PROMISSORY NOTE
$2,500,00.00 July 15, 1994
FOR VALUE RECEIVED, the undersigned, BLUE VALLEY BUILDING CORP., a
Kansas corporation ("Borrower"), with an address at P.O. Box 26128, Overland
Park, Kansas 66225, promises to pay to BUSINESS MEN'S ASSURANCE COMPANY OF
AMERICA, a Missouri corporation, with an address at c/o Charter American
Mortgage Company, 2001 Shawnee Mission Parkway, Mission Hills, Kansas 66205
("Lender") or to order, the principal sum of Two Million Five Hundred Thousand
and 00/100 Dollars ($2,500,000.00), together with interest on the unpaid
principal balance of this Note at the "Interest Rate" (as defined below) in the
amounts and in the manner set forth herein.
1. Term.
(a) The term of this Note (the "Loan Term") shall commence on the date
hereof and shall end on August 1, 2009 (the "Maturity Date"). "Loan Year", as
used herein, shall mean the twelve (12) month period beginning on the due date
of the first "Monthly Payment" (as set forth in Section 3 below) and each
consecutive twelve (12) month period thereafter during the Loan Term, and "Loan"
shall mean the loan from Lender to Borrower evidenced by this Note.
(b) Notwithstanding the provisions of paragraph 1(a) above, Lender
shall have the right to accelerate the maturity of this Note and to declare the
same due and payable on the last day of the tenth (10th) Loan Year (the
"Accelerated Maturity Date"), by giving notice to Borrower not later than one
hundred eighty (180) days prior to the Accelerated Maturity Date. The entire
outstanding principal balance and all accrued and unpaid interest shall then be
due and payable on the Accelerated Maturity Date, without prepayment charge.
2. Interest Rate.
(a) This Note shall bear interest at a rate equal to seven and one-half
percent (7.50%) per annum (the "Interest Rate"). All payments due under this
Note shall be applied first against accrued interest and then against the
outstanding principal amount due under this Note. The interest hereunder shall
be calculated based on a three hundred sixty (360) day year consisting of twelve
(12) months of thirty (30) days each.
(b) At Lender's option, the Interest Rate shall be adjusted as of the
first (1st) day of the eleventh (11th) Loan Year (the "Adjustment Date") to a
rate per annum (the "Adjusted Interest Rate") equivalent to two hundred (200)
basis points above the then current yield of U.S. Treasury Securities (i) with
an asking price closest to par, (ii) paying interest semi-annually, (iii) not a
"zero coupon" obligation or an obligation with an optional prepayment, and (iv)
having a maturity date closest to the Maturity Date, as such yield is published
in the Wall Street Journal on the Adjustment Date (or the next preceding
publication date), such yield rate to be applicable regardless of the schedule
of interest payments under this Note and such Treasury Security, but in no event
shall the Adjusted Interest Rate be less than seven and one-half percent (7.50%)
nor greater than eight and one-half percent (8.50%) per annum. If Lender shall
so elect to adjust to the Interest Rate, Lender shall so notify Borrower not
later than sixty (60) days prior to the Adjustment Date. Borrower shall
thereupon have a period of one hundred eighty (180) days from the Adjustment
Date in which Borrower may prepay the Loan in full, without prepayment charge or
other penalty. If Borrower shall not so prepay the Loan prior to the expiration
of such one hundred eighty (180) day period, Borrower shall be deemed to have
accepted the Adjusted Interest Rate, and this Note
shall continue in full force and effect in accordance with its terms and the
Adjusted Interest Rate. Notwithstanding the election of Borrower to prepay the
Loan under this paragraph (b), the Adjusted Interest Rate shall be applicable
until the date of such prepayment.
3. Monthly Payment; Final Payment.
(a) The outstanding principal balance and accrued interest under this
Note shall be repaid in monthly installments of principal and interest of
$23,175.31 (the "Monthly Payments"). The first Monthly Payment shall be due and
payable on the first day of September, 1994, and on the first day of each
succeeding month; provided, however, that on August 1, 1994, Borrower shall make
a payment of the accrued interest from the date of closing of the Loan through
and including the last day of July, 1994. If not sooner paid, the entire
outstanding principal balance and all accrued and unpaid interest under this
Note shall be due and payable on the Maturity Date.
(b) If the Interest Rate shall be adjusted pursuant to Section 2(b)
above, then effective as of the first day of the eleventh (11th) Loan Year, the
Monthly Payment shall be adjusted to an amount sufficient to fully amortize the
then outstanding principal balance of this Note in equal monthly installments of
principal and interest over a period of sixty (60) months at the Adjusted
Interest Rate.
