PROMISSORY NOTE

$1,500,000.00                                                Date: July 07, 2000

For value  received,  the undersigned  Diversified  Resources  Group,  Inc. (the
"Borrower"  or  "DRGI"),  at 355  Interstate  Blvd.,  Sarasota,  Florida  34240,
promises  to  pay to  the  order  of  Sagedale  Farms,  LLC,  (the  "Lender"  or
"Sagedale"),  c/o:  James  Matheny at 105  Fairway  Valley  Court,  Cary,  North
Carolina, 27513, (or at such other place as the Lender may designate in writing)
the sum of  $1,500,000.00  with  interest  from  July 07,  2000,  on the  unpaid
principal at the interest rate Lender pays to Wachovia Bank.

The  unpaid   principal  and  accrued  interest  shall  be  payable  in  monthly
installments of interest only beginning on August 07, 2000, and continuing until
July 07, 2001, (the "Due Date"),  at which time the remaining  unpaid  principal
and interest shall be due in full.

As consideration for Sagedale's securing financing and making the loan to DRGI:

a.    Within  ten (10)  days of the time of  funding  of the  Loan,  DRGI  shall
      deliver to Sagedale or its assigns Six Hundred  Thousand  (600,000) shares
      of the  unrestricted  common stock of DRGI, which shall be market tradable
      upon receipt,  and an additional Six Hundred Thousand  (600,000) shares of
      restricted  common  stock of  DRGI,  which  shall  contain  a  restriction
      prohibiting its sale for a period of twelve (12) months after issuance.

b.    On or before the date that is twelve (12) months after the date of funding
      of the Loan,  DRGI shall at its sole discretion pay or deliver to Sagedale
      or its assigns, at DRGI's option, either:

(i)         One Million Two Hundred Fifty Thousand  Dollars  ($1,250,000.00)  by
            wire transfer or other immediately available funds; or

(ii)        A  sufficient  number of the shares of the  common  stock of DRGI so
            that the market  value of such  shares,  on the date such shares are
            received by Sagedale  or its  assigns,  equals or exceeds the sum of
            $1,250,000.00.

c.    On or before the date on which the Hotel is open for business,  DRGI shall
      deliver to  Sagedale  or its  assigns,  a  certificate  or other  document
      evidencing a fully prepaid hotel suite for all three (3) major Winston Cup
      events held at the Charlotte Motor Speedway for each of the five (5) years
      immediately following completion of the Hotel.

DRGI shall pay the principal balance of the Loan, plus accrued,  unpaid interest
on the Wachovia Loan, upon the first of the following events to occur:

a.    Sale by DRGI of the real  property  known as Falls River,  located in Wake
      County, North Carolina,  which DRGI currently has under contract,  or of a
      sufficient  amount of the  property so that DRGI  realizes net proceeds in
      excess of $1.5 Million; or

b.    The day that is one (1) year from the date of the Wachovia Loan.

This Note is secured by DRGI's total interest in Front Street Partners, LLC. The
Lender is not required to rely on the above  securities  for the payment of this
Note in the case of default, but may proceed directly against the Borrower.

All payments on this Note shall be applied first in payment of accrued  interest
and any remainder in payment of principal.

If any  installment  is not paid when due,  the  remaining  unpaid  balance  and
accrued  interest shall become due immediately at the option of the Lender.  The
Borrower  reserves  the right to prepay this Note (in whole or in part) prior to
the due date with no prepayment penalty.

If any payment  obligation  under this Note is not paid when due,  the  Borrower
promises to pay all costs of  collection,  including  reasonable  attorney fees,
whether or not a lawsuit is commenced as part of the collection process.

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The  proceeds  of this  Note is for  funding  DRGI  corporate  activities  which
includes  the  acquiring  of an interest  in 6.52 acres of land,  Highway 29 and
Moorehead Road, Concord, North Carolina.

If any of the  following  events  of  default  occur,  this  Note and any  other
obligations of the Borrower to the Lender, shall become due immediately, without
demand or notice:

1)   the failure of the Borrower to pay the principal  and any accrued  interest
     in full on or before  the Due  Date;
2)   the death of the  Borrower(s)  or  Lender(s);
3)   the filing of bankruptcy proceedings involving the Borrower as a Debtor;
4)   the application for appointment of a receiver for the Borrower;
5)   the  making  of a  general  assignment  for the  benefit  of the  Borrowers
     creditors; or
6)   the insolvency of the Borrower

In  addition,  the  Borrower  shall be in default if there is a sale,  transfer,
assignment,  or any other  disposition of any assets pledged as security for the
payment of this Note, or if there is a default in any security  agreement  which
secures this Note.

If any  one or  more  of the  provisions  of  this  Note  are  determined  to be
unenforceable,  in whole or in part,  for any reason,  the remaining  provisions
shall remain fully operative.

All payments of  principal  and interest on this Note shall be paid in the legal
currency of the United States. Borrower waives presentment for payment, protest,
and notice of protest and nonpayment of this Note.

No renewal or extension of this Note, delay in enforcing any right of the Lender
under this Note, or assignment by Lender of this Note shall affect the liability
of the Borrower. All rights of the Lender under this Note are cumulative and may
be exercised concurrently or consecutively at the Lender's option.

This Note shall be construed in  accordance  with the laws of the State of North
Carolina.

Signed this _____ day of ________________, 2000

Borrower:
Diversified Resources Group, Inc.


By:   __________________________________________
      Carl Smith
      Chief Executive Officer

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