HomeMy WebLinkAbout2020-05-8637ORDINANCE NO. 2020-05-8637
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY,
AUTHORIZING AND APPROVING AN AMENDMENT TO AND
ASSUMPTION OF LEASE AGREEMENT; MEMORANDUM OF LEASE
AND MEMORANDUM OF ASSIGNMENT AND ASSUMPTION;
ASSIGNMENT AND LOAN ASSUMPTION AGREEMENT; SECURITY
AGREEMENT, RECORDING OF RELATED FINANCING STATEMENTS
RELATED TO KSR LEGACY INVESTMENT, CORP., AND RECORDING OF
RELATED TERMINATION STATEMENTS RELATED TO GENOVA
PRODUCTS, INC., IN CONJUNCTION WITH McCRACKEN COUNTY,
KENTUCKY, WITH RESPECT TO A PUBLIC PROJECT; AND
AUTHORIZING THE EXECUTION OF LEGAL DOCUMENTS RELATED
THERETO
WHEREAS, the City of Paducah (the "City") and McCracken County (the "County")
jointly own an industrial building located at 5400 Commerce Drive within the boundaries of
Paducah, McCracken County, Kentucky, (the "the Premises") which building was constructed by
the City and the County for the public purpose of economic development; and
WHEREAS, the City, and the County entered into a Lease Agreement dated on or about
June 30, 2014 with Genova Products, Inc. ("Genova") for the lease of the Premises; and
WHEREAS, the City and the County entered into a Loan Agreement and Loan
Agreement Related Documents with Genova dated March 21, 2016, for the sole purpose of
purchasing trade fixtures, equipment, and fixtures to enhance its operations on the Premises and
create additional and new job opportunities to Kentucky residents; and
_ WHEREAS, as of April 30, 2020, the outstanding amount due and owing to the City and
County by Genova Products under the Loan Agreement and related documents was approximately
Six Hundred Forty -Six Thousand Eight Hundred Ninety -Nine and 39/100 Dollars ($646,899.39);
and
WHEREAS, a Receiver was appointed to take charge of the financial affairs of Genova
Products, Inc. pursuant to the order of the Circuit Court for Genesee County (Michigan) Case No.
20-113858 CB, including the leasehold interest described above and including the loan obligations
described above; and
WHEREAS, the court-appointed Receiver and KSR Legacy Investment, Corp. (KSR)
have entered into an Asset Purchase Agreement, dated as March 31, 2020 (the "Purchase
Agreement"), pursuant to which the Receiver has agreed to sell, assign, transfer and convey to
KSR, and KSR has agreed to assume from Receiver, all of Genova's obligations, rights, titles
and interests under the above -referenced Loan Agreement and Lease Agreement; and
WHEREAS, the City now wishes to enter into certain agreements as described herein
with the County, KSR, and Genova's court-appointed Receiver, Gene R. Kohut, to allow for the
assignment by Receiver, on behalf of Genova, and the assumption by KSR of all obligations,
requirements, duties, responsibilities, liabilities, covenants, promises, and balances due in
connection with the Lease Agreement and the Loan Agreement and all other related
memorandums and documents.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF PADUCAH, KENTUCKY, AS FOLLOWS:
SECTION 1. Recitals and Authorization. The City hereby authorizes and
approves an Amendment to and Assumption of Lease Agreement by and between the City of
Paducah, Kentucky, McCracken County, Kentucky, and KSR Legacy Investment, Corp., for the
purpose of adding sections related to purchase option and sign and for the assumption of all
obligations, requirements, duties, responsibilities, liabilities, covenants, promises, and balances
due of Genova under the Lease, the related Memorandum Of Understanding and the related
Memorandum Of Lease, in substantially the same form attached hereto and made part hereof as
Exhibit A, with the provision that the option to purchase price is to be determined and negotiated
by the parties at the fair market value as supported by an acceptable appraisal thereon Further, the
City of Paducah hereby authorizes and approves a Memorandum of Lease and Memorandum of
Assignment and Assumption by and between the City of Paducah, McCracken County, Kentucky,
Gene R. Kohut as receiver for the assets and property of Genova Products, Inc., and KSR Legacy
Investment, Corp., in order to give third parties notice of the aforementioned assignment and the
estate of KSR in the Premises pursuant to the Lease, in substantially the same form attached hereto
and made part hereof as Exhibit B. It is further determined that it is necessary and desirable and
in the best interest of the City to enter into an Assignment and Loan Assumption Agreement
together with the Security Agreement by and between the City of Paducah, McCracken County,
Kentucky, Gene R. Kohut as receiver for the assets and property of Genova Products, Inc., and
KSR Legacy Investment, Corp., for the purposes therein specified, in substantially the same form
attached hereto and made part hereof as Exhibit C & Exhibit D, respectively, and related
financing statements and termination statements on standard Uniform of Commercial Code forms.
Further, the Mayor of the City is hereby authorized to execute the Amendment to and Assumption
of Lease Agreement, Memorandum of Lease and Memorandum of Assignment and Assumption,
Assignment and Loan Assumption Agreement and Security Agreement and any and all other
agreements, documents and instruments of any kind executed or delivered in connection with, or
evidencing, securing, guaranteeing or relating to same with such changes in the agreements not
inconsistent with this Ordinance and not substantially adverse to the City as may be approved by
the official executing the same on behalf of the City or the City Manager. The approval of such
changes, and that such are not substantially adverse to the City, shall be conclusively evidenced
by the execution of the Amendment to and Assumption of Lease Agreement, Memorandum of
Lease and Memorandum of Assignment and Assumption, Assignment and Loan Assumption
Agreement and Security Agreement by the authorized official.
SECTION 2. Compliance With Open Meetings Laws. The City Commission
hereby finds and determines that all formal actions relative to the adoption of this Ordinance
were taken in an open meeting of this City Commission, and that all deliberations of this City
Commission and of its committees, if any, which resulted in formal action, were in meetings
open to the public, in full compliance with applicable legal requirements.
