LEASEHOLD ASSIGNMENT OF LEASES AND RENTS

Transcription

1 Prepared by and after recording return to: Jay Shadwick Duggan, Shadwick, Doerr & Kurlbaum Oakmont Overland Park, Kansas LEASEHOLD ASSIGNMENT OF LEASES AND RENTS This Assignment is made as of December, 2012, by WOODSIDE RACQUET CLUB MANAGEMENT, INC. a Kansas corporation, 2000 West 47 th Place, Westwood, Kansas ("Assignor") to GREAT WESTERN BANK, a South Dakota corporation, Shawnee Mission Parkway, Shawnee, Kansas ("Assignee"). WHEREAS, Assignor is currently the owner of a sub-leasehold interest and is or may become sublessor or lessor of the real property which is more particularly described in Exhibit A attached hereto ("Premises"), and made a part hereof; and WHEREAS, Assignor is indebted to Assignee in the original principal sum of $2,035, and has executed and delivered a Promissory Note in the amount of $2,035,000.00, ("Note") of even date herewith, to evidence such debt to Assignee, the Note being secured by, inter alia, a Mortgage and Security Agreement of even date herewith ("Mortgage"), which encumbers the Premises; and, WHEREAS, Assignee has required, as a condition to the making of the loan hereinbefore described, the following assignment of the Assignor's interest in the leases hereinafter described; and WHEREAS, Assignor desires to satisfy Assignee's loan condition and to more fully secure to the Assignee the payment of the Note by making the following assignment of its interest in the leases hereinafter described. W I T N E S S E T H: NOW, THEREFORE, in consideration of the premises and the sum of Ten Dollars ($10.00) cash in hand paid, the receipt of which is hereby acknowledged by the Assignor, Assignor does hereby assign, transfer and set over unto the Assignee all of the Assignor's interest in and to any leases which now exist or which may hereafter come into existence in and upon the above described Premises, such assignment to be made upon the terms and conditions hereinafter set forth. Provided, however, it is expressly understood and agreed, anything to the contrary contained herein notwithstanding, that the Assignee shall not exercise any of the rights or powers herein conferred upon it until a default shall occur under the terms and provisions of this Assignment, the Note or Mortgage.

2 ARTICLE I - DESCRIPTION OF LEASES The leases to which this Assignment shall apply shall include all of the leases, licenses, rental agreements, and membership contracts which may be in existence in and upon the above described Premises at the time of the execution of this Assignment, any new leases, licenses, agreements and membership contracts in and upon the Premises which shall be entered into from and after the date of the execution of this Assignment and all renewals, extensions, amendments, supplemental agreements or substitutes which may be entered into after the date of this Assignment which shall affect in any way the leases herein described (collectively the "Leases"). ARTICLE II - ASSIGNMENT OF RENTS AND PROFITS As a part of this Assignment, the Assignor does further assign, transfer and set over to the Assignee all of the rents, issues, profits, assessments, and other charges which are to be collected from the Leases. In addition, the Assignor hereby specifically authorizes the Assignee, at the Assignee's option and election, to enter upon the demised premises set out in each such Lease for the purpose of collecting rents, operating and maintaining said demised premises and performing all other acts necessary for the operation and maintenance of said demised premises. It is the intent of the Assignor hereunder to authorize the performance by the Assignee of all acts with respect to the demised premises under the Leases which the Assignor shall be entitled to perform under each of said lease agreements. ARTICLE III - APPLICATION OF LEASE PROCEEDS BY ASSIGNEE The Assignee shall, after payment of all reasonable and proper charges and expenses, credit the net amount of income which it may receive by virtue of this Assignment to any amounts due the Assignee from the Assignor under the terms and provisions of the Note and the Mortgage. The manner of the application of such net income and the item to which such net income shall be credited shall be within the sole discretion of the Assignee and the Assignee shall apply such net income to any one or more of the following items in any order in its absolute discretion: (a) (b) (c) (d) (e) (f) (g) To current principal installments or to the unpaid principal balance of the Note. To interest as it accrues on the indebtedness. To taxes or special assessments which constitute a lien against the Assignee's security. To ground rentals, if any. To any obligations of the Assignor or Assignor as lessor under the terms of any of the Leases. To cure any default under the terms of the Note or Mortgage. To any costs or expenses of executing the Mortgage and any advances secured thereby. ARTICLE IV - ASSIGNOR TO ACT AS AGENT OF ASSIGNEE To facilitate the collection of rents and profits due under the Leases and the performance of Assignor's or lessor's covenants required to be performed under such Leases, the Assignee hereby makes, constitutes and appoints the Assignor as Assignee's true and lawful attorney and hereby authorizes Assignor, on behalf of Assignee, to ask, demand, collect and receive from all lessees under such Leases all rentals as they accrue under the terms and provisions of said Leases and to perform on behalf of Assignee all of the other lease covenants required to be performed by the Assignor or lessor under such Leases. The Assignee further authorizes the Assignor to receive such rentals and to give appropriate receipts therefor, to apply or expend such rentals in payment of any of the expenses of operation of the above described Premises (including the mortgage indebtedness thereon) and to apply or expend the balance of any such rentals in 2

