-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BbKF666LT0LwUUGJf4Okw6MsXjtLFZ+6r/bc6ylqTEHgRrE2nxC32LHNP7GpwaOp 5/i0P67fzmox7JN1D4HHhA== 0000912057-00-021784.txt : 20000505 0000912057-00-021784.hdr.sgml : 20000505 ACCESSION NUMBER: 0000912057-00-021784 CONFORMED SUBMISSION TYPE: SC TO-I/A PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20000504 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMREP CORP CENTRAL INDEX KEY: 0000006207 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 590936128 STATE OF INCORPORATION: OK FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: SC TO-I/A SEC ACT: SEC FILE NUMBER: 005-12681 FILM NUMBER: 619478 BUSINESS ADDRESS: STREET 1: 641 LEXINGTON AVENUE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2127054700 MAIL ADDRESS: STREET 1: 641 LEXINGTON AVE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN REALTY & PETROLEUM CORP DATE OF NAME CHANGE: 19671019 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AMREP CORP CENTRAL INDEX KEY: 0000006207 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 590936128 STATE OF INCORPORATION: OK FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: SC TO-I/A BUSINESS ADDRESS: STREET 1: 641 LEXINGTON AVENUE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2127054700 MAIL ADDRESS: STREET 1: 641 LEXINGTON AVE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN REALTY & PETROLEUM CORP DATE OF NAME CHANGE: 19671019 SC TO-I/A 1 SCHEDULE TO I/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE TO Tender Offer Statement (Under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934) (Amendment No. 1) AMREP CORPORATION (Name of Subject Company (issuer)) AMREP CORPORATION (issuer and offeror) (Name of Filing Person(s) (identifying status as offeror, issuer or other person)) Common Stock, par value $.10 per share (Title of Class of Securities) 032159105 (CUSIP Number of Class of Securities) Edward B. Cloues, II, Chairman of the Board P.O. Box 888 Pitman, New Jersey 08071-0888 (856) 256-3310 (Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons) COPY TO: Edward B. Winslow Jacobs Persinger & Parker 77 Water Street New York, New York 10005 (212) 344-1866 CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- *TRANSACTION VALUATION AMOUNT OF FILING FEE - -------------------------------------------------------------------------------- $5,075,000 $1015.00 - -------------------------------------------------------------------------------- * Calculated solely for purposes of determining the filing fee. Based upon the purchase of 725,000 shares at the maximum tender offer price per share of $7.00. / / Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: N/A Filing Party: N/A Form or Registration No.: N/A Date Filed: N/A / / Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: / / third party tender offer subject to Rule 14d-1. /X/ issuer tender offer subject to Rule 13e-4. / / going-private transaction subject to Rule 13e-3. / / amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: / / INTRODUCTORY STATEMENT This Tender Offer Statement on Schedule TO (the "Statement") relates to the tender offer by AMREP Corporation, an Oklahoma corporation (the "Company"), to purchase up to 725,000 shares of its common stock, par value $.10 per share (the "Shares"), at prices, net to the seller in cash, not greater than $7.00 nor less than $5.25 per Share, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 4, 2000 (the "Offer to Purchase") and the related Letter of Transmittal. Copies of the Offer to Purchase and Letter of Transmittal are filed as Exhibits (a)(1)(i) and (a)(1)(ii), respectively, to this Statement. The information in the Offer to Purchase and Letter of Transmittal is incorporated herein by reference in answer to Items 1 through 11 of Schedule TO except as to those Items for which additional information is specifically provided herein. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. Except as set forth in the Offer to Purchase, neither the Company nor any person controlling the Company nor, to the Company's knowledge, any of its directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations). ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. Except as disclosed in the Offer to Purchase, the Company currently has no plans or proposals nor is the Company involved in any negotiations that relate to or would result in (a) any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (b) any purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (c) any material change in the present dividend policy or indebtedness or capitalization of the Company; (d) any change in the present Board of Directors or management of the Company; (e) any other material change in the Company's corporate structure or business; (f) a class of equity securities of the Company being delisted from a national securities exchange; (g) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; (h) the suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Exchange Act; (i) the acquisition by any person of additional securities of the Company or the disposition of securities of the Company; or (j) any change in the Company's Certificate of Incorporation or By-Laws or any actions which may impede the acquisition of control of the Company by any person. ITEM 7. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION. (b) There are no material conditions to the Company's arrangements for the financing for the tender offer and the financing has been obtained. ITEM 11. ADDITIONAL INFORMATION. (a)(1) Except as disclosed in the Offer to Purchase, there are no present or proposed material agreements between the Company and any of its executive officers, directors, controlling persons or subsidiaries. (a)(5) The Company is not aware of any legal proceedings pending or threatened, relating to the tender offer. ITEM 12. EXHIBITS. (a)(1)(i) Form of Offer to Purchase dated May 4, 2000. (a)(1)(ii) Form of Letter of Transmittal. (a)(1)(iii) Form of Notice of Guaranteed Delivery. (a)(1)(iv) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(v) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(vi) Form of Letter from the Company to participants in the Company Savings and Salary Deferral Plan, including the form of Direction Form to the Trustee of said Plan from participants in said Plan. (a)(1)(vii) Form of letter dated May 4, 2000 from the Chairman of the Company's Board of Directors to shareholders of the Company. (a)(1)(viii) Guidelines for Certification of Taxpayer Identification Number on Form W-9. (b)(1) Master Loan Agreement dated effective February 26, 1999 between AMREP Southwest, Inc. and Norwest Bank New Mexico, N.A. (b)(2) First Amendment to Master Loan Agreement Amended Effective January 26, 2000. (d) Not applicable. (g) Not applicable. (h) Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. AMREP CORPORATION By: /s/ Mohan Vachani ------------------------------------- Name: Mohan Vachani Title: Senior Vice President & Chief Financial Officer Dated: May 4, 2000 2 INDEX TO EXHIBITS ITEM DESCRIPTION (a)(1)(i) Form of Offer to Purchase dated May 4, 2000. (a)(1)(ii) Form of Letter of Transmittal. (a)(1)(iii) Form of Notice of Guaranteed Delivery. (a)(1)(iv) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(v) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(vi) Form of Letter from the Company to participants in the Company Savings and Salary Deferral Plan, including the form of Direction Form to the Trustee of said Plan from participants in said Plan. (a)(1)(vii) Form of letter dated May 4, 2000 from the Chairman of the Company's Board of Directors to shareholders of the Company. (a)(1)(viii) Guidelines for Certification of Taxpayer Identification Number on Form W-9. (b)(1) Master Loan Agreement dated effective February 26, 1999 between AMREP Southwest, Inc. and Norwest Bank New Mexico, N.A. (b)(2) First Amendment to Master Loan Agreement Amended Effective January 26, 2000. EX-99.(A)(1)(I) 2 EXHIBIT 99(A)(1)(I) EXHIBIT (A)(1)(I) AMREP CORPORATION OFFER TO PURCHASE FOR CASH UP TO 725,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $7.00 NOR LESS THAN $5.25 PER SHARE - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, JUNE 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- AMREP Corporation, an Oklahoma corporation (the "Company"), invites its shareholders to tender shares of its common stock, par value $.10 per share (the "Shares"), to the Company at a price not greater than $7.00 nor less than $5.25 per Share in cash, to be specified by tendering shareholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price (not greater than $7.00 nor less than $5.25 per Share), net to the seller in cash (the "Purchase Price"), that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The Company will select the lowest Purchase Price that will allow it to buy 725,000 Shares (or such lesser number of Shares as are validly tendered at a price not greater than $7.00 nor less than $5.25 per Share). The Company will pay the Purchase Price for all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer including the proration terms thereof. The Company reserves the right, in its sole discretion, to purchase more than 725,000 Shares pursuant to the Offer. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration will be returned as promptly as practicable following the expiration of the tender offer. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTIONS 6 AND 15. The Shares are listed and principally traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol "AXR". On May 1, 2000, the last full trading day on the NYSE prior to announcement of the Offer, the closing per Share price as reported on the NYSE Composite Tape was $5.0625. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 7. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. THE DATE OF THIS OFFER TO PURCHASE IS MAY 4, 2000. - -------------------------------------------------------------------------------- SUMMARY TERM SHEET This term sheet is provided for your convenience. Please refer to the full text of this Offer to Purchase for more specific details. WHO IS OFFERING TO BUY MY SECURITIES? o AMREP Corporation. See Section 11 for more detailed information about AMREP. WHAT IS THE CLASS AND AMOUNT OF SECURITIES SOUGHT IN THE OFFER? o We are offering to purchase 725,000 shares of our common stock, or any lesser number of shares that shareholders properly tender in the offer. If more than 725,000 shares are tendered, all shares tendered at or below the purchase price will be purchased on a PRO RATA basis, except for "odd lots" which will be purchased on a priority basis. See Section 1 for a more detailed discussion of the offer. HOW MUCH IS AMREP OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE FORM OF PAYMENT? AMREP is conducting the offer through a procedure commonly called a modified "Dutch Auction." o This procedure allows you to select the price within a specified price range at which you are willing to sell your shares. The price range for the offer is $7.00 to $5.25. o AMREP will determine the lowest single per share price within the price range that will allow it to purchase 725,000 shares, or if fewer shares are tendered, all shares tendered. o All shares purchased will be purchased at the same price, even if you have selected a lower price, but no shares will be purchased above the purchase price determined by AMREP. o If you wish to maximize the chance that your shares will be purchased, you should check the box in the section on the Letter of Transmittal indicating that you will accept the purchase price determined by AMREP under the terms of the offer. Note that this election could result in your shares being purchased at the minimum price of $5.25 per share. o Shareholders whose shares are purchased in the offer will be paid the purchase price, in cash, as soon as practicable after the expiration of the offer period. Under no circumstances will AMREP pay interest on the purchase price, including but not limited to, by reason of any delay in making payment. See Section 1 for a more detailed discussion of the purchase price. HAVE THERE BEEN ANY RECENT DEVELOPMENTS CONCERNING AMREP OR ITS BUSINESSES? o Yes. See the information in Section 11 under the captions "RECENT PROPOSALS CONCERNING THE SHARES" and "PENDING TRANSACTION." DOES AMREP HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? o Yes. See Section 10 for a discussion of the source and amount of funds for the transaction. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER? o You have until 5:00 P.M. on June 6, 2000. See Section 1 for a more detailed discussion of the expiration of the offer. CAN THE OFFER BE EXTENDED, AMENDED OR TERMINATED, AND UNDER WHAT CIRCUMSTANCES? o We can extend or amend the offer in our sole discretion. If we extend the offer, we may delay the acceptance of any shares that have been tendered. See Section 15 for a more detailed discussion of extension and amendment of the offer. o We can terminate the offer under certain circumstances. See Section 6 for a description of the circumstances. HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED? o We will issue a press release to the Dow Jones News Service. o We may also communicate the extension of the offer through other means. See Section 15 for a more detailed discussion of the notification procedure. - -------------------------------------------------------------------------------- (i) - -------------------------------------------------------------------------------- ARE THERE ANY CONDITIONS TO THE OFFER? o The offer is not subject to a condition that a minimum number of shares are tendered. o AMREP's obligation to accept for payment, purchase or pay for any shares tendered depends upon a number of conditions, including: o AMREP concluding that its purchase of shares is not reasonably likely to result in its shares being held of record by fewer than 300 persons or its shares not being listed on the New York Stock Exchange. o No significant decrease in the price of equity securities generally, or any adverse changes in the U.S. stock markets or credit markets, shall have occurred during the offer. o No legal action shall have been threatened, or be pending or taken, that might adversely affect the offer. o No material change in the business, condition (financial or otherwise), income, operations or prospects of AMREP shall have occurred during the offer. o No person filing a notification form under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 reflecting an intent to acquire AMREP or any of our shares. o The offer is subject to other conditions. See Section 6 for a more detailed discussion of conditions of the offer. HOW DO I TENDER MY SHARES? o If the share certificates are registered in your name, you should send the share certificates together with a properly completed Letter of Transmittal to The Bank of New York (the "Depositary"). o If your shares are registered in the name of a broker or other nominee, you should instruct your broker or other nominee to tender the shares on your behalf. Your broker or other nominee will execute a Letter of Transmittal on your behalf. o Under some conditions, you may need to obtain a signature guarantee or provide other documentation. See Section 3 for a more detailed discussion of the procedure for tendering your shares, including instructions regarding book-entry transfer. IN WHAT ORDER WILL TENDERED SHARES BE PURCHASED? WILL TENDERED SHARES BE PRORATED? o FIRST, AMREP will purchase shares from all holders of "odd lots" of less than 100 shares (including any shares held in AMREP's Savings and Salary Deferral Plan) who properly tender all of their shares at or below the selected purchase price; and o SECOND, after purchasing all shares from the "odd lot holders," AMREP will then purchase shares from all other shareholders who properly tender shares at or below the selected purchase price, on a PRO RATA basis. o Consequently, all of the shares that you tender in the offer may not be purchased even if they are tendered at or below the purchase price. o See Section 1 for a more detailed discussion of proration. UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES? o You can withdraw shares you previously tendered until 5:00 P.M., New York City time on June 6, 2000. If the offer is extended beyond that time, you may withdraw your tendered shares at any time until the expiration of the offer. o In addition, if we have not yet accepted your shares for payment, you may withdraw shares you previously tendered after 12:00 Midnight on June 29, 2000. See Section 4 for a more detailed discussion of withdrawal rights. HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? o You must send a notice containing your name, the number of shares you tendered, the number of shares you wish to withdraw and the name of the registered holder to the Depositary, and the Depositary must receive the notice before the time to withdraw your shares has expired. - -------------------------------------------------------------------------------- (ii) - -------------------------------------------------------------------------------- o If you delivered or otherwise identified the certificates to the Depositary, you will need to provide the serial numbers on those certificates and your signature on your withdrawal notice must be guaranteed by an eligible institution, which means a bank, broker, dealer or other firm or entity that is a member in good standing of the Securities Transfer Agents Medallion Program. o If your shares were to be tendered by book-entry transfer, the notice must identify the relevant account number. See Section 3 for a more detailed discussion of withdrawal procedures. IS THIS THE FIRST STEP IN A GOING-PRIVATE TRANSACTION? o No. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? o You will increase your percentage ownership interest in AMREP. o You will increase your percentage interest in our future earnings. See Section 8 for a more detailed discussion of the effects of the offer. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? o As of May 1, 2000, the closing price per share of AMREP common stock, as reported on the NYSE Composite Tape was $5.0625. See Section 7 for a more detailed discussion of the share price. DO AMREP INSIDERS OR AFFILIATES HAVE ANY MATERIAL INTEREST IN THE TRANSACTION? o Our executive officers and directors have informed us that they do not intend to tender their shares in connection with the offer. o As a result, the percentage of shares owned by our executive officers and directors will increase after the offer has been completed. o Assuming 725,000 shares are tendered, our executive officers' and directors' aggregate percentage ownership of our outstanding common stock will increase from 54.9% to 61%. See Section 9 for a more detailed discussion of the interests of our executive officers and directors. DOES AMREP RECOMMEND THAT I TENDER IN THE OFFER? o The Board of Directors has approved the offer, but is not making any recommendation whether shareholders should tender. WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? o If you have questions about the tender offer, you should contact D.F. King & Co., Inc., our information agent for the offer, toll free at (800) 431-9629 (bankers and brokers call collect (212) 269-5550) or consult your broker. - -------------------------------------------------------------------------------- (iii) TABLE OF CONTENTS SECTION PAGE - ------- ---- SUMMARY TERM SHEET...........................................................(i) FORWARD-LOOKING STATEMENTS .................................................(iv) IMPORTANT INFORMATION........................................................(v) INTRODUCTION..................................................................1 THE OFFER.....................................................................2 1. Number of Shares; Proration...........................................2 2. Tenders by Owners of Fewer than 100 Shares............................4 3. Procedure for Tendering Shares........................................4 4. Withdrawal Rights.....................................................8 5. Purchase of Shares and Payment of Purchase Price .....................9 6. Certain Conditions of the Offer......................................10 7. Price Range of Shares; Dividends.....................................11 8. Background and Purpose of the Offer; Certain Effects of the Offer....12 9. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares.................................13 10. Source and Amount of Funds...........................................14 11. Certain Information about the Company................................14 12. Effects of the Offer on the Market for Shares; Registration under the Exchange Act.............................................15 13. Certain Legal Matters; Regulatory Approvals..........................16 14. Certain U.S. Federal Income Tax Consequences.........................16 15. Extension of the Offer; Termination; Amendments......................18 16. Fees and Expenses....................................................19 17. Miscellaneous........................................................19 THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION, IF GIVEN OR MADE, AS HAVING BEEN AUTHORIZED BY THE COMPANY. FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe harbor for forward-looking statements made by or on behalf of the Company. All statements that express expectations, estimates, forecasts or projections are forward-looking statements within the meaning of the Act. In addition, other written or oral statements which constitute forward-looking statements may be made by or on behalf of the Company. Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "projects", "forecasts", "may", "should", and variations of such words and similar expressions, are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. (iv) Forward-looking statements have been made in this Offer to Purchase, including in Section 8, Background and Purpose of the Offer, and Section 11, Certain Information about the Company. Such statements are based on beliefs of the Company's management as well as assumptions made by and information currently available to management. A wide range of factors could materially affect future developments and performance of the Company, including the following: (i) the level of demand for land in the markets in which the Company sells land; (ii) the possibility of changes in the magazine distribution system for magazines which the Company distributes; (iii) possible future litigation and governmental proceedings; (iv) the availability of financing and financial resources in the amounts, at the times and on the terms required to support the Company's future business, including possible acquisitions; (v) the failure to carry out marketing and sales plans; (vi) the failure to successfully integrate acquired business, if any, into the Company without substantial costs, delays or other operational or financial problems; and (vii) economic and business conditions, including general economic and business conditions, that are less favorable than expected. The foregoing list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. IMPORTANT INFORMATION Any shareholder desiring to tender all or any portion of such shareholder's Shares should either (i) complete and sign the Letter of Transmittal or a facsimile thereof in accordance with the instructions in the Letter of Transmittal, mail or deliver it with any required signature guarantee and any other required documents to The Bank of New York (the "Depositary"), and either mail or deliver the stock certificates for such Shares to the Depositary (with all such other documents) or follow the procedure for book-entry delivery set forth in Section 3, or (ii) request such shareholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such shareholder. A shareholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact that broker, dealer, commercial bank, trust company or other nominee if such shareholder desires to tender such Shares. Shareholders who desire to tender Shares and whose certificates for such Shares are not immediately available or who cannot comply with the procedure for book-entry transfer on a timely basis or whose other required documentation cannot be delivered to the Depositary by the expiration of the Offer should tender such Shares by following the procedures for guaranteed delivery set forth in Section 3. TO EFFECT A VALID TENDER OF THEIR SHARES, SHAREHOLDERS MUST VALIDLY COMPLETE THE LETTER OF TRANSMITTAL, INCLUDING THE SECTION RELATING TO THE PRICE AT WHICH THEY ARE TENDERING SHARES. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL OR THE NOTICE OF GUARANTEED DELIVERY MAY BE DIRECTED TO THE INFORMATION AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE. (v) TO THE HOLDERS OF SHARES OF COMMON STOCK OF AMREP CORPORATION: INTRODUCTION AMREP Corporation, an Oklahoma corporation (the "Company"), invites its shareholders to tender shares of its common stock, par value $.10 per share (the "Shares"), to the Company at a price not greater than $7.00 nor less than $5.25 per Share in cash, to be specified by tendering shareholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price (not greater than $7.00 nor less than $5.25 per Share), net to the seller in cash (the "Purchase Price"), that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The Company will select the lowest Purchase Price that will allow it to buy 725,000 Shares (or such lesser number of Shares as are validly tendered at a price not greater than $7.00 nor less than $5.25 per Share). The Company will pay the Purchase Price for all Shares validly tendered and not withdrawn at prices at or below the Purchase Price, upon the terms and subject to the conditions of the Offer, including the proration provisions described below. The Company reserves the right, in its sole discretion, to purchase more than 725,000 Shares pursuant to the Offer. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTIONS 6 AND 15. If, before the Expiration Date (as defined in Section 1), more than 725,000 Shares (or such greater number of Shares as the Company may elect to purchase) are validly tendered at or below the Purchase Price and not withdrawn, the Company will, upon the terms and subject to the conditions of the Offer, purchase such Shares first from all Odd Lot Owners (as defined in Section 2) who validly tender all their Shares at prices at or below the Purchase Price and then on a PRO RATA basis from all other shareholders who validly tender Shares at prices at or below the Purchase Price. The Company will return at its own expense all Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration. The Purchase Price will be paid net to the tendering shareholders in cash for all Shares purchased. Tendering shareholders will not be obligated to pay brokerage commissions, solicitation fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes on the Company's purchase of Shares pursuant to the Offer. HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE DEPOSITARY (AS DEFINED BELOW) THE SUBSTITUTE FORM W-9 THAT IS INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. In addition, the Company will pay all fees and expenses of D.F. King & Co., Inc. (the "Information Agent") and The Bank of New York (the "Depositary") in connection with the Offer. See Section 16. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. The Company is making the Offer because (i) its Board of Directors believes that, given the Company's businesses, assets and prospects, the purchase of the Shares pursuant to the Offer is an attractive investment that will benefit the Company and its remaining shareholders, and (ii) it gives shareholders an opportunity to sell their Shares at a price greater than the prevailing market price of the Shares immediately prior to the announcement of the Offer without the usual costs associated with a market sale. After the Offer is completed, 1 the Company expects to have sufficient cash flow and access to other sources of capital to fund its businesses, including its growth plans. As of the close of business on May 1, 2000, there were 7,240,350 Shares outstanding and 12,000 Shares issuable upon exercise of outstanding stock options ("Options") under the Company's Non-Employee Directors Option Plan. The 725,000 Shares that the Company is offering to purchase represent approximately 10% of the outstanding Shares. The Trustee of the AMREP Corporation Savings and Salary Deferral Plan (the "Savings Plan") holds Shares (the "ESOP Shares") allocated to accounts of certain participants ("Participants"). Each Participant may instruct the Administrative Committee under the Savings Plan ("Committee") to direct the Trustee to tender all or part of the ESOP Shares allocated to the Participant's account (the "Participant's ESOP Shares") by following the instructions set forth in "Procedure for Tendering Shares - ESOP SHARES" in Section 3. The Shares are listed and principally traded on the New York Stock Exchange, Inc. ("NYSE") under the symbol "AXR". On May 1, 2000, the last full trading day on the NYSE prior to the announcement of the Offer, the closing per Share price as reported on the NYSE Composite Tape was $5.0625. THE COMPANY URGES SHAREHOLDERS TO OBTAIN CURRENT QUOTATIONS ON THE MARKET PRICE OF THE SHARES. THE OFFER 1. NUMBER OF SHARES; PRORATION Upon the terms and subject to the conditions of the Offer, the Company will accept for payment (and thereby purchase) 725,000 Shares or such lesser number of Shares as are validly tendered before the Expiration Date (and not withdrawn in accordance with Section 4) at a net cash price (determined in the manner set forth below) not greater than $7.00 nor less than $5.25 per Share. The term "Expiration Date" means 5:00 P.M., New York City time, on Tuesday, June 6, 2000, unless and until the Company in its sole discretion shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Company, shall expire. See Section 15 for a description of the Company's right to extend the time during which the Offer is open and to delay, terminate or amend the Offer. The Company reserves the right, in its sole discretion, to purchase more than 725,000 Shares pursuant to the Offer, but does not currently plan to do so. In accordance with applicable regulations of the Securities and Exchange Commission (the "SEC"), the Company may purchase pursuant to the Offer an additional amount of Shares not to exceed 2% of the outstanding Shares without amending or extending the Offer. Subject to Section 2, if the Offer is oversubscribed, Shares tendered at or below the Purchase Price before the Expiration Date will be purchased on a PRO RATA basis. The proration period also expires on the Expiration Date. The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share Purchase Price that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The Company will select the lowest Purchase Price that will allow it to buy 725,000 Shares validly tendered and not withdrawn pursuant to the Offer (or such lesser number as are validly tendered at prices not greater than $7.00 nor less than $5.25 per Share). If (i) the Company increases or decreases the price to be paid for Shares, the Company increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares, or the Company decreases the number of Shares being sought and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in Section 15, the Offer will be extended until the expiration of such period of ten business days. For purposes of the Offer, a 2 "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York City time. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTIONS 6 AND 15. In accordance with Instruction 5 of the Letter of Transmittal, each shareholder desiring to tender Shares must (i) specify the price (not greater than $7.00 nor less than $5.25 per Share) at which such shareholder is willing to have the Company purchase Shares, which could result in no Shares being purchased, or (ii) elect to have such shareholder's shares purchased at a price determined by the Company, which could result in such Shares being purchased at the minimum price of $5.25 per Share. As promptly as practicable following the Expiration Date, the Company will, in its sole discretion, determine the Purchase Price (not greater than $7.00 nor less than $5.25 per Share) that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The Company will pay the Purchase Price, even if such Shares were tendered below the Purchase Price, for all Shares validly tendered prior to the Expiration Date at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer, including the proration terms thereof. All Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration, will be returned to the tendering shareholders at the Company's expense as promptly as practicable following the Expiration Date. If the number of Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date is less than or equal to 725,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer), the Company will, upon the terms and subject to the conditions of the Offer, purchase at the Purchase Price all Shares so tendered. PRIORITY. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date more than 725,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer) are validly tendered at or below the Purchase Price and not withdrawn, the Company will purchase such validly tendered Shares in the following order of priority: (i) all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any Odd Lot Owner (as defined in Section 2) who: (a) tenders all Shares (including Participant's ESOP Shares) beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference); and (b) completes the box captioned "Odd Lots" in the Letter of Transmittal (or, in the case of Participants holding Odd Lots, the Direction Form sent to such Participants (the "Direction Form")) and, if applicable, in the Notice of Guaranteed Delivery; and (ii) after purchase of all of the foregoing Shares, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, on a PRO RATA basis. PRORATION. In the event that proration of tendered Shares is required, the Company will determine the final proration factor as promptly as practicable after the Expiration Date. Proration for each shareholder tendering Shares (other than Odd Lot Owners) shall be based on the ratio of the number of Shares tendered by such shareholder at or below the Purchase Price to the total number of Shares tendered by all shareholders (other than Odd Lot Owners) at or below the Purchase Price (with adjustments to avoid purchases of fractional shares). This ratio will be applied to shareholders tendering Shares (other than Odd Lot Owners) to determine the number of Shares that will be purchased from each such shareholder pursuant to the Offer. Although the 3 Company does not expect to be able to announce the final results of such proration until approximately seven business days after the Expiration Date, it will announce preliminary results of proration by press release as promptly as practicable after the Expiration Date. Shareholders can obtain such preliminary information from the Information Agent and may be able to obtain such information from their brokers. As described in Section 14, the number of Shares that the Company will purchase from a shareholder may affect the United States federal income tax consequences to the shareholder of such purchase and therefore may be relevant to a shareholder's decision whether to tender Shares. The Letter of Transmittal affords each tendering shareholder the opportunity to designate the order of priority in which Shares tendered by such shareholder are to be purchased in the event of proration. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares as of April 26, 2000 and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the Company's shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. 2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES The Company, upon the terms and subject to the conditions of the Offer, will accept for purchase, without proration, all Shares validly tendered at or below the Purchase Price and not withdrawn on or prior to the Expiration Date by or on behalf of shareholders who beneficially owned as of the close of business on May 4, 2000, and continue to beneficially own as of the Expiration Date, an aggregate of fewer than 100 Shares, including Participant's ESOP Shares ("Odd Lot Owners"). To avoid proration, however, an Odd Lot Owner must validly tender at or below the Purchase Price all such Shares (including Participant's ESOP Shares) that such Odd Lot Owner beneficially owns; partial tenders will not qualify for this preference. This preference is not available to partial tenders or to owners of 100 or more Shares in the aggregate (including Participant's ESOP Shares), even if such owners have separate stock certificates for fewer than 100 such Shares. Any Odd Lot Owner wishing to tender all such Shares beneficially owned by such shareholder pursuant to the Offer must complete the box captioned "Odd Lots" in the Letter of Transmittal (or, with respect to an Odd Lot Owner holding Participant's ESOP Shares, the Direction Form) and, if applicable, in the Notice of Guaranteed Delivery and must properly indicate in the section entitled "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in the Letter of Transmittal (or the Direction Form, if applicable) the price at which such Shares are being tendered, except that an Odd Lot Owner may check the box in the section entitled "Odd Lots" indicating that the shareholder is tendering all of such shareholder's Shares (including the Odd Lot Owner's Participant's ESOP Shares) at the Purchase Price. See Section 3. Shareholders owning an aggregate of less than 100 Shares whose Shares are purchased pursuant to the Offer will avoid both the payment of brokerage commissions and any applicable odd lot discounts payable on a sale of their Shares in transactions on the NYSE. 3. PROCEDURE FOR TENDERING SHARES PROPER TENDER OF SHARES. As used herein: "Book-Entry Confirmation" means the confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility. "Book-Entry Transfer Facility" means The Depository Trust Company. "Eligible Institution" means a bank, broker, dealer or other firm or entity that is a member in good standing of the Securities Transfer Agents Medallion Program. 4 The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of the Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Company may enforce such agreement against the participant. FOR SHARES TO BE VALIDLY TENDERED PURSUANT TO THE OFFER: (i) the certificates for such Shares (or confirmation of receipt of such Shares pursuant to the procedures for book-entry transfer set forth below), together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees, or an Agent's Message with a book-entry transfer, and any other documents required by the Letter of Transmittal, must be received prior to 5:00 P.M., New York City time, on the Expiration Date by the Depositary at its address set forth on the back cover of this Offer to Purchase; or (ii) the tendering shareholder must comply with the guaranteed delivery procedure set forth below. AS SPECIFIED IN INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH SHAREHOLDER DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST EITHER (1) CHECK THE BOX IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER" OR (2) CHECK ONE OF THE BOXES IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER." A SHAREHOLDER WHO WISHES TO MAXIMIZE THE CHANCE THAT HIS OR HER SHARES WILL BE PURCHASED AT THE RELEVANT PURCHASE PRICE SHOULD CHECK THE BOX ON THE LETTER OF TRANSMITTAL MARKED "SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER." NOTE THAT THIS ELECTION COULD RESULT IN SUCH SHAREHOLDER'S SHARES BEING PURCHASED AT THE MINIMUM PRICE OF $5.25 PER SHARE. A SHAREHOLDER WHO WISHES TO INDICATE A SPECIFIC PRICE (IN MULTIPLES OF $0.125) AT WHICH HIS OR HER SHARES ARE BEING TENDERED MUST CHECK A BOX UNDER THE SECTION CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER" OF THE LETTER OF TRANSMITTAL IN THE TABLE LABELED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED." NOTE THAT THIS ELECTION COULD RESULT IN NO SHARES BEING PURCHASED AT THAT PRICE. A SHAREHOLDER WHO WISHES TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE AT WHICH SUCH SHARES ARE BEING TENDERED. THE SAME SHARES CANNOT BE TENDERED (UNLESS PREVIOUSLY PROPERLY WITHDRAWN IN ACCORDANCE WITH THE TERMS OF THE OFFER) AT MORE THAN ONE PRICE. Odd Lot Owners who tender all Shares must complete the section entitled "Odd Lots" in the Letter of Transmittal (or, in the case of an Odd Lot Owner holding Participant's ESOP Shares, the Direction Form sent to Participants (see "ESOP SHARES", below)) and, if applicable, in the Notice of Guaranteed Delivery, in order to qualify for the preferential treatment available to Odd Lot Owners as set forth in Section 2. SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is required on the Letter of Transmittal if (i) the Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes of this Section, includes any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the holder of the Shares) tendered therewith and payment and delivery are to be made directly to such registered holder, or (ii) if Shares are tendered for the account of an Eligible Institution. In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instructions 5 and 6 of the Letter of Transmittal. If a certificate representing Shares is registered in the name of a person other than the signer of a Letter of Transmittal, or if payment is to be made, or Shares not purchased or tendered are to be issued, to a person other than the registered holder, the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate, with the signature on the certificate or stock power guaranteed by an Eligible Institution. 5 In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility as described below), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) and any other documents required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of the Shares by causing such Facility to transfer such Shares into the Depositary's account in accordance with such Facility's procedure for such transfer. Even though delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), with any required signature guarantees, or an Agent's Message, and other required documents must, in any case, be transmitted to and received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the guaranteed delivery procedure set forth below must be followed. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to the Offer and such shareholder's Share certificates cannot be delivered to the Depositary prior to the Expiration Date (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Depositary before the Expiration Date, such Shares may nevertheless be tendered provided that all of the following conditions are satisfied: (i) such tender is made by or through an Eligible Institution; (ii) the Depositary receives (by hand, mail, overnight courier, telegram or facsimile transmission), on or prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form the Company has provided with this Offer to Purchase (indicating the price at which the Shares are being tendered), including (where required) a signature guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery; and (iii) the certificates for all tendered Shares in proper form for transfer (or Book-Entry Confirmation), together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) and any required signature guarantees, or an Agent's Message with a book-entry transfer, and any other documents required by the Letter of Transmittal, are received by the Depositary no later than 5:00 p.m., New York City time, on the third NYSE trading day after the date the Depositary receives such Notice of Guaranteed Delivery. RETURN OF UNPURCHASED SHARES. If any tendered Shares are not purchased, or if less than all Shares evidenced by a shareholder's certificates are tendered, certificates for such unpurchased Shares will be returned as promptly as practicable after the expiration or termination of the Offer or, in the case of Shares tendered by book-entry transfer at the Book-Entry Transfer Facility, such Shares will be credited to the appropriate account maintained by the tendering shareholder at the Book-Entry Transfer Facility, in each case without expense to such shareholder. 6 ESOP SHARES. As of May 1, 2000, the Savings Plan held 11,725 Participant's ESOP Shares. Such Shares will, subject to the limitations of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and applicable regulations thereunder, be tendered (or not tendered) by the Trustee according to the instructions of Participants to the Committee. Participant's ESOP Shares for which the Committee has not received timely instructions from Participants will NOT be tendered. The Committee will make available to Participants all documents furnished to shareholders generally in connection with the Offer. Each such Participant will also receive a Direction Form upon which the Participant may instruct the Committee regarding the Offer. Each Participant may direct that all, some or none of the Participant's ESOP Shares be tendered and the price at which such Shares are to be tendered. PARTICIPANTS MAY NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF PARTICIPANT'S ESOP SHARES, BUT MUST USE THE DIRECTION FORM SENT TO THEM. PARTICIPANTS ARE URGED TO READ THE DIRECTION FORM AND ANY RELATED MATERIALS CAREFULLY. All proceeds received by the Trustee on account of Participant's ESOP Shares purchased will be reinvested in accordance with the provisions of the Savings Plan as soon as administratively possible and such investment will be credited to the Participant's individual account. BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the United States federal income tax backup withholding rules, unless an exemption applies under the applicable law and regulations, 31% of the gross proceeds payable to a shareholder or other payee pursuant to the Offer must be withheld and remitted to the United States Treasury, unless the shareholder or other payee provides such person's taxpayer identification number (employer identification number or social security number) to the Depositary and certifies under penalties of perjury that such number is correct. Therefore, each tendering shareholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding, unless such shareholder otherwise establishes to the satisfaction of the Depositary that the shareholder is not subject to backup withholding. Certain shareholders (including, among others, all corporations and certain foreign shareholders (in addition to foreign corporations)) are not subject to these backup withholding and reporting requirements. In order for a foreign shareholder to qualify as an exempt recipient, that shareholder must submit an IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting to that shareholder's exempt status. Such statements can be obtained from the Depositary. See Instructions 10 and 11 of the Letter of Transmittal. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING EQUAL TO 31% OF THE GROSS PAYMENTS MADE TO SHAREHOLDERS FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL. For a discussion of certain United States federal income tax consequences to tendering shareholders, see Section 14. WITHHOLDING FOR FOREIGN SHAREHOLDERS. Even if a foreign shareholder has provided the required certification to avoid backup withholding, the Depositary will withhold United States federal income taxes equal to 30% of the gross payments payable to a foreign shareholder or his or her agent unless the Depositary determines that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business within the United States. For this purpose, a foreign shareholder is any shareholder that is not (i) a citizen or resident of the United States, (ii) a corporation, partnership, or other entity created or organized in or under the laws of the United States, any State or any political subdivision thereof or (iii) an estate or trust the income of which is subject to United States federal income taxation regardless of the source of such income. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a foreign shareholder must deliver to the Depositary before the payment a properly completed and executed IRS Form 1001. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a foreign shareholder must deliver to the Depositary a properly completed and executed IRS Form 4224. The Depositary will determine a shareholder's status as a 7 foreign shareholder and eligibility for a reduced rate of, or exemption from, withholding by reference to any outstanding certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate that such reliance is not warranted. A foreign shareholder may be eligible to obtain a refund of all or a portion of any tax withheld if such shareholder meets the "complete redemption", "substantially disproportionate" or "not essentially equivalent to a dividend" test described in Section 14 or is otherwise able to establish that no tax or a reduced amount of tax is due. Backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of withholding. Foreign shareholders are urged to consult their own tax advisors regarding the application of United States federal income tax withholding, including eligibility for a withholding tax reduction or exemption, and the refund procedure. See Instructions 10 and 11 of the Letter of Transmittal. TENDERING SHAREHOLDER'S REPRESENTATION AND WARRANTY; COMPANY'S ACCEPTANCE CONSTITUTES AN AGREEMENT. It is a violation of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a person acting alone or in concert with others, directly or indirectly, to tender Shares for such person's own account unless at the time of tender and at the Expiration Date such person has a "net long position", within the meaning of such Rule, equal to or greater than the amount tendered in (i) the Shares and will deliver or cause to be delivered such Shares for the purpose of tender to the Company within the period specified in the Offer, or (ii) other securities immediately convertible into, exercisable for or exchangeable into Shares ("Equivalent Securities") and, upon the acceptance of such tender, will acquire such Shares by conversion, exchange or exercise of such Equivalent Securities to the extent required by the terms of the Offer and will deliver or cause to be delivered such Shares so acquired for the purpose of tender to the Company within the period specified in the Offer. Rule 14e-4 also provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. A tender of Shares made pursuant to any method of delivery set forth herein will constitute the tendering shareholder's representation and warranty to the Company that (i) such shareholder has a "net long position" in Shares or Equivalent Securities being tendered within the meaning of Rule 14e-4, and (ii) such tender of Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering shareholder and the Company upon the terms and subject to the conditions of the Offer. DETERMINATIONS OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares to be accepted, the price to be paid therefor and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders it determines not to be in proper form or the acceptance of or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity in any tender of Shares. No tender of Shares will be deemed to be properly made until all defects or irregularities have been cured or waived. None of the Company, the Depositary, the Information Agent or any other person is or will be obligated to give notice of any defects or irregularities in tenders, and none of them will incur any liability for failure to give any such notice. CERTIFICATES FOR SHARES (OR A TIMELY BOOK-ENTRY CONFIRMATION), TOGETHER WITH A PROPERLY COMPLETED LETTER OF TRANSMITTAL (OR AN AGENT'S MESSAGE WITH A BOOK-ENTRY TRANSFER), AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT BE DEEMED TO BE VALIDLY TENDERED. 4. WITHDRAWAL RIGHTS Except as otherwise provided in this Section 4, tenders of Shares pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time before the Expiration Date and, unless accepted for payment by the Company as provided in this Offer to Purchase, may also be withdrawn after 12:00 Midnight, New York City time, on Thursday, June 29, 2000. 8 For a withdrawal to be effective, the Depositary must receive (at its address set forth on the back cover of this Offer to Purchase) a notice of withdrawal in written, telegraphic or facsimile transmission form on a timely basis. Such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares tendered, the number of Shares to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Shares. If the certificates have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering shareholder must also submit the serial numbers shown on the particular certificates evidencing the Shares and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedure for book-entry transfer set forth in Section 3, the notice of withdrawal must specify the name and the number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the procedures of such facility. All questions as to the form and validity, including time of receipt, of notices of withdrawal will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. None of the Company, the Depositary, the Information Agent or any other person is or will be obligated to give any notice of any defects or irregularities in any notice of withdrawal, and none of them will incur any liability for failure to give any such notice. Withdrawals may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered before the Expiration Date by again following any of the procedures described in Section 3. If the Company extends the Offer, is delayed in its purchase of Shares or is unable to purchase Shares pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, subject to applicable law, retain on behalf of the Company all tendered Shares, and such Shares may not be withdrawn except to the extent tendering shareholders are entitled to withdrawal rights as described in this Section 4. Participants in the Savings Plan should disregard the foregoing procedures with respect to Participant's ESOP Shares attributable to their individual accounts in the Savings Plan and should follow the procedures for withdrawal included in the letter from the Company to Participants transmitting the Direction Form. 5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share Purchase Price (not greater than $7.00 nor less than $5.25 per Share), net to the seller in cash, that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering shareholders, and will accept for payment and pay for (and thereby purchase) up to 725,000 Shares validly tendered at or below the Purchase Price and not withdrawn as soon as practicable after the Expiration Date. For purposes of the Offer, the Company will be deemed to have accepted for payment (and therefore purchased), subject to proration, Shares that are validly tendered at or below the Purchase Price and not withdrawn when, as and if it gives oral or written notice to the Depositary of its acceptance of such Shares for payment pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, the Company will purchase and pay a single per Share Purchase Price for all of the Shares accepted for payment pursuant to the Offer as soon as practicable after the Expiration Date. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made promptly (subject to possible delay in the event of proration). Payment for Shares purchased pursuant to the Offer will be made by depositing the aggregate Purchase Price therefor with the Depositary, which will act as agent for tendering shareholders for the purpose of receiving payment from the Company and transmitting payment to the tendering shareholders. In the event of proration, the Company will determine the proration factor and pay for those tendered Shares accepted for payment as 9 soon as practicable after the Expiration Date. However, the Company does not expect to be able to announce the final results of any such proration until approximately seven business days after the Expiration Date. Under no circumstances will the Company pay interest on the Purchase Price including, without limitation, by reason of any delay in making payment. Certificates for all Shares not purchased, including all Shares tendered at prices greater than the Purchase Price and Shares not purchased due to proration, will be returned (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to the account maintained with the Book-Entry Transfer Facility by the participant who so delivered such Shares) as promptly as practicable following the Expiration Date or termination of the Offer, without expense to the tendering shareholder. In addition, if certain events occur, the Company may not be obligated to purchase Shares pursuant to the Offer. See Section 6. The Company will pay all stock transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer; provided, however, that if payment of the Purchase Price is to be made to, or (in the circumstances permitted by the Offer) if unpurchased Shares are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or such other person), payable on account of the transfer to such person will be deducted from the Purchase Price unless evidence satisfactory to the Company of the payment of such taxes or exemption therefrom is submitted. See Instruction 7 of the Letter of Transmittal. 6. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other provision of the Offer, the Company shall not be required to accept for payment, purchase or pay for any Shares tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, or the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f) promulgated under the Exchange Act, if at any time on or after May 4, 2000 and prior to the time of payment for any such Shares (whether any Shares have theretofore been accepted for payment, purchased or paid for pursuant to the Offer) any of the following events shall have occurred (or shall have been determined by the Company to have occurred) that, in the Company's judgment in any such case and regardless of the circumstances giving rise thereto (including any action or omission to act by the Company), makes it inadvisable to proceed with the Offer or with such acceptance for payment or payment: (a) the acceptance for payment of Shares by the Company would be reasonably likely to result in (i) Shares being held of record by less than 300 persons, or (ii) the Shares not being listed on the NYSE; or (b) there shall have been threatened, instituted or be pending before any court, agency, authority or other tribunal any action, suit or proceeding by any government or governmental, regulatory or administrative agency or authority or by any other person, domestic or foreign, or any judgment, order or injunction entered, enforced or deemed applicable by any such court, agency, authority, or tribunal, which (i) challenges or seeks to make illegal, or to delay or otherwise directly or indirectly to restrain, prohibit or otherwise affect the making of the Offer, the acquisition of Shares pursuant to the Offer or is otherwise related in any manner to, or otherwise affects, the Offer; or (ii) could, in the sole judgment of the Company, materially affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company and its subsidiaries, taken as a whole, or materially impair the Offer's contemplated benefits to the Company; or (c) there shall have been any action threatened or taken, or any approval withheld, or any statute, rule or regulation invoked, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or the Company or any of its subsidiaries, by any government or governmental, regulatory or administrative authority or agency or tribunal, domestic or foreign, which, in the sole judgment of the Company, would or might directly or indirectly result in any of the consequences referred to in clause (i) or (ii) of paragraph (b) above; or 10 (d) there shall have occurred (i) the declaration of any banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory); (ii) any general suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the over-the-counter market; (iii) the commencement of a war, armed hostilities or any other national or international crisis directly or indirectly involving the United States; (iv) any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event which, in the sole judgment of the Company might materially affect, the extension of credit by banks or other lending institutions in the United States; (v) any significant decrease in the market price of the Shares or in the market prices of equity securities generally in the United States or any change in the general political, market, economic or financial conditions in the United States or abroad that could have in the sole judgment of the Company a material adverse effect on the business, condition (financial or otherwise), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or on trading in the Shares; (vi) in the case of any of the foregoing existing at the time of the announcement of the Offer, a material acceleration or worsening thereof; or (vii) any decline in either the Dow Jones Industrial Average or the S&P 500 Composite Index by an amount in excess of 10% measured from the close of business on May 3, 2000; or (e) any change shall occur or be threatened in the business, condition (financial or other), income, operations or prospects of the Company and its subsidiaries, taken as a whole, which in the sole judgment of the Company is or may be material to the Company and its subsidiaries, taken as a whole; or (f) any person or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 reflecting an intent to acquire the Company or any of its Shares. The foregoing conditions are for the Company's sole benefit and may be asserted by the Company regardless of the circumstances giving rise to any such condition (including any action or inaction by the Company) or may be waived by the Company in whole or in part. The Company's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. In certain circumstances, if the Company waives any of the foregoing conditions, it may be required to extend the Expiration Date of the Offer. Any determination by the Company concerning the events described above and any related judgment or decision by the Company regarding the inadvisability of proceeding with the purchase of or payment for any Shares tendered will be final and binding on all parties. 7. PRICE RANGE OF SHARES; DIVIDENDS The Shares are listed and principally traded on the NYSE. The high and low prices per Share on the NYSE Composite Tape as compiled from published financial sources for the periods indicated are listed below: FISCAL YEAR ENDING APRIL 30, HIGH LOW ---------------- ---- --- 1999 1st Quarter .............................. 9 5/16 6 1/2 2nd Quarter .............................. 8 1/16 5 1/2 3rd Quarter .............................. 7 3/16 5 7/8 4th Quarter .............................. 8 4 5/8 2000 1st Quarter .............................. 7 1/4 5 3/8 2nd Quarter .............................. 6 9/16 4 7/16 3rd Quarter .............................. 5 1/8 3 11/16 4th Quarter .............................. 5 15/16 4 1/2 11 On May 1, 2000, the last full trading day on the NYSE prior to the announcement of the Offer, the price for the Shares as reported on the NYSE Composite Tape ranged from $5.00 to $5.125 and the closing price was $5.0625. THE COMPANY URGES SHAREHOLDERS TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE OF THE SHARES. The Company has never paid any dividends. 8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER The Company was incorporated in the State of Oklahoma in 1987 as the successor to an Oklahoma corporation which commenced business in 1956. It is primarily engaged in two unrelated businesses, each operated by a wholly-owned subsidiary: the Real Estate business operated by AMREP Southwest Inc., and the Fulfillment Services and Magazine Distribution business operated by Kable News Company, Inc. For the last two decades, in its real estate operations the Company has been both a real estate developer and a builder of single-family homes, originally in Rio Rancho, New Mexico and, more recently, also in the Denver, Colorado metro area, the Sacramento, California metro area and Portland, Oregon. In the early 1960s, the Company established the community that now is the City of Rio Rancho, New Mexico, and it has been the predominant builder of housing there. Rio Rancho, which adjoins Albuquerque, now has a population of over 50,000. The Company entered the Denver market in 1993, and in 1997 it purchased the assets of a homebuilder and land developer with operations in the Sacramento and Portland markets. During the second half of fiscal 1999 and the first half of fiscal 2000, the Company implemented a plan to restructure its real estate operations and to discontinue its homebuilding operations. The reason for this decision was that over the past several years these homebuilding operations have not provided acceptable returns. This restructuring has enabled the Company to significantly reduce its debt and to concentrate its efforts on more rapidly developing its land in Rio Rancho, where it will continue to develop and sell residential lots to other builders and lots and tracts for commercial and industrial purposes. The Company also has sold or offered for sale all of its land holdings and housing projects in Colorado and its operations in California and Oregon are being wound down. The Company is making the Offer because (i) its Board of Directors believes that, given the Company's businesses, assets and prospects, the purchase of the Shares pursuant to the Offer is an attractive investment that will benefit the Company and its remaining shareholders, and (ii) it gives shareholders an opportunity to sell their Shares at a price greater than the prevailing market prices of the Shares immediately prior to the announcement of the Offer, without the usual costs associated with a market sale. The Offer would also allow Odd Lot Owners whose Shares are purchased pursuant to the Offer to avoid both the payment of brokerage commissions and any applicable odd lot discounts payable on sales of odd lots on the NYSE. To the extent the purchase of Shares in the Offer results in a reduction in the number of shareholders of record, the costs to the Company for services to shareholders should be reduced. Shareholders who determine not to accept the Offer will increase their proportionate interest in the Company's equity, and therefore in the Company's future earnings and assets, subject to the Company's right to issue additional Shares and other equity securities in the future. After the Offer is completed, the Company expects to have sufficient cash flow and access to other sources of capital to fund its businesses, including its growth plans. Shares the Company acquires pursuant to the Offer will be retained as treasury stock (unless and until the Company determines to retire such Shares) and be available for issue without further shareholder action (except as required by applicable law or, if retired, the rules of any securities exchange on which Shares are listed) for purposes including, but not limited to, the acquisition of other businesses, raising of additional capital for use in 12 the Company's businesses, and satisfaction of obligations under existing or future employee benefit plans. The Company has no current plan for issuance of Shares repurchased pursuant to the Offer. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. 9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES As of May 1, 2000 there were 7,240,350 Shares outstanding. Ownership of Shares by the directors and executive officers of the Company is indicated in the following table:
NUMBER OF SHARES PERCENTAGE OF SHARES NAME AND POSITION BENEFICIALLY OWNED BENEFICIALLY OWNED - ----------------- ------------------ -------------------- Edward B. Cloues II, Director and Chairman........ 4,000 (1) 0.06 Jerome Belson, Director........................... 45,000 (1) 0.62 Daniel Friedman, Director and Senior Vice President....................................... 38,924 (3) 0.54 Nicholas G. Karabots, Director.................... 2,818,893 (1) 38.90 Albert Russo, Director............................ 1,066,220 (2)(4) 14.70 Samuel N. Seidman, Director....................... 2,000 (1) 0.03 Mohan Vachani, Director, Senior Vice President and Chief Financial Officer..................... 500 0.01 James Wall, Director and Senior Vice President.... 8,057 (5) 0.11 Valerie Asciutto, Senior Vice President and General Counsel................................. -- --
- -------------------- (1) Includes 2,000 Shares which the individual has the right to acquire pursuant to currently exercisable options. (2) Includes 1,500 Shares which Mr. Russo has the right to acquire pursuant to currently exercisable options. (3) Includes 314 Shares held in the Company's Savings and Salary Deferral Plan allocated to the account of Mr. Friedman. (4) Mr. Russo shares voting power over 1,064,720 of the Shares with his mother and two of his siblings and has sole dispositive power over 481,741 of the Shares. (5) Includes 287 Shares held in the Company's Savings and Salary Deferral Plan allocated to the account of Mr. Wall. The Company has been informed by its directors and executive officers that the Shares they beneficially own will not be tendered pursuant to the Offer. If the Company purchases 725,000 Shares pursuant to the Offer, Mr. Karabots will beneficially own 43.3% and Mr. Russo will beneficially own 16.4% of the outstanding Shares. Messrs. Karabots and Russo are members of the Executive Committee of the Company's Board of Directors. Based on the Company's records and information provided to the Company by its directors and executive officers, neither the Company nor any of its directors or executive officers has effected any transactions in the Shares during the 60 days prior to the date hereof. On May 12, 1999, the Company announced that its Board of Directors had authorized the repurchase of up to 300,000 of the outstanding Shares (the "Repurchase Program"). The Shares were to be purchased from time to time in the open market or unsolicited negotiated transactions, including block purchases. Between May 12, 1999, and November 2, 1999, the date of its most recent purchase, the Company repurchased 143,300 Shares 13 pursuant to the Repurchase Program at prices ranging from $4 1/2 to $6 7/16 per Share. All such Shares were purchased on the NYSE. Rule 13e-4 under the Exchange Act prohibits the Company from making any further purchases of Shares until 10 business days after the Expiration Date, other than pursuant to the Offer; thereafter, the Company may resume the Repurchase Program. Any future Share purchases under the Repurchase Program, or otherwise, may be on the same terms as, or on terms more or less favorable to shareholders than, the terms of the Offer. Any future purchases by the Company, either pursuant to the Repurchase Program or otherwise, will depend on numerous factors, including the market price of the Shares, the results of the Offer, the Company's business and financial condition and general economic and market conditions. Shares purchased in the Offer will not be counted in the number of Shares to be purchased pursuant to the Repurchase Program. 10. SOURCE AND AMOUNT OF FUNDS Assuming that the Company purchases 725,000 Shares pursuant to the Offer at the maximum purchase price of $7.00 per Share, the Company expects that the maximum aggregate cost, including all fees and expenses applicable to the Offer, to be approximately $5,225,000. The Company has cash in excess of that amount available to pay such cost. On February 9, 2000 AMREP Southwest Inc., the Company's real estate subsidiary ("ASW"), paid to the Company $2,800,000, a portion of which was a loan to the Company from ASW. On January 26, 2000 ASW borrowed such $2,800,000 from Wells Fargo Bank of New Mexico, with the borrowing secured by ASW accounts receivable from its land sales. The borrowing carries interest at the Bank's Prime Rate. Interest is payable quarterly and principal is repaid from collections on the collateral. The Bank loan must be fully paid by April 30, 2001 while the collateral has a blended maturity of late July, 2001. It thus is probable that a substantial payment will be due the Bank on April 30, 2001. Although there is no formal plan or arrangement to meet the payment requirement, it is expected that payment will be made with funds generated from ASW's operations or by refinancing the obligation. It is estimated that the Company will incur approximately $150,000 in filing, legal and other one-time charges in connection with the Offer. 11. CERTAIN INFORMATION ABOUT THE COMPANY The Company's executive offices are located at 641 Lexington Avenue, New York, New York 10022 and its telephone number is (212) 705-4700. The address for the Company's directors and executive officers is c/o the Company at its executive offices. RECENT PROPOSALS CONCERNING THE SHARES. In March 2000 the Company received an unsolicited offer from two persons acting jointly to acquire the Company for a cash price of $7.75 per share. Among other things, the proposed transaction would have involved the merger of the Company into an entity of the offerors, and this would have required the approval by the owners of a majority of the Company's shares. Nicholas G. Karabots and Albert Russo (and members of his family) together own more than a majority of the Company's shares, and such shareholders advised the Board that they would not approve such a transaction at a price of $7.75 per share. A shareholder affiliated with one of the persons that made the offer has submitted to the Company the proposal set forth below for inclusion in the Proxy Statement for the Company's Annual Meeting of Shareholders to be held in September 2000. The Company assumes that proponent intends to present the proposal at the Meeting. RESOLVED, that the stockholders recommend to the Board of Directors that the Company promptly undertake a program to sell the Company in a transaction in which stockholders will receive at least $9.00 per share in cash and that the Board of Directors actively negotiate with bona fide potential purchasers who indicate a willingness to offer $9.00 cash per share of AMREP Common Stock. 14 Such a sale would require the approval of a majority of the outstanding shares, and each of Messrs. Karabots and Russo has advised the Board that he would not approve a sale at $9.00 per share, which is less than the book value, but has reserved the right to change his position at any time. PENDING TRANSACTION. For a number of months the Company's Kable News Company, Inc. subsidiary ("Kable" ) has been in negotiations with a privately owned company ("Magazine Company") which is in the business of owning and operating retail stores engaged principally in the business of selling magazines, newspapers and other periodicals. In the proposed transaction, (i) a Kable subsidiary would enter into a joint venture with the Magazine Company to form a new entity ("Supply Company") which, as its principal business, would supply the publications inventory to the Magazine Company's retail stores, and (ii) the Kable subsidiary would be awarded equity in the Magazine Company and would have the right to acquire additional equity for a total of as much as 10% of the equity of the Magazine Company. Separately, Kable plans to expand its publications direct supply business and expects to be able to employ the processing capacity of the Supply Company to service a portion of that business. The Magazine Company presently has 11 stores and it has advised Kable that during the next five years it plans to open up to 900 stores throughout the United States. The total cash which may be required from the Kable subsidiary is estimated to be approximately $2 million through the end of fiscal year 2001 and approximately $8 million more during the ensuing three fiscal years. It is anticipated that for its $10 million aggregate investment, the Kable subsidiary would receive no return from the Supply Company or the Magazine Company for at least four years. Management considers this to be an attractive opportunity because it would aid Kable in the development of its proposed direct to retail business and, if the Magazine Company's operations are successful, Kable will also benefit from the enhanced value of its equity investment. However, as the negotiations have been protracted and several key points have yet to be incorporated into the documents, there are no assurances that the transaction will be consummated. Furthermore, even if consummated, there are no assurances that the transaction will ultimately be successful or that Kable will be able to recover its investment. ADDITIONAL INFORMATION. The Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is obligated to file reports and other information with the SEC relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's directors and officers, their remuneration, options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's shareholders and filed with the SEC. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; and at its regional offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, New York, New York 10048. Copies of such material may also be obtained by mail, upon payment of the SEC's customary charges, from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549. The SEC also maintains a Web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. Such reports, proxy statements and other information concerning the Company also can be inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005, on which the Shares are listed. 12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE EXCHANGE ACT The Company's purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and is likely to reduce the number of shareholders. Nonetheless, the Company believes that there will still be a sufficient number of Shares outstanding and publicly traded following the Offer to ensure a continued trading market in the Shares. Based on the published guidelines of the NYSE, the Company does not believe that its purchase of Shares pursuant to the Offer will cause its remaining Shares to be delisted from such exchange. 15 The Shares are currently "margin securities" under the rules of the Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. The Company believes that, following the purchase of Shares pursuant to the Offer, the Shares will continue to be "margin securities" for purposes of the Federal Reserve Board's margin regulations. The Shares are registered under the Exchange Act, which requires, among other things, that the Company furnish certain information to its shareholders and to the SEC and comply with the SEC's proxy rules in connection with meetings of the Company's shareholders. The Company believes that its purchase of Shares pursuant to the Offer will not result in the Shares becoming eligible for deregistration under the Exchange Act. 13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS The Company is not aware of any license or regulatory permit material to its business that might be adversely affected by its acquisition of Shares as contemplated in the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the Company's acquisition or ownership of Shares as contemplated by the Offer. Should any such approval or other action be required, the Company currently contemplates that it will seek such approval or other action. The Company cannot predict whether it may determine that it is required to delay the acceptance for payment of, or payment for, Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company's obligations under the Offer to accept for payment and pay for Shares are subject to certain conditions. See Section 6. 14. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES The following summary describes certain United States federal income tax consequences relevant to the Offer. The discussion contained in this summary is based upon the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), existing and proposed Treasury regulations promulgated thereunder, rulings, administrative pronouncements and judicial decisions, changes to which could materially affect the tax consequences described herein and could be made on a retroactive basis. This summary discusses only Shares held as capital assets, within the meaning of Section 1221 of the Code, and does not address all of the tax consequences that may be relevant to particular shareholders in light of their personal circumstances, or to certain types of shareholders (such as certain financial institutions, dealers in securities or commodities, insurance companies, tax-exempt organizations or persons who hold Shares as a position in a "straddle" or as a part of a "hedging" or "conversion" transaction for United States federal income tax purposes). In particular, the discussion of the consequences of an exchange of Shares for cash pursuant to the Offer applies only to a United States Holder. For purposes of this summary, a "United States Holder" is a holder of Shares that is (a) a citizen or resident of the United States, (b) a corporation, partnership or other entity created or organized in or under the laws of the United States, any state or any political subdivision thereof, or (c) an estate or trust the income of which is subject to United States federal income taxation regardless of its source. This discussion does not address the tax consequences to foreign shareholders who will be subject to United States federal income tax on a net basis on the proceeds of their exchange of Shares pursuant to the Offer because such income is effectively connected with the conduct of a trade or business within the United States. Such shareholders are generally taxed in a manner similar to United States Holders; however, certain special rules apply. Foreign shareholders who are not subject to United States federal income tax on a net basis should see Section 3 for a discussion of the applicable United States withholding rules and the potential for obtaining a refund of all or a portion of the tax withheld. The summary may not be applicable with respect to Shares acquired as compensation (including Shares acquired upon the exercise of options or which were or are subject to forfeiture restrictions). The summary also does not address the state, local or foreign tax consequences of 16 participating in the Offer. EACH SHAREHOLDER SHOULD CONSULT SUCH SHAREHOLDER'S TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES OF PARTICIPATION IN THE OFFER. UNITED STATES HOLDERS WHO RECEIVE CASH PURSUANT TO THE OFFER. An exchange of Shares for cash pursuant to the Offer by a United States Holder will be a taxable transaction for United States federal income tax purposes. As a consequence of the exchange, a United States Holder will, depending on such holder's particular circumstances, be treated either as having sold such holder's Shares or as having received a dividend distribution from the Company, with the tax consequences described below. Under Section 302 of the Code, a United States Holder whose Shares are exchanged for cash pursuant to the Exchange will be treated as having sold such holder's Shares, and thus will recognize gain or loss if the exchange (a) results in a "complete termination" of such holder's equity interest in the Company, (b) is "substantially disproportionate" with respect to such holder or (c) is "not essentially equivalent to a dividend" with respect to the holder, each as discussed below. In applying these tests, a United States Holder will be treated as owning Shares actually or constructively owned by certain related individuals and entities. If a United States Holder sells Shares to persons other than the Company at or about the time such holder also sells Shares to the Company pursuant to the Offer, and the various sales effected by the holder are part of an overall plan to reduce or terminate such holder's proportionate interest in the Company, then the sales to persons other than the Company may, for United States federal income tax purposes, be integrated with the holder's sale of Shares pursuant to the Offer and, if integrated, should be taken into account in determining whether the holder satisfies any of the three tests described below. A United States Holder that exchanges all Shares actually or constructively owned by such holder for cash pursuant to the Offer will be treated as having completely terminated such holder's equity interest in the Company. An exchange of Shares for cash will be "substantially disproportionate" with respect to a United States Holder if the percentage of the then outstanding Shares actually and constructively owned by such holder immediately after the exchange is less than 80% of the percentage of the Shares actually and constructively owned by such holder immediately before the exchange. A United States Holder will satisfy the "not essentially equivalent to a dividend" test if the reduction in such holder's proportionate interest in the Company constitutes a "meaningful reduction" given such holder's particular facts and circumstances. The IRS has indicated in published rulings that any reduction in the percentage interest of a shareholder whose relative stock interest in a publicly held corporation is minimal (an interest of less than 1% should satisfy this requirement) and who exercises no control over corporate affairs should constitute such a "meaningful reduction." If a United States Holder is treated as having sold such holder's Shares under the tests described above, such holder will recognize gain or loss equal to the difference between the amount of cash received and such holder's tax basis in the Shares exchanged therefor. Any such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the holding period of the Shares exceeds one year as of the date of the exchange. If a United States Holder who exchanges Shares pursuant to the Offer is not treated under Section 302 as having sold such holder's Shares for