Exhibit – 10.1
 
EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (this “Agreement”) is made this 14th day of July 2009,
by and between AGREE REALTY CORPORATION, a Maryland corporation (the “Company”),
and RICHARD AGREE (the “Executive”).
 
WITNESSETH :
 
WHEREAS, the Executive is expected to make certain contributions to the
financial strength of the Company;
 
WHEREAS, the Company desires to assure itself of the continuity of management
and desires to establish certain compensation rights of certain of its key
senior executive officers, including the Executive; and
 
WHEREAS, the Company desires to employ the Executive and the Executive desires
to accept such employment on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained,
the parties hereto hereby agree as follows:
 
1.           Employment; Term.  The Company hereby employs the Executive as
Chief Executive Officer of the Company and the Executive agrees to serve the
Company in such capacity for the period commencing on July 1, 2009 (the
“Effective Date”) and ending on June 30, 2014 (the period during which the
Executive is employed by the Company hereunder is referred to as the “Employment
Period”); provided that, upon any expiration of the Employment Period, the
Employment Period will automatically be extended for one year unless either the
Company or Executive gives written notice of non-extension to the other at least
120 days prior to the expiration of the Employment Period.  The Executive shall
also serve as Chairman of the Board of Directors of the Company (the “Board”) to
the extent requested by the Board.
 
2.           Termination.  Subject to the terms and conditions set forth herein,
the Executive’s employment may be terminated by either party hereto upon thirty
(30) days’ written notice to the other party hereto.

 
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3.           Duties.  The Executive shall be responsible for the supervision,
control and conduct of all the business and affairs of the Company and shall
have such additional duties and any additional responsibilities as are normally
assigned to a Chief Executive Officer which may from time to time be reasonably
designated by the Board, provided that the scope of his duties and the extent of
his responsibilities shall not be substantially different from the duties and
responsibilities customarily associated with such positions in a publicly-held
corporation of similar size and business.  At all times, the Executive shall be
subject to the direction of the Board.  During the Employment Period, the
Executive shall devote his full business time and best efforts to the business
and affairs of the Company and its subsidiaries.  Notwithstanding the foregoing,
the Executive may: (i) engage in any civic or charitable activity for which the
Executive receives de minimis compensation or other pecuniary advantage; (ii)
invest his personal assets in any business that is not competitive with the
Company or any of its subsidiaries, provided that such investment will not
require any services on the part of the Executive which would unreasonably
interfere with his obligations hereunder; (iii) purchase securities that are
listed on a national securities exchange of any entity that is competitive with
the Company or any of its subsidiaries, provided that the Executive may not
beneficially own five percent (5%) or more of any class of such securities; (iv)
serve as a director of up to three publicly traded entities that are not
competitive with the Company or any of its subsidiaries; and (v) participate in
any other activity approved in advance in writing by the Board.  For purposes of
this Section 3, a business or entity is “competitive in retail real estate” with
the Company or any of its subsidiaries if such business or entity consists of or
includes any type or line of business engaged in by the Company or any of its
subsidiaries and such business is conducted, in whole or in part, within a
one-hundred (100) mile radius of the Company’s principal executive headquarters.
 
4.           Compensation.  The Company shall pay the Executive a minimum salary
of two hundred and eighty thousand dollars ($280,000.00) per annum as
compensation to the Executive for the services rendered by the Executive
hereunder, including, but not limited to, all services rendered by the Executive
as an officer or director of the Company and its subsidiaries.  Such
compensation shall be payable in regular installments in accordance with the
customary payroll practices of the Company.  The Compensation Committee shall
review the Executive’s salary at least annually to determine whether the
Executive’s salary shall be adjusted based on such criteria as the Compensation
Committee shall from time to time establish.  For purposes of this Agreement,
“salary” means the amount established and adjusted from time to time pursuant to
this Section 4.
 
5.           Benefits.
 
(a)           The Company agrees to reimburse the Executive for all reasonable
and necessary travel, business entertainment and other business expenses
incurred by the Executive in connection with the performance of his duties under
this Agreement.  Such reimbursements shall be made by the Company on a timely
basis, but no later than 60 days from the date such expenses are incurred, upon
submission by the Executive of documentation in accordance with the Company’s
standard procedures.  All such reimbursements shall be subject to reasonable
limitations, which may from time to time be prescribed by the Board.  The
reimbursement policies, practices and procedures applicable to Executive shall
be the most favorable policies, practices and procedures of the Company relating
to reimbursement of employment expenses incurred by Company directors, officers
or employees in effect at any time during the twelve month period preceding the
date Executive incurs the expenses.  The expense reimbursement or any in-kind
benefits provided for any calendar year shall not affect the expenses eligible
for reimbursement or any in-kind benefits provided in any other calendar year,
and the Executive’s right to expense reimbursement or in-kind benefits cannot be
liquidated or exchanged for any other benefit.

