PROMISSORY NOTE
$2,975,000.00 September __, 2008
FOR VALUE RECEIVED, LAKEWOOD REINVESTMENT AUTHORITY, a body
corporate duly organized and existing as an urban renewal authority under the laws of the State
of Colorado ("Borrower"), promises to pay to the order of FIRSTBANK OF COLORADO
("Lender"), at 10403 West Colfax Avenue, Lakewood, Colorado 80215, or such other address as
Lender may from time to time designate, Two Million Nine Hundred Seventy Five Thousand
and No/100 Dollars ($2,975,000.00) ("Loan"), pursuant to the Loan Agreement of even date
herewith, between Borrower and Lender (as the same may hereafter be further amended,
modified or restated, the "Loan Agreement"), in lawful money of the United States of America,
with interest thereon from the date of this Note to and including the date this Note is paid in full,
at the fixed interest rate of six percent (6.00%) per annum ("Interest Rate"). The Interest Rate
shall be computed on a 360 day year basis, multiplied by the actual number of days elapsed.
Capitalized terms used herein but not defined herein have the meanings given such terms in the
Loan Agreement.
Payments of accrued but unpaid interest shall be due and payable on December 1, 2008
and June 1, 2009; thereafter, Borrower shall make payments of principal and interest, amortized
over a twenty-one (21) year period, on December 1 and June 1 of each calendar year through and
including December 1, 2030 when the unpaid principal balance plus all accrued and unpaid
interest shall be due and payable in full without notice or demand ("Maturity Date").
The Loan will be drawn fifty percent (50%) upon execution of this Note, with the
remaining fifty percent (50%) to be funded into a Project Account (as defined in the Loan
Agreement) held by Lender for up to one year, with interest payable at the Interest Rate. Subject
to the terms of the Loan Agreement, Borrower may draw the remaining fifty percent (50%) of
the Loan amount funded into the Project Account at any time during the one (1) year period
following execution of this Note.
The Borrower further agrees to pay on demand from the Tax Increment Revenue (or the
Reserve Account or the Surplus Reserve Account) (all as defined in the Loan Agreement) any
expenditures made by the Lender in accordance with the Loan Documents, including reasonable
attorneys' fees incurred in connection with any matter pertaining hereto and/or the security
pledged for this indebtedness. At the option of Lender, all such expenditures which are not paid
by the Borrower as and when due, may be paid by the Lender and, at the Lender's option, shall
be payable on demand and may be added to the unpaid balance of this Note and become a part of
and on parity with the principal indebtedness secured by the Loan Documents and other
instruments executed in connection herewith and shall accrue interest at the Default Rate
(defined below).
If Lender refers this Note to an attorney for collection or seeks legal advice following a
default beyond all cure periods allowed under this Note, or the Lender is the prevailing party in
any action instituted on this Note, or if any other judicial or nonjudicial action, suit or proceeding
is instituted by Lender or any future holder of this Note, and an attorney is employed by Lender
to appear in any such action or proceeding, or to reclaim, seek relief from a judicial or statutory
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stay, sequester, protect, preserve or enforce Lender's interest in this Note, the Loan Documents or
any other security for this Note (including, but not limited to, proceedings under federal
bankruptcy law or in connection with any state or federal tax lien), then Borrower promises to
pay from the Tax Increment Revenue (or the Reserve Account or the Surplus Reserve Account),
reasonable attorneys' fees and reasonable costs and expenses incurred by Lender and/or its
attorney in connection with the above-mentioned events. If not paid within ten (10) days after
such fees become due and written demand for payment is made, such amount shall be due on
demand or may be added to the principal, at the Lender's discretion, and shall bear interest at the
Default Rate.
