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EXHIBIT 10.11
CHANGE IN TERMS AGREEMENT
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PRINCIPAL LOAN DATE MATURITY LOAN NO. CALL / COLL ACCOUNT OFFICER INITIALS
$4,350,000.00 08-22-2003 04-30-2006 55032 6001 360
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item
above containing "***" has been omitted due to text length limitations.
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BORROWER: NORTH AND SOUTH ASPEN, LLC (TIN: ▇▇-▇▇▇▇▇▇▇) LENDER: WESTSTAR BANK
SARDY HOUSE, LLC (TIN: ▇▇-▇▇▇▇▇▇▇) ASPEN ▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
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PRINCIPAL AMOUNT: $4,350,000.00 DATE OF AGREEMENT: AUGUST 22, 2003
DESCRIPTION OF EXISTING INDEBTEDNESS. A Promissory Note dated March 28, 2003
between North & South Aspen, LLC and WestStar Bank, in the amount of
$4,000,000.00, maturing on April 30, 2006.
DESCRIPTION OF COLLATERAL. A Deed of Trust dated March 28, 2003 between Sardy
House, LLC, a Colorado Limited Liability Company, and WestStar Bank, in the
amount of $4,000,000.00, recorded on March 28, 2003 under Reception #480704.
DESCRIPTION OF CHANGE IN TERMS.
To increase the principal amount from $4,000,000.00 to $4,350,000.00.
To change the payment schedule to: 14 months of interest only payments
commencing August 31, 2003. Then 18 months of fixed principal payments of
$8,702.00 plus accrued interest commencing October 30, 2004. Final payment of
unpaid principal and interest due and payable at maturity, April 30, 2006.
PROMISE TO PAY. NORTH AND SOUTH ASPEN, LLC; AND SARDY HOUSE, LLC ("BORROWER")
JOINTLY AND SEVERALLY PROMISE TO PAY TO WESTSTAR BANK ("LENDER"), OR ORDER, IN
LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF FOUR
MILLION THREE HUNDRED FIFTY THOUSAND & 00/100 DOLLARS ($4,350,000.00), TOGETHER
WITH INTEREST ON THE UNPAID PRINCIPAL BALANCE FROM AUGUST 22, 2003, UNTIL PAID
IN FULL. THE INTEREST RATE WILL NOT INCREASE ABOVE 21.000%.
PAYMENT. SUBJECT TO ANY PAYMENT CHANGES RESULTING FROM CHANGES IN THE INDEX,
BORROWER WILL PAY THIS LOAN IN ACCORDANCE WITH THE FOLLOWING PAYMENT SCHEDULE:
14 MONTHLY CONSECUTIVE INTEREST PAYMENTS, BEGINNING AUGUST 31, 2003, WITH
INTEREST CALCULATED ON THE UNPAID PRINCIPAL BALANCES AT AN INTEREST RATE BASED
ON THE WESTSTAR BANK BASE (CURRENTLY 5.000%), ADJUSTED IF NECESSARY FOR THE
MINIMUM AND MAXIMUM RATE LIMITATIONS FOR THIS LOAN, RESULTING IN AN INITIAL
INTEREST RATE OF 7.000%; 18 MONTHLY CONSECUTIVE PRINCIPAL PAYMENTS OF $8,702.00
EACH, BEGINNING OCTOBER 30, 2004, WITH INTEREST CALCULATED ON THE UNPAID
PRINCIPAL BALANCES AT AN INTEREST RATE BASED ON THE WESTSTAR BANK BASE
(CURRENTLY 5.000%), ADJUSTED IF NECESSARY FOR THE MINIMUM AND MAXIMUM RATE
LIMITATIONS FOR THIS LOAN, RESULTING IN AN INITIAL INTEREST RATE OF 7.000%; 18
MONTHLY CONSECUTIVE INTEREST PAYMENTS, BEGINNING OCTOBER 30, 2004, WITH INTEREST
CALCULATED ON THE UNPAID PRINCIPAL BALANCES AT AN INTEREST RATE BASED ON THE
WESTSTAR BANK BASE (CURRENTLY 5.000%), ADJUSTED IF NECESSARY FOR THE MINIMUM AND
MAXIMUM RATE LIMITATIONS FOR THIS LOAN, RESULTING IN AN INITIAL INTEREST RATE OF
7.000%; AND ONE PRINCIPAL AND INTEREST PAYMENT OF $4,218,640.67 ON APRIL 30,
2006, WITH INTEREST CALCULATED ON THE UNPAID PRINCIPAL BALANCES AT AN INTEREST
RATE BASED ON THE WESTSTAR BANK BASE (CURRENTLY 5.000%), ADJUSTED IF NECESSARY
FOR THE MINIMUM AND MAXIMUM RATE LIMITATIONS FOR THIS LOAN, RESULTING IN AN
INITIAL INTEREST RATE OF 7.000%. THIS ESTIMATED FINAL PAYMENT IS BASED ON THE
ASSUMPTION THAT ALL PAYMENTS WILL BE MADE EXACTLY AS SCHEDULED AND THAT THE
INDEX DOES NOT CHANGE; THE ACTUAL FINAL PAYMENT WILL BE FOR ALL PRINCIPAL AND
ACCRUED INTEREST NOT YET PAID, TOGETHER WITH ANY OTHER UNPAID AMOUNTS UNDER THIS
AGREEMENT. UNLESS OTHERWISE AGREED OR REQUIRED BY APPLICABLE LAW, PAYMENTS WILL
BE APPLIED FIRST TO ANY ACCRUED UNPAID INTEREST; THEN TO PRINCIPAL; THEN TO ANY
UNPAID COLLECTION COSTS; AND THEN TO ANY LATE CHARGES. INTEREST ON THIS
AGREEMENT IS COMPUTED ON A 365/360 SIMPLE INTEREST BASIS; THAT IS, BY APPLYING
THE RATIO OF THE ANNUAL INTEREST RATE OVER A YEAR OF 360 DAYS, MULTIPLIED BY THE
OUTSTANDING PRINCIPAL BALANCE, MULTIPLIED BY THE ACTUAL NUMBER OF DAYS THE
PRINCIPAL BALANCE IS OUTSTANDING. BORROWER WILL PAY LENDER AT LENDER'S ADDRESS
SHOWN ABOVE OR AT SUCH OTHER PLACE AS LENDER MAY DESIGNATE IN WRITING.
