SECUREDPROMISSORY NOTE
PrincipalAmount:
$34,000,000.00
WAIKOLOA,HI
September 30, 2016
1. PromisetoPay.ISLANDVISTAS,LLC,aNevadalimitedliabilitycompany,("Borrower"),promisestopaytotheorderof WHALES POINTFUND, LLP, a Delaware limited liability partnership("Lender"),the principal sumof $34,000,000.00, orthe actual amount that Lender actually advances to Borrowerunderthe Term Loan Agreement, in lawful money oftheUnited States,on or before the Maturity Date, together with Interest on the unpaid principal balance.
2. TermLoanAgreement.BorrowerismakingthisnoteinconnectionwiththeTermLoanAgreement.
3. Definitions.Thefollowingwordsusedinthisnotehavethedefinitionsstated below:
| (1) | "BusinessDay"meansanydayotherthanaSaturday,Sundayorotherdayonwhich commercialbanksinHawai'iareauthorizedorrequired by law toclose. |
| (2) | "ContractRate"means6.0%interestper annum. |
| (3) | "Default"meansanyconditionoreventthat,withthegivingofnoticeorthelapseoftime orboth,willconstituteanEventofDefaultunder section 8.1 of theTerm LoanAgreement. |
| (4) | "DefaultRate"means10.0%interestperannum. |
| (5) | "EB-5Investor"meanseachindividualinvestorwhohasprovidedtherequisite documentationnecessarytosubscribetotheofferingconducted byLender pursuanttothe termsof the EB-5Programwith respect totheProject. |
| (6) | "EB-5Program"meansUSCIS'sImmigrantInvestorProgram,asprovidedinthe ImmigrationandNationalityAct,§203(b)(5)(8U.S.C §1152(b)(S)), as amended, and implementingTitle 8 CFR § 204.6(m),as amended. |
| (7) | "EventofDefault"hasthemeaninggiveninsection8.1oftheTermLoanAgreement; |
| (8) | "InterestRate"means:(1)theContractRate,priortotheearliestoccurrenceofanEvent ofDefaultortheMaturityDate; and (2) the DefaultRatesubsequent totheoccurrenceof the earlier of an Event ofDefault or the Maturity date. |
| (9) | "LoanDocument"meanscollectively,thisnote,theTermLoanAgreement,theMortgage,theGuarantyAgreement,thePledgeAgreement,the Assignment of Salesand Contracts and Proceeds, theEnvironmental Indemnity Agreement, andall otherinstruments, agreements, documents, andwritings executed in connection with any ofthe foregoing. |
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| (10) | "MaturityDate"meansthefifthanniversaryoftheEffectiveDateoftheTermLoan Agreement. |
| (11) | "PriorAdvance"meansasumofmoneyequalto$1,000,000.00,attributabletoapproved EB-5Investors,thatLenderadvancedtoBorrowerfor useinconnection withtheProject, prior to the effective date of thisnote. |
| (12) | "Project"meansthe48luxurycondominiumvillasoncertainrealpropertylocatedat Waikoloa,SouthKohala,Island,CountyandState of Hawai'i to be developedby Borrower. |
| (13) | "SubscriptionAmount"means,withrespecttoeachEB-5Investor,$500,000. |
| (14) | "TermLoanAgreement"meanstheloanagreementbetweenBorrowerandLendermade inconnectionwiththisnote. |
| (15) | "TermLoanTranche"meansadisbursementoffundsfromBorrowertoLenderpursuant totheprovisionsofthisnoteandthe Term LoanAgreement. |
| (16) | "TrustAccount"meansthedepositaccountidentifiedinthetrustagreementintowhich theSubscriptionAmountofeachEB-5Investoris held pendingthe filingof that investor's I-526Petition with USCIS,asmorefully statedinthetrust agreement. |
4. ThePriorAdvance.Ontheeffectivedate,thePriorAdvancewillbedeemedto be apartofthesumsdueunderthisnoteandwillbesubjectto all oftheprovisions of thisnote. Lender's obligation toadvanceoneor more TermLoanTranches is hereby reduced by an amount ofmoney equalto thePrior Advance.
