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Section 1: 8-K (FORM 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): October 4, 2018

 

Global Net Lease, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Maryland 001-37390 45-2771978
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

 

405 Park Avenue, 4th Floor
New York, New York 10022

(Address, including zip code, of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (212) 415-6500

 

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 1.01.Entry into a Material Definitive Agreement.

 

Addition of BMO to Existing “At-the-Market” Program

 

On October 4, 2018, Global Net Lease, Inc. (the “Company”) entered into an amendment (the “Amendment”) to the Equity Distribution Agreement dated December 12, 2016 between the Company, its operating partnership and the current agents under the Company’s “At-the-Market” program with respect to its common stock, UBS Securities LLC, Robert W. Baird & Co. Incorporated, Capital One Securities, Inc., Mizuho Securities USA LLC, B. Riley FBR, Inc. (formerly known as FBR Capital Markets & Co.), and KeyBanc Capital Markets Inc., for the purpose of adding BMO Capital Markets Corp. (“BMO”) as an additional agent.

 

Certain of the agents or their affiliates are or have been lenders to the Company under its credit facility and other loans, agents under the Company’s “At-the-Market” program with respect to its Series A Preferred Stock or counterparties with respect to certain of the Company’s swaps.

 

A copy of the Amendment is filed as Exhibit 1.1 to this Current Report on Form 8-K, and the description of the material terms of the Amendment in this Item 1.01 is qualified in its entirety by reference to the Amendment, which is incorporated herein by reference.

 

A copy of the opinion of Proskauer Rose LLP relating to the Company’s “At-the-Market” program with respect to its common stock is being filed with this Current Report on Form 8-K as Exhibits 8.1 and 23.1.

  

Item 9.01.Financial Statements and Exhibits.

 

(d)Exhibits

 

Exhibit No.Description

 

1.1Amendment No. 2 to Equity Distribution Agreement.

 

8.1Opinion of Proskauer Rose LLP.

 

23.1Consent of Proskauer Rose LLP (included in Exhibit 8.1 hereto).

 

 

 

 

 

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.

 

   
Date: October 4, 2018 By:  /s/ James L. Nelson
    Name: James L. Nelson
Title:   Chief Executive Officer and President

 

 

 

 

 

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Section 2: EX-1.1 (EXHIBIT 1.1)

Exhibit 1.1

 

GLOBAL NET LEASE, INC.

 

AMENDMENT NO. 2 TO EQUITY DISTRIBUTION AGREEMENT

 

 

October 4, 2018

 

UBS Securities LLC
1285 Avenue of the Americas
New York, NY 10019

 

Robert W. Baird & Co. Incorporated

1717 K Street NW, Suite 910

Washington, D.C. 20007

 

Capital One Securities, Inc.

299 Park Avenue, 14th Floor

New York, NY 10171

 

Mizuho Securities USA LLC

320 Park Avenue, 12th Floor

New York, NY 10022

 

B. Riley FBR, Inc.

299 Park Avenue, 7th Floor

New York, NY 10171

 

KeyBanc Capital Markets Inc.

127 Public Square, 4th Floor

Cleveland, Ohio 44114

 

BMO Capital Markets Corp.

3 Times Square

New York, NY 10036

 

Ladies and Gentlemen:

 

Reference is made to the Equity Distribution Agreement, dated as of December 12, 2016, as amended on May 19, 2017 (the “Agreement”), by and among Global Net Lease, Inc., a Maryland corporation (the “Company”), and Global Net Lease Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), on the one hand, and UBS Securities LLC, Robert W. Baird & Co. Incorporated, Capital One Securities, Inc., Mizuho Securities USA LLC, B. Riley FBR, Inc. (formerly known as FBR Capital Markets & Co.) and KeyBanc Capital Markets Inc. (each an “Existing Agent” and collectively, the “Existing Agents” and together with the Company and the Operating Partnership, the “Parties”) pursuant to which the Company may issue and sell through the Existing Agents, acting as agent and/or principal, shares of the Company’s common stock, par value $0.01 per share, having an aggregate sale price of up to $175,000,000. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

 

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In connection with the foregoing, the Parties wish to amend the Agreement through this Amendment No. 2 to Equity Distribution Agreement (this “Amendment”) to modify the definition of certain defined terms set forth in the Agreement and used therein and to make certain other changes to the Agreement with effect on and after the date hereof (the “Effective Date”).

