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MAKER:
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Sunbelt Investors, L.L.C., a Nevada
limited liability company
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MAKER’S
MAILING ADDRESS:
Sunbelt Investors, L.L.C.
6 Carnival Rd.
Hilton Head, South Carolina 22926-3720
Beaufort County, South Carolina
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PAYEE:
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Great Western Land and Recreation,
Inc., a Nevada corporation
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PLACE FOR
PAYMENT:
Great Western Land and Recreation, Inc.
7373 North Scottsdale Rd., Suite C 140
Scottsdale, Arizona 85253
Maricopa County, Arizona, or any other place that Payee may
designate in writing.
PRINCIPAL
AMOUNT: $1, 974, 681.20. The maximum amount of this promissory note
(the “Note”) shall not exceed TWO MILLION TWO HUNDRED
THOUSAND AND 00/100 U.S. DOLLARS ($2,200,000.00) (plus ten percent
(10%) depending on the closing costs, administrative cost, bank
fees and commitment costs).
Interest will
accrue at the rate of zero percent (0%) for the first six
(6) months of this Note; thereafter, if the Note has not been
paid in full or transferred, the applicable interest rate for the
next six (6) months shall be one percent (1%). In partial
consideration for this low interest rate in the first year, Maker
warrants to grant to Payee the right of first refusal to purchase
the property made the basis of this transaction, which right of
first refusal shall exist and continue throughout the pendency of
this Note.
In year two
(2) of the Note interest shall accrue at a rate of three
percent (3%), however Payee extends Maker the option of applying to
the second year interest the FIFTY THOUSAND AND 00/100 U.S. DOLLARS
($50,000.00) of consideration for the second year of the
Non-Compete Agreement executed concurrently herewith between Maker
and Payee.
In year three
(3) of this Note, the applicable interest rate shall be six
percent (6%), however Payee extends Maker the option of exchanging
to Payee a one-third (1/3) interest in Houston Promenade Four,
L.L.C. (an Arizona limited liability company, located at 7373 North
Scottsdale Rd., Suite C 140, Scottsdale, Arizona 85253,
Maricopa County, Arizona), at its then appraised value as
determined by a neutral valuation expert in the industry, as
currency to be applied against the interest due for the third
year.
Years Four and
Five and any other year for which this Note is extended:
For years four
(4) and five (5), and for any year beyond the fifth year
through which this Note is extended, interest shall accrue at a
rate of six percent (6%).
Consideration
for Favorable Interest Rates:
In
consideration of the favorable interest rates in this Note and upon
Payee’s requests, Maker covenants to abide by the following
conditions at all times during the pendency of the indebtedness
reflected by this Note:
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1.
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Each of the lot sizes in the
Westchester Lakes development will be no less than fifty
(50) feet across the front of the lot, except for an
occasional corner lot, so as not to compete with the lot sizes in
the Mallard Crossing development;
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2.
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Maker will cooperate with Payee to
obtain drainage casements and participate in good faith using
reasonable best efforts in the search for appropriate drainage
solutions for both the Westchester Lakes development and the
Mallard Crossing development; and
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3.
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Maker and Payee agree to each work
independently, in good faith and using reasonable best efforts, as
is in each’s own interest, to obtain a third party buyer to
purchase the Property, as soon as is practical.
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MATURITY DATE:
The Maturity Date for this Note shall be September 30, 2011,
on which date payment is due in full on the Principal Amount and
all outstanding interest. However, Payee grants to Maker an
opportunity to extend this Note for an extra two (2) year
period. The extension option must be exercised by Maker in writing
to Payee no less that thirty (30) days prior to the Maturity
Date of this Note as specified herein.
INTEREST RATE
ON MATURED, UNPAID AMOUNTS: Three quarters of one percent (3/4%)
per month.
TERMS OF
PAYMENT (PRINCIPAL AND INTEREST):
The Principal
Amount is due and payable on September 30, 2011, and the
interest is due and payable annually as it accrues on the 30th day
of September each year. Payments will be applied first to accrued
interest and the remainder to reduction of the Principal
Amount.
SECURITY FOR
PAYMENT: This Note is secured by a Deed of Trust dated
September 29, 2006 from Sunbelt Investors,
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