Document:

Exhibit 10.1

 

BUSINESS LOAN AGREEMENT

 

	
        Principal

$3,000,000.00
	Loan Date

 02-03-2020	Maturity

 08-01-2022	Loan No

2401	
        Call / Coll

70 / 26
	
        Account

0010188747
	Officer

 DC	Initials
	
        References in the boxes above are for Lender's
        use only and do not limit the applicability of this document to any particular loan or item.

        Any item above containing "***"
        has been omitted due to text length limitations.

 

	 	 	 	 	 
	Borrower:	MOUNTAIN
    HAWK EAST DEVELOPMENT COMPANY LLC 333 RIO RANCHO DR., SUITE 202
 RIO RANCHO, NM  87124	 	Lender:	Sandia
Laboratory Federal Credit Union

3707 Juan Tabo Blvd. Albuquerque,

 NM  87111

	 	 	 	 	 

 

THIS BUSINESS
LOAN AGREEMENT dated February 3, 2020, is made and executed between MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC ("Borrower")
and Sandia Laboratory Federal Credit Union ("Lender") on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including
those which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as
set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject
to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of
this Agreement.

 

TERM.
This Agreement shall be effective as of February 3, 2020, and shall continue in full force and effect until such time
as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, reasonable
attorneys’ fees, and other fees and charges, or until
such time as the parties may agree in writing to terminate this Agreement.

 

PROJECT.
The project to be funded with the proceeds of this Loan is expected to consist of the development of residential lots in Tract
37-A (as contemplated by the paragraph below entitled “PARTIAL RELEASE OF EXCESS LAND”) of the Hawksite Subdivision,
Rio Rancho, NM 87124 in three construction phases (the “Project”).

 

LINE
OF CREDIT. The Indebtedness includes a revolving line of credit in the maximum principal amount of $3,000,000.00; provided
that, the amount available under the credit line shall be limited to 75% of the bulk discounted value of Tract 37-A.
If no lots have been released from the Mortgage in a phase, then the bulk discounted value of such phase of Tract 37-A shall be
determined by appraisal. However, if lots have been released from the Mortgage in a phase, then the remaining value of such phase
shall equal the sale price per lot provided in the applicable (if any) purchase agreement with a homebuilder multiplied by the
number of unreleased lots in such phase. The bulk discounted value shall be calculated at the time of each draw using the Borrowing
Base form attached hereto as Exhibit “A” and made a part hereof. The proceeds of this Loan shall be used
to fund the construction costs of Tract 37-A in the following order: (1) construction of offsite infrastructure for the Project
and construction of infrastructure that services phase 1 of the Project through substantial completion of such phase; (2) construction
of infrastructure that services phase 2 of the Project through substantial completion of such phase; and (3) construction
of infrastructure that services phase 3 of the Project through substantial completion of such phase. “Substantial completion”
means the issuance of a certificate of substantial completion by the City of Rio Rancho.

 

CONDITIONS
PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of
the conditions set forth in this Agreement and in the Related Documents.

 

Loan
Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the
Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all
other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties;
(6) a completed Borrowing Base form (Exhibit “A”); and (7) such
Related Documents as Lender may require for the Loan; all
in form and substance satisfactory to Lender and Lender's counsel.

 

Borrower's
Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have
provided such other resolutions, authorizations, documents
and instruments as Lender or its counsel, may require.

 

Payment
of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable
as specified in this Agreement or any Related Document.

 

Representations
and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document
or certificate delivered to Lender under this Agreement are true and correct.

 

No
Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under
this Agreement or under any Related Document.

 

REPRESENTATIONS
AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement
of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

 

Organization.
Borrower is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in
good standing under and by virtue of the laws of the State of New Mexico.
Borrower is duly authorized to transact business in all other states in which Borrower is doing
business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing
business. Specifically, Borrower is, and at all times shall
be, duly qualified as a foreign limited liability company in all states in which the failure to so qualify would have a material
adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact
the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 333 RIO RANCHO
DR., SUITE 202, RIO RANCHO, NM 87124. Unless Borrower has designated otherwise in writing, the principal office is the office at
which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to
any change in the location of Borrower's state of organization or any change in Borrower's name. Borrower shall do all things necessary
to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and
Borrower's business activities.