Should any payment or installment hereunder be not paid when the same becomes due
and payable, Borrower recognizes that the Lender will incur extra expenses for both the
administrative cost of handling delinquent payments and the cost of funds incurred by Lender
after such due date as a result of not having received such payment when due. Therefore,
Borrower shall, in such event, without further notice, and without prejudice to the right of Lender
to collect any other amounts provided to be paid herein, including default interest or to declare a
default hereunder, pay to Lender from the Tax Increment Revenue (or the Reserve Account or
the Surplus Reserve Account) to cover such expenses incurred as a result of any installment
payment due being not received within ten (10) days of its due date, an administrative fee of
$100.00.
Prior to the Maturity Date, this Note may be prepaid at any time, in whole or in part;
provided, however, if the principal balance of the Note is reduced more than thirty-three percent
(33%) below the scheduled principal reduction balance at any time prior to the fifth (5th)
anniversary date of this Note, a prepayment premium will be assessed at such time in an amount
equal to the aggregate sum of the prepayments multiplied by one percent (1%). All payments or
prepayments under this Note shall be applied first to the repayment of sums, if any, advanced by
the Lender of this Note under the provisions of the Loan Documents to protect and preserve the
security, together with interest on the sums so advanced at the Default Rate; second to the
payment of accrued and unpaid interest on the principal indebtedness evidenced by this Note;
and last to the reduction of the principal indebtedness evidenced by this Note.
Upon the happening of any of the following events and after sending any required notice
and passage of any time period granted Borrower within which to cure, if any, and at the option
of the Lender, all amounts then unpaid under this Note, including interest, shall bear interest for
the period beginning with the date of the happening of such event at a default rate of two percent
(2%) per annum in excess of the Interest Rate of this Note (the "Default Rate"), and in addition
the Lender may, at its option, without prior notice and demand, except as otherwise provided
herein, declare immediately due and payable the entire unpaid principal sum hereunder, together
with all interest thereon, plus any other sums payable at the time of such declaration pursuant to
this Note, the Loan Documents and any other instrument securing this Note. An Event of
Default means:
(a) Failure of Borrower to observe or perform any of the conditions by
Borrower to be performed under the terms of this Note or the Loan Agreement;
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(b) The occurrence of any default beyond any applicable notice and cure
periods under the Note, the Loan Agreement or any other Loan Documents evidencing or
securing the Loan;
(c) The conveyance, assignment, pledge, transfer, hypothecation, or other
disposition of the Tax Increment Revenue or the Collateral (as such terms are defined in
the Loan Agreement), or any of its rights or interest in and to the Tax Increment Revenue
or the Collateral (except in connection with any additional indebtedness incurred by
Borrower as permitted by Lender pursuant to the Loan Agreement);
(d) The existence of any collusion or bad faith by or with the acquiescence of
Borrower;
(e) If at any time or times hereafter any material representation, statement,
report, or certificate is made now or hereafter by Borrower that is not true and correct
when made;
(f) If Borrower is enjoined, restrained, or in any way prevented by court
order, or if any proceeding is filed or commenced seeking to enjoin, restrain, or in any
way prevent Borrower from conducting all or a substantial part of its business affairs;
(g) If there occurs the appointment of a receiver, trustee, or custodian of all or
any substantial part of the assets owned by Borrower;
(h) Failure to promptly pay to Lender on demand the amount by which the
indebtedness hereunder may, at any time, exceed the face amount of the Note;
(i) Filing of any petition by or against Borrower under Federal Bankruptcy
Act or any similar law, state or federal, whether now or hereafter existing and, in the case
of involuntary proceedings, failure to cause same to be vacated, stayed, or set aside
within sixty (60) days after filing;
(j) If the Loan made pursuant to this Note is considered at any time to not be
a bank qualified and tax exempt obligation under state and federal law; or
(k) If the Loan is not used to fund the Project (as defined in the Loan
Agreement).
Unless another time period is otherwise stated herein, Borrower shall not be in default
unless Lender shall have delivered written notice of the default to Borrower and said default is
not cured within ten (10) days in the event of a monetary default or within thirty (30) days in the
event of a nonmonetary default.
Any default under this Note which is not cured within any applicable cure period shall
constitute a default under each of the other Loan Documents, and any default under any of the
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Loan Documents shall constitute a default hereunder and under each of the other Loan
Documents.
