(k) Upon issuance of a Short-Term rental permit, the City will mail a copy of the information described in Sec. 16- 417 (l) to all properties adjoining the parcel of the Short-Term rental unit as determined by the Escondido Geographic Information System.
(l) The following information shall be posted in a conspicuous location within the Short-Term rental unit:
(1) The Short-Term rental permit number;
(2) The name and contact information for the host and/or designated responsible contact person; (3) The maximum number of overnight occupants;
(4) Applicable rules and schedules for trash storage and pickup, noise, and parking; (5) Local emergency information;
(6) Contact information for the City’s Code Compliance Division and Police Department.
(m) All Short-Term rental owners shall comply with the provisions of any city, county, state, or federal disaster or emergency orders.
(n) Unless otherwise provided in this chapter, the host shall comply with all provisions of Chapter 25 Article 4 of the Escondido Municipal Code concerning TOT, including, but not limited to, collecting, remitting, and recording relevant taxes.
Sec. 16-418 Recordkeeping duties.
The host shall maintain for a period of four years records in such form as the tax administrator (as defined in, and required by, Chapter 25 article 4) may require to determine the amount of TOT owed to the City. The tax administrator shall have the right to inspect such records at all reasonable times. (Chapter 25. Section 25-87). Such records shall be maintained at the host’s premises or shall be available for delivery to the tax administrator within one business day after request. (Chapter 25 section25-87(b)).
Sec. 16-419 Violations.
(a) It shall be a public nuisance for any person to commit, cause or maintain a violation of this article, which shall be subject to the provisions of Chapter 17 article 12 (Noise) and Chapter 6 article 20 (Property Maintenance.) (b) As described in Chapter 16 article 6, the City may issue a notice of violation to any occupant, owner(s) or operator, pursuant to this article, if there is any violation of this article committed, caused or maintained by any of the above parties. The City may:
(1) Suspend or revoke any license issued under the provisions of this article upon information that any of the provisions of this article, or any other ordinance or statute, is being violated by the license holder. (d) Unless otherwise provided herein, any person convicted of an infraction shall, for each separate violation of this article be subject to:
(1) A fine in an amount not to exceed one thousand dollars ($1,000) for a first conviction of an offense; 366 Item18.
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Exhibit “B”
(2) A fine in an amount not to exceed three thousand dollars ($3,000) for a second conviction of the same offense within a twelve-month period of the date of the first offense; and (3) A fine in an amount not to exceed five thousand dollars ($5,000) for the third conviction of the same offense within a twelve-month period of the date of the first offense. The City may issue an administrative citation to any host, occupant, owner(s) or operator, pursuant to the provisions set forth in Chapter 1A (Administrative Remedies), including, but not limited to, the imposition of any and all civil and/or criminal penalties set forth therein if there is any violation of this chapter committed, caused or maintained by any of the above parties.
(e) The City may pursue any remedy, citation, fee, or fine for any violation related to the collection, documentation, and remittance of all relevant taxes as outlined in Chapter 25 article 4 (Transient Occupancy Tax)
(f) Each and every day on which a violation occurs shall be deemed to be a separate violation. Multiple incidents in one day may be pursued by the City as separate violations. (g) The following violations may result in either the immediate revocation of a Short-Term rental permit and any affiliated licenses and/or denial of future Short-Term rental permits:
(1) Operation without required licenses, permits, or certificates; (2) Failure to include a valid Short-Term rental permit number in Advertisements; (3) Advertising an occupancy greater than the permitted number of guests; (4) Intentionally misrepresenting any material fact in procuring the license or permit; (5) Use of any Ineligible Unit for Short-Term rental activity; (6) Failure to remit TOT or other taxes;
(7) Three or more violations of the operational requirements of this article other than those listed above, but including those relating to Chapter 17 Article 12 (Noise) and Chapter 6 Article 20 (Property Maintenance) in a license year.
(h) The remedies provided in this section are not exclusive, and nothing in this chapter shall preclude the use or application of any other remedies, penalties, or procedures established by law. The City may pursue any other administrative or judicial legal remedies available, including, but not limited to, civil injunctions, license revocations, and civil penalties for violations of this chapter.
Sec. 16-420 Revocation.
(a) Grounds for Suspension and Revocation
(1) Major Violations
(A) Immediate and major violations that jeopardize public safety, violate licensing requirements, or involve criminal activities, such as felonies on site, non-payment of taxes, or significant license issues, may result in the immediate revocation of the Short-Term rental permit at the discretion of the City’s Director of Development Services for the period of one- year from the date of revocation.
(2) Three Strikes for Lower-Level Violations
(A) The City will adopt a three-strikes policy for lower-level quality-of-life violations, including but not limited to noise disturbances, disorderly conduct, and repeated violations of operational requirements.
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Ordinance No. 2024-07
Exhibit “B”
(B) Each documented violation will be considered a strike. (C) Upon the third strike within a one-year timeframe, the Short-Term rental permit will be subject to immediate revocation.
(b) Reapplication Period
(1) Reapplication After Revocation
(A) After the revocation period expires, an applicant seeking to resume Short-Term rental activity must reapply for a new Short-Term rental permit.
(B) The reapplication process will include a thorough review of the property's compliance history and may require additional measures to address past violations. (C) The Director of Development Services may determine if a host is eligible for a new permit at its discretion.
(c) Appeals
(1) Hosts may appeal the revocation decision through the appeals process outlined in Chapter 16 Article 5. (2) Appeals should be submitted within a specified timeframe provided in Chapter 16 section 16-222 after the revocation decision.
Sec. 16-421 Severability.
If any provision of this ordinance shall be deemed or held to be invalid or unenforceable for any reason whatsoever, then such invalidity or unenforceability shall not affect any other provision of this Ordinance which may be given effect without such invalid or unenforceable provision, and to this end, the provisions of this ordinance are hereby declared to be severable.
Sec. 16-422 Effective Date
The effective date of this ordinance shall be July 1, 2025
Sec. 16-423 Program Review
(a) If the total number of valid Short-Term permits in the city equals or exceeds 250, and for every 250 permits thereafter, the City Manager or their designee shall present to the City Council a report on the impacts of Short- Term rentals and the efficacy of compliance efforts in Escondido. (b) Unless otherwise extended or modified by action of the City Council, this Ordinance shall expire, and its terms shall no longer remain in effect as of three years from the effective date.
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STAFF REPORT
December 4, 2024
File Number XXXX-XX
SUBJECT
ENTERING INTO A GROUND LEASE BETWEEN THE CITY OF ESCONDIDO AND R 1 ESCONDIDO INVESTMENT, LLC FOR PROPERTY AT 270 E VIA RANCHO PKWY, ESCONDIDO, C ALIFORNIA;
DECLARATION OF EXEMPT SURPLUS PROPERTY
DEPARTMENT
Economic Development, Real Property
RECOMMENDATION
Request the City Council Adopt Resolution No. 2024-168 authorizing the Mayor to execute a Ground Lease between the City of Escondido and R1 Escondido Investment, LLC ; authorizing execution of Assignment and Assumption Agreement; and Declaration of Exempt Surplus Property Staff Recommendation: Approval (City Manager’s Office: Jennifer Schoeneck, Director of Economic Development)
Presenter: Jennifer Schoeneck, Director of Economic Development , Francisco Vargas , Real Property Management Analyst
ESSENTIAL SERVICE – Yes, Land Use/Development
COUNCIL PRIORITY –Increase Retention and Attraction of People and Businesses to Escondido
FISCAL ANALYSIS
The proposed Ground Lease with R1 Escondido Investment, LLC (“R1” or “Lessee”) at the existing three (3) story building previously occupied by Nordstrom at 270 E Via Rancho Pkwy, Escondi do, CA, 92025 - 8005, Inc shall be for a period of twenty (20) years. Fixed rent payments are required by the lease terms, projected rental payments throughout the term of the agreement is anticipated to be approximately $2.7 million. The developer estimates a capital investment of approximately $22 million for the site, with the business expected to create approximately 100 jobs.
PREVIOUS ACTIONS
1. Ordinance No. 80-88: Discontinue the use of a portion of Kit Carson Park generally located at the intersection of Via Rancho Parkway and I-15 as park land. 369
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2. Resolution No. 80-308: City Council amended the General Plan of the City of Escondido, by inter alia, changing the land use classification of the shopping center site from Regional Park and Highway Oriented Commercial to General Commercial.
3. Resolution No. 81-13: The City Council authorized the Mayor and the City Clerk to execute, on behalf of the City of Escondido, a Ground Lease with Ernest W. Hahn Incorporated Involving City property generally located at the intersection of I-15 and Via Rancho Parkway for the purpose of construction of a major regional shopping center.
a. The Ground Lease was entered into on February 2, 1981, for a 55-year term conditioned on completion and opening.
4. Resolution No. 82-86: Authorizing Amendment No. 1 to Ground Lease with Ernest W. Hahn Incorporated for a portion of City owned property generally located at the intersection of Via Rancho Parkway and I-15.
5. Resolution No. 83-160: A Resolution of the City Council of the City of Escondido, California, authorizing the Mayor and City Clerk to execute on behalf of the City a short form of lease with Ernest W. Hahn Incorporated for a portion of the City -owned property generally located at the intersection of Via Rancho Parkway and I-15.
6. Resolution No. 84-119: A Resolution of the City Council of the City of Escondido, California, authorizing the Mayor and City Clerk to execute on behalf of the City, a consent to assignment of the North County F air Regional Shopping Center Ground Lease from EWH 1979 Development Company, L.P. to EWH Escondido Associates, L.P.
7. Resolution No. 85 -126: A Resolution of the City Council of the City of Escondido, California, authorizing the Mayor and City Clerk to execu te an Easement, License, Construction, and Maintenance Agreement for the North County Fair Regional Shopping Center. a. First Amendment to Easement, License, Construction, and Maintenance Agreement on July 15,1985.
8. Resolution No. 86-37: Authorizing the Mayor and City Clerk to execute Amendment No. 2 to the Ground Lease with E.W.H. Escondido Associates, L.P.
9. Resolution No. 86-300: Authorizing the Mayor and City Clerk to execute Amendment No. 3 to the Ground Lease with E.W.H. Escondido Associates, L.P.
a. Lease was amended three (3) times to amend language providing for the official commencement of the term on July 1, 1983, expiring on June 30, 2038.
10. Resolution No. 98 -220: A Resolution of the City Council of the City of Escondido, California, authorizing the Mayor and City Clerk to sign a Consent to Assignment and Estoppel Certificate permitting the transfer of the North County Fair Ground Lease. a. Shopping center now managed by Westfield Management Company.
11. Resolution No. 86-241: Ground Lease with J.C. Penny Properties, Inc.
12. Resolution No. 86-242: Ground Lease with Sears, Roebuck and Co.
13. Resolution No. 86-243: Ground Lease with Adcor Realty Corporation. a. Formerly Robinson’s-May Men’s Store.
14. Resolution No. 86-244: Ground Lease with Nordstrom, Inc.
15. Resolution No. 86-245: Ground Lease with Carter Hawley Hale Stores, Inc. 370
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a. Formerly The Broadway, now Macy’s.
16. Resolution No. 86-443: A Resolution of the City Council of the City of Escondido, California, authorizing the Mayor and City Clerk to execute specified documents pertaining to the operation and financing of the North County Fair Regional Shopping Center.
17. Ordinance No. 2012-02: Authorizing the Mayor and City Clerk to execute a Lease Amendment (Amendment No. 4) and related documents to provide an option to extend the ground lease for the Westfield Shopping Center for an additional fifteen (15) years. a. Ordinance No. 2012-02 provided an option to extend term by an additional fifteen (15) years, subject to certain conditions and modifications, such that the ground lease will expire on June 30, 2053.
b. Ordinance No. 2012-02 outlined a Parcel Trade. Westfield arranged the parcel trade between the City of Escondido and Macy’s. The parcel trade was between the Broadway tract (which The City owned) for the May tract (which Federated (Macy’s) owned). This enabled Macy's to continue operating on top of land they will now own. It takes land Macy's owed, and transferred it to the City, with leasehold interests to Westfield, who leased it for development and use as a Target store.
BACKGROUND
Escondido’s North County shopping mall ( formerly Westfield North County Fair ) is located on approximately 83 acres at the south end of the City. The City owns approximately 74 acres and the Macy’s Tract of approximately 8 acres is under separate ownership. It was originally developed by Ernest Hahn and designed by architect Jon Jerde in the mid-1980’s on land owned primarily by the City. The Westfield Property mall development includes approximately 1.2 million square feet of retail commercial space and at the time of development was touted as the largest enclosed mall in the San Diego region.
The North County Mall came about pursuant to Proposition A in June 1979. The voters approved the sale of an undeveloped 75.5-acre portion of Kit Carson Park abandoning it as park use and both specifying the planned development of a retail center and replacing the previous park property by acquiring 77.5 acres of adjacent property and dedicating that newly acquired property for park purposes.
The six major department stores at the time the mall opened in 1985 included Sears, J.C. Penney, Nordstrom, Robinsons, Broadway and May Company. Five of these stores were not part of the mall ground lease but were on their own parcels, leased directly from the City. The sole exception was May Company, which owned the parcel on which their store was situated. The term of each department store ground lease is similar to the primary ground lease, which was 55 years. Cooperation between the department stores and the shopping center is assured through a Reciprocal Easement Agreement (“REA”).
The department stores were seen as “anchors” for the shopping center and thus desirable tenants. Rents for the departme nt stores were set very low to induce theses stores to locate in the mall. With the exception of J.C. Penney, rents for each department store lease was fixed at $98,000 per year. J.C. Penney 371
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pays virtually no rent at $10.00 per year. However, all departmen t stores provide significant sales tax revenues to the City and have “anchored” the shopping center since its opening.
In 2012, a renovation project at the Westfield Property was completed, including a new Target store; improvements to the mall common areas and entrances; resurfacing of the parking lot; new restaurants and a remodel of the food court. In association with the renovation project, terms of the original lease were revised, which included a lease extension and an increased ground rent. The origi nal ground lease term was extended for an additional 15 years, as requested by Westfield, and will now expire on June 30, 2053.
There has been significant consolidation in the department store market sector since the shopping center was first developed. Ma y Company consolidated with Robinsons, resulting in two anchors being owned by a single company. The Broadway was then acquired by Macy’s. Federated Department Stores, which owns Macy’s, subsequently acquired Robinsons -May. In addition, the City arranged t o trade the City - owned Broadway tract for the Federated -owned May tract. This exchange enabled Macy’s to continue operating on land they own while transferring the previous Macy’s tract to the City, with leasehold interests to Westfield. Westfield then sub -leased a portion of the property for the development of a Target store
More recently, Sears and Nordstrom discontinued operations at the shopping center. Thus, of the original six independent anchors at the shopping center in 1985, there are now two department store ownerships:
J.C. Penney and Macy’s.
Currently, the City has multiple ground leases related to the North County Mall Property. The map below (Figure 1) shows approximate parcel boundaries at the mall property. For reference, these parcels have been numbered 1 through 8. The Ground Lease under consideration here, covers Parcel 3. The City owns all parcels with the exception of Parcel 6.
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Figure 1. North County Shopping Mall Parcel Map: Red parcels denote ground leases with anchor stores with the exception of Parcel 3, the former Nordstrom site and subject of this Ground Lease proposal. Blue parcels denote other ground leases. Parcel boundaries are approximate.
The proposed R1 Ground Lease has a twenty (20) year term . The City and Lessee are entering into this Ground Lease specifically so that Lessee can facilitate and execute subleases of the former Nordstrom building site (“Improvements”). The parties anticipate and intend that the ground floor, second floor and third floor of the Improvements will be sublet to Round One Entertainment, Inc. (“Round One”). The City consents to Round One as a Sublessee.
The Round One sublease will provide for the operation of a family-oriented entertainment center offering bowling, karaoke, ga mes, such as, by way of example and not limitation, video and electronic games, arcade games and redemption games, darts, trampolines, billiards and ping pong, batting cages, roller skating and other family-oriented amusements and technological evolutions of any of the, along with food and beverages including alcoholic beverages (i.e., beer, wine and spirits) which the City acknowledges its support thereof, subject to Round One obtaining all applicable governmental and quasi-governmental permits and licenses for such use (the “Round One Use”).
There are several important terms in the proposed R1 Ground lease. See Exhibit “A”. The minimum base rent is $100,000 per year throughout the Lease Term. Fixed Rent shall commence on the earlier to occur of the following (the “Rent Commencement Date”): (i) the Opening Date of Round One, as defined herein, 373
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or (ii) the date that is four hundred twenty-five (425) days following the latest to occur of (a)the Delivery Date to the subtenant (as defined in Section 7.03 of the Round One Sublease), (b) Subtenant’s receipt of Lessee’s approval of subtenant’s Plans and Specifications (as defined in Section 7.01 of the Round One Sublease), (e) the delivery to subtenant of the SNDA, as defined in Section 27.03 of the Round One Sublease, executed by Lessor and an SNDA executed by any other Holder, as defined in Section 27.03, holding an interest in the Premises to which the sublease is subordinate as of the Effective Date, and (f) the date on which subtenant obtains a building permit (the “Building Permit”) from applicable governmental authorities allowing subtenant to perform subtenant’s Work (as defined in Section 7.01 of the Round One Lease) in the Demised Premises.. Notwithstanding the foregoing, Lessee agrees (1) to act in good f aith to ensure that both Lessee and subtenant under the Round One Lease act diligently to complete all requirements in this section and to move forward towards the Rent Commencement Date without unreasonable delay and (2) unreasonable delay in taking the s teps necessary to reach the Rent Commencement Date shall constitute a material breach of this Agreement.
Staff recommends the execution of the proposed Ground Lease because it provides certainty to the Lessee and sublessees. This certainty will encourage additional investment in the North County Mall Property, thus increasing rent revenues and sales tax revenues for the City. These revenues are unrestricted General Fund revenues which can be used for the benefit of the resid ents of the City . Additionally, staff recommends assigning to R1 the Construction Operation and Reciprocal Easement Agreement such that it may work with the other mall tenants on issues related to common spaces and parking fields. See Exhibit “B”.
Importantly, this action has no effect on, and provides no right to, the City’s Planning Commission or City Council’s review and consideration of any applications for entitlements and the Planning Commission and City Council shall have sole and absolute discretion to approve, disapprove, modify or otherwise take any action regarding an application or request for entitlements. The City of Escondido makes no promise, warranty or representation as to the outcome of such review or the approval of any such application.
Staff analysis has also found that the North County Mall Property, and the parcels subject to the proposed Ground Lease are Exempt Surplus Land pursuant to Government Code section 54221(f)(1)(G). Proposition A, passed by Escondido voters on June 5, 197 9, restricts use of the North County Mall Property for “the planned development of a retail center,” thus prohibiting its use for housing. State law requires that the City make findings in support of this exemption.
Staff recommend adoption of Resolution No. 2024-168 authorizing the Mayor, subject to final negotiation and approval as to form by the City Attorney, the following documents:
RESOLUTIONS
a) Resolution No. 2024-168
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b) Resolution No. 2024 -168—Exhibit “A” - Ground Lease between The City of Escondido and R1 Escondido Investment, LLC
c) Resolution No. 2024 -168 – Exhibit “B” - Assignment and Assumption of Construction Operation and Reciprocal Easement Agreement
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RESOLUTION NO. 2024-168
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ESCONDIDO, CALIFORNIA, AUTHORIZING THE MAYOR
AND AUTHORIZED OFFICERS TO EXECUTE, ON BEHALF
OF THE CITY (1) A GROUND LEASE BETWEEN THE CITY
OF ESCONDIDO AND R1 ESCONDIDO INVESTMENT, LLC
AND (2) AN ASSIGNMENT AND ASSUMPTION OF
CONSTRUCTION OPERATION AND RECIPR OCAL
EASEMENT AGREEMENT FOR PROPERTY AT 270 E VIA
RANCHO PKWY, ESCONDIDO, C ALIFORNIA; AND
DECLARING THE SUB JECT PROPERTY AS EXEMPT
SURPLUS PROPERTY
WHEREAS, this Resolution is being adopted for the purpose of authorizing the Mayor, the City Manager, a Deputy City Manager , the Acting Real Property Manager , and others as permitted by law (“Authorized Officers”) to execute, on behalf of the City, such documents as may be required to enter into a new Ground Lease between the City of Escondido (“City”) and R1 Escondido Investment LLC (“R1” or “sublessee”), a California Limited Liability Company , at the fo rmer Nordstrom site at 270 E Via Rancho Parkway, Escondido, California, and an Assignment and Assumption of Construction Operation and Reciprocal Easement Agreement; and
WHEREAS, the City Council has considered the Ground Lease proposal and terms, the Staff Report, attachments and exhibits to the Staff Report, and any public comment; and WHEREAS, the City has negotiated the terms of a Ground Lease with R1 for the use of the former Nordstrom site at 270 E Via Rancho Parkway as attached hereto as Exhibit “A”; and WHEREAS, the City has negotiated the terms of the Assignment and Assumption of Construction Operation and Reciprocal Easement Agreement for the subject site at 270 E. Via Rancho Parkway as attached hereto as Exhibit “B”; and
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WHEREAS, lessee and its sublessee(s) will be required to make application for all required permits, approvals, and authorizations from government and permitting agencies for work to be performed at the property site including, without limitation, environmental approvals if any pursuant to applicable law (“Project Approvals”), and no action taken herein shall be deemed to constitute, and does not in fact constitute, any approval, agreement, obligation, permission, promise, warra nty or representation that any such Project Approvals will be forthcoming by the City Council or City’s Planning Commission, and the City Council and City’s Planning Commission shall have the sole, complete, absolute and unqualified right to approve, reject in whole or in part, or modify any Project Approval applications before the reviewing bodies as required by applicable law, and will in fact provide such independent review, and lessee and its sublessee(s) acknowledge that no Project Approvals are deemed to be issued or obtained by the adoption of this Resolution alone; and
WHEREAS, the City Council hereby finds and determines that the R1 Ground Lease authorized by this Resolution is justified for the purpose of utilizing existing vacant space and attracting the necessary capital investments required to achieve the public’s best interests and promote a successful regional asset; and
WHEREAS, the City Council hereby further finds and determines that the R1 Ground Lease for the terms specified will p rovide certainty to the lessee and sublessee(s) , thus enabling and encouraging additional investment in the North County Mall Property which will produce increased sales tax revenues for the City, which funds can be used for the benefit of the residents of the City; and WHEREAS, the City Council hereby further finds and determines that the specific legislative action related to leases of City property taken by this Resolution involves only the approval of a Ground Lease with a new entity, R1, for a period of not more than twenty (20) years and, as a result, no further notices, hearings or competitive bidding are required under State law or the Escondido Municipal Code; and 377
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WHEREAS, the City Council hereby further finds and determines that the subject prope rty of the R1 Ground Lease is Exempt Surplus Land pursuant to Government Code section 54221(f)(1)(G) and Proposition A passed by the voters on June 5, 1979, approving and requiring this entire North County Mall Property, of which the R1 leasehold is a part, to be used for “the planned development of a retail center” and thereby constituting a valid legal restriction not imposed by the City making housing prohibited.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Esc ondido, California , as follows:
1. That the above recitations are true and incorporated herein as though fully set forth.
2. That the Mayor and all Authorized Officers are hereby authorized to execute, subject to final negotiation and approval as to form b y the City Attorney, certain documents and others as may be required to implement the intent of this City Council action including, but not limited to, the forms which are attached to this Resolution as Exhibit “A” and Exhibit “B”, and as identified as follows:
Exhibit “A”- Ground Lease between The City of Escondido and R1 Escondido Investment, LLC Exhibit “B” – Assignment and Assumption of Construction Operation and Reciprocal Easement Agreement
3. That the subject property of the R1 Ground Lease is Ex empt Surplus Land pursuant to Government Code section 54221(f)(1)(G).
