This Instrument Prepared by and Return to:
MORRIS J. KRIGER
5400 Poplar Avenue
Memphis, TN 38119
PROMISSORY NOTE
MODIFICATION AGREEMENT
THIS AGREEMENT made and entered into this 23rd day of April, 1987, by and
between FPI Royal View, Ltd., L.P., a Kansas limited partnership, hereinafter
referred to as 'Maker', and The Merchants Bank, a Missouri banking
corporation, hereinafter referred to as 'Bank';
W I T N E S S E T H
WHEREAS, Maker has heretofore executed and delivered to Bank a Promissory Note,
dated March 2, 1987, in the original principal sum of $20,000,000, payable to
the order of Bank ('Note');
NOW THEREFORE, in consideration of the debts and trusts aforesaid and of the sum
of $1.00 and other good and valuable considerations, each to the other in hand
paid, receipt whereof is hereby acknowledged, it is hereby mutually covenanted
and agreed as follows:
1. The Note is hereby amended to read as set forth in Exhibit A attached hereto
and by reference made a part hereof.
2. This Agreement does not create any new or further indebtedness or additional
liability of any party not originally liable under the terms of the Note, except
that the principal amount of the Note is increased from $20,000,000 to
$22,745,000. Nothing contained herein shall adversely affect or invalidate the
security now held by Bank, nor impair nor release any covenant, condition or
agreement in said Note, which, except as modified by this Agreement shall
continue in full force and effect in accordance with its original terms.
3. Bank agrees, upon the execution of this Agreement, to make a notation on
said Note as follows: 'This Note is modified by Promissory Note Modification
Agreement dated April 23, 1987'.
4. The agreements herein shall bind, and the benefits hereof shall inure to,
the respective successors and assigns of the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed the day and year first
above written by the duly authorized general partners of Maker and a duly
authorized officer of Bank.
FPI ROYAL VIEW, LTD., L.P.,
a Kansas limited partnership
By: /s/ Avron B. Fogelman
--------------------------
AVRON B. FOGELMAN
General Partner
By: FOGELMAN PROPERTIES, INC.,
General Partner
By: /s/ Avron B. Fogelman
------------------------
AVRON B. FOGELMAN
President
THE MERCHANTS BANK
By: /s/ Michael J. Caffrey
------------------------
EXHIBIT A
POINTE ROYAL MULTI-FAMILY HOUSING FACILITY NOTE
(Overland Park, Johnson County, Kansas)
$22,745,000 Overland Park, Kansas
April 23, 1987
FOR VALUE RECEIVED, FPI ROYAL VIEW, LTD., L.P., A Kansas limited partnership,
(the "Borrower", which term shall be construed to include the successors and
assigns of the Borrower), promises to pay to the order of THE MERCHANTS BANK,
(the "Issuer", which term shall be construed to include the successors and
assigns of the Issuer), the principal sum of TWENTY-TWO MILLION SEVEN HUNDRED
FORTY-FIVE THOUSAND DOLLARS ($22,745,000), together with interest on the
principal balance from time to time unpaid as more particularly set forth
below. Interest shall be computed by the "exact method", that is, the product
resulting when multiplying the rate of interest by the principal balance
outstanding divided by the number of days in the Loan Year in which the month
for which interest is being paid occurs, multiplied by the actual number of
days interest has accrued. A Loan Year is that twelve (12) month period
commencing on April 23, and ending on April 22.
ARTICLE I
1.1 Payment of Principal. The principal amount of the indebtedness evidenced
hereby is and shall be due and payable, on April 23, 1999, being that date
twelve (12) years from the date hereof.
1.2 Prepayment of Principal. For a period of five (5) years from the date
hereof, no prepayment shall be made or permitted in respect to the principal
amount hereof. At any time thereafter, the Borrower may prepay in whole, but
not in part, the said principal indebtedness. If such prepayment is made
during the sixth year from the date hereof, the Borrower shall pay a prepayment
penalty equal to five percent (5%) of the outstanding principal balance.
Thereafter, the prepayment penalty shall decrease one (1) percentage point per
year until there exists no prepayment penalty during the eleventh and twelfth
years. Any prepayment penalty due hereunder shall be in addition to any
Contingent Interest (as defined below) otherwise payable. For purposes of
this Section 1.2 and the computation of any penalty due hereunder,
"prepayment" shall include any
acceleration due to the occurrence of an event of default, but shall not
include any principal reduction required because of any damage, destruction or
condemnation of the Facility.
