SECURED PROMISSORY
NOTE


 


Principal Amount:


$34,000,000.00


WAIKOLOA,
HI


September 30, 2016


 


1.                   
Promise to
Pay.ISLAND VISTAS,
LLC, a Nevada
limited liability company, ("Borrower"),
promises to pay
to the order
of WHALES POINT FUND, LLP, a Delaware limited liability partnership ("Lender"),
the principal sum of $34,000,000.00, or the
actual amount that Lender actually advances to Borrower under
the Term Loan Agreement, in lawful money of the
United States, on or before the Maturity Date, together with Interest on the
unpaid principal balance.


 


2.                    
Term Loan
Agreement. Borrower is
making this note
in connection with
the Term
Loan Agreement.


 


3.                    
Definitions. The
following words used
in this note
have the definitions
stated below:


 


		(1)	"Business Day"
means any day
other than a
Saturday, Sunday or
other day on
which commercial banks in
Hawai 'i are
authorized or required by law to
close.



 


		(2)	"Contract Rate"
means 6.0% interest
per annum.



 


		(3)	"Default"
means any condition
or event that,
with the giving
of notice or
the lapse of
time or both, will
constitute an Event
of Default under section 8.1 of
the Term Loan Agreement.



 


		(4)	"Default Rate" means
10.0% interest per
annum.



 


		(5)	"EB-5
Investor" means each
individual investor who
has provided the
requisite documentation necessary to
subscribe to the
offering conducted by Lender pursuant
to the terms of the EB-5
Program with respect to the
Project.



 


		(6)	"EB-5
Program" means USCIS's
Immigrant Investor Program,
as provided in
the Immigration and Nationality
Act, § 203(b)(5)
(8 U.S.C §1152(b)(S)), as amended, and implementing
Title 8 CFR § 204.6(m), as amended.



 


		(7)	"Event
of Default" has
the meaning given
in section 8.1
of the Term
Loan Agreement;




 


		(8)	"Interest Rate"
means: (1) the
Contract Rate, prior
to the earliest
occurrence of an
Event of Default or
the Maturity Date; and (2) the Default
Rate subsequent to the
occurrence of the earlier of an Event of
Default or the Maturity date.


 





		(9)	"Loan Document"
means collectively, this
note, the Term
Loan Agreement, the
Mortgage, the Guaranty
Agreement, the Pledge
Agreement, the Assignment of Sales and
Contracts and Proceeds, the Environmental Indemnity Agreement, and
all other instruments, agreements, documents, and
writings executed in connection with any of the foregoing.





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		(10)	"Maturity
Date" means the
fifth anniversary of
the Effective Date
of the Term
Loan Agreement.



 


		(11)	"Prior
Advance" means a
sum of money
equal to $1,000,000.00,
attributable to approved EB-5
Investors, that Lender
advanced to Borrower
for use in connection with
the Project, prior to the effective date of this
note.



 


		(12)	"Project"
means the 48
luxury condominium villas
on certain real
property located at Waikoloa,
South Kohala, Island,
County and State of Hawai'i to be
developed by Borrower.



 


		(13)	"Subscription Amount"
means, with respect
to each EB-5
Investor, $500,000.



 


		(14)	"Term
Loan Agreement" means
the loan agreement
between Borrower and
Lender made in connection
with this note.



 


		(15)	"Term
Loan Tranche" means
a disbursement of
funds from Borrower
to Lender pursuant to
the provisions of
this note and
the Term Loan Agreement.



 


		(16)	"Trust
Account" means the
deposit account identified
in the trust
agreement into which the
Subscription Amount of
each EB-5 Investor
is held pending the filing of that
investor's I-526 Petition with USCIS, as
more fully stated in
the trust agreement.



 


4.                    
The Prior
Advance. On the
effective date, the
Prior Advance will
be deemed to be a
part of the
sums due under
this note and
will be subject
to all of the provisions of this
note. Lender's obligation to advance one
or more Term Loan Tranches is hereby
reduced by an amount of money equal to the
Prior Advance.


