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2022-4111
Reference Information CONTRACT #2022-4111 Accepting Office/Agent First American Title Insurance Company National Commercial Services PropertyAddress/ProjectReference. 3989 Central Avenue, Columbia Heights, MN File Number., NCS-984777X1-M PLS General Description ofProject.'The City of Columbia Heights City Hall (to be platted and legally described as Commercial Unit, CIC No. 342, The Heights, a Condominium, Anoka County, Minnesota) INDEMNITY AGREEMENT I (Mechanics' Liens) INTRODUCTION THIS INDEMNITY AGREEMENT I (this "Agreement") is made and entered into as of October 25, 2022, by The City of Columbia Heights (the "Indemnitor") in favor of FIRST AMERICAN TITLE INSURANCE COMPANY, a Nebraska corporation, its affiliates, subsidiaries, and agents (collectively "First American"). RECITALS: A. Indemnitor is the owner of, and/or has a material interest in, the Property or a transaction involving the Property. B. In connection with the Project, Construction of certain improvements has commenced or will commence on the Property. C. In connection with a contemplated transaction involving the Property, First American has been requested to issue one or more Title Policies in respect to the Property insuring against loss or damage by reason of Mechanics' Liens. D. In connection with future transactions, First American may issue one or more Title Policies insuring against loss or damage by reason of Mechanics' Liens. If First American, in its discretion, elects to issue a Title Policy for the Property, it will do so in material reliance on each of the covenants, agreements, representations, and warranties of Indemnitor set forth in this Agreement, and First American would not have issued a Title Policy but for such covenants, agreements, representations, and warranties of Indemnitor. NOW, THEREFORE, the parties hereto agree as follows: AGREEMENT: 1. DEFINITIONS: As used herein, the following terms shall have the following meanings: Construction: Any and all work, labor, services, construction, alteration, maintenance, repair, and/or placement or segregation of materials, whether heretofore or hereafter furnished, by the Indemnitor, or parties acting on behalf of or at the direction of the Indemnitor, which may give rise to the right for liens to be filed against the Property under the applicable statutes and/or equitable principles of the State. Construction Costs: All costs, fees, expenses, and/or obligations for or in connection with the Construction. Effective Date: The date this Agreement becomes effective in accordance with Paragraph 3 below. Mechanics' Liens: All liens or rights to lien against the Property which attach or are claimed against the Property due to Construction. Person: A natural person, or an artificial person (including, without limitation, a corporation, partnership, limited liability company, trust, or other artificial person), as the context may require. Policy Date: The "Date of Policy" as indicated on Schedule A of a Title Policy. Project: The work or works of improvement generally described in the "General Description of Project" line of the Reference Information. Property: That certain real property as described on Exhibit A attached hereto and incorporated herein by reference. Property Owner: BPOZ Columbia Heights, LLC. Reference Information:The informational items indicated on the header of page one of this Agreement. State: The state, commonwealth, territory, or similar political subdivision in which the Property is located. Title Policy(ies): Policy or policies of title insurance issued by First American on or after the Effective Date with respect to the Property. 2. REPRESENTATIONS AND WARRANTIES. As of the Effective Date, Indemnitor represents and warrants to First American as follows: (a) except as otherwise previously disclosed in writing to First American, all Construction Costs currently due and owing have been timely paid; (b) the Indemnitor has committed funds sufficient to pay all Construction Costs applicable to the Project; (c) except as otherwise previously disclosed in writing to First American, to the best of Indemnitor's knowledge, there are no Mechanics' Liens filed against the Property; (d) Indemnitor has no knowledge of any potential Mechanics' Liens that may be filed against the Property due to untimely payments of or disputes regarding Construction Costs. 