5. PaymentofInterest.BorrowershallpaysimpleinterestoneachTermLoanTranche(andthePrior Advance) atthe Contract Rate.Interestwill be due and payable quarterly,in arrears.Withrespect to each Term Loan Tranche,interest willaccrue fromthetimeaparticularTerm LoanTrancheis advancedto or for Borrower'sbenefit pursuant to the provisionsof thisnote.
6. ComputationofInterestandFees.Allcomputationsofinterestandfeesunder thisnotewillbemadeonthebasisofayearof360 daysandineachcasefortheactual number of days(includingthefirst daybut excludingthe lastday (actual/360) occurring intheperiod for which suchinterestor fees arepayable (to the extent computed onthe basisofdays elapsed).Each determination by Lender ofan interest amountor fee under thisnote will be madeingood faith and, except for manifest error,willbe final, conclusive, and binding onBorrower.
7. PrepaymentsandPrepaymentProhibition.(a)Borroweracknowledgesthatall loanfeesandotherprepaidfinancechargesare earned ontheday thatBorrowersigns this note, and that Lenderwill not refundthesesums ifBorrower prepays some orallofthe sumsdue under thisnote,unless required bylaw.
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(b) Borrowershallnotprepayanypartofthesumsadvancedunderthisnote priortotheMaturityDate.BorroweracknowledgesthatthefundsLenderis providing toBorrower are funds obtainedthrough theEB-5 program, and that theEB-5 programrequires that an investor'sfunds be"at-risk"forthe duration ofthe EB-5 program. Assuch,Borrower acknowledges that attemptstopre-pay sums advanced under thisnote willlikely jeopardize Lender's relationship withLender's investors.As such,Lender shall not to attempt toprepay sums advancedpursuant tothis note and theTermLoan Agreement. Anyprepayments madein violation ofthis section7 will bevoid.
(c) BorrowershallnotsendLenderanypaymentsmarked"paidinfull", "withoutrecourse",orwithanysimilarlanguage.IfBorrowersendssuch a payment toLender,Lendermay acceptthatpaymentwithout losinganyofLender's rightsunderthis note, the "paid" in full" and "without recourse" language will be ineffective, and Borrower will remain obligated to pay allsums due under thisnote.
8. MannerofPayment.Borrowershallmakeeachpaymentrequiredtobemade underthisnote(whetherofprincipal,interest,fees,orofotheramountspayableunderthisnote) priorto2:00p.m.CST, on thedate when due, inimmediately availablefunds,withoutset-offorcounterclaim. Anyamountsreceived aftersuchtimeonany datemay,inLender's discretion,be deemedto have beenreceived on thenextsucceedingBusinessDayfor purposes of calculating intereston thatpayment.Borrower shallmake allsuch payments to Lender eitherat its Payment Office or byelectronictransferfromBorrower's operatingaccount.If any payment under thisnote becomesdue on a day thatis nota Business Day, thedatefor that payment willbe extendedto the nextBusinessDay,and, in the case ofany payment accruing interest,interest on that paymentwill beduefor the period ofthe extension.
9. RepaymentoftheIndebtedness.Subjecttoanyextensions,Borrowershallrepay theprincipalamountofallsumsadvancedunderthisnote,togetherwithallaccrued and unpaid interest,on the Maturity Date.Borrower shallpayLender at Lender's address statedin section 22, oratanotherplace thatLender designates inwriting.
10. InterestafterDefault.UponanEventofDefault,includingBorrower'sfailureto makethefinalpaymentdueunderthisnote, theinterest rate onthisnote will automatically,and withoutnoticerequired from Lender, increase to 10% annualinterest. Theincreasedinterest rate will apply ontheday after the occurrenceof an EventofDefault.
11. ExtensionoftheMaturityDate.Borrowermay,notmorethanonetime,by deliveringawrittennoticetoLendernoearlier than60 days and no later than 30 daysprior to the MaturityDate,requestthatLender extendthe Maturity Date foranadditional 12 calendar months. Lender may, initssole discretion,grant Borrower's requestfor this one-yearextension,but onlyif, as ofthe firstdayofthe proposed one-year extension,Borrower is notin Default and no Event of Defaultexists. The Interest Rateduring any extensionwill be theDefaultRate. If Lender grants the extension,Borrower shall payLender's costs andexpensesincludinglegalfees, arisingoutofthe extension.
