Exhibit 10.1


 


FIRST AMENDMENT TO SETTLEMENT AGREEMENT


 


THIS FIRST AMENDMENT TO SETTLEMENT AGREEMENT
(“First Amendment”), dated as of July 15, 2015 (the “First Amendment Effective Date”), is
entered into between the Pension Benefit Guaranty Corporation (“PBGC”) and AMREP Corporation (“AMREP”
and collectively with PBGC, the “Parties”) and amends the Settlement Agreement entered into and effective on
August 30, 2013 by the Parties (“Settlement Agreement”).


 


WITNESSETH


 


WHEREAS, PBGC is a wholly-owned United States
government corporation and agency of the United States that administers the pension plan insurance program established under Title
IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), 29 U.S.C. § 1301 et
seq.; and


 


WHEREAS, AMREP is an Oklahoma corporation
and the sponsor of the Retirement Plan for Employees of AMREP Corporation (“Pension
Plan”); and


 


WHEREAS, in April 2010, AMREP ceased operations
at its facility in Louisville, Colorado (“First Cessation of Operations”). In January 2011, AMREP ceased operations
at its facility in Mount Morris, Illinois (“Second Cessation of Operations” and collectively with the First
Cessation of Operations, the “Cessations of Operations”). As a result of the Cessations of Operations, certain
employees who were participants in the Plan were separated from employment; and


 


WHEREAS, PBGC asserted that the Cessations
of Operations were events described in section 4062(e) of ERISA, and that AMREP and the other members of its controlled group,
within the meaning of section 4001(a)(14) of ERISA were therefore subject to the provisions of section 4063 of ERISA and liable
thereunder to PBGC with respect to the Pension Plan (“Liability”); and


 


WHEREAS, the Parties entered into that certain
Tolling and Forbearance Agreement with respect to the Cessations of Operations on August 13, 2012, and the Parties addressed the
Liability by executing the Settlement Agreement, a copy of which is attached hereto as Exhibit 1; and


 


WHEREAS, in the Settlement Agreement, AMREP
agreed, among other things, to secure all unpaid Liability by executing first lien mortgages (“Original PBGC Mortgages”)
in favor of PBGC on certain real properties (“Original Mortgaged Properties”); and


 


WHEREAS, AMREP has agreed to sell the surface
of one of the Original Mortgaged Properties located in Brighton, Colorado (such surface of the property being sold (which does
not include any mineral (e.g., oil and gas) rights), “Brighton Property”) to Meritage Homes of Colorado, Inc.
(“Buyer”) in four sale transactions (collectively, the “Sale”). A copy of the sale agreement
is attached hereto as Exhibit 2 (“Sale Agreement”). The Sale Agreement contemplates obtaining necessary
approvals from various Governmental Authorities (as defined therein); and


 




     


     


    

  


WHEREAS, in order to expedite such approvals,
AMREP has asked PBGC to accept a mortgage on a property in Palm Coast, Florida in exchange for the release of the Original PBGC
Mortgage encumbering the Brighton Property in advance of the closing dates outlined in the Sale Agreement. In further consideration
thereof, AMREP has agreed that its obligation under Section 2.5 of the Settlement Agreement to make all payments to the
Pension Plan relating to the Sale will survive the termination of the Settlement Agreement; and


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, AMREP and PBGC hereby agree as follows:


 


		1.	The Settlement Agreement is fully incorporated by reference herein and shall, as amended hereby,
continue in full force and effect. For the avoidance of doubt, nothing in this First Amendment releases AMREP of any obligations
or duties under the Settlement Agreement. Initially capitalized terms used but not otherwise defined in this First Amendment have
the meanings given to them in the Settlement Agreement.



 


		2.	AMREP’s real property located at 11 Commerce Boulevard in Palm Coast, Florida (“Palm
Coast Property”) shall be treated as a Replacement Property under Section 2.4 of the Settlement Agreement. PBGC
agrees that the Palm Coast Property is acceptable additional security for the outstanding Liability.



