Document:

Exhibit 10.3

 

	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.

 

RECORDATION REQUESTED BY:

Sandia Laboratory
Federal Credit Union

3707 Juan Tabo Blvd.

Albuquerque,
NM 87111

 

WHEN RECORDED MAIL TO:

Sandia Laboratory
Federal Credit Union

3707 Juan Tabo Blvd.

Albuquerque,
NM 87111

 

SEND TAX NOTICES TO:

Sandia Laboratory
Federal Credit Union

3707 Juan Tabo Blvd.

Albuquerque,
NM 87111

 

	 	 	FOR RECORDER'S USE ONLY

 

LINE OF CREDIT MORTGAGE

 

MAXIMUM LIEN. The
lien of this Mortgage shall not exceed at any one time $6,000,000.00.

 

THIS MORTGAGE dated Februaryuary
3, 2020, is made and executed between MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC, A NEW MEXICO LIMITED LIABILITY COMPANY (referred
to below as "Grantor") and Sandia Laboratory Federal Credit Union, whose address is 3707 Juan Tabo Blvd., Albuquerque,
NM 87111 (referred to below as "Lender").

 

GRANT OF MORTGAGE. Grantor,
for consideration paid, grants and conveys to Lender all of Grantor's right, title, and interest in and to the following described
real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements,
rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch
or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation
all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in SANDOVAL County, State of New
Mexico:

 

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 or its
address is commonly known as a portion of TRACTS 35 and 37 OF HAWKSITE SUBDIVISION, RIO RANCHO, NM 87124. If there is a
conflict between the legal description and the Real Property address, the legal description shall control. 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.

 

This
Mortgage secures the Indebtedness including, without limitation, a revolving line of credit, which obligates Lender to make advances
to Grantor so long as Grantor complies with all the terms of the Note.

 

WITH MORTGAGE COVENANTS.

 

Grantor presently
assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents
from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and
Rents.

 

THIS MORTGAGE, INCLUDING
THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT
OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE
AND IS UPON THE STATUTORY MORTGAGE CONDITION FOR THE BREACH OF WHICH IT IS SUBJECT TO FORECLOSURE AS PROVIDED BY LAW. THIS MORTGAGE
IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:

 

PAYMENT AND PERFORMANCE.
Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become
due and shall strictly perform all of Grantor's obligations under this Mortgage.

 

POSSESSION
AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the
following provisions:

 

Possession
and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property;
(2) use, operate or manage the Property; and (3) collect the Rents from the Property.

 

Duty to Maintain.
Grantor shall maintain the Property in tenantable condition
and promptly perform all repairs, replacements, and maintenance necessary to preserve its value.

 

Compliance
with Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership
of the Property, 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 the Property; (2) Grantor has no knowledge of, or reason to
believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (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 Property by any prior owners or occupants
of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters;
and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant,
contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release
any Hazardous Substance on, under. about or from the Property; and (b) 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. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense,
as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests
made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the
part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due
diligence in investigating the Property for Hazardous
Substances. Grantor hereby (1) releases and waives
any future claims against Lender for indemnity or contribution in the event Grantor 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 Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring
prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The
provisions of this section of the Mortgage, including the obligation to indemnify and defend. shall survive the payment of the
Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition
of any interest in the Property, whether by foreclosure or otherwise.

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 2
	 	 	 

 

Nuisance,
Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or
to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant
to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock
products without Lender's prior written consent. Nothing contained in this section, or on the Mortgage, generally, shall be interpreted
to prevent Grantor from, or otherwise require Lender’s consent prior to, engaging in the routine business of developing the
raw land to sites ready for residential construction.

 

Removal of
Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent.
As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.

 

Lender's
Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to
attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions
of this Mortgage.

 

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

 

Duty
to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition
to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect
and preserve the Property.

 

TAXES AND LIENS. The
following provisions relating to the taxes and liens on the Property are part of this Mortgage:

 

Payment.
Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water
charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done
on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having
priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing
by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph.