 


5.                    
Payment of
Interest. Borrower shall
pay simple interest
on each Term
Loan Tranche (and
the Prior Advance) at the Contract
Rate. Interest will be due and payable
quarterly, in arrears. With
respect to each Term Loan Tranche, interest will
accrue from the time
a particular Term Loan
Tranche is advanced to or for Borrower's
benefit pursuant to the provisions of this
note.


 


6.                    
Computation of
Interest and Fees.
All computations of
interest and fees
under this note will
be made on
the basis of
a year of
360 days and in
each case for
the actual number of days (including
the first day but excluding
the last day (actual/360) occurring in the
period for which such interest or
fees are payable (to the extent computed on the
basis of days elapsed).
Each determination by Lender of an interest amount
or fee under this note will be made in
good faith and, except for manifest error, will
be final, conclusive, and binding on Borrower.


 


7.                    
Prepayments and
Prepayment Prohibition. (a)
Borrower acknowledges that
all loan fees and
other prepaid finance
charges are earned on the
day that Borrower signs this note,
and that Lender will not refund these
sums if Borrower prepays some or all
of the sums due under this
note, unless required by law.




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(b)              
Borrower shall
not prepay any
part of the
sums advanced under
this note prior to
the Maturity Date.
Borrower acknowledges that
the funds Lender
is providing to Borrower are funds obtained
through the EB-5 program, and that the EB-5
program requires that an investor's funds
be "at-risk" for
the duration of the EB-5 program. As such,
Borrower acknowledges that attempts to pre-pay
sums advanced under this note will likely
jeopardize Lender's relationship with Lender's investors.
As such, Lender shall not to attempt to
prepay sums advanced pursuant to this
note and the Term Loan Agreement. Any
prepayments made in violation of this
section 7 will be void.


 


(c)              
Borrower shall
not send Lender
any payments marked
"paid in full", "without
recourse", or with
any similar language.
If Borrower sends
such a payment to Lender, Lender
may accept that payment
without losing any of
Lender's rights under this note, the
"paid" in full" and "without recourse" language will be ineffective, and Borrower will remain obligated
to pay all sums due under this note.


 


8.                    
Manner of
Payment. Borrower shall
make each payment
required to be
made under this note
(whether of principal,
interest, fees, or
of other amounts
payable under this
note) prior to 2:00
p.m. CST, on the date when due, in
immediately available funds, without
set-off or counterclaim. Any
amounts received after such
time on any date
may, in Lender's discretion,
be deemed to have been received on
the next succeeding
Business Day for purposes of calculating
interest on that payment.
Borrower shall make all such payments
to Lender either at its Payment Office or by electronic
transfer from Borrower's operating
account. If any payment under this note
becomes due on a day that is not
a Business Day, the date for that
payment will be extended to the next
Business Day, and, in the case of
any payment accruing interest, interest on that payment
will be due for the period of
the extension.


 


9.                    
Repayment of
the Indebtedness. Subject
to any extensions,
Borrower shall repay the
principal amount of
all sums advanced
under this note,
together with all
accrued and unpaid interest, on the Maturity Date.
Borrower shall pay Lender at Lender's
address stated in section 22, or at
another place that Lender designates
in writing.


 


10.                  
Interest after
Default. Upon an
Event of Default,
including Borrower's failure
to make the final
payment due under
this note, the interest rate on
this note will automatically, and
without notice required from Lender, increase
to 10% annual interest. The increased
interest rate will apply on the day
after the occurrence of an Event of
Default.


 


11.                  
Extension of
the Maturity Date.
Borrower may, not
more than one
time, by delivering a
written notice to
Lender no earlier than
60 days and no later than 30 days prior to the Maturity
Date, request that
Lender extend the Maturity Date for an
additional 12 calendar months. Lender may, in its
sole discretion, grant Borrower's request
for this one-year extension, but
only if, as of the first
day of the proposed one-year extension,
Borrower is not in Default and no Event of Default
exists. The Interest Rate during any extension
will be the Default Rate. If Lender
grants the extension, Borrower shall pay Lender's
costs and expenses including
legal fees, arising out
of the extension.