 

Assumed
Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names
used by Borrower. Excluding the name of Borrower, the following
is a complete list of all assumed business names under which Borrower does business: None.

 

Authorization.
Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by
all necessary action by Borrower and do not conflict with, result
in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of organization or membership
agreements, or (b) any agreement or other instrument
binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's
properties.

 

Financial
Information. Each of Borrower's financial statements
supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has
been no material adverse change in Borrower’s financial condition subsequent to the date of the most recent financial statement
supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.

 

Legal
Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when
delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their
respective terms.

 

Properties.
Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good
title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower
has not used or filed a financing statement under any other name for at least the last five (5) years.

 

     

     

    

 

		BUSINESS LOAN AGREEMENT	
	Loan No: 2401	(Continued)	Page 2
	 	 	 

 

Hazardous
Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During
the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower
has no knowledge of, or reason to believe that there has been (a) any breach or violation
of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release
of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or
(c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower
nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat,
dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted
in compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents
to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral
with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes
only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person.
The representations and warranties contained herein are based on Borrower's due diligence in
investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby
(1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable
for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any
and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal,
release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement,
including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration
or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether
by foreclosure or otherwise.

 

Litigation
and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes)
against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by
Lender in writing.

 

Taxes.
To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have
been filed, and all taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith in the ordinary course
of business and for which adequate reserves have been provided.

 

Lien
Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would
be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.

 

Binding
Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers
thereof, as well as upon their successors, representatives and assigns, and are legally enforceable
in accordance with their respective terms.

 

AFFIRMATIVE
COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

 

Notices
of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial
condition, and (2) all existing and all threatened
litigation, claims, investigations, administrative proceedings
or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the
financial condition of any Guarantor.

 

Financial
Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine
and audit Borrower's books and records at all reasonable times.

 

Financial
Statements. Furnish Lender with the following:

 

Annual Statements.
As soon as available, but in no event later than one-hundred twenty (120) days after the end of each fiscal year, Borrower’s
balance sheet and income statement for the year ended, prepared by Borrower.

 

Additional
Requirements. Tax Returns. Not later than ninety (90) days after AMREP Corporation has filed it tax return for the tax reporting
period ended, Guarantor shall cause to be delivered to Lender the state and federal tax returns for Guarantor. Guarantor’s
annual internally prepared balance sheets and income statements shall be delivered to Lender within one hundred twenty (120) days
after the end of the fiscal year.

 

All
financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent
basis as Lender may reasonably request, and certified by Borrower as being true and correct.

 

Additional
Information. Furnish such additional information and statements, as Lender may request from time to time.

 

Insurance.
Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect
to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower,
upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance
in form satisfactory to Lender, including stipulations
that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender.
Each insurance policy also shall include an endorsement providing that coverage
in favor of Lender will not be impaired in any way by any act, omission or default of Borrower
or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss
payable or other endorsements as Lender may require.

 

Insurance
Reports. Furnish to Lender, upon request of Lender,
reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation
the following: (1) the
name of the insurer; (2) the risks insured; (3) the
amount of the policy; (4) the properties insured; (5) the
then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and
(6) the expiration date of the policy.

 

Guaranties.
Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor
named below, on Lender's forms, and in the amount and under the conditions set forth in those guaranties.

 

	Name of Guarantor	Amount
	AMREP SOUTHWEST, INC.	Unlimited

 

Other
Agreements. Comply with all terms and
conditions of all other agreements, whether
now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any
default in connection with any other such agreements.

 

Loan
Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by
Lender in writing.

 

     

     

    

 

		BUSINESS LOAN AGREEMENT	
	Loan No: 2401	(Continued)	Page 3
	 	 	 

 

Taxes,
Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature, imposed
upon Borrower or its properties, income,
or profits, prior to
the date on which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower's properties, income, or
profits. Provided however, Borrower will not be required to pay and discharge any such assessment,
tax, charge, levy, lien or claim so long as (1) the legality of the same shall be contested
in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with
respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP.

 

Performance.
Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in
writing of any default in connection with any agreement.