cash, the entire amount of cash received by such holder will be treated as a dividend to the extent of the Company's current and accumulated earnings and profits, which the Company anticipates will be sufficient to cover the amount of any such dividend and will be includible in the holder's gross income as ordinary income in its entirety, without reduction for the tax basis of the Shares exchanged. No loss will be recognized. The United States Holder's tax basis in the Shares exchanged generally will be added to such holder's tax basis in such holder's remaining Shares. To the extent that cash received in exchange for Shares is treated as a dividend to a corporate United States Holder, such holder will be (i) eligible for a dividends-received deduction (subject to applicable limitations) and (ii) subject to the "extraordinary dividend" 17 provisions of the Code. To the extent, if any, that the cash received by a United States Holder exceeds the Company's current and accumulated earnings and profits, it will be treated first as a tax-free return of such holder's tax basis in the Shares and thereafter as capital gain. The Company cannot predict whether or to what extent the Offer will be oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to the Offer will cause the Company to accept fewer Shares than are tendered. Therefore, a holder can be given no assurance that a sufficient number of such holder's Shares will be exchanged pursuant to the Offer to ensure that such exchange will be treated as a sale, rather than as a dividend, for United States federal income tax purposes pursuant to the rules discussed above. SHAREHOLDERS WHO DO NOT RECEIVE CASH PURSUANT TO THE OFFER. Shareholders whose Shares are not exchanged pursuant to the Offer will not incur any tax liability as a result of the consummation of the Offer. See Section 3 with respect to the application of United States federal income tax withholding to payments made to foreign shareholders and backup withholding. THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS. 15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS The Company expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 6 shall have occurred or shall be deemed by the Company to have occurred, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares by giving oral or written notice of such extension to the Depositary and making a public announcement thereof. The Company also expressly reserves the right, in its sole discretion, to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for Shares upon the occurrence of any of the conditions specified in Section 6 hereof, by giving oral or written notice of such termination or postponement to the Depositary and making a public announcement thereof. Additionally, in certain circumstances, if the Company waives any of the conditions of the Offer set forth in Section 6, it may be required to extend the Expiration Date of the Offer. The Company's reservation of the right to delay payment for Shares that it has accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires that the Company must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, the Company further reserves the right, in its sole discretion, and regardless of whether any of the events set forth in Section 6 shall have occurred or shall be deemed by the Company to have occurred, to amend the Offer in any respect (including, without limitation, by decreasing or increasing the consideration offered in the Offer to holders of Shares or by decreasing or increasing the number of Shares being sought in the Offer). Amendments to the Offer may be made at any time and from time to time effected by public announcement thereof, such announcement, in the case of an extension, to be issued no later than 9:00 A.M., New York City time, on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to shareholders in a manner reasonably designed to inform shareholders of such change. Without limiting the manner in which the Company may choose to make any public announcement, except as provided by applicable law (including Rule 13e-4(e)(3) promulgated under the Exchange Act), the Company shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If the Company makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Company will extend the Offer to the extent required by Rule 13e-4 promulgated under the Exchange Act, which requires that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other 18 than a change in price or a change in percentage of securities sought) will depend upon the facts and circumstances, including the relative materiality of such terms or information. If (i) the Company increases or decreases the price to be paid for Shares, the Company increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares, or the Company decreases the number of Shares being sought, and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given, the Offer will be extended until the expiration of such period of ten business days. 16. FEES AND EXPENSES The Company has retained D.F. King & Co., Inc., as Information Agent, and The Bank of New York, as Depositary in connection with the Offer. The Information Agent and the Depositary will receive reasonable and customary compensation for their services. The Company will also reimburse the Information Agent and the Depositary for out-of-pocket expenses, including reasonable attorneys' fees, and has agreed to indemnify the Information Agent and the Depositary against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. The Information Agent may contact shareholders by mail, telephone, facsimile transmission and personal interviews, and may request brokers, dealers and other nominee shareholders to forward materials relating to the Offer to beneficial owners. Neither the Information Agent nor the Depositary has been retained to make solicitations or recommendations in connection with the Offer. The Company will not pay fees or commissions to any broker, dealer, commercial bank, trust company or other person for soliciting any Shares pursuant to the Offer. The Company will, however, on request, reimburse such persons for customary handling and mailing expenses incurred in forwarding materials in respect of the Offer to the beneficial owners for which they act as nominees. No such broker, dealer, commercial bank or trust company has been authorized to act as the Company's agent for purposes of the Offer. The Company will pay (or cause to be paid) any stock transfer taxes on its purchase of Shares, except as otherwise provided in Instruction 7 of the Letter of Transmittal. 17. MISCELLANEOUS The Company is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has filed with the SEC a Tender Offer Statement on Schedule TO (the "Schedule TO") which contains additional information with respect to the Offer. The Schedule TO, including the exhibits and any amendments thereto, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth in Section 11 with respect to information concerning the Company. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE COMPANY IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. AMREP CORPORATION May 4, 2000 19 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for the Shares and any other required documents should be sent or delivered by each shareholder or such shareholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth below: THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER: (212) 815-6213 Reorganization Services Department Reorganization Services P.O. Box 11248 Confirm Facsimile Transmission Department Church Street Station by Telephone (212) 815-6173 101 Barclay Street New York, New York 10286-1248 Receive and Deliver Window New York, New York 10286
Any questions or requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Information Agent at the telephone number and address below. Shareholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 BANKS AND BROKERS CALL COLLECT: (212) 269-5550 ALL OTHERS CALL TOLL FREE: (800) 431-9629 20 EX-99.(A)(1)(II) 3 EXHIBIT 99(A)(1)(III) EXHIBIT (A)(1)(II) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF AMREP CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED MAY 4, 2000 - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, JUNE 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL BY HAND OR OVERNIGHT COURIER REORGANIZATION SERVICES DEPARTMENT REORGANIZATION SERVICES DEPARTMENT P.O. BOX 11248 101 BARCLAY STREET CHURCH STREET STATION RECEIVE AND DELIVER WINDOW NEW YORK, NEW YORK 10286-1248 NEW YORK, NEW YORK 10286 - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4) - --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED (FILL IN EXACTLY AS NAME(S) APPEAR(S)ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY) - -------------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES NUMBER OF CERTIFICATE REPRESENTED BY SHARES NUMBER(S)(1) CERTIFICATE(S) TENDERED(2) ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- TOTAL SHARES: - --------------------------------------------------------------------------------------------------------------------
INDICATE IN THIS BOX THE ORDER (BY CERTIFICATE NUMBER) IN WHICH SHARES ARE TO BE PURCHASED IN THE EVENT OF PRORATION.(3) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY.) SEE INSTRUCTION 15. 1st:_____ 2nd:_____ 3rd:_____ 4th:_____ 5th:_____ - -------------------------------------------------------------------------------- (1) Need not be completed by shareholders tendering Shares by book-entry transfer. (2) If fewer than all of the Shares represented by any listed Share certificate are being tendered, indicate the number of such Shares being tendered in this column. Unless otherwise indicated, it will be assumed that all Shares represented by each Share certificate delivered to the Depositary are being tendered hereby. See Instruction 4. (3) If you do not designate an order, then in the event less than all Shares tendered are purchased due to proration, Shares will be selected for purchase by the Depositary. See Instruction 15. - -------------------------------------------------------------------------------- NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY. DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY. DELIVERIES TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE VALID DELIVERY TO THE DEPOSITARY. - -------------------------------------------------------------------------------- / / Check here if you cannot locate your certificates and require assistance in replacing them. Upon receipt of this Letter of Transmittal, the Depositary will contact you directly with replacement instructions. See Instruction 16. - -------------------------------------------------------------------------------- This Letter of Transmittal is to be used only if certificates are being forwarded herewith or if delivery of Shares (as defined below) is being made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") (hereinafter referred to as the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as defined below). THIS LETTER OF TRANSMITTAL MAY NOT BE USED FOR TENDERING ESOP SHARES ALLOCATED TO ACCOUNTS UNDER THE COMPANY'S SAVINGS AND SALARY DEFERRAL PLAN (THE "SAVINGS PLAN"). SEE INSTRUCTION 14. Shareholders who cannot deliver their Share certificates and any other required documents to the Depositary by the Expiration Date (as defined in the Offer to Purchase) must tender their Shares using the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. The names and addresses of the registered holders should be printed, if they are not already printed above, exactly as they appear on the certificates representing Shares tendered hereby. The certificate numbers, the number of Shares represented by such certificates, the number of Shares that the undersigned wishes to tender and the purchase price at which such Shares are being tendered should be indicated in the appropriate boxes on this Letter of Transmittal. --------------------------------------------------------------------------- (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution ------------------------------ Account No. at DTC ----------------------------------------- Transaction Code No. --------------------------------------- / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s) ------------------------------------------- Date of Execution of Notice of Guaranteed Delivery ------------------------ Name of Institution that Guaranteed Delivery ------------------------------ Window Ticket No. (if any) ------------------------------------------------ IF DELIVERY IS BY BOOK-ENTRY TRANSFER: Name of Tendering Institution --------------------------------------------- Account No. at DTC -------------------------------------------------------- Transaction Code No. ------------------------------------------------------ --------------------------------------------------------------------------- 2 Ladies and Gentlemen: The undersigned hereby tenders to AMREP CORPORATION, an Oklahoma corporation (the "Company"), the above-described shares of the Company's common stock, par value $.10 per share (the "Shares"), at the price per Share indicated in this Letter of Transmittal, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 4, 2000 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned: (i) hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to all the Shares that are being tendered hereby or orders the registration of such Shares tendered by book-entry transfer that are purchased pursuant to the Offer to or upon the order of the Company; and (ii) hereby irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to: (i) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Company upon receipt by the Depositary, as the undersigned's agent, of the Purchase Price (as defined below) with respect to such Shares; (ii) present certificates for such Shares for cancellation and transfer on the books of the Company; and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The undersigned hereby represents and warrants to the Company that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. The undersigned represents and warrants to the Company that the undersigned has read and agrees to all of the terms of the Offer. All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the Instructions will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty to the Company that (i) the undersigned has a net long position in the Shares or equivalent securities being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (ii) the tender of such Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer. 3 The undersigned understands that the Company will determine a single per Share price (not greater than $7.00 nor less than $5.25 per Share), net to the Seller in cash, that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The undersigned understands that the Company will select the lowest Purchase Price that will allow it to purchase 725,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $7.00 nor less than $5.25 per Share) validly tendered and not withdrawn pursuant to the Offer. The undersigned understands that all Shares validly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration provisions, and that the Company will return all other Shares, including Shares tendered at prices greater than the Purchase Price and not withdrawn and Shares not purchased because of proration. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, the Company may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Shares tendered or may not be required to purchase any of the Shares tendered hereby or may accept for payment fewer than all of the Shares tendered hereby. Unless otherwise indicated under "Special Payment Instructions", please issue the check for the Purchase Price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility). Similarly, unless otherwise indicated under "Special Delivery Instructions", please mail the check for the Purchase Price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the Purchase Price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail such check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if the Company does not accept for payment any of the Shares so tendered. The undersigned understands that acceptance of Shares by the Company for payment will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer. NOTE: SIGNATURES MUST BE PROVIDED BELOW 4 - -------------------------------------------------------------------------------- PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE INSTRUCTION 5) - -------------------------------------------------------------------------------- IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED MUST BE USED - -------------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS TABLE AND INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES - -------------------------------------------------------------------------------- SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER / / The undersigned wants to maximize the chance of having the Company purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares at, and is willing to accept, the Purchase Price determined by the Company in accordance with the terms of the Offer. This action could result in receiving a price per Share as low as $5.25 or as high as $7.00. CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER / / $5.25 / / $5.50 / / $5.75 / / $6.00 / / $6.25 / / $6.50 / / $6.75 / / $7.00 / / $5.375 / / $5.625 / / $5.875 / / $6.125 / / $6.375 / / $6.625 / / $6.875
- -------------------------------------------------------------------------------- 5 - -------------------------------------------------------------------------------- ODD LOTS (SEE INSTRUCTION 9) This section is to be completed ONLY if Shares are being tendered by or on behalf of a person who owns beneficially, as of the close of business on May 4, 2000 and who continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including Shares allocated to the person's account under the Savings Plan). The undersigned either (check one box): / / owned beneficially, as of the close of business on May 4, 2000 and continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares (as defined in the Offer to Purchase) allocated to the account of the undersigned under the Savings Plan), all of which are being tendered, or / / is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial owner thereof, Shares with respect to which it is the record owner, and (ii) believes, based upon representations made to it by such beneficial owner, that such beneficial owner owned beneficially, as of the close of business on May 4, 2000 and continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares allocated to such person's account under the Savings Plan) and is tendering all of such Shares. If you have checked either box above in this Odd Lots table and you do not wish to specify a purchase price for your tendered Shares, check the following box, in which case you will be deemed to have tendered at the Purchase Price determined by the Company in accordance with the terms of the Offer (persons checking this box should not indicate the price per Share in the preceding table captioned "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal). See Instruction 5. / / - -------------------------------------------------------------------------------- - -------------------------------------------------- -------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 6 AND 8) (SEE INSTRUCTIONS 1, 6, 7 AND 8) To be completed ONLY if the check To be completed ONLY if the check for the Purchase Price of Shares purchased for the aggregate Purchase Price of Shares and/or certificates for Shares not purchased purchased and/or certificates for Shares not are to be mailed to someone other than the tendered or not purchased are to be issued undersigned or to the undersigned at an in the name of someone other than the address other than that shown below the undersigned. undersigned's signature(s). Issue: / / check and/or Mail: / / check and/or / / certificate(s) to: / / certificate(s) to: Name Name ---------------------------------------- ---------------------------------------- ---------------------------------------- ---------------------------------------- (Please Print) (Please Print) Address: Address: ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ (Include Zip Code) (Include Zip Code) ------------------------------------ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) - -------------------------------------------------- --------------------------------------------------
6 - -------------------------------------------------------------------------------- TO BE COMPLETED BY ALL STOCKHOLDERS (PLEASE SIGN HERE) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Signature(s) of Owner(s)) Dated:____________________, 2000 Name(s) ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title) ---------------------------------------------------------- Address ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone No. ----------------------------------------------------- Must be signed above by registered holder(s) exactly as name(s) appear(s) on Share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. (If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 6.) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 6) Name of Firm ------------------------------------------------------------------- Authorized Signature ----------------------------------------------------------- Name --------------------------------------------------------------------------- (PLEASE PRINT) Title -------------------------------------------------------------------------- Address ------------------------------------------------------------------------ (INCLUDE ZIP CODE) Area Code and Telephone No. ---------------------------------------------------- Dated: ____________________, 2000 - -------------------------------------------------------------------------------- 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program (an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) have not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" in this Letter of Transmittal, or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 6. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be used either if Share certificates are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal prior to the Expiration Date. If certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Shareholders whose Share certificates are not immediately available, who cannot deliver their Shares and all other required documents to the Depositary or who cannot complete the procedure for delivery by book-entry transfer prior to the Expiration Date may tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Company (with any required signature guarantees) must be received by the Depositary prior to the Expiration Date, and (iii) the certificates for all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered electronically, in each case together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange, Inc. trading days after the date the Depositary receives such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative or contingent tenders will be accepted. By executing this Letter of Transmittal (or facsimile thereof), the tendering shareholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule and attached to this Letter of Transmittal. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY Transfer). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) 8 signing this Letter of Transmittal, unless otherwise provided in the "Special Payment Instructions" or "Special Delivery Instructions" boxes in this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be validly tendered, the shareholder (other than an Odd Lot Owner (as defined in Section 2 of the Offer to Purchase)) must either: (a) check the box under "Shares Tendered At Price Determined Pursuant To The Offer"; or (b) check a box indicating the price per Share at which such shareholder is tendering Shares under "Shares Tendered At Price Determined By Shareholder" in the table captioned "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal. By checking the box under "Shares Tendered At Price Determined Pursuant To The Offer" a tendering shareholder agrees to accept the Purchase Price determined by the Company in accordance with the terms of the Offer, which may be as low as $5.25 or as high as $7.00 per Share. If a tendering shareholder elects instead to check a box under "Shares Tendered At Price Determined By Shareholder" and the Purchase Price is less than the price represented by the box selected, none of the tendered shares will be purchased. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED, OR (OTHER THAN AS DESCRIBED BELOW FOR ODD LOT OWNERS) IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. A shareholder wishing to tender portions of such shareholder's Share holdings at different prices must complete a separate Letter of Transmittal for each price at which such shareholder wishes to tender each such portion of such shareholder's Shares. The same Shares cannot be tendered (unless previously validly withdrawn as provided in Section 4 of the Offer to Purchase) at more than one price. An Odd Lot Owner (as defined in Section 2 of the Offer to Purchase) who does not wish to specify a purchase price may check the box in the table captioned "Odd Lots" indicating that such shareholder is tendering all Shares at the Purchase Price determined by the Company. An Odd Lot Owner who checks this box should not check any of the boxes in the table captioned "Price (In Dollars) Per Share At Which Shares Are Being Tendered." 6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signatures(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the Purchase Price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), in which case the certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such certificates. Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on such certificate(s). Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. 9 If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of such person so to act must be submitted. 7. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the aggregate Purchase Price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the Purchase Price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to Purchase. Except as provided in this Instruction 7, it will not be necessary to affix transfer tax stamps to the certificates representing Shares tendered hereby. 8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Purchase Price of any Shares tendered hereby is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal, or if the check and/or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown above in the box captioned "Description of Shares Tendered," then the tables captioned "Special Payment Instructions" and/or "Special Delivery Instructions" in this Letter of Transmittal should be completed. A shareholder tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such shareholder at the Book-Entry Transfer Facility. 9. ODD LOTS. As described in Section 1 of the Offer to Purchase, if fewer than all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date are to be purchased, the Shares purchased first will consist of all Shares tendered by any shareholder who owned beneficially, as of the close of business on May 4, 2000, and continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares allocated to such shareholder's account under the Savings Plan) and who validly tendered all such Shares at or below the Purchase Price. Partial tenders of Shares will not qualify for this preference and this preference will not be available unless the table captioned "Odd Lots" in this Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery, is properly completed. Additionally, a tendering Odd Lot holder who does not wish to specify a purchase price may check the box in the table captioned "Odd Lots" indicating that such shareholder is tendering all Shares at the Purchase Price determined by the Company. See Instruction 5. 10. SUBSTITUTE FORM W-9 AND FORM W-8. Under the United States federal income tax backup withholding rules, unless an exemption applies under the applicable law and regulations, 31% of the gross proceeds payable to a shareholder or other payee pursuant to the Offer must be withheld and remitted to the United States Treasury, unless the shareholder or other payee provides such person's taxpayer identification number (employer identification number or social security number) to the Depositary and certifies that such number is correct. Therefore, each tendering shareholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding, unless such shareholder otherwise establishes to the satisfaction of the Depositary that it is not subject to backup withholding. Certain shareholders (including, among others, all corporations and certain foreign shareholders (in addition to foreign corporations)) are not subject to these backup withholding and reporting requirements. In order for a foreign shareholder to qualify as an exempt recipient, that shareholder must submit an IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting to that shareholder's exempt status. Such statements may be obtained from the Depositary. 