4. Prepayment. (a) Borrower shall not have the right to prepay any
principal or interest under this Note for the first three (3) Loan Years of
the Loan Term. After the third (3rd) Loan Year, Borrower shall have the
right to prepay the entire outstanding principal balance of this Note on
the following terms and conditions:
(1) Delivery of sixty (60) days prior written notice to Lender;
(2) Payment of all accrued interest and other charges under this
Note and all sums due under all other Loan Documents; and
(3) Payment of a percentage of the then outstanding principal
balance of this Note, as a prepayment charge, during the
fourth (4th) Loan Year and thereafter, of two percent (2%).
(b) Notwithstanding the foregoing, Borrower shall have the right, after
the third (3rd) Loan Year, to prepay up to five percent (5%) of the then
outstanding principal balance of this Note, on a non-cumulative basis, without
prepayment charge, on the due date of any monthly payment, upon first complying
with the provisions of clauses (1) and (2) of paragraph (a) above. Borrower
shall further have the right to prepay the Loan, including all interest and
charges thereunder, in full, without prepayment charge, on the last day of the
tenth (10th) Loan Year, even though Lender shall not have exercised its right
under Section 1(b) above, upon first giving notice to Lender not later than one
hundred eighty (180) days prior to the date of prepayment.
5. Security. The indebtedness evidenced by this Note is secured by a
Mortgage, Assignment of Leases and Rents, Security Agreement and Financing
Statement dated as of the date hereof (the "Mortgage") and by a separate
Assignment of Leases and Rents dated as of the date hereof, given by Borrower to
Lender and encumbering certain real property and improvements located in the
City of Overland Park, County of Johnson, State of Kansas (the "Mortgaged
Estate"). This Note, the Mortgage, Assignment of Leases and Rents, Environmental
Indemnity and any other instruments or documents that evidence or secure the
indebtedness under this Note are herein collectively called the "Loan
Documents", and the terms of all Loan Documents are incorporated into this Note
by reference.
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6. Late Charge. If any payment of interest, principal or other charge
or cost under this Note or any other Loan Document is not made within ten (10)
days of the date such payment is due and payable (calculated by including the
due date), Borrower shall pay to Lender, as liquidated damages by reason of such
delay in payment, an amount equal to five percent (5%) of the total amount of
such delinquent payment (a "Late Charge"). Any such payment on which a Late
Charge is payable shall not be deemed to be have been paid until the Late Charge
shall have been paid.
7. Default Rate. If any payment of interest, principal, premium or
other charge or cost under this Note or any other Loan Document is not made
within ten (10) days of the date such payment is due and payable (calculated by
including the due date), including payment after acceleration of this Note, such
delinquent amount shall accrue interest at a rate (the "Default Rate") equal to
the lesser of (i) the Interest Rate (as the same may be adjusted from time to
time) plus five percent (5%) or (ii) the maximum rate allowed by law, until the
date such payment, including any applicable Late Charge, shall be paid in full.
Any such payment on which interest at the Default Rate is payable shall not be
deemed to have been paid until all interest accrued at the Default Rate shall
have been paid.
8. Events of Default. Each of the following shall be an "Event of
Default" under this Note: (i) failure to pay when due any principal, interest or
other charge payable under this Note or any other Loan Document within ten (10)
days of the date such payment is due and payable (calculated by including the
due date); (ii) failure to perform or observe any other covenant or obligation
of Borrower under this Note and such default is not completely cured by Borrower
within thirty (30) days after notice thereof from Lender specifying such
default; or (iii) the occurrence of an "Event of Default" as defined in any
other Loan Document or any other default under any other Loan Document which is
not cured within the applicable cure period, if any, provided therein.
9. Remedies. Upon the occurrence of an Event of Default, Lender may, at
its option, exercise any one or more of the following remedies: (i) declare the
entire unpaid principal balance of this Note, together with all accrued and
unpaid interest and any other charges or amounts payable under the Loan
Documents, to be immediately due and payable, regardless of the Maturity Date;
(ii) pursue any other rights and remedies of Lender under the Loan Documents,
applicable law, or otherwise; and (iii) offset against any amounts payable under
this Note any debts or obligations of Lender to Borrower, or any amounts held by
Lender on behalf or for the benefit of Borrower.
10. Reinvestment Fee. If Lender shall exercise its right under Section
9(i) above to accelerate the payment of this Note, then Borrower shall pay to
Lender, as a reinvestment fee, an amount equal to ten percent (10%) of the
outstanding principal balance of this Note during the first three (3) Loan
Years, and thereafter in accordance with the prepayment charge set forth in
Section 4(a) above.
11. Waiver by Borrower. Borrower and any guarantor or endorser of this
Note hereby waive diligence, demand, presentment for payment, notice of
nonpayment, protest, notice of dishonor and notice of protest, and specifically
consent to and waive notice of any renewals, modifications or extensions of this
Note, whether in favor of Borrower or any other person or persons, and hereby
waive any defense by reason of extension of time for payment or other indulgence
granted by Lender.
