Exhibit 10.2

SECURED PROMISSORY NOTE

 

$3,670,000.00

   August 7, 2015    Pueblo, Colorado

For value received, EWSD I LLC, an Arizona limited liability company, EAST WEST
SECURED DEVELOPMENTS, LLC, an Arizona limited liability company, BRIAN LOISELLE,
an individual, and TODD JOHNSON, an individual (together, jointly and severally,
the “Borrower”’) promise to pay to the order of SOUTHWEST FARMS, INC., a
Colorado corporation (together with its successors and assigns, the “Lender”),
the principal amount of THREE MILLION SIX HUNDRED SEVENTY THOUSAND AND NO/100THS
DOLLARS ($3,670,000.00) pursuant the terms of this Note, with interest thereon
as provided below.

1. Carry-Back Loan; No Re-Advances. This Note evidences Borrower’s obligation to
pay a portion of the purchase price payable by Borrower to Lender pursuant to
the terms of that certain Contract to Buy and Sell Real Estate (Land) dated as
of July 13, 2015, relating to the purchase and sale of that certain real
property located at 214 39th Lane, Pueblo, Colorado 81006, together with all
related water rights, mineral rights, improvements, fixtures and other
appurtenances (collectively, the “Property”). The loan evidenced by this Note is
in the nature of a seller carry-back loan. The loan evidenced by this Note shall
be non-revolving and shall not be re-advanced after repayment. The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note itself or by Lender’s internal records.

2. Interest. Interest on the outstanding principal balance of this Note shall
accrue, and shall be calculated, at the rate of five percent (5.0%) per annum
(the “Interest Rate”) from the date of this Note until paid in full. Interest
shall be computed on the basis of actual days elapsed and a 365-day year and
shall be payable in arrears.

3. Payments. This Note shall be payable as follows: (a) thirty-five
(35) payments of principal and interest, which shall be calculated based upon a
hypothetical amortization period of thirty (30) years, commencing on
September 1, 2015 and continuing thereafter on the first day of each calendar
month through and including July 1, 2018; and (b) one (1) final BALLOON payment
of all unpaid principal and accrued but unpaid interest on August 1, 2018 (the
“Maturity Date”). The time period from the date of this Note through and
including the satisfaction of all obligations under this Note and the other Loan
Documents (as defined below) is hereinafter referred to as the “Loan Term”. All
payments against this Note shall be payable without setoff, deduction or demand
and shall be made in lawful money of the United States of America at 1825
Chianti Court, Pueblo, Colorado 81001, or at such other place as Lender may from
time to time designate in writing.

4. Application of Payments. Payments made under this Note shall be applied first
to late charges, second to collection costs, third to accrued and unpaid
interest and fourth to principal hereunder. Notwithstanding the foregoing, any
payments received after the occurrence of and during the continuance of an Event
of Default (as defined below) shall be applied in such manner as Lender may
determine.

5. Default Rate. At Lender’s option and without prior notice, upon the
occurrence of an Event of Default (as defined below) or at any time during the
pendency of any Event of Default under this Note or any related loan documents,
Lender may impose a default rate of interest (the “Default Rate”) equal to the
lesser of (a) eighteen percent per annum (18%); and (b) the highest rate
permitted under applicable law. The Default Rate shall remain in effect until
the default has been cured and that fact has been communicated to and confirmed
by Lender. Lender’s imposition of the Default Rate shall not constitute an
election of remedies or otherwise limit Lender’s rights concerning other
remedies available to Lender as a result of the occurrence of an Event of
Default. In the event of a conflict between the provisions of this paragraph and
any other provision of the Note or any related agreement, the provisions of this
paragraph shall control. If a default rate is prohibited by applicable law, then
the pre-default rate shall continue to apply after default or maturity.

 

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6. Late Charge. If any installment of principal or interest due or becoming due
pursuant to this Note is not received in full within ten (10) days after the due
date therefor, then Lender may, at its option, assess and collect, and Borrower
shall pay, a late charge equal to five percent (5%) of the past due sum. It is
agreed that this “late charge” is reasonable in amount and is based upon the
desire of Borrower and Lender to agree in advance on an amount to reimburse
Lender for the anticipated expense it will incur as a result of any amount not
being paid when due under this Note.

7. Prepayments. The Borrower may at its sole discretion have the privilege of
prepaying this Note, in whole or in part, at any time without premium or
penalty. Borrower shall provide Lender with written notice of Borrower’s intent
to prepay in full of this Note at least five (5) business days prior to delivery
of such prepayment in full to Lender. Any partial prepayment of this Note by
Borrower shall have the effect of reducing the amount of the final balloon
payment due hereunder but shall not delay the next scheduled payment due under
this Note or reduce the next scheduled payment under this Note (except to the
extent the principal amount hereunder has been reduced and thereby the amount of
accrued but unpaid interest is also reduced).