10 11. WITHHOLDING ON FOREIGN SHAREHOLDERS. Even if a foreign shareholder has provided the required certification to avoid backup withholding, the Depositary will withhold United States federal income taxes equal to 30% of the gross payments payable to a foreign shareholder or his or her agent unless the Depositary determines that an exemption from or a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business in the United States. For this purpose, a foreign shareholder is a shareholder that is not (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States, any state or any political subdivision thereof or (iii) any estate or trust the income of which is subject to United States federal income taxation regardless of the source of such income. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a foreign shareholder must deliver to the Depositary a properly completed IRS Form 1001. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a foreign shareholder must deliver to the Depositary a properly completed IRS Form 4224. The Depositary will determine a shareholder's status as a foreign shareholder and eligibility for a reduced rate of, or an exemption from, withholding by reference to outstanding certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate that such reliance is not warranted. A foreign shareholder may be eligible to obtain a refund of all or a portion of any tax withheld if such shareholder meets the "complete termination," "substantially disproportionate" or "not essentially equivalent to a dividend" test described in Section 14 of the Offer to Purchase or is otherwise able to establish that no tax or a reduced amount of tax is due. Backup withholding generally will not apply to amounts subject to the 30% or treaty-reduced rate of withholding. Foreign shareholders are urged to consult their tax advisors regarding the application of United States federal income tax withholding, including eligibility for a withholding tax reduction or exemption and refund procedures. 12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent at its telephone numbers and address listed below. Requests for additional copies of the Offer to Purchase, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent, and such copies will be furnished promptly at the Company's expense. Shareholders may also contact their local broker, dealer, commercial bank or trust company for documents relating to, or assistance concerning, the Offer. 13. IRREGULARITIES. All questions as to the number of Shares to be accepted, the price to be paid therefor and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders it determines not to be in proper form or the acceptance of or payment for which may in the opinion of the Company's counsel be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Shares or any particular shareholder. No tender of Shares will be deemed to be validly made until all defects or irregularities have been cured or waived. None of the Company, the Depositary, the Information Agent or any other person is or will be obligated to give notice of any defects or irregularities in tenders, and none of them will incur any liability for failure to give any such notice. 14. SAVINGS PLAN. Participants in the Savings Plan may not use this Letter of Transmittal to direct the tender of ESOP Shares allocated to such participants' accounts under the Savings Plan, but must use the separate Direction Form sent to them by the Company. See Section 3 of the Offer to Purchase. 15. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of the Offer to Purchase, shareholders may designate the order in which their Shares are to be purchased in the event of proration. The order of purchase may affect whether any capital gain or loss recognized on the Shares purchased is long-term or short-term (depending on the holding period for the Shares purchased) and the amount of gain or loss recognized for federal income tax purposes. See Sections 1 and 14 of the Offer to Purchase. 11 16. LOST, STOLEN OR DESTROYED CERTIFICATES. If your certificate(s) representing Shares have been lost, stolen or destroyed, so indicate on page 2 of this Letter of Transmittal. The Depositary will send you additional documentation that will need to be completed to effectively surrender such lost, stolen or destroyed certificates. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF) TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE. SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9 WITH THEIR LETTER OF TRANSMITTAL. 12 PAYER'S NAME: THE BANK OF NEW YORK - ------------------------------------------------------------------------------------------------------- PART 1 - PLEASE PROVIDE YOUR TAXPAYER TIN____________________ SUBSTITUTE IDENTIFICATION NUMBER ("TIN") IN THE BOX AT (Social Security Number FORM W-9 RIGHT AND CERTIFY THAT IT IS CORRECT BY or Employer Identification ------------ SIGNING AND DATING BELOW. Number) --------------------------------------------------------------------------- Department of the Treasury PART 2 - CERTIFICATION -- Under penalties of perjury, I certify that: Internal Revenue Service (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding; or (b) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends; or (c) the IRS has notified me that I am no longer subject to backup withholding. Payer's Request for -------------------------------------------------------------------------- Taxpayer Identification Number and Certification CERTIFICATION INSTRUCTIONS -You must cross out Item (2) above if you have been notified by the IRS that you are PART 3 currently subject to backup withholding because you Awaiting TIN / / have failed to report all interest or dividends on your tax return. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING. , 2000 --------------------------- ----------------- Signature Date - -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered and application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments due to me will be withheld, but will be refunded if I provide a Taxpayer Identification Number within 60 days. , 2000 - --------------------------- ----------------- Signature Date - -------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 Banks and Brokers call collect: (212) 269-5550 All Others Call Toll Free: (800) 431-9629 EX-99.(A)(1)(III) 4 EXHIBIT 99(A)(1)(III) EXHIBIT (A)(1)(III) AMREP CORPORATION NOTICE OF GUARANTEED DELIVERY OF SHARES OF COMMON STOCK This form, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) if certificates for the shares of common stock of AMREP Corporation are not immediately available, if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all other documents required by the Letter of Transmittal to be delivered to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase (defined below)). Such form may be delivered by hand or transmitted by mail or overnight courier, or (for Eligible Institutions only) by facsimile transmission, to the Depositary. See Section 3 of the Offer to Purchase. THE ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM MUST COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION. THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL BY FACSIMILE TRANSMISSION BY HAND OR OVERNIGHT COURIER REORGANIZATION SERVICES DEPARTMENT (for Eligible Institutions only) REORGANIZATION SERVICES P.O. BOX 11248 (212) 815-6213 DEPARTMENT CHURCH STREET STATION CONFIRM FACSIMILE TRANSMISSION 101 BARCLAY STREET NEW YORK, NEW YORK 10286-1248 BY TELEPHONE RECEIVE AND DELIVER WINDOW (212) 815-6173 NEW YORK, NEW YORK 10286
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. Ladies and Gentlemen: The undersigned hereby tenders to AMREP Corporation, an Oklahoma corporation (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 4, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the number of shares of common stock, par value $.10 per share (the "Shares"), of the Company listed below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. - -------------------------------------------------------------------------------- Name(s) (Please Print): NUMBER OF SHARES: ---------------------------------------- ---------------------------------------- Address(es): - --------------------- ---------------------------------------- ---------------------------------------- (INCLUDING ZIP CODE) CERTIFICATE NOS: (IF AVAILABLE) - --------------------- ---------------------------------------- (SIGNATURE(S)) / / Check here if Shares will be tendered by book-entry transfer and complete the following: Name of Tendering Institution: -------------------------------------------------- -------------------------------------------------- (AREA CODE AND TELEPHONE NUMBER) Account No.:________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED - -------------------------------------------------------------------------------- IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE SPECIFIED MUST BE USED - -------------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES - -------------------------------------------------------------------------------- SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER / / The undersigned wants to maximize the chance of having the Company purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares at, and is willing to accept, the Purchase Price determined by the Company in accordance with the terms of the Offer. This action could result in receiving a price per Share as low as $5.25 or as high as $7.00. CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER / / $5.25 / / $5.50 / / $5.75 / / $6.00 / / $6.25 / / $6.50 / / $6.75 / / $7.00 / / $5.375 / / $5.625 / / $5.875 / / $6.125 / / $6.375 / / $6.625 / / $6.875
- -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- ODD LOTS This section is to be completed ONLY if Shares are being tendered by or on behalf of a person who owns beneficially, as of the close of business on May 4, 2000 and who continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including Shares allocated to the person's account under the Savings Plan (as defined in the Offer to Purchase)). The undersigned either (check one box): / / owned beneficially, as of the close of business on May 4, 2000 and continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares, all of which are being tendered, or / / is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial owner thereof, Shares with respect to which it is the record owner, and (ii) believes, based upon representations made to it by each such beneficial owner, that such beneficial owner owned beneficially, as of the close of business on May 4, 2000, and continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares (as defined in the Offer to Purchase) allocated to such person's account under the Savings Plan (as defined in the Offer to Purchase)) and is tendering all of such Shares. If you have checked either box above in this Odd Lots table and do not wish to specify a purchase price, check the following box, in which case you will be deemed to have tendered at the Purchase Price determined by the Company in accordance with the terms of the Offer (persons checking this box should not indicate the price per Share in the preceding table captioned "Price (In Dollars) Per Share At Which Shares Are Being Tendered)." / / - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, an Eligible Institution (as defined in the Offer to Purchase), hereby guarantees (i) that the above-named person(s) has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, (ii) that such tender of Shares complies with Rule 14e-4, and (iii) to deliver to the Depositary at one of its addresses set forth above certificate(s) for the Shares tendered hereby, in proper form for transfer (or Book-Entry Confirmation (as defined in the Offer to Purchase)) together with a properly completed and duly executed Letter(s) of Transmittal (or manually signed facsimile(s) thereof), with any required signature guarantee(s), or an Agent's Message (as defined in the Offer to Purchase) with a book-entry transfer, and any other documents required by the Letter of Transmittal, all within three New York Stock Exchange, Inc. trading days after the date hereof. - ---------------------------------- ---------------------------------------- Name of Firm Authorized Signature - ---------------------------------- ---------------------------------------- Address Name - ---------------------------------- ---------------------------------------- City, State, Zip Code Title - ---------------------------------- Area Code and Telephone Number Dated: _______________, 2000 - -------------------------------------------------------------------------------- DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. EX-99.(A)(1)(IV) 5 EXHIBIT 99(A)(1)(IV) EXHIBIT (A)(1)(IV) AMREP CORPORATION OFFER TO PURCHASE FOR CASH UP TO 725,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $7.00 NOR LESS THAN $5.25 PER SHARE - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, JUNE 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- May 4, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: In our capacity as Information Agent, we are enclosing the material listed below relating to the offer of AMREP Corporation, an Oklahoma corporation (the "Company"), to purchase up to 725,000 shares of its common stock, par value $.10 per share (the "Shares"), at prices not greater than $7.00 nor less than $5.25 per Share, net to the seller in cash, specified by tendering shareholders, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 4, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The Company will determine a single price (not greater than $7.00 nor less than $5.25 per Share), net to the seller in cash, that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The Company will select the lowest Purchase Price that will allow it to purchase 725,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $7.00 nor less than $5.25 per Share) and not withdrawn pursuant to the Offer. The Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer, including the provisions relating to proration described in the Offer to Purchase. See Section 1 of the Offer to Purchase. The Purchase Price will be paid in cash, net to the seller, with respect to all Shares purchased. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration will be returned. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6 OF THE OFFER TO PURCHASE. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. The Company will, upon request, reimburse you for reasonable and customary handling and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. For your information and for forwarding to your clients, we are enclosing the following documents: 1. The Offer to Purchase. 2. A letter to shareholders of the Company from the Chairman of the Board of Directors of the Company. 3. The Letter of Transmittal for your use and for the information of your clients. 4. The Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to the Depositary by the Expiration Date (each as defined in the Offer to Purchase). 5. A letter that may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space for obtaining such clients' instructions with regard to the Offer. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withholding. 7. A return envelope addressed to The Bank of New York, the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 6, 2000, UNLESS THE OFFER IS EXTENDED. The Company will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. The Company will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter of Transmittal. As described in the Offer to Purchase, if more than 725,000 Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, as defined in Section 1 of the Offer to Purchase, the Company will accept Shares for purchase in the following order of priority: (i) all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any shareholder who owned beneficially, as of the close of business on May 4, 2000, and who continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including Shares allocated to the shareholder under the Savings Plan (as defined in the Offer to Purchase)) and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" in the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery; and (ii) after purchase of all of the foregoing Shares, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date on a PRO RATA basis. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. Any questions or requests for assistance or additional copies of the enclosed materials may be directed to D.F. King & Co., Inc., 77 Water Street, New York, New York 10005 (banks and brokers, call collect (212) 269-5550; all others call toll-free (800) 431-9629.) Very truly yours, D.F. King & Co., Inc. Enclosures NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. -2- EX-99.(A)(1)(V) 6 EXHIBIT 99(A)(1)(V) EXHIBIT (A)(1)(V) AMREP CORPORATION OFFER TO PURCHASE FOR CASH UP TO 725,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $7.00 NOR LESS THAN $5.25 PER SHARE - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, JUNE 6, 2000, UNLESS THE OFFER IS EXTENDED - -------------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated May 4, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") setting forth an offer by AMREP Corporation, an Oklahoma corporation (the "Company"), to purchase up to 725,000 shares of its common stock, par value $.10 per share (the "Shares"), at prices not greater than $7.00 nor less than $5.25 per Share, net to the seller in cash, specified by tendering shareholders, upon the terms and subject to the conditions of the Offer. Also enclosed herewith is certain other material related to the Offer, including a letter to shareholders from Edward B. Cloues, II, Chairman of the Board of Directors of the Company. The Company will determine a single per Share price (not greater than $7.00 nor less than $5.25 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering shareholders. The Company will select the lowest Purchase Price that will allow it to purchase 725,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $7.00 nor less than $5.25 per Share) validly tendered and not withdrawn pursuant to the Offer. The Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer, including the provisions thereof relating to proration. See Section 1 of the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Your attention is invited to the following: 1. You may tender Shares at prices (in multiples of $.125), not greater than $7.00 nor less than $5.25 per Share, as indicated in the attached Instruction Form, net to you in cash. 2. The Offer is for up to 725,000 Shares, constituting approximately 10% of the total Shares outstanding as of May 4, 2000. The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions set forth in the Offer to Purchase. 3. The Offer, proration period and withdrawal rights will expire at 5:00 P.M., New York City time, on Tuesday, June 6, 2000, unless the Offer is extended. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf. 4. As described in the Offer to Purchase, if more than 725,000 Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase), the Company will purchase Shares in the following order of priority: (i) all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any shareholder who owned beneficially, as of the close of business on May 4, 2000, and who continues to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares (as defined in the Offer to Purchase) allocated to the account of the shareholder under the Savings Plan (as defined in the Offer to Purchase)) who validly tenders all of such Shares (partial tenders will not qualify for this preference) and makes the appropriate entry in the table captioned "Odd Lots" in the Letter of Transmittal, the Notice of Guaranteed Delivery and the Instruction Form, as applicable, and (ii) after purchase of all the foregoing Shares, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date on a PRO RATA basis. See Section 1 of the Offer to Purchase for a discussion of proration. 5. Tendering shareholders will not be obligated to pay any brokerage commissions or solicitation fees on the Company's purchase of Shares in the Offer. Any stock transfer taxes applicable to the purchase of Shares by the Company pursuant to the Offer will be paid by the Company, except as otherwise provided in Instruction 7 of the Letter of Transmittal. 6. If you wish to tender portions of your Shares at different prices you must complete a separate Instruction Form for each price at which you wish to tender each portion of your Shares. We must submit separate Letters of Transmittal on your behalf for each price you will accept. THE SAME SHARES MAY NOT BE TENDERED AT MORE THAN ONE PRICE. 7. If you owned beneficially, as of the close of business on May 4, 2000, and continue to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares allocated to your account under the Savings Plan), and you are electing to have your ESOP Shares tendered and you instruct us to tender at or below the Purchase Price on your behalf all Shares we hold for your account prior to the Expiration Date and check the box captioned "Odd Lots" in the Instruction Form, all such Shares will be accepted for purchase before proration, if any, of the purchase of other tendered Shares. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. If you wish to have us tender any or all of your Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer to Purchase, please so instruct us by completing, executing and returning to us the attached Instruction Form. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the Instruction Form. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. The Offer is being made to all holders of Shares. The Company is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. -2- INSTRUCTION FORM WITH RESPECT TO OFFER TO PURCHASE FOR CASH UP TO 725,000 SHARES OF COMMON STOCK OF AMREP CORPORATION The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated May 4, 2000, and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") in connection with the Offer by AMREP Corporation (the "Company") to purchase up to 725,000 shares of its common stock, par value $.10 per share (the "Shares"), at prices not greater than $7.00 nor less than $5.25 per Share, net to the undersigned in cash, specified by the undersigned, upon the terms and subject to the and conditions of the Offer. This will instruct you to tender to the Company the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, at the price per Share indicated below, upon the terms and subject to the conditions of the Offer. - -------------------------------------------------------------------------------- SHARES TENDERED / / By checking this box, all Shares held by us for your account will be tendered. If fewer than all Shares are to be tendered, please check the box below and indicate the aggregate number of Shares to be tendered by us. / / Tender_____________Shares. Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED - -------------------------------------------------------------------------------- IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED MUST BE USED - -------------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER / / The undersigned wants to maximize the chance of having the Company purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares at, and is willing to accept, the Purchase Price determined by the Company in accordance with the terms of the Offer. This action could result in receiving a price per Share as low as $5.25 or as high as $7.00. CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER / / $5.25 / / $5.50 / / $5.75 / / $6.00 / / $6.25 / / $6.50 / / $6.75 / / $7.00 / / $5.375 / / $5.625 / / $5.875 / / $6.125 / / $6.375 / / $6.625 / / $6.875
- -------------------------------------------------------------------------------- -3- - -------------------------------------------------------------------------------- ODD LOTS / / By checking this box, the undersigned represent(s) that the undersigned owned beneficially, as of the close of business on May 4, 2000 and continue(s) to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares allocated to the account of the undersigned under the Savings Plan) and is tendering all of such Shares. If you have checked the box above in this Odd Lots table and do not wish to specify a purchase price, check the following box, in which case you will be deemed to have tendered at the Purchase Price determined by the Company in accordance with the terms of the Offer (persons checking this box should NOT indicate the price per Share in the preceding table captioned "Price (In Dollars) Per Share At Which Shares Are Being Tendered"). / / - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SIGN HERE Dated: _____________, 2000 Signature(s) ---------------------------- ---------------------------------------- Print Name(s) --------------------------- Address --------------------------------- ---------------------------------------- ---------------------------------------- Social Security or Taxpayer ID No.: ------------------------ - -------------------------------------------------------------------------------- EX-99.(A)(1)(VI) 7 EXHIBIT 99(A)(1)(VI) EXHIBIT (A)(1)(VI) AMREP CORPORATION 641 LEXINGTON AVENUE NEW YORK, NY 10022 ---------------------- IMMEDIATE ATTENTION REQUIRED ---------------------- To Participants in the AMREP Corporation Employee Stock Ownership Plan Re: AMREP Corporation Tender Offer Dear Participant: AMREP Corporation (the "Company") announced on May 2, 2000, that the Company's Board of Directors has approved a plan to repurchase up to 725,000 shares of its common stock (the "Shares"). In this repurchase plan, called a modified Dutch Auction tender offer, shareholders have an opportunity to sell their Shares at a price which will be not greater than $7.00 nor less than $5.25 per share. After Shares are tendered by shareholders, the Company selects a price within that range and buys back Shares that have been tendered at or below such price. Enclosed are the tender offer materials and a Direction Form that require your immediate attention. These materials contain important information about the tender offer and should be carefully reviewed. The Company's Employee Stock Ownership Plan ("ESOP Plan") was merged into the Company's Savings and Salary Deferral Plan (the "Savings Plan") in 1993 and the Trustee of the Savings Plan ("Trustee") holds the Shares (the "ESOP Shares") issued under the ESOP Plan which are allocated to the accounts of ESOP Plan participants ("ESOP Participants"). Our records show that you are an ESOP Participant. As described below, each ESOP Participant has the right, by instructing the Administrative Committee under the Savings Plan (the "Committee"), to determine whether and on what terms to tender ESOP Shares allocated to the ESOP Participant's account. IF YOU WISH TO PARTICIPATE IN THE TENDER OFFER, YOU SHOULD COMPLETE THE ENCLOSED DIRECTION FORM AND RETURN IT IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 2, 2000. PLEASE COMPLETE AND RETURN THE DIRECTION FORM EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE TENDER OFFER. NONE OF THE COMPANY, ITS BOARD OF DIRECTORS, THE COMMITTEE, OR ANY OTHER PARTY MAKES ANY RECOMMENDATIONS AS TO WHETHER TO DIRECT THE TENDER OF SHARES, THE PRICE AT WHICH TO TENDER, OR WHETHER TO REFRAIN FROM DIRECTING THE TENDER OF SHARES. EACH PARTICIPANT MUST MAKE HIS OR HER OWN DECISION ON THESE MATTERS. This letter summarizes the transaction and the procedures for completing the Direction Form. However, you are urged to review the more detailed explanation provided in the Offer to Purchase and the related Letter of Transmittal enclosed with this letter. BACKGROUND The Company has made a tender offer to purchase up to 725,000 Shares at a price not greater than $7.00 nor less than $5.25 per share. The enclosed Offer to Purchase, dated May 4, 2000 ("Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") set forth the objectives, terms and conditions of the Offer. The Offer extends to the approximately 12,900 ESOP Shares. While only the Trustee has the power to cause ESOP Shares to be tendered or not tendered, ESOP Participants are being given the right to direct whether or not the ESOP Shares allocable to the ESOP Participant's account should be tendered. The Trustee will be instructed to follow the direction of the Committee concerning the tendering of ESOP Shares. The Committee in turn will follow the directions of ESOP Participants which are given in properly completed Direction Forms that are timely received. The Trustee will be instructed NOT to tender ESOP Participant's ESOP Shares for which the Committee has not received timely instructions from ESOP Participants. PLEASE NOTE THAT THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER ESOP SHARES. THE DIRECTION FORM MUST BE USED TO DIRECT THE TENDER ESOP SHARES. HOW THE OFFER WORKS The details of the Offer are described in the enclosed materials, which you should review carefully. However, in broad outline, the transaction will work as follows with respect to ESOP Participants. - The Company has offered to purchase up to 725,000 of its Shares at a single per share price to be determined by it not greater than $7.00 nor less than $5.25 (the "Purchase Price"). - If you want any of the ESOP Shares allocated to your account sold on the terms and subject to the conditions of the Offer, you need to instruct the Committee by completing the enclosed Direction Form and returning it in the enclosed return envelope. - As described in Section 1 of the Offer to Purchase, if fewer than all Shares validly tendered at or below the Purchase Price (as defined in the Offer to Purchase) and not withdrawn prior to the Expiration Date (as defined in the Offer to Purchase) are to be purchased, the Shares purchased first will consist of all Shares tendered by "Odd Lot Owners" who validly tendered all of their Shares at or below the Purchase Price. "Odd Lot Owners" are shareholders, including ESOP Participants, who owned beneficially as of the close of business on May 4, 2000 and continue to own beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares (including ESOP Shares credited to such ESOP Participants' accounts). Partial tenders of Shares will not qualify for this preference and this preference will not be available unless the section captioned "Odd Lots" in the Direction Form is completed. - If you want to tender any of your ESOP Shares you need to indicate on the Direction Form that you wish to tender a stated number (or all) of the ESOP Shares allocated to your account, either (i) at the Purchase Price determined by the Company or (ii) at a per Share price determined by you (in multiples of $.125) which is not greater than $7.00 nor less than $5.25. - FOR THE TRUSTEE TO MAKE A TIMELY TENDER OF THE ESOP SHARES ALLOCABLE TO YOUR ACCOUNT, YOU MUST COMPLETE AND RETURN THE ENCLOSED DIRECTION FORM IN THE RETURN ENVELOPE SO THAT IT IS RECEIVED BY THE COMMITTEE AT THE ADDRESS ON THE RETURN ENVELOPE NOT LATER THAN 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 2, 2000. If the Committee does not receive a completed, signed original Direction Form from you by such deadline, the Trustee will NOT tender any of your ESOP Shares. 