First Supplement to Uncommitted Master Note Facility, dated as of September 26, 2018, among Agree Limited Partnership, Agree Realty Corporation and Teachers Insurance and Annuity Association of America (TIAA)

Exhibit 10.3

Execution Version

Agree Limited Partnership

First Supplement to Uncommitted Master Note Facility

Dated as of September 26, 2018

Re:          $25,000,000 4.32%, Series 2018-B, Senior Guaranteed Notes

due September 26, 2030

Agree Limited Partnership

70 E. Long Lake Road

Bloomfield Hills, MI 48304

First Supplement to Uncommitted Master Note Facility

Dated as of

September 26, 2018

To the Purchaser named in

Schedule A hereto

Ladies and Gentlemen:

This First Supplement to Uncommitted Master Note Facility (the “First Supplement”) is among Agree Limited Partnership, a Delaware limited partnership (the “Company”), and Agree Realty Corporation, a Maryland corporation operating as a real estate investment trust (the “Parent Guarantor”) and Teachers Insurance and Annuity Association of America, as listed in Schedule A hereto (“TIAA” or the “Purchaser”).

Recitals

A.           The Company and the Parent Guarantor have entered into the Uncommitted Master Note Facility dated as of August 3, 2017 with TIAA (as heretofore amended and supplemented, the “Master Note Facility”); and

B.           The Company desires to issue and sell, and the Purchaser desires to purchase, an initial Series of Notes (as defined in the Master Note Facility) pursuant to the Master Note Facility and in accordance with the terms set forth below;

Now, Therefore, the Company and the Purchaser agrees as follows:

1.          Authorization of the New Series of Notes. The Company has authorized the issue and sale of $25,000,000 aggregate principal amount of its 4.32%, Series 2018-B, Senior Guaranteed Notes due September 26, 2030 (the “Series 2018-B Notes”). The Series 2018-B Notes, and each Series of Notes which may from time to time hereafter be issued pursuant to the provisions of the Master Note Facility, are collectively referred to as the “Notes” (such term shall also include any such notes issued in substitution therefor pursuant to Section 13 of the Master Note Facility). The Series 2018-B Notes shall be substantially in the form set out in Exhibit 1 hereto with such changes therefrom, if any, as may be approved by the Purchaser and the Company.

2.          Sale and Purchase of Series 2018-B Notes. Subject to the terms and conditions of this First Supplement and the Master Note Facility and on the basis of the representations and warranties hereinafter set forth, the Company will issue and sell to the Purchaser and the Purchaser will purchase from the Company, at the Closing provided for in Section 3, Series 2018-B Notes in the principal amount specified opposite its name in the attached Schedule A hereto at the purchase price of 100% of the principal amount thereof.

3.          Closing. The sale and purchase of the Series 2018-B Notes to be purchased by the Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, IL 60603 at 10:00 a.m. Chicago time, at a closing (the “Closing”) on September 26, 2018 or on such other Business Day thereafter on or prior to October 2, 2018 as may be agreed upon by the Company and the Purchaser (the “Closing Date”). At the Closing, the Company will deliver to the Purchaser the Series 2018-B Notes to be purchased by the Purchaser in the form of a single Series 2018-B Note (or such greater number of Series 2018-B Notes in denominations of at least $100,000 as the Purchaser may request) dated the date of the Closing and registered in the Purchaser’s name (or in the name of the Purchaser’s nominee), against delivery by the Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company in accordance with wire transfer instructions provided by the Company to the Purchaser pursuant to Section 4 of this First Supplement, as it relates to Section 4.11 of the Master Note Facility. If, at the Closing, the Company shall fail to tender such Series 2018-B Notes to the Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to the Purchaser’s satisfaction, the Purchaser shall, at the Purchaser’s election, be relieved of all further obligations under this Agreement, without thereby waiving any rights the Purchaser may have by reason of such failure or such nonfulfillment.

