverage endorsement, including without limitation, loss or damage caused by sprinkler leakage, vandalism, malicious mischief, windstorm, water damage, and covering the cost of demolition and debris removal and such other risks as are customarily covered with respect to similar real estate developments in the area of the Property. If any Owner shall separately insure his Unit against loss by fire or other casualty, and should any loss intended to be covered by insurance carried by the Association occur, and should the proceeds payable under such insurance be reduced by reason of insurance carried by any Owner, such Owner shall assign the proceeds of such insurance carried by him, to the extent of such reduction, to the Board for application by the Board to the same purposes as the reduced proceeds are to be applied. In the event that such Owner fails to pay such amount within thirty days of a written demand by the Association, the Board may levy a Reimbursement Assessment against such Owner for such amount.
(c) Fidelity coverage against dishonest acts on the part of directors, Officers, employees, volunteers, trustees, managers or any other persons who handle the funds of the Association. Such fidelity bonds shall name the Association as obligee shall be written in an amount equal to not less than the sum of three months' Regular Assessments for all Units in the Property plus the Association's reserve funds and shall contain waivers of any defense based on the exclusion of persons who serve without compensation from any definition of "employee" or similar expression.
Section 12.02. Waiver By Members. As to each of the policies provided for in this Article, which will not be voided or impaired by the requirements of this Section, the Members and the Owners hereby waive and release all claims against the Association, the board, the Declarant and their agents and employees, with respect to any loss covered by such insurance, whether or not caused by negligence of or breach of any agreement by said persons, but only to the extent of insurance proceeds received in compensation for such loss.
Section 12.03. Other Insurance; Annual Review. The Association may purchase such other insurance as it may deem necessary, including but not limited to, plate-glass insurance, workers' compensation, officers' and directors' liability and errors and omissions insurance. The Board shall annually determine whether the amounts and types of insurance it has obtained provide adequate coverage for all Common Area, Units, any Association Property and any Maintenance Area in light of increased construction costs, inflation, practice in the area in which the. Property is located or any other factor which tends to indicate that either additional insurance policies or increased coverage under existing policies are necessary or desirable to protect the interests of the Association and the Owners. If the Board determines that increased coverage or additional insurance is appropriate, it shall obtain the same.
Section 12.04. Premiums, Proceeds and Settlement. Insurance premiums for any insurance coverage obtained by the Association pursuant to this Article shall be a Common Expense to be included in the Regular Assessments levied by the Association. Insurance proceeds shall be used by the Association for the repair or replacement of the property for which the insurance was carried, or otherwise disposed of as provided in this Article or in the Article entitled "Destruction". The Association is hereby granted the authority to negotiate loss settlements with the appropriate insurance carriers. Any two directors of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim and such signatures shall be binding on the Association and the Members.
Section 12.05. Abandonment of Replacement Cost Insurance. Unless at least two-thirds of the First Mortgagees (based on one vote for each First Mortgage owned) or Owners (other than Declarant) have given their prior written approval, the Association shall not be entitled to fail to maintain the extended coverage fire and casualty insurance required by this Article on less than a one hundred percent current replacement cost basis.
Section 12.06. Beneficiaries of Insurance. All insurance obtained by the Association shall be in the name of the Association and shall be maintained at least for the benefit of the Association, the Owners and the Mortgagees as their interests may appear.
ARTICLE XIII - Destruction
Section 13.01. Destruction of Common Area. In the event of the partial or total destruction of all or any portion of the Common Area of any Project, the following provisions shall be applicable:
(a) If the amount available from the proceeds of insurance maintained by the Association is at least eighty-five percent of the estimated costs of the repair, replacement or reconstruction (collectively, "Repair") of the Common Area, the Common Area shall be repaired, replaced or reconstructed (collectively, "Repaired").