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12. Collateral.ThisnoteissecuredbytheCollateraldescribedintheTermLoanAgreement.
13. InterestRateLimitation.If,foranyreason,thefulfillmentofanyprovisionsof thisnoteorofany other document signed inconnectionwiththis note, at the timeperformance of such provision, causes theinterest rateofthis note toexceed the maximum ratepermitted by law, theobligationto befulfilledwillbe reduced to the maximum ratepermitted bylaw.
| 14. | EventsofDefault.TheoccurrenceofanyEventofDefaultasdefinedinArticle8 |
oftheTermLoanAgreementwillbedeemedtobeanEventofDefaultunderthisnote.
15. EffectofanEventofDefault.UponoccurrenceofanEventofDefault,Lender maydeclaretheentireunpaidbalanceplusallaccruedunpaidinterestimmediately due, and Borrower must paythis amount.In addition,Lender mayexercise anyotherright orremedy grantedbyanyother LoanDocument withrespect toanEventofDefault.
16. RecoveryofReturnedPayments.IfLendermustreturnto Borroweranypayment previouslyappliedtoBorrower'sobligationsunderthisnote because ofa voidable preference under the Bankruptcy Codeor forany other reason, Borrower andanyguarantorofthis note will remainliable for thefull amountreturned.Borrowerandeveryguarantor of thisnote willremain liablefor the returned sum asthoughLender had never received it.
17. Borrower'sWaivers.Borrowerandanyotherpersonwhosigns,guarantees,orendorsesthisnoteherebywaivespresentmentforpayment,demand for payment, and noticeof dishonor.
18. Lender'sRights.Lendermayexercisethefollowingrightswithoutgivingnoticetoanyone,gettingconsentfromanyone,orreleasinganyone from theobligation to paythe full amount of this note:
| (1) | Reducetheamountofordelaytheduedateofanypaymentdueunderthisnote; |
| (2) | Extend,renew,or changeanyotherprovisionofthisnoteinamannerthatisfairto Borrower; |
| (3) | Releaseanysecurity,includingoneormoreco-guarantors; |
| (4) | SueanyguarantorwithoutfirstsuingBorroweroranyotherpersonorpursuinganyother remedyavailabletoLender;or |
| (5) | Collectmoneyfromoneormoreguarantorsirrespectiveofanyrealorpersonaldefenses thatBorrowermayhave. |
19. Lender'sExerciseofLender'sRights.EachrightgrantedtoLenderunderthisnoteisseparatefromallotherrightsgrantedtoLender.LendermayexerciseLender'srightsone at
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atime,allatonce,ornotatall.Lender'sdecisionnottoexerciseaparticularrightwillnotbe deemed tobeLender's waiver of theunexercised right.
20. CollectionExpenses.Lendermayhireorpaysomeoneelsetohelpcollectonthis noteorrecovertheCollateralfromBorrowerwhenan Event ofDefault occurs.Borrower shall pay allexpensesthat Lender incursin connection with collection or recoveryof theCollateral.
21. LitigationExpenses.Inanyjudicial,administrative,orarbitrationaction,suit, claim,investigation,orproceedingarisingoutofthisnote, the non-prevailing party shall pay the prevailingparty'scourt filing fees, court costs,arbitration fees,witnessfees, and attorneys' and otherprofessionals' fees and disbursements.
22. Notices.(a)ExceptinthecaseofnoticesandothercommunicationsthatLender expresslypermitsBorrowertogiveinanothermanner,fora noticeorother communication under thisagreementtobevalid, itmustbe inwritinganddelivered:(1) inperson; (2) byreliable overnight courier, with all fees prepaid; or(3) byUnitedStates registered or certified mail, return receiptrequested,withpostageprepaid.
