Exhibit 10.2

 

NON-REVOLVING LINE OF CREDIT
PROMISSORY NOTE

 

$2,475,000.00 June 17, 2019 Note #__________ Albuquerque, New Mexico

 

FOR VALUE RECEIVED, the undersigned Lomas Encantadas Development Company, LLC, a
New Mexico limited liability company (“Maker”), hereby promises to pay to the
order of BOKF, NA dba Bank of Albuquerque (“Lender”), at its office located at
100 Sun Avenue NE, Suite 500, Albuquerque, New Mexico 87109, or at such other
place as may be designated in writing by the holder of this Non-Revolving Line
of Credit Promissory Note (“Note”), the principal sum of Two Million Four
Hundred Seventy-Five Thousand and No/100 Dollars ($2,475,000.00), or so much
thereof as shall be disbursed hereunder, together with interest thereon at the
rates specified in this Note, payable as set forth herein.

 

1.          Definitions. As used in this Note, the following terms shall have
the meanings indicated for each:

 

A.          “Event of Default” shall have the meaning ascribed to such term in
the Mortgage, including without limitation a default in payment or performance
under this Note.

 

B.           “Interest Rate” shall mean from and following the closing date, the
loan and the other obligations shall bear interest at LIBOR (defined below) plus
three hundred (300) basis points, as calculated in accordance with paragraph 5
below. The Interest Rate is not necessarily the lowest rate charged by Lender on
its loans. If the Interest Rate becomes unavailable during the term of the Loan,
Lender may designate a comparable substitute index after notifying Maker.
Notwithstanding any language herein seemingly to the contrary: (a) Maker shall
not be obligated to pay in excess of the maximum interest rate permitted by law
for any interest payment period; and (b) upon the occurrence of an Event of
Default, at the option of the holder of this Note, interest will accrue at the
Default Rate of interest hereafter specified.

 

C.           “LIBOR” means a floating rate (expressed to the fifth decimal
place) equal to (i) the rate of interest which is identified and normally
published by ICE Benchmark Administration for loans in United States dollars for
thirty (30) day periods as of 11:00 a.m. (London time), on the first of each
month (or if such day is not a business day, the next succeeding business day)
plus (ii) the maximum reserve requirement, if any, then imposed under Regulation
D of the Board of Governors of the Federal Reserve System (or any successor
thereto) for “Eurocurrency Liabilities” (as defined therein); provided, however,
that if LIBOR determined as provided above shall be less than zero, LIBOR shall
be deemed to be zero for the purposes of this Agreement. Any change in LIBOR is
effective on the first day of each month. If ICE Benchmark Administration no
longer reports the LIBOR or Lender determines in good faith that the rate so
reported no longer accurately reflects the rate available to Lender in the
London Interbank Market or if such index no longer exists or accurately reflects
the rate available to Lender in the London Interbank Market, Lender may select a
comparable replacement index. Lender will notify Maker in writing, within 10
days of the selection of a comparable replacement index, such notification will
include, the effective date of the replacement index, the new interest rate, and
the new monthly payment.

 

 

 

 

D.           “Loan” shall mean the loan evidenced by this Note.

 

E.           “Loan Agreement” shall mean the certain Development Loan Agreement
dated the same date as this Note, between Lender and Maker and pursuant to which
this Note is executed.

 

F.           “Maturity Date” shall mean June 17, 2022, or such earlier date on
which the entire unpaid principal balance of this Note shall be paid or required
to be paid in full, whether by prepayment, acceleration or otherwise.

 

G.           “Mortgage” shall mean the Mortgage, Security Agreement and
Financing Statement dated the same day as this Note made by Maker in favor of
Lender securing, among other things, the indebtedness evidenced by this Note.

 

2.          Draw Note. This Note evidences a loan that may be advanced in more
than one advance during the term of this Note. This Note does not evidence a
revolving line of credit. Maker acknowledges and agrees that it does not have
the right under this Note to borrow, pay and re-borrow the loan proceeds. The
loan evidenced by this Note shall be disbursed in accordance with the provisions
of the Loan Agreement.

 

3.          Payments. Maker shall make monthly payments of interest only on the
seventeenth (17th) day of each month beginning on July 17, 2019, and continuing
on the seventeenth (17th) day of each month thereafter through and including May
17, 2022. On the Maturity Date, Maker shall make one final payment of all
accrued and unpaid principal and interest and any other unpaid sums. Upon the
occurrence of an Event of Default, at the option of the holder of this Note,
interest shall accrue at the Default Rate. IN NO EVENT SHALL THE SUM TOTAL OF
ALL ADVANCES ON THE NOTE EXCEED THE FACE AMOUNT OF THE NOTE.