3. EFFECTIVE DATE AND TERM. 3.1. Effective Date. The Effective Date of this Agreement shall be the earlier of the date First American issues or becomes contractually obligated to issue its Title Policy in connection with the Property. Where First American issues more than one Title Policy in connection with the Property, the Effective Date shall be the earliest Policy Date of the respective Title Policies. Indemnitor acknowledges and agrees that delivery of this Agreement by Indemnitor to First American shall not be deemed a commitment to issue a Title Policy for the Property. First American has no obligation or duty to Indemnitor, Property Owner, or any other person to accept this Agreement or, in the future, to issue a Title Policy for the Property solely by reason of this Agreement. 3.2. Term. Upon acceptance of this Agreement by First American this Agreement shall remain in effect until the latest of (a) the expiration of the time period for filing any Mechanics' Lien arising out of the Project (including any extensions of such time period that may occur as a result of tolling or stay), plus sixty (60) days, and (b) the full and final expungement of record (after the passage of any appeal periods) of any Mechanics' Lien and/or lis pendens arising out of any Mechanics' Lien that may be filed against the Property arising out of the Project, and (c) a final, non -appealable order resolving any action or proceeding (including nonjudicial actions such as mediation or arbitration) pertaining to any Mechanics' Lien arising out of the Project. Notwithstanding the expiration or termination of this Agreement under the prior sentence, any obligation of Indemnitor to indemnify First American arising prior to the expiration or termination of this Agreement survives and remains in effect until satisfied by Indemnitor. Indemnitor acknowledges and agrees that First American may rely on this Agreement to issue a Title Policy at any time without notice to or further approval of Indemnitor. 4. MULTIPLE INDEMNITORS. 4.1. Joint and Several. If there is more than one Indemnitor under this Agreement, then all of the obligations contained in this Agreement shall be the joint and several obligations of each and every Indemnitor. Each Indemnitor shall be fully liable to First American even if another Indemnitor is not liable for any reason, including the failure of such Indemnitor to execute this Agreement. 4.2. Waiver and Release. First American has the right, in its discretion and without notice to or consent by Indemnitor, to (a) waive any provision of this Agreement as it relates to any Indemnitor, at any time or from time to time, without providing the same or similar waiver for the benefit of any other Indemnitor, and/or (b) release any Indemnitor from any or all obligations under this Agreement at any time or from time to time, without releasing any other Indemnitor. 5.1. Payment of Construction Costs. Indemnitor covenants and agrees that Indemnitor shall cause all Construction Costs on the Property to be paid promptly and in full prior to the time of filing any Mechanics' Liens. 5.2. Indemnity. In addition to any other rights or remedies available to First American at law or in equity, Indemnitor agrees to pay, protect, defend, indemnify, hold and save harmless First American from and against any and all liabilities, claims, obligations, losses, costs, charges, expenses, causes of action, suits, demands, judgments, and damages of any kind or character whatsoever, including, but not limited to, actual attorneys' fees and costs (including appellate fees and costs) incurred or sustained by First American, and actual attorneys' fees awarded against First American, directly or indirectly, by reason of, relating to, or arising under any Title Policy relating to Mechanics' Liens, or in any other action at law or in equity under any theory of recovery as a result of Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved the existence of Mechanics' Liens. For the avoidance of doubt, it is the intent of the parties that all loss, cost, or expense relating to Mechanics' Liens will be borne by Indemnitor, and not by First American. 5.3. Day to Noffy First American. Indemnitor shall notify First American in writing if Indemnitor is in any manner notified or becomes aware: (a) of a claim or dispute which relates to Mechanics' Liens; (b) of the filing or commencement of any action at law or in equity or any judicial or non -judicial proceeding (including mediation or arbitration) relating to Mechanics' Liens; (c) that the Indemnitor no longer has committed funds sufficient to complete the Project; and/or (d) of any untimely payments of or disputes regarding Construction Costs that may give rise to a Mechanics' Lien. Indemnitor agrees to notify First American in writing of any such matter as soon as practicable, but in no event later than seven (7) days from Indemnitor's being notified or becoming aware of such matter. 