WA STG Endorsement (Energy Project - Leasehold/Easement - Loan)
ATTACHED TO POLICY NUMBER ______________________
STEWART TITLE GUARANTY COMPANY
Order Number: ____________
1. As used in this endorsement, the following terms shall mean:
a. “Evicted” or “Eviction”: (a) the lawful deprivation, in whole or in part, of the right of possession or use insured by this policy, contrary to the terms of any Lease or Easement or (b) the lawful prevention of the use of the Land or the Improvements for the purposes permitted by the Lease or the Easement, as applicable, in either case as a result of a matter covered by this policy.
b. “Easement”: each energy easement agreement described in Exhibit A to Schedule A.
c. “Easement Interest”: the right of use granted in the Easement for the Easement Term.
d. “Easement Term”: the duration of the Easement Interest, as set forth in the Easement, including any renewal or extended term if a valid option to renew or extend is contained in the Easement.
e. “Improvements": Those Electricity Generation and Transmission Facilities required or permitted to be built on the Land by the Lease or the Easement, as applicable, that have been built at the Tenant’s expense or in which the Tenant has an interest greater than the right to possession during the Lease Term or the right to use during the Easement Term, as applicable.
f. “Lease”: each energy lease agreement described in Exhibit A to Schedule A.
g. “Leasehold Estate”: the right of possession granted in the Lease for the Lease Term.
h. “Lease Term”: the duration of the Leasehold Estate, as set forth in the Lease, including any renewal or extended term if a valid option to renew or extend is contained in the Lease.
i. “Remaining Term”: the portion of the Lease or Easement term remaining after the Insured has been Evicted as a result of a matter covered by this policy.
j. “Tenant”: the tenant under the Lease or grantee under the Easement, as applicable, and, after acquisition of all or any part of the Title in accordance with the provisions of Section 2 of the Conditions of this policy, the Insured Claimant.
2. Valuation of Title
a. The computation of loss or damage caused by an Eviction shall consist of the value of (i) the Leasehold Estate for the Remaining Lease Term or the Easement Interest for the Remaining Easement Term, as applicable and (ii) any Improvements existing on the date of the Eviction;
b. The computation of loss or damage caused by an Eviction affecting less than all of the insured Leases or Easements shall take into account any resulting diminution in value of the Title as an integrated project; and
c. The Insured Claimant shall have the right to have the Leasehold Estate and the Easement Interest, as applicable, and the Improvements valued either as a whole or separately. In either event, this determination of value shall take into account rent no longer required to be paid for the Remaining Lease Term and easement payments no longer required to be paid for the Remaining Easement Term, as applicable.
3. Valuation of Severable Improvements:
a. In the event of an Eviction, the calculation of the loss shall include (but not to the extent that these items of loss are included in the valuation of the Title determined pursuant to Section 8 of the Conditions or any other provision of this endorsement) the diminution in value of the Insured’s interest in any Severable Improvement resulting from the Eviction, reduced by the salvage value of the Severable Improvement.
b. This Section 3 relates solely to the calculation of the Insured’s loss resulting from a claim based on a defect, lien, encumbrance or other matter otherwise insured against by the Policy. This Policy does not insure against loss or damage (and the Company will not pay any costs, attorneys’ fees or expenses) relating to:
i. the attachment, perfection or priority of any security interest in any Severable Improvement;
ii. the vesting or ownership of title to or rights in any Severable Improvement;
iii. any defect in or lien or encumbrance on the title to any Severable Improvement; or
iv. the determination of whether any specific property is real or personal in nature.
4. Additional items of loss covered by this endorsement:
If the Insured acquires all or any part of the Title in accordance with the provisions of Section 2 of the Conditions of this policy and thereafter is Evicted, the following items of loss, if applicable and without duplication, shall be included in computing loss or damage incurred by the Insured, but not to the extent that the same are included in the valuation of the Title determined pursuant to paragraph 2 of this endorsement or Section 8(a)(ii) of the Conditions.
a. The reasonable cost of: (i) disassembling, removing, relocating and reassembling any Personal Property that the Insured has the right to remove and relocate, situated on the Land at the time of Eviction, to the extent necessary to restore and make functional the integrated project; (ii) transportation of that Personal Property for the initial one hundred miles incurred in connection with the restoration or relocation; (iii) repairing the Personal Property if damaged by reason of the disassembly, removal, relocation or reassembly thereof; (iv) repairing any damage to the Land resulting from the disassembly, removal and relocation of the Personal Property to the extent required of the Insured.
b.Rent, easement payments or damages for use and occupancy of the Land prior to the Eviction which the Insured as owner of the Leasehold Estate or the Easement Interest, as applicable, may be obligated to pay to any person having paramount title to that of the lessor in the Lease or the grantor in the Easement, as applicable.
c. The amount of rent, easement payments or damages that, by the terms of the Lease or the Easement, as applicable, the Insured must continue to pay to the lessor or grantor after Eviction with respect to the portion of the Leasehold Estate or Easement Interest, as applicable, and the Improvements from which the Insured has been Evicted.
d. The fair market value, at the time of the Eviction, of the estate or interest of the Insured in any lease or sublease or easement specifically permitted by the Lease or Easement, as applicable, and made by the Tenant as lessor or grantor of all or part of the Leasehold Estate or Easement Interest, as applicable, or the Improvements.
e. Damages that the Insured is obligated to pay to lessees or sublessees or easement or subeasement grantees on account of the breach of any lease or sublease or easement or subeasement specifically permitted by the Lease or Easement, as applicable, and made by the Tenant as lessor or grantor of all or part of the Leasehold Estate or Easement Interest, as applicable, or the Improvements caused by the Eviction.
f. The reasonable costs to obtain land use, zoning, building and occupancy permits, architectural and engineering services and environmental testing and reviews for a replacement leasehold reasonably equivalent to the Leasehold Estate or a replacement easement reasonably equivalent to the Easement Interest, as applicable.
g. If the Improvements are not substantially completed at the time of Eviction, the actual cost incurred by the Insured, less the salvage value, for the Improvements up to the time of Eviction. Those costs include costs incurred to obtain land use, zoning, building and occupancy permits, architectural and engineering fees, construction management fees, costs of environmental testing and reviews, and landscaping costs.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.
No guidelines are available for this form at this time.