HomeMy WebLinkAboutCity Council Resolution 2020-162
C ITY OF P LYMOUTH
R ESOLUTION N O. 2020-162
R ESOLUTION A PPROVING S UBORDINATION OF THE M ETROPOLITAN
C OUNCIL L OCAL H OUSING I NCENTIVES A CCOUNT L OAN TO FACILITATE
R EFINANCING OF 1020 W EST M EDICINE L AKE D RIVE
WHEREAS, Plymouth Leased Housing Associates, Limited Partnership (“Owner”) is
the owner of real property located at 1020 West Medicine Lake Drive in Plymouth,
Minnesota (“Property”). The Stone Creek at Medicine Lake Apartments is a 132-unit multi-
family rental housing project located on the Property, which project was completed in 2004;
and
WHEREAS, the Property contains 34 affordable units at 30-50% AMI and 98 luxury
market rate units; and
WHEREAS, the Property signed a 30-year Low Income Housing Tax Credit (“LIHTC”)
Land Use Restrictive Agreement (“LURA”) for all 34 units and a 40 year restriction on 13
Metropolitan Housing Opportunities Program units with the Minneapolis Public Housing
Authority; and
WHEREAS, the Property was financed with Fannie Mae first mortgage loan at 6.5%,
and a series of subordinate deferred loans from Hennepin County, the City of Plymouth, the
Family Housing Fund and Minnesota Housing Finance Agency; and
WHEREAS, the City and Owner entered into Loan Agreement (“City MET Loan
Agreement”) dated April 1, 2003 in which the City made a loan to Owner in the principal
amount of $200,000 (“City MET Loan”) and Owner provided to the City a Mortgage on the
Property as security for the City MET Loan; and
WHEREAS, Owner has recently received a loan proposal from Bridgewater Bank
(“Bridgewater”) for 18.2 million (65% loan to value ration) to refinance the existing Fannie
Mae loan, for the purposes of: (i) paying corporate staff; (ii) paying pre-development costs
on development projects currently in the pipeline; and (3) supporting operations of existing
affordable housing projects; and
WHEREAS, the Bridgewater loan interest rate is 4% interest resulting in a debt
service that is less than the existing Fannie Mae debt service; and
WHEREAS, the Broker Options of Value generally indicate values for the project and
Property in the range of $28-$30 million, which indicates an adequate value to support the
loan; and
WHEREAS, as a condition of the loan, Bridgewater is requiring that the City and
current subordinated lenders to the Fannie Mae loan execute the subordination agreement
attached hereto as Exhibit A; and
WHEREAS, city staff have reviewed the subordination agreement and recommend
execution by the City.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PLYMOUTH, MINNESOTA that the Subordination Agreement attached hereto as Exhibit A is
approved and the Mayor and City Manager are authorized to execute the agreement.
APPROVED by the City Council on this 26th day of May, 2020.
STATE OF MINNESOTA)
COUNTY OF HENNEPIN) SS.
The undersigned, being the duly qualified and appointed City Clerk of the City of Plymouth, Minnesota,
certifies that I compared the foregoing resolution adopted at a meeting of the Plymouth City Council on
May 26, 2020 with the original thereof on file in my office, and the same is a correct transcription
thereof.
WITNESS my hand officially as such City Clerk and the Corporate seal of the City this ___________day of
__________________, __________.
____________________________________
City Clerk
EXHIBIT A
SUBORDINATION AGREEMENT
MASTER SUBORDINATION AGREEMENT
THIS MASTER SUBORDINATION AGREEMENT (“Agreement”) is entered into this
____ day of May, 2020, by and among (i) BRIDGEWATER BANK, a Minnesota banking
corporation (“Senior Lender”), (ii) CITY OF PLYMOUTH, MINNESOTA, a public body
corporate and politic (the “City”), (iii) HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF PLYMOUTH, a public body corporate and politic (the “City
HRA”); (iv) COUNTY OF HENNEPIN, a political subdivision of the State of Minnesota on
behalf of the Hennepin Housing Consortium, a joint powers consortium (the “County”); and (v)
HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY, a political
subdivision of the State of Minnesota (“County HRA”).
RECITALS
A. Plymouth Leased Housing Associates, Limited Partnership, a Minnesota limited
partnership (“Borrower”) is the owner of certain land located at 1020 West Medicine
Lake Drive in Plymouth, Minnesota, and legally described in Exhibit A (“Land”). The
Land is improved with a 132-unit multifamily rental housing project (“Improvements”
together with the Land shall be collectively referred to as the, “Mortgaged Property”).
