PROMISSORY NOTE
[SATISFACTION: The debt evidenced by this Note has been
satisfied in full as of __________________, ______
Signed: __________________________________________]
Mooresville, North Carolina
$ 428,105.90
December 30, 2004
FOR VALUE RECEIVED the undersigned, jointly and severally, promise to
pay to INTERFUND MORTGAGE CORP., a Florida corporation, or order, the principal
sum of FOUR HUNDRED TWENTY-EIGHT THOUSAND ONE HUNDRED FIVE AND 90/100 DOLLARS
($428,105.90), with interest from the date hereof, at the rate of ten per cent
(10%) per annum on the unpaid balance until paid or until default, both
principal and interest payable in lawful money of the United States of America,
at the office of Interfund Mortgage Corp., 7100 West Camino Real Blvd., Suite
402, Boca Raton, Florida 33433, or at such place as the legal holder hereof may
designate in writing. It is understood and agreed that additional amounts may be
advanced by the holder hereof as provided in the instruments, if any, securing
this Note and such advances will be added to the principal of this Note and will
accrue interest at the above specified rate of interest from the date of advance
until paid. The principal and interest shall be due and payable as follows:
If not sooner paid, the entire indebtedness (both principal and accrued
interest) shall be due and payable in full on December 30, 2006. In the
event the maker makes any prepayment, in whole or in part, of this
Note, such prepayment must include and be accompanied by a payment of
the interest that has accrued through the date of such prepayment and
that would have accrued through December 30, 2006, applicable to the
amount of principal being prepaid, and it is specifically understood
and agreed that the holder's obligation to accept, and the maker's
right to make, any prepayment under this Note is expressly conditioned
upon the payment of all of said interest with the prepayment of any
principal.
This Note may not be prepaid in full or in part at any time unless
accompanied by the interest payment applicable thereto, as specified above.
If payable in installments, each such installment shall, unless
otherwise provided, be applied first to payment of interest then accrued and due
on the unpaid principal balance, with the remainder applied to the unpaid
principal. If any payment received by the holder under this Note is rescinded,
avoided or for any reason returned by the holder because of any adverse claim or
threatened action, the returned payment shall remain payable as an obligation of
all persons liable under this Note as though such payment had not been made.
Interest and fees, if any, shall be computed on the basis of a 360-day
year for the actual number of days in the applicable period, which means taking
the stated (nominal) rate for a year's period and then dividing said rate by 360
to determine the daily periodic rate to be applied for each day in the
applicable period. The application of this method of interest computation
produces an annualized effective rate that exceeds the nominal rate. If at any
time the effective interest rate under this Note would, but for this paragraph,
exceed the maximum lawful rate, the effective interest rate under this Note
shall be the maximum lawful rate, and any amount received by the holder in
excess of such rate shall be applied to principal and then to fees and expenses,
or, if no such amounts are owing, returned to the maker.
The undersigned promises to pay to the holder, or order, on demand a
late fee in the amount of four percent (4%) of any payment that is past due for
fifteen (15) or more days.
In the event of
(a) default in payment of any installment of principal or interest
hereof as the same becomes due and such default is not cured within
five (5) days from the due date, or
(b) default under the terms of any instrument securing this Note,
and such default is not cured within fifteen (15) days after written
notice to maker, or
(c) default by the undersigned under the terms of the Builder
Purchase and Sale Agreement between the undersigned as "Builder" and
The Farms, LLC as "Seller" dated as of December 17, 2004 (which is
incorporated herein by reference), relating to the sale and purchase of
certain real property as described in the Deed of Trust given as
security for this Note, specifically including, without limitation, the
failure of D. S. Rushing, Inc. to be admitted to, and remain at all
times in good standing under, the "Featured Builder Program at the
Farms", as defined and described in said Builder Purchase and Sale
Agreement, or
(d) the failure of the undersigned to have commenced construction
(which shall mean having obtained approval of final plans by any
applicable architectural review committee, having obtained a building
permit, and having completed the footings for the residential dwelling)
of at least four (4) residential dwellings by December 30, 2005, and of
(3) additional residential dwellings (for a total of seven (7)) by June
30, 2006, on the seven (7) residential lots acquired by the undersigned
under the Builder Purchase and Sale Agreement described above,
then in any such event the holder may without further notice, declare the
remainder of the principal sum, together with all interest accrued thereon and,
the additional interest or prepayment premium, if any, at once due and payable.
Failure to exercise this option shall not constitute a waiver of the right to
exercise the same at any other time. The unpaid principal of this Note and any
part thereof, accrued interest and all other sums due under this Note and the
Deed of Trust, if any, shall bear interest at the rate of eighteen per cent
(18%) per annum after default until paid.
All parties to this Note, including maker and any sureties, endorsers,
or guarantors hereby waive protest, presentment, notice of dishonor, and notice
of acceleration of maturity and agree to continue to remain bound for the
payment of principal, interest and all other sums due under this Note and the
Deed of Trust notwithstanding any change or changes by way of release,
surrender, exchange, modification or substitution of any security for this Note
or by way of any extension or extensions of time for the payment of principal
and interest; and all such parties waive all and every kind of notice of such
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change or changes and agree that the same may be made without notice or consent
of any of them.
Upon default the holder of this Note may employ an attorney to enforce
the holder's rights and remedies and the maker, principal, surety, guarantor and
endorsers of this Note hereby agree to pay to the holder reasonable attorneys
fees not exceeding a sum equal to fifteen percent (15%) of the outstanding
balance owing on said Note, plus all other reasonable expenses incurred by the
holder in exercising any of the holder's rights and remedies upon default. The
rights and remedies of the holder as provided in this Note and any instrument
securing this Note shall be cumulative and may be pursued singly, successively,
or together against the property described in the Deed of Trust or any other
funds, property or security held by the holder for payment or security, in the
sole discretion of the holder. The failure to exercise any such right or remedy
shall not be a waiver or release of such rights or remedies or the right to
exercise any of them at another time.
This Note is to be governed and construed in accordance with the laws
of the State of North Carolina.
This Note is given to evidence a loan made for the acquisition of real
property, and is secured by a deed of trust of even date which is a first lien
upon the property therein described.
Any notices to the undersigned shall be sufficiently given if in
writing and mailed or delivered to the undersigned's address shown below or such
other address as provided hereunder, and to the holder if in writing and mailed
or delivered to the holder at the address for payments as provided herein above,
or such other address as the holder may specify in writing from time to time. If
the undersigned changes its address at any time, the undersigned shall promptly
give written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid.
The undersigned shall promptly pay all documentary, intangible
recordation and/or similar taxes on this transaction whether assessed at closing
or arising from time to time.
IN TESTIMONY WHEREOF, each corporate maker has caused this instrument
to be executed in its corporate name by its President, and its corporate seal to
be hereto affixed, all by order of its Board of Directors first duly given, the
day and year first above written.
D. S. RUSHING, INC.,
a North Carolina corporation
By: /s/ DAVID S. RUSHING
----------------------------------------
David S. Rushing, President
(Corporate Seal)
Address for notices: 221 Beracah Road,
Mooresville, NC 28115
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