 

SECTION 1. Amendments to the Agreement. The Parties agree, from and after the Effective Date, that:

 

  (a) The definitions of the terms “Agent” and “Agents” are hereby amended to read as follows: “UBS Securities LLC, Robert W. Baird & Co. Incorporated, Capital One Securities, Inc., Mizuho Securities USA LLC, B. Riley FBR, Inc., KeyBanc Capital Markets Inc. and BMO Capital Markets Corp. (each an “Agent” and collectively, the “Agents”),”.

 

  (b) Section 2(cc) of the Agreement is hereby amended to read as follows: “Commencing with its taxable year ended December 31, 2013, the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”) and all applicable regulations under the Code, and its proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT under the Code and all applicable regulations under the Code for its taxable year ending December 31, 2018 and thereafter; all statements in the Registration Statement, the Basic Prospectus and the Prospectus Supplement under the caption “Material U.S. Federal Income Tax Considerations” regarding the Company’s qualification and taxation as a REIT are correct in all material respects.  The Company intends to continue to qualify as a REIT under the Code and all applicable regulations under the Code for all subsequent years, and the Company, after reasonable inquiry and diligence, does not know of any event that would reasonably be expected to cause the Company to fail to qualify as a REIT at any time including the consummation of the Merger.  The Operating Partnership is and has been at all times classified as an entity disregarded as separate from its owner or as a partnership and not as an association or partnership taxable as a corporation for federal income tax purposes, the Company does not know of any event that would cause or would reasonably be expected to cause the Operating Partnership to cease being classified as an entity disregarded as separate from its owner or as a partnership for federal income tax purposes and the Company does not know of any event that would cause or would reasonably be expected to cause the Operating Partnership to be treated as an association or partnership taxable as a corporation for federal income tax purposes.”.
  (c) Section 10 of the Agreement is hereby amended to include the following subsection (g): “(g) BMO Capital Markets Corp., 3 Times Square, 25th Floor, New York, New York 10036, Attention: Legal Department (fax no.: (212) 702-1205)”.

 

SECTION 2. Obligations Binding upon BMO Capital Markets Corp. BMO Capital Markets Corp. hereby agrees to be bound by the terms of the Agreement. BMO Capital Markets Corp. shall be considered to be an Agent under the Agreement to the same extent as if it were a party to the Agreement on the date of the execution thereof.

 

SECTION 3. No Other Amendments; References to Agreements. Except as set forth in this Amendment, all other terms and provisions of the Agreement shall continue in full force and effect. All references to the Agreement in the Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof, be deemed a reference to the Agreement as amended by this Amendment.

 

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SECTION 4. Counterparts. This Amendment may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties.

 

SECTION 5. Law; Construction. This Amendment and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Amendment (“Claim”), directly or indirectly, shall be governed by, and construed in accordance with, the internal laws of the State of New York.

 

SECTION 6. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company and the Operating Partnership consent to the jurisdiction of such courts and personal service with respect thereto. The Company and the Operating Partnership hereby consent to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party against any Agent or any indemnified party. Each of the Agents and the Company and the Operating Partnership (on their behalf and, to the extent permitted by applicable law, on behalf of their stockholders and affiliates) waive all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Amendment. The Company and the Operating Partnership agree that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Company and the Operating Partnership and may be enforced in any other courts to the jurisdiction of which the Company and the Operating Partnership are or may be subject, by suit upon such judgment.

 

SECTION 7. Headings. The Section headings in this Amendment have been inserted as a matter of convenience of reference and are not a part of this Amendment.

 

[Signature Page Follows]

 

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  Very truly yours,
   
  GLOBAL NET LEASE, INC.
     