4. That no actions, permissions, approvals or rights are issued or granted to R1 for the construction of any improvements unless and until R1 has been issued or obtained all required Project Approvals as defined herein, referred to in the attached Exhibits, and as may be required by law, if any, and 378
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no approvals are deemed given and no rights to the Ground Lease and anticipated sublease(s) herein shall be enjoyed until all relevant terms of the Ground Lease have been satisfied. 379
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GROUND LEASE
by and between
CITY OF ESCONDIDO,
Lessor,
and
R1 ESCONDIDO INVESTMENT , LLC
Lessee
Resolution No. 2024-168
Exhibit "A"
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TABLE OF CONTENTS
ARTICLE I PREMISES ................................................................................................................. 2 ARTICLE II TERM ........................................................................................................................ 2
2.1 Term ........................................................................................................................ 2
2.2 Termination Upon Failure to Execute Round One Sublease.. ................................ 2
2.3 Option to Terminate Upon Termination of Sublease with Round One.. ................ 3 ARTICLE III RENT ....................................................................................................................... 3
3.1 Fixed Rent ............................................................................................................... 3
3.2 Rent Adjustment. .................................................................................................... 3
3.3 Fixed Rent; Manner of Payment ............................................................................. 3
3.5 Participation Rent.................................................................................................... 4 (a) Preferred Return ...................................................................................................... 4 (b) Participation Rent.................................................................................................... 4 (e) Audit all information pertaining to Net Operating Income. .................................... 4 ARTICLE IV USE OF DEMISED PREMISES ............................................................................. 4
4.1 Use .......................................................................................................................... 4
4.2 Permitted Contests .................................................................................................. 4 ARTICLE V CONDITION OF TITLE .......................................................................................... 5
5.1 Covenant of Title .................................................................................................... 5
5.2 Mortgage Subordination ......................................................................................... 5
5.3 Title Insurance ........................................................................................................ 5 ARTICLE VI IMPROVEMENTS .................................................................................................. 5
6.1 Lessor’s Non-Responsibility for Improvements ..................................................... 5 ARTICLE VII TAXES AND ASSESSMENTS ............................................................................. 8
7.1 Payment of Taxes and Assessments By Lessee ...................................................... 8
7.2 Non-Segregation of Demised Premises .................................................................. 8 ARTICLE VIII INSURANCE ...................................................................................................... 11
8.1 Casualty Insurance ................................................................................................ 11
8.2 General Liability Insurance................................................................................... 11
8.3 Policy Form ........................................................................................................... 11
8.4 Notice of Cancellation .......................................................................................... 11
8.5 Blanket Insurance and Self-Insurance .................................................................. 11
8.6 Inability to Obtain Insurance ................................................................................ 12
8.7 Application of REA .............................................................................................. 12 ARTICLE IX UTILITIES............................................................................................................. 12 ARTICLE X MECHANICS’ LIENS............................................................................................ 12 ARTICLE XI LESSEE’S FINANCING ....................................................................................... 13
11.1 Fee Subordinated to Mortgage .............................................................................. 13
11.2 Leasehold Mortgage.............................................................................................. 14 Resolution No. 2024-168
Exhibit "A"
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11.3 Mortgage ............................................................................................................... 18
11.4 Loss Payable Endorsement ................................................................................... 18 ARTICLE XII EASEMENTS....................................................................................................... 18 ARTICLE XIII DEFAULT........................................................................................................... 18
13.1 Performance by Lessor on Lessee’s Default ......................................................... 18
13.2 Event of Default .................................................................................................... 18
13.3 Remedies of Lessor ............................................................................................... 19
13.4 Waiver ................................................................................................................... 20
13.5 Remedies of Lessee............................................................................................... 20
13.6 Delays in Performance .......................................................................................... 20 ARTICLE XIV ATTORNEYS’ FEES ......................................................................................... 21 ARTICLE XV NOTICES ............................................................................................................. 21 ARTICLE XVI ESTOPPEL CERTIFICATE ............................................................................... 22 ARTICLE XVII QUIET POSSESSION ....................................................................................... 23 ARTICLE XVIII TITLE TO IMPROVEMENTS ........................................................................ 23 ARTICLE XIX ALTERATIONS AND ADDITIONS................................................................. 23 ARTICLE XX TRANSFERS, ASSIGNMENT AND SUBLETTING ........................................ 24 ARTICLE XXI CONDEMNATION ............................................................................................ 26
21.1 Definitions............................................................................................................. 26
21.2 Total Taking .......................................................................................................... 26
21.3 Partial Taking ........................................................................................................ 26
21.4 Allocation of Award; Total Taking ....................................................................... 27
21.5 Allocation of Award; Partial Taking..................................................................... 27
21.6 Rent Reduction...................................................................................................... 28
21.7 Temporary Taking ................................................................................................ 28
21.8 Settlement ............................................................................................................. 29
21.9 Application of REA .............................................................................................. 29 ARTICLE XXII DESTRUCTION AND RESTORATION ......................................................... 29
22.1 Obligations of Lessee ............................................................................................ 29
22.2 Destruction Not A Release .................................................................................... 29
22.3 Termination of Lease ............................................................................................ 30
22.4 Application of REA .............................................................................................. 30 ARTICLE XXIII ........................................................................................................................... 30 ARTICLE XXIV RIGHT OF FIRST REFUSAL ......................................................................... 31
24.1 Receipt of Offer .................................................................................................... 31
24.2 Right to Sell to Offeror ......................................................................................... 31 ARTICLE XXV REA ................................................................................................................... 32 ARTICLE XXVI INTENTIONALLY OMITTED ...................................................................... 32 ARTICLE XXVII INDEMNIFICATION BY LESSEE ............................................................... 32 Resolution No. 2024-168
Exhibit "A"
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ARTICLE XXVIII MISCELLANEOUS ...................................................................................... 33
28.1 Successors and Assigns......................................................................................... 33
28.2 Language ............................................................................................................... 33
28.3 Short Form Lease .................................................................................................. 33
28.4 Force Majeure ....................................................................................................... 33
28.5 Correction of Legal Description of Demised Premises ........................................ 33
28.6 California Law to Govern ..................................................................................... 34
28.7 Counterparts .......................................................................................................... 34
28.8 Invalidity ............................................................................................................... 34
28.9 No Agency ............................................................................................................ 34
28.10 Effect of Lessor’s Conveyance ............................................................................. 34
28.11 Waste..................................................................................................................... 34 ARTICLE XXIX LOOP ROAD PARCEL................................................................................... 34
EXHIBITS
Exhibit A - Demised Premises Legal Description
Exhibit B - Tract Line Plot Plan of Shopping Center
Exhibit C - Permitted Title Exceptions
Exhibit D - Form of Lessee’s Estoppel Certificate
Exhibit E – Form of Short Form Lease
Resolution No. 2024-168
Exhibit "A"
383
Item19.
1 GROUND LEASE
THIS GROUND LEASE (“Lease”), made and entered into as of the last date of signature below (“Effective Date”) , by and between the CITY OF ESCONDIDO, (hereinafter called “Lessor”), and R1 Escondido Investment, LLC, a California limited liability company (hereinafter called “Lessee”) (collectively, referred to herein as the “Parties”).
RECITALS:
A. Lessor is the own er of certain real property as is legally described on Exhibit A attached hereto and designated as “R1 Escondido Investment Parcel” on the Plot Plan attached hereto as Exhibit B and the Improvements located thereon, said Exhibits being incorporated herein by this reference and made a part hereof. On the terms and conditions hereinafter set forth, Lessee desires to lease from Lessor the R1 Escondido Investment Parcel. Lessor and Lessee are concurrently entering into (i) this Lease and (ii) an Assignment and Assumption of REA Agreement as described below
B. EWH, Carter Hawley Hale Stores, Inc., Sears Roebuck and Co. (“Sears”), J.C. Penney Properties, Inc. (“Penney”), The May Department Stores Company (“May”), Nordstrom, Inc., and Adcor Realty Corporation ente red into that certain Construction, Operation and Reciprocal Easement Agreement dated November 26, 1986, recorded on November 26, 1986, as Document No. 86 -549267, in the Official Records of San Diego County, California (the “Official Records”) (the “Origin al REA”), as amended by that certain First Amendment to Construction, Operation and Reciprocal Easement Agreement dated March 12, 2013, recorded on March 14, 2014, as Document No. 2014-0100990, in the Official Records, by and between EWH and North County F air LP (collectively, “Developer”), Macy’s Retail Holdings, LLC (as successor-in-interest to May), Sears, Penney, Nordstrom and Target Corporation (“Target”) (the “First Amendment to REA”). (collectively, the “REA”). The REA establishes certain reciproca l easements, covenants and conditions with respect to the construction, maintenance and operation of the Shopping Center, including, without limitation, the Tracts (as defined in the REA) and the Common Area (as defined in the REA). As noted above, Lessor will be assigning and Lessee will be assuming, concurrently with this Ground Lease, all the rights and obligations under the REA
C. The City of Escondido City Council has declared the leasehold interests described herein as Exempt Surplus Land pursuant to Government Code section 54221(f)(1)(G).
IT IS MUTUALLY COVENANTED AND AGREED BY AND BETWEEN LESSOR AND LESSEE AS FOLLOWS:
DEFINITIONS:
For purposes of this Lease, the following terms, as used in the singular or the plural, shall have the following meanings:
A. Unless otherwise specifically defined in this Lease, capitalized terms used in this Lease shall have the same meanings as given to said terms in the REA.
Resolution No. 2024-168
Exhibit "A"
384
Item19.
2 B. “Improvements” shall mean the existing three (3) story building previously occupied by Nordstrom, Inc. located upon the Demised Premises and any restoration, addition or replacement thereof.
C. “Lease Year” shall mean a period of February 1 through January 31.
D. “Opening Date” shall mean the date on which the first sublessee is initially open for business to the public.
E. “Round One Sublease” shall mean that Lease Agreement entered into by and between Lessee and ROUND ONE ENTERNTAINMENT INC. governing the sublease of the Demised Premises.
F. “Shopping Center ” shall mean the Improvements constructed on the Demised Premises as well as the improvements constructed on the remainder of the Shopping Center Site, including but not limited to Developer Mall Stores, Developer Non -Mall Stores, the Enclosed Mall, the Maj or Department Store buildings, Automobile Parking Area, landscaped areas, and other improvements of a type customarily found in a first class enclosed -mall regional shopping center in Southern California and all of the land within the Shopping Center Site , as these terms are defined in the REA.
ARTICLE I
PREMISES
Lessor hereby demises and leases unto Lessee, and Lessee hereby leases from Lessor, for the consideration and upon and subject to the terms and conditions herein set forth, the real property legally described on Exhibit A and designated as “R1 Escondido Investment Parcel” on Exhibit B together with all and singular the Improvements, appurtenances, rights, licenses, privileges and easements thereunto belonging or in anywise appe rtaining ( collectively the “Demised Premises ”). Lessee understands and acknowledges that the Demised Premises was previously leased to a prior lessee who did not return the Demised Premises in a vanilla shell condition. Lessee agrees to accept the Demised Premises in its current , as is, condition and will perform any cleanup, improvement, or other items it deems necessary upon taking possession of the Demised Premises.
ARTICLE II
TERM
2.1 Term. The term of this Lease (hereinafter sometimes referred to as the “Lease Term” or the “Term of this Lease”), shall commence and be fully effective as of the date this Lease is fully executed and shall expire at midnight on the twentieth (20 th) anniversary of the Opening Date, unless sooner terminated, as hereinafter provided.
2.2 Termination Upon Failure to Execute Round One Sublease. As discussed elsewhere herein, the Parties intend for Lessee to fully sublease the Demised Premises. If Lessee Resolution No. 2024-168
Exhibit "A"
385
Item19.
3 fails to execute the sublease with Round One as described herein within one year of the Effective Date this Lease shall automatically terminate.
2.3 Option to Terminate Upon Termination of Sublease with Round One. Should the Sublease with Round One terminate, at any point during this Lease, Lessor or Lessee shall have the option to terminate this Lease upon thirty (30) days’ written notice.
ARTICLE III
RENT
3.1 Fixed Rent. Lessee agrees to pay to Lessor as net minimum rent (“ Fixed Rent”), the sum of One Hundred Thousand and 00/100 Dollars ($100,000.00) per year throughout the Lease Term, in the manner described below. Lessee’s payment of Fixed Rent shall commence on the earlier to occur of the following (the “ Rent Commencement Date”): (i) the Opening Date of Round One, as defined herein, or (ii) the date that is four hundred twenty-five (425) days following the latest to occur of (a)the Delivery Date to the subtenant (as defined in Section 7.03 of the Round One Sublease ), ( b) Subtenant’s receipt of Lessee’s approval of subtenant’s Plans and Specifications (as defined in Section 7.01 of the Round One Sublease), (e) the delivery to subtenant of the SNDA, as defined in Section 27.03 of the Round One Sublease, executed by Lessor and an SNDA executed by any other Holder, as defined in Section 27.03, holding an interest in the Premises to which the sublease is subordinate as of the Effective Date, and (f) the date on which subtenant obtains a building permit (the “Building Permit”) from applicable governmental authorities allowing subtenant to perform subtenant’s Work (as defined in Section 7.01 of the Round One Lease) in the Demised Premises.. Notwithstanding the foregoing, Lessee agrees (1) to act in good faith to ensure that both Lessee and subtenant under the Round One Lease act diligently to complete all requirements in this section and to move forward towards the Rent Commencement Date without unreasonable delay and (2) unreasonable delay in taking the steps necessary to reach the Rent Commencement Date shall constitute a material breach of this Agreement.
3.2 Rent Adjustment. Fixed Rent shall be subject to an annual upward adjustment of three percent (3%) of the then-current Fixed Rent. The first such adjustment shall become effective commencing on the first (1st) anniversary of the Rent Commencement Date, and subsequent adjustments shall become effective on every successive anniversary for so long as this Lease continues in effect.
3.3 Fixed Rent; Manner of Payment . The Fixed Rent shall be payable to Lessor in lawful money of the United States, at the following address : The City of Escondido, 201 N.
Broadway, Escondido, California 92025, in twelve (12) equal monthly installments, in advance, on t he first (1st) day of each calendar month, without setoff or deduction except as may be permitted by law and without any prior notice. Should the obligation to pay Fixed Rent commence on a day of the month other than the first day of such month, then the F ixed Rent for the first fractional month shall be prorated on a daily basis for the period from such date to the end of such calendar month at the rate of one -three hundred sixty -fifth (1/365) of the annual Fixed Rent for each day. Should the obligation to pay Fixed Rent expire on a day of the month other than the last day of such month, then the Fixed Rent for such fractional month shall be prorated on a daily basis for the period from the first day of such month until the expiration date at the rate of o ne-three Resolution No. 2024-168
Exhibit "A"
386
Item19.
4 hundred sixty-fifth (1/365) of the annual Fixed Rent for each day. Fixed Rent for the first (1 st) fractional month shall be paid within ten (10) days after the Opening Date.
3.4 Intentionally Omitted
3.5 Participation Rent. In addition to the payment of Fixed Rent, Lessee agrees to pay Lessor, during each Lease Year, as defined herein, “Participation Rent” constituting 50% of “Net Operating Income” generated from the Premises by Lessee. Net Operating Income shall be calculated by subtracting from the total of all rent payments payable to Lessee through subrentals of the Premises (“Sub-Rent”), the following: 1) any pass-through payments, such as taxes, common area maintenance payments or insurance, 2) any and all operational costs incurred by Lessee, pursuant to any and all subleases and the REA, 3) any Fixed Rent payable hereunder, and 4) Lessee’s Preferred Return, as defined herein. (a) “Preferred Return” shall mean a sum equal to Secured Overnight Financing Rate Index, as published by the Federal Reserve Bank of New York (or recognized replacement), as of the first day of each month and applied on a forward basis plus 5% per annum, compounded monthly, of the soft and hard costs incurred in the renovation of the Demised Premises. Preferred Returns shall accrue until distributed and shall be cumulative. (b) Participation Rent shall be payable on annual basis within ninety (90) days following the end of each Lease Year, as defined herein, commencing with the first full Lease Year following the Rent Commencement Date. Lessee shall deliver to Lessor a statement in writing, certified by a financial officer of Lessee, which statement shall show the Net Operating Income of such Lease Year. Concurrently with the submission of the statement, Lessee shall pay to Lessor the Participation Rent for such Lease Year. A “Lease Year” shall constitute a period of February 1 through January 31, with the portion of the Term from the Rent Commencement Date to the succeeding January 31 shall be a Partial Lease Year. (e) Upon thirty (30) days' prior written notice to Lessee, but no more often than once each Lease Year, Lessor may audit all information pertaining to Net Operating Income and Lessee will make all such books and records available or cause the same to be made available for such examination.
ARTICLE IV
USE OF DEMISED PREMISES
4.1 Use. Lessee may use the Demised Premises for any purpose not prohibited by the REA. Lessee’s use of the Demised Premises shall be in accordance with all laws, statutes, codes, acts, ordinances, orders, rules and regulations of any governmental authority having jurisdiction, applicable to the Demised Premises or Improvements located thereon; and in accordance with the terms of insurance policies covering or applicable to the Demised Premises or Improvements located thereon, or any part thereof, to the extent required to be maintained by Lessee hereunder.
4.2 Permitted Contests. Lessee, at its sole cost and expense, may contest, after prior written notice to Lessor, the amount or validity or application, in whole or in part, of any of the items enumerated in Section 4.1 hereof, provided that (a) Lessee shall first make all contes ted Resolution No. 2024-168
Exhibit "A"
387
Item19.
5 payments, under protest if it desires, unless such proceedings shall suspend the collection thereof, (b) neither the Demised Premises or Improvements located thereon would be in any danger of being sold, forfeited, lost or interfered with, and (c) Less ee shall furnish such security, if any, as may be required in any such proceedings. Lessor, at the sole expense of Lessee, will join in or lend its name to any such contest if (i) requested so to do by Lessee, and (ii) Lessor’s failure to so join would bar or prevent Lessee’s right to prosecute any such contest.
ARTICLE V
CONDITION OF TITLE
5.1 Covenant of Title . Lessor warrants, covenants and represents that it holds fee simple title to the Demised Premises, and that Lessor shall deliver the Demised Premises to Lessee free and clear of all recorded or unrecorded liens, encumbrances, covenants, conditions, restrictions, assessments, easements, leases, taxes and other exceptions to title, except for those items which are set forth in Exhibit C attached hereto and made a part hereof ( “Permitted Exceptions”), which have been approved and accepted by the Lessee.
5.2 Mortgage Subordination. This Lease is not and shall not be subject or subordinate to any mortgage made by Lessor and that this Lease or a memorandum thereof shall be recorded ahead of any mortgage to be placed on Lessor’s interest in the Demised Premises or any part thereof by Lessor.
5.3 Title Insurance. Upon execution of this Lease, Lessor shall arrange for the payment of and cause to be delivered to Lessee a leasehold title insurance policy, issued by First American Title Insurance Company, including all standard and general exceptions and exclusions raised in such form of leasehold title insurance policy and with all endorsements requested by Lessee , insuring Lessee in the amount of $8,500,000.00 that the Demised Premises are free of liens, claims, charges, encumbrances, covenants, restrictions, easements, or adverse interest of any kind whatsoever, except as set forth in Exhibit C.
ARTICLE VI
IMPROVEMENTS
6.1 Lessor’s Non -Responsibility for Improvements . Lessor shall not under any circumstances whatsoever be required to build any improvements on the Demised Premises, or to maintain or make any repairs, replacements, alterations or renewals of any nature or description to the Improvements; provided, however, that nothing contained in this Section 6.1 is intended to or shall (i) impose upon Lessor any obligations with respect to the construction or mainten ance of the Improvements not expressly set forth in this Lease, or (ii) prevent Lessee from enforcing any rights or pursuing any remedies it may have at law, in equity or under this Lease arising from the negligence or willful misconduct of Lessor with respect to the construction or maintenance of the Improvements.
6.1 Round One Sublease Requirement. Lessor and Lessee are entering into this Lease specifically so that Lessee can facilitate and execute sublease s of the Improvements. The parties Resolution No. 2024-168
Exhibit "A"
388
Item19.
6 anticipate and intend that the ground floor, second floor and third floor of the Improvements will be sublet to Round One Entertainment, Inc. (“Round One”) as described below. Lessor hereby consents to Round One as a Sublessee.
(a) The Parties anticipate and agree that the Round One Sublease will provide for the operation of a family oriented entertainment center offering bowling, karaoke, games, such as, by way of example and not limitation, video and electronic games, arcade games and redemption games, darts, trampolines, billiards and ping pong, batting cages, roller skating and other family-oriented amusements and technological evolutions of any of the, along with food and beverages including alcoholic beverages (i.e., beer, wine and spirits) which Lessor acknowledges its support thereof, subject to Round One obtaining all applicable governmental, quasi-governmental, permits and licenses for such use (the “Round One Use”). (b) The Parties anticipate and agree that the Round One Sublease will contain the following conditions (the “Round One Conditions”).
(i) Use Permit Condition.
Round One’s Use requires i) a special use permit (otherwise known as a “CUP”) and ii) a license, approval and permit to sell beer, wine and spirits; collectively referred to as the “Use Permit Condition.” If the Use Permit Condition is not satisfied within one hundred eighty (180) days following the date of the Round One Sublease’s execution, then Round One has the option to terminate the Sublease. (ii) Building Permit Condition.
(iii) Within twenty (20) days after receiving notice from Lessee of Lessee’s approval of the Round One’s plans and specifications, Round One shall submit such plans and apply for a building permit from the governing authorities (the “Building Permit Condition”) If Round One is unable to satisfy the Building Permit Condition within one hundred eighty (180) days from the date of such submittal and application, then Round One shall have the option to terminate the Lease.
(b) All construction undertaken or caused to be undertaken by Lessee (and/or Sublessee) pursuant to this Section 6.1 shall be in accordance with the construction requirements of the REA.
6.2 Future Project Approvals.
(a) Other than those required to be obtained by Round One or future sub lessees, Lessee shall apply for and obtain, at its sole cost and expense, all governmental, quasi - governmental, and utility provider(s) approvals, permits, licenses and the like necessary or desirable to permit Lessee to undertake its use of the Demised Premises. Lessee shall ensure that any subleases of the Demised Premises require the sublessee to obtain, at the sublessee’s sole cost and expense, all governmental, quasi -governmental, and utility provider(s) approvals, permits, Resolution No. 2024-168
Exhibit "A"
389
Item19.
7 licenses and the like necessary or d esirable to permit sublessee’s use of the Demised Premises.
The approvals and permits shall include, without limitation, zoning approvals, site plan approvals, conditional use permits, liquor licenses, subdivision approvals, environmental approvals (including any required pursuant to any applicable environmental laws), signage approvals, utility relocation and/or connection approvals and permits, building permits and operating permits and licenses (collectively, the “Project Approvals”).
(b) All work upon an d improvements to the Demised Premises shall be constructed in compliance with all applicable governmental regulations, laws and restrictions.
Lessee acknowledges that any government approved entitlements required under federal, state or local law made by the City of Escondido in its role as a governmental agency will be made in the public interest and according to applicable legal requirements. Nothing herein shall in any manner affect the City Planning Commission’s or City Council’s review and considera tion of any applications for entitlements and the Planning Commission and City Council shall have sole and absolute discretion to approve, disapprove, modify or otherwise take any action regarding an application or request for entitlements. The City of Es condido makes no promise, warranty or representation as to the outcome of such review or the approval of any such application. (c) All conditions contained in the Project Approvals and all requirements for on-site and off-site improvements or services, in -lieu fees or payments, dedication or reservation requirements, water rights acquisition costs, local improvement district costs, connection charges, assessments, mitigation fees, impact fees, permit fees and any other similar requirements, fees or charges imposed on the Project by any governmental entity or utility service provider in connection with the Project Approvals shall be the responsibility of Lessee. The design, construction and implementation of any improvements shall be the responsibility of Lessee. (d) For purposes of this Lease, the Project Approvals shall not be deemed to have been “obtained” or “issued” until the period of time (if any) to contest or appeal any such issuance has passed without the filing of a contest or appeal or, if a contest or appeal has been filed, after the issuance of a final and non -appealable order, decision or judgment confirming the issuance of the relevant Project Approvals without modifications or conditions that are unacceptable to Lessee. Lessee shall deliver notice to Lessor (the “Project Approvals Notice”) promptly after Lessee and/or a sublessee has obtained all of the Project Approvals related to any sublease.
(e) Lessor agrees, in its capacity as owner of the Demised Premises, to comply with all reasonable request s of Lessee with regard to the Project Approvals (including, without limitation, executing, or causing to be executed, all applications or submissions necessary to obtain the Project Approvals so long as the same are in accordance with the terms of this Le ase and required by applicable law). Nothing in this clause (e) is intended to require Lessor, in its capacity as a governmental entity, to take any action that is prohibited by applicable law.
