GLADSTONE LAND CORPORATION (NASDAQ:LAND) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement |
On April 11, 2017, Gladstone Land Corporation (the Company)
amended and restated its existing advisory agreement with
Gladstone Management Corporation, a registered investment adviser
(the Adviser), by entering into the Second Amended and Restated
Investment Advisory Agreement between the Company and the Adviser
(the Amended Agreement). The Companys entrance into the Amended
Agreement was approved unanimously by its board of directors,
including, specifically, its independent directors. The following
is a summary of the pertinent terms of the Amended Agreement. All
capitalized terms below not defined in this Current Report on
Form 8-K are defined in the Amended Agreement.
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A Base Management Fee will be paid quarterly and will be calculated as 2.0% per annum (0.50% per quarter) of the prior calendar quarters Total Equity. For purposes of this calculation, Total Equity will be defined as total equity plus total mezzanine equity, each as reported on the Companys balance sheet, adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items. |
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An Incentive Fee will be paid quarterly if the Companys FFO for the quarter exceeds a hurdle rate of 7.0% per annum (1.75% per quarter) of the prior calendar quarters Total Equity. For purposes of this calculation, FFO will be determined prior to any Incentive Fee being recorded and will include any dividends accrued on securities (including preferred stock) that are not treated as a liability under generally accepted accounting principles in the U.S. |
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A Capital Gains Fee will be paid at the end of each fiscal year and will be calculated as 15.0% of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses for the applicable fiscal year, less the aggregate Capital Gains Fees paid in prior periods. |
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In the event that the Amended Agreement is terminated by the Company, the Company will pay a Termination Fee equal to three times the sum of the average annual Base Management Fee and Incentive Fee earned by the Adviser during the 24-month period prior to the effective date of such termination. |
The description above is only a summary of the material
provisions of the Amended Agreement and is qualified in its
entirety by reference to a copy of the Amended Agreement, which
is filed herewith as Exhibit 10.1 to this Current Report on Form
8-K and incorporated herein by reference.
Item 8.01 Other Events
The Company has engaged Gladstone Securities LLC (Gladstone
Securities) as its non-exclusive agent to assist the Company with
arranging mortgage financing for properties owned by the Company.
In connection with such engagement, Gladstone Securities may from
time to time solicit the interest of various commercial real
estate lenders and/or recommend to the Company third-party
lenders offering credit products or packages that are responsive
to the Companys needs. The Company will pay Gladstone Securities
a financing fee (the Fee) in connection with the services it
provides to the Company for securing mortgage financing on any of
its properties. Depending on the size of the mortgage obtained,
the maximum amount of the Fee, which is payable upon closing of
the financing, will range from 0.5% to 1.0% of the amount of
mortgage obtained. The amount of the Fee may be reduced or
eliminated as determined by the Company and Gladstone Securities
after taking into consideration various factors, including, but
not limited to, the involvement of any third-party brokers and
market conditions.
Gladstone Securities is affiliated with us and our Adviser, as
each is owned by David Gladstone, our Chairman, Chief Executive
Officer and President. Any Fee we pay to Gladstone Securities to
this engagement is separate from the fees we pay to our Adviser
to the Amended Agreement.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits. |
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Exhibit No. |
Description |
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| 10.1 |
Second Amended and Restated Investment Advisory Agreement between Gladstone Land Corporation and Gladstone Management Corporation, dated April 11, 2017. |
About GLADSTONE LAND CORPORATION (NASDAQ:LAND)
Gladstone Land Corporation is an externally-managed, agricultural real estate investment trust (REIT). The Company is engaged in the business of owning and leasing farmland. The Company’s segment is farmland and farm-related properties. The Company is engaged in leasing its farms to independent farming operations and corporate farming operations. The Company owns approximately 43 farms consisting of over 16,810 total acres across six states in the United States (Arizona, California, Florida, Michigan, Nebraska and Oregon). The Company also owns approximately three cooling facilities and one facility utilized for the storage and assembly of boxes for shipping produce (a box barn). These properties are leased to approximately 33 different, unrelated tenants that are either independent or corporate farming operations. It also leases a small parcel on one of its properties to an oil company. Its properties include San Andreas, West Gonzales, West Beach, Dalton Lane and Keysville Road. GLADSTONE LAND CORPORATION (NASDAQ:LAND) Recent Trading Information
GLADSTONE LAND CORPORATION (NASDAQ:LAND) closed its last trading session up +0.03 at 11.27 with 37,934 shares trading hands.
