8-K

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): March 19, 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 8.01. Other Events.

As previously disclosed in a Current Report on Form 8-K filed by Agree Realty Corporation (the “Company”), a Maryland corporation, with the Securities and Exchange Commission (the “SEC”) on March 19, 2018, the Company entered into a forward sale agreement (the “Forward Sale Agreement”) with Citibank, N.A., and (ii) the Company and Agree Limited Partnership (the “Operating Partnership”), a Delaware limited partnership, for which the Company is the sole general partner, entered into an underwriting agreement (the “Underwriting Agreement”) by and among the Company, the Operating Partnership and Citigroup Global Markets Inc., as representative of the several underwriters named therein (collectively, the “Underwriters”) and in its capacity as an agent of Citibank, N.A., as forward counterparty, relating to the issuance and sale of up to 3,450,000 shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), at a public offering price of $48.00 per share, including an option to purchase up to 450,000 additional shares of Common Stock.

On March 16, 2018, the Underwriters exercised the option in full to purchase 450,000 additional shares (the “Option Shares”) of Common Stock, and on March 19, 2018, the Company entered into an amendment (the “Amendment”) to the Forward Sale Agreement relating to the exercise of the underwriters’ option to purchase additional shares. The sale of the Option Shares closed on March 20, 2018.

The Option Shares were offered pursuant to the Company’s registration statement on Form S-3 (File No. 333-218476) which became effective upon filing with the SEC on June 2, 2017. A copy of the Amendment, Forward Sale Agreement and Underwriting Agreement are filed herewith as Exhibits 1.1, 1.2 and 1.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.  The summary set forth above is qualified in its entirety by reference to Exhibits 1.1, 1.2 and 1.3.

Item 9.01. Financial Statements and Exhibits.

(d)        Exhibits

Exhibit	Description
1.1	Amendment to Forward Sale Agreement, dated as of March 19, 2018 between the Company and Citibank, N.A.
1.2	Forward Sale Agreement, dated as of March 13, 2018 between the Company and Citibank, N.A.*
1.3	Underwriting Agreement, dated as of March 13, 2018 by and among the Company, the Operating Partnership and Citigroup Global Markets Inc.*
5.1	Opinion of Ballard Spahr LLP regarding legality of the Shares.*
8.1	Opinion of Honigman Miller Schwartz and Cohn LLP as to certain tax matters.
23.1	Consent of Ballard Spahr LLP (included in Exhibit 5.1).
23.2	Consent of Honigman Miller Schwartz and Cohn LLP (included in Exhibit 8.1).

* Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 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: March 20, 2018

EX-1.1

Exhibit 1.1

 

Date: March 16, 2018

To: Agree Realty Corporation

70 E. Long Lake Road

Bloomfield Hills, Michigan 48304

From: Citibank, N.A.

390 Greenwich Street

New York, NY 10013

Attn: Adam Muchnick

Telephone: (212) 723-3850

Email: adam.muchnick@citi.com

Re: Amendment to Registered Forward Transaction

Ladies and Gentlemen:

The purpose of this letter agreement (the “Amendment”) is to amend certain terms and conditions of the letter agreement between Citibank, N.A. (“Dealer”) and Agree Realty Corporation (“Counterparty”), dated as of March 13, 2018 (the “Confirmation”), as provided below. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Confirmation.

1. The “General Terms” section of the Confirmation is hereby amended as follows:

(a) Subject to Section 2(v) of this Amendment, the reference to “3,000,000 Shares” in the “Number of Shares” definition shall be replaced by “3,450,000 Shares”.

(b) The definition of “Forward Price” shall be amended by inserting the following at the end of clause (b): “; provided, further, that in respect of any Borrowed Additional Shares (as defined in the Underwriting Agreement), the Forward Price shall be adjusted by the Calculation Agent at the Date of Delivery for such Borrowed Additional Shares to account for the fact that the application of the Daily Rate under this clause (b) shall not apply prior to such Date of Delivery with respect to the related Additional Number of Shares.”