3 whatever manner such Assignor shall elect, and Assignee hereby ratifies and confirms all that the said Assignor shall lawfully do pursuant to the exercise of the authority herein granted. In the event of a default or breach by Assignor in any of the terms, provisions or conditions of this Assignment, the Note or the Mortgage, or any of the loan documents securing the Note, the Assignee shall have the right to revoke such power of attorney, and Assignee hereby reserves such right of revocation of this power of attorney. The Assignee may revoke such power of attorney in the event of such default by giving notice thereof to the Assignor, such revocation to be effective at such time as notice is given, whether such notice be communicated orally or in writing to the Assignor. Assignee may give written notice of such revocation to such lessees at their respective demised premises or such other address as Assignee may have for lessee; provided, however, Assignor agrees that any funds received by it after such notice of revocation to Assignor shall be held in trust by Assignor for the benefit of Assignee and shall be delivered to Assignee upon request. The Assignor agrees that a written demand on any lessee in or upon the demised premises by Assignee for the payment of future rentals directly to the Assignee shall be prima facie evidence that a revocation of the aforesaid power of attorney has occurred and shall be sufficient notice to said lessee to make future rental payments to the Assignee without the necessity of any consent by the Assignor. Any such lessee shall be entitled to rely upon such written demand, and any rent so paid by such lessees to the Assignee shall not be further recoverable by the Assignor from any such lessee. ARTICLE V - LEASE WARRANTIES AND COVENANTS BY ASSIGNOR With respect to each of the leases herein assigned, Assignor hereby covenants and warrants the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) That Assignor is the owner of the sub-leasehold estate in the above described Premises and has full right and power to enter into the Leases. That the Leases have been or will be properly executed by the proper parties. That all of the terms, provisions and conditions of each of the Leases are presently in full force and effect and that there are no present defaults in the performance of any of such terms and conditions. That Assignor shall, upon demand, provide Assignee with copies of all executed leases upon the described Premises. That the Assignor has not executed a prior assignment of said Leases or rentals due thereunder which remains in full force and effect and shall not enter into any future assignments of said Leases to any third party, whether an absolute assignment or as a collateral assignment, without Assignee's prior written consent. That the Assignor has not performed any acts or executed any other instruments which might prevent the Assignee from operating under any of the terms or conditions of this assignment and agreement or which would limit the Assignee in such operation. That the Assignor has not executed or granted any modification or amendment of any of the Leases, if any, except as specifically enumerated herein. That all of the said Leases, if any, are in full force and effect according to their original terms. That the Assignor has not collected or anticipated any rentals from any of the lessees under said Leases for a period of time in excess of one month prior to the accrual of such rental. That the Assignor will, at the Assignor's sole cost and expense, appear in and defend any action growing out of or in any manner connected with any of the Leases or the obligations or liabilities of the lessor, lessee or guarantor thereunder. 3

4 (k) (l) (m) (n) (o) (p) (q) (r) (s) That the Assignor will fulfill or perform each and every lease covenant which is required to be fulfilled or performed by the lessor thereunder. That the Assignor will give prompt notice to the Assignee of any notice of default given by any lessee under any of the Leases to the Assignor as lessor under such Lease, such notice to include a complete copy of any such lessee's notice which shall have been given. That the Assignor will enforce at its sole cost and expense, short of termination of the lease, the performance or observance of each and every covenant and condition required under the assigned leases to be performed or observed by the lessees thereunder. That the Assignor will not materially modify nor in any way adversely alter the terms of any of the Leases. That the Assignor will not terminate the term of any assigned lease nor accept a surrender thereof unless required to do so by the terms of the Lease. That the Assignor will not waive or release any of the lessees under the Leases from any obligations or conditions required to be performed by such lessees under the Lease. That the Assignor will not consent to an assignment of the lessee's interest in any of the said Leases or to a subletting under any such Leases. That the Assignor will immediately deliver to Assignee any and all financial statements and financial data (e.g. balance sheet, income statements, etc.), financial information, sales data, gross receipt information (e.g. for percentage rent calculations), or similar information regarding the sales conducted by tenant or information regarding the tenant s financial condition, received from the tenants under the Leases. That in the event the tenant under a Lease is a franchisee, the Assignor will immediately deliver to Assignee with copies of any franchisor inspection reports or franchisor notices that Assignor receives from the tenant or the franchisor. It is expressly understood and agreed, however, that the Assignor may take any action which is otherwise prohibited by any of the preceding covenants or warranties without such action constituting a default hereunder, if Assignor shall first obtain the prior approval or consent of the Assignee in writing. ARTICLE VI - DEBTS SECURED; TERMINATION OF ASSIGNMENT This Assignment is made for the purpose of securing the following: (a) The payment of the indebtedness evidenced by the Note. (b) The performance and discharge of each and every obligation, covenant and agreement of Assignor contained in this Assignment, the Note, Mortgage and in any of the loan documents described in or securing said Note, including, without limitation, the Loan and Security Agreement of even date herewith. Upon the payment in full of all indebtedness secured hereby and release of the Mortgage, this Assignment shall be void and of no further effect. The release of the Mortgage shall constitute a release of this Assignment. For purposes of determining the remaining unpaid portion of such debt or debts, the Assignor agrees that the affidavit, certificate, letter or statement of any officer or authorized agent of the Assignee showing any part of said indebtedness to remain unpaid shall be and constitute conclusive evidence of the validity, effectiveness and continuing force of this Assignment, and any person may and is 4

