Everett Public Facilities District 2/28/2002

under Section 7.1.1 as if the damage or destruction met the description set forth in the first sentence of that Section if Lessee: (1) gives notice to that effect to Lessor within ninety (90) days after the determination of the insurance appraiser with respect to said damage or destruction; (2)promptly deposits in the Joint Account funds or secured assurances as to their availability required under the provisions of Section 7.1.1 (without regard to the limitation of the Maximum Lessee Required Contribution); and(3) promptly demonstrates that it can deposit the funds required or that will be required under the provisions of Section 7.1.1 (without regard to the limitation of the Maximum Lessee Required Contribution), whereupon the provisions of Section 7.1.1 shall be fully applicable to such damage or destruction. In the event Lessee terminates this Lease as a result of damage or destruction, Lessee shall nevertheless be obligated to restore the Premises to a graded land condition with utilities marked and remove all debris therefrom, if and to the extent requested by Lessor by written notice provided no later than thirty (30) days after Lease termination. Section 7.2 Prompt Repair. If Lessee is obligated or elects to repair, replace, reconstruct, or rebuild any structures, improvements, or other property as herein above provided, the same shall be effected at Lessee's cost and expense (which may be paid from insurance proceeds available as above provided and subject to the provisions of Section 7.1.2) and all repairs shall be of a quality and workmanship to return the Regional Center to a condition comparable to first class regional centers of similar age and type in other Northwest and British Columbia cities, and Lessee shall diligently commence and continuously carry out such repair, replacement, reconstruction, or rebuilding to full completion as soon as possible, except to the extent of delays due to strikes, lockouts, shortages of labor or materials after due diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act of the public enemy, or other causes beyond the reasonable control of Lessee after the exercise of due diligence, including diligence in contracting and the exercise of rights under contracts with contractors and suppliers ("Force Majeure Events"). Lack of funds and lack of financing shall not be deemed to be reasons beyond the control of Lessee. Prior to commencement of construction of such repair or replacement, any proceeds of such insurance shall be held in the Joint Account and such funds shall constitute security to Lessor for the performance of Lessee's obligations under this Lease until actual commencement of such construction. Section 7.3 Damage During Last Five Years of Term. If there occurs during the last five (5) Lease Years of the Term damage or destruction to any structure or improvement on or in the Premises and the costs of repairing, restoring, replacing, or rebuilding the same exceed ten percent (10%) of the then replacement cost of the improvements, as determined by the insurance appraiser provided for in Article 6,then Lessee or Lessor may elect to terminate this Lease and, in such event, Lessee or Lessor shall give notice to the other party of its election within sixty (60) days after the determination by the insurance appraiser of the amount of damage, this Lease shall thereupon terminate as of the date of such notice, and any insurance proceeds shall be invested as provided in Section 6.7 and distributed in accordance with the rights of the parties. Section 7.4 Periodic Adjustments. Whenever periodic adjustments are provided for in this Article and in other provisions of this Lease, such adjustments shall be made based on the percentage increase, if any, in the last Consumer Price Index (CPI)published by the U.S. 14 GROUND LEASE COE--EPFD