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7.1.L. - Page 92 <br /> 8.7 FNMA, FHLMC and FHA Requirements. Notwithstanding anything herein to the contrary,the <br /> Association shall maintain such policies, containing such terms, amount of coverage, endorsements, <br /> deductible amounts, named insureds, loss payees, standard mortgage clauses, notice of changes or <br /> cancellation, and an appropriate insurance company rating that shall satisfy the minimum requirements <br /> imposed by the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage <br /> Corporation ("FHLMC") and the Federal Housing Administration ("FHA") or any successor thereto. If the <br /> FNMA, FHLMC or FHA requirements conflict, the more stringent requirements shall be met. <br /> 8.8 Insurance Trustee. All property insurance proceeds payable to the Association under any <br /> property insurance policy procured by the Association as described in Section 8.2, subject to the rights of <br /> Mortgagees under Article 10, may be paid to a trustee as designated by the Board to be held and expended <br /> for the benefit of the Owners and Mortgagees as their respective interests shall appear. The trustee shall be <br /> a commercial bank or other financial institution with trust powers in the county in which the Development is <br /> located that agrees in writing to accept such trust. If repair or reconstruction is authorized,the Association will <br /> have the duty to contract for such work as provided for in this Declaration. <br /> 8.9 Other Insurance. In addition to the policies described in Sections 8.1 and 8.2, the <br /> Association may obtain and maintain such other insurance as the Board in its discretion considers necessary <br /> or advisable. <br /> ARTICLE 9 <br /> Unit Damage, Destruction or Condemnation <br /> If an Improvement within any Unit, including the residence, is damaged or destroyed by fire or other <br /> casualty, the Owner of such Unit shall repair or reconstruct the Improvement to substantially the same <br /> condition and appearance as existed immediately before the damage or destruction, subject to such <br /> modifications as may be approved by the Architectural Committee or as required by law. All repair, <br /> restoration and reconstruction work shall be subject to the approval and completion requirements set forth in <br /> Article 7. The work shall be performed only by contractors duly licensed by the State of California. In <br /> addition, because the residences are situated on the podium and may effect Association Property,the Board <br /> in its discretion may require, prior to the commencement of the work,appropriate collateral to ensure lien-free <br /> completion of the work and payment of all labor and materials, appropriate liability insurance against any <br /> liability arising from the work, indemnification protection and compliance with construction rules, including <br /> rules regarding construction access, hours of construction, material storage, and cleanup requirements. <br /> Pending commencement of the work, the Owner shall take appropriate steps to secure the area for <br /> safety purposes and to screen unsightly views. <br /> ARTICLE 10 <br /> Association Property Damage, Destruction or Condemnation <br /> 10.1 Restoration Defined. As used in this Article 10, the term "restore" shall mean repairing, <br /> rebuilding or reconstructing Improvements damaged or destroyed as a result of a fire or other casualty to <br /> substantially the same condition and appearance in which they existed prior to fire or other casualty damage. <br /> 10.2 Insured Casualty. If any Association Property Improvement is damaged or destroyed from a <br /> risk covered by the insurance required to be maintained by the Association and the insurance proceeds are <br /> sufficient to cover the loss, then the Association, to the extent permitted under existing laws and except as <br /> otherwise authorized under this Article 10,shall restore the Improvement subject to such changes as may be <br /> approved by the Architectural Committee or required by law. The Association shall proceed with the filing and <br /> adjustment of all claims arising under the existing insurance policies. The insurance proceeds shall be paid to <br /> and held by the Association or an insurance trustee selected under the provisions of Section 8.7. If the <br /> insurance proceeds exceed the costs of restoration,the excess proceeds shall be paid into reserves and held <br /> for the benefit of the Association. <br /> CLSS\51643\927586.5 38 June 16,2014 <br />