5 hereby authorized to rely thereon. This Assignment may be released by a separate document without release of the Mortgage. ARTICLE VII - ASSIGNEE'S PERFORMANCE OF LESSOR'S OBLIGATIONS The Assignor agrees that the Assignee may at any time, at its option (but without obligation to do so and without releasing the Assignor of any obligation herein or under the Leases), make, perform, or do any act which is required herein to be performed by the Assignor, including specifically but without limitation the right to appear in and defend any action purporting to affect the security hereof or the rights or powers of the Assignee and the right to perform any obligations of the Assignor or lessor contained in any of the Leases. Assignor further agrees that the Assignee, in exercising any such powers, may pay all necessary costs and expenses, may employ counsel, and may pay therefore attorneys' fees (to the extent then permitted by law), for all of which the Assignor will immediately upon demand reimburse all such sums expended by the Assignee pursuant to such authority, such reimbursement to Assignee to include the full sum expended together with interest thereon at the rate per annum specified in said Note as applicable in the event of a default. Any such reimbursement shall be added to the indebtedness secured by this Assignment and shall be secured hereby and by the Mortgage and by the loan documents described in or securing said Note. ARTICLE VIII - DEFAULT The Assignor agrees that, in the event it defaults in the payment of the Note or in the performance of any of its obligations or covenants contained herein, or in the performance of any of its obligations or covenants contained herein or in the Note, Mortgage, or in any of the loan documents described in or securing said Note (collectively "Event of Default"), the Assignee may, at its option, subject to the notice and cure periods described in the Note, without regard to the adequacy of the security for the indebtedness hereby secured, either in person or by agent with or without bringing any action or proceeding, or by a receiver to be appointed by a court, take any or all of the following actions, none of which shall cause Assignee to be deemed a mortgagee-in-possession: (a) (b) (c) (d) (e) (f) Enter upon, take possession of, and operate the Premises. Make, enforce, modify and accept the surrender of Leases. Obtain and evict tenants. Fix or modify rents. Perform any acts which the Assignee deems proper to protect the security hereof until all indebtedness secured hereby is paid in full; and Sue for or otherwise collect and receive in its own name all rents, issues and profits under the Lease(s), including those past due and unpaid and apply the same less costs and expenses of operation and collection, including attorneys' fees, upon any indebtedness secured hereby in such order as the Assignee may determine. The Assignor understands and agrees that, in the Event of Default, the Assignee as the holder of the Note may, at its option and in addition to any other remedies described herein, accelerate the maturity of the Note and declare the entire principal balance of the Note, together with all accrued interest and other amounts owing pursuant to this Assignment or the Mortgage or any of the loan documents described in or securing said Note immediately due and payable. Any income received from the Premises by the Assignee in excess of the amount necessary to meet all obligations of the Assignor secured hereby, including any accelerated indebtedness, shall be paid over by the Assignee to the Assignor. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid shall not be deemed to cure or waive 5

6 any default or to waive, modify or affect any notice of default given under the Note or the Mortgage or to invalidate any act done pursuant to any such notice. Nothing herein contained and no act done or omitted by Assignee pursuant to the powers and acts granted herein shall be deemed to be a waiver by Assignee of any of its rights and remedies under the Note or Mortgage or any of the loan documents described in or securing said Note, and this Assignment is made and accepted without prejudice to any of the rights and remedies possessed by Assignee under the terms thereof. The right of the Assignee to collect said indebtedness and to enforce any other security therefor owned or held by it may be exercised by the Assignee either prior to, simultaneously with or subsequent to any action taken hereunder. The remedies provided by this instrument should be cumulative of those provided in the Note and the Mortgage and the aforesaid loan documents. ARTICLE IX - NON-LIABILITY OF ASSIGNEE The Assignee shall not be obligated to perform or discharge any obligation under the Leases, or under or by reason of this Assignment, and the Assignor hereby agrees to indemnify the Assignee against and hold it harmless from any and all liability, loss or damage which it may or might incur under the lease or under or by reason of this Assignment and of and from any and all claims and demands whatsoever which may be asserted against it by reason of any alleged obligation or undertaking on its part to perform or discharge any of the terms of the lease. Should the Assignee incur any such liability, loss or damage under the lease or under or by reason of this Assignment, or in defense against any such claims or demands, the amount thereof, including costs, expenses and attorneys' fees together with interest thereon at a rate per annum specified in said Note as applicable in the event of a default shall be secured hereby, and the Assignor shall reimburse the Assignee therefor immediately upon demand. Nothing herein contained shall be construed as making Assignee, or its successors and assigns, a mortgagee in possession, nor shall it or its successors or assigns be liable because of laches or for failure to collect any of the rents, issues, profits, revenues, rights and benefits, it being expressly understood and agreed by the Assignor that the Assignee shall only be required to account for such sums as are actually collected by Assignee. ARTICLE X - SUCCESSORS AND ASSIGNS This Assignment shall inure to the benefit of the successors and assigns of the Assignee and shall bind the Assignor's legal representatives, successors and assigns. Assignee's rights shall be automatically transferred or assigned to the holder of the Note if different than Assignee. ARTICLE XI - NOTICES The parties agree that all notices, demands or documents which are required or permitted to be given or served hereunder shall be in writing and shall be deemed given when delivered by hand or overnight delivery or sent by registered or certified mail, return receipt requested addressed to the Assignor at the address furnished below, and to the Assignee at the following address: Assignor: Assignee: Woodside Racquet Club Management, Inc West 47 th Place Westwood, Kansas Attn: Blair Tanner Great Western Bank Shawnee Mission Parkway Shawnee, Kansas Attn: Commercial Loans Such addresses may be changed from time to time by either party by serving notice as above provided. ARTICLE XII - STATUS OF LEASES AND RENTS 6