 

Right
to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the
obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of
nonpayment, Grantor shall within thirty (30) days after the lien arises or, if a lien is filed, within thirty (30) days after Grantor
has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit
with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge
the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the
lien. In any contest, Grantor shall defend itself and Lender
and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee
under any surety bond furnished in the contest proceedings.

 

Evidence
of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments
against the Property.

 

PROPERTY DAMAGE INSURANCE.
The following provisions relating to insuring the Property are a part of this Mortgage:

 

Maintenance
of Insurance. The amount specified for insurance as provided in the statutory mortgage condition is the full insurable
value of the improvements on a replacement basis. Grantor shall procure and maintain policies of fire insurance with standard extended
coverage endorsements on a replacement basis for the full insurable value covering all improvements on the Real Property in an
amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Policies
shall be written by such insurance companies and in such
form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing
a stipulation that coverage will not be cancelled or diminished without a minimum of ten (10) days' prior written notice to
Lender. Should the Real Property at any time become located in an
area designated by the Administrator of the Federal Emergency Management Agency as a special
flood hazard area, Grantor agrees to obtain and maintain flood insurance for the full unpaid principal balance of the loan and
any prior liens on the property securing the loan, up to
the maximum policy limits set under the National Flood Insurance Programs, or as otherwise required by Lender, and to maintain
such insurance for the term of the loan. Flood insurance
may be purchased under the National Flood Insurance Program, from private insurers providing "private flood insurance"
as defined by applicable federal flood insurance statutes and regulations, or from another flood insurance provider that is both
acceptable to Lender in its sole discretion and permitted by applicable federal flood insurance statutes and regulations.

 

Grantor's
Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on
each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of
the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining
that value; and (5) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost
of the Property.

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 3
	 	 	 

 

LENDER'S
EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if
Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure
to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents,
Lender on Grantor'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 the Property and paying all costs for insuring,
maintaining and preserving the Property. 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 Grantor. 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. The Mortgage also will
secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled
upon the occurrence of any Event of Default.

 

WARRANTY;
DEFENSE OF TITLE. The following provisions relating to
ownership of the Property are a part of this Mortgage:

 

Title.
Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in
fee simple, free and
clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy,
title report, or final title opinion issued in favor of, and
accepted by, Lender in connection with this Mortgage, and (b) Grantor has the full right, power, and authority to execute
and deliver this Mortgage to Lender.

 

Defense
of Title. Subject to the exception in the paragraph
above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event
any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage,
Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such
proceeding, but Lender shall be entitled to participate
in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause
to be delivered, to Lender such instruments as Lender may request from time to time to permit
such participation.

 

Compliance
with Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.

 

Survival
of Representations and Warranties. All representations, warranties,
and agreements made by Grantor in this Mortgage shall survive the
execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time
as Grantor's Indebtedness shall be paid in full.

 

CONDEMNATION.
The following provisions relating to condemnation proceedings
are a part of this Mortgage:

 

Proceedings.
If any proceeding in
condemnation is filed, Grantor
shall promptly notify Lender in writing, and
Grantor shall promptly take such steps as may
be necessary to defend the action and obtain the award. Grantor may be the nominal party
in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel
of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments
and documentation as may be requested by Lender from time
to time to permit such participation.

 

Application
of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied
to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment
of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation.

 

IMPOSITION OF TAXES,
FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are
a part of this Mortgage:

 

Current
Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take
whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse
Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage,
including without limitation all taxes. fees, documentary
stamps, and other charges for recording or registering this Mortgage.

 

Taxes.
The following shall constitute taxes to which this section applies: (1) a
specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific
tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage;
(3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on
all or any portion of the Indebtedness or on payments of
principal and interest made by Grantor.

 

Subsequent
Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the
same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided
below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above
in the Taxes and Liens section and deposits with Lender
cash or a sufficient corporate surety bond or other security satisfactory to Lender.

 

SECURITY
AGREEMENT; FINANCING STATEMENTS. The following
provisions relating to this Mortgage as a security agreement are a part of this Mortgage:

 

Security
Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and
Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.