5.4. Rights and Obligations. Indemnitor acknowledges and agrees that First American has a duty of good faith to its insured under any Title Policy. Therefore, upon the filing of any action at law or in equity or the assertion of any claim, cause of action, or judicial or non -judicial proceeding relating to Mechanics' Liens, or at any other time which First American deems it necessary to protect itself or its insured under a Title Policy in light of First American's duties, First American shall require that Indemnitor, at Indemnitor's sole cost and expense, promptly do one or more of the following: (a) Cause a valid release of any Mechanics' Lien to be filed of record in the proper governmental office. (b) Cause to be recorded with respect to any Mechanics' Lien a bond releasing the Property from the effect of the Mechanics' Lien, should such bond be available and effective in removing the effect of such Mechanics' Lien from the Property as a matter of law. (c) In situations where affirmative legal action or proceedings at law or in equity are necessary to discharge, eliminate, or remove any Mechanics' Lien, cause counsel selected by First American to institute such action or proceeding as is necessary to discharge, eliminate or remove the Mechanics' Lien. Indemnitor may object to First American's choice of counsel for reasonable cause. Indemnitor agrees to cause such counsel to keep First American apprised as to the status of such action or proceeding, at no cost to First American. (d) If an action or proceeding concerning any Mechanics' Lien is instituted by a third party, cause such action or proceeding to be timely defended and resisted by counsel selected by First American, which counsel will protect First American and any and all insured(s) to whom First American may have potential liability as a result of the Mechanics' Lien. Indemnitor may object to First American's choice of counsel for reasonable cause. Indemnitor agrees to cause such counsel to keep First American apprised as to the status of such action or proceeding, at no cost to First American. (e) If the payment of a sum of money will discharge, eliminate, or remove the effect of any Mechanics' Lien as to the Property, pay such sum as is sufficient to discharge, eliminate, or remove the Mechanics' Lien in a manner legally sufficient to effect the release of the Mechanics' Lien of record, and deliver documents evidencing such payment to First American, in a form satisfactory to First American. (f) Take such action with respect to any Mechanics' Lien as First American authorizes Indemnitor in writing to undertake, provided that any such authority shall not be a waiver by First American to require Indemnitor at any time to comply with the foregoing subparagraphs of this Paragraph above, within ten (10) days of First American's written revocation of authority to take action other than that under any other subparagraphs of this Paragraph, and demand that Indemnitor comply with any other subparagraphs of this Paragraph. Indemnitor covenants and agrees to cooperate with First American and to act diligently and in good faith in connection with First American's rights under this Paragraph 5.4. If Indemnitor shall fail to meet the demand of First American as set forth above within a timeframe that does not compromise First American's rights or obligations with respect to any such claim, action or proceeding, then First American shall have the right, but not the obligation, to take such action as First American deems reasonable to protect its interests and that of its insured under any Title Policy. 5.5. Interest. Indemnitor agrees that any sums which are actually advanced or incurred by First American pursuant to this Agreement or by its exercise of any rights hereunder shall be repaid by Indemnitor to First American within ten (10) days of Indemnitor's receipt of First American's written demand therefor, together with interest thereon at four percent (4%) above the prime rate as published in the Wall Street Journal as of the date such sum was first advanced by First American, and continuing until it is repaid in full, but in no event shall such rate of interest exceed the lesser of: (a) ten percent (10%) per annum, or (b) the maximum rate permitted by law in the State. Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved 5.6. Determination of Coverage. Any determination of coverage by First American shall be conclusive evidence that the matter is within the Title Policy coverage as to Mechanics' Liens for purposes of this Agreement. Indemnitor acknowledges and agrees that Indemnitor has no right to participate in First American's coverage decisions. If First American accepts the defense of a matter within the Title Policy as to the Mechanics' Liens with a reservation of rights, then all costs, damages, expenses, and legal fees actually incurred by First American shall be deemed within the terms and obligations of Indemnitor under this Agreement even if the matter is subsequently determined by a court to not be within the Title Policy as to the Mechanics' Liens. 