Resolution No. 2024-168
Exhibit "A"
390
Item19.
8 ARTICLE VII
TAXES AND ASSESSMENTS
7.1 Payment of Taxes and Assessments By L essee. Lessee shall pay, or cause to be paid, all real property taxes and assessments which are levied or assessed against the Demised Premises and the Improvements located thereon during the Term of this Lease. The amount of such real property taxes and a ssessments shall be prorated on a daily basis between Lessor and Lessee with respect to any fiscal tax year only a part of which falls within the Term of this Lease.
Any real property taxes and assessments pertaining to a period of time prior to the Rent Commencement Date and subsequent to the expiration or sooner termination of this Lease shall be the obligation of Lessor. For purposes of this Lease, “real property taxes ” shall include any possessory interest or similar tax, and any taxes which are based o n the receipt of rent by Lessor, and which are levied as an alternative to or as an addition to general real estate taxes and are payable because of Lessor’s ownership of the Demised Premises. Lessee shall have no obligation to pay any tax upon or pertaini ng to the income of Lessor. Lessee shall have the right to exercise the benefit of any provisions of any statute or ordinance permitting such taxes and assessments to be paid in installments over a period of time, and Lessor agrees to execute any instruments which may be required by the taxing authority in connection with the election to take advantage of such installment payments. Lessee’s obligation to pay real property taxes and assessments shall be limited to taxes and assessments uniformly imposed upon all taxable real property within the jurisdiction of the taxing authority and at rates which are uniformly applied.
Lessee shall have the right to contest any taxes or assessments or the increases in any taxes or assessments which Lessee is obligated to pay under this Lease; provided, however, Lessee shall (i) give Lessor notice of any such intention to contest, (ii) indemnify and save Lessor harmless from all liability on account of said contest, and (iii) in the event of a final determination adverse to Lessee, prior to enforcement, foreclosure or sale, and expiration of the redemption period, pay the amount involved together with all penalties, fines, interest, costs and expenses which may have accrued.
It is agreed that nothing herein contained shall be construed to require Lessee to pay any inheritance, franchise, corporation, income or excess profits taxes or surtaxes, imposed upon or against Lessor, its legal representatives, successors or assigns.
In the event Lessee shall fail to comply with its obligations as set forth in this Article VII, after thirty (30) days prior written notice from Lessor to Lessee and failure to cure by Lessee, Lessor may pay such taxes or assessments, and penalties and interest thereon, and Lessor shall be entitled to prompt reimbursement from the Lessee for the sums so expended, with interest thereon at the rate of two percent (2%) per annum, over the lending reference rate being charged from time to time by Bank of America, NT & SA, San Francisco main branch.
7.2 Non-Segregation of Demised Premises. Lessor undertakes and agrees to diligently attempt to obtain from the taxing authorities a separate tax bill for the Demised Premises or a segregation of the real estate taxes attributable thereto and otherwise to cooperate with Less ee in the obtaining of such information from such taxing authorities as will facilitate an accurate determination of taxes attributable to the Demised Premises. Lessor further agrees not to make any Resolution No. 2024-168
Exhibit "A"
391
Item19.
9 application to the taxing authorities which, if granted, would change the manner in which the Demised Premises and the Improvements thereon are being or will be assessed or which would have the effect of increasing the assessed valuation of the Demised Premises and the Improvements thereon.
In the event the Demised Premises are not separately assessed but are part of a larger parcel which includes the Demised Premises for assessment purposes (hereinafter referred to as the “larger parcel”), the parties hereto shall use assessor’s work sheets, if available to dete rmine the real estate taxes applicable to the Demised Premises, if such assessor’s work sheets are not available, then real estate taxes applicable to the Demised Premises shall be determined as follows:
(a) A fractional portion of the real estate taxes assess ed, in any tax fiscal year during the term hereof, against the land comprising the larger parcel, the numerator of which shall be the number of square feet of land area underlying the Demised Premises and the denominator of which shall be the number of square feet of land area in the larger parcel, plus (b) A fractional portion of the real estate taxes assessed, in any tax fiscal year during the term hereof, against all Improvements upon the larger parcel, the numerator of which shall be the Floor Area of build ings located on the Demised Premises and the denominator of which shall be the Floor Area of the building located on the larger parcel, provided that equitable adjustments shall be made for: (1) buildings which are only partially completed on the date tha t such real estate taxes become a lien, taking into effect cost figures and stages of construction throughout the Shopping Center; and (2) the estimated cost of the several buildings.
Notwithstanding the foregoing, in the event the Demised Premises are not separately assessed but are part of a larger parcel for such assessment purposes, and the valuation of the assessed parcel is based on the capitalization of income therefrom, the fractional portion of the impositions attributable to the Demised Premises s hall not exceed an amount determined by applying the tax rate fixed by the taxing authority to a value computed by capitalizing the Fixed Rent payable by Lessee under this Lease at the capitalization rate used by the assessor in fixing the value of the larger parcel.
Lessor shall within thirty (30) days after receipt by Lessor of the assessed valuations of the land and Improvements included within such larger parcel, furnish Lessee a statement setting forth the amounts of such assessments and describing the land and Improvements with respect to which such assessments have been made. If Lessor shall fail to furnish Lessee the aforesaid statement of assessed valuations within said thirty (30) day period, the amount which Lessee shall be required to reimburse L essor shall be limited to the amount of the taxes applicable to Demised Premises and the Improvements thereon for the preceding tax fiscal year.
Lessor will pay or cause to be paid all real estate taxes assessed with respect to such larger parcel and the Improvements thereon. Lessee shall in such case reimburse Lessor for the real estate taxes applicable to the Demised Premises prior to the date said larger parcel taxes are delinquent, but in no event sooner than thirty (30) days following Lessee’s receipt of all applicable tax bills, invoices and the statement from Lessor described below. Lessor shall deliver to Lessee semi - annually, at least forty -five (45) days prior to the date that each installment of taxes would be delinquent if not paid, a statement s etting forth the amount of taxes applicable to the Demised Resolution No. 2024-168
Exhibit "A"
392
Item19.
10 Premises and the Improvements thereon for the tax fiscal year and showing in reasonable detail how Lessor has arrived at the amounts so set forth, a photostatic copy or copies of a receipted tax bill or bills showing payment of the real estate taxes for said tax fiscal year and Lessee shall pay to Lessor Lessee’s share of the installment then due not later than the date such installment would become delinquent.
Lessee shall, upon notice to Lessor, have the right to contest on behalf of Lessor any and all such real estate taxes assessed with respect to such larger parcel and the Improvements thereon; provided, however, that Lessor and any other parties having an i nterest in such larger parcel may join in such contest at their own cost and expense, in which event Lessee shall cooperate with such other parties in such contest. In the event the Demised Premises are separately assessed, Lessee alone shall have the sole right to contest any increase in the assessed valuation of the Demised Premises or the Improvements thereon. If any such proceedings are undertaken solely by Lessee, such proceedings shall be at the cost and expense of Lessee and conducted by counsel selected by Lessee, and if Lessee deems it appropriate such measures shall be taken in the name of Lessee.
Lessor shall lend its name to such proceedings, if requested by Lessee, without charge or cost to Lessee. If the result of any such contest shall be a re duction in the amount of the real estate taxes so contested, such refund or recovery from the taxing authorities with respect to such real estate taxes shall be divided between Lessee and Lessor, after Lessee reimburses itself from such recovery for Lessor ’s proportionate share of all costs and expenses incurred by Lessee in such proceedings, in such manner as will result in each of them having paid only such party’s proportionate share of the contested taxes as so reduced.
If Lessor shall contest the amount of such real estate taxes without participation by Lessee in the cost and expenses of such proceedings, such refund or recovery arising therefrom shall be divided between Lessor and Lessee, after Lessor reimburses itself from such recovery for Lessee’s proportionate share of all costs and expenses incurred by Lessor in such proceedings, in such manner as will result in each of them having paid only such party’s proportionate share of the contested taxes as so reduced. Lessor shall give Lessee prior written notice of its intent to contest the assessment of such real estate taxes.
Lessor shall not, without the prior approval of Lessee, make, enter into, or agree to any settlement, compromise or other disposition of any contest, or discontinue or withdraw fro m any contest, or accept any refund, adjustment or credit with respect to any real estate taxes which Lessee shall have contested.
If a contest shall be entered into jointly between Lessor and Lessee, each party’s proportionate share of the costs and expenses incurred in such proceedings shall be determined by multiplying such costs and expenses by a fraction having as its numerator such party’s proportionate share of the contested taxes as reduced by reason of such proceedings and as its denominator the entire amount of such taxes as so reduced.
Resolution No. 2024-168
Exhibit "A"
393
Item19.
11 ARTICLE VIII
INSURANCE
8.1 Casualty Insurance. Subject to the provisions of Section 8.7, Lessee shall keep, or cause to be kept, the Improvements on the Demised Premises insured during the period Lessee is required to operate pursuant to the REA, against loss or damage by fire and such risks embraced by coverage of the type customarily included in extended coverage endorsements in the State of California. Lessee shall not be required to obtain earthquake insurance.
8.2 General Liability Insurance. During the Term of this Lease, Lessee, at its sole cost and expense, shall maintain public liability and property damage insurance of the type, coverage and amount set forth in the REA.
8.3 Policy Form. All policies of insurance provided for in this Lease shall (a) be in such forms and amounts as provided in the REA, and (b) shall be issued by insurers of recognized responsibility as provided in the REA. Upon delivery of the Demised Premises by Lessor to Lessee and thereafter not less than fifteen (15) days prior to the expiration date of each policy furnished pursuant to this Article VIII or Article XIX hereof, Lessee shall deliver to Lessor a certificate evidencing the existence of each policy of insurance required hereunder.
8.4 Notice of Cancellation. Each such policy or certificate therefor issued by the insurer shall to the extent reasonably obtainable contain an agreement by the insurer that such policy shall not be cancelled without at least thirty (30) days prior notice to Lessee, Lessor and to Lessee’s Mortgagee and/or Leasehold Mortgagee, if any.
8.5 Blanket Insurance and Self-Insurance. Any insurance provided for in this Article VIII, or in Article XIX hereof, may be effected by a policy or policies of blanket or loss limit-type insurance covering other risks and liabilities of Lessee, provided, however, that the amount of the total insurance allocated to the Improvements shall be such as to furnish protection which is equivalent to the protection furnished by the separate policies in the amounts herein required, and provided further that in all other respects, any suc h policy or policies shall comply with the other provisions of this Lease. In any such case it shall not be necessary to deliver the original of any such blanket policy to Lessor, but Lessee shall deliver to Lessor, upon request, a certificate evidencing the existence of such insurance. Notwithstanding anything to the contrary contained in this Article VIII or in Article XIX hereof, the insurance requirements of Lessee under this Article VIII and under Article XIX may be satisfied in whole or in part under any plan of self-insurance from time to time maintained by Lessee, or its subsidiary, successor, affiliate or controlling corporation maintaining such self-insurance plan for Lessee’s benefit on condition that Lessee or its subsidiary, successor, affiliate or controlling corporation has and maintains a net worth of $200,000,000 or more and net current assets of $100,000,000 or more, and that Lessee or its said subsidiary, successor, affiliate or controlling corporation, maintaining such self -insurance plan, shall furnish to Lessor upon request evidence of said net worth and net current assets. If Lessee, or such Person maintaining the self -insurance plan for Lessee, has a net worth and net current assets less than the foregoing amounts, it shall not be permi tted to self-insure. The annual report of Lessee (or of such Person maintaining the self -insurance plan on behalf of Lessee) which is a publicly held corporation that is audited by an independent certified public accountant shall be Resolution No. 2024-168
Exhibit "A"
394
Item19.
12 sufficient evidence of its net worth and its net current assets. The provisions of Sections 8.3 and
8.4 shall not apply to the extent that Lessee is self-insured in accordance with this Section 8.5.
8.6 Inability to Obtain Insurance. In the event that Lessee, after reasonable and diligent efforts, is unable to obtain any of the insurance provided for in this Lease, and if Lessee shall in such case obtain the maximum insurance reasonably obtainable and promptly give notice to Lessor of the extent of Lessee’s inability to obtain any in surance required to be maintained hereunder, then the failure of Lessee to procure and maintain such insurance as is not reasonably obtainable shall not be hereunder.
8.7 Application of REA . So long as the REA is in full force stated and effect, the insurance requirements therein as to the Improvements on the R1 Escondido Investment Parcel shall be applicable and the provisions of this Article VIII shall be of no force and effect. In the event of the termination of the REA and the election by Lessee not to ter minate this Lease, then all of the provisions of the REA referred to in this Article VIII shall be incorporated herein by reference and shall continue to be performed by Lessee during the balance of the Lease Term, it being understood that all insurance proceeds Lessee shall receive pursuant to this Article VIII shall belong to Lessee.
ARTICLE IX
UTILITIES
Lessee shall pay, or cause to be paid, during the Term of this Lease, all charges for water, gas, electrical power, telephone, sewage, trash collection and all ot her utilities and services supplied to or for the Improvements at the instance of Lessee (hereinafter referred to as “Utilities”) and agrees to hold Lessor harmless with respect to any charges for said Utilities.
Lessee shall also procure, or cause to be p rocured, without cost to Lessor, any and all necessary permits, licenses or other authorizations required for the lawful and proper installation and maintenance within the Improvements of wires, pipes, conduits, tubes and other equipment and appliances for use in supplying any Utilities to and upon the Improvements. Lessor, upon request of Lessee, will join with Lessee in any application required for obtaining or continuing any Utilities.
ARTICLE X
MECHANICS’ LIENS
During the Term of this Lease, Lessee, at its sole cost and expense, shall be responsible for the discharge of, prior to fore closure thereupon, all liens, encumbrances and charges (other than liens, encumbrances and charges created by Lessor and the liens and encumbrances which Lessee is permitted to impose upon the Demised Premises pursuant to Article XI of this Lease) upon the Demised Premises, subject to a contest of any such liens as hereinafter set forth. Lessee shall, however, have the right to contest the validity or amount of any lien or claimed lien, provided that upon final determination of the lien or claim for lien, Lessee shall immediately pay any judgment rendered with all proper costs and charges and shall have the lien released or judgment satisfied at Resolution No. 2024-168
Exhibit "A"
395
Item19.
13 Lessee’s expense, and if Lessee shall fail to do so, Lessor may at its option, following twenty (20) days prior written notice to Lessee, pay any such final judgment and any such amount shall become immediately due and payable to Lessor by Lessee with interest thereon at the rate of two percen t (2%) per annum, over the lending reference rate from time to time being charged by Bank of America.
Lessor or its representatives shall have the right to post upon the Demised Premises notices of non-responsibility in compliance with applicable law. Lessee shall, before the commencement of any work estimated to cost in excess of One Hundred Thousand Dollars ($100,000.00), which might result in any such lien, give to Lessor written notice of its intention to do so in sufficient time to enable the posting o f such notices of non - responsibility; provided, however, the requirement of the giving of such notices of intention to perform such work shall not be required if Lessee, or the sublessee which is to perform such work or cause such work to be performed (or its guarantor), has a net worth in excess of One Hundred Million Dollars ($100,000,000.00).
ARTICLE XI
LESSEE’S FINANCING
11.1 Fee Subordinated to Mortgage . Lessor agrees for itself and its successors and assigns to join in the execution, as trustor, in any mortgage or deed of trust which Lessee may, at any time and from time to time during the Term of this Lease, cause to be recorded against the Demised Premises and the Improvements located thereon. Such mortgage, and the mortgagee thereunder, are hereinafter referred to as “Lessee’s Mortgage ” and “Lessee’s Mortgagee ”, respectively. Lessor shall subordinate its fee interest in the Demised Premises to the lien of the Lessee’s Mortgage if the following conditions are satisfied:
(i) The Lessee’s Mortgagee shall be an institutional lender (but the assignee/sublessor in an assignment and leaseback transaction need not be an institutional lender);
(ii) The Lessee’s Mortgage shall secure a loan, the proceeds of which shall be used to pay for the cost of construction of the Improvements located on the Demised Premises and the financing thereof and Lessee’s share of the cost of common improvement work for the Shopping Center Site (including, without limitation, the actual cost of all materials and labor used directly in the construction of the Improvements located on the Demised Premises, and all Improvements required or permitted to be made thereon or related thereto; architectural, engineering legal and similar fees directly related or properly allocated solely to this transaction; building permits, premiums for fire, public liability and builders risk insurance during construction; title charges; commitment fees, standby fees and other fees and expenses incurred in connection with the making of Lessee’s Mortgage; interest costs; mortgage taxes, land taxes, transfer taxes, survey costs and recording charges), or to reimburse Lessee for the cost thereof, and shall be used for no other purpose;
Resolution No. 2024-168
Exhibit "A"
396
Item19.
14 (iii) The Lessee’s Mortgage shall be for a term which shall not extend beyond the expiration date of the Term of this Lease;
(iv) The Lessee’s Mortgage shall specifically provide that Lessor shall not be liable for the payment of the sums secured by such mortgage, nor for any expenses in connection therewith, and neither such Lessee’s Mortgage nor any instrument collateral thereto shall contain any covenant or obligation on Lessor’s part to pay such debt or any part thereof, or to take any affirmative action of any kind whatsoever and shall expressly provide that the mortgagor and the mortgagee thereunder will seek no monetary judgment against Lessor in connection with Lessee’s Mortgagee.
Lessor shall not be required to sign or execute the note to be secured by the Lessee’s Mortgage, but shall execute the Lessee’s Mortgage itself, and all other documents reasonably and customarily required by the Lessee’s Mortgagee or by the title company insuring the Lessee’s Mortgage or by any combination of them in order to subject Lessor’s interest in the Demised Premises to the lien of the Lessee’s Mortgage, provided th e Lessee’s Mortgage is in accordance with the terms and conditions enumerated above.
The Lessee’s Mortgage shall contain provisions that all notices of default under the Lessee’s Mortgage must be sent to Lessor and Lessee and that Lessor shall have the rig ht to cure any default if Lessee fails to do so and Lessee shall diligently attempt to obtain a provision in any Lessee’s Mortgage that Lessor shall have ten (10) days more time, in the case of any monetary default, and thirty (30) days more time, in the c ase of a non -monetary default, than is given to Lessee to remedy such default.
11.2 Leasehold Mortgage. Lessee and every successor and assignee of Lessee permitted hereunder (including, but not limited to, any sublessee of Lessee or of its permitted assignees) is hereby given the right (exercisable at any time and from time to time) by Lessor, in addition to any other rights herein granted, without Lessor’s prior written consent, to mortgage its interest in this Lease or any part or parts thereof, and/or its interest in any sublease(s), under one or more leasehold mortgage(s) (“Leasehold Mortgage”) and to assign such interest in this Lease, or any part or parts thereof, and/or in any sublease(s), as collateral security for such Leasehold Mortgage(s) (or to assign its interest in same in connection with an assignment and leaseback transaction), upon the condition that all rights acquired under such Leasehold Mortgage(s) shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and to all rights and interests of Lessor herein. None of such covenants, conditions or restrictions is or shall be waived by Lessor by reason of the right given so to mortgage such interest in this Lease, except as expressly provided herein.
The holder of any first mortgage or deed of trust upon the leasehold estate created by this Lease and Lessee’s Improvements shall be the Leasehold Mortgagee referred to herein and shall be entitled to the rights and benefits as provided herein (“Leasehold Mortgagee”). (a) Provided that the Leasehold Mortgagee shall have notified Lessor in writing of its status as a Leasehold Mortgagee and its name and address, Lessor thereafter shall give to such Leasehold Mortgagee a copy of each notice of default at the same time as and whenever such Resolution No. 2024-168
Exhibit "A"
397
Item19.
15 notice shall be given by Lessor to Lessee, such copy to be addressed to the Leasehold Mortgagee at the address last furnished to Lessor as hereinabove provided. Lessor shall not serve a notice of cancellation or termination upon Lessee unless a copy of any prior notice of default shall have been given to the Leasehold Mortgagee as hereinabove provided and the time as hereinafter specified for the curing of such default shall have expired without the same having been cured.
Lessor agrees to notify the Leasehold Mortgagee in writing of the failure of Lessee to cure a default within any applicable grace period and of the curing of any default by Lessee. The performance by the Leasehold Mortgagee of any condition or agreement on the part of Lessee to be performed hereunder will be deemed to have been performed with the same force and effect as though performed by Lessee.
(b) Lessor will accept performance by the Leasehold Mortgagee within the following periods of any obligation on Lessor’s part to be performed hereunder, with the same force and effect as though timely performed by Lessee:
(i) as to any rent and other sums payable hereunder, within ten (1 0) days after written notice from Lessor that Lessee has not cured such default within the period provided in Article XIII; and
(ii) As to all other defaults, within thirty (3 0) days more time than is given Lessee to remedy or cause to be remedied the defaults complained of, or, if within such period such default cannot be cured, to commence t o so cure within such period and diligently and continuously proceed therewith to completion. (iii) As to any default which Leasehold Mortgagee is without the legal power to cure by payment or performance, Leasehold Mortgagee shall have thirty (30) days after re ceipt of written notice from Lessor of such default within which to give Lessor written notice that the Leasehold Mortgagee or a wholly owned subsidiary or affiliate of Leasehold Mortgagee elects to become the tenant under this Lease in the place and stead of the then Lessee upon all the terms, covenants and conditions provided in this Lease.
(c) Lessor shall not exercise its right to terminate this Lease as provided in Article XIII during the time that the Leasehold Mortgagee shall require to complete its reme dies under its mortgage or deed of trust upon the leasehold estate of Lessee hereunder, provided, however, and upon condition:
(i) That the Leasehold Mortgagee proceeds, promptly and with due diligence, with the remedies under its mortgage or deed of trust on the leasehold estate and thereafter prosecutes and completes the same with all due diligence; and (ii) That the Leasehold Mortgagee shall pay to Lessor the rent and all other charges required to be paid by Lessee hereunder which have accrued and those which shall become due and payable during said period of time.
Upon the completion of any foreclosure proceedings or acquisition of Lessee’s interest in this Lease by the Leasehold Mortgagee, any default not reasonably curable by the Leasehold Resolution No. 2024-168
Exhibit "A"
398
Item19.
16 Mortgagee shall be deemed waived by Lessor as to the Leasehold Mortgagee and any purchaser at a foreclosure sale or their respective successors and assigns. (d) Lessor shall also be obligated to give any notice of cancellation and termination to the Leasehold Mortgagee, simultane ously with such notice given to Lessee; provided, however, that nothing contained in this Section 11.2(d) shall grant to Lessor any right to terminate this Lease not expressly set forth in Section 13.3 hereof. No such notice to Lessee shall be effective with respect to termination of this Lease unless the Leasehold Mortgagee shall also have been so notified as aforesaid. The Leasehold Mortgagee shall then have the right to notify Lessor in writing, within thirty (30) days after receipt by the Leasehold Mortgagee of such notice of cancellation and termination, that (1) Leasehold Mortgagee, or any designee or nominee which Leasehold Mortgagee may designate or name in such notice (hereinafter called the “approved nominee”), elects to lease the Demised Premises from the date of termination of this Lease for the remainder of the Term of this Lease, at the rent and other charges herein reserved and otherwise upon the same terms, covenants and conditions as are herein set forth, with the same relative priority in ti me and in right as this Lease (to the extent possible) and having the benefit of and vesting in the Leasehold Mortgagee, or the approved nominee, all of the rights, title, interest, powers and privileges of Lessee hereunder, and (2) Leasehold Mortgagee fur ther obligates itself to (and in fact does) within ten (10) days after delivery to Lessor of such election:
(i) Cure the default upon which such termination was based, or in respect to any default not capable of curing within such ten (10) days, or which cannot be cured without entry into possession, proceed and effect cure with due diligence following delivery of possession;
(ii) Pay to Lessor all rent and other charges due under this Lease up to and including the date of commencement of the term of such new lease less any net rental income received by Lessor for such period; and
(iii) Pay to Lessor all expenses and reasonable attorneys’ fees incurred by Lessor in connection with any such default with the preparation, execution and delivery of such new lease.
