10. Notes Payable

As of September 30, 2011, Agree Limited Partnership (the “Operating Partnership”) had in place a $55 million Credit Facility with Bank of America, as the agent, which was guaranteed by the Company (the “Credit Facility”). The Credit Facility had been extended in January 2009 and was due to mature in November 2011. Advances under the Credit Facility bore interest within a range of one-month to 12-month LIBOR plus 100 basis points to 150 basis points or the lender’s prime rate, at the Company’s option, based on certain factors such as the ratio of the Company’s indebtedness to the capital value of the Company’s properties. The Credit Facility generally was used to fund property acquisitions and development activities. As of September 30, 2011, $42,239,943 was outstanding under the Credit Facility bearing a weighted average interest rate of 1.31%. The Credit Facility was paid off in October 2011 with proceeds from the New Credit Facility (defined below).

As of September 30, 2011, the Company also had in place a $5 million Line of Credit (“the Line of Credit”) that had been extended in October 2009 and was due to mature in November 2011. The Line of Credit bore interest at the lender’s prime rate less 75 basis points or 150 basis points in excess of the one-month to 12-month LIBOR rate, at the Company’s option. The purpose of the Line of Credit was generally to provide working capital and fund land options and start-up costs associated with new projects. As of September 30, 2011, $1,144,961 was outstanding under the Line of Credit bearing a weighted average interest rate of 2.50%. The Line of Credit was paid off in October 2011 with proceeds from the New Credit Facility (defined below).

		In October 2011, the Company closed on a new $85,000,000 unsecured revolving credit facility (the “New Credit Facility”). The New Credit Facility can be increased by up to $50,000,000 at the Company’s request, dependent upon there being one or more lenders willing to acquire the additional commitment, for a total potential credit facility commitment of $135,000,000. The New Credit Facility matures in October 2014, and can be extended for two one-year terms to October 2016 subject to certain conditions. The New Credit Facility bears interest at LIBOR plus a spread of 175 to 260 basis points or the base rate plus a spread of 75 to 160 basis points depending on the Company’s leverage. As of October 26, 2011, the Company borrowed $54 million on the New Credit Facility and the interest rate was anticipated to be 185 basis points over LIBOR. The net proceeds from the New Facility were used to repay the Credit Facility and Line of Credit. The New Credit Facility contains customary covenants, including financial covenants regarding debt levels, total liabilities, tangible net worth, fixed charge coverage, unencumbered borrowing base properties, permitted investments etc. The Company was in compliance with the covenant terms at closing.