Extension of Note DUE April 1, 2019

SECOND PROMISSORY NOTE MODIFICATION AGREEMENT

THIS SECOND PROMISSORY NOTE MODIFICATION AGREEMENT (“Second Modification”) is made and entered into as of January 15, 2019 (“Effective Date”) by and between TELLURIDE COUNCIL FOR THE ARTS AND HUMANITIES, a Colorado nonprofit corporation, d/b/a/ “Telluride Arts” (“Borrower”) and TELLURIDE TRANSFER COMPANY, LLC, a Colorado limited liability company (“Lender”).  Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Note (as defined below).

RECITALS

WHEREAS, Lender made a loan to Borrower in the original principal amount of $930,000 (the “Loan”), which Loan is evidenced by Borrower’s Promissory Note in such amount dated April 20, 2018 (the “Note”) (such Note and any other instrument or document given in connection with or to secure the Loan being collectively referred to as the “Loan Documents”).

WHEREAS, Lender and Borrower entered into that certain Promissory Note Modification Agreement dated as of November 2018 (the “First Modification”) amending the Note, pursuant to which Buyer made a payment to Lender in the amount of $200,000 and thereby extended the Initial Maturity Date to January 15, 2019.

WHEREAS, Borrower and Lender desire to further extend the Initial Maturity Date as hereinafter provided.

NOW, THEREFORE, in consideration of the foregoing promises and the covenants contained herein, Borrower and Lender agree as follows:

1.     The Recitals set forth above are hereby incorporated into and made a part of this Second Modification

2.     Subject to Lender’s timely receipt of the payment described below, Lender and Borrower agree that the Initial Maturity Date hereby is extended to April 1, 2019. On or before January 28, 2019, Borrower shall make a payment to Lender of not less than $100,000 to be immediately applied by Lender first to the accrued interest and other charges owing under this Note and thereafter to Principal.  In the event such payment is not received on or before January 28, 2019, no extension of the Initial Maturity Date shall be deemed to have been granted and an Event of Default shall immediately exist.

3.     Pursuant to Section VI.9 of the Deed of Trust, Borrower is required to post or maintain a Letter of Credit.  As of the date of this Amendment, Borrower has not obtained the requisite Letter of Credit and has requested that Lender temporarily keep in place its existing Letter of Credit so as to avoid any adverse consequences from the Town of Telluride.  Lender agrees to renew or replace its existing Letter of Credit so as to maintain such Letter of Credit or replacement thereof in effect until at least April 1, 2019, provided that Borrower shall reimburse Lender for Lender’s actual out-of-pocket expenses incurred in connection therewith.  Borrower shall remit such reimbursement to Lender within 10 days after written demand therefor.  For the avoidance of any doubt, the amount of the foregoing reimbursement is in addition to the $100,000 principal pay down required above. 

4.     The Loan Documents are in all respects ratified and confirmed by Borrower and Lender and incorporated by reference herein, and each of the Loan Documents, the First Modification and this Second Modification shall be read, taken and construed as one and the same instrument. All references to the Note in the Loan Documents shall mean and refer to the Note as modified by the First Modification and this Second Modification. In the event of any conflict between the terms and provisions of this Second Modification and the terms and provisions of the Note and/or the First Modification, the terms and provisions of this Second Modification shall control.