(e) After such cancellation and termination of this Lease and upon compliance by Leasehold Mortgagee, or the approved nominee, within such time, Lessor shall thereupon execute and deliver such new lease to Leasehold Mortgagee or the approved nominee, having the same relative priority in time and right as this Lease (to the extent possible) and having the benefit of all of the right, title, interest, powers and privileges of Lessee hereunder in and to the Demised Premises, including specific assignment of Lessor’s interest in and to any then existing sublease where the subtenant may have attorned to Lessor or which, at the time of cancellation or termination of this Lease, was prior in right to the Leasehold Mortgage or which by separate agreement or by its terms had been granted non-disturbance privileges. Lessor hereby agrees that with respect to any such sublease so assigned, it will not modify or amend any of the terms or provisions thereof, during the period between the expiration or termination of this Lease and the execution and delivery of the new lease. Lessor agrees that it will not terminate any sublease while foreclosure of the leasehold estate of Lessee is pending or while the Leasehold Mortgagee has the right to receive a replacement lease.
Resolution No. 2024-168
Exhibit "A"
399
Item19.
17 (f) Upon the execution and delivery of the new lease, title to all improvements within the Demised Premises, as well as all equipment, fixtures and machinery thereunder, shall automatically vest in the Leasehold Mortgagee or the approved nominee until the expiration of the term of the new lease, unless the new lease shall thereafter sooner be terminated. (g) In the event that Leasehold Mortgagee exercises its right under Section
11.2(d) to enter into a new lease (or to designate its nominee to enter into a new lease), Leasehold Mortgagee or the approved nominee shall have the right to assign such lease without the consent of Lessor.
(h) Anything herein contained to the contrary notwithstanding, Lessor and Lessee mutually agree that so long as there exists an unpaid Leasehold Mortgage on the leasehold estate of Lessee, this Lease or any renewal thereof shall not be modified, amended or altered and Lessor shall not accept a surrender of the Demised Premises or a cancellation of this Lease (provided the Leasehold Mortgagee remedies any default a nd keeps this Lease current, all as hereinbefore provided) prior to the expiration or sooner termination thereof as hereinbefore provided, without the prior written consent of the Leasehold Mortgagee. (i) So long as any debt secured by a Leasehold Mortgagee up on the leasehold created by this Lease shall remain unpaid, unless the Leasehold Mortgagee shall otherwise consent in writing, the fee title to the Land and the leasehold estate in the Demised Premises shall not merge but shall always be kept separate esta tes, notwithstanding the union of such estates either in Lessor or in Lessee or in a third party by purchase or otherwise. (j) Lessor agrees for the benefit of any Leasehold Mortgagee that at any time, and from time to time, upon not less than twenty (20) day s’ prior notice from Lessee or from a Leasehold Mortgagee, to deliver a certificate in recordable form to Lessee and to the Leasehold Mortgagee stating that this Lease is unmodified (or, if there have been modifications, setting them forth) and in full force and effect, the dates to which rental and other charges have been paid, and that either Lessee is not in default in the performance of any of the terms and provisions of this Lease (or, if there are defaults, specifying the nature thereof with sufficient particularity that Lessee and the Leasehold Mortgagee will know the nature of the acts which must be performed and the amounts of the payments which must be made to cure any such default), it being agreed that any such statement delivered pursuant to thi s Section 11.2 may be relied upon by any prospective assignee of Lessee’s interest in this Lease or by any Leasehold Mortgagee or prospective Leasehold Mortgagee.
(k) Lessee agrees that it shall obtain from any Leasehold Mortgagee an agreement to the effect (i ) that such Leasehold Mortgagee shall notify Lessor of any default by Lessee under the Leasehold Mortgage in favor of such Leasehold Mortgagee at the time that the Leasehold Mortgagee serves upon Lessee any notice of such default required by law, (ii) that Lessor shall have the right, but not the obligation, to cure any default under such Leasehold Mortgagee on Lessee’s behalf within the time permitted by law for Lessee to cure such default, and (iii) that if Lessor recovers possession of the Demised Premis es by reason of a default by Lessee under this Lease as provided in Article XIII, such Leasehold Mortgagee shall not take any action to foreclose upon its Leasehold Mortgage so long as Lessor shall cure any default thereunder Resolution No. 2024-168
Exhibit "A"
400
Item19.
18 within the time permitted by law for Lessee to cure such default and shall thereafter timely satisfy the obligations of Lessee under such Leasehold Mortgage as they accrue.
11.3 Mortgage. As used in this Lease, all references to a “mortgage” shall be deemed to include a deed of trust and an assignment of this Lease in an assignment and leaseback transaction, and all references to the “holder(s)” of a mortgage or to a “mortgagee” shall be deemed to include the beneficiary and/or trustee under a deed of trust and the assignee/sublessor in an a ssignment and leaseback transaction.
11.4 Loss Payable Endorsement. Lessor agrees that the name of any mortgagee may be added to the “Loss Payable Endorsement” of any and all insurance policies required to be carried by Lessee hereunder, and that, subject to the terms of the REA, all insurance and/or condemnation proceeds to which Lessee may be entitled hereunder for purposes of restoration of the Improvements on the Demised Premises may be made available jointly to the Lessee and such mortgagee.
ARTICLE XII
EASEMENTS
Lessor covenants and agrees as to its fee interest in the Demised Premises that it will execute any instruments which may be reasonably requested by Lessee in connection with the granting of easements for installation, maintenance and repair and replacement o f Utilities, or which may be provided for pursuant to the REA.
Neither Lessor or Lessee shall grant or otherwise convey any type of easement or easements affecting the Demised Premises or the Shopping Center Site for the benefit of any property not within the Shopping Center Site.
ARTICLE XIII
DEFAULT
13.1 Performance by Lessor on Lessee’s Default . In the event that Lessee shall fail or neglect to do or perform any act or thing herein provided for it to be done or performed, and Lessee shall not have commenced to perform within forty-five (45) days after receipt by Lessee of written notice from Lessor specifying the nature of the act or thing to be done or performed, and thereafter complete performance with due diligence, then Lessor may, but shall not be required to, do or perform or cause to be done or performed such act or thing (entering upon the Demised Premises for such purposes, if Lessor shall so elect), and Lessee shall repay as additional rent to Lessor upon demand, the entire cost and expense thereof. Any act or thing done by Lessor, pursuant to the provisions of this paragraph shall not be , or be construed as, a waiver of any covenant, term or condition herein contained, or of the performance thereof.
13.2 Event of Default . Any of the following shall constitute an event of default (hereinafter called “Event of Default”) on the part of Lessee:
Resolution No. 2024-168
Exhibit "A"
401
Item19.
19 (i) The failure to pay the rent set forth herein, subject to the following condition: In the event Lessee fails to pay the rent herein reserved, or any part thereof, within the time periods provided herein, Lessor shall provide Lessee written notice of such default. In the event Lessee has not cured such default within fifteen (15) days following the receipt by Lessee of such notice, Lessor shall deliver to Lessee a second notice of such default. In the event Lessee has not cured such default within fifteen (15) days following receipt of such second notice from Lessor, such failure shall constitute an Event of Default hereunder. (ii) The failure, for a period of more than forty -five (45) days after Lessee’s receipt of notice from Lessor, to do, observe, keep and perform any of the terms, covenants, conditions, agreements and provisions of this Lease which Lessee is required to observe, keep or perform, subject to the provisions of Section 28.4. (iii) The abandonment of the Demised Premises by Lessee. (iv) The adjudication of Lessee as bankrupt, the filing of any involuntary petition in bankruptcy against Lessee which is not withdrawn or otherwise disposed of in favor of Lessee within one hundred twenty (120) days, the filing of a voluntary petition in bankruptcy, or for reorganization or arrangement, by Lessee, or if Lessee shall make a general assignment for the benefit of creditors or voluntarily take the benefit of or claim to be insolvent under any of the provisions of the Bankruptcy Act, or the appointment of a permanent receiv er or trustee for Lessee or Lessee’s property, or if a temporary receiver or trustee of Lessee or Lessee’s property shall be appointed and such permanent or temporary receiver or trustee shall not be discharged within one hundred twenty (120) days from the date of appointment.
For the purposes of Subparagraph (ii) of this Section 13.2, if the default complained of be a default other than one which may be cured by the payment of money, no Event of Default on the part of Lessee in the performance of work or a cts to be done or conditions to be met shall be deemed to exist if steps to cure the same shall have been commenced by Lessee within forty -five (45) days after receipt by Lessee of written notice from Lessor, which notice shall set forth the nature of such default, and shall be prosecuted to completion, with due diligence and continuity.
Notwithstanding the foregoing, Lessee shall be excused from failure to perform any term, covenant, condition or agreement under this Lease during the time and to the extent such performance or delay is excused pursuant to Section 13.6 hereof or the terms of the REA.
13.3 Remedies of Lessor. Lessor shall have the right, following the earlier to occur of (A) any future Event of Default under Section 13.2(i), or (B) any subsequent D efault Condition, which subsequent Default Condition results from an Event of Default under Section 13.2(ii), (iii) or (iv), and subject to the rights of a mortgagee pursuant to Article XI, to terminate this Lease in the manner provided by law as of a date specified in the notice to Lessee, which date shall not be less than sixty (60) days after the date of serving such notice, except in the case of a breach for non-payment of rent under the provisions of Section 13.2(i), in which of event such date of termination shall be not less than thirty (30) days after the expiration of any notice given under said Subparagraph (i) (unless, in either event such default is cured or such final damage judgment Resolution No. 2024-168
Exhibit "A"
402
Item19.
20 is satisfied by Lessee, as the case may be, prior to such date ). In the event such termination shall occur, Lessor shall have the right to eject all parties in possession thereof therefrom and repossess and enjoy the Demised Premises together with all additions, alterations, and improvements thereto, and Lessor shall thereupon be entitled to recover from Lessee the worth at the time of such termination, of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease for the balance of the term over the greater of (i) the then reasonable or obtainable rental value of the Demised Premises for the same period, or (ii) the amount of rent actually received by Lessor for the same period from the lease of the Demised Premises to a third person.
The remedies of Lessor as hereinabove provided are in addition to, and not exclusive of any other remedy of Lessor herein given or which may be permitted by law. Any re -entry, as provided for herein, shall be allowed by Lessee without hindrance, and Lessor shall not, except for Lessor’s negligence or w illful misconduct, be liable in damages or guilty of trespass because of any such re-entry.
13.4 Waiver. If either party fails or neglects, for any reason, to take advantage of any of the terms hereof providing for the termination of this Lease or the declarati on of any default by the other party, or if either party having the right to declare this Lease terminated or the estate hereby demised terminated or forfeited or to exercise any other default remedy, shall fail so to exercise same, any such failure or neglect shall not be or be deemed to be construed to be a waiver of any cause for the termination or forfeiture of the estate hereby demised or other default subsequently arising, or as a waiver of any of the covenants, terms or conditions of this Lease or of the performance thereof. None of the covenants, terms or conditions of this Lease can be waived except by the written consent of Lessor or Lessee, as applicable.
13.5 Remedies of Lessee . If Lessor shall fail to perform any of the terms, provisions, covenants or conditions to be performed or complied with by Lessor pursuant to this Lease, or if Lessor should fail to make any payment which Lessor agrees to make, and any such failure shall remain uncured for a period of thirty (30) days after Lessee shall have ser ved upon Lessor notice of such failure, then Lessee may at Lessee’s option, at any time prior to commencement of Lessor’s acting to cure such failure and thereafter if Lessor fails to diligently perform the curing of such failure, perform any such term, provision, covenant or condition or to make any such payment, as Lessor’s agent, and in Lessee’s sole discretion as to the necessity therefor, and Lessee shall not be liable or responsible for any loss or damage resulting to Lessor or anyone holding under Lessor on account thereof. The full amount of the cost and expense entailed, or payment so made shall immediately be owing and payable by Lessor to Lessee, and Lessee shall have the right to deduct the amount thereof, together with interest at the maximum le gal rate thereon from the date of payment, without liability or forfeiture, from rents then due or thereafter coming due hereunder, and irrespective of who may own or have any interest in the Demised Premises at the time such deductions are made. The option given in this Section 13.5 is for the sole protection of Lessee, and its existence shall not release Lessor from the obligation to perform the term, provisions, covenants and conditions herein provided to be performed by Lessor or deprive Lessee of any r ights or remedies at law or in equity which Lessee may have by reason of any such default by Lessor.
13.6 Delays in Performance. The time within which either party hereto shall be required to perform any act under this Lease, other than the payment of money, sh all be extended by a period of time equal to the number of days during which performance of such act is delayed due Resolution No. 2024-168
Exhibit "A"
403
Item19.
21 to an event of Force Majeure as defined in Section 28.4. Unless the party entitled to such extension shall give notice to the other party hereto of its claim to such extension and the nature thereof with five (5) days after the event of Force Majeure giving rise to such claim shall have occurred, there shall be excluded in computing the number of days by which the time for performance of the a ct in question shall be extended, the number of days in excess of five (5) which shall have elapsed between the occurrence of such event of Force Majeure and the actual giving of such notice.
ARTICLE XIV
ATTORNEYS’ FEES
If any action or suit is instituted by either party against the other to enforce the provisions of this Lease, the prevailing party in said action or suit shall be entitled to receive from the other party, court costs incurred in such action and reasonable attorneys’ fees in an amount determined by the court.
ARTICLE XV
NOTICES
Any and all notices by the Lessor to the Lessee, or by the Lessee to the Lessor, shall be in writing and sent by registered or certified mail, return receipt requested, postage prepaid, addressed to the respective addresses below stated:
in the case of Lessor to: CITY OF ESCONDIDO
201 N. Broadway
Escondido, California 92025
Attention: City Attorney
with a copy to: CITY OF ESCONDIDO
201 N. Broadway
Escondido, California 92025
Attention: City Manager
in the case of Lessee to: R1 Escondido Investment
c/o: Larry Green
100 N Crescent Drive
Suite 325
Beverly Hills, CA 90210
Attention: Managing Director
with a copy to: Charlie Hollingsworth
26901 Agoura Road
Suite 180
Resolution No. 2024-168
Exhibit "A"
404
Item19.
22 Calabasas, CA 91301
Attention: R1 Escondido Investment
The foregoing parties may at any time change the address by notice to the other parties in writing.
Rent shall be payable by check sent by ordinary mail by Lessee to Lessor at the address set forth in Section 3.2 above, or any change thereof pursuant to this paragraph.
Notwithstanding any of the foregoing, the date of receipt shall be the third (3rd) day after transmission and shall constitute the initial day of notice in computing the elapsed time as specified in any notice requirement in this Lease if said notice is given in accordance with the above requirements. If notice is given in any other fashion, such notice shall be deemed effective only upon receipt by each of the above named recipients as to such party. In the event fee title to th e Property and all rights of Lessor under this Lease are transferred or conveyed to a third party, then if Lessor is not advised of such transfer, Lessee may continue to send all Notices to Lessor at the address set forth above (or, if applicable, such other address for Lessor set forth in a Notice given by Lessor to Lessee pursuant to this Article XV) or at the address for the owner of the Property on file with the governmental entity in charge of assessing real property taxes.
ARTICLE XVI
ESTOPPEL CERTIFICATE
Lessor and Lessee agree at any time and from time to time and within thirty (30) days after written request from the other party, to execute, acknowledge and deliver to the other party a statement in writing, stating that this Lease is unmodified and in full fo rce and effect (or if there have been modifications that the same is in full force and effect, as modified, and stating the modifications), and the dates to which the Fixed Rent and other charges have been paid in advance, if any, and whether or not there is any existing default or Event of Default in any of the requesting party’s obligations under the terms of this Lease, or notice of default served by the party requested to deliver such estoppel certificate. If any such statement shall allege non-performance by the other party, the nature and extent of such non-performance shall, insofar as actually known by the party providing such estoppel certificate, be summarized therein. Any such estoppel certificate to be delivered by Lessee shall be in the form att ached hereto as Exhibit D, and shall contain the following provision:
“This statement shall act as a waiver of any claim to the extent such claim is based on facts contrary to those asserted in this statement and to the extent said claim is asserted agains t a bona fide encumbrancer or purchaser for value, without knowledge of facts to the contrary to those contained in this statement. This statement shall in no event subject the undersigned to any liability whatsoever, notwithstanding the negligent or other wise inadvertent failure of the undersigned to disclose correct and/or relevant information.”
Resolution No. 2024-168
Exhibit "A"
405
Item19.
23 ARTICLE XVII
QUIET POSSESSION
Lessor covenants that it has full power and authority to enter into this lease transaction, and to grant the leasehold estate for the period pr ovided in this Lease, and that Lessee and its successors and assigns shall and may at all times peaceably and quietly have, hold, occupy and enjoy the Demised Premises during the Term of this Lease, free from any hindrance or encumbrance by Lessor, or any person or persons claiming through or under the Lessor; provided, however, that nothing contained in this Article XVII shall impair in any manner the ability of Lessor to avail itself of the remedies of Lessor following a breach of the terms of this Lease by Lessee, as set forth in Article XIII.
ARTICLE XVIII
TITLE TO IMPROVEMENTS
It is agreed between Lessor and Lessee that during the term of this Lease, all Improvements to be erected, attached, or used in connection with the Demised Premises shall be deemed the property of Lessee, but upon termination of this Lease, either by expiration of its term or otherwise, the Improvements then located on the Demised Premises shall become the property of Lessor. On the date of such termination, Lessee shall surrender to Lessor the Demised Premises and any such Improvements located thereon , and the Demised Premises shall be surrendered in a working condition, with all fixtures, furniture and equipment removed, leaving an open floor plan with the exception of escalators and elevators. The Demised Premises shall be free and clear of all financing encumbrances created by Lessee. During the term of this Lease, Lessee alone shall be entitled to depreciation and all tax credits relating to the Improvements located on the Demised Premises.
On or before the date of such termination, any furniture, furnishings, trade fixtures, fixtures or business equipment on the Demised Premises may be removed by Lessee where furnished by or at the expense of Lessee or Lessee’s subtenant.
ARTICLE XIX
ALTERATIONS AND ADDITIONS
19.1 Subject to the REA, Lessee shall have the right at its expense from time to time to make alterations or additions to the Improvements to be situated on the Demised Premises. Lessee shall give Lessor prior written notice of any such alterations or additions under circumstances which would require notice under Article X hereof. Upon termination of the Lessee’s leasehold estate, such alterations or additions, if any, then remaining on the Demised Premises, shall be considered as Improvements and shall not be removed by the Lessee but shall become a part of the Demised Premises. Any such work shall be performed and done strictly in accordance with the laws and ordinances relating thereto and in compliance with the REA.
19.2 Insurance for Alterations. During the period of construction of any such alteration or addition in, to or of the Improvements located on the Demised Premises, Lessee shall maintain Resolution No. 2024-168
Exhibit "A"
406
Item19.
24 or cause to be maintained the insurance called for in Article VIII hereof, subject to the provisions of Section 8.7.
ARTICLE XX
TRANSFERS, ASSIGNMENT AND SUBLETTING
20.1 Transfers Generally.
(a) Definition of "Transfer". For the purposes of this Lease a "Transfer" shall mean any assignment or transfer of Lessee's interest in this Lease or any of Lessee's rights or obligations hereunder, by Lessee's action, by operation of law or otherwise, or any subletting of, the Premises or any portion thereof, or any franchise, concession, license or other occupancy agreement, or the grant of any franchise, concession, license or other occupancy rights with respect to the Demised Premises or any portion thereof. A "Transfer" shall include the issuance, assignment, transfer or other disposition of any direct or indirect equity interest in Lessee (whether stock, partnership interests, interests in a limited liability company or otherwise) to any Person or group of related Persons, whether in a single transaction or a series of related or unrelated transactions, in such quantities that after such issuance, assignment, transfer or other disposition "control" of Lessee directly or indirectly, shall have changed, sha ll be deemed a Transfer ("control" shall mean the ability to control or direct the business decisions of Lessee); provided, however, the provisions of this sentence shall not apply to any such equity transfer if with respect to the rights of Lessee’s Mortgagee pursuant to a Leasehold Mortgage.
(b) Transfer by Lessee. Except as otherwise provided herein, Lessee shall not, without the prior written consent of Lessor, enter any Transfer with any entity that is not a Qualified Transferee; provided the foregoing shall not be deemed to prohibit Lessee Affiliate Transfers, any Lessee Foreclosure Transfer or any Leasehold Sublessee Leases. (i) A “Qualified Transferee” means a transferee reasonably approved in writing by Lessor. The parties acknowledge that , in determining whether to approve or disapprove a proposed Transferee, Lessor shall limit its consideration to the operating experience of the proposed Transferee, and the financial capability of the proposed Transferee. A proposed Transferee that has a net worth determined in accordance with generally accepted accounting principles equal to or greater than the net worth of Lessee, determined in accordance with generally accepted accounting principles as of the date of any Transfer shall be deemed to hav e sufficient financial capability. The proposed transferee's operating experience may be satisfied by the transferee retaining a property manager that is experienced in managing projects similar to the Shopping Center; provided, however, a transfer to the Developer, as defined in the REA, shall be deemed a Qualified Transferee.
(ii) A “Lease Affiliate Transfer” is a sale or transfer or other conveyance of Lessee's interest under this Lease by Lessee to any Related Entity. A “Related Entity, is a person or entity that controls, is controlled by, or is under common control with, such person or entity, and "control" (and its correlative meanings, "controlled by" and "under Resolution No. 2024-168
Exhibit "A"
407
Item19.
25 common control with") for purposes of the term Related Entity, shall mean (i) the direct or indirect ownership of more than twenty percent (20%) of the outstanding voting capital stock of any other entity which is a corporation or more than twenty percent (20%) of the beneficial interest of any other entity, or (ii) the possession of the power to direct or cause the direction of the day to day operations and affairs of such other entity in the capacity of general partner, manager or managing member, or otherwise (it being agreed and acknowledged that a party may be deemed to control an entit y even though another party has the right to approve or consent to certain decisions or actions of such entity). (iii) A "Lessee Foreclosure Transfer" means any transfer to a Leasehold Mortgagee, or any entity designated by a Leasehold Mortgagee or any ot her purchaser pursuant to a foreclosure, deed in lieu of foreclosure, settlement agreement, or other transfer in full or partial satisfaction of debt, and any subsequent transfer made by a Leasehold Mortgagee or any such designee or purchaser.
(c) Leasehold Subleases. Lessee may sublet all or any part of the Demised Premises (including, without limitation, subleases and sub-subleases of portions of the Demised Premises), provided that each such sublease shall be subject to the provisions of this Lease and the REA.
No sublease shall release or reduce any of the obligations of Lessee hereunder, and all such obligations shall continue in full effect as obligations of a principal and not as obligations of a guarantor or surety, to the same extent as though no subletting had been made. Lessee shall ensure that every subletting hereunder is subject to the express condition, that by accepting a sublease hereunder of all or any portion of the Demised Premises each sublessee shall be conclusively deemed to have agreed, that if this Lease should be terminated prior to the scheduled expiration of the Term or if Lessor should succeed to Lessee's estate in the Demised Premises, then unless otherwise agreed in an NDA, the Leasehold Sublessee shall, at the option of Lessor, attorn to and recognize Lessor as the Leasehold Sublessee's Lessor under the Leasehold Sublessee Lease, provided that Lessor shall not (i) be liable for any act or omission or negligence of Lessee under such sublease, (ii) be subject to any countercla im, offset or defense which theretofore accrued to such sublessee against Lessee, (iii) be bound by any payment of Rent for more than one (1) month in advance, (iv) be bound by any obligations which Lessor lacks the legal capacity or reasonable ability to perform.
Within fifteen (15) days after request by Lessee and provided that Lessor shall have been provided with a full copy of any Lease as to which subordination is requested, Lessor shall (i) execute a Non -disturbance and Attornment Agreement in the f orm of Exhibit C, with such commercially reasonable revisions as may be requested by a Leasehold Sublessee ("NDA").
20.2 Documentation. Lessee shall promptly submit to Lessor such documentation as Lessor may reasonably request with respect to any Transf er hereunder (other than a Leasehold Sublessee Transfer) in order to ascertain the identity of the transferee and whether such Transfer complies with the requirements of this Lease.
20.3 Transfers Void. Any Transfer by Lessee in contravention of this Ar ticle 15 shall be void and of no effect.
Resolution No. 2024-168
Exhibit "A"
408
Item19.
