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ME BANK <br /> OF ELK RIVER <br /> 411 Member FDIC <br /> VI <br /> October 25, 2000 <br /> Cathy Mehelich <br /> Director of Economic Development <br /> Elk River Economic Development Authority <br /> 13065 Orono Parkway <br /> P.O. Box 490 <br /> Elk River, Minnesota 55330-1743 <br /> Re : Chirstopher Carlson / Sportech, Inc. <br /> Mortgage Subordination <br /> Dear Ms . Mehelich: <br /> On June 15, 1998, The Bank of Elk River granted Christopher and Debra <br /> Carlson a $300, 000 first real estate mortgage on their commercial <br /> property located at 15703 Jarvis Street in Elk River. That loan now <br /> has a balance of about $281, 000 . The Economic Development Authority <br /> subsequently granted a second real estate mortgage in the amount of <br /> $45, 000 on November 8, 1998 . That loan now has a balance of about <br /> • $43 , 000 . <br /> The Carlsons are now planning to double the size of their commercial <br /> building to 20, 000 square feet . The Bank intends on granting a <br /> $225, 000 additional loan to fund the expansion. However, we are <br /> requesting that the Economic Development Authority subordinate its <br /> current second real estate mortgage to our new mortgage to the <br /> Carlsons . <br /> We have obtained a new appraisal of the expanded building from Terry <br /> Nagorski of Nagorski/Knaeble Appraisals, which shows a new value of <br /> $752 , 000 . A copy of that appraisal is enclosed for your review. <br /> Thus, the total loan to value ratio, including the EDA loan, stands <br /> at 73% . Hence, the EDA would remain in a collateral position that <br /> is acceptable. <br /> Please call me with any questions or comments . We look forward to <br /> your response . <br /> Sncer y, <br /> , t <br /> ,James H. Gessert . <br /> Vice President <br /> MAIN STREET OFFICE SCHOOL STREET OFFICE OTSEGO OFFICE <br /> 630 Main Street 846 Freeport Avenue 15800 88th Street NE <br /> Elk River, MN 55330 Elk River, MN 55330 Otsego,MN 55330 <br /> (763)441-1000 (763)441-9000 (763)441-7700 <br /> Fax (763)441-0847 Fax (763)441-0791 Fax (763)441-7755 <br />