AGREE REALTY CORP (Form: 8-K, Received: 07/23/2018 16:07:41)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 23, 2018 (July 18, 2018)

AGREE REALTY CORPORATION

(Exact name of registrant as specified in its charter)

Maryland

(State of other jurisdiction of incorporation)

1-12928

(Commission file number)

38-3148187
(I.R.S. Employer Identification No.)

70 E. Long Lake Road

Bloomfield Hills, MI

(Address of principal executive offices)

48304
(Zip code)

(Registrant’s telephone number, including area code) (248) 737-4190

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01.

Entry into a Material Definitive Agreement.

As previously disclosed in a Current Report on Form 8-K filed by Agree Realty Corporation (the “Company”) with the Securities and Exchange Commission on December 15, 2016, the Company, as parent guarantor, Agree Limited Partnership, as borrower (the “Borrower”), and certain indirect subsidiaries of the Borrower entered into an Amended and Restated Revolving Credit and Term Loan Agreement (the “Credit Agreement”) with PNC Bank, National Association, as administrative agent (the “Agent”), and certain other lenders named therein (collectively, the “Lenders”). On July 18, 2018, the Company and the Borrower entered into an increase agreement (the “Increase Agreement”) with the Agent and certain of the Lenders (the “Increasing Lenders”), pursuant to which the Increasing Lenders agreed to increase their revolving commitments under the Credit Agreement by $75 million in the aggregate, raising the total revolving commitments under the Credit Agreement to $325 million. The Credit Agreement, which also provides for term loans in an aggregate principal amount of $100 million, has an accordion feature that allows the total borrowing capacity under the Credit Agreement to be increased to a maximum amount of $500 million, subject to certain conditions.

Pursuant to the Credit Agreement, the Company and certain indirect subsidiaries of the Company guaranteed to the Lenders all of the obligations of the Borrower and each other guarantor under the Credit Agreement, any notes and the other loan documents, including any obligations under hedging arrangements. In connection with the Increase Agreement, each guarantor executed a guarantor acknowledgment, pursuant to which such guarantor reaffirmed its continued obligations under the existing guaranty. All other material terms of the Credit Agreement remain unchanged.

Copies of the Increase Agreement and Form of Revolving Note are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2 and are incorporated herein by reference. The foregoing summary of the Increase Agreement does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Increase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.02.

Results of Operations and Financial Condition.

On July 23, 2018, the Company issued a press release describing its results of operations for the second quarter ended June 30, 2018. The press release is furnished as Exhibit 99.1 to this report and is hereby incorporated by reference.

Item 2.03.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated herein by reference.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Increase in Board Size and Appointment of Craig Erlich and W. Gregory Lehmkuhl as Directors

On July 20, 2018, the Board of Directors (the “Board”) of Agree Realty Corporation (the “Company”) voted to increase the size of the Board to ten members and voted to appoint Craig Erlich and Greg Lehmkuhl to the Board to fill the vacancies created by the increase in Board size, effective July 20, 2018. Mr. Erlich and Mr. Lehmkuhl will stand for election at the Company's 2019 Annual Meeting of Stockholders.

Craig Erlich, 51, is a Senior Vice President and General Manager of the George P. Johnson Company (“GPJ”), a global experiential marketing firm with 30 offices worldwide. Mr. Erlich has full responsibility for operations in GPJ’s world headquarters in Detroit, MI and its Nashville, TN facilities. Prior to GPJ, Mr. Erlich was owner, President and CEO of pulse220, a boutique meetings and events firm which he successfully sold to GPJ in 2015. Prior to pulse220, Mr. Erlich served as President of QMS, a direct marketing and fulfillment firm located in Detroit, MI. Mr. Erlich holds a Bachelor of Arts in Marketing from the Eli Broad College of Business at Michigan State University.

W. Gregory Lehmkuhl, 45, serves as President and Chief Executive Officer of Lineage Logistics Holdings, LLC. He oversees all facets of the company’s operations nationwide. Previously, Mr. Lehmkuhl served as corporate Executive Vice President for Con-Way and President of Con-Way Freight, Con-Way’s less-than-truckload motor carrier and largest subsidiary, where he was responsible for overall company operating and financial performance, strategic planning and business plan development and direction of the company’s continuous improvement processes. He has also held senior management positions at Menlo Worldwide Logistics, Delphi Automotive Systems and Penske Logistics. Mr. Lehmkuhl holds a Bachelor’s Degree in Business from Michigan State University as well as a Master of Business Administration from Oakland University.

In connection with their appointments to the Board, Mr. Erlich and Mr. Lehmkuhl will be compensated in accordance with the Company's non-employee director compensation program.

Item 7.01

Regulation FD Disclosure.

On July 23, 2018, the Company posted a slide presentation to its web site at www.agreerealty.com. The presentation is furnished as Exhibit 99.2 to this report and is hereby incorporated by reference. The information in this Section 7.01, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly stated by specific reference in such filing. The furnishing of this information hereby shall not be deemed an admission as to the materiality of any such information.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit	Description

10.1	Increase Agreement, dated as of July 18, 2018 among Agree Limited Partnership, as the Borrower, the Company, as the parent, PNC Bank, National Association and the other lenders party thereto.
10.2	Form of Revolving Note.
99.1	Press release, dated July 23, 2018, reporting the Company’s results of operations for the second quarter ended June 30, 2018.
99.2	Presentation, dated July 23, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AGREE REALTY CORPORATION


	By:	/s/ Clayton R. Thelen
		Name: Clayton R. Thelen
		Title: Chief Financial Officer and Secretary

Date: July 23, 2018

Exhibit 10.1

EXECUTION VERSION

INCREASE AGREEMENT

THIS INCREASE AGREEMENT (this “ Agreement ”) dated as of July 18, 2018 (the “ Agreement ”), is executed by each of the existing Revolving Lenders under (and as defined in) the Credit Agreement (as defined below) a signatory hereto (the “ Increasing Lenders ”), PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “ Administrative Agent ”), AGREE REALTY CORPORATION, a Maryland corporation (the “ Parent ”), and AGREE LIMITED PARTNERSHIP, a Delaware limited partnership (the “ Borrower ”).