6. REMEDIES. Indemnitor specifically acknowledges that upon any default by any Indemnitor under this Agreement, First American shall have the right to exercise any and all remedies available at law, in equity, or under this Agreement against any, some, or all of the Indemnitors, including but not limited to injunctive relief, specific performance, damages, self-help, and/or resort to any collateral held by First American to secure the obligations of Indemnitor under this Agreement. 7. SUBROGATION AND SUBORDINATION. Indemnitor hereby unconditionally grants to First American any and all rights of subrogation Indemnitor may have with respect to Mechanics' Liens. Indemnitor agrees to promptly execute any documents with respect to Mechanics' Liens or any other matter relating to this Agreement requested by First American with respect to such right of subrogation and to deliver same to First American. Indemnitor hereby subordinates any and all debts owed to any one Indemnitor from any other Indemnitor to the obligations owed to First American under this Agreement. Indemnitor acknowledges and agrees that First American is subrogated under its Title Policy to any obligations of Indemnitor that may be owed to First American's insured under such Title Policy, and nothing in this Agreement modifies, amends, replaces, or supersedes First American's rights under its Title Policy. ► F-11 ► WIT111111f►'f��77uT�i��7►e Intentionally omitted. 8.1. Covenants Regarding Financial Information. Should any Indemnitor be notified or become aware of any event which could be a material adverse change in the financial condition of such Indemnitor, then such Indemnitor shall provide written notice to First American as soon as practicable, but in no event later than seven (7) days after such Indemnitor is notified or becomes aware of such event. 9. WAIVERS AND RELATED COVENANTS. In the event that Indemnitor is not the Property Owner, Indemnitor understands and agrees that First American has no obligation to secure an indemnity from the Property Owner. Indemnitor agrees that the validity of this Agreement and the obligations of Indemnitor hereunder shall in no way be terminated, affected, limited, or impaired by reason of (a) the assertion by First American of any rights or remedies which it may have under any agreement or cause of action against any other Person (including but not limited to Property Owner); (b) First American's failure to exercise, or delay in exercising, any such right or remedy that First American may have against any other Person (including but not limited to Property Owner); (c) First American's failure to exercise, or delay in exercising, any right or remedy First American may have hereunder or in respect to this Agreement; (d) the commencement of a case under Title 11 of the United States Code and/or any similar State insolvency or creditors' rights laws by or against any Person (including but not limited to Property Owner); or (e) Indemnitor's ownership interest in the Property or lack thereof. Indemnitor further covenants that this Agreement shall remain and continue in full force and effect as to any Title Policies issued at any time by First American with respect to the Property and that First American shall not be under a duty to protect, secure, or enforce any rights it may have under any indemnity agreement or any other right against any third party, and that other indulgences or forbearances may be granted under any or all of such documents, all of which may be made, done or permitted without notice to, or further consent of, Indemnitor. First American may, at its option, proceed directly and at once, without notice, against any Indemnitor to collect and recover the full amount of the liability hereunder or any portion thereof, without proceeding against the Property Owner or any other Person. Indemnitor hereby waives and relinquishes (f) any right or claim of right to cause a marshaling of any Indemnitor's assets; (g) all rights and remedies accorded by applicable law to indemnitors or guarantors, except any rights of subrogation which Indemnitor may have, provided that the assurances and obligations provided for hereunder shall not be contingent upon the existence of any such rights of subrogation; (h) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (i) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice or demand; 0) any defense based upon an election of remedies by First American, including without limitation an election to proceed in a manner which Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved has impaired, eliminated or otherwise destroyed Indemnitor's rights of subrogation and reimbursement, if any, against the Property Owner or any third party; (k) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (1) intentionally omitted; (m) and any duty on the part of First American to disclose to Indemnitor any facts First American may now or hereafter know about the Property Owner, since Indemnitor acknowledges that Indemnitor is fully responsible for being and keeping informed of the financial condition of the Property Owner and of all circumstances bearing on the risk of nonperformance of any obligations covered by this Agreement. 