EXHIBIT 10.1
ASSUMPTION AGREEMENT
THIS AGREEMENT ("Agreement") is made as of August 17, 2001 by and among
First UNUM Life Insurance Company, a New York corporation, successor in interest
to NY Holdings 1994-1, with a mailing address of 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxx 00000-0000 ("UNUM"), King's Court Investors Limited Partnership, a Kansas
limited partnership, with a mailing address of 0000 X. 00xx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxx 00000 ("Borrower"), Maxus Realty Trust, Inc., a Missouri
corporation with a mailing address of 000 Xxxxxx Xxxx, Xxxxx Xxxxxx Xxxx,
Xxxxxxxx 00000 ("Buyer"), Xxxxx X. Xxxxxxx, an individual with a mailing address
of 000 Xxxxxx Xxxx, Xxxxx Xxxxxx Xxxx, Xxxxxxxx 00000 ("Principal") and Security
Bank of Kansas City, a Kansas banking corporation with a mailing address of One
Security Plaza, 701 Minnesota, Xxxxxx Xxxx, Xxxxxx 00000, as trustee
("Trustee").
R E C I T A L S:
A. Borrower is the lessee of certain real and personal property (the
"Property") located in Olathe, Kansas, legally described in Exhibit A attached
hereto and incorporated herein, encumbered by among other things, (a) that
certain Lease Agreement between the City of Olathe, Kansas (the "Issuer") and
Borrower, dated as of November 1, 1998 ("Lease"); (b) that certain Leasehold
Mortgage and Security Agreement by and between Trustee, and Borrower dated
December 1, 1998 and recorded in Book 5955, page 295, as Document No. 2917655,
of the Official Records of the Register of Deeds of Xxxxxxx County, State of
Kansas ("Mortgage"); (c) that certain Assignment of Rents, Leases and Other
Benefits by and between Trustee, and Borrower dated as of December 1, 1998 and
recorded in Book 5955, Page 329, Document No. 2917656 of the Official Records of
the Register of Deeds of Xxxxxxx County, State of Kansas ("Assignment"); and (d)
the Amended and Restated Land Use Restriction Agreement among the Issuer, the
Trustee and Borrower dated as of November 1, 1998 and recorded in Book 5955,
Page 216, Document No. 2917650 of the Official Records of the Register of Deeds
of Xxxxxxx County, State of Kansas ("XXXX").
B. Principal is the Chairman of the Board of Buyer.
C. UNUM is the holder for value of Bonds dated December 1, 1998
(collectively, the "Bonds" and each a "Bond"), in the original principal amount
of $2,209,000.00 issued by Issuer and directly or indirectly secured by, among
other things, the Mortgage and the Assignment.
D. In conjunction with the issuance of the Bonds, Borrower or its
principals also executed the additional following documents: (i) Tax Compliance
Agreement dated as of November 1, 1998 between the Issuer and the Borrower; (ii)
Guaranty (Covenants) dated December 1, 1998 from Xxxxx X. Xxxxxx, Xxxx X.
Xxxxxxx, III and Xxxxx X. Xxxxxxx ("Guaranty") (iii) Environmental Agreement and
Indemnity dated November 30, 1998 from the Borrower, Xxxxx X. Xxxxxx, Xxxx X.
Xxxxxxx, III and Xxxxx X. Xxxxxxx ("Environmental Agreement") (the foregoing
documents, together with the Lease, Mortgage, Assignment and XXXX are
hereinafter collectively referred to as the "Loan Documents").
E. Borrower wishes to assign the Lease to Buyer, and Borrower, Principal
and Buyer have requested that UNUM and the Trustee consent to the assignment of
the Lease to Buyer upon the following conditions with the following
understandings, and UNUM and the
Trustee have agreed to consent to this assignment of the Lease (but no future
assignment or transfer) upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties do hereby agree as follows:
1. Borrower and Buyer agree that the unpaid principal balance of the Bonds
is, as of the date hereof, Two Million Two Hundred Nine Thousand Dollars
($2,209,000.00), and further agree that the Loan Documents are valid, binding
agreements enforceable in accordance with their respective terms without right
of offset, defense or counterclaim thereto. They further agree that the Mortgage
and the Assignment create a paramount first lien against, and security interest
in, the Property, subject to no other encumbrances except current taxes and
assessments, if any, which may constitute a lien against the Property but which
are not due and payable at the present time, and such other exceptions as may
have been agreed to in writing by UNUM.