SECTION 3. Conflicts. All ordinances, resolutions, orders or parts thereof in
conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed
and the provisions of this Ordinance shall prevail and be given effect.
SECTION 4. Severability. The provisions of this Ordinance are declared to be
severable. If any section, phrase or provision shall for any reason be declared invalid, such
declaration shall not affect the validity of the remainder of this Ordinance.
SECTION 5. Emergency Declared. Pursuant to KRS 83A.060, the City
Commission suspends the requirement of a second reading of this ordinance. As grounds
therefor, the City Commission does hereby declare an emergency to exist due to the
requirements by the court-appointed Receiver in order to comply with the case management of
the Circuit Court for Genesee County (Michigan) Case No. 20-113858 CB and so as not to delay
resolution of said case.
SECTION 6. Effective Date. This ordinance shall become effective immediately
upon its adoption by affirmative vote of 2/3 or more of the legislative body.
Brandi Harless, Mayor
ATTEST:
Lindsay Parish, Citi, Clerk
Introduced & Adopted by the Board of Commissioners, May 20, 2020
Recorded by City Clerk, May 20, 2020
Published by The Paducah Sun, May 22, 2020
\ord\agree-Assumption of Loan & Lease — KSR — Genova 2020
Ordinance Prepared by Lindsay Parish, reviewed by Kerry Smith, McMurry & Livingston,
PLLC, Attorneys at Law
Exhibit A
AMENDMENT TO AND ASSUMPTION OF LEASE AGREEMENT
THIS AMENDMENT TO AND ASSUMPTION OF LEASE AGREEMENT (this "Amendment") is
entered into this 211 day of May 2020 ("Effective Date"), by and between MCCRACKEN COUNTY, KENTUCKY
("County"), with a principal mailing address of 300 Clarence Gaines Street, Paducah, Kentucky 42003, and CITY of
PADUCAH, KENTUCKY ("City"), with a principal mailing address of Post Office Box 2267, Paducah, Kentucky
42002-2267 (County and City shall collectively be referred to as "Lessor"), and KSR LEGACY INVESTMENT,
CORP, a Utah corporation registered to do business in the Commonwealth of Kentucky with a principal mailing
address of 1760 West 1900 South #5, Salt Lake City, UT 84040 ("Lessee").
RECITALS
A. WHEREAS, Lessor entered into that certain Lease Agreement dated on or about June 30, 2014
("Lease") with Genova Products, Inc., a Michigan corporation and assignor to Lessee ("Genova"), for the lease of
certain Premises, which incorporates by reference a Memorandum of Understanding ("MOU") with counterparts
signed on or about June 9, 23, 25 and/or 29, 2014, between said parties, as further evidenced by a Memorandum of
Lease ("MOL") dated on or about June 30, 2014, recorded July 2, 2014, in Deed Book 1281, page 4, McCracken
County (Ky.) Clerk's office.
B. WHEREAS, Lessee is the assignee of certain assets of Genova pursuant to (1) the order of the
Circuit Court for Genesee County (Michigan) Case No. 20-113858CB, including the leasehold interest described
herein, which provides for the assignment of the tenant's interest under the Lease to Lessee and (2) an Assignment
and Assumption Agreement by which Lessee assumed the tenant's interest under the Lease as of the date of such
assignment (item (2), "Lease Assignment and Assumption Agreement").
C. WHEREAS, Lessor and Lessee desire to amend the Lease and MOU and MOL to grant to Lessee
an option to purchase the Premises and certain real property owned by Lessor, subject to the terms and conditions set
forth in this Amendment.
D. WHEREAS, Lessor and Lessee also desire to set forth their agreement with respect to a certain Loan
Agreement dated on or about March 21, 2016, by and between McCracken County, Kentucky / City of Paducah,
Kentucky and Genova and the Loan Agreement Related Documents which shall be the subject of a separate
Assignment and Loan Assumption Agreement.
NOW, THEREFORE, in exchange for the Lessee's agreement to assume the obligations
as described herein, and in exchange for the Lessor's agreement and consent thereto, and in
exchange for the parties' agreement to amend the terms of the Lease as provided herein, and in
exchange of the mutual promises exchanged herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as set forth
below.
AGREEMENT
1. Capitalized Terms. All capitalized terms used and not otherwise defined herein
shall have the meanings set forth in the Lease, the MOU, and the MOL.
2. Purchase Option and Sign. The Lease is hereby amended to the extent necessary
to include the following as Sections 36 and 37:
SECTION 36. Purchase Option.
On or before August 19, 2020, Lessee and its affiliates, successors and
assigns shall have the right to purchase ("Purchase Option") all of Lessor's fee
interest in (a) the Premises and (b) the real property described on Exhibit A,
attached hereto and incorporated herein by this reference, and the improvements,
easements located thereon and the appurtenances thereto ("Lessor's Estate"). In
the event that Lessee elects to exercise the Purchase Option, Lessee shall provide
Lessor with written notice of such election at any time on or before the expiration
of the Initial Term (as may be renewed or extended) ("Notice of Exercise").
Promptly following Lessee's Notice of Exercise, Lessor agrees to enter into a
purchase and sale agreement with Lessee, which purchase and sale agreement shall
contain customary and commercially reasonable terms and conditions respecting
the purchase of Lessor's Estate, including, without limitation, the following: (i) the
purchase price of Lessor's Estate shall be $3,600,000.00; (ii) the closing date for
the purchase and sale of Lessor's Estate shall be held at a reasonable time and a
place within McCracken County, Kentucky to be designated by Lessee and shall
occur 60 days from the Notice of Exercise; (iii) at closing, Lessor shall execute and
deliver to Lessee, at Lessee's expense, a special warranty deed containing
covenants of special warranty and further assurances and which conveys good and
marketable title to Lessor's Estate, subject only to those specific matters of record
listed as exceptions to coverage in a commitment for a standard owner's policy of
title insurance; (iv) the conveyance of Lessor's Estate shall be free and clear of any
monetary encumbrances; (v) Lessee shall cause, at its cost and expense, a title
company designated by Lessee to issue a standard owner's policy of title insurance,
and Lessee shall have the option of obtaining extended coverage, at its cost and
expense; (vi) rents and other expenses owed under the lease as of the closing date
set forth in item (ii) above shall be pro -rated at such closing; (vii) Lessor shall
convey title in accordance with the terms of the purchase and sale agreement and
such conveyance shall be "as -is," "where -is" condition "with all faults," subject to
commercially reasonable representations and warranties made by Lessor; and (viii)
escrow fees, if any, shall be shared equally to be paid/deducted at Closing. In the
event that Lessee exercises its option hereunder, then in that event at the Closing,
the Lessee agrees to grant unto the Lessor and/or G.P.E.D,C„ Inc. (a/k/a Greater
Paducah Economic Development Council), as Lessor's designee, an easement
and/or a license for a period not to exceed 25 years (from the date of Closing) or
such other period as may be agreed upon by the parties in order to maintain a sign
with reasonable dimensions upon the Premises at or near the front corner
intersection with Commerce Drive.
