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. Pursuant 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.
Pursuant 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.