B. Senior Lender has agreed to extend a loan in the original principal amount of
$18,200,000.00 to the Borrower (the “Senior Loan”), which is evidenced pursuant to a
Promissory Note executed by the Borrower in favor of Senior Lender in the amount of
$18,200,000.00 (the “Senior Note”), the proceeds of which shall be disbursed to
Borrower pursuant to the terms of a Loan Agreement by and between Borrower and
Senior Lender of even date herewith (the “Senior Loan Agreement”), in connection
with the Mortgaged Property. The Senior Loan is secured in part by a Combination
Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents of
even date herewith executed by the Borrower in favor of the Senior Lender, encumbering
the Mortgaged Property (the “Senior Mortgage”).
C. Pursuant to a Loan Agreement dated as of April 1, 2003 between the City and Borrower
(“City MET Loan Agreement”), the City made a loan to Borrower in the original
principal amount of $200,000.00 (“City MET Loan”). The City MET Loan is secured
by a Mortgage dated April 1, 2003 executed by the Borrower in favor of the City,
encumbering the Mortgaged Property, recorded on April 24, 2003 with the Hennepin
County Registrar of Titles’ Office as Document No. T3724632 (the “City MET
Mortgage”).
D. Pursuant to a Loan Agreement between the City HRA and Borrower dated as of April 1,
2003 between the City HRA and Borrower (“City HRA TIHAP Loan Agreement”), the
City HRA made a loan to Borrower in the original principal amount of $236,000.00
(“City HRA TIHAP Loan”). The City HRA TIHAP Loan is secured by a Mortgage
dated April 1, 2003 executed by the Borrower in favor of the City HRA, encumbering the
Mortgaged Property, recorded on April 24, 2003 with the Hennepin County Registrar of
Titles’ Office as Document No. T3724630 (the “City HRA TIHAP Mortgage”).
E. Pursuant to a Loan Agreement dated as of April 1, 2003 between the City HRA and
Borrower (“City HRA AHFP Loan Agreement”), the City HRA made a loan to
Borrower in the original principal amount of $130,000.00 (“City HRA AHFP Loan”).
The City HRA AHFP Loan is secured by a Mortgage dated April 1, 2003 executed by the
Borrower in favor of the City HRA, encumbering the Mortgaged Property, recorded on
April 24, 2003 with the Hennepin County Registrar of Titles’ Office as Document No.
T3724631 (the “City HRA AHFP Mortgage”).
F. Pursuant to a Loan Agreement dated as of April 1, 2003 between the County and
Borrower (“County Loan Agreement”), the County made a loan to Borrower in the
original principal amount of $400,000.00 (“County Loan”). The County Loan is secured
by a Combination Mortgage, Assignment of Rents, Security Agreement, and Fixture
Financing Statement dated April 1, 2003 executed by the Borrower in favor of the
County, encumbering the Mortgaged Property, recorded on April 24, 2003 with the
Hennepin County Registrar of Titles’ Office as Document No. T3724626 (the “County
Mortgage”).
G. Pursuant to a Loan Agreement dated as of April 1, 2003 between County HRA and
Borrower (“County HRA Loan Agreement”), the County HRA made a loan to
Borrower in the original principal amount of $400,000.00 (“County HRA Loan”). The
County HRA Loan is secured by a Combination Mortgage, Assignment of Rents,
Security Agreement, and Fixture Financing Statement dated April 1, 2003 executed by
the Borrower in favor of the County, encumbering the Mortgaged Property, recorded on
April 24, 2003 with the Hennepin County Registrar of Titles’ Office as Document No.
T3724628 (the “County HRA Mortgage”).
H. The execution and delivery of this Agreement is a condition of Senior Lender consenting
to the City Met Loan, the City HRA TIHAP Loan, the City HRA AHFP Loan, the
County Loan and the County HRA Loan.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. Definitions. The following terms, when used in this Agreement (including, as appropriate,
when used in the above recitals), will have the following meanings.
(a) The terms used in this Agreement and not otherwise defined in this Agreement, will
have the meanings given to those terms in the Senior Loan Agreements.
(b) “Bankruptcy Proceeding” means any bankruptcy, reorganization, insolvency,
composition, restructuring, dissolution, liquidation, receivership, assignment for
the benefit of creditors, or custodianship action or proceeding under any federal or
state law with respect to Borrower, any guarantor of any of the Senior Indebtedness,
any of their respective properties, or any of their respective partners, members,
officers, directors, or shareholders.
(c) “Borrower” means all persons or entities identified as “Borrower” in the first
Recital of this Agreement, together with their successors and assigns, and any other
person or entity who acquires title to the Mortgaged Property after the date of this
Agreement; provided that the term “Borrower” will not include Senior Lender if
Senior Lender acquires title to the Mortgaged Property.
(d) “City HRA AHFP Indebtedness” means all sums evidenced or secured or
guaranteed by, or otherwise due and payable to the City HRA pursuant to, the City
HRA AHFP Loan Documents.
