Lease and development agreement

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Section 10.6 Separate Insurance.

The Lessee shall not carry separate insurance concurrent in form or contributing in the event of loss with that required under this Agreement, unless the Port Authority and the City are included therein as named insured, with loss payable as provided in this Agreement. The Lessee shall immediately notify the Port Authority of the carrying of any such separate insurance and, at the Port Authority’s request, shall deliver to the Port Authority the policies therefor or duplicate originals thereof.


Section 11.1 Repair of Damage.

If the Premises, or the Building or any other structures, improvements, fixtures and equipment, furnishings and physical property located thereon, or any part thereof, shall be damaged or destroyed by fire, the elements, the public enemy or other casualty, or by reason of any cause whatsoever and whether partial or total, the Lessee shall at its sole cost and expense and, whether or not such damage or destruction is covered by insurance proceeds sufficient for the purpose, remove all debris resulting from such damage or destruction, and shall rebuild, restore, repair and replace the Premises, and the Building and any structures, improvements, fixtures and equipment, furnishings and physical property located thereon, in accordance with the plans and specifications for the same as they existed prior to such damage or destruction or, with the consent in writing of the Port Authority make such other repairs, replacements, changes or alterations as is mutually agreed to by the Port Authority and the Lessee. Such rebuilding, restoration, repairs, replacements, or alterations shall be commenced promptly and shall proceed with all due diligence subject to the terms and conditions of this Agreement, including, without limitation, the terms and provisions of the Article of this Agreement entitled “Alterations and Improvements”.

Section 11.2 Destruction at End of Term.

(a) Lessee’s Options. Notwithstanding the provisions of Section 11.1 above, if such damage or destruction occurs during the last two (2) years of the term of the letting and the cost of rebuilding, restoration, repair or replacement shall exceed fifty percent (50%) of the then full insurable value on a replacement cost basis of the Building immediately prior to such damage or destruction, the Lessee shall have the option of either:

(i) performing all rebuilding, restoration, repairs, replacements or alterations required, in accordance with the provisions of this Agreement, or

(ii) terminating the letting under this Agreement in its entirety by written notice to the Port Authority given within thirty (30) days after the occurrence of such damage or destruction, provided, that there shall be in force and effect the required insurance valid and subsisting and adequate to cover such damage or destruction without any defenses to the payment by the insurance carriers based upon acts or omissions of the Lessee or of any other insureds other than the Port Authority and the City and provided, further, that both at the time of the giving of notice and on the effective date thereof: (x) the Lessee is not in default under any of the provisions of this Agreement or under notice of termination from the Port Authority, and (y) this Agreement and any buildings, structures, improvements, fixtures and equipment, furnishings and physical property located on the Premises are unencumbered by any mortgage, security interest, judgments, or other liens (to be evidenced by a search made by a title company acceptable to the Port Authority and to be furnished by the Lessee at its sole cost and expense) and free from any pending matters that might develop into additional rental unless the Lessee shall secure payment and discharge of such mortgages, security interests, judgments or other liens and the payment of such additional rental to the Port Authority in a manner satisfactory to the Port Authority.

(b) Insurance Proceeds. In the event of termination pursuant to the provisions of the foregoing paragraph (a), the Lessee shall pay the Port Authority all Rental payable up to and including the date of termination. The insurance proceeds shall be (w) first, at the Port Authority’s option, used to demolish any remaining portion of the Improvements and grade and fence the Land, (x) second, paid to the Recognized Mortgagees, (y) third, paid to the Port Authority.

(c) Surrender of Premises. Upon the effective date of such termination, the Lessee shall surrender and deliver up the Premises, including the Building and all structures, improvements, fixtures and equipment, furnishings and other property located on the Premises, into the possession and use of the Port Authority in the manner specified in the Article of this Agreement entitled “Surrender”, subject, however, to the physical condition and state of repair thereof. Subject to the foregoing, the Lessee, upon such termination, surrender and removal, shall be released and discharged from any and all obligations under this Agreement other than those that have accrued prior to the date of such termination or shall mature on such date.

Section 11.3 No Surrender.

Except as provided in Section 11.2 above, no destruction of or damage to the whole or any part of the Premises, or to any part of the Building or any other structures, improvements, fixtures, and equipment thereon, or any other casualty, cause or condition shall permit the Lessee to surrender or terminate this Agreement or shall relieve the Lessee from its liability to make payment of any monies, charges, fees or rentals or additional rentals payable under this Agreement or from any of its other obligations hereunder. The Lessee waives any rights now or hereafter conferred upon the Lessee by statute or otherwise to quit or surrender the Premises and terminate this Agreement or any part thereof, or to any suspension, diminution, abatement or reduction of rent on account of any destruction or damage. The parties hereby stipulate that the provisions of this Section constitute an “express agreement to the contrary” pursuant to Section 227 of the Real Property Law of New York, and neither the provisions of Section 227 of the Real Property Law of New York nor those of any similar statute shall extend or apply to this Agreement.
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