AMREP CORPORATION (NYSE:AXR) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On December 18, 2017, Lomas Encantadas Development Company LLC (“Borrower”), an indirect subsidiary of AMREP Corporation, entered into a Development Loan Agreement with BOKF, NA dba Bank of Albuquerque (“Lender”). The Development Loan Agreement is evidenced by a Non-Revolving Line of Credit Promissory Note, dated December 18, 2017, and is secured by a Mortgage, Security Agreement and Financing Statement, between Borrower and Lender, dated November 16, 2017, with respect to 343 planned residential lots within the Lomas Encantadas subdivision (the “Mortgaged Property”). to a Guaranty Agreement, dated December 18, 2017, entered into by AMREP Southwest Inc. (“Guarantor”) in favor of Lender, Guarantor has guaranteed Borrower’s obligations under each of the above agreements. The Development Loan Agreement, Non-Revolving Line of Credit Promissory Note, Mortgage, Security Agreement and Financing Statement, Guaranty Agreement and other related transaction documents are collectively referred to as the “Loan Documentation.”
to the Loan Documentation, Lender agrees to lend up to $4,750,000 to Borrower on a non-revolving line of credit basis to partially fund the development of the Mortgaged Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly. Lender is required to release the lien of its mortgage on any lot included in the Mortgaged Property upon Borrower making a principal payment of $43,000 or $53,000 depending on the location of the lot. Borrower is required to make periodic principal repayments to the extent not previously paid as follows: $1,370,000 on or before August 18, 2019, $599,000 on or before November 18, 2019, $599,000 on or before February 18, 2020, $599,000 on or before May 18, 2020, $599,000 on or before August 18, 2020 and $599,000 on or before November 18, 2020. The outstanding principal amount of the loan may be prepaid at any time without penalty. The loan is scheduled to mature on December 18, 2021. Borrower incurred certain customary costs and expenses and paid certain fees to Lender in connection with the loan.
Borrower and Guarantor have made certain representations and warranties in the Loan Documentation and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The Loan Documentation contains customary events of default for similar financing transactions, including: Borrower’s failure to make principal, interest or other payments when due; the failure of Borrower or Guarantor to observe or perform their respective covenants under the Loan Documentation; the representations and warranties of Borrower or the Guarantor being false;the insolvency or bankruptcy of Borrower or Guarantor; andthe failure of Guarantor to maintain a tangible net worth of at least $35 million. Upon the occurrence and during the continuance of an event of default, Lender may declare the outstanding principal amount and all other obligations under the Loan Documentation immediately due and payable.
The foregoing description of the Loan Documentation is a summary only and is qualified in all respects by the provisions of the Loan Documentation; copies of the Development Loan Agreement, Non-Revolving Line of Credit Promissory Note, Mortgage, Security Agreement and Financing Statement, Guaranty Agreement are attached hereto as Exhibits 10.1 through 10.4 and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description |
| 10.1 | Development Loan Agreement, dated as of December 18, 2017, between BOKF, NA dba Bank of Albuquerque and Lomas Encantadas Development Company, LLC. |
| 10.2 | Non-Revolving Line of Credit Promissory Note, dated December 18, 2017, by Lomas Encantadas Development Company, LLC in favor of BOKF, NA dba Bank of Albuquerque. |
| 10.3 | Mortgage, Security Agreement and Financing Statement, dated as of November 16, 2017, between BOKF, NA dba Bank of Albuquerque and Lomas Encantadas Development Company, LLC. |
| 10.4 | Guaranty Agreement, dated as of December 18, 2017, made by AMREP Southwest Inc. for the benefit of BOKF, NA dba Bank of Albuquerque. |
AMREP CORP. ExhibitEX-10.1 2 tv481717_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 DEVELOPMENT LOAN AGREEMENT This Development Loan Agreement (“Agreement”) is made and entered into effective as of December 18,…To view the full exhibit click here
About AMREP CORPORATION (NYSE:AXR)
Amrep Corporation is a holding company. The Company, through its subsidiaries, operates through two segments: real estate operations and fulfillment services. The Company conducts its real estate business through AMREP Southwest Inc. (AMREP Southwest) and its subsidiaries, with its activities occurring primarily in the City of Rio Rancho and certain adjoining areas of Sandoval County, New Mexico. The real estate operations include land sales and lease activities. Its fulfillment services is offered through its subsidiary Palm Coast Data LLC (Palm Coast) and its affiliates. Its fulfillment services business performs fulfillment and contact center services, including subscriber list and database management, payment and order processing and accounting, subscriber mailing services, customer service and contact center management, data processing and business intelligence solutions, print and digital marketing solutions, and product fulfillment warehousing, processing and distribution.