 

Security
Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's
security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender
may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage
as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest.
Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property.
Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a
manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after
receipt of written demand from Lender to the extent permitted by applicable law.

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 4
	 	 	 

 

Addresses.
The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest
granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of
this Mortgage.

 

FURTHER ASSURANCES;
ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage:

 

Further
Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause
to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded,
refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and
all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments
of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in
order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations
under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage
as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender
agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred
in connection with the matters referred to in this paragraph.

 

Attorney-in-Fact.
If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose
of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole
opinion, to accomplish the matters referred to in the preceding paragraph.

 

PARTIAL
RELEASES. Lender shall execute partial releases of the lien of this Mortgage upon the following conditions: Payment to Lender
in the amount of $52,000 PER LOT for each lot in which
a partial release is being requested.

 

FULL PERFORMANCE.
If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage,
Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of
any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property.

 

EVENTS OF DEFAULT. Each
of the following, at Lender's option, shall constitute an Event of Default under this Mortgage:

 

Payment Default.
Grantor fails to make any payment when due under the Indebtedness.

 

Default on
Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or
any other payment necessary to prevent filing of or to effect discharge of any lien.

 

Other
Defaults. Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Mortgage 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 Grantor.

 

False
Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this
Mortgage 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.

 

Defective
Collateralization. This Mortgage 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.

 

Death or
Insolvency. The dissolution of Grantor's (regardless of whether election to continue is made), any member withdraws from the
limited liability company, or any other termination of Grantor's existence as a going business or the death of any member, the
insolvency of Grantor, the appointment of a receiver for any part of Grantor'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 Grantor.

 

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 Grantor or by any governmental agency against any property securing the Indebtedness.
This includes a garnishment of any of Grantor's accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness
of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor 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.

 

Breach of
Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied
within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation
of Grantor to Lender, whether existing now or later.

 

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.

 

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

 

Right to
Cure. As a condition precedent to an Event of Default, Lender will provide Grantor 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.

 

RIGHTS AND REMEDIES
ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise
any one or more of the following rights and remedies. in addition to any other rights or remedies provided by law:

 

Accelerate
Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately
due and payable, including any prepayment penalty that Grantor would be required to pay.

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 5
	 	 	 

 

UCC Remedies.
With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party
under the Uniform Commercial Code.

 

Collect
Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including
amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness.
In furtherance of this right, Lender may require any tenant or other user of the Property to
make payments of rent or use fees directly to Lender. If
the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments
received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other
users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any
proper grounds for the demand existed. Lender may exercise
its rights under this subparagraph either in person, by agent, or through a receiver .

 

Appoint
Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with
the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents
from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may
serve without bond if permitted by law. Lender's right
to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial
amount. Employment by Lender shall not disqualify a person from serving as a receiver .

 

Judicial
Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property.

 

Deficiency
Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due
to Lender after application of all amounts received from the exercise of the rights provided in this section.

 

Tenancy at
Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or
the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property,
or (2) vacate the Property immediately upon the demand of Lender.

 

Other
Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity.

 

Sale of the
Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled.
In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in
one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property.

 

Notice
of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of
the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall
mean notice given at least ten (10) days before the time of the sale or disposition. Any
sale of the Personal Property may be made in conjunction with any sale of the Real Property.

 

Election
of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall
not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed
so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or
restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety
or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness.

 

Attorneys'
Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled
to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court
action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that are reasonably necessary
at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable
on demand and shall bear interest at the Note rate from the date of the expenditure until repaid.
Expenses covered by this paragraph include,
without limitation, however 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 and reasonable expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment
collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports,
and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition
to all other sums provided by law.

 

Right of
Redemption. IF THIS MORTGAGE IS FORECLOSED, THE REDEMPTION PERIOD AFTER JUDICIAL SALE SHALL BE ONE (1) MONTH IN LIEU OF NINE
(9) MONTHS.

 

NOTICES.
Any notice required to be given under this Mortgage, including without
limitation any notice of default and any notice of sale 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 Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage
shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its
address for notices under this Mortgage 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, Grantor agrees to keep Lender
informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor,
any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Notice by facsimile is expressly prohibited.