 
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(b)           The Executive shall be entitled to participate in any and all life
insurance, medical insurance, disability insurance, and other benefit plans
which are made generally available during the Employment Period by the Company
to executives of the Company, including, but not limited to, the Company’s 2005
Equity Incentive Plan, Profit Sharing Plan, performance Bonus Plan (to the
extent that the Executive qualifies under the eligibility provisions of such
plan or plans) or other similar plans.  Additionally, the Executive shall be
entitled to receive annual paid vacation and paid holidays made available
pursuant to Company policy to all of the executives of the Company.
 
6.           Termination.  The amounts described in Sections 6 and 7 hereof will
be in lieu of any termination or severance payments required by the Company’s
policies or applicable law (other than as required under applicable law), and
will constitute Executive’s sole and exclusive rights and remedies with respect
to the termination of Executive’s employment with the Company.  The Company may
withhold from any payments hereunder all federal, state, city or other taxes to
the extent required by applicable law.
 
(a)           Death; Disability.  In the event of the death or Disability of the
Executive, the Executive’s employment hereunder shall terminate, and the Company
shall pay to the Executive or the Executive’s personal representative or estate,
as the case may be, in cash (i) any accrued and unpaid salary through the date
of termination, (ii) any accrued and unpaid cash bonus with respect to the
fiscal year preceding the termination, (iii) a pro-rata portion of the cash
bonus with respect to the fiscal year in which the termination occurs, and (iv)
any reimbursable expenses under Section 5(a) hereof that have not been
reimbursed as of the date of termination. Subject to Section 19(d) hereof, the
payments under this Section 6(a) shall be paid within ten (10) days of such
termination.  In addition, all unvested securities of the Company issued to the
Executive under the Company’s 2005 Equity Incentive Plan or any similar plan
shall become fully vested as of the date of termination.
 
For purposes of this Agreement, “Disability” shall mean the inability of the
Executive to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months.
 
For purposes of this Agreement, “Bonus” shall mean (i) the annual cash bonus
from the Company plus (ii) the grant date fair value, in accordance with
generally accepted accounting principles, of share-based compensation by the
Company.
 
(b)           Good Reason or Other Than for Cause, Death or Disability.  Except
with respect to a Change in Control (which is covered by Section 7 hereof), in
the event that Executive’s employment is terminated by the Company for any
reason other than death, Disability or Cause, or the Executive’s employment is
terminated by Executive for Good Reason, the Company shall pay to the Executive
in cash (i) any accrued and unpaid salary through the date of termination, (ii)
any accrued and unpaid cash bonus with respect to the fiscal year preceding the
termination, (iii) a pro-rata portion of the cash bonus with respect to the
fiscal year in which the termination occurs, (iv) an amount equal to two (2)
times Executive’s “compensation” (as defined in Section 7(b) hereof) , and (v)
any reimbursable expenses under Section 5(a) hereof that have not been
reimbursed as of the date of termination.  The Executive shall also continue to
participate in all benefit plans made generally available by the Company to its
executives for the remaining portion of the Employment Period (as if such
termination had not occurred).  Subject to Section 19(d) hereof, the payments
under clauses (i), (ii), (iii) and (v) hereof shall be paid within ten (10) days
of such termination.  In addition, all unvested securities of the Company issued
to the Executive under the Company’s 2005 Equity Incentive Plan or any similar
plan shall become fully vested as of the date of such termination.

 
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For purposes of this Agreement, “Cause” shall mean:  (i) the Executive’s willful
failure or refusal to perform specific reasonable written directives of the
Board, which directives are consistent with the scope and nature of the
Executive’s duties and responsibilities under this Agreement, and which are not
remedied by the Executive within sixty (60) days after written notice of his
failure by the Board; (ii) a felony conviction of the Executive; (ii) any act of
dishonesty involving the Company which results in a material unjust gain or
enrichment to the Executive at the expense of the Company; (iv) any act
involving moral turpitude of the Executive which materially and adversely
affects the business of the Company; or (v) a material breach by the Executive
of his obligations under Section 8 hereof.  No act or failure to act on the part
of the Executive shall be deemed “willful” if it was due primarily to an error
in judgment or negligence, but shall be deemed “willful” only if done or omitted
to be done by the Executive not in good faith and without reasonable belief that
his action or omission was in the best interests of the Company.
 