SECTION 37. Sign.
During the remaining term of the Lease, the Lessor and/or G.P.E.D,C„ Inc.
(a/k/a Greater Paducah Economic Development Council), as Lessor's designee, is
granted a license in order to maintain a sign with reasonable dimensions upon the
Premises at or near the front corner intersection with Commerce Drive.
3. Full Force and Effect. Except as amended by this Amendment, all other terms of
the Lease, the MOU and the MOL remain in full force and effect. Except as otherwise provided
herein, to the extent that there are any inconsistencies between the terms of the Lease, the MOU,
and/or the MOL and this Amendment, the terms of the Lease, the MOU and the MOL shall control.
4. Assumption. Lessee assumed all obligations, requirements, duties, responsibilities,
liabilities, covenants, promises, and balances due of Genova under the Lease, the MOU and the
MOL arising on or after the date of the Lease Assignment and Assumption Agreement. Lessor
acknowledges and approves such assumption of Genova's interest as tenant under the Lease
pursuant to the Lease Assignment and Assumption Agreement.
5. Estoppel Certificate. Lessor certifies that, to the best of its knowledge, there are no
default by either party under the Lease or any act or omission that, with the passage of time, would
become a default under the Lease.
6. Successors and Assigns. The provisions of this Amendment will be binding upon,
inure to the benefit of and be enforceable by and against the parties hereto and their respective
successors and permitted assigns.
7. Cooperation. The parties hereto agree to cooperate in the drafting and execution of
such additional documents as may be reasonably requested or necessary to carry out the intent and
purpose of this Amendment, including but not limited to a recordable version of an amendment to
the MOL.
8. Counterparts. This Amendment may be executed in any number of counterparts,
each of which shall be an original for all purposes, but all of which shall constitute but one and the
same instrument. The parties may e-mail, telecopy, or fax signatures appearing on any portion of
this Amendment, and the same shall constitute originals for all purposes.
9. Governing Law/Choice of Forum. This Amendment and any action related thereto,
whether sounding in tort, contract, statutory or regulatory law, or otherwise, will be governed by
and construed in accordance with the law of the Commonwealth of Kentucky as applicable to
contracts made and to be performed in the Commonwealth of Kentucky, without regard to conflicts
of laws principles. Any legal action related to this Amendment shall be brought in a court sitting
in McCracken County, Kentucky, which shall have exclusive jurisdiction over such action.
10. Representations. Each party represents that it is in good standing and has authority
to carry out the transactions herein; that the transactions contemplated herein will not violate or
breach any term of any laws, judgments, contracts, or require the consent of any other person or
entity; that there is not any legal proceeding pending or threatened which relates to the transactions
herein; that all tax returns (if any are required) have been filed and that all applicable taxes have
or will be paid; that the parties shall cooperate in the drafting and filing of any federal income tax
form 8594 which may be required; and that no representation herein contains any omission of or
untrue statement of a material fact..
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the
Effective Date.
LESSOR:
CITY OF PADUCAH, KENTUCKY
TITLE:
COMMONWEALTH OF KENTUCKY
. ss.
COUNTY OF McCRACKEN
Subscribed, sworn to and acknowledged before me by CITY OF PADUCAH,
KENTUCKY by and through its duly authorized representative,
on this the day of
2020.
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
My commission expires:
Notary ID Number:
MCCRACKEN COUNTY, KENTUCKY
MO
TITLE:
COMMONWEALTH OF KENTUCKY )
: ss.
COUNTY OF McCRACKEN )
Subscribed, sworn to and acknowledged before me by MCCRACKEN COUNTY,
KENTUCKY by and through its duly authorized representative,
on this the day of
2020.
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
My commission expires:
Notary ID Number:
LESSEE:
KSR LEGACY INVESTMENT, CORP
a Utah corporation registered to
do business in Kentucky
IC _
TITLE:
STATE OF UTAH )
ss.
COUNTY OF )
Subscribed, sworn to and acknowledged before me by KSR LEGACY INVESTMENT,
CORP by and through its duly authorized representative, ,
on this the day of , 2020.
NOTARY PUBLIC
STATE AT LARGE
My commission expires:
Notary ID Number: _
Exhibit A
To
AMENDMENT TO AND ASSUMPTION OF LEASE AGREEMENT
Legal Description of Lessor's Real Property
The below is subject to Declaration of Protective Covenants and Restrictions for Industrial Park
West of record in Deed Book 1186, page 67, and re-recorded in Deed Book 1186, page 643,
McCracken County Clerk's office.
That certain real property located in McCracken County, Kentucky, and more particularly
described as follows:
BEING TRACT "D," CONSISTING OF 1.2 ACRES, AND
ACRES, IN THE INDUSTRIAL PARK WEST AS
SUBDIVISION OF THE INDUSTRIAL PARK WEST TO,]
"E" OF THE PADUCAH-MCCRACKEN COUNTY INbi
PROPERTY OF RECORD IN PLATT SECTIONI "L,FS/P_A
CLERICS OFFICE. '
BEING PART OF THE SAME PROPERTY
AND COUNTY OF MCCRACKEN, KEN7,1
RECORD IN DEED BOOK 1035, PAGE S
OFFICE.
