(Revolving Line of Credit)
BANK: Compass Bank
333 Rio Rancho Drive NE
Rio Rancho, New Mexico 87124-1450
505 Marquette NW
Date: September 18, 2006
PROMISE TO PAY. AMREP Southwest, Inc. ("Borrower") promises to pay to Compass
Bank ("Bank"), or
order, in lawful money
of the United States of America, the
principal amount of Twenty Five Million Dollars ($25,000,000.00) or so much as
may be outstanding,
together with interest on the unpaid outstanding principal
balance of each
shall be calculated from the date of each
advance until repayment of each advance.
LINE OF CREDIT.
REVOLVING LINE. This Note evidences a revolving line of credit.
under this Note, as well as directions for payment from Borrower's accounts,
must be requested
by Borrower in writing
through its designated Authorized
unpaid principal balance owing on this Note at any time may
evidenced by endorsements on this Note or by Bank's internal
print-outs. Bank will
have no obligation to advance funds under
this Note if a default has occurred under the terms of this Note,
or Borrower is
not in compliance with the Agreement (defined below) or with any
that Borrower has with Bank, including any agreement made in
connection with the
signing of this Note.
hereunder, to the
total amount of the principal sum
stated above, may be
made by the holder at the joint request of (i)James Wall,
(ii)Gary L. Sullivan, Vice President (collectively, the
who are authorized to jointly request advances. Written
notice of the
signed by the
Persons, must be
received by Bank's
or department, via hand delivery,
form acceptable to
Bank. Bank is
entitled to rely on such written notice as authentic and
made; so long as prior
to making any
advance, Bank shall
request for the advance with either one of the
Authorized Persons. All advances will be made by deposit or credit
account(s) at Bank.
PAYMENT. Borrower will
pay the outstanding
principal plus accrued
September 17, 2008. In addition, Borrower will pay regular monthly
all accrued unpaid interest due as of each payment date,
beginning October 18,
2006, with all
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 interest, then to principal due, then to any
costs and other charges due under this Note, with any
remaining amount to the outstanding principal balance. The annual
for this Note is computed on a 365/360 basis; that is, by applying the ratio
the annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the
Borrower will pay Bank at Bank's address shown above or at such
other place as Bank may designate in writing.
RATE OPTIONS. Borrower
shall have the option to elect from two interest
described below as the
WSJ Rate Option or the LIBOR Rate Option.
Borrower shall elect one of the interest rate rates upon the
initial advance on
the Note and at the end of each Rate Period (as defined below). The entire
balance of the Note
shall bear interest at
interest rate as
provided below which
will continue until a
different rate is
The WSJ RATE OPTION shall apply to any Note
principal balance for
which the Borrower
has not designated a rate option.
NOTICE: Under no
circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law.
A. WSJ RATE
OPTION. The WSJ Rate Option is a rate of interest
subject to change from
time to time based on
changes in an
which is the prime rate as published in The Wall Street
table (the "Index").
The Index is not
the lowest rate
Bank on its loans.
If the Index
becomes unavailable during the term of this
loan, Bank may designate a substitute index after notice to
tell Borrower the current Index rate upon Borrower's request.
The interest rate
change will not occur more often than each day. Borrower understands that Bank
may make loans based on other rates as well. The interest rate to be applied
the unpaid principal
balance of this Note when the WSJ Rate option applies will
be at a rate of 1.00 percentage point under the Index.
B. LIBOR RATE OPTION. The Libor Rate Option is a rate based on