26 20.4 Assignment and Subleasing Requirements. Within twenty (20) days after any assignment of this Lease, Lessee shall give Lessor a fully executed copy of the assignment documentation. Any Leasehold Sublessee Leas e shall specifically provide that the Leasehold Sublessee Lease will be subject and subordinate to this Lease and to all matters to which this Lease is subject and subordinate.
20.5 Assignee Obligated. Each and every assignee of this Lease, whether as assignee or as successor in interest to Lessee named herein or any subsequent assignee, including any purchaser of this Lease upon a foreclosure of any Leasehold Mortgage or other lien on this Lease, shall, in the case of an assignee of the Lease, immediate ly be and become and remain liable, for the payment of the Rent and other sums payable under this Lease, and for the due performance of all of Lessee's obligations under this Lease, in each case to the extent arising from and after the effective date of su ch assignment and continuing thereafter during the period of such assignee's ownership of the Leasehold Estate. No Transfer to such assignee or to such purchaser shall be binding upon Lessor unless such assignee or purchaser shall deliver to Lessor a reco rdable instrument which contains a covenant of assumption by said assignee or purchaser to such effect, but the failure or refusal of such assignee or purchaser to deliver such instrument shall not release or discharge such assignee or purchaser from its o bligations as above set forth. Upon Lessee's assignment of this Lease and the assignee's assumption as provided above, Lessee shall be released from all obligations hereunder first arising from and after the effective date of such assignment.
ARTICLE XXI
CONDEMNATION
21.1 Definitions. Whenever used in this Article, the following words shall have the following respective meanings:
(i) “Condemnation” or “condemnation proceedings ” shall mean any action or proceeding brought by authority of competent jurisdiction for the purpose of any Taking of the Demised Premises or any part thereof as a result of the exercise of the power of eminent domain, including a voluntary sale to such authority either under threat of or in lieu of condemnation or while such action or proceeding is pending.
(ii) “Taking” shall mean the delivery of possession of the Demised Premises or any part thereof to the authority of competent jurisdiction pursuant to condemnation.
(iii) “Vesting Date” shall mean the date of the Taking.
21.2 Total Taking. In case of a Taking of all of the Demised Premises, this Lease shall terminate as of the Vesting Date and the rent under this Lease shall abate as of, and be apportioned to the date of termination.
21.3 Partial Taking. In case of a Taking of less than all of the Demised Premises (other than for a temporary use) Lessee shall determine, in its discretion, prior to or within one hundred Resolution No. 2024-168
Exhibit "A"
409
Item19.
27 eighty (180) days after the Vesting Date, whether the remaining portion of the Demised Premises (after Restoration as referred to in Section 21.5) can economically and feasibly be used by Lessee.
If it is determined by Lessee that the remaining portion of the Demised Premises cannot be economically and feasibly used by Lessee, Lessee, at its election, may terminate this Lease on at least ten (10) days but not more than one hundred eighty (180) days notice to Lessor to such effect provided that such election to terminate is exercised prior to the earlier to occur o f (i) thirty (30) days after such determination, or (ii) two hundred ten (210) days following such Taking. Upon any such termination, Lessee shall have no obligation to repair or restore any improvement located on the Demised Premises, and the rent shall be apportioned to the date of termination.
If Lessee does not elect to terminate this Lease within the period aforementioned, it shall continue in full force and effect as to the remaining portion of the Demised Premises subject to a reduction in the rent as provided in Section 21.6.
21.4 Allocation of Award; Total Taking . If this Lease shall terminate, pursuant to the provisions of Sections 21.2 or 21.3, the total award in the condemnation proceedings shall be apportioned and paid, to the extent available, in the following order of priority:
(i) The Lessee’s Mortgagee and/or Leasehold Mortgagee, if any, shall first be entitled to have its mortgage loan satisfied, including such unpaid principal and accrued interest which is not past due and any pre-payment premium or penalty. (ii) Lessor, Lessee and the Lessee’s Mortgagee and/or Leasehold Mortgagee shall next be entitled to their expenses and charges, including, without limitation, reasonable attorneys’ fees incurred in connection with the Taking. (iii) Lessor shall be entitled to an amount equal to the value, on the Vesting Date, of the land taken as if vacant and unimproved and without this Lease, after the payment to Lessee from the proceeds of such award of the value of Lessee’s leasehold interest in the land constit uting the Demised Premises, determined with reference to the unexpired portion of the Term of this Lease, including all option periods, whether or not exercised. If the condemnation award separately specifies the amount allocable to Lessor and Lessee, as above described, then such amount shall govern and be deemed the value thereof; otherwise, Lessor and Lessee shall agree upon such value and if they cannot agree, it shall be determined by arbitration under the provisions of Article XXIII. (iv) The balance of the award shall be paid over to Lessee less, however, the value of Lessor’s reversionary interest in the Improvements located on the Demised Premises, which shall be paid over to Lessor, such reversionary interest being determined with reference to the remaining Term of this Lease.
21.5 Allocation of Award; Partial Taking. If this Lease shall not terminate as provided in Section 21.3, it is agreed that Lessee’s obligation to restore hereunder shall be determined only to the extent of Lessee’s obligation to restore pursuant to the REA.
Resolution No. 2024-168
Exhibit "A"
410
Item19.
28 The total award in the condemnation proceedings, in the event of such partial taking, shall be apportioned and paid, to the extent available, in the following order of priority:
(i) Lessee shall first be entitled to an amount equal to t he cost of Restoration.
(ii) Lessor, Lessee and any Lessee’s Mortgagee and/or Leasehold Mortgagee shall next be entitled to their expenses and charges, including, without limitation, reasonable attorneys’ fees incurred in connection with the Taking. (iii) Lessor shal l be entitled to an amount equal to the value, on the Vesting Date, of the land taken as if vacant and unimproved and without this Lease, after the payment to Lessee from the proceeds of such award of the value of Lessee’s leasehold interest in the land which is taken, determined with reference to the unexpired portion of the Term of this Lease, including all option periods, whether or not exercised. If the condemnation award separately specifies the amount allocable to Lessor and Lessee, as above described, then such amount shall govern and be deemed the value thereof.
(iv) Lessee, subject to the rights of any Lessee’s Mortgagee and/or Leasehold Mortgagee, shall be entitled to the balance of the award, less, however, the value of Lessor’s reversionary interest i n the Improvements located on that portion of the Demised Premises as taken and not restored, which shall be paid over to Lessor, such reversionary interest being determined with reference to the remaining Term of this Lease.
21.6 Rent Reduction. Upon any Takin g which does not result in a termination of this Lease, the Fixed Rent payable by Lessee under this Lease immediately prior to the Taking shall be reduced in the proportion that the amount of land taken bears to the Demised Premises.
21.7 Temporary Taking. In the event of a Taking of all or any portion of the Demised Premises for temporary use (which shall mean a period of ninety [90] days or less), the foregoing provisions of this Article, except Section 21.6, shall be inapplicable thereto, this Lease shall continue in full force and effect and Lessee shall be entitled to make claim for, recover and retain any award recoverable in respect of such temporary use whether in the form of rental or otherwise.
If the award is made in a lump sum covering a period beyond the expiration of the Lease Term, Lessor also shall be entitled to make claim for and participate in the award proportionately.
If any portion of the award for such temporary use is intended to cover the cost of restoring the Improvements located on the D emised Premises to the condition they were in prior to such temporary use or to make repairs occasioned by or resulting from such temporary use, such portion shall be used by Lessee to cover the cost of such restoration and repair, and any balance remaining shall belong to and be paid to Lessee. Lessee shall have no obligation to restore or repair except as provided in the REA, and Lessee’s right to receive a portion of the award, as above provided, shall not be affected thereby.
In the event of a Taking of all or any portion of the Demised Premises for temporary use which is for a period longer than ninety (90) days, Lessee shall have the right to terminate this Resolution No. 2024-168
Exhibit "A"
411
Item19.
29 Lease, which option must be exercised by Lessee giving written notice thereof to Lessor within said ninety (90) day period. If said right to terminate is so exercised by Lessee, any award recoverable in respect of such temporary use as to the Demised Premises shall be allocated between Lessor and Lessee as if it was a Taking under Section 21.4. In th e event said right to terminate is not exercised by Lessee within the aforesaid time period, then the provisions of this Section 21.7 shall apply.
21.8 Settlement. Without the consent of Lessee and Lessee’s Mortgagee and/or Leasehold Mortgagee, Lessor shall not make any settlement with the condemning authority or convey any portion of the Demised Premises to such authority in lieu of condemnation or consent to any Taking.
21.9 Application of REA. In the event the Demised Premises, or any part thereof, shall be taken in condemnation proceedings or by exercise of any right of eminent domain or by agreement between Lessor, Lessee and those authorized to exercise such right, and if at such time the REA has not terminated or expired as to the Demised Premises, then, as bet ween the REA parties, the provisions of the REA shall control the collection, application and distribution of awards resulting from a Taking of all or a portion of the Shopping Center, and as between Lessor and Lessee, the Lease shall control the collection, application and/or distribution of that portion of the award which Lessor or Lessee is entitled to receive as a result of a Taking. Any provision herein to the contrary notwithstanding, if at the time of any such Taking the REA is no longer in force or effect, or if as a result of such Taking the REA is terminated, or the REA is terminated as to the Demised Premises, Lessee may, at its election, terminate this Lease by giving Lessor at least thirty (30) days prior written notice of its intention to do so. In such event, the foregoing provisions of Section 21.4 shall control said collection, application and/or distribution of awards resulting from such Taking.
ARTICLE XXII
DESTRUCTION AND RESTORATION
22.1 Obligations of Lessee. Except as hereinafter otherwise provided and subject to the provisions of Section 22.3 hereof In the event of damage to or destruction of the Improvements located on the Demised Premises, or any part thereof, Lessee, at Lessee’s sole cost and expense shall, but only to the extent required by, and under the terms and conditions of, the REA, restore, and/or rebuild the same as and to the extent required of Lessee under the REA. Such restoration, and/or rebuilding shall be commenced and prosecuted with due diligence and shall be accomplished at the standard established in the REA.
22.2 Destruction Not A Release . Except as expressly provided in Section 22.3 hereof, no destruction of, or damage to the Improvements located on the Demised Premises or any part thereof by fire or any other cause shall permit Lessee to surrender this Lease or shall relieve Lessee from its obligation to pay the full rent under this Lease or from any of its other obligations under this Lease, and Lessee waives any rights now or hereafter conferred upon it by statute or otherwise to quit or surrender this Lease or the Demised Premises or any suspension, diminution, abatement or reduction of rent on account of any such destruction or damage.
Resolution No. 2024-168
Exhibit "A"
412
Item19.
30 22.3 Termination of Lease . In the event the Improvements located on the Demised Premises shall be sub stantially damaged or destroyed (as defined in this Section 22.3) by fire or any other cause whatsoever, or such damage or destruction shall materially impair the usefulness of the Demised Premises, in the opinion of Lessee, and if pursuant to the REA Less ee is not required to restore Improvements located on the Demised Premises, Lessee shall have the right to terminate this Lease at any time within one (1) year from the date of such damage or destruction, such termination to be effective upon at least thirty (30) days prior notice to Lessor. If Lessee elects to terminate the Lease, Lessee shall, at Lessor’s request, raze the Improvements or portion thereof so damaged. If Lessee does not so terminate, or if such damage or destruction is not substantial, Lessee will construct such Improvements as Lessee shall deem appropriate so long as the usage for which such construction is undertaken is not prohibited by the REA. If Lessee elects not to terminate the Lease and not to so repair or reconstruct alternative Improvements, Lessee shall, at Lessor’s request, raze the damaged Improvements and remove all debris from the Demised Premises in accordance with Section 12.7 of the REA. Lessee may exercise its option to terminate this Lease under this Section 22.3 by serving such notice upon Lessor, without any liability on the part of Lessee to Lessor except for the payment of the Fixed Rent and all additional sums required to be paid by Lessee under the terms of this Lease up to the date of such termination and performance by Lessee of the razing and removal of debris obligations of Lessee above set forth in this Section 22.3. Any insurance proceeds Lessee shall receive as a result of such damage or destruction shall belong to Lessee.
For the purposes of this Section 22.3 the Improvements which constitutes a single architectural unit shall be deemed substantially damaged or destroyed if the estimated cost of restoring the Improvements as nearly as possible to their value, condition and character immediately prior to su ch damage or destruction is twenty -five percent (25%) or more of the estimated total replacement cost of the Improvements. The foregoing paragraph is subject to the terms and conditions of the REA.
22.4 Application of REA. So long as the REA is in full force and effect as to the Demised Premises, the reconstruction obligations hereunder shall be performed in compliance with and pursuant to the reconstruction provisions of the REA. Upon termination of the REA and the election by Lessee not to terminate this Lease, said REA provisions governing the manner in which repair or reconstruction is performed shall, for the remaining term of this Lease, continue as if incorporated herein and made a part hereof.
ARTICLE XXIII
ARBITRATION
If there should be any difference or dispute between the parties hereto, which this Lease provides shall be arbitrated, such difference or dispute shall be submitted to arbitration, which arbitration shall be conducted as follows:
Either party may serve a written notice upon the other party specifying the difference or dispute and demanding that it be submitted to arbitration. Within twenty (20) days after the service of such notice and demand, each of the parties hereto shall appoint an arbitrator and notify the other party in writing, within said period, of the name of its arbitrator, together with the written Resolution No. 2024-168
Exhibit "A"
413
Item19.
31 acceptance of such arbitrator. If either party fails within the specified time to appoint its arbitrator, such arbitrator shall be appointed in the same manner and upon like notice as is hereinafter provided for the appointment of a third arbitrator. If the said two arbitrators appointed by the parties hereto shall fail to agree upon a decision within thirty (30) days after the appointment of the latter of said two arbitrators, they shall thereupon, not later than ten (10) days thereafter, appoint a third arbitrator, and in default of such appointment, either party hereto, upon two (2) days written notice to the other may make application on behalf of both to the Presiding Judge of the San Diego County Superior Court, California, for the nomination of the third arbitrator; and the person so nominated by said court shall be the third arbitrator. Neither party shall raise any question as to the said court's full power and jurisdiction to entertain the application and make the appointment. In case a vacancy in the office of any arbitrator so appointed, shall occur by reason of death, resignation, refusal, physical incapacity or otherwise, a new arbitrator to fill such vacancy shall be appointed in the same manner and by the same party as the previous incumbent was appointed. The mutual decision, under oath, of any two of aid arbitrators shall be final and binding upon the parties hereto. Each party shall pay half the expense of such arbitration. The arbitrators shall be governed wholly by the terms of this Lease and shall have no power to add to or change its terms. The arbitrators shall have no power to award damages or costs for or against any party when rendering the decision.
ARTICLE XXIV
RIGHT OF FIRST REFUSAL
24.1 Receipt of Offer. In the event Lessor shall at any time during the Term of this Lease receive from any Person an offer to purchase all or any portion of Lessor’s fee interest in the Demised Premises which offer Lessor desires to accept, Lessor shall give to Lessee written notice of the price and a copy of the document containing the terms and conditions of such offer, and of Lessor’s willingness to sell for such price and on such terms and conditions, and Lessee shall have the option and privilege of purchasing such property for said price and upon the terms of such offer, so long as said purchase is not in conflict with the Surplus Land Act (Gov. Code §§ 54220- 54234). Notwithstanding a ny other provision in this Article, all parties shall comply with all applicable provisions of the Surplus Land Act. Lessee shall notify Lessor in writing, within thirty (30) days of receipt of notice from Lessor, whether or not it desires to accept the te rms of such offer of sale. Should Lessee accept said offer, Lessor shall convey such property to Lessee in accordance with the offer terms. Failure to send such notification within said thirty (30) day period shall constitute an election by the Lessee to reject the offer.
24.2 Right to Sell to Offeror. In the event Lessee shall reject said offer to purchase upon such terms and conditions, or shall fail to send Lessor written notice within said period of thirty (30) days of its election to purchase said interest upon the price and terms specified in said offer, Lessor may thereafter sell its fee interest or portion thereof to the Person making the offer, only at the price and on the terms stated in the offer. Any variation in said price, and/or terms and conditions shall require a new notice from Lessor to Lessee setting forth all of the changes to said price, terms and/or conditions and Lessee shall have an additional thirty (30) day period to accept said offer on such new or different price, terms and conditions. In the event Lessor does not enter Resolution No. 2024-168
Exhibit "A"
414
Item19.
32 into a binding agreement for the sale of such interest to such Person at the price and on the terms stated in the offer within thirty (30) days after the earlier to occur of (i) rejection of same by Lessee, or (ii) in th e event Lessee fails so to notify Lessor of its election to purchase said interest, the expiration of the applicable thirty (30) day period set forth above, or if the sale is not consummated, Lessor shall not sell its interest without a new notice to Lesse e in accordance with this Article XXIV, and Lessor shall give Lessee notice in writing of any subsequent proposal to sell Lessor’s interest or offer acceptable to Lessor, and Lessee shall have the right of first refusal to purchase such interest upon the p rice and terms of such subsequent proposal or offer, in the same manner as hereinabove provided for the original offer.
ARTICLE XXV
REA
This Lease and Lessor’s interest in the Demised Premises shall be subject to the REA, and in the event of any conflict between the provisions of this Lease and the provisions of the REA while both documents are in full force and effect, the provisions of the REA shall control, except as between Lessor and Lessee, in which event the provisions of this Lease shall control. In addition to the rights of Lessee set forth in Sections 21.9 and 22.3, Lessee shall have the right to terminate this Lease upon ninety (90) days written notice to Lessor given within one hundred eighty (180) days after the REA shall expire or terminate as to the Nordstrom Tract (as such term is defined in the REA, and as may be amended).
ARTICLE XXVI
INTENTIONALLY OMITTED
ARTICLE XXVII
INDEMNIFICATION BY LESSEE
Lessee agrees to indemnify, defend and save harmless Lessor against and from any and all claims by or on behalf of any Person arising from conduct or management of or from any work or thing done in the Demised Premises and will further indemnify, defend and save Lessor harmless against and from any and all claims by or on behalf of any Person arising during the Term of this Lease from any condition of any Improvements located thereon, or arising from any breach or default on the part of Lessee in the performance of any covenant or agreement on the part of Lessee to be performed pursuant to the terms of this Lease, or arising from any act of negligence of Lessee, or any of its agents, contractors, servants, employees, sublessees or licensees, or arising from any accident, injury or damage whatsoever caused to any person, firm or corporation occurring during the Term of this Lease, on th e Demised Premises, and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in or about any such claim, action or proceeding brought thereon, except to the extent any of the same shall result from the negligence or intentional wrongdoing of servants or employees.
Resolution No. 2024-168
Exhibit "A"
415
Item19.
33 ARTICLE XXVIII
MISCELLANEOUS
28.1 Successors and Assigns. Each of the terms, covenants and conditions of this Lease shall extend to and be binding on and inure to the benefit of not only Lessor and Lessee, but each of their respective successors, legal representatives and assigns. Whenever in this Lease reference is made to either Lessor or Lessee, the reference shall be deemed to include, wherever applicable, the successors, legal representatives and assigns, of such parties with the same force and effect as if in every case expressed.
28.2 Language. The words “Lessor” and “Lessee” wherever used herein shall be applicable to one or more persons as the case may be, and the singular shall include the plural, and the neuter shall include the masculine and feminine, and if there be more than one, the obligations hereof shall be joint and several. The word “person” wherever used shall include individuals, firms, partnerships, associations and corporations. The language in all parts of this Lease shall be in all cases construed as a whole and according to its fair meaning and not strictly for or against Lessor or Lessee.
28.3 Short Form Lease . The parties agree to execute and record a short form lease substantially in the form attached to this Lease as Exhibit E at any time on or after the Effective Date.
28.4 Force Majeure . Each party shall be exc used from performing any obligation or undertaking provided in this Lease, except any obligation to pay any sums of money under applicable provisions hereof unless such payment is for an obligation or undertaking excused, delayed or extended by the provisi ons of this Section 28.4, in the event but only so long as the performance of any such obligation or undertaking is prevented or delayed, retarded or hindered by act of God, fire, earthquake, floods, explosion, actions of the elements, war, invasion, insurrection, riot, mob violence, sabotage, inability to procure labor, equipment, facilities, materials or supplies in the open market, failure of transportation, strikes, lockouts, action of labor unions, condemnation, requisition, laws, orders of governmenta l or civil or military or naval authorities, any declared, actual, or threatened public emergency, including, without limitation, any public health emergency, epidemic, pandemic, infectio us disease outbreaks or health and safety circumstances that require individual isolation, quarantine or quarantine-like restrictions, or other methods of social distancing, or any other cause, whether similar or dissimilar to the foregoing, not within the respective control of such party (other than the lack or inability to procure monies to fulfill its commitments and obligations or undertakings provided in this Lease).
Notwithstanding any specific references in certain other provisions of this Lease to this Section 28.4, the absence of such specific reference in any other provisions of this Lease shall not be deemed to diminish the general applicability of this Section 28.4.
28.5 Correction of Legal Description of Demised Premises . It is recognized that by reason of construction errors, the Improvements located on the Demised P remises may not be precisely constructed within the Demised Premises as described in Exhibit A hereof. In the event the Improvements of Lessee have not been precisely constructed within the Demised Premises, Resolution No. 2024-168
Exhibit "A"
416
Item19.
34 Lessor and Lessee will join in the execution of an agreement, in recordable form, amending Exhibit A to this Lease, so as to revise the description of the Demised Premises to include any portion of the Improvements encroaching upon other land owned by Lessee, provided that if there is an encroachment onto a tract of land owned by Lessor and leased to a third party, Lessor shall arrange with such third party to join in said agreement amending Exhibit A. Nothing herein contained shall be deemed to relieve or excuse Lessee from exercising all due diligence to construct its Improvements within its Tract as described on Exhibit A hereof and as shown on Exhibit B hereof.
28.6 California Law to Govern . This Lease shall be construed and enforced in accordance with the laws of the State of California.
28.7 Counterparts. This instrument may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
28.8 Invalidity. If any term or provision of this Lease or the application thereof to an y person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby.
28.9 No Agency. It is understood and agreed that nothing contained in this Lease nor in any act of the parties hereto shall be deemed to create any relationship between the parties hereto other than the relationship of Lessor and Lessee.
28.10 Effect of Lessor’s Conveyance . If during the term of this Lease, Lessor shall sell its interest in the Demised Premises, then from and after the effective date of such sale, Lessor shall be released and discharged from any and all obligations and responsibilities under this Lease except those already accrued, provided that Lessor’s successor shall have delivered to Lessee a written instrument expressly assuming the obligations of Lessor hereunder for the benefit of Lessee.
28.11 Waste. Lessee shall not commit, or cause to be committed, any waste or nuisance, or other act or thing which may disturb the quiet enjoyment of any other tenant or occupant of the complex in which the Demised Premises are located.
ARTICLE XXIX
LOOP ROAD PARCEL
Developer under t he De veloper Lease (as defined in the REA) has a perpetual non - exclusive easement for a vehicular roadway over, on and across a portion of the Developer Tract shown on Exhibit B as “Loop Road Parcel”.
It is hereby agreed between Lessor and Lessee that so long as this Lease is in full force and effect, Lessee, its customers, employees, business visitors and invitees shall have access to and from the Demised Premises and the Loop Road Parcel including access points shown on Exhibit B as well as the use of the Loop Road Parcel for motor vehicle traffic from Via Rancho Parkway Resolution No. 2024-168
Exhibit "A"
417
Item19.
35 south of the Shopping Center Site to the new access road to Interstate 15 north of the Shopping Center Site.
Lessee’s access and use rights described in this Article XXIX shall become perpetual and non-exclusive upon Lessee’s exercise of the first right of refusal pursuant to and in accordance with Article XXIV and the grant of such perpetual and non -exclusive access and use rights shall be incorporated in the grant deed given by Lessor to Lessee under Article XXIV.
[Remainder of Page Intentionally Blank; Signatures Follow]
Resolution No. 2024-168
Exhibit "A"
418
Item19.
36 IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day, month and year first above written.
CITY OF ESCONDIDO
By:
Dane White
Its: Mayor
“LESSOR”
R1 ESCONDIDO INVESTMENTS, LLC
By:
Larry Green
Its: Manager
“LESSEE”
Resolution No. 2024-168
Exhibit "A"
419
Item19.