8. Security. This Note is secured by, inter alia, that certain Deed of Trust,
Security Agreement and Financing Statement, which encumbers the Property (as the
same may be amended, modified, supplemented or restated from time to time, the
“Deed of Trust”), that certain Assignment of Rents and Leases dated of even date
herewith, which encumbers the Property (as the same may be amended, modified,
supplements or restated from time to time, the “Assignment of Rents”), certain
financing statements and fixture filings to be filed in the applicable public
records granting liens in certain fixtures and replacements thereof, and such
other documents executed and delivered in connection with the loan evidenced by
this Note (collectively, together with this Note, and as the same may be
amended, modified, supplements or restated from time to time, the “Loan
Documents”).

9. Events of Default.

(a) Events of Default. Any one or more of the following shall constitute an
“Event of Default”:

(i) Any failure to pay any principal or interest under this Note when the same
shall become due and payable and such failure continues for five (5) days after
written notice thereof to Borrower, or the failure to pay any other sum due
under this Note, the Deed of Trust, or any other Loan Document when the same
shall become due and payable and such failure continues for five (5) days after
written notice thereof to Borrower. No notice, however, shall be required after
maturity of this Note.

(ii) Any failure or neglect to perform or observe any of the covenants,
conditions or provisions of this Note, the Deed of Trust, any other Loan
Document, or any other document or instrument executed or delivered in
connection with the loan (other than a failure or neglect described in one or
more of the other provisions of this Section 9(a)) and such failure or neglect
continues unremedied for a period of thirty (30) days after written notice
thereof to Borrower.

(iii) Any warranty, representation or statement contained in this Note, the Deed
of Trust, or in any other Loan Document or any other document or instrument
executed or delivered in connection with the loan, or made or furnished to
Lender by or on behalf of Borrower, that shall be or shall prove to have been
false when made or furnished.

(iv) The filing by any Borrower or any guarantor of the loan (or against any
Borrower or such guarantor to which such Borrower or such guarantor acquiesces
or that is not dismissed within 45 days after the filing thereof) of any
proceeding under the federal bankruptcy laws now or hereafter existing or any
other similar statute now or hereafter in effect; the entry of an order for
relief under such laws with respect to any Borrower or such guarantor; or the
appointment of a receiver, trustee, custodian or conservator of all or any part
of the assets of any Borrower or such guarantor.

 

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(v) The insolvency of any Borrower or any guarantor of the loan; or the
execution by any Borrower or such guarantor of an assignment for the benefit of
creditors; or the convening by any Borrower or such guarantor of a meeting of
its creditors, or any class thereof, for purposes of effecting a moratorium upon
or extension or composition of its debts; or the failure of any Borrower or such
guarantor to pay its debts as they mature; or if any Borrower or such guarantor
is generally not paying its debts as they mature.

(vi) The admission in writing by any Borrower or any guarantor of the loan that
it is unable to pay its debts as they mature or that it is generally not paying
its debts as they mature.

(vii) The death or incapacity of any Borrower, if an individual, or the
liquidation, termination or dissolution of any Borrower, if a corporation,
limited liability company, partnership or joint venture.

(viii) Any levy or execution upon, or judicial seizure of, any portion of any
collateral or security for the loan.

(ix) Any attachment or garnishment of, or the existence or filing of any lien or
encumbrance, other than any lien or encumbrance permitted by the Deed of Trust,
against any portion of any collateral or security for the loan that is not
removed or released within thirty (30) days after its creation.

(x) The institution of any legal action or proceedings to enforce any lien or
encumbrance upon any portion of any collateral or security for the loan, which
is not dismissed within thirty (30) days after its institution.

(xi) The occurrence of any event of default under the Deed of Trust, any of the
other Loan Documents, or any other document or instrument executed or delivered
in connection with the loan and the expiration of any applicable notice and cure
period.

(xii) The occurrence of any event of default and the expiration of any
applicable notice and cure period under any document or instrument given by any
Borrower, by any entity owned by any Borrower or, if Borrower is a corporation,
limited liability company, partnership or trust, by any entity owned by the same
persons or entities that own Borrower, in connection with any other indebtedness
or obligation of Borrower or such entity to Lender, Lender’s subsidiaries or
affiliates or their respective successors or assigns, whether or not the other
indebtedness or obligation is related to the Property or other property secured
by this loan.

(xiii) The occurrence of any adverse change in the financial condition of any
Borrower or any guarantor that Lender, in its reasonable discretion, deems
material, and, as a result thereof, Lender in good faith shall believe that the
prospect of payment or performance of the loan is impaired, and such condition
is not remedied within thirty (30) days after written notice thereof to
Borrower.

(b) Acceleration. If an Event of Default shall occur, at the election of Lender,
the full amount of this Note, and any other amounts due under any of the other
Loan Documents, shall become immediately due and payable without notice or
demand.