 

In addition, Maker shall make the following required principal payments (the
“Curtailment Payments”) to Lender: (i) Nine Hundred Thousand and No/100 Dollars
($900,000.00), on or before March 17, 2021; (ii) Three Hundred Thousand and
No/100 Dollars ($300,00.00) on or before June 17, 2021; (iii) Three Hundred
Thousand and No/100 Dollars ($300,000.00) on or before September 17, 2021; (iv)
Two Hundred Sixty Two Thousand Five Hundred and No/100 Dollars ($262,500.00) on
or before December 17, 2021; (v) Five Hundred Twenty-Five Thousand and No/100
Dollars ($525,000.00) on or before March 17, 2022; and (vi) One Hundred Eighty
Seven Thousand Five Hundred and No/100 Dollars ($187,500.00) on or before the
Maturity Date. Payments of the Release Price (defined in the Loan Agreement) to
Lender shall be credited towards the Curtailment Payments.

 

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4.          Loan Origination Fee. On the date this Note is signed, Maker will
pay to Lender a loan origination fee of Twelve Thousand Three Hundred Seventy
Five and No/100s Dollars ($12,375.00).

 

5.          Computation of Interest and Related Fees. Interest due under this
Note shall be calculated on the unpaid principal to the date of each installment
paid, and each payment of principal and/or interest made hereunder shall be
credited first to the discharge of interest, and the balance shall be credited
to the unpaid principal sum. All payments of interest shall be computed on the
per annum basis of a year consisting of three hundred sixty (360) days and for
the actual number of days elapsed (including the first day, but excluding the
last if payment is received by the holder of this Note by 1:00 p.m. New Mexico
time). In addition to any other means of payment, Maker shall have the right to
make payments by wire transfer or ACH directly to Lender. Within ten (10) days
after written request by Maker, Lender shall provide wiring and ACH instructions
to Maker for all payments due pursuant to the Loan.

 

6.          Default Interest. Subject to the notice and cure provisions
contained in the Mortgage, while any Event of Default exists in the making of
any of the payments herein provided to be made, or in the performance or
observance of any of the terms, covenants or conditions of the Loan Agreement,
this Note, the Mortgage or of any instrument now or hereafter securing payment
of the indebtedness evidenced by this Note, at the option of the holder of this
Note, in its sole discretion, the entire unpaid principal balance hereof shall
bear interest at the rate per annum equal to the applicable interest rate,
adjusted as of the date of any change therein, plus five percent (5%) per annum
(the “Default Rate”). Notwithstanding the foregoing, if Lender determines
pursuant to paragraph 15.6 of the Mortgage, that the Loan evidenced by this Note
is required to be classified as high volatility commercial real estate, then the
Interest Rate will be increased as provided in paragraph 15.6 of the Mortgage.
During the existence of any such Event of Default, the holder of this Note may
apply payments received on any amounts due hereunder, or under the terms of any
instrument now or hereafter evidencing or amounts due hereunder, or under the
terms of any instrument now or hereafter evidencing or securing such
indebtedness, as the holder may determine, and if the holder of this Note so
elects, notice of election being expressly waived, the principal hereof
remaining unpaid, together with accrued interest, shall at once become due and
payable. Any and all additional interest that has accrued at the rate provided
in this paragraph shall be due and payable at the time of, and as a condition
precedent to, the curing of any Event of Default.

 

7.          Late Fees. Subject to the notice and cure provisions contained in
the Mortgage, to the extent any principal and interest due under this Note is
not paid within fifteen (15) calendar days of the due date therefore, and, to
the extent that the following described fee is deemed to constitute interest,
subject to paragraph 9 of this Note, in addition to any interest or other fees
and charges due hereunder or under this Note, Maker shall pay a late fee equal
to the lesser of: (a) five percent (5%) of the amount of the payment that was to
have been made; or (ii) $400.00. Maker agrees that the charges set forth herein
are reasonable compensation to Lender for the acceptance and handling of such
late payments.

 

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8.          Currency. All sums called for, payable, or to be paid hereunder
shall be paid in lawful money of the United States of America, which, at the
time of payment, is legal tender for the payment of public and private debts
therein.

 

9.          Pre-Payment. This Note may be prepaid in whole or in part without
penalty upon not less than two (2) business days’ advance written notice to the
holder of this Note.

 

