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i ; (excluding foundation and excavation cost) of the Improvements. If all-risk insurance becomes unavailable, then Lessee shall insure the Improvements with such coverage as is customary from time to time for comparable first-class buildings in the Salem, Oregon metropolitan area. The amount of such 1. insurance policy shall be increased from time to time as the full replacement cost of the Improvements ' increases. Any dispute regazding insurance matters shall be arbitrated by the parties. ~f,l ~~ c_: t:' .- 1 ~ 4~ l -= ~~ ~ ~~ ~ :~ r" ,~ f~ ~ In the event of any casualry damage to the Improvements, Lessor may make proof of loss if Lessee fails to do so within 15 days of the casualty and after 10 days' written notice from Lessor of its intent to do so. If the insurance proceeds (the "Proceeds") of any insurance on the Improvements equal more than 10~0 (or such lesser percentage as ;nay be contained in any Permitted Leasehold Mortgage) of the replacement cost of the Improvements, then all Proceeds shall be paid to the First Leasehold Mortgagee, if any, and if none then to a bank trust department (the "Trustee") as trustee for the parties and any Permitted Leasehold Mortgagees. The Trustee shall be selected by Lessee and approved by Lessor, wluch approval shall not be_ unreasonably withheld or delayed. If the Proceeds are less than such amount, then the Proceeds shall be delivered to Lesse~. Unless the casualty occurs within five years of the expiration of the Term and Lessor elects to terminate this Lease, Lessee shall promptly repair or replace the damaged and destroyed Improvements in substantially the form on the date of the casualty or in a manner reasonably satisfactory to Lessor. The Trustee shall pay or_ reimburse L,essee from the Proceeds for the cost of repair, restoration, or replacement on satisfactory proof of expenditure by Lessee, satisfactory evidence of sufficient progress on the work, and satisfactory evidence of sufficient funds available to complete restoration. The Trustee shall not be liable to the parties except ~ the event of gross negligence or fraud. The Trustee shall be entided to deduct a customary and reasonable chazge for its services. Any proceeds not used for the repair, restoratian, or replacement of the Improvements shall be distributed on the same basis as any condemnation proceeds pursuant to the provisions of S~tion 16.2 below. If the damage occurs within five years of the expiration of the Term of this I.ease, then Lessor shall have the option of terminating this Lease and retaining all the Proceeds in -excess of the amount required to pay the remaining balance, if any, on any Permitted Leasehold Mortgages. Any dispute regarding the distribution of Froceeds shall be arbitrated. 7.2 Lessee, at its expense, shall maintain at all times during the Term of this Lease commercial general liability insurance in respect of the Premises and the conduct or~ operation of its business, with Lessor as additional insured, with $3,000,000.00 minimum combined single-limit coverage, or its equivalent. Such policies shall contain such endorsements as are reasonably requested by Lessor and the exclusions shall be limited to those approved by Lessor, such approval not to be unreasonably withheld. Lessee shall deliver to Lessor and any additional named insured such fully paid- for policies or certificates of iusurance, in a form satisfactory to Lessor, issued by the insurance company or its authorized agent, at least l0 days before the Commencement Date. Lessee shall procure and pay for renewals of such insurance from time to time before the expiration, and Lessee shall deliver to Lessor and any additional named insured such renewal policy or certificate at least 30 days before the expiration of any eusting policy. All insurance policies shall contain provisions whereby (1) losses shall be payable-despite the negligence of any person having an insurable interest in the Improvements; (2) the Proceeds will be paid in accordance with. the terms of this Lease; and (3) the policies cannot be canceled or modified unless Lessor and any additional named insured are given at least 30 days' prior written nodce of such cancellation or modification. 7.3 All insurance policies shall be written as primary policies and shall not be~ contributing with or be in excess of the coverage that either Lessor or Lessee may carry. All such insurance policies shall be issued in the name of Lessee, with Lessor and any Permitted Ix,asehold Mortgagee being included in the insurance policy definition of who is an additional insured, shall contain a standard mortgagee's clause in form satisfactory to the Permitted Leasehold Mortgagees, and shall be primary to any insurance available to Lessor. ~ 7.4 ~ All policies of insurance shall be issued by good, responsible companies, reasonably acceptable to Lessor and any Permitted Leasehold Mortgagee and that are qual~ed to do business in the State of Oregon. Executed copies of such policies of insurance shall be delivered to any Permitted Leasehold Mortgagee and certificates shall be delivered to Lessor within 30 days after the Building is completed and thereafter within 30 days before the expiration of the term of each such policy. As often North Pad Ground Lease Courthouse Square Page - 9 .