(c) Non-Exclusive Remedies. Upon the occurrence at any time of any Event of
Default under this Note or any of the other Loan Documents, without notice,
demand or cure rights, except as specifically provided in this Note or the
applicable Loan Document, Lender may exercise any right or remedy provided in
this Note or the

 

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other Loan Documents. During the existence of any such Event of Default, Lender
may apply payments received against this Note (or under any instrument securing,
evidencing, or relating to the indebtedness evidenced by this Note) as Lender
may determine, subject to the provisions of the Loan Documents. After any Event
of Default unless and until such Event of Default is cured satisfactorily to
Lender in Lender’s sole discretion, Lender shall have the right, at its option
and without any obligation, to exercise any remedy provided in the Loan
Documents or available to Lender under any applicable law. All of Lender’s
rights and remedies not only under the provisions of this Note, but also under
any other agreement or transaction shall be cumulative and not alternative or
exclusive, and may be exercised by Lender at such time or times and in such
order of preference as Lender in its sole discretion may determine.

10. Waiver. No delay or omission on the part of Lender in exercising any right
or remedy hereunder shall operate as a waiver of such right or remedy or of any
other right or remedy under this Note. A waiver on one occasion shall not be
construed as a bar to or waiver of any such right and/or remedy on any future
occasion. Borrower and every endorser or guarantor of this Note, regardless of
the time, order or place of signing, waives presentment, demand, protest, notice
of intent to accelerate, notice of acceleration and all other notices of every
kind in connection with the delivery, acceptance, performance or enforcement of
this Note and assents to any extension or postponement of the time of payment or
any other indulgence, to any substitution, exchange or release of collateral,
and to the addition or release of any other party or person primarily or
secondarily liable and waives all recourse to suretyship and guarantor defenses
generally, including any defense based on impairment of collateral. To the
maximum extent permitted by law, Borrower and each endorser and guarantor of
this Note waive and terminate any homestead rights and/or exemptions respecting
the Property under the provisions of any applicable homestead laws.

11. Subordination of Other Debts. Any and all present or future debts of
Borrower to any endorser of this Note are subordinated to the full payment and
performance of all present and future debts of Borrower to Lender. No person
obligated on account of this Note may seek contribution from any other person
also obligated, unless and until all liabilities, obligations and indebtedness
to Lender of the person from whom contribution is sought have been irrevocably
satisfied in full.

12. Joint and Several. The obligations of each Borrower and any endorser or
guarantor of this Note are joint and several; provided, however, the release by
Lender of a Borrower or any one or more endorsers or guarantors shall not
release any other person or entity obligated on account of this Note. The
release or compromise by Lender of any collateral shall not release any person
obligated on account of this Note.

13. Further Assurances. The parties hereto agree to do all things deemed
necessary by Lender in order to fully document the loan evidenced by this Note.
The undersigned agree to assist in the cure of any defects in the execution,
delivery or substance of this Note and the other Loan Documents and related
agreements, and in the creation and perfection of any liens, security interests
or other collateral rights securing such loan.

14. Consent to Sell Loan. The parties hereto agree that: (i) with prior notice
to Borrower, Lender may Sell or transfer all or part of the loan to one or more
purchasers, whether related or unrelated to Lender; (ii) Lender may provide to
any purchaser, or potential purchaser, any information or knowledge Lender may
have about the parties or about any other matter relating to the Loan, under
commercially reasonable terms of confidentiality; (iii) the purchaser of a loan
will be considered its absolute owner and will have all the rights granted under
the loan documents or agreements governing the sale of the loan; and (iv) the
purchaser of a loan may enforce its interests irrespective of any claims or
defenses that the parties may have against Lender.

15. Collateral Assignment by Lender. Lender shall be permitted to collaterally
assign its rights and interest under this Note to any one or more third party
lenders to Lender. Upon receipt of written notice of such collateral assignment
and at Lender’s expense, Borrower shall execute such additional documents as
such third-party lender may request to confirm Borrower’s consent to such
collateral assignment and Borrower’s agreement to make payments directly to such
third-party lender upon notice from such third-party lender.

 

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16. Costs of Collection. Borrower agrees that if, and as often as, this Note is
placed in the hands of an attorney for collection or to defend or enforce any of
Lender’s rights hereunder or under any instrument relating to or securing
payment of this Note, Borrower shall pay Lender its reasonable attorneys’ fees
and all court costs and other expenses incurred in connection therewith,
regardless of whether a lawsuit is ever commenced or whether, if commenced, the
same proceeds to judgment or not. Such costs and expenses shall include, without
limitation, all costs, attorneys’ fees and expenses incurred by Lender in
connection with any insolvency, bankruptcy, reorganization, arrangement or
similar proceedings which in any way affects the exercise by Lender of its
rights and remedies under this Note, the other Loan Documents or any other
instrument securing, evidencing, or relating to the indebtedness evidenced by
this Note.

