Common use of Reconstruction After Casualty Clause in Contracts

Reconstruction After Casualty. If, during the Term, the Improvements are wholly or partially damaged or destroyed (whether or not such casualty is covered by insurance, or required to be covered by insurance under the terms of this Lease), Tenant shall promptly give written notice of such damage or destruction to Landlord. Except as provided in Section 9.2.2 or 9.2.3, such damage or destruction shall not terminate this Lease, and Tenant shall promptly repair and restore the Improvements to substantially the same floor area, size, type, quality and nature as existed immediately prior to such damage or destruction unless Landlord gives its prior written approval to do otherwise pursuant to Section 9.1. Tenant shall utilize any available insurance proceeds to fund the costs of such repair and restoration and to the extent insurance proceeds do not cover such costs, all further costs shall be at Tenant’s sole cost and expense. Such repair and restoration shall be commenced promptly and prosecuted with due diligence. If the Improvements are not repaired and restored and if this Lease is terminated, each with the consent of Landlord or as provided in Section 9.2.2 or 9.2.3, then any insurance proceeds shall be applied as follows and in the following order of priorities. (a) first, insurance proceeds shall be applied towards demolition and removal expenses which may be incurred by Tenant, or, upon Tenant’s failure, Landlord. Tenant hereby acknowledges its obligation to demolish and remove Improvements upon Landlord’s demand in the event of a termination of the Lease as described in Section 9.2.2, and that such demolition and removal shall be accomplished at Tenant’s sole cost to the extent that available insurance proceeds are insufficient for such purpose; (b) second, insurance proceeds shall be applied to payment of the principal amount, and accrued interest then owing to a Leasehold Mortgagee, to the extent that such principal or accrued interest is not in default as of the date this Lease is terminated; and (c) third, all remaining insurance proceeds shall be allocated between Landlord and Tenant as follows: (1) the Tenant shall be allocated a portion of such remaining insurance proceeds equal to a fraction thereof, where the numerator of such fraction is the number of complete months remaining under the current term of the Lease including all available extension periods under Section 2.4 and whose denominator is the total number of complete months in the Lease term including all such available extension periods; and (2) the Landlord shall be allocated all remaining insurance proceeds not allocated to the Tenant pursuant to subparagraph (1) above.