(b) If the amount available from such proceed. is less than eighty-five percent of the estimated costs of Repair of the Common Area, the Common Area shall nevertheless be Repaired unless at least two-thirds of the Owners (other than the Declarant) in the Project in which the partially or totally destroyed Common Area is located ("Affected Owners") determine by written consent not to proceed with such Repair. Any such determination by the Affected Owners must be made within thirty days after they have received written notice of their right to make the determination. The Board shall cause such notice to be sent to all Affected Owners as soon as possible after the amount available from insurance proceeds and the estimated costs of Repair of the Common Area are determined.
(c) In the event Common Area is totally or partially destroyed in more than one Project, the Board shall separately follow the procedures set forth in this Article as to each Project so affected.
Section 13.02. Repair to Proceed. If the Repair of the Common Area of a Project is to proceed, the following provisions shall be applicable:
(a) It shall be the duty of the Association to Repair the Common Area to it's former condition as promptly as is practical and in a lawful and workmanlike manner.
(b) Any Repair of any of the Common Area undertaken pursuant to this Article shall substantially conform to the Unit Plan of the damaged or destroyed Common Area and the original construction plans of such Common Area (if available and if not available, construction plans caused to be prepared by the Board which substantially conform to the original construction plans, as determined by the Board), unless changes recommended by the Board have been approved in writing by seventy-five percent of the Affected Owners.
(c) The Board shall have the power to record an amendment to the Unit Plan of the affected Project so that such Unit Plan conforms to the Common Area as designed to be Repaired. In the event the Board decides to record such amendment to such Unit Plan, all Affected Owners and all Mortgagees in the Project in which the partially or totally destroyed Common Area is located ("Affected Mortgagees") shall execute and acknowledge the amendment if required to comply with St. Vincent & The Grenadines Civil Code or any similar statute then in effect. The Affected Owners and Affected Mortgagees shall also execute such other documents and take such other actions as are required to make such amendment to the Unit Plan effective.
(d) Available insurance proceeds shall be used for the Repair of the Common Area and the Board shall levy a Reconstruction Assessment against each Affected Owner at such time and in such amount as the Board shall determine is necessary to cover any cost of Repair in excess of insurance proceeds. The amount of the Reconstruction Assessment levied against each Affected Owner shall bear the same relationship to the total amount of all such Reconstruction Assessments levied against all Affected Owners as the total square footage of such Affected Owner's Residential Element bears to the total square footage of the Residential Elements of all Affected Owners.
(e) The Board or its delegates shall have the sole ability to contract for any work as may be necessary for the Repair of the Common Area.
Section 13.03. Repair of Units.
(a) If improvements within the interior of a Unit are damaged, but The ship within which the Unit is located is not partially or totally destroyed, the Owner of the Unit shall Repair the damage at his individual expense, and if the damage is covered by insurance maintained by the Association, the Board shall promptly distribute to any such Owner the proceeds of such insurance. If a unit that is intended for generation of lease or rental income it shall be maintained in a standard to be acceptable for such purpose as interpreted by the Architectural Committee. It is the burden of the Owner of individual dwelling units to carry Homeowners insurance to cover Public Liability and Property Damage (PLPD) and Fire and extended coverage to loss of personal property.
(b) If improvements within the interior of a Unit are damaged, the ship within which the Unit is located is partially or totally destroyed and the Repair of The ship is to proceed, the following provisions shall be applicable:
(i) If the damage to the improvements is covered by insurance maintained by the Association, the Board shall either (A) treat any such damaged improvements as "Common Area" and proceed with its Repair in accordance with the terms and procedures set forth in this Article or (B) promptly distribute to any such Owner the proceeds of such insurance, in which case the damage shall be Repaired by and at the individual expense of the Owner of the Unit for repair to reestablish the previous value. In as much as the Association has residual and consequential interest in the interior of dwelling units they shall without fail be returned to habitable and commercial status for the generation of rental income and Homeowners Dues.
(ii) If the damage to the improvements is not covered by insurance- maintained by the Association, the damage shall nevertheless be Repaired by and at the individual expense of the Owner of the Unit.
(c) If improvements within the interior of a Unit are damaged, The ship within which the Unit is located is partially or totally destroyed and the Repair of The ship is not to proceed, the damaged improvements shall be treated as "Common Area" under Section 13.03.