(e) “City HRA AHFP Loan Default” means any act, failure to act, event, condition,
or occurrence which allows (but for any contrary provision of this Agreement), or
which with the giving of Notice or the passage of time, or both, would allow (but
for any contrary provision of this Agreement), the City HRA to take an
Enforcement Action; provided, however, that for purposes of this Agreement, no
City HRA AHFP Loan Default shall occur solely by reason of a cross-default
provision in the City HRA AHFP Loan Documents relating to a Senior Loan
Default.
(f) “City HRA AHFP Loan Documents” means the City HRA AHFP Loan
Agreement, the City HRA AHFP Note, the City HRA AHFP Mortgage, and all
other documents at any time evidencing, securing, guaranteeing, or otherwise
delivered in connection with the City HRA AHFP Indebtedness, as the same may
be amended.
(g) “City HRA AHFP Note” means the promissory note or other evidence of the City
HRA AHFP Indebtedness referred to in the City HRA AHFP Loan Agreement and
any replacement of the City HRA AHFP Note.
(h) “City HRA TIHAP Indebtedness” means all sums evidenced or secured or
guaranteed by, or otherwise due and payable to the City HRA pursuant to, the City
HRA TIHAP Loan Documents.
(i) “City HRA TIHAP Loan Default” means any act, failure to act, event, condition,
or occurrence which allows (but for any contrary provision of this Agreement), or
which with the giving of Notice or the passage of time, or both, would allow (but
for any contrary provision of this Agreement), the City HRA to take an
Enforcement Action; provided, however, that for purposes of this Agreement, no
City HRA TIHAP Loan Default shall occur solely by reason of a cross-default
provision in the City HRA TIHAP Loan Documents relating to a Senior Loan
Default.
(j) “City HRA TIHAP Loan Documents” means the City HRA TIHAP Loan
Agreement, the City HRA TIHAP Note, the City HRA TIHAP Mortgage, and all
other documents at any time evidencing, securing, guaranteeing, or otherwise
delivered in connection with the City HRA TIHAP Indebtedness, as the same may
be amended.
(k) “City HRA TIHAP Note” means the promissory note or other evidence of the City
HRA TIHAP Indebtedness referred to in the City HRA TIHAP Loan Agreement
and any replacement of the City HRA TIHAP Note.
(l) “City MET Indebtedness” means all sums evidenced or secured or guaranteed by,
or otherwise due and payable to the City pursuant to, the City MET Loan
Documents.
(m) “City MET Loan Default” means any act, failure to act, event, condition, or
occurrence which allows (but for any contrary provision of this Agreement), or
which with the giving of Notice or the passage of time, or both, would allow (but
for any contrary provision of this Agreement), the City to take an Enforcement
Action; provided, however, that for purposes of this Agreement, no City MET Loan
Default shall occur solely by reason of a cross-default provision in the City MET
Loan Documents relating to a Senior Loan Default.
(n) “City MET Loan Documents” means the City MET Loan Agreement, the City
MET Note, the City MET Mortgage, and all other documents at any time
evidencing, securing, guaranteeing, or otherwise delivered in connection with the
City MET Indebtedness, as the same may be amended.
(o) “City MET Note” means the promissory note or other evidence of the City MET
Indebtedness referred to in the City MET Loan Agreement and any replacement of
the City MET Note.
(p) “County Indebtedness” means all sums evidenced or secured or guaranteed by, or
otherwise due and payable to the County pursuant to, the County Loan Documents.
(q) “County Loan Default” means any act, failure to act, event, condition, or
occurrence which allows (but for any contrary provision of this Agreement), or
which with the giving of Notice or the passage of time, or both, would allow (but
for any contrary provision of this Agreement), the County to take an Enforcement
Action; provided, however, that for purposes of this Agreement, no County Loan
Default shall occur solely by reason of a cross-default provision in the County Loan
Documents relating to a Senior Loan Default.
(r) “County Loan Documents” means the County Loan Agreement, the County Note,
the County Mortgage, and all other documents at any time evidencing, securing,
guaranteeing, or otherwise delivered in connection with the County Indebtedness,
as the same may be amended.
(s) “County Note” means the promissory note or other evidence of the County
Indebtedness referred to in the County Loan Agreement and any replacement of the
County Note.
(t) “County HRA Indebtedness” means all sums evidenced or secured or guaranteed
by, or otherwise due and payable to the County HRA pursuant to, the County HRA
Loan Documents.
(u) “County HRA Loan Default” means any act, failure to act, event, condition, or
occurrence which allows (but for any contrary provision of this Agreement), or
which with the giving of Notice or the passage of time, or both, would allow (but
for any contrary provision of this Agreement), the County HRA to take an
Enforcement Action; provided, however, that for purposes of this Agreement, no
County HRA Loan Default shall occur solely by reason of a cross-default provision
in the County HRA Loan Documents relating to a Senior Loan Default.