1.3 Payment of Interest. Commencing on the first day of the month next
following the date of this Note, and continuing on the first day of each
succeeding month thereafter to and including the date of payment of the full
principal amount hereof, Borrower shall pay Basic Interest. Further, commencing
on the earlier of (i) February 15 of the year next following the Completion
Date or (ii) February 15, 1989, Borrower shall submit a statement establishing
the amount of and shall pay Contingent Interest, if any, due in respect to
Property Cash Flow. Additional Contingent Interest due in respect to Property
Cash Flow shall thereafter be payable on February 15 of each succeeding year
until final payment of the principal amount of this Note, at which time all
Contingent Interest due in respect to Property Cash Flow accrued and unpaid,
and all Contingent Interest due in respect of Sale or Refinancing Proceeds,
shall be due and payable.
1.4 Basic Interest. Basic Interest means an amount computed on the principal
balance hereof equal to, and shall be payable, at the rate of (a) ten and
one-half percent (10.50%) per annum from the date hereof to and including the
Completion Date, and (b) nine and one-half percent (9.5%) per annum
thereafter, until payment in full of the principal hereof.
1.5 Contingent Interest. "Contingent Interest" means an amount computed on the
basis of, and is payable from Property Cash Flow and Sale or Refinancing
Proceeds, and in amounts equal to a percentage of Property Cash Flow and Sale
or Refinancing Proceeds as follows:
(a) 75% thereof until the total interest (Basic Interest plus Contingent
Interest) paid on this Note shall have been in an amount which results in a
yield of 10.75% per annum on the principal amount of this Note computed on a
cumulative but non-compounded basis from the earlier of (i) January 1, 1989 or
(ii) the Completion Date; and
(b) 50% of the remaining balance thereof until the total interest (Basic
Interest plus Contingent Interest) paid on this Note shall have been in an
amount which results in a yield of 12.75% per annum on the principal amount of
this Note computed on a cumulative but non-compounded basis from the earlier
of (i) January 1, 1989 or (ii) the Completion Date; and
(c) 25% of the remaining balance thereof from the earlier of (i) January 1,
1989 or (ii) the Completion Date.
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The following words and terms as used herein shall have the following
meanings:
"Property Cash Flow" means, with respect to any fiscal year (or portion
thereof) after the Completion Date, all cash receipts derived from the
operation of the Facility (exclusive of Sale or Refinancing Proceeds), less
cash receipts used to pay operating expenses including interest (other than
Contingent Interest).
"Sale or Refinancing Proceeds" means (a) the cash received by the Borrower
from the sale or disposition of the Facility, after retirement of all amounts
of outstanding principal on the Facility Note and less all expenses related to
the sale or disposition, including commissions, or (b) the Appraised Value of
the Facility less the outstanding principal of the Facility Note and less an
estimated amount equal to the usual expenses related to a sale or disposition,
including commissions.
1.6 Interest Savings Clause. Notwithstanding any provision herein to the
contrary, no interest hereon shall be payable to the extent that such exceeds
the amount permitted to be paid by Borrower or received by Issuer under
applicable law. To the extent that any payments are made and received in
violation of the provisions hereof, such payments shall be treated in all
respects as principal payments subject to the provisions of Section 1.2 of
this Note, notwithstanding which such partial prepayment shall be permitted
without any penalty which would otherwise be payable thereunder.
1.7 Place and Form of Payment. All payments of principal, premium, if any, and
interest on this Note shall be made for the account of the Issuer to
Prudential-Bache Properties, Inc., One Seaport Plaza, 199 Water Street, New
York, New York 10038, Attn: Chester A. Piskorowski, or at any other place
designated by its successors or assigns, in lawful money of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, on each payment date described above.
1.8 Collateral. This Note is secured by the Mortgage made by the Borrower for
the benefit of the Issuer, and Borrower does hereby covenant to abide by and
to comply with each and every term, covenant, provision, stipulation, promise,
agreement and condition set forth in the Mortgage.
1.9 Default Rate. From and after the occurrence of an Event of Default, the
Basic Interest shall be payable at a rate equal to the greater of (i) the
Prime Rate plus two and one-half percent (2.5%) per annum or (ii) sixteen
percent (16%) per annum from and after the date such Event of Default occurred
and until such event of default shall be cured.
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ARTICLE II
DEFAULTS BY BORROWER
2.1 Events of Default Defined. The following shall be "Events of Default"
under this Note:
(a) The failure by the Borrower to pay or cause to be paid, on the date
required, any installment of principal, premium or interest payable under this
Note, however, the Borrower shall be entitled to cure such Default by making
such principal and interest payment within ten (10) days after the giving of
written notice from Issuer notifying the Borrower of its failure to make said
payment; or
(b) The failure by the Borrower to observe and perform any covenant, condition
or agreement under this Note (other than payment of principal and interest
under this Note) or under the Loan Agreement of even date between Borrower and
Issuer, or the Mortgage on its part to be observed or performed for a period
of thirty (30) days after the giving of written notice, specifying such
failure and requesting that it be remedied, given to the Borrower by the
Issuer.