WHEREAS, the Borrower, the Parent, the lenders from time to time party thereto, the Administrative Agent, and the other parties thereto have entered into that certain Amended and Restated Revolving Credit and Term Loan Agreement dated as of December 15, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; terms used herein but not defined herein shall have the meanings set forth in the Credit Agreement);

WHEREAS, pursuant to Section 2.16 of the Credit Agreement, the Borrower has requested that the aggregate amount of the Commitments (as defined in the Credit Agreement) be increased; and

WHEREAS, each Increasing Lender is willing to increase the amount of such Increasing Lender’s Commitment on the terms set forth herein; and

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

Section 1.

(a) Commitment Increases . Upon the effectiveness of this Agreement, the Borrower, the Parent and each Increasing Lender acknowledge and agree that the amount of such Increasing Lender’s Commitment shall be increased by the amount set forth for such Increasing Lender on Schedule I hereto as such Lender’s “Commitment Increase”.

(b) Reallocation . Pursuant to Section 2.16(c) of the Credit Agreement and in connection with the increase of the Commitments under Section 1(a) , on the Increase Amount Date each Increasing Lender shall purchase from each Revolving Lender that is not an Increasing Lender its Applicable Revolving Percentage (determined with respect to the Revolving Lenders’ respective Commitments after giving effect to the increase of Commitments under Section 1(a) ) of any outstanding Revolving Loans, by making available to the Administrative Agent for the account of such other Revolving Lender, in same day funds, an amount equal to the portion of the outstanding principal amount of such Revolving Loans to be purchased by such Increasing Lender. The Borrower shall pay to the Revolving Lenders amounts payable, if any, to such Revolving Lenders under Section 3.05 of the Credit Agreement as a result of any resulting prepayment of any such Revolving Loans.

Section 2. Conditions Precedent . The effectiveness of this Agreement, including without limitation, the increases of the Commitments under Section 1(a) , is subject to receipt by the Administrative Agent of each of the following, each in form and substance satisfactory to the Administrative Agent (the date such conditions are satisfied, the “ Increase Amount Date ”):

(a) a counterpart of this Agreement duly executed by the Borrower, the Parent, the Administrative Agent, and each of the Increasing Lenders;

(b) Revolving Notes executed by the Borrower, payable to each Increasing Lender requesting a Revolving Note, in the amount of such Increasing Lender’s aggregate Commitment (after giving effect to the increase contemplated hereby);

(d) (i) copies of the Organization Documents of each Loan Party, certified (x) as of a recent date by the appropriate governmental official, each dated as of the Increase Amount Date or a recent date prior thereto and (y) by its secretary or assistant secretary as being in full force and effect without modification or amendment; provided , that to the extent such Organization Documents have previously been delivered to the Administrative Agent, the certification by such secretary or assistant secretary shall certify that such Organization Documents are in full force and effect and have not been modified or amended since the such date the same were delivered to the Administrative Agent; (ii) signature and incumbency certificates of the officers of each Loan Party executing this Agreement and each other agreement executed in connection therewith to which it is a party; (iii) resolutions of the board of directors or similar governing body of each Loan Party approving and authorizing the execution, delivery and performance of this Agreement and each other agreement executed in connection therewith to which it is a party, certified as of the Increase Amount Date by its secretary or assistant secretary as being in full force and effect without modification or amendment; and (iv) a good standing certificate from each Loan Party’s jurisdiction of incorporation, organization or formation and each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(e) an opinion of counsel to the Loan Parties, and addressed to the Administrative Agent and the Lenders, covering such matters as reasonably requested by the Required Lenders, in form and content similar to the opinion provided to the Administrative Agent and the Lenders pursuant to Section 5.01(a)(v) of the Credit Agreement or such other form acceptable to the Administrative Agent;

(f) evidence that all fees, expenses and reimbursement amounts due and payable to the Administrative Agent and the Increasing Lenders have been paid; and

(g) such other documents, instruments and agreements as the Administrative Agent may reasonably request.

Section 3. Representations and Warranties of Loan Parties . Each Loan Party represents and warrants that (x) no Default or Event of Default shall be in existence on the Increased Amount Date, either before or immediately after giving effect to the increases in the Commitments effected hereby, or would result from the application of the proceeds thereof, and (y) the representations and warranties of each Loan Party contained in Article VI of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of the Increase Amount Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date.

Section 4. Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK OTHER THAN THE CHOICE OF LAWS PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

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Section 5. Counterparts . This Agreement may be executed in any number of counterparts each of which, when taken together, shall constitute one and the same agreement.

Section 6. Headings . Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.

Section 7. Amendments; Waivers . This Agreement may not be amended, changed, waived or modified except by a writing executed by each of the Increasing Lenders, the Administrative Agent, the Parent and the Borrower.

Section 8. Expenses . The Borrower shall reimburse the Administrative Agent upon demand for all costs and expenses (including attorneys’ fees) incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Agreement and the other agreements and documents executed and delivered in connection herewith.

Section 9. Benefits . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement is a Loan Document.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	PNC BANK, NATIONAL ASSOCIATION,
	as Administrative Agent and as an Increasing Lender

	By:	/s/ David C. Drouillard
		Name: David C. Drouillard
		Title: Senior Vice President

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