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7.1.F. - Page 125 <br /> Association residing in Members and their First Lenders vote against such repair and <br /> reconstruction; or (2) available insurance proceeds are not sufficient to substantially repair or <br /> reconstruct the improvements within a reasonable time as determined by the Board, a Special <br /> Assessment levied to supplement the insurance fails to receive the requisite approval (if such <br /> approval is required) as provided in Section 4.4, and the Board, without such approval by the <br /> Owners, is unable to supplement the insurance by borrowing on behalf of the Association sufficient <br /> monies to enable the improvements to be substantially repaired or reconstructed within a <br /> reasonable time. As long as the Declarant Mortgage encumbers the Project, as defined in Section <br /> 9.6.D, the rights of the beneficiary under the Declarant Mortgage shall, to the extent of any conflict <br /> with this Section 8.2, shall prevail and control. <br /> A. Inadequate Insurance Proceeds or Uninsured Loss. If the insurance <br /> proceeds are insufficient to restore the damaged Improvement or the loss is uninsured, the Board <br /> shall add to any available insurance proceeds all reserve account funds designated for the repair <br /> or replacement of the damaged Improvement. If the total funds then available are sufficient to <br /> restore the damaged Improvement, the improvement shall be restored. If the aggregate amount of <br /> insurance proceeds and such reserve account funds are insufficient to pay the total costs of <br /> restoration, a special assessment shall be levied by the Board up the maximum amount permitted <br /> without the approval of the Members in accordance with the limitations set forth in this Declaration <br /> and by law. If the total funds then available are sufficient to restore the damaged Improvement, the <br /> Improvement shall be restored. Any special assessment levied to cover a shortfall in available <br /> repair proceeds shall be prorated among the Condominiums as described in Section 4.5 and <br /> without regard to the extent of damage or destruction to the individual Condominiums. <br /> B. If the total funds available to the Association are still insufficient to restore <br /> the damaged Improvement, then the Board first shall attempt to impose an additional Special <br /> Assessment pursuant to Section 8.2.C, below, and, second, use a plan of alternative reconstruction <br /> pursuant to Section 8.2.D below. Any special assessment levied to cover a shortfall in available <br /> repair proceeds shall be allocated among the Condominiums without regard to the extent of <br /> damage or destruction to the individual Condominiums. If the Members do not approve such <br /> actions, then the provisions of Section 8.2.G shall apply. <br /> C. Additional Special Assessment: If the total funds available to restore the <br /> damaged Improvement as provided in Section 8.2.B are insufficient, then a meeting of the <br /> Members shall be called for the purpose of approving a special assessment to make up all or a <br /> part of the deficiency ("Additional Special Assessment"). The Additional Special Assessment shall <br /> be prorated among the Condominiums as described in Section 4.5 and without regard to the extent <br /> of the damage or destruction to the individual Condominiums. If the amount of the Additional <br /> Special Assessment approved by the Members and the amounts available pursuant to Section <br /> 8.2.B, above, are insufficient to restore the damaged Improvement or if no Additional Special <br /> Assessment is approved, the Association shall consider a plan of alternative reconstruction in <br /> accordance with Section 8.2.D. <br /> D. Alternative Reconstruction: The Board shall consider and propose plans to <br /> reconstruct the damaged Improvement making use of whatever funds are available to it pursuant to <br /> Section 8.2.A, 8.2.B and Section 8.2.0 above ("Alternative Reconstruction"). All proposals shall <br /> be presented to the Owners. If two-thirds of the voting power of the Owners whose Condominiums <br /> were materially damaged as determined by the Association ("Affected Owners") and a majority of <br /> the voting power of the Members, including the Affected Owners, agree to any plan of Alternative <br /> Reconstruction, then the Board shall contract for the reconstruction of the damaged Improvement in <br /> accordance with the plan of Alternative Reconstruction making use of whatever funds are then <br /> available to it. If no plan of Alternative Reconstruction is agreed to, then the provisions of Section <br /> 8.2.G shall apply. <br /> E. Costs of Damage — Condominiums: In the case of damage or destruction <br /> of a Unit, whether by fire, earthquake or other causes, the Owner of that Condominium Unit shall <br /> be responsible for the costs of repair or reconstruction that is not covered by the Association's <br /> insurance policies or is within the deductible amount. If an Owner fails to pay the costs of such <br /> repair or reconstruction, the Association may elect to pay for the uninsured portion of the cost or <br /> deductible amount and shall have the right to assess the Owner(s) for the cost thereof as a <br /> Reimbursement Charge and to enforce the Reimbursement Charge as provided in this Declaration. <br /> In any case where insurance proceeds are pre-empted by any Owner's lender for application to <br /> 62 <br /> [DRAFT][05.03.14] C:\Program Files\Neevia.Com\Document Converter\temp\4056.doc <br />