(d) All distributions of insurance proceeds to Owners under this Section shall be used for the Repair of damaged improvements within the interior of the Owners' Units, subject to the prior rights of Mortgagees whose interests may be protected by Association insurance policies. All such Repairs shall be performed by the Owners as promptly as practical and in a lawful and workmanlike manner.
Section 13.05. Assessment Abatement. If the Board determines that any Unit has become uninhabitable by reason of its total or partial destruction, Regular Assessments shall abate against the Owner of the Unit until the Board determines that the Repair of the Unit has restored its habitability. However, if the Board determines that such abatement will adversely and substantially affect the management, maintenance or operation of the Property it may elect to disallow such abatement.
Section 13.06. Certificate of intention to Repair and Partition. In the event the Association undertakes the Repair of any of the Common Area pursuant to this Article, not later than one hundred eighty days after the date of destruction the Board shall cause one of the officers of the Association to execute, acknowledge and record in the Office of the Adventurer Cruise Ship Acquisition Corporation, a certificate declaring the intention of the Association to Repair Common Area. If no such certificate is recorded within the one hundred eighty day period, it shall be conclusively presumed that the Association has determined not to undertake the Repair of Common Area pursuant to this Article. In such event, the right of any Affected Owner to partition through legal action as described in the Article entitled "Limitations upon the Right to Partition and Severance" shall immediately revive.
Section 13.07. Association Property Improvements. In the event of the partial or total destruction of all or any portion of any Association Property, the following provisions shall be applicable:
(a) If the amount available from the proceeds of insurance maintained by the Association is at least eighty-five percent of the estimated costs of the Repair of the Association Property, the Association Property shall be Repaired.
(b) If the amount available from such proceeds is less than eighty-five percent of the estimated costs of the Repair of Association Property, the Association Property shall nevertheless be Repaired unless at least two-thirds of the Owners (other than the Declarant) determine by written consent not to proceed with such Repair. In the event any excess insurance proceeds remain, the Board shall retain such sums in the general funds of the Association or distribute pro rata all or a portion of such sums to the Owners, subject to the prior rights of Mortgagees whose interests may be protected by the insurance policies.
(c) If the Repair of the Association Property is to proceed, it shall be the duty of the Association to Repair the Association Property to its former condition as promptly as is practical and in a lawful and workmanlike manner. Available insurance proceeds shall be used for such purpose and the Board shall levy a uniform Reconstruction Assessment against each Owner and his Unit at such time and in such amount as the Board shall determine is necessary to cover any cost of Repair of the Association Property in excess of insurance proceeds.
(d) Any Repair of the Association Property undertaken pursuant to this Article shall substantially conform to the original construction plans of such Association Property (if available and if not available, construction plans caused to be prepared by the Board which substantially conform to the original construction plans, as determined by the Board), unless changes recommended by the Board have been approved in writing by seventy-five percent of the Owners.
Section 13.08. Negotiations with Insurer. The Board shall have full authority to negotiate in good faith with representatives of the insurer of the totally or partially destroyed Common Area or any Association Property and to make settlement with the insurer for less than the full insurance coverage on the damage to the Common Area or any Association Property. Any settlement made by the Board in good faith shall be binding upon all Owners. If it should become necessary in the judgment of the Board to incur costs for appraisals, legal fees, court costs or similar expenses in order to determine or collect insurance proceeds, such costs shall be first deducted before distribution or application of insurance proceeds as provided in this Article.
ARTICLE XIV - Eminent Domain
Section 14.01. Definition of Taking. The term "taking" as used in this Article shall mean condemnation by eminent domain or sale under threat of such condemnation.
Section 14.02. Representation by Board in Condemnation Proceeding. In the event of a threatened taking of all or any portion of a Project or any Association Property, the Board shall, subject to the right of all Mortgagees who have requested the right to join the Board in the proceedings, represent (a) all of the Owners in that Project in an action to recover all awards with respect to such Project and (b) all of the Owners in an action to recover all awards with respect to any Association Property. No Owner shall challenge the good faith exercise of the discretion of the Board in fulfilling its duties under this Article. The Board is further empowered, subject to the limitations of this Article to act as the sole representative of the Owners in all aspects of any condemnation proceedings including, without limitation, any sale to the condemnor in lieu of engaging in a condemnation action.