«B Com(} ISTIN (OF 7.2207
IRTTKI ,DN THE__), VER OF
141;IACT'PA'i, ASI} TRACT
DEVE
Lf}'+I1'+T %'AUTIi1RITY
"�A�'CCRACkEI4`C LINTY COURT
MNVEYED-TO 'CITY O#`%VADUCAH, KENTUCKY,
BY,. tF_0 DATED`'ARCH 25, 2004, OF
N THF. MCC, RAClf QOUNTY COURT CLERK'S
THE ABOVE LEGAL DESCRIPTIONS WERE PREPARED WITHOUT THE BENEFIT OF A
TITLE EXAMINATION AND THE DRAFTSMAN ASSUMES NO LIABILITY THEREFOR.
Exhibit B
MEMORANDUM OF LEASE AND
MEMORANDUM OF ASSIGNMENT AND ASSUMPTION
THIS MEMORANDUM OF LEASE AND MEMORANDUM OF ASSIGNMENT AND
ASSUMPTION is made as of the 21" day of May, 2020, by and between by and among GENE R.
KOHUT, c/o Honigman LLP, 2290 First National Building, 660 Woodward Avenue, Detroit, MI
48226-3506 Attn: Scott B. Kitei and Ahmad Sabbagh, solely as Receiver for the assets and
property of GENOVA PRODUCTS, INC., a Michigan corporation (such Receiver is referred to
as "Assignor" and Genova Products, Inc. is referred to as "Genova"), KSR LEGACY
INVESTMENT, CORP, 1760 West 1900 South #5, Salt Lake City, Utah 84040, a Utah
corporation ("Assignee" or "Lessee" and/or "Assignee/Lessee" as the context may require),
MCCRACKEN COUNTY, KENTUCKY, c/o office of County Judge -Executive, 300 Clarence
Gaines Street, Paducah, KY 42003 ("County") and CITY OF PADUCAH, KENTUCKY, c/o
Office of the City Manager, City Hall, 300 South 5th Street, P.O. Box 2267, Paducah, Kentucky
42002-2267 ("City") (the County and the City being referred to together as "Lessor" as the context
may require).
WITNESSETH:
WHEREAS, Lessor and Genova entered into a lease agreement dated on or about June 30,
2014, which is the subject of a Memorandum of Lease dated June 30, 2014, and recorded July 2,
2014, in Deed Book 1281, page 4, McCracken County Clerk's office (the "Original
Memorandum"), with respect to the Premises described on Exhibit "A," hereto ("the Lease"); and
WHEREAS, Assignor was appointed as the Receiver for Genova pursuant to the order of
the Circuit Court for Genesee County (Michigan) Case No. 20-113858 CB, and pursuant to the
order of said Court entered on or about April 13, 2020, the Assignor, as Receiver, was authorized
and directed to sell and assign to Assignee the interest of Genova in the Lease described herein;
and
WHEREAS, Assignor, as Receiver, assigned the interest of tenant under the Lease to
Assignee as of the date of, and pursuant to, an Assignment and Assumption Agreement dated on
or about March 31, 2020; and
WHEREAS, Lessee assumed the obligations of tenant under the Lease as of the date of,
and pursuant to, such Assignment and Assumption Agreement; and
WHEREAS, Lessor and Lessee entered into a separate Amendment to and Assumption of
Lease Agreement dated on or about May 21, 2020, which incorporates and amends the Lease;
and
WHEREAS, the parties hereto desire to enter into and record this Memorandum of Lease --'
and Assignment in order to give third parties notice of the aforementioned assignment and the
estate of Lessee in the Premises pursuant to the Lease.
NOW, THEREFORE, in consideration of the mutual promises exchanged herein, and in
consideration of the rents and covenants provided in the Lease, the parties agree as follows:
above.
MEMORANDUM OF ASSIGNMENT AND ASSUMPTION
(1) Assignor sold, transferred, conveyed, and/or assigned to KSR all of the
right, title and interest of Genova under the Lease.
(2) Assignee accepted the foregoing described assignment of the Lease as of
the date of such assignment and assumed and agreed to perform, observe
and discharge all of the duties, obligations and undertakings of the tenant
thereunder arising on or after the date of the foregoing described assignment
of the Lease.
(3) Lessor hereby consents to the aforementioned assignment.
MEMORANDUM OF LEASE
This Memorandum of Lease effectively replaces the Existing Memorandum described
The term of the Lease commenced on or about July 1, 2014, and has continued and shall
continue thereafter for a period of ten (10) years (the "Initial Term"), unless sooner terminated or
extended as provided for in the Lease. Pursuant to the Lease, Lessor grants Lessee the right and
option to extend the term for an additional ten (10) years (the "Renewal Term"), as more
particularly described in the Lease. Pursuant to the aforementioned Amendment to and
Assumption of Lease Agreement, the Lessor has granted to Lessee an option to purchase the
Property which may be exercised at any time on or before August 19, 2020.
All terms, covenants and conditions of the Lease and of the Amendment to and
Assumption of Lease Agreement, and the above -captioned Assignment and Assumption
Agreements are incorporated herein. This Memorandum of Lease and Memorandum of
Assignment and Assumption is binding upon the heirs, successors and assigns of the Lessor and
the Lessee.
IN WITNESS WHEREOF, the parties have duly executed this Memorandum of Lease
and Memorandum of Assignment and Assumption effective as of the date first written above.
ASSIGNOR:
GENE R. KOHUT
Court Appointed Receiver
Circuit Court for Genesee County (Michigan)
Case No. 20-113858 CB
STATE OF MICHIGAN )
SS.
COUNTY OF )
Subscribed, sworn to and acknowledged before me by GENE R. KOHUT on this the
day of , 2020.
NOTARY PUBLIC
STATE AT LARGE
My commission expires:
Notary ID Number:
'J ASSIGNEE/LESSEE:
KSR LEGACY INVESTMENT, CORP
a Utah corporation registered to
do business in Kentucky
TITLE:
STATE OF UTAH )
ss.
