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April 15, 1986, and ending January 15, 2001. The note
states that payment of the note is secured as follows:
Security. This Note is secured by Maker's [i.e.,
the club's] assignment of those certain Class A
Initiation Fee Notes pursuant to that certain
Collateral Assignment of Notes and Security
Agreement of even date herewith. This Note is
further secured by, among other things, a Deed
of Trust and Assignment of Rents of even date
herewith (the "Trust Deed") to First American
Title Insurance Company, as Trustee, covering
certain real property situated in the County
of San Diego, State of California. Reference
is made to the Deed of Trust with respect to
the rights of acceleration of the indebtedness
evidenced by this Note.
Mr. Dixon and petitioner also personally guaranteed the
loan from Sandia. The club used the proceeds of the loan
from Sandia in the amount of $4,760,000 together with other
funds to retire the construction loan from Anchor, the
principal and interest on which amounted to $4,870,457.16
through January 17, 1986.
By the end of 1985, before the interim construction
loan became due, prospective purchasers had committed to
buy only 18 of the 36 class A memberships. However, as
a condition for providing permanent financing for the
project, Sandia required that all the time-share
memberships be sold. Therefore, in order to obtain
permanent financing, Mr. Dixon and petitioner each
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