17. Purpose. Borrower certifies that the loan evidenced by this Note is obtained
for business or commercial purposes and that the proceeds thereof will not be
used primarily for personal, family, household or agricultural purposes.
Borrower further certifies that the loan evidenced by this Note will not be used
for the purpose of purchasing or carrying margin stock or margin securities
within the meaning of Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.

18. Usury. In no event whatsoever shall the amount paid, or agreed to be paid,
to Lender for the use, forbearance, or retention of the money to be loaned
hereunder (collectively, “Interest”) exceed the maximum amount permissible under
applicable law. If the performance or fulfillment of any provision hereof or of
any agreement between Borrower and Lender shall result in Interest exceeding the
limit for interest prescribed by law, then the amount of such Interest shall be
reduced to such limit. If, from any circumstance whatsoever, Lender should
receive as Interest an amount which would exceed the highest lawful rate, the
amount which would be excessive Interest shall be applied to the reduction of
the principal balance owing hereunder (or, at the option of Lender, be paid over
to Borrower) and not to the payment of Interest.

19. Governing Law. This Note shall be governed by, and construed in accordance
with, the laws of the State of Colorado, without regard to its conflicts of laws
principles.

20. Notices. The notice provisions of the Deed of Trust are incorporated herein
by reference and any notices sent pursuant to this Note shall be delivered in
accordance with such notice provisions.

21. Successors. The term “Borrower” as used herein shall include the original
Borrower of this Note and any party who may subsequently become liable for the
payment hereof as an assumer with the consent of Lender, provided that Lender
may, at its option, consider the original Borrower of this Note alone as
Borrower unless Lender has consented in writing to the substitution of another
party as Borrower. The term “Lender” as used herein shall mean Lender, or, if
this Note is transferred, the then holder(s) of this Note.

22. Invalidity. Invalidation of any of the provisions of this Note or of any
article, paragraph, sentence, clause, phrase or word herein, or the application
thereof in any given circumstance, shall not affect the validity of the
remainder of this Note.

23. Time of Essence. Time is of the essence in the performance of each and every
obligation of Borrower.

 

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24. Jurisdiction; Venue. Borrower and each endorser or guarantor of this Note
each irrevocably submits to the nonexclusive jurisdiction of any Federal court
sitting in the State of Colorado and any state court sitting in the County of
Pueblo, Colorado, over any suit, action or proceeding arising out of or relating
to this Note. Each of Borrower, and any endorser or guarantor of this Note
irrevocably waives, to the fullest extent it may effectively do so under
applicable law, any objection it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that the same has been brought in an inconvenient forum.

25. Jury Waiver. WAIVER OF TRIAL BY JURY-BORROWER AND LENDER (BY ITS ACCEPTANCE
HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG BORROWER AND LENDER ARISING OUT OF
OR IN ANY WAY RELATED TO THIS NOTE OR ANY OTHER LOAN DOCUMENT REFERENCED HEREIN.
THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
DESCRIBED IN THIS NOTE AND THE OTHER LOAN DOCUMENTS REFERENCED HEREIN.

26. Indemnification. Each Borrower shall indemnify and hold Lender harmless from
and against all claims, costs, expenses, actions, suit, proceedings, losses,
damages and liabilities of any kind whatsoever, including, but not limited to,
attorneys’ fees and expenses, arising out of any matter relating, directly or
indirectly, to the loan evidenced by this Note, to the ownership, development,
construction, or sale of the Property, whether resulting from internal disputes
of Borrower, disputes between Borrower and any guarantor, or whether involving
other third persons or entities, or out of any other matter whatsoever related
to this Note, the Deed of Trust, and other documents or property securing the
loan, but excluding any claim or liability which arises as the direct result of
the gross negligence or willful misconduct of Lender and excluding any acts of
Lender after the date of the transfer of title to Lender if Lender becomes the
owner of the Property. This indemnity provision shall continue in full force and
effect and shall survive not only the making of the loan but shall also survive
the repayment of the loan and the performance of all of Borrower’s other
obligations under the Loan Documents.

[SIGNATURE FOLLOWS ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

 

BORROWER:

/s/ Brian Loiselle

Brian Loiselle, individually

/s/ Todd Johnson

Todd Johnson, individually EWSD I LLC, an Arizona limited liability company By:
 

/s/ Brian Loiselle

Print Name:   Brian Loiselle

Title:   Member/Manager EAST WEST SECURED DEVELOPMENTS, LLC, an Arizona limited
liability company By:  

/s/ Brian Loiselle

Print Name:   Brian Loiselle

Title:   Member/Manager

Signature Page to Secured Promissory Note