For purposes of this Agreement, “Good Reason” shall mean:  (i) a material breach
of this Agreement by the Company; (2) other than for Cause, a material reduction
in the nature or scope of the Executive’s title, authority, powers, functions,
duties, or responsibilities; (3) other than for Cause or related to a general
reduction that is not limited to any executive of the Company, a material
reduction in the salary and Bonus paid to Executive or benefits provided to
Executive; or (4) without Executive’s written consent, a transfer of the place
of employment of more than thirty (30) miles from the Company’s principal
executive headquarters.
 
(c)           Cause or Without Good Reason.  In the event Executive’s employment
is terminated by the Company for Cause, or is terminated by Executive without
Good Reason, the Company shall pay the Executive in cash (i) any accrued and
unpaid salary through the date of termination, (ii) any accrued and unpaid cash
bonus with respect to the fiscal year preceding the termination, and (iii) any
reimbursable expenses under Section 5(a) hereof that have not been reimbursed as
of the date of termination.  Subject to Section 19(d) hereof, the foregoing
payments shall be made within ten (10) days of such termination.  Except as set
forth in this Section 6(c) or as required by law, (i) any and all other benefits
which the Executive would otherwise have been entitled to receive pursuant to
the terms of this Agreement or applicable law shall be forfeited and (ii) any
unvested securities of the Company issued to the Executive under the Company’s
2005 Equity Incentive Plan or any similar plan shall be forfeited.
 
The Executive shall not be deemed to have been terminated for Cause hereunder
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the Board then in office (excluding Executive or any immediate family member of
Executive) at a meeting of the Board called and held for such purpose, after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel (if the Executive chooses to have counsel present at
such meeting), to be heard before the Board, finding that, in the good faith
opinion of the Board, the Executive had committed an act constituting Cause as
herein defined and specifying the particulars thereof in detail.

 
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(d)           Retirement.  Notwithstanding any of the foregoing, if the
Executive retires from employment with the Company at any time after he reaches
the age of 65, except if such employment is terminated for Cause, all unvested
securities of the Company issued to the Executive under the Company’s 2005
Equity Incentive Plan or any similar plan shall become fully vested as of the
date of such retirement; provided, however, if the Executive and Company agree
that Executive will provide consulting services thereafter, the unvested
securities of the Company issued to the Executive under the Company’s 2005
Equity Incentive Plan or any similar plan shall vest in accordance with their
respective terms  for as long as such consulting services are provided by
Executive.  If the consulting period is terminated following retirement, then
all unvested securities of the Company issued to the Executive under the
Company’s 2005 Equity Incentive Plan or any similar plan shall become fully
vested as of the date of the termination of such consulting period.
 
(e)           Timing.  To the extent not set forth in Section 6(a)-(c) hereof or
otherwise provided in Section 19(d) hereof, any amounts under Section 6(a)-(c)
will be paid, and the certificates, if any, for the vested securities will be
delivered, as soon as reasonably possible, but in no event later than 30 days
after the termination occurs.
 
7.           Change in Control of the Company.
 
(a)           If a Change in Control of the Company occurs prior to the end of
the Employment Period and (a) Executive’s employment is terminated by the
Company for reasons other than death, Disability or Cause, or (b) the Executive
terminates employment with the Company for Good Reason, in each case within 18
months after such Change in Control, subject to Section 19(d) hereof, the
Company, or any successor thereto, will pay to the Executive in cash, (i) any
accrued and unpaid salary through the date of termination, (ii) any accrued and
unpaid cash bonus with respect to the fiscal year preceding the termination,
(iii) a pro-rata portion of the cash bonus with respect to the fiscal year in
which the termination occurs, (iv) an amount equal to three (3) times
Executive’s “compensation” (as defined below); and (v) any reimbursable expenses
under Section 5(a) hereof that have not been reimbursed as of the date of
termination.  The Executive shall also continue to participate in all benefit
plans made generally available by the Company to its executives for the
remaining portion of the Employment Period (as if such termination had not
occurred).  Subject to Section 19(d) hereof, the payments under clauses (i),
(ii), (iii) and (v) hereof shall be paid within ten (10) days after such
termination.  In addition, all unvested securities of the Company issued to the
Executive under the Company’s 2005 Equity Incentive Plan or any similar plan
shall become fully vested as of the date of such termination.  Subject to
Section 19(d) hereof, any amounts under clause (iv) will be paid, and the
certificates, if any, for the vested securities will be delivered, as soon as
reasonably possible, but in no event later than 30 days after such termination.