4.          Conditions to Closing. The obligation of the Purchaser to purchase and pay for the Series 2018-B Notes to be sold to the Purchaser at the Closing is subject to the fulfillment to the Purchaser’s satisfaction, prior to the Closing, of the conditions set forth in Section 4 of the Master Note Facility (it being understood that all references to “Purchaser” therein shall be deemed to refer to the Purchaser hereunder, all references to “this Agreement” shall be deemed to refer to the Master Note Facility as supplemented by this First Supplement, and all references to “Notes” therein shall be deemed to refer to the Series 2018-B Notes, and as hereafter modified), and as provided in Section 5 of this First Supplement, except as supplemented, amended or superseded by the representations and warranties set forth in Exhibit 2 hereto (which changes are subject to the approval of the Purchaser), each of the representations and warranties of the Company and the Parent Guarantor set forth in Section 5 of the Master Note Facility shall be correct as of the date of Closing and the Company and the Parent Guarantor each shall have delivered to the Purchaser an Officer’s Certificate, dated the date of the Closing certifying that such condition has been fulfilled.

5.          Representations and Warranties of the Company and the Parent Guarantor. With respect to each of the representations and warranties contained in Section 5 of the Master Note Facility, each of the Company and the Parent Guarantor represents and warrants to the Purchaser that, as of the date hereof, such representations and warranties are true and correct (A) except that all references to “Purchaser” therein shall be deemed to refer to the Purchaser hereunder, all references to “this Agreement” shall be deemed to refer to the Master Note Facility as supplemented by this First Supplement, and all references to “Notes” therein shall be deemed to refer to the Series 2018-B Notes, and (B) except for changes to such representations and warranties or the Schedules referred to therein, which changes are set forth in the attached Exhibit 2 and which are in all respects satisfactory to the Purchaser as a condition to the Closing.

6.          Representations of the Purchasers. The Purchaser confirms to the Company that the representations set forth in Section 6 of the Master Note Facility are true and correct on the date hereof with respect to the purchase of the Series 2018-B Notes by such Purchaser, except that all references to “Purchaser” therein shall be deemed to refer to the Purchaser hereunder, all references to “this Agreement” therein shall be deemed to refer to the Master Note Facility as supplemented by this First Supplement, and all references to “Notes” therein shall be deemed to refer to the Series 2018-B Notes.

7.          Maturity; Interest. The Series 2018-B Notes will have the maturity date and bear interest at the rate set forth therein.

8.          Prepayments of the Series 2018-B Notes. All prepayment provisions in Section 8 of the Master Note Facility shall apply to the Series 2018-B Notes equally as “Notes” thereunder, subject to the definitions applicable to the Series 2018-B Notes contained herein.

9.          Applicability of Master Note Facility. Except as otherwise expressly provided herein (and expressly permitted by the Master Note Facility), all of the provisions of the Master Note Facility are incorporated by reference herein, shall apply to the Series 2018-B Notes as if expressly set forth in this First Supplement and all references to “Notes” shall include the Series 2018-B Notes. Without limiting the foregoing, the Company and the Parent Guarantor agree to pay all costs and expenses incurred in connection with the initial filing of this First Supplement and all related documents and financial information with the SVO; provided that such costs and expenses with respect to the Series 2018-B Notes shall not exceed $5,000 per Series or tranche of such Notes. Capitalized terms used herein without definition have the respective meanings ascribed to them in the Master Note Facility (as amended from time to time).

10.         Governing Law. This First Supplement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

11.         Agreement to be Bound. The Company, the Parent Guarantor and the Purchaser agree to be bound by and comply with the terms and provisions of the Master Note Facility as fully and completely as if the Purchaser were an original signatory to the Master Note Facility.

The execution hereof shall constitute a contract between the Company, the Parent Guarantor and the Purchaser for the uses and purposes hereinabove set forth, and this First Supplement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.

Accepted as of the date first written above.

Information Relating to Purchaser

Payments

All payments on or in respect of the Series 2018-B Notes shall be made in immediately available funds on the due date by electronic funds transfer, through the Automated Clearing House System, to:

JPMorgan Chase Bank, N.A.

ABA # 021-000-021

Account Number: 900-9-000200

Account Name: TIAA

For Further Credit to the Account Number: G07040

Reference: PPN: 00855@ AF1/Agree Limited Partnership

Maturity Date: September 26, 2030/Interest Rate: 4.32%/P&I Breakdown

Payment Notices

All notices with respect to payments and prepayments of the Series 2018-B Notes shall be sent to:

Teachers Insurance and Annuity Association of America

730 Third Avenue

New York, New York 10017

Attention: Securities Accounting Division

Phone: (212) 916-5504

Email: ***@*** or ***@***

With a copy to:

JPMorgan Chase Bank, N.A.

