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cancelled or substantially modified without at least <br />ten ii0) days prior written notice to the Association. <br /> <br /> c. Adequate fidelity coverage against dishonest <br />acts by the Association's officers, directors, trustees <br />and employees, and all others who are responsible for <br />handling funds of the Association. Such fidelity bonds <br />shall name the Association as an obligee and shall be <br />written tn an amount acceptable to the Association, <br />including reserves, unless a greater amount is required <br />by FNMA. Such fidelity bonds shall contain waivers of <br />any defense based on the exclusion of persons who serve <br />without compensation from any definition of "employee" <br />or similar expressions. <br /> <br /> d. Such other insurance as the Board of Directors <br />may deem necessary or desirable. <br /> <br /> Section ?.2 Premiums a Common Expense. Ali insurance <br />premiums required to be paid pursuant to this Article VII <br />shall be a Common Expense, and shall be assessed uniformly <br />among the House. <br /> <br /> Section ?.3 Insurance Trustee/Reconstruction. In the <br />event that any part of the Property is destroyed or damaged <br />by causes covered by the insurance referred to above, all <br />proceeds of said insurance coverage shall be payable to the <br />Association as Insurance Trustee on behalf of the Owners. <br />Said insurance proceeds shall be applied and administered <br />as follows: <br /> <br /> a. Such Insurance proceeds paid to the Association <br />shall promptly be deposited in escrow with a reputable <br />title insurance company, authorized to do business in <br />the State of Minnesota and selected by the Trustee, and <br />held in escrow for restoration of the Property; <br />provided, however that in the ~vent that the cost of <br />repairs or reconstruction is less than $10,000, the <br />Association may, at its discretion, deposit all monies <br />received In its own accounts and undertake the <br />responsibilities of the title insurance company or <br />other escrow agent. <br /> <br /> b. The Association shall, as promptly as <br />practicable after the insurance proceeds are received <br />and deposited with the title insurance company, enter <br />into a contract with a qualified builder providing For <br />the reconstruction of the improvements affected to <br />substantially the same condition as existed immediately <br />prior to the Insured loss; provided, however, that no <br />contract shall be entered into for an amount in excess <br />of the insurance proceeds until additional funds are <br />deposited sufficient to cover all construction costs as <br />approved by the Association. The Association shall, in <br /> <br />Northfork <br /> <br />page 15 of 25 <br /> <br /> <br />