2. Buyer hereby assumes and agrees to pay, perform and be bound by the Loan
Documents, just as if Buyer had executed them originally and except as
hereinafter provided (including in paragraph 5 below pertaining to the
Environmental Agreement), Borrower is released from any liability or obligation
under or provided by the Loan Documents to the extent, but only to the extent,
that it can prove that (i) such liability or obligation first accrued after the
date hereof, and (ii) Borrower is not in any way, either directly or indirectly
responsible for such liability or obligation. Buyer and Principal agree that the
provisions of Section 4.5 of the Lease which include a limitation of liability
and certain exceptions thereto are incorporated herein by reference as if fully
set forth herein and that the liability thereunder is expressly assumed by Buyer
and Principal and the limitation on liability is expressly confirmed by UNUM.
Nothing contained in that Section 4.5 of the Lease shall: (i) be construed to
prevent UNUM or the Trustee from exercising and enforcing any other remedy
allowed at law or equity or allowed by any of the Loan Documents; or (ii) be
deemed to limit the liability of Buyer and Principal for failure to deliver to
the Trustee for the benefit of UNUM any rents or other income derived from the
operation of the Property received by Buyer at anytime subsequent to the date
that Trustee or UNUM provides notice to Buyer that Buyer's license to collect
the same has terminated in accordance with the above-described Assignment; or
(iii) limit Buyer's liability under Section 1.11 of the Mortgage or the
liability of Buyer and Principal under the Environmental Agreement and Indemnity
executed or assumed by Buyer and Principal in favor of UNUM on or about the date
hereof. Furthermore, Buyer and Principal understand and agree that
notwithstanding the limitation of liability hereinabove set forth, if Buyer
reassigns the Lease or transfers or further encumbers the Property in violation
of the terms and provisions of the Mortgage, commencing upon the effective date
of any such assignment, transfer or encumbrance, Buyer and Principal thenceforth
shall be personally liable, jointly and severally, for the payment of principal,
interest and all other payment due and payable under the Lease and the other
Loan Documents.
3. Buyer and Principal represent to UNUM that each possesses and has
carefully reviewed complete and accurate copies of the Loan Documents.
4. UNUM and the Trustee hereby consent to the assignment of the Lease to
Buyer under the conditions of and with the understandings contained in this
Agreement. Borrower, Principal and Buyer agree that this Agreement shall not
imply any consent by UNUM to any future sale, conveyance, assignment, lease,
disposition, further encumbrance or other transfer of
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the Property or, except as provided hereinbelow, the Buyer's interest therein
or in the Lease without the prior written consent of UNUM and compliance with
all other conditions in the Loan Documents. Without limiting the foregoing,
Buyer acknowledges and agrees that the one-time right to transfer under Section
1.11 (e) of the Mortgage is extinguished and is not available to Buyer.
Notwithstanding the foregoing and the provisions of Section 1.11 (b) of the
Mortgage, for so long as the Buyer is a corporation whose shares are traded on
a public stock exchange, transfers and issuance of the capital stock of Buyer
shall be permitted to the extent that no such transfer or issuance results in
(i) the persons or entities that are currently the stockholders of Buyer at
any time holding less than 51% of the outstanding capital stock of Buyer, or
(ii) Principal holding at any time less than 10% of the outstanding capital
stock of Buyer.
5. Borrower and Buyer agree that this Agreement does not create or evidence
a release by UNUM of any obligation of Borrower under the Environmental
Agreement. Borrower hereby ratifies the terms of and confirms its obligations
under the Environmental Agreement.
6. Buyer and UNUM agree that this Agreement shall not create or evidence a
novation of the Loan Documents.
7. From and after the date hereof, Buyer shall not have any right, except
as otherwise specifically provided, to redeem all or a portion of the principal
balance of the Bonds until January 1, 2005. From January 1, 2005 through
maturity, Buyer shall have the right to redeem all or a portion of the Bonds,
upon payment of the principal amount thereof, plus accrued interest thereon to
the redemption date, plus, if the optional redemption occurs prior to December
1, 2010, the "Special Redemption Premium" (as hereinafter defined).
The "Special Redemption Premium" means the sum of (i) the amount which, if
invested with the outstanding principal amount of a Bond, would return to UNUM
the discounted present value of the anticipated stream of payments on the Bonds
utilizing a discount factor equal to the Tax Free Rate (defined below), plus
(ii) the amount, if any, equal to the amount of income taxes the owner of the
applicable Bond may incur as the result of receipt of the Special Redemption
Premium (as certified in writing by the applicable Bond owner to the Trustee and
the Buyer).