P.O. Box 35308

Newark, New Jersey 07101

And to:

Teachers Insurance and Annuity Association of America

c/o Nuveen Alternatives Advisors LLC

8500 Andrew Carnegie Boulevard

Charlotte, North Carolina 28262

Attention: Global Private Markets

(704) 988-1000 (General Number)

Nuveen ***@***

Contemporaneous written confirmation of any electronic funds transfer shall be sent to the above addresses setting forth (1) the full name, private placement number, interest rate and maturity date of the Series 2018-B Notes, (2) allocation of payment between principal, interest, Make-Whole Amount, other premium or any special payment and (3) the name and address of the bank from which such electronic funds transfer was sent.

Other Notices and Communications

All other notices and communications shall be delivered or mailed to:

Teachers Insurance and Annuity Association of America

c/o Nuveen Alternatives Advisors LLC

8500 Andrew Carnegie Boulevard

Charlotte, North Carolina 28262

Attention: Global Private Markets

(704) 988-1000 (General Number)

***@***

Taxpayer Identification Number: 13-1624203

Physical Delivery of the Series 2018-B Notes:

JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center

3^rd Floor

Brooklyn, New York ###-###-####

Attention: Physical Receive Department

For TIAA A/C #G07040

[Form of Series 2018-B Note]

Agree Limited Partnership

4.32% Senior Guaranteed Note, Series 2018-B, due September 26, 2030

For Value Received, the undersigned, Agree Limited Partnership (herein called the “Company”), a limited partnership organized and existing under the laws of Delaware, hereby promises to pay to [_____________________], or registered assigns, the principal sum of [_____________________] Dollars (or so much thereof as shall not have been prepaid) on September 26, 2030 (the “Maturity Date”) with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance hereof at the rate of 4.32% per annum from the date hereof, payable semiannually, on the the 31st day of March and 30th day of September in each year, commencing with March 31, 2019 or the first March 31 or September 30 following the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the Default Rate (as defined in the hereinafter defined Master Note Facility).

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Master Note Facility referred to below.

This Note is one of the Senior Guaranteed Notes, Series 2018-B (herein called the “Notes”) issued pursuant to the First Supplement dated as of September 26, 2018 to the Uncommitted Master Note Facility dated as of August 3, 2017 (as from time to time amended, the “Master Note Facility”), between Agree Realty Corporation (the “Parent Guarantor”), the Company, Teachers Insurance and Annuity Association of America and the Purchasers from time to time referred to therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Master Note Facility and (ii) made the representations set forth in Section 6.2 of the Master Note Facility. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Master Note Facility.

This Note is a registered Note and, as provided in the Master Note Facility, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

Pursuant to a Guaranty dated as of September 26, 2018, the Parent Guarantor, operating as a real estate investment trust and certain subsidiaries, have each absolutely and unconditionally guaranteed payment in full of the principal of, Make-Whole Amount, if any, and interest on this Note and performance by the Company of all of its obligations contained in the Master Note Facility all on the terms set forth in such Guaranty.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Master Note Facility, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Master Note Facility.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Supplemental Representations

The Company represents and warrants to the Purchaser that except as hereinafter set forth in this Exhibit 2, each of the representations and warranties set forth in Section 5 of the Master Note Facility is true and correct in all material respects as of the date hereof with respect to the Series 2018-B Notes with the same force and effect as if each reference to “Notes” set forth therein was modified to refer the “Series 2018-B Notes” and each reference to “this Agreement” therein was modified to refer to the Master Note Facility as supplemented by the First Supplement. The Section references hereinafter set forth correspond to the similar sections of the Master Note Facility which are supplemented hereby:

Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates. Schedule 5.4 of the Master Note Facility is hereby replaced by the below Schedule 5.4:

Schedule 5.4

Organization and Ownership of Shares of Subsidiaries; Affiliates

(as of August 30, 2018)

Note: The above list excludes dormant Subsidiaries that do not own any property.

Affiliates (other than Subsidiaries)

None

Directors and Executive Officers of the Company

The sole general partner of the Company is the Parent Guarantor. Please see the directors and senior officers of the Parent Guarantor listed above.

Section 5.14. Use of Proceeds. The Company will apply the proceeds of the sale of the Series 2018-B Notes issued hereunder to finance, among other things, acquisitions, tenant improvements, new construction, development and redevelopment, capital expenditures, debt repayment, leasing commissions and for general working capital.