Section 14.03. Procedure on Taking. In the event of a taking of all or any portion of a Project, the Board shall distribute the award from the taking authority according to the provisions of this Section after deducting fees and expenses related to the condemnation proceeding including, without limitation, fees for attorneys and appraisers and court costs. In the event the taking is by judgment of condemnation and the judgment apportions the award among the Owners in the affected Project and their respective Mortgagees, the Board shall distribute the amount remaining after such deductions among such Owners and such Mortgagees on the allocation basis set forth in the judgment. In the event the taking is by sale under threat of condemnation, or if the judgment of condemnation fails to apportion the award, the Board shall distribute the award among such Owners and their respective Mortgagees, as their interests may appear, based upon the relative loss of value of the Units affected by such taking as determined by the appraised value of each such Unit prior to and after the taking as determined by a qualified real estate appraiser hired by the Board at the expense of the Association. The determination by such appraiser as to the value of each such Unit prior to and after the taking shall be final and binding on all Owners and Mortgagees. In no event shall any portion of any award be distributed by the Board to an Owner and/or the Mortgagees of his Unit in a total amount greater than the portion allocated under this Section to such Unit. Nothing contained in this Section shall entitle an Owner to any priority over a Mortgagee of his Unit as to any condemnation award.
Section 14.04. Inverse Condemnation. The Board is authorized to bring an action in inverse condemnation. In such event, the provisions of this Article shall apply with equal force.
Section 14.05. Revival of Right to Partition. Upon a taking which renders more than fifty percent of the Units in a Project incapable of being restored to at least ninety-five percent of their floor area and substantially their condition prior to the taking, the right of any Owner within such Project to partition through legal action as described in the Article entitled "Limitations upon the Right to Partition and Severance" shall immediately revive. The determination as to whether Units. partially taken are capable of being so restored shall be made by the Board, whose decision shall be final and binding on all Owners and Mortgagees.
Section 14.06. Awards for Owners' Personal Property and Relocation Allowances. Where all or any portion of a Project is taken, each Owner in that Project shall have the exclusive right to claim all of the award made for his personal property, and any relocation, moving expenses, or other allowance of a similar nature designed to facilitate relocation. Notwithstanding the foregoing provisions, the Board shall represent each such Owner in an action to recover all awards with respect to such portion, if any, of the Owner's personal property as is at the time of any taking, as a matter of law, part of the real property comprising any Unit, and shall allocate to such Owner so much of any award as is attributed in the taking proceedings, or failing such attribution, attributed by the Board, to such portion of the Owner's personal property.
Section 14.07. Notice to Members. The Board, immediately upon having knowledge of any taking or threat of a taking with respect to a Project or any portion of a Project, shall promptly notify all Members.
Section 14.08. Change of Unit Interest. In the event of a taking of all or any portion of a Project, the Board may amend the Unit Plan for that Project to reflect the change in the Project. In the event the Board decides to record such amendment to a Unit Plan, all Owners in the affected Project and their Mortgagees shall execute and acknowledge the amendment if required to comply with the Civil Code of the Country where the ship is registered, or any similar statute then in effect. Such Owners and Mortgagees shall also execute such other documents and take such other actions as are required to make such amendment effective. The Board shall cause a notice of change in such Unit Plan to be sent to each such Owner and Mortgagee within ten days of the filing of such amendments in the World Yacht Club Ltd office.
Section 14.09. Association Property. Any awards received on account of a taking of all or any portion of any Association Property shall be paid to the Association. In the event of a taking of less than all of any Association Property, the rules as to repair, replacement and reconstruction of Association Property shall apply as in the case of destruction of Association Property. In the event of a total taking of the Association Property, the Board shall either retain any award in the general funds of the Association or distribute pro rata all or any portion of the award to the Members. Any such distribution shall be subject to the prior rights of Mortgagees.
