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this Lease, or otherwise insured against, or (ii) the Premises or the Improvements, or any part thereof, are damaged or destroyed by fire or any other casualty or occurrence not required to be insured against under this Lease and not otherwise insured against, but the cost of repairing or restoring such uninsured damage will not exceed One Million Dollars ($1,000,000), then in either of such events Tenant shall promptly cause the Premises and the Improvements to be fully repaired and restored to the condition existing immediately prior to such fire, casualty or occurrence (subject to changes necessary to comply with then existing Applicable Laws and any changes in design approved by Landlord, which approval shall not be unreasonably withheld to the extent such design changes require Landlord's approval pursuant to Section 10.1). Subject to the rights of a Leasehold Mortgagee to hold and disburse such funds, if the insurance proceeds are less than One Million Dollars ($1,000,000), such amounts shall be paid directly to Tenant for the purpose of paying for reconstruction. If the insurance proceeds are One Million Dollars ($1,000,000) or more, Landlord may elect (subject to the rights of a Leasehold Mortgagee to hold and disburse such funds) to have the insurance proceeds payable on account thereof be deposited into an interest -bearing escrow account to be disbursed to Tenant in such progress payments as Landlord may reasonably approve over the course of reconstruction and taking into account the restoration and reconstruction work already completed and the costs already incurred therefor as of the date the insurance proceeds shall have been paid by the insurer to Landlord. Any interest so earned shall be deemed to be part of the insurance proceeds. Any insurance proceeds which are in excess of the costs of such repairs and restoration shall be LEASE BETWEEN CITY OF SAN LEANDRO AND SAN FRANCISCO BAY CONFERENCE RESORT PAGE 41 2574001\313983.8