 
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(b)           The Executive’s “compensation” shall be determined as follows: (i)
in respect of salary, an amount equal to the highest annualized rate of the
Executive’s salary during the Employment Period; (ii) in respect of Bonus, the
Executive’s average Bonus over the previous three calendar years; and (iii) in
respect of other benefits set forth in this Agreement or otherwise made
available generally to executives of the Company pursuant to Company policy
(excluding grants of Company securities), an amount equal to the fair market
value of such benefits.
 
(c)           Notwithstanding any other provision of this Agreement, in the
event that the Company or Executive determines, based upon the advice of its tax
advisors, (i) that part or all of the consideration, compensation or benefits to
be paid to Executive under Section 7(a) or any other provision hereof constitute
payments “contingent on a change in ownership or control” of the Company within
the meaning of the Treasury Regulations under Section 280G(b)(2) (or a successor
provision) of the Internal Revenue Code of 1986, as amended (“parachute
payments”), and (ii) that the aggregate present value of such parachute
payments, singularly or together with the aggregate present value of any
consideration, compensation or benefits to be paid to Executive under any other
plan, arrangement or agreement which constitute parachute payments
(collectively, the "Parachute Amount"), exceeds 2.99 times the Executive's "base
amount" as defined in Section 280G(b)(3) of the Code (the "Executive Base
Amount"), then the amounts constituting parachute payments which would otherwise
be payable to or for the benefit of Executive shall be reduced to the extent
necessary so that the Parachute Amount is equal to 2.99 times the Executive Base
Amount (the "Reduced Amount"); provided, however, that the Company shall pay to
Executive the Parachute Amount without reduction if it is determined that
payment of the Parachute Amount would generate more after−tax income to
Executive than the Reduced Amount.  In the event of a reduction of the payments
that would otherwise be paid to Executive, then the Company may elect which and
how much of any particular entitlement shall be eliminated or reduced and shall
notify Executive promptly of such election; provided, however that the aggregate
reduction shall be no more than as set forth in the preceding sentence of this
Section 7(c).
 
(d)           For purposes of this Agreement, a “Change in Control” shall mean
the occurrence of any of the following events at any time during the Employment
Period:
 
(i)           The Company is merged, consolidated or reorganized into or with
another corporation or other legal person and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of the entity resulting from such
merger, consolidation or reorganization immediately after such transaction are
held in the aggregate by holders of the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors of the Company (“Voting Stock”) immediately prior to such
transaction;
 
(ii)           The Company sells all or substantially all of its assets to any
other corporation or other legal person, and less than a majority of the
combined voting power of the then-outstanding voting securities of the purchaser
immediately after such transaction are held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such sale;
 

 
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(iii)           If a report is filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), disclosing that any person (as the term “person” is used in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act), other than Richard Agree, and
his immediate family and affiliates, in aggregate, is the beneficial owner (as
the term “beneficial owner” is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 25% or
more of the Voting Stock;
 
(iv)           Any time at which individuals who, as of the date hereof,
constitute the directors of the Company cease for any reason to constitute at
least a majority thereof, provided that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the incumbent Board will be considered as though such
individual were a member of the incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board.
 
Notwithstanding the foregoing provision of Section 7(d)(iii) hereof, a Change in
Control shall not be deemed to have occurred for purposes of this Agreement
solely because the Company, an entity in which the Company directly or
indirectly beneficially owns 50% or more of the voting securities of such
entity, any Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company either files or becomes obligated to file a
report with the Securities and Exchange Commission under the Exchange Act
disclosing beneficial ownership by such entity of Voting Stock in excess of 25%
or otherwise or that a change in control of the Company has or may have occurred
or will or may occur in the future by  reason of such beneficial
ownership.  Notwithstanding the foregoing provisions of this Section 7(d), a
transaction or occurrence identified in Section 7(d) (i), (ii), (iii) or (iv)
shall not be deemed to be a Change in Control unless it constitutes a “change in
control event” within the meaning of Treasury Regulations Section
1.409A-3(i)(5)(i).
 