A-1
4871-1525-0000, v. 2
EXHIBIT A
LEGAL DESCRIPTION
Resolution No. 2024-168
Exhibit "A"
420
Item19.
B-1
4871-1525-0000, v. 2
EXHIBIT B
TRACT LINE PLOT PLAN OF SHOPPING CENTER
Resolution No. 2024-168
Exhibit "A"
421
Item19.
C-1
4871-1525-0000, v. 2
EXHIBIT C
PERMITTED TITLE EXCEPTIONS
Resolution No. 2024-168
Exhibit "A"
422
Item19.
D-1
4871-1525-0000, v. 2
EXHIBIT D
FORM OF LESSEE’S ESTOPPEL CERTIFICATE
The City of Escondido
201 N. Broadway
Escondido, California 92025
Re: North County Fair
Escondido, California
R1 Escondido Investment , LLC _a California corporation ________________ (“Lessee”) is the Lessee under that certain Ground Lease dated ______________ 2023 (the “Lease”), by and between the City of Escondido, California (“Lessor”) and Lessee. Lessee hereby states that, to the best of its knowledge, as of the date of this Estoppel Certificate:
(i) There is no default under the Lease nor has any notice of default been delivered by Lessee to Lessor;
(ii) There has not been any assignment, modification or amendment of the Lease (except by _________________________);
(iii) The Lease is in full force and effect; and
(iv) No Fixed Rent or other charges payable by Lessee to Lessor under the Lease have been paid in advance.
This statement shall act as a waiver of any claim to the extent such claim is based on facts contrary to those asserted in th is statement and to the extent said claim is asserted against a bona fide encumbrancer or purchaser for value, without knowledge of facts contrary to those contained in this statement. This statement shall in no event subject the undersigned to any liability whatsoever, notwithstanding the negligent or otherwise inadvertent failure of the undersigned to disclose correct and/or relevant information.
Dated: ________________________ R1 Escondido Investment , LLC a California corporation
By:_______________________________
Resolution No. 2024-168
Exhibit "A"
423
Item19.
1 EXHIBIT E
FORM OF SHORT FORM LEASE
Recording Requested by
and when Recorded Return to:
L Green Investment, LLC
100 N Crescent Drive
Suite 325
Beverly Hills, CA
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (this “ Memorandum”) is made this ____ day of ____________, 202 3 by and between THE CITY OF ESCONDIDO (“ Lessor”), and R1 ESCONDIDO INVESTMENT, LLC, a California corporation_______(“Lessee”), with reference to the following:
1. Lease. Lessor and Lessee have executed that certain Lease, dated as of ____________ __, 2023 (the “Lease”), which provides for the lease by Lessor to Lessee of that certain real property located in the City of Escondido, County of San Diego, State of California, which real property (the “Premises”) is more particularly described on Exhibit A attached hereto and made a part hereof.
2. Term. The term of the Lease continues as of the date of the Lease Agreement and, except as provided below, shall expire at midnight of the day twenty (20) years after the Rent Commencement Date (as such term is defined in the Lease).
3. Mortgage / Deed of Trust. Pursuant to Article XI of the Lease, Lessor has agreed to join in the execution of any mortgage or deed of trust which Lessee may cause to be recorded against the Premises and the improvements located thereon, subject to the satisfaction of certain conditions set forth in the Lease with respect to such mortgage or deed of trust.
4. Right of First Refusal. Pursuant to Article XXIV of the Lease, Lessor has granted to Lessee a right of first refusal to purchase all or any portion of Lessor’s fee interest in the Premises, on the condition that such purchase does not conflict with the Surplus Lands Act.
5. Miscellaneous Provisions.
Resolution No. 2024-168
Exhibit "A"
424
Item19.
2 4871-1525-0000, v. 2
(a) If any provision of this Memorandum or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, then the remainder of this Memorandum, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Me morandum; and each provision of this Memorandum shall be valid and enforceable to the fullest extent permitted by law. (b) This Memorandum shall be construed in accordance with the laws of the State of California.
(c) This Memorandum shall be binding upon and inur e to the benefit of the successors and assigns of Lessor and Lessee.
(d) In the event action is instituted to enforce any of the provisions of this Memorandum, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys’ fees and costs. (e) This Memorandum may be executed in more than one counterpart, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
[Signature Page Immediately Follows]
Resolution No. 2024-168
Exhibit "A"
425
Item19.
4871-1525-0000, v. 2
All rights and obligations of Lessor and Lessee hereunder are governed by the terms, covenants, conditions, limitations and restrictions contained in the Lease.
ATTEST:
OFFICE OF THE CITY ATTORNEY
“LESSOR”:
THE CITY OF ESCONDIDO
By:
Name:
Title:
“LESSEE”:
R1 Escondido Investment , LLC
a California limited liability company
By:
Name:
Title:
Resolution No. 2024-168
Exhibit "A"
426
Item19.
4871-1525-0000, v. 2
Exhibit A
Legal Description of the Premises
Resolution No. 2024-168
Exhibit "A"
427
Item19.
R1 Escondido Investment LLC
R1 Escondido Investment LLC
R1 Escondido Investment LLC
Resolution No. 2024-168
Exhibit "A"
428
Item19.
R1 Escondido Investment LLC
R1 Escondido Investment LLC
R1 Escondido Investment LLC
Resolution No. 2024-168
Exhibit "A"
429
Item19.
Chicago Title Company
725 South Figueroa Street, Suite 200, Los Angeles, CA 90017 Phone: (213) 488-4300 ● Fax: (213) 488-4377
CLTA Preliminary Report Form – Modified (11/17/06) Page 1 Issuing Policies of Chicago Title Insurance Company
ORDER NO.: 00122199-994-LT2-X27
Chicago Title Company - Valencia
23929 Valencia Blvd., Suite 304
Valencia, CA 91355
ATTN: Melinda Gile
Email: [email protected]
REF: NBU#
122181-57
Escrow/Customer Phone: (213) 488-4300
Title Officer: Jordan Curiel/Ted Tan (LA/Comm)
Title Officer Phone: (213) 488-4331
Title Officer Fax: (213) 488-4360
Title Officer Email: [email protected]
PROPERTY: 270 EAST VIA RANCHO PARKWAY EAST, ESCONDIDO, CA
PRELIMINARY REPORT
In response to the application for a policy of title insurance referenced herein, Chicago Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms.
The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner’s Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from the office which issued this report.
This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested.
The policy(s) of title insurance to be issued hereunder will be policy(s) of Chicago Title Insurance Company, a Florida corporation.
Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.
It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects and encumbrances affecting title to the land.
Chicago Title Company
By:
Authorized Signature
Resolution No. 2024-168
Exhibit "A"
430
Item19.
Chicago Title Company
725 South Figueroa Street, Suite 200, Los Angeles, CA 90017 Phone: (213) 488-4300 ● Fax: (213) 488-4377
CLTA Preliminary Report Form – Modified (11/17/06) Page 2
PRELIMINARY REPORT
EFFECTIVE DATE: October 8, 2024 at 7:30 a.m.
ORDER NO.: 00122199-994-LT2-X27
The form of policy or policies of title insurance contemplated by this report is:
ALTA Extended Owner's Policy (6-17-06)
1. THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS:
A FEE
2. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN:
CITY OF ESCONDIDO, A MUNICIPAL CORPORATION
3. THE LAND REFERRED TO IN THIS REPORT IS DESCRIBED AS FOLLOWS:
See Exhibit A attached hereto and made a part hereof.
Resolution No. 2024-168
Exhibit "A"
431
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 3 EXHIBIT “A”
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF ESCONDIDO, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL 3 OF ESCONDIDO MAP NO. 85-08, IN THE CITY OF ESCONDIDO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO PARCEL MAP NO. 14270, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 1, 1986.
APN(s): 760-170-25-00
Resolution No. 2024-168
Exhibit "A"
432
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 4
EXCEPTIONS
AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS:
A. There were no taxes levied for the fiscal year 2024-2025 as the fee property was vested in a public entity.
B. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy.
1. Water rights, claims or title to water, whether or not disclosed by the public records.
2. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: Green Mutual Water Company of San Diego County, a corporation Purpose: Water pipes and appurtenances
Recording Date: December 12, 1952
Recording No: Book 4685, Page 46 of Official Records
Affects: A portion of said land as more particularly described in said document.
Reference is hereby made to said document for full particulars.
3. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: Green Mutual Water Company of San Diego County, a corporation Purpose: Pipes together with the pumps, wells, motors, pipelines, electric lines, equipment and facilities together with the right of ingress and egress therefrom Recording Date: December 7, 1953
Recording No: Book 5069 Page 269 of Official Records
Affects: A portion of said land as more particularly described in said document. and Recording Date: December 30, 1953
and Recording No: Book 5098, Page 380 of Official Records and Recording Date: December 30, 1953
and Recording No: Book 5098, Page 401 of Official Records Reference is hereby made to said document for full particulars.
The City of Escondido is the (Successor in interest to the Green Mutual Water Company) holder of easements recorded.
The City of Escondido (Successor in interest to the Green Mutual Water Company) holder of that certain interest in all water pipes and appurtenances together with the right to build and maintain facilities for the extraction and delivery of water as disclosed by documents recorded December 12, 1953 in Book 4685,
Resolution No. 2024-168
Exhibit "A"
433
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 5
4. An agreement regarding construction of a sewage treatment and disposal facility, dated June 21, 1967, upon the terms, covenants and conditions contained therein.
Executed by and
between: The City of San Diego, a municipal corporation and the City of Escondido, a municipal corporation
Recording Date: July 17, 1967
Recording No.: 103860 of Official Records
5. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities and incidental purposes
Recording Date: April 6, 1981
Recording No: 81-104243 of Official Records
Affects: A portion of said land as more particularly described in said document.
The exact location and extent of said easement is not disclosed of record.
6. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities, ingress and egress and incidental purposes Recording Date: April 6, 1981
Recording No: 81-104244 of Official Records
Affects: A portion of said land as more particularly described in said document.
The exact location and extent of said easement is not disclosed of record.
7. A Resolution No. 85-28 of the City Council of the City of Escondido California establishing water repayment fees to the city for the South Escondido Boulevard Water Repayment Area was recorded February 13, 1985 as Instrument No. 85-049204 of Official Records.
Affects: 271-030-10 (Owner) North County Fair Kit Karson Park – (Front Foot) 1652.59 – (Total Assessment) $40,890.43, no installments are delinquent.
8. Matters contained in that certain document
Entitled: Easement, License, Construction and Maintenance Agreement Dated: May 30, 1985
Executed by: EWH Escondido Associates, L.P., a Delaware limited partnership and the City of Escondido, a municipal corporation
Recording Date: June 13, 1985
Recording No: 85-210724 of Official Records
Reference is hereby made to said document for full particulars.
A First Amendment to Easement, License, Construction and Maintenance Agreement, recorded August 23, 1985 as Instrument No. 85-307344 of Official Records.
Resolution No. 2024-168
Exhibit "A"
434
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 6
9. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities and incidental purposes
Recording Date: June 18, 1985
Recording No: 85-216666 of Official Records
Affects: A portion of said land as more particularly described in said document.
10. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities and incidental purposes
Recording Date: June 18, 1985
Recording No: 85-216667 of Official Records
Affects: A portion of said land as more particularly described in said document.
11. Easement(s) for the purpose(s) shown below and rights incidental thereto, as delineated on or as offered for dedication on
Map/Plat: Parcel Map No. 14270
Purpose: Public utilities, private sanitary, sewer and storm drains and incidental purposes Affects: As shown on said map.
11a. An unrecorded lease with certain terms, covenants, conditions and provisions set forth therein as disclosed by the document
Entitled: Memorandum of Lease
Lessor: The City of Escondido
Lessee: Nordstrom, Inc., a Washington corporation
Recording Date: November 26, 1986
Recording No: 86-549264
The
present ownership of the leasehold created by said lease and other matters affecting the interest of the lessee are not shown herein.
12. Matters contained in that certain document
Entitled: North County Fair Construction, Operation and Reciprocal Easement Agreement Recording Date: November 26, 1986
Recording No: 86-549267 of Official Records
Reference is hereby made to said document for full particulars.
Matters contained in that certain document
Entitled: First Amendment to Construction, Operation and Reciprocal Easement Agreement
Recording Date: March 14, 2014
Recording No: 2014-0100990 of Official Records
Reference is hereby made to said document for full particulars.
Resolution No. 2024-168
Exhibit "A"
435
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 7
13. Reciprocal easements, for the purpose(s) shown below and rights incidental thereto as created by the following document:
Document: North County Fair Construction, Operation and Reciprocal Easement Agreement Purpose: Nonexclusive purposes for automobile parking and incidental uses, utilities, construction and for maintaining common fou8ndations and walls, and loop road Recording Date: November 26, 1986
Recording No: 86-549267 of Official Records
Affects: A portion of said land as more particularly described in said document.
14. Intentionally deleted.
15. Intentionally deleted.
16. Intentionally deleted.
17. Intentionally deleted.
18. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities, ingress and egress and incidental purposes Recording Date: June 21, 2007
Recording No: 2007-0418281 of Official Records
Affects: A portion of said land as more particularly described in said document.
Limitations on the use, by the owners of said Land, of the easement area as set forth in the easement document shown hereinabove.
Reference is hereby made to said document for full particulars.
19. Intentionally deleted.
20. Intentionally deleted.
21. Intentionally deleted.
22. Intentionally deleted.
23. Intentionally deleted.
24. Intentionally deleted.
25. Intentionally deleted.
26. Intentionally deleted.
27. Intentionally deleted.
28. Intentionally deleted.
29. Intentionally deleted.
Resolution No. 2024-168
Exhibit "A"
436
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 8
30. Intentionally deleted.
31. Intentionally deleted.
32. Intentionally deleted.
33. Intentionally deleted.
34. Intentionally deleted.
35. Please be advised that our search did not disclose any open Deeds of Trust of record. If you should have knowledge of any outstanding obligation, please contact the Title Department immediately for further review prior to closing.
36. Any rights of the parties in possession of a portion of, or all of, said Land, which rights are not disclosed by the public records.
The Company will require, for review, a full and complete copy of any unrecorded agreement, contract, license and/or lease, together with all supplements, assignments and amendments thereto, before issuing any policy of title insurance without excepting this item from coverage.
The Company reserves the right to except additional items and/or make additional requirements after reviewing said documents.
37. Matters which may be disclosed by an inspection and/or by a correct ALTA/NSPS Land Title Survey of said Land that is satisfactory to the Company, and/or by inquiry of the parties in possession thereof.
38. Intentionally deleted.
39. Intentionally deleted.
40. Intentionally deleted.
41. Intentionally deleted.
42. Intentionally deleted.
43. Intentionally deleted.
44. Intentionally deleted.
45. Intentionally deleted.
46. Intentionally deleted.
PLEASE REFER TO THE “INFORMATIONAL NOTES” AND “REQUIREMENTS” SECTIONS WHICH FOLLOW FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION.
Resolution No. 2024-168
Exhibit "A"
437
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 9
END OF EXCEPTIONS
Resolution No. 2024-168
Exhibit "A"
438
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 10
REQUIREMENTS SECTION
1. The Company will require the following documents for review prior to the issuance of any title insurance predicated upon a conveyance or encumbrance by the corporation named below:
Name of Corporation: CITY OF ESCONDIDO
a) A Copy of the corporation By-laws and Articles of Incorporation b) An
original or certified copy of a resolution authorizing the transaction contemplated herein c) If
the Articles and/or By-laws require approval by a ‘parent’ organization, a copy of the Articles and By- laws of the parent
The Company reserves the right to add additional items or make further requirements after review of the requested documentation.
2. Unrecorded matters which may be disclosed by an Owner’s Affidavit or Declaration. A form of the Owner’s Affidavit/Declaration is attached to this Preliminary Report/Commitment. This Affidavit/Declaration is to be completed by the record owner of the land and submitted for review prior to the closing of this transaction. Your prompt attention to this requirement will help avoid delays in the closing of this transaction. Thank you.
The Company reserves the right to add additional items or make further requirements after review of the requested Affidavit/Declaration.
END OF REQUIREMENTS
Resolution No. 2024-168
Exhibit "A"
439
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 11
INFORMATIONAL NOTES SECTION
1. None of the items shown in this report will cause the Company to decline to attach ALTA Endorsement Form 9 to an Extended Coverage Loan Policy, when issued.
2. The Company is not aware of any matters which would cause it to decline to attach CLTA Endorsement Form 116 indicating that there is located on said Land Commercial properties, known as 270 East Via Rancho Parkway East, located within the city of Escondido, California, , to an Extended Coverage Loan Policy.
3. Note: The policy of title insurance will include an arbitration provision. The Company or the insured may demand arbitration. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage.
4. Notice: Please be aware that due to the conflict between federal and state laws concerning the cultivation, distribution, manufacture or sale of marijuana, the Company is not able to close or insure any transaction involving Land that is associated with these activities.
5. Pursuant to Government Code Section 27388.1, as amended and effective as of 1-1-2018, a Documentary Transfer Tax (DTT) Affidavit may be required to be completed and submitted with each document when DTT is being paid or when an exemption is being claimed from paying the tax. If a governmental agency is a party to the document, the form will not be required. DTT Affidavits may be available at a Tax Assessor-County Clerk-Recorder.
6. Due to the special requirements of SB 50 (California Public Resources Code Section 8560 et seq.), any transaction that includes the conveyance of title by an agency of the United States must be approved in advance by the Company’s State Counsel, Regional Counsel, or one of their designees.
7. Note: There are NO conveyances affecting said Land recorded within 24 months of the date of this report.
END OF INFORMATIONAL NOTES
Jordan Curiel/Ted Tan (LA/Comm)/jh2
Resolution No. 2024-168
Exhibit "A"
440
Item19.
Wire Fraud Alert Page 1
Original Effective Date: 5/11/2017
Current Version Date: 5/11/2017 WIRE0016 (DSI Rev. 12/07/17) TM and © Fidelity National Financial, Inc. and/or an affiliate. All rights reserved Wire Fraud Alert
This Notice is not intended to provide legal or professional advice. If you have any questions, please consult with a lawyer.
All parties to a real estate transaction are targets for wire fraud and many have lost hundreds of thousands of dollars because they simply relied on the wire instructions received via email, without further verification. If funds are to be wired in conjunction with this real estate transaction, we strongly recommend verbal verification of wire instructions through a known, trusted phone number prior to sending funds.
In addition, the following non‐exclusive self‐ protection strategies are recommended to minimize exposure to possible wire fraud. NEVER RELY on emails purporting to change wire instructions. Parties to a transaction rarely change wire instructions in the course of a transaction.
ALWAYS VERIFY wire instructions, specifically the ABA routing number and account number, by calling the party who sent the instructions to you. DO NOT use the phone number provided in the email containing the instructions, use phone numbers you have called before or can otherwise verify. Obtain the phone number of relevant parties to the transaction as soon as an escrow account is opened. DO NOT send an email to verify as the email address may be incorrect or the email may be intercepted by the fraudster.
USE COMPLEX EMAIL PASSWORDS that employ a combination of mixed case, numbers, and symbols. Make your passwords greater than eight (8) characters. Also, change your password often and do NOT reuse the same password for other online accounts.
USE MULTI-FACTOR AUTHENTICATION for email accounts. Your email provider or IT staff may have specific instructions on how to implement this feature.
For more information on wire‐fraud scams or to report an incident, please refer to the following links:
Federal Bureau of Investigation: Internet Crime Complaint Center:
http://www.fbi.gov http://www.ic3.gov
Resolution No. 2024-168
Exhibit "A"
441
Item19.
FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 Copyright © 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 1 Order No. 00122199-994-LT2-X27 FIDELITY NATIONAL FINANCIAL, INC.
PRIVACY NOTICE
Effective January 1, 2020
Fidelity National Financial, Inc. and its majority-owned subsidiary companies (collectively, “FNF,” “our,” or “we”) respect and are committed to protecting your privacy. This Privacy Notice explains how we collect, use, and protect personal information, when and to whom we disclose such information, and the choices you have about the use and disclosure of that information.
A limited number of FNF subsidiaries have their own privacy notices. If a subsidiary has its own privacy notice, the privacy notice will be available on the subsidiary’s website and this Privacy Notice does not apply.
Collection of Personal Information
FNF may collect the following categories of Personal Information:
contact information (e.g. , name, address, phone number, email address); demographic information (e.g., date of birth, gender, marital status); identity information ( e.g. Social Security Number, driver’s license, passport, or other government ID number); financial account information (e.g. loan or bank account information); and other personal information necessary to provide products or services to you.
We may collect Personal Information about you from:
information we receive from you or your agent;
information about your transactions with FNF, our affiliates, or others; and information we receive from consumer reporting agencies and/or governmental entities, either directly from these entities or through others.
Collection of Browsing Information
FNF automatically collects the following types of Browsing Information when you access an FNF website, online service, or application (each an “FNF Website”) from your Internet browser, computer, and/or device:
Internet Protocol (IP) address and operating system; browser version, language, and type;
domain name system requests; and
browsing history on the FNF Website, such as date and time of your visit to the FNF Website and visits to the pages within the FNF Website.
Like most websites, our servers automatically log each visitor to the FNF Website and may collect the Browsing Information described above. We use Browsing Information for system administration, troubleshooting, fraud investigation, and to improve our websites.
Browsing Information generally does not reveal anything personal about you, though if you have created a user account for an FNF Website and are logged into that account, the FNF Website may be able to link certain browsing activity to your user account.
Other Online Specifics
Cookies. When you visit an FNF Website, a “cookie” may be sent to your computer. A cookie is a small piece of data that is sent to your Internet browser from a web server and stored on your computer’s hard drive. Information gathered using cookies helps us improve your user experience. For example, a cookie can help the website load properly or can customize the display page based on your browser type and user preferences. You can choose whether or not to accept cookies by changing your Internet browser settings. Be aware that doing so may impair or limit some functionality of the FNF Website.
Web Beacons. We use web beacons to determine when and how many times a page has been viewed. This information is used to improve our websites.
Do Not Track. Currently our FNF Websites do not respond to “Do Not Track” features enabled through your browser.
Links to Other Sites. FNF Websites may contain links to unaffiliated third-party websites. FNF is not responsible for the privacy practices or content of those websites. We recommend that you read the privacy policy of every website you visit.
Use of Personal Information
FNF uses Personal Information for three main purposes:
To provide products and services to you or in connection with a transaction involving you. To improve our products and services.
To communicate with you about our, our affiliates’, and others’ products and services, jointly or independently.
When Information Is Disclosed
We may disclose your Personal Information and Browsing Information in the following circumstances:
to enable us to detect or prevent criminal activity, fraud, material misrepresentation, or nondisclosure; to nonaffiliated service providers who provide or perform services or functions on our behalf and who agree to use the information only to provide such services or functions;
Resolution No. 2024-168
Exhibit "A"
442
Item19.
FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 Copyright © 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 2 Order No. 00122199-994-LT2-X27 to nonaffiliated third party service providers with whom we perform joint marketing, pursuant to an agreement with them to jointly market financial products or services to you;
to law enforcement or authorities in connection with an investigation, or in response to a subpoena or court order; or in the good-faith belief that such disclosure is necessary to comply with legal process or applicable laws, or to protect the rights, property, or safety of FNF, its customers, or the public.
The law does not require your prior authorization and does not allow you to restrict the disclosures described above. Additionally, we may disclose your information to third parties for whom you have given us authorization or consent to make such disclosure. We do not otherwise share your Personal Information or Browsing Information with nonaffiliated third parties, except as required or permitted by law. We do share Personal Information among affiliates (other companies owned by FNF) to directly market to you. Please see “Choices with Your Information” to learn how to restrict that sharing.
We reserve the right to transfer your Personal Information, Browsing Information, and any other information, in connection with the sale or other disposition of all or part of the FNF business and/or assets, or in the event of bankruptcy, reorganization, insolvency, receivership, or an assignment for the benefit of creditors. By submitting Personal Information and/or Browsing Information to FNF, you expressly agree and consent to the use and/or transfer of the foregoing information in connection with any of the above described proceedings.
Security of Your Information
We maintain physical, electronic, and procedural safeguards to protect your Personal Information.
