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EXHIBIT 3 <br />19.1 Policies Required. While any obligation of Developer under the Loan <br />Documents remains outstanding, Developer shall maintain at Developer's sole expense, <br />with insurers either (i) admitted in California or (ii) are not admitted to California but <br />have an A.M. Best Rating of "A" or above and reasonably approved by the City, the <br />following policies of insurance in form and substance reasonably satisfactory to the City <br />Attorney: <br />(a) worker's compensation insurance and any other insurance <br />required by law in connection with the construction; <br />(b) prior to commencement and following completion of the <br />construction, fire and hazard "all risk" insurance covering 100% of the replacement cost <br />of the Improvements in the event of fire, lightning, windstorm, vandalism, malicious <br />mischief and all other risks normally covered by "all risk" coverage policies in the area <br />where the Property is located (including loss by flood if the Property is in an area <br />designated as subject to the danger of flood); <br />(c) upon commencement of the construction and at all <br />times prior to completion of the construction, builder's risk -all risk insurance covering <br />100% of the replacement cost of all Improvements (including offsite materials) during the <br />course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, <br />malicious mischief and all other risks normally covered by "all risk" coverage policies in <br />the area where the Property is located (including loss by flood if the Property is in an area <br />designated as subject to the danger of flood); <br />(d) public liability insurance in the amount of $1,000,000 for "single <br />occurrence'; <br />(e) property damage insurance in amounts reasonably <br />required by City from time to time, and in no event less than $1,000,000; and <br />(1) any other insurance reasonably required by City. <br />All such insurance shall provide that it may not be canceled or materially modified <br />without thirty (30) days (ten (10) days for nonpayment of premium) prior written notice <br />to City. The policies required under subparagraphs (b) and (c) shall include a "lender's <br />loss payable endorsement" in form and substance satisfactory to City, showing the City <br />as encumbrance. The City shall be named as an additional insured(s) in the policies <br />required under subparagraphs (d) and (e) with primary coverage. Certificates of insurance <br />for the above policies (and/or original policies, if required by City) shall be delivered <br />within ten (10) days after demand therefore, and prior to start of any construction work. <br />All policies insuring against damage to the Improvements shall contain an agreed value <br />clause sufficient to eliminate any risk of co-insurance. No less than ten (10) days prior to <br />the expiration of each policy, Developer shall deliver to City evidence of renewal or <br />replacement of such policy reasonably satisfactory to City Attorney. <br />19.2 RESERVED. <br />31 <br />80A-67 <br />