COUNTY OF )
Subscribed, sworn to and acknowledged before me by KSR LEGACY INVESTMENT,
CORP by and through its duly authorized representative,
, on this the day of , 2020.
NOTARY PUBLIC
STATE AT LARGE
My commission expires:
Notary ID Number:
LESSOR:
CITY OF PADUCAH, KENTUCKY
mm
TITLE:
COMMONWEALTH OF KENTUCKY )
:ss.
COUNTY OF McCRACKEN )
Subscribed, sworn to and acknowledged before me by CITY OF PADUCAH,
KENTUCKY by and through its duly authorized representative,
on this the day of ,
2020.
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
My commission expires:
Notary ID Number:
MCCRACKEN COUNTY, KENTUCKY
I:
TITLE:
COMMONWEALTH OF KENTUCKY )
. ss.
COUNTY OF McCRACKEN )
Subscribed, sworn to and acknowledged before me by MCCRACKEN COUNTY,
KENTUCKY by and through its duly authorized representative,
on this the day of ,
2020.
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
My commission expires:
Notary ID Number:
Exhibit "A"
To
MEMORANDUM OF LEASE AND
MEMORANDUM OF ASSIGNMENT AND ASSUMPTION
Legal Description of Lessor's Real Property
The below is subject to Declaration of Protective Covenants and Restrictions for Industrial Park
West of record in Deed Book 1186, page 67, and re-recorded in Deed Book 1186, page 643,
McCracken County Clerk's office.
That certain real property located in McCracken County, Kentucky, and more particularly
described as follows:
! Vii' J ! r
BEING TRACT "D," CONSISTING OF 1.2 ACRES, AND TRA�C_'' EI l C�J� �sT�,{oI? 7.22ID'i
ACRES, IN THE INDUSTRIAL PARK WEST' AS S�TI�JFORT N THE ,7VER OF
SUBDIVISION OF THE INDUSTRIAL PARK WEST T O`C,RE]ATE .� T. Crrv- ;-I} TRACT
"E" OF THE PADUCAH-MCCRACKEN COUNTY I.3�SRII:: AELi}RIU'tEi�;'�,'AiITHiRITY
PROPERTY OF RECORD IN PLAT SECTION %," ,PA -1.16 CUNTY COURT
CLERIC'S OFFICE. r., it " -�
s
BEING PART OF THE SAME PROPERTY 063 VEYED`T4 CITY OF!�?,6)UCAH, KENTUCKY,
AND COUNTY OF MCCRACKEN, K�, BY f E T DATED -MARCH 26, 2004, OF
RECORD IN DEED BOOK 1035, PA�GR t5 ,- N TH&M' CCRACM-N COUNTY COURT CLERIC'S
OFFICE.
THE ABOVE LEGAL DESCRIPTIONS WERE PREPARED WITHOUT THE BENEFIT OF A
TITLE EXAMINATION AND THE DRAFTSMAN ASSUMES NO LIABILITY THEREFOR.
I hereby certify that this
instrument was prepared by:
Law Offices
McMurry & Livingston, PLLC
201 Broadway
P. O. Box 1700
Paducah, KY 42002-1700
Kerry D. Smith
Exhibit C
ASSIGNMENT AND LOAN ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND LOAN ASSUMPTION AGREEMENT is dated as of , 2020
(this "Agreement"), by and among Gene R. Kohut, c/o Honigman LLP, 2290 First National Building, 660
Woodward Avenue, Detroit, MI 48226-3506 Attn: Scott B. Kitei and Ahmad Sabbagh, solely as receiver
for the assets and property of Genova Products, Inc., a Michigan corporation ("Assignor"), KSR
Legacy Investment, Corp, P.O. Box 708490, Sandy, UT 84070, a Utah corporation ("Assignee"), and
McCracken County, Kentucky, c/o office of County Judge -Executive, 300 Clarence Gaines Street,
Paducah, KY 42003 ("County") and City of Paducah, Kentucky, c/o Office of the City Manager, City
Hall, 300 South 5th Street, P.O. Box 2267, Paducah, Kentucky 42002-2267 ("City" and, together with
County, "Lender"). All capitalized terms used herein but not otherwise defined have the meaning set forth
in the Loan Agreement (as defined below).
WHEREAS, Assignor and Assignee have entered into that certain Asset Purchase Agreement,
dated as March 31, 2020 (the "Purchase Agreement"), pursuant to which Assignor has agreed to sell, assign,
transfer and convey to Assignee, and Assignee has agreed to assume from Assignor (the "Assignment"),
all of Assignor's obligation, right, title and interest under that certain Loan Agreement by and between
Lender and Genova Products, Inc. dated as of March 21, 2016 (the "Loan Agreement") and Loan
Agreement Related Documents (as described below);
WHEREAS, the following are a part of and related to the above -referenced Loan Agreement:
(a) Loan Agreement dated on or about March 21, 2016, by and between McCracken
County, Kentucky / City of Paducah, Kentucky and Genova Products, Inc. which
incorporates by reference a Memorandum of Understanding with counterparts
signed on or about June 9, 23, 25 and/or 29, 2014, between said parties.
(b) Promissory note dated on or about July 1, 2016, given by Genova Products, Inc.
(Borrower) to McCracken County, Kentucky / City of Paducah, Kentucky
(Lender(s)) in the original principal amount of $738,213.60, with a balance due
and owing as of April 30, 2020, in the amount of $424,992.57.
(c) Promissory note dated on or about February 1, 2017, given by Genova Products,
Inc. (Borrower) to McCracken County, Kentucky / City of Paducah, Kentucky
(Lender(s)) in the original principal amount of $361,786.40, with a balance due
and owing as of April 30, 2020, in the amount of $221,906.82.
(d) Security Agreement dated on or about February 1, 2017, between Genova
Products, Inc. (Grantor) and McCracken County, Kentucky / City of Paducah,
Kentucky (Secured Party(ies)) regarding Engel Injection Molding Machine
Victory 4550/560 Hy -Tech Serial No. 209724 and such other collateral as better
described in said security agreement.