7 During the term of this Assignment, Assignor agrees that: (a) (b) (c) (d) Assignee shall have a perfected, absolute and present assignment of the Leases and rents, profits, payments, fees, and dues arising from such Leases (the rents ); The Leases and rents are no longer Assignor's property or the property of Assignor's estate, as defined in Title 11, United States Code; and The Leases and rents will not constitute collateral, cash or otherwise. Upon the occurrence of an event of default, if Assignee is required to take actual possession of the Premises (or some action equivalent thereto, such as securing the appointment of a receiver) in order to "perfect" or "activate" Assignee's rights hereunder, Assignor waives the benefits of such law and agrees that such law shall be satisfied solely by: (i) Assignee giving written notice to Assignor that Assignee intends to enforce its rights in and to the Premises and the Leases and rents; and (ii) Assignee giving written notice to the tenants, obligors, licensees, or members under the Leases they should commence making payments under the Leases directly to Assignee or Assignee's designee. IN WITNESS WHEREOF, Assignor has set its hand as of the day and year first herein written. WOODSIDE RACQUET CLUB MANAGEMENT, INC. a Kansas corporation STATE OF KANSAS ) ) ss COUNTY OF ) By Blair C. Tanner, President On this day of December, 2012, before me appeared Blair C. Tanner, to me personally known, who being by me duly sworn, did say that he is the President of Woodside Racquet Club Management, Inc., a Kansas corporation, and that the foregoing instrument was signed on behalf of said corporation by authority of its Board of Directors, and said Blair C. Tanner acknowledges said instrument to be the free act and deed of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal at my office the day and year last above written. Notary Public My commission expires: Print Name: 7

8 EXHIBIT A Borrower s Sub-leasehold Estate in the Land, Improvements and Fixtures in and upon the real property legally described as follows: Lots 1 and 2, WOODSIDE CLUB COMPLEX, a subdivision in the City of Westwood, Johnson County, Kansas. Pursuant to the Land and Building Sublease Agreement dated (aka Amended Restated and Consolidation of Sub-Lease Agreements by and between Westwood Foundation, Forty- Seventh partners, L.P. and Woodside Racquet Club Management, Inc.) ( Sublease ) by and between Westwood Foundation ( Landlord ) and Woodside Racquet Club Management, Inc. (dba Woodside Health & Tennis Club Sub-Tenant ), a Kansas corporation, as evidenced by a Memorandum of Land and Building Sublease Agreement dated and recorded February 4, 2011 as Document No in Book at Page , which assigns that certain unrecorded Sub- Sublease Agreement dated June 1, 1981, between Forty- Seventh Partners, L.P., and C. Wayne Freeland First Marital Trust dba Woodside Ltd., a landlord, and Woodside Racquet Club Management, Inc., a Kansas Corporation, as sub-sub Tenant, amended January 1, 1993 and December 15, 1999, as evidence by a Memorandum of Third Amendment of Sub-Sublease recorded May 10, 2006 in Book at Page

9 BORROWER S AFFIDAVIT The undersigned ("Borrower"), being first duly sworn, represents and warrants to and covenants with Lender as follows: 1. The Borrower is receiving from Great Western Bank, a South Dakota corporation ("Lender"), a loan ("Loan") evidenced by, and repayable in accordance with, the terms of a Promissory Note in the amount of $2,035, ("Note"), all as secured by a Leasehold Mortgage and Security Agreement ("Mortgage") encumbering Borrower s leasehold interest in a Sublease with Westwood Foundation dated ( Sublease ) pertaining to the real and personal property, buildings and improvements ("Improvements") located at 2000 West 47 th Place, Westwood, Kansas ("Property"), a Leasehold Assignment of Leases and Rents ( Assignment ) and a Security Agreement ( Security Agreement ) encumbering the remainder of Borrower s assets ( Collateral ). 2. Borrower is the owner of a sub-leasehold estate in the Property. The Property is in the sole possession of Borrower, and there is no other person or party who is in possession or who has a right to possession. Borrower is the owner of the Collateral free and clear of any third party liens, rights or title (except for a prior leasehold mortgage lien in favor of Lender), and Borrower is in possession of all Collateral. There are no management agreements, service contracts or other agreements providing third parties with other rights pertaining to the Property other than the following Leases: Lease dated May 1, 1981 ( Lease ) between The City of Westwood, Kansas and the Westwood Foundation. The City of Westwood, Kansas is the owner of fee simple title to the underlying Property which is subject to the Lease and Sublease. 3. The Property is zoned under all applicable governmental laws and regulations so as to permit its current use and occupancy for a tennis and racquet club, swimming pool and health and fitness center, and all governmental permits and licenses to permit such use and occupancy have been issued by the appropriate governmental authorities and are currently in full force and effect. 4. The Mortgage constitutes a valid first mortgage lien encumbering the Borrower s subleasehold interest in the Property, and no person, firm, entity or corporation has any rights in the Property superior to the lien of the Mortgage, except for the rights described in the Lease. The Security Agreement constitutes a valid first lien encumbering the Collateral free and clear of all third party liens, rights, titles and interests. 5. There are no outstanding options to purchase or leases of any nature affecting the Property thereon except for the Lease and Sublease. 6. There have been no improvements, alterations or repairs to the Property or to the improvements thereon for which payment in full has not been made prior to the date hereof; and there are no mechanic's, materialmen's, laborer's, supplier's or other liens or assessments against the Property or any improvements thereon. 7. There are no suits, bankruptcies or other executions pending in any court which could in any way affect the Borrower s title to the Property or constitute a lien thereon, and Borrower is not a surety of any bond wherein through the default of the principal thereof a lien against the Property could be created. 8. As of the date hereof, there has been no material adverse change in the financial condition of Borrower or any Guarantor of the Note as disclosed by financial statements previously submitted to the Lender prior to the date hereof. 9. There is no action, suit or proceeding now pending (or to the best of Borrower's knowledge threatened) against, involving or affecting the Borrower or any Guarantor before any court or any

