Exhibit 10.2


 





PROMISSORY NOTE


 


	Borrower:	
        Southeastern Land Developers,
        LLC

        6350 Lake Oconee Parkway,
        STE 102, PMB 103

        Greensboro, GA 30642
	Lender:	
        Shepherd’s Finance, LLC

        12627 San Jose Boulevard

        Suite 203

        Jacksonville, FL 32223

        (302) 752-2688



 

	Principal Amount:  $1,050,000.00	Initial Rate:   9.85%	Date of Note:  June 20, 2014


 


PROMISE TO PAY.
Southeastern Land Developers, LLC ("Borrower") promises to pay to Shepherd’s Finance, LLC ("Lender"),
or order, in lawful money of the United


 


+6+ States of America,
on demand, but in no event later than June 30, 2016 (“Maturity Date”), the principal amount of One Million Fifty Thousand
and 00/100 Dollars ($1,050,000.00) or so much as may be advanced under the Loan Documents from time to time, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until
repayment of each advance. Lender shall disburse the funds in accordance with the Construction Loan Agreement and other Loan Documents.


 


PAYMENT. Borrower
will make payments of principal and interest on this loan on demand, and as otherwise provided in that certain Credit Agreement
by and between Borrower and Lender dated of even date herewith (the "Credit Agreement"). Unless otherwise agreed or
required by applicable law, payments will be applied first to any unpaid collection costs; then to any late charges; then to any
accrued unpaid interest; and then to principal. Borrower will pay Lender at Lender's address shown above or at such other place
as Lender may designate in writing.


 


VARIABLE INTEREST
RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which
is the Shepherd’s Finance, LLC Cost of Funds plus the Rate Adder. Lender’s Cost of Funds (the "Index"),
shall mean the greater of five percent (5.0%) or the weighted average price paid by Lender on or in connection with all of its
borrowed funds. Such weighted average price shall include interest rates, loan fees, legal fees and any and all other costs paid
by Lender on its borrowed funds, and, in the case of funds borrowed by Lender from an Affiliate of Lender, the weighted average
price paid by such Affiliate on or in connection with such borrowed funds. Lender’s Cost of Funds is determined each month
at the beginning of the month, based on the cost of funds for the previous month. Each change in such rate shall be effective
as of the beginning of the month. The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower
the current Index rate upon Borrower's request. The interest rate change will not occur more often than each change in the Index.
The interest rate on the Loan will be adjusted contemporaneously with changes in the Index. Borrower understands that Lender may
make loans based on other rates as well. The Index currently is 7.850% per annum. Interest on the unpaid principal balance
of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate equal to the
percentage points over the Index, as set forth in the Rate Adder below, adjusted if necessary for any minimum and maximum rate
limitations described below, resulting in an initial rate of 9.850% per annum. NOTICE: Under no circumstances will the interest
rate on this Note be less than 7.000% per annum or more than the maximum rate allowed by applicable law.


 


“Rate Adder”
shall be calculated each month, based on the number of full months since the Closing Date.


 


	
        Number of full months
        since

        Closing Date
	Rate Adder
	1-12	2%
	13 and greater	7%


 


INTEREST CALCULATION METHOD. Interest
on this Note shall be computed as provided in the Credit Agreement.


 


PREPAYMENT.
Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not
be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except
for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments
will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked
"paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept
it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates
that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations
or as full satisfaction of a disputed amount must be mailed or delivered to: Shepherd’s Finance, LLC, 12627 San Jose Boulevard,
STE 203, Jacksonville, FL 32223.


 






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INTEREST AFTER
MATURITY OR DEFAULT. Interest on this Note shall be computed as provided in the Credit Agreement.


 


DEFAULT. Each
of the following shall constitute an event of default ("Event of Default") under this Note:


 


Payment
Default. Borrower fails to make any payment when due under this Note, and such default shall continue ten (10) consecutive
days.


 


Other
Defaults. Borrower defaults in the performance or observance of any term , obligation , covenant , condition , agreement or
duty contained in this Note, the Credit Agreement or any of the Related Documents or defaults in the performance or observance
of any term, obligation, covenant, condition, agreement or duty contained in any other agreement between Lender and Borrower.


 


False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under
this Note, the Credit Agreement, or any of the Related Documents is false or misleading in any material respect, either now or
at the time made or furnished or becomes false or misleading at any time thereafter.


 


Death
or Insolvency. The dissolution of Borrower or any guarantor (regardless of whether election to continue is made), any member
withdraws from the limited liability company , or any other termination of Borrower's or any guarantor's existence as a going
business or the death of any member or guarantor, including, without limitation, Vincent T. Zadjeika, the insolvency of Borrower
or any guarantor , the appointment of a receiver for any part of Borrower's or any guarantor's property, any assignment for the
benefit of creditors, any type of creditor workout , or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower or any guarantor.


 


Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or an affiliate of Borrower which is or which shall become obligated
to Lender in connection with the loan or otherwise (an "Obligated Affiliate"), or by any governmental agency against
any property securing the loan. This includes a garnishment of any of Borrower's or an Obligated Affiliate's accounts , including
deposit accounts, with Lender . However, this Event of Default shall not apply if there is a good faith dispute by Borrower or
an Obligated Affiliate as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding
and if Borrower or an Obligated Affiliate gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion
, as being an adequate reserve or bond for the dispute.


 


Events
Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor of any of the indebtedness or any guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced
by this Note.


 


Adverse
Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.


 


Event of Default under the Credit Agreement or any Loan Document. The occurrence of
an Event of Default (as such term is defined in the Credit Agreement) under the terms of the Credit Agreement or the occurrence
of a default or Event of Default (as such term is defined in any Loan Document) under any Loan Document (as such term is defined
in the Credit Agreement).


 


LENDER'S RIGHTS.
Upon Lender's demand, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.


 


ATTORNEYS' FEES;
EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and appeals. Lender may also recover from Borrower all
court, alternative dispute resolution or other collection costs (including, without limitation, fees and charges of collection
agencies) actually incurred by Lender.


 


JURY WAIVER.
Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender
or Borrower against the other.


 


GOVERNING LAW.
This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of Georgia without regard to its conflicts of law provisions. This Note has been given by Borrower and accepted by Lender
in the State of Georgia.


 


CHOICE OF VENUE.
If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Greene County,
State of Georgia.


 






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COLLATERAL.
Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: an
Deed to Secure Debt dated June 20, 2014, to Lender on real property located in Greene County, State of Georgia.


 


LINE OF CREDIT.
This Note evidences a straight line of credit. Once the total amount of principal has been advanced, Borrower is not entitled
to further loan advances. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of
an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs.


 


SUCCESSOR INTERESTS.
The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and assigns.


 


GENERAL PROVISIONS.
If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice
to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than
the party with whom the modification is made. The obligations under this Note are joint and several.


 


PRIOR TO SIGNING
THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE.


 


BORROWER ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


 


THIS NOTE IS
DELIVERED UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING
TO LAW.


 


BORROWER:


 


Southeastern
Land Developers, LLC


 


By: /s/ Charles
R. Rich                                         


Charles
R. Rich, Manager of Southeastern Land Developers, LLC


 






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