Upon the occurrence of any Event of Default under this Note and the expiration of any
notice and cure periods, the holder of this Note shall have the right to foreclose any security
interests securing the payment hereof, draw on the Reserve Account or Surplus Reserve Account
(as such terms are defined in the Loan Agreement), and exercise any and all other remedies it
may possess under the Loan Documents, at law or in equity. Failure to exercise any right
granted herein upon any Event of Default shall not constitute a waiver of the right to exercise
such right in the event of any subsequent or other default. If an Event of Default occurs,
Borrower hereby: (i) waives all applicable exemption, valuation and appraisal rights; and (ii)
expressly agrees that the acceptance by the Lender of this Note of any performance which does
not strictly comply with the terms of this Note or of other Loan Documents shall not be deemed
to be a waiver of any rights of the Lender.
Except as otherwise provided herein, the Borrower waives presentment and demand for
payment, notice of acceleration or of maturity, protest and notice of protest and nonpayment,
bringing of suit and diligence in taking any action to collect sums owing hereunder and agrees
that its liability on this Note shall not be affected by any release or change in any security for the
payment of this Note or release of anyone liable hereunder. No extension of time for the
payment of this Note, or any installment hereof or other modification of the terms hereof made
by the Lender with any person now or hereafter liable for the payment of this Note, shall affect
the original liability under this Note of the Borrower, even provided the Borrower is a party to
such agreement.
In no event whatsoever shall the amount paid, or agreed to be paid, to the holder of this
Note for the use, forbearance or retention of the money to be loaned hereunder ("Interest")
exceed the maximum amount permissible under applicable law. If the performance or
fulfillment of any provision hereof or of any of the Loan Documents or any agreement between
Borrower and the Lender of this Note shall result in Interest exceeding the limit for interest
prescribed by law, then the amount of such Interest shall be reduced to such limit. If, from any
circumstance whatsoever, the Lender of this Note should receive as Interest, an amount which
would exceed the highest lawful rate, the amount which would be excessive Interest shall be
applied to the reduction of the principal balance owing hereunder (or, at the option of the Lender,
be paid over to Borrower) and not to the payment of Interest.
If any provision hereof or of any of the Loan Documents shall, for any reason and to any
extent, be invalid or unenforceable, then the remainder of the document or instrument in which
such provision is contained and any of the other Loan Documents shall not be affected thereby
but instead shall be enforceable to the maximum extent permitted by law.
The term "Borrower" as used herein shall include the original Borrower of this Note and
any party who may subsequently become liable for the payment hereof, as an assumer with the
consent of the Lender, provided that the holder of this Note may, at its option, consider the
original Borrower of this Note alone as Borrower unless Lender has consented in writing to the
substitution of another party as maker. The term "Lender" as used herein shall mean the Lender
or, if this Note is transferred, the then holder of this Note.
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BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
OTHER PARTY.
The Borrower shall make no investment or other use of the proceeds of the Loan that, if
such investment or other use had been reasonably expected on the date of issue of the Note,
would have caused the Note to be an "arbitrage bond" within the meaning of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder, and the Borrower shall
comply with all the requirements of said code and regulations throughout the term of the Note.
The Borrower hereby designates the Note as a "qualified tax-exempt obligation" within the
meaning of § 265(b) of the Internal Revenue Code of 1986, as amended.
Borrower represents that Borrower constitutes a qualified small issuer under Section
265(b)(3)(C) of the Code and anticipates issuing $10,000,000 or less of qualified tax-exempt
obligations during the calendar year.
This Promissory Note shall be construed in accordance with the laws of the State of
Colorado.
IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note as of the
day and year first above written.
BORROWER:
LAKEWOOD REINVESTMENT AUTHORITY, a body
corporate duly organized and existing as an urban renewal
authority under the laws of the State of Colorado
By:
Michael J. Rock, Executive Director
ATTESTED TO BY:
Margy Greer, Clerk
APPROVED BY:
Lawrence R. Dorr, Treasurer
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