10. NOTICE. Any notices, demands or communications under this Agreement between Indemnitor and First American shall be in writing, shall include the Reference Information, and may be given either by commercial overnight delivery service, or by mailing via first-class United States certified mail, postage prepaid, return receipt requested. Any such notice, demand, or communication must be addressed to each party as set forth on the signature page of this Agreement. If the address for First American is not completed on the signature page, notice to First American shall be given to First American's office for the State. All notices given in accordance with the requirements in this Paragraph shall be deemed to be received as of the earlier of (a) actual receipt by the addressee thereof, or (b) the expiration of five (5) business days after depositing same with the commercial overnight delivery carrier or the United States Postal System, as applicable. 11. 11.1. No Waiver. No delay, error, or omission by First American in exercising any right or power under this Agreement shall impair any such right or power or be construed as a waiver thereof. A waiver by First American of a breach of any of the covenants, agreements, restrictions, obligations, or conditions of this Agreement with respect to the Indemnitor shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions, obligations or conditions under this Agreement. No waiver of any of First American's rights or powers under this Agreement is effective unless in writing and executed by First American. 11.2. No Third Party Beneficiaries, This Agreement is only between Indemnitor and First American, and is not intended to be, nor shall it be construed as being, for the benefit of any third party. 11.3. Partial Invalidity. If any term, provision, condition, or covenant of this Agreement or the application thereof to any party or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such term, provision, condition, or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. 11.4. Modification or Amendment. Any alteration, change, modification, amendment, or supplement to this Agreement or any documents incorporated herein, in order to become effective, can only be made by written instrument executed by all parties hereto. 11.5. Execution in Counterpart. This Agreement and any alteration, change, modification, amendment or supplement to this Agreement may be executed by Indemnitor in several counterparts, and as so executed, will constitute one agreement binding on all Indemnitors, notwithstanding that all Indemnitors are not signatories to the original or the same counterpart. Any signature page may be detached from its counterpart and attached to another counterpart so as to form one complete document. Counterparts executed and delivered by electronic means, including but not limited to facsimile or portable document format (PDF), shall be fully effective and binding and shall constitute originals. 11.6. Qualification; Authority. Each natural person executing this Agreement on behalf of an Indemnitor which is an artificial person represents, warrants, and covenants to First American that (a) such artificial person is duly formed, in good standing, and authorized to do business in the State, (b) such natural person is duly authorized to execute and deliver this Agreement on behalf of such artificial person in accordance with authority granted under the organizational documents of such artificial person, and (c) such artificial person is bound under the terms of this Agreement. 11.7. Merger of Prior Agreements and Understandings. This Agreement and other documents incorporated herein by reference contain the entire understanding and agreement between the parties relating to the obligations of the parties with respect to Mechanics' Liens, and all prior or contemporaneous agreements, understandings, representations, warranties, and statements, whether oral or written, shall be Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved of no force or effect. 