The "Tax Free Rate" means the annual rate of return on "AA" rated
government obligation municipal bonds maturing at or nearest December 1, 2010 as
reported in Bloomberg Financial Markets Commodities News on the date which is
five Business Days prior to (i) the redemption date pursuant to Section 303 or
306 of the Trust Indenture dated as of November 1, 1998 between Issuer and
Trustee, (ii) the accelerated maturity date of the Bonds pursuant to Section 702
of said Trust Indenture, or (iii) the date written notice is given that the Bond
Interest Rate (defined in said Trust Indenture) will be the Index Rate (defined
in said Trust Indenture), as applicable.
Buyer acknowledges and agrees that UNUM is consenting to the assignment and
assumption of the Lease in consideration of the receipt by UNUM of all interest
and other benefits intended to be conferred by the Bonds and the other Loan
Documents and if payments of principal are made to UNUM prior to the regularly
scheduled due date of such payments, for whatever reason (whether voluntarily or
involuntarily as a result of (a) acceleration of the Bond
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and the amounts due under the Lease on account of an Event of Default under the
Bonds or the Loan Documents, (b) the exercise of UNUM's or the Trustee's
rights under "due-on-sale," "due-on-encumbrance" or similar provisions in the
Loan Documents, (c) in connection with any bankruptcy proceeding involving the
Property or (d) in connection with any foreclosure of the Property, whether
judicial or non-judicial), UNUM will not receive all such interest and other
benefits and may incur additional costs.
For these reasons, and to induce UNUM to consent to the assignment and the
assumption of the Lease, Buyer expressly waives any right to redeem the Bonds
except pursuant to this Section 7 and agrees that and agrees that, except in
cases where the Note is prepaid from casualty insurance proceeds or condemnation
awards (which shall be addressed as described in Section 304 of the Trust
Indenture), all other voluntary and involuntary prepayments will be accompanied
by the premium specified above. all voluntary and involuntary prepayments will
be accompanied by the premium specified above. Such premium shall be required
whether payment is made by Buyer, anyone on behalf of Buyer, or by the purchaser
at any judicial or non-judicial foreclosure sale, and may be included in any bid
by UNUM at such sale.
By its initials appearing below, Buyer acknowledges that: (i) it is a
knowledgeable and sophisticated real estate investor; (ii) it fully understands
the effect of the provisions of this Section 7; (iii) the consent of UNUM to the
assumption of the Lease by Buyer at the interest rate and other terms set forth
in the Loan Documents is sufficient consideration for the inclusion of the
provisions in this Section 7; and (iv) UNUM would not consent to the assignment
and assumption of the Lease on the terms set forth herein without the inclusion
of such provisions. Buyer also acknowledges that the provisions of this Section
7 limiting the right of redemption and providing for payment of the premium
specified above were independently negotiated and bargained for, and constitute
a specific, material part of the consideration given by Buyer to UNUM for
consenting to the transfer to Buyer of Borrower's interest in the Lease.
/s/ DLJ
------------------
BUYER'S INITIALS
8. It is agreed that neither Borrower nor Buyer nor Principal has any
defenses or offsets against the indebtedness evidenced by the Bonds and the Loan
Documents.
9. Borrower and Buyer agree that all costs, expenses and fees, including,
but not limited to, recording fees and attorneys fees, incurred in connection
with the transaction contemplated herein shall be the sole responsibility of
Borrower and Buyer, and that UNUM shall incur no costs or expenses relating
thereto.
10. This Agreement shall bind and inure to the benefit of the parties
hereto and their heirs, personal representatives, successors, assigns and the
subsequent holders or owners of the Loan Documents. This Agreement shall be
governed by and construed in accordance with the laws of the State of Kansas.
11. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date above
written.
King's Court Investors Limited Partnership, a
Kansas limited partnership
By: King's Court Associates, L.L.C., a Kansas
limited liability company, its general partner
By: /s/ ARM
Xxxxx X. Xxxxxx, its Authorized Member
First UNUM Life Insurance Company
By: /s/ Xxxxxxx Xxxxxx Carvel
Its: Xxxxxxx Xxxxxx Xxxxxx
Assistant Vice President
Maxus Realty Trust, Inc.
By: /s/ Xxxxx X. Xxxxxxx
Its: Chairman
Security Bank of Kansas City, as Trustee
By: /s/ Xxxxxxx X. Xxxxx
Its: Vice President & Trust Officer
By signing below, Xxxxx X. Xxxxxxx agrees to be liable only for matters set
forth in Sections 2, 3, and 8 of this Assumption Agreement.