(b) Avalidnoticeorothercommunicationunderthisagreementwillbe effectivewhenitisreceivedbythepartytowhichitis addressed. A noticewillbedeemed to have been received as follows:
| (1) | ifthenoticeisdeliveredinperson,deliveredbyreliableovernightcourier,withallfees prepaid,ordeliveredbyUnitedStatesregisteredorcertified mail, return receiptrequested andpostage prepaid, upon receipt asindicated bythe dateon the signed receipt; |
| (2) | ifapartytowhichthenoticeisaddressedreceivesthenoticeorothercommunicationafter5:00p.m.ona business day atthe location specifiedin the addressforthatparty,orona day that isnotabusiness day, thenthe notice will bedeemed received at 9:00a.m.on the next business day;and |
| (3) | ifthepartytowhichthenoticeisaddressedrejectsorotherwiserefusestoacceptthat notice,orifthenoticecannotbe deliveredbecause ofa change inaddress forwhichno noticewasgiven,thenuponthat rejection, refusal,orinabilitytodeliver. |
(c) Foranoticeorothercommunicationtoapartyunderthisagreementtobe valid,itmustbeaddressedusingtheinformation specifiedbelow for thatparty oranyother information specified by thatpartyin accordancewiththissection 22.
ToBorrower: IslandVistas,LLC
69-201 WaikoloaBeachDr.,Ste. 2617
Waikoloa,HI96738ATTN:RobertKistler
Email:rkistlerl@gmail.comTel:(808)886-1702
Fax:(808)443-0145
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ToLender: WhalesPointFund,LLP
91AvenidaDelMar,3rdFloor SanClemente,CA92672ATTN:RumikoYoneyamaEmail:rumi@koaconsultants.cnTel:(949) 542-8777
Fax:(949)542-8781
(d) ForBorrower'sconvenience,LendermaypermitBorrowertoprovide noticesbytelephone,fax,oremail.UnlessLenderbehaves recklessly with regard toany notice provided to Lenderby telephone,fax,or email,Lendermay rely on the authority of any Person purportingto be a Personauthorizedby Borrower to give that notice andLender will notbe liable to Borrower or otherPerson because of any action taken or not takenbyLender inreliance upon any telephonic,facsimile,or emailnotice. Lender's failureto receivewrittenconfirmation of any telephonic, facsimile, oremail notice orreceipt byLender of valid noticein accordance with section 22(b) that varieswiththe provisions understoodbyLender tobecontained inany telephonic,facsimile, or email notice will notaffectBorrower's obligationto repaythe TermLoanor Borrower's performance or observanceoftheprovisions of thisagreement or the other Loan Documents.
23. WaiversandAmendments.NofailureordelaybyLenderinexercisinganyright orpowerunderthisnoteor underanyotherLoan Document, andno course ofdealingbetween Borrower andLender, will operate as a waiver ofany provision ofthisnoteor theotherLoan Documents,norwillanysingle or partial exerciseofany such rightor poweror anyabandonment or discontinuance ofsteps toenforcesuchrightor power,preclude any other or furtherexercise of those rightsor powersor theexercise of any other right or powerunderthis note or under this note. Nowaiverof any provision ofthisnote oranyotherLoan Document or consent toanydeparture by Borrowerfrom thosedocumentswillbe effective unlesstheamendment or waiver is in writing, signed byBorrower andLender, andanysuch waiver or consent will be effectiveonly inthe specific instanceandforthespecific purpose for whichgiven.
24. SuccessorsandAssigns.(a)Theprovisionsofthisnotearebindinguponandinure tothebenefitofBorrowerandLenderandtheir respective successors and assigns. Borrower shall notassign or transferany rightor obligationestablished by this notewithout Lender 's prior written consent (which Lender may withholdfor anyreason). Any attempted assignmentor transfer in violation ofthis section 24 will be void.
(b) LendermayassignalloraportionofLender'srightsandobligationsunder thisnoteandtheother Loan Documents to oneor more assignees.
| 25. | GoverningLaw.ThelawsoftheStateofHawai'i,withoutgivingeffectto |
Hawai'i'sprincipalsofconflictsoflaw,willgoverninterpretationofthisnoteandtheotherLoan Documents.