(v) “County HRA Loan Documents” means the County HRA Loan Agreement, the
County HRA Note, the County HRA Mortgage, and all other documents at any time
evidencing, securing, guaranteeing, or otherwise delivered in connection with the
County HRA Indebtedness, as the same may be amended.
(w) “County HRA Note” means the promissory note or other evidence of the County
HRA Indebtedness referred to in the County HRA Loan Agreement and any
replacement of the County HRA Note.
(x) “Enforcement Action” means any of the following actions taken by or at the
direction of any Subordinate Lender: the acceleration of all or any part of any
Subordinate Indebtedness, the advertising of or commencement of any UCC sale,
the obtaining of or seeking of the appointment of a receiver, the seeking of default
interest, the taking of possession or control of any of the Mortgaged Property, the
commencement of any suit or other legal, administrative, or arbitration proceeding
based upon any Subordinate Note or any other of the Subordinate Loan Documents,
the exercising of any banker’s lien or rights of set-off or recoupment, or the exercise
of any other remedial action against Borrower, any other party liable for any
Subordinate Indebtedness (including any guarantor of any of the Subordinate
Indebtedness) or obligated under any Subordinate Loan Documents.
(y) “Enforcement Action Notice” means a written Notice from any Subordinate
Lender to Senior Lender, given following any one or more Subordinate Loan
Default(s) and the expiration of any Notice or cure periods provided for such
Subordinate Loan Default(s) in the applicable Subordinate Loan Documents,
setting forth in reasonable detail such Subordinate Loan Default(s) and the
Enforcement Actions proposed to be taken by such Subordinate Lender.
(z) “Notice” is defined in Section 6(d).
(aa) “Senior Indebtedness” means all sums evidenced or secured or guaranteed by, or
otherwise due and payable to Senior Lender pursuant to, the Senior Loan
Documents.
(bb) “Senior Lender” means the person or entity named as such in the first paragraph
of this Agreement, and any other person or entity that becomes the legal holder of
the Senior Notes after the date of this Agreement.
(cc) “Senior Loan Default” means any act, failure to act, event, condition, or
occurrence which constitutes, or which with the giving of Notice or the passage of
time, or both, would constitute, an “Event of Default” as defined in the Senior Loan
Documents.
(dd) “Senior Loan Documents” means the “Loan Documents” collectively as defined
in the Senior Loan Agreement.
(ee) “Subordinate Indebtedness” means collectively the City HRA AHFP
Indebtedness, the City HRA TIHAP Indebtedness, the City MET Indebtedness, the
County Indebtedness and the County HRA Indebtedness.
(ff) “Subordinate Lender” means individually or collectively any of the City, City
HRA, County and/or the County HRA and any other person or entity who becomes
the legal holder of any of the Subordinate Notes, as applicable, after the date of this
Agreement.
(gg) “Subordinate Loan Default” means individually or collectively any City HRA
AHFP Loan Default, City HRA TIHAP Loan Default, City MET Loan Default,
County Loan Default and/or County HRA Loan Default.
(hh) “Subordinate Loan Documents” means individually or collectively any City
HRA AHFP Loan Documents, City HRA TIHAP Loan Documents, City MET
Loan Documents, County Loan Documents and/or County HRA Loan Documents.
(ii) “Subordinate Note” means individually or collectively any of the City HRA
AHFP Note, City HRA TIHAP Note, City MET Note, County Note and/or County
HRA Note.
2. Subordination of Subordinate Indebtedness.
(a) The Subordinate Indebtedness is and will at all times continue to be subject and
subordinate in right of payment to the prior payment in full of the Senior
Indebtedness as provided in this Agreement.
(b) Until the occurrence of a Senior Loan Default, each Subordinate Lender will be
entitled to retain for its own account all payments made on account of the principal
of and interest on such Subordinate Indebtedness in accordance with the
requirements of such Subordinate Loan Documents. However, immediately upon
each Subordinate Lender’s receipt of Notice or actual knowledge of a Senior Loan
Default, each Subordinate Lender will not accept any payments on account of any
Subordinate Indebtedness and the provisions of Section 2(c) of this Agreement will
apply. Each Subordinate Lender acknowledges that any Subordinate Loan Default
constitutes a Senior Loan Default. Accordingly, upon the occurrence of any
Subordinate Loan Default, each Subordinate Lender will be deemed to have actual
knowledge of a Senior Loan Default.
(c) If (i) any Subordinate Lender receives any payment, property, or asset of any kind
or in any form on account of any Subordinate Indebtedness (including any proceeds
from any Enforcement Action) after a Senior Loan Default of which any
Subordinate Lender has actual knowledge (or is deemed to have actual knowledge
as provided in 2(b) above) or has been given Notice, or (ii) any Subordinate Lender
receives, voluntarily or involuntarily, by operation of law or otherwise, any
payment, property, or asset in or in connection with any Bankruptcy Proceeding,
such payment, property, or asset will be received and held in trust for Senior
Lender. Each Subordinate Lender will promptly remit, in kind and properly
endorsed as necessary, all such payments, properties, and assets to Senior Lender.