8.           Non-Competition; Non-Solicitation.  The Executive agrees that if
the Executive’s employment is terminated by the Company for Cause or Executive
terminates such employment without Good Reason, that for a one (1) year period
following the termination date:
 
(a)           The Executive shall not engage in any business which is
competitive with the business of the Company or any of its subsidiaries as of
the termination date.  For the purposes of this Section 8, a business shall be
deemed “competitive” if it consists of or includes any type or line of business
engaged in by the Company or any of its subsidiaries as of the date of such
termination and which is conducted, in whole or in part, within a one-hundred
(100) mile radius of the Company’s principal executive headquarters as of the
date of such termination.  For purposes of this Agreement, the executive shall
be deemed to “engage in a business” if he: (i) participates, directly or
indirectly, in such business as a director, officer, stockholder, employee,
salesman, partner or individual proprietor; (ii) acts as a paid consultant,
representative or advisor to such business; (iii) participates in such business
as an investor (whether through loans, contributions to capital or otherwise) or
has a controlling influence over such business; or (iv) permits his name to be
used by or in connection with such business, provided that nothing herein
contained shall be deemed to preclude the purchase of securities that are listed
on a national securities exchange of any entity that is competitive with the
Company or any of its subsidiaries, provided that the Executive may not
beneficially own five percent (5%) or more of any class of such securities.

 
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(b)           The Executive will not directly, or indirectly through another
person or entity, (i) solicit any employee of the Company or its subsidiaries to
leave the employ of the Company or its subsidiaries, or in any way interfere
with the relationship between the Company or its subsidiaries, on the one hand,
and any employee thereof, on the other hand, (ii) hire any person who was an
employee of the Company or its subsidiaries until one year after such
individual’s employment relationship with the Company or its subsidiaries has
been terminated or (iii) induce or attempt to induce any customer, supplier or
other business relation of the Company or its subsidiaries to cease doing
business with the Company or its subsidiaries, or in any way interfere with the
relationship between any such customer, supplier or business relation, on the
one hand, and the Company or its subsidiaries, on the other hand.
 
9.           Confidentiality.  The Executive shall not at any time use or
divulge, furnish or make accessible to anyone (other then in the regular course
of the business of the Company or any of its subsidiaries) any information
regarding trade secrets, proprietary information or other confidential
information (including, but not limited to, any information concerning customers
or accounts) with respect to the business affairs of the Company or any of its
subsidiaries.  This Section 9 shall not apply to information that is or becomes
generally available (i) to the public other than as result of a disclosure by
Executive or any of its representatives, or (ii) to Executive or its
representatives on a non-confidential basis from a source (other than the
Company or its representatives) which Executive reasonably believes is not
prohibited from disclosing such information to Executive by a contractual, legal
or fiduciary obligation to the Company or any of its representatives.
 
10.           Notices.  All notices relating to this Agreement shall be in
writing and shall be deemed to have been given (i) when delivered personally,
(ii) three days after the date of mailing, if sent in the United States by
registered or certified first-class mail, or (iii) one day after the date of
mailing, if sent by nationally recognized overnight courier, and shall be sent
return receipt requested in a postpaid envelope, addressed to the other party at
the address set forth below, or to such changed address as the other party may
have fixed by written notice; provided, however, that any notice of change of
address shall be effective only upon receipt:
 
To the Company                                             Agree Realty
Corporation
31850 Northwestern Highway
Farmington Hills, MI 48334
Attention:  Board of Directors
 
To the Executive                                             Agree Realty
Corporation
31850 Northwestern Highway
Farmington Hills, MI 48334
Attention:  Richard Agree
 
11.           Assignability, Binding Effect.  This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and assigns,
including without limitation any corporation which may acquire all or
substantially all of the Company’s assets and business or with or into which the
Company may be consolidated or merged, and shall inure to the benefit of and be
binding upon the Executive, his heirs, executors, administrators and legal
representatives, provided that the obligations of the Executive hereunder may
not be assigned or delegated.

 
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12.           Survival.  Notwithstanding the expiration or termination of this
Agreement, Sections 5-18 hereof shall survive and continue in full force and
effect in accordance with their respective terms.
 
13.           Complete Understanding; Amendment; Waiver.  This Agreement
constitutes the complete understanding between the parties with respect to the
employment of the Executive hereunder, and no statement, representation,
warranty or covenant has been made by either party with respect thereto except
as expressly set forth herein.  This Agreement shall not be altered, modified,
amended or terminated except by written instrument signed by each of the parties
hereto.  Waiver by either party hereto of any breach hereunder by the other
party shall not operate as a waiver of any other breach, whether similar to or
different from the breach waived.  No delay on the part of the Company or the
Executive in the exercise of any of their respective rights or remedies shall
operate as a waiver thereof, and no single or partial exercise by the Company or
the Executive of any such right or remedy shall preclude other or further
exercise thereof.
 