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12.                  
Collateral. This
note is secured
by the Collateral
described in the
Term Loan
Agreement.


 


13.                  
Interest Rate
Limitation. If, for
any reason, the
fulfillment of any
provisions of this note
or of any other document signed
in connection with
this note, at the time performance of such provision, causes the
interest rate of this note to
exceed the maximum rate permitted by law, the
obligation to be fulfilled
will be reduced to the maximum rate permitted
by law.


 


		14.	Events of Default.
The occurrence of
any Event of
Default as defined
in Article 8



of the
Term Loan
Agreement will be
deemed to be
an Event of
Default under this
note.


 


15.                 
Effect of
an Event of
Default. Upon occurrence
of an Event
of Default, Lender may
declare the entire
unpaid balance plus
all accrued unpaid
interest immediately due, and Borrower must pay
this amount. In addition, Lender
may exercise any other
right or remedy granted by
any other Loan Document with
respect to an Event
of Default.


 


16.                  
Recovery of
Returned Payments. If
Lender must return
to Borrower any payment previously
applied to Borrower's
obligations under this
note because of a voidable preference under the Bankruptcy Code
or for any other reason, Borrower and any
guarantor of this note will remain
liable for the full amount returned.
Borrower and every
guarantor of this note will remain
liable for the returned sum as though
Lender had never received it.


 


17.                 
Borrower's Waivers.
Borrower and any
other person who
signs, guarantees, or
endorses this note
hereby waives presentment
for payment, demand for payment,
and notice of dishonor.


 


18.                  
Lender's Rights.
Lender may exercise
the following rights
without giving notice
to anyone, getting
consent from anyone,
or releasing anyone from the
obligation to pay the full amount of this note:


 


		(1)	Reduce the amount
of or delay
the due date
of any payment
due under this
note;



 


		(2)	Extend,
renew, or change any
other provision of
this note in
a manner that
is fair to Borrower;



 


		(3)	Release any security,
including one or
more co-guarantors;



 


		(4)	Sue any
guarantor without first
suing Borrower or
any other person
or pursuing any
other remedy available to
Lender; or



 


		(5)	Collect money
from one or
more guarantors irrespective
of any real
or personal defenses that
Borrower may have.



 


19.                  
Lender's Exercise of
Lender's Rights. Each
right granted to
Lender under this
note is separate
from all other
rights granted to
Lender. Lender may
exercise Lender's rights
one at




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a
time, all at
once, or not
at all. Lender's
decision not to
exercise a particular
right will not
be deemed to be Lender's waiver of
the unexercised right.


 


20.                  
Collection Expenses.
Lender may hire
or pay someone
else to help
collect on this note
or recover the
Collateral from Borrower
when an Event of Default occurs.
Borrower shall pay all expenses that
Lender incurs in connection with collection or recovery
of the Collateral.


 


21.                  
Litigation Expenses.
In any judicial,
administrative, or arbitration
action, suit, claim, investigation,
or proceeding arising
out of this
note, the non-prevailing party shall pay the prevailing party's
court filing fees, court costs, arbitration fees,
witness fees, and attorneys' and other
professionals' fees and disbursements.


 


22.                  
Notices. (a)
Except in the
case of notices
and other communications
that Lender expressly permits
Borrower to give
in another manner,
for a notice or
other communication under this agreement
to be valid, it
must be in writing
and delivered: (1) in
person; (2) by reliable overnight courier, with all fees prepaid; or
(3) by United States registered
or certified mail, return receipt requested, with
postage prepaid.