2.2 Remedies upon the Happening of any Event of Default.
(a) If an Event of Default shall have occurred and be continuing, Issuer, by
notice in writing to the Borrower may declare the unpaid balance of this Note
to be immediately due and payable and upon any such declaration, the same shall
become and shall be immediately due and payable notwithstanding anything to
the contrary contained in this Note or in the Mortgage. In such event, the
Borrower, subject to the exculpatory provisions contained herein shall pay the
Issuer an amount equal to the sum of (i) the total principal, premium, if any,
and interest on the Note, plus (ii) all costs and expenses of collection,
including a reasonable compensation to Issuer, its agents and attorneys (to
the extent permitted by applicable law), and any reasonable expenses or
liabilities incurred by Issuer.
(b) If the Borrower shall fail forthwith to pay such amounts upon demand,
Issuer may institute any actions or proceedings at law or in equity for the
collection of such amounts, may prosecute any such action or proceeding to
judgment or final decree against the Borrower and may collect out of the
property of the Borrower, subject to the lien of the Mortgage, the moneys
adjudged or decreed to be payable in any manner provided by law.
(c) In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Borrower under Federal or State bankruptcy laws or any
other
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applicable law, or in case a custodian, receiver or trustee shall have been
appointed for the property of the Borrower or in the case of any other
similar judicial proceedings relative to the Borrower, or to the creditors
or property of the Borrower, Issuer may, by intervention in such proceedings
or otherwise, file and prove a claim or claims for the whole amount specified
in Section 2.2(a) hereof, and may take such other action as may be necessary
or advisable to collect and receive any moneys or other property payable or
deliverable on any such claims. Any custodian, receiver, assignee or trustee
in bankruptcy or reorganization is hereby authorized to make such payments to
Issuer.
(d) If Issuer shall have proceeded to enforce any right under this Note and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to Issuer, the Borrower and Issuer shall
be restored respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Borrower and Issuer shall continue as
though no such proceeding had been taken.
ARTICLE III
MISCELLANEOUS
3.1 Waivers. The Borrower expressly waives protest, demand, presentment and
notice of dishonor, and agrees that this Note may be extended, in whole or in
part, without limit as to the number of such extensions or the period or
periods thereof and without notice to it and without affecting its liability
thereon.
3.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if sent by mail, by private courier or
delivery service, or by telegraph or telex, when received. All mail shall be
sent by registered mail, return receipt requested, postage prepaid, addressed
as follows:
To the Issuer: Fogelman Mortgage L.P. I
c/o Prudential-Bache Properties, Inc.
One Seaport Plaza
199 Water Street
New York, NY 10038
Attn: Chester A. Piskorowski
To the Borrower: FPI Royal View, Ltd., L.P.
c/o Fogelman Properties, Inc.
5400 Poplar Avenue
Memphis, TN 38119
Attn: Morris J. Kriger
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The issuer or the Borrower, may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates and
other communications shall be sent.
3.3 Exculpatory Provisions. Notwithstanding any other
provision of this Note to the contrary, in the event of any non-payment under
this Note, neither the Borrower nor any of its partners shall have any
personal liability hereunder, and no holder of this Note shall ask or take or
cause to be asked or taken personal judgment against the Borrower or any of
its partners for any payment required to be made under this Note, it being
understood that said holder of this Note will look solely to the revenues and
receipts derived from this Note, and any instrument securing the payment
thereof, and no other property or assets of the Borrower or any of its
partners shall be subject to levy, execution or other enforcement procedure
for the satisfaction of the indebtedness evidenced by this Note; provided, that
the foregoing provisions shall not constitute a waiver of any indebtedness
evidenced by this Note and shall not limit the rights of Issuer under any
guaranty executed in connection with the Note, and shall not limit the right
of the holder of this Note to exercise its rights hereunder or under any
instrument securing the payment hereof so long as no judgment then in the
nature of a deficiency judgment shall be asked or taken against the Borrower
or any of its partners.
3.4 Loan Agreement. The terms and conditions of the Loan Agreement attached
hereto as Exhibit A are incorporated herein and made a part hereof by
reference, as if fully set forth herein verbatim.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed on the
day and year first above written.
FPI ROYAL VIEW, LTD., L.P.
By: Fogelman Properties, Inc.,
General Partner
Attest:
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