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<br /> <br />4810-5342-0509, v. 2 <br /> 50 <br /> <br />(b) Course of Construction. Whenever any Improvements or alterations <br />to the Association Insured Property are in the course of construction, the insurance required under this <br />Section shall be carried by the Association in builder’s risk form written on a completed value basis, insuring <br />against loss to the extent of at least the full replacement value of the Association Insured Property <br />(excluding foundations and footings, except for earthquake coverage) of the Property being covered. <br />(c) Payment of Insurance Proceeds. Subject to the rights of <br />Mortgagees, the proceeds from such property insurance shall be payable to the Association or an insurance <br />trustee (“Trustee”) to be held in trust for the benefit of the Association and the Owners, Mortgagees and <br />others, as their respective interests shall appear. If so named as an insured, the Trustee shall have <br />exclusive authority to negotiate losses under any policy providing property or liability insurance and to <br />perform such other functions as are necessary to accomplish this purpose. The Trustee shall be a <br />commercial bank or other financial institution with trust powers in the County that agrees in writing to accept <br />such trust. <br />(d) Primary. With respect to Association Insured Property, the property <br />insurance maintained by the Association shall be primary and noncontributing with any other property <br />insurance maintained by an Owner covering the same loss. <br />(e) Endorsements. The property insurance policy shall contain, to the <br />extent available on commercially reasonable terms as may be determined by the Board, the following <br />endorsements or their equivalents: agreed amount, boiler and machinery (to the extent applicable), inflation <br />guard, ordinance or law, replacement cost, and such other endorsements as may customarily be obtained <br />with respect to properties similar in construction, location and use, as may be determined by the Board. <br />(f) Adjustment of Losses. The Association shall timely file, pursue and <br />complete the adjustment of all claims arising under the property insurance policies carried by the <br />Association. The Board is appointed attorney-in-fact by each Owner to negotiate and agree on the value <br />and extent of any property damage under any policy carried by the Association. The Board is granted full <br />right and authority to: (i) compromise and settle any property damage claim under any policy of property <br />insurance carried by the Association, or enforce any such claim by legal action or otherwise; and (ii) execute <br />releases in favor of any insurer with respect to any such claim. <br />(g) Waiver of Claims and Subrogation. The Association waives all <br />claims against the Owners for any damage to the Association Insured Property (including without limitation, <br />any loss of use of such property), except that the Association may claim against an Owner for property <br />damage caused by that Owner to the extent that either: (i) the peril causing such damage is not covered by <br />the property insurance required by this Declaration to be maintained by the Association or the property <br />insurance actually maintained by the Association (whichever is greater), provided that such Owner’s liability <br />for such uninsured damage is limited to the amount of liability insurance required to be maintained by such <br />Owner pursuant to this Declaration; (ii) the peril causing such damage is covered by the Association’s <br />property insurance, but the damage is within the amount of the deductible or self-insured retention, provided <br />that such Owner’s liability for such damage is limited to the amount of liability insurance required to be <br />maintained by such Owner pursuant to this Declaration; or (iii) such damage is caused by the gross <br />negligence or willful misconduct of that Owner. Any property insurance policy obtained by the Association <br />must contain a waiver of subrogation rights by the insurer consistent with this Section; provided, however, <br />that a failure or inability of the Association to obtain such a waiver from an insurer shall not defeat or impair <br />the waivers between the Association and the Owners as set forth herein. If an Owner is liable for damage <br />under this Section, the Association may, after Notice and Hearing, levy a Compliance Assessment amount <br />of damage for which the Owner is responsible, and the increase, if any, in insurance premiums directly <br />attributable to such damage. The waivers of claims and subrogation set forth in this subsection apply only <br />in favor of the Owners and do not limit or waive, release or discharge any claims that the Association (or <br />its insurers) may have against any third party, including without limitation any contractor, service provider, <br />agent, or Invitee, provided that such waivers shall also apply in favor of a Lessee if and to the extent that <br />the Owner has similarly agreed in such lease agreement to a waiver of claims and subrogation against <br />such Lessee. <br />303