10 governmental agency which may result in any material adverse change in the business or financial condition of Borrower or any Guarantor or would or could result in a lien upon the Property. 10. Borrower has not received any notice with respect to the Property from any insurer or governmental or quasi-governmental authority of any violation of any building codes, zoning or regulations, fire prevention law or ordinance, or unsafe structures law or ordinance. 11. The Borrower has the valid power and authority to own and operate the Property, to borrow from Lender the amount of the Loan, to grant liens against its property to secure repayment of debt, and in connection therewith, to execute and deliver to Lender, the Notes, Mortgage, Assignment, and Loan and Security Agreement, and all of the documents evidencing or securing the Loan which may be required by Lender as a condition to making the Loan. 12. The Loan is a valid obligation of the Borrower and is not contrary to any agreement between Borrower s creditors and the Borrower or any deed of trust, mortgage or other agreement to which Borrower or its properties are subject. 13. The Borrower's federal tax identification number is The Borrower's principal place of business is located at 2000 West 47 th Place, Westwood, Kansas The Loan is for commercial/business purposes and no part of the Loan proceeds are to be used for any consumer purpose for the acquisition of goods or services for personal, family or household purposes. 16. Borrower is a corporation in good standing under the laws of the State of Kansas and the person signing the Loan Documents has full power and authority to execute the Loan Documents and bind the Borrower. 17. In the event it is necessary to execute additional documents in connection with this Loan in order to correct a mutual mistake, a unilateral mistake of Lender, a scrivener s error, an inadvertent omission, or other deficiency concerning loan documentation, Borrower agrees to execute, notarize, and deliver to Lender such additional documentation required by Lender necessary to carry out the intent of Lender. 18. USA PATRIOT ACT NOTIFICATION. The following notification is provided to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318: Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product. If the Borrower is an individual, such information includes the Borrower s name, taxpayer identification number, residential address, date of birth, and other information that will allow Lender to identify Borrower. If Borrower is not an individual, such information includes the Borrwer s name, taxpayer identification number, business address, and other information that will allow Lender to identify Borrower. If Borrower is an individual, Lender may request a copy of Borrower s driver s license or other identifying documents, and, if Borrower is not an individual, Lender may request copies of Borrower s legal organizational documents or other identifying documents. 19. Neither Borrower nor any of the Guarantors shall (a) be or become subject at any time to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control) that prohibits or limits Lender from making any advance or extension of credit to the Borrower or from otherwise conducting business with the Borrower; or (b) fail to provide documentary and other

11 evidence of such Borrower s identity as may be requested by Lender at any time to enable Lender to verify such Borrower s identity to or comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section IN WITNESS WHEREOF, the undersigned has executed this Affidavit as of December,2012. WOODSIDE RACQUET CLUB MANAGEMENT, INC. a Kansas corporation By Blair C. Tanner, President STATE OF KANSAS ) ) ss COUNTY OF ) On this day of December, 2102 before me appeared Blair C. Tanner, to me personally known, who being by me duly sworn, did say that he is the President of Woodside Racquet Club Management, Inc., a Kansas corporation, and that the foregoing instrument was signed on behalf of said corporation by authority of its Board of Directors, and said Blair C. Tanner acknowledges said instrument to be the free act and deed of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal at my office the day and year last above written. My commission expires: Notary Public