 

Operations.
Maintain executive and management personnel with substantially the same qualifications and experience as the present executive
and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business
affairs in a reasonable and prudent manner.

 

Environmental
Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as
may be requested by Lender or any governmental authority relative to any substance. or any waste or by-product of any substance
defined as toxic or a hazardous substance under applicable federal, state, or local law. rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used by Borrower.

 

Compliance
with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral,
including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance,
or regulation and withhold compliance during any proceeding, including appropriate
appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interests in the Collateral are not jeopardized Lender may require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.

 

Inspection.
Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's
other properties and to examine or audit Borrower's books, accounts. and records and to make copies and memoranda of Borrower's
books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower,
upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at Borrower's expense.

 

Environmental
Compliance and Reports. Borrower shall comply in all
respects with any and all Environmental Laws; not cause
or permit to exist, as a result of an intentional or unintentional
action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental
activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly
and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter
or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other
natural resources.

 

Additional
Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust. security agreements, assignments,
financing statements, instruments,
documents and other agreements as Lender or its attorneys may reasonably request to evidence
and secure the Loans and to perfect all Security Interests.

 

LENDER'S
EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest
in the Collateral or if Borrower fails to comply with any provision of this Agreement or any
Related Documents, including but not limited to Borrower's
failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents,
Lender on Borrower's behalf may {but shall not be obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on any Collateral and paying all
costs for insuring,
maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender
to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments
to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note;
or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.

 

CESSATION
OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan
Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender (B) Borrower or any Guarantor
dies. becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings,
or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's
financial condition, in the financial condition of any Guarantor or in the value of any Collateral securing any Loan;
or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender.

 

STATUTORY
LIEN. Borrower agrees that all loan advances under
this Agreement are secured by all shares and deposits in
all joint and individual accounts Borrower has with Lender now and in
the future. Borrower authorizes
Lender. to the extent permitted by applicable law, to apply
the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares
and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal
law if given as security are not subject to the security interest Borrower has given in Borrower's
shares and deposits.

 

PARTIAL RELEASE OF EXCESS
LAND. The Line of Credit Mortgage securing the Loan (the “Mortgage”), encumbers Tracts
numbered Thirty-five (35) and Thirty-seven (37) of RIO RANCHO HAWKSITE, as the same is shown and designated on the plat entitled
 “PLAT OF RIO RANCHO HAWKSITE, A SUBDIVISION OF A PORTION OF UNPLATTED PROPERTY WITHIN UNIT 25, RIO RANCHO ESTATES, BEING
A PORTION OF SECTION 8, 9 AND 17, TOWNSHIP 13 NORTH, RANGE 3 EAST, NEW MEXICO PRINCIPAL MERIDIAN, CITY OF RIO RANCHO, SANDOVAL
COUNTY, NEW MEXICO”, filed in the office of the County Clerk of Sandoval County, New Mexico on February 24, 2004, in
Vol. 3, Folio 2392B (Rio Rancho Estates Plat Book No. 17, Page 16)(the “Real Property”). Notwithstanding
anything herein to the contrary, Borrower intends to replat the Real Property and upon the recording of a replat of the Real Property
creating Tract 35-A consisting of approximately 17.6240 acres, more or less, and Tract 37-A consisting of 24.0510 acres, more or
less (the “Replat”), with Tract 37-A continuing to secure the Loan subject to partial release provisions set forth
in the Mortgage. Tract 35-A shall be released from the operation of this Mortgage following the recording of the Replat within
ten (10) business days after a written request from Grantor to Lender.

 

DEFAULT.
Each of the following shall constitute an Event of
Default under this Agreement:

 

Payment
Default. Borrower fails to make any payment when due
under the Loan.

 

     

     

    

 

		BUSINESS LOAN AGREEMENT	
	Loan No: 2401	(Continued)	Page 6
	 	 	 

 

Other Defaults.
Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or
in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

 

False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under
this Agreement or the Related Documents is false or misleading
in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

 

Death
or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made). any member withdraws from
Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower,
the appointment of a receiver for any part of Borrower's property, any assignment for
the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.