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
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ACKNOWLEDGMENTS
STATE OF Missouri )
)
COUNTY OF Xxxxxxx )
I, the undersigned, a Notary Public in and for said County in said State,
do hereby certify that Xxxxx X. Xxxxxx, whose name as Authorized Member of
King's Court Associates, L.L.C., a Kansas limited liability company and general
partner of King's Court Investors Limited Partnership, a Kansas limited
partnership, is signed to the foregoing instrument, and who is known to me, and
known to be such member, acknowledged before me on this day that, being informed
of the contents of said instrument, he, as such member and with full authority,
executed the same voluntarily for and as the act of said company.
Given under my hand and official seal this the 17th day of August, 2001.
Xxxxx X. Xxxxx
Notary Public
My Commission expires: 0-00-0000
XXXXX XX XXXXX
XXXXXX XX XXXXXXXXXX, ss. August 16, 2001
Then personally appeared the above-named Xxxxxxx Xxxxxx Carvel, Assistant
VP of First UNUM Life Insurance Company and acknowledged the foregoing
instrument to be her free act and deed, in her said capacity, and the free act
and deed of First UNUM Life Insurance Company.
Given under my hand and official seal this the 16th day of August, 2001.
Xxxxxxx X. Xxxxxxx
Notary Public
Commission Expires: June 13, 2008
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STATE OF Missouri )
)
COUNTY OF Xxxxxxx )
I, the undersigned, a Notary Public in and for said County in said State,
do hereby certify that Xxxxx X. Xxxxxxx, whose name as Authorized Officer of
Maxus Realty Trust, Inc., a Missouri corporation, is signed to the foregoing
instrument, and who is known to me, and known to be such officer, acknowledged
before me on this day that, being informed of the contents of said instrument,
he, as such officer and with full authority, executed the same voluntarily for
and as the act of said corporation.
Given under my hand and official seal this the 17th day of August, 2001.
/s/ Xxxxx X. Xxxxx
Notary Public
My Commission expires: 0-00-0000
XXXXX XX XXXXXX )
)
COUNTY OF XXXXXXX )
I, the undersigned, a Notary Public in and for said County in said State,
do hereby certify that Xxxxxxx X. Xxxxx, whose name as Authorized Trust Officer
of Security Bank of Kansas City, a Kansas banking corporation, is signed to the
foregoing instrument, and who is known to me, and known to be such officer,
acknowledged before me on this day that, being informed of the contents of said
instrument, he, as such member and with full authority, executed the same
voluntarily for and as the act of said corporation.
Given under my hand and official seal this the 16th day of August, 2001.
/s/ Xxxxx X. Xxxx
Notary Public
My Commission expires: 5/29/05
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STATE OF Missouri )
)
COUNTY OF Xxxxxxx )
I, the undersigned, a Notary Public in and for said County in said State,
do hereby certify that Xxxxx X. Xxxxxxx, whose name is signed to the foregoing
instrument, and who is known to me, and known to be such person, acknowledged
before me on this day that, being informed of the contents of said instrument,
he executed the same voluntarily.
Given under my hand and official seal this the 17th day of August, 2001.
/s/ Xxxxx X. Xxxxx
Notary Public
My Commission expires: 1-27-2005
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EXHIBIT "A"
TRACT I:
XXXX 0, 0, 0 XXX 0, XXXXX 1; XXXX 0, 0, 0 XXX 0, XXXXX 2; XXXX 0, 0, 0 XXX 0,
XXXXX 7; XXXX 0, 0, 0 XXX 0, XXXXX 8; XXXX 0, 0, 0 XXX 0, XXXXX 9; AND LOT A,
EXCEPT THE EAST 10 FEET OF LOT A, ALL IN KING'S COURT, A SUBDIVISION IN THE CITY
OF OLATHE, XXXXXXX COUNTY, KANSAS.
TRACT II:
XXXX 0, 0, 0, 0 XXX 0, XXXXX 3; XXXX 0, 0, 0 XXX 0, XXXXX 4; XXXX 0, 0, 0, 0, 0
XXX 0, XXXXX 5; XXXX 0, 0, 0, 0, 0 XXX 0, XXXXX 6; AND LOT B, EXCEPT THE EAST 10
FEET OF LOT B, ALL IN KING'S COURT, A SUBDIVISION IN THE CITY OF OLATHE, XXXXXXX
COUNTY, KANSAS.
TRACT III:
XXX X, XXXXX 00, XXXXX'XXXXX, A SUBDIVISON IN THE CITY OF OLATHE, XXXXXXX
COUNTY, KANSAS