12 CONSTRUCTION LOAN AGREEMENT THIS AGREEMENT is made as of the day of November, 2012, by and between WOODSIDE RACQUET CLUB MANAGEMENT, INC., a Kansas corporation ("Borrower") and GREAT WESTERN BANK ("Lender"). WITNESSETH THAT in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto hereby agree as follows: ARTICLE I - DEFINITIONS For purposes of this Agreement, the following terms shall have the following meanings: Section Title Company. Company. "Title Company" shall mean First American Title Insurance Section Inspector. "Inspector" shall mean the bank officer or engineer or third party architect selected by Lender. Section Mortgaged Premises. "Mortgaged Premises" shall mean the real property located in Kansas City, Wyandotte County, Kansas, legally described on Exhibit A attached hereto and made a part hereof, together with all fixtures and personal property described in the Leasehold Mortgage and Security Agreement. Section Improvements. "Improvements" shall mean the structures and other improvements to be constructed by Borrower in and on the Mortgaged Premises in accordance with the Plans and Specifications. Section Collateral Documents. "Collateral Documents" shall mean the following documents, each of which shall be in form and substance acceptable to Lender: (a) A Promissory Note in the principal amount of $2,035, ("Note"). (b) A Leasehold Mortgage and Security Agreement ("Mortgage") securing the Note (and other debts) for $2,035, and constituting a first and prior lien on the Mortgaged Premises and Improvements and covering the fixtures and personal property described in the Mortgage. A fee title Mortgage shall also be filed to secure the same debt on the fee owned tracts described on Exhibit A. Any reference to Mortgage herein shall mean the Mortgages filed on the leasehold and fee property. (c) A Leasehold Assignment of Leases, Rents and Operating Agreements ("Assignment"). A fee title Assignment shall also be filed to secure the same debt on the fee owned tracts described on Exhibit A. Any reference to Assignment herein shall mean the Assignments filed on the leasehold and fee property. (d) UCC-1 Financing Statements covering the fixtures and personal property described in the Mortgage and in the Financing Statements ("Financing Statements"). (e) A Commitment for a Mortgagee's Policy of Title Insurance (the "Binder"), issued by Title Company, said Policy to insure that the Mortgage is to be a first and prior lien against Borrower's fee simple interest in the Mortgaged Premises, and insuring Lender against claims for mechanic's liens. (f) Guaranty executed by Blair C. Tanner, Blair C. Tanner Trust dated July 12, 2000, as amended and restated June 26, 2008, and David Wayne Freeland, Trustee of the David Wayne Freeland Sub-trust of the C. Wayne Freeland Revocable Declaration of Trust dated March 16, ("Guaranty").

13 (g) (h) Environmental and ADA Indemnity Agreement ("Indemnity"). Loan and Security Agreement ( Loan Agreement ). Section Organizational Documents. "Organizational Documents" shall mean the following documents, each of which shall be in form and substance acceptable to Lender: (a) (b) Articles of Incorporation and Bylaws of Borrower. Resolution of Directors for Borrower to execute all necessary documents. Section Construction Documents. "Construction Documents" shall mean the following documents, all of which shall be in form and substance acceptable to Lender: (a) Plans and Specifications for the Improvements, approved by Lender, and prepared by registered engineer and architect qualified to do business in Kansas, containing original evidence of such approval. (b) (c) Certificates or Policies of Casualty Insurance, in amounts approved by Lender. Certificates of Liability Insurance and Workmen's Compensation Insurance. (d) ALTA/ACSM Survey prepared by a registered land surveyor describing and showing the Mortgaged Premises; the location or proposed location of all Improvements and of all easements (including, in the case of recorded easements, recording data concerning the same), encroachments, roads, utilities, rights-of-way and other encumbrances on or under the Mortgaged Premises, and otherwise in a form acceptable to Lender and which will allow for deletion of the Survey exceptions. (e) Sworn construction and project cost statement, certified to by Borrower, stating and itemizing in full the Total Project Costs, as hereinafter defined, and certifying that they are fair and reasonable. The initial budget for Total Project Costs is attached hereto as Exhibit B and made a part hereof. (f) A schedule of the estimated time and amount of the advances to be requested by Borrower. (g) An Assignment of Plans, Specifications, Construction and Service Contracts, Licenses and Permits, permitting Lender to use the plans, specifications, and permits without cost to Lender, if Lender shall take over and complete the Improvements. (h) An Assignment of Construction Contract, if executed, for Borrower's general contractor and major sub-contractors, permitting Lender to call upon said contractors or major sub-contractors to complete their obligations under said contracts, without cost to Lender in excess of the amount called for in said contracts, if Lender shall take over and complete the Improvements. (i) All building and occupancy permits which Lender shall request to establish approval of the construction, occupancy and operation of the improvements by the local governing municipality. (j) Evidence that the existing and proposed use of the Mortgaged Premises meet and will meet all zoning and use requirements of all governmental units having jurisdiction over the Mortgaged Premises and Improvements. (k) Improvements. Copies of all contracts with architects, contractors and engineers relating to the 2