 


(b)              
A valid
notice or other
communication under this
agreement will be effective
when it is
received by the
party to which
it is addressed. A notice will
be deemed to have been received as follows:


 


		(1)	if the notice
is delivered in
person, delivered by
reliable overnight courier,
with all fees prepaid,
or delivered by
United States registered
or certified mail, return receipt requested
and postage prepaid, upon receipt as indicated
by the date on the signed receipt;



 


		(2)	if a
party to which
the notice is
addressed receives the
notice or other
communication after 5:00
p.m. on a business day at
the location specified in the address for
that party, or
on a day that is not
a business day, then the notice
will be deemed received at 9:00 a.m.
on the next business day; and



 


		(3)	if the
party to which
the notice is
addressed rejects or
otherwise refuses to
accept that notice, or
if the notice
cannot be delivered because of
a change in address for which
no notice was given,
then upon that rejection, refusal,
or inability to
deliver.



 


(c)               
For a
notice or other
communication to a
party under this
agreement to be valid,
it must be
addressed using the
information specified below for that party
or any other information specified by that
party in accordance with
this section 22.


 


To
Borrower:Island Vistas, LLC


69-201 Waikoloa
Beach Dr., Ste. 2617


Waikoloa,
HI 96738 ATTN:
Robert Kistler


Email:
rkistler l @gmail.com Tel:
(808) 886-1702


Fax: (808)
443-0145




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To
Lender:Whales Point Fund,
LLP


91
Avenida Del Mar,
3rd Floor San Clemente,
CA 92672 ATTN:
Rumiko Yoneyama
Email: rumi@ koaconsultants.cn
Tel: (949) 542-8777


Fax: (949)
542-8781


 


(d)              
For Borrower's
convenience, Lender may
permit Borrower to
provide notices by telephone,
fax, or email.
Unless Lender behaves recklessly
with regard to any notice provided to Lender by
telephone, fax, or email,
Lender may rely on the authority of any Person purporting
to be a Person authorized by Borrower
to give that notice and Lender will not be
liable to Borrower or other Person because of any action taken or not taken
by Lender in reliance upon any telephonic,
facsimile, or email notice. Lender's
failure to receive written
confirmation of any telephonic, facsimile, or email notice or
receipt by Lender of valid notice in
accordance with section 22(b) that varies with the
provisions understood by Lender to
be contained in any telephonic,
facsimile, or email notice will not affect
Borrower's obligation to repay the
Term Loan or Borrower's performance or observance
of the provisions of this
agreement or the other Loan Documents.


 


23.                  
Waivers and
Amendments. No failure
or delay by
Lender in exercising
any right or power
under this note
or under any other
Loan Document, and no course of dealing
between Borrower and Lender, will operate as a waiver of
any provision of this note
or the other Loan Documents,
nor will any
single or partial exercise of any
such right or power or any
abandonment or discontinuance of steps to
enforce such right
or power, preclude any other or further
exercise of those rights or powers or
the exercise of any other right or power under
this note or under this note. No waiver of
any provision of this note or
any other Loan Document or consent
to any departure by Borrower
from those documents will
be effective unless the amendment
or waiver is in writing, signed by Borrower and
Lender, and any such waiver or consent
will be effective only in the specific instance
and for the
specific purpose for which given.


 


24.                  
Successors and
Assigns. (a) The
provisions of this
note are binding
upon and inure to
the benefit of
Borrower and Lender
and their respective successors and assigns. Borrower shall not
assign or transfer any right or obligation
established by this note without Lender 's prior written consent (which Lender
may withhold for any reason). Any attempted
assignment or transfer in violation of this
section 24 will be void.


 


(b)              
Lender may
assign all or
a portion of
Lender's rights and
obligations under this note
and the other Loan Documents to one
or more assignees.


 


		25.	Governing Law. The
laws of the
State of Hawai'i,
without giving effect
to



Hawai
'i's principals of
conflicts of law,
will govern interpretation
of this note
and the other
Loan Documents.