11.8. Jurisdiction and Venue. Indemnitor hereby submits to the personal jurisdiction of any state or federal court of First American's choosing having subject matter jurisdiction with respect to this Agreement, and Indemnitor waives any objection to venue therein should any action at law or in equity be necessary to enforce or interpret this Agreement. If any action at law or in equity is necessary to enforce or interpret this Agreement, then the prevailing party in such action shall be entitled to recover from the other party the prevailing party's actual attorneys' fees and other expenses incurred in connection with such action or proceeding in addition to its actual court costs. 11.9. Other. This Agreement is to be interpreted according to the laws of the State and is to be construed according to its fair meaning. All parties contributed materially to the preparation and negotiation of this Agreement, and this Agreement is not to be construed against any party. Titles and captions in this Agreement are for convenience only and are not part of the substance of this Agreement. The introduction, recitals, and Reference Information set forth hereinabove are all incorporated into this Agreement as material and essential terms of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number will each be deemed to include the others wherever and whenever the context so dictates. This Agreement inures to the benefit of and binds the personal representatives, successors, heirs, and assigns of the parties hereto. 12. SECURITY. Indemnitor has provided or will provide security for this Agreement to First American as follows: [ X ] None at this time [ ] Security Agreement* (Cash) [ ] Security Agreement* (Non -Cash) [ ] Security Agreement** (Other) ] Letter of Credit Agreement w/ Sight Draft ] Control Agreement ] Deed of Trust / Mortgage / Security Deed ] Other: A breach by an obligor, pledgor or debtor under any of the foregoing documents as well as any documents which may be referenced in such documents shall be deemed a breach by Indemnitor under this Agreement. Unless otherwise agreed in writing, any sums held by First American as security may be held by First American in its general accounts and not deposited into an interest bearing account. Indemnitor understands that as a result of maintaining its accounts with a financial institution and its on -going banking relationship with the specific financial institution, First American may receive certain financial benefits such as an array of bank services, accommodations, loans or other business transactions from the financial institution ("collateral benefits"). Indemnitor agrees that any and all such collateral benefits belong solely to First American and First American has no obligation to account to Indemnitor for the value of any such collateral benefits. If the funds are deposited into a special interest bearing account, all such interest will be added to and retained in the account as part of the security for First American. Any such interest earned will be attributed for tax purposes to the Indemnitor depositing same. 13. ESTOPPEL. NOTWITHSTANDINGANYPOSSIBLEDIFFERENCEINTHEPARITYOF THE PARTIES HERETO, INDEMNITOR UNDERSTANDS THAT FIRST AMERICAN IS UNDERTAKING A RISK SIGNIFICANTL Y GREA TER THAN THA T UNDERTAKEN IN THE NORMAL COURSE OF PROVIDING TITLEINSURANCEPOLICIESANDRELATEDSERVICES BYENTERINGINTOTHISAGREEMENTAND ISSUINGPOLICIESOFTITLEINSURANCEIN RELIANCEONTHISAGREEMENTANDEACHAND EVERYONE OF THE COVENANTS, AGREEMENTS, REPRESENTATIONS, AND WARRANTIES OF INDEMNITOR CONTAINED HEREIN, THEREFORE, INDEMNITOR HEREBY DECLARES ITS WILLINGNESSTOENTER INTO THISAGREEMENTANDTOINDUCEFIRSTAMERICANTOACCEPT THISAGREEMENT, REALIZING THAT INDEMNITOR S BEST INTEREST, IN THE OPINION OF INDEMNITOR, IS BEING SERVED THEREBY, [Signature page follows] * Requires a UCC Financing Statement to be executed and filed. ** May require a UCC Financing Statement to be executed and filed. Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved File number: NCS-984777XI-MPLS NOTICE: THIS AGREEMENT CONTAINS PROVISIONS WHICH PERSONALLY OBLIGATE INDEMNITOR. IT IS STRONGLY RECOMMENDED THAT INDEMNITOR CONSULT LEGAL COUNSEL PRIOR TO EXECUTING THIS AGREEMENT. INDEMNITORS: THE CITY OF COLUMBIA HEIGHTS By: Kelli Bourgeois Its: City Manager Notice Address: City of Columbia Heights 590 40th Avenue NE Columbia Heights, MN 55421 ADDRESS FOR NOTICE TO FIRST AMERICAN: (If this information is not completed, please see Paragraph 10.) Notice Address: 121 South 8th Street, Suite 1250, Minneapolis, MN 55402 Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved EXHIBIT A DESCRIPTION OF PROPERTY File Number: NCS-984777X1-MPLS Site Address: 3989 Central Avenue, Columbia Heights, Minnesota Description of Property: Commercial Unit, CIC No. 342, The Heights, a Condominium, Anoka County, Minnesota. Revised July 1, 2014 © 2014 First American Title Ins. Co. All Rights Reserved