ex10-3.htm


    Exhibit
10.3

    


    NOTICE
OF CONFIDENTIALITY RIGHTS:  IF YOU ARE A NATURAL PERSON, YOU MAY
REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT
THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE
PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE
NUMBER.

    


    EXTENSION
OF REAL ESTATE NOTE AND LIEN

    


    THE STATE
OF TEXAS

    KNOW ALL
MEN BY THESE PRESENTS:

    COUNTY OF
CAMERON

    


    That
SOUTH PADRE ISLAND DEVELOPMENT,
L.L.C. FORMERLY KNOWN AS SOUTH PADRE ISLAND DEVELOPMENT, L.P., of CAMERON County, Texas, herein
called the undersigned, being legally obligated to pay the hereinafter described
promissory Note and who, if not presently primarily liable for the payment of
said Note, does hereby expressly assume the payment thereof, said Note being in
the original principal sum of FOUR MILLION AND NO/100THS
($4,000,000.00) dated September 1, 2005, executed by SOUTH PADRE ISLAND
DEVELOPMENT, L.P., payable to the order of TEXAS STATE BANK and secured by a
Deed of Trust dated September 1, 2005, recorded in Document #00054391, Volume
11785, Pages 36, Official Records of Cameron County, Texas, said Note and Lien
being extended by Extension of Real Estate Note and Lien dated May 1, 2008,
recorded in Document #2008-00026320, Volume 15134, Page 134, of the Official
Records of Cameron County, Texas; and Extension of Real Estate Note and Lien
dated July 1, 2008, recorded in Document #2008-00035358, Volume 15295, Page 60,
of the Official Records of Cameron County, Texas; said Note being secured by the
liens therein created or mentioned against the following property,
to-wit:

    


    TRACT
I:

    Lots H43,
H44, H45, H47, H56, H57, H60, H61, H62 of the Harbor Block 7 Subdivision, Town
of Laguna Vista, Cameron County, Texas, according to the map or plat thereof
recorded in Cabinet 1, Slot 2550-A, Map Records, Cameron County,
Texas

    


    TRACT
II:

    Lots H63,
H64, H65, H66, H67, H68, H69, H70, H71, H72, H73, H74, B15, B16 and B17 of the
Harbor Block 9 Subdivision, Town of Laguna Vista, Cameron County, Texas,
according to the Map or Plat thereof recorded in Cabinet 1, Slot 2550-B, Map
Records, Cameron County, Texas.

    


    AND who
now desires to extend or rearrange the time or manner of payment of said Note
and to extend and carry forward said liens on said property, and

     

    
      WHEREAS,
COMPASS BANK (formerly
known as Texas State Bank), the legal owner and holder of said note and of the
liens securing the same, in consideration of the premises and at the request of
the undersigned, has agreed to extend or rearrange the time or manner of payment
of said note as hereinafter provided;

      


      NOW,
THEREFORE, in consideration of the extension or rearrangement of the time or
manner of payment of said Note as hereinafter set forth by the legal owner and
holder thereof, the undersigned hereby renews said Note and the indebtedness and
promises to pay to the order of COMPASS BANK, at its office in
the City of Harlingen, Cameron County, Texas, the sum of ONE MILLION FIVE HUNDRED SEVENTY-NINE
THOUSAND SEVEN HUNDRED TWENTY-NINE AND 92/100THS ($1,579,729.92), or the
unpaid balance of all payments advanced hereon from time to time (it being
understood that this Note is intended as a revolving line of credit and the
undersigned shall be entitled to continue to request additional advances on this
Note up to a maximum of $1,579,729.92 in the aggregate), together with interest
thereon at the variable rate of WALL STREET JOURNAL PRIME INTEREST
RATE (WSJ) percentum
per annum, provided, however, that the interest
rate prior to maturity shall not at any time be less than a Floor Rate of Six
Percent (6.00%) and
not be higher
than a Ceiling Rate of Eighteen percent
(18%) percentum per annum from the date hereof and to accrue on a 360-day year
until maturity.  Principal and interest shall be payable at
115 East Van Buren, Harlingen,
Texas 78550.  The principal indebtedness and accrued interest
thereon shall bear interest after maturity at the maximum rate allowed by
law.