14 Section Construction Costs. "Construction Costs" shall mean all costs direct and indirect paid to construct and complete the Improvements including, but not limited to, demolition costs, site preparation costs, architectural fees, inspection fees (including inspection fees for Lender), legal fees, engineering fees, land costs and all costs of labor, material and services paid or incurred by Borrower. Section Loan and Carrying Charges. "Loan and Carrying Charges" shall mean all fees to Lender, brokerage fees, standby fees, interest charges, service fees, attorneys' fees (including attorneys for Lender), contractor's fees, developer's fees, title insurance fees and charges, recording fees, registration taxes, real estate taxes, special assessments, insurance premiums and utility charges incurred by Borrower and payable prior to or during the term of this Agreement. Section Total Project Costs. "Total Project Costs" shall mean the total of all Construction Costs and Loan and Carrying Charges, as described on Exhibit B attached hereto. Section Loan. "Loan" shall mean the loan referred to in Article II hereof to the extent Lender is required to make advances under provisions of this Agreement. Section Completion Date. "Completion Date" shall be May 1, Section Owner's Equity Funds. "Owner's Equity Funds" shall mean the funds required to pay the Total Project Costs less the Loan amount, plus the funds for those items of Total Project Costs which Lender has required to be paid by Borrower. ARTICLE II - THE LOAN The purpose of this loan is to provide funds to construct and develop a swimming pool and related improvements on the Property. The Loan shall be advanced in stages by Lender and disbursed by Lender pursuant to the provisions of Articles III and IV. The Loan, or so much thereof as has been advanced hereunder, shall bear interest at the rate as set forth in the Note Disbursement of construction loan funds will be made no more frequently than twice monthly. Borrower shall receive the requests for payments from the third party contractors, subcontractors, and vendors and review such requests. Upon Borrower s approval for payment, Borrower shall issue a check and attach the invoice, pictures of progress, reports from Borrower s engineer or contractors, a description of the work performed, lien waivers (on a trailing basis) and a copy of the check, together with the written draw request ( Draw Request ), and send the same to Lender and the Title Company. Upon receipt of Lender s written approval to pay such requests, Borrower may deliver the checks to the third party payees. Lender shall require, in addition to the conditions set forth in Article III and IV, the Draw Request using the AIA 702 and 703 forms. Lender shall have ten (10) business days to approve or reject the Draw Request (and if rejected, Lender shall communicate specific reasons for curing the Draw Request) and during such ten days, Lender may have its inspector verify the progress of construction and received approval from the Title Company that Lender's policy will be increased in the amount of the disbursement in a manner satisfactory to Lender. ARTICLE III - CONDITIONS PRECEDENT TO ADVANCES Section The following events shall be conditions precedent to the first advance under this Agreement: (a) The Borrower shall deliver, without expense to the Lender, copies of the Collateral Documents, Organizational Documents and Construction Documents, each to be duly executed to the extent required by Lender. The Collateral Documents required by Lender to be filed shall have been filed, without expense to Lender, and all filing fees, charges, expenses and taxes shall have been paid by Borrower. 3

15 (b) There shall have been no material adverse change in either the financial condition of Borrower, the Guarantors, or the Mortgaged Premises prior to any advance. (c) The title to the Mortgaged Premises shall be approved in all respects by Lender. In the event any lien for work or services performed in or on the Mortgaged Premises or materials delivered thereto has been filed, Borrower shall notify Lender of such fact and immediately satisfy any such lien before any more disbursements will be made to Borrower. (d) All documents, instruments, agreements and contracts have been signed by Borrower and Guarantors as required by Lender, and all conditions precedent have been satisfied in Lender s sole and absolute discretion. (e) No event of default shall exist under any of the Collateral Documents or under any other loan owed by Borrower to Lender. (f) Lender shall determine, in its sole discretion, that no environmental contamination exists on or under the Mortgaged Premises. (g) Lender has received and approved in writing a final budget of Total Project Costs, Plans and Specification, and Construction Timeline. (h) Borrower has received all governmental approval and permits to commence construction and has delivered evidence of such approvals to Lender, including, without limitation, recording of the final plat and subdivision of the Property. (i) The Title Company has agreed to issue an ALTA loan policy of title insurance in the amount of at least $2,035,000 insuring Lender s second mortgage lien on the Property (junior only to Lender s prior lien), including, without limitation, all endorsements required by Lender, and priority over all claims by third parties and mechanic s lien claimants. (j) Borrower has delivered a list of all third party contractors, subcontractors, suppliers and vendors who will provide work, labor and materials to the Project. Section The following events shall be conditions precedent to each subsequent advance under this Agreement: (a) Documents. There shall be no default under the terms of this Agreement or any of the Collateral (b) As of the date immediately prior to any advance, the total amount of the unadvanced proceeds (not including holdbacks, if any) of the Loan shall be sufficient, in Lender's opinion, to complete the Improvements. To the extent the total amount of the unadvanced proceeds of the Loan shall be insufficient, in Lender's opinion, to complete the Improvements, Borrower shall immediately deposit with Lender an amount equal to such additional Owner's Equity Funds which shall be disbursed by Title Company or Lender prior to the disbursement of any further advance or advances under this Agreement. In this regard, it shall be the obligation of Borrower to inform Lender of any increase or decrease in Total Project Costs from those costs shown on the Sworn Construction and project cost statement. (c) Title to the Mortgaged Premises and Improvements shall be approved in all respects by Lender, and the Title Company shall agree to increase the coverage under Lender's title policy in a manner satisfactory to Lender. (d) Up to a ten percent (10%) retention of funds may be required by Lender in its sole discretion. (e) There shall have been no material adverse change in the Plans and Specifications, without Lender's prior written consent. 4