(e) Lien Subordination Agreement dated on or about March 21, 2016, between Wells
Fargo Bank, National Association (Subordinated Lien Agent) and McCracken
County, Kentucky / City of Paducah, Kentucky (Lender(s)).
(f) UCC 2016093770-7 filed with the Michigan Secretary of State on or about July 5,
2016, with respect to Genova Products, Inc. (Debtor) and City of Paducah,
Kentucky (Secured Party) regarding all trade fixtures, equipment and fixtures
better described in Exhibit "A" attached thereto in said UCC filing.
(g) UCC 20170221000641-6 filed with the Michigan Secretary of State on or about
February 17, 2017, with respect to Genova Products, Inc. (Debtor) and City of
Paducah, Kentucky (Secured Party) regarding Engel Injection Molding Machine
Victory 4550/560 Hy -Tech Serial No. 209724 and such other collateral as better
described in said UCC filing.
(h) UCC 2016093771-9 filed with the Michigan Secretary of State on or about July 5,
2016, with respect to Genova Products, Inc. (Debtor) and McCracken County,
Kentucky (Secured Party) regarding all trade fixtures, equipment and fixtures
better described in Exhibit "A" attached thereto in said UCC filing.
(i) UCC 20170221000638-2 filed with the Michigan Secretary of State on or about
February 17, 2017, with respect to Genova Products, Inc. (Debtor) and McCracken
County, Kentucky (Secured Party) regarding Engel Injection Molding Machine
Victory 4550/560 Hy -Tech Serial No. 209724 and such other collateral as better
described in said UCC filing.
Exhibit D
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement" or "Security Agreement") made and
executed on this _ day of , 2020, by and among KSR LEGACY INVESTMENT,
CORP, P.O. Box 708490, Sandy, UT 84070, a Utah corporation registered to do business in
Kentucky, hereinafter referred to as "Grantor," and MCCRACKEN COUNTY, KENTUCKY,
with a principal mailing address of 300 South 7th Street, Paducah, Kentucky 42003, and CITY OF
PADUCAH, KENTUCKY, with a principal mailing address of Post Office Box 2267, Paducah,
Kentucky 42002-2267, hereinafter collectively referred to as "Secured Party." Terms not otherwise
defined herein shall have the same meaning as defined in the Credit Agreement (defined below).
WITNESSETH:
WHEREAS, Grantor and Secured Party entered into an Assignment and Loan Assumption
Agreement as a part of a Purchase Agreement related to the assets and obligations of Genova
Products, Inc., which is in receivership, pursuant to an action pending in the Circuit Court for
Genesee County (Michigan), Case No. 20-113858 CB, of even date herewith, wherein Secured
Parry agreed to extend certain credit to Grantor for the sole purpose of purchasing trade fixtures,
equipment, and fixtures upon a certain tract of real property located at 5400 Commerce Drive in
Paducah, McCracken County, Kentucky (the "Property"); and
WHEREAS, as a condition to consummating the above transaction, Secured Party has
requested that Grantor grant and assign unto Secured Parry a security interest in the Collateral
hereinafter described in accordance with the terms and provisions herein contained, to which Grantor
is agreeable; and
WHEREAS, Grantor does hereby expressly acknowledge and agree that Grantor executes
this Security Agreement as inducement to Secured Party in consummating the above transaction.
NOW, THEREFORE, in consideration of the foregoing premises, and for valuable
consideration, the legal adequacy and sufficiency of which is hereby acknowledged by all parties
hereto, the parties do covenant and agree as follows:
1) Assignment of Security Interest. Grantor does hereby grant, transfer, and assign
unto Secured Party a first priority security interest in the Collateral to secure the payment of the loan
as described in the Assignment and Loan Assumption Agreement (sometimes referred to herein as
the "Credit Agreement") and duties of Grantor under the Credit Agreement, and all interest accruing
thereon, and any renewals and extensions thereof. The Collateral shall also secure any and all other
obligations and liabilities of Grantor to Secured Parry under the Credit Agreement, now existing or
hereafter arising, including but not limited to any and all late charges, collection costs and expenses,
including Secured Party's reasonable attorney's fees and legal expenses, any expenditures made by
Secured Party hereunder, any future advances extended by Secured Party to Grantor.
2) Collateral. The Collateral covered by this Agreement includes all of the following -
described property of Grantor, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located (collectively, the "Collateral"):
ENGEL INJECTION MOLDING MACHINE VICTORY 4550/560 HY-TECH
SERIAL NO. 209724, ALL ATTACHMENTS, REPLACEMENTS,
SUBSTITUTIONS AND ADDITIONS AND ACCESSIONS, THERETO,
PRODUCTS THEREO AND PROCEEDS OF ALL OR ANY PART OF THE
FOREGOING AND PROCEEDS OF INSURANCE THEREON. IN ADDITION,
ALL TRADE FIXTURES, EQUIPMENT AND FIXTURES DESCRIBED ON
EXHIBIT "A" ATTACHED HERETO AND ALL ATTACHMENTS,
ACCESSIONS, ACCESSORIES, TOOLS, PARTS, SUPPLIES, INCREASES
AND ADDITIONS TO AND ALL REPLACEMENTS OF AND SUBSITUTIONS
FOR, AND PROCEEDS (AS DEFINED IN THE UNIFORM COMMERCIAL
CODE) (INCLUDING INSURANCE PROCEEDS), OF THE COLLATERAL.
The Collateral shall also include all attachments, accessions, accessories, tools, parts, supplies,
increases and additions to and all replacements of and substitutions for, and proceeds (as defined in
the Uniform Commercial Code) (including insurance proceeds) of, the Collateral.
3) Warranty of Title. Grantor represents and warrants to Secured Party that following
the closing on the above -referenced Purchase Agreement, Grantor is the absolute owner of the legal
and beneficial title to the Collateral and is in full possession thereof, and that (a) the Collateral is free
and clear of all liens, encumbrances, and adverse claims whatsoever, and (b) the Collateral shall at
all times remain free and clear of any liens, encumbrances, and adverse claims.