ARTICLE XV - Rights of Lenders
Section 15.01. Priority of Mortgage Lien. No breach of the covenants, conditions, restrictions or easements contained in this Declaration, nor the enforcement of any lien provisions in this Declaration, shall affect, impair, defeat or render invalid the lien of any Mortgage made in good faith and for value, but all of said covenants, conditions, restrictions and easements shall be binding upon and effective against any Owner whose title is derived through foreclosure or trustee's sale, or otherwise, with respect to a Unit.
Section 15.02. First Mortgage Relationship with Assessment Liens.
(a) The Assessment lien provided for in the Article entitled "Assessments" shall be subordinate to the lien of any First Mortgage which was recorded prior to the date a notice of delinquent assessment is recorded with respect to any such Assessment in accordance with the Section entitled "Lien and Notice of Delinquent Assessment".
(b) Any First Mortgagee who obtains title to a Unit pursuant to the remedies provided in the First Mortgagee's Mortgage or foreclosure of the First Mortgage will not be liable for such Unit's unpaid Assessments, dues or charges which accrue prior to the acquisition of title to such Unit by such First Mortgagee, but shall take title to such Unit subject to any lien or claim for unpaid Assessments against such Unit which accrues subsequently to the time such First Mortgagee obtains title to such Unit.
(c) Nothing in this Section shall be construed to release any Owner from his obligation to pay any Assessment levied pursuant to this Declaration.
Section 15.03. Vote of First Mortgagees. For purposes of this Declaration, the term Eligible First Mortgagees" means those First Mortgagees who have requested the Association to notify them of any proposed action that requires the consent of a specified percentage of First Mortgagees who have requested such notification. Unless at least fifty-one percent of the Eligible First Mortgagees (based upon one vote for each First Mortgage owned) have given their prior written approval, neither the Association, the Members nor the Owners shall be entitled to amend a material provision of this Declaration, the Articles or the Bylaws. Without limiting the generality of the foregoing, provisions governing the following subjects shall be deemed to be material:
[Question appropriateness of terminology]
(a) Voting rights;
(b) Assessments, assessment liens, and the priority of assessment liens;
(c) Reserves for maintenance, repair, and replacement of Common Area and Association Property;
(d) Responsibility for maintenance add repairs;
(e) Reallocation of interests in the Common Area (including Exclusive Use Common Areas) and Association Property and rights to their use;
(f) Redefinition of Unit boundaries;
(g) Convertibility of Units into Common Area and vice versa
(h) Expansion or contraction of the Property, or the addition, annexation, or withdrawal from the Property;
(i) Insurance or fidelity bonds;
(j) Leasing of Units;
(k) Imposition of any restrictions on a Unit Owner's right to sell or transfer his Unit;
(1) A decision by the Association to establish self-management when professional management had been required previously by the Declaration, Articles or Bylaws or by an Eligible First Mortgagee;
(m) Restoration or repair of the Property (after a hazard damage or partial condemnation) in a manner other than that specified in the Declaration;
(n) Any action to terminate the legal status of any of the Projects or the Association after substantial destruction or condemnation occurs; or
(o) Any provisions of the Declaration, Articles or Bylaws that expressly benefit First Mortgagees, insurers of First Mortgages or guarantors of First Mortgages.
Unless at least two-thirds of the Eligible First Mortgagees (based on one vote for each First Mortgage owned) have given their prior written approval, neither the Association, the Members nor the Owners shall be entitled to amend any provision to this Declaration, Articles or Bylaws governing any action to terminate the legal status of any of the Projects or the Association for reasons other than substantial destruction or condemnation of the Property.
An Eligible First Mortgagee shall be deemed to have approved a proposed amendment to the Declaration, Articles or Bylaws if the Eligible First Mortgagee fails to submit to the Association its written disapproval of the proposed amendment within thirty days after the Eligible First Mortgagee receives a written proposal for the amendment and written notice of the proposal, provided such proposal and notice were delivered to the Eligible First Mortgagee by certified or registered mail, with a "return receipt" requested.