  By: /s/ James L. Nelson   
    Name: James L. Nelson
    Title:   Chief Executive Officer and President

 

 

GLOBAL NET LEASE OPERATING

PARTNERSHIP, L.P.

     
  By: Global Net Lease, Inc., its general partner
     
  By: /s/ James L. Nelson
    Name: James L. Nelson
    Title:   Chief Executive Officer and President

 

 

 

[Signature Page to Amendment No. 2 to Equity Distribution Agreement]

 

 

ACCEPTED as of the date first above written:

 

UBS SECURITIES LLC

 
     
By: /s/ Chris LoBello  
Name: Chris LoBello  
Title:   Associate Director  
     
By: /s/ Whitney Mikell  
Name: Whitney Mikell  
Title:  Director  
     
     

ROBERT W. BAIRD & CO. INCORPORATED

     
By: /s/ Tim Stefanou  
Name: Tim Stefanou  
Title:  Vice President  
       

CAPITAL ONE SECURITIES, INC.

 
     
By: /s/ Greg K. Steele  
Name: Greg K. Steele  
Title: Managing Director  
     
MIZUHO SECURITIES USA LLC  
     
By: /s/ Ashish Sanghrajka  
Name: Ashish Sanghrajka  
Title: Managing Director  
     
B. RILEY FBR, INC.  
     
By: /s/ Patrice McNicoll  
Name: Patrice McNicoll  
Title: Co-Head, Investment Banking  
     
KeyBanc Capital Markets INC.  
     
By: /s/ Paul Hodermarsky  
Name: Paul Hodermarsky  
Title: Managing Director  
     
BMO CAPITAL MARKETS CORP.  
     
By: /s/ David Raff  
Name: David Raff  
Title: Managing Director  
       

[Signature Page to Amendment No. 2 to Equity Distribution Agreement]

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Section 3: EX-8.1 (EXHIBIT 8.1)

 

Exhibit 8.1

 

Proskauer_PageTwoLogo_Black_Chevrons     Proskauer Rose LLP   Eleven Times Square   New York, NY 10036-8299

 

October 4, 2018

 

Global Net Lease, Inc.

405 Park Avenue, 3rd Floor

New York, New York 10022

 

Re: Global Net Lease, Inc.

 

Ladies and Gentlemen:

 

We have acted as counsel to Global Net Lease, Inc., a Maryland corporation (the “Company”), with respect to certain tax matters in connection with the issuance and sale of shares of common stock of the Company, par value $0.01 per share, having an aggregate sale price of up to $175,000,000 (the “Stock”). The issuance and sale of the Stock are discussed in (i) the prospectus dated November 10, 2016 (the “Base Prospectus”), filed as part of a registration statement on Form S-3, Registration No. 333-214579, with the Securities and Exchange Commission (the “Commission”) on November 14, 2016 (the “Registration Statement”), (ii) the prospectus supplement, dated December 12, 2016, in the form filed with the Commission on December 13, 2016 (the “Initial Prospectus Supplement”), (iii) the prospectus supplement, dated May 19, 2017, in the form filed with the Commission on May 19, 2017 (the “Second Prospectus Supplement”), and (iv) the prospectus supplement, dated October 4, 2018, in the form filed with the Commission on October 4, 2018 (the “Third Prospectus Supplement,” and together with the Initial Prospectus Supplement, the Second Prospectus Supplement, and the Base Prospectus, the “Prospectus”). In connection with the filing by the Company of the Third Prospectus Supplement, we have been asked to provide an opinion regarding: (i) the classification of the Company as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”)1; (ii) the accuracy and fairness of the discussion in the Prospectus Supplement under the caption “Material U.S. Federal Income Tax Considerations”; and (iii) the treatment of Global Net Lease Operating Partnership, L.P, a Delaware limited partnership (the “Operating Partnership”) as a partnership or a disregarded entity for U.S. federal income tax purposes.