2 - After the Expiration Date the Company will determine the Purchase Price. Unless the Offer is terminated or amended in accordance with its terms, the Company will then buy all of the Shares, up to 725,000, that were tendered at the Purchase Price or below. - If you direct the tender of any ESOP Shares allocable to your account at a price in excess of the Purchase Price, those Shares will not be purchased. - If there is an excess of Shares tendered at or below the Purchase Price, Shares tendered pursuant to the Offer may be subject to proration as set forth in Section 1 of the Offer to Purchase. However, as described above, all Shares tendered by ESOP Participants who are Odd Lot Owners and complete the section captioned "ODD LOTS" in the Direction Form will be purchased without proration. - IMPORTANT: IF THE ESOP SHARES ALLOCATED TO YOUR ACCOUNT ARE REPURCHASED BY THE COMPANY, THE PROCEEDS WILL BE REINVESTED IN FOR YOUR ACCOUNT IN ACCORDANCE WITH THE PROVISIONS OF THE SAVINGS PLAN AS SOON AS ADMINISTRATIVELY POSSIBLE. PROCEDURE FOR TENDERING ESOP SHARES You must complete, sign and return the enclosed Direction Form in the return envelope so that it is received at the address listed on the enclosed return envelope not later than 12:00 Midnight, New York City time, on June 2, 2000, unless extended. If your Direction Form is not received by this deadline, or if it is not fully or properly completed, the ESOP Shares allocable to your individual account will not be tendered. You may call Peter M. Pizza at (212) 705-4700 to find out the number of ESOP Shares allocated to your account. To properly complete your Direction Form, you must do the following: (1) At the bottom of page 1 of the Direction Form, check Box 1 or Box 2. CHECK ONLY ONE BOX. Make your decision which box to check as follows: - CHECK BOX 1 if you do NOT want the ESOP Shares allocable to your individual account tendered for sale at any price and simply want the Savings Plan to continue holding such Shares. - CHECK BOX 2 in all other cases and EITHER (i) set forth opposite Box 2 the number of ESOP Shares you wish to tender and indicate the purchase price at which you wish to tender by completing the section on page 2 entitled "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED", OR (ii) if you are an Odd Lot Owner and wish to tender all ESOP Shares allocable to your account, complete the section on page 2 entitled "ODD LOTS". (2) Date and sign the Direction Form on page 3 and give your address and social security number in the spaces provided. (3) Return the Direction Form in the enclosed return envelope so that it is received by the Committee at the address on the return envelope not later than 12:00 Midnight, New York City time, on June 2, 2000. Please complete and return the Direction Form even if you decide not to participate in the Offer. NO FACSIMILE TRANSMITTALS OF THE DIRECTION FORM WILL BE ACCEPTED. Your direction will be deemed irrevocable unless withdrawn by 12:00 Midnight, New York City time, on June 2, 2000. In order to make an effective withdrawal, you must submit a new Direction Form, which may be obtained by calling Peter M. Pizza at (212) 705-4700. Your new Direction Form must include your name, 3 address and Social Security number and be signed by you. Upon receipt by the Committee of such a new Direction Form, your previous direction will be deemed cancelled. PLAN PARTICIPANTS WILL NOT RECEIVE ANY PORTION OF THE TENDER PROCEEDS DIRECTLY. ALL SUCH PROCEEDS WILL REMAIN IN THE SAVINGS PLAN AND MAY BE WITHDRAWN ONLY IN ACCORDANCE WITH THE TERMS OF THE SAVINGS PLAN. For federal income tax purposes, no gain or loss will be recognized by ESOP Participants in the Savings Plan as a result of the tender or sale of ESOP Shares. However, certain tax benefits that may otherwise be available in connection with the future withdrawal or distribution of ESOP Shares from the Savings Plan may be adversely affected if ESOP Shares are tendered and sold. Specifically, under current federal income tax rules, if an ESOP Participant receives a distribution of ESOP Shares in kind as part of a "lump sum" withdrawal or distribution, the excess of the fair market value of the ESOP Shares on the date of such withdrawal or distribution over the cost to the ESOP Plan of those ESOP Shares is excluded from the value of the withdrawal or distribution for purposes of determining the participant's federal income tax liability with respect to the withdrawal or distribution. Any excess in market value over the cost will be taxed to the extent realized when the ESOP Shares are sold as long-term capital gain. If you direct the Committee to tender ESOP Shares allocable to your individual account in the Offer, you may adversely affect your ability to take advantage of this tax benefit. If you direct the Committee not to tender any Shares attributable to your individual account, the cost of Shares attributable to your individual account will not be affected. SHARES OTHER THAN ESOP SHARES If you hold Shares directly or through a broker, you will receive, under separate cover, tender offer materials directly from the Company or the broker, which can be used to tender such Shares. Those tender offer materials may not be used to direct the Committee to tender or not tender the ESOP Shares. The direction to tender or not tender ESOP Shares allocable to your account may only be made in accordance with the procedures in this letter. FURTHER INFORMATION If you require additional information concerning the terms and conditions of the Offer or the procedure to tender ESOP Shares, please contact Peter M. Pizza at (212) 705-4700. Sincerely, AMREP Corporation 4 DIRECTION FORM FOR PARTICIPANTS IN THE AMREP CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN BEFORE COMPLETING THIS FORM, PLEASE READ CAREFULLY THE ACCOMPANYING OFFER TO PURCHASE AND ALL OTHER ENCLOSED MATERIALS. The undersigned acknowledges receipt of the letter of AMREP Corporation (the "Company"), the Offer to Purchase, dated May 4, 2000, and the related Letter of Transmittal (which Offer to Purchase and Letter of Transmittal, as amended from time to time, together constitute the "Offer") in connection with the Offer by AMREP Corporation to purchase up to 725,000 shares of its common stock, par value $.10 per share (the "Shares"), at a price not greater than $7.00 nor less than $5.25 per Share, upon the terms and subject to the conditions of the Offer. This will instruct the Administrative Committee under the AMREP Corporation Savings and Salary Deferral Plan (the "Savings Plan") to tender to the Company the number of Shares indicated below that are allocated to the account of the undersigned (the "ESOP Shares"), at the price per Share indicated, upon the terms and subject to the conditions of the Offer. The undersigned understands that, for any ESOP Shares allocated to the account of the undersigned that are tendered and purchased by the Company, the Company will pay cash to the Trustee, and the Trustee will credit such investment to the undersigned's account and reinvested in accordance with the provisions of the Savings Plan. INSTRUCTIONS Carefully complete the form below, print your name, address and Social Security number and date and sign in the spaces provided. Enclose this Direction Form in the accompanying return envelope and mail it promptly. YOUR DIRECTION FORM MUST BE RECEIVED BY THE COMMITTEE AT THE ADDRESS ON THE RETURN ENVELOPE NOT LATER THAN 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 2, 2000. PLEASE COMPLETE AND RETURN THE DIRECTION FORM EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE OFFER. Direction Forms that are not fully or properly completed, dated, and signed, or that are received after the deadline, will be disregarded, and the ESOP Shares allocated to your account will not be tendered. NONE OF THE COMPANY, ITS BOARD OF DIRECTORS, THE COMMITTEE, OR ANY OTHER PARTY MAKES ANY RECOMMENDATIONS AS TO WHETHER TO DIRECT THE TENDER OF SHARES, THE PRICE AT WHICH TO TENDER, OR WHETHER TO REFRAIN FROM DIRECTING THE TENDER OF SHARES. EACH PARTICIPANT MUST MAKE HIS OR HER OWN DECISION ON THESE MATTERS. - -------------------------------------------------------------------------------- (CHECK ONLY ONE BOX) 1. / / Please refrain from tendering and direct the Trustee to continue to HOLD all ESOP Shares allocated to my account. 2. / / Please direct the Trustee to tender ______ of the ESOP Shares allocated to my account [insert in the blank space either a number or the word "ALL"] at the price set forth below. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED - -------------------------------------------------------------------------------- IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE DIRECTION FORM FOR EACH PRICE SPECIFIED MUST BE USED - -------------------------------------------------------------------------------- CHECK ONLY ONE OF THE BOXES BELOW OR, IF AVAILABLE, COMPLETE THE SECTION UNDER "ODD LOTS" BELOW. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED (UNLESS THE SECTION UNDER "ODD LOTS" BELOW IS AVAILABLE AND HAS BEEN COMPLETED), THERE IS NO VALID TENDER OF ESOP SHARES - -------------------------------------------------------------------------------- SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER / / The undersigned wants to maximize the chance of having the Company purchase all the ESOP Shares allocated to the account of the undersigned Participant which the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders ESOP Shares at, and is willing to accept, the Purchase Price determined by the Company in accordance with the terms of the Offer. This action could result in receiving a price per Share as low as $5.25 or as high as $7.00. CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER / / $5.25 / / $5.50 / / $5.75 / / $6.00 / / $6.25 / / $6.50 / / $6.75 / / $7.00 / / $5.375 / / $5.625 / / $5.875 / / $6.125 / / $6.375 / / $6.625 / / $6.875
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ODD LOTS This section is to be completed ONLY if (i) you are tendering all Shares beneficially owned by you (including all ESOP Shares allocated to your account), and (ii) you owned beneficially as of the close of business on May 4, 2000 and continue to own as of the Expiration Date, an aggregate of fewer than 100 Shares (including all ESOP Shares allocated to your account). / / The undersigned hereby tenders ESOP Shares at, and is willing to accept, the Purchase Price determined by the Company in accordance with the terms of the Offer. This action could result in receiving a price per Share as low as $5.25 or as high as $7.00. CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER / / $5.25 / / $5.50 / / $5.75 / / $6.00 / / $6.25 / / $6.50 / / $6.75 / / $7.00 / / $5.375 / / $5.625 / / $5.875 / / $6.125 / / $6.375 / / $6.625 / / $6.875
- -------------------------------------------------------------------------------- 2 RETURN THIS DIRECTION FORM IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED AT THE ADDRESS ON THE RETURN ENVELOPE NOT LATER THAN 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 2, 2000. PLEASE COMPLETE AND RETURN THIS DIRECTION FORM EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE OFFER. NO FACSIMILE TRANSMITTALS OF THE DIRECTION FORM WILL BE ACCEPTED. - -------------------------------------------------------------------------------- SIGN HERE Dated: ______________, 2000 ---------------------------------------- (Signature) ---------------------------------------- (Print Name) ---------------------------------------- (Address) ---------------------------------------- (Include Zip Code) Social Security or Taxpayer ID No. ________________________ - -------------------------------------------------------------------------------- EX-99.(A)(1)(VII) 8 EXHIBIT 99(A)(1)(VII) EXHIBIT (A)(1)(VII) [Letterhead of AMREP Corporation] May 4, 2000 Dear Shareholder: Enclosed is a copy of AMREP Corporation's Offer to Purchase 725,000 shares of its common stock ("Shares") or such lesser number as are properly tendered, subject to the terms and conditions set forth in the Offer to Purchase and the related Letter of Transmittal. The price paid will be determined by AMREP and will be not be greater than $7.00 nor less than $5.25 per Share. As set forth in the Offer to Purchase, you can select the price (within the $7.00 to $5.25 price range) at which you are willing to sell your Shares. Based upon the number of shares tendered and the prices specified by the tendering shareholders, and subject to the terms of the offer, the Company will determine a single per share price within that price range that will allow the Company to purchase 725,000 shares or such lesser number of shares as are properly tendered. AMREP will pay that price for all Shares tendered at or below that price and purchased pursuant to the Offer to Purchase. You may tender all or only a portion of your Shares. THE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 6, 2000, UNLESS EXTENDED. If, after reviewing the information set forth in the Offer to Purchase, you wish to tender Shares for purchase by AMREP, please contact your broker, dealer, commercial bank, trust company or other nominee to effect the tender for you; or, if you have the certificates for your Shares and they are in your name, you may follow the instructions contained in the Offer to Purchase and Letter of Transmittal. Tendering shareholders will not be obligated to pay brokerage commissions or, subject to Instruction 7 of the Letter of Transmittal, transfer taxes, on the purchase of Shares by AMREP; however, a broker, dealer or other person may charge a fee for processing the transactions on behalf of shareholders. Shareholders are not required to pay a service charge to AMREP or to The Bank of New York, the Depositary, in connection with their tender of Shares. Neither AMREP nor its Board of Directors is making any recommendation to any holder of Shares as to whether to tender Shares. Each shareholder is urged to consult his or her broker, investment advisor or tax advisor before deciding to tender any Shares. The Company has been informed by its directors and executive officers that none of them will tender shares. Should you have any other questions on the enclosed material, please do not hesitate to contact your broker, dealer or advisor, or to call D.F. King & Co., Inc., the Information Agent, toll free at (800) 431-9629. Yours truly, /s/ Edward B. Cloues, II ---------------------------------------- Edward B. Cloues, II Chairman EX-99.(A)(1)(VIII) 9 EXHIBIT 99(A)(1)(VIII) EXHIBIT (A)(1)(VIII) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER -- Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e.,00-0000000. The table below will help determine the number to give the payer.
- ------------------------------------------------------------ ------------------------------------------------------------ Give the Give the EMPLOYER SOCIAL SECURITY IDENTIFICATION For this type of account: number of -- For this type of account: number of -- - ------------------------------------------------------------ ------------------------------------------------------------ 1. An individual's The individual 7. Sole proprietorship The owner (4) account account 2. Two or more The actual owner of 8. A valid trust, estate, The legal entity (5) individuals (joint the account or, if or pension trust account) combined funds, any one of the individuals (1) 9. Corporate account The corporation 3. Custodian account of The minor (2) 10. Religious, charitable, The organization a minor (Uniform or educational Gift to Minors Act) organization account 4. Adult and minor The adult or, if the 11. Partnership account The partnership (joint account) minor is the only held in the name of contributor, the minor (1) the business 5. Account in the name The ward, minor, or 12. Association, club, or The organization of guardian or incompetent person (3) other tax-exempt committee for a organization designated ward, minor, or incompetent 13. A broker or registered The broker or nominee person nominee 6. (a) The usual The grantor-trustee (1) 14. Account with the The public entity revocable savings Department of trust account Agriculture in the (grantor is also name of a public entity trustee) (such as a state or local government, (b) So-called trust The actual owner school district, or account that is not prison) that receives a legal or valid agricultural program trust under State payments law - ------------------------------------------------------------ ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) You must show your individual name, but you may also enter your business or "doing business as" name. Your may use either your SSN or EIN (if you have one). (5) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title. NOTE: If no name is circled where there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 (PAGE 2) OBTAINING A NUMBER issued by individuals. Note: You may be subject to backup withholding if this If you don't have a taxpayer identification number or interest is $600 or more and is paid in you don't know your number, obtain Form SS-5, the course of the payer's trade or Application for a Social Security Number Card, or Form business and you have not provided your SS-4, Application for Employer Identification Number, at correct taxpayer identification number the local office of the Social Security Administration to the payer. or the Internal Revenue Service and apply for a number. o Payments of tax-exempt interest PAYEES EXEMPT FROM BACKUP WITHHOLDING (including exempt-interest dividends under Section 852). Payees specifically exempted from backup withholding on ALL payments include the following: o Payments described in Section 6049(b)(5) to non-resident aliens. o A corporation. o Payments on tax-free covenant bonds o A financial institution. under Section 1451. o An organization exempt from tax under o Payments made by certain foreign Section 501(a), or an individual organizations. retirement plan or a custodial account under Section 403(b)(7). o Payments made to a nominee. o The United States or any agency or Exempt payees described above should File Form W-9 to instrumentality thereof. avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER o A State, the District of Columbia, a IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE possession of the United States, or any FORM, AND RETURN IT TO THE PAYER IF THE PAYMENTS ARE subdivision or instrumentality thereof. INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. o A foreign government, a political subdivision of a foreign government, or Certain payments other than interest, dividends and any agency or instrumentality thereof. patronage dividends, that are not subject to information reporting are also not subject to backup withholding. o An international organization or any For details, see the regulations under Sections 6041, agency, or instrumentality thereof. 6041A(a), 6045 and 6050A. o A registered dealer in securities or PRIVACY ACT NOTICE - Section 6019 requires most commodities registered in the U.S. or a recipients of dividend, interest or other payments to possession of the U.S. give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for o A real estate investment trust. identification purposes. Payers must be given the numbers whether or not recipients are required to file o A common trust fund operated by a bank tax returns. Payers must generally withhold 31% of under Section 584(a). taxable interest, dividend and certain other payments to a payee who does not furnish a taxpayer identification o An exempt charitable remainder trust, or number to a payer. Certain penalties may also apply. a non-exempt trust described in Section 4947(a)(1). PENALTIES o An entity registered at all times under (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER the Investment Company Act of 1940. IDENTIFICATION NUMBER. - If you fail to furnish your taxpayer identification number to a payer, you are o A foreign central bank of issue. subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to Payments of dividends and patronage dividends not willful neglect. generally subject to backup withholding include the following: (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. - If you fail to include any portion of an o Payments to nonresident aliens subject includable payment for interest, dividends, or patronage to withholding under Section 1441. dividends in gross income, such failure will be treated as being due to negligence and will be subject to a o Payments to partnerships not engaged in penalty of 5% on any portion of an underpayment a trade or business in the U.S. and attributable to that failure unless there is clear and which have at least one nonresident convincing evidence to the contrary. partner. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO o Payments of patronage dividends where WITHHOLDING. - If you make a false statement with no the amount received is not paid in reasonable basis which results in no imposition of money. backup withholding, you are subject to a penalty of $500. o Payments made by certain foreign organizations. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -Falsifying certifications or affirmations may subject Payments of interest not generally subject to backup you to criminal penalties including fines and/or withholding include the following: imprisonment. o Payments of interest on obligations FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.
EX-99.(B)(1) 10 EXHIBIT 99(B)(1) EXHIBIT (B)(1) MASTER LOAN AGREEMENT This Loan Agreement dated effective February 26, 1999, is by and between AMREP SOUTHWEST, INC. ("Borrower"), a New Mexico corporation, and NORWEST BANK NEW MEXICO, N.A. ("Bank"), a state banking corporation. This Agreement is made and executed upon the terms and conditions contained or referenced herein. All previous, new, or future loans or financial accommodations by the Bank to the Borrower are subject to this Agreement. Borrower understands and agrees that: (a) In granting, renewing, or extending any Loan, the Bank is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (b) The granting, renewing, or extending of any Loan by the Bank shall at all times be subject to the Bank's sole judgment and discretion; and (c) All such Loans shall be and shall remain subject to the terms of this Agreement. This Agreement shall continue to be in full force and effect between the parties until all Loans by the Bank to the Borrower, including all extensions, renewals, replacements, substitutions, and modifications thereof are paid in full. (d) MAXIMUM AGGREGATE OUTSTANDING BALANCE. Notwithstanding any provision of this Agreement or any Related Document to the contrary, Lender has no obligation to make any advances, draws, loan or loans to Borrower in excess of $19,516,241, in the aggregate maximum principal amount. (e) PRIOR AGREEMENTS REPLACED. This Agreement replaces all existing agreements, commitments, and loan agreements between the Borrower and the Bank including the Master Loan Agreement dated effective July 12, 1996, and all amendments to that prior loan agreement. (f) EXISTING NOTES AND REQUESTED FINANCING. The Borrower has requested that the Bank increase, extend, or modify certain existing notes and commitments as described in Section I, paragraph 1.14 below. SECTION I - DEFINITIONS. As used in this Agreement, the following terms shall have the respective meanings indicated: 1.01 AGREEMENT means this Master Loan Agreement. 1.02 BANK means Norwest Bank New Mexico, N.A. and its successors and assigns. 1.03 BORROWER means Amrep Southwest, Inc., a New Mexico corporation and its successors and assigns. 1.04 BORROWER'S RESOLUTIONS means the resolutions duly adopted by the Board of Directors of the Borrower dated April 29, 1998, authorizing execution and delivery of the Loan Documents, a copy of which is attached as EXHIBIT 1.04. 1.05 BUSINESS DAY means a day when the Bank is open for business. 1.06 CLOSING DATE means February 26, 1999. 1.07 COLLATERAL means all collateral, liens, assignments, mortgages, security interests, and other rights, presently in connection with the Loan, or hereafter, created or signed by or in favor of Borrower to the Bank in order to secure performance and/or repayment of the Loan. 1.08 COLLATERAL DOCUMENTS means any and all documents executed by or on behalf of the Borrower, any guarantor, or any party having any right, title or interest in any Collateral which evidences, grants, creates, assigns, or perfects any interest in the Collateral in favor of Bank. 1.09 GOVERNMENTAL AUTHORITY means the United States of America; the State of New Mexico; any political subdivision of any of the foregoing and any agency, department, commission, board, bureau or instrumentality of any of them which now or hereafter exercises jurisdiction over the Borrower. 1.10 GUARANTY means the Commercial Guaranty of Borrower's parent company Amrep Corp., an Oklahoma corporation, in the form attached as EXHIBIT 1.10. 1.11 LOAN(S) means all indebtedness of the Borrower to the Bank, when advanced pursuant to the terms of this Agreement or otherwise, and including the Note(s). 2 1.12 LOAN DOCUMENTS means this Agreement, the Notes, all Collateral Documents, and all other liens, lien interests, and instruments (and including all exhibits thereto), executed pursuant hereto or in connection with or as security for the payment of the Obligations or for performance of the Borrower's obligations under this Agreement, or for both such payment and performance and all renewals, extensions, modifications and amendments of any of the foregoing. 1.13 LOAN FEES means the loan fees payable by Borrower to Bank at closing, plus Bank's attorneys' fees and costs and other fees incurred by the Bank in initiating and/or enforcing its rights under the Loan Documents. 