16 (f) There shall have been no material adverse changes in the financial condition of the Borrower, the Guarantors, or the Mortgaged Premises. (g) The project architect and the Lender's Inspector shall certify in writing to Lender as to the percentage of completion, the quality of workmanship, and compliance with the project's plans and specifications. (h) Lender. There are no mechanic s liens filed nor notices of intent to file liens delivered to Borrower or Section The following events shall be conditions precedent to the final advance under this Agreement: (a) The Improvements, in the opinion of the Inspector and lender, have been completed in accordance with the Plans and Specifications as approved by Lender. (b) A certificate of occupancy or completion for the Improvements from the governmental agency having jurisdiction and such other evidence of completion as may be reasonably required by Lender shall have been delivered to Lender. (c) All suppliers, subcontractors, materialmen, contractors and others hired for construction services have been paid in full and the Title Company commits to insure Lender against mechanic's liens in an amount satisfactory to Lender, as evidenced by final lien waivers and releases from all third party contractors, subcontractors and vendors. Lender reserves the right to withhold such sums as may be reasonably necessary to assure that the Project is completed before Lender makes the final payment. (d) Borrower has delivered to Lender an as-built survey disclosing the location of all improvements, easements, appurtenances, and all streets, rights of way, utilities, encumbrances, and encroachments, and all in accordance with the "Minimum Standard Requirements for ALTA/ASCM Land Title Surveys" on the Mortgaged Premises in a form sufficient for the Title Company to provide complete survey coverage to Lender as satisfactory to Lender. (e) All streets, easements, utilities and related services necessary for the construction of the Improvements and the use and operation thereof for their intended purpose are or will be available to the boundaries of the Mortgaged Premises, including potable water, storm and sanitary sewer, gas, electric and telephone facilities and garbage removal. (f) Documents. There shall be no default under the terms of this Agreement or any of the Collateral (g) There shall have been no material adverse changes in the financial condition of the Borrower, the Guarantors, or the Mortgaged Premises. (h) The project architect and Inspector shall certify in writing to Lender as to the percentage of completion, the quality of workmanship, and compliance with the project's plans and specifications. ARTICLE IV - ADVANCES AND DISBURSEMENTS Section At least ten (10) days after receipt of the Draw Request, made no more often than twice per month, Lender shall advance an amount approved by Lender, certified to be currently payable (excluding withholdings) by Borrower for Total Project Costs. Borrower shall submit to Lender all lien waivers and other evidence required by Lender prior to disbursement of any advance required. Under no circumstances shall any portion of any advance be used for any purpose other than the payment of Total Project Costs. Each Draw Request shall include certifications of the Borrower, or for the benefit of Borrower, that the remaining non-disbursed portion of the Loan is adequate to complete the construction of the 5

17 Improvements. All Construction Costs for each respective Draw Request shall have been approved in writing by the Inspector. All Loan and Carrying Charges shall be approved by Lender. Lender shall disburse all funds advanced as Lender, in its sole discretion, shall deem necessary to perform its obligations under this Agreement. Section If interest has accrued on the Loan and is due and unpaid, or if Borrower has failed to make when due any payments required under the terms and conditions of the Collateral Documents, or if fees are payable to Lender hereunder, Lender shall be, and hereby is, authorized to advance in any manner agreed to by Lender, for payment to Lender from the proceeds of the Loan, the total amount of such accrued interest, payments and fees (whether or not a Draw Request has been submitted by Borrower), and the same shall be deemed to be an advance of the proceeds of the Loan under this Agreement in the same manner and with the same effect as if advanced under the provisions of paragraph 4.1 hereof. Section No advance will be made for payment of any developer's fees or contractor's fee in advance of the approved disbursement schedule, unless specifically approved by Lender. However, the developer's fee shall be funded when the contractor shall have completed construction. Section If the Borrower shall withhold any sums from any subcontractor, the Lender may withhold from the Borrower a like sum or sums. Such sums withheld by the Lender will be paid out to the Borrower as the sums withheld by the Borrower are paid out to the subcontractor. Section All sums advanced and disbursed under this Agreement shall be disbursed under and secured by the Collateral Documents. ARTICLE V - COVENANTS, WARRANTIES, REPRESENTATIONS AND AGREEMENTS OF BORROWER Borrower covenants, warrants, represents and agrees: Section (a) That Borrower is a duly organized Kansas corporation. (b) That the making and performance of this Agreement and the execution and delivery of the Note and the other Collateral Documents are within the powers of the Borrower, have been duly authorized by all necessary action on the part of the Borrower and do not violate any provision of law or of the Borrower's Bylaws or result in the breach of, or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any property or assets of the Borrower pursuant to, any indenture or loan or credit agreement or other agreement or instrument to which the Borrower is a party or by which the Borrower or its property may be bound or affected (other than the Collateral Documents). (c) That this Agreement and the Collateral Documents are the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. (d) That there are no actions, suits or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or the properties of the Borrower before any court or governmental department, commission, board, bureau, agency or instrumentality, which if determined adversely to the Borrower, would have a material adverse effect on the financial condition, properties or operations of the Borrower or on the ability of the Borrower to perform this Agreement. Section That all advances under this Agreement shall be used solely to pay Total Project Costs. That the Mortgaged Premises and Improvements do and shall comply with all applicable ordinances, regulations and laws of governmental departments and agencies having jurisdiction over the Mortgaged Premises and do not and shall not violate any private restrictions or covenants or encroach upon or interfere with easements affecting the Mortgaged Premises. That Borrower will carry on continuously, diligently and with reasonable dispatch, the construction of the Improvements in accordance with the Plans and Specifications and free from all mechanics', laborers', and materialmen's liens and in a good and workmanlike manner, and shall complete construction of the Improvements by the Completion Date. 6