Choices With Your Information
If you do not want FNF to share your information among our affiliates to directly market to you, you may send an “opt out” request by email, phone, or physical mail as directed at the end of this Privacy Notice. We do not share your Personal Information with nonaffiliates for their use to direct market to you.
Whether you submit Personal Information or Browsing Information to FNF is entirely up to you. If you decide not to submit Personal Information or Browsing Information, FNF may not be able to provide certain services or products to you.
For California Residents: We will not share your Personal Information or Browsing Information with nonaffiliated third parties, except as permitted by California law. For additional information about your California privacy rights, please visit the “California Privacy” link on our website (https://fnf.com/pages/californiaprivacy.aspx) or call (888) 413-1748.
For Nevada Residents: You may be placed on our internal Do Not Call List by calling (888) 934-3354 or by contacting us via the information set forth at the end of this Privacy Notice. Nevada law requires that we also provide you with the following contact information: Bureau of Consumer Protection, Office of the Nevada Attorney General, 555 E. Washington St., Suite 3900, Las Vegas, NV 89101; Phone number: (702) 486-3132; email: [email protected].
For Oregon Residents : We will not share your Personal Information or Browsing Information with nonaffiliated third parties for marketing purposes, except after you have been informed by us of such sharing and had an opportunity to indicate that you do not want a disclosure made for marketing purposes.
For Vermont Residents : We will not disclose information about your creditworthiness to our affiliates and will not disclose your personal information, financial information, credit report, or health information to nonaffiliated third parties to market to you, other than as permitted by Vermont law, unless you authorize us to make those disclosures.
Information From Children
The FNF Websites are not intended or designed to attract persons under the age of eighteen (18).We do not collect Personal Information from any person that we know to be under the age of thirteen (13) without permission from a parent or guardian.
International Users
FNF’s headquarters is located within the United States. If you reside outside the United States and choose to provide Personal Information or Browsing Information to us, please note that we may transfer that information outside of your country of residence. By providing FNF with your Personal Information and/or Browsing Information, you consent to our collection, transfer, and use of such information in accordance with this Privacy Notice.
FNF Website Services for Mortgage Loans
Certain FNF companies provide services to mortgage loan servicers, including hosting websites that collect customer information on behalf of mortgage loan servicers (the “Service Websites”). The Service Websites may contain links to both this Privacy Notice and the mortgage loan servicer or lender’s privacy notice. The sections of this Privacy Notice titled When Information is Disclosed, Choices with Your Information, and Accessing and Correcting Information do not apply to the Service Websites. The mortgage loan servicer or lender’s privacy notice governs use, disclosure, and access to your Personal Information. FNF does not share Personal Information collected through the Service Websites, except as required or authorized by contract with the mortgage loan servicer or lender, or as required by law or in the good-faith belief that such disclosure is necessary: to comply with a legal process or applicable law, to enforce this Privacy Notice, or to protect the rights, property, or safety of FNF or the public.
Your Consent To This Privacy
Notice; Notice Changes; Use of Comments or Feedback
By submitting Personal Information and/or Browsing Information to FNF, you consent to the collection and use of the information in accordance with this Privacy Notice. We may change this Privacy Notice at any time. The Privacy Notice’s effective date will show the Resolution No. 2024-168
Exhibit "A"
443
Item19.
FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 Copyright © 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 3 Order No. 00122199-994-LT2-X27 last date changes were made. If you provide information to us following any change of the Privacy Notice, that signifies your assent to and acceptance of the changes to the Privacy Notice. We may use comments or feedback that you submit to us in any manner without notice or compensation to you.
Accessing and Correcting
Information; Contact Us
If you have questions, would like to correct your Personal Information, or want to opt-out of information sharing for affiliate marketing, send your requests to [email protected], by phone to (888) 934-3354, or by mail to:
Fidelity National Financial, Inc.
601 Riverside Avenue
Jacksonville, Florida 32204
Attn: Chief Privacy Officer
Resolution No. 2024-168
Exhibit "A"
444
Item19.
CA Discount Notice Effective Date: 1-10-2010
Notice of Available Discounts
Pursuant to Section 2355.3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc. and its subsidiaries (“FNF”) must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions, a preliminary report or commitment. Please be aware that the provision of this notice does not constitute a waiver of the consumer’s right to be charged the field rate. As such, your transaction may not qualify for the below discounts.
You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative. These discounts are generally described below; consult the rate manual for a full description of the terms, conditions and requirements for each discount. These discounts only apply to transaction involving services rendered by the FNF Family of Companies. This notice only applies to transactions involving property improved with a one-to-four family residential dwelling.
FNF Underwritten Title Company FNF Underwriter
CTC - Chicago Title Company CTIC - Chicago Title Insurance Company Available Discounts
CREDIT FOR PRELIMINARY REPORTS AND/OR COMMITMENTS ON SUBSEQUENT POLICIES (CTIC) Where no major change in the title has occurred since the issuance of the original report or commitment, the order may be reopened within 12 months and all or a portion of the charge previously paid for the report or commitment may be credited on a subsequent policy charge within the following time period from the date of the report.
DISASTER LOANS (CTIC)
The charge
for a lender’s Policy (Standard or Extended coverage) covering the financing or refinancing by an owner of record, within 24 months of the date of a declaration of a disaster area by the government of the United States or the State of California on any land located in said area, which was partially or totally destroyed in the disaster, will be 50% of the appropriate title insurance rate.
CHURCHES OR CHARITABLE NON-PROFIT ORGANIZATIONS (CTIC)
On properties used as a church or for charitable purposes within the scope of the normal activities of such entities, provided said charge is normally the church’s obligation the charge for an owner’s policy shall be 50% to 70% of the appropriate title insurance rate, depending on the type of coverage selected. The charge for a lender’s policy shall be 40% to 50% of the appropriate title insurance rate, depending on the type of coverage selected.
EMPLOYEE RATE (CTC and CTIC)
No charge
shall be made to employees (including employees on approved retirement) of the Company or its underwritten, subsidiary title companies for policies or escrow services in connection with financing, refinancing, sale or purchase of the employees’ bona fide home property. Waiver of such charges is authorized only in connection with those costs which the employee would be obligated to pay, by established custom, as a party to the transaction.
Resolution No. 2024-168
Exhibit "A"
445
Item19.
Attachment One (6-5-14) CA & NV
ATTACHMENT ONE
CALIFORNIA LAND TITLE ASSOCIATION
STANDARD COVERAGE POLICY – 1990
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of:
1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
3. Defects,
liens, encumbrances, adverse claims or other matters:
(a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy.
4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated.
5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law.
6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws.
EXCEPTIONS FROM COVERAGE - SCHEDULE B, PART I
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
1. Taxes
or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records.
Proceedings by
a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof.
3. Easements, liens or encumbrances, or claims thereof, not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records.
6. Any lien or right to a lien for services, labor or material not shown by the public records.
CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13)
ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE
EXCLUSIONS
In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from:
1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning:
a. building;
b. zoning;
c. land
use;
d. improvements
on the Land;
e. land division; and
f. environmental
protection.
This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27.
2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15.
3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17.
4. Risks:
a. that
are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b. that
are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; Resolution No. 2024-168
Exhibit "A"
446
Item19.
Attachment One (6-5-14) CA & NV
c. that result in no loss to You; or
d. that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28.
5. Failure to pay value for Your Title.
6. Lack
of a right:
a. to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in
streets, alleys, or waterways that touch the Land.
This Exclusion does not limit
the coverage described in Covered Risk 11 or 21.
7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors’ rights laws.
8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence.
9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances.
LIMITATIONS ON COVERED RISKS
Your insurance for the following Covered Risks is limited on the Owner’s Coverage Statement as follows:
For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A.
The deductible amounts and maximum dollar limits shown on Schedule A are as follows:
Your Deductible Amount
Our Maximum Dollar
Limit of Liability
Covered Risk 16:
1.00% % of Policy Amount Shown in Schedule A or
$2,500.00 (whichever is less) $ 10,000.00
Covered Risk 18:
1.00% % of Policy Amount Shown in Schedule A or
$5,000.00 (whichever is less) $ 25,000.00
Covered Risk 19:
1.00% of Policy Amount Shown in Schedule A or
$5,000.00 (whichever is less) $ 25,000.00
Covered Risk 21:
1.00% of Policy Amount Shown in Schedule A or
$2,500.00 (whichever is less) $ 5,000.00
2006 ALTA LOAN POLICY (06-17-06)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of:
1. (a) Any
law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the
character, dimensions, or location of any improvement erected on the Land; (iii) the
subdivision of land; or
(iv) environmental
protection;
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects,
liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.
4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated.
5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law.
6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction creating the lien of the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a
preferential transfer for any reason not stated in Covered Risk 13(b) of this policy.
7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b).
The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
EXCEPTIONS FROM COVERAGE
(Except as provided in Schedule B - Part II,( t(or T)his policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of:
Resolution No. 2024-168
Exhibit "A"
447
Item19.
Attachment One (6-5-14) CA & NV
(PART I
(The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records.
2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records.
6. Any lien or right to a lien for services, labor or material not shown by the Public Records.
PART II
In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:) 2006 ALTA OWNER’S POLICY (06-17-06)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of:
1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the
character, dimensions, or location of any improvement erected on the Land; (iii) the
subdivision of land; or
(iv) environmental
protection;
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects,
liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title.
4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is
(a) a
fraudulent conveyance or fraudulent transfer; or
(b) a
preferential transfer for any reason not stated in Covered Risk 9 of this policy.
5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A.
The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of:
(The above policy
form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records.
2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records.
6. Any lien or right to a lien for services, labor or material not shown by the Public Records.
7. (Variable
exceptions such as taxes, easements, CC&R’s, etc. shown here.) Resolution No. 2024-168
Exhibit "A"
448
Item19.
Attachment One (6-5-14) CA & NV
ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (12-02-13)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys’ fees or expenses which arise by reason of:
1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the
subdivision of land; or
(iv) environmental
protection;
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects,
liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.
4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated.
5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, or any consumer credit protection or truth-in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26.
6. Any
claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11.
7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25.
8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6.
9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction creating the lien of the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a
preferential transfer for any reason not stated in Covered Risk 27(b) of this policy.
10. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence.
11. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances.
Resolution No. 2024-168
Exhibit "A"
449
Item19.
Resolution No. 2024-168
Exhibit "A"
450
Item19.
Owner’s Declaration Printed: 3/23/2017 1:57 PM by TT6
MISC0220 (DSI Rev. 10/17/17) Page 10 Escrow No. : 00122199-994-LT2
OWNER'S DECLARATION
Escrow No.: 00122199-994-LT2 -X27
Property Address: 270 East Via Rancho Parkway East
Escondido, CA
The undersigned hereby declares as follows:
1. (Fill in the applicable paragraph and strike the other) a. Declarant ("Owner") is the owner or lessee, as the case may be, of certain premises located at 270 East Via Rancho Parkway East, Escondido, CA, further described as follows: See Preliminary Report/Commitment No. for full legal description (the "Land"). b. Declarant is the ______________________________ of ____________________________________ ("Owner"), which is the owner or lessee, as the case may be, of certain premises located at 270 East Via Rancho Parkway East, Escondido, CA, further described as follows: See Preliminary Report/Commitment No. for full legal description (the "Land").
2. (Fill in the applicable paragraph and strike the other) a. During the period of six months immediately preceding the date of this declaration no work has been done, no surveys or architectural or engineering plans have been prepared, and no materials have been furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure on the Land or in connection with the improvement of the Land in any manner whatsoever.
b. During the period of six months immediately preceding the date of this declaration certain work has been done and materials furnished in connection with _________________________ upon the Land in the approximate total sum of $__________, but no work whatever remains to be done and no materials remain to be furnished to complete the construction in full compliance with the plans and specifications, nor are there any unpaid bills incurred for labor and materials used in making such improvements or repairs upon the Land, or for the services of architects, surveyors or engineers, except as follows: ___________________________________________. Owner, by the undersigned Declarant, agrees to and does hereby indemnify and hold harmless Chicago Title Company against any and all claims arising therefrom.
3. Owner
has not previously conveyed the Land; is not a debtor in bankruptcy (and if a partnership, the general partner thereof is not a debtor in bankruptcy); and has not received notice of any pending court action affecting the title to the Land.
4. Except as shown in the above-referenced Preliminary Report/Commitment, there are no unpaid or unsatisfied mortgages, deeds of trust, Uniform Commercial Code financing statements, regular assessments, special assessments, periodic assessments or any assessment from any source, claims of lien, special assessments, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records. There are no violations of the covenants, conditions and restrictions as shown in the above-referenced Preliminary Report/Commitment.
5. The Land is currently in use as _____________________; _______________________ occupy/occupies the Land; and the following are all of the leases or other occupancy rights affecting the Land:
___________________________________________________________________________________
6. There are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements, claims of easement, or boundary disputes that affect the Land.
7. There are no outstanding options to purchase or rights of first refusal affecting the Land.
8. Between the most recent Effective Date of the above-referenced Preliminary Report/Commitment and the date of recording of the Insured Instrument(s), Owner has not taken or allowed, and will not take or allow, any action or inaction to encumber or otherwise affect title to the Land.
This declaration is made with the intention that Chicago Title Company (the "Company") and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements. Owner, by the undersigned Declarant, agrees to indemnify the Company against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein.
I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on ______ at _________________________________.
Signature: ________________________________
Resolution No. 2024-168
Exhibit "A"
451
Item19.
Assignment and Assumption of Construction, Operation and Reciprocal Easement Agreement 1 EXEMPT FROM FEES pursuant to
Gov’t Code §§ 6103, 27383, and 27388.1
(filing requested/executed by municipality)
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
City of Escondido
201 North Broadway
Escondido, California 92025-2798 This Space for Recorder’s Use Only
ASSIGNMENT AND ASSUMPTION OF CONSTRUCTION OPERATION AND
RECIPROCAL EASEMENT AGREEMENT
This ASSIGNMENT AND ASSUMPTION OF CONSTRUCTION OPERATION AND RECIPROCAL EASEMENT AGREEMENT (“Assignment”) is made and entered into as of the last signature date set forth below (“Effective Date”), by and between the CITY OF ESCONDIDO, a California municipal corporation (“Assignor”), on one hand, and R1 Escondido Investment, LLC, a California limited liability company (“Assignee”), on the other hand. (Assignor and Assignee may each be referred to herein as a “Party” and collectively as the “Parties.”) WHEREAS, Assignor is currently the owner of that certain real property located in the City of Escondido, County of San Diego, State of California , more particularly described in Exhibit A, attached hereto and incorporated herein by this reference ( “R1 Escondido Investment Parcel ”); and
WHEREAS, Assignor has leased the R1 Escondido Investment Parcel, and the improvements located thereon to Assignee pursuant to a certain Ground Lease, dated _________, 202_, as (“R1 Lease"); and
WHEREAS, in conjunction with the R1 Lease, Assignor is obligated to assign to Assignee, as related to the R1 Escondido Investment Parcel, all of Assignor’s obligations, duties, covenants, conditions, and liabilities in and under that certain Construction, Operation and Reciprocal Easement Agreement dated November 26, 1986, recorded on November 26, 1986, as Document No. 86- 549267, in the Official Records of San Diego County, California, as amended by that certain First Amendment to Construction, Operation and Reciprocal Easement Agreement dated March 12, 2013, recorded on March 14, 2014, as Document No. 2014-0100990, in the Official Records, (collectively, the “REA”); and
WHEREAS, pursuant to the R1 Lease and the REA, and the Parties established certain reciprocal easements, covenants, and conditions with respect to the construction, maintenance , and operation of the Shopping Center (as defined in the R1 Lease), including, without limitation, the Tracts Resolution No. 2024-168
Exhibit "B"
452
Item19.
Assignment and Assumption of Construction, Operation and Reciprocal Easement Agreement 2 (as defined in the REA) and the Common Area (as defined in the REA); and
NOW, THEREFORE, in reliance on the foregoing and in consideration of the mutual covenants, agreements, and conditions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Assignment and Assumption . As of the Effective Date, Assignor hereby assigns, transfers, sets over, and delivers unto Assignee all of Assignor’s obligations, duties, covenants, conditions, and liabilities in the REA as it relates to the R1 Escondido Investment Parcel, provided, however, that this Assignment shall not release or relieve Assignor of any of its obligations, duties, covenants, conditions, or liabilities under the REA to the extent arising or accruing prior to the Effective Date of this Assignment. Assignee hereby assumes the performance of all of the terms, covenants, obligations, and conditions imposed upon Assignor under and with respect to the REA to the extent arising or accruing from or after the Effective Date of this Assignment. Assignor shall retain all obligations respecting the REA for the period of time prior to the Effective Date of this Assignment.
2. Representations and Warranties of Assignor . Assignor hereby makes the following representations and warranties to the Assignee as of the Effective Date:
2.1 Assignor is the current holder of the entire interest of R1 Escondido Investment Parcel.
2.2 The REA is unmodified and remains in full force and effect.
2.3 No default on the part of Assignor, and no breach or failure of condition that, with notice or lapse of time or both, would constitute a default on the part of Assignor, exists under the REA.
2.4 The execution, delivery, and performance by Assignor of this Assignment (i) will not contravene any legal requirements applicable to Assignor; (ii) will not conflict with, breach, or contravene any other agreement binding upon Assignor; and (iii) will not result in the creation or imposition of any lien on any portion of the Property, except as otherwise may be permitted under the terms of the REA.
3. Counterparts. This Assignment may be executed on separate counterparts that, upon completion, may be assembled into and shall be construed as one document.
4. Effective Date. Unless a different date is provided in this Assignment, the effective date of this Assignment shall be the latest date of execution set forth by the names of the signatories below.
(SIGNATURE PAGE FOLLOWS)
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
453
Item19.
Assignment and Assumption of Construction, Operation and Reciprocal Easement Agreement 3 IN WITNESS WHEREOF, this Assignment is executed by the Parties or their duly authorized representatives as of the Effective Date:
ASSIGNOR
Date: By
Name:_________________________
Its: ___________________________
ASSIGNEE
Date: By
Name:_________________________
Its: ___________________________
(ABOVE SIGNATURES MUST BE NOTARIZED; ACKNOWLEDGMENT PAGES FOLLOW) Approved as to Form:
OFFICE OF THE CITY ATTORNEY
Michael R. McGuinness, City Attorney
______________________________________
M. Dare DeLano, Assistant City Attorney
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
454
Item19.
Assignment and Assumption of Construction, Operation and Reciprocal Easement Agreement 4 ACKNOWLEDGMENT
STATE OF CALIFORNIA ]
COUNTY OF ______________________ ]
On ___________________________________, before me,
_______________________________________________, a Notary Public, personally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: ________________________________________ (Seal)
Assignor
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
455
Item19.
Assignment and Assumption of Construction, Operation and Reciprocal Easement Agreement 5 ACKNOWLEDGMENT
STATE OF CALIFORNIA ]
COUNTY OF ______________________ ]
On ___________________________________, before me,
_______________________________________________, a Notary Public, personally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: ________________________________________ (Seal)
Assignee
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
456
Item19.
Assignment and Assumption of Construction, Operation and Reciprocal Easement Agreement 6 Exhibit A
Legal Description of Property
All that certain real property in the City of Escondido, County of San Diego, State of California, more particularly described as follows:
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
457
Item19.
Chicago Title Company
725 South Figueroa Street, Suite 200, Los Angeles, CA 90017 Phone: (213) 488-4300 ● Fax: (213) 488-4377
CLTA Preliminary Report Form – Modified (11/17/06) Page 1 Issuing Policies of Chicago Title Insurance Company
ORDER NO.: 00122199-994-LT2-X27
Chicago Title Company - Valencia
23929 Valencia Blvd., Suite 304
Valencia, CA
91355
ATTN: Melinda Gile
Email: [email protected]
REF: NBU# 122181-57
Escrow/Customer Phone: (213) 488-4300
Title Officer: Jordan Curiel/Ted Tan (LA/Comm)
Title Officer Phone:
(213) 488-4331
Title Officer Fax: (213) 488-4360
Title Officer Email: [email protected]
PROPERTY: 270 EAST VIA RANCHO PARKWAY EAST, ESCONDIDO, CA
PRELIMINARY REPORT
In
response to the application for a policy of title insurance referenced herein, Chicago Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms.
The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth
in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner’s Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from the office which issued this report.
This report (and
any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested.
The policy(s) of title insurance to be issued hereunder will be policy(s) of Chicago Title Insurance Company, a Florida corporation.
Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this
report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.
It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens,
defects and encumbrances affecting title to the land.
Chicago Title Company
By:
Authorized Signature
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
458
Item19.
Chicago Title Company
725 South Figueroa Street, Suite 200, Los Angeles, CA 90017 Phone: (213) 488-4300 ● Fax: (213) 488-4377
CLTA Preliminary Report Form – Modified (11/17/06) Page 2
PRELIMINARY REPORT
EFFECTIVE DATE: October 8, 2024 at 7:30 a.m.
ORDER NO.: 00122199-994-LT2-X27
The form of policy or policies of title insurance contemplated by this report is:
ALTA Extended Owner's Policy (6-17-06)
1. THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS:
A FEE
2. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN:
CITY OF ESCONDIDO, A MUNICIPAL CORPORATION
3. THE LAND REFERRED TO IN THIS REPORT IS DESCRIBED AS FOLLOWS:
See Exhibit A attached hereto and made a part hereof.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
459
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 3 EXHIBIT “A”
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF ESCONDIDO, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL 3 OF ESCONDIDO MAP NO. 85-08, IN THE CITY OF ESCONDIDO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO PARCEL MAP NO. 14270, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 1, 1986.
APN(s): 760-170-25-00
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
460
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 4
EXCEPTIONS
AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS:
A. There were no taxes levied for the fiscal year 2024-2025 as the fee property was vested in a public entity.
B. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy.
1. Water rights, claims or title to water, whether or not disclosed by the public records.
2. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: Green Mutual Water Company of San Diego County, a corporation Purpose: Water pipes and appurtenances
Recording Date:
December 12, 1952
Recording No: Book 4685, Page 46 of Official Records
Affects: A portion of said land as more particularly described in said document.
Reference is hereby made to said document for full particulars.
3. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: Green Mutual Water Company of San Diego County, a corporation Purpose: Pipes together with the pumps, wells, motors, pipelines, electric lines, equipment and facilities together with the right of ingress and egress therefrom Recording Date: December 7, 1953
Recording No: Book 5069 Page 269 of Official Records
Affects: A portion of said land as more particularly described in said document. and Recording Date: December 30, 1953
and Recording No: Book 5098, Page 380 of Official Records and Recording Date: December 30, 1953
and Recording No: Book 5098, Page 401 of Official Records Reference is hereby made to said document for full particulars.
The City of Escondido is the (Successor in interest to the Green Mutual Water Company) holder of easements recorded.
The City of Escondido (Successor in interest to the Green Mutual Water Company) holder of that certain interest
in all water pipes and appurtenances together with the right to build and maintain facilities for the extraction and delivery of water as disclosed by documents recorded December 12, 1953 in Book 4685,
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
461
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 5
4. An agreement regarding construction of a sewage treatment and disposal facility, dated June 21, 1967, upon the terms, covenants and conditions
contained therein.
Executed by and
between: The City of San Diego, a municipal corporation and the City of Escondido, a municipal corporation
Recording Date: July 17, 1967
Recording No.: 103860 of Official Records
5. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities and incidental purposes
Recording Date: April 6, 1981
Recording No: 81-104243 of Official Records
Affects: A portion of said land as more particularly described in said document.
The exact location and extent of said easement is not disclosed of record.
6. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities, ingress and egress and incidental purposes Recording Date: April 6, 1981
Recording No: 81-104244 of Official Records
Affects: A portion of said land as more particularly described in said document.
The exact location and extent of said easement is not disclosed of record.
7. A Resolution No. 85-28 of the City Council of the City of Escondido California establishing water repayment
fees to the city for the South Escondido Boulevard Water Repayment Area was recorded February 13, 1985 as Instrument No. 85-049204 of Official Records.
Affects: 271-030-10 (Owner) North County Fair Kit Karson Park – (Front Foot) 1652.59 – (Total Assessment) $40,890.43, no installments are delinquent.
8. Matters contained in that certain document
Entitled: Easement, License, Construction and Maintenance Agreement Dated: May 30, 1985
Executed by: EWH Escondido Associates, L.P., a Delaware limited partnership and the City of Escondido, a municipal corporation
Recording Date: June 13, 1985
Recording No: 85-210724 of Official Records
Reference is hereby made to said document for full particulars.
A First Amendment to Easement, License, Construction and Maintenance Agreement, recorded August 23, 1985 as Instrument No. 85-307344 of Official Records.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
462
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 6
9. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities and incidental purposes
Recording Date: June 18, 1985
Recording No: 85-216666 of Official Records
Affects: A portion of said land as more particularly described in said document.
10. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities and incidental purposes
Recording Date: June 18, 1985
Recording No: 85-216667 of Official Records
Affects: A portion of said land as more particularly described in said document.
11. Easement(s) for the purpose(s) shown below and rights incidental thereto, as delineated on or as offered for dedication on
Map/Plat: Parcel Map No. 14270
Purpose: Public utilities, private sanitary, sewer and storm drains and incidental purposes Affects: As shown on said map.
11a. An unrecorded lease with certain terms, covenants, conditions and provisions set forth therein as disclosed
by the document
Entitled: Memorandum of Lease
Lessor: The City of Escondido
Lessee: Nordstrom, Inc., a Washington corporation
Recording Date: November 26, 1986
Recording No: 86-549264
The present ownership of the leasehold created by said lease and other matters affecting the interest of the lessee are not shown herein.
12. Matters contained in that certain document
Entitled: North County Fair Construction, Operation and Reciprocal Easement Agreement Recording Date: November 26, 1986
Recording No: 86-549267 of Official Records
Reference is hereby made to said document for full particulars.
Matters contained in that certain document
Entitled: First Amendment to Construction, Operation and Reciprocal Easement Agreement
Recording Date: March 14, 2014
Recording No: 2014-0100990 of Official Records
Reference is hereby made to said document for full particulars.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
463
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 7
13. Reciprocal easements, for the purpose(s) shown below and rights incidental thereto as created by the following document:
Document: North County Fair Construction, Operation and Reciprocal Easement Agreement Purpose: Nonexclusive purposes for automobile parking and incidental uses, utilities, construction and for maintaining common fou8ndations and walls, and loop road Recording Date: November 26, 1986
Recording No: 86-549267 of Official Records
Affects: A portion of said land as more particularly described in said document.
14. Intentionally deleted.
15. Intentionally deleted.
16. Intentionally deleted.
17. Intentionally deleted.
18. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document:
Granted to: San Diego Gas and Electric Company, a corporation Purpose: Public utilities, ingress and egress and incidental purposes Recording Date: June 21, 2007
Recording No: 2007-0418281 of Official Records
Affects: A portion of said land as more particularly described in said document.
Limitations on the use, by the owners of said Land, of the easement area as set forth in the easement document shown hereinabove.
Reference is hereby made
to said document for full particulars.
19. Intentionally deleted.
20. Intentionally deleted.
21. Intentionally deleted.
22. Intentionally deleted.
23. Intentionally deleted.
24. Intentionally deleted.
25. Intentionally deleted.
26. Intentionally deleted.
27. Intentionally deleted.
28. Intentionally deleted.
29. Intentionally deleted.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
464
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 8
30. Intentionally deleted.
31. Intentionally deleted.
32. Intentionally deleted.
33. Intentionally deleted.
34. Intentionally deleted.
35. Please be advised that our search did not disclose any open Deeds of Trust of record. If you should have knowledge of any outstanding obligation, please contact the Title Department immediately for further review prior to closing.
36. Any rights of the parties in possession of a portion of, or all of, said Land, which rights are not disclosed by the public records.
The Company will require, for review, a full and complete copy of any unrecorded agreement, contract, license and/or lease, together with all supplements, assignments and amendments thereto, before issuing any policy of title insurance without excepting this item from coverage.
The Company reserves the right to except additional items and/or make additional requirements after reviewing said documents.
37. Matters which may be disclosed by an inspection and/or by a correct ALTA/NSPS Land Title Survey of said Land that is satisfactory to the Company, and/or by inquiry of the parties in possession thereof.
38. Intentionally deleted.
39. Intentionally deleted.
40. Intentionally deleted.
41. Intentionally deleted.
42. Intentionally deleted.
43. Intentionally deleted.
44. Intentionally deleted.
45. Intentionally deleted.
46. Intentionally deleted.
PLEASE REFER TO
THE “INFORMATIONAL NOTES” AND “REQUIREMENTS” SECTIONS WHICH FOLLOW FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
465
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27
EXCEPTIONS
(Continued)
CLTA Preliminary Report Form – Modified (11/17/06) Page 9
END OF EXCEPTIONS
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
466
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 10
REQUIREMENTS SECTION
1. The Company will require the following documents for review prior to the issuance of any title insurance predicated upon a conveyance or encumbrance by the corporation named below:
Name of Corporation: CITY OF ESCONDIDO
a)
A Copy of the corporation By-laws and Articles of Incorporation b)
An original or certified copy of a resolution authorizing the transaction contemplated herein c)
If the Articles and/or By-laws require approval by a ‘parent’ organization, a copy of the Articles and By- laws of the
parent
The Company reserves the right to add additional items or make further requirements after review of the requested documentation.
2. Unrecorded matters which may be disclosed by an Owner’s Affidavit or Declaration. A form of the Owner’s Affidavit/Declaration is attached to this Preliminary Report/Commitment. This Affidavit/Declaration is to be completed by the record owner of the land and submitted for review prior to the closing of this transaction. Your prompt attention to this requirement will help avoid delays in the closing of this transaction. Thank you.
The Company reserves
the right to add additional items or make further requirements after review of the requested Affidavit/Declaration.
END OF REQUIREMENTS
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
467
Item19.
PRELIMINARY REPORT Chicago Title Company
YOUR REFERENCE: NBU# 122181-57 ORDER NO.: 00122199-994-LT2-X27 CLTA Preliminary Report Form – Modified (11/17/06) Page 11
INFORMATIONAL NOTES SECTION
1. None of the items shown in this report will cause the Company to decline to attach ALTA Endorsement Form 9 to an Extended Coverage Loan Policy, when issued.
2. The Company is not aware of any matters which would cause it to decline to attach CLTA Endorsement Form 116 indicating that there is located on said Land Commercial properties, known as 270 East Via Rancho Parkway East, located within the city of Escondido, California, , to an Extended Coverage Loan Policy.
3. Note: The policy of title insurance will include an arbitration provision. The Company or the insured may demand arbitration. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage.
4. Notice:
Please be aware that due to the conflict between federal and state laws concerning the cultivation, distribution, manufacture or sale of marijuana, the Company is not able to close or insure any transaction involving Land that is associated with these activities.
5. Pursuant
to Government Code Section 27388.1, as amended and effective as of 1-1-2018, a Documentary Transfer Tax (DTT) Affidavit may be required to be completed and submitted with each document when DTT is being paid or when an exemption is being claimed from paying the tax. If a governmental agency is a party to the document, the form will not be required. DTT Affidavits may be available at a Tax Assessor-County Clerk-Recorder.
6. Due
to the special requirements of SB 50 (California Public Resources Code Section 8560 et seq.), any transaction that includes the conveyance of title by an agency of the United States must be approved in advance by the Company’s State Counsel, Regional Counsel, or one of their designees.
7. Note: There are NO conveyances
affecting said Land recorded within 24 months of the date of this report.
END OF INFORMATIONAL NOTES
Jordan Curiel/Ted Tan (LA/Comm)/jh2
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
468
Item19.
Wire Fraud Alert Page 1
Original Effective Date: 5/11/2017
Current Version Date: 5/11/2017 WIRE0016 (DSI Rev. 12/07/17) TM and © Fidelity National Financial, Inc. and/or an affiliate. All rights reserved Wire Fraud Alert
This Notice is not intended to provide legal or professional advice. If you have any questions, please consult with a lawyer.
All
parties to a real estate transaction are targets for wire fraud and many have lost hundreds of thousands of dollars because they simply relied on the wire instructions received via email, without further verification. If funds are to be wired in conjunction with this real estate transaction, we strongly recommend verbal verification of wire instructions through a known, trusted phone number prior to sending funds.
In addition, the following non‐exclusive self‐protection strategies are recommended to minimize exposure to possible wire fraud. NEVER RELY on emails purporting to change wire instructions. Parties to a transaction rarely change wire instructions in the course of a transaction.
ALWAYS VERIFY wire instructions, specifically the ABA routing number and account number, by calling the party who sent the instructions to you. DO NOT use the phone number provided in the email containing the instructions, use phone numbers
you have called before or can otherwise verify. Obtain the phone number of relevant parties to the transaction as soon as an escrow account is opened. DO NOT send an email to verify as the email address may be incorrect or the email may be intercepted by the fraudster.
USE COMPLEX EMAIL PASSWORDS that employ a combination of mixed case, numbers, and symbols. Make your passwords greater than eight (8) characters. Also, change your password often and do NOT reuse the same password for other online accounts.
USE MULTI-FACTOR AUTHENTICATION for email accounts. Your email provider or IT staff may have specific instructions on how to implement this feature.
For more information on wire‐fraud scams or to report an incident, please refer to the following links:
Federal Bureau of Investigation: Internet Crime Complaint Center:
http://www.fbi.gov http://www.ic3.gov
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
469
Item19.
FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 Copyright © 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 1 Order No. 00122199- 994-LT2-X27 FIDELITY NATIONAL FINANCIAL, INC.
PRIVACY NOTICE
Effective January
1, 2020
Fidelity National Financial, Inc. and its majority-owned subsidiary companies (collectively, “FNF,” “our,” or “we”) respect and are committed to protecting your privacy. This Privacy Notice explains how we collect, use, and protect personal information, when and to whom we disclose such information, and the choices you have about the use and disclosure of that information.
A limited number of FNF subsidiaries have their own privacy notices. If a subsidiary has its own privacy notice, the privacy notice will be available
on the subsidiary’s website and this Privacy Notice does not apply.
Collection of Personal Information
FNF may collect the following categories of Personal Information:
contact information (e.g., name, address, phone number, email address); demographic information ( e.g., date of birth, gender, marital status); identity information (e.g. Social Security Number, driver’s license, passport, or other government ID number); financial account information (e.g. loan or bank account information); and other personal information necessary to provide products or services to you.
We may collect Personal Information about you from:
information we receive from you or your agent;
information about your transactions with FNF, our affiliates, or others; and information we receive from consumer reporting agencies and/or governmental entities, either directly from these entities or through others.
Collection of Browsing Information
FNF automatically collects the following types of Browsing Information when you access an FNF website, online service, or application (each an “FNF Website”) from your Internet browser, computer, and/or device:
Internet Protocol (IP) address and operating system;
browser version, language, and type;
domain name system requests; and
browsing history on the FNF Website, such as date and time of your visit to the FNF Website and visits to the pages within the FNF Website.
Like most websites, our servers automatically log each visitor to the FNF Website and may collect the Browsing Information described above.
We use Browsing Information for system administration, troubleshooting, fraud investigation, and to improve our websites.
Browsing Information generally does not reveal anything personal about you, though if you have created a user account for an FNF Website and are logged into that account, the FNF Website may be able to link certain browsing activity to your user account.
Other Online Specifics
Cookies. When you visit an FNF Website, a “cookie” may be sent to your computer. A cookie is a small piece of data that is sent to your Internet
browser from a web server and stored on your computer’s hard drive. Information gathered using cookies helps us improve your user experience. For example, a cookie can help the website load properly or can customize the display page based on your browser type and user preferences. You can choose whether or not to accept cookies by changing your Internet browser settings. Be aware that doing so may impair or limit some functionality of the FNF Website.
Web Beacons.
We use web beacons to determine when and how many times a page has been viewed. This information is used to improve our
websites.
Do Not Track. Currently our FNF Websites do not respond to “Do Not Track” features enabled through your browser.
Links to Other Sites. FNF Websites may contain links to unaffiliated third-party websites. FNF is not responsible for the privacy practices or content of those websites. We recommend that you read the privacy policy of every website you visit.
Use of Personal Information
FNF uses Personal Information for three main purposes:
To provide products and services to you or in connection with a transaction involving you. To improve our products and services.
To communicate with you about our, our affiliates’, and others’ products and services, jointly or independently.
When Information Is Disclosed
We may disclose your Personal Information and Browsing Information in the following circumstances:
to enable us to detect or prevent criminal activity, fraud, material misrepresentation, or nondisclosure; to nonaffiliated service providers who provide or perform services or functions on our behalf and who agree to use the information only to provide such services or functions;
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
470
Item19.
FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 Copyright © 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 2 Order No. 00122199- 994-LT2-X27 to nonaffiliated third party service providers with whom we perform joint marketing, pursuant to an agreement with them to jointly market financial products or services to you;
to law enforcement or authorities in connection with an investigation, or in response to a subpoena or court order; or in the good-faith belief that such disclosure is necessary to comply with legal process or applicable laws, or to protect the rights, property, or safety of FNF, its customers, or the public.
The law does not require your prior authorization and does not allow you to restrict the disclosures described above. Additionally, we may disclose your information to third parties for whom you have given us authorization or consent to make such disclosure. We do not otherwise share your Personal Information or Browsing Information with nonaffiliated third parties, except as required or permitted by law. We do share Personal Information among affiliates (other companies owned by FNF) to directly market to you. Please see “Choices with Your Information” to learn how to restrict that sharing.
We reserve
the right to transfer your Personal Information, Browsing Information, and any other information, in connection with the sale or other disposition of all or part of the FNF business and/or assets, or in the event of bankruptcy, reorganization, insolvency, receivership, or an assignment for the benefit of creditors. By submitting Personal Information and/or Browsing Information to FNF, you expressly agree and consent to the use and/or transfer of the foregoing information in connection with any of the above described proceedings.
Security of Your Information
We maintain physical, electronic, and procedural safeguards to protect your Personal Information.
Choices With Your Information
If you do not want FNF to share your information among our affiliates to directly market to you, you may send an “opt out” request by email,
phone, or physical mail as directed at the end of this Privacy Notice. We do not share your Personal Information with nonaffiliates for their use to direct market to you.
Whether you submit Personal Information or Browsing Information to FNF is entirely up to you. If you decide not to submit Personal Information or Browsing Information, FNF may not be able to provide certain services or products to you.
For California
Residents: We will not share your Personal Information or Browsing Information with nonaffiliated third parties, except as permitted
by California law. For additional information about your California privacy rights, please visit the “California Privacy” link on our website (https://fnf.com/pages/californiaprivacy.aspx) or call (888) 413-1748.
For Nevada Residents: You may be placed on our internal Do Not Call List by calling (888) 934-3354 or by contacting us via the information set forth
at the end of this Privacy Notice. Nevada law requires that we also provide you with the following contact information: Bureau of Consumer Protection, Office of the Nevada Attorney General, 555 E. Washington St., Suite 3900, Las Vegas, NV 89101; Phone number: (702) 486-3132; email: [email protected].
For Oregon Residents: We will not share your Personal Information or Browsing Information with nonaffiliated third parties for marketing purposes, except after you have been informed by us of such sharing and had an opportunity to indicate that you do not want a disclosure made for marketing purposes.
For Vermont Residents: We will not disclose information about your creditworthiness to our affiliates and will not disclose your personal information,
financial information, credit report, or health information to nonaffiliated third parties to market to you, other than as permitted by Vermont law, unless you authorize us to make those disclosures.
Information From Children
The FNF Websites are not intended or designed to attract persons under the age of eighteen (18).We do not collect Personal Information from any
person that we know to be under the age of thirteen (13) without permission from a parent or guardian.
International Users
FNF’s headquarters is located within the United States. If you reside outside the United States and choose to provide Personal Information or Browsing Information to us, please note that we may transfer that information outside of your country of residence. By providing FNF with your Personal Information and/or Browsing Information, you consent to our collection, transfer, and use of such information in accordance with this Privacy Notice.
FNF Website Services for Mortgage Loans
Certain FNF companies provide services to mortgage loan servicers, including hosting websites that collect customer information on behalf of mortgage loan servicers (the “Service Websites”). The Service Websites may contain links to both this Privacy Notice and the mortgage loan servicer or lender’s privacy notice. The sections of this Privacy Notice titled When Information is Disclosed, Choices with Your Information, and Accessing and Correcting Information do not apply to the Service Websites. The mortgage loan servicer or lender’s privacy notice governs use, disclosure, and access to your Personal Information. FNF does not share Personal Information collected through the Service Websites, except as required or authorized by contract with the mortgage loan servicer or lender, or as required by law or in the good-faith belief that such disclosure is necessary: to comply with a legal process or applicable law, to enforce this Privacy Notice, or to protect the rights, property, or safety of FNF or the public.
Your Consent To This Privacy Notice; Notice Changes; Use of Comments or Feedback
By submitting Personal Information and/or Browsing Information to FNF, you consent to the collection and use of the information in accordance with this Privacy Notice. We may change this Privacy Notice at any time. The Privacy Notice’s effective date will show the Attachment "1"
Resolution No. 2024-168
Exhibit "B"
471
Item19.
FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 Copyright © 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 3 Order No. 00122199- 994-LT2-X27 last date changes were made. If you provide information to us following any change of the Privacy Notice, that signifies your assent to and
acceptance of the changes to the Privacy Notice. We may use comments or feedback that you submit to us in any manner without notice or compensation to you.
Accessing and Correcting Information; Contact Us
If you have questions, would like to correct your Personal Information, or want to opt-out of information sharing for affiliate marketing, send your
requests to [email protected], by phone to (888) 934-3354, or by mail to:
Fidelity
National Financial, Inc.
601 Riverside Avenue
Jacksonville, Florida 32204
Attn: Chief Privacy Officer
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
472
Item19.
CA Discount Notice Effective Date: 1-10-2010
Notice of Available Discounts
Pursuant to Section 2355.3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc. and its subsidiaries
(“FNF”) must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions, a preliminary report or commitment. Please be aware that the provision of this notice does not constitute a waiver of the consumer’s right to be charged the field rate. As such, your transaction may not qualify for the below discounts.
You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative. These discounts
are generally described below; consult the rate manual for a full description of the terms, conditions and requirements for each discount. These discounts only apply to transaction involving services rendered by the FNF Family of Companies. This notice only applies to transactions involving property improved with a one-to-four family residential dwelling.
FNF Underwritten Title Company FNF Underwriter
CTC - Chicago Title Company CTIC - Chicago Title Insurance Company Available Discounts
CREDIT FOR PRELIMINARY REPORTS AND/OR COMMITMENTS ON SUBSEQUENT POLICIES (CTIC) Where
no major change in the title has occurred since the issuance of the original report or commitment, the order may be reopened
within 12 months and all or a portion of the charge previously paid for the report or commitment may be credited on a subsequent policy charge within the following time period from the date of the report.
DISASTER LOANS (CTIC)
The charge for a lender’s Policy (Standard or Extended coverage) covering the financing or refinancing by an owner of record,
within 24 months of the date of a declaration of a disaster area by the government of the United States or the State of California on any land located in said area, which was partially or totally destroyed in the disaster, will be 50% of the appropriate title insurance rate.
CHURCHES OR CHARITABLE NON-PROFIT ORGANIZATIONS (CTIC)
On
properties used as a church or for charitable purposes within the scope of the normal activities of such entities, provided said charge is normally the church’s obligation the charge for an owner’s policy shall be 50% to 70% of the appropriate title insurance rate, depending on the type of coverage selected. The charge for a lender’s policy shall be 40% to 50% of the appropriate title insurance rate, depending on the type of coverage selected.
EMPLOYEE RATE (CTC and CTIC)
No charge shall be made to employees (including employees on approved retirement) of the Company or its underwritten, subsidiary
title companies for policies or escrow services in connection with financing, refinancing, sale or purchase of the employees’ bona fide home property. Waiver of such charges is authorized only in connection with those costs which the employee would be obligated to pay, by established custom, as a party to the transaction.
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
473
Item19.
Attachment One (6-5-14) CA & NV
ATTACHMENT ONE
CALIFORNIA LAND TITLE ASSOCIATION
STANDARD
COVERAGE POLICY – 1990
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of:
1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien
or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage
any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
3. Defects, liens, encumbrances, adverse claims or other matters:
(a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to
the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy.
4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated.
5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law.
6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the
insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws.
EXCEPTIONS FROM COVERAGE - SCHEDULE B, PART I
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public
records.
Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof.
3. Easements, liens or encumbrances, or claims thereof, not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted
under (a), (b) or (c) are shown by the public records.
6. Any lien or right to a lien for services, labor or material not shown by the public records.
CLTA HOMEOWNER'S POLICY OF
TITLE INSURANCE (12-02-13)
ALTA HOMEOWNER'S
POLICY OF TITLE INSURANCE
EXCLUSIONS
In addition to the Exceptions in Schedule B,
You are not insured against loss, costs, attorneys' fees, and expenses resulting from:
1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning:
a. building;
b.
zoning;
c. land use;
d.
improvements on the Land;
e. land division; and
f.
environmental protection.
This Exclusion does not limit
the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27.
2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the
coverage described in Covered Risk 14 or 15.
3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17.
4. Risks:
a. that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b.
that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; Attachment "1"
Resolution No. 2024-168
Exhibit "B"
474
Item19.
Attachment One (6-5-14) CA & NV
c. that result in no loss to You; or
d.
that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28.
5. Failure to pay value for Your Title.
6. Lack of a right:
a.
to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b.
in streets, alleys, or waterways that touch the Land.
This Exclusion does not limit
the coverage described in Covered Risk 11 or 21.
7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or
similar creditors’ rights laws.
8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence.
9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances.
LIMITATIONS ON COVERED RISKS
Your insurance for the following Covered Risks is limited on the Owner’s Coverage Statement as follows:
For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A.
The deductible amounts and maximum
dollar limits shown on Schedule A are as follows:
Your Deductible Amount
Our Maximum Dollar
Limit of Liability
Covered Risk 16:
1.00% % of Policy Amount Shown in Schedule A or
$2,500.00 (whichever is
less) $ 10,000.00
Covered Risk 18:
1.00% % of Policy Amount Shown in Schedule A or
$5,000.00 (whichever is
less) $ 25,000.00
Covered Risk 19:
1.00% of Policy Amount Shown in Schedule A or
$5,000.00 (whichever is
less) $ 25,000.00
Covered Risk 21:
1.00% of Policy Amount Shown in Schedule A or
$2,500.00 (whichever is
less) $ 5,000.00
2006 ALTA LOAN POLICY (06-17-06)
EXCLUSIONS FROM COVERAGE
The
following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of:
1. (a) Any
law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii)
the character, dimensions, or location of any improvement erected on the Land; (iii)
the subdivision of land; or
(iv)
environmental protection;
or
the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under
Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to
the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.
4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated.
5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law.
6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction creating the lien of
the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b)
a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy.
7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and
the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b).
The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
EXCEPTIONS FROM COVERAGE
(Except as provided in Schedule B - Part II,( t(or T)his policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of:
Attachment "1"
Resolution No. 2024-168
Exhibit "B"
475
Item19.
Attachment One (6-5-14) CA & NV
(PART I
(The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property
or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records.
2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may
be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land
survey of the Land and not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted
under (a), (b), or (c) are shown by the Public Records.
6. Any lien or right to a lien for services, labor or material not shown by the Public Records.
PART II
In
addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:) 2006 ALTA OWNER’S POLICY (06-17-06)
EXCLUSIONS FROM COVERAGE
The
following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of:
1. (a) Any
law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii)
the character, dimensions, or location of any improvement erected on the Land; (iii)
the subdivision of land; or
(iv)
environmental protection;
or
the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under
Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to
the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title.
4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as
shown in Schedule A, is
(a) a fraudulent conveyance or fraudulent transfer; or
(b)
a preferential transfer for any reason not stated in Covered Risk 9 of this policy.
5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date
of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A.
The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of:
(The
above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property
or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records.
2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may
be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land
survey of the Land and that are not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted
under (a), (b), or (c) are shown by the Public Records.
6. Any lien or right to a lien for services, labor or material not shown by the Public Records.
7. (Variable exceptions such as taxes, easements, CC&R’s, etc. shown here.) Attachment "1"
Resolution No. 2024-168
Exhibit "B"