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 6
	 	 	 

 

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

 

Amendments.
This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage 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.

 

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

 

Governing
Law. This Mortgage 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 Mortgage has been accepted by Lender in
the State of New Mexico.

 

Choice
of Venue. If there is a lawsuit, Grantor 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 Mortgage 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 Mortgage 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 Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this Mortgage, 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.

 

Severability.
If a court of competent jurisdiction finds any provision of this Mortgage 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 Mortgage. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of
any other provision of this Mortgage.

 

Merger. There
shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any
time held by or for the benefit of Lender in any capacity, without the written consent of Lender.

 

Successors
and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding
upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person
other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under
the Indebtedness.

 

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

 

Waiver of
Homestead Exemption. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State
of New Mexico as to all Indebtedness secured by this Mortgage.

 

DEFINITIONS. The
following capitalized words and terms shall have the following meanings when used in this Mortgage. 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 Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code:

 

Borrower.
The word "Borrower" means MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC.

 

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 Mortgage in the events
of default section of this Mortgage.

 

Grantor.
The word "Grantor" means MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC.

 

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.

 

Improvements.
The word "Improvements" means all existing
and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities,
additions, replacements and other construction on the Real Property.

 

Indebtedness.
The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note
or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the
Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred
by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage.
Specifically, without limitation, Indebtedness includes all amounts that may be indirectly
secured by the Cross-Collateralization provision of this Mortgage.

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 7
	 	 	 

 

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

 

Mortgage.
The word "Mortgage" means this Mortgage between Grantor and Lender.

 

Note. The
word "Note" means the promissory note dated February 3, 2020, in the original principal amount of

 

$3,000,000.00
from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of,
and substitutions for the promissory note or agreement. The interest rate on the Note is 4.500% per annum.

 

Personal
Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now
or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts,
and additions to, all replacements of, and all substitutions
for, any of such property; and together with all proceeds {including without limitation all insurance proceeds and refunds of premiums)
from any sale or other disposition of the Property.

 

Property.
The word "Property" means collectively the Real Property and the Personal Property.
The word "Property" also includes all existing or subsequently erected or affixed
buildings, improvements and fixtures, all appurtenances,
all rights relating to the Real Property (including minerals, oil,
gas, water, and the like), and all ditch rights (including
stock in utilities with ditch or irrigation
rights).

 

Real
Property. The words "Real Property" mean the real property, interests
and rights, as further described in this Mortgage.

 

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 Indebtedness.

 

Rents.
The word "Rents" means all present and future rents, revenues, income,
issues, royalties, profits, and other benefits derived from the Property.

 

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS
OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS.

 

GRANTOR:

 

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

 

 

 

LIMITED LIABILITY COMPANY
ACKNOWLEDGMENT

 

 

	STATE OF NEW MEXICO	) ss
	 	 
	COUNTY OF SANDOVAL	)

 

This instrument was acknowledged
before me on February 3, 2020, by CAREY PLANT, Vice President of MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC, on behalf
of MOUNTAIN HAWK EAST DEVELOPMENT COMPANY LLC, a
limited liability company.

 

	 	/s/ Debra J. Torrez
	 	Notary Public

 

	 	Commission expiration:	3/28/2022

 

    

     

    

 

MORTGAGE

 

	Loan No: 2401	 	Page 8
	 	 	 

 

LENDER ACKNOWLEDGMENT

 

	STATE OF NEW MEXICO	) ss
	 	 
	COUNTY OF BERNALILLO	)

 

 

This instrument was acknowledged
before me on February 3, 2020, by DAN COVER, Vice President of SANDIA LABOROATORY FEDERAL CREDIT UNION, a Federal
credit union.

	 	/s/ Karla J. Walker
	 	Notary Public

 

	 	Commission expiration:	7/9/2021Exhibit 10.4

 

	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.