1.14 NOTE(S) collectively means all notes existing, executed in conjunction with the closing or hereafter executed and delivered by the Borrower to the Bank together with all extensions, amendments, modifications, revisions, replacements, and substitutions thereof permitted by the Bank, including but not limited to: (a) The Construction Note dated February 26, 1999, in the maximum principal amount of $4,500,000, with a present principal balance of approximately $4,434,519, maturing November 30, 1999, a copy of which is attached as EXHIBIT 1.14(A). (b) The Amortizing Term Loan dated July 12, 1996, in the original principal amount of $1,191,290.37, with a present principal balance of approximately $473,764, maturing July 12, 2000, a copy of which is attached as EXHIBIT 1.14(B); (c) The Off Site Development Note dated February 26, 1999, in the maximum principal amount of $5,000,000, maturing February 28, 2001, a copy of which is attached as EXHIBIT 1.14(C); (d) The On Site Development Line consisting of individual Notes for Phases IV and VI with a combined maximum principal balance of $1,525,406: 3 ONSITE DEVELOPMENT NOTES MAXIMUM PRINCIPAL AMOUNT Phase IV, maturing March 15, 1999 $ 125,656.00 Phase VI, maturing August 26, 1999 $1,399.750.00 A copy of the On Site Development Notes for Phases IV and VI are attached as EXHIBITS 1.14(D)(IV)AND(VI) respectively. (e) The Estates Development Note dated July 26, 1996, in the original principal amount of $2,000,000, with a present principal balance of approximately $479,084, maturing October 31, 1999, a copy of which is attached as EXHIBIT 1.14(E). (f) The Letter of Credit dated October 21, 1998, in the maximum principal amount of $100,000.00, expiring October 31, 1999, in favor of HOW Insurance Company, a copy of which is attached as EXHIBIT 1.14(F). (g) The Commerce Center Note dated April 29, 1998 in the original principal amount of $8,220,000, with a present committed principal balance of approximately $7,427,987, and a current outstanding principal balance of approximately $2,269,317, maturing April 29, 2000, a copy of which is attached as EXHIBIT 1.14(G). (h) The Letter of Credit in favor of Cumberland Casualty & Surety Company dated February 10, 1999, in the maximum principal amount of $10,000, expiring February 4, 2000, a copy of which is attached as EXHIBIT 1.14(H). 1.15 OBLIGATIONS means all obligations of the Borrower: (a) To pay the principal of, and interest on all Loan(s), each Note and any Renewal Note in accordance with their respective terms, now existing or existing in the future, and to all other indebtedness of Borrower to the Bank. The term "indebtedness" means and includes without limitation all loans, notes, obligations, debts, and liabilities of the Borrower to the Bank, as well as all claims by the Bank against the Borrower pursuant to any Loan Document; whether now or hereafter existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unliquidated; where the Borrower may be liable individually or jointly with others; where the Borrower may be obligated as a guarantor, surety or otherwise. (b) To reimburse the Bank, on demand, for all of the Bank's 4 expenses and costs, including the reasonable fees and expenses of its counsel, in connection with maintenance and protection of any Collateral, the initiation, amendment, modification or enforcement of the Loan Documents and any documents evidencing or relating to a Renewal Note, including, without limitation, any proceeding brought or threatened to enforce payment of any of the Obligations, if the Bank prevails against the Borrower in litigation to enforce such payment. 1.16 ORGANIZATIONAL DOCUMENTS means copies of the current Articles of Incorporation and Bylaws of the Borrower and all amendments thereto, and evidence satisfactory to the Bank that the Borrower is a corporation in good standing in the State of New Mexico. 1.17 PERSON means any individual, partnership, corporation or other business entity or organization. 1.18 RENEWAL NOTE means any promissory note executed and delivered by the Borrower to the Bank in connection with a renewal, extension, modification, amendment, revision, replacement or substitution of any Note described or referenced in this Agreement. SECTION II - THE LOANS. 2.01 THE LOAN. The Notes listed as Exhibits in Section 1.14 are, at closing, the only Notes outstanding to the Bank from the Borrower and no other notes, loans, extensions of credit or advances are to be made except advances on certain of the Notes as described in this Agreement, including the exhibits. 2.02 SECURITY FOR PAYMENT AND PERFORMANCE. The Collateral is given to secure the Loans and is and will be used as security for any and all other obligations of Borrower to the Bank, whether now existing or hereafter arising. Repayment and performance of the Obligations is secured by the Collateral Documents, including, but not limited to the following: (a) Real Estate Mortgage dated December 3, 1986, recorded January 16, 1987 as Document No. 95245 in the Office of the County Clerk, Sandoval County, New Mexico, including all subsequent re-recordings, modifications, amendments, and restatements; (b) Real Estate Mortgage dated December 5, 1991 recorded December 10, 1991 as Document No. 79064 in the Office of 5 the County Clerk, Sandoval County, New Mexico, including the Supplemental Agreement to Mortgage and all modifications, amendments, and restatements to mortgage subsequently filed; (c) Real Estate Mortgage dated December 5, 1991 recorded December 10, 1991 as Document No. 79063 in the Office of the County Clerk, Sandoval County, New Mexico, including the Supplemental Agreement to Mortgage and all modifications, amendments, and restatements to mortgage subsequently filed; (d) Real Estate Mortgage dated December 10, 1993 and recorded December 15, 1993 as Document No. 27300 in the Office of the County Clerk, Sandoval County, State of New Mexico, including all modifications, amendments, and restatements to mortgage subsequently filed; (e) The Commercial Guaranty of Amrep Corp., a copy of which is attached as EXHIBIT 1.10 as limited by the letter effective February 26, 1999, from the Bank to Guarantor, a copy of which is attached as EXHIBIT 1.10(A) ; and (f) All other Collateral now or hereafter assigned, pledged, mortgaged or granted to the Bank to secure repayment of the Loan. 2.03 RIGHT OF SETOFF. Collateral includes the Bank's right of set-off against any balance or share belonging to Borrower of any deposit or other account with the Bank, notwithstanding any other security for the Loans. 2.04 COLLATERAL; DEFICIENCY. All security held by the Bank under the terms of this Agreement and the other Loan Documents shall be available as Collateral for the Loans and may be applied to satisfy the Borrower's Obligations and to otherwise perform its duties and obligations under the Loan Documents. The Borrower shall remain liable for any deficiency remaining after such application. 2.05 INTEREST ON THE NOTES. Interest shall accrue at the rate specified in the Note. The Bank may, at its option, calculate and charge interest as though each payment is made on the payment due date with principal reductions effective as of the date of receipt. 2.06 REPAYMENT OF THE NOTES. Each Note shall be due and payable on the dates specified in the Note and in accordance with the terms thereof. All payments shall be paid directly to the Bank in immediately available funds. Upon any Event of Default, the Bank may charge any deposit account of Borrower for all or any part of the Obligations due or declared due. The records maintained by the Bank shall be deemed to be evidence of the date of and amount of each payment on the Note and the other Obligations. Upon an 6 Event of Default payments may be applied to any Note(s) in such amounts and in such order or priority as the Bank deems necessary. 2.07 RENEWALS, EXTENSIONS, ADDITIONAL LOANS. Each Note, Line, and Letter of Credit referenced in this Agreement contains its own repayment terms and maturity. Borrower acknowledges the enforceability of such specific terms and acknowledges that there is no agreement, representation, or assurance by the Bank that a renewal, extension, or modification of any note or loan, if such request is made by the Borrower, would be considered or approved by the Bank. Should Borrower, at any future date, request the renewal, extension, or modification of any note or loan, the decision whether to grant or allow such request shall be at the Bank's sole discretion, the Bank has no obligation or duty to the Borrower to grant such request(s) if made, and shall have no liability to the Borrower or to any other person if it declines, for any reason, to approve any such request. This Agreement shall apply to and shall control as to any subsequent renewal, extension, modification, note, loan, or other extension of credit by the Bank to the Borrower, unless specific contrary language, referencing that this Agreement does not apply, is contained in such subsequent note. SECTION III - COLLATERAL REQUIREMENTS; DISBURSEMENT PROCEDURES; RELEASE PROVISIONS; PAYMENTS. 3.01 Provided no Event of Default exists, disbursement shall be governed by the applicable referenced exhibit which also require the Borrower to maintain minimum collateral requirements, entitle Borrower to release of collateral and require Borrower to make payment on the Loans: (a) EXHIBIT 3.01(A) - Disbursement Procedures, $4,500,000 Construction Note; (b) EXHIBIT 3.01(B) - No Exhibit (c) EXHIBIT 3.01(C) - Disbursement Procedures, $5,000,000 Off Site Development Note; (d) EXHIBIT 3.01(D) - Disbursement Procedure, $1,399,750, On Site Development Note Phases IV and VI; (e) EXHIBIT 3.01(E) - Disbursement Procedures, $2,000,000 Estates Development Note. (f) EXHIBIT 3.01(F) - $100,000 Letter of Credit No. S061302 shall be governed by the terms of such Letter of Credit and any replacement thereof; (g) EXHIBIT 3.01(G) - Disbursement Procedures, $8,220,000 Commerce Center Development Note (h) EXHIBIT 3.01(H) -$10,000 Letter of Credit No. S061419 7 shall be governed by the terms of such Letter of Credit and any replacement thereof; and 3.02 CESSATION OF ADVANCES. Notwithstanding any of the foregoing, any agreement to fund or make advances under any Note or any commitment to make any additional Loan to Borrower, whether under this Agreement or under any other agreement, the Bank shall have no obligation to make or fund advances under any Note nor to fund any other commitment if: (a) Borrower or any Guarantor is in default under the terms of this Agreement, any Loan Document, or any other agreement that Borrower or Guarantor has with the Bank; (b) Borrower or Guarantor becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) There occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; (d) Any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke the legal enforceability of Guarantor's guaranty of the Loan or any other loan with the Bank; (e) The Bank receives any stop notice pursuant to the Stop Notice Act or any lien, in excess of $50,000, is filed by any subcontractor or supplier on any real property which is Collateral for this Loan; or (f) The Bank in good faith deems itself insecure even though no Event of Default shall have occurred. Any election or agreement by the Bank to fund any advance or disbursement despite any of the foregoing shall not operate to waive, limit, or modify this provision, nor create any obligation or duty upon the Bank to honor any other concurrent or subsequent funding requests occurring during an Event of Default. SECTION IV. COVENANTS, REPRESENTATIONS, REQUIREMENTS, AND RESTRICTIONS. The Borrower represents, warrants, covenants and agrees that: 4.01 CORPORATE STATUS. The Borrower is a duly organized and validly existing corporation in good standing and duly authorized to carry on its business in the State of New Mexico as now conducted and to enter into and perform its obligations under this Agreement and each of the Loan Documents. 4.02 MAINTENANCE OF STATUS. The Borrower will maintain its existence as a corporation which is duly authorized to do business in the State of New Mexico, will comply with all statutes and rules 8 and regulations applicable to its organization and existence and its business in New Mexico or elsewhere, and will maintain its properties and other assets in good condition. 4.03 DUE AUTHORIZATION. The execution, delivery and performance by the Borrower of the Loan Documents have been duly authorized by all necessary corporate action by the Borrower and its Board of Directors. 4.04 VALIDITY AND BINDING EFFECT. The Loan Documents have been duly and validly executed, issued and delivered by the Borrower and constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their terms except as may be limited by bankruptcy, insolvency, reorganization or other similar laws related to or affecting enforcement of creditors' rights. 4.05 COMPLIANCE. The execution and delivery by the Borrower of the Loan Documents and compliance by the Borrower with the terms thereof will not violate (i) any law or regulation, including but not limited to any securities law or regulation, (ii) Borrower's Organizational Documents or (iii) any other instrument or agreement binding upon the Borrower. 4.06 IMPOSITIONS. The Borrower will comply with all legal requirements and will pay all taxes, assessments, governmental charges and other obligations which, if unpaid, might become a lien against the Borrower's property, except liabilities being contested in good faith and against which, if requested by the Bank, the Borrower will set up reserves to satisfy such obligations as they become due. 4.07 EXPENSES. The Borrower will pay on behalf of the Bank or reimburse the Bank directly for all reasonable out-of-pocket expenses incurred by the Bank after closing in connection with the Loan, including but not limited to, charges and disbursements of legal counsel for the Bank and other Loan Fees. 4.08 ACCURACY OF REPRESENTATIONS. No certificate, statement, document, financial or other information delivered by or on behalf of Borrower to the Bank in connection herewith or in connection with the Loan contains any untrue statement of a material fact or fails to state any material fact necessary to keep such information from being misleading. Borrower represents and warrants all financial and other information hereafter furnished to the Bank will be materially accurate and complete and acknowledges that such information will be submitted to the Bank with the intent that the Bank will rely upon such information. 9 4.09 FINANCIAL INFORMATION, RATIOS, AND OTHER INFORMATION. So long as any Loans remain outstanding, the Borrower will furnish, or cause to be furnished, to the Bank financial information at such frequency and in form as required by the Bank and will observe the following requirements: (a) Quarterly Form 10-Q reports filed by Amrep Corporation pursuant to the Securities Exchange Act of 1934. Said reports to be provided within 15 days after their filing with the Securities Exchange Commission. (b) Annual Form 10-K reports filed by Amrep Corporation pursuant to the Securities Exchange Act of 1934. Said reports to be provided within 15 days after their filing with the Securities Exchange Commission. (c) Annual consolidated financial statements of Amrep Corporation, audited by Arthur Anderson and Company or other national accounting firm acceptable to the Bank, within 15 days after Amrep Corporation's receipt of said financial statement. (d) Quarterly consolidating financial statements and such supporting documentation as Bank may require of AMREP Corporation and all subsidiaries, within 60 days after the end of each fiscal quarter. (e) Quarterly financial statements of the Borrower and such supporting documentation as the Bank may require, within 60 days after the end of each fiscal quarter. (f) Annual financial statements and such supporting documentation as the Bank may require of the Borrower within 120 days of Borrower's fiscal year-end. (g) Such other financial and other information as the Bank may reasonably require. (h) Borrower and/or Guarantor shall perform, observe, and comply with the provisions contained in EXHIBIT 4.09(H). 4.10 COLLATERAL TITLE, LIENS. Borrower shall, at its own expense, take any and all actions necessary to remove any encumbrances or clouds upon title to the Collateral, except those agreed to in writing by the Bank; and Borrower shall keep the Collateral free and clear of such encumbrances or clouds upon title, except those agreed to in writing by the Bank. 4.11 SOLVENCY. The Borrower is solvent, and has no actual knowledge that there are any proceedings, pending or threatened against it, which could materially adversely affect its financial 10 condition or its ability to timely perform all Obligations, nor are there any governmental or any judicial proceedings of any kind pending or threatened against it except as disclosed to the Bank in writing prior to closing. 4.12 NO MISREPRESENTATION. No certificate, statement, information or documents delivered by or on behalf of the Borrower or any guarantor, to the Bank in connection with this Agreement or in connection with the Loan contains any untrue statement of a material fact or fails to state any material fact necessary to keep the statements contained in this Agreement from being misleading. 4.13 COLLATERAL FREE AND CLEAR. The Collateral is free and clear of any adverse liens, restrictions or limitations including any restriction from transfer except those that have been disclosed to the Bank in writing prior to closing. 4.14 NOTICE TO BANK OF ADVERSE CLAIMS. The Borrower will promptly notify the Bank of (i) any litigation or any claim or controversy which might be the subject of litigation against the Borrower affecting any of the Collateral, if such litigation or potential litigation might, in the event of an unfavorable outcome, have a material adverse effect on such entity's financial condition or on the Bank's lien or security interest in the Collateral or might cause an Event of Default; (ii) any material adverse change in the financial condition or business of the Borrower; (iii) any other matter which in the opinion of the Borrower might materially adversely affect the financial condition of the Borrower; and/or (iv) the occurrence of any Event of Default. 4.15 RECORDS. The Borrower will keep accurate records, in accordance with generally accepted accounting principles, of all its transactions so that at any time, and from time to time, its true and complete financial condition may be readily determined and, at the Bank's reasonable request, make such records available for the Bank's inspection and permit the Bank to make and retain copies thereof. 4.16 PAYMENT OF WAGES. The Borrower shall pay all wages and payroll taxes (federal, state and local) as they become due and shall comply with all applicable federal, state and local labor laws. 4.17 FURTHER ASSURANCES. Throughout the term of the Loan, Borrower and any guarantor shall take whatever action is deemed by the Bank to be reasonably necessary to preserve and/or protect the Bank's lien on the Collateral, including, without limitation, executing additional documents. 4.18 NO ASSIGNMENT. The Borrower may not without the Bank's prior written consent , assign the Loan ,the Loan proceeds or the Borrower's rights under the Loan Documents. Any such assignment without such consent shall be void. 11 4.19 HAZARDOUS SUBSTANCES. The terms "hazardous substance", "disposal", "release", and "threatened release", as used in this Agreement, shall have the same meanings as set forth in 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, 49 U.S.C. Section 6901, ET SEQ., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. Except as disclosed to and acknowledged by the Bank in writing, Borrower represents and warrants that: (a) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any hazardous waste or substance by any person on, under, or about any of the Collateral. (b) Borrower has no knowledge of, or reason to believe that there has been: (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any hazardous waste or substance by any prior owners or occupants of any of the Collateral, or (ii) any actual or threatened litigation or claims of any kind by any person relating to such matters. (c) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, or about any of the Collateral. Borrower authorizes the Bank and its agents to enter upon the Collateral to make such inspections and tests as the Bank may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by the Bank shall be for the Bank's purposes only and shall not be construed to create any responsibility or liability on the part of the Bank to Borrower or to any other person. Borrower hereby: (i) releases and waives any future claims against the Bank for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs (excluding any cost incurred due to any hazard caused by the Bank, its successors, 12 or assigns) under any such laws, and (ii) agrees to indemnify and hold harmless the Bank against any and all claims, losses, liabilities, damages, penalties, and expenses which the Bank may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Borrower's ownership or interest in the Collateral, whether or not the same was or should have been known to Borrower. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the indebtedness and the satisfaction of this Agreement and shall not be affected by the Bank's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. 4.20 INSURANCE. Maintain fire and other risk insurance, public liability insurance, and such other insurance as the Bank may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies reasonably acceptable to the Bank. Borrower, upon request of the Bank, will deliver to the Bank from time to time the policies or certificates of insurance in form satisfactory to the Bank, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days' prior written notice to the Bank. In connection with all policies covering assets in which the Bank holds or is offered a security interest for the Loans, Borrower will provide the Bank with such loss payable or other endorsements as Lender may require. 4.21 NOTIFICATION OF ADDITIONAL DEBT TO BORROWERS. The Borrower shall notify the Bank in writing within ten (10) business days of incurring any new indebtedness in excess of $1,000,000, individually or in the aggregate, including any written or other contractual commitment to loan the Borrower such amount(s). 4.22 YEAR 2000 COMPLIANCE (Y2K). The Borrower shall take all action that may be necessary or desirable, or that Bank may reasonably request, in order to ensure that the Borrower, its affiliates, and all customers, suppliers, and vendors that are material to the Borrower's business, become Year 2000 Compliant on or before August 1, 1999. Such acts shall include, without limitation, (i) performing a comprehensive inventory, review and assessment of all the Borrower's systems and adopting a detailed plan, with itemized budget and timetable, for the remediation, monitoring and testing of such systems, and (ii) making a detailed inquiry of all material customers, suppliers and vendors to ascertain whether such entities are aware of the need to be Year 2000 Compliant and are taking all appropriate steps to become Year 13 2000 Compliant on a timely basis. Borrower shall, promptly upon request, provide to Bank such certifications or other evidence of Borrower's compliance with the terms of this section as Bank may from time to time reasonably require. SECTION V - CLOSING CONDITIONS; TITLE INSURANCE. 5.01 CONDITIONS PRECEDENT TO CLOSING. The Bank shall not be obligated to close the Loan unless all of the following conditions shall be satisfied at the time of such advance, or current compliance with such condition shall have been waived in writing by the Bank and unless all warranties were substantially true, correct and accurate at the time made and remain so through closing; (a) THE LOAN DOCUMENTS AND OTHER ITEMS. The Bank shall have received original, properly executed Loan Documents and other documents or items, including: (1) This Agreement; (2) The Notes, Exhibits 1.14(a-h); (3) The Borrower's Resolution; (4) The Collateral Documents described in Section II. (b) NO DEFAULT. There shall be no Event of Default under any existing Notes or any Loan Documents. (c) NO POTENTIAL DEFAULT. No event shall have occurred which, with notice or lapse of time or both, would constitute an Event of Default under any Loan Documents, unless such potential default shall have been cured to the satisfaction of Bank prior to the ripening of such potential default into actual default. (d) FULFILLMENT OF CONDITIONS. The Borrower shall have satisfied all conditions for the advance and the Borrower shall be in current compliance with all of its covenants, agreements and obligations under any Loan Documents. 5.02 TITLE INSURANCE. The Bank, in addition to any requirements necessary to any disbursement or advance allowed under this Agreement (and any Exhibit) may require, prior to any advance or disbursement, ALTA Mortgagee's policies of title insurance, 14 insuring a first lien position on the Mortgages referenced in Section II, including policy endorsements insuring all advances under the Loan. Such coverage shall include, as necessary, coverage for the revolving or multiple advance Obligations contemplated in this Agreement. SECTION VI - DEFAULT AND REMEDIES. 6.01 EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: (a) DEFAULT ON INDEBTEDNESS - Failure of Borrower to make any payment on any Note within five (5) days of the date due. (b) OTHER DEFAULTS - Failure of Borrower to comply with or to perform any other terms, obligations, requirements, restrictions, covenants or conditions contained in this Agreement or in any Note or any Loan Document, or failure of Borrower to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement between Bank and Borrower (other than payment of a monetary amount required on any Note), or between the Borrower and any other creditor or lender, within fifteen (15) days of the date due unless such failure cannot reasonably be cured within fifteen days, Borrower is diligently pursuing the cure, and neither timely repayment of the Loan nor the value, security or marketability of the Collateral is impaired. (c) FALSE STATEMENTS - Any warranty, representation, or statement made or furnished to Bank by or on behalf of Borrower or any Guarantor under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished. (d) DEFECTIVE COLLATERALIZATION - This Agreement 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. (e) INSOLVENCY - The dissolution or termination of Borrower's existence as a going business, insolvency, appointment of a receiver for any part of Borrower'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 Borrower. 15 (f) CREDITOR PROCEEDINGS - Commencement of any collection action, collection suit, garnishment, attachment, levy, or foreclosure, whether by judicial process, self-help, repossession, or other method, by any creditor of Borrower or of the Guarantor seeking to collect an amount or claim in excess of $100,000.00 or seeking to foreclose or execute against or place a lien upon the Collateral. The Borrower shall give the Bank written notice of the occurrence of any such claim or action; such event shall not be an Event of Default if the Borrower has provided the Bank with information, assurances, or other necessary protection by which the Bank can reasonably determine that such claim against the Borrower or Guarantor does not impair timely repayment of the Loan, nor impair the Collateral. (g) STOP NOTICES OR LIEN CLAIMS - The Bank receives any stop notice pursuant to the Stop Notice Act or any lien, in excess of $50,000, is filed by any subcontractor or supplier on any real property which is Collateral for this Loan. (h) EVENTS AFFECTING GUARANTOR - Any of the preceding events occurs with respect to the Guarantor. (i) INSECURITY - Bank, in good faith, deems itself insecure. 6.02 REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default, the Bank may forthwith or at any time during such default or events, without notice to the Borrower declare, the unpaid balance of the Obligations, including all principal and all interest then accrued, to be immediately due and payable; and the Obligations shall become and be immediately due and payable without presentment, notice of protest or other notice of dishonor or of any other kind of notice whatsoever, including, without limitation, notice of default, notice of intent to accelerate and notice of acceleration, all of which are hereby expressly waived by Borrower; and the Bank may immediately enforce its rights under the Loan Documents; and may exercise all rights available to it in law or equity including all rights available under this Agreement or under the other Loan Documents. SECTION VII - MISCELLANEOUS. 