      


        
          
             


          

          
            1

             


          

          
             


          

        

The term
“Prime Interest Rate” as used in this Note means a per annum interest rate equal
to the “Prime Rate” as published each day by the Wall Street Journal
in its “Money Rates” section, and if more than one such rate is published, then
the highest such rate on any day when the Wall Street Journal
is not published or a prime rate is not published under the Money Rates section
thereof, then the prime rate published for the preceding publication date of the
Wall Street Journal
shall apply.  Should the method of establishing the prime
interest rate, or the publication of such prime rate, cease or be abolished,
then the prime interest rate used for the balance of the term of this note shall
be that interest rate established, adopted or used by Holder as its prime or
base interest rate. The applicable Note Rate shall be adjusted with each change
in the Prime Rate and shall be effective until the effective date of the next
change in the prime rate.

    

    


    The
unpaid principal and interest shall be payable as follows:

    


    PRINCIPAL
SHALL BE DUE ON OR BEFORE MAY 1, 2010.  INTEREST ACCRUING ON THE
UNPAID PRINCIPAL BALANCE SHALL BE DUE AND PAYABLE MONTHLY BEGINNING JUNE 1,
2009, AND CONTINUING ON THE SAME DAY OF EACH CONSECUTIVE MONTH.

    


    THE
REVOLVING LINE OF CREDIT AMOUNT IS BEING CAPPED AT $1,579,729.92.

    


    Notwithstanding
the terms of extension of maturity set forth above, the obligation is and
continues to be a “revolving
credit promissory note” subject to the fluctuations up or down due to
future disbursements of loan proceeds and/or future repayments thereof from time
to time over the term of the indebtedness.  Prior to maturity, obligor
may borrow, repay and reborrow under the note and there is no limitation on the
number of advances made under the note so long as the total unpaid principal
amount at any time outstanding does not exceed $1,579,729.92.

    


    Note
payments are payable on their due date (s), and, except as otherwise required by
law and/or the loan documents, the holder hereof may, following default,
exercise all rights and remedies available to it by law, contract and/or
equity.

    


    In
addition to any other rights and remedies available to the holder hereof, on and
after the date hereof, the undersigned further agrees, that at the option of the
holder hereof, a one-time “late charge” may be collected by the holder hereof
from the undersigned on each delinquent payment in an amount equal to five
percent (5%) of the amount of any payment not made within ten (1) days of its
due date.  The “late charge” may be imposed without notice to the
undersigned, and shall be immediately due and payable.

    


    It is
agreed that the “late charge” is not interest, but rather a reasonable amount
paid to the holder hereof to compensate it for any additional administrative
expenses and costs it incurs due to the undersigned’s failure to make the note
payment on its due date.  Payments made subsequent to the incurrence
of a “late charge” will be applied first to any due regularly scheduled payments
in order of their due date and any remaining funds paid will be applied to any
accrual late fees then in accordance with other terms of the note.

    


    If a
“late charge” is imposed by the holder hereof on a delinquent payment, the
unpaid principal owing on the note will continue to accrue interest at the
contract interest rate as provided in the note, and no interest will accrue on
any delinquent interest associated with the delinquent payment.

    



    
      
         


      

      
        2

         


      

      
         


      

    


    If a
“late charge” is not assessed by the holder hereof, the delinquent payment, at
the option of the holder hereof, shall accrue interest at the default interest
rate, as provided in the note, from the date the payment was due until it is
paid.  In the event a default rate is not specified in the note, then
on and after the date hereof, the default rate, at the option of holder hereof,
shall be the maximum rate per annum allowed by law.

    


    From and
after the maturity date and/or acceleration date of the note, all unpaid
principal, together with accrued interest, shall bear interest at the default
interest rate as provided in the note.

     

    The
undersigned hereby extends said liens and security interests on said property
until said indebtedness and Note as so renewed and extended has been fully paid,
and agrees that such extension or rearrangement shall in no manner affect or
impair said Note or the liens and security interests securing the same and that
said liens and security interest shall not in any manner be waived, which are
acknowledged by the undersigned to be valid and subsisting, and the undersigned
further agrees that all terms and provisions of said original Note and of the
instrument or instruments creating or fixing the liens securing the same shall
be and remain in full force and effect as therein written, except as otherwise
expressly provided herein.

    


    In
consideration of the benefits received, the undersigned hereby waives, releases
and terminates all claims, or right to claim whether known or unknown, that
Compass Bank, or any predecessor as owner and holder of the Note, or any other
party has charged, collected or received usurious interest under the Note or any
other document relating to the Note, and hereby waives and releases any right or
power to bring any claim based on any claim of usury.