To the extent permitted by applicable law or the Company’s benefit plans, this
Agreement shall supersede any other plan, agreement or arrangement with the
Company regarding the Executive’s employment and termination of employment.

14.           Severability.  If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be enforced to the fullest extent permitted by
law.
 
15.           Governing Law.  This Agreement shall be governed and construed in
accordance with the internal laws of the State of Michigan, without giving
effect to any choice of law or conflict or law provisions or rules that would
cause the application of the laws of any jurisdiction other than the State of
Michigan.
 
16.           Indemnification.  The Company shall indemnify and hold harmless
the Executive against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys’ fees actually and necessarily
incurred, in any action or proceeding to which the Executive is made a party by
reason of the fact that he is or was an officer or director of the Company, to
the fullest extent permitted by law, the Bylaws of the Company and the Articles
of Incorporation of the Company.
 
17.           Counterparts.  This Agreement may be executed in counterparts, all
of which together shall constitute one agreement binding on all parties hereto.

 
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18.           Titles and Captions.  All paragraph, article or section titles or
captions in this Agreement are for convenience only and in no way define, limit,
extend or describe the scope or intent of any provisions hereof.
 
19.           Code Section 409A Compliance.

(a)           The intent of the parties is that payments and benefits under this
Agreement comply with Internal Revenue Code Section 409A and the regulations and
guidance promulgated thereunder (collectively "Code Section 409A") and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that may be
imposed on Executive by Code Section 409A or damages for failing to comply with
Code Section 409A.

(b)           In the event that any provision of this Agreement is determined by
the Company or the Executive to not comply with Code Section 409A, the Company
shall fully cooperate with Executive to reform this Agreement to correct such
noncompliance to the extent permitted under any guidance, procedure, or method
promulgated by the Internal Revenue Service now or in the future that provides
for such correction as a means to avoid or mitigate any taxes, interest, or
penalties that would otherwise be incurred by Executive on account of such
noncompliance.

(c)           A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a "separation from service" within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a "termination," "termination of employment" or like terms shall
mean "separation from service."

(d)           Notwithstanding any other payment date or schedule provided herein
to the contrary, if the Executive is deemed on the date of termination to be a
"specified employee" within the meaning of that term under Code Section
409A(a)(2)(B), then each of the following shall apply:

 (i)           With regard to any payment that is considered deferred
compensation under Code Section 409A payable on account of a "separation from
service," to the extent required under Code Section 409A such payment shall be
made on the date which is the earlier of (A) the expiration of the six (6)-month
period measured from the date of such "separation from service" of the
Executive, and (B) the date of Executive's death (the "Delay Period"). Upon the
expiration of the Delay Period, all payments delayed pursuant to the preceding
sentence shall be paid to Executive in a lump sum; and

 (ii)           To the extent that any benefits to be provided during the Delay
Period are considered deferred compensation under Code Section 409A provided on
account of a "separation from service," and such benefits are not otherwise
exempt from Code Section 409A, Executive shall pay the cost of such benefits
during the Delay Period, and the Company shall reimburse Executive (to the
extent that such costs would otherwise have been paid by the Company or to the
extent that such benefits would otherwise have been provided by the Company at
no cost to Executive) the Company's share of the cost of such benefits upon
expiration of the Delay Period, and any remaining benefits shall be reimbursed
or provided by the Company in accordance with the procedures specified herein.

 
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(e)           Notwithstanding any other provision of this Agreement to the
contrary, in no event shall any payment under this Agreement that constitutes
"deferred compensation" for purposes of Code Section 409A be subject to offset,
counterclaim or recoupment by any other amount payable to Executive unless
otherwise permitted by Code Section 409A.

(f)           Whenever a provision of this Agreement specifies a payment period
with reference to a number of days (e.g., “payment shall be made within ten (10)
days of such termination”), the actual date of payment within the specified
period shall be within the sole discretion of the Company.
 
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
 
AGREE REALTY CORPORATION
   
By:
/s/ Gene Silverman
Name: Gene Silverman
Title: Chairman Executive Compensation
Committee
   
EXECUTIVE
   
By:
/s Richard Agree
Richard Agree

 
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