Lease and development agreement



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Section 9.2 Self-Help by Port Authority.


In the event the Lessee fails to perform its obligations under Section 9.1 within ten (10) Business Days after notice from the Port Authority to do so (except in the case of an emergency) or, where such obligation by its nature is not susceptible of complete performance within such period, the Lessee has commenced within such period but fails diligently and continuously to perform such obligation to completion, the Port Authority may, at its option, perform the Lessee’s obligations under Section 9.1 in addition to any other remedy available to it, and an amount equal to 130% of the actual cost of such work shall be payable by the Lessee to the Port Authority on demand, and shall constitute and be deemed additional Rental hereunder. Any work to be performed by the Port Authority, its agents, employees or contractors in accordance with this Section shall be performed, except in an emergency requiring immediate action, on reasonable prior notice, at reasonable hours, and subject to reasonable security requirements. Nothing contained herein shall or shall be deemed to obligate the Port Authority to perform any work which the Lessee is required to perform pursuant to the provisions of this Agreement, and the Lessee shall be solely responsible for any failure to perform any such work.

Section 9.3 MOA Maintenance Guidelines.


All maintenance and repair work pertaining to the historic portions of the Building shall be performed in accordance with the MOA Maintenance Guidelines and shall involve architects experienced in the restoration of historic structures. All maintenance and repair work pertaining to the historic portions of the Building, or otherwise performed pursuant to the MOA Maintenance Guidelines, shall be performed by contractors qualified to perform maintenance and preservation work on historic structures.

ARTICLE 10. INSURANCE

Section 10.1 Required Insurance.


(a) Lessee to Secure and Maintain. In addition to any other insurance provided for or required under this Agreement, the Lessee shall secure and maintain the policies of insurance set forth below in this Section, which policies shall be effective on the Lease Commencement Date (to the extent then applicable) and throughout the term of the letting under this Agreement.

(b) Property. The Lessee shall procure and maintain all-risk property damage insurance, including coverage for flood and earthquake, covering the full replacement cost of the Building and any other improvement constructed by the Lessee pursuant to this Agreement and all structures, improvements, fixtures and equipment, furnishings and physical property owned, leased or within the care, custody or control of the Lessee and now or in the future located on or constituting a part of the Premises.

(c) Boiler and Machinery. The Lessee shall procure and maintain boiler and machinery insurance covering all boilers, pressure-vessels and air conditioning and any other related equipment operated by the Lessee in or on the Building, including expedited expense, the policy to be effective throughout the term of the letting in such amounts as to sufficiently cover the replacement cost of such boilers, pressure-vessels and air conditioning and other related equipment and to be in the form as may now or in the future be prescribed as of the effective date of said insurance by the rating organization having jurisdiction and/or the Superintendent of Insurance of the State of New York.

(d) Business Interruption Insurance. The Lessee shall procure and maintain business interruption insurance on an actual loss sustained basis written on an “all risks of physical loss” basis in an amount equal to the greater of (x) the gross rents payable by users of the Hotel and subtenants of the Premises for a period of two (2) years and (y) the aggregate amount of Basic Rental, Percentage Rental and Subtenant Impositions payable by the Lessee hereunder for a two (2) year period. The proceeds of such insurance shall be payable to the Port Authority, which shall apply such proceeds to the Rental obligations of the Lessee, with any remaining balance to be paid to the Lessee.

(e) Liability.

The Lessee, in its own name as insured and including the Indemnified Parties as additional insureds, shall procure and maintain a policy or policies of Commercial General Liability Insurance, including products/completed operations, premises—operations, explosion, collapse and underground property damage independent contractors coverage and broad form property damage coverage, and covering bodily injury, including death, and property damage liability, broadened to include or equivalent separate policies covering sprinkler leakage legal liability and water damage legal liability (including damage caused by water and any other substance discharged from any part of the fire protective equipment for the Building or the collapse or fall of tanks forming part thereof, or the component parts or supports of such tanks), none of the foregoing to contain care, custody or control exclusions, and providing for coverage in the limits set forth below; Commercial Automobile Liability Insurance covering owned, non-owned and hired vehicles and including automatic coverage for newly acquired vehicles and providing for coverage in the limit set forth below; Garage Keepers Liability Insurance, covering fire and explosion, theft of the entire automobile, rust and vandalism and collision, in the limit set forth below; and Liquor Liability Insurance in the limit set forth below.



Type of Coverage

Minimum Limits

Commercial General Liability




Combined single limit per occurrence for death, bodily injury and property damage liability:

$100,000,000.00

Commercial Automobile Liability




(covering owned, non-owned and hired vehicles) combined single limit per occurrence for death, bodily injury and property damage liability:

$2,000,000.00

Garage Keepers Liability




Combined single limit per occurrence for death, bodily injury and property damage liability:

$2,000,000.00

Liquor Liability




Combined single limit per occurrence for death, bodily injury and property damage liability:

$10,000,000.00

(f) Workers’ Compensation Insurance. The Lessee shall procure and maintain Workers’ Compensation Insurance in accordance with the requirements of law, provided, however, that in the event any class of employees under any contract or subcontract for work to be performed on the Premises is not protected under the Workers’ Compensation statute, the Lessee shall provide, and cause any additional employers to provide, Employer Liability insurance for the protection of such of its employees as are not otherwise protected. Limits of Employer Liability Insurance shall be as follows:

$1,000,000.00 each accident


$1,000,000.00 each employee – disease
$1,000,000.00 policy limit – disease.

(g) Commercial Crime Insurance. The Lessee shall procure and maintain commercial crime insurance covering both innkeeper’s/bailee legal liability and employee dishonesty, with a combined single limit per occurrence of not less than $1,000,000.00.

(h) Other. The Lessee shall procure and maintain such other insurance, in such amounts, as from time to time may be required by the Port Authority.

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