4) Perfection of Collateral. Grantor shall take all other steps as reasonably required
by Secured Party to perfect and to continue the perfection of the Secured Party's interest in the
Collateral. Grantor does hereby appoint Secured Party as its attorney-in-fact, without requiring the
Secured Party to act as such, to perform all acts that the Secured Party deems reasonably necessary
to perfect and continue to perfect its security interest in, and to protect and preserve, the Collateral.
In the event any item or items of Collateral may only be perfected by possession, Grantor agrees that
Secured Party shall have the right to the possession of such item or items of Collateral until the
above-described indebtedness is fully paid and satisfied. Any and all costs, taxes, and expenses of
filing or recording any financing statement or continuation statement shall be at the sole cost and
expense of Grantor. Grantor shall pay and satisfy such costs, tax, and expense which may be incurred
by Secured Party regarding same upon demand from Secured Party.
5) Location of Collateral. The Grantor shall keep the Collateral at the Property.
Grantor shall not remove the Collateral from any approved location without the prior written consent
of Secured Parry, excepting, however, (a) any assets sold in the ordinary course of business, and (b)
sales or dispositions of obsolete or worn Collateral.
6) Identification of Collateral. The Secured Party shall have the right, upon any Event
of Default, without written waiver by Secured Party, to require Grantor to prepare a schedule or
itemization of all items of Collateral, containing such descriptions, terms, and provisions as
reasonably required by Secured Party, including, without limitation, the nature, extent, and location
of each item of Collateral.
7) Maintenance and Repair to Collateral. Grantor shall at all times maintain all
tangible items of Collateral in good condition and repair (ordinary wear and tear excepted). Secured
Party, through its designated representatives, shall have the right at all reasonable times upon two
(2) business days prior written notice, to examine, inspect, and audit the Collateral. Grantor shall
immediately notify Secured Parry of all loss or damage to Collateral, the aggregate book value of
which, exceeds Fifty Thousand Dollars ($50,000).
8) Insurance. The Grantor shall maintain, or cause to be maintained, public liability
insurance and casualty, hazard, fire, earthquake, and extended coverage insurance for replacement
value on all tangible items of Collateral, and replacements thereto, all in such form and amounts and
with such insurers as acceptable to Secured Party (it being agreed that the amount of the insurance,
the types of insurance coverage, the insurance companies, and the insurance policies, certificates and
endorsements, maintained by Grantor as of the Closing Date are satisfactory to Secured Party).
Secured Party shall be named on any insurance procured hereunder as a first and prior secured party
loss payee with respect to the Collateral. Any policies provided hereunder shall contain a provision
whereby they cannot be cancelled except after ten (10) days written notice to Secured Party. The
Grantor shall furnish to Secured Party such evidence of insurance as the Secured Party may
reasonably require. If no Event of Default has occurred and is continuing, proceeds payable under
any casualty policy will, at Grantor's option, be payable to Grantor to replace the property subject
to the claim, provided that any such replacement property shall be deemed Collateral in which
Secured Party has been granted a first priority security interest. Upon any Event of Default, without
written waiver by Secured Party, any insurance proceeds received by Secured Party, as a loss payee,
shall, at the Secured Party's discretion, be applied either to the repair or replacement of any item of
Collateral which is damaged or destroyed which resulted in the payment of the insurance proceeds,
or in the alternative, be applied toward the satisfaction of the indebtedness as described above.
Grantor does hereby appoint Secured Party as its attorney-in-fact for the purpose of processing and
collecting upon any claim under any insurance policy provided hereunder.
9) Taxes, Assessments, and Liens. Grantor will pay before delinquent all taxes,
assessments, and liens upon the Collateral, its use or operation, upon this Agreement, the Credit
Agreement, or upon any promissory note or notes evidencing the Obligations. If the Collateral is
subject to a lien (other than Permitted Liens) which is not discharged within fifteen (15) days,
Grantor shall deposit with Secured Party, cash or acceptable bond or surety, in an amount to
adequately provide for the discharge of the lien, plus any interest, cost, reasonable attorney fees or
other charges that could accrue as a result of foreclosure sale of the Collateral. In any contest with
respect to the Collateral, Grantor shall defend itself and Secured Party and shall satisfy all final
adverse judgments before enforcement against the Collateral. Grantor shall name Secured Parry as
an additional obligee under any bond furnished in any contest proceeding.
10) Collection on Collateral. So long as no Event of Default exists, Grantor shall have
the right to collect the Collateral. Upon any Event of Default, without written waiver by Secured
Party, Grantor's right to collect upon and realize on the Collateral shall immediately terminate, and
all sums payable thereunder shall be paid directly to Secured Parry and applied to the Obligations.
Grantor hereby appoints Secured Party as its attorney-in-fact for the purpose of notifying any debtor
of Grantor with respect to any Collateral of the existence of the security interest herein created and
of collecting upon any and all sums due under the Collateral, and does hereby authorize and empower
Secured Parry to take any act for and in its behalf to effectuate same.
11) Conduct of Business. Debtor shall not conduct business under any other name other
than given above nor change or reorganize the type of business entity under which it does business
nor change the office of its registered agent except upon thirty (30) days prior written notice to
Secured Party. In the event of such change of name or business entity, Grantor guarantees that all
documents, instruments, and agreements demanded by Secured Party shall be prepared and filed
at Grantor's expense before such change of name or business entity occurs. Additionally, Grantor
hereby covenants and agrees to Secured Parry that it shall operate its business in a reasonable and
prudent manner in conformance with all Obligations and liabilities of Grantor to Secured Parry under
the Loan Documents.
12) Hazardous Use. Grantor has not and shall not utilize any item of Collateral in
noncompliance with any federal, state, or local environmental law or regulation. Grantor shall
indemnify Secured Party and save it harmless from any claim, demand, or cause of action regarding
Grantor's failure to comply with this covenant, except and to the extent caused by Secured Party's
gross negligence or willful misconduct.