Senior Lender will apply any payment, asset, or property so received from any
Subordinate Lender to the Senior Indebtedness in such order, amount (with respect
to any asset or property other than immediately available funds), and manner as
Senior Lender determines in its sole and absolute discretion. Each Subordinate
Lender designates and appoints, irrevocably and coupled with an interest, Senior
Lender (and all persons and entities designated by Senior Lender) as each
Subordinate Lender’s true and lawful attorney-in-fact with power to endorse the
name of such Subordinate Lender, as applicable, upon any check or other
instrument and to take any action necessary to collect any payment, property, or
asset referred to in, or otherwise effectuate the provisions of, this Section 2(c).
(d) Without limiting the subordination of the Subordinate Indebtedness to the payment
in full of the Senior Indebtedness as provided herein, in any Bankruptcy
Proceeding, upon any payment or distribution (whether in cash, property, securities,
or otherwise) to creditors (i) the Senior Indebtedness will first be paid in full in cash
before any Subordinate Lender will be entitled to receive any payment or other
distribution on account of or in respect of any of the Subordinate Indebtedness, and
(ii) until all of the Senior Indebtedness is paid in full in cash, any payment or
distribution to which any Subordinate Lender would be entitled but for this
Agreement (whether in cash, property, or other assets) will be made to Senior
Lender.
(e) The subordination of all of the Subordinate Indebtedness as provided herein will
continue if any payment under the Senior Loan Documents and/or the Subordinate
Loan Documents (whether by or on behalf of Borrower, as proceeds of security or
enforcement of any right of set-off or otherwise) is for any reason repaid or returned
to Borrower or its insolvent estate, or avoided, set aside or required to be paid to
Borrower, a trustee, receiver or other similar party under any bankruptcy,
insolvency, receivership or similar law. In such event, any or all of the Senior
Indebtedness and/or Subordinate Indebtedness originally intended to be satisfied
will be deemed to be reinstated and outstanding to the extent of any repayment,
return, or other action, as if such payment on account of such indebtedness had not
been made.
3. Subordination of Subordinate Loan Documents.
(a) Each of the Subordinate Loan Documents is, and will at all times remain, subject
and subordinate in all respects to the liens, terms, covenants, conditions, operations,
and effects of each of the Senior Loan Documents as and to the extent provided in
this Agreement and the Senior Loan Documents.
(b) Each Subordinate Lender acknowledges and agrees that it has no rights or claims
under any of the Subordinate Loan Documents in or to any of the proceeds of the
Senior Loan or any portion of the Mortgaged Property and Capital Contributions
and any purported right or claim thereto is hereby disclaimed and made expressly
subject and subordinate in all respects to the rights and claims of Senior Lender
under the Senior Loan Documents in or to such Mortgaged Property and Capital
Contributions.
(c) If any Subordinate Lender, by indemnification, subrogation or otherwise, acquires
any lien, estate, right or other interest in any of the Mortgaged Property and Capital
Contributions, then such additional lien, estate, right or other interest will be fully
subject and subordinate to the receipt by Senior Lender of payment in full of the
Senior Indebtedness, and to the Senior Loan Documents, to the same extent as the
Subordinate Indebtedness and the Subordinate Loan Documents are subordinate
pursuant to this Agreement.
4. Additional Representations and Covenants.
(a) Without the prior written consent of Senior Lender in each instance, each
Subordinate Lender will not do any of the following:
(i) Amend, modify, waive, extend, renew, or replace any provision of any of
the Subordinate Loan Documents in any way which would have a material
adverse effect on the Borrower or repayment of the Senior Loan.
(ii) Pledge, assign, transfer, convey, or sell any interest in the Subordinate
Indebtedness or any of the Subordinate Loan Documents unless the
transferee expressly acknowledges this Agreement and agrees to be bound
by its terms.
(iii) Take any action which has the effect of increasing any of the Subordinate
Indebtedness or materially alter the repayment terms of any of the
Subordinate Indebtedness which would have a negative impact on the
ability of the Borrower to repay the Senior Indebtedness.
(b) Each Subordinate Lender will deliver to Senior Lender a copy of each Notice of
any Subordinate Loan Default delivered by any such Subordinate Lender pursuant
to the applicable Subordinate Loan Documents or in connection with the applicable
Subordinate Indebtedness, simultaneously with such Subordinate Lender’s delivery
of such Notice to Borrower. Senior Lender will deliver to each Subordinate Lender
in the manner required in Section 5(b) a copy of each Notice of a Senior Loan
Default delivered to Borrower by Senior Lender. Neither giving nor failing to give
a Notice to Senior Lender or any Subordinate Lender pursuant to this Section 4(b)
will affect the validity of any Notice given by Senior Lender or any Subordinate
Lender to Borrower, as between Borrower and Senior Lender or any Subordinate
Lender as the Notice is provided to Borrower.
(c) Without the prior written consent of Senior Lender in each instance, each
Subordinate Lender will not commence, or join with any other creditor in
commencing, any Bankruptcy Proceeding. In the event of a Bankruptcy
Proceeding, each Subordinate Lender will not vote affirmatively in favor of any
plan of reorganization or liquidation unless Senior Lender has also voted
affirmatively in favor of such plan. In the event of any Bankruptcy Proceeding,
each Subordinate Lender will not contest the continued accrual of interest on the
Senior Indebtedness, in accordance with and at the rates specified in the Senior
Loan Documents, both for periods before and for periods after the commencement
of such Bankruptcy Proceedings.
(d) Whenever any of the Subordinate Loan Documents give any Subordinate Lender
approval or consent rights with respect to any matter related to the Mortgaged
Property (including, without limitation, with respect to the renovation, repair,
replacement or operation thereof), and a right of approval or consent with regard to
the same or substantially the same matter is also granted to Senior Lender pursuant
to the Senior Loan Documents or otherwise, Senior Lender’s approval or consent
or failure to approve or consent, as the case may be, will be binding on all
Subordinate Lenders. None of the other provisions of this Section 4 are intended
to be in any way in limitation of the provisions of this Section 4(d).
(e) All requirements pertaining to insurance under all of the Subordinate Loan
Documents (including requirements relating to amounts and types of coverages,
deductibles and special endorsements) will be deemed satisfied if Borrower
complies with the insurance requirements under the Senior Loan Documents of
Senior Lender. All original policies of insurance required pursuant to the Senior
Loan Documents and all proceeds thereof will be held by Senior Lender.
(f) Each Subordinate Lender will not collect payments for the purpose of escrowing
for any cost or expense related to the Mortgaged Property.
(g) Within ten (10) days after request by Senior Lender, each Subordinate Lender will
furnish Senior Lender with a statement, duly acknowledged and certified setting
forth the then-current amount and terms of the applicable Subordinate
Indebtedness, confirming that there exists no default under the applicable
Subordinate Loan Documents (or describing any default that does exist), and
certifying to such other information with respect to the applicable Subordinate
Indebtedness as Senior Lender may request.
(h) Except as provided in Section 5(d), Senior Lender may amend, waive, postpone,
extend, renew, replace, reduce or otherwise modify any provision of any of the
Senior Loan Documents without the necessity of obtaining the consent of or
providing Notice to any Subordinate Lender, and without affecting any of the
provisions of this Agreement.
5. Default Under Loan Documents.
(a) Senior Lender will have the right, but not the obligation, to cure any Subordinate
Loan Default, until such time, if ever, as Senior Lender delivers to each Subordinate
Lender Senior Lender’s Notice of written consent to an Enforcement Action
described in an Enforcement Action Notice given by any Subordinate Lender as a
consequence of any Subordinate Loan Default. Each Subordinate Lender
acknowledges that all amounts advanced or expended by Senior Lender to cure any
Subordinate Loan Default will be added to and become a part of the Senior
Indebtedness and will be secured by the lien of the respective Senior Mortgage(s).
(b) Senior Lender will deliver to each Subordinate Lender a copy of any Notice sent
by Senior Lender to Borrower of a Senior Loan Default within five (5) Business
Days of sending such Notice to Borrower. Failure of Senior Lender to send Notice
to any Subordinate Lender will not prevent the exercise of Senior Lender’s rights
and remedies under the Senior Loan Documents. Any Subordinate Lender will
have the right, but not the obligation, to cure any Senior Loan Default during such
period of time, if any, as Borrower is permitted by the terms of the Senior Loan
Documents to cure a Senior Loan Default. Any Subordinate Lender will not be
subrogated to the rights of Senior Lender under the Senior Loan Documents by
reason of any Subordinate Lender having cured any Senior Loan Default.
(c) Except as permitted by this subsection (c), any Enforcement Action on the part of
any Subordinate Lender will be subject to the prior written consent of Senior
Lender. In the event of any Subordinate Loan Default, each Subordinate Lender
will not commence any Enforcement Action until after (i) such Subordinate Lender
has delivered to Senior Lender an Enforcement Action Notice with respect to such
Enforcement Action, and (ii) Senior Lender has delivered to such Subordinate
Lender Senior Lender’s written consent to such Enforcement Action by such
Subordinate Lender. Senior Lender will advise such Subordinate Lender whether
Senior Lender consents to the Enforcement Action by such Subordinate Lender
within ninety (90) days following Senior Lender’s receipt of the Enforcement
Action Notice (failure of Senior Lender to provide written consent to the
Enforcement Action within such 90-day period constitutes Senior Lender’s refusal
of such consent). Each Subordinate Lender acknowledges that Senior Lender may
grant or refuse consent to any Subordinate Lender’s Enforcement Action in Senior
Lender’s sole and absolute discretion. Each Subordinate Lender acknowledges that
the provisions of this Section 5(c) are fair and reasonable under the circumstances,
that each Subordinate Lender has received a substantial benefit from Senior Lender
having granted its consent to each Subordinate Loan, and that Senior Lender would
not have granted such consent without the inclusion of these provisions in this
Agreement.
6. Miscellaneous Provisions.
(a) If there is any conflict or inconsistency between the terms of any of the Subordinate
Loan Documents and the terms of this Agreement, then the terms of this Agreement
will control.
(b) This Agreement will be binding upon and will inure to the benefit of the respective
legal successors and permitted assigns of the parties hereto. No other party will be
entitled to any benefits hereunder, whether as a third-party beneficiary or otherwise.
(c) This Agreement does not constitute an approval by Senior Lender of the terms of
any of the Subordinate Loan Documents.
(d) Each Notice, request, demand, consent, approval or other communication
(collectively, “Notices,” and singly, a “Notice”) which is required or permitted to
be given pursuant to this Agreement will be in writing and will be deemed to have
been duly and sufficiently given if (i) personally delivered with proof of delivery
(any Notice so delivered will be deemed to have been received at the time so
delivered), or (ii) sent by a national overnight courier service (such as FedEx)
designating earliest available delivery (any Notice so delivered will be deemed to
have been received on the next Business Day following receipt by the courier), or
(iii) sent by United States registered or certified mail, return receipt requested,
postage prepaid, at a post office regularly maintained by the United States Postal
Service (any Notice so sent will be deemed to have been received on the date of
delivery as confirmed by the return receipt), addressed to the respective parties as
follows:
(i) Notices intended for Senior Lender will be addressed to:
Bridgewater Bank
7831 East Bush Lake Road, Suite 300
Bloomington, Minnesota 55439
Attn: Ross Wieser
With a copy to:
Messerli & Kramer, P.A.
1400 Fifth Street Towers
100 South Fifth Street
Minneapolis, Minnesota 55402
Attn: Michelle R. Jester, Esq.
(ii) Notices intended for Subordinate Lenders will be addressed to:
City:
City of Plymouth
3400 Plymouth Boulevard
Plymouth, MN 55447
Attn: Community Development Director
City HRA:
Housing and Redevelopment Authority in and for the City of Plymouth
3400 Plymouth Boulevard
Plymouth, MN 55447
Attn: Community Development Director
County:
County of Hennepin
701 Fourth Avenue South, Suite 400
Minneapolis, MN 55415
Attn: Director
County HRA:
Hennepin County Housing and Redevelopment Authority
701 Fourth Avenue South, Suite 400
Minneapolis, MN 55415-1843
Attn: Deputy Executive Director
Any party, by Notice given pursuant to this Section, may change the person or
persons and/or address or addresses, or designate an additional person or persons
or an additional address or addresses, for its Notices, but Notice of a change of
address will only be effective ten (10) days after receipt. Neither party will refuse
or reject delivery of any Notice given in accordance with this Section.
(e) Nothing in this Agreement or in any of the Senior Loan Documents or any
Subordinate Loan Documents will be deemed to constitute Senior Lender as a joint
venturer or partner of any Subordinate Lender.
(f) Upon Notice from Senior Lender or any Subordinate Lender to the other, all will
execute and deliver such additional instruments and documents, and will take such
actions, as are required by the notifying party in order to further evidence or
implement the provisions and intent of this Agreement.
(g) This Agreement will be governed by the laws of the State in which the Mortgaged
Property is located.
(h) If any one or more of the provisions contained in this Agreement, or any application
of any such provisions, is invalid, illegal, or unenforceable in any respect, the
validity, legality, enforceability, and application of the remaining provisions
contained in this Agreement will not in any way be affected or impaired.
(i) The term of this Agreement will commence on the date of this Agreement and will
continue until the earliest to occur of the following events: (i) the payment of all
of the Senior Indebtedness; provided that this Agreement will be reinstated in the
event any payment on account of the Senior Indebtedness is avoided, set aside,
rescinded or repaid by Senior Lender as described in Section 2(e) of this
Agreement, or (ii) the payment of all of the Subordinate Indebtedness other than by
reason of payments which any Subordinate Lender is obligated to remit to Senior
Lender pursuant to this Agreement, and the termination of all Subordinate Lenders’
obligations to advance proceeds of any Subordinate Loan; provided that this
Agreement will be reinstated in the event any payment on account of any of the
Subordinate Indebtedness is avoided, set aside, rescinded or repaid by any
Subordinate Lender as described in Section 2(e) of this Agreement.
(j) No failure or delay on the part of any party to this Agreement in exercising any
right, power, or remedy under this Agreement will operate as a waiver of such right,
power, or remedy, nor will any single or partial exercise of any such right, power
or remedy preclude any other or further exercise of such right, power, or remedy or
the exercise of any other right, power or remedy under this Agreement.
(k) Each party to this Agreement acknowledges that if any party fails to comply with
its obligations under this Agreement, the other parties will have all rights available
at law and in equity, including the right to obtain specific performance of the
obligations of such defaulting party and injunctive relief.
(l) This Agreement shall inure to the benefit of any subsequent holder of the Senior
Indebtedness.
(m) This Agreement may be amended, changed, modified, altered or terminated only
by a written instrument or written instruments signed by the parties to this
Agreement.
(n) This Agreement may be executed in two or more counterparts, each of which will
be deemed an original but all of which together will constitute one and the same
instrument.
\[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS\]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and
year first above written.
SENIOR LENDER:
BRIDGEWATER BANK,
a Minnesota banking corporation
By: ________________________________
Ross Wieser
Its: Vice President
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ___ day of _________, 2020,
by Ross Wieser, the Vice President of Bridgewater Bank, a Minnesota banking corporation on
behalf of the banking corporation.
__________________________________________
Notary Public
Master Subordination Agreement Page S-1
SUBORDINATE LENDER:
CITY OF PLYMOUTH
By: ________________________________
Printed Name: _______________________
Its: ________________________________
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ___ day of _________, 2020,
by_____________________, the _________________ of the City of Plymouth, a public body
corporate and politic on behalf of the City.
__________________________________________
Notary Public
Master Subordination Agreement Page S-2
SUBORDINATE LENDER:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF PLYMOUTH
By: ________________________________
Printed Name: _______________________
Its: ________________________________
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ___ day of _________, 2020,
by_____________________, the _________________ of the Housing and Redevelopment
Authority in and for the City of Plymouth, a public body corporate and politic on behalf of the
Housing and Redevelopment Authority for the City of Plymouth.
__________________________________________
Notary Public
Master Subordination Agreement Page S-3
SUBORDINATE LENDER:
APPROVED AS TO FORM COUNTY OF HENNEPIN, STATE OF
MINNESOTA ON BEHALF OF THE
HENNEPIN HOUSING CONSORTIUM
_____________________________
Assistant County Attorney
Date: ________________________ By: __________________________________
Chair of its County Board
Attest: ________________________________
Deputy/Clerk of the County Board
Date: _________________________________
By: __________________________________
County Administrator
Date: _________________________________
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ___ day of _________, 2020,
by_________________________________, the Chair of the County Board, and
_______________________________, the Deputy/Clerk of the County Board, and
___________________________ the County Administrator of the County of Hennepin, State of
Minnesota on behalf of the Hennepin Housing Consortium.
__________________________________________
Notary Public
RECOMMENDED FOR APPROVAL:
__________________________________________
Chief Housing and Economic Development Officer
Date: ____________________________________
Master Subordination Agreement Page S-4
SUBORDINATE LENDER:
HENNEPIN COUNTY HOUSING AND
REDEVELOPMENT AUTHORITY
a Minnesota public body corporate and politic
APPROVED AS TO FORM
_____________________________ By:
Assistant County Attorney Chair of its Board
Date: ________________________ Attest:
Deputy/Clerk of the County Board
By: ______________________________________
Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of ____________,
2020, by _________________________________, the Chair of the Board and
____________________ the Executive Director of the Hennepin County Housing and
Redevelopment Authority, a public body corporate and politic, on behalf of the Authority.
Notary Public
RECOMMENDED FOR APPROVAL:
Chief Housing and Economic Development Officer
Date:
Master Subordination Agreement Page S-5
CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement, dated May ____,
2020, by and among Bridgewater Bank, the City of Plymouth Minnesota, the Housing and
Redevelopment Authority for the City of Plymouth, the County of Hennepin, and Hennepin
County Housing and Redevelopment Authority, State of Minnesota and consents to the terms and
conditions of the parties set forth in this Agreement.
PLYMOUTH LEASED HOUSING
ASSOCIATES, LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: Plymouth Leased Housing Associates,
LLC,
a Minnesota limited liability company
Its: General Partner
By: ____________________________
Paul R. Sween
Its: Vice President
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ___ day of _________, 2020,
by Paul R. Sween, the Vice President of Plymouth Leased Housing Associates, LLC, a Minnesota
limited liability company, as General Partners of Plymouth Leased Housing Associates, Limited
Partnership, a Minnesota limited partnership on behalf of the limited partnership.
__________________________________________
Notary Public
Master Subordination Agreement Page S-6
EXHIBIT A
LEGAL DESCRIPTION
Lot 1, Block 1, Stone Creek Village, Hennepin County, Minnesota.
Hennepin County, Minnesota
Torrens Property