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26.                  
Jurisdiction. Borrower
hereby irrevocably and
unconditionally submits, for itself
and its property,
to the non-exclusive
jurisdiction of one
or more federal
or state courts located in the State
of Hawai'i, County of Hawai'i and
any appellate court in the State
of Hawai'i, in any action or proceeding
arising out this note,
any other Loan Document, or the
transactions contemplated in this note or
other Loan Documents, or for recognition or enforcement
of any judgment. Borrower irrevocably
and unconditionally agree that all claims
with respect to
any such action or proceeding may be heard and determined in such
Hawai 'i state court or, to
the extent permitted by law, federal
court. A final judgment in any action
or proceeding initiated in
a permitted court will be conclusive and
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in
this note or any other
Loan Document affects any right that
Lender may otherwise have to bring any action
or proceeding relating to this note
or any other Loan Document
against Borrower any Loan Party in the courts
of any other jurisdiction.


 


27.                  
Venue.
Borrower irrevocably
and unconditionally waives,
to the fullest
extent permitted by
law, every past,
present, and future
objection to the defense
of an inconvenient forum or any other defense
the maintenance of any action
or proceeding in one or more federal or
state courts located in the State of
Hawai'i, County of Hawai'i and any appellate court in the State
of Hawai'i.


 


28.                  
Consent to
Service of Process.
Borrower irrevocably
consents that service
of process for
any action may
be made in any manner expressly permitted in section 22. Nothing in this
note or in any other Loan
Document affects Lender's right to
serve process in any other manner
permitted by law.


 


29.                  
Waiver of
Jury Trial. Borrower
irrevocably waives, to
the fullest extent
permitted by law, any
right that Borrower may
have to a
jury trial in any
proceeding arising directly or indirectly
arising out of this note, any
other Loan Document, or the transactions
contemplated by this note or the
Loan Documents, regardless of whether the
proceeding is one of contract, tort, or
any other legal theory. Borrower hereby:


 


		(1)	Represents
that no representative,
agent, or attorney of
any party has
represented, expressly or otherwise,
that Lender would
not, in the
event of litigation,
seek to enforce this
waiver; and



 


		(2)	Acknowledges
that Borrower was
not induced to
enter into this
note by, among
other things, the waivers
embodied in this
section 29.



 


30.                  
Entire Agreement.
This note, together
with the other
Loan Documents, and
one or more other
documents relating to
any fees payable to
Lender constitutes the entire agreement
among Borrower and Lender regarding the subject
matter of this
note and the Term
Loan Agreement. These documents, together, supersede
all prior agreements
and understandings, written or oral, regarding
the subject matter of this note and
the Term Loan Agreement.
There are no other
unwritten oral agreements Borrower and Lender.




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31.                  
Severability. If any
provision of this
note or any other
Loan Document is
held to be illegal,
invalid, or unenforceable
in any jurisdiction, that provision will, as to
that jurisdiction, be ineffective to the
extent of the illegality, invalidity, or
unenforceability, without affecting
the legality, validity, or enforceability of the remaining
provisions of this note or any other Loan
Document. The illegality, invalidity,
or unenforceability of a particular
provision in a particular jurisdiction will
not invalidate or render unenforceable that provision in any
other jurisdiction.


 


32.                  
Patriot Act.
Lender hereby gives
notice to Borrow
that, pursuant to
the requirements of the
USA PATRIOT
Act (Title III
of Pub. L.
107-56 (signed into law October 26,
2001)) (the "Patriot Act"), Lender may be
required to obtain, verify and record
information that identifies Borrower, including Borrower's name and
address and other information that will allow Lender to identify Borrower in
accordance with the Patriot Act. Borrower shall
provide to Lender, to the extent
commercially reasonable, all required information
and take all other actions that Lender reasonably requests
in order to enable Lender to maintain
compliance with the Patriot Act.


 


33.                  
Conflicts. If
any provision of
this note conflicts
with any provision
of the Term
Loan Agreement, the
provisions of the Term Loan
Agreement will prevail.


 


34.                  
Effective Date.
This note will
be effective on
that date that
Borrower signs it
(as indicated by the
date associated with
Borrower's signature).


 


Borrower is
signing this promissory
note on the
date stated opposite
Borrower's signature.


 


 


 


Dated:09/30/16


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