 

Defective
Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure
of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

 

Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the
Loan. This includes a garnishment of any of Borrower's
accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives
Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor
or forfeiture proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. If Guarantor
shall fail to maintain a minimum net worth equal to or greater than $29,000,000 measured annually
as of April 30th of each year and determined by review of financial statements required to be provided to
Lender. Guarantor will provide to Lender (a) Guarantor’s annual financial statements (balance sheet and income statement)
within 120 days of its Fiscal Year end (FYE is April 30). All financial information provided to Lender will be in form and
content acceptable to Lender in its reasonable discretion. Guarantor’s net worth covenant is a material inducement to Lender
making the Loan and Borrower agrees that a failure of Guarantor to maintain said minimum net worth shall constitute an Event of
Default under this Loan Agreement and Related Documents.

 

Adverse
Change. A material
adverse change occurs in Borrower's financial condition.

 

Right to Cure.
As a condition precedent to an Event of Default, Lender will provide Borrower written notice and thereafter either: (a) fifteen
(15) days to cure any monetary default; and (b) thirty (30) days to cure any non-monetary default or, if the non-monetary
default is of the nature that cannot reasonably be cured within thirty (30) days, then Grantor shall initiate steps which Lender,
in Lender’s sole discretion, deems sufficient to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.

 

EFFECT OF AN EVENT OF DEFAULT.
If any Event of Default shall occur, except where otherwise provided in this Agreement
or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other
agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements). and,
at Lender's option, all Indebtedness immediately will become due and payable, all without notice
of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection
above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided
in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's
rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make expenditures or to act to perform an obligation of Borrower
or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies.

 

MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

 

Amendments.
This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration
or amendment.

 

Attorneys'
Fees; Expenses. Borrower agrees to pay upon demand all of Lender's reasonable costs and reasonable expenses, including Lender's
reasonable attorneys' fees and Lender's reasonable legal expenses, incurred in connection with the enforcement of this Agreement.
Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the reasonable costs and reasonable
expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not
there is a lawsuit, including reasonable attorneys' fees and reasonable legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such reasonable additional fees as may be directed
by the court.

 

Caption
Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

 

Consent
to Loan Participation. Lender may provide to
any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other
matter related to the Loan provided that: (i) Lender notifies Borrower in writing of such disclosure prior to such disclosure;
and (ii) such purchaser executes, acknowledges and delivers to Lender and Borrower a confidentiality agreement in form and
substance mutually acceptable to Borrower and Lender.

 

Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the
laws of the State of New Mexico without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in
the State of New Mexico.

 

Choice
of Venue. If there is a lawsuit, Borrower agrees upon
Lender's request to submit to the jurisdiction of the courts of Sandoval County, State
of New Mexico.

 

No
Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other
provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender
and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower’s or any Grantor's
obligations as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld
in the sole discretion of Lender.

 

     

     

    

 

		BUSINESS LOAN AGREEMENT	
	Loan No: 2401	(Continued)	Page 7
	 	 	 

 

Notices.
Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered
(unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited
in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the
beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice
to the other parties, specifying that the purpose of the notice is to change the party's address.
For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current
address. Unless otherwise provided or required by law, if there
is more than one Borrower, any notice given by Lender to
any Borrower is deemed to be notice given to all Borrowers.
Notice by facsimile is expressly prohibited.

 

Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance.
If feasible, the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless
otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect
the legality, validity or enforceability of any other provision of this Agreement.

 

Subsidiaries
of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's
subsidiaries. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender
to make any Loan or other financial accommodation to any of Borrower's
subsidiaries.

 

Successors
and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents
shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower
shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior
written consent of Lender.

 

Survival
of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying
on all representations, warranties, and covenants made by Borrower in this Agreement or in
any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further
agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the
extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made
and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower's
Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the
last to occur.

 

Time
is of the Essence. Time
is of the essence in the performance of this Agreement.

 

DEFINITIONS.
The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically
stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America.
Words and terms used in the singular shall include the plural, and the plural shall include
the singular, as the context may require. Words and terms
not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in
accordance with generally accepted accounting principles as in effect on the date of this Agreement:

 

Advance. The
word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf on a
line of credit or multiple advance basis under the terms and conditions of this Agreement.

 

Agreement.
The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified
from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.

