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HomeMy WebLinkAboutMortgage Subordination MORTGAGE SUBORDINATION AGREEMENT THIS AGREEMENT, entered into this 10th day of March, 1995, between Northeast State Bank of Minneapolis, a Minnesota corporation ("Northeast"), and the Housing and Redevelopment Authority in and for the city of Columbia Heights, a public body corporate and politic under the laws of Minnesota (the "HRA"). WHEREAS, Northeast will advance funds to Mobilia, Ltd., a Delaware corporation in the principal amount of Seven Hundred Thousand and NO/100 Dollars ($700,000.00) as evidenced by that certain Promissory Note dated March 10, 1995, ("First Mortgage Note") for the purpose of financing certain business interests and for the payoff of certain liens on that certain parcel of property legally described on Exhibit A attached hereto and incorporated herein. WHEREAS, Northeast will secure its First Mortgage Note by taking a first mortgage against the Property, which first mortgage will be dated March 10, 1995, and recorded March 1995, as document no. in the office of t~ Hennepin County Recorder and Registrar of Titles ("First Mortgage"). WHEREAS, Northeast will not make the advances under the Note until the Note is secured by a first mortgage on the Property. WHEREAS, the HRA is the holder of a Note from Mobilia, Ltd., a Delaware corporation in the principal amount of One Million Fifteen Thousand Ninety-nine and NO/100 Dollars ($1,015,099.00) as evidenced by that certain Promissory Note dated March 10, 1995, ("Second Mortgage Note"). WHEREAS, the HRA will secure its Second Mortgage Note by taking a second mortgage against the Property described on Exhibit A attached hereto, which Second Mortgage will be dated March 10, 1995, and recorded March , 1995, as document no. in the office of the Hennepin County Recorder and Registrar of Titles ("Second Mortgage"). WHEREAS, Northeast's First mortgage constitutes a prior and superior lien than that of the second mortgage. NOW, THEREFORE, in consideration of the mutual covenants herein, the parties hereby agree as follows: SECTION 1. SUBORDINATION The HRA hereby covenants and agrees that the second mortgage shall be considered and in all respects shall be subordinate to the first mortgage and any note and any other extensions or renewals of the first mortgage or the first mortgage note provided that: A. Any funds derived from the first mortgage note are used solely for the purposes for which the first mortgage note was procured. B. In any extension or renewal of the first mortgage and/or the first mortgage note, the interest then due is paid and not capitalized. C. The amount of this subordination shall not exceed the original amount of $700,000.00, with interest thereon as provided in the first mortgage note, together with the statutory fees allowed for the foreclosure of the first mortgage. SECTION 2. DEFAULT In the event of any default in the terms of the First Mortgage or the First Mortgage Note, Northeast will immediately give notice of such default to the HRA. The HRA, at its option, shall be allowed to cure such default within a period of fifteen (15) days after such notice is given. SECTION 3. NOTICES Any notices required to be given hereunder or otherwise by law, shall be in writing and shall be sent by united States mail, postage prepaid and deposited in a United States Post Office or a branch thereof, and addressed to the party intended at its address set forth below or such other address as it may designate by notice given. If to HRA: Northeast State Bank 3989 Central Avenue NE Minneapolis, MN 55421 city of Columbia Heights Housing and Redevelopment Authority 590 NE 40th Avenue Columbia Heights, MN 55421 If to Northeast: Such notice shall be effective upon the date of deposit into the mail as herein provided. SECTION 4. BINDING EFFECT All rights and obligations ar1s1ng out of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. -2- . ,FROM BARNA OUZ9 3a 9.19'9:5 9119 P. . NOR'l'HEAST NORTllEAST STATE BAN!< OF MINNEAPOLIS, a ~in~neBotrc~oration. ' BY'~~ M ael Co ns Its: Executive Vlce President I I I I I I I i I IN WITNESS WHEREOF, tbe parties have oaused this Agreement to be ex~ted the year and day above first written. lIRA HOUSING AND aEDEV2LOP~ENT AUTHORITY, in and for the City of Columbia Helqhta 8YI ~JI /!t~~~t!:jt./l ();, Its; ca. / () By:~a~~,~~ :Its: XeQut:ive 0 rec~or S'l'ATB 011' MINNESOTA) II ) ~B. COUNTY Ol"~ The tore~einq instrument was ac~nowledqGd before me this 10th day of March, 1995, by Michael Collins, the Executive Vice President of Northeast state Bank of Minneapolis, a oorporation under the laws of Minnesota, Qn~e alf of the oorporation. ' €I) MICHAEL F. HURLEY IIOTARVl'UtUC. MIHNESOTA HENNEPIN COUNTY lti_eom.l!n,31.2000 otary Publ c COUNTY OF Anoka STATE OF MINNESOTA) J 8S. Tbe'fore9oinq inGt~mQnt was acknowledsed before me this 10th day of MarCh, 1995, by D.J. Murzyn., Jr'llnd , n"n;ll <! 8. Sr.hne i der , ,tho. Chai~ and. Executive D1recto~, respeotively, Of COlumbia Keiqhts BouQinq and R.developmen~ Authority, a pub lid body C rporate ~nd politic under the laws of Minnesota, on behalf t the :Z'o tl>WN_1i'.....M'~:J I L ,/, ~ /J;:r.~:.. 1<J;rH;~'r'N R. PEPIN '0 <>: tas1:-:~:;~ N011J\vrUHLlC - M:~t:ESOT~ ~ /: Uc 1 / 0 r~~~~/rt.ycommoExpoJM,C1.20~ y Pu~ c ~i~';I'NoW~m'IM'" '-3- p'd r N3Nj;,j:) '8 S3W,OH 6.: '3. S6. 60 ::J1jl<1 ,.-,.." THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Plaza 200 Coon Rapids Boulevard Minneapolis, MN 55433 (612) 780-8500 (MFH) mfh\nesb\mobilla\subordln -4- EXHIBIT A LEGAL DESCRIPTION Lot 32, Block 6, Reservoir Hills. Lots 25 through 28, Block 1, Walton's and 34, Block 6, Reservoir Hills. Rearrangement of Lots 33 The vacated alley adjacent to Lots 25 Walton's Rearrangement of Lots 33 and Hills. through 28, Block 1, 34, Block 6, Reservoir Those parts of Lots 28 through 31, Block 6, Reservoir Hills, Lots 23 and 24, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, and of the vacated alley adjacent to Lot 24, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, lying Southwesterly and Westerly of the following described line: Beginning at a point on the South line of said Block 1, Walton's Rearrangement, said point being 18.00 feet West of the Southeast corner of Lot 23, of said Block 1, Walton's Rearrangement; thence Northerly on a line 18.00 feet West of and parallel with said East line of Lot 23, a distance of 87.00 feet; thence on a straight line to a point on the North line of Lot 30 of said Block 6, Reservoir Hills, said point being 47.23 feet Easterly of the Northwest corner of said Lot 30 and there terminating, all in Anoka County, Minnesota. -5-