7.01 EXECUTION AND FORM OF DOCUMENTS. Each written instrument required by this Agreement or any of the other Loan Documents to be furnished to the Bank shall be duly executed by the person or persons specified (or where no particular person is specified, by such person as the Bank shall require), duly acknowledged where required by the Bank and, in the case of affidavits and similar sworn instruments, duly sworn to and subscribed before a notary public duly authorized to act in the premises by Governmental Authority; shall be furnished to the Bank in one or more copies as required by the Bank; shall be in such 16 form and of such substance as shall be effective, in the judgment of the Bank, to accomplish the results intended by such instrument; and shall in all respects be in form and substance satisfactory to the Bank and to its legal counsel. 7.02 FORM OF EVIDENCE OF FACTS. Where evidence of the existence or nonexistence of any fact is required by this Agreement or any of the other Loan Documents to be furnished to the Bank, such evidence shall in all respects be in form and substance reasonably satisfactory to the Bank, and the duty to furnish such evidence shall not be considered satisfied until the Bank shall have acknowledged, in writing, that it is satisfied therewith; provided that, if the Bank fails to so acknowledge within sixty (60) days after receipt of such evidence, it shall be deemed to be satisfied therewith. 7.03 ASSIGNMENT OF LOAN PROCEEDS. Borrower hereby irrevocably assigns to the Bank and grants a security interest to the Bank in and to its right, title and interest in (a) all Loan proceeds held by the Bank, whether or not disbursed and (b) all funds deposited by the Borrower with the Bank either under this Agreement or otherwise. 7.04 SEVERABILITY. If any item, term or provision contained in the Loan Documents is in conflict, or may hereafter be held to be in conflict with the laws of the United States or the State of New Mexico, as applicable, or any political subdivision of any of them, then only the documents containing such provision shall be affected and it shall be affected only as to such particular item, term or provision and shall in all other respects remain in full force and effect. 7.05 NO WAIVER. No course of dealing between the Bank and the Borrower or any guarantor, or any delay on the part of the Bank in exercising any rights hereunder or under the Loan Documents shall operate as a waiver of any rights of the Bank, except to the extent, if any, expressly waived in writing by the Bank. 7.06 SURVIVAL. All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in any certificates or other documents or instruments delivered pursuant to this Agreement shall survive the making by the Bank of the Loan and the execution and delivery of the Loan Documents, and shall continue in full force and effect until the Obligations are paid in full. 7.07 NOTICES. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by hand delivery, facsimile transmission, delivery by commercial courier or by depositing the same in the United States Mail, postage prepaid, addressed to the respective parties as follows: If to the Borrower: Amrep Southwest, Inc. 333 Rio Rancho Drive Rio Rancho, NM 87124 17 Attn: James H. Wall, President with a copy to: Matthew M. Spangler, Esq. P.O. Box 15698 Rio Rancho, NM 87174-5698 If to the Bank: Norwest Bank New Mexico, N.A. P.O. Box 1081 Albuquerque, NM 87103 Attn: Ron D. Smith, Executive Vice President 7.08 MODIFICATION. This Agreement shall not be changed orally or by course of conduct or dealing but shall be changed only by agreement in writing signed by all parties hereto. 7.09 COUNTERPARTS. This Agreement may be executed simultaneously in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute one and the same instrument. 7.10 BINDING EFFECT. This Agreement shall be binding upon the Bank, the Borrower and its successors, assigns, heirs and personal representatives. 7.11 NO PARTNERSHIP OR JOINT VENTURE. Notwithstanding anything to the contrary in the Loan Documents, and notwithstanding any action the Bank takes pursuant to the Loan Documents, the Bank and the Borrower shall not be deemed to be engaged in a partnership or joint venture, nor shall the Bank be deemed to be an agent or principal of the Borrower. 7.12 ASSIGNMENT BY THE BANK. The Loan Documents, and the Loan contemplated thereby, may be placed, participated, assigned and/or serviced by the Bank and/or its successors and assigns, and in connection with any of the foregoing, the Bank may receive servicing, brokerage or other fees. Any such placement, participation, assignment or servicing shall be at the Bank's sole option; and the Bank and its successors and assigns shall have no obligations to disclose to the Borrower the receipt, or contemplated receipt, of any such fees, nor shall the Borrower have any claim or right to the same. In the event the Bank sells or transfers its entire interest in the Loan and the Loan Documents, the Bank or such purchaser or assignee will notify the Borrower of such event within 30 days. 7.13 RELATION TO OTHER DOCUMENTS. The provisions of this Agreement are not intended to supersede the provisions of the other Loan Documents except as stated hereinabove, but should be construed as supplemental thereto. However, except as specifically provided herein, if there is any inconsistency between the provisions of this Agreement and the other Loan Documents, this Agreement shall control any conflicting language or provision 18 deemed modified to comport with this Agreement. 7.14 JURISDICTION. Borrower hereby irrevocably agrees that any legal action or proceedings against the Borrower with respect to this Agreement may be brought in the courts of the State of New Mexico or in the U.S. District Court for the District of New Mexico. Borrower hereby consents and attorns to the jurisdiction of such courts and further consents to the personal jurisdiction of any court located within Bernalillo County, New Mexico, with respect to any lawsuit to enforce the obligations of Borrower under this Agreement. This provision shall not limit the right of the Bank to bring such action or proceedings against the Borrower in the courts of such other states or jurisdictions where the Borrower may be subject to jurisdiction. 7.15 GOVERNING LAW. This Agreement and the Loan Documents have been negotiated, executed and delivered solely within the State of New Mexico. The rights and obligations of the parties under this Agreement and under each of the Loan Documents shall be governed by and construed and interpreted in accordance with the laws of the State of New Mexico. BORROWER: AMREP SOUTHWEST, INC. By: ------------------------------------- James H. Wall, President BANK: NORWEST BANK NEW MEXICO, N.A. By: ------------------------------------- Ron D. Smith, Executive Vice President 19 EXHIBITS: 1.04 Corporate Resolution to Borrower dated April 29, 1998 1.10 Commercial Guaranty of Borrower's parent company AMREP Corp. 1.10(a) Letter effective February 26, 1999, from the Bank to Guarantor 1.14(a) Construction Note in the amount of $4,500,000.00 1.14(b) Amortizing Term Loan in the original principal amount of $1,191,290.37 1.14(c) Off Site Development Note in the amount of $5,000,000.00 1.14(d)IV Onsite Development Note, Phase IV 1.14(d)VI Onsite Development Note, Phase VI 1.14(e) Estates Development Note in the original principal amount of $2,000,000.00 1.14(f) Letter of Credit Note in the amount of $100,000.00 1.14(g) Commerce Center Note in the original principal amount of $8,220,000. 1.14(h) $10,000.00 Letter of Credit 3.01(a) Disbursement Procedure, $4,500,000.00 Construction Note 3.01(c) Disbursement Procedure, $5,000,000.00 Off Site Development Note 3.01(d) Disbursement Procedure, Phase IV and VI On Site Development Note 3.01(e) Disbursement Procedure, $2,000,000.00 Estates Development Note 3.01(f) $100,000.00 Letter of Credit 3.01(g) Disbursement Procedure, $8,220,000 Commerce Center Development Note 3.01(h) $10,000.00 Letter of Credit 4.09(h) Financial Ratios and Restrictions. 20 EX-99.(B)(2) 11 EXHIBIT 99(B)(2) EXHIBIT (B)(2) FIRST AMENDMENT TO MASTER LOAN AGREEMENT AMENDED EFFECTIVE JANUARY 26, 2000 THIS FIRST AMENDMENT, dated effective January 26, 2000, between AMREP SOUTHWEST, INC. and WELLS FARGO BANK NEW MEXICO, N.A. (formerly Norwest Bank New Mexico, N.A.) amends, and is made pursuant to Section 7.08 of, the Master Loan Agreement dated effective February 26, 1999 (the "Agreement"). 1. This Amendment is supplemental to and a part of the Agreement, as previously amended, which is incorporated herein by reference. All capitalized definitions and terms used in this Amendment have the same meaning as defined in the Agreement unless a different definition is specified herein. The term "Agreement" now includes this Amendment and the exhibits referenced in this Agreement. The Agreement remains in full force and effect and is only modified and amended by this Amendment, including the exhibits referenced in the Agreement. 2. The Construction Note, EXHIBIT 1.14(A) has matured and is paid in full. The Construction Line is terminated and no more advances will be made on that Line. 3. Development is complete on all phases of the On Site Development Line. The On Site Development Notes for Phases IV, VI, and VII, EXHIBITS 1.14(D)(IV)(VI)(VII), have been paid in full. The On Site Development Line is terminated. 4. The Estates Development Note, EXHIBIT 1.14(E) matured October 31, 1999, and has been paid in full. 5. The $100,000.00 Letter of Credit to HOW Insurance Company, EXHIBIT 1.14(F), has been extended to expire October 31, 2000, in the form of REPLACEMENT EXHIBIT 1.14(F). 6. The $10,000.00 Letter of Credit to Cumberland Casualty and Surety Company, EXHIBIT 1.14(H), has been extended to expire February 4, 2001, in the form of REPLACEMENT EXHIBIT 1.14(H). 7. A new $10,000,000.00 revolving line of credit, the "Receivables Financing Line," is created to finance contracts, notes, and other receivables from the Borrower's sale of real estate. This Line, with a maximum principal balance of $10,000,000.00, dated January 26, 2000, maturing April 30, 2001, is evidenced by the "Receivables Financing Note," a copy of which is attached as EXHIBIT 1.14(I). 8. The term "Note(s)" includes the Receivables Financing Note. 1 9. The Collateral given to secure repayment of the Loans includes, in addition to all other Collateral listed in Section 2.02 SECURITY FOR PAYMENT AND PERFORMANCE and not already released, the Collateral Documents or types of collateral documents listed: 2.02(g): COMMERCIAL SECURITY AGREEMENT 2.02(h): COMMERCIAL PLEDGE AGREEMENT 2.02(i): FINANCING STATEMENT 2.02(j): Assignment of individual real estate notes and mortgages assigned as Collateral using an assignment form substantially similar to the ASSIGNMENT OF MORTGAGE, EXHIBIT 2.02(J). 2.02(k): Assignment of individual real estate contracts assigned as Collateral using an assignment form substantially similar to the ASSIGNMENT OF LAND SALE CONTRACT (Real Estate Contract), EXHIBIT 2.02(K) or other form acceptable to the Bank. 2.02(l): Mortgage of Borrower's real property interest as to the individual real estate contracts assigned as Collateral using a mortgage form substantially similar to the LINE OF CREDIT MORTGAGE, EXHIBIT 2.02(L) or 2 other form acceptable to the Bank. 2.02(m): PROMISSORY NOTE COLLATERAL RECEIPTS for real estate notes assigned to the Bank in the form of EXHIBIT 2.02(M). 2.02(n): Any escrow agreements with any third party escrow agents for the control and delivery of contracts assigned as Collateral and payments on such contracts. 2.02(o): Any other documents which the Bank may require, to assign or perfect any liens on real estate contracts, notes and mortgages, or other contract interests which the Borrower assigns to the Bank as Collateral. 10. Subparagraph 2.07 is restated as follows: 2.07. RENEWALS, EXTENSIONS, ADDITIONAL LOANS. Each Note, Line, and Letter of Credit referenced in this Agreement contains its own repayment terms and maturity. Borrower acknowledges the enforceability of such specific terms and acknowledges that there is no agreement, representation, or assurance by the Bank to renew, extend, or modify any Note or Loan, or to make a commitment to make any additional loan, extension of credit, or credit facility, if such request were later made by the Borrower. Should Borrower, at any future date, request the renewal, extension, or modification of any note or loan, or any additional loan, extension of credit, or credit facility, the decision whether to grant or allow such request shall be at the Bank's sole discretion, the Bank has no obligation or duty to the Borrower to grant such request(s) if made, and the Bank shall have no liability to the Borrower or to any other person if it declines, for any reason, to approve any such request. This Agreement shall apply to and shall control as to any subsequent renewal, extension, modification, note, loan, credit facility, letter of credit, or other extension of credit by the Bank to the Borrower, unless specific contrary language, referencing this subparagraph of the Agreement and that this Agreement does not apply, is contained in such subsequent note or writing. 11. The following is added to Section 3.01: [I] EXHIBIT 3.01(I) - Disbursement Procedures for $10,000,000.00 Receivables Financing Line. 12. Subparagraph 4.09(f) is restated as follows: 4.09(f): Annual consolidated financial statements of the Borrower, audited by a certified public accounting firm acceptable to the Bank, within 15 days of the Borrower's receipt of said financial statements. 3 13. The attached Replacement EXHIBIT 4.09(H) FINANCIAL RATIOS AND RESTRICTIONS replaces the original EXHIBIT 4.09(H). 14. The Borrower has requested that the Bank extend a $750,000 non-revolving credit facility to support the issuance of individual letters of credit by the Bank, on the Borrower's behalf. Such letters of credit, issued to local governments, utility companies and the like would be used to assure payment for real estate infrastructure development costs. Such credit facility and letters of credit, if granted, will be "Obligations" of the Borrower under this Agreement and will be subject to all conditions, terms, requirements, rights, and remedies of this Agreement. BORROWER: AMREP SOUTHWEST, INC. By: --------------------------------------- James H. Wall, President BANK: WELLS FARGO BANK NEW MEXICO, N.A. By: --------------------------------------- Ron D. Smith, Executive Vice President 4 EXHIBIT 3.01(i) DATED EFFECTIVE JANUARY 26, 2000 TO MASTER LOAN AGREEMENT DATED EFFECTIVE FEBRUARY 26, 1999 DISBURSEMENT PROCEDURE AND REQUIREMENTS, BORROWING BASE, ESCROW AND PAYMENTS FOR THE $10,000,000 RECEIVABLES FINANCING NOTE The Borrower shall, in addition to all other requirements and restrictions under the Master Loan Agreement, as amended, observe and perform the following requirements as to the $10,000,000 Receivables Financing Note, EXHIBIT 1.14(i): A. REVOLVING LINE This Line is a revolving credit facility in the maximum principal amount of $10,000,000.00 to finance Borrower's sale of improved residential and commercial real estate and developed lots. Collateral for the Line consists of a pool of individual real estate contracts, real estate notes and mortgages, real estate notes and deeds of trust, and other receivables, in accordance with all Borrowing Base and other requirements and conditions of this Exhibit and the Agreement. All amounts outstanding, all advances requested under this Receivables Financing Line and all required payments shall be based upon the borrowing base formula and other requirements described or referenced below. B. BORROWING BASE; ELIGIBLE CONTRACTS 1) ELIGIBLE CONTRACTS; REQUIREMENTS. The term "Eligible Contracts" means any real estate contract, real estate note and mortgage, real estate note and deed of trust, or other similar real estate purchase contracts receivable (generically, "contract(s)") which the Bank determines: (i) meet the general standards described below; (ii) are satisfactory collateral for the Receivables Financing Note, and (iii) do not appear to contain more than a normal credit risk. The decision of the Bank as to whether to accept any contract as an Eligible Contract shall be final. Factors which the Bank will generally require to consider an Eligible Contract as part of the Borrowing Base will include, but are not limited to: a) The initial contract balance will be not more than 80% of the total real estate purchase price and the contract required a minimum 20% cash down payment from the purchaser; b) The outstanding principal balance of the contract must be not less than $100,000.00 at the time the contract is offered and accepted as an Eligible Contract and the purchaser's obligation to pay the contract balance is not conditional or contingent; c) The contract purchaser is a bona fide third party purchaser for value, is not affiliated with the Borrower, and is a corporation or individual purchasing property for a business purpose. Contracts by individuals to buy residential property for their own use are not eligible; d) The original contract payment and other terms must not have been altered, extended, renewed, or modified; e) If the contract requires payments of interest only, the maturity (date on which the principal balance is due in full) must be not more than 12 months from the original contract date; f) If the contract requires payment of both interest and principal (on not less than quarterly intervals), the maturity (date in which the principal balance is due in full) must be not be more than 36 months from the original contract date; g) Not more than the aggregate of $4,000,000.00 in contract principal balances ($3,000,000.00 of the Borrowing Base and the Receivables Financing Note principal balance) will be comprised of contracts due from any single or affiliated or related group of purchasers without the Bank's prior written approval; h) Payments on the contract must be less than 90 days past due and the contract must not be in default; i) The weighted average remaining maturity of all accepted Eligible Contracts, based upon the adjusted contract balances (as defined below), calculated at least monthly, must not exceed 18 months; j) A mortgagee's title policy or title search on the contract real property subject to the contract confirming the Borrower's interest is not: (i) subject to any prior liens or encumbrances (other than for current taxes and the like), or (ii) subject to any restrictions or covenants which adversely effect the value or marketability of the property; k) The Borrower is required to provide to the Bank any financial or other information about the contract purchaser(s), information about the value and marketability of the underlying real estate, and any other information which the Bank reasonably requests. 2) COLLATERAL PLEDGE/ASSIGNMENT OF ELIGIBLE CONTRACTS. In order for an Eligible Contract to be accepted by the Bank and included in the Borrowing Base Formula, such contract must be assigned and pledged to the Bank and such pledge or assignment perfected, at Borrower's expense. Generally, the Bank anticipates that real estate contracts for the purchase of real property in New Mexico will be collaterally assigned to the Bank, the assignment recorded, and a mortgage by the Borrower to the Bank (subject to the interest of the real estate contract purchaser) will be recorded. Real estate notes and mortgages will be assigned to the Bank, the assignment recorded, and physical possession of the original promissory note will be held by the escrow company as agent for the Bank. Other receivables will be pledged or assigned and such assignment perfected at the Borrower's expense as determined necessary by the Bank and its legal counsel and applicable state law. 3) ACCEPTANCE OF ELIGIBLE CONTRACTS. The Borrower will submit to the Bank proposed contracts to be accepted as Eligible Contracts, with properly recorded/perfected assignments or pledges as required by the Bank, escrowed as described in this Exhibit, together with any other documentation required by the Bank. The Bank shall have the sole discretion to accept any contract as an Eligible Contract and may reject any contract for any reason. Acceptance by the Bank will be in writing. C. BORROWING BASE FORMULA 1) BORROWING BASE FORMULA. Advances on the Receivables Financing Note will be limited to a Borrowing Base Formula of 75% of the adjusted contract balances derived from accepted Eligible Contract balances (the "Borrowing Base"). To calculate such Borrowing Base, the principal balance(s) of any accepted contracts which allow a per lot pro rata release will first be reduced/adjusted as provided in subparagraph 2, below. Subject to all other requirements, conditions, and limits in this Exhibit and the Agreement, and provided no Event of Default by the Borrower under the Agreement has occurred, the Borrower may request advances on the Receivables Financing Note up to the Borrowing Base. For example, if the aggregate adjusted contract balance is $1,000,000, the Borrower could, at that date, have a maximum aggregate of $750,000 advanced on the Receivables Financing Note. 2) ADJUSTMENTS (REDUCTIONS) FOR PARTIAL RELEASES. As to any accepted Eligible Contract which contains multiple lots/parcels, and per lot/parcel payment and partial release provisions, the contract balance (and the resulting Borrowing Base) will be reduced by the greater of; (a) the per lot release price, or (b) 115% of the pro-rata per lot release price, resulting in an adjusted (reduced) contract balance and reduced Borrowing Base. A schedule showing example calculations is attached as ATTACHMENT I to this Exhibit. 3) FUNDING ADVANCES. If the Note is not fully advanced and the Borrowing Base calculations reflect that additional advances under the Borrowing Base Formula can be made, the Borrower may request, and the Bank will, within 3 business days of such request, advance the requested amount supported by the Borrowing Base Formula. The Bank is not obligated to make any advance unless all requirements, conditions, and limitations of the Agreement including this Exhibit have been observed. 4) APPLYING PAYMENTS FROM ELIGIBLE CONTRACTS. All principal payments received on any Eligible Contract assigned to the Bank under the Borrowing Base will be paid to the Bank. Provided no Event of Default by the Borrower under the Agreement has occurred, such principal payment 3 received will be applied to reduce the principal balance of the Receivables Financing Note. If an Event of Default has occurred, such payment will be applied to any Obligations of the Borrower to the Bank in accordance with the Agreement or the terms of any Note(s). 5) RECALCULATION OF THE BORROWING BASE. The Borrowing Base will be recalculated when: (a) any payment is received on any accepted Eligible Contract, (b) at any time such a contract no longer meets the Bank's requirements for Eligible Contracts (whether due to delinquency of 90 days or more, weighted average maturity(ies) exceeding 18 months, real estate contracts are in default, or for any other reason), as determined by the Bank, or (c) a new Eligible Contract is accepted by the Bank into the Borrowing Base. 6) ADDITIONAL COLLATERAL OR PRINCIPAL REDUCTION REQUIRED. In the event the principal balance of the Receivables Financing Note for any reason exceeds the Borrowing Base, the Borrower shall within 5 business days of notice from the Bank either: a) Provide additional Eligible Contracts acceptable to the Bank to increase the Borrowing Base to more than the Receivables Financing Note balance, or b) Reduce the principal balance of the Receivables Financing Note to the Borrowing Base. Any failure by the Borrower to comply with this requirement shall constitute an Event of Default by the Borrower under the Agreement. If the Borrowing Base is exceeded due to a recalculation for contracts delinquent 90 days or more and is not corrected as required above, the Bank will require the Borrower, at the Borrower's expense, to immediately take steps to obtain mortgagee's (or similar title insurance insuring the Bank's interest) on such delinquent contract(s), and obtain appraisals which meet all current bank regulatory requirements and meet the Bank's internal real estate appraisal requirements for each parcel of real property remaining on such delinquent contract(s). D. ESCROW OF ELIGIBLE CONTRACTS, ESCROW COMPANY All Eligible Contracts will be escrowed by the Borrower and subject to an escrow agreement, in the form acceptable to the Bank. Such escrow agreement(s) will generally provide: 1) All Eligible Contracts which are accepted by the Bank and are part of the Borrowing Base Formula will be escrowed with the named escrow company which will be responsible for collecting all payments and maintaining payment, delinquency, and default records for each such Eligible Contract; 2) The contract purchaser, obligor, or maker, of each Eligible Contract shall be notified to make all payments directly and only to the escrow company; 4 3) All principal payments on each Eligible Contract will be received by the escrow company as agent for the Bank and shall be forwarded by the escrow company directly to the Bank. Provided no Event of Default by the Borrower under the Agreement exists interest payment received by the escrow company shall be paid to the Borrower. Upon the occurrence of any such Event of Default, all payments of interest and all other payments received under each escrowed Eligible Contract shall be paid directly to the Bank; 4) The escrow company will hold physical possession of the promissory notes and all other negotiable instruments related to any Eligible Contract, as agent for the Bank, in order to perfect the Bank's security interest, assignment, and any liens on such instruments; 5) The Bank will release its lien on any Eligible Contract or any lot or parcel subject to any Eligible Contract in exchange for the per lot or pro rata release price contained in such contract. The escrow company will furnish, with any principal payment on any Eligible Contract, a description of the lots to be released. The Bank will, upon receipt of such payment (in collected funds) prepare and return a release for the appropriate lot(s) to the escrow company for delivery to the contract purchaser. 6) The Escrow Agreement will require the escrow company to provide periodic reports to the Bank and the Borrower of all payments received on each Eligible Contract during the month and include information regarding delinquent contracts and notices and other remedial actions taken as to any delinquent contracts. F. BORROWING BASE CERTIFICATES 1) The Borrower shall provide to the Bank a monthly certification of the Eligible Receivables Borrowing Base not later than the 25th day of the following month. The Borrowing Base Certificate shall contain the information required by the Bank which will include, but is not limited to: 1) Contract Purchaser 2) Contract Date 3) Contract Maturity 4) Original Sale Price 5) Original Contract Balance 6) Payment Terms 7) Current Payment Due Date 8) Outstanding Contract Balance 9) Adjusted Outstanding Contract Balance (adjusted for partial releases) 10) Months to Maturity 11) Maximum Advance Amount (calculated on adjusted contract balances) 12) Weighted Average Life of Eligible Contracts (calculated on adjusted contract balances) 13) Any other information which the Bank may reasonably require. 5 2) In addition to the monthly Borrowing Base Certificates, the Borrower shall provide to the Bank, a monthly report listing as to each Eligible Contract, not later than the 10th day of each month which report will include, as to each Eligible Contract: 1) Purchaser 2) Contract Identification 3) Original Lots/Legal Description 4) Lots/Legal Description for Released Land 5) Lots/Legal Description for Remaining Land 6) Contract Principal Balance 7) Contracted pro rata per lot/parcel Release Price for Remaining Land 8) Contracted pro rata per lot/parcel Release Percentage for Remaining Land G. RELEASE OF ELIGIBLE CONTRACTS In the event the Borrower repays the Receivable Financing Note in full and wishes to terminate such credit facility, and provided no Event of Default has occurred under the Agreement, the Borrower shall be entitled to request that the Bank release its liens upon and release any escrow agreements relating to any remaining Eligible Contracts. Upon such request and provided the Receivables Financing Note is paid in full and no Event of Default has occurred, the Bank shall promptly furnish such releases to the Borrower. 6 -----END PRIVACY-ENHANCED MESSAGE-----