13) Expenditures by Secured Party. In the event Grantor fails to timely pay and satisfy
all of its obligations hereunder, including but not limited to Grantor's obligations to pay and satisfy
any costs of maintenance and repair of the Collateral, insurance premiums, taxes, liens, security
interests, encumbrances, and other claims, the Secured Party shall have the right, but not the
obligation, at its option, to pay such costs, and additionally have the right, but not the obligation, at
its option, to pay any and all other costs and expenses for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Secured Parry shall bear interest at the rate
charged under the Credit Agreement from the date incurred. All such expenditures shall become
part of the Obligations and, at Secured Party's option, shall be (a) payable upon demand, (b) be
added to the balance on the Credit Agreement and be apportioned among and be payable with any
installment payments to become due thereunder, or (c) be treated as a balloon payment which shall
be due and payable at the Loan Maturity Date as defined in the Credit Agreement. This Agreement
shall also secure payment of these amounts. Such rights of Secured Party shall be in addition to all
other rights and remedies to which Secured Party may be entitled upon the occurrence of an event
of default.
14) Events of Default. The occurrence of an Event of Default (under and as defined in
the Credit Agreement) shall constitute an "Event of Default" under this Agreement.
15) Remedies of Secured Party Upon Default. Upon any Event of Default, without
written waiver by Secured Parry, Secured Party shall have all of the following rights and remedies,
and additionally, shall have all other rights and remedies provided by law, specifically including all
rights and remedies as set forth in KRS 355.9-501 et seq. Specifically, Secured Party shall have the
following rights and remedies:
a. Secured Party shall have the right to accelerate the unpaid principal and
interest due under the Credit Agreement, and all other Obligations of Grantor to Secured Party, at
which time all of the Obligations shall be immediately due and payable.
b. Upon request of Secured Party, Grantor shall assemble all Collateral at any
place designated by Secured Party. Secured Parry shall have the right to take possession of the
Collateral and to enter the Premises for the taking of possession or of removing the Collateral.
Grantor hereby grants to Secured Parry the use of the Premises for the purpose of possession,
removal, placing the Collateral in saleable form, sale, or other disposition of the Collateral. Secured
Parry shall have the right to sell Collateral at its reasonable discretion.
�i
C. Secured Parry shall have the right to appoint a receiver to take possession of,
operate, control, and other sell and dispose of the Collateral. It is agreed by Grantor that the receiver
may be an employee of Secured Party and may serve without bond. All fees incurred by virtue of
the appointment of a receiver and his or her attorney shall become part of the Obligations secured
by this Agreement and deemed an expenditure hereunder.
d. Any notices required under the Kentucky Revised Statutes shall be deemed
reasonable if mailed by Secured Party to the persons entitled thereto at Grantor's last known address
at least ten (10) days prior to disposition of the Collateral and, in reference to a private sale, need
state only that Secured Party intends to negotiate such a sale. Disposition of the Collateral shall be
deemed commercially reasonable if made to a public offering advertised at least once in a newspaper
of general circulation in the community where the Collateral is located or by a private sale for a sum
equal to or in excess of the liquidating value of the Collateral as reasonably determined by Secured
Party.
e. All of Secured Party's rights and remedies, whether evidence by this
Agreement or any other agreement executed by Grantor to Secured Party, shall be cumulative and
may be exercised singularly or concurrently. Election by Secured Party to pursue any remedy shall
not exclude pursuit of or other remedy, and an election to make expenditures or take action to
perform an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not
affect the Secured Parry's right to declare an Event of Default and to exercise its remedies.
f. All costs and expenses incurred by Secured Party upon any Event of Default,
without written waiver by Secured Party, including its reasonable attorney's fees, shall become part
of the Obligations secured by this Agreement and shall be deemed as an expenditure hereunder.
Costs and expenses include Secured Party's reasonable attorney's fees and legal expenses whether
or not there is a lawsuit, including reasonable attorney's fees and legal expenses for protection and
preservation of the Collateral, for bankruptcy proceedings, appeals, and any anticipated post
judgment collection services. Grantor shall also pay all court costs and such additional fees as be
directed by a court of competent jurisdiction.
16. Other SijZnificant Provisions. This Agreement, together with the Loan Documents,
constitute the entire understanding and agreement of the parties as to the matters as set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or bound by the alteration or
amendment. This Agreement and any action relating to this Agreement shall be construed under the
laws of the Commonwealth of Kentucky. Grantor does hereby submit itself to the jurisdiction of the
courts of McCracken County, Commonwealth of Kentucky. Grantor does further waive its right to
trial by jury. This Agreement shall be binding upon the parties hereto, their heirs, successors and
assigns.
[Signature pages follow]
WITNESS our signatures on the date first above written.
GRANTOR:
KSR LEGACY INVESTMENT, CORP
a Utah Corporation registered to
do business in Kentucky
BY:
TITLE:
STATE OF UTAH
ss.
COUNTY OF )
Subscribed, sworn to and acknowledged before me by KSR LEGACY INVESTMENT,
CORP by and through its duly, authorized representative,
on this the day of ,
2020.
NOTARY PUBLIC
STATE AT LARGE
My commission expires:
Notary ID Number:
SECURED PARTY:
CITY OF PADUCAH, KENTUCKY
BY:
TITLE:
COMMONWEALTH OF KENTUCKY )
. ss.
COUNTY OF McCRACKEN )
Subscribed, sworn to and acknowledged before me by CITY OF PADUCAH,
KENTUCKY by and through its duly authorized representative,
on this the day of
2020.
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
My commission expires:
Notary ID Number:
MCCRACKEN COUNTY, KENTUCKY
BY:
TITLE:
COMMONWEALTH OF KENTUCKY )
. ss.
COUNTY OF McCRACKEN 1 �,
Subscribed, sworn to and acknowledged before me by MCCRACKEN COUNTY,
KENTUCKY by and through its duly authorized representative,
on this the day of
2020.
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
My commission expires:
Notary ID Number: