PROMISSORY NOTE
U.S. $32,000,000.00 As of December 20, 2000
FOR VALUE RECEIVED, SILVER MESA AT PALOMINO PARK LLC, a Colorado limited
liability company, having an address at 1600 Wynkoop Street, Suite 202, Denver,
Colorado 80202 ("Maker"), hereby promises to pay to the order of KEYBANK
NATIONAL ASSOCIATION, a national banking association ("Payee"), having an
address at Mailstop CO-02-WT-0401, 1675 Broadway, Suite 400, Denver, Colorado
80202 the principal sum of Thirty-Two Million Dollars ($32,000,000.00) or so
much thereof as may be advanced from time to time, and interest from the date
hereof on the balance of principal from time to time outstanding, in United
States currency, at the rates and at the times hereinafter described.
This Note is issued by Maker pursuant to that certain Loan Agreement of
even date herewith (the "Loan Agreement") entered into between Payee and Maker.
This Note evidences the Loan (as defined in the Loan Agreement). Payment of this
Note is governed by the Loan Agreement, the terms of which are incorporated
herein by express reference as if fully set forth herein. Capitalized terms used
and not otherwise defined herein shall have the meanings given to them in the
Loan Agreement.
1. INTEREST. The principal amount hereof outstanding from time to time
shall bear interest until paid in full at the Applicable Rate.
2. REQUIRED PRINCIPAL PAYMENTS. Maker shall make, on or before the dates
hereinafter set forth, the required principal payments hereinafter set forth;
provided, however, that any prepayment of principal made pursuant to Section 4.4
of the Loan Agreement, including the payment of any Release Consideration upon
the release of a Condominium Unit pursuant to the provisions of the Loan
Agreement shall be credited against the next due and owing principal payment
described below.
Date Principal Payment
---- -----------------
December 1, 2001 $ 8,000,000.00
June 1, 2002 an additional $8,000,000
June 1, 2003 an additional $7,600,000
3. MATURITY DATE. The indebtedness evidenced hereby shall mature on the
Maturity Date. On the Maturity Date, the entire outstanding principal balance
hereof, together with accrued and unpaid interest and all other sums evidenced
by this Note, shall, if not sooner paid, become due and payable.
4. GENERAL PROVISIONS.
(a) Regardless of whether an Adjusted LIBOR Rate would otherwise then
be in effect, in the event (i) the principal balance hereof is not paid
when due whether by acceleration or upon the Maturity Date; or (ii) an
Event of Default exists, then the principal balance hereof shall bear
interest from and after the Default Rate. In addition, for any installment
of principal and/or interest (exclusive of the payment due upon the
Maturity Date) which is not paid within five (5) days of the due date
thereof a late charge equal to the greater of (a) ten percent (10%) of the
amount of such installment; or (b) Twenty-Five Dollars ($25.00) shall be
due and payable to the holder of this Note on demand to cover the extra
expense involved in handling delinquent payments.
(b) Maker agrees that the obligation evidenced by this Note is an
exempt transaction under the Truth-in-Lending Act, 15 U.S.C.ss.1601, et
seq.
(c) If any provision or provisions, or if any portion of any provision
or provisions, in this Note is found by a court of law to be in violation
of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court
should declare such portion, provision or provisions of this Note to be
illegal, invalid, unlawful, void or unenforceable as written, then it is
the intent of all parties hereto that such portion, provision or provisions
shall be given force to the fullest possible extent that they are legal,
valid and enforceable, that the remainder of this Note shall be construed
as if such illegal, invalid, unlawful, void or unenforceable portion,
provision or provisions were not contained therein, and that the rights,
obligations and interest of Maker and the holder or holders hereof under
the remainder of this Note shall continue in full force and effect. All
agreements herein are expressly limited so that in no contingency or event
whatsoever, whether by reason of advancement of the proceeds hereof,
acceleration of maturity of the unpaid principal balance hereof, or
otherwise, shall the amount paid or agreed to be paid to the holders hereof
for the use, forbearance or detention of the money to be advanced hereunder
exceed the highest lawful rate permissible under applicable usury laws. If,
from any circumstances whatsoever, the fulfillment of any provision hereof,
at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law which a court of
competent jurisdiction may deem applicable hereto, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity
and if from any circumstance the holder hereof shall ever receive as
interest an amount which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance due hereunder and not to the payment of interest.
(d) This Note and all provisions hereof shall be binding upon Maker
and all persons claiming under or through Maker, and shall inure to the
benefit of Payee, together with its successors and assigns, including each
owner and holder from time to time of this Note.
(e) Time is of the essence as to all dates set forth herein.
(f) Maker agrees that its liability shall not be in any manner
affected by any indulgence, extension of time, renewal, waiver, or
modification granted or consented to by Payee; and Maker consents to any
indulgences and all extensions of time, renewals, waivers, or modifications
that may be granted by Payee with respect to the payment or other
provisions of this Note, and to any substitution, exchange or release of
the collateral, or any part thereof, with or without substitution, and
agrees to the addition or release of any makers, endorsers, guarantors, or
sureties, all whether primarily or secondarily liable, without notice to
Maker and without affecting its liability hereunder.
(g) Maker hereby waives and renounces for itself, its successors and
assigns, all rights to the benefits of any statute of limitations and any
moratorium, reinstatement, marshalling, forbearance, valuation, stay,
extension, redemption, appraisement, or exemption and homestead laws now
provided, or which may hereafter be provided, by the laws of the United
States and of any state thereof against the enforcement and collection of
the obligations evidenced by this Note.
(h) If this Note is placed in the hands of attorneys for collection or
is collected through any legal proceedings, Maker promises and agrees to
pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect this Note,
including all reasonable attorneys' fees and disbursements.
(i) All parties now or hereafter liable with respect to this Note,
whether Maker, principal, surety, guarantor, endorsee or otherwise hereby
severally waive presentment for payment, demand, notice of nonpayment or
dishonor, protest and notice of protest. No failure to accelerate the
indebtedness evidenced hereby, acceptance of a past due installment
following the expiration of any cure period provided by this Note, any Loan
Document or applicable law, or indulgences granted from time to time shall
be construed (i) as a novation of this Note or as a reinstatement of the
indebtedness evidenced hereby or as a waiver of such right of acceleration
or of the right of Payee thereafter to insist upon strict compliance with
the terms of this Note, or (ii) to prevent the exercise of such right of
acceleration or any other right granted hereunder or by the laws of the
State. Maker hereby expressly waives the benefit of any statute or rule of
law or equity now provided, or which may hereafter be provided, which would
produce a result contrary to or in conflict with the foregoing.
(j) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF COLORADO AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
Maker has delivered this Note as of the day and year first set forth above.
MAKER:
SILVER MESA AT PALOMINO PARK LLC, a Colorado limited liability company
By: Wellsford Park Highlands Corp., a Colorado
corporation, its Manager
By: /s/ David M. Strong
--------------------------------------------------
Its: Vice President
Print Name: David M. Strong