(c) The following definitions are added after the definition of “Forward Price”:

Additional Number of Shares:	The Borrowed Additional Shares (as defined in the Underwriting Agreement) that the Underwriters (as defined in the Underwriting Agreement) have purchased from Dealer, or its affiliate, as forward seller, pursuant to Section 1 of the Underwriting Agreement.
Date of Delivery:	The time of purchase of the Additional Number of Shares as determined under the Underwriting Agreement.

2. The effectiveness of this Amendment on the Date of Delivery shall be subject to the satisfaction or waiver by Dealer of the following conditions: (i) the condition that the representations and warranties of Counterparty contained in the Underwriting Agreement and any certificate delivered pursuant thereto by Counterparty are true and correct as of the Date of Delivery as if made on the Date of Delivery, (ii) the condition that Counterparty has performed all of the obligations required to be performed by it under the Underwriting Agreement on or prior to the Date of Delivery, (iii) all of the conditions set forth or referenced in Section 8 of the Underwriting Agreement, (iv) the Underwriting Agreement remains in effect and has not terminated pursuant to Section 10 of the Underwriting Agreement, and (v) the condition that, as determined by Dealer in good faith and a commercially reasonable manner, neither of the following has occurred: (A) Dealer is unable to borrow and deliver for sale a number of Shares equal to the Additional Number of Shares, or (B) in Dealer’s commercially reasonable judgment either it is impracticable to do so or Dealer would incur a stock loan cost (excluding, for the avoidance of doubt, the federal funds rate component payable by the relevant stock lender to the Dealer) of more than a rate equal to 200 basis points per annum to do so (in which event the Confirmation shall be effective but the Additional Number of Shares for this Transaction shall be the number of Shares Dealer is required to deliver in accordance with Section 2 of the Underwriting Agreement and the number referenced in Section 1(a) of this Amendment shall be reduced accordingly).

3. Each party hereby reaffirms on the date hereof the representations contained or incorporated by reference in the Confirmation (with any references therein to the “Trade Date” deemed references to the date of this Amendment).

4. The Confirmation, this Amendment and any provisions of the Underwriting Agreement referred to herein and therein constitute the entire agreement and understanding of the parties with respect to their subject matter and terms of the Transaction and supersede all prior or contemporaneous written and oral communication with respect thereto. No amendment, modification or waiver in respect of this Amendment will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties. This Amendment may be executed in counterparts (including by facsimile transmission), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

5. The Confirmation, as modified herein, shall continue in full force and effect. All references to the Confirmation in the Confirmation or any document related thereto shall for all purposes constitute references to the Confirmation as amended hereby.

6. This Amendment and any claim, controversy or dispute arising under or relating to this Amendment shall be governed by the laws of the State of New York without reference to the conflict of laws provisions thereof. The parties hereto irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the United States Court for the Southern District of New York in connection with all matters relating hereto and waive any objection to the laying of venue in, and any claim of inconvenient forum with respect to, these courts.

[Signature Page Follows]

2 

Please confirm your agreement to be bound by the terms stated herein by executing the copy of this Amendment enclosed for that purpose and returning it to us. 

Yours sincerely,
CITIBANK, N.A.
By:	/s/ James Heathcote
Name:	James Heathcote
Title:	Authorized Signatory

[Signature Page to Amendment to Citi

Registered Forward Transaction

Confirmation]

Confirmed as of the date first above written:

AGREE REALTY CORPORATION

By:	/s/ Clayton Thelen
Name:	Clayton Thelen
Title:	CFO

[Signature Page to Amendment to Citi

Registered Forward Transaction

Confirmation]

EX-8.1

Exhibit 8.1

  (313) 465-7000 Fax: (313) 465-8000 honigman.com

March 20, 2018

Citibank, N.A.

390 Greenwich Street

New York, New York 10013

As Forward Counterparty (as defined in the Underwriting Agreement)

Citigroup Global Markets Inc. (as agent for Citibank, N.A.)