 

Borrower.
The word "Borrower" means MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC and includes all co-signers and co-makers
signing the Note and all their successors and assigns.

 

Collateral.
The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal
property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of a security interest, mortgage,
collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien
or title retention contract, lease or consignment intended as a security device, or any other security or lien interest
whatsoever, whether created by law, contract, or otherwise.

 

Environmental
Laws. The words "Environmental Laws" mean any and all state, federal and local statutes,
regulations and ordinances relating to the protection of human health or the environment, including
without limitation the Comprehensive Environmental Response,
Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. No. 99-499 ("SARA"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq.,
or other applicable state or federal laws, rules,
or regulations adopted pursuant thereto.

 

Event
of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in
the default section of this Agreement.

 

GAAP.
The word "GAAP" means generally accepted accounting principles.

 

Grantor.
The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for
the Loan, including without limitation all
Borrowers granting such a Security Interest.

 

Guarantor.
The word "Guarantor" means AMREP
SOUTHWEST, INC.

 

Guaranty.
The word "Guaranty" means
the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

 

Hazardous
Substances. The words "Hazardous Substances"
mean materials that, because of their quantity, concentration
or physical, chemical or infectious characteristics, may
cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed
of, generated, manufactured, transported or otherwise handled.
The words “Hazardous Substances" are used in their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental
Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction
thereof and asbestos.

 

Indebtedness.
The word "Indebtedness" means the indebtedness
evidenced by the Note, including all principal and interest together with all other indebtedness and costs and expenses for which
Borrower is responsible under this Agreement or under any of the Related Documents.

 

Lender.
The word "Lender" means Sandia Laboratory Federal Credit Union, its successors and assigns.

 

Loan.
The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described
on any exhibit or schedule attached to this Agreement from time to time.

 

Note.
The word "Note" means the Note dated February 3, 2020 and executed by MOUNTAIN HAWK EAST DEVELOPMENT COMPANY
LLC in the principal amount of $3,000,000, together with
all renewals of, extensions of, modifications of, refinancing of, consolidations of, and substitutions for the note or credit agreement.

 

     

     

    

 

		BUSINESS LOAN AGREEMENT	
	Loan No: 2401	(Continued)	Page 8
	 	 	 

 

Related
Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Loan.

 

Security
Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants,
arrangements, understandings or other agreements, whether created by law, contract, or otherwise,
evidencing, governing, representing, or creating a Security
Interest.

 

Security Interest.
The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future,
whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise.

 

BORROWER
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN
AGREEMENT IS DATED FEBRUARY 3, 2020.

 

BORROWER:

 

MOUNTAIN HAWK EAST DEVELOPMENT COMPANY
LLC

 

 

	 	By:	/s/ Carey Plant
	 	 	CAREY PLANT, Vice President of MOUNTAIN
 HAWK EAST DEVELOPMENT COMPANY LLC

 

LENDER:

 

SANDIA LABORATORY FEDERAL CREDIT
UNION

 

 

	 	By:	/s/ Dan Cover
	 	 	
        Dan Cover, Vice
President

 

     

     

    

 

		BUSINESS LOAN AGREEMENT	
	Loan No: 2401	(Continued)	Page 9
	 	 	 

 

Exhibit “A”
 – Borrowing Base Form

 

	 	Mountain Hawk East Development Company, LLC Borrowing Base Calculation	 
	Line	 
	 	 	As of ____________________________________	 	 
	 	Based on the Phase 1, 2 and 3 bulk value contained in the appraisal dated  _______________  	 
	Phase 1	 $                                        -   	 
	1	if no lots have been released from the Mortgage in such phase	 
	OR	 
	2	if lots have been released from the Mortgage in such phase, then the remaining value of such phase shall equal the sale price per lot provided in the applicable (if any) purchase agreement with a homebuilder multiplied by the number of unreleased lots in such phase	 $                                        -   	 
	Total lots owned by Borrower _________ multipled by lot purchase price__________ contained in the applicable (if any) purchase agreement with a homebuilder with respect to the lots in such phase (repeat calculation for any additional contracts)	 
	 
