|
DEBT SUBORDINATION AGREEMENT
<br />THIS DEBT SUBORDINATION AGREEMENT (this “Agreement”) is made and entered into
<br />as of the ___ day of August, 2024, by and among HERITAGE MILLWORK, INC., a Minnesota
<br />corporation (“OpCo”), JADE ELK PROPERTIES LLC, a Minnesota limited liability company
<br />(“HoldCo” and together with OpCo, collectively, “Borrowers”), the ECONOMIC
<br />DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and
<br />politic of the State of Minnesota (“Subordinated Creditor”), and FIRST BANK ELK RIVER, a
<br />Minnesota state banking corporation (“Senior Lender”).
<br />W I T N E S S E T H:
<br />WHEREAS, as a condition to entering into that certain Construction Loan Agreement dated as of
<br />even date herewith (the “Loan Agreement”), by and among Borrowers and Senior Lender, Senior
<br />Lender requires that Borrowers, and Subordinated Creditor enter into this Agreement; and
<br />WHEREAS, Subordinated Creditor acknowledges that the extensions of financial
<br />accommodations to Borrowers by Senior Lender are of value to Subordinated Creditor.
<br />NOW, THEREFORE, in consideration of the premises and for other good and valuable
<br />consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
<br />follows:
<br />1. Definitions. As used herein, the following capitalized terms shall have the following
<br />meanings:
<br />“Event of Default” shall have the meaning given to such term in the Loan Agreement.
<br />“Senior Claim” shall mean all of Borrowers’ indebtedness, liabilities and obligations to
<br />Senior Lender now existing or hereafter arising, direct or indirect, absolute or contingent,
<br />joint or several, whether as maker, endorser, surety, guarantor or otherwise, as well as the
<br />notes or other instruments evidencing the same, and any extensions, renewals,
<br />restatements or refinancings thereof, including, without limitation, the obligations of
<br />Borrowers to Senior Lender under the Loan Agreement and the documents related
<br />thereto.
<br />“Subordinated Claim” shall mean all of Borrowers’ indebtedness, liabilities and
<br />obligations to Subordinated Creditor, now existing or hereafter arising, direct or indirect,
<br />absolute or contingent, joint or several, whether as maker, endorser, surety, guarantor or
<br />otherwise, as well as the notes or other instruments evidencing the same, and any
<br />extensions, renewals, restatements or refinancings thereof, including, without limitation,
<br />the obligations of OpCo to the Subordinated Creditor under and in respect of the
<br />Subordinated Loan.
<br />“Subordinated Loan” shall mean any and all indebtedness of OpCo to Subordinated
<br />Creditor, whether or not evidenced by a promissory note or other debt instrument,
<br />including without limitation all indebtedness evidenced by the Subordinated Note.
<br />Page 21 of 33
|