12. No Waiver by Lender. No delay, failure or forbearance on the part
of Lender in exercising any right, remedy or privilege under this Note or under
any other Loan Document shall affect such right, remedy or privilege, nor shall
any single or partial exercise thereof or any abandonment or discontinuance of
steps to enforce such a right, remedy or privilege preclude any further exercise
thereof or the exercise of any other rights, remedies or
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privileges under any Loan Document. The rights, remedies and privileges of
Lender hereunder are cumulative and not exclusive of any rights, remedies or
privileges which Lender may have and may be exercised and enforced
alternatively, successively or concurrently, at the sole discretion of Lender.
13. Notices. All notices, consents or communications required or
permitted to be given under this Note shall be in writing and shall be deemed to
have been properly given and received (i) if sent by hand delivery, then upon
delivery, (ii) if sent by overnight courier or United States Express Mail, then
one (1) day after dispatch, and (iii) if mailed by certified or registered U.S.
mail, postage prepaid and return receipt requested, then two (2) days after
deposit in the mail. All such notices and communications shall be given (x) to
Lender at its address set forth in this Note, and (y) to Borrower at its address
set forth in this Note, Attn: Robert D. Regnier (with a copy to Buck, Bohm &
Stein, 4601 College Boulevard, Suite 200, Leawood, Kansas 66211-1650), or at
such other addresses as either party may designate by notice in accordance with
the terms of this paragraph.
14. Lender's Costs. Borrower and any guarantor or endorser of this Note
agree to pay all costs, charges and expenses, including attorneys' fees, to the
extent permitted by law, which may be incurred by Lender for the collection of
any sums due under the Loan Documents or enforcing any of Lender's rights under
the Loan Documents, together with interest on such sums from the date incurred
at the Default Rate.
15. Limited Liability. The liability of Borrower for the repayment of
the indebtedness evidenced by this Note and the performance of the Secured
Obligations shall be limited to the security given by Borrower and other parties
for this Note and other Secured Obligations. Notwithstanding anything to the
contrary contained herein, and notwithstanding any delay by Lender in exercising
any right, remedy or privilege under any Loan Document, Borrower shall be
personally liable beyond its interest in the security granted to Lender to the
extent of: (i) any funds received by Borrower or any other person or entity for
or on account of Borrower as security deposits under any Leases; (ii) any Rents
received or held by Borrower after the occurrence of an Event of Default or any
Rents received by Borrower which are prepaid more than one month in advance;
(iii) all condemnation awards and payments and insurance proceeds received by
Borrower that have not been applied as required by the terms of the Loan
Documents; (iv) the cost to repair the Mortgaged Estate as a result of a
casualty not reimbursed by insurance to the extent that such insurance is
required by the terms of the Loan Documents; (v) any liability, damage, cost or
expense (including attorneys' fees) incurred by Lender as a result of any fraud,
misrepresentation or bad faith by Borrower or any Guarantor; (vi) any liability,
damage, cost or expense (including attorneys' fees) incurred by Lender under the
terms of the Environmental Indemnity; (vii) any liability, damage, cost or
expense (including attorneys' fees) incurred by Lender due to any waste of the
Mortgaged Estate by Borrower or Borrower's representatives or tenants; and
(viii) any failure to pay delinquent Taxes. Nothing contained herein shall limit
or affect Lender's rights under any guaranty or other collateral which may now
or hereafter be given in connection with this Note.
16. Miscellaneous.
(a) This Note shall be governed by and construed in accordance with the
laws of the State in which the Mortgaged Estate is located. The terms of this
Note are severable, and if any provision, or the application or any provision,
shall be declared invalid or unenforceable, the remaining provisions and all
other applications of such provisions shall remain in full force and effect, and
shall not be impaired in any way.
(b) This Note may not be amended or modified except by a written
agreement signed by Borrower and Lender.
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(c) In no event shall payments of interest to Lender exceed the maximum
rate or amount permitted to be charged under applicable law. If Lender shall
receive any payment that is or would be in excess of the interest or other
charge permitted to be charged under applicable law, the portion of any such
payment received by Lender in excess of the maximum interest permitted by law
shall be credited to the principal balance of the Loan.
(d) Whenever used herein, the terms "Borrower" and "Lender" shall also
mean, to the extent applicable, the heirs, successors, legal representatives and
assigns of Borrower and Lender, and the term "including" shall mean "including,
without limitation." Unless otherwise defined herein, capitalized terms used
herein shall have the respective meanings as set forth in the Mortgage.
(e) Time is of the essence of this Note.
(f) This Note and every covenant and agreement herein contained shall
be jointly and severally binding upon each party or entity executing this Note
as or on behalf of Borrower and its and their heirs, successors, legal
representatives and assigns, and shall inure to the benefit of Lender and its
successors and assigns.
BLUE VALLEY BUILDING CORP.,
a Kansas corporation
ATTEST: [SEAL] By: /s/ Robert D. Regnier
Robert D. Regnier, President
By: Patricia L. Day
Secretary
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