    


    In
consideration of (i) the modification of certain provisions of the Note, as
herein provided, and (ii) the other benefits received by the undersigned
hereunder, the undersigned hereby RELEASES, RELINQUISHES and forever DISCHARGES
Compass Bank, as well as its predecessors, successors, assigns, agents,
officers, directors, employees and representatives, of any from any and all
claims, demands, actions and causes of action of any and every kind or
character, whether known or unknown, present or future, which the undersigned
may have against Compass Bank, and its predecessors, successors, assigns,
agents, officers, directors, employees and representatives, arising out of or
with respect to any and all transactions relating to the Note or any other
document relating to the Note, occurring prior to the date hereof, including any
loss, cost of damage, or any kind or character, arising out of or in any way
connected with or in any way resulting from the acts, actions or omissions of
Compass Bank, and its predecessors, successors, assigns, agents, officers,
directors, employees and representatives, including any breach of fiduciary
duty, breach of duty, breach of any duty of fair dealing, breach of confidence,
beach of funding commitment, undue influence, duress, economic coercion,
conflict of interest, negligence, bad faith, malpractice, violations of the
Racketeer Influenced and Corrupt Organization Act, intentional or negligent
infliction of mental distress, tortuous interference with contractual relations,
tortuous interference and corporate governance or prospective business
advantage, breach of contract, deceptive trade practices, liable, slander,
conspiracy or any claim for wrongfully accelerating the Note or wrongfully
attempting to foreclose on any collateral relating to the Note, but in each case
only to the extent permitted by applicable law.

    



    
      
         


      

      
        3

         


      

      
         


      

    


    BALLOON
NOTE WARNING

    


    THIS LOAN
IS PAYABLE IN FULL ON OR BEFORE MAY 1, 2010.  AT
MATURITY, YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID
INTEREST THEN DUE.  THE BANK IS UNDER NO OBLIGATION TO REFINANCE THE
LOAN AT THAT TIME.  YOU WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT
OUT OF OTHER ASSETS THAT YOU MAY OWN, OR WILL HAVE TO FIND A LENDER, WHICH MAY
BE THE BANK YOU HAVE THIS LOAN WITH, WILING TO LEND YOU THE MONEY.  IF
YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE
CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING
FROM THE BANK.

    


    NOTICE

    


    IN
EXECUTING THIS EXTENSION OF REAL ESTATE NOTE AND LIEN THE UNDERSIGNED HEREBY
ACKNOWLEDGES THAT THIS EXTENSION OF REAL ESTATE NOTE AND LIEN SUPERSEDES ALL
PRIOR WRITTEN AND ORAL CONTRACTS AND UNDERSTANDINGS RELATED TO THE NOTES AND THE
RENEWAL AND EXTENSION OF PROMISSORY NOTE DESCRIBED HEREIN.  THIS
EXTENSION OF REAL ESTATE NOTE AND LIEN HEREWITH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF UNDERSTANDINGS OF THE PARTIES,
THE UNDERSIGNED ACKNOWLEDGES THAT NO UNWRITTEN ORAL AGREEMENTS EXIST BETWEEN THE
PARTIES.

    


    Effective
this 1st  day
of May, 2009.

     

    
      


      
        	
                SOUTH
      PADRE ISLAND DEVELOPMENT, LLC

              	 
      	
                COMPASS
      BANK

              
	
                FORMERLY
      KNOWN AS SOUTH PADRE ISLAND

              	 
      	 
      
	
                DEVELOPMENT,
      L.P.

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By: /s/ JUSTIN L. AWTREY

              	 
      	
                ________________________________

              
	
                      Justin
      L. Awtrey, Vice President

              	 
      	 
      


      

      


       

    

    (Acknowledgment)

    
      	
              STATE
      OF TEXAS

            	
              '

            


    

    '

    
      	
              COUNTY
      OF CAMERON

            	
              '

            


    

    


    This
instrument was acknowledged before me on the _______ day of June, 2009, by
Justin L. Awtrey, as Vice-President on behalf of SOUTH PADRE ISLAND DEVELOPMENT,
LLC, FORMERLY KNOWN AS SOUTH PADRE ISLAND DEVELOPMENT, L.P.

    


    __________________________________________

    Notary
Public, State of Texas

    


    


    


    


    (Corporate
Acknowledgment)

    
      	
              STATE
      OF TEXAS

            	
              '

            


    

    '

    
      	
              COUNTY
      OF CAMERON

            	
              '

            


    

    


    This
instrument was acknowledged before me on the _________ day of June, 2009, by
____________________________________, as _______________________________________
on behalf of COMPASS BANK, A BANKING CORPORATION.

    


    __________________________________________

    Notary
Public, State of Texas

     

     

     

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