Unless at least two-thirds of the First Mortgagees (based upon one vote for each First Mortgage owned) or Owners (other than the Declarant) of the Units have given their prior written approval, the Association shall not be entitled to do any of the following:
(t) By act or omission, seek to abandon or terminate a Project.
(u) By act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the Common Area of any Project or any Association Property; provided, however, the granting of easements for public utilities or for other public purposes consistent with the intended use of the Common Area and any Association Property shall not require such approval.
(v) Change the pro rata interest or obligations of any individual Unit for the purpose of: (i) levying Assessments or charges or allocating distributions of hazard insurance proceeds or condemnation awards, or (ii) determining the pro rata share of ownership of each Unit in Common Area.
(w) Partition or subdivide any Unit.
(x) Use hazard insurance proceeds for losses to any Association Property or a Project (whether to Units or to Common Area) for other than the repair, replacement or reconstruction of such Association Property or Project.
(y) Change the method of determining the Assess meets, obligations, dues or other charges which may be levied against an Owner.
(z) By act or omission change, waive or abandon any scheme of regulations, or enforcement of such regulations, pertaining to the architectural design or the exterior appearance of Units, the exterior maintenance of Units, the maintenance of any party walks on any of the Common Area or Association Property or common fences and drive-ways, or the upkeep of lawns and plantings within the Property.
Section 15.04. Other Plights of First Mortgagees.
(a) Any First Mortgagee, insurer of a First Mortgage or guarantor of a First Mortgage shall, upon written request to the Association, be entitled to:
(i) Inspect the books and records of the Association during normal business hours;
(ii) Receive the annual audited financial statements of the Association within ninety days following the end of the Association's fiscal year;
(iii) Receive written notice of all annual and special meetings of the Members or of the Board and to designate a representative to attend, but not vote at, all such meetings;
(iv) Receive thirty days' written notice before the Association shall be entitled to (A) abandon, dissolve or terminate the Association, (B) effectuate any decision to terminate professional management and assume self-management of the Property or (C) amend a material provision of this Declaration, the Articles or Bylaws. Without limiting the generality of the foregoing, the following provisions shall be deemed material: (W) this Article, (X) the Article entitled "Insurance", and (Y) any rights granted specifically to Mortgagees.
(v) Receive written notice of a lapse cancellation or material modification of any insurance policy or fidelity bond maintained by the Association; and
(vi) Receive written notice of any proposed action that requires the consent of a specified percentage of Eligible First Mortgagees (as such term is defined in Section 14.03).
(b) No Unit may be partitioned or subdivided, if at all, without the prior written approval of any First Mortgagee of such Unit.
Section 15.05. Notice to First Mortgagees and Others of Owner Default. Any First Mortgagee, insurer of the First Mortgage of such First Mortgagee or guarantor of such First Mortgage shall, upon written request to the Association, be entitled to written notification from the Association of any default in the performance of the obligations imposed by this Declaration, the Articles or Bylaws by the Owner whose Unit is encumbered by such First Mortgagee's Mortgage, which default has not been cured within sixty days of a request by the Association or, in the case of a default in the payment of any Assessment or other charge by such Owner, which default has not been cured within sixty days after the Assessment or charge becomes delinquent.
Section 15.06. Right of First Refusal. In the event this Declaration is amended to provide for any right of first refusal, no such right shall impair the rights of any First Mortgagee to:
(a) Foreclose or take title to a Unit pursuant to the remedies provided in any such First Mortgagee's Mortgage;
(b) Accept a deed (or assignment) in-lieu of foreclosure in the event of default by a Mortgagor under any such First Mortgagee's Mortgage; or First Mortgagee.
(c) Sell or lease a Unit acquired by such
Section 15.07. Conflicts. In the event of any conflict between any of the provisions of this Article and any of the other provisions of this Declaration, the provisions of this Article shall control.