 


		3.	The form of Replacement PBGC Mortgage
                                         on the Palm Coast Property is attached hereto as Exhibit 3 (“Palm Coast
                                         Replacement PBGC Mortgage”). AMREP shall, at its sole expense, file and record
                                         the Palm Coast Replacement PBGC Mortgage at least ten days prior to the 1st
                                         Closing (as such term is defined in the Sale Agreement). AMREP shall promptly provide
                                         PBGC with a copy of the file-stamped, recorded Palm Coast Replacement PBGC Mortgage via
                                         email to Courtney Morgan at morgan.courtney@pbgc.gov.



 


		4.	After the Palm Coast Replacement
                                         PBGC Mortgage has been properly recorded and AMREP has provided the file-stamped copy
                                         thereof to Courtney Morgan, AMREP shall, at its sole expense, provide to PBGC an acceptable
                                         recordable discharge and release of the Original PBGC Mortgage on the Brighton Property
                                         (“Brighton Release”). PBGC will promptly execute and return the Brighton
                                         Release to AMREP via email to Christopher Vitale at CVitale@amrepcorp.com. AMREP
                                         shall bear all responsibility for filing the Brighton Release at its sole expense. AMREP
                                         further agrees to provide PBGC with a copy of the file-stamped, recorded Brighton Release
                                         via email to Courtney Morgan as provided above.



 




     


     


    

  


		5.	In accordance with Section 2.5 of the Settlement Agreement, AMREP shall provide to PBGC
a written closing statement evidencing all financial details of the Sale, including purchase price, no later than five days after
each closing thereunder relating to the Brighton Property (each, a “Meritage Closing”). No later than ten days
after each Meritage Closing, AMREP shall deposit into the Pension Plan 50% of the lesser of the net proceeds and the Appraised
Value of the Brighton Property subject to the Meritage Closing (each such deposited amount, a “Sale Contribution”
as defined in the Settlement Agreement, shall be treated in the same manner as Additional Contributions under the Settlement Agreement
including, without limitation, the election prohibition under Section 1.2 of the Settlement Agreement (“Election
Prohibition”)). AMREP shall further provide to PBGC written documentation of each Sale Contribution within five days
of its deposit thereof into the Pension Plan. AMREP’s obligation to make a Sale Contribution for each Meritage Closing, and
such Election Prohibition, shall survive the termination of the Settlement Agreement.



 


		6.	In the event any portion of the Brighton Property is sold to any entity other than Buyer or any
of its affiliates (an “Alternative Buyer”), AMREP shall provide to PBGC a written closing statement evidencing
all financial details of the sale to such Alternative Buyer, including purchase price, no later than five days after any closing
of a sale to such Alternative Buyer (an “Alternative Buyer Closing”). No later than ten days after any Alternative
Buyer Closing, AMREP shall deposit into the Pension Plan 50% of the lesser of the net proceeds and the Appraised Value of the Brighton
Property subject to such Alternative Buyer Closing (each such deposited amount, a “Sale Contribution” as defined
in the Settlement Agreement, shall be treated in the same manner as Additional Contributions under the Settlement Agreement including,
without limitation, the Election Prohibition). AMREP shall further provide to PBGC written documentation of each Sale Contribution
within five days of its deposit into the Pension Plan. AMREP’s obligation to make a Sale Contribution for each Alternative
Buyer Closing shall terminate on August 30, 2018.



 


		7.	All Original PBGC Mortgages and Replacement PBGC Mortgages, including the Palm Coast Replacement
PBGC Mortgage (once filed and recorded), shall continue to be governed by the terms of the Settlement Agreement, as amended hereby.



 


IN WITNESS WHEREOF,
the Parties have executed this First Amendment, effective as of the First Amendment Effective Date.


 


	Accepted and Agreed:	 	 	 
	 	 	 	 	 
	AMREP CORPORATION	 	Pension Benefit Guaranty Corporation
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Christopher Vitale	 	By:	/s/ Karen L. Morris
	 	 	 	 	 
	Name:	Christopher Vitale	 	Name:	Karen L. Morris
	 	 	 	 	 
	Title:	Executive Vice President	 	Title:	Acting Director CFRD