|
Item
1.01
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Entry
into a Material Definitive Agreement; Item 2.01 Completion of Acquisition
or Disposition of Assets; Item 2.03 Creation of a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a
Registrant.
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On
November 30, 2007, Maxus Realty Trust, Inc. (the "Registrant"), through one
of
its subsidiaries, completed the acquisition of the Regency North Apartments
in
the transaction described below.
Regency
North Associates, L.P., a Missouri limited partnership ("Regency LP") entered
into an Agreement and Plan of Merger (the “Merger Agreement”) with Regency North
Acquisition, LLC, a Missouri limited liability company ("Regency LLC") on
October 23, 2007. Regency LLC is wholly-owned by Maxus Operating Limited
Partnership, a Delaware limited partnership ("MOLP"), which in turn is primarily
owned by the Registrant. Under the terms of the Merger Agreement, Regency LLC
is
the surviving entity, which effectively results in Regency LLC succeeding to
the
ownership of the Regency North Apartments, Regency LP's primary asset. The
Regency North Apartments complex is located in Kansas City, Missouri and
consists of an 180 unit multi-family apartment complex.
David
L.
Johnson, a significant shareholder, Chairman, President, Chief Executive Officer
and Trustee of the Registrant, is the principal beneficial owner and President
of KelCor, Inc., the general partner of Regency LP, which has a 5% interest
in
Regency LP. Mr. Johnson, together with his wife, also jointly owns approximately
85% of Bond Purchase, L.L.C., a 28.2057% limited partner in Regency
LP.
John
W.
Alvey, Treasurer and Principal Financial Officer of the Registrant is an
executive officer of KelCor, Inc., the general partner of Regency LP, and a
minority
beneficial owner and executive officer of Bond
Purchase, L.L.C.
In
consideration for the merger, Regency LLC paid approximately $6.3 million,
including the assumption of certain of Regency LP’s liabilities and the
assumption of a $5,250,000 mortgage loan with an outstanding principal balance
of approximately $4,815,000 secured by the Regency North Apartments (the
"Mortgage Loan"). The Mortgage Loan, which matures on January 1, 2011, bears
interest at a fixed rate of 7.22% and requires monthly payments of approximately
$37,700. The Mortgage Loan contemplates a prepayment premium, which would apply
in the event Regency LLC prepays the Mortgage Loan more than 180 days prior
to
maturity (the "Prepayment Premium"). The lender may accelerate the Mortgage
Loan
(and charge a Prepayment Premium) if Regency LLC defaults under the terms of
the
mortgage loan documents, which defaults are customary defaults in real estate
mortgage loan transactions. In the event of a prepayment on or before 114 months
after January 1, 2001, the prepayment premium equals the greater of (i) 1%
of
the unpaid principal balance or (ii) the principal being prepaid or accelerated,
multiplied by the excess (if any) of one-twelfth of 7.22% over one-twelfth
of
the then-applicable yield rate on the 5.75% U.S. treasury security due August
1,
2010, multiplied by a present value factor more particularly described in the
note. After such date, the prepayment premium equals 1% of the unpaid principal
balance. .
In
addition, the Registrant and MOLP have each executed guaranty agreements
guaranteeing certain obligations of Regency LLC under to the Mortgage
Loan.
The
Registrant anticipates using approximately $515,000 of MOLP's cash to pay the
merger consideration and will issue 37,733 operating units of
MOLP. Based upon a $15 per unit value of the MOLP operating units,
MOLP operating units have an estimated value equal to $566,000. In
connection with the merger transaction and as part of the merger consideration
identified above, Bond Purchase, L.L.C. and other affiliates of the Registrant
will receive approximately $55,000 in cash and 36,933 MOLP operating units
in
connection with the payment of certain liabilities of Regency
LP.
.
The
Registrant retained the services of Mainland Valuation Services (the
"Appraiser"), an independent third party, to appraise the fair market value
of
the Regency North Apartments. The consideration paid was based on the
Appraiser's appraisal of the Regency North Apartments dated August 24,
2007. Although the Appraiser appraised the market value of the Regency North
Apartments, it did not recommend an amount of consideration to be offered
in the
transaction.
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Item
9.01.
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Financial
Statements and Exhibits.
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(a)
Financial statements of businesses acquired.
Pursuant
to Item 9.01(a)(4) of Form 8-K, we intend to file the audited financial
statements relative to Regency LP required pursuant to Rule 3-05(b) of
Regulation S-X and any additional information specified by Rule 3-14 by amending
this Report no later than 71 calendar days after the date this Report must
be
filed.
(b)
Pro
forma financial information.
Pursuant
to Item 9.01(b) and Item 9.01(a)(4) of Form 8-K, we intend to file the pro
forma
financial information relative to Regency LP required pursuant to Article
11 of
Regulation S-X by amending this Report no later than 71 calendar days after
the
date this Report must be filed.
(d)
Exhibits.
4.1 Assumption
Agreement dated as of November 30, 2007, by and among Regency North Associates,
L.P., as Original Borrower, Regency North Acquisition, LLC, as New Borrower
and
Federal Home Loan Mortgage Corporation, as Noteholder.
4.2 Multifamily
Note dated as of December 27, 2000, by Regency North Associates, L.P., as
Borrower, in favor of Northland/Marquette Capital Group, Inc., as
Lender.
4.3 Multifamily
Deed of Trust, Assignment of Rents and Security Agreement dated as of December
27, 2000, among Regency North Associates, L.P., as grantor, Assured Quality
Title Company, as trustee, and Northland/Marquette Capital Group, Inc., as
beneficiary.
10.1 Guaranty
dated as of November 30, 2007, by Maxus Operating Limited Partnership in
favor
of Federal Home Loan Mortgage Corporation.
10.2 Guaranty
dated as of November 30, 2007, by Maxus Realty Trust, Inc. in favor of Federal
Home Loan Mortgage Corporation.
10.3 Agreement
and Plan of Merger dated October 22, 2007 by and between Regency North
Associates, L.P. and Regency North Acquisition,
LLC.
SIGNATURES
Pursuant
to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to
be signed on its behalf by the undersigned hereunto duly
authorized.
MAXUS
REALTY TRUST, INC.
Date: December
6,
2007 By:
/s/ David L. Johnson
David
L.
Johnson
Chairman
of the Board, President and
Chief
Executive Officer
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