AMREP CORPORATION (NYSE:AXR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On June 17, 2019, 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 June 17, 2019, and is secured by a Mortgage, Security Agreement and Financing Statement, between Borrower and Lender, dated June 17, 2019, with respect to certain planned residential lots within the Lomas Encantadas subdivision located in Rio Rancho, New Mexico. to a Guaranty Agreement, dated June 17, 2019, entered into by AMREP Southwest Inc. (“Guarantor”), an indirect subsidiary of AMREP Corporation, in favor of Lender, Guarantor has guaranteed Borrower’s obligations under each of the above agreements.
to the loan documentation, Lender agrees to lend up to $2,475,000 to Borrower on a non-revolving line of credit basis to partially fund the development of certain planned residential lots within the Lomas Encantadas subdivision. 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 upon Borrower making a principal payment of $37,500. Borrower is required to make periodic principal repayments of borrowed funds not previously repaid as follows: $900,000 on or before March 17, 2021, $300,000 on or before June 17, 2021, $300,000 on or before September 17, 2021, $262,500 on or before December 17, 2021, $525,000 on or before March 17, 2022 and $187,500 on or before June 17, 2022. The outstanding principal amount of the loan may be prepaid at any time without penalty. The loan is scheduled to mature on June 17, 2022.
Borrower and Guarantor have made certain representations and warranties in connection with this loan 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; and the failure of Guarantor to maintain a tangible net worth of at least $32 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 immediately due and payable. Borrower incurred certain customary costs and expenses and paid certain fees to Lender in connection with the loan.
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 1.02 Termination of a Material Definitive Agreement.
Reference is made to Note 8 to the consolidated financial statements contained in the annual report on Form 10-K of AMREP Corporation for the year ended April 30, 2018, which was filed with the SEC on July 20, 2018, regarding the Development Loan Agreement entered into between Lender and Borrower in December 2017, in which Lender agreed to lend up to $4,750,000 to Borrower on a non-revolving line of credit basis to partially fund the development of certain residential lots within the Lomas Encantadas subdivision. Borrower has repaid all outstanding amounts due to Lender under such loan and, on June 17, 2019, the loan was terminated.
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 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 10.1 | Development Loan Agreement, dated as of June 17, 2019, between BOKF, NA dba Bank of Albuquerque and Lomas Encantadas Development Company, LLC. |
| 10.2 | Non-Revolving Line of Credit Promissory Note, dated June 17, 2019, 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 June 17, 2019, between BOKF, NA dba Bank of Albuquerque and Lomas Encantadas Development Company, LLC. |
| 10.4 | Guaranty Agreement, dated as of June 17, 2019, made by AMREP Southwest Inc. for the benefit of BOKF, NA dba Bank of Albuquerque. |
AMREP CORP. Exhibit
EX-10.1 2 tv523703_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 June 17,…
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.