 

COMMERCIAL GUARANTY

 

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

 

CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees
full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all
Borrower's obligations under the Note and the Related Documents. This
is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when
lender has not exhausted lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing
the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,
on demand, in legal tender of the United States of America, in same-day funds, without set-off or deduction or counterclaim, and
will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability
is unlimited, and Guarantor's obligations are continuing.

 

INDEBTEDNESS.
The word "Indebtedness" as used in this Guaranty
means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and
all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabilities
and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively
or interchangeably with others, owes or will owe lender. "Indebtedness" includes, without limitation, loans, advances,
debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest
rate protection agreements or foreign currency exchange agreements or commodity price protection
agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances,
loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations
whether: voluntarily or involuntarily incurred; due or
to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined;
direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured
or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated
by lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may
be voidable for any reason (such as infancy, insanity, ultra
vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. However, "Indebtedness"
shall not include any liabilities and obligations under any agreement regulated as a "swap"
by the Commodity Exchange Act, as amended, unless otherwise agreed in writing.

 

If
Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, lender's rights under
all guaranties shall be cumulative. This Guaranty shall
not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability
will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties.

 

CONTINUING
GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT,
PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN
AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON
THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND
SUCCEEDING INDEBTEDNESS EVEN WHEN All OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.

 

DURATION
OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any
notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt
by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations
under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in
writing. Guarantor’s written notice of revocation must be mailed to Lender, by certified mail, at lender's address listed
above or such other place as lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness
created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new
Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined
or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new
Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred
under a commitment that became binding before revocation; any renewals, extensions, substitutions, and modifications of the Indebtedness.
This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity,
regardless of lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other
legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability
of Guarantor under this Guaranty. A revocation Lender
receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty.
It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness
covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness,
even to zero dollars ($0.00), shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and
Guarantor's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may
from time to time be zero dollars ($0.00).

 

GUARANTOR'S
AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and
without lessening Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above,
to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise
to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more
times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases
of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to
take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any such security, with
or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more
of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how,
when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct
the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as lender in its discretion
may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness;
and (H) to assign or transfer this Guaranty in whole
or in part.

 

     

     

    

 

Guarantor’s
Net Worth. Guarantor shall 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
REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements
of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty;
(B) this Guaranty is executed at Borrower's request and not at the request of Lender;
(C) Guarantor has full power, right and authority to enter into this Guaranty;

 

[THE REMAINDER OF
THIS PAGE IS INTENTIONALLY BLANK]

 

     

     

    

 

	Loan No: 2401	Page 3
	 	 

 

(D) the
provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor
and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has
not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will
provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently
has been, and all future financial information which will be provided to Lender is and will be true and correct in all material
respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no
material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements
provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no
litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) is pending or
threatened against Guarantor in which the amount at issue is in excess of Two Hundred Fifty Thousand Dollars ($250,000.00); (1) Lender
has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to
keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose
to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower.

 

FINANCIAL
STATEMENTS AND TAX RETURNS. Not later than thirty (30) 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

 

GUARANTOR'S
WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending
money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including
notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction
on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection
with the creation of new or additional loans or obligations; (C) to
resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor;
(D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other
guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code;
(F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time,
with respect to any matter whatsoever.

 

Guarantor
also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights
or defenses arising by reason of (A) any "one action" or "anti-deficiency"
law or any other law which may prevent Lender from bringing any action, including a claim for
deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially
or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's
subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss
of rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor,
or of any other person, or by reason of the cessation of Borrower's liability from any cause
whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness
on the basis of unjustified impairment of any collateral for the Indebtedness; or (E) any defenses given to guarantors at
law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily
or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to
Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law
for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the
enforcement of this Guaranty.

 

Guarantor further
waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any counterclaim,
counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor,
or both.

 

GUARANTOR'S
UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences
and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined
to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public
policy.

 

STATUTORY
LIEN. Guarantor agrees that all Guarantor's obligations under this Guaranty
are secured by all shares and deposits in all joint and individual accounts Guarantor has with Lender now and in
the future. Guarantor authorizes Lender, to
the extent permitted by applicable law, to hold these funds if
there is a default and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty.
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 Guarantor has given
in Guarantor's shares and deposits.