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26. Jurisdiction.Borrowerherebyirrevocablyandunconditionally submits,foritself anditsproperty,tothenon-exclusivejurisdictionofoneormorefederalorstate courtslocated in the State of Hawai'i,Countyof Hawai'i andanyappellatecourt in the State of Hawai'i,in any actionor proceeding arising outthisnote,anyotherLoan Document, or the transactions contemplated in thisnoteor otherLoan Documents, or for recognition or enforcementofany judgment. Borrowerirrevocably and unconditionally agreethatall claimswithrespecttoanysuch action or proceeding may be heard and determined in suchHawai 'i statecourtor, totheextent permittedby law, federalcourt.A final judgment inany action orproceedinginitiated ina permitted court will beconclusiveandmay be enforced in other jurisdictions bysuit on the judgment orin anyother manner provided by law. Nothing inthis noteorany otherLoan Document affects anyrightthat Lender may otherwisehave to bring anyactionor proceeding relatingto thisnote or anyother LoanDocumentagainstBorrower any Loan Party in thecourtsof anyother jurisdiction.
27. Venue.Borrowerirrevocablyandunconditionallywaives,tothefullestextentpermittedbylaw,everypast,present,andfutureobjection tothedefenseof an inconvenient forum or anyother defensethe maintenanceofany actionor proceeding in one ormore federal orstate courtslocated in the Stateof Hawai'i, County of Hawai'i and anyappellate court in the Stateof Hawai'i.
28. ConsenttoServiceofProcess.Borrowerirrevocablyconsentsthatserviceofprocessforanyactionmaybemade in any manner expressly permitted in section 22. Nothing in thisnoteor in any otherLoanDocument affects Lender'srighttoserve processin anyother manner permittedby law.
29. WaiverofJuryTrial.Borrowerirrevocablywaives,tothefullestextentpermitted bylaw,anyrightthatBorrower mayhavetoajury trialinanyproceeding arisingdirectly or indirectlyarisingout of thisnote, any otherLoan Document, or thetransactionscontemplated by thisnoteor theLoan Documents, regardlessof whether theproceeding is oneof contract, tort,or any otherlegal theory. Borrowerhereby:
| (1) | Representsthatnorepresentative,agent, orattorneyofanypartyhasrepresented,expressly orotherwise,thatLenderwouldnot,intheeventoflitigation,seek toenforcethiswaiver; and |
| (2) | AcknowledgesthatBorrowerwasnotinducedtoenterintothisnoteby,amongother things,thewaiversembodiedinthissection29. |
30. EntireAgreement.Thisnote,togetherwiththeotherLoanDocuments,andoneor moreotherdocumentsrelatingtoanyfeespayable toLenderconstitutes theentire agreement among Borrower andLenderregarding the subject matterofthisnoteandthe TermLoanAgreement. These documents, together, supersedeallprioragreementsandunderstandings, written or oral,regarding the subject matterofthis note andthe TermLoanAgreement.Thereareno otherunwritten oral agreements Borrower andLender.
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31. Severability. Ifanyprovisionofthisnoteorany otherLoanDocumentisheldto beillegal,invalid,orunenforceablein any jurisdiction, that provision will,as tothat jurisdiction, be ineffectivetothe extent of the illegality,invalidity,orunenforceability,withoutaffecting the legality, validity,or enforceability of the remainingprovisions ofthis note or any otherLoan Document.The illegality,invalidity,orunenforceability ofa particularprovision ina particular jurisdiction willnot invalidateor render unenforceable that provision in anyother jurisdiction.
32. PatriotAct.LenderherebygivesnoticetoBorrowthat,pursuanttothe requirementsoftheUSAPATRIOTAct(TitleIIIofPub.L.107-56 (signed intolaw October26, 2001)) (the "Patriot Act"),Lender may berequiredto obtain,verify and record information that identifies Borrower, including Borrower'sname andaddress and other information that will allow Lender to identifyBorrower in accordancewith the Patriot Act.Borrower shallprovide to Lender, totheextent commerciallyreasonable, all requiredinformation and take all other actionsthat Lender reasonably requestsin order toenableLender to maintaincompliance with thePatriot Act.
33. Conflicts.IfanyprovisionofthisnoteconflictswithanyprovisionoftheTermLoanAgreement,theprovisionsof theTerm LoanAgreementwill prevail.
34. EffectiveDate.ThisnotewillbeeffectiveonthatdatethatBorrowersignsit(as indicatedbythedateassociatedwithBorrower'ssignature).
BorrowerissigningthispromissorynoteonthedatestatedoppositeBorrower'ssignature.
Dated: 09/30/16
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