	 	 	 	 	 
	Phase 2	 $                                        -   	 
	3	if no lots have been released from the Mortgage in such phase	 
	OR	 
	4	if lots have been released from the Mortgage in such phase, then the remaining value of such phase shall equal the sale price per lot provided in the applicable (if any) purchase agreement with a homebuilder multiplied by the number of unreleased lots in such phase	 $                                        -   	 
	Total lots owned by Borrower _________ multipled by lot purchase price__________ contained in the applicable (if any) purchase agreement with a homebuilder with respect to the lots in such phase (repeat calculation for any additional contracts)	 
	 
	 	 	 	 	 
	Phase 3	 $                                        -   	 
	5	if no lots have been released from the Mortgage in such phase	 
	OR	 
	6	if lots have been released from the Mortgage in such phase, then the remaining value of such phase shall equal the sale price per lot provided in the applicable (if any) purchase agreement with a homebuilder multiplied by the number of unreleased lots in such phase	 $                                        -   	 
	Total lots owned by Borrower _________ multipled by lot purchase price__________ contained in the applicable (if any) purchase agreement with a homebuilder with respect to the lots in such phase (repeat calculation for any additional contracts)	 
	 
	 	 	 	 	 
	7	Eligible Collateral Value (Total the appropriate lines listed above)                                                                      	 	 
	8	Collateral Margin	75%	 
	9	Total Margined Collateral Value must be greater than or equal to the balance on the revolving line of credit (Multiply line 7 by line 8)	 $                                        -   	 
	 	 	 	 	 
	 	Total Potential Debt Exposure (existing $3.0MM RLOC)	 $                             3,000,000 	 
	 	 	 	 	 
	 	 	 	 	 
	 	_________________________________           ________________________________	 	 
	 	Signature:                                                                Date:Exhibit 10.2

  

PROMISSORY NOTE

 

	Loan No: 2401	 	Page 1
	 	 	 

  

	
        Principal

        $3,000,000.00
	Loan Date

 02-03-2020	Maturity 

08-01-2022	Loan No

 2401	
        Call / Coll

        70 / 26
	
        Account

        0010188747
	Officer 

DC	Initials
	
        References in the boxes above
        are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

        Any
        item above containing "***" has been omitted due to text length limitations.

 

 

	Borrower:	MOUNTAIN HAWK EAST DEVELOPMENT
COMPANY LLC	Lender:	Sandia Laboratory Federal Credit Union
	 	333 RIO RANCHO DR., SUITE 202 RIO	 	3707 Juan Tabo Blvd.
	 	RANCHO, NM 87124	 	Albuquerque, NM 87111

 

 

 

	Principal Amount: $3,000,000.00	Interest Rate: 4.500%	Date of Note: February 3, 2020

 

PROMISE
TO PAY. MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC ("Borrower") promises to pay to Sandia Laboratory Federal Credit Union
("Lender"), or order, in lawful money of the United States of America, the principal amount of Three Million
& 00/100 Dollars ($3,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding
principal balance of each advance, calculated as described in the "INTEREST CALCULATION METHOD" paragraph using an interest
rate of 4.500% per annum. Interest shall be calculated from the date of each advance until repayment of each advance. The interest
rate may change under the terms and conditions of the "INTEREST AFTER DEFAULT" section.

 

PAYMENT.
Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on August
1, 2022. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning
March 1, 2020, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed
or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late
charges; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such other place
as Lender may designate in writing.

 

INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/365 basis; that is, by applying the ratio of the interest rate over
the number of days in a year (365 for all years, including leap years), multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed
using this method.

 

PREPAYMENT.
Borrower agrees that all loan fees and other prepaid finance charges are earned fully as
of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing,
Borrower may pay without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due.
Borrower agrees not to send Lender payments marked "paid in full", "without
recourse", or similar language. If
Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this
Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes
 "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: Sandia Laboratory Federal Credit Union, Attn: Business Services, 3707 Juan
Tabo Blvd. Albuquerque, NM 87111.

 

LATE
CHARGE. If a payment is late 10 or more days, Borrower will be charged 5.000% of the unpaid portion of the regularly
scheduled payment or $10.00, whichever is greater.

 

INTEREST
AFTER DEFAULT. Upon the occurrence of an Event of Default, including failure to pay upon
final maturity, the interest rate on this Note shall be
increased by 5.000 percentage points. However,
in no event will the interest rate exceed the maximum interest
rate limitations under applicable law.