388 Greenwich Street

New York, New York 10013

As Forward Seller (as defined in the Underwriting Agreement)

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

As representative of the several Underwriters

Re: Certain U.S. Federal Income Tax Matters

Ladies and Gentlemen:

We have acted as counsel to Agree Realty Corporation, a Maryland corporation (the “Company”), and Agree Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), in connection with the Underwriting Agreement, dated March 13, 2018, by and among Citigroup Global Markets Inc., as Representative of the several Underwriters listed in Schedule I attached thereto, Citigroup Global Markets Inc., in its capacity as agent for Citibank, N.A., the Company and the Operating Partnership (the “Underwriting Agreement”), and the public offering (the “Offering”) of 3,450,000 shares of the Company’s common stock, par value $0.0001 per share (the “Common Shares”), including 450,000 Common Shares issuable pursuant to the 30-day option granted to the Underwriters. This opinion letter is provided to you at the request of the Company and the Operating Partnership pursuant to Section 8(c) of the Underwriting Agreement. Except as otherwise indicated, capitalized terms used in this opinion letter are defined as set forth in the Underwriting Agreement.

2290 First National Building · 660 Woodward Avenue ∙ Detroit, Michigan 48226-3506

Detroit ∙ Ann Arbor ∙ Bloomfield Hills ∙ Chicago ∙ Grand Rapids ∙ Kalamazoo ∙ Lansing

March 20, 2018	Page 2

We have also acted as counsel to the Company in connection with the preparation of the section captioned “Material Federal Income Tax Considerations” in the Prospectus (as defined below).

In rendering the opinions stated below, we have examined and, with your consent, relied upon the following documents:

(i) the Company’s Articles of Incorporation, as amended;

(ii) the Registration Statement on Form S-3 filed on June 2, 2017 (the “Registration Statement”), the prospectus filed as part of the Registration Statement (the “Base Prospectus”), and the prospectus supplement filed on March 13, 2018 (together with the Base Prospectus, the “Prospectus”);

(iii) the Limited Partnership Agreement of the Operating Partnership, as amended to the date hereof;

(iv) a letter of even date to us from Clay Thelen, Chief Financial Officer of the Company, containing certain written representations of the Company (“Certificate of Representations”);

(v) the tax opinion issued by Hunton & Williams LLP, dated November 27, 2013, regarding the Company’s qualification as a real estate investment trust (a “REIT”) for U.S. federal income tax purposes (the “Prior REIT Opinion”); and

(vi) such other records, certificates and documents as we have deemed necessary or appropriate for purposes of rendering the opinions set forth herein.

In our examination of the foregoing documents, we have assumed, with your consent and without independent investigation, that:

(i) each of the documents referred to above has been duly authorized, executed, and delivered; is authentic, if an original, or is accurate, if a copy; has not been amended; and the signatures on each original document are genuine;

(ii) where any such document required execution by a person, the person who executed the document had proper authority and capacity;

(iii) all representations and statements set forth in such documents are and will be true and correct;

2290 First National Building · 660 Woodward Avenue ∙ Detroit, Michigan 48226-3506

Detroit ∙ Ann Arbor ∙ Bloomfield Hills ∙ Chicago ∙ Grand Rapids ∙ Kalamazoo ∙ Lansing

March 20, 2018	Page 3

(iv) where any such document imposes obligations on a person or entity, such obligations have been or will be performed or satisfied in accordance with their terms;

(v) the Company is a corporation validly existing and in good standing under the laws of the State of Maryland;

(vi) the Company has the requisite corporate power and authority, under Maryland law, to own and lease the properties owned and leased by it and to carry on its business as is now being conducted by it;

(vii) during its taxable year ending December 31, 2018, and future taxable years, the Company will operate in a manner that will make the representations contained in the Certificate of Representations true for such years, without regard to any qualifications as to knowledge or belief;

(viii) the Company will not make any amendments to its organizational documents after the date of this opinion that would adversely affect the Company’s qualification as a REIT for any taxable year; and

(ix) no action will be taken by the Company after the date hereof that would have the effect of altering the facts upon which the opinions set forth below are based.