10.        Interest Savings Clause. All agreements between Maker and the holder
of this Note are expressly limited so that in no event whatsoever, whether by
reason of disbursement of the proceeds hereof or otherwise, shall the amount of
interest or loan finance charge contracted for, charged or received by the
holder of this Note exceed the highest lawful contractual rate of interest or
the maximum finance charge permissible under applicable federal or state law
which a court of competent jurisdiction, by final non-appealable order,
determines to be applicable hereto. It is the intention of Maker and the holder
of this Note to conform strictly to applicable usury laws from time to time in
force, and all agreements between Maker and the holder of this Note, whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever, whether by acceleration
of the maturity hereof or otherwise, shall the amount paid or agreed to be paid
to the holder of this Note, or collected by the holder of this Note, for the
use, forbearance or detention of the money to be loaned hereunder or otherwise,
or for the payment or performance of any covenant or obligation contained herein
or in the Mortgage or in any other document evidencing, securing or pertaining
to the indebtedness evidenced hereby, exceed the maximum amount permissible
under applicable usury laws. If under any circumstances whatsoever fulfillment
of any provisions hereof or of the Mortgage or any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed or permitted by law, including judicial determination,
then ipso facto, the obligation to be fulfilled shall be reduced to the limit of
such validity; and if under any circumstances the holder of this Note hereby
shall ever receive an amount deemed interest by applicable law which would
exceed the highest lawful rate, such amount that would be excessive interest
under applicable usury laws shall be applied to the reduction of the principal
amount owing hereunder or to other indebtedness secured by the Mortgage and not
to the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal and other indebtedness, the excess shall be deemed to have
been a payment made by mistake and shall be refunded to Maker or to any other
person entitled thereto. All sums contracted for, charged or received by the
holder of this Note for the use, forbearance or detention of the indebtedness of
Maker evidenced hereby, outstanding from time to time shall, to the extent
permitted by applicable law, be amortized, pro-rated, allocated and spread from
the date of disbursement of the proceeds of this Note until payment in full of
such indebtedness so that the actual rate of interest on account of such
indebtedness is uniform through the term hereof. The terms and provisions of
this paragraph shall control and supersede every other provision of all
agreements between the holder of this Note and Maker and any endorser or
guarantor of this Note.

 

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11.        Governing Law. Payment of this Note is secured, without limitation,
by the Mortgage, which covers real and personal property located in Rio Rancho,
New Mexico. THIS NOTE AND EACH OTHER LOAN DOCUMENT (AS DEFINED IN THE LOAN
AGREEMENT), AND ALL MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM
(WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW MEXICO, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. MAKER HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF SANDOVAL, STATE OF NEW MEXICO, AND IRREVOCABLY AGREES THAT, SUBJECT TO
LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER RELATED DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.
MAKER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS
AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.

 

12.        Remedies. Subject to the notice and cure provisions contained in the
Mortgage, upon the occurrence or existence of any Event of Default, the holder
hereof may, without further notice, declare the entire unpaid principal balance
of this Note and all unpaid, accrued interest on this Note and all other
obligations of the Maker to the holder of this Note, whether direct or indirect,
absolute or contingent, now existing or hereafter arising, immediately due and
payable, without further notice or demand, and the Maker shall pay all such sums
and other obligations. Further, upon the occurrence or existence of any such
Event of Default, the holder of this Note shall be entitled to exercise any or
all remedies provided or referenced in this Note, the Loan Agreement, the
Mortgage or any other instrument or agreement evidencing, securing or relating
to the indebtedness evidenced by this Note and any other rights and remedies
under state or federal law. Failure to exercise any such rights and remedies
upon any Event of Default shall not constitute a waiver of any rights in the
event of any subsequent Event of Default. If this Note is placed in the hands of
an attorney for collection or if collected through the probate court, bankruptcy
court, or by any other legal or judicial proceedings, the Maker agrees and is
obligated to pay, in addition to the sums referred to above, the reasonable
attorneys' fees of the holder of this Note, together with all court costs and
other reasonable expenses paid by such holder.

 

13.        Waiver. The Maker, endorsers, sureties, guarantors and all other
parties who may become liable for all or any part of this Note severally waive
demand, presentment, notice of dishonor, protest, notice of protest, notice of
nonpayment, notice of intent to accelerate, notice of acceleration of the
maturity of this Note and consent to: (a) any and all extensions of time for any
term or terms regarding any payment due under this Note, including partial
payments or renewals before or after maturity; (b) changes in interest rates as
provided in this Note; (c) any substitutions or release of collateral; and (d)
the addition, substitution or release of any party liable for payment of this
Note.

 

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14.        Miscellaneous. All notices provided for herein shall be given in
accordance with the provisions of the Loan Agreement.

 

A.          [Intentionally Omitted].

 

B.           This Note is given to evidence an obligation incurred for business
purposes and not for personal, single family residential or agricultural
purposes.

 

C.           This Note may not be terminated orally, but only by a discharge in
writing and signed by the party who is the owner and holder of this Note at the
time enforcement of any discharge is sought.

 

D.          MAKER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE RELATED
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. MAKER
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT LENDER HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE OTHER RELATED DOCUMENTS, AND THAT LENDER WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. MAKER WARRANTS AND REPRESENTS
THAT MAKER HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
COUNSEL, AND THAT MAKER KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

[SIGNATURE ON NEXT PAGE]

 

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Signed and delivered effective as of (but not necessarily on) the date set forth
above.

 

“MAKER” LOMAS ENCANTADAS DEVELOPMENT COMPANY, LLC,   a New Mexico limited
liability company         By: /s/ Carey A. Plant     Carey A. Plant, Vice
President

 

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