 

DEFAULT.
Each of the following shall constitute an event of default ("Event of Default")
under this Note:

 

Payment
Default. Borrower fails to make any payment when due under this Note.

 

Other
Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this
Note or in any of the related documents or to comply with
or to perform any term, obligation, covenant or condition
contained in any other agreement between Lender and Borrower.

 

False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower
or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or
at the time made or
furnished or becomes false or misleading at any time thereafter.

 

Death
or Insolvency. The dissolution of
Borrower (regardless
of whether
election to continue
is made), any member withdraws
from Borrower, or any other termination
of Borrower's existence as a going business or the death of any member, the insolvency of Borrower the appointment of a receiver
for any part of Borrower's property, any assignment for
the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.

 

Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental
agency against any collateral securing the loan. This includes
a garnishment of any of Borrower's accounts, including
deposit accounts, with Lender. However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness
of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor
or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor
or forfeiture proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.

 

Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or
any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note.

 

Adverse
Change. A material adverse change occurs in Borrower's financial condition.

 

Right
to Cure. As a condition precedent to an Event of Default, Lender will provide Borrower written notice and thereafter
either: (a) fifteen (15) days to cure any monetary default; and (b) thirty (30) days to cure any non-monetary default or, if the
non-monetary default is of the nature that cannot reasonably be cured within thirty (30) days, then Grantor shall initiate steps
which Lender, in Lender’s sole discretion, deems sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

    

     

    

  

PROMISSORY NOTE

 

	Loan No: 2401	 	Page 2
	 	 	 

 

LENDER'S
RIGHTS. Upon the occurrence of an Event of Default, Lender may declare the entire unpaid
principal balance under this Note and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.

 

ATTORNEYS'
FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower
does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's reasonable legal expenses,
whether or not there is a lawsuit, including reasonable attorneys' fees, reasonable expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also
will pay any court costs, in addition to all other sums provided by law.

 

GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of New Mexico without regard to its conflicts of law provisions. This Note
has been accepted by Lender in the State of New Mexico.

 

CHOICE
OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts located
in Sandoval County, State of New Mexico.

 

STATUTORY
LIEN. Borrower agrees that all loan advances under this Note are secured by all shares
and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to
the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Note when Borrower
is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special
tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's
shares and deposits.

 

COLLATERAL.
Borrower acknowledges this Note is secured by the following collateral described in the security instruments listed
herein:

 

(A)  
a Line of Credit Mortgage, dated February 3, 2020, to Lender on real property located in SANDOVAL
County, State of New Mexico.

 

(B)  
a Collateral Assignment of Purchase Agreement dated February 3, 2020, by and from Borrower to and in favor of Lender which
assigns that certain Lot Purchase Agreement dated as of August 30, 2019.

 

LINE
OF CREDIT. This Note evidences a revolving line of credit.
The principal amount of this Note may be drawn, paid down, redrawn, and repaid in conformity with the Advances provision of this
Note. Advances under this Note may be requested either orally or in writing by Borrower or
by an authorized person. Lender may, but need not, require
that all oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. Borrower agrees
to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any
of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements
on this Note or by Lender’s internal records, including daily computer printouts.

 

SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its
successors and assigns.

 

GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this
fact will not affect the rest of the Note. Lender
may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower, to the extent allowed
by law, waives presentment, demand for payment and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, Borrower shall not be released
from liability. Borrower agrees that Lender may renew
or extend (repeatedly and for any length
of time) this loan or release any party or guarantor or
collateral or impair, fail to realize
upon or perfect Lender's security interest
in the collateral; and
take any other action
deemed necessary by Lender without the consent of or notice
to anyone. Borrower also agrees that Lender may modify
this loan without the consent of or notice to anyone other than Borrower.

 

PRIOR TO
SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT
OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

MOUNTAIN HAWK EAST DEVELOPMENT COMPANY
LLC

 

 

	By:	/s/ Carey Plant	 
	 	CAREY PLANT, Vice President of MOUNTAIN
	 	HAWK EAST DEVELOPMENT COMPANY LLC

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