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6.1. B. - Page 92 8.2. Damage or Destruction: If Project improvements (including a Unit) are damaged or destroyed by fire or other casualty, the improvements shall be repaired or reconstructed substantially in accordance with the original as -built plans and specifications, modified as may be required by applicable building codes and regulations in force at the time of such repair or reconstruction and subject to such alterations or upgrades as may be approved by the Architectural Control Committee, unless either of the following occurs: (1) the cost of repair or reconstruction is more than fifty percent (50 %) of the current replacement costs of the Project improvements, available insurance proceeds are not sufficient to pay for at least eighty -five percent (85 %) of the cost of such repairs or reconstruction, and three - fourths (314) of the total voting power of the Association residing in Members and their First Lenders vote against such repair and reconstruction; or (2) available insurance proceeds are not sufficient to substantially repair or reconstruct the improvements within a reasonable time as determined by the Board, a Special Assessment levied to supplement the insurance fails to receive the requisite approval (if such approval is required) as provided in Section 4.4, and the Board, without such approval by the Owners, is unable to supplement the insurance by borrowing on behalf of the Association sufficient monies to enable the improvements to be substantially repaired or reconstructed within a reasonable time. A. Costs of Damage — Condominiums: In the case of damage or destruction of a Unit, whether by fire, earthquake or other causes, the Owner of that Condominium Unit shall be responsible for the costs of repair or reconstruction that is not covered by the Association's insurance policies or is within the deductible amount. If an Owner fails to pay the costs of such repair or reconstruction, the Association may elect to pay for the uninsured portion of the cost or deductible amount and shall have the right to assess the Owner(s) for the cost thereof as a Reimbursement Charge and to enforce the Reimbursement Charge as provided in this Declaration. In any case where insurance proceeds are pre - empted by any Owner's lender for application to said Owner's debt, the Association shall immediately impose an individual Assessment upon said Owner's Condominium Unit equal in amount to such preemption pursuant to Section 4.3, and shall enforce such Assessment in accordance with Sections 4.3 and 5.2.F hereof. The proceeds of such Assessment or lien shall then be substituted for the pre - empted insurance proceeds. B. Process For Repair or Reconstruction: If the improvement is to be repaired or reconstructed and the cost for repair or reconstruction is in excess of twenty -five percent (25 %) of the current replacement cost of all the Project improvements, the Board shall designate a construction consultant, a general contractor, and an architect for the repair or reconstruction. All insurance proceeds, Association monies allocated for the repair or reconstruction, and any borrowings by the Association for the repair or reconstruction shall be deposited with a commercial lending institution experienced in the disbursement of construction loan funds (the "Depository") as selected by the Board. Funds shall be disbursed in accordance with the normal construction loan practices of the Depository that require as a minimum that the construction consultant, general contractor and architect certify within ten (10) days prior to any disbursement substantially the following: (1) that all of the work completed as of the date of such request for disbursement has been done in compliance with the approved plans and specifications; (2) that such disbursement request represents monies which either have been paid by or on behalf of the construction consultant, the general contractor or the architect and/or are justly due to contractors, subcontractors, materialmen, engineers, or other persons (whose name and address shall be stated) who have rendered or furnished certain services or materials for the work and giving a brief description of such services and materials and the principal 48 03/06/12 T:IWPWIN601PR0TECTS333 MAIN STREETIDEC - DRAFTING FORM[7][03 06 l2l.doc