 

The opinions set forth in this letter are based on relevant provisions of the Code, Treasury Regulations issued thereunder (including Proposed and Temporary Regulations), and interpretations of the foregoing as expressed in court decisions, administrative determinations, and the legislative history as of the date hereof. These provisions and interpretations are subject to differing interpretations or change at any time, which may or may not be retroactive in effect, and which might result in modifications of our opinions. In this regard, an opinion of counsel with respect to an issue represents counsel’s best judgment as to the outcome on the merits with respect to such issue, is not binding on the Internal Revenue Service (“IRS”) or the courts, and is not a guarantee that the IRS will not assert a contrary position with respect to an issue, or that a court will not sustain such a position if asserted by the IRS.

 

 

1 Unless otherwise stated, all Section references herein are to the Code.

 

Boca Raton | Boston | Chicago | Hong Kong | London | Los Angeles | New Orleans | New York | Newark | Paris | São Paulo | Washington, D.C.

 

 

 

 

Proskauer_PageTwoLogo_Black_Chevrons 

 

Global Net Lease, Inc.

October 4, 2018

Page 2

 

In rendering our opinions, we have made such factual and legal examinations, including an examination of such statutes, regulations, records, certificates and other documents as we have considered necessary or appropriate, including, but not limited to, the following: (1) the Registration Statement (including exhibits thereto) and Prospectus; (2) the Articles of Amendment and Restatement of the Company, filed on April 3, 2015, as amended through the date hereof; (3) the Articles Supplementary of the Company, filed on September 8, 2017; (4) the Articles Supplementary of the Company, filed on December 15, 2017; (5) the Articles Supplementary of the Company, filed on March 23, 2018; (6) the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated June 2, 2015 (the “Partnership Agreement”), and any amendments thereto through the date hereof; (7) the Second Amendment to the Partnership Agreement, dated September 11, 2017; (8) the Third Amendment to the Partnership Agreement, dated December 15, 2017; (9) the Fourth Amendment to the Partnership Agreement, dated March 23, 2018; (10) the Fifth Amendment to the Partnership Agreement, dated July 19, 2018; (11) the Equity Distribution Agreement, dated December 12, 2016, as amended by Amendment No. 1 dated May 19, 2017 and Amendment No. 2 dated October 4, 2018 (as amended, the “Equity Distribution Agreement”), by and between UBS Securities LLC, Robert W. Baird & Co. Incorporated, Capital One Securities, Inc., Mizuho Securities USA LLC (f/k/a Mizuho Securities USA Inc.), B. Riley FBR, Inc. (f/k/a FBR Capital Market & Co.), KeyBanc Capital Markets Inc., and BMO Capital Markets Corp.; (12) other public filings of the Company with the Commission such as Forms 10-Q and 10-K; and (13) such other documents and corporate records as we have deemed necessary or appropriate for purposes of our opinion. The opinions set forth in this letter also are based on certain written factual representations and covenants made by an officer of the Company, in the Company’s own capacity and in its capacity as the general partner of the Operating Partnership, in a letter to us of even date herewith (the “Officer’s Certificate”) relating to, among other things, those factual matters as are germane to the determination that the Company and the Operating Partnership, and the entities in which they hold direct or indirect interests, have been and will be formed, owned and operated in such a manner that the Company has and will continue to satisfy the requirements for qualification as a REIT under the Code (collectively, the Officer’s Certificate and the documents described in the immediately preceding sentence are referred to herein as the “Transaction Documents”).

 

In our review, we have assumed, with your consent, that all of the factual representations, covenants and statements set forth in the Transaction Documents are true and correct, and all of the obligations imposed by any such documents on the parties thereto have been and will be performed or satisfied in accordance with their terms. Moreover, we have assumed that the Company and the Operating Partnership each will be operated in the manner described in the relevant Transaction Documents. We have, consequently, assumed and relied on your representations that the information presented in the Transaction Documents (including, without limitation, the Officer’s Certificate and the exhibits thereto) accurately and completely describe all material facts relevant to our opinion. We have not undertaken any independent inquiry into, or verification of, these facts for the purpose of rendering this opinion. While we have reviewed all representations made to us to determine their reasonableness, we have no assurance that they are or will ultimately prove to be accurate. No facts have come to our attention, however, that would cause us to question the accuracy or completeness of such facts or Transaction Documents in a material way. Our opinion is conditioned on the continuing accuracy and completeness of such representations, covenants and statements. Any material change or inaccuracy in the facts referred to, set forth, or assumed herein or in the Transaction Documents may affect our conclusions set forth herein.