VARIABLE INTEREST RATE. The interest rate on this Agreement is subject to change
from time to time based on changes in an index which is the WestStar Bank Base
(the "Index"). The Index is not necessarily the lowest rate charged by Lender on
its loans and is set by Lender in its sole discretion. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current Index rate
upon Borrower's request. The interest rate change will not occur more often than
each day. Borrower understands that Lender may make loans based on other rates
as well. THE INDEX CURRENTLY IS 5.000% PER ANNUM. THE INTEREST RATE OR RATES TO
BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THE NOTE WILL BE THE RATE OR RATES
SET FORTH HEREIN IN THE "PAYMENT" SECTION. NOTWITHSTANDING ANY OTHER PROVISION
OF THIS AGREEMENT, AFTER THE FIRST PAYMENT STREAM, THE INTEREST RATE FOR EACH
SUBSEQUENT PAYMENT STREAM WILL BE EFFECTIVE AS OF THE LAST PAYMENT DATE OF THE
JUST-ENDING PAYMENT STREAM. NOTWITHSTANDING THE FOREGOING, THE VARIABLE INTEREST
RATE OR RATES PROVIDED FOR IN THE NOTE WILL BE SUBJECT TO THE FOLLOWING MINIMUM
AND MAXIMUM RATES. NOTICE: Under no circumstances will the interest rate on the
Note be less than 7.000% per annum or more than (except for any higher default
rate shown below) the lesser of 21.000% per annum or the maximum rate allowed by
applicable law. Whenever increases occur in the interest rate, Lender, at its
option, may do one or more of the following: (A) increase Borrower's payments to
ensure Borrower's loan will pay off by its original final maturity date, (B)
increase Borrower's payments to cover accruing interest, (C) increase the number
of Borrower's payments, and (D) continue Borrower's payments at the same amount
and increase Borrower's final payment.
PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Agreement, Borrower understands that Lender is entitled
to a MINIMUM INTEREST CHARGE OF $25.00. Other than Borrower's obligation to pay
any minimum interest charge, Borrower may pay without penalty all or a portion
of the amount owed earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of Borrower's obligation to
continue to make payments under the payment schedule. Rather, early payments
will reduce the principal balance due and may result in Borrower's making fewer
payments. Borrower agrees not to send Lender payments marked 'paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Agreement,
and Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to:
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
LATE CHARGE. If a payment is 11 days or more late, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $15.00, WHICHEVER IS GREATER.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon
final maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Agreement to 21.000% per annum. The
interest rate will not exceed the maximum rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
PAYMENT DEFAULT. Borrower fails to make any payment when due under the
Indebtedness.
OTHER DEFAULTS. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Borrower defaults under any loan,
extension of credit, security agreement. purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Burrower's property or Borrower's ability to
perform Borrower's obligations under this Agreement or any of the Related
Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
DEATH OR INSOLVENCY. The dissolution of Borrower (regardless of whether
election to continue is made), any member withdraws from Borrower, or any
other termination of Borrower's existence as a going business or the death
of any member, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the Indebtedness. This
includes a garnishment of any of Burrower's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with
CHANGE IN TERMS AGREEMENT
LOAN NO: 55032 (CONTINUED) PAGE 2
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Lender monies or a surety bond for the creditor or forfeiture proceeding,
in an amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any
of the Indebtedness or any guarantor, endorser, surety, or accommodation
party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness evidenced by this
Note.
ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired. INSECURITY. Lender in good faith believes
itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Agreement and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Agreement if Borrower does not pay. Borrower will pay Lender the reasonable
costs of such collection. This includes, subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses, whether or not there
is a lawsuit, including without limitation attorneys' fees and legal expenses
for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), and appeals. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law.
GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF COLORADO. THIS
AGREEMENT HAS BEEN ACCEPTED BY LENDER IN THE STATE OF COLORADO.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any ▇▇▇ or ▇▇▇▇▇ accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
COLLATERAL. Borrower acknowledges this Agreement is secured by the following
collateral described in the security instrument listed herein. all the terms and
conditions of which are hereby incorporated and made a part of this Agreement: a
Mortgage or Deed of Trust to the Public Trustee for the benefit of Lender on
real property located in Pitkin County, State of Colorado.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.
LOAN CONDITIONS, COVENANTS AND MONITORING. Borrower will need to have pre-sold
membership units with a total value of not less than $4.5 Million by March 1,
2005 otherwise Borrower must list for sale the subject property as a
single-family residence or repay the subject loan in full. Contracts shall be in
form and substance satisfactory to Bank, in its sole discretion.
LINE OF CREDIT. This note evidences a straight line of credit. Once the total
amount of the principal has been advanced, Borrower is not entitled to further
loan advances. Advances under this note, as well as directions for payment from
Borrower's accounts, may be requested orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. Borrowers agrees to be liable for all sums either: (A)
advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower's accounts with Lender. The unpaid principle balance
owing on this note at any time may be evidenced by endorsements on this Note or
by Lender's internal records, including computer print-outs. Lender will have no
obligation to advance funds under this Note if: (A) Borrower or any guarantor is
in default under the terms of this Note or any agreement that the Borrower or
any guarantor has with Lender, including any agreement made in connection with
the signing of this Note; (B) Borrower or any guarantor ceases doing business or
is insolvent; (C) any guarantor seeks, claims, or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; (D) Borrower has applied funds provided pursuant to the Note for
purposes other than those authorized by Lender; or (E) Lender in good faith
believes itself insecure.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
Agreement on transfer of Borrower's interest, this Agreement shall be binding
upon and inure to the benefit of the parties, their successors and assigns. If
ownership of the Collateral becomes vested in a person other than Borrower,
Lender, without notice to Borrower, may deal with Borrower's successors with
reference to this Agreement and the Indebtedness by way of forbearance or
extension without releasing Borrower from the obligations of this Agreement or
liability under the Indebtedness.
MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Agreement without losing them. Each Borrower understands
and agrees that, with or without notice to Borrower, Lender may with respect to
any other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) apply such security and direct the order or
manner of sale thereof, including without limitation, any non-judicial sale
permitted by the terms of the controlling security agreements, as Lender in its
discretion may determine; (e) release, substitute, agree not to ▇▇▇, or deal
with any one or more of Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; and (f) determine how, when and
what application of payments and credits shall be made on any other indebtedness
owing by such other Borrower. Borrower and any other person who signs,
guarantees or endorses this Agreement, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Agreement, and unless otherwise expressly stated in writing, no
party who signs this Agreement, whether as maker, guarantor, accommodation maker
or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made. The
obligations under this Agreement are joint and several.
CONTINUED ON NEXT PAGE
CHANGE IN TERMS AGREEMENT
LOAN NO: 55032 (CONTINUED) PAGE 3
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PRIOR TO SIGNING THIS AGREEMENT, EACH BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
EACH BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
BORROWER:
NORTH AND SOUTH ASPEN, LLC
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, MANAGER ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, MANAGER
OF NORTH AND SOUTH OF NORTH AND SOUTH
ASPEN, LLC ASPEN, LLC
SARDY HOUSE, LLC
BLOCK 66, LLC, MANAGER OF SARDY HOUSE. LLC
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, MANAGER ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, MANAGER
OF BLOCK 66, LLC OF BLOCK 66, LLC
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NOTICE TO COSIGNER
YOU ARE BEING ASKED TO GUARANTEE THIS DEBT. THINK CAREFULLY BEFORE YOU DO. IF
THE BORROWER DOESN'T PAY THE DEBT, YOU WILL HAVE TO. BE SURE YOU CAN AFFORD TO
PAY IF YOU HAVE TO, AND THAT YOU WANT TO ACCEPT THIS RESPONSIBILITY.
YOU MAY HAVE TO PAY UP TO THE FULL AMOUNT OF THE DEBT IF THE BORROWER DOES NOT
PAY. YOU MAY ALSO HAVE TO PAY LATE FEES OR COLLECTION COSTS, WHICH INCREASE THIS
AMOUNT.
THE LENDER CAN COLLECT THIS DEBT FROM YOU WITHOUT FIRST TRYING TO COLLECT FROM
THE BORROWER. THE LENDER CAN USE THE SAME COLLECTION METHODS AGAINST YOU THAT
CAN BE USED AGAINST THE BORROWER, SUCH AS SUING YOU, GARNISHING YOUR WAGES, ETC.
IF THIS DEBT IS EVER IN DEFAULT, THAT FACT MAY BECOME A PART OF YOUR CREDIT
RECORD.
THIS NOTICE IS NOT THE CONTRACT THAT MAKES YOU LIABLE FOR THE DEBT.
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