Section 15.08. Notice of Destruction or Taking. In the event that a material portion of (a) the Property, (b) a Project or (c) a Unit is materially damaged or destroyed or is made the subject of any condemnation or eminent domain proceeding, any First Mortgagee, insurer of a First Mortgage or guarantor of a First Mortgage affected by such damage, destruction or proceeding shall, upon written request to the Association, be entitled to receive written notice of such damage, destruction or proceeding.
Section 15.09. Payments of Taxes or Premiums by First Mortgagees. First Mortgagees may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against any Association Property, unless such taxes or charges are separately assessed against the Owners in which case the rights of the First Mortgagees shall be governed by the provisions of their Mortgages. First Mortgagees may, jointly or singly, also pay overdue premiums on hazard insurance policies, or secure new hazard insurance coverage on the lapse of a policy, for any Association Property and First Mortgagees making such payments shall be owed immediate reimbursement from the Association. Entitlement to such reimbursement shall be reflected in an agreement in favor of any First Mortgagee which requests the same to be executed by the Association.
Section 15.10. Proceeds and Awards Priority. No provision in the Declaration, the Articles or Bylaws shall give or be construed as giving an Owner, or any other party, priority over any rights of a First Mortgagee- of a Unit pursuant to its Mortgage in the case of a distribution to such Owner of insurance proceeds or condemnation awards for losses to or a taking of Units, Units, Common Area or any Association Property.
Section 15.11. Notice of Amendment Hearing. Any First Mortgagee shall be entitled to receive not less than fifteen days' written notice of any court hearing held pursuant to St. Vincent & The Grenadines Civil Code Section 1356.
ARTICLE XVI
Limitations Upon the Right to Partition and Severance
Section 16.01. No Partition. The right of partition is hereby suspended, except that the right to partition shall revive and a Project may be sold as a whole when the conditions for such action set forth in the Articles entitled "Destruction" and "Eminent Domain have been met; provided, however, notwithstanding the foregoing, any Owner may, upon the prior written approval of the First Mortgagee encumbering his Unit, bring an action for partition by sale of the Project in which his Unit is located, as provided in Section 1359 of the Civil Code of St. Vincent & The Grenadines or any similar statute then in effect upon the occurrence of any of the events provided in said Section; and provided, further, that if any Unit shall be owned by two or more co-tenants, nothing contained in this Section shall be deemed to prevent a Judicial partition as between such co-tenants.
Section 16.02. No Severance. The Unit Elements, Exclusive Use Common Areas and other rights appurtenant to the ownership of a Unit are inseparable, and each Owner agrees that he will not, while this Declaration or any similar declaration is in effect, make any conveyance of less than an entire Unit, Exclusive Use Common Areas and such appurtenances. Any conveyance made in contravention of this Section shall be void. The provisions of this Section shall terminate on the date that judicial partition shall be decreed.
Section 16.03. Proceeds of Partition Sale.
(a) Whenever an action is brought for the partition by sale of a Project whether upon the occurrence of any of the events provided in Section 1359 of the Civil Code of St. Vincent & The Grenadines (or similar statute then in effect) or upon the revival of the right to partition pursuant to the Articles entitled "Destruction" or "Eminent Domain," a portion of the proceeds of such sale shall be allocated to each Unit subject to such partition. The portion allocated to each such Unit shall bear the same relationship to the total sale proceeds as the fair market value of each such Unit bears to the total fair market value of all such Units as of the date of partition as determined in accordance with an appraisal conducted by a qualified real estate appraiser hired by the Board at the expense of the Association. Such appraisal shall be final and binding upon the Association, all Owners and Mortgagees.
(b) The distribution of the proceeds of any such partition sale shall be adjusted as necessary to reflect any prior distribution of insurance proceeds or condemnation award as may have been made to Owners and their Mortgagees pursuant to the Articles entitled "Destruction" and "Eminent Domain." In the event of any such partition and sale, the liens and provisions of all Mortgages or Assessment liens encumbering Units so encumbered shall extend to each applicable Owner's interest in the proceeds of such partition and sale. The Owner's share of such proceeds shall not be distributed to such Owner except upon the prior payment of any Mortgage or Assessment lien encumbering such proceeds.