 

SUBORDINATION
OF BORROWER'S DEBTS TO GUARANTOR. Guarantor
agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now
have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender
may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable
to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness.
Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower
or against any assignee
or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective
only for the purpose of assuring to Lender full payment
in legal tender of the Indebtedness. If Lender so requests,
any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with
a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized,
in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and
to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty.

 

     

     

    

 

	Loan No: 2401	Page 4
	 	 

 

Right to
Cure. As a condition precedent to either (a) any default under this Guaranty; (b) Event of Default as defined by
the Related Documents; or (c) the calling due of the Guarantor’s obligations of this Guaranty, Lender will provide Guarantor
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 Borrower or Guarantor 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.

 

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

 

Amendments.
This Guaranty, together with any
Related Documents, constitutes the
entire understanding
and agreement of the parties
as to the matters set forth in this Guaranty.
No alteration of or amendment to
this Guaranty 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. Guarantor 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 Guaranty. Lender
may hire or pay someone else to help enforce this Guaranty, and
Guarantor shall pay the reasonable costs and reasonable expenses of such enforcement. Costs and expenses include Lender’s
reasonable attorneys' fees and reasonable 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. Guarantor also shall pay all court costs and such additional reasonable
fees as may be directed by the court.

 

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

 

Governing
Law. This Guaranty 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.

 

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

 

Integration.
Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity
to be advised by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol
evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all
losses, claims, damages, and costs (including Lender's
attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements
of this paragraph.

 

Interpretation.
In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall
be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower
named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor"
respectively shall mean all and any one or more of them. The
words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees
of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself
will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions
of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable.
If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability
companies, or similar entities, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers,
or other agents acting or purporting to act on their behalf, and any indebtedness
made or created in reliance upon the professed exercise of such powers shall be guaranteed
under this Guaranty.

 

Notices.
Any notice required to be given under this Guaranty shall be given in writing, and,
except for revocation notices by Guarantor, 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 Guaranty. All revocation notices by Guarantor shall
be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION
OF GUARANTY." Any party may change its address for
notices under this Guaranty 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,
Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless
otherwise provided or required by law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed
to be notice given to all Guarantors. Notice by facsimile is expressly prohibited.

 

No
Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty 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 Guaranty 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 Guaranty. No prior waiver by Lender,
nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's
rights or of any of Guarantor's obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, 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.

 

Successors
and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be
binding upon and inure to the benefit of the parties, their
successors and assigns.

 

     

     

    

 

	Loan No: 2401	Page 5
	 	 

 

DEFINITIONS.
The following capitalized words and terms shall have the following meanings when used in this Guaranty: 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 Guaranty shall have the meanings attributed
to such terms in the Uniform Commercial Code:

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. 

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

 

Guaranty.
The word "Guaranty" means this guaranty from Guarantor to Lender. 

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. 

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 $3,000,000.00, together with all renewals of, extensions of, modifications of, refinancing of, consolidations of, and substitutions
for the note or credit agreement. 

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 Note.

 

EACH UNDERSIGNED
GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS
THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL
CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE
BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED FEBRUARY 3, 2020.

 

GUARANTOR:

 

AMREP SOUTHWEST, INC.

 

	 	By:	/s/
    Carey Plant
	 	 	Carey Plant, Vice President of
	 	 	AMREP SOUTHWEST, INC.

 

CORPORATE ACKNOWLEDGMENT

 

	STATE OF NEW MEXICO	 
	)	 ss
	)	 
	COUNTY OF SANDOVAL	 

 

This instrument was
acknowledged before me on February 3, 2020, by Carey Plant, Vice President
of AMREP SOUTHWEST, INC., a New Mexico corporation, on behalf of the corporation.

 

	 	/s/ Debra J. Torrez
	 	Notary Public	 	 
	 	 	 	 
	 	Commission expiration:	3/28/2022

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