We have not independently verified all of the representations, facts or assumptions set forth in such documents or any other documents. We consequently have assumed that the information presented in such documents or otherwise furnished to us accurately and completely describes all facts stated therein. In connection with the opinions rendered below, we have assumed the correctness of the Prior REIT Opinion with respect to all periods prior to January 1, 2013, subject only to our limited independent investigation with respect to the periods before January 1, 2013. We also have relied upon the correctness, without regard to any qualification as to knowledge or belief, of the factual representations and covenants contained in the Certificate of Representations and the factual matters discussed in the Prospectus that relate to the Company’s status as a REIT. Where the factual representations in the Certificate of Representations involve terms defined in the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations thereunder (the “Regulations”), published rulings of the Internal Revenue Service (the “Service”), or other relevant authority, we have reviewed with the individual making such representations the relevant provisions of the Code, the applicable Regulations, the published rulings of the Service, and other relevant authority. We are not aware of any facts that are inconsistent with the representations contained in the Certificate of Representations. It should be noted, however, that the Code, Regulations, judicial decisions, and administrative interpretations are subject to change at any time and, in some circumstances, with retroactive effect. We can give no assurance, therefore, that legislative enactments, administrative changes or court decisions may not be forthcoming that would modify or supersede the opinions stated herein. In addition, there can be no assurance that positions contrary to our opinions will not be taken by the Service, or that a court considering the issues will not hold contrary to such opinions. The Service has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as a REIT.

2290 First National Building · 660 Woodward Avenue ∙ Detroit, Michigan 48226-3506

Detroit ∙ Ann Arbor ∙ Bloomfield Hills ∙ Chicago ∙ Grand Rapids ∙ Kalamazoo ∙ Lansing

March 20, 2018	Page 4

Moreover, the opinions set forth below represent our conclusions based upon the documents, facts, assumptions and representations referred to above. Any material amendments to such documents or changes in any significant facts after the date hereof, or inaccuracy of such assumptions or representations, could affect the opinions stated herein.

We express no opinion as to the laws of any jurisdiction other than the federal income tax laws of the United States of America to the extent specifically referred to herein.

Based on the documents and assumptions set forth above, the representations and covenants set forth in the Certificate of Representations, and the factual matters discussed in the Prospectus under the caption “Material Federal Income Tax Considerations” (which are incorporated herein by reference), we are of the opinion that:

1.the Company qualified to be taxed as a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 2010 through December 31, 2017, and the Company’s current and proposed method of operation will enable it to continue to qualify as a REIT under the Code for its taxable year ending December 31, 2018 and thereafter; and

2.the description of the law and the legal conclusions contained in the Prospectus under the caption “Material Federal Income Tax Considerations” is correct in all material respects.

We will not review on a continuing basis the Company’s compliance with the documents or assumptions set forth above, or the representations set forth in the Certificate of Representations. Accordingly, no assurance can be given that the actual results of the Company’s operations for any given taxable year will satisfy the requirements for qualification and taxation as a REIT. Although we have made such inquiries and performed such investigations as we have deemed necessary to fulfill our professional responsibilities as counsel, we have not undertaken an independent investigation of all the facts referred to in this opinion letter or the Certificate of Representations. In particular, we note that the Company has engaged in transactions in connection with which we have not provided legal advice and which we may not have reviewed.

The foregoing opinions are limited to the U.S. federal income tax matters addressed herein, and no other opinions are rendered with respect to other U.S. federal tax matters or to any issues arising under the tax laws of any other country, or any state or locality. We undertake no obligation to update the opinions expressed herein after the date of this opinion letter.

2290 First National Building · 660 Woodward Avenue ∙ Detroit, Michigan 48226-3506

Detroit ∙ Ann Arbor ∙ Bloomfield Hills ∙ Chicago ∙ Grand Rapids ∙ Kalamazoo ∙ Lansing

March 20, 2018	Page 5

Other than as expressly stated above, we express no opinion as to any other U.S. federal income tax issue or matter relating to the Company. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes of matters stated, represented, covenanted, or assumed herein or any subsequent changes in applicable law. This opinion is issued to you in connection with the Offering and may not be used or relied upon by any other person or for any other purpose without our express written consent.

Very truly yours,

/s/ HONIGMAN MILLER SCHWARTZ AND COHN LLP

JHC:SAS:MKH:MSB

2290 First National Building · 660 Woodward Avenue ∙ Detroit, Michigan 48226-3506

Detroit ∙ Ann Arbor ∙ Bloomfield Hills ∙ Chicago ∙ Grand Rapids ∙ Kalamazoo ∙ Lansing