 

 

 

 

Proskauer_PageTwoLogo_Black_Chevrons 

 

Global Net Lease, Inc.

October 4, 2018

Page 3

 

We also have assumed the legal capacity of all natural persons, the genuineness of all signatures, the proper execution of all documents, the authenticity of all documents submitted to us as originals, the conformity to originals of documents submitted to us as copies, and the authenticity of the originals from which any copies were made. Where documents have been provided to us in draft form, we have assumed that the final executed versions of such documents will not differ materially from such drafts.

 

With respect to matters of Maryland law, we have relied upon the opinion of Venable LLP, counsel for the Company, dated as of the date hereof, that the Company is a validly organized and duly incorporated corporation under the laws of the State of Maryland.

 

Based upon, and subject to the foregoing and the discussion below, we are of the opinion that:

 

(i)commencing with the Company’s taxable year ended on December 31, 2013, the Company has been organized in conformity with requirements for qualification as a REIT under the Code, and the Company’s actual method of operation through the date hereof has enabled it to meet and, assuming the Company’s election to be treated as a REIT is not either revoked or intentionally terminated, the Company’s proposed method of operation will enable it to continue to meet, the requirements for qualification and taxation as a REIT under the Code;

 

(ii)the discussion in the Prospectus under the caption “Material U.S. Federal Income Tax Considerations,” to the extent it constitutes matters of law, summaries of legal matters or legal conclusions, is a fair and accurate summary of the U.S. federal income tax considerations that are likely to be material to a holder of the Company’s Stock; and

 

(iii)the Operating Partnership has been and will be taxed as a partnership or a disregarded entity and not an association or publicly traded partnership (within the meaning of Section 7704) subject to tax as a corporation, for U.S. federal income tax purposes beginning with its first taxable year.

 

 

 

 

Proskauer_PageTwoLogo_Black_Chevrons 

 

Global Net Lease, Inc.

October 4, 2018

Page 4

 

We express no opinion on any issue relating to the Company, the Operating Partnership or the discussion in the Prospectus under the caption “Material U.S. Federal Income Tax Considerations” other than as expressly stated above.

 

The Company’s qualification and taxation as a REIT will depend upon the Company’s ability to meet on a continuing basis, through actual annual operating and other results, the various requirements under the Code as described in the Registration Statement with regard to, among other things, the sources of its gross income, the composition of its assets, the level of its distributions to stockholders, and the diversity of its stock ownership. Proskauer Rose LLP will not review the Company’s compliance with these requirements on a continuing basis. Accordingly, no assurance can be given that the actual results of the operations of the Company and the Operating Partnership, the sources of their income, the nature of their assets, the level of the Company’s distributions to stockholders and the diversity of its stock ownership for any given taxable year will satisfy the requirements under the Code for the Company’s qualification and taxation as a REIT.

 

This opinion letter is rendered to you for your use in connection with the Prospectus and may be relied upon by you and your stockholders. Except as provided in the next paragraph,  this opinion letter may not be distributed, quoted in whole or in part or otherwise reproduced in any document, filed with any governmental agency, or relied upon by any other person for any other purpose (other than as required by law) without our express written consent.

 

We consent to the use of our name under the caption “Legal Matters” in the Prospectus and to the use of these opinions for filing as Exhibit 8.1 to the Company’s Current Report on Form 8-K filed on the date hereof. In giving this consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or the rules and regulations of the Commission thereunder.

 

Sincerely yours,

 

/s/ Proskauer Rose LLP

 

 

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